David Royce: How to Turn a Boring Idea into a 9-Figure Business | Entrepreneurship | E392

The way back then, you got information about business was can 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 to PT and ask it questions

and I cannot believe how accurate it is. David Royce is the founder and former chairman of Appedive 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 the following one's passion 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 out, 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 if you think so, one, 43%, 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 secrets 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 impact. The greatest impact it had was. Young and profitors, what if the fastest past to massive wealth isn't chasing your passion,

“but mastering boring, everyday problems better than anyone else?”

In today's episode of Young and 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 master class 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 and profiting 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 door selling pest control. 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.

“Try to figure out what was the best way to get my way through school.”

And I'm working part-time. I had a friend coming to me and say, you know, I made 25 grand last summer, you know, and we surf part-time, and all those kind of thing, and all I heard was 25 grand. But you know, it was 25 years ago.

So it's like 50 grand in today's money. Yeah, I had no idea really what it was. He said it was pest control, but I just literally drew about to Sacramento 10 hours. Got a department, and it was ready to go on that Monday morning.

And it took me, man, it was like five days of selling zero. I was horrible. It 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, you know, 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 read this. And I'm going to get really, really good at this.

Because it was a commission job. And so there is the ability to make a lot if you, you know, improve 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, 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 going to work for it and just keep going, eventually you'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. Actually, that's so important. So important for young people to hear, to really, you know, spend the time to actually learn the scale. So you became a master at sales. So much so that you ended up like training other sales people and being like one of the top rookies and 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?

benefits. You know, people buy for the reason why something is there, you know, you don't just just say, well, we do this. 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 an option close, right? 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 when I love that. So not like if you're going to do it, just what time are you going to do it? 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 sitting

finance to go to New York, do M&A. And yeah, I just, I, the first year as a top rookie, the next year, I went to go work for a startup. The first company was a big large company. And the start-up, I had no idea what I was getting into. It only been in business for one year. 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 what I had gone through. So I asked my boss, I said, hey, can I write a training manual? Yeah. And he was really good at training. He would work with us. But it's nice when you have something you read, folks 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 with the other team did. Oh, wow. 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 last year, I was doing 200, I was making 225 grand a year. So almost a half million dollars in today's money. I was managing 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 just he looks at me and goes, what are you doing? For why would you go work for somebody else in work 80 hundred our weeks all year long when you're doing what you're doing and 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 had never

thought about it before. It just wasn't sophisticated. I was getting a college degree. And I thought, you know, I am really good at this. I'm in the top one percent of one percent in sales. Maybe maybe I should consider it. I know he said, you know, you know, 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 you have, if you have questions, you know, you can call me.

What a cool boss. But as I'm listening to this story, it's like you, you had somebody who really believed in you who gave you opportunity is 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 interests, best interests. So

we wanted to triple win one for the business, one 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 set of things, but he had a family too. And he was very busy with that set of, you know, life. And he really just said, look, here's, if you 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, a studied finance that worked at a large company. So I saw what that looked like at a hundred million dollar level. And then I've worked at a 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 his, for his best interest, 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 had got him to invest into my first company too.

“He had talked about it. He kind of pitched always like, if you want to go do it, you can go do your”

own thing. But then I was really nervous to get through that and I hate risk. I actually love the mitigate risk. I love 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 buy an investing in the company?

but I want to be a silent investor. If you have questions, you can call me, but you know, I don't want to do any other work. You didn't want any more work. Yeah. He was selling his business too,

didn't get out of it. So he sold his company for about 10 million bucks. And quite honestly,

that was probably what maybe 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, he had control over his ego where he kind of let you shine and wasn't worried about you taking his customers and become in 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. A lot of there's a lot of passion industries. Right. You know, you know, when to go out and be a 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're going to be in the top one percent of one percent, you know, to make

a dent and it intervary make good money. And a lot of people too, they, they want to race into a business without the experience. And I'm also a big believer in 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, I want to put everything.

