Latest / Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast / There Are Millions Hiding in Your Customer Database

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There Are Millions Hiding in Your Customer Database · Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast

• 0:00
  SPEAKER_00: We did have to get far enough along as an organization to make use of the data.
• 0:04
  SPEAKER_00: We generally see like a 30 to 40% increase among customers that adopt Faraday.
• 0:08
  SPEAKER_00: So like if I know it's a two-year-old system, I also know who I'm gonna be sending that home.
• 0:12
  SPEAKER_00: Yeah.
• 0:12
  SPEAKER_00: And if you don't know that data, you're just sort of like shoot fish in a barrel.
• 0:15
  SPEAKER_00: What do you think contractors should be capturing on every business?
• 0:17
  SPEAKER_00: What work was being done and like why did the homeowner call, right?
• 0:20
  SPEAKER_00: Because that will tell you like a lot of signals around 10.
• 0:22
  SPEAKER_00: What's overhyped?
• 0:23
  SPEAKER_00: The issue that we see from customers is kind of like this overpromise on AI stuff.
• 0:27
  SPEAKER_01: They're driving AI into the business, but there is a point where like someone still has to be in the loop.
• 0:32
  SPEAKER_01: What's the first uh workflow that you think every contractor should be automating?
• 0:35
  SPEAKER_01: I think um, you know.
• 0:43
  SPEAKER_01: Welcome back to Owned and Operated, a top 150 U.S.
• 0:47
  SPEAKER_01: business and entrepreneurship podcast.
• 0:49
  SPEAKER_01: I'm your host, John Wilson, and on this show, we talk everything home service.
• 0:52
  SPEAKER_01: Today I'm joined by my longtime friend, Alex Coleman, the founder of Faraday.
• 0:56
  SPEAKER_01: Alex and I have known each other for about five or six years, and we started working together three or four years ago, and it's been a ton of fun, and it's fun to finally convince him to come onto this show.
• 1:07
  SPEAKER_00: Yeah, glad to finally be here.
• 1:08
  SPEAKER_00: I think we met six.
• 1:09
  SPEAKER_01: Is it 2020 or 2021?
• 1:10
  SPEAKER_01: It was around there.
• 1:11
  SPEAKER_00: I'm trying to remember who how we got introduced.
• 1:13
  SPEAKER_00: Twitter, probably.
• 1:14
  SPEAKER_00: Yeah, probably.
• 1:15
  SPEAKER_00: I think it was probably Twitter.
• 1:16
  SPEAKER_00: Yeah.
• 1:17
  SPEAKER_00: Um, and I think I remember coming to the old shop, yeah, yeah, and getting a shop tour, which is very cool.
• 1:21
  SPEAKER_01: Yeah.
• 1:22
  SPEAKER_01: Well, it is kind of fun.
• 1:23
  SPEAKER_01: Um, obviously, you've been here since you were here last year, I think.
• 1:28
  SPEAKER_01: And but it it is fun.
• 1:30
  SPEAKER_01: Um, like having like friends and and just people that like I've we've known for long enough that like, hey, I stop in once a year and every year, like, oh, here's the new iteration of like what we're what we're doing.
• 1:41
  SPEAKER_01: So that is that is kind of cool.
• 1:42
  SPEAKER_01: Yeah, you have two warehouses now.
• 1:44
  SPEAKER_01: You've had one before.
• 1:45
  SPEAKER_02: Yeah, yeah, yeah, yeah.
• 1:46
  SPEAKER_01: I think we have six.
• 1:47
  SPEAKER_01: It's just there's two right here.
• 1:49
  SPEAKER_01: Yeah.
• 1:50
  SPEAKER_01: Um, all right.
• 1:50
  SPEAKER_01: So today we're gonna dive into uh a couple different things.
• 1:53
  SPEAKER_01: We're gonna be talking about uh what Faraday does, uh, which I just feel like is long overdue.
• 1:58
  SPEAKER_01: Whenever I tell friends that you exist, they're like, hold on, what?
• 2:03
  SPEAKER_01: Um, so I think we'll be talking about that.
• 2:05
  SPEAKER_01: And then we should be talking about like AI and the trades in general and like how to think about it.
• 2:09
  SPEAKER_01: Sounds like fun.
• 2:10
  SPEAKER_01: Yeah.
• 2:10
  SPEAKER_01: All right, cool.
• 2:11
  SPEAKER_01: Well, how about you give us a little bit of background into yourself and then what does like what problem does Faraday solve?
• 2:16
  SPEAKER_00: Yeah, sure.
• 2:16
  SPEAKER_00: I started the company about six years when we first met on Twitter, I think was trying to tackle sort of the well-documented labor shortage.
• 2:22
  SPEAKER_00: So the original thesis was there's a bunch of people that work at like UPS or Amazon that wanted to get in skilled trades but were like restricted from doing so either from the cost of college or the cost of switching careers.
• 2:33
  SPEAKER_00: So started the business to try and get more people into the trades.
• 2:36
  SPEAKER_00: I grew up on a manufacturing shop floor.
• 2:38
  SPEAKER_00: My dad and uncle started a manufacturing business in the 80s.
• 2:40
  SPEAKER_00: So wanted to get more people into skilled trades because I found out uh how much fun it was to work in in the trades.
• 2:45
  SPEAKER_00: Um that was sort of the the origin for Faraday.
• 2:48
  SPEAKER_00: And uh about two years ago, kind of pivoted the business into what we're doing now, which is helping contractors in the back office.
• 2:54
  SPEAKER_00: I think the insight there was actually from Wilson.
• 2:56
  SPEAKER_00: Yeah.
• 2:56
  SPEAKER_00: You got camped out your office for a few weeks, and I realized that on every job you were taking pictures of nameplates.
• 3:02
  SPEAKER_00: And um, I was, I think I asked you like, what do you do with these?
• 3:05
  SPEAKER_00: And like, oh yeah, someone from the office is supposed to like type those in because they're really important to us.
• 3:09
  SPEAKER_00: And it's like, how many pictures do you have?
• 3:11
  SPEAKER_00: 20,000.
• 3:12
  SPEAKER_00: It's like, all right, well, someone's never going to be able to do that.
• 3:14
  SPEAKER_00: So I think it's like a weekend project went through all the photos and we uncovered like 10 million in replacement opportunities.
• 3:20
  SPEAKER_00: And it was just like lights went on, and you're like, Yeah, this is so valuable.
• 3:23
  SPEAKER_00: And then we just went to the next company, like we have the same issue.
• 3:26
  SPEAKER_00: Um, so it's one of the things we just sort of like stumbled upon an issue that we just observed, but it's been it took us four years to get close enough to a business to figure out like what problems we could actually solve.
• 3:35
  SPEAKER_01: Yeah.
• 3:35
  SPEAKER_01: Yeah, it was um it was funny.
• 3:39
  SPEAKER_01: So before you guys walked in, we were taking, we had the discipline of like taking photos down, but we definitely did not do data plates.
• 3:46
  SPEAKER_01: So we actually bought a business in um 2021, and they had date like age, it was useful information.
• 3:55
  SPEAKER_01: Like they had ages of furnaces and ages of air conditioners, and we're like, how we didn't even know that you could put that stuff into SurStane.
• 4:02
  SPEAKER_01: Uh and I remember being like, what is this as we integrated the two systems together?
• 4:08
  SPEAKER_01: Um yeah, it ended up being it ended up being huge.
• 4:11
  SPEAKER_01: And I still think, well, it it gave us like it gave us ammunition for specifically aged equipment.
• 4:19
  SPEAKER_01: Uh, but I think it's turned into a lot more.
• 4:21
  SPEAKER_01: But it gave us like, oh yeah, that's a 10-year, that's a 10-year age system.
• 4:24
  SPEAKER_01: That's a s that water heater's out of warranty that you're about to go out to.
• 4:28
  SPEAKER_01: Um, it gave like real, real information that was helpful uh for both the technician in the field, but also like marketing campaigns.
• 4:36
  SPEAKER_00: Yeah, I think marketing is like the sort of like the low-hanging fruit here.
• 4:39
  SPEAKER_00: It's like, hey, am I gonna blast a hundred thousand customers with the same promo?
• 4:42
  SPEAKER_00: Or do or do I target these 500 people that I know have this issue?
• 4:47
  SPEAKER_00: And then like once you get that call booked, let's say you you do the blast, you email a hundred thousand people at random, those calls get booked, and now it's like, great, I gotta assign a technician to every one of these.
• 4:56
  SPEAKER_00: It's like, which ones are you gonna send your opportunity text to?
• 4:58
  SPEAKER_00: And if you don't know that data, you're just sort of like shooting fish in a barrel.
• 5:02
  SPEAKER_00: Yeah, tech shows up, it's a brand new system, or like a maintenance tech goes to a 10-year-old call and you've just like lost the you can't call tell the homeowner, like, hey, we sent the wrong person, like real quick, let me go grab the right person.
• 5:13
  SPEAKER_00: So it's just really important to have that data for marketing and for dispatch.
• 5:16
  SPEAKER_00: And um, one of the reasons, uh, inspirations behind Fair Day is I bought uh a house with my wife like two and a half years ago.
• 5:23
  SPEAKER_00: And we have two 30-year-old furnaces and two 30-year-old AC units.
• 5:27
  SPEAKER_00: And I had someone come out to take a look at it and they sold me a membership plan.
• 5:30
  SPEAKER_00: And I was sort of curious, like I bought it more out of curiosity, like what was it gonna be about?
• 5:34
  SPEAKER_00: And uh the next time I heard from them was like at the renewal for the membership program.
• 5:38
  SPEAKER_00: And I ended up canceling it, but I was like, my profile should just have like dollar signs next to it.
• 5:42
  SPEAKER_00: Should be like, Oh yeah, this person has like you know, it's like gonna be a$30,000 plus repair.
• 5:47
  SPEAKER_00: Yeah, and one of them actually broke down over the winter, and I spent like multiple hours like taking the fairness apart.
• 5:53
  SPEAKER_00: And it's like if someone had emailed me like a month before being like, hey, we'll give you a BOGO deal, like I probably would have done it.
• 5:59
  SPEAKER_00: Um, and just makes me think that's probably happening a ton where it's like someone paid to acquire me as a customer, completely lost sight of like the value of me as a customer, and then like I like won't ever call them back at this point.
• 6:11
  SPEAKER_00: And that's just like not the experience that the contractor or the customer should have.
• 6:15
  SPEAKER_01: Yeah.
• 6:16
  SPEAKER_01: I think we got, I think we got um, we had a few things.
