Buying a Business Doesn't Mean You Can Run It

I think the vast majority of people when it comes to ownership should be passive investors. They should not be operators. And I think, I believe in ownership. I do not believe that most people or everyone should be an owner.

This stuff I feel like is sold on social media as an easy way to be a business owner. And I mean, even if you're a sophisticated company with sophisticated people and a great management team, I still look at bringing a company in as incredibly difficult.

Q4 across the, the organization, it was like 120% revenue. From one year to the next just by focusing on it. And I was like, it was like in, in absolute numbers, like $8 million to $16 million, uh, for that quarter. And that's always been our worst quarter.

Interesting study from Harvard. 30%, uh, there's a 30% pop in successful exits if you're a partnership, which is kind of similar to data you said. It's a very meaningful difference to actually selling a company in the future, having a partner actually ever even getting to the chance to exit your business. It's 30% higher if you're a partnership.

It's not that you need to be healthy to have a good business or be a good leader. It's just that the ingredients of good health are also really good ingredients that go into becoming a great leader.

I do wanna leave people with that. Like, I would challenge your idea that there's a day coming in the future where you'll do something different than what you're doing now. You gotta do it now. Welcome back, everybody. Good to see you. So kicking it off with what I think is now our standard protocol. We volley questions at each other. So I've got 10 to volley at Mike today, and we don't show each other the questions in advance. And so, Mike, today I'm throwing a bunch of financial but non-business. They're like kind of business-related but more financial-related questions at you than business questions. And so the—

I thought for sure you were going to go the hot take route and try to get me in trouble with politics or something like that.

The hot take is on my agenda. I was just taking a break from it, but it's coming back. Because everyone was like, those were very Luke warm hot takes. Yeah.

So I thought JP would come back hot swinging after the vacation.

Coming back, but just not this week. And I have actually been thinking about a few of my hot take ones. So it's definitely on my mind. They are coming.

You have less to lose now. You have no customers.

That's right. That's right. What are you gonna take from me?

Exactly.

I doubt my CityTurf clients are listening to this. So I'm not a super controversial guy. I just keep my mouth shut. So, you know, it is a stretch even if I don't have customers to lose to go out too far on a limb. Him. I'm totally good having the conversations one-on-one. I just don't have them in public. So, all right. So on this one, the way you're going to think about it, it's kind of, I love the betting exercise.

Okay.

Like, even though, you know, I don't think either one of us give a flip about betting, but I love that mindset because I think that's half the problem with opinions in the world is everybody just has an opinion. But if they had to put money on their opinion, they'd have very different opinions.

Yeah.

And so, uh, the, the idea here, the framing is you have to put $10,000 on this. You have to be willing to lose $10,000. And I know you're not really, but you know, it's like kind of think about that was like, ooh boy, am I really confident enough to gamble $10,000 on each of these questions?

Right.

Um, and so I, I, I can answer any of these if you want, are curious. I don't know if I should tell you if I disagree or not. I mean, I obviously have the advantage to think about it a little bit, whereas you don't. You might change your mind later, but I, I think these questions are interesting. I don't necessarily think they're easy. So we'll see what you say. All right. Starting at the top, uh, the S&P 500. Okay. So you're basically saying, yes, I believe I would put $10,000 on that or no, I would bet against it. So you're, you're betting in agreement. That's the way to frame this. And of course, ask me questions if you need to.

Okay.

So will the S&P 500 be double what it is today in 10 years?

Oh, that'd be a 7.

Yes. Okay. I agree with you. I'll, I'll say if I agree to this.

Okay. Yeah, that's good. That's good.

I like that. I think it's interesting. So I agreed with you, but again, I, for everybody watching, I have a massive advantage. I get to think about it. Mike's never heard this before. Okay. So will the US dollar lose its reserve currency status within 25 years.

What percent? Because like right now it's like 90%.

Oh, I was like, I would guess above 50%. I was like, I guess maybe above 50% defines it as the world currency. I don't, I don't know, a world reserve currency. I don't know how you, I don't know how you would actually, I'd have to give that one some thought.

Yeah. And did you say in 5 or 10 years?

Oh no, no, I said 25.

Oh, 25 years.

Yeah. Oh yeah. 5 years is an easy no, in my opinion.

Yeah. Oh, the challenge is not whether or not it loses 50%. It's like, what replaces it is the tough part.

Agreed. That's why I love these questions. It gives you an idea of how, you know, everybody— you think.

Yeah. Cause everyone likes to bag on the US dollar, but it's like, well, what's going to replace it then? Bitcoin, gold. I agree with you.

Yeah, exactly.

Oh, 50%. I'll take that it's still in 25 years is above 50%.

Me too.

Yeah, okay.

Really? I don't think we're, I don't believe we're gonna lose it in 25 years.

Okay.

But not an easy question.

Yeah, no, it definitely is like one of those things where it's like, okay, how old are you kind of starts to matter because like when you're 75, if you're losing, you know, the currency status, you're gonna change your investing strategy. But in 25 years.

And you better have changed it way in advance. Like you can't change it when it happens. You had to be way ahead of the curve or you're screwed.

Yeah.

All right. All right. Number 3. I got 10 for you. The average American life expectancy will exceed 100 years within 5 years. I'm sorry, 50 years.

Oh, yeah.

So within 50 years.

Yes.

So average. Oof.

Like, are we talking life expectancy or like—

Yes.

Oh, man.

Average life expectancy.

Right now it's what, 73, 74?

Somewhere along those lines. And I think maybe dropping a bit for Americans, which is sad.

Oh, 50 years? Average though is tough. That means people are living 120. No, it's not going, not 100.

I went no as well.

Oh man.

I had to think of it. That one wasn't, that was, I mean, I created these questions.

Okay, I have a question. Did you run these questions through AI? Did you like get?

I did afterwards.

Let's go.

I did, but I, so I made myself answer them all first.

Yeah, and then you ran it through?

Okay. And then I ran them through.

Did you change any of your answers after?

No. And 100% match.

Let's go.

Yeah. I mean, I don't know what that means. Maybe AI is really, really stupid.

ChatGPT, let's go. Yeah. Yeah.

No. So I used Claude and I said, I want you to do, like, I always use the word deep research again. What's that mean? Based on everything you can do to research each of these questions, I want you to give me your very best guess. Yeah. 100% match with what I said. I don't know what that means.

So, so far you're— Confirmation biases. Let's, let's go.

Yeah, exactly. But so far you're matching up with Claude as well. So far we're as smart as Claude. Okay. So, all right. Um, I, you know, the one on that one, number 3 there, I did, I did think, you know, if you were, if I were to reframe that as would the top, say, 1%, right. Then I would think I'd switch my answer to yes.

Yeah. Or like what percent of people get above 100 years old? Yeah. I think that's gonna make a big jump, but averages take a lot to move needle.

Yep. So, and I, I did, when I write these questions, I like wrote down a bunch of ideas and then I dumped them into ChatGPT and had it help me reword them. So I did do that. So I don't remember in the original version of my question if I said average, but by the time I got it back and it said average, like I, I was a no with you.

Hey, hey, if you, if you live to 100, we still have like a lot of years of podcasts left to go. We do.

We're, I think we're gonna run out of, uh, this. We're gonna have to find a new way to start the show. Or by that time, we will be very controversial.

That's right. That's right. All right.

Number 4, marriage rates will continue to decline until fewer than 40% of Americans get married in 20 years.

I would take the bet that that is going to happen.

That's what I did too. I think there's a— I think there's a— and this is probably top of mind because some of the podcasts and things I listen to, it's like, The data's pretty crummy on young guys these days. Yeah.

That's a controversial take. We need to drill down on that one in the comments below. If you want us to talk about the crummy nature of young men in America, let us know. While we're on it, what podcast specifically, when you thought about that, what podcast are you listening to?

Uh, some of them are tech podcasts. So I've heard it, I've heard like Rogan talk about it. Uh, there's a number of. Tech podcasts that I listen to, like Peter Diamandis. I know I've heard him talk about it. Um, I've heard, uh, Scott Galloway talk about it. So just a variety of different— I can't— those are 3 that come to mind, but I've heard it quite a bit. And I'm kind of aware of it because I'm— I know a lot of parents that are like all thinking about their kids these days.

Yeah.

More and more, I think the girls are more put together than the boys. I mean, that's what I feel like I see.

And even just like the education rates in university too. So, okay. Everyone needs to comment below if you want us to do a whole episode on non-business stuff and the socioeconomic collapse of the young man in America. Pull our, our Scott Galloway hats on.

Just let us know. Yeah, exactly. All right. Number 5, uh, a 4-day work week will be the standard for most Americans within 15 years.

For a W-2, yes. Okay. I think there's going to be a lot of like 10/99 stuff for a day or two a week kind of thing on top of the 4-day week.

Oh, that's an interesting take. I didn't think so. I went no on this one. I think we're still going to be working 5 days a week. Just may. Yeah, I think so. I mean, who knows? Like we're just guessing here, but I think, uh, people will be less and less efficient. Like, yeah, they're at work, but they're working. But what's that really mean? But that's an interesting take that I didn't think about that way. It's like we could be splitting our time between a few things.

Yeah.

Okay. Number 6, self-driving vehicles will eliminate the need for most service company drivers within 15 years. So your guy in a truck, the self-driverless truck could take him to his jobs within 15 years and stay— I used the word standard, meaning let's call it above 70% could be in that camp.

Of the jobs? Of the employ—

Above 70% of the time, a truck could be driving somebody to the job. To do the work.

15 years, man. I don't think it's going to be a lack of technology. It's going to be regulation. Like, I still feel like that person's going to work. Someone's going to require a driver's license. Ah, but man, Robotaxis are already not doing that. I'm going to go yes.

Okay. I went no. That was a hard one too. Yeah. I went no. I just, I do believe in this argument that we're like, there's a lot of exponentials happening right now. And so we kind of look at the past and think, and we look at how long the tech has taken to develop and we project out and say, well, it won't happen in 15 years. I think we're at risk of being wrong on this stuff, but I went ahead and said no on this one.

Okay.

It's to, to, to your point too, it's like, I think the tech could be there in a lot of places, but will society really go for it?

15 years is a long time.

It is a long time though. It is a long time.

You have to realize that's half of my life, bro.

Yeah. I mean, 15 years ago, see what was 15 years ago for me?

You were just starting Service Autopilot.

I just started Service Autopilot and City Turf was doing a million bucks.

So if AI has, you know, popped its, reared its little ugly head in that fast 15 years, what's gonna happen in the next 15 years, you know?

I might take that one back, but I went with no. I gotta stay with it 'cause I went with no, but I think that one I'm wavering.

I think at first the legislation, that was my first like apprehension, But when you look at Waymos or you look at robo taxis, even the Waymos, like it's not required that you have a driver's license if you're in the vehicle. I feel like that would be an opportunity is where can you get driverless vehicles, but then have a non-driver be the worker?

It'd be huge. It'd be huge. Yeah. All right. Wow. We are going slow. Number 7, within 5 years, will AI be better at diagnosing home repair problems than the average field technician?

Ooh, what service? Can you give me an example or just in broad terms?

I went— I was imagining broad on this one. So I was imagining— I was imagining broad, but I do— I was picturing like fertilization, weed control problems, like bare spots or disease issues or issues with your bushes. I definitely did a bunch of that. But I was also thinking even, you know, HVAC and plumbing type stuff.

I think if the, if the technician is tech-enabled, no. But if you just are taking a raw employee entry-level, not a lot of experience, I think the AI will definitely lap them.

Okay. I went with yes.

Okay.

But I was, I will add one thing that I was picturing. It wasn't purely based on video or pictures. It could be just based on the tech describing the problem in detail to a model and then the model helping diagnose it.

