How Redwood Services Built a $1.1B Home Services Platform | VIP Guests Richard Lewis & John Conway

Summary

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Episode Summary — To The Point: Home Services VIP Room

Episode: How Redwood Services Built a $1.1B Home Services Platform
Air Date: May 26, 2026
Guests: Richard Lewis (CEO, Redwood Services), John Conway (COO, Redwood Services)
Host & Panel: RYNO Strategic Solutions, Chris (Host), Chad, Aaron

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Main Theme

This episode explores the rise of Redwood Services to a $1.1B valuation in the home services industry. Richard Lewis and John Conway dive into their people-first approach, leadership lessons, the evolution and consolidation of the home services market, and keys to scaling businesses from $3M to hundreds of millions in revenue. They also tackle what’s broken in the industry, and share unfiltered insights for contractors facing today’s operational and growth challenges.

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Key Topics & Insights

1. Redwood’s Growth Philosophy & Core Values

• People and Process Over Profits (07:00, 08:04)
  • Redwood’s foundational belief: take care of people, and profit will follow.
  • John Conway:

    “Building something great is phenomenal. And... building something great the right way... sets you at a whole nother level... I have a huge appreciation for Richard’s leadership and vision for that.” (08:32)

• Consistency of Mission (08:04–09:03)
  • The values discussed at their first lunch in 2020 are still driving the business years later, now on a much larger scale.

2. How the Industry Has Changed for Contractors

• Market Consolidation & Sophistication (12:22–14:23)
  • John:

    “There are more sophisticated players in most markets… It’s more of a challenge for mom and pops to compete, especially as it relates to the marketing side... Still a fragmented market, but scaled players can own 25–30% collectively in big markets.”

• Reliance on Technology & Digital Marketing (14:23–16:20)
  • Richard:

    “The consumer today is very different... how to communicate and interact, the world of digital marketing... It’s just getting harder and harder... That’s why more are saying, I want the support of a group like Redwood so I can focus on the fun stuff.” (15:27)

3. Diagnosing Business Stagnation: Key Growth Barriers

• Where $3–$5M Companies Get Stuck (17:20–20:36)
  • John:

    “Leadership... There’s a ceiling... you gotta sometimes shock them... think bigger.”

  • Common weaknesses: missed opportunity calls, lack of goal orientation, dispatch inefficiency.
  • Richard:

    “Three themes: lack of process, people, and budgeting. There is a best practice way to run these businesses... The ones that grow budget, hold themselves accountable, and drive towards a vision.” (18:56)

4. Where Margin Leaks Out

• Labor and Materials (21:10–22:51)
  • John:

    “We probably see the most margin leakage in labor... overtime, being understaffed... Also, not being aggressive enough on pricing.”

  • Equipment costs for smaller operators are “obscene,” and dealers must leverage supplier competition for better pricing. (23:05–24:27, E)

5. Building High-Performance Teams at Scale

• Recruiting to Where the Business Is Going (26:09–31:31)
  • Richard:

    “Hire for where the business will be, not where it is... I’ll interview a hundred people to find the right person. We just don’t settle.”

  • Willingness to “get it wrong” quickly and correct.
• Outgrowing People & Leadership Accountability (29:57)
  • Richard:

    “If you run a business for five or six years and haven’t outgrown someone, the problem might be with you.”

6. Leadership Development & Breaking Through Growth Ceilings

• Self-Development is Crucial (31:31–34:29)
  • John:

    “I came out of Nexstar confident... but not qualified to be COO of a $700M company... The first thing I needed to do was recognize that in order for the business to grow, I have to grow faster than my team.”

  • Investing in executive coaching and remaining humble are key facets.
• Different Leadership ‘Phases’ (37:56–41:21)
  • Chad describes:
    1. “Doer Phase”
    2. "Empowerment Phase"
    3. “Enterprise/Accountability Phase”
  • Richard:

    “There’s nothing that either of us can do to drive the outcome except make sure the right people are in the right seats. That’s a hard adjustment.”

7. The Value of Peer Connection and Shared Learning

• Transparency as Motivation (49:44–50:36)
  • Redwood prints a physical magazine for all partner managers sharing org-wide performance to foster transparency and healthy internal competition.
  • Richard:

    “Part of what we do is just get 21 amazing contractors in a room and put up a slide sorted by EBITDA growth... and you don’t have to say anything else after that.”

  • John:

    “We’re doing something special... sharing with teammates what they’re a part of, but without doing it in a bossy way.” (47:04–48:32)

8. What’s Broken in Home Services (Unfiltered)

• Employee Retention (57:33–59:57)
  • Richard:

    “What’s broken is employee retention... The amount of turnover, 50–60% per year, is draining. We’ve started to make excuses, saying ‘it’s just the industry.’”

• Over-Reliance on Marketing (59:43–62:14)
  • John:

    “The marketing side is broken. We’ve convinced ourselves marketing’s job is to make the phone ring. When you’re in home services and it's sunny and 72—doesn’t matter who does your marketing, the phone’s not ringing... Spending more doesn’t win. Operational inefficiencies show up, and it creates dependence.”

  • Spending north of 10–12% of revenue on marketing usually signals operational problems, not marketing problems.

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Notable Quotes & Moments

• On Scaling with Core Principles:

  “All of the kind of principles that we put in place when we started this business... the only difference today is instead of a thousand teammates, it’s 3,000 teammates and a lot more.” — Richard Lewis (09:18)

• On Outgrowing Leadership:

  “If you run a business for five or six years and haven’t outgrown someone, the problem might be with you.” — Richard Lewis (31:12)

• On Retention as an Industry Problem:

  “It’s hard to grow a business when you’re turning over 50, 60% of your teammates annually... We’ve started to make excuses for ourselves, like, ‘that’s just the industry.’” — Richard Lewis (57:49)

• On When More Marketing Isn’t the Answer:

  “Rarely have I seen companies who have spent more and been able to win spending more... It’s not been my experience. Typically when you start spending north of... 10–12% on marketing, the only thing that’s really showing up is operational inefficiencies.” — John Conway (59:55–61:40)

• On Leadership Growth:

  “I needed to grow as a leader in order to help the business grow... I spent 45 minutes this morning with an executive coach that I lined up myself.” — John Conway (31:31–34:29)

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Timestamps for Key Segments

• 05:45: Introduction of Richard Lewis & John Conway
• 07:00: Redwood’s Values: People & Process Over Profits
• 12:22: How the home services landscape has changed
• 17:20: Barriers for $3–5M companies (“tuck-in” and platform acquisitions)
• 21:10: Margin leakage: labor, materials, pricing
• 26:09: How to recruit and build a scalable, high-impact organization
• 29:57: Outgrowing people and leadership self-awareness
• 37:56: Leadership phases: doer, empowerment, enterprise
• 49:44: Transparency and competition: The Redwood Nation magazine
• 57:33: What’s broken: employee retention and marketing dependencies

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Tone & Color

• Candid, peer-to-peer dialogue—the hosts and guests trade real-world war stories, poke fun, and dig deep into both personal and organizational challenges.
• Open, non-corporate—guests are encouraged to avoid “PC” answers and share their actual opinions even on controversial topics.
• Action-oriented and self-reflective—hosts and guests urge listeners to “don’t talk about it, be about it” and put plans into real execution.

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For Listeners Who Missed This Episode

This episode offers a rare inside look at how a $1.1B home services platform built and scaled—by obsessing over people, process, and transparent leadership. Practical take-aways for contractors at any size: hold yourself accountable, avoid the marketing money pit, build deep teams, stay humble, and solve for retention as early and as often as possible. Redwood’s success, by their own telling, is about making connections and not being afraid to outgrow your old way of doing things.

