If YOU DIED... Would your Business Survive?

38% of owners say that they want to sell their business in the next 3 to 5 years. They said that they don't have a plan yet to be prepared to sell the business.

Okay, if I get hit by a bus, very clear instructions of who takes over. Ultimately, like, there needs to be a leader at the top of this organization. There shouldn't be this void. And I think, I think for some owner-operators, they actually almost feel pride in that if they didn't show up to work or they got hit by a bus, things would stop.

The grieving period between the time something happens to you and the time they can act on selling your accounts, it's the window's too short. Those accounts are all going to just disperse. They're going to go find other— the business is completely worthless.

Like if you get hit by a bus and they've been— they've joined because of you, there's a big chance a bunch of them leave if they're not a very good game plan.

For as long as I can remember, I— in my file cabinet, I have an If I Die folder and it says, If I die, that's okay. It's filed, tells you where to look for everything, what we got. What to do, who to call.

Welcome back, everyone. Jonathan Patoschnik, Mike Andes, we're here for another week. I just wanted to first off say—

Howdy.

It has been 3 months and we have not missed a single week. So shout out to Jonathan. Jonathan has traveled the world carrying a microphone and his camera in his suitcase to make sure we stayed on track here. And so thank you to Jonathan for humoring us. And being here.

The real test, the real test is I'm dedicated this, you know, I've not, I've missed some Five for 50 videos, but I'm here. I'm dedicated. But the real test is coming. I get this Alaska trip. So, but we'll solve for that. I'm determined to be consistent.

It's like a coach in the gym. You just get the coach to make sure you show up on a regular cadence. That's right.

I've got personal accountability here. I can't let you down. I gotta show up.

Oh, all right. I have a few things. Second thing is, based upon your non-financial advice, because see, we aren't just about hearing things, we take action on it. You talked about AI and how it's going to make us all dumb. So I determined today not a single trace of AI has been used in my docket. Not a single piece. So anything I say is 100% original thought. Um, okay, because we don't want to become idiots and allow the AI robots to take over. So that was the second thing. Third piece of advice, I want everyone to know that that when we razz each other, we do take notes. When Jonathan's over there writing, when I'm over here writing, we're taking notes. And Jonathan made a fantastic website at cityturfreviews.com.

I did.

I did. Last week's Razz. And so although it is friendly competition, iron sharpens iron. Fantastic website. Very proud. That's cool.

I didn't know if you'd see that.

Oh yeah. Well, you know what's funny is last night I was, I was getting ready for the pod. And I was like, okay, oh man, he mentioned that. I need to make sure like he got that before it went out. Oh yeah, I knew you'd wrote it down. I'm like, I'm sure, surely he'll, but you know, I'm just making sure. I don't want someone else to buy it. And so I just quickly typed it in. This is late last night, I'm in bed. And sure enough, it's a beautiful looking website. I'm very proud. And, um, I will, I will take small credit. I, I did expect a small little footnote at the bottom.

Inspired by Mike Andes.

Home Service Millionaire podcast, time code, last week's channel. Yeah, yeah, yeah. Okay.

All right.

And then the last thing I had. Okay, this is Flowers. Several months ago, and hopefully the editors can cut back to this, you mentioned that you thought AI was gonna go in the direction of a router, which is—

Oh yeah, I do believe that.

Here's where the prompt is, or here's what I'm asking, and then it determines the cheapest model. And I, like, especially in the past couple weeks, this has become a really important topic, and I think this is the way the world is moving. But you were one of the first person, people that I, heard talk a lot about, hey, this is not going to be, I choose my model. This is, I have access to 10 models. I, for low weight, cheap prompts, I can get a much easier output for a lower cost, lower token cost.

Yep. If I was betting, I'm actually betting on a lower token cost in the future. The models right now are pretty dang amazing. Imagine what they're going to be in 2 years. From a software standpoint, what I think is going to happen is within your software you have the equivalent of what I'll call a router. And in that router, I'm gonna plug in multiple models. Some are gonna be open source models, some might be the most recent Claude model. Inside the software, I am going to route and use the right model for the right problem.

And so shout out to Jonathan Patoschnik. He is looking into the future and bringing those things forward. And so just in case we ever do it, it's a, I just wanna go back to the fact that he also said we will probably go to driverless vehicles, before the drones. And so all of the predictions that he has made, I'm sure will happen very shortly.

And— Oh, I— if only.

Yeah, we'll make sure we always cut the— just like All in Pod, we will make sure we only clip the parts where we were right, and we will bring those forward.

Only pull forward 1% of my predictions. That's all you'll be able to pull forward.

If you predict enough, eventually you'll be right.

Yeah, exactly.

Oh man. Well, I stole the show. Today is—

No, no, it's great.

You're in the driver's seat, so.

Yeah, yeah. So, hey everybody, good to see you. So along the lines of predictions, I wanted to bring back some predictions, some stuff that I've been thinking about, uh, that I really get excited. Some of these things are just predictions, but a few of them are like things I really get excited about. And a few of them, we've kind of talked about them before, and I might want to phrase them differently, but they're things I think about. Like, and so I'm just kind of curious your take on these. Um, this will be a pretty easy one for you. And then you texted me right before. The show, and I really want to talk about what you just texted me about. So that's— let's dig into that. So I've got, I don't know, 7 or 8 predictions for you here, and I wrote them yesterday, and I'll be really curious to hear what you say.

All right, all right.

So first one, this came from a conversation I just had this week, and it came from a— something I've thought about going back a decade as a risk to the City Turf business. And then I had this conversation yesterday and it kind of brought it back up. So the scenario is a US state does what Europe or Canada has done a bit of when we're talking about chemicals. So it could be fertilization, weed control, or it could be pest control. So there is a model that exists outside the United States where chemical usage is banned and you can't sell pest control or fertilization, weed control. Let's call it weed control as a recurring service. You can only sell it as a one-time, like, in other words, I've got a roach in my house. You could come treat it, but you can't sell me into a contract to keep coming and treating roaches. So the, all the questions I'm about to give you, do you think there's, this could happen? Yes or no. In the United States within the next 5 years. Do you think a scenario like that could happen that a California, a New Jersey, a New York?

Mm-hmm.

Cause that's where it would happen.

Yeah.

I was about, I was literally about to say no.

And then you brought up the state name.

Like, yeah, yeah, yeah. Okay.

I do see a world in which that might happen.

Cause 'Cause they lead the stuff, these things that happen to us. So could you imagine in the next 5 years something like that happening in one of those states?

Oh man, yeah, one of those states, yeah. I don't think it'll happen in most states, especially in 5 years, but I do see, my question becomes what's the alternative? Like where do they go buy that service from in the future? Or is it strictly something that we have to work around? For example, it's like, well, it's one-time services, but we charge your card each time. Well, are you on a contract? If not, does that really validate it? I feel like it would be, there'd be a lot of loopholes, but what were your thoughts?

Interestingly, a friend of mine that this kind of, this whole conversation came up, we were talking yesterday at dinner and, uh, he said what they've done in some of the other countries is they've essentially done the one time and then they sell you an insurance product.

Hmm.

So they're now selling insurance. So if you need 'em to come back, You come back under insurance instead of under recurring.

Got it.

And so of course there will be loopholes. There's always workarounds and loopholes. Entrepreneurs are smart. They're savvy.

We are smarter than the lawmakers.

And we move way faster. So, all right, next one. So selling through text message and email becomes fully automated and it's the way most companies sell again within 5 years. So fully automated. Okay.

What were your thoughts?

I think there's a chance.

Fully automated in 5 years?

To sell?

The majority? Like the majority of sales?

Yeah, people that'll buy software. Because— oh, okay, I should— like, I'm thinking pest control, fertilization, weed control, lawn mowing, house cleaning, window cleaning, not HVAC, not plumbing, not some of that break-fix stuff that you have to literally roll a truck to see what the problem is and diagnose it.

So are you saying, okay, so let's just use lawn mowing for example. You're thinking they, I assume they text in and then AI is feeding them the pricing, collecting their card information, etc.?

Yeah, yeah. I mean, you're, you're already getting there. You're publishing your prices online. You're, you already know the pricing, small, medium, large. You use technology to figure out the size of the property and you have all your scripting, your scenarios built. Your AI is completely trained on all your customer service and call recordings.

Yeah.

And it's a combination of AI plus automation. It's gonna— it just has the conversation.

We're close. We're pretty much there. It's, it's more a matter of will it be industry standard? That's what I was kind of thinking. Like, is the majority of businesses going to do that? No, I don't think so. But will it be possible? Like, yes, 100%.

Oh, for sure. Yeah, I think there will be technology to do it. I think it's a big opportunity.

Yeah, I agree.

I saw—

I don't know, I saw on your site, text us. I, that was great. That was really good.

Oh, we've been pushing. Yeah, I've got that. I mean, if you look at the City Turf site too, this is be, this is everywhere through my stuff. I'd say for most of the year, been pushing that pretty hard. I think we implemented EveryChat at the end of last year, but it was kind of, I can't remember, but, but we kind of using it. But now that I'm reworking lots of stuff, then it's going into a lot of our messaging. It's our, it's our general message of easy.

That is text.

Fast and easy.

Yeah.

Yeah. So, but no, uh, still massive numbers call. One of my problems, interestingly enough, was I, for a long time, have done, um, call attribution using random generated numbers. So you could tie it back to a truck, you tie it back to whatever the case might be. Created a whole new problem, which was people were texting those numbers.

Yeah.

So I had to kill that. I still got to find a solution for that problem. And there are solutions, but that's my—

it's, uh, that's like sort of my thought is like, it has to almost be automated because in a way I don't want to create another channel that I have to be monitoring 24/7. Because phones are enough for me to have to like think about, hey, I've got to be— any incoming message I need to be able to field. Whereas like if we gave them the number that is inside of like their CRM, like HomeWorks for example, we need to be going inside that CRM and making sure any inbound text is being responded to quickly. Because this looks like the phone, if you don't answer it, You know, lead is gone.

Yeah. We only use one texting number. It's our main phone number. Yeah. It's the main phone number, it's our texting number, and that's it. We don't want all these other texting numbers. It's a nightmare. So it's created an attribution problem, which is why I'm very, that we're, you know, we can deal with it, but I'm very aware of how many phone calls we get even still versus text messaging. But it's growing. It's growing. This was kind of my belief I've had for like 2 years that this text messaging thing really matters.

So now you got my wheels turning of how I can take 200 numbers and somehow figure out a way to make it work.

Well, there are ways to do it. Like we use WhatConverts, but then you end up paying for all your text messaging twice. And then it just creates holes. Like, you know how the dream is that every system talks together and everything's connected with an API? You live in software a while, you know APIs break. Like QuickBooks changes something, you know, and it breaks. And now you have 90 connections with every, you know, LLMs and different models. Stuff breaks and you're always like, or they deprecate connect. There's all this stuff you got to do. Well, now I kind of think about the same thing. It's like, okay, they text to this number. That number's got to pass it to this number. And then when you respond, it's got to go back through that chain. Like you can just imagine how you look like an idiot eventually because people don't think you're responding to it. And that's, that's the worst. It makes me nervous. I don't like that. So there's a solution, but it's not a solution I like.

All right. Well, I'm going to write this down for a problem to think about at 2 in the morning.

Yeah. Yeah. Oh, good. Tell me when you solve the problem for me.

Yeah.

Right. All right. Okay. So, uh, another one. Okay. This is a robotic lawnmower thing. I cannot let this go.

Okay.

I can't let this go. I've got a new robotic lawnmower, my third one since 2019. And I love this one.

So if you could just predict in the next 3 months, like last time, it'll happen this time. Yeah. Yeah. Yeah.

So I've reframed the question for you. All right. So households making over $100,000 a year in income. That have a half an acre or greater. Okay. Do you think we could get 10% penetration in the market? 10% of them use a robotic mower within 5 years?

Who's we? Like, is that the manufacturer selling it, or—

oh, we as the industry. The industry.

Okay.

Like, yeah, yeah, yeah, yeah.

Ah, I think so. It'd be— someone have to market it well, and I think these manufacturers stink at marketing.

Now I think it's going to have to be the service providers that pull this off.

Yeah, but I don't, I don't know if anyone will do it because it'll jeopardize most of their existing legacy revenue. And after—

see, I don't think so. Okay. I don't think so.

Okay.

