Latest / Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast / How We're Using AI to Scale towards a $70M Home Service Business

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How We're Using AI to Scale towards a $70M Home Service Business · Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast

• 0:00
  SPEAKER_01: Home service now is seen as a safe haven from AI.
• 0:04
  SPEAKER_00: What can't AI replace?
• 0:06
  SPEAKER_00: Where does it stay out of?
• 0:08
  SPEAKER_01: I think it stays out of the truck.
• 0:09
  SPEAKER_01: As I think about AI in the trades, I think that most companies are trying to do it wrong.
• 0:15
  SPEAKER_01: Getting rid of the human is not the thing that we should be aspiring to do.
• 0:19
  SPEAKER_00: The pendulum is swinging halfway back, it seems like.
• 0:22
  SPEAKER_01: And we were guilty of it too.
• 0:23
  SPEAKER_01: We tried to go full AI in call center, and it's like, oh well, that actually wasn't the right decision.
• 0:27
  SPEAKER_00: Where are you guys using technology replacement here?
• 0:30
  SPEAKER_01: A lot of it we're using to like.
• 0:38
  SPEAKER_01: Welcome back to Owned and Operated, a top 200 business and entrepreneurship podcast.
• 0:44
  SPEAKER_01: I'm your host, John Wilson.
• 0:46
  SPEAKER_01: We run a plumbing HVAC and electric company out of Ohio.
• 0:49
  SPEAKER_01: And for fun, I talk to my friends on this show about how to build their home service company.
• 0:55
  SPEAKER_01: Today I'm joined by my good friend and frequent co-host, Jack Carr.
• 1:01
  SPEAKER_01: Mr.
• 1:02
  SPEAKER_01: Jack Carr.
• 1:03
  SPEAKER_00: That's Mr.
• 1:04
  SPEAKER_00: Doom, Mr.
• 1:05
  SPEAKER_00: Big Money over here.
• 1:07
  SPEAKER_01: A fun thing about Jack is that he shares a name with a famous author.
• 1:12
  SPEAKER_01: And whenever I go through airports, I see I see your name.
• 1:18
  SPEAKER_00: Yes.
• 1:19
  SPEAKER_00: Yeah.
• 1:20
  SPEAKER_00: It also makes my name un ungooglable.
• 1:23
  SPEAKER_01: Yeah, yeah.
• 1:23
  SPEAKER_01: That that part is pretty that part is pretty much more famous, Jack.
• 1:26
  SPEAKER_01: There's a much more famous John Wilson, too.
• 1:28
  SPEAKER_01: He's like a HBO producer.
• 1:30
  SPEAKER_01: So that that's kind of funny.
• 1:31
  SPEAKER_00: It's what happens when you have just a generic.
• 1:32
  SPEAKER_01: Yeah, it's like John Smith.
• 1:34
  SPEAKER_01: Yeah.
• 1:34
  SPEAKER_01: Yeah.
• 1:34
  SPEAKER_00: Yep.
• 1:35
  SPEAKER_01: Um, yeah, dude.
• 1:36
  SPEAKER_01: Let's let's rip it.
• 1:37
  SPEAKER_01: Uh, what are we talking about today?
• 1:39
  SPEAKER_00: AI.
• 1:40
  SPEAKER_00: Surprise, surprise.
• 1:41
  SPEAKER_00: I feel like AI is just now permeating through everybody's business and it becomes one of these talking points because it because it's ever evolving.
• 1:49
  SPEAKER_00: Yeah.
• 1:50
  SPEAKER_00: Yeah.
• 1:51
  SPEAKER_00: So I think that today we hit on how we're actually utilizing AI and what it can and can't replace and and what that looks like for our businesses currently.
• 2:02
  SPEAKER_01: Yeah.
• 2:02
  SPEAKER_01: You know, kind of an interesting aside to this as we get started, we did an episode, I want to say it was back in like February, but my sense of time is warped.
• 2:10
  SPEAKER_01: And what we talked about was there were these like three distinct periods of like big growth in home service.
• 2:21
  SPEAKER_01: And one of them was like uh the emerging of technology serving home service, service tight and Google My Business, and Angie's list, LSA, and that's like the mid uh 20 teens.
• 2:35
  SPEAKER_01: And then there's uh COVID, and that like pulled forward and created a lot of like net new demand.
• 2:42
  SPEAKER_01: Uh so that was a pretty like remarkable um time period.
• 2:47
  SPEAKER_01: And then the most recent, which is just starting to happen, uh, is like home service now is seen as a safe haven from AI.
• 3:01
  SPEAKER_01: And I was having dinner on Monday night with uh a partner from like I don't know, like a top three VC fund.
• 3:10
  SPEAKER_01: Uh and that was their exact thesis.
• 3:15
  SPEAKER_01: Was they're starting to like VC funds are starting to deploy like very real amounts of money into the trades because they're seeing it as like two things.
• 3:28
  SPEAKER_01: One, it's it's like durable and it's a safe haven from AI, but two, they can drive AI into that business similar to Uber, I think is probably my best example.
• 3:38
  SPEAKER_01: Like they took taxiing and they made it technology, and they're trying to do something similar with home service.
• 3:45
  SPEAKER_00: Yeah, and so I think that's interesting as as we start to go through this because there's portions of this business, right?
