← Making It with Jon Davids
Making It with Jon Davids
246 - This College Side Hustle Now Makes $700M/year | Brian Scudamore, 1-800-GOT-JUNK (encore)
00:53:22
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- [00:00]
A
Today we're bringing you one of your favorite conversations from last year. It's John's interview with Brian Scudamore, founder of 1-800- Got Junk. What's up guys? JD here. And on today's show, I'm talking to Brian Scudamore, founder of 1-800-GOT Junk. I told you guys about this company back on episode 170 and Brian's here to give us the raw version. And there are so many important lessons in this conversation for from staying focused on your business to creating your own luck, how to solve seemingly impossible problems. There was actually a time when Brian owed $36,000 to his phone company, money he did not have. And he came up with a really crafty solution that most people would never have thought of and it probably saved his company. He's gonna tell us all about that and more. Brian's also a dragon on Dragon's Den, Canada's Shark Tank and author of the book wtf. Willing to how failure can be your key. And hey, if you're a fan of this podcast, make sure to leave a rating or review wherever you're listening. Apple, Spotify. And if you like a specific episode like this one, let me know in the reviews so I can make more of that stuff. Get my best content to your inbox@johndavids.com and now let's get to the show. You're listening to Making it with John Davidson. So, Brian, you have one of those classic rags to riches entrepreneurship stories. It almost sounds like it's made up. It's like a movie script in the making. And I told the story on Instagram and millions of people saw it, so people probably have some idea. But tell me how the 1-800-got-JUNK story happened.
- [01:47]
B
Yeah, it all started here in Vancouver 35 years ago. So these overnight success stories sure take a long time. I was in a McDonald's drive through trying to figure out a way to pay for college and then in front of me serendipitously was a beat up old pickup truck with plywood sides. I looked at that truck and I was like, that's going to pay for my college education. I bought a truck for 700 bucks, drove down alleys and laneways. I had a business that paid for itself in two weeks, then paid for university, but then ironically inspired me to drop out of college because I was learning more running a business than I was studying books.
- [02:24]
A
And when you're sitting in that McDonald's drive thru and you see this pickup truck in front of you, how long does it Take for that thought to snap into your head, oh, I need a job, I need money. I could do that. Was it 10 seconds?
- [02:37]
B
It's interesting, hard to remember, but that was 35 years ago. But when I look back at that, I had not finished high school and I dropped out with one course short. But I knew I wanted to go to university and had to find a way to pay for it. So when I was able to connect the two and go, oh, there's a guy, it says Mark's hauling on the side of the truck. It's filled with junk. He's clearly got a business. Seems like an easy business to start in what was at the time a very tight summer job market. So I just took the bull by the horns, bought myself a pickup and started the business. Now, good question. How long did it take? I feel like I left that drive through and just started thinking, I could do that, I could do that. And then it meant taking action, looking in the classified papers for a truck for sale, a beat up old F100 and that kind of thing. And I took the little steps, but it was a week later I had a business and off I went.
- [03:33]
A
And was that your first stab at entrepreneurship or had you done things before that?
- [03:37]
B
I'd always been inspired by my grandparents, who I was born in San Francisco, raised in Canada. My grandparents had an army surplus store in a dodgy end of the city. And I used to go down there and work every Christmas holiday, summer holiday. And I realized that building a business was like playing a game, ringing the cash register, meeting people, smiles on their faces. It was fun. I always knew I would do something in business. And I did everything from start car washes on the corner and have a price war with one of my neighbors, Eric. I used to at private school, I went to boarding school for a year. I got kicked out of regular high school, my parents sent me to a boarding school, and I started a school store in my dorm room. I'd go down, you know, half an hour walk into town, buy all these chocolate bars and chips and pops and sell them out of my dorm room. So I'd always had that fire and that spirit, and I had always kind of started these little businesses, but this was the first, I guess what you would say, adult business and even having
- [04:37]
A
the wherewithal to sell stuff in college. One of the things I always love to ask entrepreneurs is what, what was your very first side hustle as a kid? And I think it's a precursor to what happens later on. We can see that with Your story and the other thing that you said a minute ago, which I think is really important to highlight here, is the speed at which you acted. You said that you saw the truck, and then a week later, you're knocking on doors with your pickup truck, looking for your first gig. I think a lot of people take a long time between their idea and they want to get it perfect, and they want to take. Take a long time to flesh everything out. And I'm sure you see this with entrepreneurs that you talk to. There's something to be said for momentum and speed and just getting that first dollar in the bank.
- [05:19]
B
I agree, John. I think a challenge that entrepreneurs go through, an obstacle they face is I've seen people try and start businesses, and they spend time talking about them, and they never get around to it. And why? Because the longer you take, the more doubt can sprout in your brain. People will tell you either yourself or those around you, not a good idea, John. I think it's going to fail. It's too risky. There's a million other junk removal companies out there. Why would. What's different about you? And so to get around that doubt, starting something quickly, before anyone has a realization it's a bad idea. And the models I love to follow are the apples of the world, where Steve and Steve get in a garage, and they're just like, oh, there's something here. And they start for under a thousand bucks. If you can start a business with low cash so that if, God forbid, you lose everything, you're not really losing that much, you can start again. That's the way to start a business.
- [06:19]
A
All right, so I've got so many questions about how this story is going already, but let's just stop here for a second. I think you made about 1,700 bucks that first summer.
