All right. Today we're playing Shoot Your Shot, where we let founders come in, sit in the hot seat, and pitch us their business. We got founders that have million-dollar businesses all the way up to hundred million dollar businesses. They get 15 minutes, and in it, they start by telling us the one big number, give us the pitch, and shoot the shot. They get to ask any questions that they want.
Yeah, we've done this in New York City. This time it's in San Francisco. Now, whatever you're doing right now, you need to stop and go to Spotify or go to YouTube. Look us up on My First Million and let us know in the comments which city you want us to go to next.
All right, let's do it.
All right, you want to bring the first guy out?
What's up?
Nick? What's good? Hit us with the big number.
All right. So I'm running a backup generator company in California.
We're doing about 12 million in ARR right now.
And we've got line of sight to 14 million this year and contracted to go out to around 25.
Okay. So the big number is 12 million in revenue and you're what are you providing for people? You provide...
Backup generator sales and service.
So what does that mean? Like I'm a homeowner out here.
I would just buy a unit. I rent a unit or you sell it to power companies.
Wholesale generators, service generators. We typically do higher-end units. Our clientele are typically the high-end estate properties as well as large, more regulated facilities. So, every telecom tower, every nursing home, every police station, fire station, every data center.
Mostly B2B. The product that the high-end estate properties get, it's an industrial product.
So, there's all these businesses that as soon as somebody says them, I'm like, ah, of course. Yet they've been a complete blind spot to me my entire life. I've never thought about it once and I always wonder how did that guy start thinking about this? So how did you realize this is a business I could go be a part of?
So I started my career in management consulting where you dabble around a bunch of different industries. At one point I landed in a corporate job at NRG, a large power company in the US, doing innovation projects there, strategy. And one of the areas we had the hardest time finding good expertise in was backup generators. And a backup generator is if your power goes down for 1 minute or 12 hours because of a storm or an earthquake or something, this thing kicks on, you're good to go.
You do not want the power to go out when you're on the surgery table unless there's a backup generator there to cover.
And so every surgery center, every hospital, they've all got them.
When did you start the company?
So I acquired the first one. And so this has been an acquisition venture. It started with a thesis. Went around looking, trying to find a service provider to buy. We bought our first one in January 2024 and then bought a second one about five to six months later.
And describe the industry. So is this a bunch of mom and pop companies, a few large players? Like what does the industry even look like?
So very barbelled. We go head-to-head up against big industrial names like Caterpillar and Cummins and Generac on the direct side where we're competing for the business of marquee names, big counties, big state contracts and things like that. We also go head-to-head against the small mom and pop players, but really the lion's share of the market is owned by the bigger platforms.
So, you did a search. You quit your job and did a search. You searched on the side. What'd you do?
So, this is actually my third search venture. I had done my first one was an office plant company.
Probably possibly those.
How'd that go?
Bought it in 2017. We've done 14 acquisitions on that platform.
Hold on. How much revenue does that do?
That's around 10 million.
What? You own it outright, right?
Was that a thesis or was it I stumbled into a guy who owned a plant?
That was a failed venture-backed startup. There's got to be an easier way to make money sitting on my couch cruising BizBuySell in the way that a lot of people do with Zillow, instead of...
You had a venture company that failed.
And so you were like a management consultant founder,
But you were like a management consultant nerd. You were just like an academic.
Totally like, here's your board deck.
Yeah. You're like, "All right, now I need to get after it." So, this company, it failed. Now we're going to get into plants.
Yeah. Okay. I'm going to buy something.
We bought it with an SBA loan. It was like the polar opposite of what I had been doing throughout my career, which was a mix of management consulting, boardroom, Fortune 500 type of stuff and venture-backed startups. And I guess there's a third leg to that, which is the small business world.
You did plants, then what?
We carved out a portfolio of commercial landscaping contracts in that plant business and sold that to private equity.
How much did you sell for?