Memorable mantra:

“Don’t talk about it, be about it.” (69:00, B)

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Transcript

[A]

What's the password? Don't talk about it, be about it. Welcome in to the to the Point Home Services VIP room, where we invite you, the listeners, in to hang alongside some of the biggest, baddest, and most successful VIPs of the home Services industries. You never know which surprise guest will show up next, so let's get this party started.

[B]

Hey, what's up? To the Point listeners, it's your boy. Welcome to the Home Services VIP room. That's the to the point Home Services VIP room. And we got a couple VIPs in here today. No, it's not you. Or it's not you, Chad, or you, Aaron. Sorry, we're past that. You guys are just my boys. But it's also good to have my two new co hosts in here. Excuse me. My one new co host back for a second week in a row. Ag. I'm so proud of you, Chad. Look at him go. It's like we just said, sent him off and he's going and doing his thing. So proud.

[C]

Aaron, I'm glad to be here again. It's exciting.

[B]

Okay, loosen up a little bit. Your face is red. It ain't that embarrassing.

[C]

I was in Phoenix and I got sunburned over the weekend. You know, you weren't there when I was there, so I didn't get to spend any time with you.

[B]

That's right. I wasn't. I apologize. And you lost a couple thousand bucks to what, Tommy? Still on Golden Tea? Sorry, man. Yeah, yeah, I'm sorry. I really missed that. Don't participate in those things. Hey, listen, it's gonna be a random thought before I. I introduce our guests. I was driving Mason to. To school this morning, and I haven't done this in a while. I, I, we were talking about idioms for a while there, you know, for, for a while, Chad, you remember doing that? Like, I just was come up with things like, oh, throw the baby out with the bath water. I'm like, what the hell does all this stuff actually mean? Well, I had one of those things pop up in my head today. John probably knows the term throw the baby out with the bath water for no other reason than you've probably just heard it before, not referencing your age whatsoever, John, but it was cut a rug. I heard them say cut a rug on the radio. So that's one of those things. It's like, you know, I'm like, I wonder what the origin origin was of cut a rug. So I'll bet you, John, you know the answer to this. Do you know what the origin was. The origin was of cut a rug.

[A]

You know, I. I'm gonna give you the best guess. And the first thing that comes to my mind for what I do know about this, and I think cut a rug was actually a dance.

[B]

Okay. So you're really close. I really love that you're acting like you don't know. So I. Yes. So cut a rug was like, back in the, like, 20, you know, 20th century, from the early 20s, 30s, 40s. It was when you were dancing so hard, John, you know, doing a little spinning and flipping around and like, you were. But typically, they were dancing on rugs in a lot of instance, not just gym floors. And so you was dancing so hard that you were going to cut through the rug.

[A]

Yep. Yeah, a little bit. Kind of like Ellen on Seinfeld, Right?

[B]

I'll bet you used to cut a rug back in the day, John.

[D]

He still does.

[A]

You should know. Yeah, I can gritty. I can. I definitely have the gritty down pat.

[C]

And.

[B]

And then really, I mean, well, you have a camera on, so let's. The only.

[D]

The only gritties. On very special occasions, we've seen them pull it out twice. One was when we got something over the finish line that took two years to materialize. And the other one was when we did our. Our transaction last year. We got John to pull out the gritty. And I can. I can share the. I can share the footage at some point.

[B]

I would love it if you could share that. We're going to cut it right into this so we can share that we're doing it. Aaron's favorite move was always the Roger Rabbit. That's a. Oh, that's a classic, classic move. And then Chad's just an old Macarena. You know, he loves the Macarena. Like, that was probably the simplest one we get him to do every once in a while. I get him to do an arm pump every once in a while. We'll see.

[C]

Yeah. You don't get. Doesn't move out on the dance floor every time we have anything going on. He always just kind of hangs way back. Way, way back.

[B]

I try. I try so hard. I mean, with the nickname 22 Savage, you think that he'd be out there dancing a little more, but. But he doesn't.

[C]

So.

[E]

Yeah, not my cup of tea.

[A]

And I can tell you Justin Jefferson would be highly irritated at what I call the gritty, by the way.

[B]

Hey, guys, you know what? Also not, you know, go to. Go ahead and take a nice, fun mood and somber it down a Little bit sad news about Brandon Clark, your Grizzlies. He's a. He's a Desert Vista guy. He's a Phoenix. A Phoenix from out here. That's sad. I think he's like 28, 29 years old.

[C]

Bummer. Yep.

[D]

Young guy, bunch of injuries. My kids were. Were in tears. The Grizzlies have caused a lot of pain in our. In our household, but obviously someone dying is. Is just beyond.

[B]

Yeah, well, it's kind of equivalent to being an Arizona Cardinals fan, just so you know. It's. It's pretty bad. Pretty bad out here. But, hey, good news is we got the hardest schedule, you know, of every schedule for next year, which is just what we needed. And I'm so grateful that the Cardinals bumped my seats up another $3,000 a year. So that was. Thank you, Michael Bidwell, you piece of. So, yeah, here I am, 24 years later, still paying it. So who's the idiot? I guess it's me. Okay, so maybe I should get into the actual episode here. So a couple of the guys you've been here talking on here. We got Richard Lewis, CEO, Redwood Services, who I. We met back in. I met in 2020. I think it was the first time I met you, Richard. Somewhere around there.

[D]

Yep.

[B]

And also John Conway, old school legend, man, Conway Services, back in Memphis, Tennessee, also. I think. Yeah. You still the COO over there at Redwood, John?

[A]

I am still the coo, still over

[B]

there cranking away next to our coach. Let me know him. I know, Chad, you worked with John directly, but two. Two great guys, man. I've been able to. To witness, Richard, specifically your journey from almost start to. To today, which is really cool, and the success you've had. And like I said, I've told you this before. I've said it on here before. I think of all the different private equity platforms that have, you know, come alive during all this period, I feel like Redwood is one of the ones that did it. What I feel was the best. I mean, meaning the right way, really, taking care of the contractors, you know, the. The individual brands, letting them do their thing, supporting them. And what's interesting as I look today, you know, you guys did your. I think it was about a year or so ago, you got your. You know, you did your $1.1 billion valuation. I believe I got that number. Is that right? Yeah, about a year ago or so. Has it been that long?

[D]

Yep, exactly a year ago.

[B]

So congrats on that. Big deal. And you guys continue to. To grow. But, John, your. Your epis did with us was actually back in July of 2021. And it was the first episode that I missed and Chad stepped in and was the co host with tall Paul at the time. And interesting enough, I wrote this down. I thought it was. It was really cool. I think this is a. A look back at what as shown through today on the success of Redwood Services. And that is your. That episode was putting people in process over profits, which is something I believe very much. If you see my little shirt. Reputation over revenue. A big believer in you. Do you do good. And the end result is great revenue that comes from it. And then. And then Richard, when we did yours, it was back in 20. I can remember it was like middle of the year 24, but it was Redwood's rise to 400 million at the time and keeping the culture. So two things focused on the human beings in the business. Coincidence? I don't think so. But congrats to you guys. Happy to have two VIPs in the VIP room. Boys, welcome.

[D]

Thank you. Thanks for having us back.

[B]

Yeah, of course. Excited. Thank you.

[A]

When I think, Chris, when I think about those two statements you just made, one of the things that I like to tell people today is that, you know, Richard and I met In August of 2020, you know, wear a mask six feet apart and had lunch together. And, you know, one of the things I'm most proud of is that today, you know, six years later, we're still, you know, we're still doing today what we said we're going to do at that lunch in 2020. And you kind of heard it from myself in 21, when Chad and I were together on the podcast. And then, of course, Richard reiterated again on 20 in 24. And, you know, so those are, you know, that's the thing I think that I'm most proud of. You know, building something great is phenomenal. And. But building something great the right way, you know, just sets. Set you at a whole nother level. So I have a huge appreciation for Richard's leadership and vision for that. And then everybody that's on the Redwood team, like, catches that vision when they get here and we all run together.

