RYNOx 2025: Ken Goodrich & Ismael Valdez Discuss How Adversity Creates Best in Class Operators

Summary

Podcast Summary: RYNOx 2025 - Ken Goodrich & Ismael Valdez Discuss How Adversity Creates Best in Class Operators

Podcast Information:

• Title: To The Point - Home Services Podcast
• Host/Author: RYNO Strategic Solutions
• Episode: RYNOx 2025: Ken Goodrich & Ismael Valdez Discuss How Adversity Creates Best in Class Operators
• Release Date: March 25, 2025

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Introduction

In this compelling episode of the To The Point - Home Services Podcast, hosts Ken Goodrich and Ismael Valdez delve into the transformative power of adversity in shaping exceptional operators within the home services industry. Through personal anecdotes, insightful discussions, and practical advice, they explore how overcoming challenges fosters resilience, leadership, and business success.

Overcoming Adversity

Ken Goodrich opens the conversation with a profound reflection on adversity:

"Adversity introduces a man to himself. In business, every struggle is a lesson. Every setback is a sharpening stone. The best businessmen aren't those who avoid hardship, but those who are forged by it." (00:00)

He contrasts his own journey, which began with a stable foundation in his father's air conditioning business, with Ismael Valdez's story of building from scratch despite significant hardships.

Ismael Valdez shares his inspiring background:

"I've never used my background or my ethnicity as an excuse to execute the results that I’ve gotten." (00:37)

Valdez recounts his early life in Mexico, the loss of his mother, and the sacrifices his father made to provide opportunities in the United States. This resilience and refusal to use his past as an excuse propelled him to success in the trades industry.

Mentorship and Grit

A significant portion of the discussion focuses on the importance of mentorship and grit in achieving business excellence.

Ken Goodrich emphasizes the value of perseverance:

"Grit. I look for grit. Like, who's gonna get up and get it done? Who's going to make it happen?" (12:20)

He explains that he seeks mentees who are determined to act and achieve tangible results, rather than merely engaging in conversations.

Ismael Valdez highlights how mentorship can make a pivotal difference:

"In 2018 or 19, I was really fucking broke... I picked up the phone and called him... that one pivotal moment was what helped me get through that thing." (44:03)

Valdez credits a critical call to Goodrich for helping him navigate a financial crisis, demonstrating the profound impact of mentorship during challenging times.

Building a Strong Company Culture

The hosts discuss the elements that contribute to a thriving company culture. Goodrich shares his philosophy on fostering a sense of belonging and pride within teams:

"People just want to be part of something that's good and growing. They want to feel like they're on a great team and they're having fun and exciting things at work." (24:24)

He recounts a moment of success during a grand opening event where employee joy and engagement signified the tipping point of a successful business.

Ismael Valdez underscores the importance of leadership and operational excellence:

"What separates a successful business from a shitty business is the drive that the operator has, the vision that he has, the execution that he has." (40:15)

Valdez encourages operators to harness their innate power and vision to shape their businesses, beyond just focusing on numbers.

Navigating Competition

Goodrich shares personal experiences dealing with competition and the strategies he employs to stay ahead:

"We do it our way. We think about things differently. We're not going down the path of being a me too company." (31:52)

He recounts a story about joining the Air-Conditioning Contractors Association's Airtime 500 group by purchasing a business in Phoenix, showcasing his innovative approach to overcoming competitive barriers.

Ismael Valdez takes a different stance, focusing on learning from competitors to drive improvement:

"I started questioning everything they were doing... I took that. That really catapulted me when I opened up myself and I started reaching out to these great industry leaders." (34:32)

Valdez emphasizes the importance of understanding competitors’ strategies and continuously educating oneself to stay ahead in the industry.

Strategic Operations and Systems

Goodrich delves into his systematic approach to managing and scaling businesses:

"I created a whole system around the metrics of the business. We created a tool that we called the DSC, the Daily Strategic Compass." (17:47)

He explains how implementing structured metrics and regular strategic meetings helped streamline operations and enhance managerial effectiveness across multiple branches.

Lessons Learned and Final Insights

Towards the end of the episode, both speakers provide actionable advice for business owners facing adversity:

Ken Goodrich advises staying focused and never letting obstacles hinder progress:

"Don’t get stuck. There’s always an answer, there’s always a solution. You just got to focus in say, I’m going to find this answer and get it done." (39:32)

Ismael Valdez encourages operators to maintain their drive and not let external factors dictate their success:

"You as an operator, CEO, owner, you have the power to change a lot of people's lives. You have the power to mold your business how you want to do it." (40:15)

Conclusion

This episode of the To The Point - Home Services Podcast offers a rich tapestry of experiences and wisdom from two seasoned industry leaders. Ken Goodrich and Ismael Valdez illustrate how adversity not only tests but also refines business operators, leading to the creation of best-in-class companies. Their discussions on mentorship, culture, competition, and strategic operations provide invaluable insights for HVAC, Plumbing, Electrical, Roofing, and other service-based companies aiming to grow and thrive in a competitive market.