- [06:26]
B
Yeah. So after I. I can't remember what I did in revenue. All I remember was my net was $1,700, which was not a lot if you took an hourly wage and what I would actually be paying myself, it wasn't very good.
- [06:40]
A
Yeah. But this was the late 1980s. I think 1700 bucks was pretty good.
- [06:44]
B
Yeah, I mean, I think a good summer job, people were making five grand, ten grand. So for all the effort I put in, plus an investment of buying my own truck, it. It wasn't great, but it was enough to get me excited to go, hey, maybe I can do better next year.
- [06:59]
A
And I bet the ironic part is that you actually enjoyed getting paid less money, but working for yourself. So you did this for one summer, two summers. And then after the third summer, you decided this is going to be your full time thing, right?
- [07:12]
B
Yeah, it was really. Once I went to university and started to really have that realization that school wasn't for me. My plan had been to fund my college education with the business. I was making friends, I was learning, but it never connected with me. I'm a very ADD type, and I had a hard time sitting in classes that I didn't enjoy. But the icing on the cake was my organizational behavior. Professor said to me, brian, I know you're running this business on the side. And what gave it away was the big brick cell phone that I pull out that would ring in class. He goes, do you think you could talk to the class about your experience and what you're doing? So I did. I spent a whole class talking, answering questions, and the energy I got and the realization that I'm learning more by talking to my peers and connecting more than I am studying with a professor. That was time to leave. And I left, sat my father down who's a liver transplant surgeon who's done a lot of schooling, and I said, dad, I'm leaving school. He looked at me and said, you're crazy, and tried to talk me out of it. And I said, I got a plan. And I went out and bought a second truck. And off I grew.
- [08:26]
A
This episode is brought to you by my Playbook website selling machine, available right now@johndavids.com playbook here's the truth. Your website is either making you money or it's costing you sales every single day. And most businesses just aren't optimizing their websites as they should be. This leads to fewer meetings booked, lower average order value, and just a whole lot of people clicking away as fast as they arrived. That's revenue you're losing. You can change all that right now with the insights in my Playbook website selling machine. Grab your free copy@johndavids.com playbook okay, so hard question, here you are today, and I'm not sure. Do you have children?
- [09:09]
B
I do. I've got three.
- [09:10]
A
Okay, you got three kids. What do you do when you're talking to your kids or other kids who are maybe 16, 17 years old, thinking about going to school, but they got the entrepreneurship bug. What do you say to them? Is there a level of self awareness that maybe you had that others don't have? How do you reconcile that?
- [09:29]
B
It's a great question and it is a hard one. And there's no perfect answer. But my Opinion is it depends on the kid, and it depends on what their dream is. If someone's dream is to become a liver transplant surgeon like my dad, don't drop out of school. Nobody wants a transplant from someone who's figured it out on the streets. And if someone wants to go into entrepreneurship and they really think that the time is now and they've got an idea and it might not last forever, they've got the next ebay in their mind, hey, maybe go give it a shot now. Would. If any one of my kids said to me, I'm going to drop out of school, I've got one in university, two in high school, what would I say? I would ask them questions and make sure they were making the right decision for them and that they weren't making a decision for me. And at the end of the day, you can always go back to school. That's what I said to my dad. I'm like, dad, I can go back to university and get that degree. I can go to high school and get my diploma. I never did either because this is where I got my education as an entrepreneur, I believe you need to learn by doing.
- [10:30]
A
So you bought a second truck, and did you hire an employee or what did you need that second truck for?
- [10:36]
B
Yeah, we needed to grow the business and take on more capacity. The marketing was working. I started to get some free press. We were on the front page of our local newspaper in Vancouver, got 100 phone calls in 24 hours. The phones were ringing off the hook, and it was exciting. So we added trucks, and I added about one truck a year. But the main reason I added a second truck was it was right after I dropped out of college. I wanted to prove to my dad, you know what, dad, I'm all in. I'm going to double the business. And I went and bought a second truck, and I don't know what it did to my dad, but because it took him about 15 years before he said, okay, you made a great decision here. But it was commitment to me that I was all in.
- [11:18]
A
Do you think having your dad be the adversary, of course, in a loving way, but telling you that you shouldn't be doing this, did that help you move forward faster?
- [11:27]
B
I think so. My dad and I are great friends, and I know at the time everything was from a loving perspective. He was trying to protect me, but I appreciate his questions and his push and ultimately his disagreement of the decision I was making. But it helped me further see inside myself, like, I'm committed and I want to do this and I'm going to do this. And then I might have had something to prove in my early 20s to prove to my dad that I was successful.
- [11:55]
A
So you were doing this for about 10 years and then I think at some point you plateaued at about a million in revenue and you had joined an entrepreneurship organization. What was that like?
- [12:06]
B
Yeah, I, I hit a million bucks after eight years in business. I joined. You need a million dollars to join eo. So I joined the entrepreneur organization and then that became my group of people. People I would learn from, ask questions of, be inspired. And I, it was funny, it had a bit of an opposite effect because I was stuck at this million dollar plateau and I was surrounded by entrepreneurs with much more glamorous businesses than junk removal with big tech companies and things that were taking off. I felt like I wasn't good enough. But what it did is it had me retreat to my parents summer cottage, that this little shack on the water an hour from Vancouver. And I started to say to myself, okay, enough of the doom loop, enough of feeling sorry for myself. What do I want? And I came up with a process I now call the painted picture. What's the vision? I wrote down the future on one page, double sided. And I started to see that five year vision come to life in my mind. And that's when I knew I had something that I needed to start growing. So it gave me a destination and off I went, made it happen.
