In this episode of Owned and Operated, John Wilson sits down with Ismael Valdez, founder of NextGen and Nuva Thermostats, to unpack how he built one of the fastest-growing home service businesses in the country.
Valdez shares how he scaled NextGen from his garage to a $100M+ powerhouse with multiple locations, breaking down the exact strategies that fueled his growth. From high-ROI marketing plays to perfecting tech turnover processes and managing gross profit like a hawk, you’ll learn the playbook that took him from startup to industry leader.
For the first time, Valdez also dives into his latest venture: Nuva Thermostats — a game-changing tool for HVAC contractors that brands the thermostat with your logo, turning every home into a lead-gen engine.
This episode isn’t just about tactics. Valdez gets real about the personal sacrifices behind scaling to $100M, how to leverage social media for future growth, and what it takes to keep winning at the highest level.
If you’re serious about scaling your HVAC or home service business, this conversation is a must-listen.
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🎙️ Host:
John Wilson
🎙️ Guest:
Ishmael Valdez (NextGen, Nuva Thermostats)
Ep 234 Transcript
Ismael Valdez: [00:00:00] Did like $1.2 million in revenue in my garage in four months.
This get from zero to 10 in a snap of a finger gross profit will tell you how much of a badass negotiator you are. Don't forget that. The fuck war is one. Inside the home, dude, if I don't have one message for the a hundred million dollar mark, it's not for everybody, man.
John Wilson: Welcome back to Owned and Operated. I'm your host, John Wilson, and during the day I run a $30 million home service company here in Ohio. And for fun, I run a podcast that teaches other people how to build their home service business. Today we're bringing back one of our most listened to episodes of all time.
Which is an interview with Ishmael Valdez, the founder of NextGen, and then turned into the founder of Nuva Thermostats. This is a [00:01:00] wide ranging conversation that covers everything from how leads have changed over the last five years, from Google to social media ads, how to drive incentive compensation into your business and an inside look into growing a hundred million dollar business.
Make sure you like and subscribe, and I know you'll enjoy today's episode. Welcome back to Owned and Operated. Uh, today we have Ishmael Valdez on with us. Welcome to the show. What's up man? How are you guys today? Good. We're good. We're excited to have you here. Uh, very excited. You founded NextGen, you took it from nothing to something, and we're really pumped up to bring you onto our legend series and talk about what that looked like.
Do you think you could spend, uh. Um, do you think you could spend a minute or two and just sort of walk us through the next gen story? At Wilson, we've saved a stupid amount of money by having AI help out with our call center, and the best tool out there that's making that happen is Avoca. So look, you've probably heard the buzz about a i, CSRs.
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That means it can handle reschedules, check tech, arrival times, and lookup customer info. It even helps with capacity planning. It's basically a CSR with perfect memory. On top of all that, it consistently makes our team better. We get post call analytics, auto tagging, and coaching tools so that no matter who's on shift, we deliver for our customers.
If you're curious, go to avoca.ai av. oc.ai, book a demo and tell 'em owned and operated, sent you. [00:03:00]
Ismael Valdez: Of course, of course. Um, first congratulations on the podcast, guys. I love doing these podcasts. The names though, too, um, owned and operated because 99% of these podcasts that I do, they don't know. They, they have no fucking clue on.
Yeah. Like what? We gotta go through the everyday grind. So that's, um, that's cool that you guys are doing this for the trades, um, and that you guys are still, you know, in the grind, in the trenches doing it because. Like I said, 99% of these guys don't have a clue. Yeah. Of what we fucking gotta go through every day to make sure that our operations running smoothly to make sure that you know.
We're profitable to make sure that we're going people, to make sure that we're like doing the actual good things that we need to do to keep the operation going. So congrats on the on, on the podcast and congrats on, on owning the business. Man. It's a, it's, it's hard to do both and, you know, I, I, I, I applaud you guys.
So my name's Ishma Valez, bro. I started on NextGen Air Conditioning in 2018, late late 2017, going into 2018. I think I got my license in January, 2018. Around [00:04:00] there. Um, you know, for, for those of you who don't know me, um, it was a pretty fast growth. Um, at the time. I, I thought it was, you know, normal for people to do this.
But I guess, you know, when I started exposing myself to social media and I started talking to people, people were blown away by, by the journey, the short journey that we had. Um, our first year in business, we were, we were all HVAC for the first three year. For the first four years, actually, we were all hvac.
Um, heating, air conditioning, um, residential, retail, residential. No Costco, no. Home Depot, no lows, none of that. It was just strictly, uh, marketing. Um, first year we did 9.8 mil. Second year we did 18.2 mil. Uh, third year we did 24, and I think going on our fourth year, we, we, we went up to 32 millions. Huge fast growth man.
At the, like I said, at the time, I didn't really know that what we were doing was special because I was so deep into the trenches. You know, hiring people, recruiting people, uh, marketing, um, figuring out the pay structures, figuring out like what [00:05:00] incentivizes who to be able to push the revenue, where the profits at.
So like, obviously you guys know what I'm talking about, right? Mm-hmm. The, the, trying to figure out the everyday grind and the everyday cycle. So, um. A couple years ago, I sold, uh, I sold to private equity, was probably one of the best decisions I've ever made in, in my life. Um. Well ended up going to, to a wrench group.