• 6:19
  SPEAKER_01: It was back in 2020, I think it was 2023, and that was probably when you launched data plates or like shortly before that.
• 6:26
  SPEAKER_01: But we moved into this building, and one of the things that happened, um, which actually now I now I'm gonna like fact check again because you know we we had just bought all these businesses.
• 6:37
  SPEAKER_01: I'm I'm writing notes.
• 6:38
  SPEAKER_01: John, check this again.
• 6:40
  SPEAKER_01: Uh so one we just bought all these businesses and we didn't have a good concept, um, which is kind of funny.
• 6:49
  SPEAKER_01: We didn't understand how valuable a customer database was.
• 6:52
  SPEAKER_01: And some of it was like, well, is it valuable?
• 6:55
  SPEAKER_01: Because like it's probably messy, it's probably like you know, bad information or whatever.
• 6:59
  SPEAKER_01: But I think it was based on the fact that that one company had data plates inside their like the data, you know, everything we would need to market to them, that it was like, oh, okay, this actually might be something interesting.
• 7:11
  SPEAKER_01: Um, and it was in 2023 that we spun up our SDR, like our outreach calling uh program inside Wilson, which today does like a third or 40% of our revenue.
• 7:23
  SPEAKER_01: Like it's crazy.
• 7:24
  SPEAKER_01: But it started with like, hey, we had 100,000 customers and we started opening that up and and it was exactly that.
• 7:29
  SPEAKER_01: We're like, hey, we paid for all these customers in one way or another.
• 7:32
  SPEAKER_01: We either marketed for them or we bought them in an acquisition, but now we have 100,000 files, just like 108,000.
• 7:39
  SPEAKER_01: And what do we do with it?
• 7:40
  SPEAKER_01: Yep.
• 7:40
  SPEAKER_01: And uh yeah, this this supercharged it, but I I think um my other point in saying that was like we did have to get far enough along as an organization to make use of the data.
• 7:52
  SPEAKER_01: Yeah, I think that's very true.
• 7:54
  SPEAKER_01: Like if you're if you're like a million bucks, like it would be it'll be helpful in five years.
• 7:59
  SPEAKER_01: Like you should start probably today, but like it won't help you right now as much as it'll help you, like you just need the team to be able to do this.
• 8:06
  SPEAKER_00: Yeah, I think that's fair.
• 8:07
  SPEAKER_00: Like if you've got two technicians and you're like, I'm gonna optimize dispatch to two techs, it's kind of like you're probably not gonna get that.
• 8:13
  SPEAKER_00: But if you have hundreds of trucks, you're in tens of thousands of homes per year, like you can really move the needle by sending the right tech to the right call.
• 8:19
  SPEAKER_00: Or like, yeah, if you've got 10,000 members, it's like, do you want to be running a thousand brand new membership calls in a week?
• 8:28
  SPEAKER_00: Like, probably not, like, because you're not going to flip anything to install.
• 8:33
  SPEAKER_00: Yeah.
• 8:33
  SPEAKER_00: So, how do you make sure you're like spreading the membership base, or maybe you're prioritizing those folks to some extent, right?
• 8:38
  SPEAKER_00: And if you don't have that data, you just don't know.
• 8:40
  SPEAKER_00: I agree.
• 8:40
  SPEAKER_00: If you're like on the smaller side, like maybe just getting started, I think it's great to start collecting it now so you have the data.
• 8:47
  SPEAKER_00: But if you don't have a way to like leverage the data, it's just not going to be that valuable.
• 8:51
  SPEAKER_01: All right.
• 8:51
  SPEAKER_01: So today, um Faraday is doing data plates and like back office automation.
• 8:57
  SPEAKER_01: Like, what are the other things you guys are?
• 8:58
  SPEAKER_00: Yeah, we um we acquired a company earlier this year to sort of expand our horizon into back office.
• 9:04
  SPEAKER_00: I think we really think about the work we're doing is like the jobs to be done.
• 9:07
  SPEAKER_00: So, like equipment data plate was like there was a person in most companies whose job was to enter this data, whether that was the technician or like they had hired someone in-house to do it.
• 9:16
  SPEAKER_00: And I think we found like the same owner of that work was generally doing like permits, warranties, rebates, warranty claims.
• 9:23
  SPEAKER_00: I think the way to think about it is like the technicians are great at doing stuff in the field, but there's like an army of people in the back office that make sure like the trains run on time.
• 9:30
  SPEAKER_00: Yeah.
• 9:30
  SPEAKER_00: And we want to build software for like that category of people.
• 9:33
  SPEAKER_00: And I think the more we get to learn about businesses, the more of these opportunities we uncover, which makes us super excited.
• 9:37
  SPEAKER_01: Yeah, I think material ordering, um, like the thing that that the category that like the jobs to do, yeah, that I think would be an interesting opportunity would be like job costing because that is something that like, well, someone's responsible for it, but like kind of who.
• 9:52
  SPEAKER_02: Yeah.
• 9:52
  SPEAKER_01: And um it doesn't feel like it has a great home.
• 9:56
  SPEAKER_01: Yeah, I think so.
• 9:57
  SPEAKER_01: I mean, there I think rebates definitely.
• 9:59
  SPEAKER_01: I'm thinking of all the things that have fallen through the cracks with us.
• 10:01
  SPEAKER_01: Like rebates fell through the crack for like three years until we handed it to someone senior enough that would get it done.
• 10:06
  SPEAKER_00: Yeah, I we talked to a company earlier this year, and they're like, they it fell off the plate for like a quarter and they had like a$250,000 receivable line.
• 10:14
  SPEAKER_00: And they're like, oh yeah, we just forgot to do this.
• 10:16
  SPEAKER_00: Yeah.
• 10:16
  SPEAKER_00: Um it's like that's real money to the bottom of the five.
• 10:18
  SPEAKER_01: It's real actual cash.
• 10:20
  SPEAKER_01: Yeah.
• 10:20
  SPEAKER_01: So it's out it and the bigger you get, like, I think yeah, our rebate line is like over half a million dollars a year.
• 10:25
  SPEAKER_01: Yeah, so much freaky money, and you're like, oh my God.
• 10:28
  SPEAKER_00: I think it's I mean, the warranty is one that's harder to calculate, but it's like it doesn't kill you until like five years from now.
• 10:33
  SPEAKER_00: But like, you know, if you offer the customer, hey, this comes with a 10-year parts warranty and you don't file that warranty and then year six it breaks, like either you have a really bad customer experience where you're then like, hey, sorry, customer, like we didn't register it and you're gonna have to pay out of pocket, or you eat the cost, right?
• 10:48
  SPEAKER_00: Where you're like, if I just spent five minutes doing this, I could have saved a hundred dollars or whatever it is on that part.
• 10:54
  SPEAKER_00: Yeah.
• 10:54
  SPEAKER_00: Um, and like those things just fall by the wayside really quickly because they don't feel the urgency today.
• 10:58
  SPEAKER_00: Yes, yeah.
• 10:58
  SPEAKER_00: Um, it's like if I don't file this today, nothing really happens, but yeah, it does happen in the future.
• 11:03
  SPEAKER_00: Yeah.
• 11:03
  SPEAKER_00: Yeah, no, that makes a lot of sense.
• 11:07
  SPEAKER_01: Have you guys ever right now you're not like selling like warranty plans themselves?
• 11:12
  SPEAKER_01: We do not, yeah, we don't sell like labor warranty plans or anything like that.
• 11:15
  SPEAKER_00: Yeah.
• 11:15
  SPEAKER_00: And I don't think we will, like, I don't think we want to be in that position.
• 11:18
  SPEAKER_00: I think we'd rather just be and I think like another way to think about us is like a lot of software today just focused on like two relationships.
• 11:26
  SPEAKER_00: It's the relationship between a contractor and their employees and a contractor and their end customer.
• 11:30
  SPEAKER_00: But a contractor has like a bunch of other relationships they handle.
• 11:34
  SPEAKER_00: So that's like with the manufacturer, with distributor, with utility, with the local jurisdiction.
• 11:38
  SPEAKER_00: And like we want to build software to connect the contractor, like the rest of that world.
• 11:42
  SPEAKER_00: Um, but we don't want to like be the ones offering those programs.
• 11:45
  SPEAKER_00: Like, you know, the companies out there doing like labor warranties are great, and you should probably just use one of those.
• 11:50
  SPEAKER_00: Yeah.
• 11:51
  SPEAKER_00: Um, but we want to make sure it's easy for like whatever you're collecting in the field to feed into that system.
• 11:55
  SPEAKER_01: Yeah.
• 11:55
  SPEAKER_01: Okay.
• 11:56
  SPEAKER_01: All right.
• 11:56
  SPEAKER_01: That makes sense.
• 11:57
  SPEAKER_01: When you first started like offering equipment data as a service, basically, like what were the big ahas that you saw?
• 12:05
  SPEAKER_01: And like because you you're now you're in some of like the largest platforms in the industry.
• 12:09
  SPEAKER_01: Like, how early did they get in and what did it look like?
• 12:12
  SPEAKER_00: Yeah.
• 12:13
  SPEAKER_00: I um I think some of the aha moments for us, we actually started with like a separate application that a tech had to use.
• 12:20
  SPEAKER_00: And so like I remember that.
• 12:21
  SPEAKER_01: You they it was like they got texted a link or something.
• 12:24
  SPEAKER_00: Yeah, yes.
• 12:24
  SPEAKER_00: And we were trying to get them to like upload it.
• 12:26
  SPEAKER_00: And it was just like really hard to enforce because like a tech doesn't have to do that.
• 12:29
  SPEAKER_00: So like you need someone really driving and like basically monitoring every call to be like, did they like leave whatever tool they were in to go do this thing?
• 12:36
  SPEAKER_00: And I think we found a way to like work within the workflow that a tech was already doing, where they don't have to like leave the tool they're on to go do the work.
• 12:45
  SPEAKER_00: I think the same thing with like permits, warranties, and rebates, like you shouldn't have to go to a different platform to like get access to the data.
• 12:50
  SPEAKER_00: Yeah, I think that was a big aha bomb that like really accelerated things.
• 12:53
  SPEAKER_00: We went from usage rates from like 30 to 40 percent to like 95 overnight because just like you could just enforce this within the tool that they were already using.
• 13:01
  SPEAKER_00: And that just makes like I think the biggest there's two parts like you want accurate equipment data collection, but you also need like reliable processes to collect it, right?
• 13:07
  SPEAKER_00: Like if the tech has an option to do it every time, like they're likely not going to do it.