Got it.

Okay. But don't know. Yeah. So I went yes there. I'm amazed at some of the stuff like where I take a picture of it and how accurate it diagnoses things.

Yeah. We had this handyman come over to our house and put in a smart thermostat and he blew the fuse in the HVAC system. And I was like, my goodness, I guarantee you if I would have taken a picture of those things, I put on ChatGPT and just asked it how to do it, I probably could have figured that out. So of course that leads to an HVAC call.

Yeah.

$300 for someone to show up.

Yeah. I mean, I've had some stuff with like some car problems because I have a bunch of really rare cars. It figures it out.

Yeah, well, I, I was just, um, just by talking to it.

So that's why I included the talking to it element.

We think about a lot of them, a lot of people, like, especially when it's very rare, they're actually going on, like, in the, if you go back 5 years ago, they're going on Reddit, they're looking it up on Google.

Yeah.

They're, and now the AI does that.

So it does it for you. Yeah. All right. Uh, number 8, labor will remain the single biggest constraint for trade businesses with for the next 15 years, regardless of what happens in technology.

Constraint to growth?

It's just the biggest. Yeah. One of the biggest challenges in the business to solve is, continues to be the problem of getting people.

15 years.

Oh. Yeah. These are so far out. They're really hard.

I don't think it's going to get easier, but the constraint to growth, I will be, I do believe will become—

I wasn't—

Okay.

I wasn't necessarily thinking constraint to growth. I was, but that is a good way to, I just thought of it as, I did say the word constraint when I wrote this, but I was imagining it's one of the— I should have— I was imagining biggest challenges inside the organization.

Yes. I still think it's going to be hard. Yeah.

That's what I did too. Yeah. All right. Uh, number 9, the US national debt causes a genuine financial crisis, not a recession, a crisis within 20 years.

Yes. I take that.

Yeah. Yeah.

Last one. But just to be clear, based upon our predictions, we believe that's going to happen, but it's not going to reset the US dollar as the reserve currency of the world based on predictions.

Yeah, I think that I can go with that. I think that aligns because I, you know, I like that analogy of the best house in a crummy neighborhood concept. So I suspect that if we have this, you see this happening across the world. I mean, China is not without a massive debt problem too.

Oh yeah.

Yeah. It's so easy for everybody to You know, hate on China, but then also turn around the very same thought and say, well, the US sucks, but China's good at this. Like China's got all the same problems.

Yeah. And will anyone trust China?

Like, exactly. So, yeah. So, so I tend to think that it can happen, but it'll happen all over the world.

Yeah.

But who knows?

Who knows? More, more like, more like options like BRICS probably popping their heads up.

Like, yeah, but that hasn't gone well either.

But even there's like more of them, like fragmented, I would say.

Yeah.

Yeah.

Like, yeah.

Like more options, even things like Bitcoin in some places. Just, but like, I still think the percentage-wise moving, especially because so much of the demand and material and consumption happens in Europe and North America, just from a percentage perspective. So anyways.

You said Bitcoin. Do you think about Bitcoin at all?

Not a ton. No. Until, until, until I can, I can go to the store and buy my groceries with Bitcoin. Yeah. I don't know.

I had that as one of my questions for you, but I dropped it.

Oh, oh really?

Yeah. All right. Last one. The mental health problems or crisis in America gets significantly worse before it gets better. Would you say yes or no? Yes.

Oh, 100%.

I, I do too. I think it's gonna get a lot worse.

Yeah.

All right.

Okay. So what do you— We really, we really ended on a low note there.

We did.

Mental health. We're all going down. Just bet against America.

We're going down and we're all gonna experience a financial disaster within 20 years. Exactly.

And young men are just absolutely screwed. They're done for.

And nobody's gonna get married anymore.

Exactly.

But I'm still an optimist. I'm still betting on America.

Let's go. Oh man.

All right, so what are you working on this week? What do you got going on?

Uh, yeah, so two, two major things. Uh, we did start the events refactor, so it's June, July, and August, 90 days. The first part is like all events page, then it's the calendar and schedule, and then it's the dispatch board.

And so— Describe what events means. What's that mean inside your tech, your system?

Anything with recurring visits, one-time jobs, to-dos, anything on the schedule. And so really the hairiest, biggest problem is recurring.

Yeah.

Because we allow for off-seasons. So it will pause the events for a period of time. And so yeah, it's just, it's been a mess. We decided 90 days, we're going to go in guns a-blazing. That has led to some, obviously, some downstream. You know what it's like to do a refactor, so it's a pain in the butt. And then the second thing we worked on is importing and implementation calls. I know this is something you did a lot at Service Autopilot, and that was make sure they stay in the first 30, 60 days.

Yeah, the onboarding.

Yeah, so we lost 29% of members in the first 90 days. And so it's just mostly because it's like, hey, here's all these resources and academy, but it's not like, structured implementation call. So we, we now have it where it's like Monday, Tuesday, every single day of the first week you join for 1 hour on small group sessions and we will do the importing process for you. Like we were always talking about onboarding, but it was like they don't have any, haven't even imported their data, let alone know how to use the software to actually then get to activation, which is like invoice dispatch, send it, you know, get payment, et cetera. So, um, we finally have it installed and, uh, Yeah. I think it'll be a lot better.

Good. Yeah, boy, onboarding was— so we owned the business for just about 9 years. I swear for all 9 years we talked about onboarding. Like, you're always looking for the silver bullet to get people to stick. Do you have many of your new clients, whatever you call them, do they talk to somebody on the team, like a sales call, or do most just sign up online?

About 60% go through a salesperson. Those tend to be the, all the guys that are 3, 4, 5 million. Most of the smaller guys that are joining at the, the lower tier do just sign up organically. But now it's like we're basically forcing people in these, like we're gonna harass them. I told the support team, I want you harassing them with text, email, phone calls. I want you on the support chat. I want them like in these calls because it leads to way more work for us anyways down the road when they don't know how to use it or they skip a couple sessions.

Yeah. And so.

Yeah, fun fact, Brent Banks, one of our owners at Augusta, he said he joined Service Autopilot like 9 years ago, and he said that first 2 months he was just harassed to get on, like get in the calls. I'm like, yes, I know we need to do this too, so.

It's critical. I mean, I think a lot of the pro— like if you could look at Service Autopilot clients that were really happy and you kind of looked at how they used the tech, they were using it like as we kind of imagined, and then we would, talk to some people that don't like Service Autopilot and like, they're not even using, they're not even using invoicing. It would blow our mind. But wait a second.

Manually putting things into QuickBooks and sending invoices and payments. Like, no, no, no, it's all here.

Yeah. So, uh, the implementation was so incredible. Do you guys, we'll move on, but do you do a, one thing that really helped us is having the sales team do an actual intro handoff to onboarding, like almost three-way. I mean, I'm in. And introduce them over to the onboarding team and hand them over to onboarding. It, it also helps with, uh, keeping the client from constantly calling sales back because now they have a new relationship with somebody on onboarding. But that was a little thing that absolutely helped us, like do the intro, hand them over. We're moving you to the next phase. Here's what we expect from you. Here's how you can— we, we want you to be incredibly successful. Here's how you can get success. This is whomever, and he's going to take it from here. You're going to love his stuff.

Was it actually on a live call, or you just did it on email?

Yes, live call.

Okay.

All right. Yeah, I don't know if it'll work for you, but we made that change and we never stopped it.

Hey, well, I— you labeled me last time as the guy who rips stuff off and just implements, so I am all in. Let's go.

You— yeah, but I— yeah.

I'm just joking.

I did. I might have. I might have.

But hey.

I, you know, one of the things that always frustrated me so much was that I would, people would call me and say, hey, I'm having this problem. And I'd say, oh yeah, I've had that problem too. Do this. And then they'd do like 90 things around the thing and they wouldn't just do the thing. It's like, well, that's why it didn't work. I spent a million dollars learning that.

The thing that's so frustrating is when someone's mad, you can't, you can't disqualify their anger and just say like, you need to go back and watch the original how to do the workflow. Cause they don't wanna watch an hour long video about how to correctly, you like, ah, so anyways, we gotta do, we gotta do it from the beginning and we gotta force people into it and they won't like it, but it's a whole lot better than 6 months in and then not knowing how to do it. So anyways, yeah. Thank you for the feedback.

Stay the course on that. It's like, it's so imperative.

Yeah.

I appreciate it. So frustrating too, because you'll still be talking about it in 2 years.

Yeah. You know, hey, it'll be better than today. What are you working on? I know you just got back from your vacation.

Yeah, but I've been, I've been back at it. I got a lot of things to work on, but maybe I'll say two. So one, I'm so dang frustrated looking at data for City Turf, like around, uh, marketing attribution. And so I just cannot get LSA to perform at a CAC that I'm happy with. This would be something I'd be interested to talk to you about. Now I will say I'm not looking at my LSA data. By service line. I can't— it's really complicated. But if I look at it as a whole, I just— the numbers are just— the LSA is still one of my worst. It is my worst performing of all channels.

Really? What's your close rate on it?

I believe it's in the 30% range, which is really— is not good for us. But one of our single biggest problems is— I'll give you an example. We've got it right. So I've been testing stuff. I've got it locked down right now to only calls, no messaging. Okay. And I know that's a bit of a challenge, but I have it. So of 170 leads in May, only 43 were qualified leads. Qualified by—

Not sold, just qualified.

Just like they were— they were not cut. Like the majority of everybody clicking on it are our clients.

Are they actually getting refunded though from LSA?

Yeah, but we have to fight a lot of them. It's like we don't necessarily get them all. It's really running up our— it's like the— if it's the single biggest problem we have, like getting Google to refund us for all the clients.

Because sometimes— Now they're using AI.

Yeah. And the client— and you— so yeah. And the client doesn't always say the right words on the call. So we have to go back to Google and it's like a hit or miss, but it's killing our conversion cost. It's just killing it, destroying it.

Do you say— did your call person say the words Are you an existing customer?

Great question.

That's been really helpful for us.

I believe we do, but I— that's a great question. I— we have somebody that's listening to every single call that we have. Basically, somebody listens to every single thing and scores it and notates that. But, um, I'll check on that. That's a good, good little—

and then the other little thing might look into— there's a little service called LSA Respond. They do a great job. Um, and they will, they will actually do like the fighting for you. Okay. And also you could turn on the text because they'll do the immediate responses too. So just—

Oh, they do?

Yeah.

Yeah.

Oh, so they will take care of all of like, basically you don't have to respond to LSA.

Oh, how interesting. Do you use them?

A lot of our owners, we have a preferred vendor relationship with them, but it's not expensive.

Oh, wow. That's very interesting. Do you have good success getting most of your refunds from Google if it's a client?

Pretty good as long as they call, because we, we do, we do ask every time, are you an existing customer?

I don't know how we couldn't be asking because we eliminated from our phone tree the button for, are you a client? Now that used to probably be part of the problem.

Mm-hmm.

And that act— that's— oh man, I'm glad we're talking about this. I hope this is interesting for other people. Mm-hmm. We, for the longest time, used to just answer the phone. Mm-hmm. Then a while back we tested. Going to a phone tree, 1 for client, 2 for lead prospect or whatever we said. Mm-hmm. We've since eliminated that again.

Mm-hmm.

And we've gone back to just answering the call immediately with no phone tree. We just don't like the phone trees. Yep. Um, I need to find out when did we eliminate that? That could be—

Yeah. So we've always done it that way, but what I have seen is people that had the auto, uh, it like based upon the phone number coming in, you just knew the client and it could pull it up. The problem now is you have no words of like existing client in there. And so just something to think about.