Uh, I think I sold it when I was, uh, doing $109 million in revenue in one year. Um, that's pretty dope. Uh, seven, six different locations in six different locations in Southern California when we sold. Um, a ton of good things came out of the cell. Um, uh, one of the best things that came outta the cell was my ve thermostat, which we're gonna talk about it.
But just a quick, a quick, uh, who I, who I am, how I got, how I got here. I did, I got into the trades zone. I was 18 years old. I was working at a supply house, uh, named, uh, uh, named Howard Industry, which distributed American standard equipment. Most of you guys back east know about American standard and train.
[00:06:00] Um. So I worked there for about eight, nine years, man. And I probably had 10,000 job offerings every single day. Mm-hmm. People of contractors like yourselves would come up to the camera and buy equipment for me, buy parts for me, and I would, you know, bullshit with them. I would talk to them, I would ask 'em a million questions 'cause.
Uh, I have a really curious mind of, you know, asking a, a, a million questions. So contractors like yourself would come in here and just buy equipment from us, and I would, you know, ask them a million questions. And that's how kind of I got into the contracting side. A after I figured out that you fuckers were making all the money, I'm like, how am I doing here?
So it took me eight years to realize that you guys were doing all the, that you guys were making all the money. So. That's when I, I started to jump on the other side of the counter and, and kind of started on the contracting side. But, you know, a couple years later we started, uh, we started NextGen In between those couple years, um, I, I started a company called A RHA and then there was another company called Home Comfort, USA, which we did pretty, pretty dope.
Um. Things down too. We got it from zero to [00:07:00] $21 million in four years, which is a pretty fast growth too. Um, that, that was my first kind of exposure into like, man, you could actually make some really, really good money doing air conditioning and plumbing. So I don't wanna worry you guys too much, but yeah.
Was that quick, quick snippet? Was that
John Wilson: before NextGen?
Ismael Valdez: Yeah. So RHA was first. Got into a couple mill, um, just, you know, recruiting people. Mm-hmm. And then home Comfort, USA. When I met, when I met Ken, it was a 50 50 partnership. Look at this is how ignorant I was back in the day. I didn't know about corporate structure and I didn't know about shares.
Mm-hmm. And I didn't know about none of the, you know, legalities behind the, behind the operation. So I took a handshake deal from him and we were supposed to be 50 50 partners. Um, we get up to like 21 and change, uh, in like a little bit over four years and. You know, he decides we needed to part ways at the time.
And probably looking back now, it was probably one of the best, you know, decisions that, that, that, that, but not the best decision, one of the best things that happened to me, so. Mm-hmm. Um, yeah, home [00:08:00] comfort was my second. My second, um. Uh, company that has started after that, when me and hip parted race, that's when a couple weeks later we started NextGen.
Jack Carr: Yeah. Yeah. Ishmael, I mean, not to, not to fanboy too much here, but I think when, right when I bought my business, I did a 30 hour drive. Uh, and I'm pretty sure I listened to almost every clip from, from you, uh, about the next gen startup. Um. I do remember in there though, you were talking about, uh, running outta your garage.
Was that with NextGen or was that, was that with Total Home Comfort? No,
Ismael Valdez: no, that was with NextGen. I did, uh, three months in my garage and that was probably one of the dopest. So in between Home me leaving Home Comfort and starting NextGen, there was about a. Three to four month period. I'm gonna trip you guys out on this.
I don't think I've ever told to anybody this. So between three to four month period, I was in my garage. 'cause I needed to get a license, right? Mm-hmm. And you can't just fucking go and sign and get a license the next day. So I was studying for my test, I was trying to get, you know, my license set up and everything.
Obviously [00:09:00] it takes time for, for, for me to do that. So I was grinding outta my garage doing subcontracting work, doing, you know, calling friends and family posting on social media like. Just doing everything I fucking could to pay the bills because I knew I wanted to start action. I knew I wanted to do it, but it was a four month, four months.
Four, about four months in the gap where I was in my garage. Just, dude, we, we did, lemme tell you something. We did like close to 1.7. No, no, no, it wasn't 1.7. It was like $1.2 million in revenue in my garage in four months. That was probably one of the dopest shits that I ever I remember was zero overhead.
I mean, you're just going zero, zero. It was me and my sister. That's hilarious. Me and my sister. So it was me and my sister in the garage and we had four or five, five installers. We had Tony, which was my right hand dude. Me and my myself. I had, I had one project manager and then I was grinding out the phones, like, Hey man, you guys need work.
I got installers ready to go. And these were con other contractors that you know, [00:10:00] were, you know. Book out jobs, and I would go and and and, and, and do the labor cycle. But bro, I would go pick up checks. I would go to Home Depot and get in material, go drop off to the guys, go run warranties. I was like, that was the funniest fucking time of my life.
And those four months we were grinding every fucking day. I remember, I remember the first month in my garage, we had fucking piles of duck in the front yard. Scrap everywhere. Mm-hmm. This is a traditional white neighborhood. Okay. Lemme lemme reemphasize. This is a traditional white neighborhood and there's fucking vans coming in and out.
There's trash all over my front yard. I'm like four in the morning with black trash bags, fucking putting the ducks inside, putting register dirty ass registers. Like, dude, those are dope ass times. That
John Wilson: sounds, yeah, that's, that's hilarious. Yeah. What did that, immediately, did that same team turn into NextGen and you just took it, that became the founding team?
