Summary of "The Homegrown Advantage: Why Training From Scratch Beats Hiring Experience" | The Home Service Expert Podcast

Podcast Information:

• Title: The Home Service Expert Podcast
• Host: Tommy Mello, $200 Million Founder | Forbes, Inc., Entrepreneur Columnist
• Episode Title: The Homegrown Advantage: Why Training From Scratch Beats Hiring Experience
• Release Date: January 17, 2025

Introduction

In this compelling episode of The Home Service Expert Podcast, host Tommy Mello engages in a deep conversation with seasoned entrepreneurs Chris Lee and Daryl Kelly. The episode, titled "The Homegrown Advantage: Why Training From Scratch Beats Hiring Experience," delves into the strategic advantages of building a team from the ground up versus hiring experienced professionals in the home service industry.

1. Humble Beginnings and Shared Values

Tommy Mello opens the discussion by sharing his modest upbringing in Michigan, emphasizing the resilience and blue-collar work ethic inherited from his parents—his mother a realtor and his father a mechanic. This foundation sets the stage for the conversation about building successful businesses from scratch.

Chris Lee and Daryl Kelly echo similar sentiments, highlighting their own humble beginnings. Chris mentions, "We all came from very similar backgrounds... building something pretty amazing" (03:15).

2. The Philosophy of Pricing and Compensation

A core theme of the episode is the strategic approach to pricing and employee compensation.

• Chris Lee underscores the danger of competing solely on price:
  "Don't price yourself to impress others... if you're trying to be the cheapest, all you're doing is trying to buy them by discounting" (00:00).

• Tommy Mello reinforces this by emphasizing the importance of compensating employees beyond just financial incentives:
  "You can compensate them in culture and opportunity... so much value." (00:51).

This discussion highlights the importance of establishing a value-driven pricing strategy and creating a supportive and enriching workplace culture to retain top talent.

3. Building Strong Partnerships

The dynamic between business partners is crucial for sustained success.

• Chris Lee describes his partnership with Daryl Kelly as akin to having a "work wife," balancing each other’s strengths and managing dominant personalities:
  "We've been doing business together for almost 20 years... we had two divorces along the way." (07:16).

• Daryl Kelly adds that having complementary traits and mutual respect has been instrumental in their long-term collaboration:
  "With Chris, it gives me that edge, that little bit more craziness that you just don't get from anyone else." (10:16).

Their partnership exemplifies how complementary skills and mutual support can drive business growth and resilience.

4. Scaling the Business: From Garage to Multi-Million

The journey from a small garage operation to a multi-million-dollar business is a testament to strategic planning and relentless execution.

• Chris Lee reflects on the importance of seeking help and learning from the best:
  "Success leaves clues... I work with people smarter than me." (17:03).

• Tommy Mello shares his experience of hiring top-tier consultants and focusing on areas like marketing and culture to propel growth:
  "I started becoming an avid reader... I fly out to visit the best in the industry." (18:04).

Their stories emphasize the necessity of continuous learning, strategic consulting, and leveraging expert knowledge to scale effectively.

5. Hiring and Developing Talent: The Homegrown Advantage

A significant advantage discussed is the strategy of developing a homegrown team rather than hiring industry veterans.

• Chris Lee explains their approach to hiring individuals with strong personalities and training them extensively:
  "We don’t hire industry people because they're trained up incorrectly... we shape them into salespeople." (51:05).

• Daryl Kelly highlights the importance of vision and cultural fit in building a cohesive team:
  "Chasing that dream was always something greater that brought in the right partners and employees." (32:04).

This strategy ensures that employees are fully aligned with the company’s mission and values, fostering loyalty and high performance.

6. Importance of Company Culture and Trust

Building a robust company culture based on trust rather than mere loyalty is crucial for long-term success.

• Chris Lee emphasizes that loyalty often equates to a master-slave dynamic, whereas trust fosters genuine collaboration:
  "Trust culture... you're going to bring value and I'm going to make sure that you receive value." (41:58).

