#248 Inside the $150M Operator Playbook: How Sierra Scaled Fast

We'd been exposed to AI. I had not yet like found an agent that even sounded like remotely believable. Half the time the customers were screaming like, human, human, human, like get me off of this. Met with Tyson and his team and I was really amazed at like how far they had come, what they had built so far.

We, we're about to go multi-location in like 31 days or something like that. I'm trying to figure out how I would implement technology across different geography. Like how do you think about that?

At the end of the day, each shop to some degree is gonna have its own language and it's really hard to take one instance of service ServiceTitan and get it to speak the languages of multiple shops.

How developed ServiceTitan is, there's just so many still like configurations. I mean, that's, I guess that's why all of these ServiceTitan consultants exist.

Welcome back to Owned and Operated. Today we're live at Pantheon. I've never done a live one, so this is kind of fun. Uh, I'm joined by RJ from Sierra and Tyson from Avoca. Welcome guys to the show.

Yeah, thanks for having us. Thank you, John.

Yeah, this this is uh we're in like a hallway at Pantheon. Uh, so this is yeah this is kind of fun. We just heard the like I think Pantheon just opened. This is my first Pantheon.

Oh really? Really?

This is crazy.

It's nuts.

Dude, it's like six thousand people in the industry for like twenty. I know.

Twenty years. I know.

And we've been servicing customers for like a decade. I've just never made it out.

It's the event. It's the one.

Yeah, yeah. It it is pretty crazy. But yes. Like 6,000-some people. The vendor floor was fascinating. The food's been good. It's been a ton of fun to like see friends. Like, we know like hundreds of people here. So that's been a lot of fun to just like walk around the hallway and be like, holy shit, what's up, dude? Yeah. So it's been cool. What's your impression so far?

So far, great event. A lot of great information out there. Excited to learn more. Excited to learn about what they're gonna bring to the table. Really the AI conversation's gonna be really interesting.

Yeah.

I think it's gonna cause, you know, there's always gonna be a lot of disruption. I think it's gonna be good disruption. It's just we're gonna have to figure out how to adjust and adapt and overcome.

Yeah, they sort of, they dropped like almost like bundling or something, their pro products. It sounds like what they're doing. It was an interesting talk to like watch mainly from like how many office managers are in the room and how many like CSRs are in the room. And like the answer is probably a lot. And I feel like that was, I don't know.

That was my first feedback to— I was sitting next to our COO and I was like, we need to go have a talk with our call center managers and dispatch managers.

Are they here?

They're here.

Yeah.

Oh yeah. Yeah. I was like, we need to go and, you know, settle some nerves.

Get them into the fold. Yeah. Get them into the fold.

Just explain that like, hey, we are becoming a technology company.

Yeah.

We have to embrace it.

Yeah.

Doesn't mean we're getting rid of everyone. We just need to figure out how we optimize for it.

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Yeah, so Sierra, it's been in business since 1987. Originally, my dad founded the company with his 2 partners. We were new construction for the longest time. 2014, we branched off into home service, sold in 2020 to private equity, and since then we've acquired 5 additional companies.

Yeah.

So we've got 6 companies in our portfolio in 5 different markets. Got a great team. We have 490 teammates throughout the platform.

So, dude, just like go hire 10 people.

I know, we're right there, man. We're right there. It's, uh, it's been a fun ride. We've got great teammates, so we're just excited for what we're building.

Yeah.

Yeah.

And 6 locations, how many states? 5. 5 states. Yep. What state has multiple, or like what states are you in?

We're in Washington, Idaho, Nevada, Colorado, and then we have 2 in Tucson, Arizona.

Okay. And when you think about, as you guys think about like more acquisition, you're actively acquiring. Okay. As you guys think about more acquisitions, you're all like West Coast right now. Like, would you go to like Cleveland, Ohio, or would you go to like, how far east would you go?

First and foremost, like, I would never say no to a good company, right? Like, we look for good companies. Like, geography matters some, but it's not the entire equation.

Yeah.

Our COO, our direct Director of Operations and our corporate controller are all on the east side of the country. They're in Tennessee and Atlanta.

Oh, really?

So we have, we have the bandwidth to expand out that way.

Yeah.

Just right now the focus has been the Western Rockies.

Yeah.

We see there's still a lot of great markets. There's Salt Lake, there's Reno. Phoenix is an opportunity.

Yeah.

So is Portland like, do we— is Portland good? Is Portland bad? Like, what do we think?

You know, we, we haven't seen a lot of opportunities up in Portland. Yeah, I— the, the business economy isn't necessarily our ideal avatar.

Yeah, sure.

If the right company was there, we would definitely go there.

Yeah.

Yeah.