All bets are on this 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 they, especially if they've never

“done it before, that's, that's really hard. I think you need to go out, develop a skill set first,”

and some sort of a core competitive advantage. And then you utilize a 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. You know, I found chat to be like, one of the best mentors, available. If you, if you're starting out from nothing, you don't know anybody that's been an

entrepreneur, get 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, you know, ones are getting rolled up by private equity, or by strategic. I think that's a great way, you know, to find different ideas, you know, to, you know, 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 dollars. It 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 if you think, so one, it's a work recurring revenue business model, right? So you sent up a customer, you know, we 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. Right? 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 pest are a lot like weeds, you know, you can go out like a garden or wood and, you know, get rid of them ones, but they're going to come back and see how 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, it 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 no, okay, the life of that customer is X. To you, I 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

you don't have 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're going to get Hollywood. Try to work for free”

for a long time, right? Are you starting in the mail room? Yep. That makes sense. That could have 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 past control, typically, you know, most companies, I call them traditional past 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 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, a pest control company versus a traditional model.

We could grow, set literally 7 to 10 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, what was different from your model compared to the traditional pest control model? Yeah. So the sales page is number one. Like, we were hands down the very, very best at 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 pest control company. Like, it was unheard of. And so it was kind of our way of differentiating and making us a front runner in the industry. So for example, we started with software in the sale on the sales side. And we noticed, at towards the end of the summers, people started, yeah, 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 ourselves, people all over the country. And we tried to match up sales trips that were like, just as good as the other individual to drive sales. And we could get our sales on a, you know, during, during say, a tournament week, we could drive sales in extra 30% higher. Oh, wow, thank you. Because people got more competitive. Right. So the math made a lot of sense.

It was to think about it like March madness for sales people. So we turned to a sales people into athletes and were able to, you know, get a lot more sales. Hey, at them, I'm not afraid to say producing this podcast for quieter skills. I do not naturally have from audio engineering to video editing. I have to hire experts who are way better than me in those areas. And as I scale my podcast,

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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. Yeah. Like everybody looks up to the tech guys. Yeah. Why do you think, you know, boring, unsexy businesses are still overlooked because it turns out some of the richest people in the world are running unsexy, boring businesses. That's right.

So think about like what gets headlines, right? Like if somebody says a pest control person may text about it. Maybe it might make a headline because it seems unusual. But it's actually not. It's far more common for, you know, these traditional businesses. There was an article in the Wall Street journal this past year. It was called the the stealthy wealthy. And in the article there's a there's actually a professor out of Princeton that's labeled us the stealthy wealthy. And he says that

43% of everybody in the top point one percent, not just one percent. The top point one, meaning you make $2.3 million or more per year are in these boring traditional industries. It's almost half. Everybody, you know, 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 resonates I think with with the news.”

That's incredible. So nearly half of the people who make over $2 million a year are running

owning boring on sexy businesses. Yeah. The individual that they highlighted in that article thinking made some sort of a machine to rip up carpet. And the niche he found was schools. He's like, you know, in the schools almost every year, the carpets turns out kids are really dirty. And you got to rip up the carpets every year and replace them with new carpet. And even doing it for, I think, 35 years. Like who would have thought, right? These are

problems that nobody thinks about 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? What when I went to college, which dates me, you know, the the internet had blown up and then it blew up, we had a big recession in 2000. And so when I graduated in 2004, this tech actually wasn't as 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, can theory to go to college, right? And take business classes. They they hold the keys to that sort of knowledge or maybe you go get an MBA. But today, I mean, you can listen to podcasts. You can go on all these different master classes or things all over the internet, how to be an 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

Actually, I've been starting to get worried because I'm like, can I even work without the

“study more? 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 QUT so much and like had to step back and be like, wait, I am an expert and chat QUT is not going to know more than me about this topic. You can help me like refine it, make it stronger, more succinct or clear. But in certain aspects, I feel like we're like really losing our ability to think. It's starting to like, worry me, invest. Yeah, it's almost like that's the secrets no longer to know where to get the knowledge.

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, you know, 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're saying like, you're not going to get rich

“following your passion in most instances, right? Sometimes you do sure. 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,

the sale on the sale side, they had this, what I call a wet rag mentality, the throw wet rag and so well, you know, see who stuck. And then after that, just was what it was. And I thought, I have to 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.