I, I, I've— I, I hold to what I— my theory from like 4 years ago. Um, you sell it if the mower cost gets cheap enough and the mower gets good enough, then you sell it exactly the way you sell it now. It's like, so if it's $150 a week to mow the bigger property, it's $150. With the mower. You change nothing. Everything, you still show up on Friday, you just do edge, weedy, and blow, but you don't mow it anymore. And you, you just sell exactly the same way. The fewer things you change, the fewer things you have to discuss with them, the more likely they are to buy. I haven't proven any of this. This is my theory.

I like it. Trust me, I like it. I just run into all these problems in my head of like, okay, so I know we don't have to do the wire anymore, but what if there's steps into the backyard and then there's a gate and I've gotta build?

Oh yeah, you still have, you still have to profile the property, right? There's no getting around that. Yeah, it's not going to work for everybody. That's why my bar's all the way down to 10%.

Okay. And then, but if it's 10% of my customers, I don't know if I want to change my business model. That's the thing. I would just probably cut it out.

I will. I wouldn't do it if it's 10% of my customers. I think I can get, well, I don't know what I can do. I just thinking about it again. Even Philip responded to a message last night to me and he even brought it back up. Like, and Philip is not exactly gung, not been gung-ho on this cuz we've tested stuff. Yeah. And it's like, just a giant disappointment. So even he mentioned it, but I'm really loving my new equipment.

And so I just, I just want to say, I hate to be, you know, the wet blanket here, but I think every time you've gotten a robot mower, you have been very excited about this technology for about 3 to 6 months.

I've been excited for 10 years. Anyway, I've turned these short questions into long ones, but I, uh, yeah, to really finish up my thought, you'd have to profile the property. I think in my market, My way more than 10% of my properties will support it. Okay. So I was thinking like a national 10% for the sake of the question. I wouldn't touch it if I didn't think I could get like 40% of my clients to take it, but it's perfect for me because I don't actually want to mow anybody's yard.

Yeah. Yeah.

I would much rather have the robot and I don't want 100% penetration. I want maybe like 40 would even be great because if, because you've got to be able to handle, now we're turning this into, you know, not where I meant to take it, but you've got to be able to handle. When something happens that you still have a lot of crews that you could deploy to do the catch-up. If you go to 100% robot mower and you get rained out for a week and your 2 weeks, your mowers can't catch up. Or if you go to 100% and this particular client was doing something in the backyard, like a whole new irrigation system, the mower can't catch up. You need to be able to drop real equipment on it. And if you've eliminated all that, that's a problem. So anyway, the discussion for another day.

Oh yeah.

I could, I was just, I was just lowering the bar to see if I could get what you would say.

So what's new about— what's this new equipment? Is it Husqvarna? What is it, Honda?

No, it's, uh, no, it's a Segway Navimow. Okay, okay. So yeah, so it's mowing my— I have it mow my property. You've been to my place, but you— my, my, uh, backyard's just under an acre, the grass part is. My whole property is closer, but everything's still landscaped. Um, so it mows 3 times a week, keeps it exactly perfect. No boundary wire, uh, mows in straight lines, changes direction every time. I've had zero issues, um, and it can— it basically takes 4 hours 3 times a week to mow my yard, plus some charging time. It does have to go back to its station 3 times, so it takes just under 4 hours. It takes about 4 hours to do the mowing once a day, but takes about 7 hours with the charging. And so I just run it at night and it, it roasts 3 times a week.

I think the ideal customer profile for this is someone with over $100,000, one segment of lawn, so no gaps in between.

It helps tremendously, but it can cross, it can cross, but it's got to be able to cross.

The big kicker is they own a lawn care business and make content about lawn care, and it makes for good content that they can make sense of. And I'm not—

yeah, but I'm not, I'm not trying to sell anybody on it. I just can't I quit thinking about it.

Hey, there's always an opportunity to come back in. You know, you're no longer— Robin no longer exists, Jonathan. You can come back in.

No, I'm not. I'm not. I'm not trying to make any money on robot mowers.

Look, like Philip, maybe that's the one time he'll come on the show is to convince you that we need to go back to robotic mowers.

I don't think he'll push that hard for that. All right. I got us way distracted. I just love the topic. I can't let it go. So, all right. A few more. A PE-backed home service company does a bigger IPO than ServiceTitan. So somebody serving home services, it could be a roll-up and ServiceTitan was, I think around $7 billion, $8 billion, somewhere in that range. So it could be any company serving home services. Is there one coming? Do you think one could happen that of that size anytime in the next 5 years?

And when you say serv—

with all—

when you say ServiceTitan, that's like the tech side. All right.

Yeah. But they were serving home services.

True, true, true.

So just any, there's been no other real significant IPO that I know of. That I can remember hearing about in a long time that they in any way cater to the home service industry. But now home services is such a news topic.

5 years, do you think?

Yeah, in 5 years, do you think there will be one that's bigger than ServiceTitan?

Not bigger. I think something over a billion, yes, but I don't think bigger than ServiceTitan.

Yeah, I don't think so either. Okay, look, 3 more.

I'm gonna try to go— I feel I don't need $9 billion, I just need over $1 billion. I'm just—

are you going in 5 years?

Come on now, come on now.

We do, we do need a lot of smaller IPOs in the United States. We need a bigger IPO market again in the United States.

This year has been crazy.

And if that happened, that'd be really good for you.

It would be, but I need it to slow down. Like right now I feel like we're going to this bubble of IPOs. I'm like, whoa, whoa, boys, give me 6 or 7 more years.

We've had nothing for a while. They come in, it comes and goes in seasons. What you need is a smaller IPO. Not— I don't mean smaller IPO market, like less. I mean, like, we need smaller companies. Yeah, yeah. But if he, like, wasn't— what was Google when they— I thought Google was like $30 billion when they IPO'd. But I mean, way back there used to be multi-hundred million dollar companies that could IPO. What was broadcast.com back in the day? Small, like $25 million. You know, we need— if we could get more companies into the market, That'd be great for you, and I think it'd be good for the market. Anyway, different topic.

Well, on my road show, I'll bring this, this clip back up.

Yeah, yeah, yeah, yeah, they'll, they'll listen. All right, all right. Smart glasses become a standard for technicians, like feeding them real-time instructions and data in 5 years.

I know you're gung-ho on this, but I see too many flaws with this.

Yep. Do you think within 5 years? No.

Okay, okay.

No, I don't, but I'm very good.

If you said 5 years, I was gonna be like, bro, I I don't know if I agree with you on that.

I am so— this is right there running in parallel with my robotic mower dream.

I remember the first time when you brought this up on stage, I was like, dude, that's genius. And I remember going home and like doing all this research about it. And then there's this, uh, other software that has now like basically taken Meta Glasses and like tried to go through it into their CRM. And it is so buggy. It is so buggy.

It's just— oh man, I want it so bad. But I too don't believe 5 years. Like, Drones, like your little— from a few episodes ago, you had the drone dropping the robot mower.

My thesis.

Give me that in glasses.

Thank you.

Driverless cars. I love that world.

Fantastic. There's our— we don't even need to wait 5 more years for an IPO. We have it right here, folks. You know it.

I want that world. So yes, I just keep hanging on to hope. But all right, um, kind of this speed to lead thing. Yeah, so right now it's just like LSA, you got to respond really fast. So The speed to lead thing gets so extreme, like, because everybody's doing it. Google's forcing it, but it's just your competition's gonna force it. So it gets so extreme that if you actually as a company want to talk to the client, we've kind of talked about this just slightly before, but if you actually want to take them to the phone and talk to them, you have a very high risk of losing the deal. Like, what do you think that could be where we're going in 5 years? That it's everybody is moving so fast with software. Pricing online, pricing through text, pricing through email, Google collecting prices, and everybody's now enabled with technology to respond really quick that if you even try to take them to the phone, you're probably gonna kill the deal. Is that, do you think that becomes a reality?

I, I think you're overly optimistic at the tech forwardness of our home service industry. You do, you do.

Okay.

Like I, I, I, I think in our world, I mean, even, even people listening, it will feel that way.. But yeah, when you look at the broad home service industry and like how many people just use any software, let alone, like, I'm struggling to get people to get Google reviews or like claim their Google Business Profile. I'm not super concerned about them automating away these things because they're just so far behind. And like, you look at how long credit cards have been around and still to this day, 53% of payments processed through HomeWorks is check.

Wait, really?

Yeah.

Huh. Maybe I've become a bit disconnected.

And so I just, I would love for that to be the truth. I think it would improve the professionalism of the industry. So I'd be a fan. I just do not see the adoption broadly. I think the top 10%, and yes, they will make more money, they will, but like broad adoption, what do you think?

Oh, I think there's a risk of that. But now, yeah, but now you've got me, uh, questioning myself here.

Like, if you're talking to $10 and $15 million owners, yes, like, that's where you live, you know.

This is where it's like, you know what, I've been out of SA for 7 years, um, I know a ton of people own big companies. My academy group, all those guys have got bigger companies now, like, uh, just like that. I still keep up with Um, I'm in tech, or I was in tech, but my brain is still living in tech. Uh, you're right. I mean, I, I think, uh, I haven't really worked with a lot of the smaller companies in quite some time, and it's an interesting perspective. Um, I'm Jonathan.

I'm trying to— I'm trying to paint you as not out of touch here. And here—

yeah, well, I'm trying to get back.

Someone texted me the other day that said, we really got to know How Jonathan spent $450,000 on longevity. I'm like, that is a topic for another day.

Yeah, I'll do a video on that. It's not going to be as crazy. Well, it will be as crazy as people might think. You can spend it pretty fast. So, yeah, yeah, that does sound fun. It's not quite as crazy as you think. Yeah. I don't know. This is what exactly you're seeing happening with me right now is exactly my argument against AI blowing up the whole world. Technology people that live in technology and see where it's going, which is who I think I am to a degree, uh, I'm not as close to it as I used to be, see what's happening and think it's going to happen really fast, but the human adoption and the government puts the brakes on it in a massive way. And so I, I do agree with everything that you're saying.

Uh, hey, your newsfeed is filled with AI tech. Private equity. Most people, they're scrolling through TikTok for cat videos. I don't think they're adopting some of this stuff anytime soon. They're just happy that the next video is a cat video after their first one because of AI.

You know what, I do— you're right, I do. I think I would— outside these questions, my general argument would, would actually be that I don't think most people will adopt it because my concern for those people is more severe than it's ever been.

I agree with that.

They're going to get really badly hurt. So I— and I've done a video on that in Five for 50 recently. I'm legitimately concerned.

I think it's like the K-shape, what we see in the economy with K-shape. Yeah, it's gonna happen in home services.

Yeah. And so there's— and so I do— there, I guess, to— if I have that concern, I do have an underlying belief that we are starting to see a change in technology where some of this stuff is legitimately going to go faster. One of my reasons why I argue that this— I'm not arguing that robotic mowers are finally going to really happen. I'm not arguing that all this stuff is— I'm not arguing glasses are going to be here in 5 years. My answer to that was, was I think we're going to be way closer, but we're not going to be there. But I do think something has fundamentally changed. And it's, it used to be Like go back 7 years, 6 years to 19 to 20, there were not this many people working on really big problems. Like they were, they were working, the people would go, they were working on finance and finance arbitrage and they, but now there are lots of people working on new technologies. Like the amount of brainpower working on AI, the amount of brainpower working on robotics, the amount of brainpower working on life science. Has the amount of kids coming out of school and going into that stuff has just skyrocketed in the last 6 or 7 years. You, you can't convince me that doesn't mean everything goes way faster now. So then my argument why I was wrong on robots when I thought it was going to happen faster was because I missed the fact that not many people were actually working on it. You would, you, you would look at like, say, Cars, and you would think about how many people are working in that, and you would say, well, gosh, if we can make a car do this, even if it's not fully autonomous, how can we not make a mower do this? Well, the reason was there wasn't enough money going into robots and there weren't enough people working on it. Now we got so many people working on this stuff. That's where I think I'm starting to say, wait a second, some of my timelines I'd put 10 years out, could they pull in a little bit? That's where I think I'm coming from a little on this. But I still think I'm highly at risk of being overly optimistic.

