Julian Scadden - General of Awesome

Welcome to another Founder Wisdom podcast. We have Julian Scadden with us today, the General of Awesome. Uh, so he is a CEO and president at Nexstar Network. He's a proponent of, uh, the trades, and he has a hell of a story to tell today. So Julian, welcome to the pod. Tell us a bit more about yourself and what you're up to.

Charles, thank you. You know, I got to tell you, you have a heck of a story yourself. I've really enjoyed looking through some of your Substacks. Once I became aware of you. So your podcast is great. Uh, your thoughts and perspective on your Substack are awesome. Uh, myself, uh, you know, I'm a, I'm an individual that's a native to America and, uh, you know, came up the American way, just kind of flippant in the '80s, figuring things out, wasn't paying attention in school. So ultimately got a job as a laborer, which landed me in the plumbing profession. And, you know, by grace, a lot of hard work and some good mentors, Actually began to learn the business side of the trades businesses. And today I'm privileged to lead Nexstar Network, which is a member-owned organization that helps home service businesses, independent home service businesses become the best in their class and, you know, just help folks like me, tradespeople trying to learn the business acumen and just need a little help. So that's the privileged work I get to do today.

So you went from homeless to CEO. Tell me about the homeless part and how you went over that slump. That was like, what, 30 years ago?

Thank you. Very generous on the timeline there. I'm a little bit older than I look, though. But yeah, this was around high school. You know, it was just a situation where, you know, raised by my mother, was having a little bit of a hard time of staying on our feet. And, you know, I was a young guy who thought I'd be better off if I just took off on my own and figured it out. And was living out of my car for a while. And that's right around the same time where I found this job as a plumber. I was doing anything, you know, delivering flyers, washing dishes. I come from you know, an environment and a belief system back then where, you know, I thought I didn't have a lot of opportunities and anything that I would produce would be solely with my hands, not with my brain. And so that's how it began. And I just fortunately landed in a plumbing company and there was an individual there who saw the skillset in me. And honestly, it was the lack of skillset, Charles, the fact that I was not a good plumber. He goes, man, you're a smart kid, but God, you're slow out there. You know, we're gonna have to fire you. You don't, you know, it's gonna take you forever to become a plumber. He goes, but you're smart. So he brought me in the office, had me answer phones, kind of go through some invoices. And he realized, and I realized, I had a bit of a passion for operations. I had a bit of a passion for numbers and how does all this work behind the scenes? What do all these working people do? You know, and I saw a few guys rich with nice cars and everybody else is going to work every day. I said, I want to learn more about that side. So it was a bit of a hump. You know, I know I kind of sped past it. I'm happy to dig in there, but I'll tell you, you know, it really, it wasn't sexy. I was a teenager living out of the back of a car without a driver's license. I was doing what I had to do at that point to survive. So, big jump to get to CEO. You know, I don't want folks to think that it happened overnight. But the reason I like to bring that up is it ties back to identity. What you start to believe in yourself is what you start to become. And I had to see myself beyond that to even get anywhere near where I'm at today. But that was with the help of others as well as personal work. And I know you get that, Charles. Wouldn't be where you're at without doing some self-work, I know.

Yeah. I mean, you mentioned smart kid. I was, but I think I didn't never fit in the educational system, right? So, sort sort of always repressed as the rebellious, uh, little guy, I guess. Uh, so sort of lost my love for education at some point. But just like you, I guess I looked at the winners and I was like, how are they winning? You know, like my first mentor is at least a millionaire on paper and was fortunate to be around him at around 19 or 20. I, even with all of his flaws, so I think I got, uh, certainly inspired by that. I think, uh, Ambition is a prerequisite, right? Like, you want to be able to get out of your situation. Me, I came from middle class. It's not like if I have been traumatized by the lack of money, but still, like, I had a desire to get more. And sometimes the middle class even worse because everyone's part of the middle class. The lower class, there's not a lot that are struggling, and it does create trauma. But middle class, like, dude, I don't want to have a fucking Toyota Camry in my driveway and a mortgage. And all of that. So I guess like I want to strive for more. So you said you were almost fired. I guess I also went through some of this as a sales rep back then. I wasn't meeting my quotas, right? Like doing 200 phone calls a day. When was the actual turn and when did you understood that you were gonna make it and that you would have something different for yourself?

