← To The Point - Home Services VIP Room Podcast
To The Point - Home Services VIP Room Podcast
Redwood Services Rise to $400M & Keep the Culture
00:57:08
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- [00:00]
A
Exactly where Redwood is today.
- [00:03]
B
Today, Redwood has 16 partner companies across the United States. 2000 teammates collectively do north of 400 million of revenue this year. It's about trying to big companies just don't have the flexibility. Going to a thriving entrepreneurial business and saying, I'm going to do this way better than you can do. To me, that is arrogant. The approach of Redwood is you're really good at what you do. Now let's take the next step and let's do it together. We're around good people. The Redwood team is awesome. Our partners are awesome. My number one job right now is just making sure I don't screw this up. There are 16 families, soon to be 17, that have literally bet on our ability to execute.
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A
If you find someone who's available but you don't have a spot for them but you know they're a talent, what do you do with that person?
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B
We will literally find a role for them. Because I think one of the biggest learnings for me over the last couple years is it honestly doesn't matter what market you're in, what your trucks look like. At the end of the day, it's about the people in the business. And if you have a strong management team with strong culture, you can win. And if you don't.
- [01:05]
A
This is to the Point a Rhino experience voted one of the top home services, marketing and operations podcasts. Cutting through the bullshit and getting to the point. Hey, what's up to the Point listeners? It's your boy Chris, the host of to the Point Home Services podcast. And I'm a little bit bummed that my co host isn't on here today. He texted me this morning and said he just flew down to Sea island in Georgia with his with some YPO folks to go golfing for the day. And it's a bummer because I know somebody that is really important to Chad, you know, is on, you know, the team of our. Of our guests today who he has a lot of respect for, who's actually been on here. His name is John Conway. He's been on here and took. And actually he co hosted an episode way back in the day, early on back in the day with Chad. They did their own episode and I was gone. I don't remember the heck I was, but he came on and. And has done one and John Conway, I'd be surprised if you don't know him, but if you don't, fantastic human being, had a great business, Conway Services in Memphis. Next, our coach, like just a fantastic human being. I don't remember what episode that was, but you can go back and look it up or you can just go to go and hit the search button and you'll, you'll be able to find it. But John's not on here today. Who's on here today is a guy that I actually met right around the middle or late to end of 2020, younger guy. And we met through a contractor down in Tucson, Arizona that became the platform for his brand consolidation business, his organization and that organization is called Redwood Services. And my guest is Richard Lewis. And Richard, dude, like we were talking about early, I mean pre podcast is. I've actually seen your entire like what you said you were going to do from the beginning and it play out and I've known you like through that process. So it's pretty cool to have you on your man. But welcome to the podcast. I'm excited for you.
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B
Yeah, thank you. Thanks for having us. Obviously your podcast is, is legendary in the space, so to be on it is, is a privilege. So thanks for having us.
- [03:21]
A
Yeah, it's been my pleasure. I'm glad to have you. And what I want our listeners to do is, you know, it's always we've, you know, the last few podcasts that we've done, you know, we've had some massive players on guys also have been in the brand, brand consolidation space. You know, Jonathan Bancroft from Morris Jenkins is on the Wrench team. Kevin Comerford from Service Champions, also Goodrich on yesterday in an interview. So that podcast probably comes out. Maybe it was probably here a week ago or so, two weeks ago somewhere. I don't remember when this one's gonna launch. But anyway, it's always interesting to get different perspectives from different seats, you know, and, and you know, I want our listeners to kind of hear your perspective just on all the things. Right. And, and you've built. How many, how many brands do you have in Redwood? In Redwood now we have 16 partner.
- [04:10]
B
Companies across the country. Yeah.
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A
So you have 16 partner companies. But Right Way and Rick Walter, great human being was the platform. Is that correct?
- [04:20]
B
Right Way was our first partnership in January of 2021. Yeah. So that was kind of the springboard to what. What is now Redwood Services. Yep.
- [04:31]
A
So, so then let's just go ahead and, and by the way, that's how we met because we were doing all the marketing for, for Right Way. Fantastic business down there continues to be a fantastic business. But maybe just share with our listeners. And by the way, you know, to the listeners, we're going to get into some Good stuff too. And I think it's. Is, I think it's important for you listening to hear someone else's perspective from a different seat who's not one of the OGs in the business, but one of the. For sure made it, made a name for himself running a fantastic company with some great partners. And I'm interested to hear his perspective as well on some of the questions I'm going to ask. But, but Richard, if you would maybe just let the listeners know to set the tone on, on those who don't have any clue who you are on exactly where Redwood is today. Like, like brag on yourself. Right. Because it's certainly worth bragging about. Even though I know you're not a guy who brags. I'm telling you brag on yourself because I want the listeners to understand where you're at today. And then, and then what we will do is we'll walk it back through your journey from Service Master and Terminix, things like that. So, so let's just start with where you're at today and then kind of walk us through the journey so they understand who they're listening to and what your background is.
- [05:41]
B
Sure. So I'm happy to talk a little bit about Redwood, but it's, it's not bragging on myself because I've had little to do with the success and it's not about making a name for myself. It's about trying to do something different in the industry, which is what we set out to do originally and it's what I think we're doing today. And so like I mentioned Today, Redwood has 16 partner companies across the United States on the east Coast. We have a business in Alexandria, Virginia, all the way to Fresno, California on the west coast. And we just look for good people, good brands, good businesses, and that's taken us all over the country. And so those 16 businesses will collectively do north of 400 million of revenue this year, about around 2,000 teammates. And Redwood is no longer just John Conway and myself, but we have 37 of the brightest minds, I think, in the industry that coach, support and enable our partners to be successful. So it's gone quite well. And really the credit is because of the amazing partner companies we have and their management teams and the frontline technicians that actually do the work every day. I mean, my job is, is probably the easiest of any of the jobs of the 2000, but, but the credit is definitely to, to the Redwood partner support center team and then to our partners for the work they do every.