- [13:14]
A
What was the five point vision?
- [13:16]
B
Yeah, so five five year vision, it was to be in the top 30 metropolitan centers within, within five years time we were in Vancouver. So there were 30 cities bigger than Vancouver population wise. I said we would be the FedEx of drunk removal, clean shiny trucks, friendly uniform drivers. That wasn't who we were at that day. I said we'd be on the Oprah Winfrey Show. This big bhag, this hairy audacious goal that we are going to land the mother of all media hits and things that just seemed like most people said to me, Brian, you're smoking hope dope. Like this is not happening. And I said no, it will. You watch. And having the picture drew people in who wanted to be a part of the game. We were playing the race we were running and it had people go okay, this is cool, I want to be a part. I don't know how we're going to get there, but we're going to find a way. And we did.
- [14:11]
A
So I remember seeing you on Oprah and it was such a novel experience because you were this Weird company from Canada doing junk removal. It almost seemed like a garbage company. Of course, it wasn't a garbage company. It was so much more than that. And you were able to capture so much attention for this story. So in my telling of the story, this breakthrough happened when you turned to your employee and said, hey, you're going to be my first franchisee in Toronto. And that was the next level of the business. Is that how it happened?
- [14:40]
B
You know what? It was breakthrough after breakthrough after breakthrough. Adding going from one truck to two was a breakthrough. Dropping out of college was a breakthrough. Firing my entire team of 11 people five years into the business because I had the wrong people. For me, that was a breakthrough. So while Oprah is like, whoa, things really took off, there was no overnight success happening. It was all building upon, in a cumulative way, every single action and decision that we'd ever made. By the time we got to Oprah, we were only servicing 8% of the North American population. So 8% of all area codes that people could phone into. So someone seen us on Oprah a week before Oprah launched. We didn't even have phone lines to support the media hit. So we actually maxed out with the phone company. They took us to 70 lines. That was the most we could have in our building. And we had to find friends and family to sit down at desks and hope that the phones were going to ring when Oprah ran. And. And every hour it ran across the country, the phones lit up, and it was a big. A big turning point for us.
- [15:50]
A
And you said you were serving 8% of the North American market at that point.
- [15:54]
B
Exactly. So we had to turn on all these area codes for all of North America. And we were getting mostly calls from places that we didn't service. But it got franchise partners who were interested in joining our tribe. It got us all just going, this is a national business or an international business. And that Oprah confidence gave us the ability just to go, let's switch it all on.
- [16:18]
A
There's a lot of talk about the big F in startup and business building, and that's fundraising, and people make a big deal out of it. I think there's a lot of reasons for that. But the other big F that people don't talk about at all is franchising, which, of course, is another way to grow a business and do very well. And you executed it masterfully. Can you explain the franchise model and why it worked so well for 1, 800, got junk?
- [16:42]
B
Sure. Well, thank you for saying masterfully. I think you're too kind. I think, you know, if you could see behind the scenes as we were flying the rocket ship and building it at the same time, there were plenty of errors and mistakes and challenges. But it was big media hits that really helped. Cnn, Wall Street Journal, New York Times. When we realized we could get press, we had six people at one point on the phones and a six person PR department calling up pitching to try and get us covered everywhere. We must have the time when we stopped counting. We'd had about 6,000 media hits. But it was a thing that we figured out. Like you said. Is it a crazy story? It's, you know, a rags to riches high school dropout this and that. But like there's plenty of those. We just figured out that everyone wants to hear a good story. We figured out how to tell it to the press and off we went. Now franchising worked for us. I think culturally I'd always believed I'd loved McDonald's as a brand and what Ray Kroc had built. And he chose franchising as a model because he wanted people to have skin in the game. He wanted to build and develop entrepreneurs who could build these great brands brand with him. I wanted to do the same thing with 1-800-got-JUNK. And so when people would see us on Oprah or CNBC and would pick up the phone and express interest, we had a rigorous interview process to screen people out. But to find those gems who saw what we saw and wanted to be a part of what we were building together. And one year, I think 2003, we had 100 franchises in one year and things just took off. But it was also frantic scrambling those franchise owners back in the day will remember there were a lot of missing systems and things we had not put in place place yet. So it was this constant juggling of more franchise owners. Now let's get the business up to the par of where we need to go. Let's now figure out how to do mass marketing. Lots of things we had to unlock as we grew the business and lots of leaks to repair as we built out in the early days.
- [18:42]
A
And why did it take you so long to jump into franchising? Is it because you didn't know the model existed or because you weren't ready? Could you have done it five or six or seven years earlier or was there something you had to figure out first?
- [18:54]
B
I read a book five years into the business called the E Myth Revisited by Michael Gerber. And it says build your business out like a franchise, even if you don't plan on franchising. People don't fail systems do you need to build systems to scale. And I read that book twice in one sitting. For a guy that doesn't read books, that was interesting. And I was. I said to myself, you know, this is the formula. And we started to look and feel so much like a franchise that in fact, I just looked at it and went, we've got consistent colors and looks of our trucks and our logos and our brands and our uniforms and our checklist systems. It just felt like the way. And so back to the Ray Kroc inspiration. We chose that model and there was no looking back. It wasn't easy. I found my first franchise partner, Paul Guy, who worked with me in Vancouver as our operations manager. He was so fired up about the business for Toronto because that's where he was born and raised. And he hopped in a truck and drove across the country. And 3,500 kilometers later, whatever it was, he started the business. But it wasn't easy because I found that first franchise partner. But finding people following him was difficult. Nobody wanted to start a business in a junk removal franchise where they're just like, why won't I just buy my own truck and start hauling junk? Why? Why should I become a part of a national brand? And my sales pitch to people was always like, there is no national brand. We are creating it. Do you want to be a part of that? And we had lots of pioneers take risks.
