Kevin Tucker: We never competed on price. There were a lot of things that I was passionate about but one of them, if not the number one, was we're not going to compete on price.
Paul Giannamore: Fat Pat, you bring this upon yourself.
Patrick Baldwin: Bring what, Paul?
Paul Giannamore: You say it's a tough crowd over here but you did, in fact, say before God, man, Jamie Clement, and our lovely readers that it was out there.
Patrick Baldwin: It wasn't on the record, wasn't it?
Paul Giannamore: It was off the record and on the record.
Patrick Baldwin: That's a little bit more than just on the record, isn't it?
Paul Giannamore: We're recording this on Thursday, October 27th, 2022. Elon has until tomorrow afternoon, 5:00 PM Eastern Standard Time to close this transaction. You're still in the clear. Although it's a few minutes to midnight over here. It's going to take a call to the governor to spare you on this. Will you get the tramp stamp of Elon?
Patrick Baldwin. I guess I said I would.
Paul Giannamore: I would 100% do it.
Patrick Baldwin: You would?
Paul Giannamore: If I made a bet on the air and lost it, I would do it.
Seth Garber: Paul, after I realized that he was going to lose this bet, I decided to start looking up Elon Musk tramp stamp tattoos. Unfortunately, I didn't find them. I did get a lot of inspiration from the Joe Rogan tattoos that people get all the time. Fat Pat, I'll make a commitment to you. It is my gift. You find whatever tattoo artists you want and I will shoot you the Venmo, write that in there, and it's my present to you.
Patrick Baldwin: Thanks.
Paul Giannamore: We don't even have to crowdfund this, Fat Pat. You got a direct donor.
Patrick Baldwin: This is special. Paul, I woke up this morning. It's Thursday, October 27th, 2022. I was like, “I'm going to listen to The Boardroom Buzz to get me in a chipper mood today. Why not listen to my voice?”
Paul Giannamore: How'd that work for you?
Patrick Baldwin: Dylan came on the air and I was like, “What is this?” Where are you behind the scenes on this, Paul? Was this your making? Are you the mad scientist, the puppet master back there?
Paul Giannamore: I 100% told him to do it and he loved it and he did it. I wanted to make sure everyone realizes that we do have an outstanding bet. By the time this airs, we'll know who the winner or the loser was. We'll see what happens. The Tesla or the tramp stamp.
Patrick Baldwin: I listened to that clip again, it sounds like it's a tramp stamp or nothing. Let that sink in.
Paul Giannamore: The irony of all of this is the deal blows up in the next 24 hours. Dylan has to show up. Next time he comes down to Puerto Rico, he's going to have an Elon tramp stamp. You're at the beach with your kids, at the pond across the street, you might be at a pool, or you're out there mowing the lawn. You take your shirt off. I don't know what you guys do down in Texas. I guess you could get it small enough that it'll look almost like a pre-cancerous growth. If you're going to do this, you got to do this for real. It's got to be something where you can see it from 30 meters. Kids are going to be like, “Mommy, that guy's got a tramp stamp on and it's Elon Musk.” That's what I want to see.
Seth Garber: Paul, do you think, in his mind, he thinks he's going to get out of this?
Paul Giannamore: I do. The more he thinks he talks about it and makes fun of it on the air, we'll get it out of our systems. Out of respect for the wager, because it's Thursday, let's give Elon until tomorrow afternoon before we unleash the fury on he who has lost.
Seth Garber: We're filming in Ybor City for stuff. There's a 100% chance I'm going to a tattoo parlor and a 100% chance we're filming in that tattoo parlor.
Paul Giannamore: 100%. Not that we've covered that, it's a rainy week down here in Puerto Rico. We got an opportunity to speak with Kevin Tucker. Kevin Tucker was a partner at VDA. VDA was a business that Rentokil acquired in 2017. It was a Potomac client. We spent all of 2017 with that business out in the market. It was a complicated transaction. It was a business that did about $50 million in revenue at the time of the transaction.
It was composed of two operating businesses, Vector Disease Control, which is effectively Municipal Mosquito as well as lake and aquatics management, which we're going to learn about when we talk to Kevin. We had Jay Davis and Jason Panono on, those were Kevin’s partners. We wanted to get Kevin on here because there are a lot of lake management readers of The Boardroom Buzz, which always surprised me.
I've gotten a handful of emails over the years saying, “Paul, talk a little bit about lake management from the lake management folks.” Also, it's an interesting business for anyone that's in the service space because it is a route-based recurring revenue business. It's extremely fragmented. There are approximately 650 lake management companies in the United States ranging from single-man operations to $25-plus million-dollar firms.
As you'll learn from Kevin, there is not a tremendous amount of competition. Who knew these companies even existed? They built a fabulous business and Rentokil found a lot of value in it, especially the day they wired the transaction proceeds to bank accounts. What's interesting enough is I'm in the PR chapter of YPO. He is in the Virginia Beach chapter of YPO. Two other partners that I had never met in person when I was doing the transaction are members of the Puerto Rican YPO chapter. I was in Switzerland at the time. Randomly I met them face to face when I was down here. It’s a small world.
Patrick Baldwin: What do you say we step into The Boardroom with Kevin Tucker?
Paul Giannamore: Let's do this, Patrick.
Patrick Baldwin: Kevin Tucker, welcome to The Boardroom.
Kevin Tucker: Thank you. Glad to be here.
Patrick Baldwin: Take us back. I know a wee bit about SOLitude Lake Management. We had Jay Davis and Jason Pananos back in episode 70. When we came to the lake management side of the business, this was your baby. You started, when?
Kevin Tucker: I started the business effectively in 2000. It was originally a different brand. We rebranded it to SOLitude probably midway through our journey because our expansion had us in 9 or 10 states. Our original name, which was Virginia Lake Management, was a little bit limiting. When I started the business, I thought Virginia seemed like a big place. As we grew and grew fairly quickly, that wasn't so big anymore. We wanted something a little bit more geographically agnostic.
Patrick Baldwin: What is lake management? I'm a structural pest guy. I can learn from lake management guys, someone like Tony Sfreddo that does porta potties or did porta potties. I'm sitting across the street from a pond here. What is lake management?
Kevin Tucker: It's a lot of different things. When the business started, I was focused primarily on water that was manmade in a lot of playing communities like golf courses and municipal. A lot of it has to do with stormwater flow and management. A lot of these developments have these ponds and features on them that although they have a stormwater purpose, their amenities to the community or the golf course or they serve some other aesthetic value, there's a need to manage that like you would your landscape or structural pest.
It’s either things you think about in terms of managing a property, managing the lakes or ponds on a property is pretty much the same in many ways in terms of it being a key component to maintaining the asset value, the aesthetic value, and the value to the people who use the property on a daily basis. More importantly but probably less important to some of our customers is the ecological impact of water management. All this water flows through these stormwater systems and it ultimately ends up in a stream, a river, or a bay.
While that may not be top of mind to all of our customers, their immediate need is, realistically, making sure that the water adds value and is an aesthetic amenity to the community. Ultimately, there's an environmental function in terms of making sure this water is healthy as it flows to the system and ultimately it ends up in a river or a bay.