- [07:06]
A
Day that's very diplomatic of you, but. Okay, so, so thanks for sharing that. Now let's walk it back a bit. So you had, you know, when I, when I had met you, you guys were like maybe six or six months or so into the deal, maybe seven months into the deal. And you had, you told me, you know, then, you know, you're building something different. Well, you know, in, in the 16, 17 years I've been doing this, I've heard such similar things all the time. Right. You came from the. Well, let's, let's, before I go there, you, when were you at Service Master and then you went into Termin X and then like maybe just tell a little bit of that during like 3000 Foot View.
- [07:46]
B
Yeah, sure, sure. So I was born and raised here in Memphis. I went to school in New York City for college. I did the Wall street thing for a couple years and hated it. And then moved back to Memphis in 2008 and just kind of by accident got a job at Servicemaster, which at the time I joined was one of the largest home services conglomerates in the world and ended up spending 12 years there just falling in love with the home service industry, but also developing, you know, a distaste, I guess, for corporate America and the bureaucracy and red tape and everything that comes with, you know, a business of that size. And so ServiceMaster owned Terminix. That was their largest business. And so I spent the last three years of my career at Service Master at Terminix. And this is kind of where I got to see the inorganic growth side to these big companies where they go around the country and just buy up, in this case, local pest control companies. And I saw what they did to these companies once they purchased them. And almost everything that would happen would erode value in the business that was purchased. And I'm not blaming, Terminix had amazing people. So this is not a knock on any one person, but big companies just don't have the flexibility, in my opinion, to do, to treat these businesses how they need to be treated in order to allow them to continue to be successful. So after watching that for three years, I said, I said to myself, like, I want to build something different. I want to invest in the home services industry, but I want to do it the opposite of the way, you know, the big corporate America businesses do it. Where, you know, we don't kick the owners out of their office, where we, you know, we embrace the ownership and embrace the management, where we, we don't rebrand, we don't drop a playbook off on their desk and say, this is how you're going to do things. Now, we don't centralize the back office like call center HR marketing. To me, the thought of going to a, a thriving entrepreneurial business and saying, hey, Congratulations on your 30 years. Congratulations on getting to 20 million. I'm going to do this way better than you can do it. To me, that is arrogance. So my whole approach and what is now the approach of Redwood is almost the opposite where it's, you're really good at what you do. Congratulations on getting to this point in your business life. Now let's take the next step. Let's go from 20 million to 80 million or 30 million to 60 million and let's do it together by combining the things you're really good at, the brand, the culture, the team. And let me sprinkle in the things that I'm really good at. The strategy, the kind of big picture, the scalability. And so that is the whole premise of Redwood. Take amazing companies, combine, partner with them, hire amazing people on the Redwood team, and then let's get after it together. And that is what has come to fruition in the last four years. Originally I was afraid, like, if everyone else is doing it one way and then I want to do it some different way, maybe I'm the idiot and maybe this is not going to work. And John Connolly and I had a thousand conversations about, you know, is this going to work in the early days? And sitting here four years later, this business is double or triple the size that I thought it would be at this point. And, you know, we're having fun. It's. We're around good people. The Redwood team is awesome, our partners are awesome. And it's just a really good thing that, you know, I guess my number one job right now is just making sure I don't screw this up.
- [11:14]
A
Well, so far so good. Yeah, I got to, I got. I ran into one of your partners, Chris Cunningham. I known Chris and Emily a long time from their, their out of Indianapolis. Known him a long time actually. Cool story is when I was first, I mean, I had my business started for about a year or so and then Chris became my largest customer and he lived a quarter mile from me. Like our houses were really, really close. And he became my, my biggest customer. Cause he was an early adopter of digital marketing. And, and so he and I got, you know, became friends who, you know, he had a big barn in the back of his house. We had a big, you know, and we would, he would have A little bonfire, and we'd hang out over there. But he was a customer of mine, and actually I learned a lot from his business, but he was, like, very, you know, know, he was kind of first to market on a lot of things in the digital world, so. So we had a lot of great conversations around that. But I ran into him because I was asked to speak at a Larson event in Indianapolis for. For ream manufacturer, and he was there. It was pretty cool because I got to run into him and, like, you know, chop it up a little bit with them and hear him, like, talk about how happy he is with, you know, his, you know, situation and his opportunity and his future. I mean, kind of cool to see that thing come full circle because, I mean, I met him in. Back in 2010, something like that. So there's a lot of.
- [12:45]
B
Emily are both amazing people. They have a great business and a really competitive hard market. And, you know, they. They were one of the very first people to take a bet on. On Redwood and what we're doing. So we have a special place in the Redwood kind of history for Chris and Emily.
- [13:04]
A
Great business. Yep. So. So real quick, just for our listener's sake, when did you start? Like, when did you start back at Service Master? When did that begin? Because you were there and then went into the Terminix space, right?
- [13:17]
B
Well, Terminix was owned by Service Master, so I. I started with Service Master in 2008 and rotated through almost every business that they had owned through a bunch of different functions all the way until mid 2020 when I left and started this business.
- [13:33]
A
Yeah, in March of 2020.
- [13:35]
B
Yeah, actually March 16th. And the air shut down on March 17th. So it was. It was amazing timing. But you know what, those early days where, like, the world just kind of shut down and I was forced to just sit in a room and think and hustle and grind, as opposed to just getting on planes and flying all over the place. So just in retrospect, I think that timing actually worked out nicely because it kind of just forced me to. To just figure all this out and kind of fine tune the thinking and the process and what we wanted to be when. When we grew up. So I'm grateful that things happened the way they did.
