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Why Most Trades Owners Can’t Scale Sales (And the Fix) Built on Doors, Not Google: The $500M Growth Playbook How Door-to-Door Scaled a $500M Company and Why It Works Anywhere
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- [00:00]
A
You're about to HEAR How a $500 million pest control company was built through door to door sales. Now, if you're in roofing, H vac, plumbing or solar, don't tune out. This company didn't scale because of pest control. It scaled because of a culture and a recruiting system that works anywhere. People drive growth. As you listen, stop thinking about pest control and start thinking about your team, your turnover, and your growth ceiling. That's where this conversation gets real. So, David, you're the of door to door. You've been in the space, what, 24 years?
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B
24.
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A
24 years. Why do you think door too is such an incredible market, A way to go to market regardless of what service you are?
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B
I think the beauty about it is you're not waiting for somebody else, right, to call in. Like, it puts you in control in the driver's seat to be able to drive your growth to whatever level you actually want to grow it to.
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A
Yeah, we work with a lot of like, guys in the trades. You got the H Vac, plumbing, electrical. Most of these guys, they would consider themselves demand services, right? They're waiting for the customer to call. This is toilets broken. You know, a H vac isn't working in, I'm hot, I need this or whatnot. And so during those times, you know, life is good. And then it's interesting in, in that same space, they have these spots that they call the shoulder season, right? And the shoulder season is when demand goes down and a lot of them struggle. What kind of advice would you give to those type of guys?
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B
Sounds like the perfect time to get out and knock tours, right? Like, even for H vac, I think about that. Like, I'm allergic to dust, right? And so like a, you know, some sort of a plan for somebody to come out every three or four months to, you know, swatch switch on my filters or whatever is key. And like, you could literally go door to door and just asking people that. And you may pick up other additional business along the way too.
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A
And you've been a part of like some large door to door organizations. Like, what was the largest organization you ever ran from? A total rep revenue, Some type of situation.
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B
Yeah. So I owned Active Environmental the year we just sold last. Or I sol I sold out last year for we were doing about 508 million in revenue a year.
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A
That's a decent amount of revenue.
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B
That's not bad.
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A
I mean, average contract in that space is worth how much?
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B
It's probably like 800, 900 bucks. There's some that go up to a thousand.
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A
But So, I mean, 500. I mean, we're talking about 500,000 customers plus, I mean. Yeah, 600, 700,000 if they're at a 8 or 900.
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B
Right? Yeah.
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A
Contract value. That's crazy.
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B
Yeah. And multiples, you know, they're anywhere from one to three times revenue.
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A
So, I mean, that's, that's decent.
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B
Yeah.
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A
So, I mean, you've made a little bit of money in your day.
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B
We have.
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A
That's awesome. But, like, I mean, how do you get to six or seven hundred thousand thousand customers that, like, most guys watching this are like, dude, I'm struggling to get a hundred a year, you know, let. Let alone 6, 700,000. Like, what was it that allowed you to One, recruit the talent to be able to do this and then do it? The vast majority through door to door.
- [03:09]
B
Yeah. So it's. It's all baby steps. Right. You start with a single location, and little by little you start figuring things out. It's. It's a very complex answer if you really want the whole story. But, you know, most people start out as a technician, probably. Right. Or. Or a sales rep. Yeah. And they go, okay, I'm gonna go get a few friends, you know, once they get going. But they're probably very likable. You know, they're. They're good with customers. They'll bring a few friends in, and then they get stuck where they're kind of like, I call, like the tech technician mindset. Right. And for that spot, it's like, you got to get your head out of the business or out of, you know, that mindset, and start managing people. And it's hard because it's expensive for most people to go, I'm no longer going to be servicing customers. And then there's this new mindset. You get into the manager mindset, and you're, you know, managing maybe 20 different people, 30 different people, but then it's like, how do I actually scale? And that's a whole other, you know, skill set. And so, like, what got you here won't get you there. And then what got you here won't get you there. You have to keep developing and learning along the way. So then it becomes all about, you know, building systems and processes and training manuals and training videos and trying to get all of your secret sauce from your recipe into, you know.
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A
So what was the shift for you? Was it because you were always just like, sales forward and then figure out operations or, like, what made the shift of like, oh, I can Take and scale this thing. Hey guys, it's Chris. If you're finding value in what you're hearing, go ahead and like and subscribe. That way people just like, you can find this content for free here on YouTube. Now let's dive back in the show.
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B
So initially, uh, when I first got in sales, I was horrible. I sold zero for five days and everybody else around me selling one to four accounts per day. And I'm going, all right, am I gonna go home? Like, this is like, am I not gonna have to quit? And I went to a Barnes Noble, bought, you know, six sales books and just started reading Brian. Yeah. Zig Ziglar, Tom Hopkins, all the legends, you know.
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A
Yeah.
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B
And yeah, by the end of the summer, I was number one sales rookie. I have a couple hundred reps and you know, I'd figured it out, but that's kind of where my obsession started. And you know, getting excited about, I got passionate about it because it was such great money. You know, with commission, you're incentivized to do better.
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A
So if I'm a, if I'm a plumber watching this right now, yeah. I'm thinking to myself, well, David, dude, you got, you got your start completely different than me.
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B
Sure. Right.
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A
Like I used to freaking turn wrenches. Right. And then I started running my own, my own company and I, it was a one man band. Then I hired a buddy to do the same thing and now we have two vans or now I finally got out of the van, I got three vans. And like, not many people got the opportunity to be raised in sales the way we were.