[B]

Hey, listen, when. When I first met you guys and Adam came in, I met Adam at the same time. Was that in the we work space or were you guys into a new office thing? Because it would have been. Was that.

[D]

No, we were in a. In a we work back then.

[B]

Okay.

[D]

And I. I think the only difference between today and then is we're just able to do this at A larger scale, but all of the. All of the kind of principles that. That we put in place when we started this business because John and I lived the other world, so we know what it's like when you're not putting the contractor first, when you're not putting the teammate first. The only difference today is instead of, you know, a thousand teammates and 100 million of revenue, it's, you know, 3,000 teammates and a lot more. And so I totally agree with John. I think it's. We're most proud of the fact that we've been able to continue to really build this around people. And it's easy to say. It's hard to do. And so I would agree with John.

[B]

Well, my hope for this particular episode and then to chatty P&AG, you guys can just chime in on whatever with whatever you're thinking. But here's for. My hope is, for this one is it's always nice when we get guys like you on who might be looking at things from a different perspective or through your own lens, from your experience across multiple brands, multi location. John, you have a different background than Richard, but now, Richard, you're like a. I mean, think about what you've been through since 2020 and in the last six years has, like, been a. A heck of a road, and you've probably learned a. A ton. And I'm. So I'm really interested to hear both your perspectives, and I'm going to ask a few questions that I hope you guys are willing, you know, to. To answer. And, and if it's PC, then fine, it's lame, but whatever. I want your real answers, but I just want the listeners to try and get an idea of what your perspective is on current state of just home services, future state, and even, you know, I, I feel like we, We. We don't. We. We talked about it for a long time, then we kind of stopped. And it's just like the Blackstone deal happened with Champions Group, which I thought was fantastic for our industry. I think it actually extends the Runway for opportunity for contractors who might want to go down this path and still maintain a decent, you know, a decent multiple, competitive multiple. I just want to get your guys's legit perspectives and then some of the questions. John, I want you to put your contractor hat back on and, and think about it that way. And Richard, just, you know, stay the course, man. Like, I want. I want to. To leverage that brain years, too. So I want the two different perspectives. But maybe what we can do is maybe John just Share. I'll go ahead and kick this off with you. Is how different are things today, you know, today from your perspective versus your Conway services? Like Conway services days? Like is it as a, from a contractor perspective, is it, you know, same show, different time zone? Like, is it, you know, is it a. Maybe just share a little bit like from your perspective because you were, you know, a, a great size business, super strong business, you know, in a good market, you know, but in different, different times. Right. So like, what's your perspective on just today, like how things are in the industry today as a contractor?

[A]

You know, I think the, the industry is definitely different than when I ran my own service company. And what I mean by the, by the, the industry is different. Really, the landscape is different. And so in any, in any sizable market at all and doesn't even have to be a huge market, there's going to be scaled players there and there's going to be players that are supported by family, office or private equity. And maybe another way to put it is they're just going to be, you know, 1, 2, 3, maybe 5 or 10 in big markets, sophisticated players in the market. And so it just is to me a little bit more of a challenge for mom and pops to compete, especially as it relates to the, the marketing side of the business. It's still a fragmented market, still a very, very fragmented business. So even the biggest players in the market may, you know, may only have, you know, 2 to 4% market share. But if there's, you know, 10, if you're in a big market and there's 10 to 15 scaled sophisticated players in the market, well, they may own 25 to 30% of the market collectively. And so I would say one thing that's different is, you know, from, from like when I ran my own business is there are more sophisticated players in most markets that are going to, are really tough to compete with. And you know, you have to bring big boy purses to the marketing table to kind of keep up with that, you know, keep up with the spin side of the business. There are things that aren't different. Some of the things that aren't different is just around blocking and tackling. You know, hey, at the end of the day, I still got to get calls on the board. I got to convert the calls and I got to charge the right price. If I do those three, I'll usually win, you know, and, and so the blocking and tackling of the business, the execution of the day to day, you know, still exist as it did when I ran the business myself.

[D]

And just to add a couple things for sure, the, the scaled players in a market and the increased sophistication of local competition I think is a huge component of why today is different. And by the way, I think we're still in the early innings. I came from a world in pest control where it was super, super consolidated industry. And I think our industry has a long way to go before it gets to that. But in addition to the scaled player dynamic, I think a couple of additional dynamics at play here versus when John had his business is the reliance on technology and how important that is and just understanding and being not cutting edge, but at least being able to keep up with technology. I think the consumer today is very different than it was in the early to late 90s when John was in the prime of his business and how to communicate and how to interact with customers. And then just the world of digital marketing, I mean, by the time you figure out, if you can ever figure out marketing, and Chris, you would know this better than anybody. As soon as you get a hold on it, something changes. And just the need to constantly have your finger on the pulse with digital marketing. It's just getting harder and harder, I think, to run a small business. And that's why I think more and more contractors are saying to themselves, I want to do this, I want to have my own business, but I want to have the support of a group like Redwood so that I can do the fun stuff. I can hire, I can develop, I can, you know, do all the things, support my local community. But I want someone else to figure out the Google algorithm. I want someone else to figure out which technologies to use. And so I think, you know, the change has actually made our value proposition at Redwood stronger over the last five plus years.

[E]

I got a question for John, so, and probably Richard as well. But you know, you guys go in and you guys have done, you know, acquisitions where you're buying a scaled player in a place. And then Richard, you and I talked a month or so ago about kind of this tuck in strategy, I guess, John, when you go. And I think this would be good advice for listeners who are like, that's great, I want to build my business. Where in the hell do I start? Like, what is broken? Because I feel like people that I talk to, like they're not even sure what's broke. They're just like, I can't get over this hump. When you go do, let's just use a tuck in, for instance, like, and obviously there's maybe not as much, there's not as much to change because you're rolling it into another one. But like, what do you see from these columns? Three to $5 million companies, like, where are they missing? Like, what is the piece that. It's like, you can identify right off the bat, like, this is good because we can, we can capitalize on these things because they're just not doing them.

[A]

Leadership, you know, like they're, you know, sometimes at that level there's a, there's a ceiling on the leader in the business, you know, and so that's the first blank. You know, someone gets a business of 5 million, they think they've arrived and hit the pinnacle. And, and you know, some, sometimes I have this statement that, that I'll say is like, come on man, just think bigger. Come on. Like, like you gotta sometimes shock them a little bit to go, you know, think, think bigger. And, and then, and then typically you'll also see, you know, they, they just miss opportunity calls. They miss identifying opportunity calls. They miss, you know, having goals, you know, and you know, a lot of times we go in, you can just, you know, start asking people in the business, hey, what's your goal today? And you know, some of them are trying to get off by five. You know, some of them are, you know, they're, they're not very goal oriented. And so I typically find when good people are given goals, they usually just try to go achieve them. If you happen to tie the goal to their paycheck, it typically, it typically helps them go achieve them better. And so being goal oriented, they're typically missing Chad, you know, opportunity calls, tech generated leads, dispatching properly. You know, those are just few of the, a few of the high level, you know, and that dispatching properly kind of goes through, you know, all the way through the sales side of the business. And, and so, you know, sometimes people will joke when I say, hey, sometimes you got to kick Bernie Sanders out of the dispatch seat, you know, and get, get somebody in the, in that seat that'll, you know, treat the business like it should be treated and get the right people on the right calls.