That's another thing. Yeah, with our system. Okay, thank you. That's a really nice insight. But you think you get a pretty good refund?

It's our best one. It's— oh, oh, oh, yeah. Refund.

Alex says your best.

Yeah, it's our best. We can't, we can't beat it with anything else. Like if we could keep— if we could spend more, every single location in Augusta leads, we would spend more on.

See, this is what's just So today I've been very frustrated because I've been thinking about this and we've been trying to be incredibly fast. Our weekend data is worse than our during the week data by a lot. We, I, I, meaning because we do staff on the weekend, but we don't staff at the same level. So our answering service picks up more.

Hmm.

I just can't figure out what the issue is. I've talked to multiple really big, huge, like $100 million type private equity funded business. They swear that LSA is their best lead source. I've had good success with LSA, but it's not— it's never been great, but it's really not performing right now and I cannot figure out why. Organic's great. Google Ads. Google Ads is half the cost of LSA for me.

Hmm.

Yeah. But you're— but you're telling me, do you run just lawn mowing?

Oh, gateway service only.

See, I've got several friends that only run lawn mowing and they love LSA. Yeah, yeah. I'm running pest control, irrigation. Yeah. And see, we don't really sell lawn mowing. We don't— we don't market mowing at all.

Well, just out of curiosity, what would you consider your gateway service usually?

Or is it like— Well, it should— it would be lawn mowing, but we don't— But it's the best.

But you don't do it.

So of, of like, I don't know, let's say we have 11,800 clients. I think it's directionally accurate. I don't know what it is today. 11,100 are fertilization, weed control clients. Like everybody buys fertilization weed control from us. But that's a, that's not been a successful service to run for us with LSA. I would, I don't know, have you ran that?

Because you— Not as much.

Not as much. It's like, yeah, so, so mowing is the most successful gateway, but we do not market mowing at all because we're not growing that business. And we, and so that's where it's like, okay, well, I can't run out mowing ads.

You're selling, you're selling those on the phone though, right? Like you're selling fertilization, weed control over the phone.

Yeah, we convert. I think we're converting it like 53% fertilization, weed control leads through organic or something like that. But that, you know, that includes the people that are just outside our market or people that like, I just want an application, you know, so we, we don't, we don't sell those.

That's where we're at. Like, we'll probably be moving into switching away from— it's just spring rush. Like mowing is always the best. We'll probably shift towards different services as the mowing season, like our lead, we can see our cost per lead slowly rising right now across the system. So we'll probably shift to different services. It's just our first year with Augusta Leads where I have like so much data. So I'll keep, I'll keep you in the loop if we switch any locations just doing fertilization, weed control.

I'd love to know. Yeah, I need to, I've got a number of, I've got a number of friends that I can ask this question, but they're all going to try to sell me SEO. I don't want to have the conversation. So I just like— so I haven't called any of them. So I'm just trying to figure it out.

Yeah, interesting. But you're saying if they're qualified, are you selling 53% of them?

Through organic, but not through LSA.

So LSA is the one? Oh, no.

LSA. Oh, man, I was just— I mean, too much data in my head. I mean, I've been looking at spreadsheets today.

Because we found the quality of the lead is so good. We close like That's our highest conversion. Oh yeah.

Not for us. Really? This is why I'm confused. But I wonder if I turned everything off and just ran lawn mowing leads as a test, what would happen?

Hey, send them my way.

Let's go.

Yeah. I'll take them.

How much are we buying for?

I'll switch leads. So you've been working on— you've been working on LSA stuff, data marketing, data.

Yeah, data. I'm really frustrated by it. Like, I'm so frustrated cuz I just can't like, why I can't figure out the why. I've talked to a number of their people that are in front of a lot of like revenue. Like, yeah. And they're like, yeah, some of my clients use LSA. Some of my clients don't use LSA. Today is so frustrating. Today's one of those days of like, why am I doing this? I really don't. I could just be racing a car around the track. Why am I doing this?

Uh, you know what's so funny is we both have the same thoughts, but for different reasons, right?

Yeah.

Like you don't, you literally don't need to do it for me. Like, it's like, why do I put myself through this? Like, just lower your goals. You don't need to do this stuff.

So that's interesting. This is, but it, but there's no way I wouldn't because the minute this is my joke, like as soon as I'm in a car on the track, the single most important thing is full-on 100% focus. Like you're going, like it could go really bad and my brain's thinking about work. Like what is wrong with me?

Man, that LSA ad. Goodness. Can't get that thing set.

I'm literally, I'm riding a dirt bike through the trees trying to keep up with guys that are faster than me. And if I'm not going full speed, like as hard as I can go, my brain gets distracted and I start thinking about work. I have to be going all out on whatever I'm doing or my brain gets noisy. It's like so frustrating, but I could never do anything else. At the end of the day, I still love this stuff. It just like, ah, why? All right. All right. Here. What are we? We're like, like 35, 40 minutes deep.

There's our cold open.

Question number 1. All right. Topic number 1 I got for us today is. The whole idea of buying businesses is super hot on social media. It's been hot for a while. I use Cody Sanchez as an example. Like, I don't know if she single-handedly made it really hot, but it's like, she's really all over that topic. So what's your general feeling on, is it a good idea, bad idea to be buying businesses? There's a couple of ways you could look at it, like good or bad for an existing business owner versus a lot of the people that are selling this concept. It's like new business opportunity stuff. So it's like, this is how you get into business, you buy a business. So where do you stand on topics like this?

Yeah, I think you, you hit the, the nail on the head and it is the total addressable market of people who should buy businesses is too small for social media. And so we've gotta dumb it down and make it where if you can just walk into a business, they're old, they got gray hair, they don't have kids, they must be willing to give the business away. I can step in and do it. Um, So I'd say as a rule of thumb, I don't think new entrepreneurs should really do it. I will asterisk that by saying that I have done it, and that was I bought Anytime Fitness.

And so—

Oh yeah. Yeah.

So what— How old were you when you did that?

Oh man, uh, 20— 21.

Okay.

And so, and essentially I did it for zero, zero dollars down. So like the quintessential no money down, I kind of pulled it off using SBA loan. Basically how I did it was the $50,000 10% down payment, the owner basically said, hey, I'm gonna hold one month of revenue, remit, it's called at Intent Fitness, of membership dues. So the day you get it, you can take the $50,000 out and go, you know, pay yourself back essentially. And so I, I just had to float the $50,000 for about a week and a half to two weeks. And then the business cash flowed from day one, even after the debt, the loan service of like, I think I'm paying like $5,300 a month back then. I paid it off.

Okay.

But like, the loan payment was like $5,300 a month. So I kind of did it. However, I would say like I had some unique advantages. I had worked there as an employee for 3 years.

Okay.

I knew the owner, Anthony, ex-military guy. He was my first boss. I got hired there when I was 16 as a trainer. I knew all the clients. I knew the area like the back of my hand. I had a lot of built-up trust with the owner. So like even through the negotiations, I just trusted him a lot. And honestly, in hindsight, I did not do enough due diligence, but I could trust him and that's why it could work. Also, another unique circumstance was it was a small town. There's like no competition. So Blaine, Washington has like 6,000 or 7,000 people. There's not enough room for another gym. And like, there is no second player. There's no like Planet Fitness ever gonna move in or Equinox or any, no one else is moving in. And then the other unique part is like, the franchise had the systems that I needed to be successful. So I didn't need to be an excellent operator because there was already so many systems put in place and like parameters that you can and cannot do these certain things. Like you can't just go like whip up a nutrition plan or like start some other type of equipment or like paint your walls, whatever. So the franchise system was good for me being a young entrepreneur. But I think that the social media version of buying a business kind of underweights two things. I kind of bucketed into two things. One was debt risk, and, and that's like, can the business actually afford or survive a bad season when you're servicing the loan? It's like, if I had that, had the $5,300 per month in debt payments, if you take that out of what used to be the net income, is there any money left over?

Yeah.

Um, also I think when it comes to debt and financing, like a lot of times people are like SBA, easy, no money. It's not easy to get SBA financing and it, it can be like 6 months long, let alone if the business doesn't have clean books. Fortunately, Anthony was a, like, he already had like 6 clubs, so it was like very organized. It was really clean. It was easy to get onto like the landlord transferring the lease. But a lot of times with SBA financing, like they, you have to have stuff buttoned down. Um, so that's like the debt side. I think people just kind of assume they can just get money and that's the part that people just like glance over. It's like, oh yeah, SBA financing, 10% down. It's like, whoa, whoa, whoa. Like, we're crossing a bunch of bridges here, like, will the SBA invest? Are you able to afford the 10% down? Will the business service that debt? So that's the debt. The second part I think is a risk that's kind of glanced over is operator risk. And that is, is the buyer actually capable of running the business? A lot of times, any successful business or small business, that's like the boring business thing. Under—

Mm-hmm.

If it's under $3 million a year, almost always it's a result of a great operator. And so if you take that person out, will the business still run? Depends on is the person replacing them going to be just as good as that great operator? And so like that operator risk, I think, is something that is overlooked. And then, um, I'll bounce back to you. I have a couple other thoughts on this around owner financing too, but those are the two kind of buckets I think that is overlooked is like debt risk and then operator risk.

Yeah. The other one that I, I, I think of this stuff is selling a business opportunity. I kind of alluded to that. So. I think it's dangerous because a lot of the people that are buying don't really have the experience. And so you're not really— now you're being thrown into something where you can't learn your way as you grow it. Now you got to come up to speed really fast and you're possibly inheriting bad culture, bad employees, family members that were working in the business that want to stay there, problems. And if you don't have quite a bit of experience, how do you even navigate that? For example, if I were buying a business, the first thing I would spend a lot of time doing is figuring out who the people I have in the business— like, what are— what's the capability and quality of the people in the business, and what should they be doing? What should they stop doing in the business? That's a skill that I now have because I've done a bunch of stuff. If you're new to business, how do you do that? Like, so just— that's really, really challenging in my mind. I don't know how most people overcome that. The other thing I was thinking about on this one is I know a lot of really, really wealthy, successful people. Again, my way I think, I think about bigger businesses. I don't really know any that have bought their way to where they're at today. Like almost everybody I know started their thing and built.

Mm-hmm.

That doesn't mean you can't buy your way. And I also know some people that, and they, they came up through the family business. I know a number of people that did that. They turned into great entrepreneurs. But I don't know many people that started out and bought a business. I do know in the trades, from having done Service All Pie, a bunch of people that bought a business and it got them into the industry. But I don't think most of them would say it was a great experience or a great deal. It was probably a mistake, but, but it got them in the business. And so, yeah, it might have been a mistake to buy it, but it also might not have. You might not ever got in the business had you not bought it. It's kind of that thing. So I tend to be a little nervous for somebody starting out buying a business. That's where I stand on this.

Yeah, a lot of times the social media kind of talks about owner financing. But a lot of times that includes a balloon payment. It was like, well, it's 3 months or 3 years, interest only, or like low payments. And at the end of 3 years, all you gotta do is improve the business. And then you'll be able to refinance it. But We, we have to assume that you are good enough operationally to make the business worth more or cash flow more.

Yeah.

That when you go to a bank, they'll actually like give you money for it and like, yes, we'll give you a loan for this now. And so, um, there's also stuff around like, is the entity structure even set up correctly? Are you taking on a whole bunch of liability? And to your point, like there might be bad culture. The other part is like there might be some really good employees, that love the owner, and when you buy it, they leave. Yeah.

Right?