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Timestamp Guide:

• 00:00: Introduction to Adversity in Business
• 00:37: Ismael Valdez's Personal Journey
• 12:20: Importance of Grit in Mentorship
• 17:47: Strategic Operations and Metrics
• 24:24: Building a Strong Company Culture
• 31:52: Navigating Competition – Ken's Strategy
• 34:32: Learning from Competitors – Ismael's Approach
• 39:32: Final Insights on Overcoming Challenges
• 40:15: Power of Operator's Vision and Execution

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Note: Advertisements, intros, outros, and non-content sections have been omitted to focus solely on the valuable discussions between Ken Goodrich and Ismael Valdez.

Transcript

[Ken Goodrich]

Adversity introduces a man to himself. In business, every struggle is a lesson. Every setback is a sharpening stone. The best businessmen aren't those who avoid hardship, but those who are forged by it. But then I thought about you and I'm thinking, like, your story is just against all odds. Like, I mean, I had a dad in the air conditioning business. He taught me the business. You know, we had a nice life. That's kind of how I started. And I had my own journey. But, like, you had no, nothing other than heart to build what. You build it so fast.

[Ishmael Valdez]

I've never used. I've never used my background or I've never used my ethnicity. I've never used my, my past for an excuse of, to execute the results that I gotten. You know, 32 years ago, I was, I was in Mexico. My mom had just passed away and, and, and we, you know, me and my brothers were orphans over there. My dad made the decision to leave us and separate us through different aunts and uncles to be able to, to be able to come to the United States. So me and my brother, like, I was with one aunt, my brother was with another aunt, my other brother was with another aunt. My dad comes to the United States and just, you know, takes a huge risk on, on coming over. From that point on forward, I like, like, I made it a. For me knowing, like, me going back and, and recognizing that decision that my dad had to make to just overcome and, and come to the United States and give us the opportunity to, to, to live in this amazing country that we live in. That's when I knew that no matter what, I was never going to use an excuse to execute on, on, on. On what I was going to do.

[Moderator]

Okay, so we're going to keep this thing rolling. And I've been excited for this next pair to get together and come up here and talk to you guys. If you saw it on the agenda, you probably thought the same thing. So I don't ever know what's going to actually happen in these situations. I just know whatever it is, it's going to be amazing. So I want to bring up our next guests to come up and speak again. Over here on this side of the stage, we're going to bring up the legend himself, Mr. Ken Goodrich, and Ishmael Valdez, our influencer. I mean, that was the perfect entrance song for these two.

[Ken Goodrich]

Right?

[Moderator]

Come on. And the timing was right. Probably could have played the clip a little longer. I can't win them all. All right, boys, this is gonna be good. I'm excited for it. Thanks, Kenny. Kenny the flashlight. Goodrich.

[Ken Goodrich]

What'S up, man?

[Ishmael Valdez]

What's up, Kenny? They got some interesting questions for you, Ken.

[Ken Goodrich]

All right, let's talk about culture.

[Ishmael Valdez]

Let's not talk about that now.

[Ken Goodrich]

Listen, Ishmael, I think there's a lot. Based on what people are telling me, there's a lot of people who want us to get up here and be their monkeys and entertain them. We're not doing that. We're collaborative businessmen. They don't know how much we talk and spend time helping each other. So we're not doing.

[Ishmael Valdez]

I don't think they know the mentorship behind all the conversations that you. That me and you have. Have had throughout the years. Other struggles you got me through, too. So I want to talk about those, too.

[Ken Goodrich]

Okay, so listen, I. I was. I was poking around, reading something yesterday, and I saw this quote, and it reminded me of you. And I'm going to say the quote, then I'm asking a question. Okay? Adversity introduces a man to himself. In business, every struggle is a lesson. Every setback is a sharpening stone. The best businessmen aren't those who avoid hardship, but those who are forged by it. And that reminded me of you, because when I think about this whole journey, I think most of us who've got to certain levels, we have a certain level of PTSD with the struggle that we've had to learn and learn on the fly and build these businesses without some of the tools and maybe even education that we probably should have had before we started. But then I thought about you, and I'm thinking, like, your story is just against all odds. Like, I mean, I had a dad in the air conditioning business. He taught me the business. You know, we had a nice life. That's kind of how I started. And I had my own journey. But, like, you had nothing other than heart to build what you build. And so fast. Just tell everybody kind of your story from the beginning, how you overcame the lack of resources to get what you got.

[Ishmael Valdez]

Thank you, Ken. Thank you for those words. Look, I don't. I've never used. I've never used my background or. I've never used my ethnicity. I've never used my. My past for an excuse of. To. To execute the results that I gotten. You know, 32 years ago, I was. I was in Mexico. My mom had just passed away, and. And, you know, me and my brothers were orphans over there. My dad made the decision to leave us and separate us through different aunts and uncles to be able to to be able to come to the United States. So me and my brother, like, I was with one aunt, my brother was with another aunt, my other brother was with another aunt. My dad comes to the United States and just, you know, takes a huge risk on coming over. From that point on forward, I like, like, I made it for me knowing, like, me going back and recognizing that decision that my dad had to make to just overcome and come to the United States and give us the opportunity to live in this amazing country that we live in. That's when I knew that no matter what, I was never going to use an excuse to execute on what I was going to do. So look, I come from Mexico. I was born and raised over there. I come to the United States and get in the trades at the age of 18, 17, 17, working at a supply house. Worked for you guys for about eight years at a counter, you know, trying to sell you guys American standard equipment and parts and material and all that. So I was deep in the trades from a young age. And yeah, you know, through, through different relationships of contractors that I was talking to daily and seeing their struggles and talking to them and seeing some of the success stories that were in the industry. That's what caught my eye the most. You know, being behind the counter and talking to 2, 300 contractors a day, coming in and picking up material and equipment and being curious and having that curious mind. I'm like, how much did you sell that equipment for? Like, you know, they were picking up and I was seeing the prices and to me, it intrigued me to be able to see everyday, you know, Americans coming in here in the supply house and making a good future for themselves. So, you know, I had a, I had a good, I had a very rough pass, but I've never used it as an excuse to not execute on what I wanted to do.