• 13:12
  SPEAKER_00: So, like, how do you make it so easy for them to actually be doing it?
• 13:16
  SPEAKER_00: Yeah.
• 13:16
  SPEAKER_00: Um, I think the other aha moment uh for us was like we found out that like ongoing data collection was a big part of it.
• 13:24
  SPEAKER_00: Um, I think the the second piece was like a lot of customers had been taking data plate photos for a long time, but like never converted that into like usable data.
• 13:33
  SPEAKER_00: Like you can't query a photo in a tool like Service Titan, right?
• 13:36
  SPEAKER_00: Um you need it in like a specific format.
• 13:39
  SPEAKER_00: And so we found out a way that we could kind of go back in time and like take those photos and turn those into like equipped records in tools like Service Titan.
• 13:46
  SPEAKER_00: And that was just like a huge unlock for businesses because I think one of the big challenges was like okay, if I'm starting out today, this data's gonna be valuable in six months once I've collected enough data.
• 13:55
  SPEAKER_00: But if I've already been taking these pictures, it's like that's valuable today because I can get all of that data that I can market to today rather than six months from now.
• 14:03
  SPEAKER_00: Yeah.
• 14:04
  SPEAKER_00: So we call it like sort of our enrichment process where we'll just go through all your old data and clean it up that way.
• 14:09
  SPEAKER_00: Day one, you have feasible information.
• 14:11
  SPEAKER_00: Yeah, yeah.
• 14:12
  SPEAKER_00: How long does that take?
• 14:13
  SPEAKER_00: Depends how many photos you have.
• 14:15
  SPEAKER_00: Um, but like we're doing one now where I think it was like a million photos and it'll be done in like three days.
• 14:20
  SPEAKER_00: So it's just like it's just like faster than you.
• 14:22
  SPEAKER_00: I mean, we just have like something that's running for TV.
• 14:25
  SPEAKER_00: Yeah, that's crazy.
• 14:26
  SPEAKER_00: And again, you think like historically you would have a human whose job was to like go through all of that and that would just take forever.
• 14:32
  SPEAKER_00: I mean a million photos.
• 14:33
  SPEAKER_00: That's a lot.
• 14:34
  SPEAKER_01: Well, I also like I could see how that could happen.
• 14:36
  SPEAKER_00: Um I mean, 10 photos a job.
• 14:40
  SPEAKER_00: Yep.
• 14:40
  SPEAKER_00: You know, over five years.
• 14:42
  SPEAKER_00: Yeah.
• 14:43
  SPEAKER_00: Depending on how many jobs you're running, but yeah, like you can yeah, there's a lot of information being collected.
• 14:47
  SPEAKER_01: Yeah.
• 14:48
  SPEAKER_01: Yeah, that's interesting.
• 14:49
  SPEAKER_01: I um I I I there's an ad I I made the mistake of logging on to like Facebook or something the other day.
• 14:57
  SPEAKER_01: And there was an ad and it said something along the lines of, no, this was on LinkedIn.
• 15:03
  SPEAKER_01: And it said something along the lines of your data is uh like worth more than you think it is, or something like that.
• 15:09
  SPEAKER_01: Um, and it was it was for home service contractors so that they could, I believe this company's trying to like build an AI, something on top of something.
• 15:17
  SPEAKER_01: So they want all of your they want to pull all your data.
• 15:20
  SPEAKER_01: Um which I'm like, no, yeah, but it makes sense.
• 15:25
  SPEAKER_01: But like that, it is kind of interesting how much like sitting data has already been captured that something can be done with.
• 15:33
  SPEAKER_01: Yeah.
• 15:33
  SPEAKER_00: I mean, again, like I don't you would know this better than me, but it's like, what does it cost?
• 15:36
  SPEAKER_00: You acquire a customer like 500 bucks or something like that.
• 15:39
  SPEAKER_00: Yeah.
• 15:39
  SPEAKER_00: So it's like you go out there, you spend$500, you dispatch a technician, and you collect data, but then you can't use it, or maybe you don't collect data, and it's like, what are you doing with the$500 you just spent?
• 15:49
  SPEAKER_00: And it could be the case that person's like the system's like nine years old, right?
• 15:52
  SPEAKER_00: So it's like, oh, it's not an opportunity, but like it is in two years, but you just never catalog the data.
• 15:58
  SPEAKER_00: So like that person should just be waiting or should be trying to warn that person up to like have a conversation at some point.
• 16:03
  SPEAKER_00: But if you don't capture the data, it's like you just kind of like if you didn't sell something there, you like lit the$500 on fire just to have like their name and contact information.
• 16:11
  SPEAKER_00: Yeah.
• 16:12
  SPEAKER_01: Yeah.
• 16:13
  SPEAKER_01: Yeah, that's interesting.
• 16:15
  SPEAKER_01: I it it has been interesting.
• 16:16
  SPEAKER_01: Like the um the more focus we put into sort of this rehash reactivation section of our business, like uh the the more that's happened.
• 16:27
  SPEAKER_01: I think what'll be uh really interesting is we haven't done any of that yet for the new companies that we've brought on this year.
• 16:36
  SPEAKER_01: Um so we went we've like roughly doubled so far this year.
• 16:40
  SPEAKER_01: And I don't think we've activated, I think we've lightly activated it.
• 16:44
  SPEAKER_01: Yeah, like basically deployed speed delete and I think it might be it, maybe a little bit of outbound, but we like we probably could like run a whole army against it.
• 16:55
  SPEAKER_00: I would imagine.
• 16:56
  SPEAKER_00: I mean, again, if they're like sitting on data that could be usable.
• 16:58
  SPEAKER_00: I think again, yeah, part of it is like how do you make it usable to the team?
• 17:02
  SPEAKER_00: Yeah, something we've also focused on, which is like again, you're you can't query a photo.
• 17:06
  SPEAKER_00: So how do you make the data really easy for everyone to use?
• 17:09
  SPEAKER_00: So that's like you know, uh in certain CRMs, you can like name uh an equipment record anything.
• 17:16
  SPEAKER_00: So you could name it like the model number.
• 17:18
  SPEAKER_00: If you're like a CSR, you're like, I don't know what that is.
• 17:21
  SPEAKER_00: So like we spent a lot of time thinking about like how should we name this so it's really easy for someone who maybe doesn't know anything to be like, oh, that's an air conditioner.
• 17:29
  SPEAKER_00: Yeah, and I know what that means, and I can see that it's 10 years old, and therefore I'm gonna change my behavior based on that.
• 17:34
  SPEAKER_00: If it's like some like weird code that only some people understand, like it's just not gonna be that valuable, even if it's in like a record that someone can see.
• 17:42
  SPEAKER_00: It needs to be in a way that anyone on the team can use.
• 17:45
  SPEAKER_00: Yeah, yeah.
• 17:46
  SPEAKER_01: That's interesting.
• 17:46
  SPEAKER_00: Would you guys integrate with uh anything beyond Service Titan?
• 17:49
  SPEAKER_00: Right now, just Service Titan.
• 17:51
  SPEAKER_00: Um, we're working on some other integrations with other folks, but I think like you alluded to earlier, like I think the larger companies tend to get the most value out of what we're doing on the equipment data side.
• 18:00
  SPEAKER_00: Yeah.
• 18:00
  SPEAKER_00: I think really interested in like some of the other back office stuff, like if that's has more of a market for SMBs, because I think like with permit filing, it's it's not like you can not do that.
• 18:11
  SPEAKER_00: And I think it's likely like the owner's spouse or their kids who are like doing that work or like they're spending their weekends doing it.
• 18:18
  SPEAKER_00: So I do think there is something there where it's like you could probably bring those tools to like the small businesses of the world, and that would be really valuable if like they could spend their time not doing permit filing or not doing rebate filing.
• 18:27
  SPEAKER_01: Yeah.
• 18:29
  SPEAKER_01: Well, I think rebate filing probably just doesn't happen.
• 18:32
  SPEAKER_01: Or that, yeah, yeah.
• 18:33
  SPEAKER_01: And you're just like, I mean, we got deliberate about it, I want to say two years ago, and maybe maybe a little bit longer, but I mean, way too late, like mid-20 million.
• 18:44
  SPEAKER_01: And we started getting deliberate about kind of a pretty significant uh line item.
• 18:50
  SPEAKER_01: And I think when we started carrying, it was kind of funny.
• 18:53
  SPEAKER_01: Like we reinvested basically everything and had like relatively low like uh net margin to revenue up until call it 23 million.
• 19:03
  SPEAKER_01: But I think we did uh a million of IBITA on like 23, so like four percent.
• 19:08
  SPEAKER_01: Yeah.
• 19:09
  SPEAKER_01: And then the next year we did three and a half and 10, you know, now 10.
• 19:12
  SPEAKER_01: So it's it's great.
• 19:14
  SPEAKER_01: You know, when when you put your mind to something, yeah, you uh but it but it was kind of funny, like thinking about the the like we started focusing on rebates, and at the time it would have been 25% of our profit, yep, which is kind of wild.
• 19:28
  SPEAKER_01: Yep.
• 19:28
  SPEAKER_01: That like we weren't doing, and I think that was probably the realization we had back then is like, hold on, we would have we would have increased profit by 25% if we had just done this like one thing filing this thing.
• 19:40
  SPEAKER_01: Yeah, it was like it was like the and alternatively, you could sell two and a half million dollars more work, like which one's easier, yeah, right?
• 19:48
  SPEAKER_01: Like it yeah, it was it was a funny realization.
• 19:50
  SPEAKER_00: Yeah, it's one of those things where it's like doesn't feel like progress, right?
• 19:53
  SPEAKER_00: Like selling two and a half million dollars more work feels like you're moving the needle, but it's like the little things too, where it's like, yeah, there's actually did you like click this button?
• 20:00
  SPEAKER_01: Yeah, yeah, basically, yeah.
• 20:02
  SPEAKER_01: Yeah.
• 20:03
  SPEAKER_01: All right.
• 20:03
  SPEAKER_01: So every service call being a marketing asset, I kind of like this idea that, and I'm I'm curious, like tell me a better way to think about this, but I like this idea that even if it's not a service call, and like any data is good data.
• 20:20
  SPEAKER_01: Um, where hey, we get a lead from Yelp.
• 20:25
  SPEAKER_01: Uh we get someone's name, we get someone's address, phone number, email probably, and like why did they call us?
• 20:35
  SPEAKER_01: So we have five points of data, but like we have nothing else.
• 20:38
  SPEAKER_01: And one of the things that I find like that most people find aggravating about Yelp and like lead aggregators in general is it's a low book rate.
