Brian Scudamore: Together, this president and I had almost bankrupted 1-80-GOT-JUNK. We were down $40 million in revenue in one year. The financial meltdown of 2007 and eight didn’t help. There was no one in my business that thought I was sane. That thought I’d made a good decision. They didn’t get it because people didn’t really understand or see what I saw. Somehow I stuck with it. While it took eight years to get to $1 million, we do $1 million on any given day, like today.
Shaan: My next guest who found that basic service that wasn’t being met and now he’s making hundreds of millions of dollars. That’s right, hundreds of millions of dollars.
Brian Scudamore: There I was on a boat with two very senior executives, offered $75 to $100 million is what they were talking and I said, “I wouldn’t sell it for a billion.”
Shaan: All right, we are talking to Brian Scudamore, the founder of 1-800-GOT-JUNK. If you’re like me, you’ve seen the billboards for 1-800-GOT-JUNK. It’s one of the catchiest businesses that I’ve seen. And it’s also a very simple business. Brian’s a guy who when he was 18 years old, he saw somebody else had a truck and said, “I’ll haul away your junk.” And he was like, “That’s a business that I could do.” And he went and rented a truck and started this business and has grown it from just him and one $700 truck, all the way to basically doing about a half a billion dollars in revenue this year.
Shaan: So he’s been doing this business for 30 years and he’s a pretty inspirational dude. But you’ll hear that in the episode today. And so I’m excited to talk to Brian. We talked a little bit about how he got the business off the ground, his sort of knack for PR. How he ended up on Hoarders and Dr. Phil and Oprah and all these other different outlets and how he’s used that to grow the business as well as his philosophies around hiring and some of the mistakes he made. It’s been a long road over these 30 years in sentence. It’s very cool story. Here comes Brian Scudamore, the founder of 1-800-GOT-JUNK.
Shaan: Ready to go. For those who are listening, Brian is the founder of 1-800-GOT-JUNK as well as a couple of other businesses that we’re going to be talking about. Kind of an amazing story, honestly. For a lot of the guests that have come on, they’re usually stories that people have never heard of, but I’d say you have actually have done a good job of getting your story out there. Is that something intentional? Do you like talking about your story or is PR part of your strategy? Talk to me a little bit about that before we even jump into talking about how 1-800-GOT-JUNK got started.
Brian Scudamore: It’s a great question. I think I realized early on in building a business that a brand is the story that it tells. Now, as a brand, whether you’re Starbucks or Airbnb or 1-800-GOT-JUNK, you have to live up to the story. That’s the difficult part. But when I saw early on, a couple of years into my business, I saw a potential opportunity. Actually my girlfriend at the time said, “You had trouble finding a job. You created your own. Get out there and tell the press that story because I think they’re going to eat this thing up.”
Brian Scudamore: The next day we were on the front page of the Vancouver Province, the largest newspaper in the city, our truck, our phone number. It was unbelievable and the phone rang off the hook. So I learned the value in free press and we got out there to tell our story, but I think it’s even bigger than that. We are about changing lives.
Brian Scudamore: If I look at our franchise partners and the lives they’re creating for themselves with our recipe, with our formula, why not recruit more great people by telling that story over and over. Why not change people’s lives as customers, whether it’s hauling away their junk or painting their house in a day with WOW 1 DAY PAINTING. We believe that stories help change lives.
Shaan: When you started, that article that came out, that story was more about, “Hey, I’m having trouble finding a job. So I created my own.” So it’s really like an entrepreneurial story. Didn’t matter what the service was at that time, is that right?
Brian Scudamore: That’s correct. I think there was a little bit of, so you couldn’t find your own job and you went and bought a truck and started hauling junk, type feeling. This wasn’t just a wasn’t a glamorous business, it wasn’t a sexy business by any means. Then when we understood the power of story, we started to look for the next story. So while I created something to fund my way through college and couldn’t find a better job and started 1-800-GOT-JUNK.
Brian Scudamore: I also with a year left in my degree, dropped out of university. And that’s where again went to the press where they were like, “You dropped of university? You sat down and talked to your dad who’s a liver transplant surgeon and told him you were leaving university to become a full time junk man?” It just didn’t add up in people’s minds and became a story.
Shaan: I like that. So we’re going to go back to the beginning and we’re going to talk about how you originally got the idea and where you got started. But the thing that I’ll point out, so I read a bunch coming into this, because I wanted to get familiar. We hadn’t met before and I wanted to understand, and the question I had, I sort of read the story that I think you’ve probably told a thousand times now or maybe more, which is, you’re 17, 18 years old, you want to figure out a way to pay your way through college.
Shaan: I think it was like, you’re sitting at a McDonald’s and you saw somebody else’s truck, right? You saw a hauling truck of somebody else’s, and you had the idea. Now the thing I’m going to ask you is probably something you don’t get asked very much, but I’ve learned, the dirty secret in entrepreneurship is that sometimes the origin story comes a little bit later. You go back and you sort of polish up the origin story and you sort of stretch and skew it a little bit to be worth telling.
Shaan: Guests have come on this podcast and I asked them the same thing, which is, is this a hundred percent exactly how it went down, where you really were just sort of had the epiphany and you were struck by the idea or were you already thinking about a business idea at the time and this really accelerated it? I guess give us the backstory, was this really how it went down?
