Young and Profiting with Hala Taha - David Royce: How to Turn a Boring Idea into a 9-Figure Business | Entrepreneurship | E392

Episode Date: March 30, 2026

Starting a business was the last thing on David Royce’s mind as a broke college student working a door-to-door sales side hustle. But while working in the unglamorous pest control industry, he discovered that ‘boring’ businesses were quietly producing more millionaires than passion-driven or tech ventures. That insight drove him to build and sell multiple pest control companies, ultimately selling them for over a billion dollars in exit valuations. In this episode, David shares why boring, unsexy businesses are the real path to wealth and how to launch, scale, and sell one profitably. In this episode, Hala and David will discuss: (00:00) Introduction (02:32) Key Lessons from Door-to-Door Sales (06:06) Realizing Pest Control Could Scale (10:55) Is Passion Overrated in Entrepreneurship? (15:56) Why Unsexy Businesses Create More Millionaires (31:35) Evaluating Blue-Collar Business Opportunities (40:57) Developing Systems to Scale Your Business (51:22) Managing Equity, Exits, and Generational Wealth (01:01:41) Growth Mindset, Mentorship, and Longevity (01:09:05) Hiring A-Players and Leading at Scale (01:12:45) Designing Your Business for a Profitable Exit David Royce is a serial entrepreneur and founder best known for building and selling several companies in the pest control industry, most notably Aptive Environmental. Starting from scratch, he scaled the business to $500 million in annual revenue across 34 states and 5,000 cities before a successful exit in 2024. David is a member of YPO (Young Presidents’ Organization) and serves as a mentor to aspiring entrepreneurs. Sponsored By: Indeed - Get a $75 sponsored job credit to boost your job's visibility at Indeed.com/profiting Shopify - Start your $1/month trial at Shopify.com/profiting. Spectrum Business - Keep your business connected seamlessly with fast, reliable Internet, Phone, TV, and Mobile services. Visit https://spectrum.com/Business to learn more. Northwest Registered Agent - Build your brand and get your complete business identity in just 10 clicks and 10 minutes at northwestregisteredagent.com/paidyap Framer - Publish beautiful and production-ready websites. Go to Framer.com/profiting and get 30% off their Framer Pro annual plan. Quo - Run your business communications the smart way. Try Quo for free, plus get 20% off your first 6 months when you go to quo.com/profiting Experian - Manage and cancel your unwanted subscriptions and reduce your bills. Get started now with the Experian App and let your Big Financial Friend do the work for you. See experian.com for details. Bitdefender - Start protecting your business today with Bitdefender Ultimate Small Business Security. Get 30% off your plan at bitdefender.com/profiting  Intuit - Start paying bills the smart way, not the hard way. Learn more at QuickBooks.com/billpay   Huel - Grab nutritionally complete meals you can drink. Get 15% off with code PROFITING at huel.com/PROFITING Resources Mentioned: David’s LinkedIn: linkedin.com/in/david-royce  Main Street Millionaire by Codie Sanchez: bit.ly/-MainStreet  Active Deals - youngandprofiting.com/deals  Key YAP Links Reviews - ratethispodcast.com/yap YouTube - youtube.com/c/YoungandProfiting Newsletter - youngandprofiting.co/newsletter  LinkedIn - linkedin.com/in/htaha/ Instagram - instagram.com/yapwithhala/ Social + Podcast Services: yapmedia.com Transcripts - youngandprofiting.com/episodes-new  Entrepreneurship, Entrepreneurship Podcast, Business, Business Podcast, Self Improvement, Self-Improvement, Personal Development, Starting a Business, Strategy, Investing, Sales, Selling, Psychology, Productivity, Entrepreneurs, AI, Artificial Intelligence, Technology, Marketing, Negotiation, Money, Finance, Side Hustle, Startup, Mental Health, Career, Leadership, Mindset, Health, Growth Mindset, Passive Income, Online Business, Solopreneur, Networking

Yeah, fam, I have really exciting news. After almost eight years of running this podcast, I finally was nominated for an I-Heart podcast award, which is like the Grammys of Podcasting. I'm heading up against the diary of the CEO, acquired, earn your leisure, and all these amazing shows for the best business and finance podcast. If you love Young and Profiting and you love this show and you want me to win, the best way to help me is to write me a five-star review on Apple Podcasts and also to subscribe to my YouTube channel. and engage on our videos. I also was nominated for an Indie Pack Award. It's the first ever independent podcast and creator awards. That's also happening in a couple weeks, and I was nominated for the best business and entrepreneurship podcast. I'm competing against Ice Coffee Hour and a number of awesome shows. And again, if you want to help me win these awards,

please write me a five-star review on Apple Podcasts and follow our YouTube channel and engage on our videos. I appreciate any support. If you guys have been to my free webinars, if you learn from the podcast. And you guys know that I never ask you for anything. This is the one time I'm asking you guys to support the show by writing us a review or engaging on our YouTube channel.

I hope to take home these wins. And thanks again for supporting the show. What an amazing time to be an entrepreneur. The way back then you got information about business was in theory to go to college and take business classes. They held the keys to that sort of knowledge. But today, you can get on chat GPT and ask it questions. I cannot believe how accurate it is.

David Royce is the founder and former chairman of Active Environmental, one of the largest residential pest control companies in North America. He's built and sold multiple companies in the same unsexy industry. Scaling these blue-collar businesses into a $500 million-plus empire without raising venture capital or playing the Silicon Valley hype game. I believe that following one's passions is dangerous. I think it's important to be obsessed. passion can kind of come and go, but if you make a choice to be obsessed and you keep working at,

you can find some things that are exciting. You took pest control and you built it into $500 million annually. What made pest control so scalable? So a few things. So one, 43% of everybody in the top 0.1%, not just 1%, the top 0.1 are in these boring traditional industries. How can we get better at starting to spot these really common everyday problems that nobody thinks about. The secret's no longer to know where to get the knowledge. It's pretty easy to find it. It's almost like, what is your horsepower, your drive, your ability to just stay focused and work and build?

How did becoming this rich impact you as a person? Like, what changed? Good and bad. The greatest impact it had was... Young improfitors, what if the fastest pass to massive wealth isn't chasing your passion, but mastering boring, everyday problems

better than anyone else? In today's episode of Young Improfers, Profiting, I sit down with David Royce, a four-time exited entrepreneur who built and sold multiple pest control companies. David breaks down how he spotted hidden opportunities in unsexy industries, turned door-to-door sales into repeatable growth engines, and explains why following your passion can actually hold you back from building real, durable wealth. If you're an entrepreneur who wants to win by focusing on fundamentals like systems, sales, and people, then tune in because this is a masterclass on Blue Collar Brilliance. Before we jump in, make sure you're following us on your favorite

podcast app. If you're new here, you won't want to miss what's coming. David, welcome to Young Improfiting Podcast. Yeah, thanks for having me. So I was doing a little bit of research about you, and I found out that your life really changed once you got this summer job going door to doors selling pest control. Right. So talk to us about that time in your life and how that really changed your trajectory. Yeah, so I was a broke college student trying to figure out what was the best way to get my way through school. And I'm working part-time. I had a friend come to me and say, you know, I made 25 grand last summer, you know, and we surf part-time and all this kind of thing. And all I heard was 25 grand. You know, it was 25 years ago. So it's like 50 grand in today's money.

And I had no idea really what it was. He said it was pest control. But I just, I literally drove out to Sacramento 10 hours, got an apartment and was ready to go. on that Monday morning. And it took me, man, I was like five days of selling zero. I was horrible at sales, but I started. But that weekend, I went out to a bookstore. And everybody else around me is selling one to four accounts daily.

So my confidence was just really, really down. And I clearly didn't know what I was doing. So went to the bookstore and just committed myself. I said 90 days, or I'm sorry, 90 minutes a day, every day this summer, I'm going to really read this and I'm going to get really, really good at this. Because it was a commission job. And so there was the ability to make a lot if you, you know, improved your skill set. Yeah. So you were going door to door for five days and you didn't make any sales.

Zero. What did that teach you about quitting too early? Yeah, you know, I did have thoughts about, you know, am I going to be able to pull this off? Like at the end of the week, you know, you have a couple days to think about what you did. And it was rough. But, you know, my personality is if I can see others doing something, you know, if you can see it, you can be it. Right. And then, you know, the thing I learned is, you know, persistence is genius in disguise, you know, and I really do believe that talent is directly proportional to desire. And if you want it bad enough and you're willing to work for it and just keep going, eventually I'll figure it out. Yeah. I totally agree with that. I'm always teaching people to just learn as much as you can.