Just a little over a million.
Okay. Okay. So, that was the one,
But it was 20% of my cash flow and like 80% of my headaches and that freed me up. Because I was like the biz dev guy. I was finding the plant acquisitions. That business, I built it. I did the first acquisition. I did four after that and then I kind of handed off to my partner to run day-to-day.
You like doing the search, the business, and you like doing the M&A. You have a partner who does operations or...
How much did you raise for this third business? What's it called? It's called On Point.
On Point. Yeah. So this is the first time we've raised outside money because we felt that given where the macros were in terms of electricity demand booming, data center market booming, electrical contractors booming, we felt like to meet the opportunity where it was going to be, we needed to raise some outside capital. So we brought in 6.5 million. We did a significant chunk of it, but there's about 5 million of outside investment in this one.
And how big is this going to get?
I don't know yet. I think this business can get really, really big.
Hundreds of millions. I think we can get to... The question will be, it's really revenue throughput. Do we have the technicians to pull off the work? I've got the work contracted. It's purely an execution game at this point.
And so describe, you said you go up against Caterpillar and these other larger players. What axis do you need to compete on? Is it price? How do you win the pitch?
100% speed. They are slow. They're good at what they do, but they're very slow.
What's the speed difference? How long...
For us, AI has been an absolutely central part of our strategy of speeding up every single process in that business. I need to be able to deliver a quote while my guy's there. These are complex machines with a very difficult part supply chain. It can take weeks to turn around a quote from a 'hey, your generator's broken' to 'hey, here's what it's going to cost me to fix it and when we can do it.' It's a very, very slow business and it's very, very difficult because of all the research and tribal knowledge and it's spread across...
What do you use to speed up that quote? If let's say the guy standing there...
Understanding what's the issue...
Is he inputting something on his phone and he's getting what?
And we've done all the backend work. Every document that we have ever produced as a company has been ingested and studied by AI. We've built a retrieval-augmented system so that we can do research on the fly and produce answers on the fly.
This is great. So there's companies, I've got a friend that owns an HVAC company and it does close to 200 million in revenue. And he was complaining and lamenting over all my business sucks for this reason. Yours suck for that reason. And he was telling me, he was like, well, we just have to get better at buying Google AdWords. And he was like, the demand's there. Like I just have to operate. And I was so envious of that because that's not what I have. I've got to teach people what it is and whatever. Are you in the weeds of training people or is your personal job just finding who else you're going to buy?
So we've kind of put a pause on M&A right now. We're really trying to nail the operational workflows...
And that's what you're doing.
And AI support, and I'm doing a lot of the building myself.
Is it a pain in the ass to train these technicians?
I'd say it's more than a pain in the ass. It's impossible. Like this is very...
Or finding them, which...
Both, because there's not enough of them. Those that exist are on their way out, not in.
I know. But what do they like, are they in the same category of an HVAC person where like if you give me eight weeks of your time I could teach you how to do this but it's hard to find someone who's willing to do it?
I'd say not far off of that. It's mechanical, it's electrical, and it's both. And usually very few guys are good at both. It's increasingly instrumentation and controls. So, there's more computer and troubleshooting, diagnostics.
How much does a field technician make? Is this like a job that people are going to want because it pays really well?
This is a good job. This is an opportunity where the elite field technicians, they will clear well into the six figures, a guy with a high school education, but it takes time to accumulate the experience. And you don't see a lot of generators. So, experience accumulates slowly. Even in HVAC, you might do three, four service calls a day. Our guys are doing one or two service calls a day.
And the consequences are massive.
The consequences are massive.
How big is the average contract?
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How big is the average contract?
It varies tremendously depending on whether you're dealing with a 3-megawatt unit at an AWS data center or Frank and Shirley's generator in their backyard. For the data center units, you're probably talking 25,000 a year in service revenue.