Yeah. Like it's funny, like over the past couple years as it's been in the back of my mind, like, oh man, this is like so important and we've gotta stay on the cutting edge. Every time it gets really hard around it though, like actually making the APIs talk to each other, doing encryption, getting financial data transmitted, doing attribution, figuring out if a lead came from Facebook or Google. Like every time it gets hard, I'm like, okay, this is why 95% won't do it. And so that's, that's always been my motivation when I, I feel like if this is a hard spot, this is a technical challenge, like Why am I beating my head up against this tiny little pixel or this tiny little— it's like, this is where everyone's gonna stop. 'Cause conceptually it'll sound so easy and they'll listen to this podcast, be like, oh, it's gonna, yeah. And then they'll hit this thing and then there'll be friction. And I, I just believe that 95% won't go past that right now.

Yeah. Yeah.

And I feel, I feel to your point, I feel, um, obligated to make sure that they're aware and that they're, they have the tools, et cetera. But there's a certain level that you have to apply yourself to actually pushing through that hard spot and figuring things out. And, uh, maybe one day it'll all be easy with AI, but I thought, I find that every time if you're like on the edge of the technology, you are going to have to push through what most people would just be like, okay, this is, it's hard here.

Yeah. Yeah. Yeah. I, when we do these episodes and we think about the docket, I always wanna make sure that it's interesting to people. And I know a lot of people listen that are smaller or they're not ready for this stuff. And so I picture a lot of people riding on a lawnmower, a lot of people driving in their truck, you know, and then a lot of bigger companies hopefully listen as well. And, and so what I hope to gain for a lot of people is just this real awareness where you're hearing this thing over and over again, and maybe it, it makes you move a little faster, implement some of this a little faster. You don't need to be cutting edge and, and think a little bigger, or as your business gets bigger, you've kind of already heard this conversation from us a few times. And it's not foreign, it's not scary. It's like, oh, I kind of have an idea what to do here. That's what I hope people get from this. And that's why, while we're having bigger conversations than maybe most people are ready for, I hope they see the value in that. It grows your mindset too. I think it makes you more optimistic. Like, wow, this is what I could do. This is what I could become.

Like, I like that kind of framing and not being afraid by the terminology too. Like even like, yeah, we're planning this whole rollout with Homeworks. It's like, I don't want the words MCP to get people messed up. I need them to understand, like, just go to Claude, do these 3 things, ask this question, be blown away, and understand that's just the tip of the iceberg. And yeah, yeah, not being afraid. Like, AI, a lot of the news, okay, should I use Claude? Should I use ChatGPT? Like, don't be afraid by that stuff. A lot of it is the high-fluting tooting people that stand behind microphones and talk all day long use these big words to appear like they're somehow above all of us, or like they have— they know something, they're super smart. And it's not difficult, but it will take you being okay with being uncomfortable in a world that you might not feel as organic to as on a mower or with a belt of tools on your, on your, on your tool belt. And I think that the people that embrace that feeling of, hey, this is not, does not feel good to, does not feel natural to me, but can push through that, they're going to win.

Yep. Another one that most people won't do, and we'll wrap with this one, And it's technology again. Do you think within 5 years a homeowner would be comfortable having a drone hover above their property while the team is working? So people are using body cams now. People have cameras on their trucks. Like, again, small number. Yeah, I admit small number, but guys, crews, home service companies are wearing body cams. Home service companies have trucks that pull up and they have a camera that are recording the front yard. It's like, is this That was happening when I was doing SA. I still owned SA. That's a long time ago. Like, so what about the drone recording? Would the homeowner be comfortable with that, knowing that their backyard's getting recorded, their property's getting recorded while we're on the property? Yeah, while we're on the property.

And is the reason for something like roofing, or is it just for like, hey, I want to see the backyard too?

Yeah, yeah, it could be roofing. It could be, this is how we're monitoring what gets done, what doesn't get done, the quality of work. You could see where the bushes are, if they need trimming. I feeds upsells. It could do a million things, from accountability to upsells to quality. It solves the rolling trucks for inspections, a whole kinds of stuff.

Possible, yes. I don't think it's to be broadly accepted.

Yeah, I think, I think you have articulated that nothing that I'm dreaming of will be broadly accepted. But, well, yeah, but brought from the home, I just wanted to— because way back, City Turf Text, this is— I think I was doing an essay We text— tested body cams and a client didn't like it.

Really?

I was talking—

I thought it would be the technicians.

Now, from the conversations I had, it was the client.

Interesting, because my first thought when you said drones was the technicians are going to feel weird about that.

Oh yeah, I was just thinking about the homeowner from my previous experiences.

Yeah, that's interesting.

And so— but I've talked to some other people that are running body cams now and they say the client doesn't care.

That's interesting.

But, and, and then the tech, uh, only turns their body cam on when they're— so ignition, ignition, get out of the truck, camera on, back in the truck, camera.

You gotta remember to push it.

Oh man, that's what I've been— I mean, I, I haven't gone down this road very far.

Every time I'm dying to do an upsell, they forget to turn on the stinking camera.

So, all right, so Tell me about the text that you sent today, because that's very interesting news. I'm— I wasn't familiar with it until you sent me that message.

LSA is dying. It's— it has gone the way— it's going the way of the dodo bird. Well, as it's known.

Is that how you— okay, I interpreted it differently. I interpret LSA as last staying, but you're going to manage it more like Google Ads.

Uh, so I guess we'll find out because it's coming out next month.

Yeah, yeah, yeah.

But from what we can interpret is that they're basically moving into PMax, which is Performance Max inside of Google. Okay. It will not have its own dashboard. And that's, I think to me, that's local services is a different dashboard. Now you're just going to go to Google Ads and inside of PMax will be a bidding strategy per, on a per lead basis instead of a more like Google Ads. Correct.

Yeah.

And so when we, when I brought to our team, I guess leads are like, hey, this isn't going to change that much for us because we're already running PMax. It's just going to be a different bidding strategy because now it's not going to be based on clicks as much as the leads. Uh, what's interesting is they're going to be combining it on the page. So on Google, in the past you've had like Google Ad slots and then you had Google LSA different. Supposedly those are gonna move together. I don't know what that's gonna look like, but, uh, from what I can tell, the word LSA will not be known in 2028.

Okay, it sounds like— do you think we defined the what's going on clear enough for people watching, or do you want to stay?

I agree. Go ahead, go ahead and go ahead and get them just surface level for it.

Oh, this is your thing, man. You sent me the link.

Okay, so, so basically Google wants their stock price to go up higher. They're like, these, these lawn care professionals are making way too much money off of us. We've got to make— extract every single dollar we possibly can from them. And so they're like, forget this LSA thing, let's move them in our Google Ads platform so we can have a bidding strategy instead of a flat fee per lead. That's basically what happened. And, uh, we're gonna take it hook, line, and sinker.

Okay, so you did a much better job than if I'd explained it. I would have been in the weeds. That's good. Um, that is what's happening, I think, from my brief reading very quickly before we jumped on here.

Back, back to what we talked about before— buy, buy the stock. Yeah, exactly.

Uh, yeah, so I'm under the impression that you said it, like, it's just they're gonna deprecate, kill the LSA. You're now going to manage it exactly where you manage Google Ads. And then if, just to make sure we're all on the same page, it's— you're right now, you could put a weekly amount on LSA or like what you're willing to pay. Now you're going to actually bid like you would bid on Google Ads, or what we used to call AdWords. Is that correct?

Close enough.

Is that your interpretation?

So, okay, Google Ads as it in its basic form is blue links, and you typically are getting some sort of cost per, per link click, and you're optimizing your keywords. Performance Max is a more broad— across banner ads, video, and the text, the blue links. So across Search Display Network as well as video on YouTube. And so they're basically bringing LSA into that now. Where now there will be all of those, uh, inside of a Performance Max or PMax campaign. And so they've been rolling out LSA now for probably, what, like 6, 7 years? And then PMax has also been slow in this rollout too. And so we kind of figured they'd eventually converge. We didn't know if it would go PMax into LSA, but it makes more sense to keep it full LSA into PMax because PMax is used in other industries outside of local services. And so they're basically just absorbing it into the, the, in my opinion, product that worked best for them and simplifying it. For a lot of people, it's actually gonna be better though, because it is simplifying this whole notion of having two separate dashboards, logins.

Yeah.

Set up the whole night.

Their, their login was janky. Terrible. And this, it is horrible. And it was hard for you to share it with team members to manage it. It was just a lot of stuff I didn't like. Now, is your reading of this that You will still be— you won't be able to write ad copy. It'll still be the same exact structure as it is now.

I don't know on that part. They're not really sharing that stuff. Literally is this morning that it came out. And so by the time this airs, there could be more information about it.

That's true. It'll be a week.

But I don't know, like, that's our biggest question is like, what's the UI going to look like? And are they—

how do you rate leads? How do you do all this stuff?

I'm really curious. Thinking about is like the AI version of this. Where are they going to go with this being more of a voice-related thing? Because now they're pulling that right into PMax. And so that's, that's where I'm trying to figure out. But in terms of our execution is not going to change, I think for anyone that is running LSA right now, be very careful. If you don't do anything, they're going to be bringing your budget over to Google Ads and enabling a whole bunch of AI features that will likely double or triple your spend on stuff that's trash, like Display Network, or— because the Display Network can be shown— okay, really quick—

to anybody.

Yeah, to anyone. Like, if I spin up an, uh, a crazy website, site places you don't want your brand showing up, but I can as a web developer just put a little part in there for Google Ads to show up as a Display Network, and anytime someone clicks on that, I get a cut of it. And so a lot of times the Display Network is low quality And so you want to be careful. If you don't do anything, you will likely see a big jump in spend with less quality leads. And so I just encourage everyone that when they hop over, it's going to be August, it starts, but then all the way through 2027, they're going to keep rolling new industries in.

Yeah. From the article you sent me, it sounds like lawn care, pest control.

They've been seeing the podcast. It's— they're like, my goodness, this guy's spending $450,000 on longevity. He can absolutely afford more on LSA. We see he's—

so we'll roll this out first. Exactly. Probably. Yeah, goodness. Yeah, probably. Yeah, thank you. Everybody can thank me that's in Dallas. That's right, exactly. All right, what have you been working on?

Uh, it's the same stuff. It's gonna be the same stuff for the next 4 or 5 weeks. Calendar, MCP, and API. I should say the thing I'm really trying to focus on is the GoTo—

you're, you're there coding away on this.

Oh yeah, all the way. No, no, mostly like you talked about, like just like where are we at, what needs to be before we go general audience. So I've pushed that a little bit forward. Um, we were gonna wait another few weeks, and we were basically waiting for like creating events, estimates, and invoices directly from your agent. And we've said, hey, instead of just— we're gonna push it out before that, um, and then feather that in in the first 3 to 4 weeks. Because I see it as, if I'm starting out, I don't really want it to be like creating invoices or estimates or events right off the rip. I'm going to probably use it for dashboards. I'm going to use it for some admin-related tasks. And so we, uh, we feel like we can add that in later on, especially once people get a little more educated. But the go-to-market has been really important. Inter— sorry, go-to-market is like, uh, how do we message this to everyone and make it really simple, have guides for people to get started and give free access for like, say, the first 30 days so people can experience it, use it. We have tutorials for them to do the basics and then have examples of the beta users that have done extensive work inside of their accounts to build more, more workflows. And, uh, so yeah, how do I present this to everyone in a way that it's not like this lofty thing that maybe 5% can use? How can I get 20 or 30% adoption is my goal right now.

Yeah.

It's really been my focus. Uh, so when we roll it out, it's, uh, hopefully, you know, very useful.

Do you happen to know if you, when you—

you're gonna ask— are you asking a technical question?

Very much. It's a code-based—

okay, give it a shot. No, give it a shot. We'll give it a shot.

Well, actually, this is a technical question, but I'm kind of curious on— when I think about stuff like this, one of the things that really scares me is, we'll call it the audit side. So person calls in, says, hey, you created this event for me, it got scheduled, I sent a tech out. It shouldn't have been— we did it, we should have never done it. You could just imagine this, not because like code goes rogue, just a million ways this could happen. You have Bob, the owner, talking to the system, but you also have Mary in the office talking to the system. And like, she accidentally, she was doing something and she accidentally created an event. There's all, so I was curious how you think about, do you know if you guys are doing like detailed audit trails or event logs where it's logging like every single click and action? Do you have, like, this is for my own curiosity, do you know any of the details behind the scenes?