Competence is confidence is something that I always say. I feel like that's so important. So important for young people to hear to really, you know, spend the time to actually learn the skills. So you became a master at sales, so much so that you ended up, like, training other salespeople and being, like, one of the top rookies in sales on your team. So what did you learn? What are some of the key things that you remember today that are still relevant in sales that you learned back then? Yeah. So a few of the things I was really struggling with was I was focusing on features instead of benefits.

You know, people buy for the reason why, you know, something is there. You know, you don't just say, well, we do this. It's we do this because. And this is why it's important to you. The second thing, I was not closing. I would get to the end of the approach and just go, so what do you think? They're like, well, and if you don't have that confidence to literally ask for the business, most people are like, maybe next time, you know.

So I sort of do what I call it an option close, where I would say, well, so we're going to be here tomorrow. you know, in the morning or the afternoon, which would work best for you. And both are in your best interest, right? And you're trying to help the customer make a decision to move forward with it. And most of the time, they respect that confidence. And they'll just say, hey, I'll give you a shot. Why not? I love that.

So not like if you're going to do it, just what time are you going to do it? Right. Give them a different option. At what point were you like, okay, I think pest control can scale. I think I can do this better. Yeah. So it was the furthest thing from my mind. It was a total 180.

I was studying finance to go to New York, do M&A. And yeah, I just, I, so the first year I was the top rookie, the next year I went to go work for a startup. The first company was a big, large company. And the startup, I had no idea what I was getting into. It only been in business for one year. You know, the operations were still, they were still dialing that in. And when I got there, there was no training manual for salespeople. And I had brought out friends as a sales manager, and I wanted them to do well.

I didn't want them to go through whatever. I had gone through. So I asked my boss, he said, hey, can I write your training manual? And he was really great at training. He would work with us. But it's nice when you have something you read, focus on. We started creating training videos to go along with it. And by the end of the summer, we were the top sales team. He had two different locations. And we had doubled what the other team did. Oh, wow. And so he pulled me aside and said, hey, why don't, why don't I give you a cut off, everybody in the company, if you want to help me try to scale this and make sure that they're doing, you know, as well as you guys were doing.

So I did that for the next few years. By the end of my, that last year, I was doing 200, I was making $225 grand a year. So almost a half a million dollars in today's money. I was managed 100 people. And I went to my boss and said, I need a letter of recommendation from you. I want to go do investment banking in New York. It's finance. I'm not sure how they're going to look at this pest control thing.

But I need you to explain, you know, what I've done, you know, it's not just the money that I'm making, but, you know, the management, the recruiting, the training, all these things I've done. And he's just, he looks at me and goes, what are you doing? Why would you go work for somebody else and work 80-100 hour weeks all year long? When you're doing what you're doing in just a short period of time, like, you really should go think, you should think about starting your own company. And so that was the first time I thought about it. I'd never thought about it before. It just, you know, wasn't sophisticated. I was getting a college degree. And I thought, you know, I am really get at this. I'm in the top 1% of 1% in sales. Maybe I should consider it. I know a lot. He said,

you know a lot of the business. You don't realize it. You think you just understand sales, but you've been around enough. You understand these other aspects. And if you have questions, you know, you can call me. What a cool boss. As I'm listening to this story, it's like you, you had somebody who really believed in you, who gave you opportunities. It probably foreshadowed how you ended up treating your own employees once you had employees. Talk to us about I guess looking back at this manager, the right things that he did that helped mold you to the person that you are today. Yeah, we really try to align our best interests with everybody's best interests. So we wanted to triple win, one for the business, two for the customers, and three for all of our employees.

And if you can align all those incentives, you get a much better outcome, you know, than just kind of focusing on one area or two areas. He was okay at the operation side of things, but he had a family, too. And he was very busy with that side of life. And he really just said, look, he gave me a list of things, actually. He gave me a list of 30 different things. He said, if I can improve the business, here's what I would do to make it better. And then I had experience in, obviously, I studied finance. I'd worked at a large company.

So I saw what that looked like at a $100 million level. And then I'd worked at the small company and really got to be more involved in the different areas. And so his allowing me to do that, I mean, part of it was, his best interest to you, but I got to see a lot of things. And then, I don't know, for some reason, he just, it made sense to him. And I actually, I got him to invest into my first company, too. He had talked about it. He kind of pitched always like, yeah, if you want to go do it, you can go do your own thing. But then I was really nervous to do that, and I hate risk. I actually love to mitigate risk. A lot of people think entrepreneurs, they want to jump out of a

plane without a parachute. It's not true. And so I went on and I asked him, I said, hey, would you mind investing in the company. I want to take it to a certain size and scale it. And he was like, yeah, I love to do that. He's like, but I want to be a silent investor. If you have questions, you can call me, but I don't want to do any other work. He didn't want any more work. Yeah. And he was selling his business too, to get out of it. So he sold his company for about $2 million and quite honestly, that was probably what made me go, okay, we were here for only four years. Yeah. That's a lot of money. I think I'll go try that. Yeah, it sounds like he was really inspiring. And then also he had control over his ego where he kind of let you shine and wasn't worried about you taking his customers and becoming competition.

So I just feel like what a great boss and experience that was for you. So one of the things that I've heard you say is that as an entrepreneur, you're really better off not following your passions. Why do you believe that? Right. So I believe that following one's passions is dangerous, or at least that it can be dangerous. No doubt, I was passionate. I became passionate about sales. And I think that people can become passionate about anything they're good at.

I like to use the word obsession. I think it's important to be obsessed. Passion can kind of come and go, but if you make a choice to be obsessed and you keep working out, you can find some things that are exciting. I think you can really build something off of that. There's a lot of passion industries, right? You know, you want to go out and be in music or Hollywood, you know, or a lot of people want to go have their own restaurant, you know,

because they're passionate about food. But those industries, you've got to be in the top 1% of 1%, you know, to make a dent and to really make good money. And a lot of people, too, they want to race into a business without the experience. And I'm also a big believer in, you know, getting experience. Why do you think following your passion is some of the worst advice somebody can get if they want to be rich? Let's say I just love basketball, right? NBA is amazing.

Who would actually want to go up to LeBron James say, hey, LeBron, I want to challenge you to a game of one-on-one. I'm going to invest everything I have. I've never played basketball before, but I want to put everything. All bets are on this one game. That's insane. Nobody would make that bet, right, except for LeBron. So I feel like a lot of people is they, you know, they want to get passionate, you know, or want to go do something that's passionate.

And especially if they've never done it before, that's really hard. I think you need to go out, develop a skill set first in some sort of a core competitive advantage. And then you utilize that competitive advantage to go off and, you know, do your own thing. If passion is overrated, what should people be optimizing for when it comes to their business? Yeah. So one of the best things about today is that you can get on chat GPT and ask it questions. I found chat to be like one of the best mentors available.

If you're starting out from nothing, you don't know anybody that's been an entrepreneur. Can on chat. It's incredible. You can learn about what are the best business models, which ones have the highest margins, which ones are recurring revenue, which make it easier to scale something, and which ones are doing well, which ones are getting rolled up by private equity or by strategics. I think that's a great way, you know, to find different ideas, you know, to one, to be able to identify it, right? Seneca said that luck is what happens, you know, when preparation meets

opportunity. So you got to figure out how to identify that first and then, you know, go out and put a lot of hard work into it to make it luck. Yeah. So you took pest control and you built it into $500 million. Was that annually? Yeah, annually. Wow. Like that's incredible. That is a dream for so many entrepreneurs tuning in. So what made pest control so scalable? So a few things. So one, it's a recurring revenue business model, right? So you sign up a customer, you know, where you typically go out every, you know, month, two months or three months to service the home. And it's one of those things where, you know, the bugs don't read the Wall Street Journal. So if there's a recession, it's very, very resilient. You know, if someone has bugs, they're going to

keep having you come out and treat the home. And pests are a lot. lot like weeds. You know, you can go out like a gardener wood and, you know, get rid of them once, but they're going to come back and see you have to have a service, you know, to order to maintain the house and the property. And it's probably really easy to find your clients because if one house has bugs, then the whole street probably has bugs, right? That's very typical, yeah. Yeah. So what are some common things that people should look for when it comes to unsexy, boring businesses like what's out there and how can people tell if this is going to be an industry that can actually scale? Yeah, so recurring revenue. It's probably one of the easiest ones because once you

get a customer, you know they're going to last for a certain period of time. You can literally look at the numbers and know, okay, the life of that customer is X. Two, I'd look for, you know, an industry that has high business margins. It's funny. I don't necessarily understand why it's this way other than supply and demand. But if a lot of people want to get into an industry, you don't have to pay people that much, right, to do that, or the market won't pay you that much. It's just supply and demand. Same thing with Hollywood.