As the business grew, we expanded. We're working on a lot larger recreational lakes as well. It started with the idea of focusing on playing communities and manmade water and moved into larger recreational lakes as part of our service offerings. Through acquisition and other things, as we grew the business, that became a more dominant part of it as well. A lot of that you find is geographically specific.
In the New England area, for example, we had a lot of larger lakes and a lot of municipalities involved. In the mid-Atlantic and southern part of the country, we were dealing with a lot more structural and manmade water as I described previously. As you move west, you run into some areas where there's a high density of development and you have a lot of upland water. In the Midwest, for example, they use a lot of lakes for recreation like boating and all that. Water is an important recreational asset.
In those communities, the reason they're using it might vary from why they might use it in a more developed area. People's needs and desires for it are different or why they may be deciding to purchase it are different. At the end of the day, what we're doing is managing for nutrient pollution, invasive aquatic plant species, toxic algae species, or anything that's going to impair the health, the aesthetic value of that water, or the usability and function of that water.
Patrick Baldwin: What's too big or what's too small? This is an eight-acre pond.
Kevin Tucker: The answer to that question depends on the market. The business that started in Virginia would probably be midsize compared to some of the lakes we work on. In other parts of the country, that would be a puddle. There is no too big or too small. Our programs are tailored to the needs and demands of the customers. Any freshwater or any surface water was a potential target for us.
Paul Giannamore: Kevin, it'd be the five-year anniversary of the transaction. Do you believe that?
Kevin Tucker: No. Time flies.
Paul Giannamore: If I think back to the sell side process, Rentokil, which ultimately ended up acquiring this business, they were immediately interested in the mosquito control aspect. That was the visible aspect to them. When they put their head into this business, what got them excited and ultimately caused them to do the deal was the fundamentals of lake management. It is an extremely fragmented industry very much like pest.
It has that recurring route-based business model in a lot of ways, especially with the smaller and midsize lakes that you guys are doing like a lot of the manmade lakes. If you've got a huge natural lake, it's a different process. On a lot of the typical maybe an eight-acre pond like what Patrick's community has if I remember correctly, that's a 3 or 4 times a-year type of service. You guys would go through these multi-year cycles depending upon the health of the body of water but it was a recurring service.
Kevin Tucker: It wasn't the smaller bodies of water. Am eight-acre one could fit into that depending on where you're at and what the customer’s desires are. It’s more of a year-round management as much as 2 to 4 times a month, 2 being the average. A lot of that depends on where you are in latitude as well. The further south you go and the longer you're growing season, the more likely you're going to have issues in the water, and the more likely the service will be year-round. The further north you go, the more likely to serve as might be seasonal like March to October or something like that.
In the vast majority of the areas that we service, it was a year-round service. Even in the southern areas in the winter, the needs and what you were doing went down effectively. Realistically, at the end of the day, our job is to manage waterbody on a twelve-month cycle in a lot of these cases as you mentioned. It was recurring, route-based, and repetitive in terms of all of your contracts being somewhat similar to what they called for. Some might be once a month and some might be as much as four a month. On average, they call for a site visit twice a month.
Paul Giannamore: How’d you originally get into this?
Kevin Tucker: I had a background out of college working in some commercial real estate stuff but I also had worked in a family landscape contracting business when I was younger. I learned a little bit enough to be dangerous about the biological side of things, pesticides, and all that. The same client base that we have in lake management is similar to what you might have in landscaping, pest control, some commercial real estate development, or residential properties. Homeowner association managers, commercial property managers, and those types of folks were similar customers.
Through those experiences, I was realizing that a lot of these properties had water on them and people were asking what to do about it and where can I go to manage it. Honestly, the idea was an epiphany. As I was doing some of that, I realized that there was a need. It seemed pretty niche and it didn't seem like there were a lot of people doing it. It seemed like the demand was under-fulfilled.
Also, I had a sense that there was some number of people who knew they needed it and wanted it but there were even more people who didn't even know they wanted it or needed it that we could educate and turn them into customers. That pot was probably even bigger. Honestly, I started the business from scratch off of an idea. It was just myself at the start out of the garage of my house. It wasn't that complicated. I bootstrapped the whole thing.
Paul Giannamore: Until I met you guys, I didn't even realize it was a business. It never struck me that there were companies that went out and maintained these bodies of water. I can think about it in the same way. When I got into pest control, Patrick, I didn't even think that was a business either. I thought it was some guy driving around an exterminator so to speak. I didn't realize a real company is doing this.
You built that business up then ultimately rebranded it as SOLitude. You were an instrumental part of the VDA lake management platform. From what I understand from Jay and Jason, they took what you developed and used that and almost reverse-merged other lake management businesses into SOLitude becoming the platform. If I remember correctly, when I was in Virginia with you over five years ago, I was out there when Maria was hitting Puerto Rico where I sit right now. It would have been a month ago over five years ago.
Kevin Tucker: If I recall, we were being rained on here as well. It’s not that it was related but I do recall we were getting rained on pretty heavily.
Paul Giannamore: We certainly were. It was a treacherous time there. The real benefit that you brought to that business was your creative sales and marketing. I want to talk a little bit about what were you doing differently than your typical lake management firm from a marketing perspective.
Kevin Tucker: If I jump back a second to something you mentioned, no offense to my competition but when I started the business, I didn't know there were competitors either. I knew of one and that's part of what attracted me to it. I wasn't technical. I had enough knowledge in terms of pesticides and things in the past but I was self-taught when I started the business on the technical side of things.
I immersed myself and learned a lot about it. Some of it's a trial and error and some of it through education and other training but mostly on the job. My background prior to that had been in business management and finance. I wouldn't have considered myself a technical person at all. That was something that was more self-taught. I looked at the business like a business and not like a management business. What is it that people care about?
First and foremost, I felt like relationships with the customers were key, having a relationship with them that was superior to other choices, and being the best relationship they experienced with any vendor. It’s not just like management but what can we do to stand out in their minds regardless of the industry and regardless of the service? How can we make a given customer or property manager, for example, look at us as being the best vendor they deal with industry agnostic?
My focus at the start was connecting with the customer, focusing on a high level of service, wanting to have great people that I expected a lot of and pay them well for that expectation but then drive home that we were in the business of serving people and we were in the business of creating great relationships. Lake and pond management was almost secondary in some ways. When I say that, I don't mean that literally from the standpoint that technically it didn't matter because it mattered tremendously.
One of the ways we delivered value was by making sure we were the most technically proficient of anyone. That was certainly part of the toolbox. When you talk about selling and marketing, our original engine was referrals. We created an incredible referral engine and it had a lot to do with the focus on relationships and putting the customer experience regardless of what we were doing for them as being the primary focus of myself and my team.
Over time, we involved what I would probably consider an inbound marketing approach. It's certainly nothing we created that's out there in the space, other people use it. The concept for us was to be thought leaders in the space and put out enough education and resources for people and get published and do all the things it took to become readily known as the experts in what we did. The customers would come to us. Rather than selling, we were educating. It was a big part of that.
Over time, between our referrals, inbound, marketing, and through all the things we did, we did email blasts, social media, and all the usual stuff but the spin we put on that was geared around having people come to us and create a demand for our service around the mystique of what we could offer that nobody else could. While we were the most knowledgeable and the best at what we did, over time, I can't claim any personal brilliance coming to this because this was a team effort. A lot of it was trial and error.
