Raising the bar

For the Boswell family, addressing the growing needs of an ever-changing electronics industry can be traced back to a small corner of a warehouse in Chicago. While managing an AT&T smelting facility in Staten Island, New Jersey, in the late 1980s and early ’90s, Bill Boswell was exposed to the end-of-life electronics industry and, in the process, was introduced to companies that were interested in recovering integrated circuits from the AT&T boards.

The idea for what is now known as Hobi International Inc. soon was born after Bill enlisted the help of his children, Craig Boswell and Cathy Hill.

Hobi was formed in 1992 in what Craig called a “bootstrap entrepreneur story.” He says, “I can recall, I was working at Texas Instruments and [my father] calling me and … he says, ‘These guys just want to take these chips off these boards. Does anybody really do that?”

HOBI at a glance

Owners: President and co-founder Craig Boswell and CEO and co-founder Cathy Hill

No. of employees: 135

Locations: Headquartered in Batavia, Illinois, with facilities in Dallas and Phoenix that perform the full suite of integrated information technology and mobile asset disposition services Hobi provides

Services: Data security and erasure, mobility managed services, reverse logistics, data center services, enterprise asset services and environmental services

Website: https://hobi.com

At the time, Craig says he didn’t think it was something anyone thought to do “only to find out later that it was probably a $100 million industry at the time.”

Eventually, their father retired but continued working with AT&T—staying involved to make enough money to go fishing, Craig says—as he realized the “tremendous business opportunity” in front of him. Bill recruited Cathy, and they put a small desk in the back of a Chicago warehouse and began making calls, keeping the relationship with AT&T. Craig pitched in when he could, providing mostly technical assistance, but he didn’t give up his job at Texas Instruments right away. “Although we were tiny—it was the three of us and one desk in a small warehouse in Chicago—this was a large corporate problem,” Craig says.

Because their father’s focus specifically had been circuit boards on the telephony side, that is where Cathy began when making her initial phone calls. She contacted many corporations—first in Chicago before branching out nationwide—asking if they had circuit boards for refining, noting that Hobi also would remarket the components. Cathy says across the board the response from many companies was that they didn’t necessarily have circuit boards but had other telephony technology or midrange or mainframe computers and didn’t know what to do with them.

“[We recognized] that need early on and really just [took] what we looked at as a very microscopic slice of this industry and looking at it very broad-based—that was the genesis of the idea,” she says.

“AT&T was concerned with things like security and environment and, at the time, most of the people that were involved in the industry were scrap people that probably didn’t have big corporate experience,” Craig adds. “We brought that to the table.”

The trio even joked that clients they approached in the early years of Hobi used to think it was a much bigger company.

Craig attributes that to his family’s prior corporate experience but credits his sister for realizing from the start what he says took the industry years to realize: “This business wasn’t about the hardware,” he says. “It was about the service.”

The natural progression, according to the siblings, was the recycling aspect of their business and eventually resale. “In the early days, that was also very much a new frontier because, of course, we didn’t have the internet,” Cathy says of resale. “Finding folks that were repurposing used electronics—the components were pretty easy [because] there were large international channels developed for those in toy manufacturing and various electronics manufacturing—but the larger pieces of gear, that was a whole new frontier that we had to essentially develop those marketplaces to be able to remarket that technology.”

Thirty years later, Hobi has become a full-service information technology asset management (ITAD) and electronics recycling services provider.

“Part of selling always is recognizing a need, and the needs were big,” Cathy says. “You have a billion-dollar industry talking to a three-, four- or five-man team at the time. That was the size of the opportunity, but it was also the size of the need. It was a fractured, almost nonexistent industry at the time.”

Hobi’s facility in Batavia, Illinois ‘A one-solution vendor’

With their father’s industry experience, Craig’s engineering background and the family’s combined experience with data engineering, Hobi’s recycling process was relatively straightforward—it was the nuance of the electronics recycling industry that took some time to develop. “We were addressing this problem, but so were large OEMs (original equipment manufacturers),” Cathy says.

“At the time, you could go to the client and say, ‘Who have you vetted? Who have you used in the past? Who is currently processing your steel or your batteries?’ And we essentially became the answer to all those questions,” she adds. “We could take the metals. We eventually started doing the resale. We could handle the batteries. We could handle the hazardous part of that equipment. But they were very much looking for a one-solution vendor.”

The next step was to sit down with clients to determine which vendors were trusted sources for metals or circuit boards and to really get a sense of the market and what it would take for Hobi to be that one-stop shop when it came to electronics recycling.

“It was a matter of a lot of calls, a lot of introductions, a lot of market development,” Cathy says. “Eventually it led to the certification process and what is the best-in-class process that was really being written not only by us but by other vendors, as well.”