You want to get in Hollywood. You probably work for free for a long time, right? Are you starting in the mail room, you know? Yep, that makes sense. That kind of a thing. So try to find a business with a really, really high margin. And then three, like, find some way to build a competitive advantage. For us, it was the sales model.

And pest control typically, you know, most companies, I call them traditional. pest control companies. Today, they just go through digital marketing. And we have a digital marketing arm. We do that too. But back early on, I was early into the sales model of knocking door to door. Most people think it's antiquated. And a lot of larger companies, even today, they haven't been able to figure out that model and how to do it well. And although the model had been around maybe for 10 years in the pest control world, nobody had really dialed it in to make it better. And for us, one of the advantages we had, I got so into sales, so passionate about it, if a sales person came to work for us and they had worked somewhere else doing the same job in another company,

they would sell 70% more with us that year than they did the previous year. And so we could grow, not only were we better at sales, but we could grow a lot faster as a company, pest control company versus a traditional model. We could grow literally seven to ten times as fast as a traditional pest control model. Well, what was the difference? Like what was you called yourself like the in and out, like in and out burger of the pest control world? So what was different from your model compared to the traditional pest control model? Yeah, so the sales stage is number one. Like we were hands down the very, very best of that.

Two, I had knocked on 60,000 doors myself for four summers. And so I had heard a lot of what people were looking for that the current industry was missing out on. And so we started to experiment with those different ideas. And then third was software. We started developing software of 16 plus years ago, which is pretty rare. especially for a pest control company. Like, no, it was unheard of. And so it was kind of our way of differentiating and making us a, you know,

frontrunner in the industry. So, for example, we started with software on the sales side. And we noticed towards the end of the summers, people started, you know, our employees started to get tired, didn't want to knock as much or, you know, they're just thinking about going home, getting back to college. And so we did as we set up these tournaments where we could compete with our salespeople all over the country.

And we try to match up sales reps that were like just, as good as the other individual to drive sales. And we could get our sales on a, you know, during, say, a tournament week, we could drive sales on extra 30% higher. Oh, wow. Just because people got more competitive. Right. So the math, it made a lot of sense. I was thinking about it like March madness for salespeople. So we turned our salespeople into athletes and we're able to, you know, get a lot more sales. Yeah, fam, you just realized your business needs to hire somebody yesterday. How do you find great candidates fast? Easy. Use Indeed. When it comes to hiring, Indeed is all you need. Stop struggling to get your job posts seen on other job sites. Indeed, sponsor jobs help you

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What I love is how simple Shopify makes everything. You don't need to be technical. You don't need to have it all figured out. It just lets you start. And like I said, starting is the hardest part. Yeah, fam, don't kick yourself a year from now because you didn't take action today. Start your business with Shopify. It's time to turn those what-ifs into sign up for your $1 per month trial at Shopify.com slash profiting. Go to Shopify.com slash profiting. That's Shopify.com slash profiting. So let's talk about rich entrepreneurs. Talk to us about this misconception that you get rich from tech.

Like a lot of us see tech billionaires and that's who we want to be. We look up to Elon Musk. We look up to, you know. Sam Altman. Stam All right. Yeah. Like everybody looks up to the tech guys. Yeah.

Why do you think, you know, boring, unsexy businesses are so overlooked? because it turns out some of the richest people in the world are running unsexy, boring businesses. That's right. So think about what gets headlines, right? Like if somebody says a pest control person made X amount of money, maybe it might make a headline

because it seems unusual, but it's actually not. It's far more common for these traditional businesses. There was an article in the Wall Street Journal this past year. It was called The Stealthy Wealthy. And in the article, there's actually a professor, Start of Prinschon that's labeled us the stealthy wealthy. And he says that 43% of everybody in the top 0.1%, not just 1%, the top 0.1, meaning

you make $2.3 million or more per year, are in these boring traditional industries. So almost half of everybody making a ton of money. But I just think in the news, you know, it doesn't make headlines. It's not good clickbait. People aren't that interested. And it's also not new. You know, it's not something that really resonant. I think, with the news.

That's incredible. So nearly half of the people who make over $2 million a year are running, owning, boring, unsexy businesses. Yeah. The individual that they highlighted in that article, I think he made some sort of a machine to rip up carpet. And the niche he found was schools. He was like, you know, in schools, almost every year,

the carpets, turns out kids are really dirty. And you've got to rip up the carpets every year and replace them with new carpet. And he'd been doing it for, I think, 35 years. years. Like, who would have thought, right? These are problems that nobody thinks about. Yeah. How can we get better at starting to spot these really common everyday problems that nobody thinks about? What an amazing time to be an entrepreneur, right? When I went to college, which dates me, you know, the internet had blown up and then it blew up, we had a big recession

in 2000. And so when I graduated in 2004, tech actually wasn't as, um, sexy to want to go get into just because, you know, it was kind of at the low point after the crash. And so the way back then you got information about business was, you know, in theory to go to college, right, and take business classes. They had, they hold, they held the keys to that sort of knowledge or maybe you go get an MBA. But today, I mean, you can listen to podcasts, right? You can go on all these different master classes or things all over the internet about how to be in entrepreneur, how to build a business. And now with AI, I mean, I do all of my research. I'm finally in my exploratory phase. I took a year off. I'm starting to explore other business

ideas. Almost all my research is on chat, GPT, like figuring out the next thing. And I cannot believe how accurate it is. Every once in a while who hallucinates. For the most part, incredible. Yeah, I use it constantly. Actually, I've been starting to get worried because I'm like, can I even work without this anymore? I've been challenging myself. I was working on a course or like a webinar for a course earlier this week. And I found myself like using chat GBT so much and like had to step back and be like, wait, I am an expert. And chat GVT is not going to know more than me about this topic.

It can help me like refine it, make it stronger, more succinct or clearer. But in certain aspects, I feel like we're like really losing our ability to think. It's starting to like worry me a bit. Yeah, it's almost like the secret's no longer to know where to get the number. It used to be you just have to know where to get it. Now it's pretty easy to find it. And so it's almost like what is your horsepower, your drive, your ability to just stay focused and work and build and continue learning?

Like those are really the assets or the keys to be able to grow. Yeah. Okay. So back on this topic of unsexy businesses, boring businesses, we were talking earlier about passion and you saying like, you know, you're not going to get rich following your passion. Right. In most instances, right?

Sometimes you can get lucky. Yeah. Most instances. So how do you stay motivated and passionate if you feel like you're in, like, for instance, like I'm sure you're not obsessed with pest control. So what did you get obsessed with in your business? So for me, it was developing people. So when I first got into the industry, on the sales side, they had this what I call

a wet rag mentality. They'd throw a wet rag against the wall, you know, see who stuck. And then after that just was what it was. And I thought, that's a shame. Like, how many people come out here and have a poor experience? And then, you know, don't become, don't help the company to be able to sell and build the business. And then they go online and write bad reviews about their employee experience. And I just thought, there's a better way to do that.

Even if you're, like, if you're self-interested, take care of your people. Like, I really found it to be a responsibility. Yeah. Right. Like, if you have a bad boss, they can actually take years of your life away, right? You can be three times more depressed. There's all these stats. So I got passionate about developing salespeople initially.

And then it was about developing sales managers. And then it was about operations. And then it was about entrepreneurship. So it wasn't so much the widget that we were selling. It was more the game, you know, a business and being creative, using my mind to think, okay, how do you scale this and how do you build systems and processes so that you can scale it across the country, you know, and help thousands of people, not just on the customer side, but on the employee side. See, I feel like that is like the big idea in this conversation.