- [14:16]
A
Yeah. And what's interesting is that if you remember, and I don't expect you to, but if you do, great, you know, Right Way was a. Was a pretty decent sized customer for us, and we were having a lot of success with them. And then, you know, when. When Covid hit, I. I I'm bragging on myself for a second because I. Cause I. I made a good decision. So I'm owners. I mean, a lot of bad decisions, too, but I. Same thing. I sat there and I thought, you know, like, everybody's kind of nervous and scared of what's going on. And by the way, it was no different for me. But it was. I knew quick, hey, everybody's gonna be home. And if a furnace goes out and it's cold, somebody needs to go and have their furnace work done, regardless of what's going on. How can we capitalize on that? So I came back and I said, guys, let's double down. Especially with our bigger players who have staffing to do it. Let's double down right now. And Right Way was one of those. And we went.
- [15:12]
B
We. Like, we.
- [15:13]
A
You know, I reached out to. Oh, gosh, what's his name, the big Scottish guy?
- [15:18]
B
Simon.
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A
Simon. Oh, great dude. And I was like, let's double down. Let's throw the, you know, no contact service call to kind of ease off the fear. We got good brand equity down there. Let's, like, double down. And we crushed that market down there. So it kind of set the tone because that's how I think ended up meeting with you as you're like, hey, this is who our marketing partner was. And then you and I kind of met from there. And, you know, I flew to Memphis. I think I flew the end of that.
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B
Yeah, no, you came out here for sure.
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C
Sorry for the interruption to the point listeners. Have you heard of rilla? Are you using really yet? If not, are you for reala? Shoot, I did. There really is the leading speech analytics software for the trades. It is on a mission to bring physical ride alongs to an end. You can coach your reps with virtual ride alongs now that are a hundred times better, faster, and much more efficient than the physical ones. All you got to do is use the killa.
- [16:16]
A
Rilla. That's R I L L A Rilla.
- [16:23]
B
Right? Right Way has had an incredible run. When we did our partnership with them In January of 2021, they are roughly a $33 million business, which is a big already. That's a big business. And they'll end this year 2024, north of in around the $75 million range to just become a behemoth. And you know, Chris Sundan and Mike Allman and Rick Walter and Simon and that crew, they're just. They're killers. And it's just awesome to see the growth of that business and also seeing the growth of the people along the way. You know, when a business goes from 33 to 75 million over a couple of years, it creates opportunities for a lot of people in the organization. So that's been the most gratifying part of seeing that business grow is seeing people take on additional responsibilities and grow in their careers. And it's been really nice.
- [17:14]
A
Got it. Yeah, I mean, I totally agree. I mean, good dudes, so and great business. And it's a Tucson, like, I mean, that's a killer business for Delta and that's. It's crept up north a little bit too. But there's some great businesses going on down there. And by the way, Tucson is a competitive market. So there's a lot of Phoenix that drip, you know, that bleeds down into Tucson like the heus and Phoenix. So not an easy market to play ball in. Okay, so I'm gonna shift gears for just a second so that way I can get into like some meat and taters of this thing for our listeners. But thank you for kind of just walking through like a little bit of the history with me. I'm gonna give you a little, a little teaser here, so that way you have a second to think about it. I want to get an idea from your seat as the, you like, as you said, like the guy who is leading strategy for, you know, the business is, you know, I want to understand what you're paying attention to, you know, like in, you know, whether it be now or in the future that you have to pay attention to because you're a strategy guy. Now I have to do the same thing. So except for I'm only looking at it from the marketing perspective. I'm like, what do I need to pay attention to now? I have to understand the industry because I have a lot of contractors depending on me to know what to do going into the next year and to have an idea of what's the market going to look like, what real opportunity is us for me to go and get new business for them. That's the game I'm in. So I'm constantly paying attention to things. I have obviously lots of conversations with lots of people. But what I have, I think too that that really sets us apart is I have tenure. I've been through this swing a few times already. So I can. I got some instinct on what I think's going to happen, but I've. I just got more data now to also support tenant. Yeah, but from your seat, you know, again, I mentioned kind of early on, you know, one of the cool things is you're, you know, you're younger in leading the brand consult, like one of the brand consolidation in the brand consolidation space. Who didn't come from inside as a contractor in this industry. Right. So I'm curious to know from your perspective, what are you paying attention to? Or I'll even give you this too, you know, with your, with your leadership team, what are you all paying attention to again, whether it be for now or for next year, is there anything that stands out to you in particular?
- [19:25]
B
I think it will sound cliche, but it's the truth. And for me, the number one thing I'm looking at daily is just the people side of the business. Because at the size that we're at, which is big for us, but I know there's businesses that are five times bigger. But for us, you know, in the size we're at, just making sure I'm being very protective of our culture because as you grow, it could easily slip away. So I spend a lot of time on culture and then just making sure we continue to have the best people. That is going to be the only way to continue to scale this thing is if every one of the people that we hire onto the Redwood team and every one of the partners that we bring into the Redwood family, they just have to be good people with gas in the tank that want to run. So from, from my just kind of daily, you know, purview, that's what I'm thinking about and making sure each of our partner companies has the management strength that they need to be successful. Because I think one of the biggest learnings for me over the last couple years is it honestly doesn't matter what market you're in, doesn't matter what colors your, your, your logo are or what your trucks look like. At the end of the day, it's about the people in the business. And if you have a strong management team with strong culture, you can win. And if you don't, it's going to be really hard. And our business is so fragmented. There's always market share to go get. There's, you know, where even our biggest businesses have single digit market share, which means there's 90 plus percent opportunity to grow. So for me it's, it's the, the people. And then the other thing I'll say is if you would ask me this question. Two years ago it was all about making sure we had capacity. That was the big thing. It was, we have to have more technicians, more technicians. The phone's ringing, we can do more. We need more good technicians. So it's about launching universities and building programs with trade schools and just how do we get more good frontline technicians into our building that have good customer service skills? And that was the focus. And while of course that's still important, I think more of the conversation recently has shifted towards marketing. And part of that is the dynamic that's been created by the brand consolidators. You know, every market now has sophisticated operators with sophisticated marketing resources behind them and getting the phone to ring is just more challenging than it was two years ago. Whether it's because of, you know, some of the COVID pull forward, whether you believe that or not, whether it's more competitiveness, you know, in the marketing space, whether it's Google, Google continuing to make changes to algorithms or increasing costs, like just more of the conversation seems to be around marketing. And in the last couple months we've really beefed up our marketing team here at Redwood. We, we have a very strong chief marketing officer now. We just hired a vice president of life cycle marketing. We had a marketing analyst start last week. So we're really investing in this side of the business because we think that the next couple years are going to be made or broken based on our ability to, you know, get the phone to ring and to do it in a cost effective way. Which I know you spent a lot of time yourself on this topic.