Yeah, it actually took me a little while. It actually took me a little while. I wanna say at least one thing here that you made me think of when you were sharing. Even though you and I, you know, self-proclaimed here and what I heard you say, we weren't great in the educational system. I can guarantee that you're not doing the things you're doing today, though, without being passionate about knowledge and information. So it was the system, I think. I just want to back up a little bit there for other folks who I think will relate. Maybe it was the educational system in the format, or even the environmental circumstances. Like myself, it was a mix of both. I wasn't interested, but boy, you're not going to get where you're at today, and nobody's going to get where they're going if they're not highly curious, adaptive, and willing to put in that work of education. It just may not be the system that fits them. So I just wanted to say that really quickly. But yeah, I think a turning point for me was really years later, though. Even though I knew I had this passion for business, there was still a lot of head trash. And I didn't necessarily believe that I would be an owner or even a business leader for quite a while, until I joined another home services business where they started to entrust me with more responsibility. I learned the numbers and the metrics at the first place I told you about, my first mentor. It was a large corporation. And so they taught me the numbers, and they were very sharp-elbow in the culture, that they were going to get those bottom-line numbers and that top-line number no matter what. But I went to another business where they were also growing, also highly profitable, but a bit more in line with my own personal style and beliefs is they really cared about people; they invested in people. But it wasn't soft. You know, let's, let's be clear here. There was clear accountability, clear expectations, but a bit more coaching towards those outcomes. And that's when I started to realize, wait a minute, maybe I can do this. And then that's when I finally realized, and I gotta be honest with me. I mean, I'm probably mid to late 20s now when I start to see this. I start to see this break in it. And then early 30s is the first time I stepped out and started, you know, a business for myself, really believing that I could do it. So it took me some time to really get that belief. I had the muscle, but it took me some time. And I had to see it modeled by others in the way that I thought I could do it too, before I went for it in and of myself. So a lot of mentors is what I want you to pick up in that question you asked.

And what was— when was the first moment in life in which you, you knew that you made it? Or did you have a moment like that?

Yeah, well, you know, let me— you know what, really, I think it was after starting that business. For so long as being an employee, I never felt like I made it. Even starting the business, I didn't feel like I made it until one day I was working with a bank and, you know, they were asking me, you know, what loans are, what I wanted to take on to grow the business. And I had been so disciplined, so conservative that I had such a cash flow reserve. I didn't need it. I didn't need it. So it really wasn't a personal thing per se. It was every moment after that, you know, personally having, you know, spouse and children and all these other indicators or, you know, a nice jacket that I can wear today. But really the first time was when I realized I didn't need anybody else to grow this business. I hadn't realized that till I was sitting there about to take on a line of credit and I was considering it. And I was looking at, you know, you look at all the factors, you know, does this make sense? Do I need it right now? How will I apply it? What's the return? And then I look at the cash that I have, and I'd been, again, growing and investing it so wisely that I realized I didn't need it. That was the first time, Charles, where I went, wait a minute, these conventional systems as we've been taught, and I know that you see well beyond it, and so I presume that all your listeners do as well, but this conventional system of debt and the way that we take it on to grow things versus a perspective of investment and returns. And that was, you know, I didn't understand the terms at that time, but that was the first moment I said, I don't need anybody else. I've actually created some freedom here within and of myself. Then I got more curious and started looking more into what do I do with this little bit that I've saved? How do I reinvest it? How do I grow it without taking on debt per se? Or how do you take on debt thoughtfully?

So at what age did you officially become an entrepreneur?