It's not about the industry. It's not about what you do. It's about how you do it and getting obsessed with actually being an entrepreneur and scaling a company. Like that's exciting in itself. And it doesn't really, as long as you're solving a problem, especially one that has a lot of market demand and you're getting rewarded because people want this problem. So you're making money. Like that in itself is a fun game, you know? There's two things that really do it for me.

One is personal growth, you know, and learning. two is service. And those are the two key things I got out of being an entrepreneur. I got to be really creative. And there was a point, you know, maybe six, well, I mean, even from early on, but definitely like at the sixth year mark where I started to say, okay, like I've sold built and sold multiple businesses, what can we do? I've got like millions of dollars now.

I can reinvest in the business. And I just started studying Silicon Valley because by that point, it was really coming back. And I went toward Google and meta and Zappos and all these different tech companies, Tesla, later on Tesla. And I just was like, okay, well, what can you do? What ideas can we take? Because the hardest talent to recruit back then were software developers. And they were building these amazing facilities. They had amazing company cultures.

They were doing incredible retreats and all these things. And so I said, all right, why don't we do that with pest control? So we built, you know, this incredible headquarters with the NCAA basketball court. You know, we had a 30-person suite at the jazz arena. Everybody could go and watch the NBA together. We have retreats where we go all over the world. We started out in Hawaii and we do things like skydiving and, you know, hiking up the volcanoes to see the lava and you're swimming with sharks or whatever.

You know, it's a lot of college kids. So we're doing lots of, you know, fun kind of wild things. And it was just, I wanted to create experiences. I want to create memories. I wanted to be different. Yeah, and I'm sure it helped with recruitment because suddenly it was cool to be part of a pest control team. Yeah, if you walk in and like your office has, you know, ping pong, foosball, you know, a movie room, a golf simulator, a basketball court. It's like, wait, what is this? A lot of people thought we were a tech company.

They're like, I had no idea this is pest control. It doesn't make any sense. And you're like, I know, it's kind of fun, huh? You mentioned a few times that you guys developed a software. So I'm curious, what kind of software was it? Like, where did it actually? Did it help your customer? Did it actually help you guys find customers? Like, what was this software? Just so people can start to think about, like, if they're in a boring industry or they want to disrupt a boring industry, what kind of ideas they could have. Yeah, started on the sales side.

And we're like, okay, how can we make sure our training gets everybody? So we put sales training videos or sales training manual on there. So everybody had easy access to it. I actually recorded an audible version of it just for us in-house. So if sales reps were driving out to the area, they could listen to it. And then it was, okay, let's develop the sales-travel. And then we started expanding into other things, like determining which doors to knock on. We started to get, you can pull all this customer information.

We actually can know our salespeople didn't know, but internally, we can know, like, who's paying their bills, you know, who's paying their mortgage, you know, do they have a pet? You know, do they have a family? And there were certain key factors that made our retention better. And so we're thinking, okay, well, how do we, you know, create a more profitable, better business that has more longevity, we took it all the way down to that level. Oh, very cool. And then other things, too, like in-house, you know, we created a CRM.

Actually, more recently, we just barely released that. But yeah, you're just constantly looking for different ways to improve the business in terms of being more profitable in terms of increasing revenues, looking for efficiencies with routing, you know, making our service pros lives easier, you know, going from place to place. They don't want to have to drive everywhere. If it saves them gas and time, and then get home earlier at the end of the day.

And it's great. So basically, it wasn't even about any external customer services. It was actually to help your own team operate better and make better decisions. Yeah, it was more internally. And then in time, like we started thinking about the customers too, where we said, okay, what are things that we can do that other companies aren't doing? So one of the ideas we had was creating a customer app. And then every time a service pro was at someone's home,

whatever pests were there, they would take photos. A lot of times when we're out of home, the customers, they're not there. Two-thirds of the time, they're at work, you know, doing something else. And so sometimes there's the question of, did your technician come to our home? So by taking a photo, they know that they were there. And two, you kind of give them that value. You show them here's where the pests are and what pests you're having. And then you can work as a team towards doing, you know, helping get rid of those pests.

So like if someone has a bunch of firewood, you know, right up against their house that might attract spiders or rodents. And we can take a photo of it, show them, you know, the rodent droppings or, you know, spider webs and be like, hey, can we take this and maybe move into the back, backyard, the far back fence? So that way you don't have stuff trying to get into the house. Yeah. So it's a way to work together, a way to visually see that they're having problems.

And I think that helps our customer attention to. Yeah. And it probably makes you guys more human. They get to connect with somebody. They feel like you're going above and beyond. Absolutely. I love that. Okay.

Let's play a game. Let's play a game called Blue Collar Billion Dollar Business or Nah. Okay, so I'm going to say in industry, you can say if it's, you know, a billion dollar industry potential or no. And, you know, be honest. It could be that it's not a great business to be in.

And then let us know at the end what industries I may have missed that you want us to make sure that you want to make sure that we know about. Great. Okay. Okay. So let's start with HVAC.

services, billion dollar business or nah? Yeah, definitely billion dollar business. You can already see this. Private equity has actually been rolling up HVAC for quite a long time. If you think about why, so one, going back to kind of what I said before, a recurring revenue model, right? You can go out, like maybe you need your filters change, you know, every quarter or whatever it is.

And so they'll make sure that they come out and do that for HVAC. And then, you know, plumbing, if somebody, someone's got a problem with their plumbing, it doesn't matter what recession you're in. They're going to call you immediately, and they want you out there yesterday, right? Just like, get out here now. Yeah, so HVAC, that's a good one. So do you recommend somebody buy

an HVAC existing company or actually start one from scratch? Like, if you could choose, would you say buy or start one from scratch? Yeah, so I was at, I was just at another podcast, and the host said, Hey, have you ever heard of Cody Sanchez?

And I was like, I've never have. And he's like, you remind me a lot of her in terms of what you talk about. He's like, you should look her up. So I looked her up. I saw she had a book, Main Street Millionaire. I just read it. I was like, this is incredible. I think her ideas are, they're even better than mine in the sense that instead of

starting from scratch, like what I did and grow organically, buy a business that already exists. It's been around for 10, 20, 30 years, right? Because they've done all that. They've mitigated almost all the risk. The only risk you have is just continuing to operate it. And if you hire, if you buy a business, maybe with like a small business loan or whatever,

yeah, you can continue. You already have like, it's kind of like training wheels. Like you've already got something. You've got a baseline, yeah. Right. It's, if you look at franchise models, they're so successful, right? Like within five years, most businesses are out of business, like new startups, 80% of them are gone.

But in franchise models, 80% still exist. Oh, wow. after five years. And the reason why you have the blueprint, right? Like, you already have the processes and the systems. You have the KPI is already listed in terms of what you need to track. You've got a financial forecast that says, here's approximately what you should be doing as you grow.

So experience really mitigates your risk. And I'm a big fan of that. I just don't. But don't you think there's something to, like, building something from the ground up and really know, like you knocked to door to door for four years. And so you knew every customer problem. You knew every customer desire.

Don't you feel like there's an advantage in that? There definitely is. You can have the same advantage. So if you buy a business, you can get into that business and go learn all of it. And so I just think that's a much better way than starting from scratch. I already had experience. That was my competitive advantage. I knew how to build the business.

And so it was more like, okay, I just need the capital. I need to firm up all the processes and systems. And then I'll, you know, scale it. from there, but I knew what I was doing because of that. And so even if you buy another business, go into it with, hey, the next six months, I'm going to go into this business. I'm going to learn every little detail about it. So I understand it. And then you're like a master that already has the perfect blueprint to be able to scale.

And you can always work to improve it. Just like, you know, my boss, it gave me 30 different things to work on. You can go in there and go, you can ask, you know, the former owner or the manager, whoever's there. What are you doing to, what are your pain points? Yeah. How can we improve? If you had the time and you could just focus on improving the business, what would you do? And I'm sure you could do customer surveys and all that good stuff to really understand.

Employee surveys. Okay. Landscaping and lawn care, billion dollar business or nah? I would say nah right now. The hard thing about lawn care, and you've seen this in multiples with lawn care. I'm not sure where it is today, like I think 10 years ago, the multiples really came down in terms of what businesses were willing to pay for them. It's hard. One is the retention is not as good as like pest control.

In fact, you've seen the larger public companies get rid of lawn care and take it out of their service or sell it off to somebody else. And then two, the hardest thing is although it's recurring, it's visual. It's really easy to see if there's a problem. And if your lawn looks brown or it's dying, they're going to keep calling you to come back. And eventually they can get frustrated with you. And it tends to be a harder thing to manage and do really well at. Okay. interesting.

