The Achieve Podcast - Paul Adams (Columbia Home Services)

Welcome to another episode of the Achieve Podcast, the show where we highlight leaders, creators, and entrepreneurs, those who are shaking up their industries, having an impact, and changing the world. I'm Taylor Baker Baker, your host, and excited today to be joined by Paul Adams, the founder of Columbia Home Services, and you can find them at ColumbiaHomeServices.com. First off, Paul, thanks for joining us today.

Oh, thanks for having me, Taylor Baker Baker.

Absolutely. And for those getting to know you, please give us the backstory on how you got into this niche that you guys are doing right now.

Age. Been around, been around the block now. Um, I've been in the trades for about 30 years. Uh, started on the electrical side, spent a long time in plumbing. and probably the better part of the last 15 or so in plumbing, HVAC. Um, so the genesis for the thesis, um, has been there for quite some period of time, uh, a desire to kind of continue to work with mom-and-pop type businesses, uh, while, you know, having the right partner, uh, to sort of be that resource and that capital to sort of build this portfolio of legacy businesses, and it's been a great journey. Hard to believe it's— we're just shy of 3 years. Uh, feels like an eternity, but, uh, it's been a great ride so far.

That's awesome. And how big is the team and organization right now?

That's probably the most, uh, exciting part, you know, starting from zero and then looking back over the last 31 months. Um, you know, we've achieved over $165 million in revenue. We operate in 7 states. Thousand employees, thousands of customers. So it's kind of been a whirlwind. Yeah. When you're doing a buy and build strategy, sometimes they have a tendency to go really, really fast.

That's crazy to grow that fast. There's got to be some major growing pains with that.

Well, we like to call it organized chaos. You know, there's certainly a fair amount of integration. work that has to be done, which is often challenging because when you're working with entrepreneurs, you know, they've never actually really worked for anyone before. So it's a different psyche. You have to have a different approach. Um, so it comes with, uh, its challenges, but certainly, um, we found some really good partners. So more good than bad.

That's impressive. Now, what would you say has been some of the main factors in driving growth for you guys?

You know, I think when you say the word acquisition, sometimes it has negative connotation. And when there's change, we know that people are reluctant to change. And when you acquire somebody's company, people go to dark places. And I think one of the things that we've tried to do is maintain continuity. Focus on the retention of the employees and the customers. And we do that by not drawing too much attention. So we try not to use the word acquisition. We try to use an overused word called partnership. In most cases, we keep the legacy owner on who wants to grow and use our resources and capital to grow. And we don't do press releases. So what we're doing is we're working specifically with that legacy owner. And our hope is that the legacy owner is the one that introduces any level of change because it's normally digested a lot easier when it's coming from a familiar face or source. Yes. And so there's no reason for us as Columbia Home Services to put emphasis on our brand and who we are. Think of us as just kind of acting in the backdrop. To make these companies more efficient. And it seems to resonate with a lot of the sellers because they are sensitive to retaining their people and their customers. And in some cases, these legacy businesses have been handed down through generations.

Yeah. Wow. Now, looking back, what turning points have had the greatest impact for you on how you think about and run the organization?

You know, in the trades there's not a lot of sophistication. Uh, when you think about heating and cooling, it's been a very, very mechanical-based business for a long time. Yep. And it's becoming more communicating, so technology's becoming more of a factor. We're professionalizing these businesses. So think of it as an owner wants to do something different and not do what they've always done because then they get what they've always got. And so they look to us to make an investment in these businesses to sort of move with the times. So think of this critical period of AI.

Yeah.

And think of the multiple generations that are out there buying these types of services and products. They're just not buying it during the 9 to 5 hours or after work. This is something where generational behavior— somebody could buy an HVAC system online at 2 o'clock in the morning. And if you don't have the technology to match the buyer's sort of timing, they just move to the next contractor. So I think, you know, there's really been less sophistication, but great people, great craftsmanship. And so I think what we're just doing is we're just professionalizing it a bit to make them more efficient, um, and then we're making it easier for the customer to do business with the contractor. So think of it as like when you historically wanted someone to come to your house to do— perform work, then you would get a window Well, Windows is not really good enough anymore. You know, the, the, the, the customer wants to see the technician en route to the home, and they want to be at work working. And if they need to be home, they can see the technician around so they can time it. So there's a lot to be said for some of this simple technology stuff, but what it's doing to the trades is it's making them, or us, more relevant to the way people go about procuring these types of services.

