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- [00:00]
John Davids
This guy turns your trash into his cash, bringing in $2 million every single week. His name is Brian Scudamore and he's the man behind 1-800-got junk. Brian destroyed and reinvented an industry and there's so much to learn from how he did it. I'm going to tell you all about that today. Welcome to the podcast. My name's John Davids. You can call me J.D. if you're a fan of the show, make sure to leave a rating review wherever you're listening. Apple, Spotify, YouTube, and of course, tell your friends about the show. That is how we grow. And by the way, guys, I shared this story on social media, Instagram, TikTok, YouTube a few weeks ago. Millions of you saw it. And Brian Scudamore himself, the founder, saw this and asked me if he could come on the podcast to share the story. So today I'm going to give you my own breakdown of this business. And in a few weeks you're going to hear Brian on the podcast as well. All right, let's get to the show Foreign. You're listening to Making it with John Davids. So rewind to 1989. Brian's a broke college student and he can't find a summer job and he needs to make some money right now. So he's grabbing some food one day at a McDonald's, drive through and he spots this deep beat up pickup truck that's filled with junk. And there's a guy behind the wheel, he's getting paid to haul it off. So Brian looks at this, he's ordering his food and he's thinking about it. He's saying, I got to make some money. I can't find a job and I don't have much time, but I can definitely do that. So he's intrigued. Seems easy enough. So he starts flipping through the classified pages. This is back when newspapers, that's how you'd find a used truck. And that's exactly what, what Brian finds, finds a truck that's on sale for 700 bucks. He buys it, then he paints it and he starts driving around for dollars. He's operating now under the name the Rubbish Boys. Before long, he's gonna find that money. So Brian quickly picks up a few gigs. In that first summer, first two or three months working, he actually turns a profit of $1,700. Now remember, the truck cost him 700 bucks. I'm sure he had some supplies. But even then he's got about 1,000 bucks leftover, and that is more than enough for one year's tuition at his school. So he does it again the next summer and then the one after that. And the cash keeps rolling in. He's making more and more every year and he's enjoying doing this stuff more than he's enjoying the classes. So finally, in his last year of college, he decides to drop out. He's not even gonna finish. He's learning more on the streets than he is in the classroom. This is a waste of his time. It's time to go all in. His parents aren't happy. It's a whole story about how his dad really, really insisted that he doesn't do this. But you, he's an entrepreneur at heart. He's going for it. So fast Forward now to 1997. Brian's doing about a million bucks a year, but he's stuck. He just can't figure out how to grow. He's hit a ceiling. He's actually joined some local entrepreneurship groups and he's seeing other people grow. And it can be very intimidating when you're watching others grow around you and you're stuck. I'm not sure if you guys have seen this. I've definitely felt this in my career where everyone around me is doing super well, especially if you surround yourself with other people that are driven and motivated, have an entrepreneurial spirit, and you're stuck. And you feel like you just can't get past that point. And that's when it hits him. Ryan realizes junk removal is a very local business now. Up until now he's been in Vancouver and he's just stuck in Vancouver doing this. And he's managed to build a million dollar business locally, but you need feet on the street in every city. You've got to actually be in these places. That's how the junk removal business works. He, he's only got two feet. He needs a few more. So he turns to one of his employees, I think it was the manager at his local Vancouver branch, his only branch, and he makes him an offer that he can't refuse. There's a story. This guy's dating a girl in Toronto. And so Brian turns to him and says, why don't you follow your girlfriend to Toronto and start this junk business there? You'll be a franchisee. You'll be my very first franchise location of this business. You know the business inside and out anyhow. So grab a truck, grab a uniform, go there and start picking up junk. And it works. In that first year, this franchisee makes a million dollars himself. So Brian realizes this is the business model this is the key to expansion, and it's time to hit the gas. So Brian leans in. He's hustling to bring in more and more partners. In order to grow a franchise, you need to actually have franchisees who, who are willing to do it. He's expanding now to the United States and it is a slog. And then he catches a very lucky break. This writer from Fortune magazine spots one of Brian's trucks on the road and he decides to write about it. It's this cool company, looks like they're doing a roll up your sleeves, blue collar job. And it looks like they're helping a lot of people. So the day after this Fortune magazine article appears, Brian's phone blows up. He gets over 500 calls from people who want to be franchisees. He signs 50 of them across the US and by 2006, Brian's Little Junk