Harnessing AI in the Trades Transforms Service Companies | Podcast Ep. 186 | Toolbox for the Trades

Hello, contractors, and welcome to Toolbox for the Trades. My name is Jackie Aubel and today I am chatting with Sebastian Jimenez, who is the founder and CEO of rilla. This is a wonderful conversation all about AI in the trades. You guys are going to love it. Sebastian Jimenez, you are the founder and CEO at rilla. Today we are going to be talking about how AI is taking over the trades. Welcome to Toolbox for the Trades podcast.

Thank you so much for having me on, Jackie.

I am so excited to have you, Sebastian. You've got so much energy and I know we're gonna have a great time. I'm gonna kick off this conversation with an icebreaker like I always do. And you and I actually something in common. We both have a history of standup comedy. I would love to know if you could tell me either your best or worst on stage experience as a standup comedian.

Oh, my. I know the best. Nobody cares about the best. The worst. The best story of me on stage, which is the worst time I bombed. Every comedian has their. Their worst bombing story. My worst bombing was the first time. I'm from the Dominican Republic. I came here, I came to America. I went to school at nyu. I learned how to do stand up comedy. Comedy in English, not in Spanish. I did stand up comedy in New York. I go back home to the doctor for Christmas. I always go back home for Christmas. My brother has a food truck. He says he didn't tell me this, but he went out there and started telling people like, hey, listen, my little bro, Sebastian, he's a famous stand up comic from New York. I'm not, but he told me, hey, he's coming down here. He's going to be doing some material here. Everybody come, come all, come all. And he, he tells me this, like the day of. He goes like, hey, man, just, you know, I need you to come down and do like a little bit of comedy for everybody. I mean, like, who's everybody? And he's like, I don't know, man. We got like 500 people signed up. And I'm like, 500 people? And I was like, and you want me to do comedy in Spanish? And he was like, yeah, in Spanish. You don't speak English. This is Spanish. I've never done stand up in Spanish. So then I just basically just went there and started winging it. And, you know, the bomb was bad. And then I was getting heckled by my dad because my dad kept going, boo. Because my whole family was. All my friends, all my family, he was like, boo. This guy sucks. Like Send him home. Go back to school, kid. He's. But. And then there was one psychopath laughing in the back, like cackling. And he wasn't laughing at the jokes, he was laughing at the situation. So I just kept, I just kept like beeline, like, I just kept looking at this one psychopath and be like, it's you and me, man, because I'm gonna. I had a rule in stand up where I would just like, I'm gonna do my time. Like, if you give me an hour, I'm gonna do an hour. So I stayed there for like a whole people. Like a third of the people left 20 minutes in, you know, people started talking. Because it's a food truck. People started eating and talking. So I did, I did my. It was, it was horrible. Oh my gosh, it was horrible.

I'm so happy I asked that question. But I. My heart breaks for you. In that time I have. I was going to save this question for later, but I think it's really appropriate to ask it now. What did you learn from your standup career that prepared you to be a CEO?

Yes. How to embarrass myself in front of my friends and family. That's what I learned. Dude. My mom, I remember my. She was just like this, like, like cringing. And my sister was trying to be so supportive. My brother was so happy because he was selling so many sandwiches and he was just like, yeah, keep going.

Everyone was supportive.

He's like, you're doing great, man.

This is great.

No, it was, it was great. My grandma fell asleep. It was, it was a great time. But anyway, so what did I learn? So I. Technically it sets on my degree that I went to business school. But that's a scam because I never went to nyu, studied business in my degree. I never showed up to class. I literally just went and did stand up comedy when I was in college. Sorry, mom, I never went to class. I literally, I don't know how. Like when I started my business, I didn't know how to read a balance sheet because Principles of Financial accounting was like at 8am so you just never went. Cuz I was doing comedy until 4am yeah. So I'm like, I'm going to wake up at 11 or 12, you know what I mean? So then everything I learned about business, I literally learned through standup comedy. And the first thing I learned, the reason I got into tech was, was through standup. I realized that tech founders, the way they build products and services and companies is very similar to what people, what stand up comedians do with their craft. And stand up comedy is, it's so great because it's one of the few art forms where you have to, you have to practice in front of a crowd. You can't do it like painting or writing or doing music where you could just do that in your room. And you can spend all day in your room and kind of practice in stand up. As soon as you have the joke and you know this, you have to go and test out the material. Even if it has no legs, you have to go and tell the joke to people. Because even if you're a psychopath talking to yourself in the mirror, you could just be like, how's it going guys? You have to, you have to wait for the laughter or the silence. And then the laughter of the silence is what tells you if you're onto something. Because the best jokes start as crappy jokes. And then you kind of work it and work it and work it until it becomes really good. And it's like that craftsmanship with the creative process. And I figured out when I was a junior in college, I had an internship with this Forbes author. We interviewed a bunch of tech founders. I had the job so that I could practice my comedy because he needed somebody who was funny to write articles for him. I we interviewed all these tech founders. The way they described building their products was the same kind of creative craftsmanship where it's like you have an idea, the idea matters for the company or the product, but the thing that matters the most is that craftsmanship of launching, getting feedback and learning from the failure and fine tuning it and tweaking it over and over and over and over and over again. Just like Edison with the light bulb. It's like 10,000 times to, you know, to try to get the light bulb right. Of course, that's exactly what I felt like I was doing in stand up. And so I learned, I learned how to build. That's how we build product. Irela, we have a whole concept now at rilla. We run it with this principle called like we're trying to operate at a high speed, like a high speed reinforcement learner, which is a machine learning algorithm that just like learns by trial and error by failing a bunch of different times. I learned that viscerally through stand up comedy. And so I learned how to do marketing and said, you know this also that it's like not just getting on, it's not just being on stage, it's getting on stage. It's like, how can you book yourself everywhere? You can go to, to try to get more opportunities to do comedy. So 50% of the battle is not just like the product, it's the marketing. And so I learned how to do sales. I learned how to. I learned how to handle failure. I learned how to be resilient. I learned how to make things out of nothing. I learned how to be poor. Like, as a poor stand up comedy, you make no money. You know, the first time I make money in stand up comedy, I was doing standup at. In Washington Square park, like outside, because I just wanted to practice and this very sweet lady put $20 right in front of me. And I thought it cause I was good at comedy. And then I realized when I took the money, I was like, she thought I was a homeless person.

