Two (or more) Birds with One Stone
by Jim King
Most social entrepreneurs find it difficult enough to make a “direct” difference in only one area of impact beyond economic impact. Intentionally making a difference in more than one other area of impact is even more challenging. Doing so directly “through” the enterprise instead of having a more “indirect” impact from using proceeds from the enterprise’s core activity may be the hardest challenge of all. Well, welcome to that type of difference maker, Champion of ChangeU Michael Dadashi, and welcome to a very, very different type of enterprise: MHD Enterprises (http://www.mhdenterprises.com/) .
MHD Enterprises is truly a company of “second chances”. First, MHD is on the surface an electronics reclamation, recycling and repurposing enterprise – very clearly an enterprise with an environmental impact. Second, MHD’s core activities provide employment opportunities for a population that very often has no such opportunities: addicts and alcoholics in recovery. Look in your local Chamber of Commerce listings, check the websites of its members, and then see how many of those members have a workforce of at least 70% addicts and alcoholics. (P.S. If you find any, please let us know. They are very rare and deserve recognition.) There is most definitely much direct impact through MHD Enterprises.
By the way. MHD does not stop at just having “direct” impact. The “indirect” impact made possible by MHD Enterprises is multi-faceted. MHD promotes community volunteerism among its staff. Check out what the website has to say about how MHD staff live out one of Michael’s life statements: “Be the change you want to see.” (http://www.mhdenterprises.com/volunteerism/) Additionally, Michael himself has gone on to found Infinite Recovery. “The mission of Infinite Recovery is to provide world-class treatment while honoring the dignity, worth, and uniqueness of all people recovering from the devastation of addiction.” (http://www.infiniterecovery.com/the-infinite-approach/). And together with his fiancée, Ylianna Guerra, Michael has co-founder HeartWater. “HeartWater is a platform designed to quench a universal thirst for authenticity and hope through powerful stories of all-inclusive recovery. “ (http://www.pouryourheartout.com/).
**NOTE: I should really stop for just a moment to wish Ylianna and Michael a happy, wonderful and beautiful wedding! After all, it is this weekend!! Congratulations, Ylianna and Michael!!!
Even with all of the types of “impact” described above, none of them appears to be the greatest impact of all. What might that be? Hope! Lots of hope!! There truly appears to be no limit to the hope that this one person and this one enterprise can provide!!!
What follows is Michael’s and MHD’s story. We have chosen to repurpose the following version even though it results in a bit longer post than is our norms. But we are sure that you will agree that it is worth every word.
This content was written by Lori Hawkins and was previously published on Oct. 6, 2012, in the Austin American-Statesman. That is almost four years ago – and a lot more has happened since then. Maybe a follow-up post will be forthcoming…
“Fast-growing electronics recycling company is built on second chances”
When Michael Dadashi started his Austin electronics recycling business in 2007, he was broke, didn’t have a car and was living with his mother.
He was also struggling with alcoholism.
But the then 23-year-old got MHD Enterprises off the ground by setting up a makeshift warehouse in his mom’s garage. He filled his brother-in-law’s truck with used electronics he bought from recyclers. He then cleaned them, recertified them and sold them on eBay.
“My alcoholism was a major roadblock of course,” Dadashi said. “It wasn’t until I turned 25 that I decided I’d had enough and wanted to redirect my life. When I did, I started to have a clear mind to work with, I refocused myself into the business, and it took off full speed.”
That’s not an exaggeration. Over the past three years, with no outside funding, Dadashi has built MHD Enterprises into a company that will post revenue of $10 million this year. MHD’s skyrocketing sales — which grew 6,277 percent between 2008 and 2011 to $7 million — landed it at No. 28 on this year’s Inc. 500 list. The list ranks companies with the highest percentage growth in revenue over the past three years. MHD took first place in the Inc. 500’s products and services category.
From the company’s 25,000-square-foot warehouse in North Austin, MHD’s workers disassemble electronics that are returned or recycled from businesses and consumers. The company breaks down the equipment, tests and repairs the parts and resells them to consumers on eBay or to wholesalers over its company website. In a typical day, MHD processes 10,000 pounds of material and ships 500 packages to eBay customers.
The company is one of hundreds of players in the rapidly expanding e-waste industry, whose growth is being fueled by the explosion of consumer electronics, as well pressure from environmental groups and expanding government regulations. The U.S. electronics recycling industry is worth about $5 billion, employs more than 30,000 workers and recycles some 3.5 million tons of e-waste annually, according to the IDC market research firm.