Brian Scudamore: Well, first of all, kudos to you because it is so rare that I get asked a question that I have not been asked. So bingo, that’s a new one. Yeah. It’s a great question and I’ve certainly met enough founders to know that that is the truth, where many of these things progress and they rewrite history and so on. So my story is 100% true. I can think it back in my mind when I… Here’s the story and I’ll give you a little more detail on it. But I was in the McDonald’s drive through, there’s a beat up old pickup truck while I’m in the drive through. I see this truck and I look over at it and I’m like, “Wow, that would be a great idea. It’s filled with junk. Maybe because I’m having a hard time finding a job, why don’t I just buy my own truck?”
Brian Scudamore: And for 700 bucks, it was actually $753 to be precise. I bought that truck, saw a classified ad, went out and checked it out and off I went to build a business. But I remember back to that moment and I can see that truck, it was a black cab with a red box. It had marks hauling on the side. It had a little yellow lightning bolt on it. It was filled with junk and the truck itself was junk. And it was one of those things where I didn’t realize what the business would become in the future. It was really just a vision to pay for college. It was something simple. So while there wasn’t a vision there of what I was starting, origin story, if you will, was absolutely legit.
Shaan: Love it. Most people when they see, a hauling truck or a junk truck, they don’t think, “Oh, I want to go do that.” In fact, when I was on my way over here, I texted a friend, I said, “I’m talking to the pioneer of junk space or the waste management space.” And he thought I was talking about the mafia. He thought, waste management is code for being in the mafia. But for some reason you were drawn to it, and I like that it was, seems like one reason is because it was simple. It was like, “Hey, I could actually do that.” Was there anything more to it or are you just wired in a different way than most people?
Brian Scudamore: I don’t know. The moment was real. The moment happened and why it happened, was it serendipity? Was it, do I have an eye for spotting ideas? I always remember as a kid I would look at companies and think, “Oh, I could do that better.” I think this was one of those moments where I looked and went, “I’ve always been interested in business.” My grandparents ran an army surplus store in San Francisco, [inaudible 00:08:23] surplus and I worked there and experience the game and excitement of building a business with them. All be it that I was a little kid, I felt a part of it.
Brian Scudamore: I think when I saw that truck, it was just, “Wow, I can do that.” Something simple. I think in today’s world, people often think, “Oh, I’ve got to be the next Instagram.” And they’re figuring out how to catch lightning in a bottle. But what people often don’t understand about a lot of these founder stories, whether you’re Instagram or Airbnb is, how it started, isn’t where it ended up. And I think that’s no different with my 1-800-GOT-JUNK story. It was a way to pay for college and it ended up becoming a franchise opportunity that has now grown into four other home service brands.
Shaan: Yeah, I think Airbnb is a good example of that, where today Airbnb is this amazing brand and they book more nights than Hilton hotel around the world every night. But when it started, it was two guys living in San Francisco, rent was super expensive and there was a conference in town and people didn’t have a place to stay. So all the hotels were booked up.
Shaan: So they just said, “Hey, we have an air mattress, we can let somebody sleep in our condo. We make a little extra cash and they get to go to this design conference.” That was the origin story, which was also very simple, born out of necessity. And so I really like that.
Shaan: So, you saw this truck and you were like, “I’m going to do this.” You go get the truck and actually you had a different brand name at the time. It wasn’t 1-800-GOT-JUNK at the time, right? What was the brand that you started with?
Brian Scudamore: It was a smaller brand, so it was more regional and the phone number was 738-JUNK. I remember meeting a guy once who told me, “Your name has to be your phone number.” I remembered that and I came up with this phone number that I called the telephone company and tried to get something, three numbers and junk and I blazoned the side of my truck with this phone number. Which proved to be, while it might sound really smart, I think it was just something I had heard and went out and did.
Brian Scudamore: But it became genius in the sense that whenever we got press, people would see the phone number on the side of the front page of the newspaper or on CNN or Oprah, whatever show we’d get on and it just became this wow. They’d see 1-800-GOT-JUNK, they’d remember the number, it was very visual and it was hugely impactful for us.
Shaan: Yeah, I think there’s a billboard right above my parents house essentially. I’ve seen 1-800-GOT-JUNK like a hundred times this year. It is so catchy, it is memorable. I read something that was like, the Rubbish Boys, was that something? Is that one of the names that you had at the time?
Brian Scudamore: It was. So, here’s the brand confusion that happened in the early days. Such a confusion that I even gave you a different brand than we had initially called ourselves. So here’s how it worked. I called the company the Rubbish Boys. It was really just me, but I had a vision for something bigger and the phone number was 738-JUNK. But the side of the truck really had that phone number emblazoned on the side that people chose to call my company 738-JUNK versus the Rubbish Boys that I had originally named it because that’s what they saw.
Brian Scudamore: That’s what led me partially to, “Okay, if we want to build a brand outside of Vancouver and grow into other markets that are bigger than Vancouver in size, we can’t be getting local phone numbers in every market. That’s going to be too confusing.” And so we came up with this 1-800-GOT-JUNK?
Shaan: Nice. And so just give the listeners a sense of the timeline here. So what year were we talking when you started this?