• 3:51
  SPEAKER_00: If anybody was listening to you, you said it's a safe haven from AI, but they're driving AI into the business.
• 3:57
  SPEAKER_01: Well, it's a safe haven in that, like, and this is this is their like their driving thesis is no one is like a robot's not going to go into a crawl center in the next 20 years.
• 4:08
  SPEAKER_01: And I'm like, yeah, I mean, to me that makes sense.
• 4:10
  SPEAKER_01: I don't know.
• 4:11
  SPEAKER_01: Uh but so I think they're like, they're seeing it as like durable, whereas like, you know, they've been investing in SaaS, they've been investing in all these other things that are now being very disrupted.
• 4:21
  SPEAKER_01: So I think they like the idea of basically like EBITDA arbitrage, is is how I think they're thinking about it.
• 4:29
  SPEAKER_01: Where, and you and I had this conversation about that landscaping company a couple weeks ago that sold for like an astronomical amount of money for the size of business it was.
• 4:39
  SPEAKER_01: And the only thing I could think of was they're looking at different math.
• 4:45
  SPEAKER_01: Like their math is they can automate their entire OpEx stack, and EBITDA goes from half a million to two million or something like because that's the only way that that math makes sense.
• 4:58
  SPEAKER_01: Uh, so, anyways, that that was this guy's theory, too, is that they can drive like arbitrage by automating more inside home service and like driving EBITDA.
• 5:10
  SPEAKER_01: I talked to a ton of home service owners, and if you're anything like the one to five million dollar shops that I know, you're probably getting hammered with AI pitches right now.
• 5:19
  SPEAKER_01: Most of them sound great until they hit the real world and just completely fall apart.
• 5:23
  SPEAKER_01: The one that we keep coming back to is Voka.
• 5:26
  SPEAKER_01: What stands out is they actually understand how contractor businesses operate.
• 5:30
  SPEAKER_01: This isn't just another AI answering service.
• 5:33
  SPEAKER_01: Avoca handles inbound calls, outbound follow-ups, texts, web leads, even dispatching, all in one system built specifically for service companies.
• 5:43
  SPEAKER_01: If you're on Service Titan, then this is a big deal.
• 5:45
  SPEAKER_01: Their integration is deep, so you're not duct taping together five different tools and hoping that nothing breaks during your busy season.
• 5:51
  SPEAKER_01: I also respect that they're realistic about AI.
• 5:54
  SPEAKER_01: When a call needs a human, they've got a 24-7 live transfer built in, so nothing slips through the cracks, and your customers don't get stuck in a bad experience or like an AI loop.
• 6:05
  SPEAKER_01: Owners using Evoka are seeing hold times basically disappear and booking rates jump, some by 30% or more.
• 6:11
  SPEAKER_01: If you want an AI partner that actually helps you book more jobs without creating more chaos, this is worth checking out.
• 6:18
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• 6:21
  SPEAKER_00: Yeah, we've talked about that a few times in terms of right, there's a few places that you can push leverage.
• 6:27
  SPEAKER_01: Yeah.
• 6:27
  SPEAKER_00: Uh you can do people leverage, you can do monetary leverage, and what they're focusing on is they their big thesis, which isn't anything that's absolutely crazy or new, is technology leverage, right?
• 6:38
  SPEAKER_00: We've seen it actually over the past six years.
• 6:41
  SPEAKER_00: The difference is the technology leverage isn't CRM.
• 6:44
  SPEAKER_00: It's not phones to CRM or fax machines to uh CRM.
• 6:51
  SPEAKER_00: It is uh no AI to AI, which is incredibly interesting.
• 6:55
  SPEAKER_00: And did you guys go over, was there any specifics of like where they're viewing that huge level of arbitrage to hit inside the HVAC industry?
• 7:06
  SPEAKER_01: I think they were trying to figure it out.
• 7:08
  SPEAKER_01: Um Yeah.
• 7:09
  SPEAKER_00: I think it was more like they Which is why they're talking to John Wilson, the man, the myth, the ledge.
• 7:14
  SPEAKER_01: Yeah, yeah, yeah.
• 7:15
  SPEAKER_01: Super uh let's let's call a plumber from Akron and like really work through this complicated topic.
• 7:22
  SPEAKER_01: But I yeah, I think um I think they were trying to figure out like where can it happen?
• 7:30
  SPEAKER_01: So their idea is it can happen.
• 7:34
  SPEAKER_01: So let's put a lot of money behind it.
• 7:36
  SPEAKER_01: And it's a lot like they're starting to like they did it in property management.
• 7:41
  SPEAKER_01: There was a few others, so like this specific fund has already done this a few times with like old school businesses and like sort of playing this out.
• 7:51
  SPEAKER_01: So and anyways, it's it was kind of funny because when he when he told me this and he's like walking through like how he's thinking about it, I'm like, dude, I just did an episode on like exactly how I think this is what the next two years is, like in February.
• 8:05
  SPEAKER_01: Are you a listener?
• 8:06
  SPEAKER_01: But but but it was it, yeah, it was it was kind of funny.
• 8:09
  SPEAKER_01: It was kind of funny.
• 8:10
  SPEAKER_00: From a granular perspective, though, where where do you think that um I guess I guess let's start with what can't AI replace?
• 8:17
  SPEAKER_00: Because I think that's the easier version of like this this conversation is where where does it stay out of?