[Ken Goodrich]

Yeah, well, it's an incredible ride, incredible story. You know, me personally, I mean, we can kind of ask the crowd. I personally have never seen a H Vac wholesaler guy ever make the transition as a good contractor. I've never seen it. They try, but I haven't seen it happen.

[Ishmael Valdez]

But I've seen a couple people try. Never had a successful journey on them, you know, but nobody had that dedication that my dad implemented on us since we were young. So.

[Ken Goodrich]

But yeah, so, you know, you, so you, you get to this point, you're like, I'm going to hang up my own shingle, I'm going to start my own business. But you had, you'd never been around accounting you'd never been around marketing, you know, you, you know, you never been around any of that stuff. How'd you pull all that together to get, you know, what.

[Ishmael Valdez]

And, and, and, and that I think that was to my advantage, Ken. Looking back at the ignorance that I had going into the trades and starting a business and working, I worked for some of the, some pretty good people throughout my journey. But, but looking back at the journey and having that ignorance of like, hey, I don't know how to market, but I'm going to figure it out. And, and I don't know how to, you know, how to run a business, but I'm going to figure it out. And just going and having that huge risk, taking that huge risk, not ever showing the other side or not knowing the other side of like, man, this cannot, the chances of this working out are so slim that I shouldn't even try, which most people, that's where most people get stuck. It's, how do I get started? And the chances of me succeeding are so slim, why should I even try? And I was so ignorant to those, you know, percentages or, or, or success stories that I just put my head down and got to work, man.

[Ken Goodrich]

You know, I got a story like that too. So I don't know. I'm 25, 26, start the business. My dad passes away. I'm trying to figure it out. And my first customer was this Greek guy, Greek immigrant, couldn't really read or write. Had built the largest taxicab company in Las Vegas. Multimillionaire, very successful guy. I'd go do a quarter million dollar job for him and he'd give me the checkbook and make me write the checkout because he couldn't write. But one thing he said to me, so he came into my office one day and I was, I was trying to bid the Stratosphere H Vac in Las Vegas. Like, I got no business trying to bid, bid the Stratosphere, but I'm going to bid the Stratosphere, right? So I'm working on the plans and he stops them and he goes, you know why you're going to make it in business? I go, why? He goes, because you don't know you can fail. And. Which is exactly what you're talking about. And by the way, another thing that he told me was one time he, I don't know, I was crying about something. I can't do this, can't do that. And you know, he starts screaming on me and he says, look, you don't understand what you have. You don't understand the tools that you have. You can speak the language, you went to school, you know mathematics, you know this, you know that, you're born here in America, you know everybody. I came here with nothing. And if I had your what you have, I would have been a multi billionaire by now. So get caught up.

[Ishmael Valdez]

The not, I don't think the not knowing that I didn't know how to fail, but I don't think I've ever had an option not to fail. Like, my dad instilled that from, from a young age to us, that, you know, that there was no option of failing. Like, whether we were working for somebody or we were starting our, or we were gonna start something, he always made that clear to us. Like, if you're gonna do it, you're gonna do it right, and if you're gonna do it right, you're gonna be the best at it. There's no excuses for it, right? And he made that real clear. I could, I could still remember him telling us that from a really, really young age. So that was probably one of the best, you know, gifts that I got, was my dad actually instilling those kind of things throughout my journey. So let's talk about mentorship, Ken, because, you know, a lot of people in this industry are looking for mentors and are always asking about mentoring questions. And you know, I get thousands of DMs and literally thousands of DMs between Facebook and Instagram. And I have two full time people just working on DMs, answering messages for people that, you know, are always asking for mentoring. What's the one, what's the one trait that you look for when, when you, when somebody's asking you to mentor you, they're asking you if you can mentor them. What's the one thing that you're looking for in them that's gonna make or break them from being a good, a good mentoree or, you know, succeeding or. What's the one thing you look for?

[Ken Goodrich]

Grit. I look for grit. Like, who's gonna get up and get it done? Who's going to make it happen? Like, I'm not going. I don't want to waste my time and my experience on, you know, just having conversations. Like, you know, as a matter of fact, I usually tell everybody, look, I'll work with you, I'll share some ideas. But to the point where you're just having conversations with me, then I'm out. So I'm looking for success stories. You know, I want to help people be successful. I want to share my knowledge and experience and see them thrive. I'm just not in it to have a conversation.

