Patrick Baldwin: Paul, it’s 2022. I know that last year we had a big Supernova event but the market has definitely changed. This year, we've got bubble trouble.
Paul Giannamore: Patrick, we are now in an era of Fed tightening, which is going to have a dramatic impact on asset prices and quite frankly, the value of your pest control business. Over the last couple of years, we've done Aftermath, Unhinged, and Supernova was by far my favorite event. If you haven't watched that yet, you should go to our Boardroom Buzz YouTube channel, which is Youtube.com/TheBoardroomBuzz. Type in Supernova and you'll find it.
It's a great way to get some historical context in preparation for Bubble Trouble, which we're going to be filming and releasing live in May 2022. It's going to be a live event. We're not going to record it. If you sign up, put your name and email in there, we’ll get out an invite, you'll get reminders, and you’ll know exactly when it's going to be and you’ll have an opportunity to ask us questions. It'll be the most important event that we've ever put on. I don’t think there's any way that you can miss this if you're thinking about selling your business in the coming months.
Patrick Baldwin: Let’s do it.
Patrick Baldwin: Paul, you welcomed me to San Juan. I want to welcome Byron Gifford with us.
Paul Giannamore: Welcome, Byron.
Byron Gifford: It’s great to be here. It’s been fun. Thanks for having me.
Patrick Baldwin: Welcome to the San Juan Boardroom. You sold a couple of branches of Evergreen.
Byron Gifford: It was in Denver and Colorado Springs.
Patrick Baldwin: I've heard you’re referred to as The Great Granddaddy of Door-to-Door.
Paul Giannamore: Granddaddy was before. Now it's Great.
Patrick Baldwin: You were mentioning some names like Lenny and McKay, the Borgs. Jared Borg was here. Eclipse was back in the day. I didn't realize all the names that were around.
Byron Gifford: I would say a great grandfather because prior to Eclipse was SalesNet. I got back from my LDS mission as you guys are probably familiar with.
Paul Giannamore: Where did you go, by the way?
Byron Gifford: I went to Ventura, California.
Patrick Baldwin: It’s tough out there.
Byron Gifford: I was up north. I was in Bakersfield. It's 115 degrees. There are oil rigs everywhere. The air pollution was terrible but I loved it. It's a great area.
Paul Giannamore: I offered to join the church if they would send me to Bangkok. They did not. It’s the reason why you won't see me at the local ward.
Byron Gifford: That's funny. After my mission, I had one of my roommates. I went to BYU Idaho. He’s called Rick back then. He was like, “I made $80,0000 last summer and another guy earned $10,000 or $12,000.” I'm like, “What did you guys do?” He was like, “We knocked doors. We sold pest control.” I'm like, “I can knock doors. I've been on a mission.”
I went to a meeting and there was pizza there. They had one of those slides where you clicked it. It wasn't even a PowerPoint or projector at that point. They’re shooting on the screen. You click and it goes to the next slide. That's old school. I went to that meeting and I'm like, “I will kill this. I was born for this.” I remember going to my buddy next to me that I brought to the meeting and I'm like, “I am going to make a career out of this.” I knew right then, I'm like, “I will kill this.” I went out and killed it. I did about 400 that first summer and then I kept doing it after that.
Paul Giannamore: Help us understand a little bit. There's a lot of history here. If you look around the market now, there are door-to-door companies everywhere. Go all the way back to the era of SalesNet. SalesNet was a vendor partner of Terminix way back in the day. This was in the ‘90s. Does that sound right?
Byron Gifford: Yeah. I'm not sure exactly when SalesNet started. My first summer was 1996 with SalesNet doing Terminix.
Paul Giannamore: Back in the ‘90s, Terminix would contract out to SalesNet. SalesNet would hire guys like you. You go knock on doors and put on accounts. Was Lenny part of SalesNet? Who was?
Byron Gifford: Kevin Oleson. In my first year there, he was the top rep. He did five-something or whatever that first summer. He had accolades. I’m trying to remember his brother-in-law. They started Preventive. He was there that year as well. That was long enough ago to where a lot of the people in the industry didn't really come from SalesNet.
I sold in 1996 and 1997. Back then, there wasn't a direct deposit for checks and payments. I remember going to the mailbox to get the check that I was supposed to get from SalesNet because I had sold all summer. I did over 521 accounts that summer. I'm ready for my $60,000 back end. I get the envelope and I'm like, “Sweet.” I rip it open and there's a $2,000 check. I'm like, “What is going on?” At that point, they were going through bankruptcy. I called Scott Harmon and talked to him. He's like, “I filed this chapter.”
Paul Giannamore: That was it. A lot of guys like you got stiffed.
Byron Gifford: We all got stiffed. I made a commitment in my second year of selling because I did 400 in my first year and I'm like, “I'm going to up my game. I'm going to work even harder. I'm going to train even harder. I'm going to run to every door. I will not walk doors.” I ran door to door all summer. I would lose a ton of weight. I was engaged. I'm like, “I'm in this.” To get that check was demoralizing. After I licked my wounds, after about a month, I knew about Eclipse. I looked in the phonebook, back then that’s what it was. I called from my landline phone. I talked to Brent Bingham. He picked up when I called the office and said, “I want to come in and talk to you.”