Just a busker or just your standard busker.

Like, oh, oh, I thought she thought I was. So I learned really everything and how I operate my business all of the same principles. I learned, I just learned it through stand up comedy. Wow.

Okay. That's really, really cool. And I'm really happy that you were able to show that. And it makes me feel a lot better from my standup experience. Like, I basically know how to run a business now. So thank you so much for giving me that confidence.

Yes.

So tell us about Rilla. For anyone here who doesn't know what Rilla is, what is it, and how can contractors use it?

Yeah. So Rila is the leading virtual ride along software for the home improvement industry. What that means is when technicians, comfort advisors, design consultants, they go out and they talk to homeowners in the home. They will be recording their conversations with their phones on the Rilla mobile app. And we will be using AI to automatically transcribe, analyze, and give them feedback to help them improve their sales and to help their managers or service managers or sales managers do what we call virtual ride alongs that are 100 times faster, better and more productive. So why do I say faster, better, more productive. We had one of our great contractors, Sylvia Nestaris from my plumber plus, also a great service line customer. She, before Rilla, she used to not even be able to do physical ride alongs, right? Because, you know, her texts are spread out. She manages two markets that are kind of far away from each other. And so with Rilla now she's doing between 200 and 435 ride alongs every single month, like virtual ride alongs. Because what the AI will do is it'll score the call automatically. Like, it'll just like when managers go out there and do a curbside pickup evaluation where they literally say, like, how did you do the greeting? How did you, you know, build rapport with a homeowner from a 1 to a 5? The AI will do that all automatically so that the manager can see what happened in a matter of seconds and then devote the rest of their time to just giving feedback, which is what they do best to coaching the reps. And so we say leading because we work with all the top contractors in the country now fhfer we work with rescue airs a bunch of the service dying customers. Anytime you say the top contract. Yes. It's, oh, you look at the service, dying customer lives. The real customer lives. So there's, there's a lot of overlap. Yeah. Yeah.

That's so cool. So how did you even get into the home improvement and the home service space? You were, you're saying like as a standup comedian, as a CEO, you've got an idea, you're testing it out. So what even like drew you to the trades? How did you get into it?

Yeah, so we did not start in the trades. We didn't stumble here either. This was a result of a very methodical process of trial and error. Right. What happened was, so when I was a junior in college, when I was a junior in college, I got introduced to tech. I'm from the Dominican Republic. I did not know that people worked in tech.

Same. I didn't know until after I graduated college that worked in tech.

I had a vague idea of, of who Steve Jobs was. Like a very big idea. Yeah, like, to me, the, like when I thought of like rich people, I thought Donald Trump. That's why I, I, I, I thought like Steve Jobs was like a, like some guy, like a fashion, like fashion like, so I didn't, I didn't know really anything about tech. When I did this internship with this Forbes author, I started getting slowly curious and then interested and then passionate and obsessed. When I graduated college, I had a fork in the road. I said, do I do stand up or do I do tech? Because I was getting really obsessed about it. And in my head I was like, oh, I'm pretty good at stand up. You know, old lady gave me $20 at the park.

Sure.

So I could probably do this. And if I do this, I know I'm gonna do this. Like, I know I'm, I'm never gonna go back. Like, I'm just gonna do comic. I love comedy and I had already enough conviction in myself that I could just make it as a stand up comedian. And so, and then in Tech. I was like, I'm pretty bad at tech. I don't know how to code. I didn't know who Steve Jobs was. I don't know anything about this, but I'm very interested in it. So in my head, I was like, I'm probably going to fail at tech. Like, I'm going to fail flat out. And like, six months, I gave myself six months. And then when that happens, I'm going to have great material to come back to stand up.

Great idea.

