By Dacia Rivers
It’s difficult to imagine that Michael Dadashi ever stops smiling. And why would he? MHD Enterprises, the company he founded and serves as CEO, is experiencing exponential growth. In 2009, the year Dadashi started his reverse logistics business, MHD billed about $150,000. Just four years later, Dadashi expects to see $9 million in revenue for 2013.
With those kinds of numbers, MHD Enterprises ranked at number 61 on the Inc. Magazine 2013 Inc. 5000 list. With a three-year growth of 4,942 percent, Dadashi solidified his place on Inc.’s list, which recognizes the top 5,000 private businesses who experience the highest level of growth each year.
MHD isn’t just growing monetarily – the company is literally expanding as well. From operating out of his mother’s garage, Dadashi has moved the business into a 25,000-square-foot facility in Austin. And MHD needs every square inch of that space. Besides offices, the building houses a large warehouse where electronics are stored, sorted, refurbished, packaged and shipped. In 2011, 1.5 million pounds of electronic waste went through the warehouse. That amount doubled to three million pounds in 2012, and Dadashi expects it to go up again in 2013.
“What we’re seeing now are declining margins but the amount of volume is going up,” Dadashi says of the industry. “We are processing more and more, and now we might make a 70 percent margin on a million pounds.”
The Business of Overhauling
Electronics resale is a multi-billion dollar industry. First, MHD acquires scrap electronics, typically from manufacturers, and separates the wheat from the chaff. What can’t be saved is recycled, but anything salvageable is refurbished, tested and given a second chance at usefulness. After saving the scrap from becoming landfill fodder, MHD resells these restored electronic components to other resellers or via eBay or the company’s own resale site, AdapterAvenue.com.
The most popular goods MHD brings back to life are hardware that provide power to electronics, such as batteries, adapters and power cords. Of course, refurbished cell phones are a quickly growing commodity – with manufacturers releasing new models at record rates, unwanted cell phones are getting ditched far before their time. Phones also have the benefit of being ultra small, making them cheaper and easier to store and ship than larger electronics. As mobile technology gets smaller and prices go up, a pallet of refurbished phones that previously went for $10,000 could now have a value of $100,000. “Phones are the most lucrative market for recycling,” Dadashi says.
Dadashi applies a start-to-finish strategy to every product that shows up in MHD’s warehouse, formulating a plan on how best to get the equipment ready for resale as soon as possible for customers like Discount Electronics, Newegg and Tiger Direct.
Dadashi’s team grades and inventories each item using SKU numbers from the original equipment manufacturers like Dell, HP and Apple, keeping a detailed record of on-hand equipment that is available to MHD’s e-commerce and B2B sites.
A huge factor in what keeps MHD on top is Dadashi’s speed at responding to the needs of the marketplace. As part of keeping his own electronic resale business competitive, Dadashi has been working on another big project. With the help of his technology guru, his CTO cousin, Dadashi is developing the software that helps MHD run smoothly so that it might benefit other businesses. After working with available software, the pair decided their business needed something custom-made. They have spent years tweaking the software that serves as the dashboard for the company’s e-commerce.
Dadashi’s cousin, a UC Berkeley computer science graduate, has created a program merging the company’s inventory and e-commerce so that, at a glance, employees can instantly see the entire inventory in real time, how long each product has been in inventory and how the item’s price compares to competitors’ prices. With a mouse-click, they can readjust their pricing to keep items competitive, an important step in an industry where the lowest price always wins.
“Our next venture is developing this software and branding it,” Dadashi says. The software is in its third iteration and it grows more robust with each version. Dadashi feels the program will be beneficial to any retail or wholesale operation, and he is excited about expanding his business into the software market, opening up an entire new industry to his skills as an entrepreneur.
What’s his secret? Above all, Dadashi is driven by his devotion to giving back and his desire to better the planet and its inhabitants, a passion he discovered on his own journey through rehabilitation.
First Steps Toward a Second Chance
The business of refurbishing electronics fell into Dadashi’s lap. He spent years working for another company, where he learned from the inside just how the recycling and repurposing trade worked. After getting fired in 2006, Dadashi dove into the expanding field, boot-strapping his own business, relying on his industry contacts and running the business on his own to cover his costs. He worked out of his mother’s home, borrowing her expertise from working in the banking industry to run the money side of MHD.