Paul Giannamore: Let's talk a little bit about Eclipse. What was Eclipse?
Byron Gifford: The same thing but much better. We had a contract in Eclipse where I eventually became an owner. We had a contract with Orkin. We market Orkin Pest Control. We do it nationwide. We do 30,000 to 40,000-plus accounts every summer. A lot of the individuals in the industry came from Eclipse. That tells you how good Eclipse was. That was the foundation of this sharp generation you're seeing.
Paul Giannamore: When you think about Eclipse putting on 30,000 to 40,000 accounts per annum with Orkin, what geographies? All over the country?
Byron Gifford: All over the country. We'd be on the East Coast and West Coast. Back then, you didn't want to go to the non-traditional market like Denver or Seattle, Washington. We said, “We're going to do it. We'll figure out how to make it happen.” Door to door didn't go there. California was the main one back in the day. It started trickling into other areas as things got more competitive like Florida.
We dabbled in Denver. That first summer we were there, there was still snow on the ground. We're like, “We're going to adapt and we're going to sell,” and we did. It went well. We had a good infrastructure. We had a system and I was part of it. A lot of it, I walked into. Some, I helped with. Either way, we had a good system as far as training, managing, and promoting. No matter what, we didn’t let things slow us down. You see them all over the place. You and I've been rattling off but they're out in the industry and they came from Eclipse.
Paul Giannamore: What was the door-to-door industry like back in the early 2000s? All of you granddaddies are all working for Eclipse. Was there much competition on the doors?
Byron Gifford: No.
Paul Giannamore: When you were at Eclipse, do you even remember if there were any other standalone door-to-door companies out there doing that?
Byron Gifford: There were. After SalesNet, I went over to Eclipse. A little history, the summer after I sold, I went out and said, “I'm going to recruit a ton of guys.” They gave me a little $2 override for every guy I brought in. I thought that was awesome. I went door to door at apartments and said, “I'm going to recruit people.” I would take pay stubs with me because that's how it was. I had a three-ring binder and I paper-hole punched them, put it in there, and I had a thick. I'd go and recruit people, “This is what I made. Come to a meeting and have a pizza.” I recruited 65 guys that year.
When I picked up the phone and I talked to Brent, I said, “Last year, I recruited 65. I'd like to help you with recruiting.” You could tell that he was floored. He verified who I was. They put me in charge of recruiting. I understood the recruiting world well and as far as who the players were at the time. There were only about 3 or 4 players. Preventive came onto the scene there in the late 1990s. That was not a large company like Orkin or Terminix who were internal and holding on to their accounts. They started to bloom up. That's the first one I can think of but then they started to creep up quite a bit until we are where we're at today. There was no competition like there is now.
Paul Giannamore: How long did you stick around at Eclipse?
Byron Gifford: 1998 was my first summer. I went out, recruited, and then sold. I came on as an owner with Eclipse right after I graduated from BYU in 2000. We were done in 2008. I was an owner there. I was there for a total of roughly eleven years.
Paul Giannamore: Nowadays, a lot of people don't think about Orkin having ever gone out and done extensive door-to-door sales. In recent years, they might put on $1 million here or there in recurring revenue. Back in the early 2000s, it was a significant revenue source for these guys.
Byron Gifford: Orkin is unique. My vibe back then whether it was true or not, it’s my perception having been in meetings with them and talking to them somewhat, they were interested in the growth as long as it met the parameters of what they could afford in their minds. They're saying, “If we're going to pay 48% for our internal cells, that's it. We're going to pay you guys and we won't pay a dime more.”
Because of the competition and all these companies starting up, I got to the point where it wasn't going to work with Orkin anymore. That's why we started Pointe Pest Control in 2005. It's because we had to out of necessity. We knew if we didn't do that, it was not going to live with Orkin. We were not making money. It was more of a holding pot.
Paul Giannamore: What I understand talking to guys like you over the years is that as Eclipse matured, you had rising costs and higher sales commissions. On the flip side, Orkin began to tighten down the screws as to what they were going to pay third-party vendors to bring in door-to-door sales. At some point, it didn't make financial sense for either partner to continue.
Byron Gifford: They were good. They did what they called the retention bonus where, a year later, we would get paid some money based on the retention to the accounts. We sold good accounts so we always qualified for that but that's all we ended up making. We got to the point where we love this relationship with Orkin. It was a great avenue for us. We don't know how to service homes. As far as pest control, it can't be that complicated. That's when we opened up a few of the Pointe branches and then we opened it up for an ownership scenario for our guys at that point to go and start.
Paul Giannamore: When you were out doing door to door for Orkin, were you wearing Orkin shirts?
Byron Gifford: Yeah.
Paul Giannamore: You look like an Orkin guy.
Byron Gifford: I like it when we’ve done with Terminix.
Paul Giannamore: Goofy ties and white shirt.
Byron Gifford: With a name badge. It feels the same. We put an ad in the BYU paper one time that says, “Come serve another mission.” We got some blowback. It was wild. Somebody called, “That's so mean and rude to missionaries.” I'm like, “It’s an inside joke. Chill out.” The uniforms we wore would have been Orkin. It's the same thing now. When we send our guys out now, they're wearing Evergreen, even though we recruited through NineFold.