- [20:28]
A
When you look back, do you wonder if you should have done it differently or maybe found an investment partner and tried to grow the corporate way? Or do you think that franchising specifically worked for your business better than anything else?
- [20:39]
B
It worked for our business, but it worked for my vision and personality. When I joined the Dragon's Den this year, the number one reason I said yes after applying the third time, they accepted me this year. But I still had to look at it and say, do I have time? Does this fit my why? And it did. And it fit for one reason was I want to inspire entrepreneurship and others. I love being on a podcast like this where someone's going to hear this and I'll never know and they'll go start off a business somewhere and they'll take an idea inspired from you and I and our conversation. I love that passion of entrepreneurs and the fire in them to go start something. So for me, having people who had skin in the game, who owned a business underneath our brand, with us, it was about building something bigger and better together. I didn't want to do it alone. And I didn't want to fundraise because I wanted control over the vision. The vision was the one thing that was most important to me, and I didn't want others saying, hey, this isn't the way. We need to grow, and the board tells you to go a different direction.
- [21:46]
A
So we'll get back to the franchising story in just a second, because I want to ask one more business question. I remember reading that at some point, about five years in, you fired your entire team. And I'm sure there's a lot of people listening to this that maybe don't love their team or the performance they're getting right now. I've actually done this, too, once in my business where I had to fire almost my whole staff. What was it that pushed you to make that kind of dramatic move, and what did you do afterwards to make sure that you wouldn't have to do it again?
- [22:14]
B
Yeah, it's a great question. What was going wrong was I was not enjoying my business anymore. I was five years in, scaled it to half a million dollars. I was making more money than I had ever made before, but I wasn't having fun. And I said, something's wrong. I'm surrounded by people that don't see that this is more than just a job. I didn't have a culture of people wanting to play together and work hard together and have fun. And so it meant making some changes. And they say one bad apple spoils the whole bunch. I had nine out of 11 bad apples, but I really did get rid of everybody, all 11, just to start fresh. And I didn't know if the other two were tainted. So I started with two words. I said, I'm sorry. I had a morning meeting. I'm sorry I've let you down. I haven't given you the love and support you've needed, the direction, the development. Maybe I haven't found the right people. And they respected that. And that was the end of my team and rebuilding so that this would not happen again. I came up with a philosophy that I learned that day was it's all about people. I need to find the right people, and I need to treat them right. And this was a leadership fail on my part. So things were going to change, and they did. And I rebuilt the business by deciding I was never going to compromise on people anymore. I was very, very selective. I took my time to find the right people. And when I realized I had the wrong people, I got them out of the business as quickly as I could.
- [23:41]
A
And have you found the same is true on the opposite side? That you can bring people on that are so good that they just 5 or 10x the business and make it a joy to work in?
- [23:50]
B
Yeah. I mean, someone once told me, Verne Harnish, who is a big mentor of mine, he's got Gazelles, he inspires entrepreneurship, and he was the founder of the entrepreneur organization. And he says that one great employee is the same as three good employees. And when you look at the productiveness, the passion, the contagious spirit, there's so many factors behind what makes a great employee. But when they're great, it rubs off on everyone, it saves you money, it grows the business, and so it's worth looking extra hard for that exceptional human being.
- [24:29]
A
This episode is brought to you by my one minute marketing roadmap, available@johndavids.com roadmap in 60 seconds, you'll get a custom report showing you how people are finding your brand, where you're losing them and how to fix it. We used a decade of data from Influicity and layered in AI to give you a real action plan. It's fast, it's free, and it might just change your business. Go to johndavis.com roadmap and get yours right now. So you've been on Dragon's Den for about a year now, and I'm sure you've talked to lots of young entrepreneurs over the last number of years and you maybe have made some angel investments before. What have you seen that surprised you from this batch of people who have pitched you on their business?
- [25:13]
B
Yeah. So Dragon's Den, we saw over 100 entrepreneurs over 10 days of filming. I've never actually invested in another business until the Dragon's Den. I've been so hyper focused on My3, our three businesses that I never invested in anyone else. So I'm on the Den and I'm learning as I go and I'm sitting behind beside Arlene Dickinson and she's been on for 19 years and she's kind of coaching me in between shots and I'm just learning. And so what surprised me is A, how much I loved it, but B, how unique and different it is. It's not something I grew up with. I've never been an investor, so I had to learn. It put me outside my comfort zone. But the surprise in terms of the entrepreneurs who pitched was how much passion is out there around Canadian entrepreneurship. Now. The Dragon's Den clearly does a great job weeding out people that don't have what it takes. But the people that were presented to us, the curtain goes up, we know nothing except their names and they present their story, their business. Everyone had a great story, everyone's all in and a lot of really good ideas. So it just. I think I was surprised at how inspired I left the Den feeling by how hard and how smart people are working. It was. It's incredible.