Yeah. So we're, we're, uh, you described [00:11:00] your revenue journey. We're on a similar revenue journey. I'm curious now I'm just, this is me being selfish. You know, we're going from, uh, we went from like 13 to 17 to 25, and next year budgeting 34, and we're hoping for mid forties after that. When, when you're imagining.
That, like what were the levers you pulled? Because we're starting to feel, we're starting to really feel the top and you know, we're in a different marketing world now, you know, than we were four or five years ago, so maybe it's, but obviously some of it's still gonna be relevant. What were the levers I was holding at 40 million?
What were the levers you were pulling from 20 to 30? Uh, or like, where did new markets come into that? Like how, how did you think about that, that gap? So, so
Ismael Valdez: the 20 to 30, uh, million dollars journeys are built on, right, because that requires a little bit more structure, more, more methodical thinking. The zero to 10 is just fucking blind.
Yeah. It's getting up every day, closing deals, having an aggressive sales team or aggressive couple sales guys, you could, you could get from zero to 10 in a snap of a [00:12:00] finger if you have a, if you have a fucking aggressive sales
John Wilson: team. Yeah.
Ismael Valdez: Okay. Aggressive sales team will get you from zero to 10. Easy.
Mm-hmm. Okay. After, from 10 to 20, it, it requires a little bit more marketing, more discipline in your marketing and being able to stay consistent. 'cause you see the dips and ups and downs in revenue. Obviously the shoulder season and all that. The 20 to 30 mark is a special mark because that's when you start bringing the tech turnovers.
The sales team will get you 10 to $20 million once you start perfecting and managing a a, a service department. That's what I found in my journey is the 10 to 20 even to the, the, I mean, sorry, the, the 20 to 30 even to up to $40 million. It was perfecting the tech turnover and perfecting the tech experience, right?
Because there, there could only, you could only push so many cells in the, in the on season, you could only push so many cells in the off season, right? Mm-hmm. Obviously, you get handicapped in the off season when there's no demand, so. When, when I found, and, and this is when Leland, uh, Leland Smith, uh, owner, ex owner of [00:13:00] of, of service champions came into my life.
Um, when I found out the tech turnover process in his operation and the way he was running the customer experience through the technician going in there either through a tuneup or through a repair or through a free, uh, whatever inspection, whatever they, whatever it took to get in the door. Once I found that, that was probably one of the biggest game changers because average ticket went up.
Closing percentage went up and then call volume went up. Mm-hmm. Right. So average ticket, closing percentage and call volume got me from 20 to $40 million. Those were the three KPIs that I was focused on there. Um, once I got to like 32 40 million, 30, 32, 30 $3 million, that's when it, like things started getting wobbly and things started getting you.
Not falling apart, but it kind of, the operation kind of fell loose. That's when my accounting team came in. Yeah. The account team, when I started structuring my accounting team and I started getting a, a high, a high level controller, uh, putting somebody in a PAR, started paying more attention to the commission structure, [00:14:00] started paying more attention to the way people were getting paid.
That's when, that's when, uh, things started tightening up. So if I could give you guys an exam, uh, uh, uh, advice from 20 to 40 million. It's, um, average ticket, closing percentage, uh, being, being consistent in your marketing and being disciplined to be able to keep your marketing. And also always keeping an eye on your accounting team, man, like knowing your fucking numbers inside.
And now knowing what gross profit you're running, gross profit is one of the like. The key things that people miss when they're running a business because everybody's so focused on the top and the bottom. Like the middle is where, where the fucking money's at, right? The middle tells you exactly how much of a fucking badass negotiator you are with labor, right?
Because that will, that will, that will put you, that will put you on the top or the bottom, and then the middle will tell you. The gross profit will tell you how much of a badass negotiator you are with distributors. Mm-hmm. Okay. Listen to what I fucking just told you. Gross profit will tell you how much of a badass negotiator you are.
If you're, if you're, if you're not a good negotiator, this is when you [00:15:00] start bringing in a team to be able to start dialing that in. Right. You're most, most, and, and, and I don't give a fuck what people saying. Most com, most HVAC companies are running between 35 and 45% for actual gross products.
John Wilson: Yeah.
Ismael Valdez: And that's assuming they're putting cost of goods on the top, cost of goods on the top, sales, tax, and labor.
Okay. Most people, some people put fucking sales on the bottom just to high, just to increase the gross profit. Or they'll do some dumb shit like that that doesn't tell you anything. Mm-hmm. So if you are running a true hustle, a true fucking. A, a true operation, a really, really solid operator in eight track will run about 45, 40, 40, 44, 45, 46, 47, grow actual gross profit on its own, paying attention to your undergrown.
Mm-hmm. The closing percentage, the average ticket is what is, and, and putting, start putting controls in the business is what's gonna get you profit at that. 20 to $40 million cycle.
John Wilson: Yeah. We, uh, I really think we just had a conversation about this with our last, uh, guest and it was [00:16:00] earning the right to know your gross margin every day because it, it, I, I think the reason that we all hone in on revenue is 'cause it's easy.
You pop open ServiceTitan in there It is. Yep. But gross margin and gross daily gross profit takes. That takes a lot to get right. Um, but we've spent, we've spent a lot of time on it and it didn't, it did move the needle. 'cause we now have daily dashboards everywhere. Where month to date, I can tell you our gross margin, gross profit dollars any day of the month, which has been like, that's been a really pretty big unlock.