So true. My dad's a general contractor, and so I grew up in the trades. And yes. So this next question is kind of a two-part. When it comes to your outreach, your messaging marketing systems, what's been working well to attract and retain customers?

Well, look, Essential Services is easy to keep customers if you just do what you say you're going to do. But there's not enough contractors out there to service the demand because there's lights to keep on, there's toilets to flush, and there's houses to cool. So often we're our own worst enemy where we get in our own way. But like what we're doing to kind of keep the customer focus is we are making investments in technology. So think of it as like when the customer calls in, they don't want to experience a waiting time or a drop call, and we don't want to experience an abandoned call. So AI is filling that void by simulating through the utilization of a bot, simulating a human having a conversation with a customer about what's the issue, when do you need us, and this is our availability. And that sounds like a very simple thing that, that often without the technology, when a customer calls in, there's a busy signal or it goes to voicemail and it doesn't get a return phone call because somebody was wearing 10 different hats and they didn't have time to respond to the customer. So, you know, I think what we're trying to do again is professionalize the way we deal with the customer. We also want to give the customer options. So get, you know, not telling a customer what they need, but presenting, you know, you'll hear this in our industry, good, better, or best options. One size doesn't fit all. And so if we're able to do that, then the customer is more naturally not going to look elsewhere. Also, if we help facilitate how they can pay for this expensive investment, So whether they finance it or lease it or they want to pay cash, a lot of consumers don't know what their options are for these large ticket items. And when you think about an HVAC system, the average ticket's probably north of $10,000 today. Yeah. So, you know, I think it's properly educating the customer, giving them options are all great things that we can do a little bit more on in terms of retaining the customer. But let's be honest, these legacy businesses, they built their businesses through amazing customer service. You know, they've got that customer-first mentality. All we're looking to do is just make it a little bit better, maybe a little bit easier to do business with the customer or them to do business with us. Um, but that's the beauty of it, is that these relationships that have established in these communities have been handed down from generation to generation. So you perhaps might be using the same plumber your father did if you still live in the same geo. So we're just building on what great people have already built. We're not actually coming in and saying, oh, we're going to do it different because these are profitable, very well-known businesses in their communities that the Google reviews and the Yelp reviews, that's not something that you want to tamper with.

Yeah, so true. So the next part of the question is, where do you still see opportunity and, uh, money on the table with this?

Well, again, I think customers that focus on price need a little bit of education, as I was saying before, on how they can fund these investments. Two is the contractor can get a little bit more sophisticated about how they present options to the customer. So you don't always have to lead with the equipment cost. Let's think about how people pay for things today. A lot of things are paid for on a monthly subscription basis. So if I lead with a monthly price, it has a lot less negative effect on the customer's purchasing decision. So because we, we've seen historically in years that somebody would buy a very you know, expensive car, and it might be an $80,000 car or truck, but really what they want to know is what is the payment per month. And if the payment's $600 a month and leather seats is only an extra $50, they look at it differently than if you come in there and say it's a $10,000 system. So where we're leaving money on the table and doing the customer a disservice is we're really not educating them on purchase options. And in my mind, it's the biggest catalyst for like the lift in organic growth, is that if you can, you know, look, cash is king. So if you want to make financing and leasing your default purchase option, great, lead with cash. But at least let the customer know that, you know, you don't need to use cash.

So true. Well said. Yes, we need a whole section on that, one segment there. So now with the AI, you've talked a little bit about it. Give us a little more. Wow, there's so much buzz and talk and concern and question around it. Where are ways you guys have found to utilize it internally?

