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How 1-800-GOT-JUNK? Failed Its Way to Success

The company now does $250m+ in revenue. But first it had to overcome its over-leveraged past.

It took 1-800-GOT-JUNK? 8 years to make its first $1m. Now 30 years in, the company does more than $250m annually.

What happened in those early years is instructive to any startup that is over-leveraged. The company’s founder and CEO Brian Scudamore spoke at Hustle Con 2018, describing the challenges of growing too fast and relying too much on credit.

At one point, the business owed more than $36k in phone bills and faced the threat of losing service — which would have crippled the company. But Scudamore persevered, and today owns a massive junk removal service, along with several other companies under the O2E Brands umbrella.

Below is a lightly edited transcript of his comments.

I would like you to think for a minute about your most recent failure. Seriously, I want you to think about that for a second. And then I want you to think about the biggest flop you’ve ever had in your career or in your life. Now, imagine for a moment that you take that learning, those failures as stepping stones towards your success. That’s the journey I have been on for the last almost 30 years, and I want to take you on today. I’m Brian Scudamore from 1-800-GOT-JUNK, the founder and CEO.

When I think of the business and the journey that I’ve taken — WTF, an attitude, a willingness to fail — has been so incredibly important. If I look at my journey, it has not been in a straight line, and I bet that your journey will not be a straight line either. Whoever said these overnight successes take a long time was absolutely right.

So let me start by taking you back for a minute. I’m not a PowerPoint guy, so I always forget how to use clickers. That is me. Seriously, that is me. Four and a half years old, a self-portrait. My grandmother… I’m a Canadian, but I was born in San Francisco. My grandparents had an Army surplus store, South of Market. He used to go down every Christmas, every summer vacation and work in the store and taste that entrepreneurial spirit.

When my grandmother passed away… loved her more than anyone on this planet… when she passed away, I was about 30 and we went through her stuff and found this picture and it was in a binder that said Brian’s drawings, and I really remember in that moment connecting with this illustration and going, “That is me. I remember drawing it.” I look at that. I’m in a uniform, same blue colors for 1-800-GOT-JUNK, cleaning up trash. How could that have happened? It was like destiny. Who thinks of becoming a junk man and becomes one? But I look at that picture and one part perplexed me when I saw it. If you look on the road I drew behind me, there’s a little broken heart. WTF. Why a broken heart? Did I have a bad childhood? Hell no.

So let me take you to 20 years ago. So what am I? 48 years old. I start this business and I’m about eight years in. I’m at a million in revenue. It felt pretty good, maybe not as fast growth as many of you are going through, but I was proud. This truck, this was truck number two and a little point to note, you can see we ran out of red paint there and didn’t have money for another spray can so finished in blue. I’m colorblind, but no one else is. Anyways, so I said, “Okay, I’ve got this business. I feel like I’m not happy,” and I wasn’t.

I started to do some reflection at that eight-year point. A million in revenue, but I had anxiety every day. I don’t know if anyone here has ever experienced panic attacks. I had them every freaking day for 10 years. It was depression, panic and anxiety. Why did that happen? I don’t know. But I realized I was a business owner. I was no longer this ADD … Well, I’m still add, but I was no longer this ADD junk man who dropped out of high school and started this business. I was a business owner, but what I wasn’t anymore was an entrepreneur. I wasn’t a creator. I was doing a day-to-day job and I was stuck. I was dealing with problems. I didn’t love the problems and it was a challenge, so I decided to do something a little bit differently.

I needed some help, so I approached the the Young Entrepreneur organization. It’s now shortened. We all got old, so they shortened it to EO instead of YEO. They dropped the Y. But the Entrepreneur Organization, my business would not be half of what it is today if I didn’t get that peer support. But a mistake happened when I joined EO and the mistake was this. If any of you have ever done this same thing, it’s painful. Comparing yourself to others, looking at other entrepreneurs, seeing what mistakes they’ve made. I wasn’t looking at their mistakes. I was looking at their successes and I was saying, “You know what? I want a $10 million business. I want $100 million business.” I was putting pressure on myself. Let’s face it, I’m not in the sexiest business in the world, and so I compared myself to others and it hurt.

So there I was in this doom loop. I was going down this downward spiral and I learned in the EO organization, if you need to solve a problem, if you want to be creative, you take a retreat. So I went and took a retreat and I feel like I’m actually standing on the edge of my parents’ summer cottage dock, so I’m going to have a seat for a second. I went to my parents’ cabin alone on the water and I sat there on the dock and I’m like, “Brian” … I didn’t really talk to myself, but I thought it and I said, “You know what? I’m failing. I’m making mistakes. I have to shift my thinking or I’m not going to get through this and ever be an entrepreneur.”