• 20:46
  SPEAKER_01: Like you might only book like 20 to 30 percent of those calls, but the other seven you still have the data for.
• 20:51
  SPEAKER_01: Yep.
• 20:51
  SPEAKER_01: Like, what do you think we should be doing with that?
• 20:54
  SPEAKER_00: Yeah, that's I mean, I think if you're not engaging with a homeowner, that's a tough one, right?
• 20:58
  SPEAKER_00: So, like if you don't book it because the can spam stuff, yeah.
• 21:02
  SPEAKER_00: I mean, it's I mean, it's not something that we spend a whole lot of time thinking about.
• 21:05
  SPEAKER_00: I think we're thinking more of like lower.
• 21:08
  SPEAKER_00: This was me just like asking your opinion.
• 21:09
  SPEAKER_00: I know you guys don't touch it, but like Yeah, I mean it's I wonder, I think there are some people that are like looking like that will submit forms out of curiosity rather than actual intent.
• 21:20
  SPEAKER_00: Yeah.
• 21:21
  SPEAKER_00: Um, like I I was actually just doing this, like we're looking at insulation for a house.
• 21:24
  SPEAKER_00: So I like submitted a form online and like that person may have reached out to me, but I probably never responded to it.
• 21:28
  SPEAKER_00: Because it was kind of like we're just curiosity to anything else.
• 21:31
  SPEAKER_00: Um, I mean, I think there's a way that you can be like warming that person up where it's like, hey, you like you took time every day to submit this thing.
• 21:38
  SPEAKER_00: Like, are you actually interested in this or like was it submitted by mistake?
• 21:42
  SPEAKER_00: Um, I mean, you should keep the information as like a remarketing tool, I would think, but um, I don't have a great answer for like what to do with that.
• 21:49
  SPEAKER_01: That's okay.
• 21:50
  SPEAKER_01: But I I like the idea that like every time you spend money and you get information, because that's basically all the you're doing with a lead is you're spending money and you're getting information on like someone that potentially.
• 22:00
  SPEAKER_01: is interested in the thing that you have.
• 22:03
  SPEAKER_01: And like sometimes you get to go out, you get to take the photo, you get to like run through the whole process.
• 22:07
  SPEAKER_01: Yeah.
• 22:08
  SPEAKER_01: But um yeah, I think it it well, I think it'd be sweet to like make better, higher and better use of that.
• 22:17
  SPEAKER_00: Yeah, I think so too.
• 22:18
  SPEAKER_00: I mean it it's data, right?
• 22:19
  SPEAKER_00: Someone you're paying to acquire it.
• 22:20
  SPEAKER_00: So like you should be using it to some extent.
• 22:22
  SPEAKER_00: I think it's just you're talking about like top, top, top of the funnel, right?
• 22:25
  SPEAKER_00: Where it's like the interest level is just not as clear.
• 22:28
  SPEAKER_00: Yeah.
• 22:28
  SPEAKER_00: And you know I think there's one of there's sort of like two things you could do, right?
• 22:31
  SPEAKER_00: You just like increase top of funnel to the point where you're getting like whatever's going down funnel is increasing because you have bigger volume to figure out how do you like get more of the top of the funnel into your funnel.
• 22:40
  SPEAKER_00: So I think you might be able to do the latter if you're like rehashing those folks to some extent.
• 22:45
  SPEAKER_00: But who knows why they actually reached out in the first place.
• 22:47
  SPEAKER_01: Yeah.
• 22:48
  SPEAKER_01: What do you think contractors should be capturing on every visit?
• 22:51
  SPEAKER_00: Um I mean you have like the basic information that's collected from tools like Yelp or tools like service tech, right?
• 22:58
  SPEAKER_00: Like customer name, uh location.
• 23:01
  SPEAKER_00: Um I think you want to be understanding like what was the like if you're sending someone out to that call, like you want to understand like what work was being done and like why did the homeowner call, right?
• 23:10
  SPEAKER_00: They might disclose it on the phone, but like they might share more when you're actually in the home.
• 23:14
  SPEAKER_00: I think we see a lot of like very uh nondescript like job summaries or invoice descriptions.
• 23:21
  SPEAKER_00: And so like if you're rehashing a call, you're like going through a customer profile and like the description of what work was done or like what you're in the home is like one sentence.
• 23:29
  SPEAKER_00: It's like you don't get a whole lot of information as to like why you're doing the work there.
• 23:32
  SPEAKER_00: I actually think like in home recording tools are really interesting for this because you don't have to like spend the time writing it down.
• 23:37
  SPEAKER_00: It's like you can just record the conversation and then know what happened in that home.
• 23:41
  SPEAKER_00: Because that will tell you like a lot of signals around intent, right?
• 23:44
  SPEAKER_00: Like why did the person call?
• 23:45
  SPEAKER_00: Are they actually having issues?
• 23:46
  SPEAKER_00: Are they shopping for a quote?
• 23:48
  SPEAKER_00: Are they actively getting quotes from other customers?
• 23:50
  SPEAKER_00: Like that all is really interesting into like how you would approach that customer moving forward.
• 23:54
  SPEAKER_00: If you just go out there and you like here's a quote to fix it then you leave like you're just not getting a whole lot of information.
• 24:01
  SPEAKER_00: Yeah.
• 24:01
  SPEAKER_00: Obviously I, you know, we think we should be collecting equipment data at a minimum like that is kind of like the thing you're there to work on in the first place.
• 24:10
  SPEAKER_00: Yeah.
• 24:10
  SPEAKER_00: Um and like not getting that is just sort of like you know you rolled a truck there, you pay to acquire the customer and then you have no idea like what's actually in that home.
• 24:18
  SPEAKER_00: And that's just like a really big piece of like how you think about like approaching that customer.
• 24:22
  SPEAKER_00: It's like um I'm trying to think of like I always joke if if you were like Amazon Amazon never collected your order history.
• 24:30
  SPEAKER_00: Every time you logged in it was just like random things and you're like I've bought so many things from here you should know like what I want to like I like this toilet paper.
• 24:38
  SPEAKER_00: Yeah yeah yeah but every time it was like no here's a different one you're like why are you doing this?
• 24:41
  SPEAKER_00: It's like the same thing.
• 24:42
  SPEAKER_00: It's like you are there to fix this thing and then the customer calls in you're like yeah what kind of equipment do you have in your home again it's like you're supposed to be the expert on this yeah and it's like one bad for marketing operations but it's like that customer experience right like if you have to ask that every single time and you're kind of like if the customer feels like you show up every time being like learning what's there for the first time it's just like not a good experience.
• 25:04
  SPEAKER_01: Yeah yeah that makes sense that's funny that's funny.
• 25:08
  SPEAKER_00: So do you guys have like a do you have a way to measure the value of this yeah I think there's a few different things we look at I think one is sort of just like what opportunity can we uncover which is sort of like you know here sort of the top of funnel like a million photos like how much opportunity is that it depends uh how often you're taking data plate pictures and sort of like I think we tend to see like anywhere from 20 to 30% of photos we capture have age systems in them.
• 25:36
  SPEAKER_00: Okay out of that a million photos it depends like how often those are actually data blade pictures it tends to be like two to three pictures on average sometimes you get like multiple data plate pictures but like furnace coil AC assume like two to three per call.
• 25:50
  SPEAKER_00: So like out of a million photos like we ran a process with a customer recently and we identified like 50 million from going just a year back.
• 25:58
  SPEAKER_00: It's like you ran the call you never captured the data and this is like an existing customer you've been to that had a replacement op that you just never tracked before and like you never ran another install the quote never got accepted so these are like active replacement opportunities in the business and that's just like going one year back.
• 26:15
  SPEAKER_00: Yeah that's crazy.
• 26:17
  SPEAKER_00: So look at replacement opportunity I think which is again that that's one of them the other uh things we look at is like there's sort of like this this funnel right which is like you know X amount of service calls should be replacement opportunities on the call board and then you want to convert some percentage of those to like a comfort advisor and comfort advisor com comfort advisor converts some percentage of those I think we found that like we can impact two of those numbers one is like how many replacement ops do you have on the call board like if you know going into the call it's a replacement op or you're like deliberately marketing that person you actually know what that number is right yeah a lot of people don't know and they're just like oh yeah it's like 40% it's like okay how do you know that number it's like oh I just think that's what it is like that's what I hear anecdotally but you can actually track it right like you don't have to be like did it was this a 10 plus year old system or not.
• 27:03
  SPEAKER_00: Yeah.
• 27:03
  SPEAKER_00: And then you know how to adjust like your boundary capacity based on that.
• 27:06
  SPEAKER_00: So like if you don't know that number like you have no idea how many you're actually running.
• 27:10
  SPEAKER_00: So part of it is like we see a lift in that number just because we're providing visibility which is like how many you actually run on a weekly basis.
• 27:16
  SPEAKER_00: And then the second is around tech generated lead rates like how often do you flip a lead to a comfort advisor.
• 27:21
  SPEAKER_00: We generally see like a 30 to 40% increase among customers that adopt Faraday.
• 27:25
  SPEAKER_00: And a big reason for that is just like transparency, right?
• 27:28
  SPEAKER_00: It's like I know this is a 10 plus op.
• 27:30
  SPEAKER_00: I'm not guessing about it.
• 27:31
  SPEAKER_00: So I'm gonna send this technician to that job versus I know this is like the data is both what is aged and what is not aged but it's like if I know it's a two year old system I also know who I'm gonna be sending that home.
• 27:41
  SPEAKER_00: Yeah.
• 27:41
  SPEAKER_01: Yeah yeah yeah that makes sense the this so this is um this is becoming a topic and internally which I feel like this is uh of all the problems that people have like heard me talk about on this show this is probably the least interesting uh but like it's becoming a real one which is all kind of annoying but also exciting in the same moment.
• 28:07
  SPEAKER_01: Um but like global data and like how do you connect it which like that's what this is remind so like you're like explaining this like aged opportunity.
• 28:14
  SPEAKER_01: I actually I don't know how many aged opportunities I have on the board right now.
• 28:17
  SPEAKER_01: Yeah which like probably should it's shoulder season like that should be super sacred.
• 28:21
  SPEAKER_01: Um and like my answer would be probably 30% you're right that's what I heard revenues going in the direction I think which I I believe and now I'm actually going to check this I it's a part of their daily huddle um but like uh now I'm gonna now I'm gonna check that yeah it's what it's like you can't manage what you can't measure right like if you're not actually measuring this in well measuring ends up being the complicated so like so what we're so my point in saying all that what is becoming the most ridiculous problem I just I can't believe that I have to care about this is this sounds like uh this sounds like a LinkedIn ad, but we have all these disparate data systems.