Brian Scudamore: Started in 89 and wound down the Rubbish Boys 738-JUNK name and changed to 1-800-GOT-JUNK eight years later. And there’s certainly a good story behind how I got the phone number. But 738-JUNK and the Rubbish Boys, I saw the revenue in my market shrink to half within a year because as we switched over to 1-800-GOT-JUNK? I’d even have friends and family say to me, even though the trucks look the same, it was just a different phone number, “Oh, there’s this competitor out there, you’ve got to watch them. They look just like you. They’re called 1-800-GOT-JUNK?” So people got confused between the brands. And I knew that it was short term pain for longterm gain and we stuck with it and obviously the right decision in the long run.
Shaan: I feel like when people listen to these podcasts, they are typically commuting to work or doing an errand something like that. And this is an escape and the goal is for it to be both inspirational and educational. And so one thing that I personally was inspired by was, you said longterm just now, this is a longterm business. This is, we’re talking 30 years of this business and there are not many, I mean, especially I’m here in Silicon Valley. There’s not many 30 year old businesses around here that you could still talk to the founder and they have the same passion and the business is still around and they didn’t pivot 10 times or go and try to start five new businesses and ditch the old one.
Shaan: So you really were longterm with this and I really respect that. It sounds like that first eight years you were building up and you hinted at something, you said there was a good story behind the 1-800-GOT-JUNK number. I’m a sucker for a good story, so I’d love to hear that and I’d love to hear first maybe about going long term.
Brian Scudamore: Sure. So it’s interesting Shaan. I am such an ADD personality. I mean to spend an hour on a podcast and not be staring out the window and thinking other things and wanting to go on the internet. I am very, very ADD. What’s interesting though, is as often as I see all these squirrels fly everywhere, I have somehow stuck with one business. Now, even though we’ve added other brands under the O2E Brands umbrella, they’re still home services, they’re still franchised get fits.
Brian Scudamore: But it amazes me sometimes that I’ve stuck with it and I’m not sure why. I went to 14 schools from kindergarten to college. The only one I ever finished was kindergarten, the only diploma I have, true story. But I’m fascinated by entrepreneurs and how ADD we can be and most entrepreneurs I see buy a company, start a company and then they sell it. Then they move on to something else and they’re always chasing this success. And I think somewhere early on I realized grow where you’re planted, stay with the business you’ve got and just do your best.
Brian Scudamore: Somehow I stuck with it. While it took eight years to get to $1 million. We do $1 million on any given day like today. So it took 30 years to ramp up to that point. But you just build this flywheel momentum by sticking with something. It’s like diet and exercise, go on diet and exercise and work hard for a week. You don’t notice results but if you stick with it for 12 weeks, wow.
Brian Scudamore: If I go to the story now of 1-800-GOT-JUNK and how I got that phone number, there I was eight years into the business and deciding I wanted to expand into the United States. Start the business in Seattle as the first prototype location outside of Canada and wanted this phone number. I remember sitting down and brainstorming with my team and we came up with this, “If we’re not going to be 738-JUNK, we’re going to go more national. 1-800 something junk.” And we came up with got junk, a play on the got milk campaign, a big advertising campaign in the ’90s. I said, “Okay, I can see it.”
Brian Scudamore: I pick up the phone and call the number and it’s taken. I don’t know where it’s taken because I couldn’t reach the actual phone number. Just said it wasn’t working from your local calling area. So I did some research, I looked around, I called everybody I knew in the States and asked them to make phone calls to the number and nobody could get through. Months later I finally realized it was working in Idaho. The Department of Transportation in Idaho owned the phone number.
Brian Scudamore: I had made 60 phone calls trying to get the number. I had hired a design company and actually it was paying invoices on them, designing a logo and a brand for 1-800-GOT-JUNK before I’d had the number or any indication that I could even get the number because that’s how much I believed in my vision or my destiny. Finally I get in touch with Department of Transportation. I narrow it down, I get through to Michael in the phone room. If you’re government, you must have someone that runs your phones.
Brian Scudamore: Michael finally says, “You’ve called me three times in the last couple of days. I don’t know why you want this phone number, but here’s AT&T forms. I’m going to send them off to you by fax. I’ve signed off on it. The number is yours.” And bingo, I get this 1-800-GOT-JUNK numbers for free.
Brian Scudamore: The point of that whole story I think is we have to sometimes as entrepreneurs put the cart before the horse. Spending a couple of thousand dollars on a logo for a brand that I didn’t really know I could get. I had to have some blind faith that if this was really a good idea, I was almost going to will it to happen. And I don’t know how the universe came together but it did and the phone number is ours. I called Michael back a couple of days later just to thank him when it all settled and he was no longer with the business. So I have no idea what the story is there and probably will never know.
Shaan: I love it. So this is not the first time you did this sort of will it into existence, sort of visualize and then go for it. I read another anecdote or heard something about you where, like I said, you’ve told your story really, really well. You’ve been on Oprah, you’ve been on Dr. Phil, you’ve been on a whole bunch of different, as mainstream as mainstream gets.
Shaan: The most interesting part of what I read there was that you had some kind of wall in your office where you and the team were putting up a vision of where you wanted to be, things you wanted to have happened through this journey of this company. One of them was getting on Oprah. And so talk a little bit about, do I have that story right? And then is this something you do repeatedly or was that just a one off sort of vision board thing you did?
