Acquisitions Anonymous - #1 for business buying, selling and operating - Yelp is not evil! Building a business using digital CAC - Acquisitions Anonymous Episode 87

Episode Date: April 20, 2022

Michael Girdley (@Girdley) and Mills Snell (@thegeneralmills) are joined by Johnny Robinson (@SqueegeeGod) in this episode. We talked about getting inspired to launch a business, building an online presence while differentiating from your competitors, W2 employees vs. 1099 workers, entrepreneurship learnings, maintaining successful business relationships, subcontracting as a growth medium, and much more!-----Thanks to our sponsors!MicroAcquire is the #1 startup acquisition marketplace. It is simply the most efficient way to buy and sell startups when you’re ready to make your next move.-----* Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel.* Do you enjoy our content? Rate our show!* Follow us on Twitter @acquanon Learnings about small business acquisitions and operations.-----Show Notes:0:00 Intro1:03 Microacquire2:58 Johnny’s LLC and background5:11 How is the operation of your business currently?7:12 What did you study in school, and how did you find your way into entrepreneurship?9:47 How did you manage to go from operating your business to passive ownership?13:53 What have you learned by hiring W-2 employees and subcontracting through 1099s? What did you choose to scale up?18:38 Do your subcontractors represent your Brand?20:41 How is your customer acquisition funnel built? Can you walk us through your operation stack?21:47 How did you build a brand and differentiate yourself online? What’s your take on Yelp?28:00 What is your formula for home services businesses?33:41 How big can window cleaning businesses get? Which additional complementary services can you stack together? 37:29 What’s the story after the Covid bump you suffered back in 2020?42:27 Tell us about your crazy hiring stories-----Past guests on Acquanon include Nick Huber, Brent Beshore, Aaron Rubin, Mike Botkin, Ari Ozick, Mitchell Baldridge, Xavier Helgelsen, Mike Loftus, Steve Divitkos, Dzmitry Miranovich, Morgan Tate and more.-----Additional episodes you might enjoy:#83 Can you grow a business in a shrinking market? Featuring baller @WilsonCompanies as a special guest!#82 How Great Operators Win! How PE does it like pros with Mark Brooks#48 Two Landscaping Businesses foSubscribe to weekly our Newsletter and get curated deals in your inboxAdvertise with us by clicking here Do you love Acquanon and want to see our smiling faces? Subscribe to our Youtube channel. Do you enjoy our content? Rate our show! Follow us on Twitter @acquanon Learnings about small business acquisitions and operations. For inquiries or suggestions, email us at [e-mail]

Welcome back, everybody, to another episode of Acquisitions Anonymous. I'm Mills Snell, one of your co-host. We have a really fun episode today, joined by Johnny Robinson, Squeegee God on Twitter, for those of you who are in the SMB world. Really, really fun conversation today. We talk about a bunch of different topics. This is a war stories episode, so we break from our regular programming of analyzing two companies for sale, and we kind of get down into the weeds. And in any given episode, we let the guests take it where they want to. So, in this one, we're talking about things like how you get inspired to start a business. Johnny started his group from scratch and is doing over a million dollars in revenue. So that path is really interesting. Things he learned along the way. W-2 employees versus 1099 and subcontractors.

The customer acquisition funnel, Yelp, how Johnny's made that work for their business. Really, really cool, impressive stuff. And then we end with some horror stories and some uh-ohs. So hope you enjoyed the episode. Before we start, a quick word from our sponsor today. Thanks so much for helping support the podcast. Today's sponsor is MicroEquire, and Microacquire is the number one startup acquisition marketplace,

and it is simply the most efficient way to buy and sell startups when you're ready to make your next move. So we've had Andrew, who's the CEO and founder of the company on the pod before, and he's been great. The cool thing about Microacquire is that most of the conventional options for buying and selling, your company, especially a tech one, are expensive for founders. So Microacquire puts all the cost and flips that the other side around. So they are free and anonymous listings, and they apply a rigorous vetting process. We're actually only 50% of the startups make it on average. They have over 2,000 online businesses listed today at any given time,

and a buyer can expect to see a range of startup types that will fit any profile from SaaS to e-commerce to apps and agencies, and of course, more. So different sizes as well, anything from $5,000 all the way up to a million or more in asking price, really, for buyers of all sizes. So founders like Microacquire too, and they come with the expectation that serious, fetid buyers will be showing up in great numbers when they decide to bring their business to market. They've helped hundreds of startups successfully get acquired and facilitated hundreds of millions

in closed deal volume. So if you're thinking about buying or selling an online business, then you definitely want to check out Microacquire. And thanks to them for sponsoring our episode today, good friends of the pod. So looking forward to all that, and definitely check out Microacquire.com. And if you're somebody looking for the right business,

definitely go visit there and consider upgrading to one of their premium accounts where you pay a bit to start the conversation and see deals and more information than just the other options. So thanks again. And here's back to the episode. Johnny, so glad you're here, man. Really, really glad to have you.

We've all been looking forward to this one. The Squeegee God himself joins us on Acquisitions Anonymous. And, you know, it's war stories. So you have baited us. You have teased us with all kinds of horror stories and things that we just can't wait to hear about day-to-day operations. So maybe before we jump in, I think most of our listeners know you and know of your business. but give us the brief rundown about who you are and what you're doing in Orange County. Yeah, well, thank you so much.