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B
Right? Right.
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A
Like the, and for those that are watching, the summer door to door model is unique.
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B
Right.
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A
And it's not like anything else in the home services. Like most, most of these guys are just trying to hope to get another customer by having their Google LSA dialed in. Right. That their phone number rings, they have their CSR that sets the appointment and hope that the plumber closes the deal. Not a salesperson. The plumber closes the deal when they go out to the home. So like that's the lens that most of these guys are watching this thing from. And then we come from a background of like, dude, we're competing on the doors while going to college.
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B
Right, Right.
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A
The reading the Brian Tracy books, getting paid 100% commission going and like scaling sales teams through pizza parties and everything else.
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B
Right.
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A
Like, how do we bridge that gap for the guy that's watching this right now and he's like, dude, there's no.
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B
Way you know, I think one, if you, if you can see the growth opportunity and you're excited about it, start reading about it, start reading about sales, Start training. And you know, there's, there's so many great systems out there to learn. Like I think of like us, like we just put everything in a training manual over time so that we could replicate that with each sales rep. And a lot of that was because my, of my horrible experience. And so, yeah, if you want to get good at whatever it is, you got to put in the 10,000 hours, you got to practice or whatever. 10,000 hours for sales. You know, it's not, it's not that hard. If you already have a great mind around what is the service that's like half the battle. Then it's just how do you deliver the message in a way that people can hear you and that you're persuasive?
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A
Right.
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B
To show that you're a confident, competent service professional.
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A
Yeah.
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B
So yeah, start reading, start watching sales videos about how people close and, and then start creating that, practicing back and forth. We used to record our sales reps and then we'd have a big screen TV in every office and we put them up on the big screen TV and we'd usually have 15 people and we'd say, okay, if you like something, you don't like something, tell us. We'll press pause. And then we want you to give, you know, the sales rep feedback on how to improve and we just keep going all the way through it and that's how we get everybody better.
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A
So what, what is your thoughts for like a business owner that's never been a great salesperson? Right. Like, they've just had a desire to grow a business and they've figured it out a little bit.
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B
Right.
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A
But they have no idea how to train. They know how to, no idea how to script. Like what, what is the next like three steps that you're given to that person so they can actually start focusing on building a sales.
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B
Yeah, I'd probably, I'd. I could give you examples of sales books. Somebody needs to create this actually for this industry. So I don't know if you guys have got this figured out yet, but I would create training videos that are, are just in general, not necessarily something specific, but just start with different industries and have people watch them. Because I do think that the same type of approach can work for a lot of industries.
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A
Yeah.
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B
You know, oftentimes you're out there, you may already have a bunch of customers in the area, which immediately builds credibility with them to let them know, you know, I service so and so I have, you know, customers here and here. You know, I'm already in the area today taking care of them. If you can be here, I'll give you some sort of a discount up front. But you know, do you mind, if you have a minute, I'll walk you through what we're doing.
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A
Yeah. So it's interesting, in these industries there are sales trainers, right? Like there's, there's sales training platforms. You know, next level, we, we do different training stuff.
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B
Yeah.
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A
But at the end of the day, a lot of these guys, they just tried to offload it to these, to somebody else.
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B
Right.
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A
Like, oh, I'm just going to contract this out. I, I see it very common in these industries where basically they offload their marketing, they offload their sales. Hopefully that I invest in this platform or this program and it's just going to automatically teach my people. Like what would you say? How important is it that a CEO or a CEO of a 10 man organization, how important is it for that he truly understands his sales process, the ability to sell?
- [09:56]
B
I think it's critical. I mean it was for me and I wasn't just great at sales. Like, I really got passionate about the service side and what we could do there. I got passionate about HR and building core values and, you know, growing that. I got passionate about finances and looking at expenses. And so to me it's, it's more about obsession and, and then taking that laser like focus and just turning it to the next thing. Like if you're a great plumber and you've got that technical side down pat, it's like, okay, we'll take that same level of excellence. The way you do anything is the way you do everything. Take that same level of excellence. Just take some time and start focusing on the sales side. Because when you, when you learn it, then you can speak to it and people can tell, like when you're speaking truth to them, they recognize and they're like, this individual is confident. I believe in what they're saying. And then you also know that people aren't just kind of telling you whatever. Like you can read between the lines if someone's actually, you know, fibbing or whatever else.
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A
Like, so what if, what if I'm Billy Bob and I'm just like, dude, I do not have the gift of gab and no matter how much I study, I can't figure it out. I'm just really good technician. What would you, what would you say to what's the solution for someone like that?
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B
I don't know. I, I, you got to believe in yourself, right, that you're willing to start putting in the time to figure it out. For me, that's my personality is like, there's nothing I can't figure out. Just give me the time and I will eventually practice enough that I can get better.
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A
Yeah. Yeah. Well, one thing, one thing we, we talk about is like, man, if you're not him, you need to recruit him, right?
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B
Like, you need to make sense.
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A
Like, you need to bring in the person that can be that visionary, that can be that sales leader. Because I think just the same way you're sharing is like, like sales is so mission critical to scale, right? Like, and, and to be able to go and combat shoulder season and to be able to go and grow into multiple locations and everything else. Like, it's all, it's always driven by sales. You, you spoke to obsession. What do you mean by obsession?