Brian Scudamore: It’s something I do repeatedly. I wrote a book called WTF, Willing to Fail. One of my favorite stories in that book would be this one. We have the, can you imagine wall, there was this big empty wall in our office that we’re all about visuals. And putting up big whiteboards and lots of color and different imagery and quotes and this wall didn’t have anything. So I remember having a conversation with someone in the office who said, “I can’t think like you can about vision Brian.” And I said, “Of course you can. Everybody can think about vision.”
Brian Scudamore: This guy’s name was Cameron Harold, our COO. So I said, “You know what, let me take this wall,” I put a big vinyl decal up on the wall that said, “Can you imagine?” And I put it up on this wall because I wanted people to start to think about vision. What could they imagine for themselves, themselves in the business? Let’s think about big bold ideas. And I challenged Cameron to think big.
Brian Scudamore: He still said he couldn’t. So one of the things I put up on the wall was, imagine being featured on The Oprah Winfrey Show. That was the first, so-called, “Can you imagine?” Put this quote up on the wall. Can you imagine being featured on The Oprah Winfrey Show with my name below it, as my commitment that I was going to make that happen. People would walk by it, look at it, be confused by it, ask me questions. I started putting a bunch of pens and paper down near the wall for other people to write up their own. Big, bold, can you imagines.
Brian Scudamore: But the cool thing is, is when you can see it and you put it up in a big vinyl decal on the wall, it’s something that you start to think about and other start to think about. And we took Tyler, our first PR hire who was in the business and he would go sit beneath that wall and look up at it and go, “Can you imagine Oprah? I can see it, I can see it.” He used to tell me he could see it. So he made it his mission to get on the phone and send emails and do all those sorts of things to pitch Harpo studios.
Brian Scudamore: We tried every which way we could to get in touch, until 14 months later, we’ve got this open office environment, Tyler’s wearing this blue wig, which he used to do to get in the spirit when he’d pitch and he stood up and he said, “I did it. I did it.” We were like, “What is going on?” He got us on The Oprah Winfrey Show, the Harpo studios called and said, “We need you down here. We’ve got a Hoarder. We’ve read about you guys, we heard about you and you’ve pitched us. We need you.”
Brian Scudamore: This was in Los Angeles. We didn’t have any franchises there and so we had to get creative. We called our San Francisco Bay area franchise owners and said, “We need you to drive down to help us in LA. We’re going to fly down and meet you.” We cleaned out a job for a Hoarder and sure enough, the next Monday I was in Oprah’s green room about to go up on stage for my four and a half minutes of fame and man, did the phone’s ever light up when that thing ran.
Shaan: Wow. A hell of a story. I love that story. That story is like the reason I do this podcast. Is to hear stories like that and it makes me want to do it, just even for my own self, not even just for my businesses. I mean is the, can you imagine wall, is that still up or has that sort of run its course now for you?
Brian Scudamore: No, it’s still up and we’ve got to do a call out to get some… this is a good reminder. Thank you Shaan. A call out to get people to submit even new, more fresh ideas. But we did cool things, and this is where I love that I can come up with an idea or someone else can come up with an idea and a completely different person can execute on it and make it happen. The whole teamwork makes the dream work.
Brian Scudamore: If I think of my Oprah vision and Tyler single-handedly made it happen. There was a vision up there that a woman, Andrea marketing manager in our office said, “Can you imagine,” hers was, “Being featured on the side of a Starbucks cup?” And Starbucks back in the day used to have this campaign on the side of their lattes and cappuccinos that said, “The way I see it,” with quotes from famous actors and musicians and poets and so on. And she pitched them the idea of a quote from me.
Brian Scudamore: Now Starbucks had to help me write it. I’m a high school dropout, so clearly I needed some help. I remember this quote ended up there and it was really the fact that I didn’t care that my name was on the cup, but it said, “Founder and CEO of 1-800-GOT-JUNK?” The 1-800-GOT-JUNK brand ended up on 10 million cups with Starbucks for free because Andrea Baxter had the freedom to conceive something unusual and big that she wanted to make happen and she did.
Brian Scudamore: The quote was, “You are what you can’t let go of.” And so it really fit with junk removal. If you can’t let go of things, what are you holding on to? So it was an amazing, amazing experience. I mean we had so many people that saw that, but that also inspired others in our company to dream big and come up with their own can you imagines.
Shaan: So this is one where I got to ask because, once it happens it’s like, “Wow, that was a great idea. So glad we did that. Can’t believe it happened. That’s awesome. What a rally.” But when you first put up this vinyl and you say, “Can you imagine?” I love how you’re talking about Andrea and you’re talking about Tyler and you’re talking about, I forgot the name of the first person who you were first challenging to think but-
Brian Scudamore: Cameron.
Shaan: Cameron. So I do a lot of things like this in our office. When we were running our startup, we just sold the company. But when we were doing our startup I had all these posters on the wall, I would challenge our team to do these funky exercises. Not everybody loves it, especially right off the bat. And so, and a lot of times I feel like, I don’t know if you watched the show, The Office, but I feel like Michael Scott, who’s this, goofy boss who’s on the edge of sort of delusion and insanity and then sometimes it turns out to be genius.