It's nice to finally meet you Mills. I've been listening to you in the car for a while now. So I was on unusual profits. A few months back, but it's good to be on Acquisition Anonymous now. It's one I've definitely wanted to be on. So thanks again for having me. But yeah, if you guys follow me on Twitter at SkiyGod, I run a residential window cleaning business. It's about 90% residential.

and now it's kind of turned into like, I wouldn't go as far as calling it like a holding company, but we have an LLC with a few different businesses under it, and they generate, we're well on, well on our way to do over a million dollars this year between all the businesses, which is kind of cool,

but I'm not going to go as far and say like, yeah, I'm going to get a holding company, you know, there's orange window cleaning. He's the main bread winner there. But a little bit about me, I got my starting window cleaning 19 years old with $150. It's no exaggeration. It was literally $150 to the dot.

And just went door to door, cleaning windows and pitching us like donut shops, liquor stores, just like mom and pop shops, stuff like that, making 10 bucks, 20 bucks, and then kind of side hustle for a couple years. And then took a corporate internship, realized, okay, this is no different from my lifeguarding job at a water park. So I definitely don't want to keep a job. I want to keep, I'll do whatever it takes. I'll do any business it takes to make sure I don't have a job after college. And so I just made Orange Window up any work. And so now I probably spend a couple hours a month on it.

And we're up 25% this year. And I only work two hours a month on it. So it's kind of cool. But yeah, the basic just on me. I love it. I love it. So you're not the one washing the windows, it sounds like, not at two hours a month. What's your team like?

How did you build your team? and how does operations kind of flow day to day? Yeah, so it's changed a ton throughout the years. I've been in and out of the field for, we'll have our five-year anniversary of being in business on June 17th, so like two months. And so for the first like three and a half years, me and my business partner, Sergio,

I started at 50-50 with a partner, Sergio. And we were in the trenches, like cleaning windows on and off for the first three and a half four years. So that's kind of changed. Like I said, from like we've had up to 8W2 employees, technicians in the field before. Now we run the business on subs. But when we were doing employees, we would have like a lead technician in the truck along with the regular technician.

And we had three trucks that we owned. So there would be one lead tech, one technician on each of the trucks. Or sometimes if we were short, there would be one man cruise. And then it was kind of Sergio running the operations, me running the sales and marketing. and then we had a kind of a general manager admin, like office manager, whatever you want to call her. She didn't really have a title,

but she basically ran, like, you know, sent out the estimates, did the bids over the phone, handled any customer complaints, things like that, basic admin stuff,

right? Scheduling the employees, things like that. And then, yeah. And so we've switched now where we use subcontractors instead of employees.

So other window cleaning companies, and that's a lot easier. We have a remote team member in the Philippines who actually runs the whole business. She books the subs, on boards new subs, schedules them. And the subs just take care of the work. And we just have a really good, we have a really good system for quality control over the phone communicating with the customer. We've still been able to maintain our five-star reputation even without having any employees. I want to be able to talk more about that.

Before we get into that, what did you go to school for? I'm guessing it wasn't SMB. It wasn't anything. service business related. What was your background and how did you, how did you find your way into this specific service? Yeah, so it's kind of funny. I didn't, I come from a family of no entrepreneurs, right? Like literally zero entrepreneurs. Everybody's kind of making ends meet. And I was taught, go to college and get a job. And so that's what I did. I signed up for community college. I barely graduated high school at like 1.9 GPA, I think 2.0 maybe. And,

I got my first job. I was pretty coddled growing up, not going to lie, like, pretty spoiled, so I had no idea, like, how anything worked. And I got my first paycheck at this lifeguard job. I was like, oh, this is cool. I'm making my own money. But I also had to deal with management and people tell me what to do, which I don't really like. And I realized I didn't like that. And so I was like, oh, this sucks. So I googled, like, I think it was like how to code. Like, I was trying to learn how to code because I wanted to get paid more. But then I found out like a startup's worth thing. I was like, what is this startup stuff?

I was like, people are just starting companies. And then I found like, oh, there's like business ideas and you can just start anything. And I was like, oh, this is dope. So I called Sergio. I was like, hey, man, like you could start a business. And I want to do that. And we ended up skipping class one day. We went to the beach.

And he's like, yeah, I just want to be civil engineer after college and get my benefits, whatever. He was like, cool. Well, I found out that this business stuff, I'm going to start a business. And he calls me, ended up calling me a week later. he found Gary Vee in that week of us not talking and he's like I'm fired up dude I want to start a business I was like okay well we need to make money tomorrow so what can we do and we stumbled upon window cleaning and we found this guy on YouTube who was yelling at us through the screen saying he closed 48 storefront accounts in 24 hours with his back against the wall and his bills were piling up and so me and surgery were like dude we could go close more accounts than that and that's how we got into it that's awesome that's awesome how I love and and and Yeah, to answer your other question, I went to school for computer information systems to begin with, and I ended up switching to entrepreneurship, which honestly was a bonehead move.

I wish I would have probably stuck with computer information systems instead of going to entrepreneurship because none of my professors had businesses. So I was like, what the hell am I even learning from you? Yeah, I think that's a repeat theme in academia, right? The guys who were teaching entrepreneurship, they've been teaching it for a long time, but not necessarily doing it. Right, exactly. So Johnny, like one question I get over and over again from people is it's pretty obvious how you get into a business and work in the business, right? You buy it and you go run it, right? What confuses people is how they get out of it. So like, how did your decision to become mostly passive in your business come about? And then specifically like, how did you do that? Yeah. So it came about because I actually got on Twitter and I saw everybody doing cool stuff. And I was like, I want to do other cool stuff. And I was like, I want to do other cool stuff. too because window cleaning is kind of boring.

And, you know, you do the same thing for so long. It gets kind of boring, especially something like cleaning windows. Like, come on, I can only talk so much about cleaning dirt off of glass. So yeah, that kind of was inspired me to kind of get into some other things. And how did I go about like making it more passive and pulling myself out? I did a good question because I didn't know it was really like I didn't, I didn't realize the difference of like owning your job versus owning a business. until I was probably like a junior in college a couple years ago.