• 8:24
  SPEAKER_01: I think it stays out of the truck.
• 8:26
  SPEAKER_00: In what way?
• 8:27
  SPEAKER_00: Because I mean that's a generalistic like I don't think I think it doesn't replace the technician, is that what you mean?
• 8:33
  SPEAKER_01: Yeah, I think that like as we're a couple years into this now, as I think about AI and the trades, I think that most companies are trying to do it wrong.
• 8:42
  SPEAKER_01: And I think that um yeah, hot take.
• 8:46
  SPEAKER_01: I think that like getting rid of the human is not the thing that we should be aspiring to do.
• 8:55
  SPEAKER_01: I don't think.
• 8:56
  SPEAKER_01: Uh when I look at our 11,000 or however many Google reviews, like yeah, people say Wilson, like they're grateful for Wilson, but like they're mainly grateful for like that tech that came out to their house and did a great job and built rapport and like made them happy, right?
• 9:18
  SPEAKER_01: And I think that um people get very worked up about this idea of like worked up is like they're trying to build to displace labor.
• 9:28
  SPEAKER_01: Um, and I just think like in home services specifically, like labor is kind of the alpha where like I don't think anyone should aspire to do that.
• 9:38
  SPEAKER_01: So I think like whoever has the best labor wins.
• 9:40
  SPEAKER_01: So I think it stays out of the truck.
• 9:42
  SPEAKER_01: Like, I don't think robotics is something I'm super concerned about because I think that would not be like you'd be focusing on the wrong line item, like I think.
• 9:52
  SPEAKER_00: But is it not robotics?
• 9:54
  SPEAKER_00: Is it the idea of rather than going robotics, it either goes in a different direction of DIY or it goes in a different direction of the the labor's now no longer yours.
• 10:12
  SPEAKER_00: Which I think touches a few other things, right?
• 10:14
  SPEAKER_00: So I formatted my graphics card on one of my computers the other day, which is wildly out of my normal scope of things to that I could be able to do.
• 10:24
  SPEAKER_00: And that would normally be a technician that you send your computer off to that then formats it and or you someone logs into your computer through uh you know remote software and like does it for you, but now that's something that the information aspect of it is gone because I can get the information aspect online.
• 10:40
  SPEAKER_00: I'm playing devil's advocate because I don't think this is the way either, right?
• 10:44
  SPEAKER_00: Nobody you can understand what a contactor or a capacitor does, or you can understand, you know, the changing out of a board and how to do it.
• 10:53
  SPEAKER_00: I still don't think that the the vast majority of the general population is going to be changing out their own control boards on a furnace.
• 11:00
  SPEAKER_01: Yeah.
• 11:01
  SPEAKER_01: I mean, I think like if people want to DIY, they're gonna DIY.
• 11:04
  SPEAKER_01: And if they don't, they don't.
• 11:05
  SPEAKER_01: Like I'm probably very capable of doing a tremendous amount of things.
• 11:08
  SPEAKER_01: Uh that doesn't mean I have the time or desire.
• 11:10
  SPEAKER_00: I think that's fair.
• 11:11
  SPEAKER_00: I do think it's worth bringing up, though, is that I do think that the the DIY aspect is more palatable when you have the information now readily available.
• 11:21
  SPEAKER_01: Yeah, I I can agree with that.
• 11:22
  SPEAKER_00: And then the other direction that was curious to me is more so from the idea of does AI replace the back office allowing that labor?
• 11:32
  SPEAKER_00: Right?
• 11:33
  SPEAKER_00: We have right currently there's really, really good technicians, but they're really, really bad business people.
• 11:38
  SPEAKER_00: And so uh they have to go work for a large corporation or a small corporation just to be able to handle the business aspect.
• 11:46
  SPEAKER_00: So does that get taken away by the ability for agents to run somebody's business while they go and actually do the labor portion?
• 11:55
  SPEAKER_01: Yeah, I mean, I think so.
• 11:56
  SPEAKER_01: I think it's probably just like um a a good way to think about it is uh like lights out factories.
• 12:04
  SPEAKER_01: It still requires people.
• 12:06
  SPEAKER_01: It's just as you scale, you just don't need as many.
• 12:09
  SPEAKER_01: So like accounting is a good example for us.
• 12:11
  SPEAKER_01: Like we just automated, we had automated like half automated AP like a year or two ago, and then we switched over to Sage Intact, and then now we're now it was like very manual for the past eight months, like very manual.
• 12:26
  SPEAKER_01: Uh and like we just re-automated it two weeks ago, and it's like okay, uh, that's done.
• 12:32
  SPEAKER_01: So I think as as we continue to grow, I think like the way to think about it is how do you supercharge uh your existing team?
• 12:41
  SPEAKER_01: And an idea that came up is like can you can you allow like hey, we have all this technology to record every call and do everything?
• 12:50
  SPEAKER_01: Well, is there a way to surface data from those calls that would like provide for a better experience?
• 12:57
  SPEAKER_01: And I think that that's a good way to think about it.
• 13:00
  SPEAKER_01: Um I I think that the ability to run 24-7 uh like demand capture uh with like we use voca, but like I think that that provides a better customer experience.
• 13:14
  SPEAKER_01: But I think everyone's so focused on replacing and they're less focused on like how does the customer feel about this thing that I'm replacing it with.