Company is making over $100 million in sales a year. So I shared the story with you guys on social media. Millions of you saw it. I got so many comments. A lot of people actually use the service. Actually a lot of people. I was surprised at how many people not only know it, but have stories of how they've used it. And there are so many parts of this story that actually come from the luxury of constraint. And I mean this when I say it. Constraint is a luxury. Not having cash, not having resources, not having connections, not even knowing what to do next is actually a luxury. The bliss of being ignorant, the bliss of naivete. Because a lot of the time when you have a lot of knowledge in an industry, you're scarred, you don't even want to move forward. But the, really the constraints here, if you think about it, Brian didn't have cash. If a business had a lot of cash, what would they have done here? They would have hired local managers. They would have had people go to those cities, maybe build them out, spend a whole bunch of money, spend a whole bunch of capital, cash flow problems, all kinds of stuff to get these locations open. But Brian didn't do that. He actually was forced to, having one of his employees move to Toronto and do a franchise. And then he realized, hey, this model actually works when people are properly motivated and, and incentivize because they're owners. They're owners of this local business. That's what a franchise is. All of a sudden. The model works in the United States and it probably works all around the world.
- [06:49]
Unknown Marketing Executive
Marketing executives, business owners. If you are running a company and looking for a fresh perspective on how to grow that company, Take a look at Influicity, that's my marketing agency where we work with brands across influencer marketing, podcasts, social media, AI content, paid ads, and so much more. But don't take my word for it. Go to Influicity. Check out our case studies from all the amazing clients we've worked with over the last decade. That's inf l u I c I t y influicity.com and I'll see you there.
- [07:23]
John Davids
Franchising and licensing are two things that people don't talk about enough. Because I don't think it's high status in entrepreneurship to talk about franchising. It's, it is really high status to talk about fundraising. But look at the other half, right? There's fundraising and there's franchising and franchising as a concept. And by the way, there are legal constraints around this. So don't go out and just start a franchise tomorrow. Consult a legal professional. But the whole idea behind franchising is that you are creating a business in a box. You're making it so that somebody else can take that business and run with it. They got the branding, you got the advertising, you've standardized the process, you've standardized the delivery. You, you standardized everything from the uniforms to the colors to here's how we do this thing. We don't do it like this, we do it like that. And then you take that and you allow somebody else to do it. And you take a small percentage, 5%, 10%, 15%, whatever those are of their ongoing revenues. That's your royalty. And there's also generally a startup cost as well. You make money off the bat right away when you bring that franchise partner on board. Licensing is similar. The big difference between licensing and franchising is the level of control or involvement that the brand owner has on the business operations. So in a licensing example, yes, you get the logo, the patents, the ip, but you basically operate the business on your own. Whereas in a franchising business, you're getting the business model itself, you're getting the systems and processes. So it's a little more hands on. And that's why there's more of a legal side to it as well. The other low status thing that I love about this business is that you're turning a commodity into a premium service. Junk removal is traditionally a messy low end service, but this company, 1-800-GOTJUNK, makes it kind of a premium service. They even talk about. I heard Brian mention in an interview one time that he was very, very fixated. On things like the uniform, the attitude of the people working for him. He didn't want people walking into houses and, and looking at someone's basement and attic and making judgments and, you know, making them feel bad about themselves that this is your mess, this is your junk, this is the place you live, and you let it get so cluttered. Like, that's our customers. We have to show them empathy, we have to show them love, we have to show them kindness. And this was all part of the brand from the very beginning. Right? You're really taking this luxury premium feel to what is effectively, you know, a commodity product. You're going into someone's house and cleaning it up. But no, no, no, we're doing a lot more than that. This is emotional and there's more to it. So you're taking something that's low status and you're making it high status. I think the big lesson here is that you can turn a commodity into a premium service by adding professionalism and branding and really taking these rough around the edges aspects and making them clean and nice and desirable. Brian also learned a ton about pricing along the way. And this is something that a lot of entrepreneurs and businesses struggle with. They're charging, generally speaking, way