And that was coincidentally when I joined the entrepreneurs organization. For those you don't know, it's just a pure group of entrepreneurs who own businesses generating a million dollars or more revenue. I'm an accelerator or I was an accelerator, which is between 250 and 90099K in revenue. And they help you scale up. They teach scaling up is long story short,

which is similar to like traction. I think it's a little bit more in-depth as opposed to traction. But I learned that and I was like, wow, you can really take this framework and apply it to any business and make cash flow for yourself. And really, you don't have to do the day-to-day stuff. I was like, this is cool. So I started kind of applying those things. And me and Sergio just started testing and throwing things at the wall and basically doing whatever we could to pull ourselves out. And the first step was obviously hiring technicians.

So we started dabbling and hiring technicians. and we started doing that with friends and family, which honestly, I wouldn't recommend. We did have one friend that worked with us. I will say, though, we did have one friend that worked with us, and he stayed with us for like three years. He's amazing. He saw it through, and we greatly appreciate him.

Shout out to Jacob. But, yeah, most of them didn't work out. I hired my nephew. I've hired friends from high school. and yeah, most didn't work out. What are the issues there, Johnny? Is it hard to hold people accountable? Is it hard to have boundaries in those relationships inside and outside of work?

Where did the shit hit the fans, so to speak? Yeah, yeah, good question. So typically the mindset I was coming from was like, oh, well, this is cool. He can help me. He needs a job. Like, my friend needs a job. And I need someone to work for me to clean these windows. So it'll work out perfectly.

And I'm his friend and he'll work hard. Yeah, not the case. most of the time it's, oh, he's my friend, I can get away with this. He's not going to say anything anyways. And on the flip side, it's challenging for you as the friend, at least for me it was, of like, okay, well, this is a friendship, but also it's my business. So I need you to do what I ask because you're getting paid to do that. But at the same time, I don't want to like, hey, you know, like micromanage or like tell them what to do and make him feel some type of way about it. And so it's kind of that weird relationship in it, which unless the friend is just an all

star and you never have to tell him anything, nine times out of ten, it's just not going to work out is what I realized. And if he was an all-question, probably be your, yeah, oh, absolutely. If he was an all-star, you'd probably be your partner, not your, not your employee. You know, like in this case, right? If he's your buddy and he's a go-getter, he's probably a guy you asked to help you start the business kind of thing. Right.

That's interesting. I agree 100%. And it worked out with me and Sergio, because Sergio is my best friend and we're 50-50 and everything, all the businesses we own. and it's worked out great because he's got a particular skill set. I've got a particular skill set. We're aligned on the goal and he works his ass off. And I think that's rare to find like a business partnership that works with a friend.

But yeah, I agree with what you just said. Tell us some stories of things that you've learned hiring. And maybe let's bucket it, you know, hiring W2 employees versus hiring subs. We work with some subs in my business. but we're about 99% self-performing commercial roofing. But we do use subs and a lot of the industry use the subs. So I'm curious kind of what you learned about managing both of those, especially doing it remotely.

Somebody else is managing the hiring and quality controlling. Tell us about what you learned in those two categories. Yeah, so W-2s. W-2s are cool. I mean, you always hear the thing of like you have more control of W-2s. And yes, you do if you have a good system. for training and actually like developing them as like team players. But we didn't have that.

And it also comes back to like me and Sergio realized I think like this is just our opinion. But we think there's like a founder market fit. And we didn't think we're really the greatest operators of window cleaning companies. Because if you want to build a team up from scratch, you need to be there in the morning, like having the trucks ready, you know, waters there like stocked with snacks. for your guys so they're happy and you know you can lead by example and and that's specifically starting from scratch and it was really hard to Sergio especially Sergio

doesn't like to wake up early I don't like to wake up early I was a little bit better at it and not going to lie but like that was a big effect on the team and like especially the older school the older school guys who were in the game the window cleaning game for like you know five six seven years and had all this experience that we wanted to retain and they just saw us like, you know, 22, 21-year-old kids, and,

you know, we've got one partner showing up late, and it's just like, it's not the best, it's not the best move as a leader, right? And so we realize that.

We're like, man, it's really hard for us to build a team. We either need to fix this or figure something else out. And I kind of got off track there,

but to go back to your question, W-2s, we didn't like also because we had to, we had to just play their uniforms, we had to supply, like if we wanted to scale, right? This business was based on labor. I needed to add more labor to get more revenue,

which meant more trucks, which meant more equipment, more uniforms, more training. And it was just a huge headache. And when we were looking at kind of like where this business was going to take us in the long run, the juice really wasn't worth the squeeze

on taking the time and effort to build, build out the systems and all that training and all the processes to scale a window cleaning business. there's not we were only going to sell it for so much you know unless we wanted to like build it for cash flow but then we were thinking about the employees in that business and kind of their trajectory they would have no room to grow anyways so then it would just be kind of like a like we constantly haven't to deal with the hiring issue and so that when we found subcontractors was when we were actually we had done an acquisition of another window cleaning company they had two window cleaning uh contracts with universities so we had those going on we also had three trucks of residential we had

somehow fulfill. We had no idea how we're going to do it. We were hiring a bunch of college and high school kids for the summer just to help us up on the commercial jobs. And I had an employee that used to work at the company about a year back. And he told me, hey, I'm a subcontractor now. I do, I take 55% of the job. You keep 45% I'll go do any job you want. And the dude was, he was a killer employee. He had tons of experience. And so I trusted him to go do jobs. And we were in a bind. We had a really big residential job we had to take care of them. We just didn't have the manpower for. So I called him. I said, hey, can you swing this? He said, yeah, swing it. It was a $4,000, like, pressure washing, house,

wash, window, cleaning the whole deal, gutters, everything. And two days later, he shows up at our yard, and he gives us, gives me a check for $4,000. I'm like, dude, that was awesome. I didn't have to worry about it. I kind of forgot about it. And he just showed up with the check. I paid him 55% of it. I kept the rest. So I was like, this is amazing. Why are we not doing this? Like, we can pull ourselves out of the field instantly if we switch. And so Sergio was kind of like, I don't know, man. Like we've got to maintain our reputation. We've got this five-star reputation.