It quickly became evident that the thriving industry was a lucrative one, and Dadashi’s insider knowledge and passion for keeping electronic junk out of the trash heap paid off – but not for long. The business fluctuated wildly due to one major problem that loomed over Dadashi’s life – his addiction to alcohol. “I was driven by fear and resentment, depression and anxiety,” Dadashi remembers. And those emotions certainly took their toll on the burgeoning enterprise. In the first three years of running his own business, Dadashi was in and out of a half dozen different rehab and detox programs. He was miserable, and no matter how much money he made, which at times was well into six figures, he felt a huge void in his life. If his business was going to survive – and he was going to survive – something big had to change. And quickly.
Rebirth of a Businessman
In 2009, after numerous unsuccessful rehabilitation attempts, Dadashi was finally able to break the cycle of binge drinking and recovery that had plagued him for years. It took a dedicated friend, who went so far as to sleep on an air mattress in Dadashi’s home, to finally spark the spiritual awakening that changed everything. Finally, Dadashi was ready for a change. “When the student is ready, the teacher appears,” Dadashi says of his personal overhaul. Through a 12-step program, he was able to get sober and stay that way. Dadashi credits the program with saving his life. “That was my revolutionary spiritual experience, and I became very open minded and willing,” he says.
Dadashi is now alcohol-free, drug-free and successful. But his transformation has taken him beyond just staying sober and making money. He now gives back in any way he possibly can, repaying the kindness that his friend gave to him – the selfless move that put him on the path to recovery.
“Now people call me and I go to them,” Dadashi says. “I leave work and jump when somebody needs help.” He also speaks weekly at an Austin recovery program and mentors people who are going through detoxification, and by giving back, he achieves the feeling he used to turn to alcohol to experience. “Today when I volunteer, give my time and share my experience, I get the euphoria,” Dadashi explains.
Being a successful business owner has given Dadashi another way to give back, by hiring people who have walked his same path. “Giving second chances is what feeds my spirit,” Dadashi says of his passion for hiring employees going through recovery.
At MHD, all employees start at the bottom, sorting electronics and learning the business, regardless of their employment history. Dadashi has hired past lawyers, CPAs and investors who come to his business looking for fellowship and support. And they get it as they climb the ranks. Some former employees have even gone on to start their own businesses and are now MHD customers.
Besides giving back to the recovery community, Dadashi also keeps his family close. Of MHD’s 25 current employees, 10 are relatives, including Dadashi’s 83-year-old grandmother, who works for the business full-time. Dadashi’s mother left the banking industry to serve as MHD’s CFO, while his father works as COO and his cousin holds the CTO post.
An Evolved Perspective
Michael Dadashi has his sights set on the horizon, and, both personally and professionally, he’s ready for what’s coming next. Although he has a few ideas of his future potential paths, he’s open to anything. The electronic resale industry is growing, and within the past three years, Dadashi has watched two of his biggest competitors get acquired by large, Fortune 500 companies. M&As are a trend in the industry, and they big keep getting bigger. As for what that means for MHD, Dadashi is receptive to anything.
“After I went through my spiritual awakening, I became very open minded, and I want to hear ideas and thoughts,” Dadashi says. He has faith that his renewed spiritual connection will offer him the guidance he’ll need if a decision comes his way. “When it’s time, the path will be crystal clear,” he says.
In the meantime, Dadashi has a little advice to offer other executives who would love to experience the growth he’s seen at MHD. “Invest in people,” he shares. “It’s the number-one way to grow, and your growth will be first-class.” When it comes to this bit of guidance, Dadashi truly walks the walk. He gives his staff members what they need, reading and attending classes with them and even holding meditation sessions. “I feed their spirits,” Dadashi says. “When the spirit is healthy, the mind is healthy.”
It’s obvious that Dadashi is truly dedicated in several aspects of his life. He is dedicated to the growth of MHD just as he is dedicated to his recovery. He is dedicated to keeping electronic waste of out landfills as he is dedicated to remaining close with his family. He is dedicated to giving second chances and supporting the people who work for him. If you look at the numbers, from rapidly increasing revenues to an expanding workspace, it’s clear that dedication is paying off. Dadashi himself has no doubt: “Living a sober, service-based life changed everything.”