Sam Parr discusses a $3 million startup building robots to wash building windows, then pivots to the bigger play: buying up dozens of small service businesses like window cleaning, lawn care, and painting, standardizing their back offices, and pushing margins from 50% to 70%. Dentistry and nursing homes show the model works.
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Last episode we had your buddy here and we, he told me about this thing where he had invested in a company that's doing drone window washing.
Yes.
I thought that was crazy fascinating and I went and researched it a bunch. There's another competitor that's raised money and drones, I don't think are the right words to describe it cuz when I think of drones, I think of like a quadcopter. These are, things that like, um, they look like the normal— so when you are pulling up the scaffolding, or when you're pulling up like the, the— what do you call it? It's like an elevator. Yeah, an elevator up, and the guys are standing on it wiping. It looks like that, but there's a robot on there that is doing it instead of people. Right.
So it's not flying, you're saying?
It's not flying. Yeah.
Why do they call it a drone then?
Because technically it is a robot. Drone means unmanned vehicle, I think.
Okay.
So technically they're right. And so another company called Sky, I forget what it's called. They raised $3 million to do this. And so this morning what I did, and yesterday morning is I went to, I Googled Manhattan skyscraper window cleaners and I found like the top 3, 4 people and I called them today to talk to them and I got, and I was talking to 'em and they're gonna call me back with some more details. But my takeaway from this industry is incredibly segmented. So like fragmented, fragmented, like small, like $20 to $10 to $20 million businesses. And there's probably 5 or 10 of them in New York.
Right. So it's like the guy Brian from 100 Got Junk, right? This is how the hauling business was. And, you know, before he sort of started aggregating all these small, fragmented local players. And you've always had this thesis, which is you could do the 1-800-GOT-JUNK model for other businesses.
Yeah. So I would do it for irrigation, for lawn mowing, for painting, which is already happening, and for landscaping.
Right. And it sounds like window washing is in that vein.
Yeah. So maybe you don't even need these freaking drones to do it, but that's definitely a cool shtick.
So the private equity plays, you go, you buy up these businesses, they have a book of business, they do recurring revenue, probably with the same buildings. And you say, okay, I'm going to buy this $5 million a year business for $8 million or $10 million. Tell me $10 million bucks. Or you do smaller ones. You buy a bunch of $1 million a year businesses and then you could bring in this technology to increase the efficiency. So they're getting 50% margin. You could get 70%.
And there's two playbooks to look at if you want to replicate this. The first is dentists. So PE right now is gobbling up dentists.
Dentistry. Dentist. Dentist.
We have friends who are doing this. I think we have like 3, like Sieva looked into doing it and then like 2 other guys I think we know. They love it. And so what they do is they find a dentist that does $2 million a year in revenue and they buy the company.
And he's like 60, ready to retire in a few years.
And they buy it for maybe if it's like a $3 million revenue thing, they probably buy it for like a million dollars.
Yeah, basically they'll buy it at like 1, I think 1 to 2x EBITDA, which is crazy.
Yeah. So basically they pay back your money in a year or two. Yeah. So they buy it for the dentist's salary, right? Times 2.
And they give him, you know, you still keep this little piece and you keep getting your salary, but you don't have to run this business anymore in the sort of all the administration, marketing, and they centralize it. So they'll go buy 10 of these dentistry and then they'll put— they'll be like, okay, we'll have one central office that's doing Facebook ads. Driving traffic to all these. We'll bring all your billing stuff into one central place, because why do you need 4 people doing billing? Because health insurance is, you know, all complicated. And so they centralize, which makes each one more efficient. And basically, the dentist is already playing golf 2 days or 3 days a week, and, uh, they're like, look, here's a, you know, accelerated retirement for you.
And the goal here is you just— you kind of become a little bit of a— just a marketing company, right? And so, um, We're—
well, we missed the punchline though. A couple of these roll-ups, I think like in Canada, 70% of dentists, you know, number's wrong, but something like that. A huge percentage of all the dentist offices have been rolled up now in Canada, and a couple of them have been taken public, the roll-ups, for $3 billion.
Name them.
I don't know the names.
Okay, well, that sucks.
Look it up.
Yeah, 'cause I'm—
Henry, if you wanna Google dentistry roll-up Canada goes public.
I would do that. And then the other model that you can look at for this is old people homes, nursing homes. Uh, like so many pe— I mean, this is like—
So my wife's dad owns 3 senior care facilities.
Yeah.
And so I was looking into this cuz I was like, wow, this thing is a cash cow.
And, um, I think it's soul crushing.
That's the problem with it. Cuz he was like, hey, you guys wanna take this over? And we were just like, oh, the money's there. But like, it sucks. I don't want this to be like my life. You know, like I think in general people wanna avoid nursing homes at all costs.
Yeah. Fuck that.
And so getting into it earlier than you need to was painful, but he's making money doing it.
How much does it make a month? Like a million dollars a month.
It depends on the size. So, so basically the model is you go and you, um, you can buy an existing nursing home, but what he looks for is he says, okay, this is an existing nursing home. It's got 28 beds, but it's permitted for 42. And so he'll either just buy it, he'll build out the other beds. And so, and then the other thing is he'll buy things that are motels today. So motel, the room or the bed might rent for like, I don't know, $150 a night. And so that becomes, let's call it $4,000, you know, ish a month. And what he does is for, for senior care, you're charging $7,000, $8,000 here in California for each bed. And you can put 2 beds in a room and then you could do memory care special, you know, dementia ward on the bottom. And that's like $12,000. And so you just put all the bullshit upsells into it.
The problem is, is that your upsell is a dementia ward. You know, so it's like, all right, clearly a lot of money can be made. You are definitely providing valuable service to people. Yeah.
You're, you're not scamming people.
We're not scamming people.
It's, but it is a dirt— it's a, it's a saddening business to be in.
Yeah. And so for these, so, uh, we're, we're getting off track, but let's go. So, so my father-in-law owns a moving company in New York and it's a medium, middle, medium-sized business. And it's done the same amount of like, let's say, let's just say some number between $10 and $30 million in sales every single year and real profitable. I go, how do you make this bigger? He goes, I'd have to buy everyone out and I don't feel like doing it. I got a good life. And so I would— you could do that for these window things. And if I was one of these drone window companies, I would look into doing that.
That's what you would do. Yeah.