That's mostly why we haven't released it GA is because like we have to go through the logs, we have to go through like, yeah, we have to give guardrails and it's like, it's AI. It's like, wait a second, we're going through every single use case one by one and figure out where this could go wrong and put parameters on this and give warnings. And so, uh, it's, it's honestly like, as much as it'll feel like magic, it has not been magic on the backend.

No, this stuff and this stuff's scary.

Yeah. Oh yeah.

I, I remember when we were released our automation platform back in 2015.

I remember, I remember the Starbucks I was sitting in when you guys released that.

Oh really?

Okay, I remember.

We, we put so much thought into not letting people get into loops. Oh, it's like, because there's just so many things that can go wrong. And somehow they'll find it. Took a little while, somebody found a to-do loop. In like 4 seconds, 500,000 to-dos were created. You know, it's like, it's like, why did the database just go to a creep and you've got to trace that stuff back. And like now, I mean, you can do it really fast in automations, but you could do anything. I could just imagine Mary thinks she's in her personal ChatGPT account and she's just talking away and nope, she's in the work account.

Literally, literally, we made a million dollars yesterday, boss.

It was great. And now somehow you guys got to figure out how to unwind all those invoices. Like, this is the scary stuff, but it's so awesome too. Yeah.

So yeah. Anyway, that's, and like the rate limits too, my own curiosity, like I feel like a rate limit on, for example, like daily is annoying cuz like I don't wanna wait till tomorrow to finish my invoicing. I just wanna get done today. But then it, by making it monthly rate limits, now I open up the possibility that 30 times more tokens can go through and they do make more errors. And so there's a lot of like this tension of me and how I want it to go and then like the potential downfalls of some, some of the technology.

So yeah, on that note, um, I was building something over on Friday night. Yeah, Tiffany was out, so yeah, so it was Friday night.

Dude, I've adopted your— I have now adopted your strategy. I'm working late now. You, you said it a few weeks ago.

It's terrible. It's terrible.

Hey, Brandon's like, I just want you to stay in bed. You can just work here in bed, but I don't really want you going out. Game on. So I got my little stand I pull out now and I just go to—

Yeah, you got your little table.

Yeah.

Yeah. It's, I would encourage you not to get stuck in this. I am so frustrated, but my brain will not be quiet. And so I mean, last anyway, I could ramble anyway, little warning. This should be, this is not my non-financial advice. This is my, this should be my non-financial advice or it's kind of financial actually. So I was just really, it actually happened. There's, there's a pro— I'm not really ready to talk about it. It has it's like, it has nothing to do with anybody here, but that's be watching. But there's a project that I just have had on my mind for 3 years that I want to build.

Okay.

And so I just decided to build it. And what actually inspired it is I did that review site. I'm really happy with my little review site.

I'm officially a UI/UX designer. I make websites now.

Yeah, yep, yep. So, and ChatGPT knows so much about me. Uh, so I bounced between ChatGPT and Claude. And so I was using Codex. Okay. Uh, so ChatGPT and it knows so much about me that it did such a great job helping me generate that review site. I did some work, but I gotta be honest, I didn't do that much work. It was so good.

Okay.

From the beginning. I, I had—

how long do you think it took you to build it?

One hour. Really?

That's pretty good.

Yeah. Yeah, I did that right after our show. I ate dinner and then I'm like, I'm like, so I, yeah, I guess we'll tell, man, we haven't even got to our coffee yet, but okay. After we did the show last Wednesday, I had dinner. I had my little ideas from our show and I'm like, I'm just going to get the domain. So I get the domain.

Oh man, it's so super slow. Once you have the domain now, it's so easy to get.

Then I'm like, yeah, it's like, well, I'm just going to see if I can like spin this thing off real quick. So I use the whatever, 5.6 SOL or whatever the, you know, in Codex. And, um, and so I give it a prompt, like I use Whisper Flow, talk out my whole prompt, tell it I wanted to write it a little bit in the third person, like, but it wasn't a great prompt. It was like, to be fair, to not like give myself too much credit, it was, it was just like first attempt, decent prompt in an account that has tons of information. And I told it what I wanted to do. It generated that site and I'm like, holy cow, I don't have much to change. It was that good.

So did you have to remove much text or not?

No, I mean, I made some— I just talked to it, made some copy.

I haven't used it much for, for, for, uh, for website creation. And that's usually my biggest beef is like there's too much text.

Oh no, no. But I do a lot of tech stuff like, cause I do a lot of writing with it and I, like to write one email still takes me a long time because I just go back and forth and back and forth on it. So it's just got so much context from me. So that's probably why it got it so good. But I told it to scrape Google reviews. I told it to go get my score. I told it to build out all the live links. I told it to go to CityTurf. I told it— it did all the linking. It did everything.

That's great.

And so anyway, here's a question that—

sorry, we gotta go deep. We gotta go deep. Okay.

Okay.

Okay. We, we like, you know, rabbit trails. So, Question, do you put your words in, create a prompt, and then inject that later on? Or do you just talk to it as it's building? Or do you create like a master, hey, I'm gonna work with you through making the prompt that then I one time drop it into the website?

Oh, like have it help me create the prompt? I used to do that. I don't do that much anymore.

Interesting, okay.

I mainly, I'm not negative on that. Somehow I've just sort of moved away from that. I literally use it so much. Um, you know, like I said, that's where my whole thing last week was coming from. I really try to do the creative dump first because—

Your copy was great. I loved your copy. It was really good.

But it's, but it's using copy that I have already created. That is my copy.

Yeah. Yeah. It's good.

And so it's, yeah. So that it's, it hits on these really key points that I— is a part of the brand. I have a whole brand language guide. See, I'm leaving big gaps here. I have style guides. I have language guides. I've created all this stuff. Like these, this is what City Turf says. This is how City Turf sounds. That's how it's able to do this so quickly. That's kind of a big thing to leave out actually. That, that, you know, cause if I, if I walked up to a, a, uh, just Tiffany's, well, she doesn't use ChatGPT, but if I went to her account and prompted under her name, I'd get a lousy site probably. Yeah. Like, so it matters, but so I, I know, sorry, I keep interrupting. You're good. You're good.

You're good. But I saw it. I was like, this is so good. And sure enough, it's 11 o'clock. But you know what? We have to, we have to compete. So I'm like, I'm going to time myself. I'm going to see how fast I can make one of my own because I knew you'd had design guides. By the way, for everyone listening, yeah, we did not plan this conversation. No, no, I got to just see what happens here because I was blown away. I thought you did a great job. And if you did an hour, that was really good because I took at least an hour and a half to 2 hours.

But to your point, I think an hour, I think an hour's legit.

I think that's really good.

I think that's very— yeah.

For me too, it was like I had to remove some copy. I had to change, like, I feel like I do a better job of AI than AI, like speaking the copy, the hooks, etc. And but it does a really good job at some elements of SEO. So for example, I wanted to push it more in the direction of like sales copy and it was, and it was more like, hey, if you're wanting to make this SEO friendly and actually rank, you're going to want to change some of these things. Yeah, I had to pull back kind of like the salesperson in me and like let the SEO go a little further.

Oh, that's so annoying.

But yeah, so CityTurfReviews.com.

So you've got one. AugustaLawnCareReviews.com.

Um, let's go.

I'm gonna look it up.

Yeah, let's go. I, I was more, uh, sorry, the one piece of copy I loved about yours, I forget, use your headline, it was really, really solid. And then the one I'm, I've been leaning to for like more broad Case Augusta stuff is, uh, um, 100,000 happy customers can't be wrong. And so kind of leaning into that because that's some of the— yep, I always have this, this list of copy I like And so I ripped that off of someone. I forget. It, it was a derivative of like the billions of hamburgers served at McDonald's.

And it can't be wrong. It's been used. Like I've heard somewhere, I've heard that kind of thing.

I think I put that part and I put the hamburger thing together. I'm like, okay, we've served over 100,000. And so that's kind of been my little tagline.

I like it. Well, all of this to say what I was originally gonna say is I did that City Turf thing. It got me, it's like, dang, this guy. And I've built lots. I, cuz I use Claude Design for a whole, some other stuff. Stuff. And so I use these tools, but I was like, that was so fast. I wonder if this idea that I've been thinking about for like 3 years, if I could work on that. Well, it sent me down a rabbit trail. A Friday night I worked on it, worked on almost all day Saturday. And this is all I was going to say. I don't remember what the lead into it was. I forgot that in Claude, no, in ChatGPT, I have it automatically hit my credit card every $120.

You get a call from Tiffany, be like, honey, I get extra for this clothing budget this month.

Well, it kept saying when I was working in Claude that the team has ran out of credits, but then it just kept working. I'm like, I don't—

This is great. I have officially hacked the system. Yeah.

So I ran up a $700 bill in a 24-hour period.

Whoa, bro.

I've never done that. Never done that. I don't even know how I did that. That's amazing. Oh, and not on, not on the review site. That was like, that didn't cost anything. It was the, uh, this other thing. That's like, I just don't, I've never done that. So that's a little side reminder for anybody. Like, don't let it auto-charge your credit card. I think I would have still done it because I wanted to do what I was doing, but I've never done that before.

Oh yeah. I remember one time I was in Manus and I put to max as a, hey, I want, I want you to refactor the code. I've made a bunch of changes, like clean things up. Oh, well, that'd be, and I walked away from it and like an hour later, whoa, whoa, whoa, now slow down. But cause like the max, X consumes like 4 or 5 times as many tokens, uh, on their, uh, airplane. Okay, we have gone a solid hour.

And where are—

is that what you worked on? Is that what you were sharing? Or what else have you been working on this week?

No, no, no, no, uh, oh yeah, uh, real fast, um, I've had a number of friends coming through, uh, shooting videos this week. So I, I'm trying to get ahead on my 5 for 50 videos because I'm being such a I'm so focused on my other stuff, I'm being bad about getting my 5 for 50 videos out.

What happened to your chief— your chief, uh, what was it, chief, uh, encouragement officer? No, chief accountability officer. The per— the guy that's supposed to text you and tell you to get stuff done. Oh yeah, Chief Annoyance Officer. There you go.

I only have him doing City Tour stuff.

Oh, come on, whoever you are, we need to get on the 5 for 50 train.

I'm gonna give him the 5 for 50 eventually. I just need to sign City Turf is my most important.

You can give me his number and I will help him. We can get a little automation. There you go. There you go.

Yeah, yeah, yeah. So I have him completely focused on taking down Augusta in Texas right now. I don't want to distract him with Five for 50.

Let's go.

Let's go. All right. So let's, let's do the docket depending on how well it goes, how long we go. I may, maybe we'll, we'll move a few around. We'll see what happens here. So, um, kind of setting these questions up. Up for anybody listening, you'll kind of hear some references to private equity. I feel like we've been talking about private equity a lot, so I'm a little sensitive to that. You're like, I don't care about private equity. I'm not selling to private equity. I'm not worried about private equity. Uh, so when you hear this, like, don't like shut down your brain and say, I'm tired of listening to private equity. I'm do— I'm phrasing it this way more to kind of link back to some conversations and then talk through our businesses. It's, it's not really about private equity. So I just wanted to kind of put that out there if, uh, so you don't, you I don't like turn off the video.

No, you gotta, you gotta feed the narrative. Like the only reason I do turnarounds is to go out and buy struggling businesses. Like we gotta feed.