- [22:42]
A
Yeah, and yeah, we, I mean you and I have had these conversations and you, and you came, you know, to a pantheon and sat through our breakout to see what we're building that supports that same theory, you know, because I do believe that, I mean all those things you said are absolutely true. The other piece is how, how much actual real time data do we have to support making a decision now, you know, in whether, in any one of your partners, in whatever, you know, whatever service that they're offering, in whatever location that they're offering it. Like I'm, I'm a big believer of that too. And so we had to grow, we had to continue to move and grow too to support that type of thing.
- [23:19]
B
But really, I mean you're kind of been on the forefront. First of all, you've been saying this since I met you and it's, it's kind of miraculous that it's taken so long to get movement on this. And by this I mean the connecting the, the revenue and profit from a job back to the original marketing spend that was associated with it. So we're getting true real time ROI on spend. The, the fact that we're just now having these conversations in detail is, is mindboggling. But I guess, you know, years ago the industry was growing so fast and there were so few big players that like you drop a million dollars into marketing, you know you're going to get a return on it. And obsessing over where every dollar is placed just wasn't as important. But today, without what you're building, without, without kind of the data and the real time insights, you're going to struggle. And by the way, that's one of the things we talk about when we're talking to a business about joining the Redwood family. One of the things I talk about is do you want to be figuring this out on your own or do you want a partner to help? Because marketing is a lot more sophisticated, a lot more complicated than it was 15 years ago where you could spend 50% of your budget on yellow pages and that was that. I mean, you really need to know what you're doing now. And one of the resources that we provide to our partners and one of the reasons businesses are interested in joining what we're doing is they don't want to have to worry about that. They want to know that we're worried about it and they want to focus on customers, employees, culture and let us worry about, you know, the complexities and the ever changing complexities of the digital marketing side in particular.
- [25:01]
A
Yeah. And I think that, and you, I think you would agree there's some, there's some partners that might not need to focus so much on marketing and just make need to focus on the blocking and tackling. But you gotta know, you know, and then when it's time to go again, if, you know, hey, for every dollar I spend on money, seven in return, it's easy to make decisions. Or if it's, let's work it backwards. If you have a partner that wants to, you know, grow, you know, 5 million, 10 million next year, and we know how many service calls or whatever it's gonna take to hit that number, well then now we got a number, we can work from it. You work the math backwards to figure out what's the spin need to be to hit that, you know, to hit that number. So like, that's the life I live in a lot. And I've had lived in it forever. So yes, I was doing it manually before. It's human beings listening to it, which still happens today, by the way, you know, but to finally get to a spot where it becomes real time, like that was a big deal. I wanted to Raise the bar for the entire industry. And I believe that's what we did. Yeah. So I'm gonna back up for just a second because you said something early on that I think is important because it's been coming up over and over and over again on episodes. And I'm not even like bringing it up. Everyone else is bringing it. And that's around the people, business and culture. And I'm not gonna spend a lot of time on this for our listeners. Cause I know you've been hearing it over and over again. But yet again, this is someone else who's had a lot of success, who continues to talk about the people in the business and the culture of a business being so incredibly important. So let me ask you this. When you find someone, Richard, like, I'm legit curious to know what your answer is. And I'm kind of going like ad libbing here a minute. If you find someone who's available but you don't have a spot for them yet, but you know they're a talent, what do you do with that person?
- [26:50]
B
We will literally create a space for them in the organization. And that's happened multiple times. I mean, it happened first of all, when I met John, we weren't looking for a chief operating officer. When I first met John Conway, I just said to him, like, hey, let's go do this together. And so that's an example when we brought Scott Brinkley, who's another legend from the world of nexstar, we created an opportunity for him. So when we find somebody that is what I refer to as a thesis changer. Somebody that's so good at what they do that they could literally change the thesis of how this business operates. We will literally find a role for them. And honestly, my, my nature is a little more fiscally conservative. So I have to credit my backers, the families that have invested in Redwood, because they've really encouraged me from day one that when you come across a thesis changer, you got to get them on the team. Now at the same time, we've made mistakes over the last couple of years. There have been people that we've hired here at Redwood that turned out not to be a great fit. I mean, we, we, we, we do our interviews and I meet everybody and there's only so much you can get to know somebody during an interview. So, you know, there's times when, when we realize we, we got it wrong, we made a mistake. We're pretty quick to make a change because it, you know, there's an expression, you'd rather have a hole than an a hole. And so we'd rather have a hole in the organization for a few weeks than have an in the organization in that same spot. And so, you know, on one hand, we'll create roles for the best people or the people that could change everything for us. And at the same time, if someone's not the right cultural fit, we're pretty quick to say, hey, this is just probably not going to be, you know, it's probably not going to work out.