So I said, let's go and do tech, right? We never look back. My first company was a very crappy startup, and it just started like that. The reinforcement learner. You just started making random decisions and you learn as you go, and you learn by doing and trialing and error. And we pivoted a bunch of times. We launched a field marketing management software that was used by consumer companies like Heineken, like Red Bull, to do their field marketing events for contractors. Field marketing is when they go to the Costco stores, they go to the home shows. Right. To try to generate leads for appointments. For consumer brands like Heineken, it's more like I send a bunch of college kids to a college campus and. And try to get them to drink Heineken. Yeah, drink Heineken or drink Red Bull or whatever. People like with the, you know, the wing team in Red Bull, they go around with a bus and it's like, yay, Red Bull. Yay. Like, that's the whole thing. So my software was used to help companies manage those field marketing activities. And the big insight that we had was one day we were just looking at the numbers for one of our customers, Heineken. We were like, it says here that you talk to 100 people per event. And they said, yes. And I said, but it says here also that you guys do 50 events a week. And they said, yes. And this is one of their tiny markets. Right? And I said, how many markets are like you and Heineken? And they said, 200. I said, that's 20,000 people you're talking to every single month per market. Times 200 markets, that's 4 million people that you're reaching face to face on these field marketing campaigns. That's 4 million people. I did some digging and I realized that Heineken was only capturing like 500,000 points of interaction from consumers through surveys, focus groups, social media, analytics. That they had more interactions offline with customers than they did online.

Yeah.

And that made sense because most of their marketing, most of their sales comes from offline. Channels. I said, what if we could capture these millions of conversations and give you consumer insights like the ones you're looking for with surveys, but with, you know, 10 times more data that's like the 10 times higher quality because it's not an Internet bot or it's not somebody who's like sample bias. Like who the hell fills out a survey? You know what I mean? Very few people do that. And so then the idea became, was like, well, but Heineken. Heineken also has salespeople that go out and talk to, you know, the, the restaurant owners and the, and the bars, like to try to sell. And I said, so why stop at field market? We could do field sales. And I was like, well, why stop at food and beverage? What about the people who sell, you know, in retail stores? Yeah, what about the people who sell pharma, medical. What about the people sell plumbing, H vac, window siding, doors, electricians, solar roofing, like all these products in the home. So we realized like, okay, we have a product that could be used for all these different markets. So we said, this is a really cool idea. I took all my money from the previous startup we started, Rilla, me and my co founder. And the word Rilla comes from guerrilla marketing because the original use case was for field marketing.

Yeah.

And, and the idea was we're going to go out and make offline commerce, offline interactions between human beings that are commercial. We're going to make those as searchable and easy to understand as Google did for the web. That was the vision for reallo. And there's 12 million outside sales and service people, and there's 10 billion conversations happening face to face every single month in America, which is one eighth of the data that's transacted on Google. We were like, what if we can make that all indexable to give all companies the power to understand their customers like Google and Amazon have. Right. That sounded like a big vision. But then, you know, as good jokes go, they start as bad jokes. And so in 2019, when we launched our field marketing product, it failed for many different reasons. One of them was that, you know, first time we launched it was with this cash app, the company Cash app. We're doing a field marketing event and it was just this girl Caitlin screaming, we got free pizza. Everybody sign up for cash app. Like, what the hell? Conversation. What insights are we going to capture?

Come on, Caitlin. I love how you remember her name.

Oh, yeah, my God. I was the first. Really? She was just like. We asked the AI like, what did. What what is, what can we learn about this brand? It's like your brand has a high association with the word pizza because Katelyn loves pizza. We're like, this is useless. So we were like, okay, where can we find conversations that are a little bit more understandable, a little bit more insightful? We pivoted to retail. We started a speech analytics software for physical retail in January 2020 with non essential New York retailers. Wow.

I'm just gonna. I just wanna pause there. I just want to pause there. You know, we talk about the COVID effect on this show all the time and the fact that you launch a app that was going to collect retail conversations at in store retail for non.

Essential clothing stores, luxury shops. Like all of the things that were banned by Dr. Fauci.

Crappy timing.

Yeah, just like they said, like, nope. We made like $0 in our first three years of business. And eventually, eventually, eventually we found this one company was called the Storm Guard roofing company because we, we went to retail. We realized retail didn't work for many different reasons. We started going after field sales. We found the Storm Guard roofing company, a roofing company all over the country. This was the first company. I reached out to them on a Monday. They got back to me on a Tuesday. We launched on a Wednesday. I've never seen a company buy this product so quickly. And, and then by the first week, we had our first case study where I asked Chad, the sales manager. I said, chad, how did it go your first week of using really? He said, sebastian, last week I went on my physical railing. I was able to coach one rep. And I said, okay, what about today with really? He's like, today with really, I was able to coach all my 10 guys. I said, that's a 10 times improvement. And he goes, no, no, no. Last week it took me six hours to coach the, this one guy. Today it took me to Coach all my 10 guys. Watch their two appointments, 20 appointments total. Just do all of that with the. I give them feedback. I was able to do that in, in less than 50 minutes.

So we went giant timesaver.