What we realized over time is that by putting the customer first in that way, the referral engine kicked it off but then the inbound, what's coming in through websites and all the other traditional things that get people excited nowadays. We had a lead engine that we couldn't hire salespeople fast enough to keep up with all the leads we were generating realistically and honestly. Most people understand that you can't hire an infinite number of salespeople all in one day, that's something you got to grow into.
We generally had got to the point where even people we hired to be hunters were no longer hunters because they were being handed warm leads 5 and 10 a day and they never had to hunt. That had a lot to do with the efficiency of our sales process. When you have a warm lead that's been well-developed and well-educated before they become a prospect, your sales cycle is much more efficient. The likelihood of closing them is much higher. You've created efficiency for your sales team in the way that you marketed and pre-qualified in a lot of ways through marketing your leads.
Paul Giannamore: You guys were doing a ton of online. You're trying to educate the community. You were talking about how to maintain these bodies of water. I remember prior to the whole sell-side process when we started doing some research on the business, it didn't take me long to figure out that I could sit at my kitchen table in Geneva, Switzerland, and type in lake management and SOLitude popped up as number one on Google.
Kevin Tucker: That was not a mistake, by the way.
Paul Giannamore: My question to you though is you guys were a regional business. If I'm typing in lake management in Geneva and you guys are coming up in Virginia, I would imagine you dealt with a lot. People out in California looking this up and saying, “There's this company, SOLitude, they're based in Virginia. Let's give them a call.” How often did you run into that where you're like, “I'll talk to you guys. I'll try to point you in the right direction but I can't do anything for you because we're not out there.”
Kevin Tucker: There was a little bit of that early on. My team probably was frustrated by me. I should take a step back too and say that all of this started with creating a culture internally and creating a team that was passionate and believed in what we were doing. All the leads in the world are worthless if we don't deliver. I'd be remiss if I didn't bring that into the equation. It started with the team. That team, I get probably frustrated at times because I was in the mindset to get the lead and we'll figure out how to deal with it and not the other way around.
With that, it led to expansion pretty quickly geographically but it also led to some inefficiencies because we might be traveling 5 or 6 hours to do a single job as we spread outward, as you can imagine, as those leads come in. For the ones that were leapfrogging well past that, we did have to turn them down for a while. In that regard, we tried to rely on others in the industry that we knew to be of high quality and create a referral process where we kept track of where we might refer somebody for now to another contractor. We would then touch base and try to keep up with how they were doing.
One day, if we were in that market, we'd reengage in VR customers. There was definitely a time when we were generating leads that we couldn't act on. A perfect example, being part of Rentokil, I've generated leads in India and we now have clients in India through the Rentokil platform for all the same reasons you mentioned because our marketing, presence on LinkedIn, and other places bring that in. Even today, we're a national player in America but now we're generating leads internationally that we're going to figure out, “Are we going to do that or are we going to have to go and refer that or turn it down?” The problem never ends, especially when you're looking to grow like that.
Paul Giannamore: Let's take a little stroll down memory lane here for a second. You're growing that business. You guys ultimately rebranded it to SOLitude. By the time I met you, Kevin, you had already joined forces with Jay and Jason over at VDA. You sold a portion of that business but remained a shareholder and then a combined entity. You guys were all partners in growing this business. How did that happen? What brought you together with Jay and Jason?
Kevin Tucker: A little bit of a funny story there. Hopefully, Jason remembers it the same way. He had reached out to me two years before we talked at that point when they were still searching. He remembered interviewing me in his search and I did not remember specifically the conversation we'd had until he brought it up and then it started coming back to me. We'd talked a couple of years before unbeknownst to me. Once he brought it up, my memory came back to that.
They had acquired another couple of businesses in our space up in the New England area. One of those was an owner that I had also developed a relationship with and we had talked about whether it made sense to join forces or something over time. Nothing ever came of that. When he made the decision to sell to them, there was maybe a little bit more of a formal introduction at that time.
They were casting a wide net and looking for acquisition opportunities. In that process, we got to talk. I wasn't looking to get out of the business or take any chips off the table at the time. We all brought strengths to the equation. They had developed a pretty good investor-backed financing model for doing acquisitions. We had the know-how in place. I had done some smaller acquisitions prior to that.
For me, looking to possibly diversify into mosquito management was attractive. I have another leg of the stool of industries to be involved in that I felt like we're good, strong, and long-term plays. They had their reasons for thinking that we were a good add for them. Through those conversations, it went from me not looking to do anything to not going to sell but if we want to join forces and figure this out, then let's do it.
Paul Giannamore: This is going back years for me now. Do you remember what year that was?
Kevin Tucker: 2015 is when we consummated it. I don't remember exactly but we probably had been discussing it for 3 to 6 months leading up to that point or something like that. The gentleman, Will Stevenson, who had helped make that more formal introduction is still with SOLitude today and is still a friend of all of us. I still speak to him once a week or every two weeks. He had a lot to do with making that initial introduction for us.
Paul Giannamore: He came through their New England acquisition prior.
Kevin Tucker: He was the business owner that I'd known previously when he decided to sell to them, he made it more of a formal introduction at that time.
Patrick Baldwin: Kevin, you said you wanted to be the best vendor to your target or your prospects. I always thought the best vendor would be delivering frappuccinos on a weekly basis and joining an association or two. What does that look like to be the best vendor?
Kevin Tucker: For me, what are your target customer’s pain points and how can you help them solve them? That's different for all of our customers. If you look at the property management segment, specifically, I don't know what you all think but I've had some pretty good relationships with commercial and residential property managers over time.
Probably one of their biggest pain points is the phone ringing with complaint calls. It's a fairly thankless profession if you think about it. Not too many people who live in a homeowner’s association pick up the phone one day and randomly call their property manager and say, “Thank you. This place looks great. We love you.” Most of the time, when their phone rings, it's someone calling to complain about something. That's one example.
To my point, my thought with our staff was, “We’ll think about it from their perspective. What's going to make their phone ring? Let's not do that.” For us, there were a lot of things to it and that’s one of many. The point I'm trying to illustrate is what are the pain points of the person you're dealing with and how can we help them solve those pain points? It may not always be specific to our service but something we do with our service might ancillary lead to solving problems for them that are bigger than that.
If someone goes from having 20 complaint calls a day down to 10 because we came on board and provide a quality service that reduced the number of complaints they were getting, to me, that was a win. Is that lake management? I guess so. That's not necessarily the best example but that's an example of my thought process in terms of our staff and trying to drive in-home. We want to do what makes their job better. Let's do that.
Patrick Baldwin: On these larger bodies of water, was the government involved or the Army Corps of Engineers?
Kevin Tucker: They are for a lot of the larger legs, for sure. Some local municipality, state, or some government or quasi-government agency is involved in a lot of the large lake stuff. The meat of our business is not government-focused. I can tell you specifically as a percentage what percentage of our business. Even up in some of the larger lakes in New England especially, there may be some government permitting required.