[Ishmael Valdez]

Is that the same thing that you're looking for when you're buying and selling businesses, though? Like, obviously there's a ton of different. You bought and sold businesses, you know, throughout your whole life. And you've been probably one of the most successful people in this room acquiring the businesses. And obviously when you walk into a, when you walk into a company, what's the one thing that you're looking for in the company and in the leader that you say, okay, this is what I want. This one I'm going to grab or this one I'm going to pass on?

[Ken Goodrich]

I have not bought many businesses where I brought the leader along. I just haven't. Most of the things I bought were underperforming businesses and I was buying customer bases or a new location or something like that. But what I had to do is I had to put a new management team and I had to find a manager. And over the years, I think I got pretty good at finding some really top talent, management talent. But, you know, one of the key ingredients kind of goes back to the grip, but it really comes back to how we started this conversation. What kind of adversity have you had you had in your life that you've overcome?

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[Ken Goodrich]

And I make this joke in some of these forms where I say, like, I like managers with daddy issues. And you know, because probably I have daddy issues. And I know that when you come from a strong dad and who's demanding and disciplined and, you know, difficult, you're usually, you're usually a hardened guy that has something to prove who's really not going to fail and failure's not an option. In every role that I took that I sold these companies, every role that I took and I took a area vice president job or a regional vice president job, or one time I took a president job at Ars, I would never miss my numbers. I did whatever I had to do to miss my numbers. Because that's innate in me from my upbringing, right? And so I look for those kind of guys and I just give them the routine. And most of the guys that I put in businesses that they don't come from the trade. So that's how I approach.

[Ishmael Valdez]

Why is that though? Because there's a ton of firm believers in here that you should raise your leaders from within. And you're saying that you're bringing in your leaders from outside of the industry. Is there a certain, you know, a certain strategy behind that? Or is there something that you're not seeing in the industry, that you're seeing outside of the industry? Or what is that? Why do you bring leaders from outside of the industry to come and manage these broken businesses that you're running into?

[Ken Goodrich]

Well, I would say that up until the last 10 years there really was not many managers in our industry. You know, it was mom and pop businesses and family businesses and half assed managers and you know, there wasn't anybody to choose from or to recruit. So you kind of had to make your own. And then once when I figure out how to make my own and, and I have a specific routine, how I get them, get them tuned up and running a branch pretty quickly.

[Ishmael Valdez]

Tell. Talk, talk about that. What is that routine that you're talking about? That, that. What is the, what is the, what is the mentorship that you're. That, that you're grooming onto these people so you could raise them to be leaders in a broken business that can take it from losing money or not growing or whatever problem that you saw in the business? What is it that you're doing to structure these people? Because most of the people in here, whether they want to admit it or not, they have a broken leadership problem. They don't have a broken business, there's broken leadership. Or they cap out at their leadership and they just ignore it. So what is it that you're doing to be able to groom and mentor these people, to fix and drive these businesses forward? Because you've taken broken businesses and made them super fucking profitable, whether it's a year, two years or five years, and grown them and sold them. So what is it that you're doing to the people to groom them and mentor them?

[Ken Goodrich]

Well, let me preface what I'm about to say with this. You know, I have had an opportunity that most of you guys haven't or won't ever have in business in that I have been involved in every single roll up that's gone on in the industry since the 90s. And so every time I got involved those roll ups, I got to be around more educated people, bigger business, bigger perspectives and things that I didn't know. And so which kind of shaped me that none of us would have got that opportunity to learn that stuff unless they, you know, went back and got their MBA or something like that while they were running their business. And I just had these new specific trainings, M and A, how to run multi branch businesses, you know, you know, regional P&LS all this stuff that I've had to deal with that most people don't get to. And I'll say like the other experiences I'm constantly trying to learn and pay attention to what's going on around me. And you know, to the same point like so gettle my former company, we have a new CEO, Jake Gress. And you know, when I think about the way he came up comes about it, I think had I understood what he knows and came about it that way, I would have been three times what I've created now. Just because it's more thoughtful, more organized, more focused on efficiency. You know, he's covering all the bases but he had the education experience to get there. So. But here's what I did. So I understood as soon as I started to understand metrics and understand that how the metrics, I started thinking about the cause and effect of each metrics and I started to write down cause and effect. This metric is affected by these things. What's the cause, what's the effect? You know, and tried to create a whole system around the metrics of the business. And we created a tool that we called the dsc, the Daily Strategic Compass. And it was a set of metrics that set up any number of things and they're all similar that you see on the service Titan dashboard. But we had evolved ones and ones we looked at different than anybody else did in the industry. But it seemed to be I created it so logical that I could take a pretty green guy in a pretty short period of time. I could get him to understand like he's flying the airplane with his gauges. And this gauge means that and that gauge means that. And if that gauge says that, pull up. If that one does that, slow down or whatever the case is. And so we started with some simple rules like that. And then to give you an idea, it's everything's based on your plan. I'm in March and it's March 12th. And you know, my pro rata calls book calls is supposed to be this number. It's that number I'm down. What am I doing about it? What am I doing about it right now? And so then we would have these calls. We still have similar things today, but at ghetto. But we'd have these calls Tuesdays and Fridays and Tuesdays we'd have all the managers on the phone and these guys that, you know, like I hire. One of my guys was a former F16 pilot, you know, other guys, you know, ran big sales organizations for huge printing companies, things like that. But they were all gritty guys who had to win, you know, they just were never going to fail. And so then I'd have these calls and on the calls we'd have one hour call and. And I'd host the call and I'd say, okay, Tucson, go. And he'd start going through his numbers. We'd be listening, I'd say, stop. Why are you up? Well, I did this and this and this. Okay, did everybody hear that? He did this, this, and this is how you're up. Watch this. And I would be giving counsel on. But when this happens, remember, be careful about this and look at these three other things. And so it was a constant learning space twice a week with very focused on these metrics, cause and effect. Pull the lever here, do this when that happens, do this when that happens. And in pretty short order I was able to get managers up. And I think in terms of the industry, I've had multi branch businesses, other states. My first one was in, well, I guess you can say my first multi branch business I bought was here was in 1997 and I had to learn it back then.