Yeah. And so I think overall it's kind of a, a, a great starting point. It's not really a good starting point for new entrepreneurs, but I do see it as healthy for expansion and more of a growth engine. And this is something that actually came up on the mastermind for, for August the other day. People were asking like, hey, will you ever do like acquisitions? And cuz they were mentioning how like Amazon and Apple have like had 100 acquisitions, et cetera. And I said, in part the tax code when it comes to a C corp really does incentivize spending your, your, your money because otherwise if you take that money out and distribute it to the shareholders, you're having double taxation. And so, um, although I have no idea or thoughts of, of doing acquisitions, it starts to make sense why a larger company starts to do acquisitions. And I know even originally when, uh, you had had the private equity come into Surfers Outside, that was the original thought. It's like, hey, we're gonna go out and do acquisitions and bring and bolt them in. And so I think times people hear even someone like Alex is like going out and buying companies or taking stakes and like bringing it together and doing a rollup, et cetera. It's like we're talking about a very different type of business in terms of size, in terms of sophistication and skill level of the people operating it. I think, um, I can count on one hand how many acquisitions inside of Augusta I've seen go well, and I can probably give you 10 examples of ones that went bad. And so the math usually isn't on the side of even trying to do the whole like you know, Aqua Hire or like, uh, I didn't say, I should like even the expansion side. When you take another brand, you try to pull it inside. There's still a lot of things that have to change. A lot of operators don't have the skill yet for that. And it's a lot of times they're just trying to bypass the time required to build something great. And it's more of an avenue of speed in terms of just growing it and building it slower.

The acquisition is just, you do it just for speed. That's what you're saying. A lot of times that's what you see.

Yeah. Yeah, it's just a matter of like, do you, you know, you two variables either, you know, cost, like how much is it gonna cost me? And then time to build. And so I think a lot of times it's like, hey, I'm willing to pay a premium in order to buy this business for the exchange of the speed I can go if I buy it. Uh, I think people just discount how much do I, can I integrate the, this other business that I pull in, uh, these other customers. Even if you buy a customer list, like in a way it's like, We, we, we, we see everything through rose-colored glasses of how much time we'll save, but not the long-term cost associated with integrating them into our existing business.

Yeah, that's the ex— where I would be personally open to buying a business is around the idea of expansion. Like, so as an example, if I was going into a new geographic area, I might buy a like business to what I own to get myself a footprint in that market. Probably wouldn't buy something overly large, and I'd use that as a base to sort of expand out. That's one way I would think about it. Another one I would think about is if I was going into a sim— like, let's say I was expanding into septic systems and drainage as an example. Not something CityTurf does, but it's got some similarities that are— we've got people that would understand that business.

I thought we were doing pets, Jonathan. I thought we were doing pets. That was last week.

That's last week.

If you had $500,000 in cash, What new business would you buy? And it can be in the trades, but you can't leverage your existing business in any way. JP, what would you be doing now?

Pets.

Pets? Oh, I did not see that coming. Okay.

I've been thinking about this for a while.

I saw your $40,000 dog, dog video the other week.

I'm done with pets. I'm done with pets.

That was last week's news.

I'm now on deceptive tapes.

That's right. Let's go. Yeah. So.

So now that we're buying a septic tank— no, but so, like, if I was— but if I was thinking of— okay, I'll save this. Pets just is too different of an add-on to City Turf. If I'm starting from scratch, I'll do pets.

We already have it in the— we already have it in the logo. You know, we already have it in the logo. There's that.

But I do like the idea of if we were to get into a new business line with the money that we have and the experience we have, I would be very interested in buying my way into that. It's a similar concept to if I'm gonna spin up a new division my business, I'm going to go hire a leader from the beginning that can run it, that has done it. It's got tons of experience versus us just trying to fully figure it out. So if I'm getting into a new line of business, I would be open to, with the capital I've got and already having experience, buy my way in. And it doesn't need to be a giant company. That's, that's one way I would think about it. And then I had a similar position to you in that if you've spent tons of money and your CAC is going up and you're just not getting the speed of growth that you can, that you want in the market and you've got the money, you could buy more speed by acquiring inside your market. But the whole, uh, just like onboarding new people into your technology company, that's one level of pain. Imagine onboarding a new company into your company.

Yeah.

Like, you know, and so, and I, I used to have at Service Autopilot, our, COO, the second COO that we had at ServiceAlpi, his name was Steve. Great guy. Uh, he used to be higher up in Carrier and, you know, they acquired a lot of companies. And this is just a little side thing. They had learned over time that when you buy companies, you don't rename them.

Mm-hmm.

I, I think it was at Carrier. It could have been one of those businesses with like, there's onboarding and then you see a lot of people that even buy companies and then they try to make them the existing brand. And there's so much change. There's change happening within the organization with the people, then there's change happening with the client. And that's a whole nother level of complication. So this stuff I feel like is sold on social media as an easy way to be a business owner. And I mean, even if you're a sophisticated company with sophisticated people and a great management team, I still look at bringing a company in as incredibly difficult. So—

I think it's just like anytime someone sells something as this is the easy way to do X, Y, and Z. I just immediately discount it. It's like, yeah, because if it was easy, everyone would do it. Yes. And it's like, everyone should be an owner. And I think that's the dumbest thing anyone has ever said. Yeah. And so I like Cody Sanchez. Thank you, Cody.

Oh yeah, yeah, yeah. I'm not knocking, but yeah.

But when, when she talks about ownership, I understand where she's coming from, but someone should, I think the vast majority of people when it comes to ownership should be passive investors. They should not be operators. And I think, I believe in ownership. I do not believe that most people or everyone should be an owner. Like it—

Yeah.

It is bad for the people they lead. It is bad for the customers. It's bad for their personal health. It's bad for their mental health. It's bad for their family. It's bad for their personal goals. And so I think it's a popular thing to say, but I think it's very dangerous. And I, to, to what we talked about earlier about like the, the mental health stuff, if the expectation is it is so easy to do business and you should just go buy it, how's that gonna make everyone feel that's grinding, hustling, and feel like they're a loser for the first year or two while they're trying to figure it out? Because there's this easy button over here I missed somehow. Cause I didn't find someone to just go buy their business and cash flow from day one. And so I don't know. I think it's dangerous sometimes.

Yeah, I would agree with you. It's an interesting— I try and figure out how to word this. I know some data on some very big name software companies that sell essentially business opportunity. They sell software, but they're selling to a business opportunity crowd.

Hmm.

And, um, mind-boggling churn, mind-boggling churn. And I never thought about it until you just said it, like what, what that even does to the person on the other side of the transaction in regards to they buy this thing, they thought whatever this one thing was gonna magically make them have a million dollar business and they were gonna get an award on a stage and it didn't go to plan and now they're kind of completely beat down.

Mm-hmm.

It's an interesting perspective cuz if you look at a lot of the YouTube channels that get really big. They end up going after the business opportunity crowd. Like most of them do. If you, if like, for example, if you are, if I were to go just after the start a new idea, business opportunity crowd, the channel would really grow, but that's not really a great client most of the time. And so back to this idea of selling the idea of building, buying a business, like that's a small subset of people you need to get to that. are wired to do such a thing versus the business opportunity crowd. Yeah, I suspect the real business there on those is selling information.

Oh yeah, 100%.

It's like 98% of the people are just buying information with the dream and they'll never do anything with it. And then the filter is some number of people join the mastermind group, and that group are the serious people that could actually buy something. Yeah, that's what the real business is.

And then they sell deal flow.

Yeah, exactly. Yeah. All right. Next on the— Docket that I wanted to talk about is right now, in fact, as of today, which it's June 10th, we got a report that inflation is up. And so kind of how we, how do you think about this in terms of what is higher? So what, let me frame this. If inflation's up, then that means the Fed isn't going to be bringing down new rates. And there was a theory that Kevin Walsh, who's the new Fed chair, wasn't going to bring down rates anyway, anytime real soon. Like, It's kind of debatable. I know Trump wants to bring them down. So let's just assume with inflation numbers up, the rates have to stay up. We can't do a rate cut. What does this mean to our businesses? You know, I think about what's it mean for housing? What's it mean for the consumer's mindset? Things like that. How do you look at this stuff?

Yeah. For, for, for someone listening that might not know high interest rates, inflation, et cetera. So generally. Higher interest rates should slow down the economy because it's harder to borrow money, it's harder to take risk, it's harder to invest into your business. And by doing that, we should bring down inflation. Because inflation typically is inverse of this thing. But what, what can— what everyone's afraid of right now, or what is— we're at risk of right now is high inflation with high interest rates. This is something called stagflation.

Yeah.

And the reason it's actually become so perilous, or it's kind of actually some of the, the, the cold open is like the national debt being so high, every single interest point that we are moving up, we are just eating so much of interest of the, or so much of the budget is going towards just interest payments. And so the kind of philosophy the past several years has been, we will have to just grow our way out of the debt, which is, hey, if we can grow the economy at 4, 5, 6%, We can eventually just make this thing, this huge $39 trillion go away. Kinda like what happened after World War II. If you look at the, I believe it was a few years right after World War II, the GDP to debt ratio is actually higher than it is today.

Yeah.

But we were just keep, like, there's just this boom, everyone back to work and like we were able to outgrow it. And, and that should work in theory. Um, I kind of look back to 2007, 2008. And I think when it comes to home services, when there's an economic trouble, and if we hit stagflation, that, that's when we can hit, start having trouble. Um, I think maintain versus upgrade is the thing that kind of goes through my mind. And so like in 2007, 2008, when it came to new car sales, um, they were down 40% in 2008, but then for maintenance of used vehicles, it was only down 1%. In other words, people were maintaining instead of upgrading. Yeah. And so I think the same thing's happening with houses right now. Like the, the mindset of the owner is, I'm going to upgrade, I'm going to add, I'm going to remodel, instead of go buy a new one, add a pergola in the backyard. There's less of those, and more of I will maintain what I currently have. And a lot of that is because we have 30-year fixed mortgages. And people are in 2.5%, 3% interest rates on their mortgage. And if they move, they gotta go to 5.5%, 6%, 7%. Interest rates. And what's interesting is like, the US is the only place that that really even exists, like this whole lock-in effect that we're having right now. If you go to Canada, like you don't have 30-year fixed mortgage. Over in New Zealand right now, they're having a huge problem with real estate coming down. And it's because 3, 4, 5 years, then you got to go refinance, or you've got to— it's a variable interest rate mortgage. And so it's very interesting where we had this massive decline in interest rates, people locked in, and now they don't want to sell because they got to go get a loan that's going to cost them an extra $5,000 a month in interest. And so they don't— they do not sell and move, but they are— they have gained wealth. They have a bunch of equity in their house now, and they're more likely to do the maintenance, the additions, the upgrades to their existing house instead of moving. And so I find it very interesting to try to tap into that market versus going after the person that usually is like, hey, I want a brand new landscape versus the person's like, hey, I just want to add a little bit more over here. I want to update this. And kind of piecemeal a smaller budget item into an existing property they already have.

I'd agree with it. We've kind of talked about this before, and I brought it back up because now we're seeing new data or maybe a continuation of data we've been seeing for a bit that just makes it look like this is probably what the future looks like for some time to come. I don't know how you would predict when rates are going to come back down and things are going to change.

I—

there's a part of me that thinks the rates. So what— here's the way I think about this. So one negative of the rates, people not moving, is it then makes it harder for me to go get— on one hand, get new clients because they're not turning the home, so they're not shopping as much.

Right.

So a little less lead flow. On the other hand, there's an argument that, well, they're turning less and so they're staying with me longer, and so I have lower churn. So like, which is better? So my general theory is if you're a smaller company, the homeowner not moving is not as good for you. If you're a really big company, the homeowner not moving might be better for you.

Yeah.