Oh my goodness. This had to be, I mean, the first successful version had to be about 36, 37. As a kid, I had my own DJing business and entertainment business. I bought a recording studio. I did all these things as a kid, but I didn't have any business acumen at that time. So I've always had the passion to create something on my own. But, you know, getting back to mentors, or without guidance or without the proper knowledge, I was really spinning my wheels. I was doing a ton of work. I love this saying: I was an octopus with roller skates, just meaning there's a lot of movement and not a lot of direction. So, you know, I didn't really feel successful back then. I always had the mentality without direction.

Interesting. And you struggled your first couple of years, or because it's a training business, or were you just like profitable from the get-go?

Yeah, it was really good in that I, you know, had a coach. And honestly, my business I ran through Nexstar Network, so I had the coach that was telling me what to do. So I think the struggle was just the normal, you know, adrenaline and muscle of starting a business from scratch of, you know, you're everybody wearing every hat. But yeah, we were, you know, growing and profitable, you know, from the first 6 months, the first year, and everything after, because I had a blueprint that I could follow through Nexstar for home services businesses. So I was pretty fortunate in that way.

And how did that scale to nowadays? I know that home services and trades drastically increase in terms of prices in my native Canada, pretty sure in the US as well. Is it still worth like jumping in trades, or at least owning a trades businesses? Granted that most CEOs of trade businesses have to invest a lot of physical time and break their backs for a couple of years, or is that just a preconception, is not true?

Yeah, I don't think it's true anymore. I could tell you historically it was probably tough without the resources to understand the operations, but I was just in San Diego, California last week with one of our amazing members. They hold a regional event where they invite local members or anybody from across the network can come join and see their operation. And there was a prospect there, prospect just meaning someone who has their own business and was considering joining Nexstar. And that's why they were there, to get a better feel for us and meet and connect with peers. And, you know, our motto, our mission, excuse me, our mission as written is to help the world's best tradespeople become the world's best businesspeople. And I'm talking about that from the front of the room. The prospect comes over and he says, you know, "Hey, Julian, I'm not a tradesperson." He said, you know, I'm a business dude. I got some money and I think this is a great business. And I started, can I still join Nexstar? I said, of course. You know, if you're independent, we're here to help people, but we use that tagline. There's a very popular book called The E-Myth that talks about going from the technician to the manager to the owner. And, um, so, you know, when I look at it today, I'll tell you, you know, it's probably still a relatively small percentage from my purview. You know, maybe 30% of the interactions I have of people that are not from the trades, it's still pretty common that they are. But boy, it's a great return on investment. Home services is cash flow heavy. It's a great recurring revenue. It's service to, you know, it's service to your community. So it's a beautiful business. But I think if I'm answering your question, no, you don't need to get in and learn the trade anymore. You never did. But, you know, if that's your notion, I would tell you to look past that. These are great businesses.

But still, you need to hire humans that would show up physically and pay these humans, right? Yes, a software business, you can have agents running the show and the margins are just through the roof, plus the exchange of your time seems to be lower. Shit show can happen if like a plumber, I don't know, breaks something or does not do something well, or just if there's a difficult client, right? So am I right in saying that these elements make the trades business less attractive than a software business?

Well, I guess it depends on what you're attracted to. You know, if you're looking at returns with, you know, minimal human interactions, sure, because there's no getting away from it, especially because I said residential service. Even if it was commercial or industrial, you are dealing with people, you know, from the people that execute the service to the people that approve and oversee. We're dealing with health and safety here. You know, this is something that can't be, you know, left alone like a self-driving vehicle, which tend to be doing better now. But the reality is when you understand the pitch of a drain and how it must fall, or, you know, the pressure on a water pipe, You know, a mistake here is not covered by insurance because I simply mean that a mistake in what we do means lives are at stake. And so yes, it's a really high trade-off in return of the energy that you give to the humans you employ, the humans that are taking on the services of your business, and therefore the result of what you have. So yeah, from that perspective, you're right, it can be very taxing. You better be built for this. You're not going to get into this— not a passive business by any means.

And what problems do your clients face normally, and how do you help them solve these?