[D]

And just, just to comment on that as well, I mean, nothing we're going to say is earth shattering because it's, it's a lot of basics. But to me, the three kind of themes I see when we're looking at businesses that are just stuck. One is a lack of process. So they just answer calls, they just dispatch leads. They, you know, everything is just, we kind of just do what we do and there is a best practice way to run these businesses. And it's not to mean that every business has to do it the exact same way. But there are defined and kind of agreed to best practices after years of trial and error. So I think process is one area, I think a huge one is people. So you look at these three to five million dollar businesses and it's the owner or it's the owner and her husband and that's it. And there's not this depth of management. And so I think people's huge. And then one that gets lost a lot is around budgeting. A lot of times we'll see businesses that are at 3 million of revenue and you ask them, hey, what's your goal for this year? And the goal is I want to do more than last year. And the businesses that we've seen get to 10, 20, 30, 70 million of revenue every year. They are budgeting. They're holding themselves and their team accountable to something and they're driving the business towards a vision. And I think that's when you're, when you're just off on your own. It's hard to have that self discipline to really hold yourself accountable to a budget. But I think that's a, a big thing that we see between those that are growing and those that are stagnant.

[B]

Hey, real quick Chad, you said something, I don't want to forget it, forget it because made me think this question. Where are you guys seeing the most margin leakage in these businesses? Like is there some common space where you're seeing like this margin leakage happening in these companies that, that you see or those size businesses? And I guess I could open this up to you, to you Chad and Aaron as well. Like I'm legit curious if there's some consistent spot where you're like yep, I know. I'm going to look here, here and here first because this is typically where it's at.

[A]

Well, you know, I would start on that Chris, just by saying we probably see the most margin leakage in labor and depending on the business, also materials as well, but certainly just not having efficient labor, not managing too efficient labor, having overtime, being understaffed and then just driving overtime. So it's obviously the two main components are labor and materials and of gross margin and labor is probably the biggest side of that. And then also having, you know, having businesses and some of these answers, by the way, Chad, don't change if it's a tuck in or a platform like some of them are. It's the people component. But you know, also just not being aggressive enough on pricing, like, not knowing that, you know, if you think about, especially the size businesses that you guys operate, I mean, it. You know, I want to say it costs more to run your business every year than it did the year before. But quite frankly, in businesses, the size of your business costs more to run it every day than it did the day before. And if you're not able to move pricing fast enough or there's some belief that, you know, that there's a going rate, you know, in the industry, which there's not, then you're going to get leakage through price. And then. And of course, your teammates are going to need to get paid more, and they're going to want to pay more. And so if you're not moving your price enough, it'll. It'll creep into your margins pretty quick, quickly, especially on the labor side.

[E]

Yeah, I would say one of the big things. John taught me this a lot. Way back in the day when our supplier was trying to give us a price increase. He goes, well, you don't need to take that. I said, well, no, they're going to give it to me. And he said, well, no, here's how you respond.

[A]

We.

[E]

We are. We're not accepting price increases. So I apologize. I said, really? That's all I gotta say. It worked. But I mean, I. When I look at, you know, we. We typically buy in kind of that 3 to 5 million dollars range of revenue. And like, the first thing that I always ask for is their equipment pricing, because, like, these distributors and manufacturers, it's crazy what they're charging some of these smaller guys for equipment. I mean, it is just. It's obscene, frankly. I mean, the fact that, like, they're paying so much, it is hard to price and stay in there. And to me, that's where, you know, I think you've got to be looking at. You got to be looking at multiple lines just because you've been a so and so dealer for 20 years, like, that's great, but they keep hiking your price. Like, it may be time to look in a different direction for a different piece of equipment and leverage kind of these, these distributors against each other to get some better pricing on this equipment. It's not going anywhere but up. It's crazy to think about. I used to think when we sold a $10,000 system, like five years ago, I was like, oh, my God, they must have bought the biggest, baddest thing that we have to offer. And now it's like 20, $30,000. And a lot of that is just driven by the equipment price, which is just crazy to me.

[B]

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[C]

I got, I want to follow back up on something like Richard and you guys were talking about. Besides if you don't mind moving the topic back to something. So I think there was, I agree there's four things. There's, you know, people, systems, leadership and then you. Right, like in the model. Right. And so when you guys are talking about this a little bit, I think Richard, I think there's a great underlining story in red redwood that I, I think might need to be articulated is like you built a great team of people. Like how did you go about doing it? Most of us are always trying to build team infrastructure, find people. You found John, you found all these people, you organize them from scratch, you got them involved and you got it going. So you know, when you think about building out a leadership team, I think that's, that's, I think that's an underlying story that may not be told, at least from my view, from knowing where John came from. Some of the people you have, your background and then you kind of collected this team together. You said we got a plan to do this. How did you collaborate that and create that team to get to where you did in a very short amount of time, to be honest and in a very successful way. So what, how did you do that? If you don't mind just sharing, how'd you get to that point?

[D]

I honestly think that's the number one most important thing for, for a leader of any organization to do is just surround yourself with people that are way better than you in any particular area. And I think it started with the self awareness on my part to know that if I wanted to build the most amazing platform for residential H Vac and plumbing contractors, I needed someone that knew about that industry. Like I'M a home services guy, I'm not an H Vac guy, I'm not a plumbing guy. And so the first thing I needed to do was find the number one person in the country that knew how to run a profitable business and could coach and share the kind of the same value system as me. And that's when I met John. And I like to tell people it's probably 60% hustle and 40% luck. It is luck that I got to John through someone else. Through someone else. And so I think just being scrappy, refusing to settle for mediocrity and then just getting lucky and then, you know, I think it really does come back to not having an ego and being self aware enough to know, okay, we need John in order for this strategy to work. And then we're going to need a badass cfo, we're going to need a badass controller and just saying we're not going to settle. And you know, I will interview a hundred people to find the right person. We just don't settle. And in the few times over the last six years where we've gotten it wrong, we have made changes very quickly. I mean there have been people that have worked for Redwood for three days and you don't always get it right. And I think being, being willing to admit when you don't and making a change quickly is super important. But this business, like I said, with a 3 to 5 million dollar contractor, you're only going to go as far as your team can take you. It's the same for a business that's going to do 750 million of revenue this year. It's only going to go as far as the team can take you. And the bigger this business has gotten, the less reliant on me it's gotten. And now it's true for John as well. Like John used to be able to be on site every month at every, every one of our partner companies. Today we're just too big for that. So now John's having to have a team around him and those people are having to have a team around them. And I think one of the biggest challenges to keep this business as special as it has been moving forward is to make sure that, you know, there's 64 of us now at Redwood. They all have to care as much about the business as John and I did in those early days. So I think Aaron, you're totally spot on with this topic.

[C]

So I want to follow that up and let these gentlemen jump in too. So you know, you Hear this. And you, I think, yeah, you got, you got lucky with John. John. John. I know John obviously from back in the day at our next door days. But I have a cool follow up question on that to say, you know, you guys have been scaling and you know, sometimes the person that got you here won't get you there. So how did you make sure that you pick these people that really could scale with the business? I mean that is accelerated, gross. And a lot of, a lot of people need to change who they are in a very quick amount of time. Right. Like your revenue and your operations grow faster than most people do. So how did you get that aligned with this group early on for the success that you've been able to do with revenue? And then how do you keep that going? You know, I mean, you know John's bandwidth to grow in this role or whoever. I'm not picking on John anyways. Awesome. But you know, his role to grow and what you advance. So how did you pick that? And then John, maybe you could follow up with like how did you stay ahead of that relationship too on your side? Because I think this is important for people to understand at all management levels, especially at scale that you guys are doing in multiple locations and brands and businesses. It's complex. Right? So yeah, I'll turn that over to you, John.