• 29:02
  SPEAKER_01: And we're trying and and I'm like and you and we need meaningful insights but like we actually do have these disparate data systems and we actually do need meaningful insights like how many aged replacement ops on the board um but yeah we're uh we're we're having we're actively like looking into how do we solve disparate data right now and I that's not really I don't think like what you're trying to solve but it it is funny.
• 29:29
  SPEAKER_01: Related yeah it is funny because we're and I was like right before you and I got on uh like here I was talking with Rich and I I called him up like like I was handling this problem as I walked in this door because um he put he's basically pulling everything from like his purchasing his payroll software I think maybe even Slack like he's connecting everything into a data lake and then he's querying his data lake and building dashboards on top of that.
• 29:56
  SPEAKER_01: Yep.
• 29:57
  SPEAKER_01: And I'm like okay because that would solve like we're trying to build all this like bespoke reporting and we can't pull shit from anywhere.
• 30:04
  SPEAKER_00: Yeah if you have to like log into five different places per company to those that was where I spent like a about half my morning trying to map these things spread that was that was that was like what I spent half my freaking morning doing today.
• 30:17
  SPEAKER_01: Was like yeah anyways but it is the um you know I feel like in the pro as far as like growing the business you know people have heard me growing this business for like last six years on the show and it was I I sometimes I think about like just like as the topics change we're like you know three years ago we were probably talking about like how to drive leads off TikTok which is still like a useful piece of information but today today I'm like trying to connect my data which like I just don't think anybody cares about but um it becomes a real problem.
• 30:48
  SPEAKER_00: Everything about like symptoms of getting old or something like that earlier.
• 30:50
  SPEAKER_00: Like this is one of them like I need a better way to connect I actually need to get meaningful insights from my data.
• 30:55
  SPEAKER_00: Do you have like a request for startups on the show?
• 30:57
  SPEAKER_00: We should do that like what like have you heard of that before?
• 31:00
  SPEAKER_00: No that's people do like some of the venture firms will be like this is like they put out a request for startups like this is what we'd love to see this is an annoying problem somebody resolve it.
• 31:07
  SPEAKER_01: Yeah pretty much like well I mean that's basically what you and I did with like permits a couple years ago.
• 31:11
  SPEAKER_00: Yeah yeah yeah I remember being in here with Ali and we were talking about like feed up things and I was like here's the three different things we could do like which one was the most like annoying and she was like hands down you have to fix permits inspections.
• 31:21
  SPEAKER_00: It's like the worst thing I deal with every day.
• 31:23
  SPEAKER_00: So like cool that we're gonna go do that then that that is funny.
• 31:26
  SPEAKER_01: Well I want to dive into that but uh I have brought up it it's funny to hear like I'll say something on this show and then like a year later somebody be like I I either did that and like executed on that and like which is funny because sometimes I haven't even I was like oh here's an idea and somebody's like oh yeah we did it and it actually fucking worked and I'm like goddamn it I should have been doing that this whole time um or uh like they come yeah with a solution like yeah hey heard this on heard this on the show like yeah here's now the problem with like this problem is all the solutions are like a hundred thousand dollars yeah yeah that's fair it's like oh you oh you need meaningful insights from your data have I got the power bi tool for you yeah um but yeah let's yeah let's talk about permits I think that's pretty interesting as your business grows the financial decisions get a lot more expensive things like hiring techs buying trucks raising pricing and marketing if you're making those decisions without really understanding your numbers you're probably leaving a pile of money on the table and that's where profit and grit comes in.
• 32:28
  SPEAKER_01: Tyler has built, scaled and sold a$25 million service business.
• 32:33
  SPEAKER_01: So his advice comes from real operating experience.
• 32:36
  SPEAKER_01: You'll work with him directly to improve your cash flow understand your margins and build better forecasts to make you more confident as you make decisions as you grow.
• 32:46
  SPEAKER_01: One client increased bottom line profit by 11% after fixing pricing improving job mix and stabilizing their cash flow.
• 32:52
  SPEAKER_01: If you're doing between three and five million a year and you want more clarity around your finances, book a free 20 minute strategy call at the link below.
• 33:01
  SPEAKER_00: Yeah uh I think it was just again sort of following this like jobs to be done and I think we had heard it from a few customers because we had built sort of like a warrantied registration tool so we built like an agent to go out and register warranty.
• 33:12
  SPEAKER_00: Yeah so I think people it was interesting like I think our customers connected the dots quicker than we did.
• 33:17
  SPEAKER_00: They were like oh oh if you could do that you can do this that's really similar to this color thing that's actually way more annoying and we're like oh I like I don't know and then we just kept hearing it and then I yeah I remember being with Allie and she was just like no you have to do this.
• 33:28
  SPEAKER_00: Like this is the most annoying thing and like we've looked at other solutions and they don't actually fix the problem for us.
• 33:33
  SPEAKER_00: So like can you do this?
• 33:34
  SPEAKER_00: And and that was sort of like part of the inspiration there.
• 33:37
  SPEAKER_01: Yeah.
• 33:37
  SPEAKER_01: Yeah I I would imagine when you're built like I think your version of technology sounds a lot more fun just as far as uh um BI tools.
• 33:49
  SPEAKER_01: Definitely more fun than BI tools.
• 33:50
  SPEAKER_01: But I think like more fun than um I it sounds fun to like be able to walk into a a business or a customer pro however you think about that and like see friction and go to resolve it.
• 34:07
  SPEAKER_01: Because it it sounds like um to be honest kind of an easy sale but it also sounds like that is helpful uh versus a lot of the technology that I think is being shoved today is kind of helpful but also like here's a brand new widget or tool and it doesn't really replace an existing process and I don't know.
• 34:28
  SPEAKER_01: To me it sounds just kind of fun because it's like you're solving problems.
• 34:32
  SPEAKER_00: It is fun.
• 34:33
  SPEAKER_00: I mean you kind of you need someone to give you the invite into the door so thank you for doing that.
• 34:38
  SPEAKER_00: But yeah I mean because I think like when I was initially talking to contractors like the reason we built workforce development was everyone's like my hardest biggest issue is like finding people.
• 34:47
  SPEAKER_01: Yeah reliable talent and we like I actually do wonder we kind of take on that is I don't know that that's the I don't think that's actually the biggest issue and I don't know that it ever has been I think it's like it's the easiest thing to point to yes when something's going wrong.
• 35:03
  SPEAKER_00: It's like it's not my fault.
• 35:04
  SPEAKER_00: It's like I can't find good people.
• 35:06
  SPEAKER_00: And then you like go a step down and it's like okay what's your gross margin and it's like 10%.
• 35:11
  SPEAKER_00: You can't afford to pay someone yeah a good salary and it's like what's your uh benefits policy it's like no benefits for 90 days and it's like okay like I get why it's hard for you to attract talent.
• 35:20
  SPEAKER_00: So I think it's like one of those things where you hear it and you're like oh yeah that's clear the problem.
• 35:23
  SPEAKER_00: Yeah then if you like ask two more questions it's like oh that's actually that's the cause of a different issue which is like you need help running the operation of the business yeah before you actually pay someone top dollar to go do it.
• 35:35
  SPEAKER_01: Well and I think what we've discovered um our like in our census our average age is Gen Z.
• 35:45
  SPEAKER_01: Yeah which is like crazy.
• 35:48
  SPEAKER_01: It's not even millennial like like it's Gen Z.
• 35:51
  SPEAKER_01: Yeah like and um I sometimes I actually this is another one of those like as I get older which by the way I'm talking 35.
• 35:57
  SPEAKER_01: So like yeah so I'm like I'm 35 years old and I'm uh I'm on the upper echelon of age in our business and I'm like this is bullshit because all the data is like dude everybody's retiring I'm like dude everybody's having babies here like we're having a different issue but yeah it it's uh I I don't I I mean obviously it is a problem but like I just I think it's a little overblown and I think that um it's hard for me to like reconcile the two realities that companies are actively doing like people staff up to the work that they have like I have X amount of work and here's my capacity or vice versa I have X amount of capacity I'm gonna fill that work.
• 36:41
  SPEAKER_01: Yeah um and like houses are still being built furnaces are still being fixed.
• 36:46
  SPEAKER_01: So I think that currently the workforce seems to be matching the demand.
• 36:52
  SPEAKER_01: Like people are getting water heaters replaced they're getting panels replaced furnaces aren't going months without being serviced.
• 36:57
  SPEAKER_01: I'd agree with that and companies are still doing layoffs.
• 37:00
  SPEAKER_01: So I struggle with this whole concept that like this is some major like it is an it is an issue in that like the trades need interest but like they kind of have a lot of interest and our average age is Gen Z.
• 37:12
  SPEAKER_01: Like we are drowning in kids who want to learn the trades.
• 37:15
  SPEAKER_00: I think we found the same thing we were like I think the narrative is generally like there is there's just lack of interest.
• 37:21
  SPEAKER_00: And it's like we did the most basic thing is like go past post an ad on Indeed and we got like tens of thousands of applications.
• 37:27
  SPEAKER_00: No it's crazy.
• 37:28
  SPEAKER_00: Okay that's not the issue actually I think the bigger issue is like if you're training stuff if you're Wilson and you're like okay I have a thousand applications I need and I need to pick five yes and those five people have never worked in trades before and I'm gonna pay them and I'm gonna pay to train them.
• 37:42
  SPEAKER_00: It's like how do I select those five people it's like that's a pretty hard problem to solve that is a hard problem.
• 37:46
  SPEAKER_00: And then it's like that person can just leave in six months and you're just out of pocket.
• 37:48
  SPEAKER_00: So I think like there's something there I don't know I mean still really believe in the mission we were working on I just think it's not like how do you get Gen Z excited about the trades because you're seeing it too like they want to do that.
• 37:57
  SPEAKER_01: So I I have uh like just people in my life that have their kids or nephews or whatever uh graduating from high school and the amount of calls and texts that I'm getting I was I we talked about this the other day on the show with Jack, but like I'm getting more contacts than ever with like hey my son is thinking about X from frankly families that like you wouldn't have historically thought that they would be thinking about the trades.
• 38:22
  SPEAKER_01: Yeah.
• 38:22
  SPEAKER_01: Like it's a lot of like the dad's a doctor and the son wants to become an electrician.
• 38:26
  SPEAKER_02: Yeah.
• 38:27
  SPEAKER_01: Um which is like cool but also I don't think interest is the problem.