- [11:52]
B
It's the one character trait I've seen in every great entrepreneur. Same thing with high achievers. It could be a music artist, it could be some, an actor in Hollywood or whatever. They're just completely obsessed about their craft and it enables them to continue to keep focusing on it and making. Like, just because I started out as a salesperson didn't mean I was going to do that for rest of my life. I said, okay, well, I kind of conquered that. What about sales management? What about recruiting people on board? And then it was, what about the operation side? Like, how can we think differently and think outside the box? I talked to tens of thousands of, you know, homeowners. I've heard a lot of things consistently that their pest control is missing in the space. So why don't we start experimenting with this idea or this idea and if it works out, we'll expand it to, you know, additional locations or whatever. So it's, it's more. And then it was entrepreneurship and then it was scaling, you know, across multiple states and like, how big can this go? And then it was, what about really cool headquarters or really developing the culture? So it's just like a step by step, baby step learn. And then when you feel like you've mastered something, going, okay, what, what's next? What, what else can I do? What would be exciting? If you're obsessed with, I don't know, that's it. Like, so I was, I went, I went to, on Spring Bake with my friend Ryan and his, his stage name is Cascade. He's famous world DJ or whatever. And Guy makes tens of millions of dollars a year as a dj and we're sitting on the beach. Yeah, as a dj.
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A
So crazy.
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B
We're talking about like, I just asked him, like, so kind of what made you successful? You've been doing this kind of same thing 20 years or whatever. What is your secret? And he's like, you know, I just stuck with it. The compound effect, like, what? He's like, no. He's like, Honestly, there are DJs are better than me.
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A
Right.
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B
You know, but they just, they couldn't get through the grind. Like the really hard times, you know, those first five, six, seven years, it was rough. He's like, I'd play almost anywhere. He's like, but over time, you know, you keep getting more calls that it starts to snowball. And here I am. He's like, I can't believe. You know, it's amazing that I get to be able to do this.
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A
You know, I couldn't agree with that more. Like just the relentless focus and not being distracted.
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B
Right.
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A
Like distracted by failure, distracted by success. I see so many guys that they start to see a little bit of success and then they start looking at other opportunities. Oh, I need to take this money and get seven streams of income or I need to go do this. Sure. The other. And they don't keep doing the thing that got them there.
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B
Right.
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A
Or yeah, they get a few hiccups.
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B
Right.
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A
And they just don't keep going. So talking about like active, so growing this thing to a half a billion dollars in sales a year or in revenue. What was like the timeline of how many years did that take?
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B
Yeah. So I like to joke that I'm like a 20 night or 20 year overnight success.
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A
Yeah.
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B
You know, because. So I built one company initially. So I got out of college, I saved about 300 grand. My old boss threw in money too, as a silent investor. And we built my first. The first company.
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A
Yep.
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B
And I almost bankrupt the company initially. And I. It was the first inclination I had, you know, it was because, you know, the. You have to pay out your commissions in advance of the revenue all coming in. You're well aware of all this.
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A
Yeah. Cash flow of pest control can be a nightmare.
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B
It was a great problem to have. We thought we'd maybe do four or 5,000 accounts. We had 7,500 accounts, which nobody did a.
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A
That was summer one.
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B
Yeah, summer one. So it was recruiting. Really great year, really great sales training or really great averages. And it was the first time where I'm like, I might need more Money Jesus is crazy. But, you know, I went to the top sales reps and I said, hey, do you mind if I pay you out in another month or two? You know, we did so well. And I'd been in the trenches with them training, and they were, you know, they were all coming back the next year. They were like, yeah, it's fine. I got, I'll pay you 10% interest. They're like, great. That's. That's fantastic. And they, many of them stayed with me for a really, really long time. So it's like, have to have that trust if you do get in that spot. But I realized I needed more cash, and so.
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A
So can I just point out something real quick?
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B
Yeah.
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A
I. I always say one of the greatest signs of a leader is the willingness to have hard conversations. Right? And so, like, obviously that was a hard conversation. You have to go to your top performers and be like, yo, I can't pay you. Right? And, and, and also understanding that there's almost always alternative solutions to the current situation, a lot of people would have just been like, well, I guess I'm. I'm done. Like, I can't, I can't afford to pay. I'm just going to max out my credit cards, pay them, and then go out of business.
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B
Right.
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A
Or, or whatnot. So there's almost always a better solution if we're just willing to have the hard conversations.
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B
Definitely.
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A
So you go and you, you do this. So that's, that's first. First year you make it through.
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B
Yep. And then, you know, the next few years, it's kind of like working in a lab and, like, figuring out what works, what doesn't. Experimenting. I'd ask my boss, what are all the things that you would fix if you had the time? He was super busy guy, had multiple kids and just, you know, caught up in life. And he's like, I. He gave me a list of like 30 things. He's like, if I had time just to work and tinker on things, this is what I would fix. So I had, like, a great idea of what do we need to do to improve the business. We experimented with it the third year, I expanded to a second location, and then I got to learn, well, how do you to scale? Like, do I have a model that I can actually scale? Right. Because I couldn't be there every day, but I was close enough I could go there every other day. It was about an hour and a. A half down in San Diego. We were over kind of by Orange County, Corona.
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A
This was multiple locations that you guys were running service territories, I guess. Yeah.
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B
And so that was kind of my first test there, too. And then I was like, I really need to get cash if I want to grow like crazy. So I sold off the business, but I kept the golden goose. So I kept the salesforce, my key leaders, my operations leaders.
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A
So you just sold the accounts?