[Ishmael Valdez]

Now he's aging himself by the way.

[Ken Goodrich]

So that's what I did. I didn't talk about culture much, I didn't talk about HR rules. I didn't really. It's like, how does this machine work? Work the machine, coach your guys, lead your guys. I mean obviously we talked about how to talk and motivate your people, but it wasn't as in depth as we all talk about culture and things like that now. It was run the machine like this.

[Ishmael Valdez]

So you're very systemized. So the one thing that people are struggling with right now and obviously P infiltrated our industry in the last four or five years and, and I've had struggles with this and you know, I'm sure you had struggles with it. What is it that you're doing specifically to start to get your employees to show up and actually do their fucking work instead of just showing up for a paycheck? Like what is it that like Is it something that ghetto is doing? Is it something that you're. That you're seeing? Because most, whether people want to admit in here or not, most people are just showing up for a paycheck at your company. Okay. And as soon as somebody else pays them more, they're going to go to the other company, right? Not everybody, right? The key people, you know, the people that I have access to me and to the owners and CEOs and all that, those are probably the glue in the company. And those are probably people that won't leave you just for a paycheck. But what is it strategically that you're doing or that you've seen work where people aren't just showing up for a paycheck and they're actually driving the business with passion and care?

[Ken Goodrich]

So I learned this very early on that people just want to be part of something. You know, they want to feel like they're part of something that's good and growing. And, you know, I don't even want to. I'm not even really add that they have a future and they just want to feel like they're on a great team and they're having fun and exciting, exciting things at work. Right. And ultimately, I guess that's culture. But I don't care where I was at in business. Like, I've been. I've been technically bankrupt several times in my career where, you know, my liabilities exceeded my asset in a big way and it didn't matter where I was at. I'd get in front of those guys and say, we are the best of the best of the best. We are the best technicians, we are the best installers. And this is how we do it, and this is why we do it. And this is where we're headed. This is where we will be. And I would continue to be the evangelist of the organization. And it didn't matter. Like, I knew that I. I'm looking at all. And I knew I didn't even have their paychecks. I couldn't even pay their paychecks today. I gave them the raw. And I remember this is a. This is a story that would tell you what I look for when I get there. This is probably 2015. I think it's 2015. But Tommy Mello had a. He had a grand opening event for his new facility, I think. I think that's what it was, right? And so I go over there and, you know, he had all his cool stuff. He had his door displays and this and that. And there was people running around And I. Right then I'm walking in, I'm like, he got it. He hit the tipping point. And the tipping point is when you can build a business and a brand and a team where they're. They've committed, they own that business, they're part of it. His people were running around smiling, happy, and they were all excited getting this party set up and showing everybody around with such pride. And I went up to Tommy, I said, you remember this moment right here? This is the most pivotal, most important part of business right here. And you're here. And I personally would probably give anything to be right here again. This is the. This is the time you've hit the tipping point. Now, from this point on, you keep this going, and it's, you know, up and to the right, but it's that point. Tell me about when you hit that point.

[Ishmael Valdez]

2000 and 2018, 2018, 2019 Christmas party, Christmas party and everybody. I remember being up on stage, and I remember being my daughters being up on stage with me, and we were giving out prizes, and I actually saw joy in people's eyes for the first time. Because from 2015, 16 to 2018, 19 was a fucking grind battle. You get more calls on the board. I need more sales. I need to make payroll. I need to call these vendors and tell them that I can't make payment yet. That was up to 2019 and 2018. 2019, I think it was the Christmas party, and for the first time, it was, you know, couple hundred employees in front of me, and I. And I looked at them, and everywhere I saw, there was joy. There was joy. People were, you know, people were having fun. People were, you know, I was, hey, we're going to do a raffle for $5,000 or $1,000, we're going to do. And people were actually cheering when. When somebody would go up on stage, it would, like, be screaming. And that was probably the. I could probably remember that. And that's when I. That's when it all settled in that I had something really, really good at next gen going on.

[Ken Goodrich]

Yeah. So you.

[Ishmael Valdez]

You.

[Ken Goodrich]

You relate to the Tommy story right then, right? Yeah. That's my favorite time. I've done six businesses, and I. That's when I look for that time.