Paul Giannamore: In the mid-2000s, things started to wind down. Now you've got somewhat of the fraternity of the OGs of door-to-door and pest control. You and some of your partners went off and found Pointe. How did that work?
Byron Gifford: Jason Craigen was an owner at Eclipse and a good friend of mine. He and I were realizing, “This isn't going to work. We're not going to make money doing this marketing as fun as it is.” It was fun because you go everywhere in the country and hit these little random spots in the country. We made some money but we're like, “We have to figure out pest control. We have to start our own.”
We've finally convinced Brent and Miles to start a pest control. Craigen and I kept coming around with names in which we’d call it. We narrowed it down to two different names, Meridian Pest Control or Pointe. Little did we know, people on the doors when you talk to them, they’d be like, “Point-e?” It has the E at the end.
We decided to go with Pointe and then we said, “This is the name, great. Let's do a logo.” Jason was a tech guru and he said, “I'm going to bid this.” He sent it out to some bidding website and a whole bunch of companies or designers said, “I'm going to take a crack at it.” We paid $350. “Here's the amount, the reward for whoever wins.” I was shocked at how much work guys put into it for $350. That's how we got the Pointe logo and design. Everything that you see today was from some dude in UCreate or whatever.
Paul Giannamore: Pointe gets put together. How many offices were there? Where were you located? What was going on?
Byron Gifford: Our main office is right in Provo. It’s right next to BYU, up the road. We started in Chicago that year. We then started up in the Tri-Cities area with Borg. Kyle and Jared Borg did Chicago as you know. In 2008, we opened up in Vegas. In Philadelphia, we opened up one as well up in that area. We did all of our financing with Pointe. Zions Bank would finance us. They were doing $0.45 on the dollar. We're like, “Sweet.” Every account we bring on, all this revenue, we can leverage it, finance it, and continue to grow.
In 2008, as the recession hit it, they said, “We need all that back. All your loans are due.” We had to sell to Terminix. We had Kyle, Jacob, and Jared. We had them all set up to where we would get some much up the top to manage operations for their branches and that sort of thing. With us selling all of our corporate branch and Pointe locations and then we were done with Orkin and there was no money at that point, we went our ways and Pointe kept going. That's how Pointe started. You see the success of the Pointe guys. Their foundation was with Eclipse. Those are sharp individuals who came from a well-built platform there at Eclipse. It's a testament to how well things ran there.
Patrick Baldwin: It's crazy to connect the dots, SalesNet, Eclipse, and Pointe. It sounds like the fall of Pointe or breaking it off was the recession and calling the no. What did you do after that?
Byron Gifford: At that point, I was like, “With this whole recession, do I want to start a branch right now? Do I want to do pest control? We had networks of guys. I had quite a few individuals that we had been marketing in Orkin, plus we had our own Pointe on branches.” At that point, it’s sold so we have these reps. I’m like, “Let's see what's going on there.”
I jumped into the telecommunications world as far as the sell-side. That's where you go and you knock on doors for bundling of phone, TV, and internet. It was good for a short amount of time because you get a list of customers. You'd see what they have and that you can re-bundle them and give them a better rate.
I was recruiting not outside of the Wasatch area in Utah where there were a lot of hubs for recruiting. We were going out to areas where AT&T or Verizon was at. We were selling these bundles. Frontier Communications was another one. We recruit there locally. I'd fly out, train a group of guys, we'd go door to door, and then I’ll manage them. Once that area dried up, I was done. It's a fickle industry. I did that for about 1.5 years.
At that point, I said, “What am I going to do? Do I still want to jump back into pest control?” I'm not sure if you're familiar with the AMP alarms. I decided to go there for a year and help them with recruiting. That's my forte back in the day. I helped them with recruiting for about a year. There were two old Eclipse individuals that I had hired and worked with. I was one of the owners, one was a manager, and one was a rep.
After we disbanded in 2008, Dan Stevens and Adam Allred had been doing garbage on the side, which is a whole separate, unique, and weird industry. I called them up in 2011 and said, “We need to partner up. We need to do pest control. We need to get after this.” They sold their garbage company out in Philadelphia. They moved back to Utah.
At that point, we started working together, ramping up, and getting going. After 2008, it was crazy. We had to sell our Pointe branches. We made a little bit of money but not much. Because of the direction I went, I lost all my networks of guys and all these sharp individuals that you hear about. I had to start from scratch. It was crazy coming back into the industry.
Patrick Baldwin: Evergreen was born in 2011.
Byron Gifford: When we got together, we worked with Terminix. We did some marketing with Terminix to raise some capital. I was out there running doors. I'm like, “I got to get after this again.” I'm slapping down $100, $150 a month, and paying my bills with that money. We're saving some money to start some branches. We did the marketing for 2012 and 2013. We started in Seattle in 2014 and then in Portland the next year in 2015. We have those two branches. We've sold them since. That's where we started. In Seattle, it was Evergreen. In Portland, it was Greenway.
Patrick Baldwin: In the past, you were the one knocking doors. Have you ever not knocked doors? Have you ever been on a door to door?