For us as we've been moving
Ismael Valdez: and, and, and look before, before we get into the next one, little guys, um, the numbers are cool and the KPIs are cool and the countings cool and all that. Don't fucking forget that the war is, is spot inside the home. Mm-hmm. Right? Don't fucking forget that. The, that the battles are won inside the home.
Having a dope as customer experience being able to. Turn a phone call to revenue is where the fucking magic's at. Yeah. Yes. The numbers and the gross profit and the gross margin and all [00:17:00] these sales, like all that is dope guys and you need to pay attention to it. And what makes us solid operators and fucking dope ass operators is that we are able to, to see everything, not just, Hey, let me just focus on marketing and hopefully that fixes the operation.
Mm-hmm. Let me just focus on sales and hopefully like the being a Dope Pass operator requires you to focus on every aspect of the. Of the, of, of the operation. Don't forget that the fucking war is won inside the home and making sure that we are providing these customers more value than what they see on a piece of paper.
Is the name of the game when you are in there providing the value, providing the option mm-hmm. Making sure that the customers are, are, are trusting you. That's where the fucking money's at, not, yes. The KPIs are cool and, you know, having a badass accounting team and knowing your numbers of dope. At the end of the day, whoever, whoever provides the best customer experience is who's gonna win the war.
Okay.
Jack Carr: And Ishmael, how did you, how did you [00:18:00] design, or how did you cultivate that culture within NextGen? Because that, that's one of the, the key pieces that I keep coming back to with your story and trying to understand how to get that. Not, not the experience for the customer, but how do you find and attract the people that can give that experience
Ismael Valdez: being a look it, I don't think I've ever told this to anybody that, so guys, our employees aren't fucking stupid, okay?
They're not retarded. They know what they know we're making money. They know that how much we're charging. They see the contracts, they see the repairs, they see the cost of the parts. They see how we're running the operation like. Why we created a such a fucking dope ass culture at action is because I, I'm number one.
I am the most fucking unselfish person in the world if I'm making fucking money. Everybody's making money. And that creates a fucking whole culture of like, Hey man, if this guy's gonna take care of us, you guys gotta understand how many times have you had, have you guys heard your employees? I was at this fucking [00:19:00] company and this fucking guy grinding me on my commission and he wouldn't pay me sometimes.
And sometimes this and sometimes that and right, and like these were disgruntled employees that weren't treated properly, right. Why the, why we were so successful at action is because part of the, part of the most, the, the, the key, the the, the, the key, um, elements in operation is the onboarding process.
And this is where you fuckers miss it. Okay? Onboarding people properly, setting the expectations properly, making sure that when you hire somebody, okay, when you hire somebody, you let them know exactly what's gonna happen, and being confident enough that you fucking step in there and you go like, Hey, look it.
You don't have to worry about money here. You don't have to worry about leads. You don't have to worry about getting paid, right. You don't have to worry about, am I gonna have a job tomorrow? That is 90% of the fucking battle. Mm-hmm. Okay. Making sure that you have a hundred percent employee to work every day instead of a half-ass employee that's worried about their pay, that's worried about making money with you.
[00:20:00] That's worried if they have leads, that's worried about their bills, that's worth. Part of the dope ass fucking culture that we built was being able to bring our employees in and be like, look, I'm gonna take all your fucking worries away. All I need you to do is make sure that when you get inside that house, you take care of our clients.
No matter fucking what. I don't care if we're wrong. I don't care if we did something wrong. I don't care if we fucked up there. Whatever it is that we need to do to take care of that client has to be done. And we took, and we had that message from day ones. Of always taking care of the clients and whoever took care of more client, the most clients would make the most money.
Right. That's how simple I, I got it to, to, to, to everybody that went to a client action is making sure guys, that guys, you gotta fucking onboard property. You gotta set the expectations properly. You gotta make sure that you set your boundaries for employees and clients and you don't fucking violate.
Okay. This is how you are gonna get paid being black and white. Look [00:21:00] it. I'm gonna give you guys a fucking tip and write this shit down if you're listening to it. When you're onboarding people, you guys gotta have a pay plan right in front of them that is so fucking simple and so retarded that they look at it and they go like, okay, cool.
I know how I'm gonna get paid, right? Mm-hmm. You guys gotta be able to do that on every single employee. You ask anybody on action. You go to any technician, any sales guy, any installer, any customer service rep, any accounting, any production, any, any department in that operation. Okay. You ask them how they're getting paid, I guarantee you they'll, they'll describe it with less than fucking 10 words.
This is how I get paid. That's how simple my big plans. And that's half of the battle guys, is making sure that they understand their pay so they could, they can in return, focus on the client and taking care of the client every single time. That's what
John Wilson: you guys need to do. Can you give me an example of that for HVC service or call taking?
They, they'll be ready Technicians.
Ismael Valdez: Technicians get paid on. [00:22:00] Hourly backup, but then we pay them on performance pay. Okay. Performance per hourly backup. Meaning California is the strictest fucking state in the universe. Not the, not the country. Not the world. The universe. Universe. Okay. If you, if you, if you can pay people property in California, my pay plans work across the universe.