• 13:20
  SPEAKER_01: And we were guilty of it too.
• 13:22
  SPEAKER_01: We tried to go full AI and call center, and it's like, oh well, that actually wasn't the right decision.
• 13:26
  SPEAKER_01: Like we should have like customer first, what do they want?
• 13:31
  SPEAKER_01: Well, they want the ability to call 24-7.
• 13:33
  SPEAKER_01: Great.
• 13:33
  SPEAKER_01: So like Evoka does that for us.
• 13:35
  SPEAKER_01: Um but it they still want the ability if they have to or like feel like they need to to talk to a human, and that does that does that too.
• 13:44
  SPEAKER_01: So uh I think whether it's the field or in the office, I think the ability to like have human is is good.
• 13:51
  SPEAKER_01: I don't know.
• 13:53
  SPEAKER_00: Well, I I went through sorry, I just I'm laughing at the phrasing of that.
• 13:57
  SPEAKER_00: The ability to have human is good.
• 13:59
  SPEAKER_01: Well, so I I had a I had an issue at my house the other day uh with my like internet and I called ATT and I could I couldn't get a hold of anybody.
• 14:10
  SPEAKER_01: Like there was literally and there was no one, my assumption is there is no one to get a hold of.
• 14:15
  SPEAKER_01: And I was sitting there like thinking about that.
• 14:18
  SPEAKER_01: I was as I was like throwing my you know phone against the wall.
• 14:22
  SPEAKER_01: And I was just like, wow, like is like I'm glad that this isn't the service that we're providing, but like six or seven months ago, like we kind of thought about it and started testing, and like it was tough.
• 14:36
  SPEAKER_01: Like I had an issue and I couldn't get solved.
• 14:38
  SPEAKER_01: I still have not gotten it solved, like two months later, because like I literally cannot get a hold of anybody to solve it.
• 14:44
  SPEAKER_01: Uh yeah.
• 14:47
  SPEAKER_00: No, so I I agree though.
• 14:49
  SPEAKER_00: I think that human first is still the the alpha here, it's still the most important.
• 14:55
  SPEAKER_00: Um, that's not getting replaced.
• 14:57
  SPEAKER_00: People still want the ability to talk to humans until AI gets to a point where it is essentially again human, yeah.
• 15:05
  SPEAKER_00: Which once that happens, I think that there's a whole another slew of uh dominoes that fall at that point.
• 15:10
  SPEAKER_00: Um, but where so where do you think then it gives us the edge?
• 15:13
  SPEAKER_00: Like we kind of touched on it, is it gives us the edge when it comes into like content uh or I guess data, not content, um, vast amounts of data that we can record and then mine for opportunities.
• 15:28
  SPEAKER_00: Well, and I think it reduces friction.
• 15:30
  SPEAKER_01: I think it reduces friction.
• 15:32
  SPEAKER_01: I think it like I think it can supercharge your team.
• 15:35
  SPEAKER_01: So like something that we're thinking about right now is we have uh Indiana, Akron in Nashville, and like Dayton, Columbus, like mid-Ohio, is like dead center.
• 15:46
  SPEAKER_01: So something we're thinking about is can we set up a distribution center in Dayton?
• 15:52
  SPEAKER_01: And like, is that juice worth the squeeze?
• 15:54
  SPEAKER_01: And then can we use like so like yes, no, and I think the answer is yes, and I think the juice is worth the squeeze.
• 16:03
  SPEAKER_01: And then the second like follow-up question is well, how do you maximize it?
• 16:07
  SPEAKER_01: And the way I'm thinking about it is what if you could you could either have a 10-person purchasing and logistics team, or you could have like a baller as hell dispatcher that has uh like a logistics dispatcher.
• 16:21
  SPEAKER_01: And as sales come across, like from Nashville or Fort Wayne or Akron or whatever, like it sort of funnels through like an AI system.
• 16:33
  SPEAKER_01: I think we could build it of just like, hey, I need this product this day at this time.
• 16:37
  SPEAKER_01: And I think we could either do that with a lot of humans or with somebody really talented.
• 16:41
  SPEAKER_01: But I think it like reduces friction to scale.
• 16:44
  SPEAKER_00: No, that's a good way to think about it.
• 16:45
  SPEAKER_00: I think that's a really good framework, is it reduces friction to scale as a auxiliary function to the human element, right?
• 16:54
  SPEAKER_00: So the ability for uh capacity planning AI, dispatch AI, allows your call takers to still have the human interaction while then just entering it in and having the friction between taking the call and the technician showing up, reducing the friction in between those two points.
• 17:13
  SPEAKER_00: So, I mean, it's all customer experience, right?
• 17:15
  SPEAKER_00: They don't see the the in between.
• 17:17
  SPEAKER_00: I still think though, like I know I'm I'm backtracking here, just to finish this point out.
• 17:22
  SPEAKER_00: I am afraid.
• 17:23
  SPEAKER_00: And that it was the other direction that we didn't get to finish the thought on.
• 17:27
  SPEAKER_00: The other direction is um I am afraid of the ability though for the singular technology essentially what happened with Uber was right, technology came in, allowed the the taxi cab companies to then become decentralized so that you're you can run your own taxi without the larger company, even though it's through a larger technology platform.
• 17:52
  SPEAKER_00: And so that's what scares me is that AI will enable some version of that.