Byron Gifford: I don't do it now. I oversee our whole company. To some degree, I focus on the operations and I help on the sell-side because that's where I'm born from and that's what I understand well. I'm good at it. In particular, the recruiting side. I oversee all of our company. When we were ramping up, I was flying everywhere, I'm knocking doors, I'm training, and I'm going crazy. I’m loving it, by the way. I was eating it up. I'm having a good old time. I realized, “I can't continue at this pace and still manage the business.”
I decided to come back to Utah and not travel anymore. I live in Utah but stay there and not travel. I focus on the nuts and bolts of the company and how we can operate things much more efficiently and be better. Once I did that, it was amazing. Our numbers started going nuts. It was awesome within our Evergreen and Greenway branches where things were running much more efficiently. We were making a lot more money. I'm like, “I can do this without knocking and going crazy doing all this stuff. This is awesome.”
Patrick Baldwin: You probably have the managers call and say, “Don't let Byron come to the branch. Give them Utah.” There's a physical thing here. You had a car accident. You had Lyme disease from knocking doors.
Byron Gifford: Yeah.
Paul Giannamore: I'm guessing it wasn't drinky-drinky and swervy-swervy.
Patrick Baldwin: It was Lyme disease.
Byron Gifford: In 2014, we did trash as well marketing on the side, which not a lot of people know about. We had a contract with a trash company, Winters Brothers, up in Danbury, Connecticut. I'm knocking doors with a rep doing some training for waste management. We contracted with them to sell trash services to homeowners. That's a unique and weird little niche that we're in.
I'm training this rep and I run doors. That's what I train my guys to do. I'm like, “I'm going to run.” They're like, “Who’s this goofball running doors?” I'm running indoors. I'm going crazy. I’m loving it. I got this rep following me that I'm training. I get this thought, “Don't cross this yard. There are ticks.” I'm like, “I'm not saving time. We're knocking doors.” I crossed through the yard. After that trip, about a week later, I found out I had a tick and it was burrowed in my leg. I got Lyme disease from that and every other complication that comes from that.
Paul Giannamore: Out of curiosity, what complications come from Lyme disease?
Byron Gifford: What I do know from chatting with the doctors, it attacks where your body's weak. It's a terrible disease. There's no question about it. It says, “Where's your body weak?” In my case, my joints were getting beat up pretty good from everything I'd been doing, my traveling and running doors for as long as I had. It attacked my spine and all my joints. After that trip, I got a fever. I saw the tick and I'm like, “I got to go to the doctor.” I went to the doctor and he said, “Let’s run some tests.”
Paul Giannamore: Did you have that little ring around?
Byron Gifford: I didn't get the ring so I'm like, “Maybe I'm okay.” I did get a fever and I wasn't feeling so good. I went to the doctor and he said, “Let's run some tests.” We ran it twice and came back negative. I'm like, “Awesome. I'm good.” I'm still trying to go crazy with work and traveling. I'm like, “I'm in an immense amount of pain.” My joints are swelling up. My elbow got to the size of a softball. My lower back would be in massive pain. I wasn’t feeling good. I'm like, “What is going on?” I'd go to doctors and they're like, “There's nothing wrong with you. It’s in your head.” I'm like, “I'm in pain. This is crazy.”
Finally, I said, “I'm going to a natural doctor. You guys don't know what's going on.” When I talked to him, he goes, “There are roughly about 43 strands of Lyme.” Typically, the doctors will only run a test that tests if you have two of the strands. He ran and it came back positive so I had Lyme that whole time. I had treatments for Lyme. It slowed me down because I can't travel as much. I want to be around for treatment and that sort of thing.
Paul Giannamore: I had read once that Lyme disease is one of the most misdiagnosed pathogens for humans. You constantly hear stories like, “I was a wreck for a year. I couldn't figure it out. I went to every different doctor. All of a sudden, finally I figured out it was Lyme.” I don’t want to go too deep into the Lyme but it's germane to this industry. This is what we do. We protect people from this stuff. You have Lyme disease. I know you're stuck with it for good but there are ways to treat it.
Byron Gifford: In the States, as far as how we can treat with Western medicine, in my opinion, it's a little bit limited. As I was going around, I probably went to 200 different providers trying to figure out what the crap to do. Finally, I did my research and nothing worked. I kept hearing about this place in Tijuana. I’m like, “Whatever.” After I hear about it enough times, I’m like, “I'm going to go.” People would say, “This place works.”
Paul Giannamore: I heard about a place in Tijuana once but it wasn't for Lyme disease.
Byron Gifford: There are a lot of places in Tijuana.
Paul Giannamore: I did go there.
Byron Gifford: Every three months, they do a treatment. They're pumping your body full of nutrients and getting you to naturally fight off this disease and then they'll use stem cells. They'll pepper up my back and my joints that got beat up. It's been working. They do a lot of different things but one thing has been pretty cool.
The first time I went there, they do bloodwork before you go but then you go and meet with the doctor there and he'll prick your finger and say, “Let's look under a microscope at what's going on with your blood. From that, I can see a lot.” He pricks it, puts it on the plate, and puts it on a microscope. He's looking at it. I see it because it's shown up on a big screen TV as well. He says, “Everything looks good. Your cells look awesome. Now I'm going to go to where it would show if you have Lyme.” He clicks over that light and they are everywhere. These nasty little things are floating all over. It was a little prick.