There is, but generally they kind of want accountability on the vendor. And that is one thing that's hard about competing against Caterpillar, right? Like the facilities guys like, 'Well, I hired Caterpillar and they couldn't figure it out.' So...
Right. So let me make sure I understand. It sounds like you sell the generators, but you service them. I would guess servicing is more than new sales.
And you get brought in directly by the facility or by the guy, whoever the company is that made that, they put service, they need service technicians out in the field everywhere. So they subcontract out to you.
So we're an independent, so we have to eat what we kill basically.
So go straight to the facility.
We got to go straight to the facility. We can work through the facilities operations companies like the JLLs and CBRE real estate.
And now you're saying my biggest bottleneck is I got to get enough technicians to be able to service the workload that we have. How are you going to solve that problem?
So, we're still figuring it out. We've got every recruiter spun up sending us leads. Some of it is like you can pay to bring guys here. Will they stay here? Open question. I'd say we can find the guys who say that he knows how to fix those things. Can we select for the guys who actually know how to fix those things? I think we've had an easier time finding people and getting them in the door and selling them on joining our company than we have had being damn certain that when that guy shows up there, he's going to find the problem and fix it.
But what did the, like we, this is the second time we've mentioned him, but like you know Tommy Mello, the A1 garage door guy. Have you heard of that guy?
And then there's like tons of these influencers who are legit business guys. What have they done to, because they have all had the exact same thing where they're like, you know, garage doors, like a lot of the people who come to me are kind of like problematic and I got to teach them how to, like I think he said, he's like, we teach them how to pet the dog. You pet the dog right when you come in, you ask, 'May I come in?'
He does like sales excellence but still he needs the technicians to go do the work. One of the things we always talk about is like, as an entrepreneur it's easy to feel like I have this problem, this burden and it's like unique to me and it's like very few problems in your business haven't already been solved by somebody else. So the easy thing to ask, who else has solved this problem and how the heck did they do it? So he's saying how the heck did the garage companies scale up their technician force?
Who do you look at that's already done this?
So you basically have to start a trade school. You are the trade school. You have to bring these...
AC buddy who I'm referring to. He has Hoffman University.
Have you done that?
Not yet. We're not big enough to do it just yet. We're working on building our shop. We have a third bay in our shop that is the training bay and we've handed our lead technician an assignment to, we got to build out our own training capabilities. We've built the digital side of it. So turning every job we do into a training experience that can be relayed onto the team because I need the guys to get more than one rep a day, right? If I can turn every rep we do that day into a bunch of reps...
How are you turning it into like a simulation?
So as guys submit their field reports, we have a pre-job briefing. So we prepare these guys to go out to the field like they're CIA agents being dropped into Afghanistan, right? Here's everything we know about this unit. Here's everything we've ever seen. They play it on their phone. They can listen and hear, hey, this is what I'm facing. And that's the AI side. Then they do their report and they document their findings in the report. And we've got a pretty slick data collection process where they can use their voice to produce their report. We've got AI reading everything that they do, everything that they say. And then at the end of the process when they submit their report, we will flag the reports that are the best training material.
When you're laying in bed at night and you're thinking, 'If we can do this, this, and this, maybe in five years we could sell or maybe I can have this much annual income or like whatever that vanity thing is.' For you, what is that?
Man, I think for me, this is my third time around and I feel like I'm doing this because I chose this. I wanted to be doing this. So, it's kind of about like what are all the cool capabilities that we could build that have never been possible before.
Well, okay. And be specific though when you're thinking about this, you're like, what is that, like what really gets you going?
I think making like really great jobs for these tradesmen, helping them, like ordinary people achieve like really, really extraordinary performance. I'm like super excited about what we're going to be able to do and like how we're going to be able to empower people who have never really worked for a company that gave a crap that much about the process. There was this really cool company, I forget the name, but they took out an ad in the Wall Street Journal, the New York Times, or some huge national publication, and they played off this idea of like, you know, how like your grandfather walked you around the city and he's like, 'You see that building?'