Oh, right, right, right, right. Yeah, yeah, yeah. Yeah. Like the early days of, of Service Autopilot, my very first clients that were in Texas, they wanted me to sign an agreement saying I wasn't gonna steal all their accounts. I'm like, I'm pretty sure I'm so busy just trying to make this business go. I'm not gonna be You know, like, I don't know, call in Miss Smith because she's in my system. So yeah, so yeah, let's feed bad narratives, silly narratives. All right. Okay. Um, so the question here is, and this goes back to last week, we were talking about like how much market share could you get? And so we didn't really arrive at a number. We said that, hey, CAC, uh, is really how you, you know, you just keep going until the CAC makes no sense, but who knows what that means. But there is a narrative in the private equity world. And again, this is not about private equity, but it does raise some interesting topics where in home services there really isn't, and across the trades, we're not just talking green industry or pest across the trades. There's not even in HVAC where there's been tons and tons of rollups. There's still no one company that is just dominant from a market share standpoint. Home services is still really fragmented, meaning there's just tons of smaller companies. Tons of competitors. And so you might remember from last week, we used the word thesis. Yeah. Like private equity has a thesis. Well, a thesis might be, it's fragmented. We could roll 'em all up. We could buy 'em up. It's a big opportunity. Okay. That's, and, and there's a lot of truth in that. Like there's just so many companies, we could buy 'em up and build a really big, great company. Another version of a thesis would be that private equity would have, if anybody listens to Cody Sanchez and so many other people are talking the same line, It's, this has been predicted for a long time. There's a lot of people that are going to age out in the trades. They're getting older. The kids are not going to turn the business over to the kids. They're going to want to sell. So another thesis is lots of these companies are coming to the market at some point in the future. And so we'll be able to buy up a lot of these companies because owners are going to want to get out. And so that's something that's happening right now. So it attracts a lot of private equity to our industries. All the trades. And so the question, and I'll kind of frame it as a question for Mike Andes, but it's really a question for everyone. It's like, as this happens, as more private equity, more investors, and again, it could be more individual pe— guys selling software companies coming into the trades. It could be, it doesn't have to be private equity. We always just use private equity to represent the idea that money is coming in. Like now people from all kinds of other businesses could be saying, hey, I want to now own a business in the trades. This could come from anywhere, not just private equity, but as these people and this money comes in, it does create a lot more competition and maybe more sophisticated competition for Augusta, for city turf. So how do our companies and how do your companies compete with this money and sophistication that's coming in? And, and maybe two ways to think about this is one, how do we compete? But another one is, we've very lightly talked on this. Is this good, bad? Does it matter? Is this something to even care about? Um, and, uh, I— this is a big framing, but I want to take it one step further. A lot of people know Tommy Mello, know who he is, like him, look up to him. Tommy Mello is private equity. Tommy Mello is exactly what people don't like. And so, I mean, I'm— he's out here. No, no, no, I like Tommy. No, no, but no, but, but he's done— he's a— it's still a found, but people will say Private equity is bad, but they like Tommy. And the difference is Tommy's still leading his company. I'm not knocking the guy. He's sharp. Okay. All right. So, but, but you do have— you can hold two competing ideas in your head. You can dislike private equity, but you like Tommy. He's private equity. Okay. And so, but, and the reason I bring him up is he's probably the single best example of somebody that's really moving fast and doing a big thing. And so if you think about his thing, is he hurting the garage door industry? Is he hurting the small garage door companies? Does he matter? Like, is it bad for the industry? And so that's kind of a way to think about it. Because if you picture a Tommy, what if there's a Tommy in your industry? Because most people can't picture somebody, but they could picture him. And you see he's spreading out across states, he's buying up companies, he's going fast. They, they're really good at selling. Like, they're aggressive. They have a huge marketing budget. They know their data. They do technology, they do all this stuff. So when I frame this question, Tommy's coming to compete with you, whatever trade you're in, are you worried about that? Hmm. And how do we think about this? So that's kind of the, the big setup here. How do you think about that?

Yeah, so a couple things came to mind. I was looking at the question slightly different, but I think it still, it works really good. Oh, and that is my biggest qualm with private equity in general. Again, I'm talking in generalities. Is their time horizon. And many times because the fund needs to sell or get ready for the next, uh, time they sell the business or turn it or raise another fund, that's usually 5 years, maybe 7. And yep, I feel like a lot of times it leads to the perverse incentives of cutting support, going very aggressive on marketing, etc. And then someone's left holding the bag. And I think your point about Tommy and like, would you want that in your hometown or in your industry is a really good way to frame it. And I think the part that I would say for that specific example is like, I think Tommy has done a good job of showing what is needed to make a great technician when it comes to training them and the amount that they invest into their training. Now, someone could argue they have all the money so they can invest 6 weeks of training into a new garage door technician. But my question is, for the person that's next door and thinking that's a bad thing is how much are you, how much are you training your new technicians? Are you training them on how to do the work, how to talk to the customer, what to say, what not to say? They spend 6 weeks and fly them from around the country to go to the headquarter building for 6 weeks. And so when I look at, is it good for the industry if that forces the local competition to say, I'm going to spend a little more time training my technicians so they talk to the customer better, they know how to do the work better, they don't do shoddy work. I think that's good for the industry. I don't know, like, specifically that case, like garage doors example, is— I don't know if he's putting pressure downwards on pricing or if he's pushing people out of the market.

I doubt he's putting pressure on pricing, but I don't know. Yeah.

And so that, that part I don't know. But I think when I think about professionalism, what do I expect from my garage door tech? If someone like that moves into town, I do think as a broad stroke the overall industry's perception. When I'm training the technicians, I show up in a wrapped truck, I'm insured, I, I make sure I do a good quality job. I ask for a review, I can talk to the customer. I think that's good for the industry and that's where my mind generally goes. I think how to beat that person is usually having a longer-term horizon. And now I'm not talking about Tommy specifically because he's still involved, but if a private equity company comes in directly, they put a different CEO and they take out the founder The way I compete with them is I think in terms of 20 to 40 years, I'm not thinking about 2 to 3 years cutting every single thing possible. Like you mentioned last week, the last 2 points on the P&L of killing the culture, sharpening the pencil so much. I think that we lean into our unique selling proposition that PE can't do. Like PE can have lower prices, they can compete with us and lose a bunch of money. They can have a huge marketing budget so they win win the mindshare of our audience because they're in front of them all the time. But like, if your unique selling proposition is you have personal service, you've been in that area for 20, 30 years and have good connections with a lot of the locals, uh, your social media is local, it's not this branded national thing. It's the biggest thing we struggle with at Augusta is like, we have to create marketing for 200 locations. If you're in the local market, you're like, that's a threat, you know. You can create social media that has Main Street and shows your city hall. I can't do that. And so I think to answer the original question, like, how do you compete with them? It's you lean into your unique selling proposition and have a longer-term horizon in terms of when you want benefit to be returning back from you. And it's not 3 or 4 or 5 years or this quarter. It is a much longer-term horizon.

Yeah. Yeah, I agree. I, I don't really worry too terribly much for the smaller companies. I, and the reason I don't worry for the smaller companies is that, especially the guy in a truck, a guy with a couple crews, it's, it's very much about, it's what you said, it's about local. The stuff I bet on back in the early days of City Turf, quality and high customer service, I think that continues to win. I think it's your, one of your most defensive plays. The localization, as you said, everything, you know, a brand, as I like to think about it, is basically just doing what you say you're going to do. So figuring out what is our brand promise, what is it as a company And you know, it doesn't even have to be worded that complicated. It's like, what do we promise as a company? What are the things that we promise we'll give you as our client, as trusting us and trying us and going with us and then actually doing it? And so many companies break that trust or inconsistent in that trust, and that's what hurts their reputation over a longer period of time. To your point, if you have a long time horizon, then you are very focused on never breaking that trust. Never breaking that brand promise because that's all you got. And if you build that and you just, you hire to that and you fire to that and you do all that, like I, it sort of in my mind takes care of itself to a degree. And, um, but as you get to become a bigger company, you know, this is where the PE coming in, especially a PE company still ran by the founder who's able to kind of keep the original culture and feel of the company. You know, the increased marketing spend is a real problem, is my opinion. I think that is a real legitimate challenge. And so it's something I do think about.

Yeah. One thing—

anything—

one thing I was thinking about, and I take this question slightly differently, but I think it's still in this world, is like one thing I think private equity kind of underestimates when it comes to home services is, for example, In, in software, I can come in, blitz the market, spend gobs of money on marketing, overspend like, like crazy. But then I can immediately down the road, I can cut marketing expenses, I can cut support, and I can make a profitable business. And I think they, they might be underestimating that our biggest cost is labor. And you can't just turn labor off. Like, it is a direct cost. It's not like Like direct cost in software is running the servers. It's the actual, you know, storage of the data. Maybe some, like, it's not the engineers. The engineers can get cut. And so if I can reduce headcount in a software business, I can make my profit margins skyrocket. In home services, if you cut your business expense, which is your labor, you can't keep revenue going up. And so I think that's where I feel like sometimes I've seen some of these rollups not do great, or like they don't have great financial performance, is they're expecting to juice the marketing. Get customers, keep them for a long time, but then we all cut somewhere and 40%, 50% of your revenue is going out the door to wages and you can't cut that. Like, it's a direct cost. It's very different than software where labor doesn't fall underneath COGS. And so I think that it might be something they are, uh, somewhat misattributing, and that they can like cut the salaries or even like management or technicians, and then it's gonna like somehow They're gonna keep them around and there's, it's not a spreadsheet. Like these technicians are not going to take a huge pay cut. And if you're gonna overpay them for some period of time, you can't cut their wages. Like when was the last time we cut wages and we, we thought the culture was gonna go well?

And so you can't scale up and down labor super fast. No, you just cannot do it.

No. Until you have robots from Jonathan.

Yeah.

Yeah.

From me. And it won't be from me. I'm just hoping somebody else. Well, along those lines too, another thing. And again, we'll go back to tactics here in a second. You know, in say software strategy, enterprise software strategy, you can come in and take market share and then you get lock-in. Like once you've got somebody on the platform, it's really hard to switch depending on what that platform is. And so you can raise prices. And also if you, if you do run that playbook for long enough, You could become such the dominant name in software that there really aren't even that many alternatives anymore that can do what you do. And so you have this pricing power to keep raising prices. I don't believe you have that pricing power in home services. Like switching costs.

Yeah.

Like the idea that you can just go double your prices overnight. Like that's people, that's what people say that aren't in the business. Like it's, that's what.

Teeny.

Anyway, it's just not possible for a big ginormous company at scale, or you will just create massive amounts of churn. And so you can't run those same playbooks. And, um, so back to the tactics, I think it's the same, like, to give people comfort that worry about this stuff. Um, it's the same, the same way you prevent being disrupted by a great competitor coming into your market. It is the same way you build a really great company that you like and wanna own for a long time is the same way you build a company that could be sold. It's like, it's all the same stuff. And it's just the basics of being really great at recruiting people, being really great at taking care of people, being really great at making, helping people see why they want to be at your company and legitimately wanting to be there. And then doing the exact same thing with the clients, running a really great operational team, having really great people. Being thoughtful about how you do raise prices and when you raise prices, being thoughtful about what you do and don't do, all this stuff we always talk about. Great customer service, great quality, inspecting the work. That is the playbook and it doesn't actually change at all because competition's coming into the market. But what does change is that you might have been able to coast. When it comes to sales and marketing, meaning that you could grow this thing by referrals slowly over time, get some reviews, ask for some referrals, you know, hope, wait for the word of mouth, do a little bit of this and a little bit of that from an ad standpoint. And you just sort of grow. And that does, I think, when there's more and more and more competition and good competition, that doesn't work as well anymore. It still works. But it just doesn't get you the business you want. You plateau faster and you get stuck. And so I think the biggest thing that happens when these types of companies come into the market is you need to learn how to, uh, do the marketing side and you need to step up your sales game. I don't think you need to be hardcore sales. Actually, I'd like to talk about that just a little bit before we move on, but you need to step up your sales and marketing game. Cuz if you don't, that's where I think most companies will get hurt. Most guys that just want to build a 1 or 2 truck business, that's a different story because that requires so few clients. You can build those businesses to 2 trucks and then you can just start taking, letting the lesser quality clients fall off and bringing in the next client at the higher price. And you just slowly keep improving this business. You don't have the risk I'm talking about, but the guys that are wanting to build bigger in the market, this, this kind of competition massively changes. How, how critical it is to learn your, your marketing and, and sales skills.

Back to our hot takes coming to fruition. You're not gonna be able to compete with CitySurf when it has hot air balloons and it has its logo on the SpaceX launch. I'm just telling you.

That's true. It's gonna be very, very difficult. Actually, that when I was talking there, it did make me think of something. Where do you stand on The typical homeowner— do people care about door knocking? I got a point here. I just— it's not really a point, it's a legit question. Like, do you think that people are annoyed by door hangers, dislike door hangers? Do people— it's like indifferent, don't care, they just ignore it if they don't want to talk to them?

Or knocking?

Uh, sorry, door knocking.

Okay, okay.

It's like— and, and it's because one of the things, like, say in pest control, there's just so much door knocking. I personally think they're highly annoying, except that I love to engage with them. 'Cause I'm in the business. Like I wanna know, you know, I wanna talk to 'em, but otherwise I can't stand door knocking.

Yeah.