too little at the beginning, and that's why they creep up and up and up. And oftentimes it's not the entrepreneur who has the guts to raise prices. So when you bring in a professional salesperson, the first thing they'll generally say to you if they're worth their pay, is they'll say, listen, you're not charging enough money. I've had this where I've said, hey, we should charge $10,000 for this. And my sales team will say, what? $10,000? No, you've got to. You gotta charge 15, 20, 25,000 for this. Because they understand how the market works without any emotional attachment. So at the beginning, I think the pricing was kind of based on time. It was like, how long does it take us to do this? The problem with that, of course, is that over time you get better and better and quicker and quicker. So you're actually charging less money, but you're doing better work. So instead they go by weight these days, I think. So it depends how much weight, the size of the truck, and basically how much they're hauling as opposed to how long it takes them to haul. You know, there are so many businesses that are initially built on dirty jobs. And I don't mean dirty as in like the product or the stuff is dirty. Like you're Picking up garbage. I mean, you're rolling up your sleeves and you're doing the work. It doesn't matter if you're an accountant, a lawyer. You know, even in my case, like when I started Influicity, it was an ad agency and we did influencer marketing and then we did social media. And over time, the only thing that changes is the level of work, the professionalism and the fact that as the business owner, you're doing less of the work, you're in the weeds less and instead you're focusing on systems and people. Right people and process to actually get the job done. But don't get intimidated at the beginning. A lot of the time entrepreneurs get worried because they say, oh, I don't want to do this. It won't scale. And the reason they think that is because they're thinking about the business as them doing it. You doing it has nothing to do with what this business is going to look like at scale. I can tell you Influicity doesn't look anything today like it did back in 2015, 16, 17, when I was doing the work. Like today, it's a completely different story. And we deliver a way better service to way more clients. It's the exact same thing with 1-800-got-JUNK. They started with the owner, Brian, just hauling trash himself. It was a summer job. It just happened to be his business. And now it's a professionalized franchise. Hundred million dollar plus revenue business. I don't even know. It might be 2 or 300 million these days, but when you start, you can't fast forward right to the end. Just take one step at a time. So there's this crazy part of the story and that is how this business went from being called the Rubbish Boys to being called 1-800-God junk. And it is a baller name. I mean, wow. The phone number, the name, how did he even get it? So this happened around the time they moved from Canada to the U.S. and Brian realized that this name, the Rubbish Boys, was not going to cut it. So he came up with the name 1-800-got-JUNK. But the phone number was actually owned by, I believe it was the New Jersey Department of Transportation. I might be wrong on that, but I think it was definitely a government body. Think it was the N.J. department of Transportation. This is around 1998. And the number was being used for a highway cleanup initiative, but it wasn't really being heavily used. In fact, it wasn't even really in service. Brian had to hunt down who owned it because when you called it, it just kind of went to a dial tone. So Brian discovers that it's available and he calls up njdot, New Jersey Department of Transportation, and he asked them for the phone number. And I think it went back and forth a few times, but in the end they just said, listen, kid, stop calling us. Fine. Tell us where you want us to assign the number. Give us your name, give us your business, we'll assign it to you. They didn't charge him a penny for it. This is like pure hustle. This was a game changing move. This phone number which became this iconic business name, 1-800-God- Junk. We all know it. We all see it plastered on trucks if you have it in your city. He actually got this for free. Think about how much money that is worth the 1-800-domain right now. 1,800-God junk domain would be worth on its own maybe 5 or $10 million. And he picked it up for free. There are assets all over the place that might be worth money, that might be worth money to your business. You just got to have the hustle and the grind to go out and get them. I'm really curious about business model engineering. I'm curious about how he tweaked a lot of the things along the way. For example, how do you make sure that with dozens and dozens and maybe a hundred plus franchisees, the quality control stays as it is? How do you make sure the people that they hire are keeping the brand mantra and keeping the brand identity as it is? I'm going to ask that and a lot more to Brian when he's on this podcast. Podcast. Now make sure you subscribe to Apple or Spotify, one of the audio feeds. We're not going to have this on YouTube, so you got to subscribe to the audio if you want to get that. Let me know what you guys think. You can get me at johndavids. Com. Get on the newsletter. I'll talk to you guys next time.