Well, look, our teams in the trenches are making these decisions. So it's not really my decision to make, but like where I sit in, in my understanding of AI and, and, and what it means to our industry and, and to our business, I often hear people talk about replacing people, and I think that's the biggest misnomer. I do not believe, and I'm not so sure our teams believe this, and it's at Columbia, is that we're going to replace people with technology. What, what I think the play is, we're going to make them so efficient that we're going to be like that much better. Because someone that's spinning plates is deciding which one's going to drop. So I'm just looking at this as if we want a growth play embrace the AI, but embrace it from the standpoint of anyone in a particular role that is doing something for the customer. Make them more efficient, make them better, make them smarter, make it easier. And that's kind of see— or where I see things directionally going in our industry. I, I hope people don't use this as a way to rationalize cutting expense, right? Because it, it, it's not really what it's intended to do. I've been experimenting with it a lot lately, and what I can do used to take me a week. I can do it in less than an hour. I can build a, a deck. I can build training. I can build marketing collateral. So I'm really, as a, as an employee, I'm really nimble when I use it.

Yeah.

And so that's, that's kind of how I see AI sort of happening. But like, it's not going to be intended to replace people because I think, you know, in essential services, everything is still very mechanical in nature. There's still a fair amount of conversation that needs to happen with the customer. We still have to go to a customer's home, which is the most intimate form of customer service. Yeah, so we need to think about ways to leverage it. I think that's where our group is doing it. I think they're thinking about, you know, the biggest dilemma in AI is the— is we don't really cold call employees. We— I'm sorry, employees, customers. What we do is we, we spend countless hours and dollars trying to get leads. But where there's this issue is what ChatGPT and Claude and all these AI tools have done to our SEO lead flow on Google is that instead of going into Google and seeing who comes up at the top, people are getting lists off ChatGPT and the money we're spending on SEO, we're not getting the benefit. We're seeing lead decline and it's because we have these disruptors in AI that are changing the way customers go about finding contractors to perform these services and sell these products.

Mm-hmm.

So that I think our team has a real challenge trying to figure out in their marketing strategy for the businesses in their communities, like, how do we navigate this? You know, does our digital agency that we use do they really have a plan for SEO, and have they changed it up so that, you know, they can leverage ChatGPT or Claude or any of these other AI tools together to grab leads? But I think right now one is kind of cannibalizing the other, and we're kind of caught in between. And I think that's a big dilemma for home services.

Yeah, there's a lot of shift going from the SEO to GEO. And what that looks like, because the AI scrapes website very differently, and you don't Google it, you ChatGPT it, like you're saying.

Yeah, exactly.

So, wow. So, Paul, if you had to pick one constraint to focus on and solve over the next 90 days to improve or change the trajectory of the business the most, what would it be?

Well, you know, particularly in heating and cooling, it's so weather dependent. But the challenge is always going to be making your business not seasonal, is to build it into a 12-month business. Yeah. And I think, you know, mix of your business is something that investors struggle over. Um, you know, nobody wants to do new construction, nobody wants to be held hostage to a construction cycle. So the question is, when when it's hot, it's a very short period of time for most of North America. And then when it's cold, again, it's a short period of time when it's cold. But not every market is a heating market. Not every market is a true, true cooling market. So I think the biggest challenge for us is figuring out how do we smooth out our revenue and our earnings and our performance over 12 months so that, you know, we can make a May when things are really heating up in a warm market, we can make November look just as good as May. And I think it's a, it's, it's a mentality, right? It's like, what are you willing to do? Can you do enough small commercial work that is somewhat synonymous with residential work and make it look and feel the same, get some service agreements maintenance and really put some marketing behind it and smooth out what we call the shoulder season so that we don't have these significant peaks and troughs. I think that's something that's historically been there that hasn't really been solved for. And I think a lot of it has to do that when investors look at these businesses, they get hung up on mix. Uh, I look at mix sometimes a little bit different. I, I think it can be used as a way to smooth things out, provided that you're being very selective on the type of mix that you get yourself involved in. So I'll give you an example. It would be much better to do maybe a custom new home build that's 7,000 square feet and they need to buy a $200,000 system, provided you have the technical craftsmanship to be able to design it and put it in, to me you can set your margin. Now, consequently, if you do sort of a track home for a, you know, a routine builder, they're slapping these homes up and they're slapping these units in, and there's no margin to be made. There's no— the quality of craftsmanship drops off, and it's a volume game. Yeah, that's for some, not for all, and I can tell you it's not for me. So I think it's just about being real regimented on your criteria sticking to it. But I think we have to look at it as a 12-month business.

I like that. That makes a lot of sense. I love, I love those ideas on making it non-seasonal. So when you look at your own journey, Paul, the wins, the mistakes, what lessons stand out to you, and which ones do you feel like took longer to learn than they should have?