- [26:31]
A
Are there a lot of businesses you've come across where they either don't need money or raising money could actually be detrimental to their growth?
- [26:39]
B
Yeah. So we said no to a business. So we did eight deals on TV and three of them turned into actual funded deals. And there was one that we said no to in particular who I loved the entrepreneur. I love the business, but I don't believe this person. And I told him and he wants a five year plan to figure out how to make it work. Because he's so tenacious. I told him, I don't think you're ready. I think that you're not ready to take on advice from an investor. I don't think you're ready for the money. And that you've got systems to create by bootstrapping so that, like I did for my first date, years, really understand your business and get it to a level where you are the front lines, you understand every role and you can be an expert in your business before you really start to scale it and bring in any money. And so I think he's got a five year plan of figuring out how to scale the system. We can help a little bit, but if we were to get in there with our team and investment and try and build it, I think he'd get frustrated and leave. And then we both fail.
- [27:41]
A
So I've been watching Dragon's Den and Shark Tank really since I was a kid. It's been on a long time. And there's something that's always struck me. You could have two entrepreneurs. So one person comes out and pitches and they have a business and let's say they're doing $100,000 in revenue and maybe they get an investment and then somebody else comes out and they pitch a business and it's pretty good. And they also have 100,000 in revenue. And then the Dragons will say, oh no, you're not ready for an investment. It's always those words, you're not ready yet. What does it mean when someone is not ready? Because that always confused me, like, what does that actually mean? And I have kind of a better sense these days. But I'm curious to know Your take, You just mentioned coachability. What are maybe one or two other things that would indicate somebody is ready for an investment?
- [28:27]
B
It's super interesting that you say that actually, John, because I remember thinking that, as I was learning in the Den, why are they saying yes to some and no to others and you're too early and this and that. It didn't seem to make sense. But what I ended up understanding over a few days, going quickly and asking lots of questions was I think someone has to be ready to have the right leadership to be able to lead the growth. They have to have the right team in place or the right leadership to know and experience, to know how to get out and build that team quickly. They have to know what to do with the money. An investor, as you would know, can only offer so much. You've still got your full time business and your deals. And if we spread ourselves too thin trying to help these entrepreneurs, if they need more help than we can give them, I think that's a challenge. So someone's got to be at the right stage to be able to be ready. I can look at myself as I said earlier that I had applied three times for Dragon's Den as a Dragon. The first two times they said no to me. Thank goodness they said no. It would have killed my business. I would not have had the time to take my eye off the ball if my businesses. I didn't have the right team to then start looking at investing in others and it would be a scramble. But now I'm in a position where after 35 years, we're in a solid state and I've got the time and energy to put into it and invest. Understand? So timing is important. You know, people think, oh, I'm out there pitching VCs and I really hope I get the money. Careful what you wish for.
- [29:59]
A
It's so true. The other thing I find is that you'll talk to a business owner and you'll say, all right, what are two or three things that you need to do to grow now? And they'll list off two or three things and you'll say, great, all right, what's the first thing you're going to do after we talk? And they'll say, I'm going to go out and try to raise money. And I think to myself, well, wait a second, those two or three things you mentioned don't require you to raise money. And even if you had money in the bank, you'd have to go do those things anyways. I feel like people have this Glamorization. I call it the tech crunch ification of our society, where every entrepreneur thinks they need to go out and raise money and in order to fulfill and validate their mission. And you wouldn't celebrate getting a mortgage on your house, so why would you celebrate bringing investors on board? You might think that raising money is the fix, but a lot of the time it's not a fix at all.
- [30:48]
B
I think there's a lot of people that, through TV and media and so on, have learned that if you've got a unicorn, go raise money, grow it quickly. Do you have the next Uber? Do you have the next Spotify? Those are so rare. That's why they're called unicorns. But I think people have this like dream and they're like, this is it. I know it is. Chances are it's not. And a more slow and steady approach is. Is the way to go. Something I remember. So I told you I was in the entrepreneur organization surrounded by great entrepreneurs building awesome businesses. More than half of them are not here today in terms of the businesses because they were growing some really successfully, seemingly ideas, but they ran out of money, they made bad decisions, the market changed. And when people grow too quickly and they can't keep up, that's a. It's a tough game to be in. And so I was watching these people and thinking, I was so impressed by all they were doing. And I'm friends with many of them today and they don't have a business anymore. They've learned, but it wasn't what it seemed. So I agree with you 100%. It's like, avoid raising money as long as you can and maybe forever depending on the model you're using and what you're looking for.
- [32:04]
A
So aside from people, what were some of the challenges that you faced as you scaled? Was cash flow a problem? Because I'd imagine you're in a business where you do the job and you get paid immediately. But were you still stretched from a cash perspective?
- [32:18]
B
Cash became a problem. We started to franchise and invested in infrastructures, people IT systems, phone systems. We over expanded for the size we were at. And we were only a $3 million business at the time, but it was a lot of capital outlay with lawyers and franchise experts and so on. And I remember a time when AT&T, the phone company was threatening to cut off our phone bill. We owed them $36,000. And I thought, okay, when your name is your phone number 1-800-got-JUNK. The last thing you can afford to ever happen is your Phone bill, getting disconnected. So we did have cash challenges and we managed them in an entrepreneurial kind of crazy way. But I remember someone in my forum group suggested proactively deal with it, call them up, negotiate, see what you can do. We negotiated 36 payments of $1,000 each. So 36 post dated checks for 36 months, no interest. They gave me a no interest loan at, at&t. Thank you. If you're listening. And I was able to get out of it, you know, I was able to pay it all off and keep our phone connected. And they said as long as those checks keep cashing, we're okay. Sometimes you get some lucky breaks, but you've also got to deal with it. My initial feeling was, okay, I'm going to ignore this thing until it goes away. While going away meant disconnection and realized that's not going to work. So you learn as an entrepreneur and you get creative and you ask for help.