• 17:56
  SPEAKER_01: Yes.
• 17:56
  SPEAKER_01: Well, I think that already kind of exists, and I think like it it went past that.
• 18:02
  SPEAKER_01: So like if you think about like what happened next, so that's what happened when Uber first came out.
• 18:08
  SPEAKER_01: What happened next was taxi companies got onto Uber.
• 18:12
  SPEAKER_01: Uh so like I don't know what percentage of Uber is like just literally driven by a taxi, but like it's kind of a lot.
• 18:17
  SPEAKER_01: Like we took Uber in DC and I got in a yellow taxi.
• 18:21
  SPEAKER_00: Um did you really?
• 18:22
  SPEAKER_01: Yeah, so like they use the product, same as us using Angie's list or whatever.
• 18:26
  SPEAKER_01: Like it's just a source of demand.
• 18:28
  SPEAKER_01: Um, and then the other thing that happened was uh there are minimum requirements.
• 18:35
  SPEAKER_01: And like someone's gonna uphold those.
• 18:37
  SPEAKER_01: In this case, it was Uber.
• 18:38
  SPEAKER_01: So like Uber's minimum requirement was like you need a taxi license, you need a car within a certain year.
• 18:43
  SPEAKER_01: Okay, well, some put some people couldn't afford that.
• 18:45
  SPEAKER_01: So they still joined companies that just fed off of Uber.
• 18:49
  SPEAKER_01: I was in New York for the first half of this week.
• 18:51
  SPEAKER_01: Every single driver worked for a business.
• 18:54
  SPEAKER_01: Like a larger yeah, so I think it's sort of like it went one way and then it like sort of bounced maybe halfway back.
• 19:02
  SPEAKER_00: The pendulum swings.
• 19:04
  SPEAKER_01: Yeah, but as I think about um, as I think about the trades, I'm a little bit less worried about that, mainly just from like municipalities, like municipalities licensing really licensing requirements.
• 19:16
  SPEAKER_01: Like, I don't know.
• 19:17
  SPEAKER_01: I I don't think that they're because it's government and because it's so decentralized, like permitting and licensing sometimes are decentralized, like in Pennsylvania, your state licensure.
• 19:31
  SPEAKER_01: Look, there is no state license, your license is by the county.
• 19:35
  SPEAKER_01: So, like, how many counties are in Pennsylvania?
• 19:38
  SPEAKER_01: So I I think in order to like really drive something big, I don't know how they do it.
• 19:45
  SPEAKER_01: I mean, and that doesn't mean it won't happen.
• 19:49
  SPEAKER_01: It's just like you have to change an entire federal government structure, and I don't think that's going to I don't I don't think that's likely because they tried briefly with the Doge group or whatever, and like that went to shit in the handbasket.
• 20:02
  SPEAKER_01: Like, imagine dealing with like a billion Betty Sue's in whatever county jurisdiction, and like we still have municipalities that require us to literally drop off an envelope of cash to get a permit.
• 20:16
  SPEAKER_01: So I don't know how you're supposed to like standardize that.
• 20:19
  SPEAKER_00: Fair.
• 20:20
  SPEAKER_00: That is a fair point.
• 20:21
  SPEAKER_00: Is the government bureaucracy that we all hate on the daily is actually what's protecting us in the long run.
• 20:27
  SPEAKER_01: That's literally moat because they they can't get out of their own way, they can't get out of their own way on it.
• 20:32
  SPEAKER_00: Remember that, folks, next time you complain about your local government bureaucracy because they're protecting your business.
• 20:37
  SPEAKER_01: That's right.
• 20:37
  SPEAKER_01: They're keeping you in business.
• 20:39
  SPEAKER_01: You don't need more leads, you just need to stop losing the ones that are already calling.
• 20:43
  SPEAKER_01: And that is exactly what Quo fixes.
• 20:45
  SPEAKER_01: Quo brings every customer conversation, whether it's calls or texts or voicemails, into one shared thread that your entire team can see.
• 20:52
  SPEAKER_01: So whoever jumps in next has full context instantly.
• 20:56
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• 21:00
  SPEAKER_01: It's gonna keep your team aligned, speeds up your response time, and makes your customer experience field dialed in every single time.
• 21:07
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• 21:13
  SPEAKER_01: You'll get a seven-day free trial plus 20% off your first six months.
• 21:18
  SPEAKER_01: Um, yeah, I so I think some other areas that are kind of fun um that give give like an edge.
• 21:25
  SPEAKER_01: I think uh reporting has been really interesting.
• 21:27
  SPEAKER_01: Being able to digest like mass amounts of reporting, uh price comparisons has been really wild.
• 21:33
  SPEAKER_01: Like being able to take, like, hey, this invoice from this vendor, this invoice from this, like, where can I get best price?
• 21:40
  SPEAKER_01: And I think that that's another example of you can either have five humans or you can have one person with like a little GPT.
• 21:48
  SPEAKER_01: Um marketing's been really powerful.
• 21:50
  SPEAKER_01: Like, sort of we haven't automated our call board yet because we're a little like scared of you know, giving something that hallucinates like control over our daily budget.
• 22:00
  SPEAKER_01: But you can do a lot of reporting uh automated.
• 22:03
  SPEAKER_01: Like we ended up we created a dashboard inside our business that used to have a full-time uh person like just focusing on that all the time.
