Q&A: How Buddy is bridging tech and trust in the scrap metal industry

In an industry where trading still largely relies on scattered emails, instant messaging, and manual back-office processes, the need for digital solutions is clearer than ever. For companies looking to stay competitive, tools that streamline workflows, centralize data, and support relationship-based trading are game changers.

Yet, technology adoption in recycling has faced unique challenges. The recycling industry relies heavily on personal relationships and hands-on processes, often making change a slower, more cautious journey. Recycling often operates around the clock with fluctuating prices, intricate logistics, and tight margins, and any technology solution needs to be fast, reliable, and capable of adapting to these demands. Many recycling professionals have seen tech solutions fail to keep up, leaving a reluctance to invest time and resources into new tools that may not address their specific needs.

Lisa and Stuart Kagan, creators of Buddy, have witnessed these pain points firsthand. Buddy has emerged not only as a marketplace, but a comprehensive solution to streamline operations across trading and admin. I caught up with Lisa Kagan to learn more about how Buddy is solving longstanding issues in the industry, why tech that's tailored to recyclers' unique needs is crucial for driving real industry progress, and more.

Slone Fox: Can you share the story behind the development of Buddy? 

Lisa Kagan: Stuart's journey in the metal recycling industry began almost three decades ago when he started at the grassroots and grew to manage the largest recycling operation in Sub-Saharan Africa, overseeing 85 yards and 4,200 employees. Leading global trading, he was all too familiar with the frustrations of industry-standard practices — trading at all hours, reaching out across various platforms to connect with buyers, and navigating countless conversations just to complete a single transaction. It was a fragmented, time-intensive process that, despite its challenges, felt like the only option for securing competitive prices.

When Stuart and I moved to New Zealand and launched a metal business together, these same issues persisted, amplified by the lack of suitable technology solutions for the recycling sector. I'd previously spent the better part of a decade with Deloitte as a management consultant and was no stranger to using technology for competitive advantage. Frustrated by the tech limitations in our own business, I began building internal systems to integrate key functions — inventory, CRM, transport, and pricing modules — creating a universal view of the customer and establishing a single source of truth for all business data. These systems streamlined operations and improved decision-making, but one major challenge remained: the endless hours Stuart spent trading across WhatsApp, email, and WeChat, often intruding into family time.

The turning point came when our New Zealand business was taken in a hostile takeover. While it was a difficult time, it also gave us the freedom to pursue a solution that addressed the broader industry's challenges. I dove into the industry's needs with over 100 market validation interviews, speaking with recyclers, traders, and end users. These conversations highlighted two key insights: First, the industry would not embrace a purely transactional marketplace. Relationships were foundational, and recyclers wanted transparency and the chance to connect with their trading partners. This realization led us to hire a designer from the dating app world to embed relationship-building into Buddy's platform.

Second, while the trading process was a painful reality for most, nearly everyone mentioned the challenges of back-office tasks — managing loading schedules on spreadsheets, communicating through scattered emails and WhatsApp groups, and sharing loading photos via digital cameras. This helped shape Buddy as not only a marketplace, but a comprehensive solution to streamline operations across trading, admin, and operations.

SF: In your experience, what are the biggest challenges that recyclers face today, and how is Buddy helping them overcome these hurdles? 

LK: This is not an easy industry. Besides the day-to-day challenges of navigating market volatility, trade protectionism and the ever-increasing regulatory burden are top of mind for everyone. The industry as a collective is working together to navigate these external challenges and is fiercely advocating for recyclers to have a seat at the table rather than being on the menu, as John Sacco aptly puts it.

The more practical challenges that come up time and time again are labour shortages, key-person risk, the lack of access to data for decision-making, and cumbersome systems and processes.

While we can't fix the labour challenges, we can help scrappies do more with the people they have. Through our one-to-many listings, programmatically generated documentation, and dynamic loading plans, we give traders, admin, and operators back their time so that they can focus on the highest-value tasks that tech can't help them with. 

We're also helping our users document all the tacit knowledge and "invisible" processes that walk out the door every night and that may or may not come back the next day. This is powerful beyond just key person risk — it boosts productivity, reduces new hire training, and creates depth for role cover. By creating these cross-functional workflows, we're able to capture thousands of data points that don't currently exist in any system of record, right from trading through to operations.

For example, how many offers are you getting for each trade to ensure you're getting the most competitive prices? When there's a claim, who packed the container so that you can engage with them to find out what happened during loading and whether or not there might be a basis for the claim? You can identify which loaders are attracting the least claims, and get them to train those who are regularly attracting claims. What was the market when you sold compared to when the claim arrived, which might be worth considering when negotiating a claim?

