Kabira Stokes, CEO of Homeboy Electronics Recycling
I was so inspired when I got a chance to interview Kabira Stokes; a social and environmental entrepreneur to be reckoned with. She has the will power and staying power to provide deep sustainability changes in her community. Here is her story:
My name is Kabira Stokes. I’m originally from Philadelphia, Pennsylvania, but I’ve been in Los Angeles for the past 17 years. I’m the founder and CEO of Homeboy Electronics Recycling, a full-service electronics recycling and data destruction company. I started the company in 2011 after I graduated from graduate school, and it was originally called Isidore Electronics Recycling. We take unwanted electronics, we process them to R2 standards, we offer certified data destruction and we focus on hiring people with criminal records. At the end of 2016, Isidore was acquired by a nonprofit organization here in Los Angeles County and the company name changed to Homeboy Recycling. I still run the company, but we’re now a partially owned subsidiary of Homeboy Industries, with Isidore retaining 25% ownership.
How did you come to starting a recycling company?
I had worked in the nonprofit sector and for the city of LA itself. And then I found my way to USC where I got my Masters in public policy. So, the concept came from what I saw in the city of Los Angeles and what I studied in graduate school. I really wanted to create an opportunity for employment for people who came out of the California correctional system. It’s really hard for people to get work once they’ve been incarcerated.
I didn’t know that you also had a social mission in addition to an environmental one.
We started as a for-profit social enterprise under the legal structure of an LLC and now, as we’ve been acquired by Homeboy, we switched our legal structure to a California Social Purpose Corporation. Primarily, we’re a full-service electronics recycling company. But, we also have a social mission to provide meaningful jobs for people who have served time. There’s a problem in society that needs addressing. About ¾ former inmates find it difficult to impossible to get work after being released and nearly ⅔ who responded to a survey by the Ella Baker Center for Human Rights were unemployed or underemployed five years after being released from prison.
Wow! That makes it really hard for them to make an honest living.
Yes, it does. So, just to be clear, people don’t work for us when people first get out. They first get trained and get work through Homeboy Industries, which is a social services agency that can offer initial 9 to 18 month-long jobs and support those employees in those jobs. Once they graduate from transitional work, they can work with our team. So, they’re people that have been through that transition and are ready for full-time employment.
We’re a very understanding employer. We’ve had people with us for years, we’ve had people that were with us for a few months and then move on to a better-paying job, which is very satisfying. And we definitely have had some folks that have not worked out. But in general our retention rate is really strong. We’ve had up to 13 people working for us at one time.
So, why are you a for profit company vs non profit?
We got a lot of pushback as to why we aren’t nonprofit, especially because of the people we hire. I just didn’t think that was the way to go. I mean, on the social side of things, there are too many people with criminal records, so it just can’t be the nonprofit world that hires them. We have to hire people with criminal records in the for-profit world. Still, we are a very understanding employer. People that have records have needs, they have to go to court, they have to have meetings, they have to deal with their parole officers, but we made it work. That compassionate approach continues after the acquisition by Homeboy Industries; it won’t change.
So, then you decided on starting a recycling company to provide jobs?
Yes, I specifically started a company in electronics recycling because, in Southern California, where I live we produce the most electronic waste in the State and just don’t have the capacity to process all of it. In general, less than 30% of electronics are recycled and, of that percentage, it’s questionable how much is responsibly recycled. It seemed to me that there was an opportunity to create work and operate in a place where our services are really needed. We give folks who face severe barriers to employment a second chance and give electronics a second chance too.
What do you mean by “give electronics a second chance”?
We achieved R2 certification in 2014. That means my company takes unwanted electronics, and we process them to “Responsible Recycling” standards. Electronics are refurbished or renewed or there’s a process of properly recycling them at the end of their life. We also provide certified data destruction. From a process perspective, we’ve developed an extensive environmental health and safety management system that we follow closely. This helps ensure the safety of our workers and that we’re doing the right thing by the environment.
Isn’t that the way all recyclers operate?
Certainly not. These processes often set us apart from other recyclers. We continually look as far as we can downstream to make sure that our waste is not being processed incorrectly or being shipped overseas to nefarious ends.
Any concerns from your customers about data destruction with regard to your employees?
Through our process of a secure chain of custody, we can allay any fears a customer may have. In addition, we don’t hire anyone with a background in identity theft or fraud because we deal with people’s sensitive data and that is what makes sense for our business.
So, where do you think your entrepreneurial interests came from?
I think the seeds of it come from my childhood. I was raised by a mother who is a true conservationist. She would reuse everything until there was just no use left and as a kid I was embarrassed by that but as an adult I am very impressed about that. She would fix things if they could be fixed and we used things that could be reused and I think that just seeped into me. I’ve always been an avid recycler. You’ll find me in other people’s garbage pulling out recyclables.