[Ishmael Valdez]

Look, let's talk about something that nobody really talks about, Ken. You know, competition, your competitors. Like, what is it that you've learned in the last, you know, 10, 15, 20 years that you've been in the industry? What is it, you know, the good things and the bad things about your competitors? What made what? You know, did you see anything? Can you tell them anything that they should be learning from their competitors or what's one key advice that you would go back and talk about?

[Ken Goodrich]

You know, one time I was in the group airtime 500, and I wanted to get in. I live in Las Vegas, born and raised in Las Vegas. And so. And they work by territories in airtime 500. And the guy, one guy owned all the territories in Vegas. And he was my biggest competitor. And, you know, I'd ask him if I could get a territory and yeah, yeah, yeah, we'll get together in a month or so. He just dragged me on, drag me on, drag me on. So I said, how am I going to get in this organization? So I called up the. I called up the office and said, hey, do you have any openings in Phoenix? And they said, yeah, we. We have openings Phoenix. So if you. If you had a company in Phoenix, you could join our airtime 500 group. I said, great. I called up my accountant who happened to work out of Phoenix and said, hey, you know, a business broker called. This guy called. The guy got an air conditioning company. I got an $800,000 business right now. I said, I'll see. I'll see you in a couple hours. I got on a plane, I flew out there, I made him get me get in front of the guy. I made the deal, and we bought the business. I bought the business that day. And then the next day I got on a plane and I flew to Florida to the airtime 500 profit day, where they bring in the members, and they're like, well, what are you doing here? We said you couldn't join. I go, nope, here's my new business card. I have business in Phoenix now. So I got in the group that way. And so when that happened, this guy was, you know, he thought it was, you know, he was very. He didn't like my creativity. And so I remember him at the first meeting, and he's yelling at the leader of this Airtime 500 group, saying, like, you know, he's cheating and he's going to use this stuff in Vegas and blah, blah, blah. And the guy said. And I'm overhearing it, and the guy says, listen, here's what I know about Ken Goodrich. Well, no, he says, you need to quit worrying about Ken Goodrich and work on your own business. Because here's what I know about him. He doesn't think about what you do. He doesn't think about you one second of the day. All he's focused on, is growing his business and really that sums up how I always felt about it now. And that said, I don't like, I tell my team and I've told my team for 30 years, we don't do anything else that anybody else does. We do it our way. We call it something different. We, you know, we just, we think about things differently. We're not going down the path of being a me too company. So I don't think much about the competition. I just beat them.

[Ishmael Valdez]

Good answer, good answer. Me, I take it a little bit different. Can I make my competition drive me? I don't, I don't ever let my competition, you know, get ahead of me. I find out what service champions is doing. I find out what ghetto's doing. I find out what everybody's doing. I find out how they're paying, I find out how they're selling. I find out what the model is doing and I want to know exactly why they're doing it and how they're doing it and at what pace they're doing it. Because to me, educating myself and knowing that, you know, I don't know everything and the only way I could get ahead of my competition is by, you know, learning what they're doing right and wrong. So I've always, you know, kept a really close eye on Leland, which is one of my, you know, one of the industry icons that we've had in our industry. And he's just to let you guys know, Leland is 15 minutes away from me at my Orange county locations, which was my headquarters and for, you know, seven, eight years that we grew next into $100 million in his backyard. I was watching him from, from afar. I was seeing how he was paying his technicians. I've learned a lot from him. The way he spun the tech turnover, I learned how serious he takes his, his memberships. And what I did that, that really helped me out in my journey was I took the time to, to, to look at my competitors and, and travel around the United States. And I've probably been into most of these, you know, fifty million dollar companies and up that, that, that when I was a smaller company because I, I was always a curious mind. I, I always, I was always humble enough to know how dumb I was since, you know, very, at a very young age and how much more I could learn from, you know, really, really successful people in the industry. So I, I never took them for granted and I always, always, always made sure that I, that I was always one step ahead of them. So if they were, you know, if I saw that Leland was, you know, turning on the marketing, what was he turning on? If I saw that, you know, Bell Brothers was doing something else with their plumbing, you know, why were they doing that? And I started questioning everything that they were doing. And my first question to everybody was, my first question I asked to everybody is why? They come up to me and they ask me a question or if I go, if I ask a question, the next question right after that is gonna be why? So I took that. That really catapulted me when I opened up myself and I started reaching out to these great industry leaders and started seeing what they were doing right and wrong. And trust me, Leland has a phenomenal business. You know, Jonathan has a phenomenal. They do a couple things good. Not everything that they do is good though, you know what I'm saying? So I've always kept a curious mind. I think that's what made NextGen NexGen.