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B
Just sold the accounts with the corresponding technicians? Technicians. Especially in pest control, it's pretty easy. You can retrain them, you could train new ones within probably two, three weeks. Right. And so we were flush with cash. I sell that business for it. Said I sold it for 13 million. I have an NDA, but that's good enough. Took all that through in the next one, and then we went into four different states that next year. You know, we were in nine states by the time I sold that one A few years down the road.
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A
What year was it that you sold that one?
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B
That was 2008. Right. The great Recession.
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A
In fact, you sold the second one you sold in 2008.
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B
Oh, no, this is. The second one was 2011. 12.
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A
Okay. So the first one. One that you get 13 million is 2008. You take it. You. You go and reinvest. If I remember right, pest control companies struggled during this Great recession time a little bit, basically, from my college standpoint, like, I was in the recruiting game right, during this time, right. Home security and those type of things. And it seemed like most pest control companies went off the map, right? Like shut their doors, didn't. Weren't able to flex into it very well while home security and whatnot kind of pushed through and made. Made it through. And then. And then we saw another rise of pest control kind of come out through that.
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B
That was like our mind. Like, if you're in that summer sales world, I mean, maybe there was some fluctuations in it. I remember. I think Eclipse sold off during that time, and they kind of went out. Whereas, like, we took all that money and, like, ramped up, you know, into four locations immediately, and then into eight, and then into 12. And so we expanded really, really quickly. And pest control in general is very resilient. The joke is that, you know, the bugs don't read the Wall Street Journal. Yeah, there's always bugs. Yeah. So, yes, you know, it was very consistent. And when we sold that, when we sold eco first, you know, we were in nine different states, west and Mississippi. You know, we kind of learned how to run a regional business. Then it was like, what else can we do? If we had tens of millions of dollars to expand and so kind of same thing, we just kept expanding, expanding with Altera. That was the third company.
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A
Was this always self funded or did you ever go raise a fund or anything?
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B
No, it was all self funded. I was really intent on making sure we had the control to do what we wanted. Yeah, especially like Altera went out and got a huge headquarters with the NCAA basketball court and a movie room and golf simulator, ping pong, foosball, that kind of stuff.
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A
This was the start of Altera.
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B
Altera, Yeah. I was studying Silicon Valley companies, trying to figure out, like, what are all the cool things that, you know, Google and Meta and Zappos are doing and can we bring those in and make pest control sexy? You know, because it's not a very sexy industry. Right. It's hard convincing a bunch of college kids that, hey, you're going to make a ton of money doing this. And when, when you walk into a beautiful building and then you have, you know, the best training on the planet, it was always about the training for us. Like, if that was my general thesis from the beginning, on the sales side, if the sales reps are truly selling more on average than anywhere else, then you'll be able to grow that consistently. It's not just about hype or flash or, you know, we're the cooler guys to come be with. And it was, it was so true for us. Like the average sales REP would sell 70% more with us if they had switched over from another company from the prior year. And so we kept all those stats and the data just to be able to use as a proof point to people when they were trying to decide whether or not to come on. So with Altera, kind of same thing, we did that for another four years, you know, expanded to a couple thousand cities and then it was like, all right, what do I want to do? I feel like I'm replicating the exact same thing over and over. And I was getting kind of bored.
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A
Yeah.
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B
And that's the hardest part, right? The obsession starts to wear a little bit where you're like, I don't know what else really to do here. And so then I'm like, okay, I'm going to take my, my right hand guy Bass and put him as in a CEO. I'm going to step back as chairman and founder. I can just focus on strategy. The things that really I'm, you know, that was most passionate about. And then I'll have vest run the day to day. And yeah, so we did that for another almost, let's see, eight and a half years, and then just sold that one recently. So it kind of gives you like the, the steps.
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A
And so basically, I mean, what I'm hearing is over all those years, you kept building across upon the same exact foundation.
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B
Right.
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A
And you were, you're selling off the accounts, but you're essentially one organization.
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B
Yeah, it's really the same organization. That's how I look at it. Yeah, it was just a different name. It was like, you can't use the same name because we don't want you using that name to go steal the old customers back. You know, from Terminix to see we sold to.
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A
But what was your biggest growth year from a percentage standpoint?
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B
Oh, geez. I would say, like, on average, it was probably 35 to 50% overall. But when you start out, when you sell off a business and then the next year you grow even bigger, I mean, you can double, you know, in size when you're, when you're smaller. Right. But yeah, as you. If you're going to do something for like eight and a half years, you might, you know, you're huge in the beginning, and then it's like, all right, 35, 50% is more. You're consistent, like kind of what you average out.
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A
Yeah. I mean, what, what I'm hearing was a consistent focus on culture and training.
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B
Right.
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A
And especially in industries that aren't necessarily sexy by, by design. Right. Like, you know, you have all these Silicon Valley companies, right. Facebook and, and all these guys that, I mean, they're flush with cash because they're selling information. Right. There's. There's not a lot of cost of good involved in, in these type of, in these type of programs. And so because of it, they're investing into all these, the cool hype and the, the cool nerd stuff, but that can also be applied in the blue collar space. And yeah, I mean, and I, I believe that. And I've always, I've always shared that with our audiences. Like, look, you got to be. Do something that's completely different, and it's kind of the Jesse Cole approach. Are you familiar with Jesse Cole?
- [23:33]
B
I'm not. No.
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A
Jesse Cole. Savannah Bananas.
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B
Okay.
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A
Heard of Savannah Bananas?
- [23:37]
B
I have not, dude.
- [23:38]
A
Oh, my goodness.
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B
Like the name, though.