- [28:37]
A
I've never heard that before. It's pretty good to have a hole. Not an eagle. I like it. I like it. I'm going see if I could steal that now. Yeah, go on it. Thank you for that. Okay, so then let me go back up just another second because we talked about a couple things and I think it's important, you know, for our listeners, you know, to hear. And, you know, let's go back to John Conway real quick because John ran a very successful home services company in Memphis and also was a very successful next star coach. And some of you listening right now probably had John as a coach and like, oh, yeah, John was fantastic. Is fantastic when, when you. I mean, John coached Chad, you know, and that's why Chad, you know, Peter, you know, my co host, Chad, sings his praises because so much of what Brothers has become was because of what he implemented. Just listening to John, and I know Chad's on here, but what he would say is, I didn't try to, like, reinvent it. Like he said, do this and I did that, and I didn't try to, like, rethink it. I just did those things and we had success with it. But I know he has a great deal of respect for John, and John built a great, a great business. So when John came in, he's your c. He's your coo, right? So when John came in, how many partners did you have at that time?
- [29:48]
B
Zero.
- [29:49]
A
Okay, so when you brought in your first partner and then your second partner and your third partner, were there things that John said, hey, if we're going to bring in these partners, these are the things that we need to implement in their businesses. And the reason I'm asking the question is when you talked about just a minute ago, when you bring a partner on how you're not going in and changing their playbook, Some of, some of this is learning from one another and implementing best practice. Maybe not right away, but over time, you know, wouldn't you want to implement best practice? I mean, that's one Of John. I think one of John's strengths is he understands a lot of best practice to help scale these businesses. But what was John's like what when he came on board, what was his role? What were the things that he was implementing across the partners that helped kind of create the success and the growth and things like that?
- [30:40]
B
So John was doing, did the same thing for us at Redwood that, that he was doing at Nexar. The difference is at Nexar, he was coaching 115 businesses and would have at the most one hour a month with people. And that was if a business was lucky and could get on site to see his, his contractors once every couple years. So he went from doing that to taking the same best practices playbook and now focused on 1, 2, 3, 4 businesses. And so John was doing the same thing, just teaching entrepreneurs and their management teams how to run a successful Next star business. And so his life didn't change in terms of what he was focused on. What changed was his ability to be focused on a way smaller number of businesses. So when I say we don't come in and change things, it's. We don't come in and say, hey, we're firing up all your CSRs and now the phones are being answered in Utah or you know, your marketer's gone, we're going to try to do that in Memphis and don't worry, we'll do it better than you could have ever done it on your own. Like, that's not what we do. But of course, when a business joins the Redwood family, we're unleashing the Next star playbook onto that business. And they're not, they're not fighting us on that. It's the opposite. They're saying, hey, you know, when can John come? When can Scott Brinkley come? And as our business has grown, we've had to hire more good coaches to help continue to scale. And so now John's operations team is, he's got 10 or 12 people that are just different business coaches, service titan coaches, accounting coaches, marketing coaches. And our whole job is to help support our partners in areas where they're struggling. And if something's working, we're not going to mess with it. It's the areas where a partner will raise their hand and say, hey, you know, I'm struggling with, with this part of the business. Help me. And then we'll help. And the other, only the, the other thing I'll add to that is, you know, our, our vision statement, which is underneath our logo on our website, is Three. Three words. Three simple words. And those three words are connection is everything. That's our vision statement. And what that means is connection between our partners to Redwood and more importantly, our partners to other partners within the Redwood family. That's where the magic is made. And Today we have 16 of the highest performing contractors in the country, all inside the Redwood family. So while John or Scott or any of our coaches could, of course, you know, help a business with an issue they have, what's more powerful is a partner within Redwood calling another Redwood partner and saying, hey, I saw the scorecard that's published every month and you have 58% gross margin in your plumbing division. Like, what are you doing? And having partners share best practices and say, hey, why don't you come spend a week in my shop? And that happens within best practice groups, that happens within nexstar. But it's just not the same as having kind of the small, intimate family where you're getting together multiple times a year and really forming meaningful relationships.
- [33:49]
A
Yeah. Which I think is some of the best learning you can do is peer to peer learning and getting together, just seeing different operations and I don't know, like, for me, sometimes it's easier for me to go and see things to, to really understand and implement something or at least to know, like, you know, to learn new things that maybe you didn't think about. So, I mean, that's why I'm in a peer group. I'm in a peer group of guys because I want to learn from guys who've done things differently than me or that push me, you know, that push me to do, to do better or to try things, you know, whatever.
- [34:26]
B
You're the poster child for adapting to change successfully. I mean, just even what I know your business was a few years ago, just the way it looks, feels, the transactions you've been a part of. I mean, you're. Frankly, I've learned from you. Just watching you kind of gracefully embrace the change and constantly just having your head on a swivel, I mean, that's what it's all about.
- [34:51]
A
Yeah. I thank you for that. I appreciate that. I think it's just because some people have that, that's just who, who they are. Like, for me, it was not a, oh, I'm like, it was, oh, well, what I got to do next, like, what's next? And while still kind of chasing the vision of what I wanted, what I wanted this business to become and how I wanted to impact the contractors and the overall, you know, industry. And so I have never Lost sight of that piece of it. But, yeah, it looks a lot different today than it did when you and I first met, you know, but it's also part of the fun, you know, and I, and I want to be the guy who can throw everything on my shoulders and for all the contractors that, you know, are banking on us to do a good job, like, I like being that guy. And I, you know, until I don't like being that guy, I'm going to keep being that guy. So. Yeah.
- [35:40]
B
Can I say the same thing? There are 16 businesses that have bet on Redwood's ability to support them. And, you know, each one of our owners, each one of our partners, has rolled significant equity into this Redwood transaction. So not only did they make a bet, you know, with their business, they made a bet with their people, with their customers, and with their financial future. And so it's a big burden. And it's something I constantly remind our team of here in Memphis and around the country, that there are 16 families, soon to be 17, that have literally bet on our ability to execute. And so there's a lot of pressure to take a, take that seriously.