[D]

Maybe I'll start and then you can go. I think there are three characteristics that, that make this possible. Number one is you have to hire for where the business is going to be in the future, not where it is today. So had we hired a CFO for a $40 million revenue business, that person we would have outrun Sean within a week. But we knew Sean had the ability to be the CFO at a billion or two billion dollar business. So I think it's hiring ahead of where you are. That's the first thing. The second thing is hiring people that have the mindset of growth. If John's mindset was I already know everything about being a coo, I'm good, he would not have survived. So all of us have the mindset of we need to get better and we need to develop ourselves every day. It's not just about preaching development, it's about developing yourself. And the third thing is not everyone is cut out to, to keep up. And there have been times in the six years where the business has outgrown certain people and that's okay. And I think the worst thing you can do is force it or what's a big pet peeve of John is just Making up a role for someone you've outgrown because you're too afraid to have that hard conversation. So you look up six years later and there's, like, people doing things that, you know, there's no box on the org chart. We just made up a role because we didn't want to tell them that the business had outgrown them. So I think that that does happen. And if you run a business for five or six years and you haven't outgrown somebody, the problem might be with you.

[A]

Yeah, very. Yeah, very good, Richard. Aaron, very good question. I like to think back to kind of the early days of Redwood, even though that was only, you know, five and a half, six years ago. And when I think back to that, you know, I came out of nexstar pretty confident in how to run a home services company and not qualified to be a COO of a $700 million company. And so one of the very first thing that I needed to do was recognize that in order for the business to grow, I have to grow, and I have to grow at a faster pace than my team is growing because they're expecting me to develop and grow myself. From a leadership standpoint, in the early days, one of the things that Mark and Adam Hanover from our family office did and the chairman of our board did was, you know, we'd have like two or three partners and we would do road shows in New York, and we were really just learning all about the M and A side of the business. And so I would just say that Adam and Mark invested a lot in this management team to the point that they helped us grow as well. And then we kind of all grew together. And so I can tell you, from the day to day side of running a home services company like Scott Brinkley has gotten a lot better than me at that now because that's what he does every day. And the team that works for Scott has gotten a lot better. So my probably day to day, like jump in the call center and help get calls on the board is probably a little rusty today just compared to how I've moved away from the day to day side of the business, even though I make sure that I'm in a couple of businesses a month, you know, working on strategic things as well. So, you know, I would say, Aaron, from my point is, first of all, just recognizing that I needed to grow as a leader in order to help the business grow. And I spent 45 minutes this morning with an executive coach that I lined up myself. So just as long as you can be humble enough to know that there's better out there, there's other perspectives out there and you can humble yourself in such a way that there is. You don't know what you don't know out there. And so as you said earlier, look, you know I'm going to be cooing this thing through 3 to 4 billion. And so as I'm doing that over the next few years, I just have to continue to grow and get better because my team's counting on me to do that and I'm counting on them to do that.

[D]

And Aaron and Chad, like we don't have all the answers and you guys have both run super successful businesses. So I'm curious what your take on this topic is of building your own teams and what your role has evolved to over the last couple of years.

[C]

I would say everything similar to you guys are saying. I think it always starts with me first. If I, if I'm not developing myself, then you're always the lid. So I think that's important. Somebody spoke about at an event last week and just talking about that, right. Like you're the lid and then you got to start to develop yourself. So as you guys are talking about where do you have to have self awareness, all the things you said. So I don't have anything really new to add to it because I think it's important most of the time the businesses start to hit this threshold, you know, where they, where the business can't grow anymore because the leader isn't growing. What you guys have mentioned. So when I think about, you know, somebody joining your platform or looking to grow with you guys and your leadership growth in it and what you guys have, usually you see that between that 10 and $20 million mark is where people just start to really fizzle out on their ability to take that past that part historically. Right. And so like I guess when you look for a platform business in that area, you're looking for great leadership, do stuff. But I guess somebody saying I'm fizzling out, I don't have that. Would a group like yours be ideal for that, that, that size business, that 10 to 2020. There's a lot of business sizes I know you guys would purchase and have the resources to do, but is that where they really can develop and grow in. And I guess that's, you know, that's kind of what I, you know, I'm trying to work through that, that kind of question, if that makes sense. Because that's where people start to stumble out. They need A next door group, they need coaching or is it better to just sometimes join this platform and get what they need through that with you guys? And it seems like you have those resources available through the coaching.

[D]

So I mean that's, that's the whole design of Redwood. That's, that's why we exist is to answer that question. And the one, the one semantic I would say is that we don't buy businesses. So we're not buying 20 million dollar businesses. I mean, yeah, we're investing in them and then we're partnering. And we don't need people to know how to go from 20 million to 120 million. What we need is someone that has the drive to do so. We know what it takes. We've hired, you know, 60 something people on the Redwood team that all they do is coach and support businesses to get there. But what you can't teach is the drive. So if someone called John or I and said, hey, I got a $20 million business, I'm done. I've been doing this for 45 years, it's time for someone else to take the keys. Like, I just, I want to make this someone else's problem. My team's okay, but honestly, you figure it out. I would say, hey, there are 59 other groups that would love to write you a check and put you on a horse and send you out to the sunset. That's not what gets us excited. What gets us excited is a 15, 25, $45 million shop that says, hey, we have all the energy in the world. We have a full tank of gas, we have a kick ass team and we've just hit a ceiling. And we could chip away at this over the next decade and get to where we're going. But we want to partner with someone and we want to, we want to get that 10 year goal. We want to do it in two years. And so we're willing to partner with you and let you just pour fuel on this fire. And that those are the stories we gravitate towards and those are the lives that we've been able to I think significantly impact like almost overnight.

[E]

I think for me from like the, you know, the growth and leadership. I think I agree with everybody. You know, it's, it's you as the leader, constantly evolving. I always put my, my kind of journey into like three different camps. There was the, there was the part where you're, you're just the doer. Like it's, you know, I used to, I'd have a call with John, John would Tell me to do this, this and this. And I'd go do this, this and this. And tell everybody along the way. We're only doing it because John said to do it. I have no idea why we're doing it. I don't even really understand it. But he said to do it, I'm going to do it. So there was like this doer phase and then you graduate to like what I like to call, like the empowerment phase. And so it's like you're bringing people on, you're trying to empower them to go do their own things and so on and so forth. And then I feel like I'm at this phase now that is really a struggle for me. And I'm really good at the empowerment phase. I can do that all day long. I can do the doer phase, the accountability phase of where you have all these people and you have people that are managing managers and they're supposed to be growing them and the managers are supposed to be developing the frontline people and like developing the systems and kind of the regiment of making sure you're holding people accountable. Because as the organization gets so big, you can't know what somebody over here that you maybe not interact with every single day. What are the systems and processes within your business that are going to hold people accountable? And I think if I look back, that's the one thing I wish I would have put in place when I was in the empowerment phase is a higher level of accountability. And it's tough when you're growing because you're like, people are doing great things and they're running and they're going fast and everything's great. But I think it's to what Aaron's point said, that self awareness of like, hey, I've got to get better at this thing or else the company's not going to be able to grow. And it's not so much like I think growth gets bucketed into like you need to be growing, like reading books and podcasts. And I think it's a lot of just like self development and reflection of understanding who you are and how you serve the business. And so for me. And that's the tough stuff, right? It's like, well, shoot, I built this thing. Like, we're good, right? And I think that there's, you know, you get away from, hey, I need to go make a correction in the call center to, I need to figure out who I am and how I kind of how I come to the business to help serve because I can't do it on the, you know, the ground floor anymore, unfortunately.