It works in Mexico, Japan. Mm-hmm. It works in fucking everything. Mars. Mars, baby Elon's gonna use it in 60 days. I, it works in Mars. Hourly backup. So we would pay everybody $20 an hour backup. So they would get, you know, double time overtime, eight hours, all that right? And then we would show them what their performance pay was based on what they were doing.
So repairs, we would pay 'em 30% on a sliding scale all the way to 15%. Okay. 30% sliding scale, 30 15% meaning. Hey, if I went out there and did a motor for a thousand dollars and that was the full book price for the motor, a thousand bucks to install it, to take care of the client, that's what they need. And I didn't discount anything.
They would get a full 30%. If [00:23:00] they discounted 5%, we would dig them 5% on their commission. If they discounted 10%, we would dig hit 'em up to 10% on their, on their repairs. Turnovers. Okay. Meaning when a technician goes in there, provides the, the service for the client, and it has, you know, three, four different options for it.
They're ranging from $500 all the way to $2,500, whatever you guys wanna fucking come up with. Mm-hmm. And, and, and the consumer then and returns says, Hey, look it. It's a 10-year-old unit. I don't wanna invest 2200 or $2,500 into this unit. How much is a new one? When those magic words come out of that customer's house, that means we've provided so much fucking value to them now, now they wanna explore permanent solutions.
That is called a turnover. That turnover to that type, that turnover gets paid. Uh, and, and we were paying 5% on action. And again, what I was paying at action, the 30% sliding scale to to, to 15 and the 5% on turnover is because we had a high average ticket. We had high closing percentage, we were priced out [00:24:00] property.
Okay? So I'm not saying go ahead and do this to your, to your companies right now because you, 99% of your fuckers are not priced out properly. So first, price yourself property in order to pay your, your, your, your employees properly. Mm-hmm. Karen, so turnovers, they would get paid 5%. I've seen companies paid two and a half, three, three and a half percent.
We were paying 5% because we wanted to recruit the top talent in the industry. The reason why everybody wanted to work on action, there's two reasons. Okay. We had a dope as fucking competitive culture. We have a dope as competitive culture, right? We have a, we every, everybody wanted to work there because the top technicians, top sales guys, top installer, top, everything was there.
So. Competitive atmosphere. And the number two, and don't fucking forget this because you fucking forget, we pay more than anybody. People go to your job, people go to your contract, people go to your shitty ass shops, people go, are driving your shitty ass vans. Mm-hmm. Because they're, they're getting paid.
Okay? The reason why they were coming [00:25:00] to me, it's an action over anybody in Southern California, is because I was paying more than anybody. I was treating 'em better, and I was paying them better. That's the reason why we were, we were growing so fast. So again. Super simple, 30 to 15% sliding scale on anything repair or iq.
And then anything that had to do with the labor department, which is install insulation, ducting, whatever they wanted the the labor department to do, they would get paid a a, a flat 5% on
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That's field. E-U-L-S-E head to their website to learn more. Field pulse.com. That makes sense. We, what was gross, you were sort of describing gross margin there for a second. Were you guys at 45 or were you north of 45%? No, we were
Ismael Valdez: running at 47.1% Gross profit. Yeah. On the HVAC side. And on plumbing we were running at 54.2,
John Wilson: I think percent on plumbing.
Yeah. Alright, so you guys af after that, like 30, like what was the gap from 30 to a hundred million? What? What happened? Walk me through it. 32 60 and then a hundred. Yeah. It's fucking crazy. So 30 from
Ismael Valdez: 32 to six.
John Wilson: When did the new locations come in? We're in the 30, 6,000.
Ismael Valdez: Oh, we've always had the locations open.
We've always had the locations. I think what took the jump on it [00:27:00] was the emphasis on fine tuning the operation at that scale.
John Wilson: Yeah.
Ismael Valdez: Like at that scale. I already had a CFO, I had a controller. Yeah. I had a, a operations manager. I had a sales manager, a sales executive. I had a service executive. I have a plumbing like it was a fucking hole.
Team of people making decisions for the operation. It wasn't just me because right now what's gonna get you stuck between 20 and 40 million is that the, the CEO still feels like he has to be the big man on the team and show everybody that he's the best one. At at that, at, at that point, I saw myself, I saw myself, humble, uh, myself a little bit more, and I started alleging people do, giving people more, you know, authority.
Yeah. To, to, to, to, to make a decision. That's what took me from, from 60 to a hundred. Was building the executive team. And then on the, on the bottom of the executive team, there was a, there was a, uh, a man, a lo, a high level management team. So there was three, two different layers of them. So there was executives and the, and [00:28:00] then the high level managers that, that's how it took us from 60 to a hundred.
John Wilson: Yeah.
Ismael Valdez: And when, when did the new locations launch? 'cause you said there was six. Oh, for year one we did heim. For, uh, first year two, we did Palm Desert. Year three, we opened up, uh, Riverside. Year four, we opened up, um, uh, Los Angeles. Year five, we opened up Sydney Valley, and year six we opened up, uh, south County, I think.
John Wilson: Yeah.
Ismael Valdez: Yeah. So we, and then on top of that we have micro locations too, which were just used for GMBs. Yeah. Um, for, for Yelp accounts, for, for LSA accounts for. For Google ads, for all that. So we, we had, we had, we had five actual operations and then we had four micro locations around the, the operations just to be able to lead, generate more through Google at, at a hundred million dollars, guys.