Yeah, time saver. So that's why I said 100 times faster, better and more productive. Because you look at the time save and you look at what you're able to do in a shorter amount of time and you make your, your, your coaches bionic. That was the first time I saw that. And I've been living in New York my entire adult life. I didn't know what a shingle was like. I went to a roofing conference. I remember going to Roofcon 2021 is at the end of 2021. And everybody's like, shingles, shingles, man. You gotta get my. And I'm like, I don't want your shingles, man. What kind of conference is this? Is this a pharma conference? Are you guys like testing out disease? Like, what are you guys doing with your shingles? Then I was, eventually I was like, okay, we gotta get more shingles. And so, and so we started in roofing. We actually started in roofing. Then from roofing we went to exterior remodeling from a Siri remodeling. It's a great customer of ours, BJ Fitzpatrick, which is owned by Dave Geiger, also a service sign customer. And Dave saw me at a conference, I can't remember which one. October 2022. And by this time we're already growing, like, really? And Dave asked me like, have you ever thought about this for H Vac sales? And I'm like, what does that H vac mean? What's that mean? And he goes like, I have a little shop in the Carolinas that I'd like you to speak with. And then, you know, and then that was end of 22. 2023 is really when we started breaking into home services proper, like H vac plumbing, electrician. And now we're working with all the top contractors. So like, like, like the principle real, it's a reinforcement learner. It's like a lot of companies, a lot of entrepreneurs, a lot of founders in tech. We know this with this concept, the product market fit, right, which is like when you, when, when your product really resonates with a particular market of people and just, they just ripping it out of your hands. And that's what every tech company needs in order to succeed. A lot of people make the mistake when they're launching their products, a new product, a new service that they obsessed about. They obsess about the product, which is good. You should obsess about your product. You should make your product really, really good. But a thing that matters even more so than the product, especially at the beginning, is finding the right market.

Yes.

So it's because. Because you could have the best product in the world. You could have the best product in the world. And if it's not a great market, then that product's not gonna grow.

Yep.

And so what we realized was that the, the first three years of us, it was really finding its market, finding its home. And eventually we found it in home improvement and home services because obviously Covid was really, really, you know, for this point in time, because, you know, contractors saw the biggest period of bonanza in history that we've seen in the industry. Because, you know, it's like a gold mine in people's homes now. Right. People moving out of cities like New York and San Francisco into the suburbs. How you increase the market for home improvement. Because people like me in New York, we're not buying.

And also, you have millennials, like, who are buying homes and who are more interested in tech interactions, and they don't necessarily have the same mindset that older generations.

Correct.

With contractors. Right.

They're less likely to do things themselves.

Yes.

They're less like, they're more likely to call somebody because they don't know what the hell they're doing. And. And because of work from home, they're spending more time at home. So they're using their appliances more. They're. They're using their, like, their air conditioning more. Their plumbing, like, everything is. Has more wear and tear, so they're more likely to replace something. So. Because of the timing of the market, because contractors, if you look at the home improvement industry, it's not. It's not home improvement. It's a people industry. Right. Every. The top contractors in America have the best people, the best management, the best technicians, the best training, the best processes. It's a people operation. You're trying to manage, recruit people and manage people and coach people. And when you had a tool like Rilla that. That helps you coach the most amount of people that you've ever had in the industry because of this, like, insane growth that contractors have had, private equities coming in really just became this insane, like, you know, tools.

Insane tool for contractors to use to grow their business and to scale that growth, to scale that training opportunity.

Yes.

Awesome.

Yeah.

Well, congratulations. I have a. I have a question lined up, but I just want to take a moment and say congratulations. I'm sure there must have been moments in those three years where you were just failing, failing, failing, where you probably were like I can imagine they were. At least it was at least one instance where you thought about dropping, like, throwing in the towel.

Not me, not you. So two of my co founders. And they know. So. So we have four. Four founders at Rilla. Lucas and I. Lucas and I founded the. The. The previous company after college. I've been working with Lucas since 2016, 17, since we were in college, for. For Lucas, for my other two co founders. They did think about. They know this. And we've talked about this, they, they talk, they, they thought about, you know, quitting and stuff like that. The main difference is they had opportunity costs. My, the two other founders that were not in the previous company, they had jobs that they had to drop for. Like, they actually had something going in their lives. You know what I mean? For me, I was like, oh, I don't care. Like, and, and that's another thing that I learned from standup, which is resilience. Yep. Jensen Huang said to a group of Stanford students recently, the CEO of Nvidia, he said, people with very high expectations of themselves tend to have low resilience. And he said this to a group of Stanford students. It's like, you guys are the most ambitious people. You guys are here in one of the finest institutions in the world and you have very high expectations of yourself.

So low resilience.

And he goes, you guys are at the most risk of having low resilience because people with high expectations of themselves have low resilience because it's a typical trope. You do everything right. You get to the best college to get the best job, you get the best grades. As soon as you hit a roadblock in life, you're not prepared for it because you've been doing everything so well and you expect so much of yourself.

That's fascinating.

And so he said to people like, you should lower your expectations of yourself so that you are able to be humble and so that you are able to deal with. In order to build resilience, you need suffering and you need setbacks and you need failure. Because I was, I was prepared to be a stand up comic. You know this as well as I do that if you're going to be a stand up comedian, it's 10 years before you even get any traction.