I was always going to start a sustainable enterprise. I was never going to make plastic widgets from China – it’s just not who I am.
Where does your interest come from to give people a second chance?
Well, I don’t have a history of incarceration. My grandfather was in prison for two years as a conscientious objector, but it’s not directly related. I come from an upper-middle-class family in the suburbs of Philadelphia.
I was raised in a multicultural setting. My parents studied Sufism, which is the mystical aspects of Islam. I was raised around people from Sri Lanka, Iran, Iraq, Pakistan and North Philadelphia and folks who spoke Spanish and Arabic and Hindi. I was told there was no difference between people because their skin is a different color or your race is different or creed or whatever. And, to just to give people a chance. It’s not for us to judge people. If they’ve done something wrong and they’ve been convicted and served time, then don’t we owe it to them to give them another chance?
How did you start up?
While in graduate school, I worked with an organization called Green for All, started by Van Jones, that was looking into creating an inclusive green economy. And I met an electronics recycler from Indiana that was hiring folks just coming out of prison to pull apart TVs and he was the first person to tell me that electronic waste is the fastest growing waste stream in the world. So, after I graduated, I visited his warehouse and, I thought, I bet if I went around to ask people for their old electronics they would give them to me and I could hire some guys who need a chance.
I raised some capital through friends and family and found my way into some warehouse space in the back of an American Apparel warehouse in Downtown LA. So, the company slipped into an industrial infrastructure, which was super helpful. Plus, they happened to have 20,000 pounds of electronics waste sitting in their basement which we could start to recycle.
What have been your main challenges?
Ironically, hiring people with a criminal record is one of the easiest things that we do. But, running a business is hard. In 2013, we had a massive electrical fire. Everyone was okay, but my business burned down, which was horrifying. Then my co-founder quit. So we joined a business incubator which really helped us get back on our feet and the experience made us a much stronger company. Another challenge for us was workers comp related. The WCIRB, without much warning, decided to change our classification code to junk dealer, which carries a really high risk factor, so our premium went up 500% and almost put us out of business. We had to appeal – I had to write the Attorney General a letter.
Then, there are commodity prices. They are unpredictable and have been real rough over the last several years. A lot of it has to do with fluctuations in the prices of oil, gold and silver. For example, when the price of oil is low, plastic is worth nothing. And many electronics are made primarily of plastic. So, it was a rocky road for us, but we learned a lot. Plus, we’re charging higher fees. Being acquired by Homeboy makes it easier, in the year since the acquisition we have seen a tremendous amount of growth. Plus, we can offer better health insurance and full benefits to all of our employees.
It doesn’t sound like it’s been easy. Why did you stick with it?
I’m very proud to have made it this far. After the fire, I certainly asked myself, do you want to still do this? And something inside of me said, I am not done yet. This is too good, it’s too real. So that’s the fighter in me that just kept going. I danced it out, I drank some stiff drinks, and I have an unbelievable network of advisers and a support system of people who believe in this idea and want it to succeed. That’s what kept me going.
I think pretty much the majority of entrepreneurs – and women entrepreneurs, are still starting businesses that aren’t sustainable – do you think that’ll change?
The system that we have had since the dawn of capitalism and industrialization is one in which we exploit people – and it’s resulted in a dying planet. This isn’t sustainable anymore. I believe that women can be on the forefront of turning things around – saying no, we are going to be holistic about our businesses. We’re going to figure out how to make money, but we’re not going to do at the expense of environment and on the backs of our fellow humans. It’s enough, really. This is a shifting time and a new form of business has to be created and we have to be the standard-bearer for that. And that is social enterprise.
What kind of planet do you want to live on in 10 years, and what kind of legacy do you want to leave for yourself for those who come after you? Do you want to build something that’s about profit over planet? I don’t. Ultimately, what we’re talking about is a redefinition of value.
Yeah, but with investors often focusing on profit only, what’s the business case?
The business case for sustainability is how you brand it, right? So are you going to create another plastic widget from China that, frankly, no one really needs? Or, are you going to set yourself apart from the pack and say, we adhere to these environmental and sustainability standards. And, this what we’re offering and we’re going to do it cool and we’re going to do it different and we’re going to do it sexy and we’re going to make people feel like they’re buying into something great. It might not work of course if it’s more expensive to use a sustainable product.
And, that’s one of the big challenges that is ahead of us. How do we subsidize the creation of sustainable products? How can we do this differently? I have a couple of ideas about that – what’s next, but for women – just get creative. You can’t at the end of the day keep dismissing the sustainable option because it’s more expensive. We’ve got to get smart and creative about it. We can change things for the better.