Shaan: But what are some of the other things that you do that are like this? And I’m guessing if I felt that way, that there’s probably other CEOs who, we’re all making it up as we go and you want to try some new things, but your staff may not always be comfortable with it or it may not be standard. But sounds like this was an example where you did it anyways and it worked. Can you talk a little bit about that, as advice for essentially me and anybody else out there who sometimes feels like Michael Scott when we do this sort of thing?
Brian Scudamore: Yeah, I’ve certainly felt like Michael Scott more than once or twice, But it’s one of those things where I see my role as the CEO to be this sort of chief visionary, chief possibility guy. Where I can help people imagine big things and dream in such a way where you never know if you come up with some big ideas, you might actually make some of them happen. So putting these things up on the wall, I mean that Oprah challenge to the company, to myself was people going, “How would you ever get on Oprah? Why would Oprah cover a junk removal company?”
Brian Scudamore: “I don’t know, but I can see it happening. I can see myself giving Oprah that big hug,” which I did. “I don’t know how it’s going to happen.” And then sure enough, Tyler goes out and makes it his mission and makes it happen. I can give you so many stories of things that we’ve come up with that had been so bold and audacious and crazy that shouldn’t have happened. Like the phone number, like the Starbucks cup. But they do happen. It’s only impossible until it happens and it comes true.
Brian Scudamore: I think that as a leader you can help inspire possibility in others. It’s only impossible if someone really wants to believe in their mind, they can’t do it. But what if you can help them think, “What if?” And I think that’s the great challenge. So if you got to be a little Michael Scott-ish to make that wonderful possibility and magic happen. Hey, so be it.
Shaan: Yeah, there’s that old cliche like, “Whether you think it’s impossible or possible. You’re right.” And this is an example of that. So it sounds like, when you talked about Tyler, you said something in passing, which was he would put on his blue wig whenever he’d get in the pitch mode or sales mode. That sounds like you assembled this crew of people who fit your vibe and your style.
Shaan: But that wasn’t always the case. So one of the kind of famous things of your story is that it wasn’t just all roses and rainbows. Even as you were growing, you hit two major road bumps. And so I want to talk about those, because this is, a. It’s not standard to hear about this and to hear the kind of transparency that you’ve shared with us.
Shaan: But the first one comes, you’re now 24 years old, you’ve got five trucks and you’ve got an 11 person team. The company’s revenue is like 500,000 a year, I think. And something happened, you did not like the direction that the company was going, even though at the surface it seemed fine. Talk about what you were feeling and then what happened at that stage when you had that person team.
Brian Scudamore: When you say it wasn’t all roses and rainbows, I mean, you’re 100% right. And I’ve always believed in this WTF, Willing to Fail attitude where you make enough mistakes, you’re going to win a few times, you’re going to learn. So I’ve made way more mistakes than I’ve had successes just to be clear. Getting to a point where we’re almost a half a billion dollar company today across our brands came from a lot of sweat and tears and a lot of mistakes.
Brian Scudamore: So I think my biggest mistake, which at the time when it happened was horrific. I mean, I was just devastated, but I’m so grateful today for that mistake, for that failure and learning. What happened was I had 11 employees and they say one bad apple spoils the whole bunch. I had nine bad apples and I just didn’t know what to do. I mean, these were people who just weren’t the clean cut, professional, happy, smiley people that I saw in the vision for my little company.
Brian Scudamore: There I was just not knowing what to do, not enjoying coming to work any longer. So I sat down with the entire team at once and I brought them in for a morning meeting and I said, “I’m sorry,” I started with those two words, very important. “I’m sorry that as their leader, I’d let them down.” I didn’t make the right decision and who I brought on board, I didn’t give them the love and respect they deserved. I just wasn’t having fun and I chose the wrong people and I didn’t see any path forward other than starting again.
Brian Scudamore: Again going from five trucks and half a million in revenue down to just me trying to do it all. Clearly I can’t drive five trucks at a time and it was a painful time in my business life where I was losing business and upsetting customers and had to rebuild again and overworking. But I learned the valuable lesson that it’s all about people, finding the right people and then treating them right.
Brian Scudamore: I made the big decision after that period of time where I said, “I’m never going to compromise again on the quality of people that I bring into my company.” Did I make mistakes after that point in time? Of course. But I got very cautious and careful and became very much a slow to hire, quick to fire type leader or company. And we really tried to pick people based on their attitude and cultural fit with our business.
Shaan: When you had to make that decision and it’s not an easy decision obviously. Anytime you let people go from your business, it’s very, very tough. But specifically to let essentially everybody go and hit the reset button while you’re mid-flight that is very, very tough. How did you actually make that decision? Did you have mentors that you talked to? Was it something you thought about for weeks? Did you just wake up and realize today’s the day. Talk us through how you actually made such a big decision.
Brian Scudamore: I don’t totally remember how I got there. I clearly remember the moment of getting rid of everybody because it was so painful. But I don’t think I had any mentors at that point. I don’t think my business maturity was there where I knew to ask for help. I think I just got fed up and said, “Enough’s enough. I’m not having fun.” And I think while most people would have said, “Let’s get rid of the nine and keep the two and rebuild.” I just knew that I couldn’t do it again without completely starting from scratch.