Junk removal. So different model, not recurring revenue per se, but I do think there's a model there. I just don't know it as well, but what I had junk removal people come out before, they're really good. They're like,

take pictures of what you have and send it to us and we'll tell you whether we'll come out and pick it up. And so if you think about it, the only charge they really have, other than you know, it's gas, you know, an employee coming up, picking it up and taking it out, they're kind of just like a middleman in between, you know, selling off the items somewhere else. And so if it's basically, if they get it for free

and they can sell it for, you know, a piece of furniture or whatever it is for $1,000, $2,000, it's not a bad business model. Yeah. One of my previous clients was the CEO of $1,800 got junk, Brian Scudamore. And he actually, he created a franchise model out of it. So he learned how to do it really well in a few cities and then started a franchise and does, really well. I don't think it's quite a billion dollars, though. Okay, pool maintenance. I would say nah in the sense that if you're trying to build a billion dollar company, I haven't seen as many groups rolling up pool services yet, but I have heard that pool margins have gotten a lot better. And so, like, if you have 20 or 30 percent margins, that's a really

great business model. And then it's recurring, right? Like, they need you out there on a weekly basis, and it's either your pool company or another pool company, like they have to have somebody. So if you have some sort of a strategy, maybe even going door to door, could be a really great strategy, especially to set up really tight routes in the exact same neighborhood. You keep saying rolling up. What do you mean by that for people who are kind of new to this world? Sure. So what you see with private equity groups that are buying lots of companies, you know, private equity groups have funds, they have investors, invest into them. And what they'll do is you can buy small companies for a lower multiple.

So for less money, let's say, you know, let's say a company is $10 million just for the sake of what, you know, simplicity. It's $10 million. Let's say you can buy it for $10 million. It has a 20% profit margin. You're going to buy it for five times that profit margin. It's $10 million.

What they can do is if they attach it to a big company, like let's say they have got $100 million dollar company, suddenly that $10 million now becomes $20 million or $30 million of value because the bigger the company, the more value is there. So in my industry, the company that bought us was looking for a platform company. And we were the third largest pest control company in United States. We're in 34 different states, 5,000 cities. And so what they wanted was to be able to bolt on, they wanted our current business, but they also wanted to be able to bolt on other companies where they could buy companies for less. and simply by attaching it,

it was, they call it accretive, now it's worth a lot more money. And so it's a great business model, especially if you have private equity or other groups rolling up companies like that, bolting them on to a bigger platform company, you know,

even if you're small, you can say, look, I want to take it, I want to go from the 5x multiple. I want to get to a 10x multiple. You know, you may not get to the 15

because you might have to have 20 companies rolled up into one. But it's incredible, incredible way to make money. Arbitrised, right? Yeah. That makes a lot of sense. So basically, these companies are bundling up smaller companies. Do the smaller companies, like, take the other company, the bigger companies process

and brand, or does it stay? Yeah. Yeah, typically, if they get to a certain size and they're bigger, I've seen this in pest control, like say if you're doing 30, 40, 50 million a year, they'll say, hey, let's just keep the brand. Like, that's a good business and the brand is worth something. let's let them keep keep that and we'll have that run on its own. But we'll also, they'll say, we'll take some of our best practices, we'll look at theirs

and maybe there's a few things they can improve. Let's improve this, this, this, right? And then they'll get what's called synergies where they'll say, we probably don't need their executives anymore. We'll just use the executives at the big company. You know, these ones are going to retire. They probably had some equity in the business. They're going to move on.

So there's a lot of ways to make additional money. Yeah. I definitely want to talk to you about your exit and what happens. and everything like that. But let's move on and talk about systems and processes. So where did your discipline come from in terms of you being obsessed with operational excellence and you wanting to, you know, systematize your processes? My obsession probably came from the poor experience I originally had in the industry

and realizing the responsibility you have as a business owner to train your people really well and to build a really incredible culture, you know, from the very start. But if I go all the way back when I started work when I was 14 at a pizza parlor, I worked at a mom-and-pop pizza parlor. Got let go from there after a year, went to go work for McDonald's after that. Super embarrassing or whatever, but it was the one place that would hire me. I'm 15 years old. Yeah, not embarrassing at 15.

That was embarrassing for me. But what was amazing about it is I very quickly realized that that was. a better business model because they had a best practice for everything. They had training manuals. They had training videos, the managers, they had logs to make sure you were trained in each little thing. Whereas, you know, at the other place, it was just the owner, hey, so here's kind of how you flip a pizza and here you do this and that and just wasn't much, you know, there. So I always, I always joke that if you want to know whether you have a scale little business, you know, leave for 30 days and see,

if it's still there later on. And McDonald's for what's worth. The food's not great, but it is a well-oiled machine. You can't build a multi-billion dollar company and not have incredible best practices. Yeah, you go from, you know, one McDonald's in New Jersey to another in Cali,

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So you've got this nail it, then scale it framework. Talk to us about how you actually created these processes and rolled them out. Yeah. So most entrepreneurs are, you know, what I'll call mom and pops, just like I'll say you have a single location. What they struggle with is typically working in the business instead of on the business. they have a manager mentality instead of an operator mentality. And it's not the big things that hold us back. It's the little things.

And it's mistaking movement for achievement. So what I started to do is I said, okay, I'm going to organize my time into A's, B's and C's. A's are the most important, but they're the least urgent. And then Bs are kind of somewhat important, somewhat urgent. And C's are, they are urgent, but they're the least important. Okay. So a C, for example, would be like paying your bills. You have to do it, right?

It's urgent. You don't want to be late. But is it important? Not really. It's not important that you do it as a business owner. You can hire somebody else to do it. You can set it up on auto pay. A B, hiring people.

That is more important, right? And you probably had to do it for a long time until you got good at it. But can you hire and train somebody else to do it? Yeah, you can do that. And then A's are the most important thing that's going to move the needle in your business. So it could be a new product, a new service line. It could be increasing the profitability of business, increasing efficiencies, you know, figuring out how to scale systems and creating systems and processes to scale better. And the problem is, is most people, it's not urgent, but they are the most important.

And they get put aside. It's like, well, I'm too busy today. I'm working on this. so-and-so not show up. I'm going to deal with this. And the key is to get your business to run on its own and then to take all your best practices and put them into training manuals, which I realize is not that fun. And I had somebody on another podcast, they asked me recently, they said, so you were really good at doing training manuals. I'm like, no, I wouldn't say I was good at it, or I was passionate about it, but I realized how valuable it was, and that's why I did it. And over

time, I got better and better at it, and I was able to do it a lot quicker. And, you know, you figure it out or everything's hard before it's easy it gets easier yeah how did you think about hiring you know your executive level leadership like what were the things that you looked for and and how did that go throughout your journey yeah so initially you know our executives everybody was homegrown in fact our co-o was my first employee um insanely hard worker very creative had worked in the industry for five or six years prior to coming over started out it's just a technician but quickly moved into service management became an operations manager, a regional manager, VP, and then, you know, C-O.

Same thing, like our bookkeeper became our person in charge of finance. And like, you know, it's just this is how you do business when you're small and you're growing. Yeah. We did to get to a point around a couple hundred million where I said, okay, we've got to bring in professional executives that, you know, have seen business at this higher level of the game. And it was nobody's fault. It's like we had done it all and nothing but, you know, congratulations and kudos to all those that were able to get to that point.

And, you know, we didn't lose them. We moved them into other positions, transition to other spots, you know, in the company. But it's really important at a certain point to bring in professionals. And the way we got there, it's one thing if you have maybe a CFO that, you know, is maybe 10 to 15% off on financials and you need one to five percent off to dial in and be better. It's another thing. If you're sitting around the executive table and you have that. now thousands of people working for you, and you have a responsibility to be the very best in lead. So this ship doesn't go under at some point.

It's important to have the very best people at that table. And if it's quiet and you don't hear a lot of new ideas coming up, that's where I typically get scared. I believe you have to always be growing where you're dying in business. And you have to keep that same entrepreneurial ethos. And if you're not having any new ideas come up to continue to fight the fight and think better and grow better, you've got to make some sort of a change. And so that's how we initially got into that. Yeah.