So I took out a sheet of paper, one page double sided, and I said, “Okay, what if I stop thinking of the bad and the challenges? What if I think of pure possibility? What could that look like?” If you’ve ever seen the movie Jerry Maguire, it was a Jerry McGuire moment. I’m feverishly writing one page, double sided, and I said things like, “We will be in the top 30 metros in North America by December 31st, 2003.” That was a five year vision. I said 30 because we’d been in 30 cities bigger than where we started in Vancouver. There were 30 cities bigger. We were going to make this happen. We’d be the FedEx of junk removal, on time service, up front rates, clean shiny trucks, friendly, uniformed drivers. We’d even be on the Oprah Winfrey Show. A bunch of nonsense to anyone else that might potentially read that, but to me, I went back to being an entrepreneur. My anxiety went away because I now had a vision for the future.

So I took this painted picture and I started sharing it with others, people around me, and people ended up in one of two camps. Are you a supporter and a fan of Brian’s vision? Do you see what I see? Or, are you someone who’s a naysayer? And that was okay. And the naysayers, about half the people said, “I don’t believe in what you believe. I don’t see what you see.” And so these people left and I let them go. And together the rest of the group, we made magic happen. We got the Oprah Winfrey Show. I remember being a guest on the show. We made all the FedEx of junk removal, a bunch of great media, and we hit the top 30 cities two weeks before December 31st, 2003. It wasn’t an accident. We had a crystal clear vision and a future destination where we were going.

Now, armed with this vision of where we were going, what I did not know is how to get there. I didn’t need to know. I just had to believe in the destination. So what I did is I said, “Okay, I’m going to embrace this WTF lifestyle, culture. I’m going to put myself out there, put it all on the line to make the vision happen. If I make mistakes, if I fall flat on my face, awesome. I’m going to learn from those.”

Let me share with you some of my favorite WTF moments. This was truck number two. Couple of years, maybe a year after this point, I made my first WTF mistake. I had 11 employees. And I remember sitting with all 11 employees one day and I said, “I’m not happy again. This isn’t working. I don’t think I’ve recruited the right people.” They weren’t happy, hardworking, hands-on, hungry people that wanted to be a part of my vision. So I got rid of everybody. Nine bad apples spoils the other two. I said to all 11, “This isn’t going to work out. I’m sorry.” Some of them were very tall and big and it was intimidating and I did it all at once to rip off the bandaid. And I said, “I as the leader, as the founder have let you down. I might not have hired the right people, trained you, given you the love and the support you needed.”

The learning for me was I had five trucks, half a million in revenue. I went down to one truck, one person, one big brick cell phone, taking all my calls, hiring, dispatching, booking, everything. It was a nightmare. I mean it, I think it was three months to rebuild. It could have been longer. It was a nightmare. But what it taught me each and every one of those three months was that you have to make a company all about people. All you have in any brand, in any business is people. Make it all about people. Find the right people and treat them right. And that became my new mission for myself. Thanks for the whistle.

No. 2: My second big WTF moment. What do they say? Don’t hire friends? Yeah, I’m an entrepreneur. I don’t listen to that kind of garbage. I recruited my best friend. He had built up a franchise company with college pro painters, had done some great stuff, so Cameron Harold. I bring Cameron into the business. We grew it from 2 million to 106 million in six or seven years. Hyper growth. It was awesome. But then I realized at some point, “Oh my gosh, we’re like nitroglycerin. We are fire, ready, aim. We have two entrepreneurially minded people at the top.” Those of you that are entrepreneurs, I talked to one person that you might all know here and I’m not going to say his name, but he said, “I’m a shitty manager.” I said, “You’re an entrepreneur. Give yourself permission to be a crappy manager, but find a great manager. Find someone to partner with.”

So I had partnered at the time with Cameron Harold realized we were like nitroglycerin, that it wasn’t going to work and I had to end that friendship and fire my best friend. I was the best man in his wedding a year prior. Who fires their best friend? Now, thankfully Cameron and I are still really good friends. We see each other often. We’ve supported and helped each other in our journeys and while it was hard in the beginning, he understood. He would say to anyone here it was the right move for both of us. It was the right move for the business. The WTF philosophy for me was get out there, put it on the line, do the right thing, because when you’re building a business, when our company was 100 million, the responsibility’s way beyond me.

I started to go, “Okay, now what? How do I continue to grow this by myself? I’m not a good manager. I’m now the guy in charge. I don’t know if I can do this.” I needed rigor, discipline, systems. I overhired. I hired a fancy recruiter. They came in, big bucks, ridiculously big bucks. I then went out and searched and I found an ex-president of Starbucks who wanted to move from the Seattle location back home to Vancouver, where she was from. Lindsey, who introduced me, wrote an article about this, which was titled Shit I’m Fucked. There’s a little anger there, not with Lindsey, but how I felt in that moment. It sucked. It was my biggest WTF moment of my life when I recruited this person, not the recruiting, but the 14 months later that would follow.

I thought, “Oh my gosh, this is unbelievable. This person is loved by everyone in the business.” Our franchise partners loved her and as things started to build and grow day by day, I realized my vision was here, hers was slightly different and I don’t think she believed in an ADD crazy high school dropout entrepreneur. She needed to for us to be successful together. Got her out, WTF moment of the day, and I said, “Okay, I’ve got to start again here.” And what I learned from that moment was I had made a decision that not one person in my company believed at the time … they believe today, but they did not believe at the time was right. They didn’t see what I saw and what was happening and where we were at. So I did this. I did get hit with a lawsuit for constructive dismissal. All sorts of bad things started to happen and it went from crappy to worse, but I made it through.