Paul Giannamore: A bunch of little Francos in your blood.
Byron Gifford: It was rough. I'm like, “These are in me.” That was the first time. I did a whole weed treatment. I came back three months later and pricked it and it went down. There were some floating around and swimming and feeding on my cells. It's gross. I looked at it and I'm like, “Sweet. There's about half.”
It was my third time. I went and they pricked it and they didn't find any. He's like, “This doesn't mean you don't have any. It means your body is learning how to fight it and keep it at bay.” It's one of those deals where if you find the right group of people, it can be treated. I feel good right now. I need to get my joints to heal back from the damage that occurred. Other than that, I'm rocking and rolling. I’m feeling extremely good. You learn from these things.
Paul Giannamore: Don't go to Connecticut.
Byron Gifford: Come to find out, I jumped online after that trip and I googled Lyme disease in the US.
Paul Giannamore: It’s the Northeast.
Byron Gifford: It's dotted right there, Danbury, Connecticut.
Paul Giannamore: Maine, Massachusetts, and the whole area.
Patrick Baldwin: Speaking of hitching a ride, are you going to hitch a ride to Tijuana? You can go and do your mission. It's not too late.
Byron Gifford: You have these things. You look at them and say, “That sucks. It's hell.” You learn from it. You grow and overcome and keep going. It's one of those deals where you can't give up. You’ve got to keep fighting. In the midst of it, I learned, “Not only can I overcome this crap mentally and physically overcome this horrific thing that's occurred but now I have an immense amount of empathy for other people.” You learn how to focus. In my case, I used my brain to get things done. Now with the legs and the body, I couldn't do what I used to do.
Paul Giannamore: It pulled you off the doors.
Byron Gifford: I was forced to. Instead of leading out in the field, which is awesome, now I can come back and I can lead and I can see what's going on and we can run things. As a result of that, in a lot of ways, it's been a blessing. It’s not just as far as, “Can you overcome challenges?” It's been a blessing. How can you run your business without you doing that? It ran 1,000 times better.
In my opinion, we do things that a lot of companies don't do that have benefited us and allowed us to be a profitable company that's growing and being successful. Amongst challenges, it’s important to see, what's the good of this? How can you become better and learn to overcome it? Instead of being upset, frustrated, and in the gutter with it all, you learn how to rise, overcome, and stay positive. It's not easy but it can happen.
Paul Giannamore: Byron, you talked about the fact that you were in other home services and businesses on the doors, which came back to pest. What is it about whether it's telecom, solar, or anything else you can sell on the doors versus pest? Why have you landed here seemingly for good?
Byron Gifford: I always describe pest control as the turtle. It wins the race but it’s slow and it's not pretty. That's pest control. I started over 27 years ago. If you go back that far, you’re still spraying and using B&G. You still have trucks. Everything's the same. The model is the same. It doesn't matter what happens as far as technology and advances and all this other cool stuff, pest control is stable. It's that turtle, it'll keep going. I would argue, at least in my world, with summer sells world, pest control has produced more millionaires than anybody else in our world of summer sells. I can confidently say that.
Paul Giannamore: I would probably tend to agree with you on that. Let me ask you this. You've been in this space a long time, although you guys do door to door now. You've got a sizable business in the southwest. You've disposed of a few offices. When you think about door to door, if you go out and ask a random industry participant, they often won't have a good opinion on door to door.
I always looked at it where you've got a spectrum. You've got guys who are super clean and doing it right. On the other end of the spectrum, you’ve got total morons that are throwing stuff on the door, harassing people at their dinner table and bad-mouthing competitors. Where do you see the future of door-to-door as one of the ingredients in the growth of the pest control industry? What do you think about that?
Byron Gifford: You and I spoke about that. You look at what we can do as far as bringing on volume in such a short amount of time. It’s a great platform to build a branch. If you can go and slap down and put on a solid 2,000 or 3,000 accounts in the summer, you do that summer after summer, now we can cross-market. Now we can do online marketing. Now we can do more traditional. We can build off what we put in place that otherwise wouldn't have happened.
By the way, a lot of it's done with density. When you sell this home, you're going to sell the neighbor. That's the pitch, “We're trying to get this neighborhood going.” You have a lot more density right off the gates. It's a lot more expensive. For those who are more skeptical of the door to door, I get it, especially with what you see.
A lot of times, you'll have reps that have gone out and sold and they're like, “I'm all that and a bag of chips. I'm going to start a pest control.” They don't know what the crap they're doing. They know how to sell. They don't have the maturity or knowledge to be able to understand how to make it work as a business and the longevity.
They think, “I want to do this for 3 or 4 years and sell it off.” That's what they think, running to the sunset. You have to go into this game of door to door doing it the right way. If it's done the right way, you can sell the right business. On our end, we do a lot of checks and balances to ensure that the quality of accounts is what we want to be paying for because we paid for these, too. We pay the rep. We want to make sure we're going to get the longevity out of these accounts.
Paul Giannamore: When I think about door to door, it wasn't until over ten years ago that I even got involved with door-to-door businesses. Quite frankly, they were difficult to sell. You only had one buyer back in the day, which was Terminix. No one else wanted to touch them. Now, that market has changed. When I think about the cost structure of door to door, on the one hand, years ago, the reps weren't demanding these massive commissions. You could go out, build a team, and, in relatively short order, put together a profitable business. Over a three-year period, you could grow a $4 million or $5 million branch if you push it. It's profitable. You don't have to turn around and sell it.