Dadashi, now 28, says he has succeeded by surrounding himself with family members and building a workplace that supports former addicts. His 83-year-old grandmother was his first employee and she still works 40 hours a week, while he recruited his mom from a lucrative banking position to be his chief operating officer. About three-quarters of his 21-person workforce has been hired out of rehab programs, including many of his top managers.
“I hire people with absolutely zero experience in this field, and they are so grateful to be respected and grow with a company,” said Dadashi, who works with nonprofits including Benchmark Recovery Center to hire workers after they have completed programs. “Our competitors have a higher turnover rate than we do because they don’t know how to manage employees. We’re very good at managing expectations — we’re a family business and everyone is part of the family.”
All employees go through a hands-on training program to learn their new jobs. Most are salaried and receive benefits including health insurance that covers pre-existing conditions and profit sharing.
For Karre Huff, MHD was the beginning of starting over. Three years ago, the former financial planner had just been through alcohol rehab, was unemployed and couldn’t find a job when Dadashi offered her an entry level position.
“I couldn’t get a job anywhere, and I said ‘I’ll do whatever work you need me to do,’ ” said Huff, who is now the company’s vice president of business development. “Michael believes in giving people the chance, and if you work hard, you are rewarded. It’s all based on trusting each other and looking out for each other.”
Those qualities are also responsible for the company’s business performance, says customer Dennis Hidalgo, a sales executive at Round Rock-based electronics reseller Foxtec.
“This is a cash upfront business, and there are very few terms involved in that, so you have to trust whom you’re buying from,” Hidalgo said. “I’ve known Mike since he was a one-man shop, and he’s an energetic and very hungry guy. But it’s his character and dedication that have made him a success.”
‘Out of rehab and out of hope’
Dadashi learned the e-recycling business while working for an electronics distributor and recycler. When he decided to break out on his own, his boss agreed to become his first vendor.
“I started small. I’d make a $1,000 profit off a truckload of equipment and invest it right back into the business,” he said.
“The $1,000 became $2,000. In five months, I was able to lease a 1,200 foot warehouse.”
Meanwhile, his personal life was spiraling out of control, and he entered alcohol rehab in 2009, putting the business briefly on hold. After that experience, he says, he became determined to help other people struggling with addiction, and that has become the foundation of MHD’s culture.
“I hire people out of rehab and out of hope, and they have a good, peaceful environment to work in,” he said. “If an employee needs to take a week off as part of a recovery program, we don’t dock their pay for that. Everyone is encouraged to volunteer on a weekly basis. We start off every day with a morning meditation. To see people come back to alive, it’s a treat I can’t describe in words. It gives me goosebumps.”
When Michael Weatherford joined the company two years ago as a product sorter, he was 19 years old, fresh out of rehab and lacking work experience. Today, he’s the company’s e-commerce sales manager.
“It’s an amazing experience to have someone take a chance on you when no one else will,” Weatherford said. “The best thing is being there for new employees who are just starting out.”
While many of his workers start at the ground level, Dadashi has also surrounded himself with experience, including recruiting his mother, former banking veteran Gail Zorne, as COO. Zorne, a former executive in the wealth management division at Bank of America, has brought a corporate perspective to the business, he says.
“I love working with my mom, but it was really about making a strong strategic move,” he said. “I had to try hard to convince her, and I had to pay her a top salary. But she has so many relationships — her client base was all the movers and shakers in Austin. And she has rolled out a healthcare plan and other programs that have elevated us as a company.”
Other senior hires include Eddie Cleveland, a former senior manager in Dell Inc.’s reverse logistics department, and Michael Ware, a former manager in testing and repair at Flextronics, the giant electronics contract manufacturer.
Now, MHD is gearing up for a new wave of growth. It’s expanding into recycling, which involves opening a new 50,000-square-foot facility in Austin; and it’s opening a recycling facility in Australia with a partner there.
Although the company has a line of credit, Dadashi plans to do it without taking on any debt.
“I’ve had investors approach me, but I want to grow this from the inside,” he said. “One of the best things about building this business is being able to help people and keep myself on track spiritually. I am excited about where we are, and I’m going to work hard to keep it going.”
Dr. Jim King is the President of Change University. You may read more about him at the bottom of the page at this link:
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