I don't know. I, that's kind of how I think about this. And so I just feel like this higher rates, homes not selling is just going to be the way it is for quite some time to come. And I go back to something we've already talked about, and that is, I think what's happening in the market where people just, I mean, everybody I talk to, like companies are growing, but they're not growing to expectations. Like some are, but a lot of them aren't. And they're spending pretty significant amounts of money still marketing. It's just like the quality of leads are lower. The lead flow is lower. A lot of people are seeing that. I, I, a lot of people across a lot of different businesses I talk to are seeing that thing. And so I tend to think the biggest challenge we're seeing right now is just general nervousness in the consumer, this general, like between the Iran war and fuel and oil and all these other, and all the negative stuff there in the news. Again, all stuff we've talked about. I think that's a large, to a large degree what's going on right now. And I just think it's going to continue. I don't, I don't know what's going to have to happen anytime soon for that narrative to change. Where do you stand on that?

Yeah. Like it, I don't like to talk about it because it seems like I'm talking about Gusteau's, but like, It is so interesting to compare that data versus what we see at Home Service Web Design. It's incredible. Um, but I will say we've seen the lowest churn this year and the least people leaving over price increases. So like, I, I just was, someone raised their prices on 150 customers, lost 2 people, and he's raised prices last year. Yeah, cuz he's in profit mode.

Yep.

I think to your point, people with equity in their house aren't moving. And I think that's an opportunity. And we got, a lot of us got very lazy selling to new homeowners or people who had just moved in 2020, 2021, 2022, when everyone was moving. The way to get a lead was to market to someone that just moved into their house.

Yep. They're all looking on Google.

Yep. And now we've got a— what you get a great video the other day speaking to the pain of the customer. And that usually revolves around the unreliability of their service provider. And if you're able to deliver on that aspect, you can take the customer from the person that is doing a poor job.

Yeah.

And so I think shifting marketing to that is the move.

And that is my belief. Yeah. That is a perfect way to encapsulate my view. And what I think is— and I think it's gonna persist for a while.

Yeah. 'Cause like 2020, 2021, 2022, everyone was getting leads, but no one was, was distinguishing what, where these leads come. It's either new homeowner. Like it's really only two times you, you get a, a, a home provider, uh, home service provider. It's, I moved. That's like a very peak time to be able to get the customer. And second is, I'm unhappy with my current provider. Everyone was getting these people because people were so transit and like moving so much. And our churn was through the roof because people were just moving. It's not happening anymore. Our churn is down. And the only way to get customer now is to shift our marketing towards going after customers that already have a provider. So instead of, instead of saying, hey, save your weekend.

Yeah.

No, they already have a provider. Like, they don't need to worry about saving time on the weekend. They already have someone. You've gotta convince them to switch.

Yeah.

And the way to speak to that pain is very different than, "I'm gonna save you time," or, you know, "We're gonna show up in professional trucks." They already have a service. I think a lot of people have missed that shift, and so because of that, their marketing isn't working, but it's because your marketing is just 2020 to 2023 client that just moved and is looking for a new provider, not the person that's had service for 20 years and needs a better person 'cause the other person stops showing up.

I agree with all that. I don't have much to add. I agree with that.

I have a proposed solution. I think this is a proposed solution for all this, this problem with the housing market.

Okay. Okay.

Okay. Now, I think it would not be good long term, but I think in the short term, everyone would like it. Now, that's how the United States— we are great with that, right? Short term pain, short term gain, long term we'll pay for it down the road. Hear me out. I feel like this could get passed too. What do you think about portable mortgages?

This is a conversation.

Yeah. Like, yeah, I think in the short term, it would be a boom. In the long run, it would make housing costs go through the roof. Because if you could portable— port your mortgage over the— now the likelihood that people can, can move now would go— like, you'd have so many buyers.

Which would run up demand, which would run up housing prices.

I guess you could argue then that people would be moving, so there'd be more sellers in the market. But even then, like, yeah, that would be a boom for home services. That would be the dream for home services right there.

That is an argument. Like, you don't know how much supply will come into the market when people are like, okay, I want to move, but I can't because I got a 3% rate and it's now 6.2%, that kind of a thing. Yes. I don't know if you'd find equilibrium or if it—

Like the difference of someone buying a house 4 years ago, 5 years ago, at that, it's almost like if you got that 30-year token, and you get a portable mortgage, yeah, that set you up for the future.

What if— what did you—

I think this would get votes. That's what I'm saying.

I know I've heard people talking about this.

If someone proposed this, anyone that owned a house would want it. I will say though that anyone that doesn't own a house is really toast.

So I would think it would rate— I have not thought about this at all, but wouldn't it need— one of the challenges is, is the whole idea that I can give you a 3% loan or 3% rate because I know the data and the data says on average you're going to be out of that house in 6.5 years. So my— I don't have a long risk curve. I don't have— so when I was selling you that deal at 3%, it was never based on 30%. It was based on the fact that on average everybody's out in 6.5 years.

I got some—

I got some people that are out in 30. I got some people that are out in 2.

Right.

But on average, it's 6.5. So I got to carry that debt on my books for 6.5 years on the average. So I can give you 3%. If now the new data set is I got to hold this for 30, I don't know what the world looks like in 30. Do you even— do I ever even offer you a 3%? I don't know. I don't— that's just a question that just now came to my mind.

Oh, I agree. The interest rates would go up to existing or to new mortgages.

But my, my, my question—

that's why I'm saying I think the cost would go through the roof. But then to existing homeowners, they'd be all over it. But they'd also vote that in because their equity would go through the roof.

Yeah, that's— I don't know, man. I don't know how to predict how that— somebody knows how this would play out. I don't know how it would play out. It's very fascinating, like, thought exercise, though.

Like, the whole, like, subject-to is one thing. Like, you sell the property and they take over the mortgage. Technically not usually feasible, but like, that's one part. But like, can I sell my house, take my mortgage, and go someplace else?

I'm with you.

Like, man, I feel like that's something I think would be bad long-term for the economy and for especially young homeowners. I think it'd be bad for us in 20 years. But I think it would get votes. And I think a politician could get voted in if they're able to push that through. But I also think the banks are against it. To your point. Okay, because now they got—

they got—

they had risk.

Yeah, massive risk. Huge. But, you know, I could also see that being an argument that once again, here's all the older people kicking the young people in the face. Like, oh yeah, yeah, they are more advantage to every— yeah, exactly. Very interesting idea. I, again, I'd heard it, but I'd never given it any thought.

Yeah, I think about this a lot. I've actually kept my pulse on it because if it ever got through, I think this would lead to a really big boom. And if anyone's going to do it, it's Trump because he loves real estate and he— they got him in his pocket. They are— he's in their pocket. So.

So if that trade's going to happen, what do you go buy? Because you can't buy up houses fast enough. So you got to go buy REITs or you got to buy some, I guess, BlackRock. I don't know where you buy something. There's a, there's a way you trade that. I don't know how to trade it.

I start talking about one-time projects.

Well, that's it. That's in the business.

Yeah. Yeah.

Well, you buy shares. My brain goes to like, how do you invest capital?

Right.

Right. To be ahead of that trade. So anyway, that's interesting. All right. So another item I had on the docket was after the hot takes that we did, we had a couple votes or some number of votes for a few of the hot take items. And one of them, I think the one that got the most, again, not a big number, I thought we'd talk about it was, my statement that the right business partner is a major competitive advantage. And the reason why I thought it was a hot take was simply that I think that a lot of people say business partners are bad and a lot of people feel that business partners are bad. And so, and I, I don't know where you'll fall on this, but I kind of feel like you're in the camp of no business partner. Uh, I don't, yeah. So kind of, how would you think about this?

Oh yeah. Okay. So, ah, it's tough. It's kind of like saying, I have had a really great experience with marriage, and I would say— I don't want to speak on your half, but I think you have too, and you would encourage people to get married. Back to our earlier cold open, I think on the other side I see people get married, and it leads to years and years of hurt because they chose the wrong person. They didn't go into it correctly. There wasn't expectation set correctly, and so it's difficult to make statements like everyone should get married when I know that half of them are going to lead to turmoil, heartache, years of pain and separation, like, really bad stuff. And so that's why I'm pretty quiet on it. I agree with you, like, having a business partnership is an absolute competitive advantage if it works. Yeah, the same way that a marriage is a competitive advantage in life if it works, if it works. And it just, it's the math part that I have a hard time quantifying and being prescriptive. Because If I say something like everyone should get married, well then 50% of people are set up for failure, just mathematically. And if I say, hey, everyone should go get business partnerships, I don't know, I don't know what the math is, 70, 80%, I don't know, don't work out. They're all gonna fail too. But I think for the, the ends of the curve, that's really where partnerships sit. So I kind of think of it like, I don't know if I could draw this. If, if you look at like all businesses, I would say like the, these over here, like the worst ones that end really, really bad. Probably a partnership. The ones that are over here, probably a partnership. And there's just risk of being over here. But if you look at like startups, venture capital, private equity, they like require multiple founders. They don't even allow solo founders. And I think it's because they're going after this over here. Um, but you have a lot of experience with it going well. And so from your perspective—

I guess too, with it. Yeah, I've got a couple where it didn't go well as well. So I've got both sides of it. My brain on this topic goes straight to the, the marriage thing as well. It's like, to me, it's the best. Like somebody who would say, I have this theory, but I tried to do some research on this theory and I couldn't prove it, but, but I'm going to go ahead and state my theory.

Okay.

If you want to quantify what's more destructive from a financial standpoint for an entrepreneur, say you've decided to be an entrepreneur. Okay. You're an entrepreneur. That's who you have to be. Means you have to build things. What's more destructive? Having one of the businesses or a business. Partnership fail and it dissolves that business, or you get a divorce and you lose half your wealth. My theory is the bigger wealth destruction is marriage than business partnerships. I don't, I can't prove that though. I tried that because I want to make that one of my arguments. It's like, so there's this part of me, it's like, okay, on one hand we say I would never be in a business partnership. Well, then I can throw all the same data at you and say, do not get married. It's just as bad. Yeah. But most people are going to get married. Yeah.

It's like, so not in 20 years. Not in 20 years.

Not in 20 years. But, and so, so my argument is, okay, why would you say, well, no, no, no, I'm still going to get married, which I'm an advocate for. Well, because you're going to put a lot of thought and effort into it. You're going to try to do it differently. You're going to be thought about it. You're going to spend some time before you jump into getting married. Like there's, you're going to put in maybe. Maybe the argument, maybe it's not black and white. Like, well, somebody commented in the comments about Dave Ramsey being very negative on, on, um, partnerships.

The only ship that doesn't sail is a partnership.

Yeah. And so I went and did a little Googling on it because I didn't know what his position was. I didn't know that actually was his position. So then I found another quote by him, whether or not it's right or not. It's like he was quoting like 70% of businesses fail, uh, due to partnerships or of part 70% of partnerships fail.

Okay.

So I did a little research on that, and the best I can tell, and my data's gonna be kind of wrong, if you take the startup phase out of it, hmm, and you just say it actually ended because of the partnership, the data might be closer to 30%. Yes, lots of partnerships fail, but did they fail because they were a partnership?

True.

Or did they fail because they're a business and most businesses fail?

And is, is the partner an easy scapegoat as to why the business failed?

Yeah.

Instead of just saying, I stink.

Yeah.

Yeah.

So, I just, so I, I'm, oh, another interesting thing. I could have never articulated this, but I had to go look this stuff up to be able to talk about this today, because I've just, I've had positive and negative experiences and my positive experiences have outweighed my negative experiences, but I can give you pros and cons. Interesting study from Harvard, 30%, there's a 30% pop in successful exits if you're a partnership, which is kind of similar to data you said. So, uh, it, it's a very meaningful difference to actually selling a company in the future.

Valuation.

Having a partner.

The 30%, is that valuation?

Actually ever even getting to the chance to exit your business.