- [33:50]
A
Yeah, getting creative in a business and moving really fast. As we were talking about earlier, the reason to take action quickly is not because you're going to make the right move, but it's because you're going to make a move before you have the time to talk yourself out of it. Because when you're trying to build something from nothing, you do have to be a little bit delusional to believe that it'll work. Because by nature you're trying to push a boulder up a hill. It's going to be difficult. But the example you just gave, the phone company wants their bill paid. And if you couldn't pay the bill, you might think, well, that's it, that's the end of the business. But it was just an opportunity for you to get creative and think about, all right, how could I pay this bill? Turn the problem into a question. You got to be really creative all the time when you're building and running a business at this scale.
- [34:32]
B
Yeah, always. And there's never a moment to sort of get out of that. I think you sort of lose it when you stop asking for help, when you think you know all the answers, when you think you're too good and get, get it in your head. But it's always stepping up and just going, there's got to be a different way. An interesting story I love to tell is in 1997, about eight years into the business, when I joined just after joining EO and looked at really franchising my business, I went out to franchise Experts, people from McDonald's, people from all sorts of big franchisors And I said, here's what I'm looking to do. What do you think? All dozen people, all experts in their own right, had said, it can't be done. This business is not franchisable. They advised me against it. I could have taken that and allowed it to douse my flame, crush my fire. And I said, well, what would make it franchisable? What's missing? And they gave me feedback and ideas that I went back and retooled and was able to actually come back to a few of them and say, well, what do you think? Now they're like, wow, you might be onto something. Building a national brand.
- [35:40]
A
What was the objection, Brian, when they said this will never work, what was it exactly that they were objecting to?
- [35:45]
B
Yeah, they looked at this business and said, we were called the rubbish boys at the time. What is stopping anyone from going out into a low barrier industry that's very fragmented like this and buying their own truck? Maybe they build a regional business of three, four or five trucks just like you. What, what's really different? The other objection was just that someone's going to work in this business and they're going to run a truck. What value can you provide? So how we retooled was 1-800-got-JUNK. A national brand. We would be everywhere if you saw us, just like a subway in California or New York, it didn't matter. It's the same company with the same service and people move a lot, so they do use us in multiple cities. There was value in a national brand and the national PR that would help to. To explode the brand. The other thing was the call center. We added a call center where we would do all the booking and dispatch so the franchise owner could focus on pounding the pavement, driving sales versus just getting out there and really creating an operational infrastructure to build and grow the business. And those two things were the big keys that helped us unlock. Okay, it does make sense.
- [36:55]
A
It's so funny. There's this Elon Musk story, and I know talking about Elon today is a hot button issue, but this is like 10 years ago. He was talking about how he was building SpaceX. And the big challenge, of course, is how do you create rockets that are much cheaper to use. And the big solution, the aha breakthrough there is we're going to make them reusable so that you don't need to build a new one every single time you use it. And there was so many things that you got to figure out along the way. And one of those things, just one of the tiny things was, how do you transport them? And I'm going to get parts of this story wrong, but there's a story that goes something like this. You need to move rockets across the country, and they're too heavy to put on boats, and you can't put them on airplanes, so you got to drive them. And when you drive them, you run into all kinds of issues because you can't take them on the highway. And you need to use back roads. And then if you use those back roads, there are telephone wires and electrical poles. And so there's a story where he was driving or his team was driving these rockets across these back roads in the US and when they would hit these poles, these strings, they would have to get a truck in front, lift the power line up, drive the rocket through, and they would do that over and over again. So this kind of story just goes to show you there's problems, whatever you're trying to do, but the trick is to be able to solve problems and to never throw in the towel. Unless something is physically impossible, it literally can't be done, then there is a solution. The only question is, who's going to figure it out first?
- [38:30]
B
That's completely it. So, a story of our franchise partner in San Francisco, Tom Ritma. He surprised me one day when I went down for a visit to San Francisco to go check up on his franchise and see how I could support him. We get into a helicopter and we fly up to the side of the Golden Gate Bridge. He wanted to take me on a tour of the city in a rented helicopter. And I'm just like, what is going on here? This is the strangest field visit of my life. We're over the Golden Gate Bridge and there's no traffic. And I grew up in San Francisco as a kid, so I'm used to that bridge having lots of traffic. There's no traffic. Then suddenly, 32, 1, 800 got junk. Junk trucks drive across a closed bridge that was closed for five minutes. And I'm like, how did this happen? How did you pull it off? So we land and he tells me the story that he had had a dream when he started the business there. He was from Calgary, Alberta, moved to San Francisco. And he goes, one day I'm going to have trucks driving across the bridge. And he approached all these different people that ran the Golden Gate Bridge to try and get it closed or a lane closed just so he could drive these trucks down and do some shots. They said, well, the only time we've ever closed the bridge is four times in the last 75 years and it's always been for movies. And this person who was a customer of 1-800-got-JUNK by coincidence said, you're not filming a movie, are you? So Tom went and wrote a documentary script about starting the business and brought it to the California Highway Patrol. And one thing led to another and before you know it, he was able to get this bridge closed for five minutes while these trucks drove across. And I'm like, everyone tells you my favorite quote in the world is Walt Disney. It's kind of fun to do the impossible. I would have told him that was impossible. I would have bet all the money in the world on that being impossible. He figured it out, and that's what entrepreneurs do best.