We didn't have a single one-star review. And I was like, trust me, dude, I'm telling you, as long as we have really good communication and maintain the systems over the phone that we have right now, we will continue to have five-star reputation with subcontractors. He's like, okay, all right, let's do it. And we switched that month, actually. and yeah, I kind of just rambled off like a lot right now. No, no, that's good. That's helpful.

I mean, I'm curious, though, Johnny, so it seems like in a service-based business like this, that brand and brand awareness is really key. Obviously, before when you had W2 guys, you probably had branded trucks, right? I think we've even talked some on Twitter about, like, vehicle wraps and stuff like that. Talking about, you know, uniforms and all those kind of things. Are your subs reppping your brand? Or is it, are they white-labeled? Are they just going out in generic uniforms, or do they have their own brands and you don't care?

Yeah, so we get that question a lot of like, well, like what happens if someone shows up in different brands? One, if your subcontractor's investing in branded materials, they're probably not going to be your subcontractor. Subcontracting and window cleaning is a little different than I would say like license trades like roofing. And correct me if I'm wrong. But we're not like bidding a job and then marking it up and then having a subcontractor go do it. We're giving them 50 to 60% of the job and keeping the rest. So guys that are going to take that deal, they want to make a little bit more than an employee would

because our best subs make anywhere between 8 to 12K a month. And so if you can make that as a subcontractor or you can go as an employee and make like $4,000 a month, what are you going to pick? So these guys, they don't really care about branding. They just want good-priced jobs that are... Like, what's the word I'm looking for here? They're, uh, all of the pain in the ass factors are taking in an account and they just want to show up to do the job, get paid.

And if they're investing into branded materials like wrapped trucks, uniforms, things like that, they're not going to be your subcontractor in the first place. And to answer your other question. Uh, so we do, uh, with one of our guys, we do lease one of our trucks to him. So he leases the equipment and everything. And he'll wear our uniform sometimes, but that truck is wrapped. So we do kind of get that moving billboard here and there with that one truck. but yeah the subcontractors don't wear branded materials we have an agreement in there that says like look we don't care like what you wear for the most part and just don't wear like branded materials

okay gotcha so you it really it sounds like your customer acquisition funnel is not built off of you know the the potency of your brand you guys have some other engine this i would say it is actually which is interesting um because i we we've realized like there's kind of two sets of customers in home service. You've got the ones who will just like, they just want to work out for referrals. They're in the local, you know, next door Facebook groups saying,

okay, I need a roof or right or need a cleaner, whatever it is, or they're asking their friends. Then there's a customer which you're going to see more of coming as technology gets better, more people start to adapt to more technology. Is the people who just want to get online quotes. They're going to go with like the best reviewed person. And so that kind of reputation

and that customer acquisition and the brand, is really well positioned on the internet. Great website, online quoting. We have all the review automation to continue to build the Google My Business and the Yelp and the Facebook. So really, it's like an internet-based home service brand, if that makes sense. Yep. Yep. Oh, absolutely.

You've said something publicly on Twitter about Yelp and how powerful it's been for you. Let's maybe talk about that. And then let's talk about the rest of your kind of tech stack for lack of a better. it's more like your operation stack that has to do with technology. But, you know, I feel like Yelp is the super polarizing thing, right? Certain people just hate it and they're like, you know, I don't want to give Yelp another dollar because they're extorting me. But I think you have a different experience.

So tell us about the way that you guys have used Yelp. Yeah, I do. I'm Yelp's number one fan. I'm a huge fan of Yelp. We've gotten up to 20 to one return on ad spend on Yelp, which is just pretty damn good. I think it gets a bad stigma because of how relentless their sales teams are because if you're if you're you list your business on yelp you're getting called every day from from a salesperson at yelp so they get really annoying and they also do this

other annoying thing where they move your reviews to what's called not recommended not recommended and then they'll blame it on the algorithm which i honestly believe is true because i work directly with yelp now through our agency or i wouldn't call it an agency like a reseller and uh so it's like an algorithm, the movie reviews to not recommended. And it's annoying because, like, with our maid service business, we're trying to build that reputation on Yelp, but we can't get any reviews to stick. So we've had like 14 real reviews come through on Yelp, but they're all getting moved to not recommended. So how are we supposed to continue to spend money on Yelp? We can't build that reputation. So there is the bad side to it, but with orange window cleaning,

crush is for us because we've already built a reputation. We've got like 200 plus reviews on there now. half of them are not recommended, by the way. But luckily, the other 100s show. And it works out well because we've got professional pictures of us in our uniform, next to the wrapped trucks. And it makes us just look way more professional than the average window cleaner. Nobody is really investing that into their company. Like for every one company you see doing that on the internet,

there's probably another 10 who don't and just rely on word of mouth. So it's really easy for us to stick out on Yelp when we've got, We've got the highlights. We've got a nice portfolio where we have being Sergio smiling next to the trucks. We've got our team presented in like our uniforms. We've got pictures of like professional pictures of clean windows of us doing the work. And so it's really simple because Yelp's the bottom of the funnel advertising. And 99% of people who go to, I'm going to sound like such a Yelp sales guy right now, but this is honest to God.