Yeah, I think, you know, I want to talk about the intersection of something you introduced of how do we introduce and leverage the efficiencies and automations that exist today in our businesses? Because we can get antiquated, you know, we can be so stuck on it's, you know, it's solely humans and it's humans all the time. So we can't think differently or creatively. So there, there's that. That's part of the challenges they face. But to the question you asked, their primary growth constraint really is finding the people to execute the work. The demand will not shrink. You know, again, to your point, I don't care if you're, you're in Canada, if you're in the States. I don't— I was just talking to some folks in Australia. The workforce's desire to go out and turn wrenches, to interact with other humans, to go into crawl spaces, to get wet, to get dirty, like you said, to break your back, is shrinking. But the demand— we still all have homes and we still all have needs. So, it's this intersection of business operations regardless should have efficiencies and automations. They need to tackle that. But the chief growth constraint right now is finding the workforce that can go out and execute the demand that is steadily increasing. The way, to your question, the way that we help them address that, and one of the tactics I'll say, in that, the way that that's being addressed is we can't wait for legislation. We can't wait for grants. We can't wait for the social clarity that these are cool jobs, or you should do it. You know, what we coach our members to do is to be out there and advocate not only that this is important work, but They have to go out and create their own training programs. We cannot wait for trade schools to fill the gap. You're no longer a service provider. You are a, a tactical professional creator. What I mean by that is they have to have their own technical training facilities. And technical, when I use that term, means turning a wrench, understanding the pressures, the equipment, and the needs and the diagnosis of those equipments. You have to have it in your business now. You can no longer wait for people to apply. You need to be in the grade schools. The middle schools, the high schools, the community, telling people, if you have any level of interest at all, we will teach you from the ground up. You can be green and we will teach you. You cannot wait for folks to go through a trade school.

Right. Um, how does that happen? Like, you, you have the same certification of a trade school?

Uh, no, the certifications, at least in our trades, fall on the individual. So they just have to have the hours and then the sign-off of a license. So it's an apprenticeship that the sign-off of a master journeyman person, uh, from master to journey to apprentice that you would check off.

Okay, and you help them get that? You help them fast-track that journey?

What we do is we help our members scale their business so they can implement those programs. We don't execute it. Yeah, the member will execute on their own. We help them create the infrastructure to support that.

Got it. Because I read the article on your website saying that switching careers to trade at like 55 is not a bad decision. How, how come would that not be a bad decision? Like spending 2 years of your life studying again with kids? Like, yeah, how would you—

sure. Well, yeah, I'm not inviting you to be a technician. So at 55, I think you're going to have some transferable skills where I don't know that folks realize how much white-collar work there is that goes on in these business, businesses to, you know, The point of automation is I'm now watching these businesses have data scientists as a normal part of their organizational chart. And people may not realize that's part of the trade. So, you know, there's a little bit of, you know, clickbait. You know, I hate to use that term in that title, but I am trying to get your attention to say, at 55, if you're joining the trades, I'm not encouraging you to go get your license and become a plumber. I'm saying that you have transferable skills and there is some business acumen and maturation that we need in the industry because of everybody in our human acumen, right?

Like Do that. 18 years old, you don't know how to speak to—

you see where I'm going—

adults or fix problems, right? You have not lived life, so you don't even know what being an adult and having a broken sink or bathroom is about. So yeah, fully subscribe to that. And yeah, especially if they start their own business, right? Like, they have a huge physical advantage that even superintelligence won't be able to to reproduce. But to come back to, to my question, right, let's say I have my trades business and I come to you. What major problem would you be fixing for me? Is it that I have these human skills but I don't have these tech skills? Is it that I have problems managing my employees, right? Uh, give me like the top 3 problems you solve.