- [40:25]
A
This episode is brought to you by Influicity's new tool, the AI Ads Generator, available now at johndavids.com ads Great ads aren't about luck. They're about leverage. The brands that win are the ones who can launch faster, test smarter, and outspent and everyone else without wasting a dollar. That's exactly what the AI Ads Generator gives you. Instant ad copy that speaks to every customer and feeds the algorithm high performing variations your competitors can't keep up with. It's like strapping a jet engine onto your marketing. And right now it's free. Yes, it's free. Go to johndavids.com ads. That's johndavids.com Ads. Another all time. Maybe the goat entrepreneurship story is how you got the phone number. That iconic one, 800, got junk phone number. And the price tag that you got it for was $0. This is almost too good to be true. And if people haven't heard it, you gotta listen to it now. So, Brian, how did you get the 1-800-got- junk phone number?
- [41:32]
B
Yeah, so there I was with a fellow employee in the office and we're brainstorming on phone numbers. We were the rubbish boys. 738 junk. A local phone number was not going to cut it as we started to expand. So we came up with this based on a got the Got milk? Advertising campaign for the Dairy board years ago. 1, 800, got junk. Oh my gosh. Like the angels could sing. I was just like, immediately a better dancer. I'm like, we got the rainbow here, the pot of gold. So I go, let's call up the number. And it wasn't said it was not available from your area. We called 1-888-GET-JUNK, which was going to be the next best thing. And the guy wanted 100 grand for it. And I said, okay, that's not going to happen. So I went back to my dream of 1-800-got-JUNK. And one of the strangest things that I did when I was having trouble finding who owned the number and whether or not it was actually in service was I hired a design company to create our logo exactly as it is today. 1-800-got junk without having the number. Because for me, it had to crystallize in my brain that we were going to get this number. It is ours. Somehow the universe is going to conspire to assist us. So 59 phone calls is what it took for me to finally get to the right person to figure out where it was working. And it was the Department of Transportation in Idaho. The state of Idaho had this working number for a traffic patrol number. And I get in touch with the dot and I say, you know, I need to speak with someone in your phone room. And they're a big government agency. They got a phone room. They put me through to Michael. Three calls to Michael. This was call number 59 in total. Michael says, I don't know why you want this number, but get off my back, so to speak. And he signed over forms and faxed it to me. He goes, we don't use it much. Not that important to me. It sounds like it's more important to you. And a couple of days when the paperwork cleared, I called him back to say thank you and see what I could do to thank him. Send his team out for drinks, I don't know. And he was no longer with the company. I don't know if it was a parting gift of his. I have no idea what happened, but we got the number, and here we are today.
- [43:44]
A
And did you tell him at any point what you needed the phone number for or. That never came up.
- [43:49]
B
I didn't. And he didn't ask. I just said, this number is a number that I'm really trying to buy. It's important for my business. And I'd really like to figure out if you guys would be willing to give it up. But I got it for, like, this is when, if you make your own luck and your own opportunities by constantly showing up and being persistent. I think a lot of entrepreneurs have stories where magic just happens. It all just comes together. And I would have been willing to pay some money. Probably not a lot, but I got it for free. And I couldn't even pay the guy's bar bill the next day to say thank you because I couldn't get in
- [44:25]
A
touch from the 1-800-got junk phone number to the appearance on Oprah, the franchising, the movie. People can hear these things and think to themselves, oh, Brian got lucky. But the thing is, Brian just keeps on getting lucky. And it makes me think you really are a master at creating your own luck. You see situations that you want and you work and work and work and work and the final result seems like, ooh, it just happened. You woke up one day and this happened to you. But this is really luck because of work and work and hustle and grinding away for so long. And then all of a sudden you
- [45:01]
B
get really lucky every single day. And it's part of what I love to do. When someone says no, that can't be done. Like my dad saying, no, you can't drop out of school and and still be successful. Then you want to show them because it's only impossible until you do it. And then it's like, wow, look at the magic. Look at the pride and what it does to inspire others to go out and do their own impossible things.
- [45:27]
A
So now you have three businesses. 1, 800, got junk and two more. What are those two? And what do they do?
- [45:33]
B
Yeah, so we have wow one day painting, which is a franchise company. Just like 1, 800, got junk where we paint people's homes in a day. So we go in and sort of flash mob paint the home and just get it all done in one day versus the two weeks that it might typically take to paint a home with one or two people. So the quality is not compromised that we lead with quality. But it's a business that has great potential to do something different in a very fragmented space. Shot Shine is windows, power washing, gutter cleaning, Christmas lights. It's what we call the house detailing space. Also a franchise business where we're looking for more people to help us grow throughout North America. And it's a recurring revenue business. When you have a customer and they can use you five times in a year to get your windows done, your gutters done, your windows again, Power wash, put up your Christmas lights, you find a customer, they become incredibly valuable. So we're really excited by that brand and that one day will be bigger than what Nintendo Got Junk is. So it's finding someone who wants to start a franchise and be a part of a bigger and better together type community. That's what's been exceptional for us. We love growing entrepreneurs and all three businesses, while they're very different, what really they have in common is proven recipe making an ordinary experience exceptional through customer Service people based businesses and love every day what we get to do with them.