Oh, oh, I see. So likelihood of an exit, 30% higher.

It's 30% higher if you're a partnership. Like it's another—

Do you feel like part of it, like when I look over on this side of the graph, it's like all the good things. Do you think the, the part of it that's so beneficial is that when one person's down, it's unlikely that both of you people are down.

Yeah, I actually thought about a couple of things. I think, you know, here's where a partnership would not be the best partnership. It could work, but may not be the best if you're the exact same person with the exact same skill set doing the exact same thing. Okay. It's like, what if he's not that important to the business? I mean, but that could still work. You might just run double as quick, but you know, in a lot of cases, if you, if you're both like a great partnership would be one person is sales and marketing focused, and another person is operational focused, and they love those things. That's a good partnership. Those have been my stronger partnerships, like with John and I. I was technical, but John was really technical. He was our CTO. I was the— I'm the sales and marketing guy. Like, I'm the guy that's willing to get on stage. So that was a great partnership. I could just think about growing. John could think about security. Really valuable, you know, that kind of thing. And so, um, so, you know, one to— I'll give pros to your point here, but one example is if you're the same person, then you don't get the benefit of maybe the opposite person pushing. So I think about pushback. So do you— do a lot of solo entrepreneurs hire a team member and they see that team member as a team member, really valuable and important, but they don't own this business. And they devalue their pushback a little bit, or they're overpowering and the team doesn't give pushback. They're afraid to. An owner gives pushback. I suspect a lot of reasons why partners don't get along is because they don't want anybody to tell them they're wrong. They don't want anybody to challenge them. They don't want to have to, like, so is the same reason why marriages go bad. Like, you're not willing to listen to the other party.

Mm-hmm.

And, but that's maybe one of the single most important things in a partnership is John and I could argue about stuff, like we, but we were still best friends. Like, like we, we were company because he was my boss and I became friends with him at, when I was 19 to 23 working at a software company. But we, we could, we could push back hard on each other and argue and he could get mad and he could be really mad, but I knew it didn't change anything in our relationship. We were gonna argue our point and eventually we're gonna arrive at a, quality commute, quality position, that's insanely valuable. And so I think that's like a long point. But I think that's one of the big ones.

Yeah, I was thinking like, I don't have a partner now. I bought my partner out pretty early on. Yeah. In Copilot, now HomeWorks. But even last year, having where the owners now have 5% of the company, even though it's, you know, future equity that they purchased, it's still a function of It, it, to your point, it's, it's, I hadn't thought about that. 'Cause now like when they get mad at me or they say something, I know they have the best interest of the business. They have equity.

Yeah.

And I'm not getting rid of them and they don't wanna get rid of me. We're just like, we're just gonna, we're gonna figure it out. And it, and there's a little bit more commitment, kind of like a marriage. It's like we're in this forever and we're gonna figure this out and we might butt heads, but like there is no back door we're walking out of.

Right.

And I feel like in that tension is where the best decisions are made.

Yeah, agreed. I— early days of Service Autopilot, you know, I'm 33 or 34 when I start that business. I don't remember. And I had done a bunch of other stuff. I'd had a bunch— had a bunch of people, but there was just something different about Service Autopilot. Uh, it's like in a different way, like it's different. Everybody's in the office. They're not out in the field on trucks. They're not in movie theaters. Like it's just different. And so you'd sit around this table and you've got a lot of very, very expensive people. At a level I had never experienced before, sitting at this table and everybody's like arguing with each other. And I noticed in my— so I'm kind of a person that wants to smooth things out and bring everybody together. That's how I'm built. And, uh, and so it really bothered me.

Really?

People are, yeah, it's really bothered me. Uh, John would get really mad about stuff. And John's a great guy. He's like, I don't, I'm making him sound like a bad guy. John is very passionate about his thing. And like, at first when people meet John, they don't— may not know what to quite think of him. But then when you get to know John, you're just like, John's— so here's my story about John. John would come into my office all the time. We need to fire this person. Like, and I'm like, okay. All right. Okay. All right. I'll do it. And he's like, no, no, no, no, no, no, no, no, no. We, we, they, they like, they got kids. We need to talk about this. He did. He would— that's how he's like, he would come off really fast and hard, but he's like, he really cares about people. He's kind of sensitive. That's a perfect John. So John in the moment would get really worked out about things. And our other team members, again, tons of experience, very senior guys. They— we would really listen to them. We wanted the pushback, but it would create all this strife. And so one of the big learning lessons for me was at first I wanted to smooth it all out. And then I learned, oh no, no, no. No, no, this is where the magic happens. This is where the magic happens.

And so— I love that, man.

I was not that way. I did not. I saw it as a negative, like, oh, we're not all getting along. I don't know. It bothered me. Something about it bothered me. But anyway, we got off topic. That's so valuable. Yeah. And for people that are listening, like, there's another level here. It's like, how do you cultivate that with your team?

Yeah.

How do you give your team— like, this is where it's really risky. To shut people down when they express ideas, or like you're— you can do it so many subtle ways. How do you not shut people down? Because if you shut them down a couple times, you'll quit getting the ideas. And, uh, and so this is like— so that's one of the things I love about a partnership. I'll give you another one. Um, I think it brings a level of accountability, like if you have mutual respect, much like in a marriage. Like, all you, you could— if you don't have respect in a marriage, then you don't care about accountability. But if you have respect with your business partner. Like, if I'm slacking, then that's hurting John or Philip or whomever, you know, like it's hurting those, it's not fair to them. And so I think that it helps keep your foot on the gas. And then, um, another one I would say is we talk about like business groups and masterminds, how lonely business can be. If you have somebody else you're kind of going to war with, that's really valuable. It's like, I think you said this, like, On the days you're down, maybe they're up and you kind of, you kind of build each other up. That's a great partnership. So those are some of the things I'm really a big fan of, but at the end of the day, it all comes back to how did you pick the partner? And then what protections do you have in place if it doesn't go well?

Yeah. Like back to the arguing part, I love that stuff. It means people care. And I, like my definition, like the last couple years has been like the only thing I love in a great team member is that they care. They care for the team, they care for the customer, and if they do care, they're willing to fight. And like the leadership team at Augusta, I know they'll hear this, we get in like heated arguments about stuff. And so like, I'm like, guys, you're gonna have to go in the, in like outside the office area.

Yeah.

You're gonna have to go in the other room where you can close the door. 'Cause like it's, it gets hot, but it's, I love seeing that 'cause it means that they do care. And like Nathan, our VP of design, he's the same way. Like he has an opinion and he will fight on it.

One thing I'm—

That's good. It's so good. Like when we, when I knew I had a huge skill gap at HomeWorks and went out and hired, I was really fortunate because almost the entire team worked for each other, worked with each other either years ago or at ActiveCampaign. And so they already had that level of trust. To where like they could hit the ground and already be debating and already be arguing. 'Cause a lot of time it takes a couple years to really have the trust built up and the confidence that I can push this person, I can, you know, say something against Mike Andes and he's gonna be okay with it. And then be able to poke and prod at someone and not hurt their feelings, do it in a way where it's not attacking them, it's attacking the problem. And so I was super blessed because they had already kind of built a lot of those connections to where they, you got in a room and you could, you could duel it out.

That's fantastic. Maybe the last thing here, this was just kind of something interesting, cuz I did do a little bit of Googling before we talked about this one. This is not a surprise to me at all, but I thought it was interesting. So the, again, I did both a little Googling and I did a little bit of Claude or ChatGPT, I don't know which. Um, but they both said pretty much the same thing, whether or not it's accurate. The real number on divorces is around 39 to 40% in the United States. And, uh, the divorce number for entrepreneurs is around 48%. So that's interesting, which has always been my theory that business is destructive to relationships. And a divorce number is like only a part of the story. How, how many people are married? But like the relationships are not awesome. I mean, I feel like that's generally the story of marriages, unfortunately. So, uh, I thought that was kind of an interesting number. I don't know if I ever, ever told you this one, but when we were doing our transaction on Service Autopilot, They, uh, it's either the investment bank or, or somebody, I think it was the investment bank told me, gave me a white paper that it was a study that had been done. And if a transaction was over a certain amount, tens of millions of dollars, the divorce rate was something like 70% after the sale of the business.

Oh man. Did you share that with Tiffany?

I told her about it. Yeah. Maybe I was naive. I wasn't worried about it, but yeah. Yeah. So no. But I, and again, was the data, my data a little bit off? Was it 60-some percent? It was a shockingly high number. I thought that was very interesting.

So you want to stay in the middle. You don't want to get too successful and you don't want to fail. You just want to be a decent entrepreneur.

I don't know if that's the takeaway or maybe you just work on the marriage.

Yeah, it's interesting because like, what's funny, I remember from my psychology class way back, probably one of my first, like, I must have been 13. 14, maybe. But like, I remember the, the 50% being thrown around, and I did some digging. I'm like, it's not really true. Like, the thing that I found interesting is the second marriage divorce rate. So here's my question: if someone has a failure rate in their partnership in business, do you think they're a toxic asset now to be— like, if someone else came to you and said, hey, I had a partnership and it failed, is that a red flag to you?

I would think about it, but it you know, what you, you do kind of have to know the context.

Yeah. Because like the divorce rate jumps a lot after—

on the second, second and third.

Yeah. You can just compound. It's like you're an entrepreneur, you have multiple marriages. And you had a $10 million exit.

So I mean, it's definitely would create question marks. There's no doubt about that. Yeah. Yeah.

I think it goes back to like that the same way that you'd say marriage is good. It's also like, well, what about the courtship? Did you spend some time with the family? Yeah. These other things, the same thing I think is true. It's like, well, of the 39% that got divorced, how, what's the percentage that spent a couple years courting that went visit their family? You know, like all these other aspects that you would've put as asterisks or recommendations before getting into the relationship.

Like, I gotta imagine, like this, I've always heard, whether it's true or not, one of the top reasons people get divorced is over money. They have different philosophies on how you spend money. Yeah. Might that also be like maybe one of the single most important things in business as well? Like, so I feel like there's this list of like 5 to 10 really common things, like, or important things that we need to make sure we're aligned on these before we ever become business partners. And if we're not aligned, the odds of it not working are really high.

Yeah. And I think a lot of times people, they immediately go to, from a partnership perspective, the ones I've seen not fail is like one person has money and one person doesn't instead of doing skills. Like one person has skill in this area and I complement them. It's more like they bring the money, I bring the work. Mm-hmm. And I feel like those are less commonly successful compared to, I have, to your point, sales and marketing. John has the ability to be able to do technical.

All mine have been skills related.

Hmm.

Like, it's like we all came into it bringing skills and we are all actively working. I can totally see that. I can see how You— I've thought about this as being on the other side of the table now where I've had a lot of opportunity to invest in businesses. And I've often thought to myself, this person isn't going to like the terms of the deal in the future when it actually works. They're going to feel like they did the work and they're going to devalue the money and they're going to forget they would have never even been in business had I not financed it. I have thought about that so many times. I'll bet that's a very common story.

And if it doesn't work out, it's probably your fault because you didn't give them enough money.

No, that's another experience I've had being involved in a few things where like people always need more money. If they know they can get money, that's always the first thing that they want to do to solve the problem is get more money.

Yeah.

Which is a whole nother problem, which is a reason I don't like the idea of angel investing.

Yeah. I think that's why, same point of like the buy, buy a business is kind of like the fast button. I think sometimes it is the lazy button, cuz like I just wanna go faster. Like I'll just go buy it. Then we have the cautionary flags of like, that might not be the best use case. I think the same thing is true in the partnerships. It's like, oh, I had, I don't, I need money. I'll go find someone with money and I'll become a partner with them. And it's the fast button when is this really a partnership that's set up for success in the future? Because you have different skills, you bring things, different things to the table. You have the tension and it's not just this binary. I bring money, I bring sweat equity. I feel like that's the easy one that a lot of us fall into.