SF: How do you gather and incorporate user feedback into the app's development? Is there any surprising feedback you've received from users?

LK: Users have the ability to provide feedback in-app, but we proactively reach out to users regularly to understand how they're using Buddy, what features they're enjoying, and what features they'd love to see in the future. We work on fortnightly releases, which means that we have a pretty quick turnaround when it comes to implementing fixes, enhancements, and new features. That's the beauty of cloud-based software, it's continuously evolving and expanding, and users have the ability to influence what we build. The majority of our users are accustomed to on-premise software, which has much longer cycles for product updates, usually years. So there's definitely an education piece there where we bring our users on the journey with us so that they can share in Buddy's vision for the future of metal recycling and play an active part in its development.

The most surprising feedback has to be when one of our users told us that he loves Buddy so much, that he named his dog after us! On a more serious note though, a lot of our users have just picked up the app and started using it right away, before we've even done any training. Of course, this was what we hoped for, but we also know that this is an industry that isn't a prolific user of tech and so we were expecting there to be more of a learning curve despite our intuitive interface.

SF: What challenges do you face in getting traditional scrap traders to adopt digital solutions? 

LK: One of the challenges that we face is that many companies have been burnt by failed software implementations or products that just don't live up to what is promised, so there's a bit of work we have to do to sell them on tech solutions more generally. 

The slow adoption of tech as an industry has had more to do with a lack of good options rather than ignorance of the value that digitization can deliver. While there's a groundswell of interest in digitization, there is also definitely a fear of change. Sometimes we're confronted with an attitude of "if it ain't broke, don't fix it", but once they see the solution in action we generally win over hearts and minds.

Some scrappies also view technology and relationships as being mutually exclusive, and you can see how that might be problematic when trying to grow adoption in a relationship-based industry. I think this is a common misconception because all the other marketplaces in the industry are effectively digitally enabled trading houses where counterparties are obscured, which effectively removes relationships from the transaction. Buddy connects counterparties with full transparency, and through our content-rich profiles and through ratings and reviews, we help counterparties build trust efficiently. 

SF: What upcoming innovations or trends in the industry are you most excited about?

LK: Right now, there's a lot of buzz around AI, and rightly so. AI's role in our physical operations is expanding, transforming areas like downstream processing and even grading at the buying scale. And we've been great at adopting tech in our operations. If you think about technologies like computer vision, automation, and robotics, there's no shortage of industry innovation there. 

We're focused on empowering people across the recycling organization, so for us the excitement is around machine learning and big data. Once metal recyclers start capturing their data more broadly to include their trade operations, AI is going to unlock insights that can really turn the dial for operators. You can slice and dice and melt (yes that's a thing) your data to make complex datasets digestible for decision-making. I also think that there's a lot the industry can gain from incorporating the Internet of Things (IoT) into our operations. While it's not a new innovation, we haven't seen anyone doing anything meaningful with it in the industry yet and we feel this is a missed opportunity. 

SF: How do you see the industry evolving in the next few years? 

LK: There is going to be an increased demand for recycled materials, off the back of the transition from basic oxygen furnaces (BOFs) to electric arc furnaces (EAFs) and more generally an earnest focus on sustainability across the broader supply chain. But with increased pressure on our margins as a result of other macroeconomic forces, operators are going to have to look in different places to realize cost efficiencies and to grow their revenues. We expect data is going to play an increasingly important role here, helping operators to uncover insights to improve their bottom line.

Much of the industry hasn't migrated to cloud-based solutions, so even though this isn't considered new technology, I believe that we will see a step-change where operators come to the realization that upgrading and integrating their tech stack can have a transformative impact. As the old guard moves into retirement and younger generations start to make up an increasing share of the workforce, the expectations around how work gets done are going to drive organizations to adopt more modern solutions.

The convergence of artificial intelligence, augmented reality, and robotic automation is also something really exciting to think about, but for this industry in particular I think that we need to first crawl before we can walk.

SF: What advice would you give to other entrepreneurs in the recycling tech space?

LK: Do your homework, assume nothing. Even if you have deep domain expertise, if you want to build a solution for the industry at large, you need to spend time asking the right questions to a large sample of potential users to understand the universality of their needs and challenges, to uncover what is going have a real impact on their business, and to quantify the value that your solution can deliver. We conducted over a hundred interviews with operators and traders globally before we laid down a single line of code. It's also worth collaborating with other players in the space. There's a huge amount of behavioural change that needs to happen for the industry to digitize, and working together to catalyze change can only help.