There may be a government say in the process. It’s still, a lot of times, a private entity at its core that's paying the bills and that's wanting the service even though there may be more government involvement. In terms of the percentage of our business that are actual government clients of some sort, I couldn't quote a percentage. We've grown in some areas where we do more of thatbBut I'd still say it's not more than 10%, definitely no more than 20%.
Patrick Baldwin: What is the day in the life of a technician look like in this business?
Kevin Tucker: That does somewhat depend on what territory you're serving and the type of clients you have. In a highly dense and well-developed area, if it's a skilled seasoned biologist, ecologist, or whatever the case may be, you're probably talking about someone who's working alone with a truck or maybe a trailer pulling an ATV of some sort or UTV or a boat. Maybe not a trailer and maybe a small boat on a rack and some smaller spray equipment and some of the things that you need to work on other equipment. A day in the life in a highly dense environment is going to be many stops at many smaller lakes and ponds.
If you move down to Florida, for example, it's nothing for customers to have 30 or 40 lakes and ponds on one property. A technician might be inspecting, managing, and treating as needed or whatever 40 ponds but they may never leave the same site. You go to other areas where you might have 1 or 2 ponds per property and you're still doing 30 ponds in a day but you're going to 15 sites that are maybe 5 to 10 minutes from each other or 15 or 20 or whatever the case may be.
In the highly-dense areas, that's the ideal situation because you're doing a lot of work in a small space with limited drive time. As you get out into larger areas, larger lakes, rural areas, or whatever, your driving time goes up. It gets a little bit less efficient. Hopefully, you're making up for that with premium service and a customer who's willing to pay a relatively fair premium price for that quality of service.
Patrick Baldwin: You said biologist or ecologist. This is a lot different than structural where you can find someone who might have a high school diploma and that's it and you can train them up to be a technician given all the certifications and the training and the books that are out there. Does it usually take a four-year degree to put someone in the field in lake management?
Kevin Tucker: It doesn't in every case but it certainly has its benefits. The business originally was built around that type of staff member. Back to the quality of service to the customer and the outcome that the customer receives, the idea being that if you have someone of that talent and passion for what they're doing and you put them on a job by themselves, they don't need me or anybody else to tell them what to do.
They can go to that job, they can evaluate it, and can make sure everything is taken care of. They can identify problems that maybe weren't in the plans for the day but they get there and realize something unexpected has happened and they can still have the knowledge, experience, and education to deal with it at the moment. Not only you'd be more efficient that way but you provide your customer a better service because whatever issues you come across, even if they're unexpected, you're dealing with them at the moment and you're not having to come back later or make somebody wait.
As we grew and did acquisitions, we might find that businesses have different models in terms of the type of staffing they had. If you go to areas like Florida where it's much more heavily dense in terms of development with a lot of water and smaller spaces, you might have people who don't have that core background but work on maybe a two-person team and then get that experience through on the job training. Ultimately, they might be running their own routes thereafter.
I'm not picking on Florida. It's just Florida, I'm giving it as an example. In some areas, you might find that people have come up more through the ranks and learned on the go versus in other areas, we might have to hire more people with an educational background because the job warrants it. It wasn't just the education. In terms of the culture, my mindset was that we can train anybody on the technical stuff but I can't train you to be a good person. I can't train you to have a good work ethic. At the end of the day, work ethic and quality of character were always number one. Having that educational background and predisposed passion for what we did certainly was a bonus.
Patrick Baldwin: On the structural side, there are a couple of trade magazines, there’s PestWorld, and there are local associations or state associations. There's training galore. What does that look like in lake management?
Kevin Tucker: Much like the industry or much more fragmented. There are some national trade organizations that play a part in that but there's no one place to go to get all the training and educational resources you need. A lot of it is proprietary to each business. Each state has the licensing as you would have in pest. There are some continuing education and some classes you have to take from the state or at least that qualify for those continuing education credits for the state.
You have to train in the beginning and pass an exam to be licensed. There's a little bit of that type of education training that happens through regulatory requirements. In terms of having robust training opportunities for your staff on an ongoing basis, our industry does not, by and large, provide that. there are conferences and things that our staff can attend and learn a lot from but it's few and far between and it's not enough. At least from our perspective, we had to supplement a lot internally and develop our own programs.
Paul Giannamore: A lot of people reading this were probably like me many years ago saying, “What the heck is lake management?” As I remember it, Kevin, you guys were doing things like aquatic weed and algae control. You were doing invasive species management. I remember a lot of aeration that you guys did as well. I also remember seeing you guys with map lakes. You guys had that aerial late mapping. Can you give us a high-level cliff notes overview of how those sorts of things work like what you guys were typically doing on a day-to-day basis?
Kevin Tucker: One of the other big ones, I'll throw in there because it's a pretty big part of our business in terms of value add services and fisheries management. For those clients who care a lot about having great fishing trophy bass or even clients who want to have a healthy fishery because they are passionate for ecological reasons. That's a big part of it. Mapping is something where you use a GPS and a depth sounder and drive cross-section grids across a lake and you would be correlating a GPS point with a depth point. You then can compile that data and create a three-dimensional model of the lake.
That was done to understand volume. Sedimentation was a big thing for that. You have clients and you have ponds and lakes that have been having an inflow of streams, ditches, pipes, or whatever for years and years. There's a lot of sediment flowing into a lot of these lakes and ponds. A lot of that work was done to understand what the sedimentation on the bottom was like and whether we were getting to a critical mass where you might need to look at dredging in order to get that lake back to where it was or to that pond back to where it was. It could not only be aesthetically valuable but also function properly. I don't know if I'm answering your question.
Paul Giannamore: You are. I do remember some fishery management discussions. When you're talking about your run-of-the-mill, you got like a homeowner's association that's got some sort of a pond or you've got a commercial property that might have a pond. Is that typically vegetation and algae-type management? Is that what you're typically doing at those facilities or ponds?
Kevin Tucker: Of all the services we offer, that's going to be the number one. Probably the backbone of that is also installing and maintaining fountains and aeration systems. Aeration as a principle is used to help prevent algae. It fits into that same algae-invasive weed management issue. In HOAs, commercial golf, and all that, your primary driver are those services. There are people who want some of the other ancillary things for whatever their personal reasons are but that's going to be the fundamental backbone of most services.
Patrick Baldwin: I keep steering outside looking at the algae out here.
Kevin Tucker: I know somebody. I might be able to hook you up.
Paul Giannamore: Kevin, I imagine you're working a lot with David Fisher over at Rentokil.
Kevin Tucker: He retired, believe it or not. I don't know if you've heard that or seen that. He's got a few things he's doing for them still as well but he's effectively retired at this point.
Paul Giannamore: I figured that was happening because Vicki left. I know he likes to be out in the cabin and hunt Vicki's wife. Vicki left Rentokil, not left David. I figured that was probably going to happen.
Kevin Tucker: Time does fly. She's still doing what she was doing. From what I understand, he’s happy and enjoying it. He's had a long and fruitful career. He was looking forward to the next phases. He's still engaged with them and working on some things. Moonlighting, I guess you would say but very much from all accounts excited to be retired and looking forward to it.
Paul Giannamore: How has Rentokil done with the lake management platform since the acquisition?