- [36:16]
A
Absolutely. And their families, like, that's, that's real life. Those are, that's human. Those are human beings. Like, that's real life. And we're impacting it one way or another. And that's the way I've, I've looked at this thing is, you know, I would rather be the positive impact on the business. And listen, like, we don't always get it right. It's not for, not, it's not because we intended to get it wrong. It's just there's still human beings involved in this business. But, and, you know, but the end of the day, you know, I, I, I feel, you know, like I've been given this platform to serve the masses. I still feel that way. And I hope, you know, there's a lot of people I can positively impact. And listen, like, when you bring someone on, you know, like, you to tell a story of the growth, it's. I want people to hear the things that you're talking about and listening to or focusing on or paying attention to on behalf of your partners, because there's so much value in that, because you're looking at it through a different lens. There's, you know, you call it, I think, roughly 400 million by the end of the year of revenue channeling through 16 partners. Like, you have a big commitment of scaling these businesses and all trickles all the way down to their families. Right so making good, responsible decisions. So if you're thinking about it, maybe it's worth, like, the listener also thinking about as well.
- [37:26]
B
Well, the other thing I would mention on that is just challenging the thinking even further that, yeah, we have 2,000 teammates around the country, and we're responsible to help. Help them and their families, which call that 10,000 people. But if you look at the number of customers that we're responsible for taking care of every day, if you look at the number of local vendors that we're responsible for being a good, you know, customer of and the charities that we support, I mean, there are literally hundreds of thousands of people that are impacted in one way or another by what we're doing every day. And that's a big responsibility. And. And we want to be one of the good guys. Like, we want to be a business that people are proud to be associated with. Now, that doesn't mean we don't put Redwood stickers on businesses that we partner with. The Redwood name is nowhere to be found. It's not about Redwood, but it's about the responsibility that we bear to our customers and the entire ecosystem of the human lives that we're impacting on a daily basis.
- [38:28]
A
Yeah, I love that. Thanks for saying that. It's. And that's fun. That's the feel. Good. Yeah. Yeah.
- [38:33]
B
Great.
- [38:34]
A
Okay, so I'm gonna shift gears just a little bit, and I want to go to your. I can't remember. I think you guys call it a partner. A partner day or your annual partner day, or you guys do, like a partner event, right? Where you bring everybody. You can go.
- [38:45]
B
Leadership summit.
- [38:46]
A
Leadership summit. So every the last few years, I've seen it. I've been jealous that I'm not there. And I know you did send an invite at one point in time, so I know part of it's on me, but. But I. I just looks like you guys have such a great time at it. And you mentioned culture, so I know culture is very important. Not just not in. When you're looking at potential partners, but you talk about at Redwood, like, culture is incredibly important. The people are incredibly important. Now, when you get everybody together for the. Your leadership event, that's a very, very expensive, you know, event to pull, you know, all those people together in one. So you have to make the most of it. What is it that you guys focus on? On the. At your leadership? I want. I want the listeners to hear, you know, why you're bringing in all of these leaders from these different partners and doing what with them. Because it's that important to have that expensive of a, of an event together that it must be important, right? So, so what is it that you're focusing on those leadership on your. What'd you call Leadership summit? Is that what you call it?
- [39:51]
C
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- [41:15]
B
And there's actually three events that we do throughout the year. That's the biggest and outside of people, that's my biggest expense at Redwood on my P and L. Our events and the way I think about it is if our vision statement and our whole philosophy is connection is everything, how can we say those words without actually bringing the people together to connect them? And zoom and group chat is just not. You're not going to build a relationship that way. So our leadership summit, we bring in 125ish of our top managers from around the country and their spouses because we want this to be number one, something they look forward to and number two, you know, kind of a family affair. So it's a big group and it is expensive and it's a combination of social activities to try to build relationships. We do breakouts for each department. So there's a sales breakout and a controllers breakout, a marketing breakout, a call center breakout and then we have general sessions where we're able to share with our partners, hey, here's what we're seeing in the market, here's what we're seeing in the industry. Here are things to be on the lookout for, here are points of emphasis that we recommend focusing on this year. And this thing has just kind of taken on a life of its own. And when I was kind of wrapping up this year, I said, you know, there's this thing called Redwood withdrawal where when these events are over, like, it feels like camp is over and people don't want to leave. Like, we're just having a good time and we do it right, and it's kind of become a signature event for us. But again, that's only one of three. We also do something for just the partners, so just our 16 partners. We have a more intimate gathering once a year, and then we do an annual budget workshop. So that'll be next week for us in Minneapolis where we'll have, I don't know, a hundred leaders from across the organization descend on our partner company, Deans, in Minneapolis for three days, where we're just building a bottoms up budget, partner by partner, and we're there to challenge them, to help them, to encourage them. And it's just a. It's a great. It's a great event.
- [43:20]
A
Got it. So, I mean, you're kind of. It's kind of a. I, I guess I, I didn't realize you had multiple events. But. But it's. It's kind of a mixture of all the things, all the different, you know, pillars of business. But also you spring everybody together and culture and keeping a tight family. You know, it's interesting. I think when I. I talked to you last, I was like. I think it was a. Was it Rhino X this year? You were in town for something?
- [43:45]
B
Yeah, yeah, I was in town for a business trip. Yep.
- [43:47]
A
Okay. And we kind of got to catch up little bit then. And that's when that, that's when we talked about how you're. The event that was coming up. So I, Whatever. I thought there was one, but it is, you know, I, I think it. It's, you know, it's that time of year, too, where people are probably going through budgeting or have went through budgeting. I mean, I'm going through it myself. I'm in Chicago, you know, next week going through the exact same thing. I'm actually presenting to the board my budget. And we're going to cross our fingers and hope that, that, you know, I can keep going. I have big, big goals for next year, you know, so. But I go through the same process. But the interesting part for, for me is, you know, there's only so many peers I have that understand where my, where my type of business is that I have connection to. Like, you know, when you become the largest. It, there's, it's, it's hard to find someone that's bigger that understands our space. So I'm like, just trying to learn what, what do I not know from the business perspective. Like, I'm always trying to be a student of what don't I know to kind of still get to this end result.
- [44:58]
B
And as you get bigger, it gets a little lonelier because there's less, there's less peers to, to lean on that can kind of relate to where you are in your journey.