Yeah, so I think I need to give context to clearly answer here. We focus on independent businesses, so traditionally the people that we're looking at they're going to have annual revenues anywhere from around $3 million to, you know, not many members that would work with us exceed $100 million at one given location. So these are really folks who are still focused on processes, understanding pricing correctly, understanding compensation structures. So it is the processes of operations are the problems that we would help solve, where many of them either know the technical aspect and they need to understand the operations, or they understand business operations and need to understand the industry. That's where we would intersect and help you, you know, amplify. I say we're more of an accelerator than an incubator in how we accelerate businesses.

Got it. And they have broken systems; they have leaks. What are these specific leaks?

Yeah, you actually, you kind of, you know, walked right into it earlier when it could be anything from simple emotional intelligence and leadership of individuals. You know, what does it mean to be a leader versus a manager? And what are the things that you should manage? And The other thing though can really be the nuances of the regional needs of plumbing, heating, cooling, or electrical. It's gonna be very different in Florida than it is in North Dakota. So just these insights to how do you apply the business knowledge to an ever-changing dynamic of, you know, there's regulations around refrigerant. And meanwhile, to your point, you have a technician that you need to talk to. And what's the process of how invoices flow from the customer through accounting, you know, to, to my bank account. There's so many moving factors in these businesses that people usually don't start their business with this in mind. We really help with foundational support models of the operations.

Yeah, I had this guy on my podcast, uh, I think 2 weeks ago. He does ads for, um, trades, and I still feel that's a major problem. It's like popping first on Google Ads when people search you up on Google My Business, uh, SEO as well. Just like being first. I think if you're first in your city most of the time you have a multimillion-dollar business just, just with that. Do you agree with this front funnel problem?

I like, I like the way that you framed it there. We get so caught up and we watch business owners get really caught up on, you know, Google rankings, SEO, pay-per-click. Then you sprinkle in, you know, your social media presence and then of course your traditional ways of marketing and mass media. I mean, It's enough to just make you, you know, just tap out and say, "I don't want to do this anymore." And it is that what we do, and especially now, we've had a large insurgence of private equity investors in our industry recently. And so folks are really curious, you know, they don't have the dollars to leverage in marketing that some of these, you know, investment-backed groups have. So to your point, how are we agile? How are we top of mind? And it has to be more than just looking at your Google rankings. It has to be a holistic approach to your community, your employees, and telling the story of who you are. Just like you said, it's such a people-driven business that people sniff out, you know, fake reviews or high rankings and really want to have that authentic person in there. You know, you're entering their home. This is not an automated transaction of convenience. This is a very sensitive, relationally driven business. Yeah.

And get a sense of who will show up to their door. Customer service, pretty much the full equation. If you have someone that's positive and, you know, wants to really solve your problem, is proactive, right? Like, I think you, you pretty much solved it. Um, let's say that you're first in Google Ads and you're making multi-million, uh, in revenue. What's the next step? Is it expansion, expanding to next city? Like, is, is that the next logical step?

Primarily what we would offer is add the— add a trade before you add a location. Meaning if you're a plumber, add HVAC. So stay in the home.

Yes.

You're already in the home. So, you know, we kind of start more with that model, add another trade, add another trade. Then you're right, it does become a territory expansion, another market, and we will help folks think through that as well. You're nailing it.

So how do you become expert at another trade? I mean, yeah, it's the same base, like, oh, home is full of systems for sure, but some of them are like so different, right? Like an electrician, for example, that's starts to get pretty complicated, risky, can burn a house down pretty easily messing up something. So how do you make them adopt that new trade that quickly? Is it just hiring qualified electricians, even if you're not like a qualified electrician yourself?

Yeah. So you, again, you nailed it. That's part of the playbook is you have to have the license holder first and foremost. So you have to have that technical expert in the building, and then you have to have the systems of training, employee development, you know, quality assurance checks throughout the business. So anything that any normal business would have, we just apply it here to to the businesses of the trades. But yeah, that, yeah, we'll have a playbook for that. But yeah, you have to start with a license. You have to have the technical training. And what we want to do, because most of the people, as you know, I can, I can see you absorbing at the revenue size I talked about, primarily they're going to be technicians or generationally close to it. And what we're offering is that shift to business person. How would a business person think about this? You know, you don't have to understand financials to start a business. You can outsource that through fractional skill sets. Similarly here with the technical aspects, and I don't know that they'd be fractional, but the same way you, you employ and you, um, account for those costs of bringing in the technical leader.