Kevin Tucker: I stayed on as the CEO for two years post-transaction and continue to run it. I transitioned out on January 1st of 2020. Of those five years, two years I stayed involved. During that time, we did some considerable acquisitions. Since then, one of the things I've helped them with is M&A to a point. I still look at SOLitude as being part of my family in one way or another.
Rentokil, SOLitude, us, or however you want to look at it has continued to do some acquisitions as well. They've grown from where it was. It's grown since I left it but it's certainly grown since we sold it too, for sure. I don't know that they've quite doubled the revenue since then but they've been aggressive in the acquisition space since they acquired u, no doubt, as you've probably seen in pest as well.
Paul Giannamore: The theory upon that acquisition was to take the lake management services that are relevant to some of the customers of Rentokil like HOAs and property management companies that have retention ponds and cross-sell. If they're doing pest control as cross-sell lake management services to those organizations, how does that work out in practice? That's always a theory, cross-sell. It sounds easy. It's difficult.
Kevin Tucker: It is a great theory and I'll protect the names of the innocent and say it's probably not going as well as you might have theorized on the front side.
Paul Giannamore: I get it.
Kevin Tucker: In all seriousness, it certainly does happen. In terms of programmatically happening on a widespread basis across all the overlapping geographies, I would say not nearly as much as you would like to think or hope.
Paul Giannamore: Kevin, I don't sell companies, I sell stories. That's what I sell.
Kevin Tucker: We did a business case on that exact fact and what incremental increase in revenue would be within our existing customer base if we were effective at that. That's confidential and it sends out information so I won't share the specifics but I will tell you, it's a compelling business case that is certainly worth a look. We'll leave it at that.
Patrick Baldwin: In the sales process for lake management, as you're trying to get the business, was it easy to get someone to switch over to you if they already have another provider?
Kevin Tucker: It would probably be a little bit loaded. In your example when they're not doing anything at all and they have a problem, that pitch is not super difficult. It becomes a budgetary decision at that point because the need is there. Our close rate was good on that. I don't have all the numbers come into memory but our close rate was in the 60% to 70% rate, which I thought was good. I don't know what other industries do but it seemed pretty good to me. That included both, people who were not doing it at all and people who already had service.
Honestly, I can't tell you specifically what the numbers broke out between those two. In terms of if they've already had service, if you think about our approach, it was an inbound approach where we were looking to create value for people, educate them, and have them seek us out. In that vein, if you think about someone who's already got another one of our competitors working for them, if they're seeking us out, there's probably already a reason for that.
I would tell you that didn't necessarily make the sale. Because there was an incumbent, it didn't always necessarily make the sale harder because there's probably a reason they were asking us in the first place. The flip of that is there are some property managers who are going to go out and get 2 or 3 bids every year because they have to or every two years because they have to. In that case, probably our success rate is not as high because they're maybe looking to check a box. They're not that interested going through the exploration of whether someone else makes sense.
We never competed on price. If there's anything that I was opposed to in my business, there were a lot of things that I was passionate about but I'd say one of them, if not the number one, we're not going to compete on price. Matter of fact, if we win the job with the highest price, that is the goal. It's not just because we're trying to build people for more money.
We want to provide the absolute best service someone can get but we also want them to pay a fair price for it. That doesn't come for free. We weren't going to get into a bidding war with people. We weren't going to try to lower our price. Our product manager was trying to get the price down. We were like, “Here's our service. Here's why we think it's the best. If you think it's valuable to you, here's what it can cost you.”
Patrick Baldwin: That resonates with me.
Kevin Tucker: One of the things I try to impress on our team, even when people might be tempted to do a price concession, if your relationship with that person is good for reasons that have nothing to do with our price or the specific service, they're not likely going to want to come to talk to you and tell you they're going to cancel you.
That's back to the original thing I was talking about with the relationship. If we are creating a relationship with that customer that is superior to any relationship they have with any other vendor, even if our price is 10% higher, as long as our service is good and that relationship is strong, are they going to want to walk up to you and say, “I'm sorry. I love everything you do but we're firing you.” I don't see that happening often.
Patrick Baldwin: From a business model perspective, did that salesperson continue on as a relationship manager through the lifecycle of the customer or did the technician take over the relationship?
Kevin Tucker: Early in the process, yes. As we grew and we had to think about shared services and creating focus groups around particular roles, the handoff to others became more prevalent over time. Early to late mid-stage of our business, the salesperson was the primary relationship manager. The technician started taking a bigger role and was expected to stay in contact.
The salesperson would parachute in when there were things outside the “paygrade” or understanding of the technicians if they wanted to price for something new. If they had something and they want to talk about a renewal in their contract and things like that, the salesperson was still in there. The technician did evolve over time as the primary relationship manager in terms of the day-to-day.
We had a customer support team in the office that people could call. If they wanted something or needed something quick, that team could help them faster than the salesperson could have anyway. As we grew, we got into a little bit more of an account management model where there were some folks who spent more of their time maintaining current customers and keeping up with their needs versus salespeople who were only dealing with new prospects. It was an evolution over time. It probably followed what you see in a lot of large companies. As they grow in scale, they got to revisit that structure.
Patrick Baldwin: I was wondering what caused that evolution if it was a bottom-line decision or if it was like, “My salespeople need to be freed up to do sales activities.”
Kevin Tucker: It’s that. If you think about our lead gen, back to one of the original things we talked about, we were generating leads at a pace that it became impractical for a salesperson to be able to keep up with all the new leads as well as keep all the existing customers happy. The last thing you want to do is not pay enough attention to a current customer. You wanted to create focus around keeping our current customers happy. That was someone's only job. The salespeople could then focus on prospects. You didn't want either one to suffer. At some point, it became necessary to give focus to each different person.
Patrick Baldwin: I wonder, Kevin. With SOLitude being acquired by Rentokil and then you got surrounded by a bunch of structural pest guys, are there things that you've learned directly with that new relationship or vice versa where they've learned new things from you?
Kevin Tucker: I'll tell you one thing, working in a public corporation is nothing that I would have selected for myself having been an entrepreneur or having built a business from scratch. That said, the two years that I did stick around and work in that environment was a great experience. I learned a lot of things that I probably wouldn't have chosen for myself. Like anything, all the experiences we have in life lead to something good and, if nothing else, more knowledge. I appreciate learning to operate that public company space.
Early on, I don't think they always knew what to do with us. I don't mean that in a negative way. I mean we were completely a new line of business for them. In an interesting way, that was fun and good. If you imagine being purchased by a company of that size and little us, they wanted to learn from us not expecting that they already had it all. There was a good dynamic there.
The flip side of that is that maybe not always understanding our business intuitively meant that sometimes we were a square peg in a round hole. I'm not sure they were always quick to recognize that and maybe adapt or change things to make it work. They maybe were too rigid on some things. There was a give-and-take there. There were some pros and cons to that as well. Even though we were a route-based business and a lot like pest, their thesis was a little bit flawed on the CapEx. We are a little bit more equipment-intensive than they probably anticipated.
Although they had all of our financials and they knew everything, I don't think they, for right or wrong maybe or inadvertently, maybe didn't have a keen enough eye on that. Some of the budgetary things in the early days were a little challenging because our CapEx needs were ultimately met. Getting there was a process that could be painful because it didn't fit what they were expecting.