- [23:40]
A
You need to look into Savannah Bananas. This is a guy that literally took one of the most boring sports in the world, baseball, and I think I have. And revamped essentially it from the fan experience. Right. And, and just overall just applied culture to, to baseball where, like, tradition is super strong and you only do things a certain way. For the last 130 years.
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B
Yeah.
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A
Now he's like, you know, completely flipped it on its head. The, the performances and everything else.
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B
It's kind of like a Harlem Globetron.
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A
Similar, similar to a Harlem Globetrotters. It's still a competition, but there's just like different rules and stuff.
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B
Okay.
- [24:17]
A
Like for example, you know, pop fly, foul ball. If a fan catches it, you're out. You. You only win by the inning. You don't. Runs, don't score past that particular inning. You know, there's just all kinds of different stuff. You have to, you have to be able to dance in order to play. And you know, they, they do introductions of the, of the players from out of the crowd instead of coming out of the tunnel type deal. Like just all kinds of.
- [24:42]
B
That's really cool.
- [24:43]
A
And the, the crazy thing is what, what he's been able to accomplish is, is now you've got a three year wait list to be able to get into a Savannah Bananas game at retail price.
- [24:53]
B
No way. Right.
- [24:54]
A
Three million fans that are. That are waiting to be able to buy a ticket and you know, you got a 40 to 80, 80 retail ticket that is selling for 4 to 500 do on the secondary market right now. And like the demand is just through the roof and they're creating more teams and it's just all these different things and I think just, it's proof that when culture is applied to the boring.
- [25:17]
B
Right.
- [25:17]
A
That you can do something absolutely incredible. Obviously you've done that. Yeah. In, in the, in the pest control world, you know, focusing on the employee with, with the cool sports. And you know, I think lucky for us, we've been a polar part of multiple culture cultures in the door to door space. In the Utah space. Right. Like u. Utah is kind of the king of, of door to door and, and where a lot of the guys that are watching this, they're just like, dude, what like basketball court? Like, how, how is that even a thing? You know, massage therapist. What are you talking about?
- [25:49]
B
Right, right.
- [25:51]
A
Free meals. Like I'm, I'm dumbfounded. And so. But yeah, what, what would you say would be like two to three culture things that you would do if you're running a boring business right now, you've had stagnant growth. Maybe you're, you're sitting at 4 to 5 million a year in your H VAC plumbing business and you haven't really scaled sales. Most of your technicians are sales people. You don't really have like a sales department and you're trying to implement culture Training, sales. Like what are two or three things you're doing right now as a business owner?
- [26:22]
B
So you know what? So I love reading and technically, to be fair, I don't read anything anymore. Everything's audible. I have adhd, so like that works much better for me. And I love.
- [26:31]
A
But I have free time.
- [26:33]
B
Right. Like it's so much easier if I'm driving or I'm, you know, catching a plane. I've got one earpod in my ear and I'm constantly listening to something. So a great book is Tony, Tony Hsieh's Delivering Happiness.
- [26:45]
A
Yes.
- [26:46]
B
It's, it's incredible. And it's about 15 years old, but to me it's like one of these staples. It changed my life in terms of how I looked at business and building a culture. I was thinking Zappos, right? Yeah, Zappos, that's right. I was thinking about going back to get an executive MBA just to figure out how to try to keep that same family feel that I originally had. As we started scaling, because I'm like, gosh, I'm like losing control. It's getting too big. Like, how does everybody. Nobody really knows me or like.
- [27:11]
A
Right.
- [27:11]
B
You know, whereas before I used to know like their kids names, you know, what their ambitions were with the company. We'd have company events and parties.
- [27:18]
A
So what was the most amount of like contractors slash employees that you ever had inside your organization?
- [27:24]
B
Seven. About 7,000.
- [27:25]
A
7,000.
- [27:26]
B
That's right.
- [27:27]
A
That's crazy.
- [27:28]
B
That's a lot. So your core values were. Is key. And Tony's book, that's all it talks about. So his first experience, he built a company called, I think it was Linked Exchange. And he sold it for like 200 plus million dollars. And when they were small, like he loved it, he was passionate about it, excited about who he's working with. But once he got over 20 employees, they were growing super fast and he, they just started hiring anybody to fill the spots. And then he no longer, he's like, I don't even know people's names. I don't get. I don't really relate to them. It was just, you know, warm bodies, fill those seats. And he said, I'm never going to make that mistake again. So this book is all about how do you create core values? How do you create your own unique company culture that's, you know, for you. And there's lots of different ways to be able to do that. And not his. It's not that his core values are right for everybody. He's like, you Come up with your own. He's like, here's kind of a template. But you know, depending upon what industry are in, the other cool thing is you can actually go, I'm not sure if this is still true, but you, you can go to Zappos and they would take you on a tour for an hour through the whole building. And so really cool, you know, facilities, like, really quirky company culture, but they were so into it and you would listen to them in on customer calls and the way they treated people and they had like extra flexibility to do kind of wild and crazy things to like wow the customer. And then they even had this three day cultural conference you go to and executives could go in. You know, I can't remember how much we paid, but you could sit there and like listen to all of their secret sauce. They would tell it to you. And I met Tony on multiple occasions and I asked him like, okay, you gotta tell me why you're doing this. Because you're giving away all your, your secrets. Like, these are your competitive advantage. Why would you do that? And he's like, oh, I just think the world would be a better place if everybody operated this way.
- [29:18]
A
Yeah.