Brian Scudamore: I didn’t know who I could trust. I didn’t know who was worth keeping and I just said, “You know what, I just got to clean house and I’m going to completely rebuild.” I remember, my first hire after that I was like, “Okay, I’m going to groom this person to then run the second truck and recruit someone else that fits perfectly with them and that vehicle and just scale it up.”
Brian Scudamore: We got the culture right and I’m still friends with many of those people that I brought on in those early days. Like Dave Ludwick who is one of my closest friends and was an employee in the truck and was one of those ones in the early days helping me rebuild. I think it’s so important to focus on the people you bring into your organization because that’s all a brand at the end of the day really is. I talked about storytelling. Stories that you talk about, about building your brand and then living up to it is the hard part. You can only live up to it if you’ve got the right people for you and for your business.
Shaan: When you had to reset and hire the next batch of people, you obviously were being very conscious of who you wanted to bring in. If they fit a certain mold that you were looking for, what was that mold? Did you write something down like, here’s what I’m looking for, the must haves. How did you think about it and what was it that you were looking for in people when you reset the culture?
Brian Scudamore: If I think of what was wrong at that point in 1994 when I fired all 11 was, I just wasn’t enjoying working with those people. They weren’t the happy, smiley people I envisioned. And so I said, “Okay, I’m going to hire happy, smiley people that I want to spend time with.” And so my litmus test was spend a day in the trucks with them driving around. Did I have fun? Were they smiley and happy with customers? Do they love life versus complaining about everything that happens to them?
Brian Scudamore: I just looked for cheery, optimistic people and still to this day, I mean, that’s a word we use constantly is, just hire happy people. And I think that HR professional that term for a second versus what we call our HR department, which is our people department. I think in the HR world, people go out and they spend so much time trying to ask the right questions and doing all these tests and they over-complicate the interview process.
Brian Scudamore: When I think really it’s just figure out what matters most. A positive attitude. Someone you want to spend time with and treat them more like you’re finding a friend versus bringing a new employee on board. Yes, we’ve got to look for skill and make sure that the person fits with the job that needs to be done. But we really hire on culture first and foremost.
Shaan: Nice. That’s something that right now I’m in the middle of a process where we are creating a new team and I have half people who I’ve worked with before for many, many years and I know them, trust them implicitly. And we’re trying to merge that with the other half of our team is a bunch of new people, some of which are, great right off the bat and the others we’re trying to figure out do they fit the culture and it’s not an easy one for sure.
Shaan: But it sounds like at some point you did get that to click and the business starts growing. So you go from that sort of half a million to a million in revenue, to 12 million in revenue to 100 million in revenue and the business keeps growing. There was another people problem that came up at one point. So at some point you hire sort of these the superstar COO. I think this person was the president of Starbucks, is that right?
Brian Scudamore: Yeah, this person was the president of one of the divisions in Starbucks, the US operations. So I thought I hit the jackpot. We had hired a big recruiter and we’re spending a lot of money and they were out their head hunting like crazy. I was introduced to someone who was this ex president of the Starbucks US and wanted to relocate to Canada where they’re originally from. I was like, “Man, I don’t even know how I can afford this person, let alone have my little company attract this person.”
Brian Scudamore: I was so impressed with the pedigree that I thought, “Wow, if I can land this man, I’d won the lottery.” And I made it happen. But what I didn’t do was take my own advice and really spend time getting to know someone to see was this person the right person for me? Did they pass the beer and barbecue test? Would I see myself wanting to have a beer with them, hanging out with them, becoming friends? Did they fit into the company barbecue? Would they put on a blue wig and dance around whatever the case might be.
Brian Scudamore: This person wasn’t the perfect fit. Very smart, did a great job in past jobs and new jobs, but wasn’t the right fit for my company. And it reminded me if you’ve got 11 employees in your whole company and it’s not working out, that can be a disaster. But you grow a business that’s well over $100 million and you’ve got one person that isn’t quite the right fit and they’re at the top that can have the same devastating effect.
Shaan: This is a great example of, the best lessons you often have to learn repeatedly. And so, those lessons that come up again and again, those are the most important ones. So this time you’re 400 employees and you have to make a similarly tough call. So how did that go down and what was your feeling at this time? Because you seem like an optimistic, positive person. I can tell you’re an inspiring guy. But you’re human and everybody has bad days, dark days, everybody sort of gets down. Talk to us about what it was like when you had to make another tough call and how you were feeling and how you came to that decision.
Brian Scudamore: Yeah, it was a sad day. I remember, had to make a change with that person. The president of my company had to get the CFO out of the business. Now, to give you a bit of a backstory, together this president and I had almost bankrupted 1-800-GOT-JUNK? We were down $40 million in revenue in one year. The financial meltdown of 2007 and eight didn’t help, but that wasn’t the real reason.
Brian Scudamore: We weren’t joined at the hip. We weren’t firing on all cylinders together and believing in the same vision. It wasn’t that we weren’t getting along, we just weren’t really aligned with the same spirit and motivation of where the company could go and how to get it there. And so made that tough decision. So there’s two key people out of the organization.
Brian Scudamore: This person’s entire leadership team I had to get rid of. I had to elevate middle level management up to be my leadership team and take over. There was no one in my business that thought I was sane. That thought I’d made a good decision. They didn’t get it because people didn’t really understand or see what I saw. That this wasn’t working and it wasn’t going to work and it was going to mean the end of the business for everybody if I didn’t make this decision.