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 initiative. 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 employees 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 when that has a lot of market demand and you're getting rewarded because people want this problem so you're making money. It 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, in learning, two is service. And those are the two key things that 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 six-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 setting 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 hill quarters with the NCAA basketball court, you know, we had a 30-person suite at the Jazz Arena to everybody could go and watch the NBA together. We have retreats, so we go all over the world. We start out in Hawaii and we do things like new skydiving and you know, hiking up the volcanoes to see the lava and you 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, I'm sure I 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 football, you know, a movie room, a golf simulator, basketball courts, 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.

You're like, I know it's kind of fun, huh? You, you mentioned a few times that you guys

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 to everybody? So we put sales training videos or sales training manual on there. So everybody had easy access to it. Actually recorded

an audible version of it, just for us in house. So if sales ruptured driving out to the area, they could listen to it. And then it was okay, let's develop the sales tournaments. 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 could know, like, who's paying their bills? Who's paying their mortgages?”

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 then into the day, and it's great. So basically,

it wasn't even about any, like, 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, we said, okay, what are things that we can do, the 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 password there they would take photos.

A lot of times when we're at a 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 a 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 much of firewood, you know, right up against their house, that might attract spiders or rodents. And if we can take a photo of it, show them, you know, rodent dropings or spider webs. And be like, "Hey, can we take this and maybe move to the back backyard and back 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, but way to visually see that they're having problems. And I think”

that helps our customer attention too. Yeah, and it probably makes you guys more human. They get to connect with somebody. They feel like they'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 now. Okay,

so I'm going to say an 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 there's lettuce now at the end, what industries I may have missed that you want us to make sure that we that you want to make sure that we know about. Great. Okay. Okay. So let's start with HVAC services, billion dollar business or now. 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 is going back to kind of what I said before, 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 got a problem with their plumbing, it doesn't matter what recession you're in, the coin

to call you immediately and they want you out there yesterday, right? Just like, get out of your 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, um, I was, I was just said another podcast. And the, 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

yeah, you can continue. You already have like, it's kind of like training wheels. Like you've already got something. You've got to get there, 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 they already

“have the processes and the systems. You have the KPIs 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 do anything. There's something to like building something from the ground up and really know like you knocked a 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, you know, 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 let, 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, 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, I give 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, you know, 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? Hmm. I'm sure you could do customer surveys and all that good stuff to really really understand. The police service. Okay, landscaping and lawn care. Billing dollar business or now. I would say, nah, right now. The hard thing about lawn care and you see this in multiples with lawn care. I'm 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 to 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, you know, it's dying, they're going to,

“they're going to keep calling you to come back. I've actually, they can get frustrated with you.”

And it tends to be a harder thing to manage and do really well at. Okay, interesting. accountable. So different model, not not recurring revenue per say, but I do think there's a model there. I just don't know it as well. But what, you know, had junk room people come out before. They're really good. Like 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, and a 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 item somewhere else. And so if it's basically, if they get it for free and they can sell it for, you know, piece of furniture, whatever it is for $1,000 bucks, $2,000 bucks, it's not a bad business model. Yeah, one of my previous clients was the CEO of 1,800,

got 1,800 junk, Brian Scudemore. He created a franchise model out of it. So he learned how to do it really well. And a few cities and then started a franchise and does, does really well.

I don't think it's quite a billion dollars, though. Okay, pool maintenance.