'I made that.' You know, and he was just part of the construction crew or like, you know, look, about 50 years ago, we installed this thing because... And there's like this pride. And the ad that they put out because they were trying to recruit people is, do you really want to brag to your kids that you made B2B software just a little bit better? You know, something like that. And like I wonder if there's like some cool mission-driven angles that you could take to this recruiting because when you talk about like I'm passionate about giving everyday guys a chance to do something interesting.
No, it's an interesting idea and I think there's definitely a point of pride over, oh, we work on, you know, it's kind of fun too because we work on a lot of high-end properties. So these are like, you know, lifestyles of the rich and famous type of stuff where we work on those properties. We put those generators in...
And the mission-critical hospitals and whatnot. Yeah. And that right there is such an important duty. It seems like, I coached high school basketball this year and our star player, the power forward, he's graduating. We were like, 'Do you want to go play in college? We can get you in front of some scouts.' And he's like, 'I'm going to trade school.' He's like, 'I'm not going to... trade school doesn't have a basketball team.' He wanted to go work for, you know, he wanted to become like an electrician, but like feel like crazy stuff like hanging out of a helicopter doing some repair in some crazy site. And it made me realize, you know, there's probably a lot of people who have the talent, you know, whether it's veterans, whether it's ex-athletes, they kind of like the idea of doing certain types of work, getting paid really well for it, not having to go to a 4-year university. And I wonder how you can surface more of them faster or where they're going today that you can tap into that flow.
I think the stigma of the trades is gone. I think that is behind us. Like the things that we were told when we were coming up, like, you know, you got to go to college, better make sure it's a good one, yada yada. I think that there's some of that still there, but like I think the stigma of going into the trades is behind us. And now it's like this is the opportunity for the tradesman's craft to shine and we're trying to give them the tools so that they really can and so that they can grow faster, learn faster.
Well, nobody's built a great brand around the trade school, right? Like...
Is there a, what's Harvard? What's Stanford for that, right? Like where could you be proud that you got into that, that you're coming out like a Navy SEAL who's going to be able to do all these amazing things.
That to me is an even bigger opportunity than what you're currently doing because like $150,000...
Yeah. It serves all kinds of industries, you know, and there are some that are really niche, you know, and they're with that specific trade. And so there's not like a big one that everybody would know, oh, that's the stamp of approval, but there's not a Harvard of the trades in general, which I do think there's like an excellent opportunity there. I would love to work on that. I feel like right now I'm working toward that and I need to understand it at a level of depth and have solved it for one quarter of the universe so that we could think about, okay, how would you next level this thing?
You have very kinetic and contagious energy. I have a feeling that in the next four or five years you're going to be significantly further along than where you are now. It's very evident.
You picked an amazing space and it's so cool. You know, we had a guy, the last guy was like a franchise guy and you're doing entrepreneurship through search and acquisition. I just love all the different styles. So, I appreciate you coming on, man.
Yeah. Thanks for having me.
All right. Appreciate you. Thank you.
We have someone else.
Welcome. How's it going?
Oh, yeah. I scream good posture. I'll work on it. I'll...
Up my game a little bit here.
All right. What's your name?
What's up, guys? I'm Kevin.
Welcome to Shoot Your Shot. Hit us with the big number to start.
So, big's relative. My number is 1.8 million. I think I'm a little unique with this setup because I actually just sold my business about two, three weeks ago.
That's what I sold it for. Starter business on the board.
Wait, so you are...
You just exited at 1.8.
Just exited at 1.8. Yeah.
What did you sell for $1.8 million?
It was a franchise business called Smash My Trash.
Smash My Trash.
I've heard of this. Have you heard this before? How to smash my trash?
Explain.