• Tommy Mello advocates for transparency and open communication:
  "Everybody knows exactly what we do... we give equity down to the installer technician level." (40:06).

This approach cultivates an environment where employees feel valued and invested in the company's success, leading to higher retention and productivity.

7. Dealing with Private Equity and Business Transitions

Navigating relationships with private equity (PE) firms presents unique challenges and opportunities.

• Chris Lee shares his experience with PE, noting both the financial benefits and the loss of control over business operations:
  "Every entrepreneur should go and experience [selling to PE]... I might have negotiated a better deal, but I wouldn’t go the PE route again." (55:02).

• Tommy Mello discusses maintaining control over critical business areas like marketing while leveraging PE resources:
  "I'm in control of marketing... I will make the phone ring off the hook." (63:30).

They highlight the importance of aligning PE strategies with the company's core values and maintaining autonomy over key operational aspects to ensure sustained growth.

8. Personal Development and the Role of Habits

Personal growth and disciplined habits are fundamental to both personal and business success.

• Chris Lee recommends the book Atomic Habits by James Clear, emphasizing the power of small, consistent changes:
  "Atomic Habits gets my mind right... I'm ready to take on the world." (76:07).

• Daryl Kelly suggests Becoming Supernatural by Joe Dispenza, focusing on meditation and rewiring the mind to overcome ingrained reactions:
  "Meditation removes programming in your body so you can think and make conscious decisions." (82:26).

• Tommy Mello shares a personal poem titled "I am Habit," illustrating the profound impact of habits on one’s life and business:
  "I am habit... Train me, take me, be firm with me and I will place the world at your feet." (76:07).

These insights underscore the necessity of developing strong, positive habits to drive continuous improvement and resilience.

9. Conclusions and Takeaways

The episode concludes with actionable insights and motivational advice for listeners:

• Tommy Mello encourages entrepreneurs to prioritize personal and team development, maintain transparency, and build a culture of trust and continuous improvement.
• Chris Lee and Daryl Kelly emphasize the value of a homegrown team, strategic hiring, and fostering a supportive company culture to achieve sustainable growth.

Key Takeaways:

• Strategic Pricing: Avoid competing solely on price; focus on value and fair compensation.
• Homegrown Teams: Develop talent internally to ensure cultural alignment and high performance.
• Strong Partnerships: Build resilient business relationships based on complementary strengths and mutual respect.
• Continuous Learning: Seek expertise and never stop learning to drive business growth.
• Trust Over Loyalty: Foster a culture of trust to enhance collaboration and retention.
• Personal Development: Cultivate disciplined habits and invest in personal growth to support business success.

Notable Quotes

1. Chris Lee [00:00]
   "Don't price yourself to impress others... if you're trying to be the cheapest, all you're doing is trying to buy them by discounting."

2. Tommy Mello [00:51]
   "You can compensate them in culture and opportunity... so much value."

3. Chris Lee [07:16]
   "We've been doing business together for almost 20 years... we had two divorces along the way."

4. Daryl Kelly [32:04]
   "Chasing that dream was always something greater that brought in the right partners and employees."

5. Chris Lee [41:58]
   "Trust culture... you're going to bring value and I'm going to make sure that you receive value."

6. Tommy Mello [40:06]
   "Everybody knows exactly what we do... we give equity down to the installer technician level."

7. Chris Lee [51:05]
   "We don’t hire industry people because they're trained up incorrectly... we shape them into salespeople."

8. Tommy Mello [17:03]
   "Success leaves clues."

9. Tommy Mello [76:07]
   "I am habit... Train me, take me, be firm with me and I will place the world at your feet."

10. Daryl Kelly [82:26]
    "Meditation removes programming in your body so you can think and make conscious decisions."

Final Thoughts

This episode of The Home Service Expert Podcast provides invaluable insights into building and scaling a home service business through strategic hiring, fostering a strong company culture, and continuous personal and professional development. Entrepreneurs in the home service industry will find actionable strategies and motivational advice to elevate their businesses and achieve sustainable success.

For more insights and actionable strategies, listen to the full episode on The Home Service Expert Podcast.