[C]

And I'll stay on this topic and then we can change if you guys want to. But, but, you know, I agree with, with, with everybody saying, I think I'm more in the, in this stage now. To me, it's like enterprise, right? So how do I show up as more as the enterprise CEO operating this business? I don't think about 100 million anymore. I think about what do I need to look like and operate for 250 million. Right. And so how does that look like? And to your point, it's like I can read books. I still read books. I listen to podcasts. I listen to you guys ask these questions to understand that. Because, you know, here you guys are doing these great things and you know, Chad and has done all these great things. It's like, but I, I need to reinvent myself at this next level. And so it's thinking about what does that look like? Because some of it is like, are you even running productive stuff? Because what I've seen is people get to a point you can muscle through to assert to another level, and then it, everything comes falling down.

[D]

Right?

[C]

And I think around that 50. 50 million for me was kind of a break, a little bit of a break that I, I muscled us probably to about 75, 80. I muscle through just old school and then you start to feel that break. So. But yeah, no, appreciate the feedback on that.

[D]

This is like a super relevant topic for probably a business of all size. And you know, to me, sometimes it gets less fun, like in Chad's three buckets, like when you're doing the work and you're controlling your own destiny, like it's fun. And then when you get to empower others, like that is fun. When you start getting to the enterprise accountability standpoint, it's more about making sure others are having fun and getting satisfaction and you getting satisfaction out of that. And you know, for us, that, that mark was like 500 million. Where John and I realized, like, we. There's nothing that either one of us can do today that's going to drive the outcome of the entire business other than make sure the right people are in the right seats on the bus. And I think that's kind of where a majority of our time now is, is just making sure we have the right people in the right seats because we're not in the weeds as much anymore. And that's a hard, that was a hard adjustment. It's still a hard adjustment.

[E]

It's the worst. You have no it's the ultimate. It's the ultimate relinquish of control. And it's like, well, hold on a second. I know how to fix that. Let me go over there and do that. It's like, well, I'm going to disrupt the whole thing if I stick my nose in this. But I really want to, because I know the answer. Um, but. And I think that's why, like, I feel like in this industry, especially where a lot of businesses are started by technicians, I always say, I don't know how you feel about this, Richard, but like I always say, like, my. My secret weapon in this whole thing has been that I was never a technician, I never worked in the field. I didn't know how to do anything. So, like, immediately I had to trust people that knew these technical things to do that. So it just came, like, inherent into the business of, like, well, I gotta figure out how to trust all these people to do the right thing, because I sure as hell don't know how to do it. And so I think that's the key piece of. Where I feel like a lot of these businesses get stuck is because people are not willing to relinquish control. It is. I'm always gonna do it.

[D]

It's not just at the ownership level. It's also at management level. Like, you look at some of your key leaders, and they were a technician and then became a field supervisor and then became a manager and now are running a department. And if they aren't developing themselves and you aren't developing them, you can't be running a department and not know how to read a P and L. But when in that journey did someone actually take the time to teach you? Like, you just assume, hey, you've been in enough of these meetings, you should be able to navigate this financial statement. And I think one of the things we've seen people like to talk about the soft skill development, the leadership development, but there's a lot of, like, tactical, practical development that we as leaders don't do a great job of a lot of times. And you'd be shocked or maybe not to know how many people are responsible for large departments and really don't understand the different drivers of the P and

[C]

L on that topic. And I know, Chris, you got your two questions. Chris, like, man, I'm used to doing the same old stuff. He's like, what's going on here?

[B]

All right, this is great.

[C]

Yeah. So we did something interesting on that for that. Cause I remember I used to. When I joined nextstar, there was These little video clips in there, like little videos on how to read a P and L. And I don't know, John, you might remember those back in the day. So we actually took all this information, loaded in Notebook LM and built all these little training videos now through Notebook LM and with test in them. And then we sent them off to the managers to test them and see what they knew through this. And it's actually a kind of cool project. And it, it was an easy way to get a little understanding and educate them too. So I agree that P and L gets really lost in all of this stuff. It's all these other things. And then you get back and you're like, don't you understand what you're looking at? And it's like, no, they, they haven't. So I think there's a lot of opportunity to develop and there's so much technology now that can speed this up and make it easier for people to get those resources. And then one last thing I want to say on this too is that there's this really cool thing I think you guys do at Redwood that I, that I really enjoy is I get your, your, your, your magazine and it's really cool. I go through, I go to look to see what companies were up in revenue. I'm nosy like that. So I go look and I flip through it, see the things. What brought that about? And why do you mail that to people like me? And is it a recruiting thing? Is it an educational thing? What, what do you guys hope to get out of that, out of that magazine? It's really well done, by the way. It's really, really well, it's, it's not even cheap paper. Like you got to spend some money on this thing.

[B]

Is it a newsletter or is it like an actual legit magazine?

[D]

So it's amazing.

[C]

Yeah.

[D]

John's team spends a lot of time on the content, but just the vision of it is we feel like we're doing a lot of cool things around Redwood Nation and we might send it to you, Aaron, and you, Chad, but you are not the intended audience. I think that was just an idea we had a couple of editions ago. The purpose is to share good news around Redwood Nation and there's now 3,000 of us. And so we send it to every manager. It's probably a couple hundred people. And at first we did what probably any business would do is we said, hey, let's just do this digitally in an email and send it out. And it'd be cheap and easy to do, but people don't read those. I mean, and we can be stubborn and we can think that we're going to find a way for people to read it, but you send an email and it gets lost. So we. We literally print out a magazine of a professional company. We send it to people's home address, and people love it and spouses read it and children read it. And it's just a great way to feature some of the amazing things that are happening across our business across the country every day. And I think I just got a draft of, like, our fifth or sixth edition of it, and it's really a powerful tool. John, I don't know if. Do you have anything additional to add?

[A]

Yeah, I think just getting it out to. We know we started to recognize, you know, probably a couple of years ago that we are really doing something special at Redwood and we're doing something different. And we like to share it not only with our managers because they're, you know, definitely a big part of it, but we also like to share it with people, you know, industry icons and experts like yourself and Chad. So people just kind of get to see, like, what. What are we doing and what are we up to and, you know, how. How things are going? And so that's the. That's the branching out that you get to, you know, that you get to see and. And, you know, continue. You know, we think again, the intended audience is the managers and the frontline managers.

[C]

And.

[A]

And they kind of get to know. I mean, we're not, you know, at the partner locations. We're really not out in front of the management team that much or the managers themselves. Meaning, you know, we. We don't want our teams running around talking about Redwood. You know, that's just, you know, we want them. We want them talking about, you know, their business. And. And so, I mean, I'll show up in a parking lot in Tucson, Arizona, with 120 chicken biscuits walking around, giving them the installers in the morning. They have no idea who I am. I mean, I had an installer asked me a few weeks ago ago, did I work at Chick Fil A, you know, and, and, and who cares? Yeah, that's it. And. And so it really is.

[C]

That's what they usually say to Chad.

[D]

Yeah.

[A]

By the way, the lady at Chick Fil A, I hadn't seen her in a couple of years. Ms. Maria that cooks all the chicken biscuits. And when I picked up. When I literally picked up 150 chicken biscuits and 100 breakfast burritos and that

[D]

Was just for you.

[E]

Yes.

[A]

And she comes running out from behind the counter and Mr. John. Mr. John gives me a big hug and out in Tucson, you know, and. And so anyways, you know, we're. We like to share with our teammates what they're a part of, but without doing it in a bossy way, for lack of a better term.

[C]

I really enjoy it. I just didn't know what the meaning of it was, if it was a recruiting thing because his team or I like that it goes to the managers. Don't remove me from your mailing now that you know.