- [29:19]
B
And I was like, oh, yeah. I'm just, that's. I'm selfish. It's my bad. Like I, it made. Start wanting to like, get back some of the reasons why I do podcasts now. Yeah, it's, it was, I'm so grateful for what he gave us, but I can't think of a better book for someone to read that and go, okay, this is how you build a company culture and how you scale something.
- [29:39]
A
I love it. I love it. Yeah. The, the abundant mindset of that is such. Is so powerful. You know, I think too often small minded and small business owners think from a standpoint of like, I have secret sauce. I can't let anybody else have it. The reality is most people will not go and implement.
- [29:58]
B
Right?
- [29:58]
A
Like, yeah, even, even if you teach them everything.
- [30:02]
B
Right.
- [30:02]
A
And so that's why for me, like, you know, when, when somebody's got a new idea and they're like, hey, I need you to sign an NDA. I'm like, for what? Right? Like, like, like I, when I was young, I used to think all my ideas needed NDAs behind them. And then I got older, I'm like, dude, literally I can just share all my ideas, all, everything with, with anybody. And rarely is anybody going to actually grasp onto anything and start implementing.
- [30:27]
B
Right?
- [30:28]
A
And if they do, I'll just partner with them and figure out you know, if they're actual action takers. And so it's, it is interesting though. But like when you, when you have that abundant mindset that it just allows for, for greatness to, to be able to happen within your own organization, inspiring others outside of it.
- [30:44]
B
Yeah. So I'm definitely guilty of that. It's funny, as I got older and I started like just being like, I'll just tell people whatever. Like, especially like people just starting out with a small pest control, I'm like, they're never going to catch up. Just be open. What was fascinating is one idea for me to them. Yeah, it might help them, but one idea that I learned from them, it could be worth millions of dollars to me. Right, right. If they're like, you know what, we've been working on this too. Because if you're willing to share, people are now going to be vulnerable and open up to you and share something back. It only takes one idea for us to make a lot of money. Oh yeah. Especially.
- [31:15]
A
Yeah. When you're doing it at scale. Right?
- [31:16]
B
Yeah.
- [31:17]
A
Like you improve a 500 million dollar company by 1% now, now you're literally talking about a 5 million dollar increase. Their 1% on their 2 million dollar company is worth 20 grand.
- [31:28]
B
Exactly.
- [31:29]
A
And so yeah, it is so, so interesting. And there's, there's so much that, I mean so much money, so much success, so much abundance out there that. Yeah. And I, I think the guys that have, have grasped onto that fact have really found a ton of success. I, I see it in the trades industry. I see it like even like Sam Taggart in the door to door space. Right. Like door to door. When he launched Door to Door con and that type of thing, I thought like dude, what are you doing? Like, like nobody's gonna, nobody's gonna buy into this.
- [32:02]
B
Right.
- [32:02]
A
Like everybody's trying to hold their own secret sauce. Like my door to door group. I'm not, I don't want you to do it. And, and then he created just this cool, abundant feeling of like recognizing people across different companies and, and being able the board and, and it's turned into something, you know, phenomenal and really better for everybody.
- [32:23]
B
Yeah. And kudos to him for having like the vision to do that because initially if you told me that idea was going to work, it'd be like no, no one's going to send all their sales reps to mingle with other sales reps. It sounds like it could be a recruiting nightmare.
- [32:34]
A
Right, Right. And I thought the only person that would invest in this is the sales rep. And the sales rep can't afford to do it, but instead. Yeah. He's got these business owners that are literally.
- [32:44]
B
Yeah.
- [32:44]
A
Pain to be trained by somebody outside of the organization. Yeah. It's so. It's so interesting.
- [32:49]
B
It's fun to see, like, ideas cross pollinate too. Right. Where it's like, you may learn something. You may not do home security, you may not do solar, you may not do roofing. But if you can pick up one thing from them, it's like, I never thought about that. Applying that here. Same thing. You can make a lot more money.
- [33:06]
A
Oh, yeah, for sure. So I know one of your secret sauces in scaling your business was getting employee slash contractor buy in.
- [33:14]
B
Right.
- [33:14]
A
Basically an equity pool that allowed these guys.
- [33:18]
B
That's right.
- [33:18]
A
To be able to share in the upside. Can you speak a little bit more to that?
- [33:21]
B
Yeah. So one of the beautiful things about how. How we did it by selling off, you know, every four years. You know, it wasn't always that popular. The idea of selling people are like, wait, am I gonna have a job? He's like, yeah, everybody. Everybody here, like, you're gonna chill for six months. I'm gonna still pay you. Relax. And then we're gonna start up again, and we're gonna have even more money and we're gonna scale even bigger, and there's gonna be more opportunities to go all. It was hard to sell people on that. We got a lot of negative rhetoric from other companies like, oh, they're gonna sell out or whatever. And the beautiful thing about it is we had so much money, we never had to give the company away to other people. And I was able to make control the entire time. And so when we started Aptiv, which is our fourth company, it's like, hey, you know what? I. I've made a lot, you know, nine digits or whatever. At this point, I'm gonna give back. I'm gonna. We're Gonna put a 25 equity pool together for all employees. So when we sold on this last round, like it was nine digits that we gave back to our employees, and many of them made six and seven figures.
- [34:25]
A
That's really cool. So how did you so 25, like, how did you structure, earn out or, you know, rank in. Into that pool?
- [34:33]
B
Yes. It was all based on numbers so that everybody's. Everybody's incentives were aligned to grow. So if you were a sales manager, you know, depending upon how many salespeople you had and how many accounts you put on each year, that would determine how much of the Overall LTIP you would get if you were an operations manager in a location, depending upon how many, you know, accounts you managed overall, as that thing would grow, then that was your portion of the LTIP executives is a little bit different where, you know, it was kind of dependent upon their specific.