• 38:32
  SPEAKER_01: Yeah yeah that was our takeaway as well yeah that's interesting.
• 38:35
  SPEAKER_01: That's interesting.
• 38:36
  SPEAKER_00: Yeah I'd love to see something where it's like I I know we were talking about this earlier there's like um they're now extending Pell Grants to community colleges for skilled trade programs.
• 38:45
  SPEAKER_00: Yeah and I think that like again it's more solving the like interest and financial commitment for a student.
• 38:51
  SPEAKER_00: I'd love to see something that like works like an apprenticeship program where like the contractor is being subsidized for the work they're doing.
• 38:57
  SPEAKER_00: If like if if someone were to do something in that realm that would just unlock a lot because like the contractor's the most incentivized to figure this out right you're like I want to grow I need more people to grow yes so I'm willing to spend the money to figure out how to train the work yeah currently contractors just burden their PL 100% yeah like it that would be um that would be the best way to do it.
• 39:15
  SPEAKER_01: We have found there's some ways but uh it's not as easy as you'd like or think.
• 39:20
  SPEAKER_01: Yeah yeah that is funny um all right who's the like what's the size you don't have to name any names but what's the size of the like largest organization that you guys have like deployed into um there was a list I saw um I think it was earlier this week it was like the top nine home serv residential home services companies or something like that.
• 39:42
  SPEAKER_00: It was like home serv H V E C Plumbing Electrical Business for commercial oh I I saw this.
• 39:47
  SPEAKER_00: And we're working like five and it was talking about a few of the public ones and some of their commercial which are not relevant to us but like we're working with five of the top nine on that list.
• 39:55
  SPEAKER_00: That's cool.
• 39:56
  SPEAKER_01: Uh which is cool and uh it sounds like they're missing one right now uh in Titan but that's right that's right that's right that's right there you know it was the like they passed each other six of the top nine or something like that.
• 40:10
  SPEAKER_01: Yeah yeah that's funny um that's crazy.
• 40:13
  SPEAKER_00: Yeah it's I mean I think the the draw there has been primarily just like consistency, right?
• 40:18
  SPEAKER_00: If you've got 40 brands and you recognize this data is reliable, it's like I want to consistently capture this data across brands like we come in to go solve that problem.
• 40:28
  SPEAKER_00: Yeah same thing with like permits warranties and rebates.
• 40:31
  SPEAKER_00: It's like does it make sense for you to have a permitting rebate and warranty team in every single one of those locations like obviously not probably not yeah like you it it just yeah runs with shared services or something like that.
• 40:42
  SPEAKER_00: So it's like yeah like why would you have that?
• 40:44
  SPEAKER_00: It's like a dependency you have and like likely that person has all the knowledge in their head and they leave like you're like out of luck on those things.
• 40:52
  SPEAKER_00: So I think we're getting a lot of momentum there.
• 40:54
  SPEAKER_00: Um and then you know even for like the independence like same thing.
• 40:58
  SPEAKER_00: It's like we had some people where it's like yeah my permit coordinator is like quit and like didn't write anything down and now we like we're behind on permits.
• 41:05
  SPEAKER_00: It's like that's just the reality and it's like it it's tough but that's like you have a huge dependency on this person.
• 41:10
  SPEAKER_00: So I think we're trying to come in where it's like let's think about this where like you're onboarding us once and you don't have to think about hiring that person again.
• 41:16
  SPEAKER_01: Yeah.
• 41:17
  SPEAKER_01: When so one of the one of the like problems that aside from like meaningful insights from my data that like we're actively working on right now is um I've I talked about this so much on the show, but like in 2021 we went multi-location from single location and uh like ran three or four branches I think we topped out of four in uh 2023 and then we merged into this facility and today we're at five branches and um we're like actively consolidating a few right now into the same one because they share like a footprint.
• 41:58
  SPEAKER_01: But it's interesting and like it's fun problems to solve like that problem of like well how do you get how do you like maximize the use of like rebates over the course over the over like five markets or whatever.
• 42:11
  SPEAKER_01: Yep.
• 42:12
  SPEAKER_01: And a lot of the like the holes that we're trying to plug right now are um like speed.
• 42:19
  SPEAKER_01: So we have we're at 53 million run rate today and we have a we have like three more partnerships that we'll probably do before the end of the year.
• 42:29
  SPEAKER_01: So like eight total is I think this year.
• 42:32
  SPEAKER_01: And we thought it was going to be like 80 million.
• 42:34
  SPEAKER_01: I actually like with the partners that we're prepping to bring in I think it's like a hundred something which is crazy.
• 42:39
  SPEAKER_01: So we would have gone from like 30 million to 100 million yeah change 12 months and um like you know like it's wild.
• 42:48
  SPEAKER_01: But a lot of the a lot of what we're trying to figure out is like exactly this problem of like okay what what stays at each branch, what makes sense how can we centralize some of this as fast as possible without like detracting from what they're doing.
• 43:04
  SPEAKER_01: Yeah.
• 43:04
  SPEAKER_01: Because there is like real value to so many problems being solved by the person that's dealing with the problem.
• 43:12
  SPEAKER_01: And like I'm not right like I'm not dealing with the problem that Jeremy's dealing with in Nashville.
• 43:16
  SPEAKER_01: Yep.
• 43:16
  SPEAKER_01: Um I'm just like sitting here.
• 43:18
  SPEAKER_01: So it that is that is an it I can see that as like really useful.
• 43:22
  SPEAKER_00: Yeah I think it's also just it's like consistency too like on the equipment data side it's like imagine you have five different brands and they have five different ways of identifying systems.
• 43:31
  SPEAKER_01: Because usually you're gonna consolidate marketing in some version just because it's the main driver of all of these businesses and you have to match the data.
• 43:38
  SPEAKER_00: Or just like tracking right like if you wanted to say okay how often are we getting replacement leads on the call board across five brands and all of different ways like even if you spend a billion dollars and get your data lake, they all are different and now you're like okay I actually don't even I have all the data here but I can't make sense of it because we're not even on the same page of how we're tracking this.
• 43:56
  SPEAKER_00: Yeah.
• 43:57
  SPEAKER_00: So it's like you get the data there and you're like actually I can't use this.
• 43:59
  SPEAKER_00: So we see Seen this now a few times with some of like the larger consolidators, just like there's a big movement to like bring consistency to like tags, business units, job types.
• 44:08
  SPEAKER_00: So it's like oh, you have to.
• 44:10
  SPEAKER_01: I mean, you literally have you like you actually just have to.
• 44:13
  SPEAKER_01: Because uh, as an example of earlier, we're like we're trying to pull all these systems together and we finally get it to roughly where we want it to be, which is like a weekly uh we're trying to put together like weekly PLs, basically, like a weekly closed PL to give progress to each branch on like where are you pacing?
• 44:30
  SPEAKER_01: And um, first off, ended up being complicated.
• 44:34
  SPEAKER_01: Second, like, hey, well, this one's on this FSM and this one's on this FSM.
• 44:38
  SPEAKER_01: And then that added even more complexity.
• 44:40
  SPEAKER_01: You're like, how are you thinking about age equipment?
• 44:42
  SPEAKER_01: Yeah.
• 44:43
  SPEAKER_01: What most, and I'm just saying this part for the listener, I think you already know this, but like what most aggregators do is they have a model tenant of Service Titan, where hey, this is the tenant, this is how we do job types, this is how we do call booking, this is how we do equipment.
• 44:59
  SPEAKER_01: And we're just gonna replicate that tenant across every new acquisition that we bring on, yeah.
• 45:04
  SPEAKER_01: Uh, so that it's clean.
• 45:06
  SPEAKER_01: So, but anyways, for the listener, it's called a model tenant.
• 45:08
  SPEAKER_00: Yeah, I think and it's like hard though, because if you've got a business that's been running for five years and overnight you're like, Yeah, that here's the process you're running for five years, it's different now.
• 45:15
  SPEAKER_00: Yeah, like that's hard to do.
• 45:17
  SPEAKER_00: Yeah, um, but if you want that like consolidated reporting, you kind of have to do it.
• 45:21
  SPEAKER_00: Dude, what's overhyped?
• 45:22
  SPEAKER_00: I don't know if any of it's overhyped.
• 45:24
  SPEAKER_00: I mean, like, I use the tools AI.
• 45:25
  SPEAKER_00: Yeah, I mean, like the tool is the tools are incredible, like the amount I can do personally.
• 45:30
  SPEAKER_00: The amount of memes that you've been able to make with those tools.
• 45:33
  SPEAKER_00: So many memes.
• 45:33
  SPEAKER_01: So many memes.
• 45:34
  SPEAKER_01: Which is worth a lot, obviously.
• 45:36
  SPEAKER_01: Like getting people to laugh is like that's worth a lot of money.
• 45:38
  SPEAKER_00: A lot of money.
• 45:39
  SPEAKER_00: I think it's I think the issue that we run into or like we see from customers is kind of like this overpromise on AI stuff, which is like you can go from 10 people doing it to zero.
• 45:48
  SPEAKER_00: And like I've never seen that before.
• 45:51
  SPEAKER_00: It's like you may go 10 to 5, like, but you still need someone that's monitoring it.
• 45:55
  SPEAKER_00: And I think the biggest thing is like around implementation.
• 45:57
  SPEAKER_00: Like, you just can't flip the switch on one day and it's like, oh, cool, problem solved.
• 46:01
  SPEAKER_00: I don't think about that ever again.
• 46:03
  SPEAKER_00: Yeah.
• 46:03
  SPEAKER_00: Like that's just not how this works.
• 46:05
  SPEAKER_00: And I like you, you need to make sure all the processes are set up for the AI to like use the data effectively.
• 46:10
  SPEAKER_00: It's like case in point being like, do I have consistent ways to identify each equipment?
• 46:14
  SPEAKER_00: So if I wanted to throw AI for like outbound marketing, and it's like, cool, I actually don't know how to figure out which ones are replacement leads, like that's never gonna work.
• 46:21
  SPEAKER_00: Um, so I think like I think it's an amazing tool.
• 46:24
  SPEAKER_00: I think the biggest type we see around is like maybe just like overhyping how much you are going to save from like an OpEx perspective.
• 46:32
  SPEAKER_00: Like there's definitely savings there, but like the idea that yeah, it's like a set it forget it, I don't think about it.
• 46:37
  SPEAKER_00: Silver bullet type thing is just like that's never been true with anything.
• 46:40
  SPEAKER_01: Yeah.
• 46:41
  SPEAKER_01: It's interesting to see.