Something that I didn't appreciate, um, we started looking for deals and I feel like you have to see this, uh, and it came to mind when I was thinking about Portland specifically, but We were looking at a deal in Pittsburgh and I had, Pittsburgh was kind of like a funny city 'cause it's like big. Like Pittsburgh's big, like top 50 city, millions of people. And there's no one big, like, or there's like one company and they're like $20 million, but there's no like, you know, winner of Pittsburgh. We started like looking around and trying to understand it. And roads were like the big problem in Pittsburgh.

Yeah.

Which I would have to imagine that's like Denver or something like that.

It's crazy.

There's Denver and then there's nothing.

Yeah. So, like, Seattle's very similar. Just like it— the metro area is so large compared to Vegas where I'm used to, which is very condensed, you know, traveling far.

Like good highways or something.

Yeah. And traveling far, there's not the traffic that you have in like Seattle and Denver or like in LA. It's just like for tech there to travel 30 minutes, they're going to complain. Whereas, techs in Seattle and in Denver are like happy that a call's only 30 minutes away. So it's just that those things, the perception you have to kind of like take into consideration is like sometimes in those bigger areas, you are— are we just servicing a, a specific radius? Yeah, right. And what— and then within that radius, what does the demographic look like?

All right, so 6 locations. When you're thinking about, uh, the conversation I'm thinking about now is like shared services and like how do we think about combining resources. Sounds like some of that, like corporate controller, CFO, COO, is a across all of them?

Yeah, so we, we definitely, we want to, whenever we bring on a partner, we want to make sure we're adding value, right? And so from an operational standpoint, making sure that we have resources that can help them grow their business, helping them put new processes in place or enhance the processes they already have in place. Yeah, we're not going into like completely gut and redo a company. We want to find a partner that we want to work with that has some runway, they're ready for an exit, they still want to stay involved though, and we can bring in some capital infusion. We've hired some some of our previous Nexstar coaches, which have a wealth of knowledge. And then, you know, we've brought on a director of HR. We have an amazing marketing team. So we bring those resources in with recruiting, and that allows us to take some of those multiple caps that an owner will typically wear off so they can focus on like vision and growth.

Yeah. And you're— and I think I heard in all of that call center dispatch, like you're centralizing some of that, all of that. Like, how do you guys think about that?

So From a call center dispatch standpoint, we want each location to own their own call center. I'm a big believer, like, if I, if I bring the call center into one location, that's going to be the first, like, um, excuse that a GM—

100%.

Yeah, 100%.

I think about that with marketing. Like, we, we're about to go multi-location in like, um, like 30 or 31 days or something like that. And like, my team, on one hand, they're like chomping at the bit. They're like— my marketing director's like, all right, let me look. And I'm like, dude, I know the moment we The moment you glance at their marketing, we own it. And then we've given them all the excuses they need to not hit numbers.

Exactly. So it's a collaboration with marketing. Yeah, they have to have a dedicated marketing person there.

Okay.

They have to have boots on the ground. We come in, we help, we advise, we, you know, we bring deals to the table. You know, we know how to—

Like M&A?

Well, not—

Or like just marketing agency deals? Yeah.

How to negotiate.

Yeah.

Most people are just buying off a rate sheet. We teach them how to go and like Develop relationships with, you know, the local television studio, your local radio companies. So we bring some of that in, just knowledge on how to like reduce costs in those areas. But yeah, where we do, where we do centralize is in like technology.

Yeah.

Right. So like for instance, like Avoca has been a great partner for us. They are in all of our locations. We brought them in. We've been very successful from like a marketing standpoint, but we did have like a conversion issue in the call center.

Like, uh, convert booking calls?

Yep. Okay, booking calls, just getting to calls, right?

Okay.

Um, after hours and then overflow.

Yeah, yeah.

And so we partnered with Avoca. They've been huge on helping us like maximize our efficiency within the call centers and then also, um, taking those excuses away that we were talking about, like, oh, we need more staffing, we need more this and that. It's like, now here's the tool, here, here's how we optimize the tool, now let's go and utilize the tool.

And like primarily, uh, inbound overflow, like nights and weekends?

Uh, we, we— that's where we started was primarily inbound overflow and, um, after hours. We now, yeah, we utilize the agent just as another call center person now. Like they take, they take lots of calls for us.

Yeah.

But they book right into ServiceTitan.

Yeah.

Uh, dispatch gets it on the board right away and we get it ran.

Yeah, that's sweet.

Yeah.

When, when you're thinking about, and like I'm, I'm mentally, I'm 31 days out and I have 2 locations and I'm like, I'm trying to figure out how I would implement technology across like different geography. Like, how do you think about that? Like you stage it one, you do it all at once. Like, how's the timeline?

Definitely. You wanna, for us, we, we, when we do technology on any location, it's always accounting first. We wanna go in, we wanna make sure we—

It's accounting first.

Accounting first.

Okay, what does that mean?