Yeah. Before you even get the opportunity to go to colleges and to start touring.

To start making any money.

Any money.

It's 10 years of poverty of like making no money where you have to, you know, finance your career. Doing a day job, like living in a commune, whatever the hell you could do to figure it out. Right. You just do that. Right. Every comedian that I've like, studied their careers, again, I was obsessed with stand up comedy. It's like Kevin Hart, he used to eat free pizza. Bill Burr, he used to make like this one big bowl of spaghetti and he saved up money from his job that he had before and he would just eat spaghetti all week. So you just try to figure out, because you're gonna be PO for 10 years. So to me, when I was doing Tech. It was like, okay, we're going out of business year one, great. We're going out of business year two, awesome. There was never a moment because I'm like. Even now, I feel weird. I'm like, we're only, like. We started Rilla 2019. We've been selling for about two. Two years, two and a half years. And so it's like a total of, like, five years doing rilla. And I'm like. I feel like we're, like, ahead of plan.

You're like, hey, we're already doing much better than I thought we were gonna be at this point.

So I'm happy that I even had it. Like, the fact that I had a salary. I remember paying myself a salary for the first time, and I'm like, this feels weird. I was like. So me and my. My. My co founder Lucas, we were like. The toughest period for us was during COVID We just. That was. That was the toughest period, the first three months of COVID because that was the only time ever that we had no users, forget about money. We had. We just. Even if the product didn't work and stuff like that, we were fine with that. But it's like, we couldn't get feedback from anybody because the stores were closed, and we didn't know where. We didn't know where to go and what to do. So we were literally just, like, waiting for somebody to launch this product and trying but not succeeding. And. And that was the only period of time because even from my time of doing standup to my first company and now, we've always been launching. We've always had feedback from the market. We've always had the product in people's.

Hands and refining, like, almost like. Like a desert period. Like, you're just.

That was it. That was the only time when I was in. And I. I'm, like, hyperactive. Like, just like, I need to go.

Are you.

Yes. You psychoanalyze. Like, I. I can tell. I just need that feedback from the market. In those first three months of COVID man, it was, like, the most depressing time because we didn't know what the hell to do. Yeah. But. But once we launched in 2020, we started launching again right after the summer in 2020, we started launching in retail stores. We started launching and launching and launching. Failing, Failing, but launching and so trialing and. You know what I mean? And we were getting close. We knew we were getting closer the more we failed.

Sure.

And so for me, there was never even in that bad period. I was like, okay, we're just going to power through. Yeah. There was never a moment where I was like, oh, we should quit or we should do something, because again, I had a 10 year time horizon in my life.

Well, if you can figure out a way to bottle your optimism and sell it to other people, I think you'll have another very successful business on your hands. I want to make sure we talk a little bit more about AI, because when you and I first spoke, you were saying this is an incredible opportunity for the trades. This is the first time where the trades has been at the forefront of this new technology and you feel like they're really shaping the way that AI is growing the home services industry. So tell me a little bit about that and tell me about Rick AI in Rila.

Yes, yes, totally. So this is a great question and this is something that I, this is what I try to talk about to contractors even beyond Rila. It's a, it's a great time to be in the home service industry, in the home improvement industry at large. So typically, anytime you've seen a transformational technology come to market, a tip in the last 20 years to half a century, it has happened when there's usually a low interest rate environment. So if you look at the dot com boom, low interest rate environment, high interest rate environment causes the dot com bust 2001, when all the Internet companies kind of died out. Yeah, if you look at social media companies, interest rates were low again in the early 2000s. And then interest rates went high for the, and then the financial crisis in 2008, but then they went back down to zero. They've been to like zero, like for the last like 15, 16 years they've been zero, like zero interest rates in 2008. And so in 2008, that's when you have all these like new deluge of startups like Airbnb and Uber and all these different things. And in the last decade you've had a very low interest rate environment for a long time. So you've had a lot of startups start in a low interest rate environment. When it's a low interest rate environment, what happens is, and it certainly happened in the last decade, tech companies are able to raise capital very cheaply at very high valuations. Because when investors try to say like, oh, to the tech company, well, where's your profits at the tech companies? Like, don't worry about the profits now, the profits are in the future. If the interest rate is 0, the price of the future is zero. So it doesn't matter when the profit. There's no price for the future because you can't keep your money in the bank and make an interest rate. So there's no risk, there's no opportunity because you could just. So that's why you saw all these big tech companies raising at these ridiculous valuations over the last decade. And the other thing that you created was a tech economy bubble. So in the last decade and even beyond, most of the tech companies that got funding were tech companies that were selling to other tech companies. Especially when it comes to B2B, like businesses selling to other businesses like Salesforce and beyond Salesforce, you had companies that, you know, like Loom. Loom is like a video thing for other tech companies. And you had an, like you had a LinkedIn plug in that race at a billion dollar valuation and you had, you know, Superhuman, for instance. Superhuman was an email for startups, right? Like literally, like email reimagine, literally.

It was this environment where all new technology was being marketed to tech tech companies.

