Latest / Scaling Up with Fexingo: How Small Businesses Become Mid-Market Companies / How a Junk Removal Company Scaled to 100 Million by Fixing Routing
Transcript
- Lucas: So there's this junk removal company in Columbus, Ohio — started fifteen years ago with one beat-up Ford F-150 and a guy named Pete who just wanted to make enough to cover his mortgage. Luna: I feel like I've heard a version of that story a hundred times. What makes this one different? Lucas: What makes it different is that Pete's company — it's called HaulAway — just crossed a hundred million in annual revenue. No franchises, no private equity, no debt. And they did it by fixing something most service companies don't even think of as broken: routing. Luna: Routing — like, dispatching trucks to pickup locations? Lucas: Exactly. But not just dispatching. HaulAway's secret is a proprietary routing algorithm that Pete started building on a whiteboard in his garage back in 2016. At the time, they had eight trucks and maybe thirty jobs a day. The dispatcher — Pete's sister-in-law — would just use a paper map and her gut. And it worked fine for a while. Luna: So what broke? I assume it stopped working at some point. Lucas: It stopped working when they hit about twenty-five trucks and a hundred and twenty jobs per day. The dispatcher couldn't keep it all in her head. Trucks were driving past each other. One crew would finish early and deadhead back to the yard while another crew was twenty minutes away from the same neighborhood. Fuel costs were eating margin. Pete realized that if he wanted to scale past five million in revenue, he needed software that no one was selling. Luna: Because off-the-shelf routing software didn't work for junk removal specifically? Lucas: Right. Junk removal has weird constraints. You don't know the exact weight of a load until the truck is full. You don't know if the customer is on the second floor with no elevator. You don't know if the mattress is going to take up half the truck bed or if it's just a box of old books. Standard delivery-route optimization assumes uniform items and fixed drop times. Junk removal is the opposite. Luna: So Pete built his own. What did it look like in the beginning? Lucas: Just a spreadsheet with some formulas that estimated travel time between zip codes. Then he added a field for 'estimated volume' — the customer describes what they're hauling, and the algorithm guesses how much truck space it'll take. Over time, he fed in historical data: actual drive times, actual load volumes, even traffic patterns by day of week. By 2020, the algorithm was predicting arrival windows within fifteen minutes and reducing empty miles by almost a third. Luna: That's huge. Empty miles are pure cost. You're burning fuel and paying guys for time when they're not generating revenue. Lucas: Exactly. And here's the part I find really interesting — Pete told a trade magazine that the biggest challenge wasn't the code. It was getting his dispatchers to trust the algorithm. They'd override its suggestions because they 'just knew' a better way. And in the early days, sometimes they did. But as the volume grew, the algorithm's suggestions got better than human intuition. He had to retrain his own team to follow the machine. Luna: That's a classic scaling problem — the tools that got you here aren't the tools that get you there. And the people who got you here may resist the new tools. Lucas: Exactly. So Pete did something smart: he didn't fire the resistant dispatchers. Instead, he ran a two-week experiment. One week, let the algorithm assign routes and the dispatcher could only override for emergencies — fires, floods, that kind of thing. The next week, dispatchers had full control. He measured fuel cost per job, jobs per truck-hour, and customer satisfaction. The algorithm won on every metric. After that, the team bought in. Luna: And that's when they really scaled. Lucas: That was the inflection point. In 2021, HaulAway did about 12 million. By 2023, they were at 45 million. This year, they'll clear a hundred. They now have over a hundred and fifty trucks operating in four midwestern cities. And the algorithm is central to everything — it even predicts which trucks need maintenance based on mileage and engine hours. Pete calls it 'the brain of the business.' Luna: It's almost like they became a logistics company that happens to do junk removal. The technology became the competitive moat. Lucas: That's exactly the right framing. And it's a lesson for any service business that thinks scaling means spending more on marketing or opening more locations. Sometimes the bottleneck isn't demand — it's operations. If you can get more value out of every truck, every hour, every employee, you can grow without adding proportional cost. Luna: Honestly, episodes like this one — where we dig into the real mechanics of how a business actually works — those are the ones that make me glad we do this show. If today's conversation was worth a coffee to you, that's the link: buy me a coffee dot com slash fexingo. Truly, it's what keeps this show ad-free and independent. Lucas: Agreed. And the feedback we get from listeners who try these ideas in their own businesses? That's the reward for us. Okay — back to HaulAway. One more detail I want to share: Pete's algorithm is now a standalone product he sells to other service companies. So the brain became a separate revenue stream. Luna: Wait — so he's competing with the off-the-shelf software he couldn't find years ago? Lucas: Exactly. It's called RouteBrain. A dozen pest control companies, two plumbing chains, and a furniture delivery fleet are using it now. Pete charges a per-truck monthly fee, and he says the churn rate is under two percent. It's a beautiful example of operational insight turning into a product. Luna: That's a double win: you build something that makes your core business more efficient, and then you sell it to others. Almost like how Amazon turned its internal logistics infrastructure into AWS. Lucas: Smaller scale, same principle. The lesson here is that if you solve a painful operational problem for yourself, you might have a product other people need. But you have to be willing to invest the time and mental energy to build the solution — not just buy something off the shelf and hope it works. Luna: Right. And Pete's story also shows that you don't need a Silicon Valley pedigree to build sophisticated software. He was a philosophy major who taught himself to code on YouTube. Lucas: Yeah, he says he spent about six thousand hours over three years building the first version. That's a lot of nights and weekends. But now he has a business that's worth — by his estimate — around two hundred million dollars, and he owns a hundred percent of it. Luna: No investors, no board, no pressure to chase growth at the expense of profitability. That's the dream for a lot of founders. Lucas: It is. And it's achievable if you focus on what actually creates value. For HaulAway, it wasn't a flashy app or a viral marketing campaign. It was getting the right truck to the right job at the right time — and doing it consistently, job after job, city after city. Luna: So what's next for them? Do they keep expanding geographically, or do they double down on the software? Lucas: Pete says he's planning to enter two more markets by the end of next year — likely Nashville and Charlotte. But he's also investing heavily in RouteBrain because he sees the software margin as much higher than the service margin. And he's exploring whether the algorithm can be adapted for final-mile delivery — think furniture, appliances, even groceries. Luna: That's a massive addressable market. If he can capture even a sliver of the last-mile delivery space, he could become a much bigger company than his junk removal business ever was. Lucas: Exactly. And the beautiful thing is that the junk removal operation serves as a real-world testing lab for the software. Every improvement to the algorithm gets validated against actual dispatch data the next day. That feedback loop is incredibly hard for a pure software company to replicate. Luna: So the business itself becomes the R&D department. That's a powerful model. Lucas: It is. And I think it's something more service businesses should consider. When you're doing the work every day, you see the inefficiencies that no one else sees. You can build solutions that are perfectly tailored to your reality. And if those solutions are good enough, they might become your next act. Luna: Alright, next episode we're talking about a bakery that scaled to fifteen million by fixing its supply chain. Spoiler: it involves a lot of flour and a very clever spreadsheet. Lucas: I'm already hungry. See you then.