I wouldn't say there was any issue in terms of being water people and bug people or anything like that. Everyone had a general appreciation for the skills. Everyone understood that we were probably if not the best, certainly one of the best and most talented companies technically in our industry. Likewise, they have an amazing amount of technical knowledge and expertise on their team. There was always mutual respect and all that was good.
There were some nuances or differences in our businesses. On the one hand, we were given some latitude early on until they figured all that out. That was positive. Probably the other thing that I would say that’s different is people. They have an intentional desire to create a great work environment and be an employer of choice as they would call it to where people want to work there and then gravitate to work there.
The difference is their flexibility and making that happen versus what we could do and what we had traditionally done in terms of creating a great culture. I don't know that they always have quite the flexibility. It's the old adage, we're turning the speedboat and they're turning a battleship. Regardless of their desires and intentions, it's tougher for a company of that size working in the public space with shareholder expectations and all these things to make investments at times and things that maybe don't show in the bottom line right away. It will absolutely pay off in the bottom line down the road.
Probably the thing I noticed the most about working together is our focus on the team and the culture and the willingness to maybe invest a little bit more today for a better tomorrow. It was a little harder for them to be able to do some of the same. That wasn't out of desire, that was a constraint that a lot of folks are working under. It's the nature of a public business.
Paul Giannamore: After the acquisition, how tightly was the lake management side coupled with the vector side?
Kevin Tucker: Not at all. Early on, when Jason, Jay, and myself made the decision to bring our businesses together, we did dabble with that a little bit. We explored the opportunity to possibly roll out some mosquito stuff to sell to customers. We expanded and started working in areas that VDA had covered and started training a few of their staff members to build and deliver pond services as we expand those areas. There was some collaboration and crossover during our time on the private side with Jason, Jay, and myself. Once Rentokil was in the mix, I would argue there was somewhere between zero and less than zero overlap between Mosquito and SOLitude.
Patrick Baldwin: Let me do that math real quick. You stayed on as CEO until 2020.
Kevin Tucker: January 1st. Let's call it December 31st of 2021.
Patrick Baldwin: Who filled that position? Was it someone that had lake management experience or someone that came out of Rentokil?
Kevin Tucker: The good thing is SOLitude is loaded with quality, passionate people. They had a lot of different things going for them in that regard. My number two at the time I left would have been Mark at the time. He came from the original business that Jason and Jay had purchased. We had hired after our merger and Jason led this search and did a good job in identifying this candidate. Mychal Manolatos was a gentleman who we hired to run our sales.
Patrick Baldwin: He was from Aramark.
Kevin Tucker: He was with us before the Rentokil deal. He was running our sales and helping us build out our sales for both sides of the business. In probably 2019, if I got my memory right, we did a fairly large acquisition in Florida. I tapped him to continue as the VP of sales but also made a case to have him lead the integration of all of our Florida business with the new acquisition we had made that was sizable. It’s not that he didn't have a day job but he had built a team. He had some regional sales managers under him.
He was looking for a new challenge and I thought he was the right man for the job to do that. Thankfully, he proved me right and did a good job with that integration, which was a big part of our business at the time. We exceeded all of our business cases on the acquisition model and everything with that integration. He did it faster, did it more profitably, and did everything well. He was successful in that.
After I left, the two of them were teed up with Mychal running sales and having his foothold on what we were doing in Florida. At the time. it maybe had moved up to roughly 50% of our business after the acquisition and Mark had been the traditional number two of the business prior to that. You would say they were almost co-leaders under Dave taking on different responsibilities for the period of time after I left.
Ultimately, they ran a process, which included interviewing people outside of the company as well as people inside. When all the dust settled, Mychal Manolatos ended up being selected as a single leader. He is still in that role today and has been promoted. He's now running SOLitude and VDA. When Dave Fisher retired, Mychal essentially moved into that role. He's doing both of them. A new leader for SOLitude has been hired under him.
Paul Giannamore: I remember years ago you guys talking about how Mychal could run that business at some point and here he is running that business.
Kevin Tucker: Mychal is an A-player and Mark is as well. Mychal ending up in that role was not necessarily a negative mark as much as it was a testament to Mychal. They're both capable, qualified, and talented people who I value both professionally and as friends. He's done a good job. He’s been faced with a lot of challenges. Before he was selected as a single leader, they both had to deal with COVID. We all know businesses struggled with that. My timing, you could argue, was fortuitous. I did not leave SOLitude knowing that COVID was coming. That was dumb luck you would say.
Paul Giannamore: Kevin, your political philosophy is similar to mine. You detest politicians on both sides of the aisle. you're also a fellow member of YPO. I finally ended up doing that, Kevin, a few years back largely at the urging of Jason Pananos and Emily Thomas who runs a pest control business here called Arrow. I've had a great time with it. I'm still considered YPO but you're probably YPO Gold or getting close to it. Are you gold yet?
Kevin Tucker: Let's not bring up those. I graduated this 2022. That's not necessarily a highlight of my life, getting into the old boys out of it.
Paul Giannamore: Did they give you like, “Welcome to Gold.”
Kevin Tucker: I didn't get roasted at my last chapter retreat. It was a roasting of all of us graduates. When we turned 50, which I have to admit that I turned 50 this 2022, we do evolve into that. Honestly, I don't necessarily 100% understand it because nothing changes within our chapter. From an international standpoint, they classify you differently. From an on-the-ground standpoint, nothing's changed about my experience.
Paul Giannamore: For some reason, mine says YPO and YPO Gold. I've still got some years before I get Gold but they've classified me nonetheless as Gold.
Kevin Tucker: Maybe they want to allow you to identify whichever way you please.
Paul Giannamore: I like to identify however I please. How active have you been in YPO as of late?
Kevin Tucker: Very. I served on my chapter’s board for probably four years. I participated in a good number of microforms, internationally and nationally. I commiserate with folks, believe it or not, who got some business dealings with some YPO-ers in other parts of the world and other countries as well. They've come up organically over time. I'm engaged. I find the organization to be valuable. There was another organization, Entrepreneurs Organization, which I was in for a good part of my career. YPO came along later.
Both organizations have been impactful. What they do best is to get you thinking on your business and not in your business. I know that's cliche but I do think it's a valuable tool to get you high level and thinking about things that maybe you wouldn't necessarily give yourself time to think about if left to your own devices and also being around a group of people that challenges you to be better. That's an important part of it as well.
Paul Giannamore: for me, it's been great because I travel a ton internationally. If I'm in Izmir, Turkey, Mexico City, or Liechtenstein, I can see who's over there in the local chapter. Of course, almost everyone in there is some sort of a high-power entrepreneur one way or the other. You meet interesting people. They're always friendly when a foreigner comes into town. I do that down here PR. I had a couple that came from Monaco. I showed them around Puerto Rico. It's been a great group.
Kevin Tucker: My college roommate is also in YPO and he was in my local chapter. Three others from his forum have all moved to Puerto Rico. They're now in the Puerto Rico chapter as well. You may come across some of them.
Patrick Baldwin: Kevin is awesome. Thanks again for joining us in The Boardroom. I appreciate it. I learned a lot. This was helpful.