99% of people that go to Yelp end up purchasing something. That's like that's an actual stat that they researched. and if someone's searching for window cleaning or whatever service you provide, and you're showing up there, it's its own search engine in a way. So if you're showing up number one on there, you're going to get tons of leads. It's just the reality. Yelp attracts buyers. So I will say, though, it only works.

I've realized because I've worked with companies all over the country with their Yelp. And if you're not in California, just probably stay away. Probably not going to work from that California. That's amazing. That's totally unexpected. that I didn't think you were going to say that. Is that because of density? Or, I mean, I use Yelp, like whenever I'm in a new city looking for a restaurant to eat at, but I've never once used Yelp in South Carolina to look for a service. Right, exactly. I don't know what it is. It just doesn't

work in other states. The search volumes, I can see search volume in any metro area across the U.S. and how many people are searching for services. And it's crazy because I can pull up, like, house cleaning or window cleaning here in Orange County. And I can see 50,000, 60,000 monthly searches just in the county, just within 20 miles of me. And that's publicly available information to anybody? That's not something proprietary that you have than nobody else has. Yeah, so it's kind of proprietary. Like I said, we're a reseller, so we have access to the tools.

But if somebody were to just DM me, I can pull it. I always pull reports for people, whatever they want. So it's not necessarily public, but if anyone needs help, more than happy to help them out, make the decision. But yeah, nine times out of ten, if you're not in California, it's not going to work. It's like some crazy stat that Yelps just over a billion dollars. your company and 80 or 70% of their revenue comes from home service companies in California.

Wow. Interesting. All right. So if your Yelp is one piece of it, right? Google My Business, Facebook ads, what other tools are you using? And then let's kind of peek behind the curtain and talk about the rest of your stack, not just the customer acquisition side. Yeah. So Yelp kills it. We've tried Facebook and crushed with Facebook too. There's no, like, I always tell everybody, if you're getting in a home service, never ever be worried about it working or it not working out. You're going to get to a point where you're going to have more work than you know what to do with. Like, there's just so much demand in it right now, and it's so hard to fulfill all that demand.

So really any, like, honestly, most platforms work, but something that works really well for us that I think not a lot of people are doing or not a lot of people know about are just like little hacks. So what we'll do is we'll call, like if someone wants a discount, I don't recommend you give discounts because you should be basing your services on value, not price, but if someone asks for a discount, we'll tell them like, okay, but you got to promise me two referrals. I'll give you 10% off, but promise me two referrals. It's not something we're going to hunt them down for, but we're planning that in their head. So then when we have the admin call back, they can ask again, yeah, you got any referrals.

And it's not, again, we're not going to press them about it, like, give me those referrals. But it's there and it does happen. And then we'll also ask them for Facebook or Nextdoor posts testimonials. So instead of getting the review, we say, hey, if you don't mind, like, just take a picture of like your clean window posted up on Facebook. We'll give you, like, $20 off. That gets us like, we just did it in Marion and Mopper Cleaning Company. We had a customer do it on Nextdoor. 10 booked jobs from that one post.

10 book jobs from one post. So little marketing hacks like that that not a lot of people are taking advantage of. of to get more referrals. We found through just like our numbers and data that we consistently get a higher average ticket off of customers that are referred in versus customers that are powered from like Yelp or Google or wherever they're coming from. So Johnny, if you're kind of, I'll say part time, right, in terms of your focus, you're not spending 40 hours a week on the window cleaning business.

Are you kind of mining these tips and tricks? and hacks yourself? Is it other people on your team? Because you probably have a distributed workforce, right? Fully remote workforce in terms of the back office. Are you kind of getting involved in the weeds and helping pinpoint these things? Or is all this just kind of folks on your team and it's all things that you figured out and now they're just running? It seems like customer acquisition is so dynamic, right? And these algorithms change all the time. So it can't be like, we figured this thing out four or five years ago and it's still just working. Nobody's exploited except for us. Yeah. Well, to be honest, that's how it is.

We didn't start out where we're at five years ago, right? This is all built up over learning and learning, and learning, learning, learning. And so I'm still constantly learning new things and testing new things, especially with Facebook and like the whole, I'm sure you guys, everybody's talking about $100 million offers, like applying that to window cleaning.

And so we're constantly learning and it's not like, I'm just like, oh, well, this is working. Let's kind of let it run until it stagnates. We're changing things up. And I still am involved in the window cleaning industry. I'm still going to go to the window cleaning, huge window cleaning convention in Nashville and August. And I'm still going to learn because I still do need to apply those things to the business,

just so I'm always up to date. But the competition just sucks in home service. And like it's really a simple formula. It's get a good reputation. As long as you have a good reputation on Google my business, Yelp and Facebook, and you're constantly pumping that, you're building a moat for yourself because you can charge higher prices

because you have the reputation to back it. and you're always going to show up organically as long as you continue to get reviews. So it's honestly pretty simple. That's kind of an interesting point because if somebody who was 20 or 21 years old reached out, this shows how little I know, but if they reached out and it was like, hey, I'm thinking about getting into window cleaning business, I would rattle off all the reasons why I think it's a bad avenue to pursue, not least of which is the fact that it's a low barrier to entry business, right?

And so typically, and again, I'm coming from the investing side primarily and now I'm in an operating role. But from the investing side, you typically would look at something and say, hey, if there's low barriers to entry, then all of your margin, all of your value could be competed away. But what I'm hearing you say is, hey, it's sure, it's a low barrier to entry business, but it can't work, right? theoretically you would say, if any guy in a pickup truck can come and compete with me, then it's really hard to build a sustainable margin, sustainable competitive advantage.