And when I look back, actually, an ingredient that I think is part of success that is important for all of us to remember … well, for me to remember. Who am I to tell you what to do? I was angry about this for a few years, right? It was hard. I almost bankrupted. We almost bankrupted together, my company that I built for 20 years. It was hard. It was painful. It caused family issues, the whole bit. But I’ve learned to feel grateful, and I mean a truly heartfelt sense of gratitude. I mean that like you wouldn’t believe, because I learned from it and I realized I couldn’t get to my next stepping stone, my next awesome place in life where we are today if it wasn’t from that moment. I needed to experience, I needed to fall flat on my face by hiring the wrong president from my company. She’s gone on to be incredibly successful leading the financial institution in Canada. They’re massive. She’s doing great. She was the wrong person for me.

So what I did is I took out another sheet of paper and I said, okay, line down the middle. What do I love to do as an entrepreneur in my company? What am I great at? What do I hate to do on the other side and what am I bad at? And yes, that list was a lot longer than the good side, but what I recognized is all these things on my bad at, not good at side that I don’t like to do, hiring, finances, metrics, I had to recruit someone that would come into my business to partner on that side. So I sat down and created a mini painted picture. I wrote down, “What does this person look like, act like? Who are they?” Attitude for winning, the sales experience, having built something big before. I mean, I listed in full detail this painted picture that I started to send out to my network.

75 COOs I interviewed all over Canada and the United States, was always on planes. Three people in my network, unrelated, when I sent out this picture, three different people had sent me one person’s name back. They didn’t say, “Hey, here’s three or five people I know that fit the bill.” These three people all said, “This is only one person. I know exactly who you’re describing and that’s Eric Church.” So I’m like, “I got to meet this Eric Church. He’s got a great job. He’s gainfully employed. He’s leading a big company.” But somehow when I reached out and called and connected, he connected with the vision I wrote for him and the vision for us to build something great together.

So grateful again for the Starbucks experience. It led me to Eric. Today we have almost a half a billion Canadian in revenue. We have four brands all under the OTE brands family. I have never been happier. We’ve got this great culture and we’re building something really, really special. Where’s the clicker? So when I look at where we are now, one of the things that I figured out is if you’re going to have a WTF moment, WTF towards what? Not just towards what vision and painted picture but towards what drives you. You are all unique people, 2,500 of you that I can’t see a single one of you cause the lights are so bright, but all 25 of you are unique and special and have a purpose in life. Mine, I believe is making meaning, not money.

What really motivates you? I think that when I talked to different entrepreneurs, I hear people say, “Oh, I want these toys and cars and dream trips,” and freedom is is fun and it’s nice to have some money. But I think when someone’s motivated mostly by money, it becomes harder and harder to actually get towards that goal. So I challenge you to think what really drives you, motivates you, what makes you tick. So for us as a company, it’s building something bigger and better together. Those are members at our franchise conference from four brands. We love what we do because we’re building it together. And so that’s what drives us in everything we do to recruit.

If I kind of leave you with a couple of thoughts here, I was asked to speak and I’m excited to share any lessons learned along the way and I’ve had help from entrepreneurs, so if there’s any way that I can help any of you, hey, we’re human beings. Let’s connect. You can reach me. Instagram is the best way: @brianscudamore.

If you want a painted picture, many people go, “You talked for two minutes about a painted picture. I don’t really get it.” If you want to see our current painted picture, it’s not a public document, but one I’m happy to share with you as entrepreneurs, go to my Instagram, follow me, send me a little a note and there’ll be a link there for you actually in the header of the bio today where you can download our painted picture. Copy bits and pieces that might resonate in the template, whatever it is for you, but if you don’t know where you’re going, any road will take you there.

The second thing is I’ve recently written a book. As an ADD entrepreneur, that was a really, really hard thing, but now it’s gone to the publishers. When it’s ready, if anyone wants to hear more about the story, I’ll send you a hard cover book for free. Again, go to that link and do whatever you need to do. Okay, so if I can help you contact me. I think one of the beauties about entrepreneurship is entrepreneurs help entrepreneurs. We connect, we network and I think it’s like magic when it happens.

As I close here, and it’s humbling because I’m up here talking about the fact that we’ve built this business, but many of you are going to build something so much better, bigger. The learning you will share with entrepreneurs, it’s unbelievable. And as I stand here on again, what reminds me of standing at the dock, I didn’t expect the stage to look like this, but it reminds me of that day where what I learned behind me, figured out this WTF mentality of how to change my thinking, to be grateful, to seize opportunities and build on them, that’s paved the way for the next 30 years. So the previous 30 years have paved my way for the next 30. I hope all of you see the moment and the opportunity to create your own painted picture, your own vision for yourself, your people and possibility. Thank you so much for having me and listening to my story.