- [45:07]
A
Right. You know, and, and even when you have a, even when you have a private equity partner and we have a great sponsor, they still don't know the business. Like we know the business inside of the business. So there's. And I've learned a ton this last year and a half, a lot. And I've. That I'm very grateful for and that's part of the fun. But the point is like, you know, you, it's still, at some point in time, you still have to make sure that you're stopping to learn the things and not just you, you know, stay on autopilot because it's working. You know, I don't know if you've ever heard this before, but like it's, you know, so you have to, when you start to feel comfortable is when you need to get yourself uncomfortable again, you know, and continuing to learn. And I've just kind of adopted that where I kind of always feel a little uncomfortable right now, you know, because I'm trying, you know, new things. You know, I might be spending more on the future of what I think something needs to be. You know, like, it's just, I kind of live in this constant phase of uncomfort and I'm okay with it. You know, it's like, it's like your to do list actually never ends. And you just gotta be okay with. You're not going to accomplish things every single, like you're not going to get your entire list accomplished every single day.
- [46:16]
B
Well, structure. When you're growing, like with us, our business has doubled like every six to nine months. And so you look around and it's, it's a different business today than it was six months ago. And six months from now, it'll be a different business. And if you're not constantly staying on top of that change and that growth, it will, it will just swallow you up. So, you know, I think that's one of the keys to our success is as we've grown, we've constantly challenged Our. Our thinking from six months ago, where six months ago, we thought, hey, this is the way we should do this. This is the optimal approach. And then we get bigger and we're like, you know what? That actually makes no sense anymore. And we're willing to just crumble that sheet of paper up and go back to the whiteboard. And I think, you know, sometimes people just get stubborn or they don't want to go through the effort of just challenging themselves. And it's. That's true for a contractor that's trying to get from 5 million to 10 million. Like, the stuff you did at 5 million is not going to work at 10 million and it's not going to work at 20 million. Like, if you're running a plumbing or H Vac business, you know, as an example, if you're not constantly changing what you do in the organization and what you're focused on, your business will just get stuck. And that's one of the biggest mistakes I see is, you know, businesses become too dependent on the founder or the owner, and people around them are not getting developed. And then the business just hits a ceiling, whether that's a $8 million or $28 million. Like, if you're not constantly grooming those around you and letting others make mistakes, you're just going to get. You're going to hit a ceiling at some point.
- [47:55]
A
Yeah, I think that's great. I mean, you kept. I mean, some of the biggest and brightest that I know, one thing they have that they consistently say is they're constantly students always learning, you know, never being just comfortable with where. Where they're at. I want to finish with. With this because we're about 45 minutes into this thing, which doesn't feel like 45 minutes. That's what. That's when, you know, you're having good conversation. But what's next for you guys? Like, you came from the pest control world. Are you guys going to try and bring in any other verticals? Like, you know, roofing's a great one, you know, and. And it's like, I think roofing is definitely on the swing. I think invest investors are very interested in that space. And, you know, I built Chad and I built one, so we have one that's that we launched Indianapolis. It's doing very well. But, like, what you are, you have anything on the radar that you're thinking of that's kind of outside of the normal, you know, holy trinity of H Vac plumbing.
- [48:58]
B
I think this comes back to something you touched on a little while ago. About just blocking and tackling. We try not to get distracted by anything other than what our core competencies are, which is finding amazing partners, bringing them into the Redwood family and then just supporting them the best we can. And just given how big H vac, plumbing and electrical those markets are, given how fragmented they are, given how much low hanging fruit exists just across even the best run businesses, we're just focused on stuff that's not super sexy. And you know, investors will always ask, you know, your question, you just asked about like what, what cool new thing are we exploring? And it's just not a fun answer. Like we're, we're just focused on being the best at what we do. And until we believe that we've arrived, and I don't know if that will ever happen, but until we, we, we think we've arrived, we're just going to stay heads down, laser focused on, on what we do today.
- [50:00]
A
I think that's totally, that's totally fair. I mean, I mean I did a podcast a few months back and it talked about how the sexy part of the business is the unsexy part. And when you focus on that part, there's actually a lot of growth that comes from that space. And by the way, like I, you know, at some point in time, you know, I'm a 17 year in the business, I started it that way. It was if I just focused on H Vac every single day, I should be the best at it. And I legit thought that because I'm thinking, well I'm the only one doing it every single day, I'm gonna learn it better than everybody else. And that is what, that's what happened. And then it started to add H vac and plumbing, right. Because companies were doing multi train and then it was H vac, plumbing, electrical. And then really it wasn't until 2020 and this was Dave Geiger that pulled me into this. It was like brought talked to me about the roofing space and I was like, oh, let's look at the roofing space. And I realized how easy that was to do marketing for roofing companies in comparison to H Vac. And I was like, well this is pretty easy and with big average tickets. But the playbook was the exact same. It was just I needed to plug in this industry, kind of learn the buy cycle, you know, of the homeowner. And I knew and which is the same in any. And it's the big gaps come when you get to like pest control where it's the low monthly, you know, number how do you make sense of that get. Because you gotta look at lifetime value of customer and try to attribute it back to. So that's when the game changed a little bit. So we've kind of steered clear of that. But like we're being pulled in that direction just because a want, like we have some massive, you know, franchise location or franchise organizations that want us to come in. But it's a process because this is our core competency and we're staying put where we know we're best and we're hyper focused on it still. So that's its own team. It's not our core. That's its own team doing those things. So. But I can respect the fact that you're just staying put and building it in that business because you're right. Like there's like we talked about. I think this was pre podcast. I forget this point is there's going to be a lot of really great opportunity in 2025 in the home services space. I believe that wholeheartedly. And that's what I've heard over and over again. And that means for you, the contractor, right, you've probably learned some things this year about the business that you needed to fix. And maybe you fixed the things this year because you no longer were order takers. You had to kind of get back to business and now you're kind of on an upward swing or you got some things figured out and 2025 is going to be a great year and you're gonna have great options. But so will you, right Richard? Because you're gonna have some great options with businesses that have great people. And the thing that, you know, that, you know, if I had to give like my, you know, on air endorsement, what that's worth is you've done what you said you were going to do and you did it give up your integrity or your character doing it. And I really respect that. And it's been cool to watch that journey for you and then to hear the partners, you know, give positive, you know, positive feedback is like the icing on the cake. Right? Because that's post transaction, you know, feelings and you know, commitment and those types of things, which is what everybody gets concerned about. So congratulations man, for doing what you've been doing and continuing to grow and you know, and, and just creating a successful, like thoughtful business that didn't give up integrity, you know, who has made it about the next transaction.