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[Ken Goodrich]

You know, Leland was my boss for like we both merged into Ars in 97 and he was my boss for three years. I know he thinks I'm the worst employee he's ever had. Most difficult one for sure. But I will say I'm with you. Like Leland's operation, it's always been pristine and precision and where maybe I came at it like I'm gonna scorch the earth and take land, I'm a land grab guy. He was a precision efficiency guy and he built every brick in that business. Is well placed before he goes on to the next one. So it's just kind of two different methodologies at it. I would say probably in the long run, he wins. In the short run, I make more, you know, hey, you know, more noise. Yeah. And then, you know, when we were at. When we were at ars together, though, I had already acquired some companies in my former company, so they said, hey, can you help us with some acquisitions here and there? And I work. Leland ran the western region, and I ran the southwest part of it for him. And so I was doing acquisitions. And, you know, when I sold the business, then the first time I was done, like, I was just gonna live it out. I made a little chunk of money and I was gonna do something different because I'd been in my whole life, and I want to try something different. I was 30, so I would. But in the acquisitions, I'm traveling all around the country, and I'm seeing every kind of operation you could see, and they're the best of the best of that time. And I'm like, getting inspired. I'm like, oh, I should have done that. Oh, I like that. That's how it's supposed to look. And that got me interested again back in the industry. But to your point, a big part of what I've learned and how I've educated myself through the industry is these kind of communities, these events, going to other people's operations. And I'm a big prescriber of getting to these best practice groups. And it's mainly one, you kind of get the fundamental processes in your hands and you don't have to reinvent the wheel and you can implement them. But number two is the community. And the majority of things I've learned is from guys, everybody in this room. And I pay attention. And I don't consider that competition because I'm not going to my local guys shocks.

[Moderator]

You know, hey, guys, I'm gonna go ahead and cut in for a second because we're getting close. I know.

[Ishmael Valdez]

Can I ask him one more question? Because he, like, this is one really good question that I. That people need to hear.

[Moderator]

Do I really have a choice?

[Ishmael Valdez]

Yeah. Yeah. Look, guys, like, Ken's probably one of the most successful business owners here, and he's in. Like he said, he's traveled the whole United States looking at businesses inside and out. And there's a lot of things that we all do good in this industry. And everybody can pick up one thing that, you know, next gen did good and Morris Jenkins does good and service champions. But there's there's also. What's the. What do you think is the one thing that, that, that they don't do good? Ken, Nobody talks about the. Everybody talks about how Leland, you know, grew his business on memberships and Nexon was on marketing and all. Like, what's the one thing that you see most businesses do? Like, not as good as they should be doing. What's the one common thing that everybody kind of misses in the industry?

[Ken Goodrich]

Well, I'm just going to stick with the leader. I haven't met many leaders who would do something like, I'm going to get in that airtime 500 group, and I'm getting on an airplane right now, and I'm buying a business so I can be in that group and get the education I need to build my business. You know, it's. Don't get stuck. There's always an answer, there's always a solution. And you just got to focus in say, I'm going to find this answer and get it done. I think that's, I mean, we can go into some finite details of the H vac industry, but to me, I just never let anything stop me.

[Ishmael Valdez]

And guys don't let, like, look, there's a lot of, There's a lot of changes in our industry going on right now. The one thing that you guys got to always realize is that we're operators for a reason, okay? There's one thing that, you know, private equity could come in here and teach us a bunch of things with it, you know, which is a good, very good things in, into our industry. At the end of the day, what separates businesses from a successful business from a. From a shitty business is the drive that the operator has, the vision that he has, the execution, the execution that he has. So don't ever take, you know, your, your power that you have for grant granted, okay? You as an operator, CEO, owner, you have the power to change a ton of people's life. You have the power to, to mold your business how you want to do it. And that's something that nobody else is going to take that from you, okay? So when you're looking at just numbers, numbers, numbers, numbers, numbers will tell you one thing, your internal gut feeling and that, that, that sixth sense that made us, you know, CEOs and successful business owners and is what's always gonna differentiate yourself from a good business from a bad business. Okay?

[Ken Goodrich]

And I'll say the last thing, we're done on the way driving here, I'm talking to this guy, a big operator that has a Business has business in San Antonio, Dallas, and Houston. And he did a PE deal, and, you know, he was crying about, you know, they don't listen to me, blah, blah, blah. And I said, listen, here's what you need to understand what we created and the way we had to come about it. Most of us in this room is completely irrational to a. To a classically trained business person, right? They look at it like, what the hell is going on here? But it's just. It's our Rube Goldberg machine that we built because we did. We didn't have any resources, we didn't have the education, but we pulled it off. We figured out how to put that together. And I said, so, you know, don't get down on about that, because no one's going to understand it but us. And I said, you know, I think what you need to do is go talk to them, say, listen, we need to work together. You respect me for what, I'll respect you for what? You know, you respect me for what I know, and let's somehow come together, and I'll help you dissect my Rube Goldberg machine that I built and. And take it to the next level. And I think that's the rub that goes on there, because, you know, we're special.

[Moderator]

Oh, hey, sit back down.

[Ishmael Valdez]

We got.

[Moderator]

We got a couple questions. Okay, Chris, you want to go ahead and kick it off?

[E]

Thank you, guys. So for me, Chris said to be vulnerable, I'm going to be vulnerable. I come from an SEC industry. I personally raised and managed a billion five.

[Moderator]

And if you know any, turn that on.

[E]

So if you know anything about that industry, wait.

[Ken Goodrich]

Well, I didn't hear the industry.