And, and my wife can't stand it. But do people care enough that does it ever hurt their reputations? Like if you built a door knocking company versus a non-door knocking company with purely marketing driven it over the long term, is the non-door knocking company liked better in the marketplace over a long time horizon? Same question. 'Cause these are, yeah. Mike, same question. HVAC comes in. I'm sorry, private equity comes in. They buy up HVAC, they buy plumbing. What do you do? You get— you make all your technicians salespeople. They're selling everything. Unit doesn't really need to be changed yet, but you know what? It's probably gonna go out in a couple years. Buy it today. Like, it's that kind of like— they are just pushing to sell, sell, sell, sell, sell. And I, when I talk to like friends and people, like there's names in my market Like people are turn— getting more and more and more turned off to those companies. Um, so where I'm going, and, and that's usually what comes when private equity, again, we're picking on private equity. I'm just talking in value. We're using it to this whole idea of money's pouring into a company to grow it as fast as you could possibly grow it. However that money comes, wherever it comes from. Do you think that that kind of stuff matters at all? I, I, I'm not sure if door knocking hurts the company or not. Over the long term.

One point you made that I have constantly thought about the past several weeks is the unmeasurable chipping away at the brand reputation. It's hard to quantify. If you go out and knock doors, you will make more business. 100%. Hard to, hard to, to argue with that. If you do it, if you go knock on 1,000 doors, you will make more money. So how am I gonna tell you that that's not a good thing for your business? Would I rather you do that than nothing? Yes. However, what does that do for the long-term brand reputation for the 995 people that said no and hated your guts? Will you always have to rely on identifying the problem for the customer because your brand reputation is so weak that when they have a problem, they would never call you? And I think that takes a long time to catch up. It takes 5 or 10 years till everyone in your market that needs your service, that's okay with that kind of thing happening, has already done business with you. And everyone else that is, is in the market and becomes problem aware doesn't call you 'cause they hate your guts. Um, it's just so hard because I know what it's like to be the person that has no money and then needs to go knock on the doors. But yeah, I also think that people want to come buy from you. And this is why like everyone thought that retail was gonna die. But at the end of the day, we like it because you go to a place and I expect to buy. Like I willingly walked into this mall, I will buy what I want. And I don't have people coming up to me and try to sell me stuff. I will go—

You hate it when you go to a store and they're all just harassing you to— Yeah, you hate that too.

And so, so, so you love the idea that I opted into this experience and I can make the cho— the choice. When you come on my property, you're invading my privacy. And I think even with like Ring doorbells and like even AI stuff coming, like it's— people are gonna become more and more aware of this privacy thing. Um, data centers. Um, and I think it's to your point, it's just, it's another thing that erodes the trust, and I think it takes a while to catch up, but eventually it does. I also think it's a delivery of when you knock on the door, what would you say?

Yeah, I totally agree with that. So I'm, uh, I, yeah, I just sometimes wonder if I'm thinking about wrong. My, my theory for many years now has been, boy, door knocking is a really fantastic way to launch the business, but very quickly pivot it to Like, can I get the business to scale fast enough to be able to afford an operational type person in my business and then pivot the whole thing to marketing driven and away from door knocking? I, I don't, I just, I worry about the long-term effects, but I also worry about the long-term effects of this. Like half the guys on the internet that are, you know, like there's a lot of guys that are just teaching sell, sell, hard sells. And I, it works. I, it all works, but. My goodness, do you not pay a price eventually in the market? Like, I don't want to go to most car— like sometimes Tiffany will be like, hey, I want to see what that car looks like before we buy it. I was like, well, that's cool for you because I'm going to be the guy they call trying to sell the car to. You get a— or she wants to go— we were in Wyoming and she's like, hey, let's go do this walkthrough in this house. And it's like, no, because I'm going to have to then talk to these people and tell them I'm not buying your house. You don't want to be sold.

That's when you give them the one digit off on your cell phone number.

I'm just not, I'm just not, I'm not that guy, I guess. But anyway, my point is I've wondered, this is kind of maybe a selfish conversation, but hopefully it's of value to other people. I was like, what is the fine line on this stuff? And I think about it a lot, even with the sales, selling on the phone, constantly upselling, pressure at the front door, like a lot of this stuff where it's like, it, it, if the, if they're really, really good at selling, it feels like a version of pressure. Like, so how does that even degrade the brand over time? And I don't know how to think about it.

Yeah. And unfortunately, I think the person that has the most money can get in the places where the customer's already at and get in front of them. Like, to your point, someone can come in and just spend a bunch of money. They're gonna do it in ways that are typically scalable, like Facebook ads or Google ads or billboards, where the customer feels like they are opting into something when they're problem aware because they've seen that messaging so many times over and over and over again. And even a comment you made the other day. And someone made a comment about it, and that was about you reaching the spouse of the decision maker or the other decision maker via a different channel. So for example, putting a postcard to the person that called in, but you need to hit— you need to get to the husband and get in front of them.

Yeah.

And that again, when they called you back and said yes, they felt like they opted into it, that relationship. And it wasn't some sort of coercion or sales tactic that now when someone said yes at the front door, now they're being held responsible in front of their spouse for saying, why did you do that? And it's just so hard to quantify. It's like brand in general is hard to quantify. Like you can quantify revenue, you can quantify customers, but what's your brand this month? What's your brand score? It doesn't exist. And so it's very hard to objectively tell someone they should not do it. But it's one of those things that chips away.

Yeah. Go, uh, last thing, uh, go back to prepays. We've talked about prepays. Why do you, do you have, is maybe the reason why you need a prepay because you forced them at the door to buy because of the high pressure sell and you're afraid that they're not getting, they didn't make this choice. They got pressured into it. They were afraid to say no. Like I've had Tiffany buy a couple things over time. Well, I'll give you an example. We were walking it. This wasn't recent. Another time we were in Jackson Hole walking down the street. And this lady pressures, like, gets her. She's so good.

Jonathan, stop going to Jackson Hole. It sounds like you just get a whole bunch of salespeople on you. You need a house, you need a car.

Yeah, yeah, we like Jackson Hole anyway. But like, case in point, like, again, brand reputation. The lady did such a good job pulling Tiffany off the sidewalk into the store, and Tiffany— the lady pressured her, and then she— and I was like, I'm not going in there, and I just kept walking. I'm like, I'm not going in this store. I'm not part of this whole thing. I'm hoping Tiffany will just come out. So anyway, Tiffany comes out and she ends up, she had just, she had spent $700 for a face cream. Wow. And she didn't really at the moment realize somehow she's like, I didn't realize I was spending $700. And then she's unhappy. Oh, wow. And so we've been back to Jackson Hole many times since.

And she walk on the other side of the street.

She does not like that store. And so like that kind of is like if somebody were to ever say to us, hey, if we lived there, we'd say, never go there. Don't even talk. Don't even talk to those people. It's another example of even going too far with the selling, like turns people off. So we're really kind of out on the edges here, but I do think it's something that you really have to think about and toe this fine line. And I just don't quite know how, I don't know how you know how far to push it.

Yeah. It's the same thing with me having with like media is like, how many times do I ask for the sale? How many times do I mention my stuff? How many times do we put a banner up that says something? It's like, it's— I need that. Like, that lady needs to make money to have that real estate. But like, how many times? What's too much, right? Because if you— if she feels like that cream is valuable, is going to help Tiffany, well, she should be obligated to do whatever is required to make sure she makes the purchase. But if she pushes her too far and you go too much with it, then you have buyer's remorse versus the opposite, which is a lot of times you buy the thing, you're like, this is going to solve my world. And yeah, they could have paid the same amount, but they feel like they opted into it. So, mm-hmm.

I've said, I said it was last thing, but one, you know, I, I think if I said this before, but way back, you know, I was in, uh, going to Dan Kennedy events and I, I told this story, but under a different context. And I was going to this thing called the, he had a super conference and info summit. I, and I would go to this info summit, which was more like marketing people selling marketing information and coaching and stuff like that. And it was a big event. Uh, and just some people were killing it, you know, all the names of like all the names came out of that world.

Yeah.

Like, you know, a lot of the names have built some interesting companies, but there were so many people that would get on stage and you wouldn't see them the next year or, or in 2 years they'd be gone. And so what, what you have is you have all these guys that like build these things really fast. It sounds awesome. And then they disappear. Here. Okay. I always have equated a lot of that to be, uh, they can't run, they can sell, they love selling, but they can't run operations. But I also think there's another, like, if people may remember this, if like in email marketing you used to get this thing where like a guy would be selling his friend's course.

Yeah.

So they'd have all these affiliates where like, if you sell my info product, you'll get 50% of it. So they're all selling each other's stuff. They all have a list of 100,000 people. There's 5 guys and they're all selling. Everybody's stuff and splitting the money. And what would the common knowledge was, you'd eventually burn out your list and you'd destroy the whole business. And so it would explain why you'd go to these info summits, the best of the best, like really phenomenal marketers, really good. But I mean, and some of the big names today, they've owned like 7 companies. They build 'em, they burn 'em down, they burn out the clients, they wear out the people, then they have to start a new business. So they never build one big, great company. They build a lot of decent companies and it's feast or famine in their lives. I've seen it. I've been in this marketing thing for long enough. We don't see it in home services, but it's something that I've seen in other worlds. And you, and it's hard, heavy sales. Like it does the exact same thing. High pressure sales. Anyway, it was just another story of what I've witnessed, why it's It's like, how in the world do you find this balance? Because there's a— this is where this is coming from— is like, there's a million guys teaching you how to sell on YouTube, and you should probably take a fair bit of that knowledge and apply the basics. It'll just make what you're doing better. But I think there's a fine line where you don't go as far as they're teaching you to go. Nobody wants to work with that company.

Yeah, I think anyway, as a sign up for sales stuff, because like there's so many tactics, like tactics do really well when it comes to selling sales. Like, I will teach you how to do sales. A lot of it's tactic driven, and I've always torn it back to even when I get in a situation where I feel like I could use a tactic, is like, the first thing has to be true is that I'm doing this for the sake— I genuinely care. And if that is always true, that's where I feel like you never cross the line of going too hard sales. And I think that's part where home services, they make the error, is the initial encounter of knocking on someone's door is already over the line. Fine for most people. Uh, but once someone invites me, for example, they invite you to your house for an estimate, that's where I feel like the line that is crossed is when you start selling out of the fact that you want more money and you don't care about them. But if you just genuinely care about the person, that's where I feel like almost sales comes naturally, and it's more about just care. Do you actually care about this person? Because, because if you do, you will explain to them why they need the new furnace But you're gonna tell them to call you in 2 years and yeah, go ahead.

Yeah, that's good. No, no, I didn't mean, I wasn't trying to cut you off. That's really, I was just agreeing. That's really great nuance cuz yeah, the way I've been phrasing this, I am very much on the side of getting good at selling and I'm very much on the side of selling your product if you're delivering a great product. And really frankly, for 95% of people listening, the problem probably isn't overselling. The problem is we are not selling enough and we're not following up enough. Probably having completely the wrong conversation here.

Having a panic attack before your first door knocking, you're like, this is great news. I should not be doing door knocking. Yeah. Yeah.

No, I'm actually a fan of door knocking. I was, I maybe, you know, like we, one of the fun things about getting to do this is we get to have bigger conversations. And so, um, I have, we are talking about something that maybe not everybody's dealing with yet, but yeah, most people you need to be selling. I'm a fan of door knocking. It's a great way to get going. Be thoughtful about how you deliver the message. But you probably do need to be following up more than you are. Let's move on.

We have officially crossed the first question on the docket and is officially 1 hour and a half into the podcast. Let's go.

I'll pare this back a little bit. Okay. So, um, all right. So another one that I wanted to talk to you about, and again, this is, uh, I want to get into some tactics here, but I was reading something. I think it was last week. That's— is it accurate? I don't know, but it caught my attention. 38% of owners say that they want to sell their business in the next 3 to 5 years. And this was in the trades. And, but in that same survey, they said that they don't have a plan yet to be prepared to sell the business. And so I thought it would be interesting to kind of talk through this a little bit and talk about like, what does it really— we've talked about selling your business. This is less about the whole selling the business. It's about like, how do you think about getting ready? How do you build, think about building your business correctly? Um, so it's not like, should you sell your business or anything like that? Because if 38% of people are thinking about it, and I have definitely, I, I am hearing this conversation a lot from friends who are very much thinking about, 'cause they're getting called by private equity all the time. And so my belief is that from the moment Most people say, I want to sell. And I saw your post, private equity.