I would say now 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, completely really great strategy, especially to set up really tight routes in the exact same neighborhood. Mm-hmm. 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 invested 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, they are a market. Let's say a company is $10 million, just for the sake of

It has a 20 percent profit margin. You can buy it for five times that profit margin is 10 million

bucks. 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 it comes to 20 million or 30 million of value because the bigger the company, the more values 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 United States, you know, 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 a creative. Now it's worth a lot more money. And so it's a great business model, especially if 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, 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. That's something arbitrage, 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 take? Typically, yeah. Typically, if they get to a certain size and they're bigger,

I've seen this in pest control, like I say, if you're doing 30, 40, 50 million here,

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 that and we'll have it run on its own. But we'll also, they'll say, well, 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 say, we, we probably don't need their executives anymore. We'll just use the

executives with the big company. You know, these ones are going to retire. They probably had new 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 happened 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 session probably came from the poor experience I originally had in the history 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 out of pizza parlor, I worked at a mom and pop pizza parlor. I 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 in 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 was a better business model because they had a best practice for everything. Yeah, 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,

there's 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 joke that if you, if you want to know whether”

you have a scalable business, you know, leave for 30 days and see if it's still there later on. And McDonald's for, 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, the chicken nugget is the same, right? And you get the same product. No matter where it is. It's very, very, it's very, very consistent. Hey, Afam, if something unexpected happened to you tomorrow with the people who depend on you, be financially okay. I asked myself that question and honestly, I didn't love my answer and that's

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call mom-and-pops, just to go 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 B's are kind of somewhat important in 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 autopay, a B hiring people. That is, that is more important, right? And you probably had to do it for a long time to 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 it'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 your business, increasing efficiencies, you know, figuring out how to scale systems and cross-creating systems and processes to scale better.

And the problem is, as most people, it's not urgent, but they are the most important, and they get

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 that asked me recently, they said, "So you were really good at doing training manuals." I'm like, "No." 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 your executive level leadership? Like, what were the things that you looked for, and how did that go throughout your journey? Yes, so initially, you know, our executives, everybody was homegrown. In fact, our COO was my first employee and, say, the 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 COO. Same thing, like, our book keeper, or our personal 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 COO to all those that we're 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, it's, 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, maybe 10 to 15 percent 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 thousands of people working for you. And you have a responsibility to be the very best and lead. So this, your 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. And 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 gotta make some sort of a change. And so that's how we initially got into that. Yeah, talked just 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 because it's been

so much time with them. I couldn't imagine, you know, becoming a hundred million dollar company

and then just saying, Jason Kate, sorry, you know, I'm gonna bring some other C-speed executives in here. I'm sure they, it was hard to break the news to them. It was hard to have that transition. How did you deal with it all? And, 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 a, I'll give you an example. Sometimes it's hard for someone to replicate themselves or build out a team underneath them.

The individual of us doing our finances amazing guy. So with the company, it's still overseas a large portion, you know, similar, infrastructure 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, and it takes time and you need that upper level person to come in and show them how to do it. But yeah, it's, it's really hard. My favorite days were the, you know, probably the first 10 years when you know everybody, you know, the kids names, you know, exactly what their desires are, the company. And we went to them too, you know,

to the majority of them and 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 a hundred percent of the first, like, well, see, on the first one, I had my boss at investment and to me. And he owned, I think it was, I think it was 3% of the figure back. Okay. And he was

the, he invested $300 million or $300,000 and I invested $300,000. And then on the next two, I owned

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 it just sell the customer base with the technicians to a large strategic. It was term and actually 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. And our people, it can't just keep moving, everybody around. If you want the business, then you got to, you know, agree to these terms. And then it had, you know,

tens of millions of dollars. And then, you know, 100 million dollars 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 hadn't investors to be as generous with all of our employees, it just wouldn't have happened. And then I gave 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 a bigger worry, you know, 500 million in revenue per year. And you know, the base up those

multiples 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 to pin 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, seven people call me and said,

you know, just say thank you, you know, I just paid off my home, just paid off my school lounge, my kid's school lounge, just bought my parents' car. Yeah, you see, it's almost official for me now. Well, 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 too 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 be everything 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 like keep drumming up so much marketing and advertising in, like, uh, 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.

So there's always sales and you got to keep it scaling, but it definitely makes it easier.

You just tiered 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, 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 in bad. So what's funny is the the greatest impact it had was the first time I sold, right? Because life changing, right? When you're used to making whatever, even though I was doing well initially, I went for three and a half years where I almost made nothing, you know, in the business. You know, it was more of an equity play where growing so fast, I could not take a lot of money out of

the business. And so as one of the reasons I sold, it was a way to be able to get cash through

“under the next business and grow even faster. Here's the thing I got to warn people about.”