The fuck, one of the biggest keys in at a hundred is your fucking lead generation has to be so mm-hmm. Fucking on point. And it's gotta be, it's gotta be nonstop all year round or [00:29:00] otherwise, you go backwards, right? You go backwards from a hundred to whatever. If you don't, if your lead generation is not on point, because at that point your fucking sales team is, is, is already profound, your sales team's already fine tuned.
Your service team's already done. Your, your, your production team, your CSRs, your all that is done at a hundred. There's nothing to work on there. No more. The structure's already there. Now it's just fucking making sure that you're feeding that beast. Yep. Uh, enough leads to be able to, to be able to sustain it.
John Wilson: What was the split between lead gen and. Like branded spend in marketing along that journey. And did it, were there points where it changed or was it pretty much all lead gen? It
Ismael Valdez: was all lead generation through Google, through Yelp, through billboards, through, um, radio, through tv. Most of our spend, though, I would say 60 to 65% of our spend was always Google.
Google was a fucking, Google was our machine to be able to lead, generate. Right. And at that time, at that point, imagine we're spending the 10 to $12 million a year. Marketing like six, [00:30:00] $7 million of that is getting spent on Google, bro. No other company here in fucking, but not even. And not just here, like no other company spending 5, 6, 7, $8 million on Google.
So we're lead generating through Google. But the key to that part too, is being able to feed the machine too. 'cause it's not, you can't just spend all your money on Google. If people don't know who the fuck you are, they're not gonna click on your ad. So that, that's, that's where the billboard game, uh, came, uh, into place.
30, I think 30% of our budget was spent on billboards. Uh, 60% was spent on, on, on Google, and then 20, it would fluctuate 10 to 20% on Yelp. Um, and then the rest was just like direct mail, email blast, ringless voice, all the little campaigns that nobody gives a fuck about.
John Wilson: Yeah. So you never really did mass media, like TV, radio?
Ismael Valdez: Oh, man. I was in it for a little bit. I was in for, uh, radio, TV for a little bit. I just found out that, that, that, that what, what, what? What most people are missing right now is that they're not paying attention to where the consumer's at. The consumer's here, baby boy.
John Wilson: Mm-hmm.
Ismael Valdez: That's all they're, that's all they pay attention [00:31:00] to.
Mm-hmm. They're not on tv, they're not on radio. If the, when, let me tell you something. Let me, let me, let me explain to you the psychology behind marketing. When you're, when you're watching a baseball game, when you're watching the news, when you're watching a a, a TV series, what are you doing on the couch now?
John Wilson: Mm-hmm.
Ismael Valdez: Your fucking phone. You're on your phone and you're using it as back notes. That's what most people don't realize. Even the older generation, the older generation is stuck on their fucking phone app. Yeah. They worse. You have all these grandmas and. And grandpa's on Facebook all fucking day long, posting pictures in Southeast and pictures of their grandkids and their kid like, this is it right here.
Whoever wins this wins the war. Mm-hmm. Right. That's why I stopped doing tv. That's why I stopped doing radio because we were getting little to no return on it. Now, I might be wrong now, you know, some of the traditional medias are coming back too, but. At the end of the day, everybody's stuck on their phone.
We gotta find a way to keep, to get their attention there.
John Wilson: Yeah. What, what are ways do you think that did that?
Ismael Valdez: So look at what I'm gonna, I'm gonna give you the journey of what ha what worked that next year. Mm-hmm. [00:32:00] So, year one to three, uh, newspapers, uh, magazines, direct mail, coupons, val pack, uh, print, uh, little tv, little radio.
All that was fucking popping back then the first three years. And then it started replenishing like that. Mm-hmm. And I started paying attention to my marketing. Right. So that's when I came out and I'm like, okay, Google. That's what fucking Google started popping in. Yelp started rising and all the, the search engines started going right.
So that's when I hopped. I, I, I, I slowly, uh, turned down all my print ads and I started going into Google, started spending into Google and, and into Yelp, into what else were we doing? A little bit of social media like everybody does, but mostly Google and Yelp. And, um, and we kept a little bit of drag mail in there.
The next phase, and this is where I kind of, uh, stepped back for NextGen and where I'm gonna tell, uh, direct you guys the, that search engine, which was Google Yell, Angie's, they all that. That was a couple years ago, like that worked really, really, really good. And so Google spiked up their fucking rates of the ass [00:33:00] and now everybody's paying a million dollars for a lead, right?
Yeah. Hundred percent. So, you know, the next generation, the the next, the next form of lead generation guys, the next form to capitalize on clients is social media and entertainment.
John Wilson: Mm-hmm.
Ismael Valdez: Okay. Listen to what I'm enter, because I always talk in the future. The next three to five years, yes. Google's still gonna work.
Yes. Yelp and Angie's and all those search engines are always gonna work. The way you're gonna feed that machine is for your social media, entertaining people on social media because everybody's stuck on this fucking phone. Mm-hmm. Entertaining people on social media, not through a, uh, before and after picture of your stupid ass water heaters or a before and after.
Picture of your ducting. Nobody gives a shit about your ducting. Nobody gives a shit about your tuneup process. Nobody gives a shit about your water heater, flushes. Nobody gives a shit about none of that. Listen to me, nobody gives a fuck about that. You know what? They care about being entertained on their phone.
So entertain these people.