Yep. Yep. Yeah. If I'm gonna invest in somebody, I want them to have a tremendous amount of skin in the game, like real legitimate risk. But that they're gonna be all in all the time.

I want reputational risk. I, I'm not an investor in any other company besides my own, but if I was investing, I would want them to have reputational public risk if, if they were to fail.

I love that. I love that. I hadn't thought about it that way. I love that. You were talking earlier about the, is it Planet Fitness? Is that the name of your—

Oh no. Uh, Anytime Fitness.

Oh, Anytime Fitness. Yeah.

Yeah.

Uh, is that a business you're gonna own long-term?

I don't know. I should probably get rid of it. We're in a remodel, like they're doing it. The thing that's been really helpful though, the reason I've kept it, it only takes about 30 minutes of my time a week. Guys go there for one quick meeting and I'm there maybe every other week. So let's just call it an hour or two a week, a month.

Okay.

I get to see what other franchise is doing internally and that's very useful for me and seeing how they pivot, how they adapt. They now have, the founders just left, so now private equity's moving in. I'm able to see all of that. And it'd be very difficult to get that same level of insider information if I was outside. So I've kept it for that reason. It does also allow me to not have to pull like a salary and stuff, as big of a salary. Um, so that's helpful.

Do you go work out there? Do you work out there?

Once in a blue moon. Like if I'm at a meeting, sometimes I'll, I'll, I'll quickly, but usually people stop at me cuz I was a trainer there before. So a lot of people know me.

Oh, okay. They still know you after all these years.

There's a lot of people that have been, it's the only gym in town. It's a small town.

Okay.

Okay. Okay. So yeah.

So how much impact did that have on you franchising Augusta?

Oh, huge. So the year, the year before we franchised Augusta, Anytime Fitness was ranked number 1 by Entrepreneur Magazine in the Franchise 500. And that was like, I would say, peak Service Autopilot. It was kind of like peak Anytime Fitness.

Okay.

And so like, founders were very involved, they were very focused on Anytime Fitness. Private equity moved in now. So like they have like the Bar Method, they have, they actually got, uh, Orange Theory is now part of the group.

Uh, oh, the private equity group owns all those brands.

Yeah. Now, now it's like a whole, like a, there's like 5 others including like, uh, Wax, Wax, uh, Wax City, Wax the City, couple others. Anyways.

Wow. Okay.

Um, yeah, just seeing that insider has been very useful for me. And, um, it was definitely an inspiration because I stepped into the business and immediately saw, I remember like very early on, I was 15, 16, being a trainer and still going to college. And I remember just thinking like, why in the world would you start a gym that wasn't Anytime Fitness? Because I just remember we launched the location. I was still working as a trainer, but we launched the location and we're profitable on the second month. It's because the brand equity, like people just knew who we were. We hardly spent any money on marketing. We opened the doors, people were there. They had systems around like the doors, the key fobs, you know, we didn't have to worry about contract stuff. It was handled by the billing department. Like there were so many systems and all. And then I had been in lawn care since I was 11 and I was still doing lawn care and I was just like, there's gotta be something for the lawn care industry. And that's when my mind started going towards, um, you know, how can we franchise the lawn care side? It's after my accident that I said, oh, I have not implemented any of these systems in my business. And I implemented those.

So, okay. How old were you when you had that accident?

Uh, 21.

Okay. Oh yeah. So along this concept of the gym and, Since you're into all that stuff, how do you think about something else we've kind of talked about? It's come up a couple of times. We talked about like health and fitness and the correlation between performance and business. So how do you think about that in your own life? What are some of your practices? And since you care about this topic, what do you tend to recommend to anyone that asks?

Yeah. Like when it comes to business and like performance, I think there's always going to be outliers that go against the the rule, but I think they're the exception.

So people like Trump.

Yeah. Trump, Elon. It's like, you know, but I think on aggregate, like if you just take the average, like if you're healthier, you are wealthier. And, uh-huh. I think physical health leads to mental health and mental health and stability, like we talked about last week, is a huge ingredient to being a great leader and a great entrepreneur. And so I think health is a byproduct of having the necessary ingredients. So like discipline and impulse control. In other words, like doing hard things and not doing things that feel good. The, like, health is a byproduct of those two things. It just so happens, I believe, that like those same ingredients are what impact business performance. Like, if you can just do hard things and not do the things that feel good, you usually can get through hard times and do what's right for the business and get to the part That's where people most of the time quit. And so I think it's just, it's, it's not that you need to be healthy to have a good business or be a good leader. It's just that the ingredients of good health are also really good ingredients that go into becoming a great leader, entrepreneur, or business owner.

What, what you do in one area of your life is what you do in all areas of your life, or however that quote goes. It's, I think that's what the concept you're generally saying.

Yeah. Now, yeah, you're, you're older than me. I don't wanna say you're old, just you're older than me. So I'm interested where you're at on this, cuz I know this was, you came back to health a lot in the past several years and focusing more on it. So what has that journey been like for you?

I've always cared about it. Always. But what I've always been, compared to the majority of people, a pretty clean eater by a lot. And I've always continued to work out. But what happened is business just got so crazy that the workouts would get spread out. They'd be inconsistent. And so it's been more of trying to bring all that hardcore consistency back. And I would say since, as I've gotten, I'd say somewhere in my forties, I started to notice that I just feel like I could do whatever I wanted in my thirties, had no impact. I could be on planes all the time. I could go to business dinners all the time. I could not sleep. I could do all this stuff and it didn't matter. All those in your 30s? Yeah. I had a high level of energy. Let's go, Mike.

Let's go.

Yeah, I really felt really, but it was somewhere in the 40s that it's like, okay, now I've gotta try harder. And so I gotta make more of an effort. Like, and that the single biggest one is diet. Like where I could let maybe slip up on diet more in the past and I'd be okay. Now I can't, I feel it incredibly fast. For me, and everybody's built differently, but I've really noticed it as I got into my 40s that I had to be really tight with diet. I could be less, um, on the sleep, but as I continue to get older, I just continue to believe all the stuff has to get dialed in kind of a, at a hardcore level to keep up your performance. And so I can only imagine what it's gonna mean as you move into your, you know, 50s, 60s, 70s, what that means. And so that's, I'm seeing that. right now that, that, you know, you've got to be really dedicated. So I— but yeah, to you, I think you're probably good for a while to come. But you already have everything I know of you. You've already got good habits and behaviors.

Yeah. Like when I was 11, I had really bad acne.

I've heard you say that.

Yeah. And that's actually what pushed me into fitness. And I started running and sweating and like not greasy foods, not fried foods. So just kind of became a habit until when I was probably, it was probably till I was 17, 18, I had bad acne. And so if I had like a pepperoni pizza, immediate breakout. And so it just kept me for like those 5 or 6 years where I had to be really, really diligent.

Yeah.

And then it, yeah, it just became a habit. And now it's like, if I don't work out, like it's horrible. Like I don't ever miss a day, never, ever, ever. So it just became a habit.

Yeah, I think that's one of the biggest things I'd encourage people to do is just be hyper-aware of If you're not working out versus when you're working out, what's the difference in how you feel? If you truly go super clean for a period of time where you're just eating, like, really— I like to use the example, like, no sugar and as minimal on carbs as you can be, or just high-quality carbs. And you, you get past a week or two of that and then you add that stuff back in. What happens?

Yeah.

Like that, if you like that, once you have that experience enough times, you'll see the difference in performance. And I think it's true for people in their 30s and 20s as well. I look around at a ton of people in their 20s and I'm just amazed at how little energy they have. And I mean, it's, it's really bad actually. And so, I just, I'm, I think it's such a competitive advantage. That's where I stand. And it's a massive competitive advantage as you get older. And I love sports and I love all that stuff. And for the majority of sports, If you'd gone down that road in life, you can't— there comes a point where you just can't do some of this stuff. You eventually age out of it. But frankly, on the business thing, if you take really good care of yourself, you kind of don't age out of business. And that's cool. You get to stay in the game. And so it's another argument in my mind about really being hyper-aware of what you're doing and how you're eating and all that kind of stuff. Not a new topic here, but I just— it's such a competitive advantage.

Yeah, and I think the part that recommitted me to it was seeing people that fall apart on mental health, and you could almost always tie it back somewhere to habits around their eating habits, their sleeping habits. And the first thing in all those cases that I would see when they would go to a doctor, it wasn't even the medication as much as like, "Hey, this is what your diet needs to be. This is how much you need to sleep. This is exactly how much water you're going to drink." This is how, like, this is the time you go to bed. And I was like, okay, if I go back, I saw all those habits being unwound prior to a huge incident and realizing I never want to be there. And then starting to, I got really sensitive to when I would be like even 2% towards a break, a, what's it called? A burnout.

Oh, burnout, yeah.

Even when I'm feeling that, and a lot of times it revolves around lack of sleep for me. And I can feel, like I can feel the cortisol going through my veins.

You grind down.

Oh yeah, man.

Oh yeah, I know that feeling.

And like, especially my heart starts like, and I'm like, okay, I need, like it's the report. And so it's funny, I've said this a couple times before, I have this telltale sign when I'm getting there and that's I get a cold sore on my lip.

Yeah, okay, you're run down.

Yeah, I just know if I get a cold sore, I am within 24 hours of a really bad low and I have to get to sleep. It's always been kind of my thing. So yeah, I had one last week when we had the security breach. Not going to lie. Not going to lie.

Oh man. You know, an interesting kind of— we'll kind of end this one with this, but one of the interesting little things I observed is I took my, call it 3 years. I don't know the exact amount of time, maybe just over sabbatical. And I didn't necessarily feel better in life during that time. This is a little bit of a learning lesson. I probably had heard stuff like this, but it really made it real for me. I just remember it's kind of— so it started during COVID I took my break and I just— and also I've always worked in an office and I like being around people. I'm extroverted in the right situation. I'm introverted as well. I'm both. It just kind of depends on the situation. And, but I like being in an office environment. I like the energy. I like the conversation. I like that. Now I'm at home all the time, every single day. COVID's going on, but we are— we traveled through COVID like we were traveling. Uh, if we could get into the country, we went.

You're a super spreader. It's okay. We understand.

I was trying to spread it everywhere. So anyway, um, but I just— something was off and I was like, oh, it must be me not being in the office. It must be what's going on with COVID And I actually concluded it was my diet. Was not ideal because of the travel. You know, so you're in other countries and you're eating the food, which is part of the coolest experience of being in some of the other countries. You're trying all this stuff and you're having the desserts and you're doing these things. And I let more of that into my life. But as soon as I get that stuff out, I just feel like 100% different person. I just don't think most people have felt that difference for real in life. It's like, like you, like truly, like even for me getting off coffee. Is a— and I don't drink much coffee because I don't metabolize it. I drink— I can drink 1 cup a day max. And, and so even getting off coffee, my energy at— even now, if I don't drink 1 cup after 5 days, my energy level never dips during the day. I just go. But if I drink coffee, my energy, even 1 cup, my off— my energy level will always dip somewhere in the day a little bit. It's like, so I just don't think most people have ever had the experience of being truly off of a Coke, like Coca-Cola, or a coffee, or whatever the thing they're doing is to really know what it feels like to have a steady state of energy. And so, it was very interesting to me. One of my big takeaways from my sabbatical was that this idea that when you retire or you don't have to work as much, now you're going to eat really clean. You're going to work out all the time. You're going to clean up all the stuff. You're going to lose the weight, whatever the story is you've been telling yourself. I don't actually believe any of those stories are true. I am, after doing that break, I'm more convinced that you are more likely to have a healthier diet and exercise when you're actually busy, when you have other stuff and you're maybe having to live a little closer to a schedule and a routine. Whereas when you retire or go on break, I don't see almost anybody. pull off the story they've been telling themselves about living healthier and working out more and sleeping more. I do not see it. And so that was a big learning I had because even to myself, who I'm a pretty— I'm a kind of a go for it. Yeah. Yeah. Kind of guy. Um, that stuff all slipped during that period of time for me as well. And a lot of it might've had to do with the travel. So that was a long, long answer, but I thought it was a— I do want to leave people with that. Like, I would challenge your idea that there's a day coming in the future where you'll do something different than what you're doing now. You gotta do it now.