And you looked at all the tech people, all the tech influencers, it became this almost like bubble economy. But when you actually look at tech as a fraction of GDP is a very small, like less than 10% of GDP is tech less than 10%? There's the entire real economy. But these companies were raising evaluations like they were going to take the entire mark, like the entire economy.

Sure.

And so what happened was in the last two years, Jerome Powell said, hey, tech parties over just like it happened in the dot com bus or interest rates went up for the first time in like 15 years.

Well, not only that, like all. So I've been in tech my entire career, since 2014 when I entered the workforce. And the market right now for tech employees is really bad. Like people are unemployed for 8, 9 months, sometimes a year.

So, so tech is going through one of these periods just like the dot com. What's very interesting. What's very interesting. And this is what hasn't happened before. This literally coincided with the advent of ChatGPT. Interest rates went up a few months before ChatGPT came out to market. So this is like if the Internet had started in a high interest rate environment. Right. This is, this is a very, this is like uncanny territory as an economy. We've never seen this like a new technology that's so transformational happens. Right. When it's like a really horrible market for tech. Think about it. It's like a new technology happening when it's a really horrible market for tech.

Yeah.

So what's happening is the venture capitalists who fund tech companies. The venture capitalists for contractors listening. Those are like the private equity people who, who. Who fund tech companies. They fund companies like Facebook and service site and Rilla and Amazon. And all the tech companies get venture capital funding, the best ones. They have the most amount of money that they've ever had in the bank because of all the insane value, all the insane funds that they raised in the last decade. They still have that money in the bank.

Mm.

They don't know where to deploy it because tech companies are literally going out of business left and right. The big tech companies are cutting budgets left and right. And so the venture capital say loves funding businesses that sell technology to other businesses. Like B2B says. Very predictable. They love it. But then they're like, we can't sell AI. They want to sell AI also. They're like, AI is huge. We want to fund AI applications. But the people who traditionally, you know, fund the research and development of applications, they have no money to spend because their valuations are cut and they're laying off people. So we want to fund the development of AI applications for somebody, but it can't be tech markets. And so they're looking for other industries. Looking for other industries. And so first in the pecking order is home improvement.

Yeah.

Why is that? Because of all the things we talked about. Because of COVID The American home has become one of the biggest gold mines in American history. Because you have people working from home, people that moved from cities into suburbs, people that is a new generation of millennials that cannot do things themselves. I literally know a roofing company, one of our customers, they went from $40 million in 2019 of annual revenue still very good. To $180 million by the end of 2021. That's growth. That's better than the best tech companies.

Yeah.

And contractors listening. Some of you have seen this. Like if you were around, like if you were established business, like 2019, 2021, those years of COVID Insane, right? Private equity, that's when they came into the fold. It's not a coincidence that private equity and now technology, they notice that it's a gold mine in the American home. It's in a recession proof industry. It's like the top of the pecking order. So the venture capital is just like the private equity people. They started noticing. And so what they're doing is that they're funding startups like Rilla. Rilla exists partly because of that. They're funding startups like Rilla. There's other Startups that are automating the call center. There's startups like Conduit Tech that are funding, they're developing applications, and they're not just developing AI applications for the general industry. They're developing AI applications for home improvement, home service contractors. Right, Because. Because that's the industry that people care about, right? It's a really hot industry. And so what's so cool about this is that home improvement contractors now find themselves at the early adopter intersection of.

AI, which is insane because as I told you, I've been at Service Titan since 2017. And in 2017, at Service Titan, we were telling contractors, hey, it's time to get it off of pen and paper, pen and paper, y adopt software. And now you're telling me that in less than a decade, the home service industry is now at the forefront of all new technology because it's a hot industry. It's an insane dynamic.

It's happened. Coincidence. It wasn't bound to happen, but it happened. I mean, Ara. I saw Ara talking at Praxis and he said this, right? He was on stage with Terry Nicholson and he said, you know, it's a very weird feeling for me, he says, because, you know, for all the time, what you're saying, Jackie, is I was trying to bring the industry up to speed and now I feel like I'm playing catch up because there's, there's. It's moving so fast, man. And you have like, contractors, like really, Rilla is like a completely net new product that that contractor started and we tried many different markets. You know what I mean? This is not like. And then like, you have people like Tyson from Avoca, AI, he's from mit, right? And he was also in the same period, like looking, if you ask Shelby her story, she was like finding different markets and she found this one. You know what I mean? Because this is where all the growth is happening. You know what I mean? Yeah. And so it's kind of crazy. I just met this team of ex Uber people. They're helping roofing contractors automates their insurance claims process, right? So if you're in a storm restoration or insurance roofer, you go to the home, you try to take an inspection, try to get the claim approved by the. By the adjuster so that you can get the roof replaced from the insurance money. They literally. You take pictures and they. It's called X build. X build. You literally take a picture and then the AI automates the entire, like email and like saying what happened in the home and the whole approval process. Just automated. And it's just, again, Uber people are.

Developing for the roofing industry.

Yes. And people from MIT and Shelby's from Stanford. Right. And I'm from a bar in the Lower east side.