- [47:06]
A
And did you buy these businesses or are they homegrown?
- [47:09]
B
So while One Day we acquired and rebranded. So the concept was me using a painting company that was called One Day Painting. We ended up calling it wow One Day Painting because the feeling I got when I walked in the home was wow, like you actually got my home transformed in a day. And then shackshine was also started by someone else who pitched us, who did my gutters. I fell in love with the business and we ended up partnering, ultimately acquiring and rebranding the look and feel. And so the timing's been exceptional with all three of them because they fit so well.
- [47:43]
A
Are these all relatively recent?
- [47:45]
B
Wow. One day is about 10 years old. Shack shine maybe close to the same. And they're just in that same way. I told you, we took 10 years to get one, 800 got jumped to a point where it was ready to scale. That's where we're at with our other two brands.
- [48:00]
A
Ten years. That's the timeline. People overestimate what they can do in one year and they underestimate what they can do in 10 years. And it sounds to me like this thing you're building, is this turning into a home services holding company where you want to just dominate the home maintenance and renovation market?
- [48:18]
B
Yeah, on one hand, yes. But, you know, that's my ego talking. Like, wouldn't it be great to have 10 brands? But. But really it's about going deep versus wide. 1-800-got junk is a $700 million business. It'll be a billion dollar and then it'll be a $2 billion. So it's figuring out, where do you put your resources? Are we better focused on the three kids we have in the family or are we better off adopting some more? To me, the end game is just I love building what we're building with great entrepreneurs who enjoy and get juiced up by the growth and the opportunity. So no plans yet for a fourth brand? We certainly see brands come along. We're busy with what we've got. We love what we've got. So it's a tough question to answer.
- [49:01]
A
Have you raised money? Do you have private equity these days or is this still 100% a private company that you own?
- [49:08]
B
Still completely private? No private equity. We don't need the money. And we've been able to grow it privately, like you and I talked about. You hold off on raising money if you don't need to, but there's no plans to go public. This is controlling the vision, loving what we do, and just continuing to do it even better and better.
- [49:27]
A
I'd imagine you're getting knocks on your door every day because this is like a private equity professional's dream.
- [49:33]
B
Yeah. So here's an interesting thing, and maybe I'm giving away a secret, but I can always change this one. So anyone that emails me with the word private equity, somewhere in the email, it actually ends up going into a filter and just gets deleted. I was getting so many emails near daily from people pitching, wanting to talk, and I love responding to people's emails because I feel it's rude to not reply. But I got too many of them. And once you engage with someone on the private equity side, well, we don't have to do anything now. We can keep talking, we can come visit, we can go for a beer. And it just took too much time and energy away from the business. So those emails get blocked from my email and I hope I'm not missing any good ones. But no interest to sell, no interest to go public or raise money. And so you have to filter out distractions sometimes to keep you. To keep you going in the right, right way.
- [50:23]
A
Well, there's so much that people are going to be inspired from this story and there's so much to learn from it. But the big takeaway I'm getting is that you've just been doing the same thing for so long, 20, 30 years here, and there's still so much room to grow. People get to 2 or 3 million in revenue and they think that they've tapped the market. And here you are, hundreds of millions of dollars and one brand, and now you're onto three brands and there's still lots of room to grow.
- [50:49]
B
Yeah. You've studied a lot of entrepreneurs. I've watched a lot of your social media, and I think you get it. Tell me if you disagree. But laser focus and growing where you're planted, those are things that really help businesses over time continue to build momentum. Are you better off starting one business and moving on to a second, or are you better off sticking with the one and continuing to grow it when you found the right one like I've been lucky enough to have, or the right three. It's sticking with them and growing them like crazy.
- [51:21]
A
The way I think about it is that every business starts off with extreme optimism because you don't know what you don't know, and there's a beauty in complete ignorance. And then you get into it and you realize that all the mud and the dirt and all the grunt work you're going to have to do. And then once you get past that, it starts to go well and it gets better and better. And then five or ten years down the line, this thing has really taken off. The problem is that most people never get past that second level. They have the wonderful optimistic early experience, and then as soon as they realize that this thing is not all it's cracked up to be, they quit and they stop and then they're done. And then they start something else. And of course they go through the same cycle over and over again. So all they're doing is spinning their wheels and at step one and step two and they're never giving themselves the opportunity to really succeed. You just restart the clock and you gotta go through the same thing over and over again. And I hope people listening to this can take that from you. Stick with it, make your own luck, keep going. And I really appreciate you sharing the story today, Brian.
- [52:24]
B
Yeah, no, thank you for having me. You're very good at this. And you know, I don't always say that, but you are a great storyteller with great questions questions. And it was a very interesting hour together. So I appreciate you including me. Thank you.
- [52:37]
A
Thanks for listening. If you enjoyed this episode, make sure to leave a rating or review on Apple and Spotify. Wherever you listen to podcasts helps other people find the show and it lets us know that we're doing something right. We'll talk to you guys next time. If you're spending more than $50,000 a year on marketing, I've got something for you. It's a playbook I wrote called how to Build a Social Media Selling Machine. You can grab it now for free@johndavis.com Playbook this is the nine step formula we use for our clients at Influicity to turn their social media channels into reliable revenue engines. Grab it right now@johndavids.com Playbook.