Kevin Tucker: My pleasure. Thank you for having me.
Paul Giannamore: Kevin, great to see you again. You look great. I'm glad to hear you're doing well over there. Thank you for joining us.
Kevin Tucker: If I’m in Puerto Rico, I'll come to look you up.
Paul Giannamore: It sounds like you might be.
Paul Giannamore: I’d love to know what Seth knew about lake management and what he may or may not have learned.
Seth Garber: Back when I had my business, we used to get approached on lake management agreements fairly regularly. Being out here in Florida and having a portfolio that was primarily large commercial management companies, it was exactly what Kevin had talked about. He said that's the target demographic. We had huge HOAs and that type of stuff. It was a common discussion down here. In our business, we looked at it and there were some reasons why we never got into it. It was an interesting business overall. Looking back and after hearing him talk about it and hearing how big his company got, it makes me wish that I probably did get into it. It was a pretty interesting business.
Patrick Baldwin: Why didn't you get into it?
Seth Garber: I'll tell you why. When we were building the company, we were building so fast that we had to stay focused on what we were doing. There were a couple of key components that I thought about. When I started to meet with the people who were doing it, they were small companies. Ultimately, they are incredibly fragmented. It was always a guy and his boat. It was a guy in his boat who was doing the job and I would watch him do the service.
They’d pull the Jon boat into the lake and they would go around there and they'd clean it up. They’d clean it up and put chemicals into it. I watched it a few times. I remember going back and talking to my partners. The first thing I envisioned and why we ended up not doing anything with lake management is I said, “I have given all of my technicians an opportunity to go fishing in the middle of the day every single day.” It was funny but that's what I thought about.
I remember having a discussion about a portfolio that we had. They had these six large industrial parks\ and then one big office park with lots of lakes. I remember talking to them about it. They had one man with a boat that would go around and do their whole portfolio. I remember thinking about it and I went, “I watched this guy do it. What if my technician didn't end up making it to work who was responsible for it? What if we didn't scale this?” We only had one guy doing it. I said, “All of a sudden, either myself or my head of operations would have to go get in that boat.” Down in Florida, everything that can eat you and kill you lives in these lakes. I remember thinking about it.
The third reason was it is complicated. Doing the cleanup of these lily pads and some of the stuff these guys do, you have to know what you're doing. Those are the three reasons. Envisioning myself getting into a boat going out into the middle of a lake and having to deal with some of the stuff we have down here in Florida was probably the bigger driver. It's a complicated business too. That's what we thought about.
Paul Giannamore: From 2012 to 2017 when they ultimately sold that business, that business was growing top line every single year in excess of 40%. They did do some acquisitions so it wasn't entirely organic. They were growing in the mid to high teens every year organically. That was on the mosquito as well as the lake management side. Organically, not counting the acquisitions.
Seth Garber: I did find it interesting listening to the episode where he was talking about the way they handled lead management. It was incredibly sophisticated. It sounded like they operated like the best-diversified services companies in the nation. Ultimately, the way he described is, arguably, some of the best technology companies with sales infrastructure in the country as well.
I found it also interesting how they talked about databasing future opportunities in the episode where he had talked about the fact that they had this incredible online presence and they were databasing all the leads from different markets. When they were ready to service the market, they utilized those as opportunities, which was incredibly expensive to do but incredibly forward-thinking.
Paul Giannamore: Another thing we didn't talk about in the interview is SOLitude’s offices in Virginia Beach were phenomenally nice. Kevin bought this building and outfitted it. It was probably one of the nicest offices that I have ever been to.
Seth Garber: It seems incredibly forward-thinking because that was from 2012 to 2016.
Paul Giannamore: I would have been in the mid-teens.
Seth Garber: Thinking about the people and the experience of coming into the office, it's such a new-age way of thinking that we see a lot of today. It's pretty neat.
Patrick Baldwin: Does that model of hiring life science degrees for lake management work in structural pest control? I've thought about it since our conversation. Going back to the whole week of the Enterprise Rent-A-Car conversation, they target that four-year college degree. Can you do that with a pest control company and have your technicians and salesmen? You have the whole management trainee and here's your future career path and spell it out for him. Could you target college grads?
Paul Giannamore: I got to be honest with you, Patrick. If we're all honest with ourselves, think about the tens of millions of young Americans that go away to a four-year university every year. More than half of them are total morons. They go there and they don't learn shit. It's a total waste of time and money for four years.
I always think about it. Maybe I look at it differently. I don't care about formal education. I don't care about the letters that people have behind their names whatsoever. Of course, I started in bulge bracket investment banking. You pretty much had to go to an Ivy League school to get into that. I looked around. For me, even at Cornell, it wasn't the school. Do you know why? Quality schools sometimes produce results is not necessarily because of the faculty but because of the other students there.
Outside of that, most of it is a total frickin waste of time. These kids end up in so much debt. Quite frankly, I am a big proponent of apprenticeships, trade schools, going to the library, spending some time reading, and teaching yourself things. Quit dicking around playing video games and watching Netflix for eight hours straight. I know I went on a little bit of a tirade.
Seth Garber: One thing I'll tell you is that we do see this a lot in the wildlife sector. For companies that are wildlife-specific companies, we do see a big focus on pulling the students out that are from forestry management and wildlife biology and moving them into wildlife companies as technicians and things like that. The best companies do that well.
To Paul's point, I'm going to rant. The same people that are going to these schools and they're learning forestry, could they go work with the forestry department as an intern or as an apprentice and learn more? Probably like anything else. We do see it a lot on that side. In lake management, you probably could see the same thing.
Paul Giannamore: It's the way society is structured now versus a few 100 years ago where it's almost table stakes. At the end of the day, the early part of your career is all about learning. The extreme majority of the opportunities won't come your way unless you have that stamp. “I went and did this four-year degree.” With kids, the better the pedigree of the school, the more opportunities they'll have.
At the end of the day, I run into a lot of kids in their early 20s that have four-year degrees and I talked to them, I'm like, “You wasted four years and a lot of money because you're a moron.” I'm starting to maybe sound like my father and that's not good but it's true. Readers out there, help me. Everyone talks to these youngsters and you're like, “Are you kidding me? You went to school? What the hell are they doing in school? You're an idiot.”
Patrick Baldwin: All of them?
Paul Giannamore: Of course, not all of them. If you talk to somebody in our grandparent’s generation, people that grew up in the early part of the 20th century, a small minority of people around the world went to university. Think about it. I don't know what the statistic is but I would imagine if you were born in the United States in 1940, I would assume less than 20% of adults back then have a four-year university degree. Now you end up with, I'm going to make the number up, 80% or 70% of these kids have four-year degrees. Quite frankly, I don't see how that's improved much. Let’s be honest.
Patrick Baldwin: Are you telling me that you would not start a pest control company and the minimum requirement is a four-year degree?
Paul Giannamore: If I'm building a pest control company, I don't need these guys writing like Shakespeare. These are guys who are going to go out and solve problems in the elements. If I'm going to build a pest control business, I need to have a technician that has a little bit of empathy with the customer who's got a great frickin attitude, a good character, not going to steal from a house, and not going to stab somebody in the back. At the end of the day, I need somebody who's got the balls to go out and do the work.