Talk to us about that more deeply. Like I know it must have been really hard because I know for like with me, I've got a, you know, I have a podcast network and agency. I'm scaling it with homegrown executives who are basically my best friends. Absolutely. Because I spend so much time with them. I couldn't imagine, you know, becoming a $100 million company and then just saying, Jason, Kate, sorry, you know.

I'm going to bring some other C-suite executives in here. I'm sure it was hard to break the news to them. It was hard to have that transition. Like, how did you deal with it all? And what was it that they couldn't do that these other executives could? So, again, like on the CFO side, it's like we needed, I'll give you an example. So sometimes it's hard for someone to replicate themselves or build out a team underneath them. And the individual was doing our finances, amazing guy.

So with the company. It still oversees a large portion, you know, similar pay structure to what he had before. But just in a different area. He needed a CFO, you know, a proven CFO to come in and show him how to do it. How do you scale, you know, the right size of department, you know, and have other people. What can you give away and what do you need to keep on your own? to continue doing. And so sometimes you just, and even though we had hired, like, for example, consultants

and people to come in and train, sometimes it's just hard. It takes time and you need that upper level person to come in and show them how to do it. But yeah, it's really hard. My favorite days were the, you know, probably the first 10 years when you know everybody, you know their kids' names, you know exactly what their desires are in the company. And we went to them, too, you know, to the majority of them said, hey, we need, here's what we need from you? Can you learn this? Can you do this? And at some point, it's hard to learn what you just simply haven't ever been around before. So let's talk about, you know, your extreme

level of success. So you built a company to $500 million. You bootstrapped it. So how much equity did you own in it? So I owned 100% on the first, like, well, let's see, on the first one, I had my boss had invested in him to me and he owned, I think it was 30% if I go back. Okay. And he was the, he invested 300,000 or 300,000. And then on the next two, I owned those 100%. And then the last one, I actually ended up giving 25% of the company away to all of our employees. Amazing. And I couldn't have done that unless I had kept all the equity previously. The beauty of what my model was, I could build up the company, and this is the reason I sold multiple companies. I would build it. And I would sell off, I do what's called an asset deal.

And so I would just sell the customer base with the technicians to a large strategic. It was Terminx who bought my first three companies. And then they give you a bunch of money. And I would keep my sales force, you know, my key operators in each location, my leaders, and I would go start a new company and just put a different logo on the brand. So it was very, very unique. And initially we couldn't go back in the same areas to compete. The second time I negotiated with them and said, you know,

I need to be creative here. Our people can't just keep moving everybody around. If you want the business, then you've got to agree to these terms. And then it had tens of millions of dollars. And then, you know, $100 million or whatever on the third one to be able to keep reinvesting the business. And so it was nice because if I had been owned by somebody else or had investors to be as generous with all of our employees, it just wouldn't have happened.

And then I get my CEO a massive portion of the company as well. So, yeah, I mean, I own about half the company or whatever by the time we sold. But it's really amazing to, when we sold, to give you an idea of how big we were, you know, 500 million in revenue per year. And, you know, based up those multiple tools we were talking before, you know, a company in my industry, we'll just go off revenue. A company in my industry usually sells from one to three times revenues, right? So, you know, it's usually dependent up on how big you are. And so I can easily say that, you know, we had nine digits that we gave away to all of our people. Many of them making six and seven figures on the day we sold.

So it was one of the coolest moments, actually, in my career, is having people call me and said, you know, just say thank you. You know, I just paid off my home. I just paid off my school loans, my kids' school loans. Just put my parents a car. Yeah, you see it's almost emotional for me now. That's amazing. It's amazing what you were able to do for your employees.

And it's impressive to me that in some of your first companies, like you were able to hold on to so much equity. Like I know, like, for example, I'm building a company right now and like working through vesting agreements and going to be giving some of my key players some equity. But I do think we're different. So, for example, like I'm creating so much content. and being like an influencer creator,

it's hard to beat everything. Right. Where that's kind of one of the benefits, I think, of having an unsexy, boring business is that the customers are there. You don't need to keep drumming up so much marketing and advertising

and, like, in order to get these customers. So you were able to kind of hold on to all your equity because... The recurring revenue model. Yeah. Right. Yeah.

There's always sales and you've got to keep it scaling, but it definitely makes it easier. You just teared up because you were thinking back to all the employees that you were able to help when you sold your business because you were able to give some of that money back. You obviously have generated a lot of income way more than the average person.

And I think a lot of entrepreneurs tuning in right now are in a position where they're going to be earning a lot of money. And, you know, with the good, it always comes the bad and things that we need to kind of consider and think about. So how did becoming this rich impact you as a person? Like, what changed, good and bad? So what's funny is the greatest impact it had was the first time I sold, right?

Because to sell for, say, $13 million, that's life-changing, right? When you're used to making whatever, even though I was doing well initially, I went for three and a half. half years where I almost made nothing in the business. It was more of an equity play. We were growing so fast, I could not take a lot of money out of the business. And so was one of the reasons I sold. It was a way to be able to get cash, throw into the next business, and grow even faster. Here's the thing I got to warn people about if you think that having a bunch of money will solve every problem. You're wrong, right? You still have to deal with who you are. You still probably have the same whatever trauma may have caused you to want to get into entrepreneurship there. I had some financial trauma growing

out. My mom told me we're probably going to lose the house the next month when I was young and my dad was gone five days a week traveling. So my mom was basically a single mom, you know, during that time. And it really scared me. And I just now, I've been, you know, worked with therapists and understanding, okay, we're like really wanted financial control. And that's why this was so important. And maybe one of the reasons it drove me. But I've noticed most entrepreneurs have a chip on their shoulder about something that drives them to keep working. I do think that entrepreneurship is addictive. I think there's massive dopamine hits on a daily basis. And I love working 16 hour days when that was possible. I think things to watch out for are,

if you start to have a family, and deciding that you're going to put time into what's important. And it's not a bad thing. Your priorities start to shift, right? It's a good thing to be able to put time into your family. But I do have other friends where, you know, similar situations that built big companies, but they're still working, right? Really, really hard.

Long days. Don't see their kids. And it's like they're okay. They're financially. Like you can do it for a couple of reasons. One, maybe because of whatever trauma you still have. but two, because it's really fun. Yeah.

And you just have to make that decision. Okay, am I going to be there? I never wanted to, you know, look back someday and go, shoot, I really agree. I should have spent more time with my kids. I only have such a long window. I grew up in a family where the saying was no amount of success compensates for failure in the home. I love that. Yeah.

I know your dad was really inspirational to you growing up. He was. bless his soul he was he was a really great father um so you have two kids i do and you were just talking about how you worked at macdonalds when you were 15 right you really earned your stripes you knocked door to door for four years you know what are your thoughts around teaching your kids how to be successful on their own or like what are your thoughts around how to handle having kids when you're really wealthy and instilling really good values and hard work in them. I think it's really hard to give them the same experience I did. I've joked with

my wife, maybe we need to fake a bankruptcy and go live in an apartment while they're in high school, so they have some of that financial insecurity to want to go do something and gain control. But it's, you know, it's funny. But then at the same time, it's like it's not, but I don't, I don't wish upon them that experience. but for me it was a gift, right? And I do want them to work. You know, when they're 15 or whatever, as soon as they can go get a job, I want them to have something, even if it's just, you know, on Saturdays or, you know, a weekend

thing or in the summertime, I think it's really healthy to learn how business operates to get those communication skills to see the systems and processes at a young age and just to be able to kind of connect the dots when you're younger. I'm also, I'm giving everything away when I die. So I'm telling my kids, like, you've got to go make it on your own. Really? Everything? Mm-hmm. You're not going to give them a dime?

I mean, maybe a dime. But what I'm telling him is, like, look, your biggest advantage is you have two parents. My wife was an attorney for a bunch of years. I've obviously been an entrepreneurship. You can ask us any question. You know, we're here to mentor you. And school, we'll take care of your school and get you through that. That's another advantage I didn't have all the way through.