John Wilson: Mm-hmm.
Ismael Valdez: While you're branching yourself. So when they need you, they go [00:34:00] on Google, Yelp, and Angie's and all those fucking search engines, and then you capitalize on 'em. That's what, that's what the lead generation's gonna be for the next three to five years.
John Wilson: Yeah. No, I mean, I think I agree.
Um, I actually very much agree. I think. I think I agree. I think we started about that. Yeah. Nice. Yeah, we, I think, I don't know, I, I'm. Google's like obviously gone through a lot of variations and like LSA got crazy, it's gonna be wild to see what happens with the GPT search and like where that takes, you know, 15 years of SEO investment.
Uh, I think that's gonna be crazy, but it does seem like social media becomes more of an engine than it has been. So we're, I think we're in full agreement
Ismael Valdez: 10 years. This is, look at three to five years. Is social media feeding Google and all that to capture,
John Wilson: right? Yeah.
Ismael Valdez: Five to 10 years from now. This is five to 10 years from now.
I'm calling it right now. Social media will finally get their [00:35:00] head out of their ass and we'll be able to lead, generate True. Yeah. Lead generation. Yeah. Through Facebook, Instagram, TikTok, fucking, uh, what, what else? YouTube like for those guys will finally get their head out of their ass and we'll be able to lead, generate live without using Google, without using Yelp, without using all those search engine.
Social media in the next five to 10 years. After five, this is, you know, 20, 30, and and beyond. 20 29, 8, 20, 29 and beyond. That's when social media is gonna be a true lead generation for the, for the trades. Yeah. Until then, you guys gotta fucking entertain people.
John Wilson: Yeah, no, I agree. And I think it's, I, I'm honestly kind of excited for it because I think it's a moat.
It's sort of like the only people that can do social media effectively are. Like the one man show, like the guy who's got the time, uh, or like somebody with the resources and everybody else is just fucked. Like, you're just not gonna be able to keep up with quality. You're not gonna be able to do the output.
So we're, we're, we've, [00:36:00] uh, we invested in it kind of early, but we're excited because we think it's really gonna like separate the boys from the men.
Ismael Valdez: Fuck
John Wilson: yeah. This fuck yeah. Is your content,
Ismael Valdez: your content creation and social media is what's gonna fuck you drive this machine up to, you know, whatever, how, however big you wanna get.
It's driving content through social media and capturing on search engine. I thought his wheel spinning on his wheels are spinning right
John Wilson: now. I, I think, uh, I think it's more, I'm, I'm like, I'm, I'm rolling back through it in my head and I'm like, we've killed it in lead gen this year. So most of our company, or most of our competitors, uh, most of the industry has had a really challenging year with leads.
And we have not at all. But we're, I'm concerned that next year we might have a little bit of a challenge, uh, just 'cause, you know, we're. You can't be immune to it forever. So yeah, we're trying to dial in what that looks like now. And the SEO thing really threw me off. Honestly, it's not. Here yet, but like, it'll be here in six months.
So, um, I don't know. That's gonna be weird.
Ismael Valdez: Look, the reason why I don't, the reason why I don't bring up [00:37:00] SEO as much as I do on, on social media, on other avenues on it, the reason why is because, um, pretty much AI is gonna be, uh, is, is gonna overtake SEO, right? They're gonna replace every content creator.
They're gonna replace all those people. What I'm interested is finding out, and this is why Google's kind of Google and, and search engines are gonna, are gonna kind of fade away and let the social media and, and listen to what I'm about to tell you guys because makes sense in my head, but I don't know if it's gonna make sense in yours.
Ready? The reason why a i is gonna change the whole game on the SEO and page search ad is because. Everybody's going to start using AI to lead, to lead generate through Google and through and SEO and all that. Right? Right. Dude, you can't have every fucking AI bot fighting each other to get, grab that best page.
Sure. Grab that. So eventually you're gonna see a diminishing search on that, and now it's gonna come up to creativity. Hey, the one thing that AI can't fucking do is be creative. Mm-hmm. Yes. They can lead you a certain way and chat. GBT can give you examples, but. They can't get on a [00:38:00] camera and fucking show who you really are as a person and show your intentions in the business and show how much you care about your client.
Hey, I can't do that shit. And I believe the next phase of, and this is where social media is gonna take off on lead generation, is being able to show who you are as a person coming up to your clients, and then lead generating through there. I think those people are gonna win over, let's just keep pouring money on Google.
SEO. Yeah. Paid search, all these fucking, uh, uh, direct mail. Let's keep doing that instead of like, Hey, how about we, how about we look at the operate, uh, at the marketing operation as a whole and start dissecting it and figuring out what we need to do to keep, you know, pushing forward instead of just being okay with Google, taking over a control of our business.
Whether you guys realize it or not, Google fucking has control of every business, no matter how big or how small you are.
John Wilson: Yeah, no, I, I fully agree. This became a big project of ours late last year. We wanted to un Google the business, and I think that that's why we Exactly. I think that that's why our lead generation [00:39:00] wasn't impacted as the same as most of the industry is.
We did on Google. Most of our, most of our business. Yeah. Uh, which was a really, yeah, it was a big win. But all that, that led to, and this is the downside, all that that led to was more lead generating activities. And I'm, I'm, I think you're right about social, but I do think that there is something more to branded.