[E]

Yeah, don't remove me either.

[C]

Yeah, no, maybe I should have been quiet so we had it.

[A]

But no, you're on there. You're on there for a reason.

[C]

That's fair. But they're very well done. I just wanted to speak about it because I thought it was. Really highlights your organization, your people. And I love your transparency in it. You're very clear about who's doing well, what the average like things that are happening. And I think that's just refreshing. So congratulations. It's really cool.

[D]

Chris and Aaron, just. You're touching on a dynamic that I think is one of the reasons that Redwood is special, is our partners are competitive and because we're transparent with all this information, no one wants to be at the bottom of the list of anything. And so part of what we do is just get 21amazing contractors in a room and put a slide up on the wall and it's sorted by organic EBITDA growth top to bottom. And you don't have to say anything else after that. Like, after that, everybody is looking to those at the top, like, what are you doing? People are looking at those on the bottom and saying, what can we do to support you? You know, where are you struggling and how can we help? And I think that competitive dynamic and the competitive juices that we have within our room of partner companies is part of our secret sauce.

[C]

I'd agree. I like it.

[B]

You know what I. I think I learned on this episode most about myself as I sit here and self reflect listening to you guys talk is I don't know if I'm happy or sad that I'm not in a big business anymore.

[C]

Oh, I thought you're gonna get into your ego or something, but okay, no,

[B]

no, no, no, no, actually, no, I'm not actually.

[A]

Every.

[B]

Every time I thought, hey, I got something to add, I was like, no, I don't. I don't actually. And. And I'm okay with it. I'm still dealing with it, right, guys? Because I'm only, you know, five months removed from being in business, and I still love the position that I'm in today. Very much so. And it's just a different spot to be in. Like, you guys are still running the race, and I'm not. That seems a little bit weird. I'm just running a different race, and it's back down at the lower level again. Like, the biggest business we got going for us is Chad and I's roofing business. I'm not sure where we're at now, but we're pushing for 6, 7 million bucks this year, but still so small. But I will say this. There's. There's a couple things that you. That you said, Richard, that I just wanted to. To say. I'm not. I don't want to open up a conversation, because I have one question. I want to get to both you to close this thing out, because we're about 50 minutes into this thing, but there's been plenty of times, you know, at our peak, we're, you know, $92 million in revenue. A lot of people. And I learned real quick what my role was and to stick to my role. And I did not even stick my nose in anything else that I was not good at. I stuck to being go to market, and I didn't deviate outside of it. Whereas when the business was smaller, I had an opinion I could give towards operations or whatever. And I learned, like, it was incredibly complicated to get a plus players in this business to scale it. And without it, it was. It just took longer. There was more breakage that was happening in the business, which caused more problems, which caused leadership issues, which causes churn which got like, turn on employee tournament client. There's so many important things that started at the top that I learned when this thing got big. And. And that's when I was like, okay, I got to continue to get better. The cool thing is now that I get to lead a small company, like, I think you guys know, I bought last year, I bought a company called Prolific Brand design, and at the same time, I bought an email, a small email marketing company. And I merged them together, and it was a little baby business. I've since split off from Prolific. I had them buy my shares back out. It's off doing its own thing. And then we started email marketing company. I learned a valuable lesson there, and that's that when I don't want to work with somebody, I cut the ties and I move on. So if anybody wants to know that publicly I cut the ties and move on from prolific and we started send it email marketing because that guy impressed me. And you know, why is he was coachable. He's a very coachable leader in the business. But both Aaron and Chad know him. His name is Zach Garside and he's leading that company. But it's so cool for me to be able to lead him or for Annabelle lead him because he's so coachable. But he does the work he's got. Like you said, Richard, his. The gas tanks full. He's ready to go and he does a great, great job. So that's been. That's been fun. You know, Chad and I have have a pretty good team over at Redbird Roofing that's got, you know, gas is full in the tank and everybody's ready to go and we're seeing a lot of success with it. That's the fun phase I get to live in right now is I kind of get to add in my 2 cents in coaching and I get to step back and let everybody do their thing. I'm loving that that side of the business. But I can remember there was plenty of times at Rhino when you don't create the position for the guy. We've totally were guilty of that too. I was definitely laughing at that because I can. Can relate that we did that. You don't want to move the person out of the business. But they weren't, you know, we're you. We couldn't pull them up the mountain with this. They weren't coming right. So it was time to let the person go.

[D]

But.

[B]

But we definitely had times where we would hire people and we didn't have a position for them. But we knew we wanted the human being and they were really good at something and I wanted them in the business. I just didn't know where they landed. I don't know if that's a good or a bad thing, but man, once you get A plus talent, you don't exactly know where they land or if it overlaps with other position. I was a fan of picking that person up and they will end up settling in a role that was. That was that worked out or that would work out well and it worked out well for us. But. But I want to. I want to finish with this question for. For both you, John and you, Richard. And there's two of them. So I'm going to give you the easier of the two because I don't think we'll get through the other one. But. And I want you to try and give the most honest feedback for the listeners too. It's not about it's it's really more just about. What do you think is the exact answer here without being so PC? And the question is for both you and I don't care which one of you wants to go first, is what part of the home service business or what? Excuse me, what's what part of the home service industry is broken but nobody wants to admit it? What part of the home service industry is broken but nobody wants to admit it? That was your extra gap to give you time to think about who wants to go first.

[E]

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[B]

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[E]

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[B]

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[D]

I'm happy to take a stab at it. John. Is that okay?

[A]

Yep.

[D]

Because if you go first, you'll take the good answer and then I'll have to come up with the second best answer.

[B]

That's exactly the way I would think about it too.

[D]

No, I, I think what's broken is employee retention or teammate retention.

[A]

Yes, interface.

[D]

Interface, John. Now, the only thing I would caveat is I think we as an industry are doing a better job admitting it now than maybe five, 10 years ago. But the amount of turnover in this industry, it's hard to grow a business when you are turning over 50, 60% of your, your teammates on an annual basis. And I think we've started to make excuses for ourselves as an industry. Like, that's just the industry. Like this is just a, how many times have you heard this is just a high turnover industry? So, yeah, no, it's 40%. My friends down the street are all at 50 or 60. So you're patting yourself on the back, but you think about it, churning through 40% of your team every single year, how, you know, all the coaching, all the development, all the process, having to constantly start over with new people, it's just, it's draining and that, that pulls down the entire organization. So I think we as an industry have to find a way to cut through this and to find a way to keep our best people. And I don't think it's necessarily paying them more. You know, you've probably seen on LinkedIn a thousand studies of, you know, it's not, it's not pay is not the most important thing. It's recognition. It's saying thank you. It's, you know, it's development. It's having hard conversations. I think if we, the people on this call and those that are listening to this podcast, if we are going to do something special, it's got to start with empowering and enabling our frontline teammates and making sure we're not losing 50 to 60% of them every single year. So, so that would be my, my answer.

[A]

Well, just for, just for clarity, when you, I wrote the question down when you were saying it, Chris, before Richard started talking, I wrote one word,

[C]

people.

