This West Grove business turns unwanted computers into valuable assets
By J. Chambless
Steve Figgatt is the director of Sycamore International in West Grove.
By John Chambless
Tucked away in West Grove is a long,
nondescript building where yesterday's must-have gadget either meets
its demise, or is reborn for more years of service.
At Sycamore International, small mountains of outdated computers, laptops and iPads arrive nearly every day. For company director Steve Figgatt, it's a reminder of how “people are scrapping really great computers,” but it's also an opportunity to put technology into the hands of students who might otherwise not have it. And there's the comfort of knowing that, last year, 1.8 million pounds of electronics did not end up being dumped into landfills because it was handled through Sycamore.
Walking through the building that formerly held a mushroom processing facility, Figgatt pointed out the stacks of newly arrived computers, the huge rooms where technicians diagnose and refurbish them, and the pallets full of reborn computers ready to be shipped to buyers again.
“In college, I majored in environmental science. Most of my work was in wind and solar power,” said Figgatt, a West Chester native who graduated in 2008 from Ithaca College in New York. “I was running a tech business on the side, fixing computers for consumers and businesses, but I was also buying small quantities of computers in college and selling them out of my dorm room and on the internet. I started a tech company in West Chester with a former business partner in 2009. We spun off this division in 2010 because it was showing a lot of promise. It's been growing a lot since 2011.”
In the bad old days of computer recycling, dead units were sometimes shipped to third-world countries where they were improperly stripped of raw materials, burned or left to leach dangerous materials into the soil and air. “It was a horrible environmental disaster,” Figgatt said. Gradually, a widespread industry grew around the salvage of metals from discarded technology, but the economic downturn of the past five years left a lot of businesses by the side of the road as the value of commodities dropped.
“The economy was in bad shape when I started up,” Figgatt said. “After our West Chester location, we bought this property, which is 15 acres. It was a cabinet-making shop after it was a mushroom business.”
Sycamore is thriving because of a twist on the usual business model. “We pay schools and corporations for their old computers,” Figgatt said. Sycamore will pick up as many units as required, pay the owner, refurbish the units and then sell them at a discount to schools or businesses that don't have the funds for brand-new units.
About 80 percent of Sycamore's business is working with schools to refurbish and replace computers used by students, but they also take technology from corporations, health care facilities and other businesses. One of the primary rules at Sycamore is security, Figgatt said, pointing out the surveillance cameras in every room, and the bar-code tags that are put on every piece of equipment that comes through the door. “Sometimes, we're picking up 20 machines, and sometimes we're picking up thousands of them. Our focus is technology that's one to eight years old. We have customers all over,” Figgatt said. “A lot of it stays domestic – charter schools that are looking to save money, or sometimes consumers. A lot of our Apple equipment goes to consumers. Some go to Europe, where there's a big secondary Mac customer base. We have a customer in Lahore, Pakistan, who has government contracts and sells to them. Because the world is so small, a lot of people can work with used equipment or run slightly older software.”
“We label everything so we can track where it came from, who worked on it, and what they did to it, by serial number,” he said. “We'll work on laptops, Macs and server equipment, and iPads have been huge. And copiers,” he said, citing a controversy a few years ago when Chinese businesses were buying used copiers from American businesses, and then retrieving sensitive data from their hard drives. Some copiers retain a scan of everything that has been copied on them.
“We provide data destruction services. Data integrity is what really matters,” Figgatt said. “A lot of what we get is old server equipment, because corporations are are moving to the Cloud and tearing out old data centers. We work with people in Dubai, we work with people in Hong Kong. They're still looking to get servers and good equipment over there.
“We wipe every single hard drive,” Figgatt said, showing off a wall of equipment with dozens of small doors where the drives are inserted and passed through a seven-step process that strips out everything. The erasing units have name stickers that read “Demeter,” Figgatt said with a grin, after the Greek goddess of the harvest. The clean drives can then be reused in refurbished computers. Damaged drives – and even the hard drives on equipment that will eventually be shredded – are first erased.
In the disposal area are huge bins of parts – circuit boards by the thousands, for instance, which can be stripped of their gold connectors, or aluminum and silver components. “We send it to smelters and they can melt it down into raw materials again,” Figgatt said. “Of course, we work with the right guys, who are certified. We do everything domestically.” Not every piece of technology has a future, however. Hulking computers from the early 1990s and huge televisions and computer monitors are stacked for disposal in one room at Sycamore. “These are completely fried,” Figgatt said. “The TVs have leaded glass, so we send them out to be recycled by other companies. We pay to have them properly disposed of. But I'd say less than 1 percent of our revenue comes from recycling. About 99 percent of what comes into our facility is reused.”
To recycle huge TVs or monitor screens, “it costs about 17 cents a pound to do it right, for a certified facility,” he said. “Basically, it's a hazardous material.”
In October, Figgatt opened Sycamore Combine, a branch of the business that specializes in repairing iPads and tablets, mostly for school districts. “We fix a lot of broken screens, since kids drop these a lot,” he said. “A lot of districts are going one-to-one with these devices, which is great for us.”
In many cases, the information formerly in a textbook is accessible only through the device, so getting the device returned quickly is important. “We support 16,000 students for service right now,” he said.
In an area specializing in newer Macs, technicians refurbish computers and monitors, photograph them and put them up for sale. On the other end of the scale, there's a crate full of Macbooks whose labels read “obsolete.”
“We can still find a user for these,” Figgatt said, “but it takes a little while. They're still perfectly usable, they just won't run the latest and greatest software.”
Figgatt cites Apple as a company that's constantly driving progress – and sales – through bringing out new versions of its products. “A new iPad is probably coming out at the end of March, so a lot of school districts will be getting rid of their 2012 iPads to upgrade,” he said. “They're still fine. As a business, we'll have to adjust to the units that will be coming in.”
The rapid cycle of updates means that any given device “will lose about 20 percent each year in depreciation” Figgatt said. “There's massive depreciation. Some of what we sell is maybe 25 percent of their original cost.”
To run Sycamore efficiently, Figgatt must know how much to pay for incoming equipment, the cost of making it usable again, and the price he can ask for the refurbished units. But when struggling school districts can outfit students with tablets that they could never afford as brand-new units, everybody wins, Figgatt said.
“We're different because we pay for assets. A lot of our competition, the old-school recyclers, took equipment for free or charged people to take it. We've invested millions of dollars back into school budgets. That helped some schools buy new assets again. It's great for them, and it's great for us.
“We processed a little over 60,000 devices through here last year,” Figgatt said. “When we started this, I had two guys in a warehouse. Now we've got over 22 employees. We're infusing millions of dollars back into school budgets. And we're getting these devices to kids who would otherwise not have them.”
For more information, visit www.sycamoreinternational.com.
To contact Staff Writer John
Chambless, email firstname.lastname@example.org.