I agree.

All right. I wanted to ask you one last question here before we wrap it up today. So we haven't, you know, we haven't talked a ton about this, but from the things that you say about Augusta in terms of the growth, I think I've seen a couple emails from you talking about the growth within the organization across all the franchisees. Sounds like things are going pretty well. The business is growing. It all sounds positive to me. What are some of the things that you think are working really well for the franchisees that are allowing their businesses to keep growing?

Well, first, let me say not everything is going well.

Of course, I have 100 things that need to be improved. The story of business forever.

Oh, man. Yeah. So I'll put that asterisk there because there's always so many things that need to be changed. But I think the biggest thing in home services is having a drop-off in revenue for the winter, the off-season, et cetera. And so 2 years ago, I just like, that was my only thing we would talk about. It was like, if it wasn't fixing what we called Q4 collapse, everything else was off the table. And so we created 5 different tracks, 'cause for some markets it doesn't work to have snowplowing, which is like track 3. It doesn't work to have winter services because there is no bushes. Some people don't wanna do Christmas lights. So we had created 5 tracks for the off-season. And the objective was, do not have a month where you ever lose money or drop below 50% of revenue of your best month. And that was probably my marching, like the only thing I thought about for 16 to 18 months. And creating those 5 tracks, we have a whole like Augustalights.com now for every location, if they do lights, selling winter services over the phone, online, like same thing with snow services. Like it was all off-season stuff. Yeah. And so yeah, like the email I think I had sent out last, a few weeks ago was like Q4 across the, the organization, it was like 120% revenue from one year to the next just by focusing on it. And it was like, it was like in, in absolute numbers, like $8 million to over $15 million, uh, $16 million, uh, for that quarter. And that's always been our worst quarter. And then it hurts Q1 because you're trying to like put money into the business and grow and expand and get ready for Spring Rush.

Yeah.

So a lack of preparation for Spring Rush actually came from a a bad Q4. And so I actually think that's the root of, of like why now these numbers are coming out the way they are. And even like our lead flow, but like there, we've been such a huge, like luck has been huge in the way AI is going and the domain authority that having all the locations around the country. This is a location from 3 days ago that we created the website and in the market, it's basically the first native. On Google besides Lawn Starter in terms of ranking on Google. And so that, that, that site started 3 days ago, that location online. And it's just because the domain authority of augustalawncare.com. And that has been for some reason this past year, just huge for us. Like we've never been able to get the first spot on Google in 3 days. Never. It used to take 3 to 6 months after getting 100+ reviews.

Mm-hmm.

And like, this is a location 3 days ago, this site went up and it's on, it's a second spot on Google, right behind Lawn Starter. And so that's, that's been a big part of it. And then I'd say the last part is probably like instant quote forms, just going all in on it. And so we started off with like instant quotes around door hangers. That was like 3 years ago.

And so— So you're putting a quote on the door hanger?

Yeah, that's what we started with. And then we moved it to online. Now we do it over the phone, like every single area and then adding every service. Like this year, for example, we now do treatments over the phone and instant quotes on the website where they can actually put their credit card information in on the website.

And so— When you say, when you say treatments over the phone, what do you mean by that?

Uh, it's like a basic treatment package or a premium treatment package. So, uh, fertilization, weed control, essentially.

You mean you're just selling it on the phone?

On the phone, but also the website. So someone can—

Oh, okay.

They'll get mowing and then it's like, hey, treatments, and they can do basic and premium and put their card on file. The card on file part was the unlock for us because you can have someone go through the form, fill it out, but then if you can't get their card information, you're harassing them trying to get it on before you get service set up. And so we got, we only really in the past year got adoption of it from all the owners when they knew they could have a card before they ever got notified that the service was on the schedule. Sorry, that the estimate was accepted.

And, um— Yeah, okay.

So that's been huge. And then having abandoned carts where like if they don't fill out the whole form, we still get the lead. We've been converting almost 40% of those. So even if they see the price and bounce, 'cause that was always a reason why you don't do instant quotes on your website, is if they bounce, then I've lost a lead.

Yeah.

But we're able to close almost 40% of them. And so that's been a huge thing this past year too. So I'd say like those few things. I think overall too, the owners are just becoming so much better at like, operations. And they just— more owners in the system for longer, getting rid of big projects, getting rid of having 10 services. Like some of it's just cleaning up bad habits. And, and they're becoming much better operators.

How do you talk to your owners about operational type things? Are you just constantly talking about principles with that throughout the organization? Or how does that coaching, education happen?

Yeah, like AI's actually been really helpful for us because we're able to take all of our training and then we synthesize all their numbers through the training and then basically say, hey, here's the areas of improvement, here's what you can do better. Um, that's been really useful because the coaching part, maybe half the owners do their monthly coaching calls and we have a coaching program, et cetera. Uh, but everyone looks at their numbers cuz they wanna see like where they're ranking against everyone else. So it's been really useful for us from a data perspective to see like what's working in certain markets, where profit margins are across markets. I forget your question. I apologize.

Well, how do you, how did, what's your process for coaching them on operations? Because you said that they're all, they're getting, the owners are getting better and better at operations. You gave some examples where maybe they changed some behaviors, quit doing certain things, but how do you have those conversations?

First off, identifying like what the constraint of the business is. And instead of trying to fight 50 fires.

Yeah.

And so I think I had to exemplify it with the whole Q4 collapse and like that was just the north star for so long and now we're seeing the results of it. And so I'm really encouraging like you finding your constraint is inside the 4L framework and then you just focus on it. Like that's all you think about. And then I'm doing my part of trying to get anything besides operations off their plate. So like can we do Augusta leads so they don't have to think about optimization of their Google, Lsa and else, like we can just do that for them. 'Cause like operations is so hard when you're scaling. It's always what breaks.

Yeah.

And so two-prong approach is like, how can I take stuff off their plate? Even making Command Center where it's, it, it can serve bigger businesses. It's like our current constraint right now is once they start hitting up against a million, Command Center isn't as, as useful. Or like there's more cuts that happen. It, they're happy when as they're growing, but then as it gets bigger, it's like, hey, I have multiple, I have different moving parts that make it hard to have Command Center service them. So that's the part we're really trying to work on right now. But if I can get as much off their plate so they can just focus on operations, and that comes a lot around even things like videos for interviews, like we talked about before, we use Spark Hire, you use Loom. How do I get it to where I got 4 applicants in front of them instead of 50 people that they gotta contact and say, "Hey, I saw your resume," and set up an interview? So wasting the time in the onboarding process process, and then even the training process and giving them technicians stages of success that they move up through and tightening up the culture aspect. Because the part I can't do for them is like, here's how you train, like training of edging. I can't do that. Even watching videos, you got to be out there with your team. You got to be a good leader. And some of those elements I can't train. So it's either how do I simplify everything else or just take it off their plate?

Right.

Because operations is always where things break.

Yeah, it makes perfect sense.

But I'll be very clear. We have so much room for improvement.

It's not everybody. It's yeah. Yeah. Yeah. Everybody does. Yeah. Well, that's fantastic. Anything else you want to talk about before we wrap it up today?

No. We're going to— are we going to do nano financial advice though?

Yes.

All right.

You kick it off.

You go. You go ahead.

You go ahead. Mine's simple. It's kind of what I talked about at the beginning. It was, is what I was— it's top of mind. Data attribution. Now this is, this is really hard when you're small. Like, do you do this kind of stuff for your team or you guys just manage it all? As much as we can.

It's still very hard. Very hard.

Yeah. I won't go far with this, but it's this idea that you really understand. So data attribution, if you don't know what the word attribution means, you're just attributing, for example, a new client to a method that brought them in a door hanger, a lead that came in from your website that actually came from Google. It's just the attribution of the client to a method. So it's like not as complicated as it sounds, but it's complicated to actually do the association. So I won't go into the weeds here, but I would encourage you to be thinking about how can you bring this into your business? And it's going to probably involve an Excel spreadsheet. Like, I think most of us just want to buy a piece of software and have everything done for us. I will tell you, I do use the software WhatConverts, and I dump a lot of data out of Service Autopilot as well. Like behind the scenes, when you're filling out one of our Service Autopilot forms, we're tracking 10 pieces of attribution data. In hidden fields. And so we're dumping that data, we're doing some merging. Again, it might make your brain shut down. You're like, I can never do this. But I would encourage you to be thinking as the business gets bigger, how can you really get an understanding of what is working best? Like how do door hangers compare to LSA compared to Google Ads compared to organic compared to referrals? And that kind of tells you where to double down on your money because we all have limited budgets. And so like, where do you spend most of your money? That's an example of attribution.

This is the number one reason I am working the MCP for HomeWorks.

So that they can get in there and figure it out.

Yeah. Because it's just, it's difficult enough.

It's difficult.

Let alone if you just have a spreadsheet and you're just throwing stuff at it, it's like you could literally, it's kind of like the, uh, inflation numbers, the government, they can kind of make it whatever they want.

You could tell any story you want to tell. Anything.

It's like, door ears are working great. Google is working great. It's like, no, turn off Google. Oh, you still have 80, 90% of your leads still come in. Yeah.

Um, so, or the other example is door hangers are working great. And then you dig in a little further, you're like, oh wow, they do bring in a lot of clients, but those are my highest churning clients.

Yeah, exactly.

And so this is, and I'm not saying they are that they're, that's not the data, but this, it's really complicated. So I hesitated to even mention this one, but I do want to put it on your plate and your radar as you grow this business. This is, something you aspire to do. Yeah.

And there's so many variables. And that's why I felt like the best way to do this was gonna be the MCP. There's still gonna be holes, but the ability to be able to say, for example, the churn aspect based upon the referral source or the lead source.

Yeah.

That's a hard thing to measure.

It really is.

It's all— if you like— so anyways.

Yeah.

Cool.

Um, so what's yours?

My non-financial advice is very simple. Take, if, if you're married or if you have a significant other, take them for a cooking class. We did our first one together. It was great. I'm usually not that type of person, but it was fantastic. It was great food and we had a great time.

Did you cook it and eat it there? Oh yeah.

Oh man, it was great. Chimichurri on some steak and the chimichurri was really the bomb. And what else? Oh, empanadas, which I just took all the crust off and just had the meat, but it was still great. And then like a salad. It was fantastic. Chef led it. There was like 8 couples. And it was a great time.

Who's the cook in your house?

Oh, that's not even close. It's Bri. I don't ever do that stuff. I have not a single time loaded the laundry or the dishwasher. She will not allow me.

Okay. Hey.

So I know you're the dishwasher, but like I have not had to.

That's my one job. That and the trash.

Let's go.

I do the trash. Well, we have somebody that comes to our house twice a week to clean and they do the trash, but then. Yeah. So I guess really my job's to take the trash out to the side.

It's okay. We know the humanoid robot's going to come based upon last episode.

It's coming. It's coming.

Oh man.

So, all right. Good. Good seeing you. Good seeing all of you. We'll see you next week.