Upcycling and Upskilling With AI: Goodwill's Steve Preston

**Sam Ransbotham** (0:02)
Hi, it's Sam. Are you looking for a podcast to help you better understand the future of business and the latest trends in tech? Then I recommend listening to Web3 with A16Z Crypto, hosted by Robert Hackett. The show digs into the ways blockchains intersect with trending topics, from AI to quantum computing. Produced by venture capital firm Andreas & Horowitz, Web3 with A16Z Crypto is a great resource for anyone who wants to learn more about the technology, people, and business ideas driving the next era of digital innovation. Be sure to find and follow Web3 with A16Z Crypto on your favorite podcast listening app or on YouTube. Goodwill Industry takes in over 5 billion pounds of retail goods each year and increasingly uses AI to help sort, distribute, and potentially recycle those goods. On today's episode, the CEO describes not only its retail operations, but also how Goodwill is using AI to assist in human skilling and re-skilling.

**Steven C. Preston** (1:16)
I'm Steve Preston from Goodwill Industries, and you're listening to Me, Myself, and AI.

**Sam Ransbotham** (1:22)
Welcome to Me, Myself, and AI, a podcast on artificial intelligence and business. Each episode, we introduce you to someone innovating with AI. I'm Sam Ransbotham, Professor of Analytics at Boston College. I'm also the AI and Business Strategy guest editor at MIT Sloan Management Review.

**Shervin Khodabandeh** (1:41)
And I'm Shervin Khodabandeh, senior partner with BCG and one of the leaders of our AI business. Together, MIT Smr and BCG have been researching and publishing on AI since 2017, interviewing hundreds of practitioners and surveying thousands of companies on what it takes to build and to deploy and scale AI capabilities and really transform the way organizations operate.

**Sam Ransbotham** (2:08)
Hey, everyone. Thanks for joining us. I don't want to over promise, but I think this episode could be pretty interesting. Today, Shervin and I are talking with Steve Preston. He's the CEO of Goodwill Industries. Steve, thanks for taking the time to chat with us.

**Steven C. Preston** (2:21)
Yeah, thanks for having me. I'm looking forward to it.

**Sam Ransbotham** (2:24)
So I'm guessing that most of our listeners are pretty familiar with Goodwill as a retail establishment. But there's a lot more to Goodwill than just retail, and I'm hoping that we can dig into that as we talk. But first, Steve, maybe we start with you elaborating on the retail part of Goodwill and, in particular, what that has to do with artificial intelligence.

**Steven C. Preston** (2:44)
Yeah. We are the largest player in the resale marketplace, and we bring in about 5 billion pounds of goods every year, and those are largely kept out of the waste stream. We bring those goods in, we touch every one of them, we price them, we evaluate them, we decide what channel to sell them through. If they are broken or not able to be resold, we are likely to be looking for recycling channels. And so, our supply chain from beginning to end is very complicated, requires a lot of human intervention, a lot of decision points, and a lot of judgment. And so, throughout that process, we see a lot of opportunities to incorporate AI in the entire flow of goods, the decision-making process, and making sure that everything we receive finds its best home somewhere in the cycle.

**Sam Ransbotham** (3:37)
I think that's interesting. And until we talked the first time a couple of weeks ago, I hadn't really thought about the problem you have. Most retailers take a bunch of goods in, they're homogenous goods, they know where they're headed, they know what the good is. Explain how artificial intelligence can help with that problem of the five million pounds and figuring out what that should be and where it should go.

**Steven C. Preston** (3:59)
Well, we think that there are a number of AI applications throughout the production process. First of all, if we bring in a large volume of goods, as I mentioned before, every good is evaluated from some perspective. The whole process of identifying what the good is, what the best home for that good is, and then how to route it can involve any number of AI applications. Everything we get is unique and we sell some things in our stores, we sell some things online. Many of our local communities actually have boutique stores, and some of it we actually sell to other third parties. The other piece that is really interesting and very important is the fact that the infrastructure in our country for textile recycling is beginning to emerge. Historically, the recycling technologies have been fairly basic for clothing, really kind of mechanical technologies. But what we see is a lot more demand and a lot more investment in technologies that turn polyester fibers all the way back into polyester pellets, which can then be used to spin fibers, go back into making textiles, and back into clothing. So really complete circularity. And that's very important, given some of the trends we see worldwide. We are, in fact, partnering with a very sophisticated, very promising provider who's looking at facilities right now in the United States. And when we get to that point, AI can actually identify the fiber composition of our textiles.