But this is so cool. And what a shift in the industry since even just I joined in 2017. And like Ara said, when service titan first came to the. First came to the masses. Right. It's such a cool time and such an opportunity for all of the folks listening who run home service companies. So we've got some time left. I want to make sure we test out rilla's AI tool here. So can you tell me. So you guys call it Rick AI, is that right?

Yes, we call it Rick AI. So, yes. So Rilla, we've had the fortune of growing really quickly. We have tens of thousands of technicians and managers and comfort advisors using Rilla now recording conversations. We recently made an announcement. We recently broke our first 1.4 million in home appointments recorded on Rilla.

Amazing.

And that was like, I haven't checked the numbers. Probably up to like 3 million or 4 million now, because that was back in April. So we have, at this point, millions of conversations recorded in the home. And what we've done is we've trained this Chat agent like ChatGPT, but we've trained it not with the Internet's data. We've trained it with all the conversational data that we have.

Amazing.

And so. And we call him Rick AI. And we call him Rick in honor of our good friend who.

Who.

Who passed away a few months back, Rick Grasso, who's one of the. He was one of the premier, like, he was one of the original sales coaches for the home improvement industry. And we absolutely love Rick, and I had the pleasure to meet him. So we called Rick AI because he's a sales coach like Rick. Right? So, so we. We analyze all these conversations, and one of the cool things that you could do is you could literally ask Rick, like, hey, Rick, what are the differences between the top 1% of top performers, comfort advisors, and technicians in the country compared to everybody else? Like, what are the top people doing differently to close more deals than everybody else? And the top people, we're talking comfort advisors that close like 5 to 10 million dollars of annual revenue to their business every single year? Right. These are like the top 5 to 1% of comfort advisors. We're talking technicians that are closing like 3 to 5 million dollars in repairs. You know what I mean? And selling, like, UV lights and like, other products and services. Right. So we Asked Rick, what are the main differences? And we do all these analysis, we're publishing it all the time now@rilla.com reports Rilla.com reports we'll link to it, don't worry. And so we've been able to figure out really cool stuff. And the analogy that I give to contractors, it's kind of like doing Moneyball for sales. Now you can improve your sales and your service with data, with big data that analyzes everything. So a few of the things that we found out with Rick, we said, Rick, what are the top differences between the top performing technicians and comfort advisors? And Rick gave us like a list of things. Number one was talk ratio. So the top performing comfort advisors and technicians, they're talking between 45 and 65% of the time compared to the homeowner. Right. So the homeowner, it's almost like 50, 50 talk ratio. The average technician and comfort advisor, they spent 75 to 85% of the time talking.

Oh. So when you actually bring that ratio down to more of a 50, 50, then you're more likely to close a sale.

You improve your chances of closing and you improve your chances of closing at higher average tickets. The way that they do this, right? Because you're making it into a conversation. The way that top technicians and comfort advisors, we ask Rick, how do you get to a lower talk ratio? The easiest way to get to a lower talk ratio, if you don't know how to do that, people would be surprised when they start on relative. They see their talk. She's like, holy crap, I'm talking 90% of the time. Like, yeah, so it's not 50, 50. The best way to bring your talk ratio down is to ask open ended questions. Rick said, the top comfort advisors and technicians, they ask 25 open ended questions per appointment. And the average technicians and comfort advisors ask five open ended questions per appointment. So it's five times the number of open ended questions to get your talk ratio to be lower. Because what the top technicians and comfort advisors do is that they start the appointment, they ask like, what brings us here? How long have you been living in the home? The usual stuff. That's where the average people stop. The top performing technicians in comfort advisors, when they are presenting their options, right? It's like, hey, we have this option. This is the best options. The good options, the better options. Like the good, better, best, Right. They stop and they say, hey, Mrs. Homeowner. It seems like that resonated with you. What about this option resonated with you?

Sure.

And they Ask an open ended question. The Irish technicians, they just like, here's what we found. They just keep talking. When they handle objections, the top performing comfort advisors and technicians, they ask an open ended question, customer says, well that's just like, there's no way we can afford that. The price is way too high. The average technician goes like, no, no, it's not high. But you see like we have these warranties and we have like the guaranteed service. And our company was founded back in 1776 with George Washington at the dawn of America. And so they start talking and talking and talking. Top technicians, company advisors, they say, what do you mean by that? What does that mean, the price is too high to you? And then he was like, well, I had another contractor that came in and gave me a quote for like half the price. Tell me about that contractor. What did that contractor offer you? Who's that contractor? You ask a lot of open ended questions. You lower your talk ratio and then your talk speed. We, we didn't think there was an optimal talk speed. Apparently there is. And we actually looked at this specifically for home services. Not just general home improved, just home services, technicians and comfort advisors. And we did a graph of like correlating talk speed with, with, with average tickets and close rates. And what you see is for both, the talk speed graph is a curve that goes up. The faster you talk, the higher your average ticket until you get to 185 words per minute when it starts going back down.

Oh, interesting.

So, so the average human Talk speed is 160 to 64 words per minute.

Okay.

The optimal talk speed according to Rick Aya in the graph that we saw is 185 to 200 words per minute. So a little bit faster than the average human talk speed. So if you're listening to a podcast, it's like imagine at 1.25. 1.25. Correct. But if you start going beyond the 200 words per minute.