We talked about HR a couple of times. Um, how do you recruit, like, a positive, energetic, problem-solving human being in your business? That sounds pretty hard, especially like newer generations. Like, what's your, your systems for that?

Yeah, I'll tell I'll tell you the, the most successful things that I've heard, and this goes back to when I was leading the business as well. I mean, you might— so here's what I'd look for. I look for those early adoptive, what would I say, impressionable jobs. And I'll just give an example: Subway sandwiches. All right? We know most people, and I mean this very respectfully, but most people behind the counter, if you look at their age, you know, they're doing it as a job. They're not doing it as a career. And I look for those people who just have that innate, you know, "Hey, sir!" And they're really careful with the sandwich. "And what can I do for you?" And they're talking to the kids, and they're really respectful. And, "Hey, do you know that you can add a cookie?" And I'm just, you know, right, these microbehaviors that I know can be translated, and you recruit them right there. You're not chasing someone who has 20 years of plumbing experience, because what they're doing is they're bartering against the market to say, "I've got 20 years of plumbing experience. I can go anywhere and work, and here's what you need to pay me." Yes, you're going to have some players like that on your team. But when you talk about recruiting, you nailed it. I'm looking at attitude, and then I'm effectively going into places to say, "Where can I observe this?" Servers, waiters, hostess, these type of people in service-based businesses, you already know they like interacting with people. They have chosen that path, and they will learn really quickly, especially in hospitality, if they like it, if they don't. If they stay in hospitality, I can tell you right now, in general, hospitality can never pay what we can pay. So you can say, hey, how would you like to keep serving people, learn a trade that's transferable across the globe, and probably make 10 times what you're making? My most recent recruit was a young man selling gutters. He was going around selling gutters, gutter replacement. And he came in and I just watched. Clean-cut young man. I could tell he had a script. I could tell he had a process. When he came to present the final sale, he had some options. And I said, you know, I can imagine that you get paid commission here. And I said, I imagine you get a percentage of the total sale. And well, you know, I'm sure that, you know, this, this sale to you might look like an investment from your perspective. What if I told you that you could follow this exact same process, but the thing you're selling probably has about 20 times the value, and you would still get, you know, 10% of that, or, you know, a percent of that. I can't remember what he told me his percent was of his sales. I said, you really wouldn't be doing much different. And as I told him, but he goes, but I don't know the tech, you know, I don't know the technical aspects of it. I said, well, here's the beauty of it. You'd be a salesperson. There'd be technicians who would come in behind you and actually execute the work. You simply know how to communicate, and therefore, you'll always have a future. I found it to be a little bit more difficult. What we tend to find in our trade, there tend to be the technical people who enjoy it. So just think of it like a programmer, the programmer of the AI, the people who create it, they're usually not the ones selling selling it to the people who need the service. They love the coding. They love getting in the weeds. But they're usually not the most communicative or verbose people that you have, unless you talk to them about the code, which could put me to sleep. Same thing, it tends to be in our organization. You're gonna have people who want to execute the work, high level of technical proficiency. Then you have other people who just love helping people and they want to serve. And you need to mix your business in that way.

Yeah, I love that. Thanks for being on, Julian, sharing the wisdom. Where can people find out more about you?

I love it. Myself, find me on LinkedIn. I'm Julian Scadden. I'm the only one. And the reason that I switched my name is because I got tired of being, you know, solicited by the title of president, CEO. So I just made up General of Awesome. I don't think that highly of myself. I surround myself with great people. If you want to learn about NextStar Network, go to nextstarnetwork.com. And I would encourage you to tune in to Charles' Substack because he will get you thinking. I'll tell you that too.

Thanks for that, John. That was Julian and Charles