I was trying to go for a shot.

I saw, I saw you smile. Again, this is not about private equity, but that is driving a lot of people asking me, should I sell my business? How do I get ready? I'm just hearing this a lot. And then I, that's probably why the 38% caught my eye. And I'm like, I believe that 38% is probably legit. And so, um, My belief is though, that if you wanna sell your company from the time you decide you wanna sell it, you probably need about 2 or 3 years of work to even get ready for it. So I'd like to spend a little bit of time just talking through what are some of the things that you would be doing if you care about this.

Yeah. I, I, my thought actually went to what you said last week about a thesis. Um, because if anyone's buying your business as a strategic, which is going to be where you have a higher multiple, they need to know if I have invest— if I'm going to invest more capital in this business, what's my output? So return on invested capital, meaning I put a dollar of my money into your business after I buy it. What's my return going to be? And first off, knowing what that number is from a CAC perspective is very important. Like, okay, hey, when you buy my business, You can expect that when you put a dollar of marketing in, you get $10 out. They're going to stay with you for 3 years. So it's a 1 to 30 over the course of their lifespan. If you know that math, that's helpful. I think for a lot of people, they don't have a good thesis. And I don't mean in terms of we could start in this new area, we could change this. I feel like a lot of times when I hear someone's proposition as to why they're going to sell their business, it's like, well, why aren't you doing these things yourself? And I think that's where I would first challenge someone if they're like, I want to sell my business. And then they're like, okay, what's your thesis? Well, we have this great opportunity to be able to do this upsell. Oh, we have this great opportunity to be able to add technology or add software or be able to raise prices. Why don't you just do that now? And I think a lot of times that's like, to your point, what we, we talked about before is you do those things and you like realize the business is pretty good. Like I don't need to sell it, but even if I am preparing to sell it, I would say, make sure you have done all the low-hanging fruit in the thesis before you go sell. That would be, that would be my word of caution is like, don't try to hand off the things that you just know you should do but don't want to do that are really easy, like raise your prices. Let's implement some software. Is it going to be a pain in the butt? But yes, if you, if you do that immediately, your thesis looks more legit and you're probably going to get a higher multiple. And so everything that you would tell the potential buyer to do, make sure whatever you can possibly do without investing more capital can be done inside the business to optimize and get it ready to sell. And ask yourself, like, can this business model be replicated? Whether it be an ad that you're running. So for example, I just talked to, uh, the previous CEO of Gym Launch today, and like, he was adamant that like they had exhausted their one offer and they needed to move on to something else. He was a CEO underneath the private equity, so they ended up kind like squashing that. However, like, can this be replicated over and over again is a huge part of your thesis, because you might have proved it works well with one service or in one market, but can you prove it in a second one? Can you, can you do that, do it again in a different industry? Can you, uh, do it for a different type of ICP? Uh, like, proving that it can be replicated so that then they, when they know they can put more dollars and fuel on it, this thing explodes. And so those are the questions I'd be asking if I was about to And this is like super top, top of mind because I just talked to Jordan, who's our first executive model, Augusta. But he, he has a very clear plan, like 10 years, here's how many locations, and here's what I'm going to sell for private equity. Okay, if I'm doing it then, I need to become a C-Corp 5 years before so I can take advantage of the QSBS eligibility. So to think that you're going to sell in a year or two, a lot of times you're not going to get what you want for it because you haven't planned for it. And, and that kind of long-term thinking, like 10 years I will sell it from now, I will build the business in a very different way if I'm actually planning to sell.

Yeah, I agree. I've noticed a lot of people that have mentioned this to me tend to be in this $1 million to $3 or $4 million range, and I often think, okay, is this desire to sell coming from a desire to escape some pain. And if that's what this is coming from, I understand it, but I don't think that's a reason to sell. To your point, if I could figure out what things would fix that pain, well, number one, if I don't fix that pain before I sell, whatever pain just represents the problems in the business. I don't have the right people. Operations isn't working very well. We have a lot of churn. We don't, we can't figure out how to grow the business. It's stalled. Whatever that problem is, If you don't fix that, you're going to get a lesser valuation. If you fix it, there's a much better story about how this thing's going to just keep going after the buyer buys it. You're going to get a much better valuation. So you kind of want to fix the problem. But where I think a lot of people are coming from, though, when they think about selling is they just want to escape the pain. Well, that means you're going to get probably a lousy valuation. And you're right. I've always thought of this kind of 1 to 4, 1.5 to 5. I don't know what the number is. Is this is some people call it the no man's land. It's a tough part of the business. It's all the parts are kind of tough, but this is a tough part of the business because you're getting your right people in place. You can't manage everything now. You gotta depend on other people. You gotta build up your leaders. You've gotta have these machines running like your marketing machine. You can't just be the guy that periodically does an email blast and periodically does this thing and it just keeps running perfectly. You've Like stuff has to keep happening in spite of you, and that's hard. And, and so, but that's also what makes the company valuable. And so for most people that are thinking about selling, that's all the stuff you have to do. And then what you might find is once you do that stuff, you're like, wait a second, why would I want to sell this? My life's so much better. I work a fraction of the time I used to work. Another thought that comes to mind is if you are taking the calls with investors, just ask them how they value a company. What do they care about? What do they look for? That kind of tells you what to build and then just go to work on building that thing. So for the person that falls in the 38% or whatever that number is, I would tell you that there's a lot of work to be done and it's pretty much all the stuff we talk about week to week on these episodes. And you want to be doing that work to prepare your company. The other thing I would tell you is before you go to sell the company, and it really wasn't trying to make this about selling. It's more, or it's not about should you or should you not sell? It's like, what do you do? The other thing I've had this conversation actually a couple times now in the last couple weeks. And my, I've given the same advice to people that are thinking about selling, figure out what you want to do next. Because unless you're selling for so much money that you can pay the taxes and not need to work for a long time, you're going to start eating that money pretty fast. And also you're going to get really bored pretty fast. And for some people you might even get depressed really fast. And so I would tell you that if you're in the 38%, start making your plan now, start working your plan. And at some point, don't get too distracted with this. Figure out what next looks like so that you have a plan when you are done at the company of what you're going to do next, both for your money and for you, because, and for you is a really a really big thing.

Yeah, I had one thing that you kind of triggered in my mind too, is like, if you're thinking about selling, is, is even if it's 3, 4, 5 years down the road, one thing that's been really helpful for me is to get a valuation and then have them tell me why they discounted the valuation. And so this is actually like a whole course I'm doing for the Home Service Boardroom, is like enterprise value being the metric of as to how good is your business. Like the end-all be-all, it wraps up your profit margins, it wraps up your systems, it wraps up the quality of revenue. But at the end of the day, what is business worth. It has really helped me because like when we, we brought in the, you know, 5% given to the owners on the SAFE, we had to go get a 409A evaluation and we have to do it every year. And when they bring the report back to me, it's like 60 pages long and it tells me specific things that like, hey, this is why we discounted you off of this main price. And that's my plan of attack to get a higher valuation. And so if you're trying to sell, it's not a bad idea— even if you get a local evaluation company, you don't need a 409A evalue necessarily, but is like $3,000 or $4,000. And just like, I want to know what the market rate is, but then why is it 30% below that? Why is it 40%? Is it my pricing? Is it the fact that there's key man risk? Is it the fact that I have to show up every single day and if I don't, things fall through the cracks? Like, is it because I don't know my customer acquisition cost? Because a good valuation will tell you a lot of those things. And then that is your checklist to work on for the next 3 to 5 years. To get the higher valuation. And so having like just a little bit of investors with me has really helped me because now I'm trying to protect their investment. It's not just me now. It's like, hey, I want to make sure I show that every year I'm improving. Well, here's my checklist that I need to work through. Like, you got to improve this. Like, this CAC is not good. This lifetime value, not good. This churn, not good. Fix these things and we'll give you this reward. And then it helps when every time you run up against it, it's really, really hard and you want to quit. You just know on the other side of that hard thing is this unlock of enterprise value. And this is where most people quit and they don't get the bill, the business that's sellable. And so I would say to anyone that's trying to sell in the next 3 to 5 years is go get evaluation, spend 3 or 4 or 5 grand annually and ask that evaluator to give you why they're discounting the business. 'Cause that's the difference between a business that makes a 10x in revenue and one that makes 2x in revenue.

That's good advice. Along the lines of this idea of the value of the business is what happens to business if something happens to the owner. So in your case, and then we'll also talk about it for those listening, how do you think about what happens to Augusta if something were to happen to you?

Yeah, so great question. I think when I saw this on the docket the other day, it was literally a question inside of the mastermind that we have daily for Augusta. They're like, hey, so what happens if you get hit by a bus?

Oh, okay. So they're asking too.

Yeah, it's very top of mind.

So let's talk Let's talk about it for you and then talk about it for how do other people prepare.

Yeah. So the first thing is once— I only formalized this once we got investors, to be perfectly honest. And so I look at two different ways, personal and then business. And so on the personal side, making sure you have life insurance, making sure you have equity being held inside of a trust, those are like some of the basics. So like the trust, making sure that your equity is held there so that if you were hit by a bus, you can distribute that equity correctly. Uh, and then like the life insurance, like having money immediately for your loved ones. Also making sure that you have asset protection in terms of like you have not been piercing the corporate veil. Because—

oh, that's my thought process.

Like, I'm assuming I get hit by a bus, but what happens if I run into something and someone else gets hurt and they come suing me? I've got to make sure that I have this really good division between, you know, church and state, i.e., my personal expenses and the business. So those are some of the things from a personal side. The business side, I do the same. Similarly, like, I do a life insurance for the business now, so that way in the event that I get hit by a bus, there's immediate liquidity for them to operate. And then having a game plan for them. And when I say them, I mean the leadership. And so for me, it was a matter of like, okay, if I get hit by a bus, very clear instructions of who takes over. Ultimately, like, there needs to be a leader at the top of this organization and immediately what happens. Like, yes, you get some life insurance money, but then like, I need people moving, I need equity to be moving hands. How I did it personally, to answer your question, was like, the person that steps in is my replacement. They get tranches of equity as they do certain things, one of which is setting up a board. And so, okay, me, when I was like, who's that replacement for me? It's actually someone who's really good, has really good connections, and is good at recruiting, because it's likely especially if you're, you know, a $10 to $50 million in revenue, let's just say, you're gonna probably need 2 to 3 people to replace you. And it's probably not going to be the person that you have as that person that replaces you in the moment. They're gonna have to go get 3 people to change, change you out. And so who gets the equity, all that should be determined. There should be a really good plan in place, from my opinion. So like, actually, I have a, I have a picture of my Google Drive. There's a Google Drive document. There you go. Let's So I don't know if you can see it. I, uh, okay, so it's a tiny little folder. It's on my Google Drive. It says, watch this if Mike Andes— dot dot dot. And it says, it says, it watches if Mike— we might have to bleep out when I say that for YouTube. But, um, it's literally a folder there that if they open it up, there's going to be for every department of like, here's the 12-month roadmap, here's what I think you should be doing, so that they, they're not walking off a cliff. They have a roadmap. And obviously I expect them to change that and adapt to current conditions, but like there shouldn't be this void. And I think, think for some owner-operators, they actually almost feel pride in that if they didn't show up to work or they got hit by a bus, things would stop. And I don't think that's being a good steward of what, whether it be employees, your family, your customers, and having that plan in place and that clear chain of command help is also really helpful to make sure there's not unrest with the team. Team. Like, if you get hit by a bus and they've been— they've joined because of you, there's a big chance a bunch of them leave if there's not a very good game plan and the leadership knows what to do next. And so personally, that's how I've tried to mitigate it as much as possible, knowing that it would be a huge loss for the company, but making sure that there's liquidity, there's equity, there's going to be board oversight so no one— no one person can undo what we've done.

And, and then like the plan of action for each department has been helpful for If you're a single, let's just say you're a single guy, you own a business, it's just you. At what point do you think in your business you need to think about this kind of thing? And because there's so many things to do, like it's just too many things, but at what point would you even tell somebody? Because I think the answer is different if you're married.

I think as soon as you have a dependent, and I would say I would classify, for me, I classify dependent as someone also needs to provide for their family.

Family.