• 22:11
  SPEAKER_01: And that was like daily leads and ROI by week by channel.
• 22:15
  SPEAKER_01: Very intensive, we're five locations, so like did it by five locations, and now it's like automated.
• 22:22
  SPEAKER_00: Yeah, so I mean it's still is it ironically still seems to revolve as much as people are trying to push it through to the the individual side, it it seems that it most of the value that we've spoken about today revolves around data and data extrapolation.
• 22:36
  SPEAKER_01: Yeah.
• 22:36
  SPEAKER_00: Do you have anything outside of data, data extrapolation that you're using AI for?
• 22:40
  SPEAKER_01: Um, I think there's some benefit to coaching, but this is back to human.
• 22:44
  SPEAKER_01: I think like when AI first came out, like uh the Rillas of the world became very popular.
• 22:49
  SPEAKER_01: But I also think my sense of that technology is it is a tool, but it quickly became like it was pitched as necessary, but then like what happened was you removed the human.
• 23:01
  SPEAKER_01: And the human like sales are human.
• 23:02
  SPEAKER_01: Sales is a human to human interaction.
• 23:06
  SPEAKER_01: Uh and I think that like recording and like giving feedback can be a very helpful tool, but like it pales in comparison to just doing a ride-along.
• 23:16
  SPEAKER_00: Really interesting.
• 23:18
  SPEAKER_00: Um the pendulum is swinging halfway back, it seems like.
• 23:22
  SPEAKER_01: Yeah.
• 23:22
  SPEAKER_01: I think it's exciting as it deploys, and then you're like, okay, here's the reality of it is uh, do you want your sales leaders not doing ride-alongs?
• 23:30
  SPEAKER_01: The answer is like, of course you want them doing ride-alongs.
• 23:32
  SPEAKER_01: Like that's a really important function.
• 23:35
  SPEAKER_00: Yeah.
• 23:36
  SPEAKER_00: I mean, it and it it trans, and that this is where it gets complicated, right?
• 23:40
  SPEAKER_00: Because it transcends beyond just the data, right?
• 23:42
  SPEAKER_00: A write-along doesn't only signify, hey, my manager is going with me, he's working with me, versus, hey, there's this thing that listens to me and gives my manager automated feedback, then then my manager might pass along to me.
• 23:57
  SPEAKER_00: Like there's a cultural aspect, there's a friendship aspect.
• 24:01
  SPEAKER_00: There, like there, there's just like so many more intricacies to a human-to-human interaction than just like, hey, you said this word.
• 24:10
  SPEAKER_00: 63% of the time when you use this word, it reduces sales.
• 24:13
  SPEAKER_00: It's a tool.
• 24:14
  SPEAKER_01: It's just like, yeah.
• 24:15
  SPEAKER_00: I I think it doesn't replace the person, which I mean, I think a lot of individuals initially hoped it would.
• 24:21
  SPEAKER_01: And I think like as we're and I I I I'm not trying to make this like an evoker pitch, but I I think like I do like the human in the loop component because I do think the idea of that is helpful.
• 24:35
  SPEAKER_01: Is like, hey, this is meant to augment and it's not meant to fully replace.
• 24:40
  SPEAKER_01: And I think, frankly, that's right.
• 24:42
  SPEAKER_01: Like, I think that's the right move.
• 24:43
  SPEAKER_00: And so that's that's in reference.
• 24:45
  SPEAKER_00: We've been referencing a lot kind of the the benefit or the the downside is around the human interaction.
• 24:54
  SPEAKER_00: But what are you guys looking at from a um like a technology replacement?
• 24:59
  SPEAKER_00: Because you said, hey, we replaced this ability to look at uh AP and compare AP to each other.
• 25:06
  SPEAKER_00: Like to me, that that should be replacing a pre-existing technological function like a service titan or a like a CRM or something like that.
• 25:17
  SPEAKER_00: Are you where are you guys using technology replacement here?
• 25:21
  SPEAKER_01: A lot of it we're using to like ease up tasks.
• 25:24
  SPEAKER_01: I also think um, so to like give the listener some perspective.
• 25:30
  SPEAKER_01: We finished like a hair under 30 million last year.
• 25:34
  SPEAKER_01: And this year, like I don't actually know what we're gonna end up at, like achieved revenue, but our run rate, because we have a few more partnerships we're about to do in the back half of the year, like our run rate's gonna be like in the mid-70s.
• 25:49
  SPEAKER_01: And so when I like I think at the the state of our business currently is like this is a strategy that we're actively deploying.
• 26:00
  SPEAKER_01: Is hey, our business uh we won't triple this year, but like we're two and a half times.
• 26:06
  SPEAKER_01: And how do we remove friction from the process?
• 26:10
  SPEAKER_01: And how can we allow technology to help us keep up with that pace?
• 26:15
  SPEAKER_01: And it's like friction is a big part of it.
• 26:18
  SPEAKER_01: Like invoicing for like that's actually not a small problem.
• 26:22
  SPEAKER_01: Hey, Wilson was getting 200 invoices a day from suppliers last year today with five branches going on eight, like probably 600 invoices a day, like a three times volume of number of invoices.
• 26:37
  SPEAKER_01: And like figuring out a technology solution to do that was important.