- [35:03]
A
So basically you created different ways for people to earn points into the, into the pool and then your percentage, percentage of those points was your percentage of the pool.
- [35:14]
B
That's right.
- [35:14]
A
Got it, Got it. Yeah. This is a, it's actually a same strategy that I, that I teach inside our community as far as creating these long term incentive plans for the employees. The, the point structure.
- [35:26]
B
Yeah.
- [35:27]
A
And, and creative and, and getting creative with different ways that different positions inside the organization can earn those points and, and created a weighted, creating a weighted system based on that. Because you know, one of the, for me, I, I agree with you. Like one of the, the fastest ways to be able to scale a company is to get real buy in from, from everybody involved to help them feel and see that they actually have a piece of the pie, that they take ownership over it as if it's their own company.
- [35:58]
B
Right. If it's a competitive market, it's like you want to maintain that talent like you were trying to recruit. You know, there's only so many people out there to recruit from if you're in some of those markets. And so you're trying to make sure it's as attractive as possible and keep them on for as long as possible.
- [36:12]
A
What was the largest payout that somebody within your organization made that wasn't a founder or a like an executive position?
- [36:20]
B
Millions.
- [36:21]
A
Millions.
- [36:22]
B
Yeah, that's, there's some like just wildly successful, you know, regional sales managers or vice presidents of sales and made a.
- [36:28]
A
Lot kudos to you to make it happen. You know, I, I, one of the reasons I'm so passionate about doing these type of structures is I was a part. So Prior to founding SoulGen, I had worked for three different organizations and all three of them had some sort of LTIP structure.
- [36:47]
B
Yeah.
- [36:47]
A
And I saw, I saw one that was structured the right way, but never, there wasn't a lot of clarity made around it. And so people fantasized about having way more than what they actually had.
- [36:58]
B
Yeah.
- [36:58]
A
And I saw the buy in there and then I saw another organization that there was constant promise of, hey, we're going to do this. But then they never actually did it.
- [37:09]
B
Right.
- [37:10]
A
And, but I saw the buy in of like guys, like in hopes of having it. I'm like, man, if people are willing to work that hard and scale that big. And both these organizations scaled very large, right? Like extremely big into the billion dollar range of revenues and stuff like that. And I'm like, man, if you, if people are willing to work that hard for this, what if we can actually deliver on it and, and be able to structure it in a way where, where guys actually know exactly what that means to them and are able to really participate in it. And that was, that was our, our game changing aspect. Right? Because like when I, when I sold my business, you know, we were in business four and a half years and I had 11 other people besides me and my main business partner that were made multimillionaires in that transaction, you know, which is just like one of the coolest things that you can be a part of and frankly is the, the secret sauce. Like most, most guys that are sitting at that 4 or $5 million range, it's like they own 100% of the business.
- [38:10]
B
Right.
- [38:11]
A
They're not willing to give up anything. Right. Like they, they understand they probably should, but they won't. Right. They're just. And so just being willing to part a little bit can be a drastic game changer.
- [38:23]
B
Besides that, it's in the founder's hands too. Like if you bring in private equity, you bring in other people, it's, it's, it's more, less popular for them just to be like, oh yeah, we're just going to generously give this out to everybody. There should be very direct aligned incentives for what it is they're going to achieve and that they're going to expand the pie and therefore it's worth it to give that ltip out.
- [38:41]
A
Right?
- [38:42]
B
Right.
- [38:43]
A
Yeah. One of, one of my favorite examples of like having a small piece of a very large pie is Elon.
- [38:49]
B
Right.
- [38:49]
A
So you know, from, from PayPal, his first big exit, you know, he, he owned 11.2%.
- [38:57]
B
Right.
- [38:57]
A
Of a 1.8 billion dollar business and it paid amount, it was like $165 million. Right. And so where most people are just again, just hoarding their couple million dollars of equity that they're, they're sitting on and not willing to expand that pie and really understand the, the opportunity out there.
- [39:16]
B
Yeah.
- [39:17]
A
So besides delivering happiness, what are a couple books that you would recommend to any entrepreneur, entrepreneur that's wanting to, to go and grow and maybe adopt some of the principles that have, that have hit home for you over the years?
- [39:29]
B
Yeah. Another one I just read, Unreasonable Hospitality by Will Gadara. Have you read that one yet?
- [39:36]
A
I started It. I have not read all the way through it.
- [39:39]
B
It feels like, you know, like a, like very Tony Shea esque, almost like it's like, you know, the second film that came out as a, you know, follow up, but really incredible. It's about someone in New York City that wanted to have the very best restaurant in the world. And his journey over time in terms of what he did. I don't know that it's scalable. Yeah. Because it's so intense. Like, in terms of what his waiters had to know, you know, every little detail is down to the finest little thing. And it's just. It's just tricky. But. And then also, you know, all of the. I'm trying to think, like, all the good to great books.
- [40:18]
A
Yeah.
- [40:18]
B
Are really solid. I think that if you want to build something long, you know, that's enduring and be excited about it, I think that you've got to continually be just engaged on, you know, building a better business, not just a bigger one.
- [40:35]
A
Yeah.
- [40:35]
B
And if you're always trying to work on it and tweak it and make it better, that can be interesting. I'm telling you, like, once you get to the point where you're like, well, it's just for the money, it won't do it. Like, you'll lose your interest over time.