[E]

Okay? I had an SEC registered firm, and. And so I personally raised and managed a billion five, which, if you know about that industry, that made me a stud. And then I sell that business and I come over to this industry four years ago, but I really personally got involved, like, two years ago. And my struggle now is I'm feeling like a failure. And so the nice thing about hearing you guys talk about, Ken, you saying you were mathematically bankrupt multiple times. Ishmael, you talking about struggling to make payroll as late as 2018. What were those push throughs when you were sitting there going, man, I'm. I'm smarter than this. How do I get through that? Because that's the piece I'm struggling with.

[Ishmael Valdez]

You know what? You know what? I don't think I've ever told this story to anybody, but I remember in 2018 or 19, I was really Fucking broke. And I couldn't hit almost payroll. And I remember, I still remember because I was in my office and I finally took the fucking initiative and guts to call Ken and tell him, look, man, you know, the business is where it's at. And, you know, I don't know what. I don't know, but I'm struggling for cash. And I still. And. And he. He turns around and he says, well, you got a fleet of vehicles, right? And I'm like, yeah. And I'm like, most of them are paid off. I made that mistake. Most of them are paid off, by the way. So he's like, well, refinance them. And I didn't know that, okay, so don't fucking. Don't sit here and critique me. But I was able to refinance those vans, go to Enterprise, put a. Put a, you know, a loan on them, and I was able to get 100, like $54,000 out of the vans when I was like, there was probably like $800 in the payroll account and, you know, there wasn't enough money coming in and vendors were calling in to get paid and all that. But that pivotal moment that Ken. That Ken told me about those vans, and I didn't know I got that money within, I want to say, maybe four days, and I was able to hit the payroll. I was able to push the business forward. I was able to. That one pivotal moment was. Was what helped me get through that thing. But it was picking up the. Picking up the phone and making that call and putting my pride aside because me and Ken had had history of not, you know, getting along together was how I got pushed through. I was. I picked up the phone and called him and I.

[Ken Goodrich]

And I told you to raise your prices. You're not Walmart.

[Ishmael Valdez]

Yeah.

[Ken Goodrich]

And. And he goes, well, well, how do I. How do I get that much? I go, just move your mouth to say the bigger number. And he did it. And he was like, wow, I can't believe I'm selling them for 20 now. I was selling for 10. Yeah, but here, let me answer your question. Look, the. I made my greatest gains when I got into the airtime 500 group because I dedicated myself to that material. I studied it. I went to those meetings. I was front center every time I took notes, I made a plan every time I went to those meetings, what I was going to accomplish, who I was going to talk to, you know, certain problems I want to have solved. Right? Every single time. I dedicated myself. And everybody needs to be in a best practice group. You know, hear these guys talk about nextar, nextar, certain path, praxis, you know, there's several others. Service nation, I guess. But, you know, you got to be in a best practice group. You be in a best practice group. And number one, you get the key, the fundamental processes of the business. So you don't have to reinvent the wheel. You have to figure out, you get the scripts for the phone, you get the. The salesman's compensation plan, you get the tax pay plan, you get this and that, all these tools that you can get implemented. And then you get some college interns and maybe a really detailed implementer type and have them just roll through that stuff, make it yours, get it implemented and train your business. Now you have a fundamental business running well and solid and that you understand your machine. And then you start tweaking your machine to make it your machine.

[Ishmael Valdez]

And to add to that, like, you don't have to get to the point where you're not making payroll. You don't have to get to the point where you're like, that's the one thing I want you guys to leave with is you don't have to get to the point where it's like, gets that tough to. Because that's what I kind of been noticing about all of us in the trades is that we get to the point where our back's against the wall so we can start reacting and start asking for help. And that's the one thing I don't. You know, I'm not a firm believer on, on the best practice groups. I don't believe in any of the shit they say, but that's just me. I rather do things unorthodox. I rather do try things my own way and lean on my friends and buddies that have successful businesses. But, you know, that's my point of view. That doesn't mean it's right or wrong.

[Moderator]

All right, thanks, guys. Just so you know, we could have asked more questions, but it's their fault. We all saw that, right? Just, you know, five more minutes. All right, Just. Okay, ten more minutes. So. But these guys, again, they're here for you. Excuse me. They're here for you. So take the time. Be selfish with your time and ask them on breaks, ask them at lunch, ask them in the evening sessions. They are here for you to ask these questions one on one. Do not be afraid to do it. Right, right.

[Ishmael Valdez]

Ask people the questions too, guys. Like, I don't want you guys to just ask about culture.

[Moderator]

Use a mic.

[Ishmael Valdez]

Ask pivotal questions, too, guys. I don't want you guys just talking about culture and like the like yes, we all get it. That's like ask good fucking questions like what's the fucking driver? What's what KPIs do you work on? Like what is it in it like do come up to us and actually intrigue us with the question. Don't like I hate repeating myself. Honestly, it's getting to a point where every single conference that we go into, everybody wants to talk about the people and how the people drive. We get it. We get it. Like, it's not something that somebody just came up with. There's fucking other things that the business needs and needs your attention, whether you guys want to see it or not. And there's things that you should be focusing on that you shouldn't. It's not just people. Okay? That's all like, you don't have to agree with me, but it's not just people.

[Moderator]

There we go.

[Ishmael Valdez]

All right.

[Moderator]

Hey, let's put our hands together for our gates guys. Thanks guys. Appreciate.