Maybe this is just me but I'd love your opinion on this. When I look at 2021 and 2022 now, I see a lot of these young guys spending an exorbitant amount of money, sign-on bonuses, high commission rates, borrowing money, and putting on as many accounts as they can being extremely leveraged. We've seen a lot of these so-called busts. We've seen these guys get too levered and run into problems and need bailouts. What do you think about the economics of door-to-door now versus over fifteen years ago? Is it something that you would advise other folks to explore? Does it make economic sense?
Byron Gifford: We're proof of that. We're making good money. The other thing is you can't say, “I'm going to go from 2,000 accounts to 20,000 accounts this summer.” You’ve got to be realistic. You got to grow it as you can afford to grow it. You get a lot of these ambitious companies and they're wanting to grow, number one, before it can finance itself to grow. Number two, before they can set up the systems and procedures to make it run well, assuming they even know how to do that.
I get it, we're high A-type people. To go door to door, you have to have an immense amount of confidence in yourself and you have to be optimistic. We're wired that way, all of us are. You got to be wise. You got to be very strategic with how you do it. Otherwise, you're upside down like what you're talking about.
Paul Giannamore: If I were a guy sitting in front of you saying, “Byron, I would like to start a pest control business from scratch. I'd like to do door to door.” Let's say I have the ability to go out and recruit and all those sorts of things. I can take care of the door-to-door side. What suggestions would you have for me about being measured in the way that I grow that business? What advice would you provide me?
Byron Gifford: First of all, I'd say, “Come work with us. We'll put you through our system where you learn how to do this.” I can tell you how to do something. Until you've lived it, it's a different ballgame. Until you've experienced how to sell it to your contract, how to get a 97% ACH, how to do a verification, how to do all these things, how do you measure your customers a certain way.
All these things that we do, I can tell you and I can give you the footprint. Until you live it, you won't be successful at it. I'm not saying there aren’t successful companies, there are. I would say, “Come into our system. Come into our program. We'll show. We have a great ownership track.” If you're going to do it on your own, there are certain things you'll want to look at as far as account quality and that sort of thing.
What I would say is don't get caught up in the glitz and glamor of all this craziness that's going on. Don't buy into the signing bonuses. Don't buy into these expensive things. Don't play the commission game. There will always be somebody who’ll beat you. Stick to your model and make it work. If you work hard and you're fixated on your goal, you'll hit it. Don't get diverted from what your goals are. Make sure you're staying on task.
Paul Giannamore: When you think about the 2008 financial crisis and now we're in 2022, you see what's going on. The economy is decelerating into a hiking cycle, which flashes red recession on the horizon. When I think about it, I think of the fact that if we do get a nasty recession coming up here, it's going to spell disaster for a lot of these guys out there. Do you agree with that? Do you see that high leverage out there?
Byron Gifford: No question about it. That's why I said we're not going to get loans. We're not going to rely on other people's money for what's going on. We can control what might happen in the future by not being under the control of someone else and mainly using their money. We want to be in 100% control of what's going on. Do I think something's going to happen? Something's got to equal this thing out that's going on. How bad? Who knows? One thing I know is I'm not stressing now because we're not doing what I explained and what we talked about, leveraging ourselves beyond the ability to be in control.
Paul Giannamore: Was that the 2008 experience?
Byron Gifford: 100%. I got PTSD from that thing. I'm like, “I never want to be in this situation again.” It costs me a good network of sharp people and the ability to grow something big. I'm going to learn from that. I'm going to not make this mistake again. That's a cool thing about life. When an individual goes and they're successful from beginning to end and they don't have hard times, they don't experience tough things, it's awesome. You did it the right way. When somebody has experienced tough things like what I've gone through, they're a lot stronger. They learned. There's a different mindset as you do things and a different hunger than otherwise. That's how I've attacked this go-round of which we're not relying on Zions Bank or anybody.
Paul Giannamore: I think about it because we have a whole generation of business owners out there that have never experienced what guys like you and I have gone through with these financial crises and the dot-com bust. When I look across the spectrum, I see you granddaddies. You got Kyle Woodbury, Jacob and Jared Borg, and the list goes on.
All these guys are judicious with their use of leverage. They don't care about being the biggest. They're focused on bringing on quality accounts, self-financing this like you guys are, and being delivered in case we run into a difficult situation. The guys who are 35 and younger are the guys with tons of sub-debt, tons of senior debt, they borrowed from the grandfather, and they borrowed from the wife's father. It's a concerning situation considering that we're heading that way rapidly. That's neither here nor there.
Byron Gifford: Think about it, if you've got all this money, regardless of where it came from, and you're younger, you haven't experienced what we talked about, what do you do with that money? You're going to spend it, “I'll do a signing bonus. Look at what this will do.” You start doing things you don't want to do. You're doing things that don't make sense. You can't because that money is there. That's what we always do.