[A]

But I'm gonna pivot the, I'm gonna pivot the answer because Richard did give the right answer, by the way. It's, it's, he's 100% correct. And Chris, I think you're going to have an appreciation for my answer because I think the marketing side of this business is broken. And I think somehow we have as scaled players and in the home services industry, we have convinced ourselves that it's marketing's job to make the phone ring and it's marketing's job to get the calls on the board. And when you're in the home services industry and you're in Indianapolis and It's sunny in 72. It doesn't matter who's doing your digital marketing. The phone is not ringing, by the way. They're happy to take your money, but you're still not ringing. And so I think understanding in this industry, Chris, that marketing is a tool in the industry that's used and, and by the way, you should, you should create the, the percentage for your budget. But it's a tool that's used to drive the business and, but it's not the only tool. And rarely have I seen companies who have spent more and been able to win spending more. Like I'm gonna spend 15 cent, I'm gonna spend 18, I'm gonna spend 16%. They just do not win doing it. It's, it's not been my experience. And typically when you start spending more than I'll, I'll call it. I mean you get a big market, it's expensive. You're in D.C. you're in Indy, you're in Phoenix. I mean it's, it's expensive. But you start spending north of 10 to 12% on marketing. You are the only thing that's really showing up is operational inefficiencies. It's, you've created a dependence on digital marketing or marketing as a whole in your business. And so I think that, you know, is kind of my, my second answer of one area of the business that's broken when we just think marketing fixes everything and I can just throw more money at it and quite frankly it doesn't now.

[B]

I think that's, I think that, listen, that have meant a lot more to me. About six months ago, I didn't blame this clip over and over and over.

[C]

I think those were great answers and I aligned with both of those actually. And I think they're smart. They're just really, they're really truthful answers to what's going on in the industry right now. And I think one thing we did here from the marketing standpoint is we put a leakage chart together and then we put dollars to every, every leakage on the thing so it had real money connected to it so people could understand the operations was the thing. And here's $2 million that we never need to spend. Marking on it was already here. And I do think people don't invest in CRM management marketing.

[D]

So yeah, that's a hot topic right now for us, Aaron. Like for every hundred phone calls that come in, how many actually turn into a sold job and if you start breaking out all the steps in the funnel and how much leakage there is from even answering the call in the first place, booking it, actually running the appointment like there's so much fall off and depending on how you calculate your KPIs, you might not even pick it up. So I think that whole topic of the leaky funnel, the leaky bucket, is something we're spending a lot of time on internally.

[C]

We have two. So I think that's a great topic. I guess that would be for a follow up at some point, right? To really understand leakage. And it takes a lot of work to do that and understand that flow and what the leakage is.

[D]

But yeah, and just Chris, one last thing on this. Just because I would be remiss not to say this, John doesn't have all the answers. I definitely don't. Redwood, we don't. The 65 of us, the power like John likes to say is in the room. You know, we've partnered with people like Aaron and Chad that are doing so much good. And I think what makes Redwood special is getting all those people in the room. And we have people that have figured out tech generated leads. We have people that have figured out inventory management. We have people that have figured out call center and just getting them all in the room sharing. And you know, at any given time there are people from different partner companies on site at other Redwood partner companies just learning. And so I think part of what John and I see our job as is just to connect really smart people together. And that's why our motto at Redwood is connection is everything. It's not about us preaching a best practice. It's about getting people like frankly the three of you in a room with our partners and saying just have at it. So just to make it clear, like you've asked a lot of questions of us today, but we are not the smartest, brightest people within Redwood. It's just our job to connect those that are.

[B]

Well, it's working.

[C]

She's pretty smart.

[A]

I seen Chad twitching a little bit on my answer because I knew he, I knew he thought I was going to go after gross margin. I seen a little PTSD coming up after.

[B]

I think Chad shares passion for call center leakage.

[C]

I'm pretty sure about that one.

[E]

That's where it's at. Call center in the operations. I tell all our branch managers sometimes I'm like, I couldn't spend enough. I would, I couldn't spend enough money in marketing to get you to budget. It's all in your operational KPIs. Marketing loves to hear that too.

[D]

Not your fault, I'll tell you. Hey, Chris, Chris, you know you've put together a good podcast format when we just want to keep going and we're not watching the clock. So, yeah, you know, kudos to you.

[C]

I have like, I have like 10 more questions. But we're.

[B]

I listen, I have, I've studied the listener base at this point and like, we're about to. We're about to lose. I mean, the content's good enough and like, this is like my main thing I'm doing with the podcast now is growing and scaling it and really paying attention to the details of it. But really what I want to focus on is when do people drop out on these podcast episodes so I can figure out what they are and aren't interested in so we can continue to focus more on topics that people actually give a about instead of just like the banter and like that. So there's like 50% entertainment, 50% education. So I want to keep chasing this thing down. Obviously, the marketing topic I love what's crazy is that you get you guys, you know, into a Chad and Aaron, you know this. I rarely ever even talked about marketing on this podcast. I mean, in comparison to everything else. And I'll tell you the. The one of the best times that I, that I loved was right after we did our deal and they put me in the CMO role and I became a traditional CMO managing funnel across multiple agencies. I loved that. It was actually like gamifying it for me that I love chasing it all the way through CAC or LTV over CAC per Lead Source Channel. I love that game. I get to leverage it a little bit today. But that was the most fun for me because it was just like, you're moving the pieces, but the, but the more you're measuring these, you know, the, the analytics of it all, you could start to be a little bit more strategic on knowing if I move this lever, it's going to provide X. It's just where does the breaking point on it. Like, I loved that time in the business. I could see myself being a CMO for fun at some point, but working for somebody might be a little bit complicated for me at this point. I don't know. We'll see. I mean, it's. Again, I'm having fun with the things I'm doing, I'm doing now. But listen, I appreciate you guys coming on here too. John and Richard, just good to catch up with both you I haven't talked to you, either one of you in a little bit. So appreciate it's coming on. And John, listen, like even sharing simple things like percentage of. Of marketing budget, like is. Is it gives people some context on like what are they spending versus what you're talking about. That's important stuff that, that people ask all the time. It seems like it still continuously is a question people want to know what should I be spending on my marketing budget, how much I'll be allocating versus traditional or whatever. So I appreciate you guys jumping on here, man. Congrats on the success of Redwood. It's so cool. Like I said a million times to you, Richard and John, like it's so cool to have seen it with right way, who was my client at the time, who became your platform and like just seeing the transition from all of it coming out to Memphis early, I think you guys had two. You think you had two brands at the time when I first met with you guys. And maybe I should have pulled the trigger then just became a CMO and said, sorry, Raj, Garage is already there. But I appreciate you guys coming on. I appreciate your time and AG and Chatty P. Always good to see you boys.

[C]

Yeah.

[B]

And. And listen to. To our listeners. Thanks for hanging on. You know, hopefully. Hopefully you got a lot of good out of this. You have at least there, you know, two. Two guys who are doing big things the industry. Actually we got four of them on here who doing big things in industry. Not me. I'm just, you know, the. The connector of dots here for everybody for you to. To listen to. But I will say this. It's always fun. I think John kind of alluded to this or. Excuse me, Richard, also this early on, like talking about it, you know, talking about the goals, you know, is the easy part. You actually got to do something about it, which is why you can't just have no zero days where we're working towards things. And the new mantra for me is don't talk about it, be about it.

[C]

Right?

[B]

Don't talk about it, be about it. Because, you know, a. A goal without a plan is a what wish wish. And it's a dream. And so don't be that guy. Actually do something about it and you can be successful like every single person that's on this episode today. So to our listeners, hopefully you enjoyed your time here in the VIP room. To our guests. Thank you boys. And until next week in the VIP room, you never know who's going to show up as a surprise guest. Mainly because I don't know who's going to show up as a surprise guest. I was waiting to see who might pop in today. I was hoping maybe Ana would have show up today since she knows all of you guys. But she didn't respond to my, my text message. So apparently she wasn't interested in joining as a surprise guest today. But hey, I appreciate all you guys. To our listeners, don't forget to leave us review. Please leave us a review. And to all of our sponsors, thank you so much, gentlemen. Till next time. We'll see you.

[A]

What's the password? Don't talk about it, be about it.