If you, um, 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 where I was 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 single mom, you know,

during that time. And it really scared me. And I just now, I think, you know, worked with

was so important. And maybe one of the reasons that 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 the

“entrepreneurship is addictive. I think this 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 priority start to shift. It's a good thing to be able to put time into your family. But I do have other friends where, you know, similar situation that 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

financial issues. 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, I'm going to be there. I never wanted to, you know, look back some day and go

shoot a really great issue. It's been 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 at the home. So I love that. Yeah. And your dad was really inspirational to you. So he was bless his soul. He was, he was a really great father. So you have two kids.

“I do. And you were just talking about how you worked in McDonald's 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 a

apartment. Wow. He's close to the house of that financial insecurity to want to go do something. That's so funny. Game 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 it 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, in 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 deal 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 break on your own. Everything? I'm telling you, I'm dying. I mean, maybe I'd die. But what I'm telling you is, like, look, your biggest advantage is you have two parents. My wife was an attorney for

a bunch of years. Obviously, in entrepreneurship, you can ask us any question. You know, we're, we're here to mentor you and school. We'll take care of your school and get you through that. It's another patch 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 in life and having purpose. You know, being excited, like, I really do believe the humans are here to work, like, and that we drive a lot of value and community from that. Yeah. As you're saying, 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 me really hard for AI to replace them. I can see it's funny because I see 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,

some of the principles that you have is to always be paranoid. And you're, you know,

proponent of one percent improvements. Why is that so important to you and how can we become more paranoid as entrepreneurs? Yeah. So only the paranoid survivors is an old quote that's

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 percent 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 a balving and learning and growing. The most dangerous thing is when bigger companies get to a point where they're just like, you know what? We're the biggest. We don't have to do things differently. You know, they start to kind of rest on their laurels. I joke that there's, there's three faces 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, startups probably that mom and pop phase. You're trying to dial in best practices. Once you have those, you scale up. But then at some point, you start to lose at 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 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, well, we don't

need software back in the day. And like, it didn't exist before. We've always done it this way.

We'll be fine. Well, if a company has software, and you don't, it's a really easy to go. Yeah, here, that company's going to die eventually. Same thing now with AI. If you don't know, 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 what if 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 you off, and I really want to be intentional. And so now I'm in that second year, and I'm starting to export different business ideas. And it's been all over the board. I didn't sell with the idea. 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're going to have to go public if we didn't find us, 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. We can't just sell all of your stock at once, sort of, you know, freaks out the market. And I thought, do I really have another, you know,

10, 20 years and maybe to 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, have helped everybody

have an incredible payday. And I felt like we had the right team in place to be able to carry the

business forward. Yeah. So how are you finding purpose now and what does legacy mean to you? Well, I see, you know, my kids really am my biggest focus. I have a home that I'm working on, remodeling. It's just, it's funny how you, like, so go on my office each day. Do you work? Yeah, I call it work, but it's like a lot of brainstorming new business ideas. Yeah. And just a lot of the other things that I do, I've involved in a organization called

Waipio, which I huge fan of. It's 38,000 members across the country, across the world. And there's about a hundred people in our chapter and it's broken up and all these different chapters.

“But you have all these other entrepreneurs. You have to do 15 million or 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, like, find mentors. I think mentors are really helpful in there. They're more like peer mentors. You can bounce ideas. It's almost like your personal board to ask questions. You can ask, or life questions about your family or whatever else, or you can ask business questions.

It's 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're being five years, right? And where 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 pot, who is like a huge potcaster who helped me grow my pot cast, right?

ship 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 Pars group. It's called Hampton. My first writer. Yeah, my first writer. Yeah, he's got a, 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. Don't give you ideas that you didn't, 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. Be aware 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

get 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 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 there's times and seasons. And that would be the one thing I'd say is

“just just be aware not to be so wrapped up in it. Because it can hurt you and you have moments of failure”

your reputation. You feel like a pure reputation and it's probably more of a company's reputation, especially if you're a really big company at that point. And it can staying 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 of founder, where it's okay to have other people no 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, right, or because you're 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's 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 in a player like, how bad do they want this? You know, do you, do they believe in all of your cultural, 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 one of the, 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 others. So he was more of the face of the company. And when you hire executive some, you know, half 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, you know, in depth. This feels like just hiring other people to do it. We, we got in trouble in that one.