Brian Scudamore: They know today it was the right decision. But at the time people were scared. I think the only word I can use to describe how I felt for months was sad. I was sad, I was lonely, I was depressed, but I was determined to rebuild my business and get it to a point again for the long term where we would be in a place we were proud of again.
Shaan: Why was the business down $40 million. That seems like a huge swing at that time. It’s surprising even some bad decisions could lead you down that path. So tell us what caused the business to take such a big swing in such a short amount of time?
Brian Scudamore: I think we took our foot off the gas in PR and a lot of our strategy there. We were shifting franchise partners to do more commercial work, at the time we weren’t ready for that strategy. We just had them changing gears and changing their focus and the leadership wasn’t there in the same consistent way that it had been in years prior. It didn’t work.
Brian Scudamore: When you’ve got one person in your business who again is at the top who doesn’t agree with your strategy or your direction, even if you seem to get along as every day passes, you get further and further apart and you’re trying to pull and push two different directions, revenue will not grow, your culture will not improve. Things will just get worse to the point where it ultimately broke and I had to make a change.
Shaan: So you make that change and how did you get the faith of the people backing you? How did you get people to feel like this is going to work? Especially when you yourself were feeling down at the time, but you were determined. Was there something you did? Did you take people off site? Did you have a big rally meeting? What did you do to get people back to believing?
Brian Scudamore: Yeah, I was transparent. I was open and honest. So I remember going on a road show and meeting up with franchise partners and I’d get 50 of them in a room and we’d sit down together and I’d say, “Here’s some flip charts. I want you to write down every question that’s on your mind right now. I’m going to leave the room. I won’t know who’s asked what and I’m going to come back and I’m going to answer every single question. And if there’s something legal that I can’t answer, I’ll tell you I can’t. But for the most part I’m just going to be open and honest and say it like it is.”
Brian Scudamore: So I told them what was going on and why this happened and that I didn’t necessarily have belief that I was the right person to take it from here, but that I was going to be the interim person to get it to a better place. And I started to search to find Eric Church, somebody who came in almost eight years ago. We call it a two in the box model where, two heads are better than one. I’ve got the vision and the culture side of the business. He’s got the strategy and execution. Of course there’s some overlap between us.
Brian Scudamore: But we spent time when I tried to find Eric said, “Okay, I’ve learned from the previous situation, I’m going to find the right leader for me to help. Someone who believes in entrepreneurs and believes in the wacky, crazy dis-focused, [inaudible 00:39:42] of how we operate some times, but who can help guide me and take the direction that we’re going that this person believes in and make it happen.
Brian Scudamore: So, I got out there and I described in a mini painted picture of mini vision of what I was looking for. And I described in a few paragraphs, Eric Church, to the point that I didn’t know Eric yet, but when I sent out through LinkedIn and my networks, here’s who I’m looking for. I was so clear that I had three people, unrelated in different parts of the country reach out and said, “The person you described is Eric Church.”
Brian Scudamore: They didn’t refer five names of execs that they thought would fit the bill. These people said, “You’re describing Eric Church. He’s a guy I know, here’s his information you should reach out and get in touch.” We spent time in that courtship period mutually getting to know each other to say, “Is this really the right fit?” One of the things I noticed about Eric that he didn’t even notice about himself at the time is all he had ever worked for was an entrepreneur.
Brian Scudamore: He was always the executer, the implementer to an entrepreneur and that person’s vision. It was such a perfect fit because he years prior had actually said, and this shows how serendipity can play a role. But he was telling his wife one day when she asked him, “What do you really want to do in life?” And he said, “One day I want to run a company like my buddy does.” He happen to have been friends with Cameron Harold, who was our COO years ago. And he said, “I want to run a company like Cameron is 1-800-GOT-JUNK?” And so sure enough, it all worked out.
Brian Scudamore: Here we are today and since Eric’s come in, we’ve quadrupled our revenue. We’re on a path to a billion right now. So close to half a billion in revenue with an opportunity to get to a billion in revenue over the next four or five years because we’re aligned. Because we believe in each other and we’re working together as a team.
Shaan: Amazing. It really is amazing. Once you get clear on what you want, and you put that out there into the world, it’s amazing how it’s like a magnet. It’ll pull the right people to you because the message you had was clear and so it resonated with the right people and they knew who to send to you. I wanted to wrap up with a couple of quick questions, rapid fire style, but you can take them as you will.
Shaan: Things that I wanted to know when I was reading about you and before we met. These are the questions I wanted to ask you. The first one is, I think in every business there are the sort of breakthrough moments where stuff starts to work or you hit some milestone. They just feel like euphoric. And in fact probably it probably felt better than even now when you’re going to do a half a billion in revenue. There was probably a moment in the early days that felt even better as you first started to see things click. What was that moment for you?
Brian Scudamore: Yeah, I’ve been asked that one before and I don’t believe there was ever a breakthrough moment. I can tell the stories of when we fired 11 people, when we hit our first million, when we first got $100 million, when we got on Oprah, it just wasn’t one moment. It’s been the cumulative result of every single decision. Good and bad that I think I, and we as a team have ever made. Because things like Oprah, I remember it took 14 months of hard work to make that moment happen.