But, yeah, I want them to have that. desire to go do something. I have seen children, like, trust funders that have, it's just been crippling to them. Yeah. And they never, it's not just about having to go to work each day, but it's about finding passion and life and having purpose, you know, and being excited. Like, I really do believe, like, humans are here to work, like, and that we drive a lot of value and community from that. Yeah. As you're saying that, the thing that popped in my mind when you said that, you know, humans, you know, we have the desire to work and having passion is so important for a mental health. You think about AI and taking so many jobs. Yeah. And what that might do

to a lot of folks, especially younger folks, who won't have those entry-level jobs available to them. You know, the beautiful thing about blue-collar businesses is I think it's going to be really hard for AI to replace them. I can see, it's funny because I see like the white-collar jobs, like transactional lawyers or accountants or a lot of those jobs being not completely going away, but getting minimized, you just don't need as much help around them. But the blue collar, like, you're going to have to create robots and they're going to have to really, really good at what they do. We'll see if we can get to that point.

That's a really good point. Okay, let's go back to entrepreneurship for a bit. So one of the things, one of the principles that you have is to always be paranoid. And you're a proponent of 1% improvements. Why is that so important to you? And how can we become more paranoid as entrepreneurs? Yeah. So only the paranoid survive is an old quote that's been around Silicon Valley for a long time.

And the idea is that you're always trying to improve. If you're not growing, you're dying. If you think back to the Fortune 500, I think it was invented in 1955. And only 10% of the companies that were originally on that list are still on. it today. So to me, that's a really great reminder that you've got to keep evolving and learning and growing. The most dangerous thing is when bigger companies get to a point where they're just like, you know, we're the biggest. We don't have to do things differently, you know, and they start to kind of rest on their laurels. I joke that there's three phases of business. There's a startup,

a scale up, and a screw up. I love that. You know, where you start to become a dinosaur. You know, Start-ups, probably that mom-and-pop phase. You're trying to dialing best practices. Once you have those, you scale up. But then at some point, you start to lose that entrepreneurial ethos. You start to lose the culture. People feel like a number. We don't have to be better. We're good enough. And then, you know, I think pride comes up before the fall. Yeah, we've got to make sure that we're not getting lazy in any way, especially, like, you know, once you're making money. Why do you feel like if you're not growing, you're dying? Like, couldn't you theoretically, just stay the same?

Think of it like an escalator. So the escalator is coming down and every competitor is trying to walk up it. And if you stop, you're now going backwards on the escalator and everybody else keeps walking up. So imagine if you said, oh, we don't need software back of the day. It didn't exist before. We're always done it this way. It'll be fine.

Well, if a company has software and you don't, it's a real easy to go, yeah, that company's going to die eventually. Same thing now with AI. If you don't adopt AI, you know, you're going to be less profitable. Eventually you're going to go away. Everybody will be used to working with AI. They won't even want to go work the old school way. No, who wants to sit, you know, and go through Google and different websites trying to find answers to whatever the question is. It's just not even not even thinkable. Yeah. So you've sold your company. Are you planning on starting another company ever again? Yeah. Yeah. This last year, I said, I'm going to take your, and I really want to be intentional.

And so now I'm in that second year. I'm starting to explore different business ideas. And it's been all over the board. I didn't sell with the idea of I want to go do this specifically. It was more, I've got to a point where I'm not learning anymore myself. And we're in 5,000 cities. If I go scale another 5,000, it's going to be the same for me. Yeah.

We also, we're getting so big that we were going to have to go public if we didn't find a, you know, a buyer. And for me, like, once you become public, then you've got to stay with. business for a long period of time. You can't just sell all of your stock at once or, you know, freaks out the market. And I thought, do I really have another, you know, 10, 20 years in me to do this? And I'm like, you know, I think I'm ready for a different challenge. So it was a way to be able to get all the money out at once, you know, help everybody have an incredible payday. And I felt like we had the right team in place, too, to be able to carry the business forward. Yeah. So how are you finding purpose now and what does legacy mean to you?

Legacy, you know, my kids really are my biggest focus. I have a home that I'm working on and remodeling. It's just, it's funny how I still go to my office each day. You still go to the office? Yeah, I call it work, but it's like a lot of it's brainstorming new business ideas. Yeah. And just a lot of the other things that I do. I'm involved in an organization called YPO, which I'm a huge fan of.

There's 38,000 members across the country, well, across the world. And there's about 100 people in our chapter. And it's broken up into all these different chapters. But you have all these other entrepreneurs. You have to do 15 million of revenue a year or more. And then you need to be in a CEO or chairman or whatever position. After a certain amount of time, then you can be in it forever. I think it's seven years.

But it's such a great way to find mentors. I think mentors are really helpful. And they're more like peer mentors that you can bounce ideas. It's almost like your personal board to ask questions. You can ask, you know, life or life questions about your family or whatever else. Or you can ask business questions. So a great way. Like I definitely make sure to mention that.

Trying to find other people who are in your SIM situation is important. I always say, tell me who your friends are and I'll tell you where you'll be in five years. Right. And we're the average of our five closest friends. So super important to make sure you're surrounding yourself with other people that you can grow with over time. Yeah, I feel like that's so important for entrepreneurs. I feel like it's important to have mentors. And you often have mentors at different stages.

So like if I think back to my journey, I had a mentor that helped me start my company. I had a mentor that helped me grow my pod, who is like a huge podcaster, who helped me grow, who helped me grow my podcast, right? And then you just have like different mentors for different seasons. And then I think these entrepreneurship groups, you're talking about like YPO. There's a new group called Hampton that I'm in that a lot of people are in now. Yeah, Sam Parr's group. It's called Hampton.

My first millionaire. Yeah, my first millionaire. Yeah, he's got an entrepreneurship group. So I feel like that's also really important because even if they're not in the same industry, it's often even better because it's like you can really tell them everything and not feel like they're your competitors and they're coming from different perspectives. And entrepreneurship is lonely. They'll give you ideas that you couldn't even have thought of or that nobody else in

your industry is even thought of. And so that's why I love it's this brand share of different ideas. Yeah. Okay. So I want to ask you some last questions about entrepreneurship. What's the one mistake you hope that the next generation of entrepreneurs don't have to deal with? I would say be careful not to believe you are just that, like your identity. Beware of having your identity completely wrapped in in what you do.

I realize in our country, we tend to think like that. I am an attorney or I am an entrepreneur or whatever. And if you go to a lot of other countries, they don't necessarily think like that. You know, it's just I am Dave and I go to work, but I also play and I do all these other things and I have hobbies and all that. And I think it is really fun and addictive as an entrepreneur to be all in all the time. But I think there's times and seasons. And that would be the one thing I'd say is just be aware not to be so wrapped up in it.

Because it can hurt too when you have moments of failure, your reputation, you feel like it's your reputation, and it's probably more the company's reputation, especially if you're a really big company at that point. And it can, it can sting a little bit more than it probably needs to. What's the number one lesson you had to learn as a leader scaling such a big company? Always be growing. Constantly be growing. I was paranoid in the sense that if I didn't feel like I was learning, so I read a couple of books every month because of that. It's like I have to be growing. I don't ever want to get to a point where I can't be the leader of the business, you know, or the chairman and founder where it's okay to have other people know more,

but I have to, you know, reasonably be smart enough, educated enough, have enough leadership skills to be able to be in that position. I don't want to be there just because I founded it, right? Or because, you know, somebody else put me in that position. I know that, you know, you mentioned throughout this interview, like, how important a team has been to you. What are you looking for in an interview? Like, what is the skill or the personality trait that you're really looking for when you're

hiring for your companies? Yeah, I think every job description is going to be different in terms of what you're looking for. And I think it's actually less about the job description. Like, identify what all those key skills are and determine that the individual has them. But also, like, are they an A player? Like, how bad do they want this? Do they believe in all of your cultural values as well?

Do they come from a field that rhymes with yours? It doesn't have to be the exact same industry, but is it something similar where it's like, yes, I can see that they're going to get it. And then the other thing, too, is when they first come on, trust but verify. We had a CFO come over when we originally hired, and he had worked at a billion dollar tech company prior. But it was a public company.

And one of the things we didn't realize is that he had dozens of people underneath him at the other. So he was more the face of the company. And when you hire executives from half a billion, billion, multi-billion-dollar companies, you got to make sure that they're willing to get their hands dirty and really get in there, learn the business in depth as opposed to just hiring other people to do it. We got in trouble in that one. We started to notice our forecast. He created the forecast.

But we noticed that we were missing our forecast over. time. It was actually worse than the previous individual who we had doing it. We're going, what's going on? To make matters even worse, though, we had just signed up to run a process to sell half the business. And it wasn't as bad in the beginning. Then we got offers from six different companies, ranging from a billion dollars to $1.6 billion. And we kept missing our forecasts at a larger scale so much that over the next couple months as they were doing their due diligence to make a final offer and sign a LOI, all of them pulled out and just said, you know what, we want to see another year or two just to make sure you guys know what you're doing.