• 46:43
  SPEAKER_01: Um, I'm in all these like group chats, and it's interesting to hear like how other people are thinking about like where to deploy AI, how to use it.
• 46:53
  SPEAKER_01: Um and like people are actively doing it, so it's not like conversation.
• 46:58
  SPEAKER_01: Yeah, uh, it's none of it's philosophical.
• 47:00
  SPEAKER_01: Most of it's like, here's it actively how we're doing it.
• 47:03
  SPEAKER_01: Uh, but it it's funny to like follow bias.
• 47:06
  SPEAKER_01: Like my bias is I want to drive efficiency because that's just like the thing that I am focused on.
• 47:11
  SPEAKER_02: Yeah.
• 47:11
  SPEAKER_01: Um, but like I suspect what's about to happen is this whole data problem.
• 47:15
  SPEAKER_01: Well, like now, I'm probably gonna the next five podcasts are probably gonna be out there random bullshit tool that I had to build.
• 47:22
  SPEAKER_01: Like, here's how I vibe coded like my new data insights thing.
• 47:26
  SPEAKER_01: And um, but I I it's it's just interesting to watch how people are using it because I think that is right.
• 47:32
  SPEAKER_01: Like, I'm hearing these businesses, they're humongous, they're driving AI into the business in whatever version, and they're aiming at call cost savings.
• 47:41
  SPEAKER_01: And I think they do achieve it to a point, but there is a uh there is a point where like you still need like someone is still human in the loop.
• 47:50
  SPEAKER_01: The someone still has to be in the loop.
• 47:51
  SPEAKER_01: 100%.
• 47:52
  SPEAKER_01: Someone still has to like touch it.
• 47:53
  SPEAKER_01: But then the smaller businesses seem to be focused on like how do I build this bespoke tool, which I also kind of feel like might be the wrong answer to.
• 48:01
  SPEAKER_00: Yeah.
• 48:02
  SPEAKER_00: It's it's I think it makes sense in some situations.
• 48:06
  SPEAKER_00: Yeah.
• 48:06
  SPEAKER_00: Like I think if it's like, like, you know, customer acquisition in your brain is a big part.
• 48:11
  SPEAKER_00: So it's like if I want to use the tool to like build my own website, I feel like that might be a like you want to customize it, you want to have your own like leading.
• 48:17
  SPEAKER_00: I'm cool with that.
• 48:18
  SPEAKER_00: Like, that makes sense.
• 48:18
  SPEAKER_00: You want to make it your own, but it's like, am I gonna rebuild Stripe as my payment processor?
• 48:22
  SPEAKER_00: It's like, yeah, that's probably not where you should be spending your hours.
• 48:25
  SPEAKER_00: Or it's like, do I want to rebuild invoicing?
• 48:27
  SPEAKER_00: It's like those are gonna solve problems, they're more like infrastructure things.
• 48:30
  SPEAKER_00: So it's like, why go do that?
• 48:32
  SPEAKER_01: Um, I think that's what everyone, I'm in all these chats, and I still feel like everyone's focused on, well, like, hey, I'm gonna go like this is the contractor talking.
• 48:40
  SPEAKER_01: Yeah, like I'm I'm gonna go build my own like CRM or FSM or whatever.
• 48:45
  SPEAKER_01: Yeah.
• 48:46
  SPEAKER_01: And I'm like, yeah, 400 grand is a lot of money a year received.
• 48:52
  SPEAKER_01: Um, but like, why?
• 48:55
  SPEAKER_01: Yeah.
• 48:56
  SPEAKER_01: Like I it, I don't know.
• 48:57
  SPEAKER_01: Like, I sort of struggle with it because I I do get I do get 400 grand is a lot of money.
• 49:02
  SPEAKER_01: So it's hard to argue at that point, but it also feels like you're um, and I'm I'm usually actually hearing it from like smaller contractors.
• 49:10
  SPEAKER_01: They're like three to five million dollars, and they're like, oh, it doesn't do this one thing, so I'm gonna go build my own FSM.
• 49:14
  SPEAKER_01: And I'm like, dude, all you actually need to do is like get to like 20 million dollars and like you can just solve those problems in a different way.
• 49:20
  SPEAKER_00: Yeah.
• 49:20
  SPEAKER_00: I think yeah, I think you only have so many things you can focus on in a business.
• 49:23
  SPEAKER_00: So it's I think like thinking about it a different way, and it's like, do you think it would be a good idea for Service Titan to build a home services company?
• 49:29
  SPEAKER_00: It's like, probably not, right?
• 49:30
  SPEAKER_00: Like they're they're really good at building software, they should probably just do that.
• 49:32
  SPEAKER_00: And I think it's the same thing.
• 49:33
  SPEAKER_00: It's like you're really good at building a home services company.
• 49:35
  SPEAKER_00: Like, there's that is a really hard thing to do.
• 49:37
  SPEAKER_00: Yeah.
• 49:38
  SPEAKER_00: Well, it's like, do you also want to try and build like a really complicated software tool at the same time?
• 49:43
  SPEAKER_00: Yeah, like you're not gonna be good at both of those things at the same time.
• 49:47
  SPEAKER_01: So well, even with being good, I actually just think it's kind of like a waste of effort.
• 49:50
  SPEAKER_01: Yeah, because like if so when somebody inevitably buys you, they're just gonna switch you over.
• 49:56
  SPEAKER_01: Yeah, right.
• 49:57
  SPEAKER_01: Yeah.
• 49:57
  SPEAKER_01: Uh and then if you wanted to go buy other companies, like you have to figure out how to integrate that data into like your custom vibed thing.
• 50:05
  SPEAKER_01: Yeah.
• 50:05
  SPEAKER_00: Like, I don't know.
• 50:07
  SPEAKER_00: I think it's also just like you get a lot of um, there's like a really interesting feedback loop when you build something with the tools where it's like you get instant gratification.
• 50:14
  SPEAKER_00: Like, cool, I like went from zero to like this thing working in like an hour.
• 50:18
  SPEAKER_00: Yeah.
• 50:18
  SPEAKER_00: But then it's like I need to spend like multiple hours per day maintaining it or like updating it with features and things break.
• 50:25
  SPEAKER_00: And it's like you kind of forget about all that work because it just feels like so like, oh, I could do this and like I could rebuild an FSM in two days because I can just like prompt it.
• 50:33
  SPEAKER_00: And then it's like, okay, but how do you like make sure that continues to run?
• 50:36
  SPEAKER_00: Like, how do you make sure invoices are actually going to customers?
• 50:38
  SPEAKER_00: How do you make sure like your dispatching is actually thinking about capacity for technicians?
• 50:42
  SPEAKER_00: Like, yeah, there's like really hard problems to solve, and it's like that's you're spending a ton of time trying to figure that out from a software perspective.
• 50:48
  SPEAKER_00: Yeah.
• 50:48
  SPEAKER_00: I think it's doable.
• 50:49
  SPEAKER_00: I just think it's hard to like, yeah, do both of those things really well.
• 50:52
  SPEAKER_01: And yeah, focus on the core engine.
• 50:55
  SPEAKER_01: That's interesting.
• 50:56
  SPEAKER_01: All right.
• 50:56
  SPEAKER_01: What's the first uh workflow that you think every contractor should be automated?
• 51:01
  SPEAKER_00: Uh it depends on the contractor.
• 51:03
  SPEAKER_00: I think um, you know, you know, we have like four products in market, and the product that a customer initially rolls out with really depends on like where they're filling the pain point.
• 51:11
  SPEAKER_00: So I think it's sort of like what is the biggest pain point in the business?
• 51:14
  SPEAKER_00: Yeah.
• 51:14
  SPEAKER_00: And like that's where you should be thinking about applying energy to.
• 51:17
  SPEAKER_00: And I think the other one is like when you think about automating a workflow, it's like one, how much leverage does it give it, does it give to you?
• 51:24
  SPEAKER_00: And two is like, are you the right person to solve that problem?
• 51:27
  SPEAKER_00: Um, like we were just touching on it's like contractors really good at doing a few things, and it's like, does a homeowner buy your product because you're the best at pulling permits?
• 51:36
  SPEAKER_00: Like, I I doubt you've ever gotten that work before.
• 51:39
  SPEAKER_00: So it's like, yeah, that's probably something you should think about automating because it actually has no impact on like your ability to acquire customers.
• 51:45
  SPEAKER_00: Um, and it's a huge train on the business.
• 51:47
  SPEAKER_00: Like, that's one of the reasons we think permits is a great business.
• 51:49
  SPEAKER_00: Yeah.
• 51:49
  SPEAKER_00: Um, so I would think about like, yeah, we're we had the same opinion about like VMI.
• 51:53
  SPEAKER_01: Yeah.
• 51:54
  SPEAKER_01: It was a realization a couple of years ago that we could run the best warehouse in the world and it wouldn't grow the business.
• 51:58
  SPEAKER_01: Yep.
• 51:59
  SPEAKER_01: Like, which was sort of like, oh, then what the hell are we doing?
• 52:01
  SPEAKER_01: 100%.
• 52:02
  SPEAKER_00: It's like, yeah, why are we wasting resources?
• 52:04
  SPEAKER_01: Huge amount of time, huge amount of energy.
• 52:06
  SPEAKER_01: Yeah.
• 52:06
  SPEAKER_00: So I think like you should think about those problems too.
• 52:09
  SPEAKER_00: It's like, yeah, if if we win at doing this, does it make does it impact the business at all?
• 52:13
  SPEAKER_00: Um, or is it just like you're chasing it because it feels like that's something you should be doing?
• 52:17
  SPEAKER_01: Yeah.
• 52:17
  SPEAKER_01: Yeah, yeah.
• 52:18
  SPEAKER_01: Yeah.
• 52:18
  SPEAKER_01: No, that that makes sense.
• 52:20
  SPEAKER_01: That makes sense.
• 52:21
  SPEAKER_01: I'm trying to think of um permits is definitely a good one.
• 52:23
  SPEAKER_01: I think like warehousing is just like using that example, I think is another like interesting one.
• 52:28
  SPEAKER_01: Job costing would be interesting, uh, just because it needs done.
• 52:31
  SPEAKER_01: I I don't know.
• 52:32
  SPEAKER_01: Like, yeah.
• 52:33
  SPEAKER_00: What's the I mean, is that not like a solved problem at this point?
• 52:35
  SPEAKER_00: Like, what's honestly no?
• 52:37
  SPEAKER_00: Okay.
• 52:37
  SPEAKER_00: No, I just figure I don't know.
• 52:39
  SPEAKER_01: I've like what's the well back to disparate tools.