• 26:43
  SPEAKER_01: Like it was an important piece of the puzzle because a lot can happen really quick if you're not staying on top of your supplier relationships and invoices.
• 26:50
  SPEAKER_01: So, like if you just take that one problem but like compound it across all the other things we talked about.
• 26:55
  SPEAKER_01: Well, like, hey, now we're managing five call boards.
• 26:57
  SPEAKER_01: Okay, well, how did technology help us do that?
• 26:59
  SPEAKER_01: Uh so I think like in the face of fast-paced growth, uh, we're less focused on like technology replacement because we were last year, like that was a big conversation for us.
• 27:13
  SPEAKER_01: Was like, how do we replace existing tools with this because it's less expensive?
• 27:17
  SPEAKER_01: And right now, just because of the stage that we're in, we're much more focused on like how can we add 10 million of revenue and it feel the same as it did yesterday?
• 27:31
  SPEAKER_01: Or even easier.
• 27:33
  SPEAKER_01: Which like AP, that's actually what happened.
• 27:35
  SPEAKER_01: Like AP actually got significantly easier in the past like month because we automated it than it was two months ago, and in that time we've added a lot.
• 27:44
  SPEAKER_00: Were you using a human before to do all the AP?
• 27:47
  SPEAKER_00: Or were you using it?
• 27:48
  SPEAKER_00: So is there any situations though, because that that's definitely a a great utilization of uh AI is is utilizing it to do those functions.
• 27:58
  SPEAKER_00: But what about like technology replacement specifically?
• 28:02
  SPEAKER_01: Well, just like I said, we haven't done much technology replacement this year.
• 28:05
  SPEAKER_00: Really?
• 28:06
  SPEAKER_01: Well, it's like we haven't had the time to think about it.
• 28:08
  SPEAKER_01: It like you're not like sitting there like Oh, I have a great one.
• 28:12
  SPEAKER_00: I know when you did.
• 28:12
  SPEAKER_00: Fleet management.
• 28:13
  SPEAKER_00: Like talking about that.
• 28:14
  SPEAKER_00: Well, that was last year.
• 28:15
  SPEAKER_00: Yeah, that was last year.
• 28:16
  SPEAKER_00: But I think that's a great example, right?
• 28:17
  SPEAKER_00: Is like, hey, you could you could have this this SaaS, right?
• 28:21
  SPEAKER_00: That for fleet fleet maintenance and management, or we can just go and build an AI on lovable in 15 minutes and save ourselves, you know, thirty thousand dollars a year.
• 28:32
  SPEAKER_01: Yeah, it's twenty, thirty grand a year.
• 28:34
  SPEAKER_01: Um so so uh yeah, a couple things happened last year, which were kind of funny.
• 28:39
  SPEAKER_01: I'll start, I'll start with the why, but like we basically like stopped buying SaaS last year.
• 28:43
  SPEAKER_01: We're just like we're kind of done.
• 28:45
  SPEAKER_01: And the theory was like we can either build it or like we should be evaluating more if we actually need it.
• 28:53
  SPEAKER_01: Like there's some things you need, like you need Google reviews, you need your CRM, you need the VoIP to like you know, answer calls.
• 29:03
  SPEAKER_01: Like there's some things like you don't have much of a choice on.
• 29:06
  SPEAKER_01: Um, but I think like the industry has become very technology's abundant, and uh it it's just so easy to drown in it, and it's so easy to like, you know, continue to find new solutions, um, which I'm very I'm pro like when it's the right move, but like sometimes it's just not the right move.
• 29:24
  SPEAKER_01: It's just like a drag.
• 29:26
  SPEAKER_01: Uh so like fleet was one of them where like, hey, I can go to market and like get a fleet software, but it's an ever scaling cost.
• 29:33
  SPEAKER_01: Like that cost was gonna be seven dollars a month per truck forever, which like I don't want that.
• 29:39
  SPEAKER_01: Like that sounds ridiculous.
• 29:40
  SPEAKER_01: Uh so yeah, we we built an alternative to it.
• 29:43
  SPEAKER_01: Um, and that's been good.
• 29:45
  SPEAKER_00: And I think what I oh, I was just gonna say, have you seen the graph of this kind of idea?
• 29:52
  SPEAKER_00: It's like the the graph in the last six months is at like apps that have hit market has reached like a three or four hundred X, and then actu the apps that have been actually paid for in utilization is dropping drastically at the same rate because people are just going out and building their own.
• 30:07
  SPEAKER_00: Like I can build my own app now, and I do not need to use this SaaS that had this very small kind of use case.
• 30:15
  SPEAKER_00: Yeah.
• 30:16
  SPEAKER_01: Yeah.
• 30:16
  SPEAKER_01: I think um, yeah, I think that's probably our best example.
• 30:20
  SPEAKER_01: We also did some, like we custom built um we custom built something for like purchasing.
• 30:26
  SPEAKER_01: We we've custom built a ton of stuff at this point.
• 30:28
  SPEAKER_01: We custom built our marketing dashboards, we've custom built most of our stuff, but a lot of it's like we stopped allowing SaaS to get bought.
• 30:37
  SPEAKER_01: Like SaaS had to go to me directly for contracts, and I just started like banhammering it.
• 30:43
  SPEAKER_01: Yeah, it's just a it's just a real drag on like and and like the business didn't change, like for the worse.