What I'm hearing you say is, really, it's just if you can manage your online profile in a very systematic way, if you can build good brand reputation, there's plenty of people who are going to hire you, and it's differentiated online, which is enough. Yeah, yeah, people ask me all the time. You nailed it.

I mean, like going back to what I was talking about, scaling up, that scaling up taught me, like, I don't care what business it is. You can apply the same principles and build some type of unique thing about your business, even in a commoditized space. Not any, I'll take that back a little bit just because, like, lots of commercial service stuff is really like just valued on price. So other than that, though, I mean, most businesses, you can build a kind of unique proposition for yourself because people ask me a lot, like, well, what's unique about you? It's like, we're the best rated company in Orange County. We have the best. reputation. Go look at our reviews on Yelp. Go look at reviews on Google. You're not going to find anything bad. It's all good stuff. Because if we do mess up, we'll fix it. It's simple. If you mess up, just fix it and have clear communication with your customer. Yeah, I wonder if this is, you know,

my impression of these home services businesses, Mills, is very much the same thing in terms of historically your moat has been you own the supply of electricians or window washers. and you combine that with some level of brand. And always the acquisition of customers was very fragmented. And back in the days of the Yellow Pages, I'm totally dating myself. So, Johnny, was the Yellow Pages still a thing when you were born? Yes, they were. I'm not that young.

I'm not that young, man. I'm 23. But, like, there used to be, there used to be, like, the equivalent of the yellow pages, you would, whoever locked up the back page of the Yellow Pages had, like, a license to print money. So it was always like in each market there'd be like one advertiser that was the plumbing company that owned the back page of the yellow pages.

And that did create a moat for those people. And Johnny, listen to you talk now, it makes me wonder if there is now an era of consolidation among some of these services business that can happen because you're starting to see that back page of the yellow pages is transition to Yelp, Google,

Google reviews and all that kind of stuff. So I don't know. It's interesting if that industry is going to stay as fragmented as it has been historically with this new kind of paradigm for how your customer acquisition is going and building up a moat just because you have a good reputation, that's a real deal.

That wasn't alive in the days of the yellow pages, you know? Yeah. So anyway. I like what you said about the whole, like, if you had the back page of the yellow pages, you had a license to print money. It's the same thing with Google My Business. If you can show up in that three pack

and have the most reviews, that is a license to print money. You will not run out of phone calls if you can get there. And you won't have to spend a dime on advertising. So yeah, definitely, I definitely think I would agree with what you said. Yeah, I don't know. I was just, just guessing. Go ahead, Mills. Johnny, how big can window cleaning businesses get? Well, dude, I've seen them pretty big. It depends, right? You have four kind of sectors

of window cleaning. You've got storefronts, you've got residential, you've got commercial, which is like anything five, six stories and below things you can handle with the boom lift. Then you have high rise. And so you get companies who'll do all of them. You have companies who do only residential. I was the believer of, hey, stay in your lane. We've done commercial jobs and they've been total shit shows. So the only commercial we do keep is those universities I was talking about earlier. But I've seen residential companies as big as $5 million. And that's just residential. I've seen other high-rise companies doing 10 million. So they can get pretty decently sized. I've yet to see a nine-figure window cleaning company. I don't know that

that exists. But yeah, just going to the huge convention and meeting all the other window washers, it's crazy. There's guys who've got a million dollar window cleaning and pressure washing companies in rural Arkansas. Yeah. Are they usually, like you mentioned pressure washing, are they usually, or window cleaning businesses usually stand alone? Or are they usually a division of, you know, a pressure washing business or I wouldn't think like landscaping because it's kind of fundamentally different. But it seems like there's a lot of different ways that you could be tangential, right, to some other scope of work, whether it's like waterproofing or, you know, like resealing windows, like glass and glazing. I'm just thinking about all the different kind of avenues that

somebody could get to window cleaning and does it end up being a division of another company or they all pretty much stand-alone. Yeah, so you typically have a service stack in a window cleaning company that's kind of scaling up. And it's window cleaning, pressure washing, gutter cleaning, and Christmas lights. So that's like the classic stack you see. You do the gutter cleaning right before the rain hits. You do the Christmas lights in the winter to keep the guys busy.

And you do the window cleaning all through the summer when it's, and spring and summer when it's really busy, it's busy season for window cleaners. And you upsell the house washing or pressure washing. Another avenue a lot of people are starting to move to that. I'm not seeing a lot of people talk about either, which is kind of a cool opportunity if you want to get into it, is soft washing.

So I'm not sure if you guys heard of soft washing, but you're mixing chemicals. So typically bleach and water. And you have some other things, but the typical mixture is bleach and water. And I'm sure you know, Mills, you're a roofer. You see the algae on the roofs, right?

Well, that has to get off. And what people are doing is called soft washing. And you spray the bleach on the algae, you kind of break it up, you let it sit for an hour or so. And then you just softly spray it off with a garden hose. And you're not using any pressure, so that's why it's called soft washing. But the algae just falls right off. And it's crazy because these guys, they're making like $2,000 to wash a roof,

and it's taken them two to three hours. I have so many questions about that, mainly because, you know, one, we don't do any residential work. So, you know, I can throw stones at those guys all day long. but it's hard enough from a, you know, from a workers' comp standpoint to put guys on a roof and keep them safe and keep your workers' comps claims down. If you're up there with water, I just, my, you know, my heart flutters a little bit in a bad way, just being worried about that. But I get it. I mean, that seems like a lot given the fact that, you know, if it's a $2,000, if it's an $8,000 new roof

and it's $2,000 to wash the roof, I mean, I think people probably, I think people probably do pay that. You also have HOA mandating roof cleans too once they get dirty enough. That's a great point. That's a really good point. You guys, I think, experienced a pretty decent bump with COVID. You're not, you know, home cleaning makes sense. Commercial cleaning makes sense. I'm kind of surprised that you guys would have a COVID bump. But what's the delineation of your customer base from like retail to, you know, maybe hospitality, like restaurants, and bars to just general kind of commercial and residential. I guess people were home more and they noticed their windows are dirty and they want them clean more frequently. But enlighten us on the COVID bump and how you manage that. Yeah. So kind of like I said, like 90-10, right? 90% of our customers are residential and the 10% comes from the universities. So really we're a residential, strictly residential.