• 52:42
  SPEAKER_01: Okay.
• 52:42
  SPEAKER_01: So, like if you think about job costing, like you have three points of data that you need.
• 52:47
  SPEAKER_01: You need the invoice to the customer, you need the invoice from the supplier, and you need the payroll.
• 52:53
  SPEAKER_01: Got it.
• 52:54
  SPEAKER_01: And it's not really connected.
• 52:57
  SPEAKER_01: Interesting.
• 52:57
  SPEAKER_01: And in order to get um, like some FSMs have it, uh, but like it's data in like good date in, good date out, got it.
• 53:09
  SPEAKER_01: Uh, or bad data in.
• 53:10
  SPEAKER_01: And like, okay, are your hourlies set up right?
• 53:13
  SPEAKER_01: Are your like do you have a an intelligent PO system?
• 53:17
  SPEAKER_01: So when that you know, PO comes or invoice comes from the supplier, you can tag it to that.
• 53:22
  SPEAKER_02: Interesting.
• 53:23
  SPEAKER_01: Um, but no, it's actually not a solved interest for most contractors.
• 53:27
  SPEAKER_01: Most contractors uh genuinely have no idea what their actual on-job gross margin is.
• 53:33
  SPEAKER_00: And is that mostly like the supplier PO piece?
• 53:35
  SPEAKER_01: I guess they're I mean Well, yeah.
• 53:37
  SPEAKER_01: So the the payroll is kind of complicated.
• 53:39
  SPEAKER_01: Yeah.
• 53:40
  SPEAKER_01: Because are they clocking in using the FSM, like Service Titan or you know, whatever?
• 53:46
  SPEAKER_01: Yeah.
• 53:46
  SPEAKER_01: Uh, or are they not?
• 53:48
  SPEAKER_01: Um, so like where's the payroll data?
• 53:50
  SPEAKER_01: And then something that's unique to our industry that I honestly don't think gets enough um gets enough like airtime as far as like this is unique and it's an interesting problem, uh, is volume of invoices from vendors.
• 54:09
  SPEAKER_01: Is a very unique.
• 54:10
  SPEAKER_01: Here's hey, hey, startup request for startup.
• 54:14
  SPEAKER_01: It's a it's a unique like because if you think about manufacturing, I'm gonna go as a manufacturer, I'm gonna go place a PO for a bajillion of this widget because I know that I have the production line of that for the next year to sell to whoever.
• 54:34
  SPEAKER_01: So purchasing isn't that complicated.
• 54:37
  SPEAKER_01: Like, yes, you're gonna take shipments as they come in, as you need them based on volume or whatever, but like ultimately you're buying a million of this widget and you just have to get it over time.
• 54:47
  SPEAKER_01: A manufacturing company, maybe it's got like 500 SKUs, but like it's very like pre-planned shopping and frankly easy to shop for.
• 54:56
  SPEAKER_01: Home service, you might have 20,000 skews that you buy off of any fucking supplier.
• 55:05
  SPEAKER_01: Um, and that that itself creates a lot of complication.
• 55:09
  SPEAKER_01: And there's not much of a way to align price the same way a manufacturer would, or like a restaurant has like, well, I know that these French fries are on the menu and they will always be on the menu.
• 55:21
  SPEAKER_01: So I just always need to get the best pricing for these french fries.
• 55:24
  SPEAKER_02: Yeah.
• 55:24
  SPEAKER_01: Uh whereas, like, hey, I could need this category of black steel pipe or copper or faucets or toilets or HVAC parts.
• 55:36
  SPEAKER_01: That was nice.
• 55:37
  SPEAKER_01: Um, where like a plumber.
• 55:40
  SPEAKER_01: Yeah, yeah, yeah.
• 55:41
  SPEAKER_01: Pretty much.
• 55:42
  SPEAKER_01: Um, where I need this category, and like, here's roughly what I think my price for this category is gonna be.
• 55:48
  SPEAKER_01: I can't place a PO for it for the year because I might only buy one of this singular, like one inch black steel nipple.
• 55:58
  SPEAKER_01: Yeah, but on the black uh pipe itself, like maybe I buy a hundred thousand dollars of it.
• 56:03
  SPEAKER_01: It's just that one skew I didn't buy much of it.
• 56:05
  SPEAKER_00: And how do you like attribute that to a job?
• 56:07
  SPEAKER_00: How do you attribute that?
• 56:08
  SPEAKER_01: And then how do you buy?
• 56:09
  SPEAKER_01: And then how do you compare cross-vendors?
• 56:11
  SPEAKER_01: It's a it is an interesting problem that we've we've sort of like solved.
• 56:16
  SPEAKER_01: Um, but yeah, all that to say, our in our invoice, we have like a accounting and AP inbox um for accounts payable, and all it does is like aggregate it, we approve it.
• 56:31
  SPEAKER_01: We get 400 invoices a day.
• 56:33
  SPEAKER_01: Wow.
• 56:33
  SPEAKER_01: It's a lot.
• 56:34
  SPEAKER_01: Yeah, that's a lot.
• 56:35
  SPEAKER_01: And those invoices could be anywhere from like$10,000 to$2, or like maybe even less.
• 56:41
  SPEAKER_01: It can be like anywhere in that spectrum.
• 56:43
  SPEAKER_01: So are you gonna match who's gonna match 400 invoices a day?
• 56:47
  SPEAKER_01: Does it follow the PO code?
• 56:49
  SPEAKER_01: Did we like match it skew for skew to check price savings against contract?
• 56:54
  SPEAKER_01: It's like it's a big, big and relatively unsolved issue.
• 56:59
  SPEAKER_00: Or like, yeah, is the like the black pipe we quoted the actual cost we want?
• 57:03
  SPEAKER_00: Or is like, is that outdated compared to like what we totally?
• 57:05
  SPEAKER_01: Or like, is this vendor cheaper?
• 57:06
  SPEAKER_01: Yeah, and how do we verify it's cheaper?
• 57:08
  SPEAKER_00: Interesting.
• 57:09
  SPEAKER_01: Yeah, that sounds like a fun one.
• 57:10
  SPEAKER_01: It it isn't it's an interesting problem.
• 57:12
  SPEAKER_01: So no, I would say job costing is not actually solved.
• 57:14
  SPEAKER_01: Okay, interesting.
• 57:15
  SPEAKER_01: Um, I think people think it's solved.
• 57:18
  SPEAKER_01: It's similar to like how many aged opportunities do you have on the board?
• 57:21
  SPEAKER_01: Like I think people like, you know, we're we're talking like 15 businesses a week right now to like acquire them.
• 57:27
  SPEAKER_01: And I'm like, hey, what do you think your gross margin is?
• 57:29
  SPEAKER_01: They're like, eh, I mean, on job, it's probably like 60%.
• 57:32
  SPEAKER_01: Okay, what about like aggregate or what about actual on-job?
• 57:36
  SPEAKER_01: And then you find out it's 45.
• 57:37
  SPEAKER_01: Yep.
• 57:37
  SPEAKER_01: Like, so they think it's solved, but it yeah, it's not even close.
• 57:40
  SPEAKER_00: I get, yeah, again, it's like one of the things if you're not measuring it, there's no way you can like if you have no way to actually see what that is, yeah.
• 57:44
  SPEAKER_00: I can see what it'd be really like how do I buy efficiencies or drive that.
• 57:48
  SPEAKER_01: Well, it's so much volume, and it's really, I think it's unique.
• 57:52
  SPEAKER_01: I think it's a unique industry.
• 57:54
  SPEAKER_01: Yeah, because there's so many different SKUs across so many different vendors, and you don't place bulk orders, you place them one at a time.
• 58:01
  SPEAKER_01: Like I'm gonna go to Home Depot and get this one part, or the supplier and get this one part.
• 58:06
  SPEAKER_01: There's pricing disparity.
• 58:07
  SPEAKER_02: Yeah.
• 58:08
  SPEAKER_01: So, yeah, interesting problem.
• 58:10
  SPEAKER_01: If you could go back to day one, young spry, less gray hair.
• 58:17
  SPEAKER_01: Yeah, what advice would you give to yourself on what you're building?
• 58:20
  SPEAKER_00: Um, that's a good question.
• 58:22
  SPEAKER_00: I don't know if I would have done a whole lot different at this point.
• 58:26
  SPEAKER_00: It's like one of those things where it's like you didn't know what you didn't know at that time.
• 58:28
  SPEAKER_00: Yeah.
• 58:29
  SPEAKER_00: Um and I think, yeah, maybe we should have like moved on from what we're doing with the business earlier.
• 58:35
  SPEAKER_00: But I think I I don't know.
• 58:36
  SPEAKER_00: Um, I think I really loved the folks we met at home services.
• 58:39
  SPEAKER_00: I was trying this with someone where it was like, why do you like home services so much?
• 58:42
  SPEAKER_00: And it was like, I've never had a relationship with a customer where I've like met their kids, I've like ate dinner at their family table.
• 58:49
  SPEAKER_00: It's just like a very unique relationship.
• 58:51
  SPEAKER_00: Um, I think it was like going back in time, I'd probably just be like just keep going, basically.
• 58:55
  SPEAKER_00: Um, like you know, four years trying to figure something out was a really long time.
• 58:59
  SPEAKER_00: Sometimes it just takes four years to like get there.
• 59:01
  SPEAKER_00: Um I'm not sure there's a whole lot I would really change, to be honest with you.
• 59:05
  SPEAKER_01: Yeah, that's awesome.
• 59:06
  SPEAKER_01: Well, if people want to find out more about Faraday or get to know you, like where can they get more information?
• 59:12
  SPEAKER_00: Our website is www.faraday.so.
• 59:15
  SPEAKER_00: You can find us on LinkedIn.
• 59:17
  SPEAKER_00: Um shopping content.
• 59:19
  SPEAKER_00: Shopping content.
• 59:20
  SPEAKER_00: Nice.
• 59:20
  SPEAKER_00: We actually, yeah, we have a he might be Gen Z.
• 59:23
  SPEAKER_00: I don't know.
• 59:24
  SPEAKER_00: It's probably Gen Z.
• 59:25
  SPEAKER_00: Or he's one of them.
• 59:26
  SPEAKER_00: He's run our socials now, so there's more presence there than there's been before.
• 59:29
  SPEAKER_00: Amazing.
• 59:29
  SPEAKER_00: Amazing.
• 59:30
  SPEAKER_01: All right.
• 59:31
  SPEAKER_01: Thanks for coming on.
• 59:32
  SPEAKER_01: Uh, if you like what you heard, make sure you like and sub.