Brian Scudamore: That sort of willingness to never give up, with the phone number, 60 phone calls to finally persuade someone to give me that phone number and to give it to me for free. What would have happened at call number 59 if I said, “Okay, this is clearly nuts and I’m done.” So I don’t think it was one moment or even close to it.
Shaan: It’s not a public company. Correct?
Brian Scudamore: No.
Shaan: Did you do a profit share? How do you get liquidity in the business for yourself?
Brian Scudamore: Yeah. From profits. I’ve certainly taken my share of dividends out of over time and we do a profit share called the great game of business inspired by Jack Stack’s model of open book management, where we share our profits. This year we gave well over a million dollars to people in the company, where we want to share profits with the people that are behind helping us to build this special group of brands.
Brian Scudamore: My financing strategy because I didn’t go public or raise money was really franchising. People would pay us a franchise fee that we would use that pool of money to help us build up more infrastructure and more growth and it’s been a great model for us.
Shaan: Of course the podcast is called My First Million, which is just really kind of like a catchy name. But the premise, I think what ends up happening a lot for entrepreneurs is, you either get excited by ideas, you get excited by solving problems or you get excited by making money or sometimes a combination. Everyone has a different combination of those three. And of course money really doesn’t go that far in the sense of changing the quality of your life.
Shaan: But I do believe personally, I believe that there are certain amounts of money that do, a step change in the quality of your life. Either you have certain security because you have that money or you have freedom of your time because you don’t have to get a job and get a paycheck every month. For you, what amount of money made the biggest difference in the quality of your life personally?
Brian Scudamore: I don’t know if it ever really did. I mean it’s easy to say that I’ve been doing this for 30 years. I’ve had a lot of opportunities where waste management… I remember it was on a fishing trip with some of their execs. They took me out and there I was out on a boat with two very senior garbage executives and they offered, $75 to $100 million is what they were talking to buy my little business. And I said, “I wouldn’t sell it for a billion.”
Brian Scudamore: The money wasn’t ever a motivator. It was building something special, accomplishing the impossible. What amount of money has changed my life? I mean, it’s nice to not have to worry about money, but who knows what’s around the corner. I mean, are we going to hit another recession at some point? Of course we are. Do we make some bad decisions that really end up hurting the business? I mean, things happen. So I think it’s just, I hold on to the fact that I love this business and I love that we’re changing lives.
Brian Scudamore: I just came out of a meeting, a regional meeting with Shack Shine window washing, gutter cleaning, franchise partners. Young hungry, hands-on, hardworking guys that are building this great brand for us. What excites me is the lives they’re building, the motivations that they have and how we, through our franchise systems and our organization are helping to change their lives. That’s what motivates me. I mean, if I lost every penny tomorrow, I think I’d still be a happy guy who would figure out how to take off again from that point.
Shaan: Well, that is my next question. Which is, if I took away this business and you had to start over, you still have all the knowledge, but you weren’t allowed to do this same business again and you were starting from scratch. So let’s pretend you’re 21 years old. Your bank account is empty and you can’t go do another business just like the one you have now. What do you think you would want to go do?
Brian Scudamore: I am a service guy. So if I look at O2E Brands, which our parent company stands for, ordinary to exceptional. We’re taking ordinary businesses like junk removal and making them exceptional through customer experience. All I’ve ever done in my entire life is service. So whether it’s junk removal or whether it’s WOW 1 DAY PAINTING, where we paint people’s homes in a day or Shack Shine. They’re all home service businesses.
Brian Scudamore: I would pick something with low cost, low barrier to entry, a highly fragmented business like window washing. If I couldn’t do any of these brands, I’d find something different. Is it in home irrigation or landscaping or lawn care or carpet cleaning, who knows. But I would find something where I could buy or even borrow some equipment and I’d get out there and I’d start going door to door and selling myself. I’d build a happy brand and I’d start to grow something all over again. Slowly but surely.
Shaan: Wonderful. Last thing is for people who hear this and they are inspired, what often happens is people want to get in touch, either to just share, “Hey, that was amazing. I loved hearing your story. Thank you for sharing.” Or they have something that they want to send you. An idea or get feedback on something. Are you open to that? And basically for the people who are listening to this right now, how should they follow you? How should they get in touch with you and who do you want actually reaching out to you?
Brian Scudamore: Anyone can reach out to me. You go to any of the social platforms. I think one of my favorite is Instagram because there’s not a lot for me to read. But, if someone wants to go to @BrianScudamore and connect with me, send me a message. One of the ways I often encourage people to reach out is, I’m such a believer in vision and creating a painted picture. That I wrote some articles and put some material together that if anyone ever wants to learn more about that, I’m happy to. Send me a note on Instagram. Just saying, “Could I see a copy of your painted picture?”
Brian Scudamore: We’ll share our vision for the company and an article about how to create one for yourself. There’s nothing in it for me other than just inspiring the world to know that, “You know what, you can dream big possibilities, great things can happen and you might just surprise yourself.”
Shaan: Awesome. Brian, thanks so much for coming on the show. I really enjoyed this myself and I think a lot of other people will too. So I appreciate your time and appreciate you coming on.
Brian Scudamore: Well, you know what, I learned so much about the things I’ve gone through and all the reflections. I mean, it’s so fun to relive when I do these, so thank you for having me because it’s a great trip down memory lane and love sharing wisdom with others.