We like to stay in that lane. And during COVID, COVID hit and COVID was brutal because January through March, and this varies depending on where you're at in the States, because rainy season might come a little later, might come a little earlier. But for us, January through March is always about 25 to probably 40% of what busy season is. So taking about like a 60, 75% hit on our revenue January through March typically every year. And that's because the rain or the fear of rain. So it might not even be raining out, but when we talk to our customers and call them to try to book them, they'll wait until April. wait till April because they don't want to get their windows clean and then the rain comes and messes it up because window cleaning can't get expensive especially for these bigger houses in Orange County. So I'm sorry, I'm rambling. What was your original question?

Well, I'm just thinking about how did you manage the COVID bump and why was there? Okay. Yeah. So to go back to the rain, it was raining and COVID hit and it took us out for like two, like a month. We had no calls, no bookings. and I thought it was about to close shop on the business. And then we got one call. And I was like, oh, cool, we're getting calls again. But I didn't expect it to increase. And so slowly but surely we started getting more and more calls. And what happened was, I think everybody just stopped advertising.

I was going on Yelp and no one was advertising. I even stopped advertising. But I realized I was kind of operating from a place of just fear and like trying to preserve like what we had in the bank. I didn't want to spend any money. But I was like, you know what? Screw it. cranked up the ads like a thousand bucks

and back from zero up back up to a thousand bucks and like the lead just started flowing we started booking and booking and booking and we're at like 42. It was crazy because going back to when I was telling you guys about joining EO, we got into EO before we were at the threshold. So like I said, to get into Accelerator, you need 250K. We have 42,000 in sales and we had to give this pitch

because we were students and we were competing against other students We had to talk about our business, what our goals were. And our goal for the year, this was in November 2019. Our goal for 2020 was to do $200,000 in revenue, have two trucks and two crews, and then also join accelerator. Those are three goals. And keep in mind, $42,000 in sales. COVID hits 2020.

We're like, there's no way in hell. We're hitting 200K now. Business is over. And cranked up the as-spent and started acquiring a bunch of things. of customers and we ended up just hitting all our goals. We just like people were home. They wanted their windows clean. They were looking out their dirty windows.

And we're the company showing up that would come and fulfill the work. So we ended up hit, we ended up in sales. We had two trucks and two crews. And then we got to EO because they gave us a scholarship for free. So that was kind of cool. Nice. I love it. What in terms of, I'm just want to make sure I have the timing.

right. So when you got the COVID bump, you were already using subcontracted labor. So it wasn't like you had to staff up. You just went and found some more subs. No, no, no, no. We were employees at the time. You were all employees at that time. Yeah. And I was the only person in the company actually because Sergio graduated a year before I did. I took an extra year to graduate. And he graduated May 2020. And he's like, you know what? I got the civil engineering degree. I didn't go to school for nothing. So he's like, I'm going to like, we had no work. I didn't blame him. I'm like, yeah, dude. Like, go ahead. I'm just going to stay here and try to figure this out. But he went to get civil engineering jobs, so I was by myself.

And when I got that first call, and so I really had to rebuild the team from scratch. So it started with me. I was going to do the jobs by myself. Then I found a guy, someone my mom knew, and he started helping me out. Then hired another couple guys, and eventually we had a team of like five dudes. I bought, I hadn't bought the second truck yet, but then Sergio was like, this job sucks after like two months can I come back and I was like yeah dude come back I don't care so came back 50 50 and rebuilt the team from scratch well you uh you let us know that you have some

crazy hiring stories some wild hiring stories any of them that stand out in your mind that we need to make sure we i have a grace everybody with yeah i have a few so i'll go i'll go like the least least worst to the best so so we used to run the business out of my out of a house. And it was funny because I was renting the house next to my mom, and then my mom had the house next to me. So they're right next to each other. And so we would use both parking spots as sort of the trucks. And so every morning, Tuesdays were trash. It was a Tuesday. It was taking out the trash. One of our trucks is a long bed, F-150. And you've got to be really careful with that thing, because that thing's long, especially when turning corners

and backing up. And so we were backing. He was, I was, I was taking. I was taking. I was taking, the trash out and the technician, the dude driving the truck, was backing out and instead of looking where he was turning and backing out into, he was looking at me, take the trash out. And I'm just looking at him. As I'm walking this trash to the street, I see him just back up right into the neighbor's vehicle that lived across the street. And I'm like, oh my God, no way. And I'm like, dude, just go. I'll handle it. I go to her door.

ends up being a total Karen about it. And she's like, are you even allowed to operate this business out of your house? Like, don't you need a license or something? And I'm like, dude, I'm literally trying to fix this right now. Like, it's an accident. I wasn't in the truck. My guys were pulling out. I'm so sorry.

I'll fix it. And she's like, well, I have a vacation that I'm leaving to tomorrow. And I need my car. And he backed into right where the door opens. And so you couldn't open the door. And I'm like, okay, well. Like me thinking like solutions, like just hop in through the passenger side, then drive it. And I'll meet you over at the collision spot and we'll see what's up, you know.