Yeah. So, the basic concept is companies that produce a lot of trash, industrial businesses, warehouses, factories, things like that, throw away a lot of stuff in these open-top dumpsters that are these rectangles that hold like 40 cubic yards of stuff. The pricing model is that every time you fill it up and you need a new one, you have to get it replaced. And that can cost like $1,000.
Yeah. I used to like get on top of ours and like jump up and down.
Imagine if a giant thing came and smashed the trash down. I thought I was going to like hire someone to come and jump on the trash for me.
That was it. No. So, we have these trucks that back up to the dumpster. Like you said, Sean, there's a crane on the back with this spinning spike that goes in, pushes the trash down. The deal is basically, let's say you get 10 pickups a month, 1,000 bucks. That's $10,000 a month you're spending on trash. We'll get you down to just round numbers, five, and we'll split the savings with you.
Wait, so a large company will spend 10 grand a month in trash?
Big factories, production facilities in like agricultural California is where I was doing a lot of work.
So, these are like you just go to the parking lot, there's a huge dumpster back there. That was the opportunity...
Smash the trash down. So, you have to do less pickups per thing because you're paying per pickup.
And do smashing trucks exist already?
It's a new concept. So, it's a franchise. This guy came up with the idea, started growing fast, decided to franchise it. So, these didn't really exist. They exist in Europe, but they're like mounted to the side of the building. So, those companies would back the dumpster up. So, the insight was throw these things on a truck, have them drive around and do it as like a mobile service.
You bought a franchise and then now sold your franchise,
Five locations.
How much did it cost to buy in?
I bought it in chunks. So, I think my buy-in was like 185k upfront.
How did you have money before?
I worked in tech. I was like somebody who worked in SaaS and had like the W2 sales.
Yeah, I was in like sales and product and stuff like that. Like the kind of classic Bay Area W2 thing.
So, this is so interesting. So, you're just sitting there at the office. You got a good job. You're working in tech and yet you're like, I need to get out there amongst the trash. What was the chain of events that led you to like quit this safe thing and go buy into a Smash My Trash franchise?
Yeah, it was a couple things. So it's like a growing sense of dissatisfaction. I kind of started to realize late in life that I wanted to work for myself. And I was also like in this venture world where you're like going after like the next round of funding, this eventual exit. And I was like blind to the way that a lot of the world worked in terms of like cash-flowing blue-collar businesses. And I started to get bit by that bug a little bit. Like I started hearing stuff about that and I got interested. And then it was really when I got married and went on my honeymoon and I waited till like the last minute to book our honeymoon. So we stayed at places that like we probably shouldn't have gone to that were nicer than we otherwise would have. Started talking to people there at the pool and stuff and been like...
No way. All the rich guys are trash.
People make cash doing businesses that are off the beaten path.
Do you remember like what were they saying? What did they do?
So one guy did like real estate. One guy did like a food truck but like as a serious operation, like had many of them. I had also had the seed planted on my bachelor party. I was there with my friend who was in private equity and he actually got in and smashed my trash before me.
So he planted the seed and he was a private equity guy.
Of the 180, how much of that was a huge chunk of your savings?
I did 85 myself. A buddy gave me 70 and then so that was like the equity and then I did a $350,000 SBA loan as well.
Were you like, I'm all in. This has to work or was this like a safe, like I'm putting a small amount in?
It felt like a pretty safe side bet. I had more than that that I would have been able to but it felt uncomfortable.
Okay.
So you decide to go in, you buy one. What happens?
So I actually bought three out of the gate.
I bought three territories out of the gate. Now territories in the franchise world, like a lot of times people picture restaurants where like it's clearly a unit. This is area. So I mean it's really one business. The areas are a little arbitrary.
How many years ago was this?
This is in 2022 I got started.
Four years ago.
So got started and part of the reason I got into it was I was interested in something where I could draw a direct line between like brute force effort and cash in the bank. I felt like in the tech world I was so many layers abstracted away from like...
Metric, right? Brute force to cash on the...