- [40:45]
A
Right.
- [40:46]
B
Because your focus should be on the business. You know, it shouldn't be on how much you're going to make someday. And that's such a fallacy, too. Like, you know, everybody that sells a business, you may have felt this too. You sell it, but then you get what the Olympians have. Right. The. The gold medal syndrome.
- [41:01]
A
Yeah.
- [41:01]
B
Like 70 of Olympians are depressed.
- [41:04]
A
Yeah.
- [41:04]
B
After they achieve it, because it's like they've lost their true north.
- [41:07]
A
Right.
- [41:07]
B
Like, well, my whole life I've been building up to this moment. What's next?
- [41:11]
A
And the actual. The actual achievement didn't fulfill them the way that they thought.
- [41:15]
B
Right. And they think, oh, well, what's next? Another gold medal? Like, well, kind of already did that, I guess. Yeah, I'll go get another gold medal and I'll do it for multiple years in a row. But it's almost like each gold medal is less satisfying.
- [41:26]
A
Right.
- [41:26]
B
As you do it, because you've already done it, you're like, ah. And so it's, it's. How do you learn to enjoy the journey along the way? Right. Like, the thing you really get from entrepreneurship or high achievement, any field, any, you know, sport, it's being. It's the discipline, you Gain. It's the character you build, the lessons you learn along the way, and hopefully you're enjoying the journey because it's not as exciting once you get to the end. Yeah.
- [41:53]
A
One thing I always share is like, the emotional spectrum exists no matter where you're at on the map, right? Like, you can have a billion dollars in your bank account and you can still feel depression. You can still feel like all, all the emotions are available at every step of the way. And so it's just like in, instead of, instead of focusing on, on that destination, it's just like, okay, how do I control the emotion? And what, what gives me happiness at all times? What, what makes me depressed? You know, what. And really understanding those, those different things and, and how you function. One of, one of the things I, I heard a while ago that I've adopted as my own was like, this guy was asked a question of, hey, what, what's your number? Like, what. What's the number in which you're going to be done?
- [42:37]
B
Yep. Right.
- [42:38]
A
And his response was, I will all. I will never be done. I will always be climbing a mountain. And, and to me, the reason why they hit so home is like, when you no longer look at life as, like, certain destinations, but more of like, hey, I'm always going to be climbing the mountain. I'm always going to be putting in the work. I'm always going to be improving. Then it, then it removes the anxiety associated with hitting certain deadlines by certain time with, you know, or fantasizing even that that is going to somehow change my life, right? Because, I mean, of course, there's a certain amount of money, a certain amount of oxygen that always, you know, is going to bring us some level of satisfaction or improve our lives. But beyond that, right? It's, it's the climb of the mountain. Not necessarily the, the current view of, or the view that you're going to achieve once being there.
- [43:33]
B
There's this guy at my alma mater who, he gave 10 years of his life to help build up the entrepreneurship program. And so he went out to a bunch of, you know, the entrepreneurs that had graduated and said, hey, do you mind helping me with this? And we were all in a meeting. We annually met. Almost all the entrepreneurs would fly in, and we were sitting in a group and he goes, all right, let's just starter, let's go around. And I want everybody to tell me what your number is, which is a little awkward, especially at byu.
- [44:01]
A
So is this Norm?
- [44:02]
B
No, this wasn't Norm. No. So this is Scott Peterson Okay. But Norm is awesome, too. Probably my favorite teacher I've ever had, for sure. I mean, he makes accounting come live, Right? Just like, you get to the second accounting class and you're like, wait, this is not what I signed up for. Give me Norm, you know, again. Yeah, but we're going around the table and everybody. Some people are kind of uncomfortable. Like, I don't know, like 100 million, a billion, like, people are just throwing out numbers. Some are very certain. Others, you know, didn't even want to say. But he gets back. It gets back to him, and he says, you're all wrong. Really? Okay. And he goes, the answer is just a little more. Right? Because it doesn't matter what you achieve, it's never enough. Right. Whether you know, your soccer player or whatever, you always kick the goalpost back further and you try for a little bit more. And until you realize, like, that's what you're chasing, it's never going to be enough.
- [44:57]
A
Right.
- [44:57]
B
And you just gotta. At some point, you got. You gotta wake up. I have some friends where they're constantly chasing and they haven't figured it out yet.
- [45:04]
A
They haven't realized that the post keeps moving.
- [45:07]
B
Yeah. It's like. Or they're. They're running from, you know, their financial trauma from growing up or whatever it might be. And, you know, it's like, you got to make peace with that.
- [45:15]
A
I love it. I love it. Appreciate you sharing some value where if. If guys want to reach out to you and, you know, pick your brain or, you know, get a.
- [45:25]
B
Your.
- [45:25]
A
Your eyes on something, what's the best way to get. Get a hold of you?
- [45:28]
B
Yeah, Just reached out me on LinkedIn. It's fine.
- [45:30]
A
All right. And so LinkedIn, not Instagram or any of the other social medias.
- [45:34]
B
Oh, man. You know what's funny is I. I literally am off all social media.
- [45:38]
A
Good for you.
- [45:39]
B
Yeah, I just have to read Anxious Generation. I'm like, I'm gonna live the example for my kids and just get off it. I still have it for motivational quotes or topics I'm interested in, but it's less about posting or seeing what every single person's doing all the time.
- [45:52]
A
Right. Love that. Appreciate you jumping on.
- [45:56]
B
Hey, thanks for the time.