So we want to— if they're not on Sage Intacct, we're going to get them converted into Sage Intacct. We want to make sure we gain control of—

How long does that take?

Um, usually 90 days.

Yeah, we're halfway through our Sage right now.

Yeah.

I'm like, I'm happy and sad.

It's, it's, it's, you know, Dan's got a good process. We, we utilize a third party to help us with that, uh, Baker Tilly. But we want to make sure that we get the the accounting integrated, we get the banking integrated so that we're, you know, able to pay attention to it and keep eyes on it. Yeah.

Okay.

And then after that, we'll, depending if they're on ADP, great. If not, we'll go to ADP, then we'll do ServiceTitan after that. And then once we get the 3 cores of our tech stack in place, and that's when we start to add on the pieces like Avoca and some of the other products that we utilize.

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Well, so most of the businesses we bought were not on ServiceTitan when we bought them.

Really?

Like, so out of the 6, uh, 4 of them were not on ServiceTitan.

Like, what were they on?

Uh, various like legacy softwares.

Huh.

All of them had a construction background to them at some point in time. Okay. So typically like a legacy construction software.

That's interesting. Okay, so for Avoca, you guys started like a year ago and 6 locations. How, how did you drive calls? Like, how did you do that?

Well, met Tyson at Pantheon actually last year.

All right, hell yeah.

Um, our CMO and Tyson had a great conversation. Ryan Field. Yeah, Ryan came back and he's like, I got this amazing, uh, technology company, they're going to help in the call center. And of course I was skeptical, just Like anyone. I, we'd been exposed to AI. It was great. You know, you could tell that like everyone was going that direction. I just, I had not yet like found an agent that even sounded like remotely like believable.

Yeah.

Half the time the customers were screaming like, human, human, human, like, get me off of this. And so anyways, went through all the onboardings, met with Tyson and his team and really just started to like, learn more about the product. And I was really amazed at how far they had come, what they had built so far. He's got an amazing team over there.

Yeah.

And he was like, tell me what we're doing wrong and tell me what you need it to do to be better. And it would literally be like we'd have a conversation with him and his team, and then within a day or two, they were making changes to how the agent was responding, how the agent was interacting, what we were looking at on the dashboards, how we wanted to see the metrics coming in. Um, how we were booking things in the service side. And so it was, it was amazing just because we had a partner that was willing to work with us and enhance that technology at a very rapid rate.

Yeah.

For the business.

Yeah. And how did, how did you put it into Vegas first and then like 30 days later?

Yeah.

Same day. Like how did you drive that?

So Vegas, we, we probably, we spent about 90 days really focusing on Vegas and like working, working on all the kinks. Yeah.

Yeah.

Worked out. And then after that, it was literally like 2 to 3 week turnarounds at each location with him and his team. It would just be like, okay, we're going to the next one. Because there's a lot you have to do with ServiceTitan as well. You gotta get your ServiceTitan set up right. You gotta get your JobTitans set up right.

Are they separate?

Change management.

Yeah.

Yep.

Are there separate service— are they separate instances?

Yes. Okay.

Does it make a difference if like it's one instance versus like the enterprise hub?

There's some slight differences, but basically if all the operational processes are the same, it's pretty much a, like a version of copy and paste. Now the difficulties and nuances come when, you know, different tenants have different kind of peculiarities, there's different rules. And so part of what we now do is, you know, we work with, you know, companies like, you know, RJ's, we actually start and do a bit of assessment. It's like, okay, here you have like, you know, 20 locations, here you have 50 locations. What are all of the differences in each of those locations?

Yeah.

How do we first come in and help you standardize both at an operational level as well as from a technology perspective? So then it's like, okay, when we start the actual Avoca onboarding, you guys are ready. And so that's kind of how I think about it.

Yeah. This might be like a dumb tactical question, but what is the actual benefit of running— we ran multiple instances for like 2 years and then we consolidated it down. Now granted, the Enterprise Hub just came out. This was like 2021. So like it wasn't good. Supposedly it's better now, but Like, why not just run one instance?

Yeah, for— I mean, for us, one, it's multiple shops being in one instance where there's no control from shop to shop, people potentially going in and accidentally messing with somebody else's job. And I understand there's permissions that you can limit within, but at the end of the day, each shop to some degree is going to have its own language within that shop, and it's really hard to take one instance of ServiceTitan and get it to speak the languages of multiple shops.

Yeah.

We use, uh, we use a third-party consultant, Maury Christmas, and she's helped us a ton with, with all of our shops and getting them as standardized as possible.

Yeah.

But even within that, like, utilizing her and her team with the standardization of job types and, uh, skill setting with all the, the different aspects of the dispatch board, it's still— there's just various nuances that it's really hard to, like, get them all together in the same place.