- [53:27]
B
I'm way more proud of how we built this than what we've built because I think there are plenty of. There are, there's plenty of money out there. There's plenty of ways to, to grow a business. But how we've done it, how we've treated people along the way, the, the testimonials that our partners are willing to give on our behalf without us around that, that's what's most exciting to me. And I think when I, I reflect back on this journey one day, that's, that's what'll stick out is, is the people that I've been able to meet, the lives that we've been able to impact, and the financial performance just is almost secondary.
- [54:02]
A
Yep. I mean, I'll be excited for you to get into your legacy phase because that's where I'm at now. I'm in my legacy phase. It's like I'm at the spot now where this last, like, run for me is where I leave like my stamp on this industry and leave a good legacy that I can walk away and feel like I did it right. I did, I did good, you know, and I left the, I left the industry and, and a much better position than where it was when I arrived. Yeah. And, and I beat everybody.
- [54:34]
B
What more could you ask for than that?
- [54:36]
A
Yeah. And that's kind of where I'm at. And I could like do with integrity. And so I've come this far.
- [54:42]
B
That's almost there.
- [54:44]
A
Almost there, man. Hey. Okay, so let's go ahead and close this thing out by this last little comment. This is pretty. And, and by the way, like, it's, it could be something that you've already said, but I just like, you know, to leave some parting words for some of the contractors, you know, and, and it doesn't necessarily need to be with your, you know, your redwood hat on. It could just be, you know, from what you've heard, maybe some of the coaches say, or John say or you know, Rick say or anybody say, but like, what are some good parting words for the contractors that, that maybe they should focus on or be thinking about or just whatever, you know, kind of is on your heart in general like that you'd want them to hear before we sign off.
- [55:20]
B
I mean that's. You could take this a million different directions, but I guess the one thing I'd say is just freaking get after it. Like we, we are in an amazing industry. We're in an amazing time. This is pretty much recession proof essential service. Just get after it. And you know, the, the, A lot of the baby boomer founders in our industry are starting to step away there. That's that creates its own set of opportunities. And, you know, I want to partner with people that are just hungry. And whether it's hungry to get from 10 million to 50 or 50 to 300, like, just be hungry, get after it. There's a lot of resources. There are more resources for residential H vac and plumbing owners than any home service industry I've ever been around. Whether it's the best practice groups, our consultants, or people like you that just know people and can open doors and give advice. So don't be afraid to lean into that. I think nexstar is an amazing organization. So things like that. And then the last thing I'd say is just don't be afraid to charge a premium price for a premium service. So many times I see business owners, they want to provide a premium service, but they're afraid to charge a premium price. And they end up doing a lot of revenue and having nothing to show for it. And ultimately, it's not about how many trucks you have. It's not about how many. How much revenue you have. It's about what is the profitability and the trajectory of your business. So those are the two things I would, I think, matter most.
- [56:47]
A
I think that's fantastic advice to close out on. Richard. It's almost like you've been in this business a little bit. Well, listen, man, I appreciate you giving me the time, you know, and hanging out and getting to chat with you, and I always enjoy getting to talk to you and just catch up anyway. So it's cool to be able to do it on air.
- [57:02]
B
Yeah, absolutely. Thanks for having me.
- [57:04]
A
Yeah, of course, man. And, you know, and even though I know you say you don't like to brag, I'm bragging on you for you, but because it's something that's worth bragging about. And it's cool because you're just, you know, you're kind of just getting rolled on the. On your journey.
- [57:18]
B
Yeah, I think so.
- [57:19]
A
Be pretty cool to watch it. So, to our listeners, you know, I heard a few, just a few key takeaways, and that is, you know, when you find somebody who you know is the right fit but you don't have a seat for them, find a seat, because I promise you, good people are going to be good for your business and they'll figure out where they land and they'll do good. I've done the same thing multiple times, you know, and culture does matter. Again, that's one thing that can set yourself, set your business apart. You've heard it many times over the last few weeks that it matters that much. Everybody can't be wrong and you're right. So. So take that into consideration and remember that the business is constantly changing. So don't forget to be a student and continuously learn whether it's with a good partner like nextar, which now Rhino is a partner of nextar, you know, for, you know, if it's a peer group, if it's whatever, like, find somebody that you can constantly learn from or grow from or go do shop visits. I mean, plenty of people open up their shops and have visits, including Chad Peterman, and he always does a couple things at his shop, and it's fantastic, you know, and then the, you know, I think the most important thing is just know that I think that we have a lot of really great blue sky in front of us and, and I see, see and hear a lot of really great things about next year. I'm not saying it's not going to be competitive. It's going to be competitive next year still, but, man, our future looks really, really good and I'm excited about it. And I'm excited what the contractors had to go through to relearn or to, you know, get back to the blocking and tackling in their businesses to set themselves up for 2025 to have an incredibly successful year. So, Rich, I appreciate you coming on, sharing it again. Kudos to, to you and to the whole Redwood crew, and I've gotten to meet some of your, you know, leadership team. All good human beings, but congrats to you and to our listeners. You don't got to do everything, but you got to do something. No zero days.