• 30:51
  SPEAKER_01: So I don't know.
• 30:53
  SPEAKER_01: Like even the AP automation, what we found out is like we were already paying for that feature in a software that we had.
• 31:00
  SPEAKER_01: And it's like, well, we're paying like 10 grand a year for this feature, and like we start digging into it and we're like, we're not even using it.
• 31:08
  SPEAKER_01: And I think that's the other thing is like, okay, are you fully utilizing the stuff you're already paying for?
• 31:13
  SPEAKER_01: It sounds like if you were building today, like how would you look at I think if I were building and not doing what we were doing to grow this year, if you weren't like doubling or tripling this year, I think that it makes a lot of sense to focus on technology replacement.
• 31:32
  SPEAKER_01: I think if you are doing what we're doing this year, which I think that like similar to the that guy from that VC firm, um I think that like what we're doing is basically AI arbitrage right now, where we are buying businesses at a rapid pace for an independent, you know, owner, and we're deploying technology into them to reduce friction as we continue to scale.
• 31:58
  SPEAKER_01: And I think that like I think that like AI and MA is like becoming a pairing.
• 32:05
  SPEAKER_00: Yeah.
• 32:06
  SPEAKER_00: Which makes a lot of sense considering like a lot of MA outside of the actual operations itself is a data and understanding the data structure behind it.
• 32:18
  SPEAKER_00: Um because you're culminating multiple assets from you know a 600 mile radius.
• 32:25
  SPEAKER_00: You need that good data to make those decisions based on based on location.
• 32:29
  SPEAKER_00: Super interesting.
• 32:30
  SPEAKER_00: I mean, I think if I was building today or like and I was uh again, push me back two or three years, my focus right now would be to evaluate like we've talked about in the past, evaluating growth or evaluate or like optimizing for growth or optimizing for EBITDA.
• 32:47
  SPEAKER_00: I think that this year or next year probably would be an EBITDA optimization year, where I would take my 3 million or my 2 million in revenue and I would try to optimize as much as possible to see how much more cash I could get out of the business because I think that there's a lot of opportunity right now to be able to get rid of some old technology that is costing you a lot of money.
• 33:10
  SPEAKER_01: Yeah.
• 33:11
  SPEAKER_01: I mean I I think that that I think I think that that is good.
• 33:14
  SPEAKER_01: I think it's a good idea.
• 33:16
  SPEAKER_00: Um thanks, John.
• 33:18
  SPEAKER_01: Yeah.
• 33:19
  SPEAKER_01: Well, I think I think what the and this guy's this guy's idea from and and I I agree is like I think at if you can scale with less friction, like can the industry's gotten used to like 10 or 15 percent margins.
• 33:34
  SPEAKER_01: Why can't 25 or 30 percent be real?
• 33:37
  SPEAKER_00: Yeah, and I don't think that those two things are mutually exclusive anymore, right?
• 33:40
  SPEAKER_00: Historically, you would think you would see again, like you said, scaling costs matches scaling business, you know, cost per seat, cost per truck.
• 33:49
  SPEAKER_00: So as you grow, you have to pay more and more.
• 33:52
  SPEAKER_00: I don't think that's any longer the case.
• 33:54
  SPEAKER_00: So there's actually room now to scale and optimize, um, which is which is an interesting uh kind of a newer idea than that.
• 34:03
  SPEAKER_01: I mean, that was this guy's theory is that like you can like AI arbitrage, basically.
• 34:07
  SPEAKER_01: And like, yeah, we're we're actively living it.
• 34:09
  SPEAKER_01: It's pretty interesting.
• 34:10
  SPEAKER_01: I think like we're making some messes along the way, good and bad, but um for the we are keeping up with it, which I think is like interesting.
• 34:21
  SPEAKER_01: And where where all MA, what we found out this year is like where all MA breaks.
• 34:26
  SPEAKER_01: It used to be operations for us, and now it is very much accounting.
• 34:30
  SPEAKER_01: Like accounting is where it all breaks.
• 34:34
  SPEAKER_01: Because we can onboard operations in like a day or two.
• 34:40
  SPEAKER_01: Like it takes almost, I mean, not no effort, but like it's not that complicated.
• 34:46
  SPEAKER_01: Um, but accounting is hard, like it's really hard.
• 34:50
  SPEAKER_01: Like, we're you and I are still working through stuff from accounting from like what April?
• 34:54
  SPEAKER_01: Like, that's crazy.
• 34:55
  SPEAKER_01: We're 90 days in.
• 34:56
  SPEAKER_01: Um, yeah, it's just where it goes to die.
• 34:59
  SPEAKER_01: It's accounting.
• 35:00
  SPEAKER_01: So, like, whatever you can do to reduce friction there, I think is like very helpful.
• 35:03
  SPEAKER_01: Damn underriders, man.
• 35:05
  SPEAKER_01: It's all underwriters.
• 35:06
  SPEAKER_01: It's crazy.
• 35:06
  SPEAKER_00: It's crazy.
• 35:09
  SPEAKER_00: Awesome.
• 35:09
  SPEAKER_00: I think that's I think we hit the nail on the head here.
• 35:12
  SPEAKER_01: If you like what you heard, give us a five star review.
• 35:14
  SPEAKER_01: Tell my mom I'm popular on the internet.
• 35:16
  SPEAKER_01: Thanks, guys.