Oh, absolutely. Yeah. I've met, I mean, even with how developed ServiceTitan is, there's just so many still like configurations. I mean, that's, I guess that's why all of these ServiceTitan consultants exist. But, uh, but yeah, I mean, I think, uh, exactly. It's been, and yeah, we, I think we've worked a bit with Mori as well. So yeah, she's very helpful.

Like, do you have multi-state operators that are in one instance?

We do. We have a few of those as well, but—

Most people have multiple.

Most people do multiple.

If they are in one instance, do they typically have a centralized call center at that point?

Yes.

Yeah.

That would make sense. Yeah. That's basically the question. Like, is that if I was multi-state in one instance, Avoca's a— that's a— you roll that out one day for the— because you don't have a choice, right? Because it— well, or you could do it by phone.

You could do it by phone number. So that's the thing. We have really a Quite a few large businesses that use exactly like based on campaign. And so when they start Avoca, they'll, they'll start with a few numbers, see that that works well, and then proliferate across their campaigns.

Okay.

Yeah, yeah.

I'm thinking of like Matt from Culdad, 8 locations, but one instance. Yeah, but it's also he does that. It's a totally different scenario because you're like all these different states. I think he's 2 states, but it's a chain of a highway, so it's like a very shared capacity. Which is really cool, I think. Like, it's interesting. That would probably be like just a, a 1-day rollout or phone numbers by the GMB or whatever. Exactly.

Exactly.

Okay. Okay. That, yeah, that makes sense.

Yep.

I would imagine that like a technology change, like call center across 6 locations is kind of a hard, like that'd be a lot.

It, it's like, to Tyson's point, you really have to have a culture of like change, change management. Like you have to really have a team that embraces change, wants to—

Figure it out.

Yeah. Wants to innovate.

Figure it out. Yeah.

You know, if, if you, you think about your traditional old shop, yeah, mom-and-pop shop, it's gonna be a lot harder.

Yeah, here's AI. Yeah, yeah, yeah.

It's gonna be a lot harder. So you really have to, as you're bringing on a new partner, you, you need to be explaining like, yeah, these are the great tech, technology advancements we're gonna help you make so that they're excited about it. 'Cause if you just go in and just be like, oh, by the way, here's all this AI stuff now, it'll never work.

Yeah.

Because they're just gonna resist it all day long.

Yeah.

What do you think's up next for Sierra? Like, what do you think the next couple years looks like?

Yeah, we're excited to continue to grow. We think there's— we think it's still a very fragmented market out there. Oh yeah. We think that there's a lot of really good partners out there. We, you know, we like to think of ourselves as a little bit different than some of the other, like, portfolio groups that are out there. We're just—

You guys are operators. Yeah, you're real. Like, you grew up in the trades.

Yeah, everyone that, like, works in our business is not— like, their background is Like HVAC, plumbing, electrical.

Yeah.

They're— they've been former GMs, former operators, former NextStar coaches. So we have a little different, like, DNA than some of these other groups. And I think we're just like guys you want to go have a beer with and want to talk about trades and how to fix stuff and how to make customers happy. So we want to continue to grow. We want to continue our growth on the Western Rockies side of the states. And then we see an opportunity to continue through, you know, the Midwest. And across the country. Hell yeah, dude.

Awesome.

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Cool.

Well, thanks for coming on today, guys. This was felt like this was a lot of fun to have you on. I knew I would eventually be able to get you on. It just happened.

It had to be at Pantheon. Tyson. Tyson's the man. He can't say no to him.

Awesome. Cool. If people want to get a hold of you, how can they find you?

I don't have a Twitter. I think I have a LinkedIn.

All right. So basically, no.

My email, RJ McGee at SierraEqualsLV.com. Awesome. Yeah. Happy to, happy to meet with anyone or do a shop tour. Love to come do a shop tour with anyone out there. Like, we love going to visit it.

Visit. Oh yeah.

Yeah.

We just had you guys out in like May or June or—

Yeah, I think right before summer. Yeah, right before summer.

Yeah, that was fun. That was a lot of fun. Yeah, we got a ton of lessons from, from you guys. Dan was great too. Is he here?

He is.

Oh, hell yeah. Yeah, I got to, I got to beat him up a little bit over Sage, but like, yeah, yeah, it was good. Like, we learned a lot.

It was good.

Yeah, it's great, great partnership. I mean, that's what's so great about the trades. We all wanna help each other win.

Yeah.

Yeah.

That's awesome. Yep. Tyson, if people wanna get ahold of you, where can they find you? Yeah.

Uh, ahold of me, we can, uh, yeah, you can feel free to email me at tyson@avoka.ai or just visit our website and get a wonderful demo from, uh, one of the wonderful members of our sales team. Awesome.

All right. Thanks guys. If you like what you heard, make sure you check out ownedandoperated.com.