Well, she's a bigger, a bigger lady. So that wasn't happening. And she's just yelling at me. And so long story short, it sucked. I didn't have to go through insurance. Ended up paying like two grand out of pocket to get her door fixed and had to pay for her rental. So that really sucked. And then we had another crazy story where.

one's kind of funnier. It was like the first day Sergio came back and I had been working with one of these dudes and I told him, it was like, hey, you're going to go with Sergio today. I'm going to take this other guy. We're going to split the jobs and we're going to knock these jobs up. And I guess he was really upset that he wasn't working with me. And so Sergio was at the red light and he's in the passenger seat. And the dude, like, Sergio can tell like the dude's visibly pissed off.

He's not talking. And he's like, you know what? like we're just sitting at a red light and he's like you know what i got to go i got to go i'm done i quit i can't do this he just gets out of the car and quits at the red light and sir jrjo's like yo what the hell and he calls me i was like no way so i give him a call he's not answering ends up calling me two hours later he's like hey hey johnny i'm sorry i was like i was really embarrassed uh like he's like can i have my job back uh what really happened was i i barred and i shit myself so i had to get out i had to get out of the truck so that was

was pretty funny. I didn't end up letting him come back because that was, I didn't buy it, to be honest. I thought that was absolutely ridiculous. Sergio said it didn't smell. So I wasn't buying that story. But the craziest story of them all is we had two guys that worked for us and they were, we'll call them like Jim and Bob, right? I can use their real names because this is crazy. So Jim and Bob ended up being friends. Bob was an employee referral of Jim. So Jim worked here first and referred him because he posted a story on his Instagram saying, hey, like Orange Window Clean, he's looking to hire. He ended swiping up. He hadn't talked to this dude since high school in like three, four years.

So I was like, okay, you don't have that much really should be fine. We interviewed the guy. He seemed like a good fit. He had a kid he needed to take care of. I was looking for something solid. So I was like, okay, cool. Probably going to be a good fit. Well, we let them work together. And one day, I'm at, I'm at the house with Sergio and we're kind of just talking or whatever. and I get a call from our admin and she's like, hey, Jim and Bob are leaving that house, the last customer's house of the day, and they're really not happy.

And I'm like, okay, well, if they're just leaving, send him back and make him happy. And she's like, no, they don't want them back. And then my stomach drops. And I'm like, wait, well, like, why wouldn't they want them back? And make a long story short, they were going into the bathroom

and turning the water on in the bathroom. And they were doing blow. they're doing blow in the customer's bathroom, and the customer sent me pictures of the residue that they left in this tray. And they were going to the bathroom, turning the water on, saying there for like two, three minutes,

or like five minutes, and then one would come out, the other would go in. And so, and these customers have, like, their little kids there, and they're sitting there doing, blowing the customer's bathroom.

And obviously, like, I'm kind of reluctant to share that story because that's a reflection of my leadership and the team we built. Those guys should have been gone, a while before that. So I was bummed, but that's just something you don't expect.

You don't expect someone to do drugs in a customer's house. And so thank God, we said, hey, look, we're canceling the check. It's free. I'm so sorry this happened. Please forgive me. And I didn't even want to say, like, don't leave a bad review because I didn't even want to let them think of

leaving a bad review. Yeah. So I didn't say anything. And I just prayed to God that they didn't leave a bad review. And thank God they didn't. But, yeah, that was probably the most brutal. story we had running the business. As important as reviews are in your business, it's amazing that it didn't end up in a review.

But kudos to you guys for owning it and making it right with them. We had an employee drive, one of our, we have about 50 trucks in our fleet. And we had a guy drive who's driving to the auto parts store and he lost control of the vehicle and drove into a single wide trailer and moved it off its foundation, broke all plumbing pipes inside. He moved it so far. And I feel like it's all, you know, it's all on how you handle it with folks. You know, we didn't, we didn't try and shirk our responsibility. We just told him, hey, look, we have insurance. We're going to make it right. Got in there, shut the water off, moved the truck, you know, and it's, you know, you just have to take ownership for that

kind of stuff. So kudos to you guys for learning that lesson and then, you know, making that mental shift in your head of nobody else to blame but me. But I got, I got a higher better or whatever the takeaway was. We definitely, yeah, the takeaway from there is definitely like, okay,

we need to, like we're always marketing, we're always selling, we always need to be hiring. And so then we started really working on our funnel there and like screening process

and things like that. So it never happened again. And I don't think, hopefully will never happen again. But, yeah, that's definitely the craziest time and definitely roller coaster of emotions there.

Yeah. A review like that would have crushed us. I was just going to kind of end with that. We would have been, we're getting no more leads. if you're just seeing that. If people read, yeah, employees are using drugs on premise in my house. Yeah, your toast.

Yeah. Well, Johnny, this has been awesome, man. I'm really glad that we got to have this conversation and kind of peek behind the curtain about what you've learned across the board. How can our listeners follow you if they don't already? What can they do to support you? Yeah, so we have a newly launched YouTube channel and TikTok and Instagram. So we're like going hard on social and just telling people about the sweaty business.

like both sweaty and subcontracting. We talk about both. We've done both. And so that TikTok, YouTube and Instagram is all just Johnny and Sergio. It's literally at at Johnny and Sergio on YouTube, TikTok, Instagram. If you want to follow me on Twitter, I do threads and stuff all about this stuff at SqueegeeGod. So, yeah, find me in any of those spots. I can manage all that stuff from my phone.

So if you like message me, I'll see it. So, yeah. But, dude, thank you guys so much for having me. Always fun catching up with you, Gurdley. And it was nice to meet you, Mills. I hope to be back. Yeah, man. Thanks for joining us.