I don't know how people take this, but I've made far more mistakes than I've had wins. But I think some of the entrepreneurs that I've revered over the years, you know, the Richard Bransons, the T. Bone Pickens, you know, these individuals failed several times. And look, I don't, I don't claim to have all the answers. I'm not the smartest guy in the room. I'm not the Ivy League graduate, um, but I can wire a thermostat. Um, I, you know, and so I look at the journey, you know, it's been remarkable. There's, there's some great people that have been a positive influence on me, but like, people, entrepreneurs are, we're just cut from a different cloth. We have different DNA. Sometimes we have a tendency to be overly excited about what we're doing and we don't focus on the details, or we just let certain things cloud objectivity because we're, we're just so passionate, right? We— our heart is always on our sleeve and we're always just, you know, tired at the end of the day because we've worn ourselves out. Um, and so, you know, I, I look at this company as I play a much smaller role now, um, is that I'm surrounded by great people. So like, they're doing a lot of the more important work. But I think sometimes where the entrepreneur has its best input or whatever is in the beginning when it's an idea that they bring to life. And of course you need partners to help you bring it to life, right? And I'm very fortunate that way. But it takes an idea person, it takes someone with passion, it takes someone that works 8 days a week, it takes someone that doesn't take no for an answer. But at some point, what you have to do as an entrepreneur is you have to let, like, subject matter experts and resources run their course. Because the biggest problem with us as entrepreneurs is we don't know when to let go and it's difficult for us to let go. But I think when, you know, I look back, I've probably done more pulling back than I ever have because objectively, when I look at our business and the people, I'm surrounded by smarter people. And so, you know, I mean that. And I think that that is a testimony to a lot of different things. It's not a testimony to me. But like, not everybody's an idea person, but these people that we have on our team know how to execute and they're working through these challenges. And guys like me, it's a little bit easier. Sometimes I can go put my head down on the mattress and it's a lot easier than some of the folk that are, you know, working countless hours to try to figure things out and navigate, you know, the the tariffs and commodity headwind and customer behavior and hiring and firing and all that kind of stuff that, you know, it's, it's a grind. But, you know, I, I think, uh, as I look back and I see where we are, we certainly have a lot of the right people doing the work that really matters.

That's beautiful. Wonderful. So last question for you. When you think about the next stages of the business, what are you most excited about?

Uh, did I say retirement? Uh, no. Um, I, I think all entrepreneurs have this similar dream, and it, it's to leave a tombstone. You're leaving a legacy, right? If you, if you If there's no tombstone, there's no legacy. It would be nice personally to know that you've left something and people took care and custody of it and took it to another level. That would be like the ultimate, right? Like, as an entrepreneur, you don't want to see your— what you built get sucked up into something else, or, you know, you want to see it standalone in many ways. So like, I think that would be like the ultimate, would be to just know that you left something and if you were retired for 10 years and you looked up and it was still there, I think that would be a pretty cool feeling. I'm not so sure everybody gets a shot at that because look, let's be honest, things change, people change, organizations change. It is what it is. But I I think some of the greatest businesses in the U.S. built this country. And what I love about the trades is that we're employing, you know, so many great people, perhaps people at levels that may not have been afforded, you know, the, the opportunity to make the money that they make in the trades. And so like there's a feel-good aspect to it. Like you go into these secondary, tertiary communities and you have this legacy business and it employs all these people and you see all these family with homes and children and everything like that. I mean, that's, that's America, right? At its best. So that'd be kind of cool to leave something like that.

Wonderful. Leave that legacy and, and that guiding star changes how you interact every day and what you're building. So But those who want to reach out, want to learn more, again, columbiahomeservices.com, LinkedIn, anywhere else you want to send them.

That's great, Taylor. Thanks for having me around.

Oh, thank you for joining us. And thank you to our sponsors of today's episode, Achieve Fractional, which provides fractional executive leadership for growing businesses. And if you enjoy the episode, share it with a friend, with a colleague. If you're not sure about the trades or what you want to do, if you need some help or service, reach out to Paul and the team, and we're glad to help you out. And we'll see you all in the next episode of the Achieve Podcast.