Seth Garber: I can tell you this. When I had my business, I had two guys on my staff who both were MBAs. One undergraduate was in sustainability and the other guy's undergraduate was in some type of engineering and they both went did an MBA. They were the two worst technicians I've ever had. I hope they're reading because they irritated me so badly. I fired both of them.
I don't know if I could create a correlation but we're running these companies, we’re doing well and killing it. These guys are always in there with their ideas that didn't make any practical sense. They were terrible with the customers. They told the customers how smart they were constantly. Honestly, the greatest moment of my life is when I caught one of them doing something that he shouldn't have done and I got to fire him.
I would take the guys without degrees that care about the customers and that want to work hard. They want to take care of people's problems. They want to do the best they can every single day for the company and their family. I would take those guys all day long. I probably am going to get some hate mail on that one.
Patrick Baldwin: I was thinking all the way back to episode 108 when you were hiring for life. That's a new concept.
Seth Garber: Over the last twelve years, it changed a little bit. I've become a little bit softer and nicer.
Paul Giannamore: I will say though, Seth. Here's one thing. You've got Pest Daily going on. You guys are doing a variety of training across the spectrum. You've got a pest control business, an HVAC, or any resi or commercial service business in the United States or elsewhere. Where I see some issues is that it would be great for these businesses if everyone, at least at the management level but even folks in the office, had financial literacy. If these folks were trained to understand, what is a P&L? What is a balance sheet? How is it that we here as a business create value for our customers? How do we extract some of that value for ourselves? What does it look like on numbers on a page?
It’s not necessarily run an open book with the people, although you can certainly do that. In that specific training, there are a lot of things that are applicable. There's technology training. There are software applications on which your employees should be trained. There's a lot of specific training that can help somebody in their day-to-day life. That's valuable. Unfortunately, you don't get a lot of that. You do from a four-year university but you also get a lot of other nonsense.
Seth Garber: I couldn't agree with you more. My degree is in international finance. I would tell you this, I didn't have any idea how to run a business or how to manage my personal finances from what I learned in college. I had somebody else who had to teach that to me. I agree with you 100%. I couldn't tell you how many discussions we have with CEOs on a regular basis who are using the wrong financial people.
They don't have an understanding of how they're handling their CPA work or all these things. How many don't understand the fact that your CPAs should be working with your financial team in order to get you the best benefit? It's a constant conversation and that ultimately builds wealth for a lot of people. I couldn't agree with you more, Paul.
Patrick Baldwin: Why is pest control so different than that? I look at the other mechanical trades, they're putting themselves through some kind of apprentice school and training and certification. They're investing in their own tools. Once they're on the job, those are their tools. Pest control is not. It's like, “I'm going to hire you. I'm going to train you. I'm going to give you all the tools and equipment.” It's different.
Paul Giannamore: It's because some of the other industries have turned into guilds where you have concerted activity unions, for example. At the end of the day, WHY do you set up a union? A union restricts the supply of labor. You've got, on the one hand, concerted activity amongst many people. On the other hand, you have the regulatory regime, which restricts.
Think about the fact that in order to be like a barber in most states, in the United States, or maybe all states, you have to have a license. How ridiculous is that? You got to have a license to cut hair. You've got this massive regulatory regime. In a lot of these other industries, when you think about electrical workers, plumbing, and all these other various trades, that stuff, Patrick, is largely related to the union. If you think about it, there are trade schools for things like HVAC, which is a little bit more complicated than pest control.
I know this for an absolute fact because as you may recall me bitching down here in Puerto Rico. I've had the AC guy come to my house ten times. He came in and every single time, he's like, “Finally, I figured it out. This is the problem.” He changed a part and then leave and come back and quit work. Finally, on the last day, he's like, “I figured it out. This is it.” I'm like, “You've changed everything else in this machine. This is the only thing that's left. When you change this, it has to work.” It is more complicated, I guess.
Patrick Baldwin: Is there a training school for pest control that I don't know of?
Seth Garber: There is.
Patrick Baldwin: It’s called Pest Daily.
Seth Garber: No. There are two that stand out. Purdue University is an incredible school. The best one in the nation is PMU, Pest Management University, down here in Florida. The reality is that those aren't requirements to become an applicator to run an operation. You don't have to go to school. These places are amazing. PMU is amazing.
Paul Giannamore: Were you talking about this at Pest World, about setting up pest control trades? Somebody came to me and I can't remember who it was. Was it any of you guys?
Seth Garber: It wasn't us but the guys that run PMU were at our event and they may have been talking about building it into even a more extensive way.
Paul Giannamore: Maybe that's what it was,
Paul Giannamore: Is that where you could hire someone and then send them off to PMU or Purdue and they come back in a few weeks ready to go?
Seth Garber: That's what we encourage. We encourage a lot of our clients to do that on the consulting side. We challenge them to have the budget to be able to do that and send them down here to Florida and send them to the school because it does speed people up for pest control, lawn, or termite. They're doing a remarkable job. That gives them practical training. They have that termite house. They've shown them how to put a proper application down. They talked about the products. We have our clients do it a lot because we don't do that type of training so we have them do it a lot.
Patrick Baldwin: That's a lot of investment. I’m thinking about vetting and how to vet them before you invest that money because they come back from training and then, all of a sudden, they decide that pest control is not for them.
Seth Garber: If you picked any outside of flights, I'll make up a number, it’s probably $1,500. With the course, hotels, and travel, it's probably about $1,500 bucks an employee.
Patrick Baldwin: I wonder if there's a way to help cover the cost or where they split the cost. It’s almost like a small student loan, “You're going to cover the cost and then over the next twelve months, I'm going to reimburse you for that.”
Seth Garber: Go through the course on your own and then provide more value and maybe get a little bit higher compensation because of it. That'd be interesting too. I'll tell you some other things I thought were interesting with lake management because we did go through quite a few opportunities where we were approached with it. The one thing where I saw lake management would come up a lot would be with BOMA, which is one of the associations. It was a pretty common talk amongst these large accounts on who is the lake management guy.
I'll tell you this, there's always only one. In all instances, there's always only one. He was able to demand the right price, which Kevin talked about. There was the guy and it was interesting. Looking back, I did like the business. I didn't like it for us. The other part I found interesting about it was the fact that they could do all this fountain management and pumps.
Rentokil, at the time, when we were running our business at Ambius, I don't know how they operated and if they still operate, but Ambius would do all the plants and they would do the interior fountains and stuff like that. A lot of these lake management companies were doing the interior fountains and all kinds of stuff. We did do some fountain work.
Patrick Baldwin: Kevin, it was great having you on The Boardroom. This is a wonderful chat. I hope you all have a great week. See you, guys.
Paul Giannamore: See you, Patrick.
Seth Garber: See you, guys.
Dylan Seals: I want to remind you right now to go ahead and subscribe to The Boardroom Buzz. We have got some incredible episodes coming up that you're not going to want to miss. Also, if you've enjoyed the podcast, please go to the Apple Podcast app and leave us a short review. We'd love to hear from you. Thanks so much again for reading and we'll see you next episode.
Jay Davis and Jason Panonos – past episode
SOLitude Lake Management
Apple Podcast – The Boardroom Buzz