Yeah.

Then it's like, then it's like it literally goes back down to like as if you were talking really slow, like at 120 words per minute. Because keep in mind, if you talk really slow, it might be because you don't know the answer. You can't help the homeowner whether you're, you're, you're stalling or you're just like, and you don't know what you're, you're not confident in what you're saying. So like 185 words per minute, that probably means something that it's like people who just know how to like. You speak very well and you like enunciate like you like, just like meeting you like the first time I was like oh my God, thank you so much. But you speak very well. So you probably are closer to the 185 talks because you're very eloquent and so. 185 talks. So you do these three things. What that generates. So open ended questions, talk ratio, talk speed, you keep it at that optimal range. What that allows you to do is it allows you to generate more time in the home.

Sure.

We asked Rick, is there a correlation between time in the home and improving your close rates and your average tickets?

And without a doubt, this was crazy.

Without a doubt there is 1000% a correlation between increasing your time at home and increasing your average tickets. We looked at this for repair calls, we looked at this for replacement calls. Altogether, we looked at it separately and there's an insane correlation in both we, we saw that the average talk time, like how long you're spending in the home for a conversation that closed a replacement sale. So like a replacement unit for H vac or re pipe for plumbing, like a large ticket replacement sale was two hours. That's the average to close a deal across the country. For the top performers, the average length of a replacement conversation in on average, that is, that did not lead to a sale was about an hour and 10 minutes. So the conversations that close are more likely to be longer. Not only that, there's literally if you look at the graphics in the real reports, I don't remember the numbers exactly, but it's like if you get for a replacement sale, if you're between 0 and 30 minutes of conversation length, your chances of closing up 40% are, your chances are that you're going to close at around 20% on average or less. If you're at about an hour, you're going to close like 25 to 35. You know, if you get above the hour and you start getting to the 2 to 3, that's when you get into that 40% close rate.

Well, it makes sense because if you're asking open ended questions and you're encouraging the homeowner to speak, that makes sense why the meeting would then be longer.

Yes.

You're finding more out, more out about their, their situation and what they need.

And how you can actually present solutions to the problems that they actually have. Nobody's buying, nobody wants to buy an H VAC unit. They want, they want to buy, they want to buy the, the fact that a solution to their problem. That it's really hot in the summer.

Exactly.

Or the fact that it's like really cold. Like nobody. What's the saying that nobody wants to buy a drill? Somebody wants to make a hole, somebody wants to hang something. Right. So it's like so, so it's, it's not that you're just like sitting there just waiting for the time to pass. It's that you're engaging the homeowner in a conversation where you're understanding their issues and their ergo, you're more likely to get them to trust you because they're bonding with you, you're spending more time with you. Ergo, they're more likely to give you the sale. That's what's happening. And for a lot of contracts, a lot, a lot of technicians. Like, how could I possibly spend two hours in the hotel? Well, it's possible. We have the data. A lot of top performers are doing it and. Yeah, and when you do it right, it almost feels like the two hours, three hours, it almost feels like 20 minutes because the homeowner is having so much fun. It's a conversation, a two way conversation. They're getting to learn more about you versus the technician who's speaking 75 to 85% of the time. Of course you can't spend two hours like that.

Yeah.

Because homeowners want to kick you out of 10 minutes.

Exactly. So this is freaking awesome. Sebastian, again, congratulations on all of the success that you've had. And you know Rilla is an official service titan partner. So folks listening, want to get started with Rilla. What's the best way for them to do that?

Yeah, so go to rila.com, that's r I l l a.com and look at all of our website there. Look at our testimonials. But if you really want to learn more about Rilla, there's no better way to do it than booking a demo with one of our highly trained sales consultants who have been trained using the latest in AI technology. Because I use Rila every single day to coach people. Every single one of my. I review. I actually I'm one of the top Rilla power users. I review every single one of the calls on Rilla. So if you go on Rilla, I will see the call. I was literally, I coach everywhere. We have like whole campaign coaching everywhere. I just did. I went to the NBA finals at the, in the Boston stadium on Sunday and I was literally doing virtual ride alongs courtside. Like as I'm watching the NBA finals. I'm literally using the Real app, like coaching people, like, coaching my reps. So I can guarantee you that we are doing the best possible to give you a great experience on that call.

Amazing. Sebastian, thank you so much. This was such a fun and energetic conversation, and I really look forward to seeing you. Are you going to be at Pantheon?

Yes, we are going to be at Pantheon. We are actually the top sponsor at Pantheon. They had the. I don't know how to say the Titan sponsor. We paid a lot of money to be a Pantheon this year.

Well, we're excited to have you and I'm excited to see you again.

We have some really cool stuff at Pantheon and I would, you know, with the things that I know that we're doing. I know you guys are doing a lot of cool stuff, but we're doing some cool stuff with Service Line at Pantheon. I'm telling you guys, if you guys haven't booked your tickets for Pantheon, we are doing some really cool stuff at Fanta, which I can't say, but it's gonna be really cool.

Awesome. Thank you so much for being on Toolbox for the trade, Sebastian.

Thank you.