Anytime we have profits in our branch, I pay it out as soon as I can. I want to keep that bank account as close to zero as I possibly can because I want to stay hungry. I want to be on my game. I want to make sure we're collecting the revenue we're supposed to collect. We're servicing the homes that we're supposed to do. I want to make sure we're not being crazy with what we're spending to get reps and to do the program. It keeps you hungry. That's why it's an important mindset. For me to be in the game, I can't see all this money. If you're getting all these loans and doing this crazy stuff, it gives you the wrong mindset as well as a wrong model, in my opinion.
Patrick Baldwin: Speaking of the change in recruiting, I'm laughing as you're talking about the old slide show. I can see it. I don't remember what it's called. You're recruiting with pizza. Over the years, what does recruiting look like? You're having to compete with solar. Everyone's writing sign-on bonuses and lots of money there. How are you competing in the recruiting game?
Byron Gifford: We go to schools. We'll go on campus. We have a nice, effective, and proven way of recruiting well on college campuses up and down Wasatch Front. Outside of that as well, we go to a whole bunch of different other schools. We get some sharp students. We’ll invite them to a meeting. We do have a presentation. It's not a slide presentation anymore. It's not even a PowerPoint. We use a different one.
Paul Giannamore: Do you bring a bunch of girls?
Byron Gifford: We probably should. It's just us there, ugly guys. We’re recruiting at work.
Paul Giannamore: I don’t know how you do it.
Byron Gifford: We'll get 100 or 150 sometimes to show up to a meeting. We’ll have pizza. We give them a little bit of a cast to bring people. We'll sit down and we'll have 20, 30, or 40 interviews afterward. We'll hire pretty well off and then we'll network off those guys. I'm not going to work from the scarcity mindset. I'm not going to work from the standpoint of worrying about what they're doing. I'm going to focus on what we do. I'm going to make sure we're competitive. I'm not going to get caught up in all this other stuff. That's how we've been successful. We got sharp people of which you've spoken with some of them.
Adam, my business partner, is phenomenal. I've surrounded myself with amazing people. They complement my weaknesses. I complement their weaknesses. As a result of that, it works well. As far as recruiting, we do our thing. We make sure we look sharp. We make sure we're doing all these things. We don't get to the signing bonus game. The interesting thing is, in our world, summer-sells have a unique little vibe. You’re a summer sells guy. You're one of those guys. They’re cocky and arrogant. That's a thing. You've probably seen that as you met with some of them.
You can probably tell, we're not that way. A lot of people resonate with our messaging and what we have and they're attracted to it. Those are the individuals that we're looking for. Those that like the glitz and glamor, they're usually attracted to those companies and it's cool. Go work for them. We do well with what we have. It's important to stay within your business model and your core principles along the way.
Paul Giannamore: As you think about maybe the next five years, where are you and your team taking this business?
Byron Gifford: In the next five years, the top twenty largest in the nation. If you’ve got seven years, we’ll be in the top twelve. That's our plan as far as revenue.
Paul Giannamore: Are you going to do this all internally financed?
Byron Gifford: All internally financed.
Patrick Baldwin: There might be some secret sauce on recruiting. I didn’t mean to crack that open. When it comes to the personalities and not the people that you're recruiting but if you look across the older clubs guys, you all have a certain mentality and certain way of doing things. They could learn from your mistakes over the years and experiences. What would you say to the younger guys that have knocked a couple of summers, they’re early on the doors, they've started their door-to-door business, maybe they're going to the bank to get a loan? What wisdom would you give to them?
Byron Gifford: As far as if they're going to start a business or they‘re going to stay in the industry?
Patrick Baldwin: If they want to survive and be around for more than a couple more summers.
Byron Gifford: As far as knocking doors and whatever else?
Patrick Baldwin: Yeah.
Byron Gifford: You have to find your why in life. If you're doing it for money, money is a decent why. Don't get me wrong. Money comes and goes. It's a piece of paper. We're seeing inflation. When you die, you don't take it with you. People have to find their why. I grew up poor. I remember running doors in Albuquerque in my second summer. There’s one summer I didn't get paid.
Back then, we didn't have cell phones. I'd write, “Here's what I'm going to sell today,” on the back of a flyer that I'd leave on the door. I was completely consumed by it because I didn't want to be poor. I wanted to create a life for myself and my family. It’s not that money is everything. That’s what I'd say, what's your why?
Personally, my why is I want to be able to help people. Not only can we create jobs and opportunities but as we make more money and we have wealth, what can I do to better other people? How can I use that? For me, that's my why. That's why I wake up early every morning to go to work to do what I do. This is a venue to do that.
For me, pest control is a great venue to be able to provide an opportunity to help others and I love it and it's awesome. That came as a result of getting Lyme disease. I'm like, “I want to help people whether it's Lyme or whether it's human trafficking. I want to help.” I'll have the resources. I'll have money. I'll have networks and people to be able to do that.
Find your why. Why are you out there knocking doors? What is it you're doing? Do you want to pay for college? What are you doing that for? Do you want to be a doctor? Why? What is your why. What's going to get you up every morning and say, “I'm going to go get yelled at and have a dog chase me down the street and I'm going to stay positive no matter what. Here's my why.” Does that answer the question?
Patrick Baldwin: Yeah, 100%. You talked earlier about personalities, the high drive, and the high friendliness of extroverts. Did you find the blind side or weaknesses that you're having to compensate for?