She adds, “The refining industry already understood this. They understood the value of precious metals in large devices coming out at the time, but they weren’t necessarily doing resale right. It was very much a collaborative effort, and some of the vendors we met in the very early stages are vendors we still deal with today.”

Cathy says from 30 years ago to now, the inventory, sterilization and testing processes—the environmental component—has always been part of the industry as a whole, but that demanufacturing innovation is what set Hobi apart from other companies that had been looking into electronics recycling. In the initial stages of development, Hobi looked at safe and effective ways of deconstructing electronics and their components to ensure they didn’t end up in landfill.

Craig says it was, in fact, his previous employer that set him and his family up for success in the development of Hobi’s recycling process. In the early ’90s, he says, a big issue among electronics manufacturing was removing fluorocarbons from devices, and while traveling to conferences and events to learn about clean manufacturing, what he began to hear more of was the concern around disposal.

“At some point, this stuff is going to come out,” he says of the impending device volume. “It has things that could be dangerous or harmful to the environment, and people are going to look to us and say, ‘What should we do?’”

He adds, “You could tell that a significant part of the electronics industry was having their eyes open to this being a major issue for years and years. It’s 30 years later, and we’re still attending conferences and laws are still being written and policies are still being developed about what we are going to do with all these electronics that are coming out.”

After about five years of navigating electronics recycling, Hobi ventured into the design aspect of the industry—meeting with engineers, designers, marketing teams and environmental advocates to improve recycling efficiency at the beginning stages of a product. “We often say it was the Wild West,” Cathy says. “It was trying to attack the problem a different way or attack the opportunity a different way.”

Client-focused

Hobi processes more than 1 million individual assets annually across its three facilities in Dallas, Phoenix and its original location in Batavia, Illinois, and Craig argues his company has the largest footprint in mobility of any ITAD company in the United States after making a significant technological investment more than a decade ago.

Over the past five years, he says corporate-owned mobility assets have risen dramatically, hitting the ITAD space as companies integrate mobility solutions in their overall computing platforms—but that hasn’t been the only industry shift in the past three decades. Clients’ focuses have turned to cost propositions, sustainability efforts and data destruction and protection. “It varies by industry,” Cathy says. “It varies by corporate culture, and that’s a fun piece of our job, to sit down with IT asset managers and say, ‘What is it you want to accomplish with your program?’ That’s why we do what we do.”

Hobi’s services include data security and erasure, mobility managed services, reverse logistics, data center services, enterprise asset services and environmental services, with systems designed to maximize a client’s return on obsolete assets while minimizing processing costs. Its systems include custom designed data management that allows Hobi to provide concise reporting on all aspects of material processing, including logistics information, costs, asset serialization and configuration, redeployment schedules, sales history and scrap summaries.

Cathy says, “Every day the bar gets raised just that much more, and you have to raise your level of service to reach that bar.”

Continued growth

Craig notes the electronics recycling industry also has become a global industry in the 30 years since Hobi’s inception. “Our sales channels are international. We invested in a direct-to-consumer sales company a couple years ago, [and] we just opened an office for that company in France so that we can resale material into the [European Union] markets instead of just the U.S. market.” He says Hobi soon will partner with a similar company in Mexico.

“As our consumption of electronics and the types of electronics changes, it’s kind of like kindergarten,” Cathy says. “Every day, you’re getting something new and [asking], Can we remarket that? Can we take that apart? Can we recycle that? What is the nuance of this device? Can we erase that? There’s so many challenges on that side as technology develops within a device. Then erasing it can be equally complex. So, it is truly a fascinating industry.”

Craig says in the early years of the company, Hobi encountered many cases where he and the rest of the small Hobi staff were educating clients on the right questions to ask to “protect their turf,” but today clients have much broader knowledge of what their companies need. “The service itself has been so much more thoroughly defined, and so now your differentiation is can you meet those expectations,” he says. “Can you be there with innovative solutions before they even ask for them?”

Craig adds, “Developing a service-focused culture early on got us traction where a company our size shouldn’t have had traction. There were billion-dollar companies, and we’re in the back corner of a warehouse, but they very much appreciated the fact that we were checking all the boxes for them.”

Thirty years later, Craig and Cathy agree that Hobi’s roots in family and service have created what she says is a “feel-good story.”

Cathy says, “Our mom was a recycler when there wasn’t recycling. She would literally take every label off soup cans when we were kids. So, there’s always a feel-good part of that story that not only are we helping companies, serving companies, but the idea that we are doing something very net positive for the environment is a great story to tell.”

The author is managing editor of Recycling Today and can be reached at mmcnees@gie.net.