We started to notice our forecast. He created the forecast. But we, we noticed that we were missing our forecast over time. It was actually worse than the previous individual we had doing ever going, what's going on? To make matters even worse, though, we had just signed up to run a process to sell, have 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 dollars.

And we kept missing our forecast 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 an L-O-I, they all of them pulled out and just said, you know what, we want to see another year too, just to make sure you guys know what you're doing. It's like, no, like we thought. I'm sure you're paying this guy a million

lesson. So one, trust but verify, to 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 to 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 a process in terms of what the buyers want that you can take the 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.

So 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 your 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. Yep. 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 five years, ten years or 20 years for me. It was around the 20 year mark when I just said, you know what? I think I'm, I'm 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. That's the thing that

really does it for you. So it's a good idea. And most companies, they're going to get in best investors. They have to know what the end is going to look like 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 it's a really good, like, series seed money or a money, you've got to have a business model

and show exactly where it's going. And you know, have some good traction to be able to pull that up. 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? And yeah, I went into the last one saying, you know, I'm ready to be out. My CEO's 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 CEO. And I just, I feel like it's kind of the same.

We, we had a couple of thousand locations and I'm like, okay, scaling thousand 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 what he graduated college, I put him in charge of all of the recruiting for our company. He was recruiting thousands of salespeople who come work for us. And he was the individual that I replaced myself with as CEO. And we, we would talk every week, you know, we

maintained our, our cultures and our process of systems. Like initially the first few years, he had to ask me for changes. He was more like a hired guy. And then over time, you know, as I became more comfortable as they will allow him to have more flexibility and, you know, anything over, say, 0.1%, that decision he could make on his own. But if it was over, like a 500,000 dollars decision, then, you know, we'd discuss it, you know, as a board and work on it.

It's so cute. Such like a full circle moment. It's like your manager, when you first started an intense 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. Specialty else. And then it allowed me to focus on the things I really enjoyed still. So the strategy hiring key executives, uh, and eventually, you know, working to find a buyer. Yeah. Well, I and my show with two questions that I ask all

of my guess, uh, the first one is what is one actionable thing are young improvisators can do today to become more profitable tomorrow. Oh, it's a good one. I'll give you the easiest one I can think of. 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. Yeah. I guess I'm just so amazed with how much information you give it and it'll give you a very, uh, you know, specific answer.

The other day I was asking you about if you have a certain amount of money, exactly how she'd be invested, why? And I started challenging it with my financial advisors advice to the advice, uh, you know, a chat, and we just kind of kept going back and forth trying different things and

“fascinating. Yeah. Um, I agree with that. And I think also explore the other apps out there. Like,”

claw, it 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 like if you're not really getting immersed in it and really learning how to prompt and and use an experiment with tools and getting comfortable with it, I feel like you might be a little bit behind right now. Definitely. Uh, what would you say your secret to

me. One is personal growth in learning and then the second is service. Um, so I think you've got

“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 to like no one's ever going to regret giving their best, you know, and those are things that made me happiest. So it's 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. David, it's good for you. 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 solve, 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 and 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 you're 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 SOP. And here's another tip to test if you've got enough SOPs 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 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. So it'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 is in my entire business so I can get a cash and fusion. I 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 gap gang. The past to wealth isn't always glamorous. Stop chasing cash and 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 BH says, "As a beginner podcast creator and host of the Do You Ever Wonder podcast, I'm astounded by the guest Hall of Brings to the Party, add to that the value each episode provides and it's a mustless in channel. Five stars for sure, only because there's no option for ten." Well, thank you so much, Mike. Feedback like this keeps us inspired to bring you the very best guest and content possible.

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