Byron Gifford: Me, personally?
Patrick Baldwin: You or even the person that's wired that way. If you look around at other guys that are running door-to-door businesses, it’s like, “Here are some blind spots to watch out for.”
Byron Gifford: We used to do a personality survey at Eclipse.
Paul Giannamore: Was it due to Orkin’s having reliance on such things?
Byron Gifford: No. It's called Predictive Index. We have them fill it, print it off, and then I'd go into an interview and we'd see what their personality is. We have thousands of these because we are recruiting 400, 500, or 600 every summer, every year. We put all this information in and then we ran to see if there was a correlation between performance and personality type, but there wasn't.
There was a profile test with the point schedule they put in place. We thought that was the magic one. It looked like this with the score on it. Come to find out, no. “What are you made of? What's your why? How bad do you want it?” We stopped using that. We said, “We're going to go after this a little bit differently.” We're going to ask, “What's your reason for doing this? Why are you going to go out and do it? What are you made of? When push comes to shove, are you going to crumble under pressure or are you going to make it happen?”
To me, that was enlightening. I'm not an extrovert. I'm an introvert. You wouldn't know it. No matter what, I'm going to do certain things. I'm going to make myself overcome. In certain situations, I'm going to make myself do what I need to do to get my ultimate why and my ultimate goal. I don't know if that answers the question of what you're looking for.
Patrick Baldwin: That's interesting. I was seeing a personality profile, like, “Here's the door-to-door guy on the scale.” Below all that, you have that motivation.
Paul Giannamore: Byron, after decades in this space, you guys have been successful. What would you say is one of the most important factors in your success and the success of your team?
Byron Gifford: Not giving up. There have been many times when we could look at it and say, “This is too painful.” You have to say to yourself, “No matter what, I am going to overcome whatever comes my way. I'm going to smile the whole time regardless of the pain and regardless of what's going on. I will adapt. I'll see what's going on and I will overcome whatever challenges hit me. I’ll make sure that I can come out on top.” If you do that, it will happen. I've seen it.
Personally, I've been beaten down a few times and I stay positive. There’s always a way to overcome it. Whatever challenges there are, there's always a way to overcome them. It is 100% in your mind. I believe that our minds can allow us to push through so much and overcome so much. You have to do it. You have to make it happen.
Paul Giannamore: How do you do it? You wake up in some dark hours, the business goes bust, you've got all sorts of issues. It's easy for people to say, “You got to overcome,” but how do you do it? How is it that you wake up in the morning and say, “Screw it, I'm going to do this today.”
Byron Gifford: That's what you say.
Paul Giannamore: Maybe not you.
Byron Gifford: In my mind, I do. If there's a problem, I'm going. We're going to make this happen. I'll say a prayer. I’ll call my higher source of power and then I will make it happen. I started diving into more self-motivation and diving into that world. I follow a regimen of that. When I'm working out, I have a list of things that I listen to that are motivating to me and uplifting. The whole time, it has got me in a scenario where I'm thinking of every issue that's going on that I need to overcome. In my mind, I'm playing through how to overcome it.
Instead of thinking, “This is here. It's beating me down. I can't do it.” The whole time, I'm thinking, “Yes, I can overdo it. Here are the resources I have. Yes, there's a way through this.” You’ve got to stay positive and it will work out. As I'm doing that and as I go through that process, it's amazing. You think of the resources, the people you have, and what you need to do to overcome certain things. From experience, there's always a way to overcome it. Whatever issues you have going on in your company, whatever you've done to put yourself in that position, there's a way to overcome that and to improve as a person and to overcome your business. In a lot of ways, it goes hand in hand, quite frankly.
Paul Giannamore: I think about self-motivation and all those sorts of things. Part of me thinks, at certain times, there are things that you should give up on because you're not doing the right thing. You're putting all this effort into the wrong area. Have you ever experienced anything like that where you've said, “Me overcoming that is completely not doing it and doing something else.”
Byron Gifford: That’s a sunk cost.
Paul Giannamore: You’re like, “It's better for me to dedicate my resources elsewhere.”
Byron Gifford: My two years of trying other things, the door-to-door realm and trying maybe a real job. People make fun of what I do now, “It's not a real job.” It's a little different. You look at it and say, “This is not a scenario that is good for me. As hard as I try, this is not a scenario where I feel good about being in.” I'm talking about being in a situation where you feel good about being. You know this is the direction you're supposed to go.
There are going to be challenges. If there are, that's not a good thing. There are going to be challenges or else you're not pushing the limit. You're not trying to experience new things. You're not trying to increase your revenue or find ways to grow your company or try new things. What I'm talking about is once you're in the scenario you want to be in and you feel good about it, there are going to be challenges. You’ve got to overcome them, you have to. As a person, you have to have the personality to overcome whatever issue you're having in your business and your life. It's all about you.
Paul Giannamore: You've done it. We appreciate you joining us here in Puerto Rico. It's been great to have you here.
Byron Gifford: Thanks for having me.
Paul Giannamore: It’s awesome meeting your wife. Thanks for bringing her down.
Byron Gifford: She's great. She's loving it, too.
Jared Borg - past episode
Pointe Pest Control