It's like, no. I'm sure you're paying this guy a million dollars a year, too. We're paying a lot of money. Yeah. And so it was tough. It was just a really hard lesson. So one, trust but verify. Two, never miss your numbers.

If you're running a process to sell your business, the buyers hate it. And it also gives them leverage over you. And then third, you know, you only sell a business half the time when you run a process. Those are about the odds. And so it's okay. You're going to learn so much running that process in terms of what the buyers want that you can take that information back and go, okay, like, here's what we got to work on. And then, you know, take it to market another two or three years later and you'll be in a much better spot. Yeah.

When you think about selling businesses, I feel like there's two types of entrepreneurs. There's entrepreneurs that start a company and they never even. think about selling. They don't design their business for selling. They're just, you know, they're not really thinking so long term. And then I feel like there's people who are creating companies to sell them. Right? And maybe there's in between. But how do you think about it and what are the key things that you need to do if you want to sell your business? Like, how do you make sure that it's a sellable business that people will want? I think it's always important in life to begin with the end in mind. Because you may not want to sell today or have

no intentions of it. But you never know, is it five years, 10 years, 20 years? For me, it was around the 20 year mark when I just said, you know what, I think I'm, I think I'm good. Or the company was a certain size. It's like, I've got to sell if I, if I want certain things or, you know, or it's going to shape. It's going to have to be a public company or whatever else. Or you don't know when you stop kind of learning if that's the thing that really does it for you. So it's a good idea. And most companies is they're going to get investors. They have to know what the end is going to look right, because no one's going to invest into them just to kind of see how it goes and if they're going to make a little bit of money along the way,

or whether they can or can't make it, maybe you can get friends and family members to do that. But to really get like series seed money or A money, you've got to have a business model and show exactly where it's going and you have some good traction to be able to pull that off. Yeah. What did selling look like for you? Like what did it, like were you just completely out of the business and he sold it? Yeah, I went into the last one saying, you know, I'm ready to be out. My CEO is going to continue on.

And I'm going to, you know, after 20 years, pull out. And were you CEO of your company for a very long time and then transition that role? The first three. So, yeah, the first three of CEO. And I just, I feel like it's kind of the same. We had a couple thousand locations. And I'm like, okay, scaling another thousand locations. I'm not going to learn anything new.

And so I had my protege who he had been top sales rep, top sales manager. And then when he graduated college, I put him in charge. of all of the recruiting for our company. He was recruiting thousands of salespeople to come work for us. And he was the individual that I replaced myself with as CEO. And we would talk every week. You know, we maintained our cultures and our processes systems. Like initially, the first few years, he had to ask me for changes.

He was more like a hired gun. And then over time, you know, as I became more comfortable, I was able to allow him to, you know, have more flexibility and, you know, anything over, say, 0.1%. that decision he can make on his own. But if it was over like a $500,000 decision, then we discuss it as a board and work on it. It's so cute.

It's such like a full circle moment. It's like your manager when you first started in pest control kind of like brought you up and gave you responsibility and let you kind of work up the ladder. And then you did the same thing for somebody else. And then it allowed me to focus on the things I really enjoyed still. So the strategy, hiring key executives and eventually, you know, working to find a buyer.

Yeah. Well, I end my show with two questions that I ask all of my guests. The first one is, what is one actionable thing our young improfitors can do today to become more profitable tomorrow? Oh, that's a good one. I'll give you the easiest one I can think of them. That's okay. Get on chat GPT and ask questions. If you have something, the more detail you give it, obviously, the better.

I mean, I don't have to tell a younger generation this. I guess I'm just so amazed with how much information you can give it. And it'll give you a very specific answer. The other day I was asking about if you have a certain amount of money, exactly how should you be invested, why? And I started challenging it with my financial advisor's advice to the advice, you know, a chat. And we just kind of kept going back and forth, trying different things. And it's fascinating.

Yeah. I agree with that. And I think also explore the other apps out there. Like, Claude is really awesome. Like, there's so many great apps out there. And honestly, if you're not spending, like, most of your time toggling between AI and your own work,

you're kind of behind at this point, I feel like. If you're not really getting immersed in it and really learning how to prompt and use and experiment with tools and getting comfortable with it, I feel like you might be a little bit behind right now. Definitely. What would you say your secret to profiting in life is? To me, I think there's two things that I've mentioned do it for me.

One is personal growth in learning, and then the second is service. So I think you've got to figure out, like, if you want to be happy in life, you know, I think we're happiest when we're striving for our true potential. And then two, like, no one's ever going to regret giving their best, you know. And those are the things that made me happiest. So as an entrepreneur, if people are looking into being that, it's great. But I also think it's great for any other aspect.

You want to be an athlete. You want to be a parent, you know, just constantly be evolving, constantly be learning, constantly be serving. So true. David, thank you so much. Thank you for joining us on Young and Profiting Podcast. You bet. It's great to be here. Yeah, fam, I really enjoyed my conversation with David. He completely flipped the script on entrepreneurship by proving that real wealth isn't always just chasing sexy tech startups. It's also in mastering these boring, unsexy businesses that solve everyday problems. These recession-proof businesses where people need these problems solved no matter how the economy is doing. And I personally took away so many lessons today, but one that's top of mind for me is his philosophy on passion. David said that following your passion is dangerous advice if you want to get

rich. Instead, develop a skill set first, build a competitive advantage, and then become obsessed with the game of entrepreneurship. So for example, David's passion was not pest control. It was actually developing people building systems and scaling businesses. Now, here's what I want you to think about. if you're in the market to buy a business, think about a boring business, an unsexy business with bulletproof fundamentals. Look for recurring revenue models, high profit margins, and recession-resistant demand. Remember, 43% of people earning over $2.3 million a year run traditional unsexy businesses. Now, while the industry might be unsexy, making that much money is certainly really sexy. Next, I want you to think about whether you're buying a business or your existing business,

how you can build more repeatable systems. David's competitive advantage, the thing that really separated him from other pest control companies, was training so effective that salespeople would sell 70% more at his company than they would at their previous company. So take a play from his playbook and commit to documenting every best practice in manuals and videos. Think about the thing that you're strongest at and how you can scale that to your team with a repeatable process or S-O-P. And here's another tip to test if you've got enough S-O-P's and best practices for your team. Try taking a vacation for 30 days like David suggested. If your business can't survive without you, you don't have a scalable business. You have a job. Finally, the last thing I want to point out

is this concept of actually selling off assets in your business rather than your business itself. So this is something that I never really thought about or knew about before this conversation with David that was really eye-opening for me. So essentially, David had the same thing. So essentially, David had the same company that he basically sold off parts of it three times before he ultimately sold the whole company. So he would just sell off his customers and keep his sales team and rebrand. And he just kept doing that, which is just so smart. It's such a great way to get cash. He knew he could just get more customers with his process. And he was just able to kind of sell off his customers each time and do these asset deals. That's what it's called asset deals. So that just got my wheels turning in terms of

my own business, like what could I actually sell off as an asset that I feel like I could just grow right back? Or is there anything in my business that I could actually just sell off that isn't my entire business so I can get a cash infusion? It got my wheels turning. I thought it would be worth reminding you guys to maybe get your wheels turning too. And I'll leave you with this Yap gang. The path to wealth isn't always glamorous. Stop chasing passion industries where you're competing against millions and start building something boring, potentially, that prints millions. A huge thanks for tuning into Young and Profiting as always. And today before we go, I did want to shout out an amazing listener who dropped us a heartfelt review. Mike B.H.

says, as a beginner podcast creator and host of the Do You Ever Wonder podcast, I'm astounded by the guest's holla brings to the party. Add to that the value each episode provides, and it's a must listen channel. Five stars for sure, only because there's no option for 10. Well, thank you so much, Mike. Feedback like this keeps us inspired to bring you the very best guests and content possible. If you want to be like Mike and support the show, drops a five-star written review on Apple, Spotify, CastBox, wherever you tune into the show. And also, we are leveling up our YouTube game. Make sure you subscribe to YouTube, young and profiting. All of our episodes are published on there. And all of our in-person

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this is your host, Halitaha, aka the podcast princess, signing off.