And so if you're hiring a bunch of young guys, you're 2 or 3 of you, you're a bunch of young dudes, they can go get another job tomorrow. Okay, you know, don't, don't spend too much time on this. But if you're hiring people that have families, if you're hiring individuals that are moving across the country or they are sacrificing time work for you and they believe in this long-term vision that you've cast, which we should all have, I think it is right for me to ensure that if I was you be hit by a bus, that they would— they would be okay. And internally, like, the personal family, okay, if— do you have a kid? Do you have a spouse? Like, even like, now it becomes pretty obvious along the personal side of like life insurance, division of church and state in terms of finances, and making sure that they're not gonna get sued the minute you get hit by that bus. Um, the trust, making sure that you have regulations, like the equity shouldn't go to your 3-year-old daughter the minute you get hit by a And so these are the type of things I think would be entry-level steps. And then as the organization grows, your liability and your responsibility grows and the amount of people that are depending on you grows and there, that level of complexity starts to grow with it, I would say.

Yeah. Yeah. I, I don't have a lot to add here. I would maybe just add a few points. If you have a partner, it helps. You still have to do all the same stuff, but you've got a partner who could really more easily bridge the gap. But then that partner, if you want the business to keep going in a meaningful way, probably needs to hire for their weakness. So if you were the CEO and they were head of ops, they're probably going to need to bring somebody in. Maybe that was like, let's say you were really, you were kind of the driving the sales and the growth and the push, push, push guy, and they're more the make it all run really well. They might need that counterpart. That's where the insurance policy becomes really valuable. It's very much what Mike's already said. So I think about that. If you're a partnership, you need a buy-sell agreement. That's the official document that describes exactly what happens. For insurance, a lot of times it's called key man insurance, and that's the business policy that will cover you. And I had key man insurance policies on people that weren't owners in the company, you know, so just a few of them. So if you can use key man for non-owners as well. It's the other argument why I like building bigger businesses. You know, not everybody agrees, but it— if you are married and if you have a family, if it's a small little business, it's probably just going to get dissolved no matter what. Like, it's just whatever the insurance policy is, that's really what's going to happen to your— your family's going to get. But the, the grieving period between the time something happens to you and the time they can act on selling your accounts It's the window's too short. Those accounts are all going to just disperse. They're going to go find other— the business is completely worthless. And so unless the business is bigger and you have people that can continue it, the business has no value for most people. And that's the— so the only hope you have is if you have a partner, they keep it going, or if you get bigger and you have a leadership team and there's a plan in place like Mike described, then you could keep it going. And then the only other thing I think I'd add that maybe you didn't say That comes to mind for me is if you are not in the camp of selling the business, and I don't think most people are in the camp of selling their business, whether they think they are or they're not, they're, they're probably not going to, you, you should generally plan, I think, for not selling your business. So as you have dependents, wife, husband, kids, whatever, this is the argument for why you periodically take money out of the business. Like so many people will go for so long, 15 years, all the money back in, all the money back in. And they say they're growing, but the business is getting bigger, but it's not really getting that much bigger. It's really a different problem. It's not really a growth problem. It's a not— there's, it's not a not— it's a problem of not being profitable enough. Or you stay in growth mode so long, push, push, push, and it is really growing, but you never— we've talked about slow down to clean things up. The, if you never take any money off the table, you're also not preventing a, you're one, not finding out if you actually have a good business. Two, you're, uh, you're not taking any money off the table to protect your family if something does happen. So this idea that you go 20 and 25 years or whatever the number is, and all the money's in the business, it can work out wonderfully. Maybe you do get a sell someday, maybe one day the switch flips and you go from just existing to making crazy amounts of profit, maybe. But if you are building something for the long term, you need to be taking money out of the company and that money needs to be getting invested somewhere. And then that and the insurance policy protects the business. I'm sorry, the, the family, because there's just no guarantee that when you're gone, the whole business getting sold or getting pieced out or the the people you have in place continuing to run it well. If you're a smaller business, it's just, there's no guarantee. And so I think this is where you need a contingency plan and, you know, a second plan, uh, not just a plan of who's gonna take it over. Yeah, those are, those were my big thoughts.

It's actually one of the biggest reasons why, like, the Copy and Paste Millionaire, it, it, it's not just about multiple locations, it's about having a definitive finish line where I start taking distributions from this segment of the business. And locations is— I found a really helpful way to be like, oh, I stop at this certain number of technicians and then I optimize it. I have net free cash flow. And if I decide to go invest, I go start another location and I have these segments that as I'm growing the business and investing into it, I know that behind me is profitable segments that I have to break off instead of just this ever-flowing 20, 30 years. I've seen this over and over and they burn out. And I would say this also for all this whole conversation around around, uh, what if you get hit by a bus? I see that whole, whole lot less common than someone having a mental breakdown. And a lot of these same things—

burning out—

because now if you burn out and you can't show up to work for a couple months, to your point, your accounts are now worthless. You're not selling your business when you're burnt out and having a mental collapse. And so I see that just as common as like, oh my goodness, someone passed away and now we've got to like do 911 It's the same when it comes to mental stuff. And for everyone that, oh, it might like, that doesn't affect me. I always go back to this like, I am just a bag of chemicals. And if there's something that goes on in your life and then you were impacted mentally, within a matter of a couple months, if you can't show up, a lot of the accounts aren't worth anything. And so just backing up your point, also not just being hit by a bus, but also just preparing for that. As well.

And it may not be to your— again, it may not be that you burned down business. It could be that something devastating happened to somebody you care about in your own life and it just triggers something you didn't expect.

Yep.

And you just get to an I don't care phase. So it could happen in so many ways. Yeah, that is a good point cuz that's the more likely, frankly, that's the more likely outcome than something happened to a person. So it's a good way to frame it.

That was the biggest thing when I started do get, getting prepared for like get hit by a bus, I started putting things in place like, what happens if I go off the rails? Like, hey, I, I'm hoping I do everything possible to keep myself healthy and keep this bag of chemicals okay upstairs. But you know, if I got bonked on the head and start saying dupe stupid stuff, like, I can't— I don't want to unravel some of these things, you know? And you start thinking in terms of that way, you start— I don't know, I feel like being a better steward of what you're, what you're responsible for.

Yeah. So changing topics here, going a kind of I have a completely different kind of question. In all the content you've created over the years, I think for what, probably a decade? How long you been doing content?

It is 10 years. Yeah.

Yeah. I thought you said that at one time. That's where I got that from. So if you, when you think about all the content you do, you think about what we're doing here, you think about the amount of frankness, um, and disclosure you give on what you're doing, how you're doing it. Do you ever worry that that is hurting Augusta or hurting your businesses? Because you're giving away too much?

Uh, yeah, I think, I think until you give that much away though, you really haven't given enough away online, in my opinion. I feel like you have to earn someone's trust and they have to have the goods to be able to go execute on it, see the results for themselves, and they— that trust is incurred to me. Uh, but in terms of Yes. Like in terms of Augusta, this is a very common theme. It's like, hey, you're talking about instant quotes. Can we just like tame it down a little bit? You're talking about like all these things we're doing on the phone or whatever. Can you just like— and I get it. I get it. And so when they come to training, I give them pretty clear expectations of that feeling. Like you are going to feel this way. And I don't really have the best solve for it as much as the, the overall mission of the business is to change the level of professionalism in the industry. And that's not going to happen if I don't share what works and what doesn't, because I can get a lot more attention on what I say versus my closed group of people inside. And the long-term vision of competing with every single person, yes, means I need to have a franchise that competes with all of these other landscapers so that they raise the level. Kind of like back to your point about private equity, Like if people are moving into town and they're doing things in a more sophisticated way, I hope that it improves everyone's level of professionalism. And if I'm going to say that, I got to back it up. And so this is a big thing with even Dr. Cash when I was coming out with the off-season stuff and like, hey, here's the 5 ways to fix it. Go through this step. Here's like the very way of solving what I feel like the biggest problem in home services. He said, just be very clear, you sharing this is going to like, this is some trade secrets and like, this is what you say would be the secret sauce. And he's like, He's like, and if you don't share this, your mission doesn't mean anything because you don't really wanna change the level of professionalism. You wanna gatekeep the information so you can make more money. I was like, sick. So that, that was, that was actually a, a good turning point for me of, of like, what do I share? And then what do we need to keep internal? And at the end of the day, I'm not too concerned about it cuz I can say everything possible, every trade secret in the world, and 95% of people won't take execution on it.

Yeah. Yeah. Only the best. Well, yeah, it, most people will not do the work. That's what it comes down to, unfortunately. And I would like to see more people do it.

Most people won't buy the URL and in a matter of a few hours have the website up. I'm just saying, I'm just saying the speed to execution. Like I think, I hope for people watching, they hear that and they realize like the conversation between us in a matter of a few hours, you just done, you just did it. And I think so many people hear podcasts, they listen to books, they hear me talk, they read a book, whatever. And it is just noise.

And they— it's entertainment.

They know what they need to do. You're 100% right. It's business entertainment. And I don't know, I hope that— that's why competing has always been the way for me to be able to really get the change across, because people don't— people don't do stuff. They hear about pay for performance, they hear about— you talk about, you know, the marketing calendar. Like, I'll challenge people watching, like, have you made your marketing calendar yet? Jonathan's talked about for 6 or 7 weeks in a row Oh, have you thought about that for your own business and actually put some, some pen to paper? Like people just don't do stuff. And so that, that's where I've kind of come, come to grips with the fact that yes, sharing it is, makes you vulnerable, puts a bunch of targets all over you, but it's, it's what's required for like what I would hopefully leave as an impact. And I think that most people will not execute on what we talk about.

Yeah. Yeah. It's, I've arrived. It's been probably one of my biggest disappointments is the, whether it was being, doing academy, which was great, loved it. And a lot of people did like incredibly well and did a lot. But you know, frankly, a lot of people, um, didn't do much either. Like they were in for a few years and then they were gone, or a few people were in for the whole time and it's like they eventually, others had noticed like they haven't done anything. They just talk, they don't do anything. It's like, and that's really disappointing. I'd like to see people do more, but most people don't. I'd always heard some stat that less than 5% of all books bought are actually ever even read.

Yeah.

Or maybe it's the first few chapters are read or something like that. Like, it's just, that's the story of life.

Yeah. This, this, this is actually the deciding— when I decided I would do Home Service Boardroom is like when I decided that we would do an accountability tracker. So when we, we have a section that we talk about, and then they have to like, they have to announce that they're taking action, like they're committing to the 30-day challenge, and they have to do a 1-week update of how it's going. And then they have to, at the end of the 30-day challenge, show their progress, and we put it all publicly of who did it, who started, everything. It's exact—

I like that.

I like it a lot.

Yeah, we did a, uh, an academy. We did a weight or a health-based one, and people had, uh, Whoop devices. This is a long time ago. This is early days of Whoop. And, um, but there was a spreadsheet run to cap of where people were at. I love the accountability. Academy never had enough accountability in it, and I think that's a big thing I'd do differently if I did it again. We might have talked about this before. I just, I really feel strongly that the accountability is the magic, magic ticket.

So, all right, end us off. Non-financial advice. We've been 2 solid hours. We didn't get to all our questions today, so we'll have to roll them into next week.

Yep. You know, you kind of took my non-financial advice, uh, in a— no, no, great, in a good way. Uh, you, for— you said it with your business. So for as long as I can remember, I, in my file cabinet it, I have an If I Die folder and it says, If I Die.

That's so cool.

And it's filed, it's filed with my stuff. And I, that's, that is my advice. It's like, it's all taped up.

You put it in a big freezer, you have ice blocks. They got to really get work hard to get to it. Yeah.

I was like, yeah, I don't, I guess I didn't, I don't know why. I guess I didn't want to open before, but I got a lot. I got, but I got a bunch of stuff in there. It tells you where to where I have a look for everything, what we got, what to do, who to call. Like it's got all, it's got some letters in there. It's got a variety of things in there that I've created. And I think that's a really important thing to have. If you have dependents, they've got to know what to do. I have the folder on my computer and I have the folder in a file cabinet.

I love it.

All right.

My non-financial advice is whatever things you've been pushing off because you're too busy, you've got all these ideas from our podcast. This is the time to start planning your off-season strategy. So it's like you have all these ideas and you're like, oh, I just can't get 'em too busy. Make note of those. Like especially with AI, you can really flesh them out. Make a document where when I know I will have time, I will execute in this way. And then that way when you get to that time, you know exactly what to do.

That's great. All right, well thank you everyone for joining us.

Another podcast in the books.

Another one. We'll see you next week.