Than we have done or that you've said so far. I think there's another layer of branded here, uh, that we're considering our big move for next year. Are you still running your referral program with spreadsheets and Venmo? Well, VUCA is gonna bring you referrals into the 21st century. It's a referral program on steroids.
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[00:40:00] VUCA automated referral programs for home service companies
Ismael Valdez: and, and look, again, this is one of the reasons why I came up with the Nuva thermostat guys, because I saw in the journey the customer journey, the customer journey's been fucked for the last 30 years. Okay? Nobody has control of the customer journey as soon as they need us to when they get us.
That is the biggest problem we've had besides, let me rephrase this. As soon as the consumer needs us to, when, who, who gets to go out there? Nobody has control. It's Google, all these fucking trillion dollar companies, right? Amazon. They all have control of that. So that was one of the biggest, uh, obstacles I wanted to, to, to fix in the industry, and that's why I came up with the thermostat.
The second biggest, uh, hurdle that we have in the, in the industry is the, is the recruitment, which, you know, we can get into later on in a, in a different episode. But the biggest problem why I came up with our thermostat is because I saw that as soon as the consumer needed us, the first thing they did is went to their thermostat.
They don't feel cold there. They don't feel hot air, whether they do, they pull out their phone and they [00:41:00] start fucking looking for a contractor. And that's where we lost them.
John Wilson: Yeah,
Ismael Valdez: that's where we lost all the consumer. And that's where I came up with the thermostat. This is the first thermostat that connects the consumer.
To you for life. Mm-hmm. Right. I saw that. Uh, if you go to your, if you go, I saw the alarm company fucking model and it, and it blew me away. If you go to your panel, right, I have a DTI don't know what you guys
John Wilson: have. Mm-hmm.
Ismael Valdez: Bell, a, DT, whatever the fuck you guys have. But if you go to your alarm panel, if you cover up that a DT logo, they're fucked.
John Wilson: Yeah.
Ismael Valdez: They would, they would be on the same, they would be back on square one like we are. If my alarm com, if my alarm was fucked up and a sensor didn't work, it didn't want an alarm, and it didn't have that a DT logo on the panel, I would search on my phone alarm company near me. And that's what they've been doing to us on the, on the HVAC side for, and the plumbing and the electrical and the roofing side for years and years and years.
So now what I did is I put, I put the, your, the contractor logo in front of the customer, consumer on the wall, [00:42:00] an easy access point, which is through a QR or through a custom app.
John Wilson: Mm-hmm.
Ismael Valdez: The, the, the consumer gets to download an app with your logo, John. Not with NuVet, not with Nest. Mm-hmm Now with Echo, be now with fucking Honeywell with your custom app.
When they need you to turn on the system, guess what they're gonna do. Oh. If it doesn't turn on, click to call. Hey, hey John, my system's not working. Mm-hmm. You get that lead back. If you don't do that right now, and they don't have a branded thermostat or they don't have anywhere to do, they have to go through their emails, they have to look for an invoice, they have to try to remember you, which we know these consumers aren't, you know?
Mm-hmm. Let's face it. Right? They have a lot of things on their head. So what do they do? Go on their phone, go on Google, AC repair near me and call a contractor, and now you lost that when I
John Wilson: Yeah,
Ismael Valdez: that's what we were trying to figure. Little bit
John Wilson: how many thermostats. Get sold a month.
Ismael Valdez: VE was a ve so the project started three years ago from scratch of a circuit board.
Yeah. [00:43:00] Molding interface to now we just launched it for, I wanna say about three and a half months ago, four months ago. We have 168 creeping up on 200 contractors, uh, that have successfully onboarded onto ve. They're, you know, taking advantage of their custom app and everything. We are selling, we are creeping up on the 2000 mark range of thermostats installed and sold already.
And this look on our first three months of startup. So, um, what it looks like in the, in the, in the next six months, we will have over a thousand contractors onboarded on Nuva. These contractors are gonna be selling five to 10 thermostats on average, five to eight to 10 thermostats a day, which would put us between, you know, eight to 10,000 thermostats a day.
Um, how many thermostats get installed every day across the nation? Hundreds of thousands. So it's, it's insane the amount of thermostats that get, that get installed. Um, why I got into the, the thermostat industry was to solve the problem for our contractors. Yeah, that was number one. But number two, if you Google what Nest sold to, uh, what Nest sold to Google for $3.2 [00:44:00] billion.
10, 3.2 fucking billion dollars. But they didn't solve anything though. No. They didn't solve anything. They put a, a nice little thermostat with Google's name on it. You don't think Google's smart enough to know that if they start putting contractor names on, on the thermostat, what happens to the lead generation on search?
Mm-hmm. They'll fucking go skyrocket down because now they're just gonna call that contractor back instead of going on Google and searching for, for a contractor and which, who, who benefits, they benefit on the thermostat and they benefit on the search. Yeah. That's what we gotta fucking stop.
Jack Carr: So if, if our listeners want to find.
Um, this product, where, where should they go to get more information? Where should they go to potentially try and onboard? How, how is that process working?
Ismael Valdez: So, NuVet home.com. NuVet home.com. NUV as in victor e home.com. You guys can fill out quick, a quick, uh, contact information. We'll reach out to you, our demo team right here in the back of me.
We'll reach out and we'll do a whole presentation for you guys. Um, social media guys. [00:45:00] I have a social media group that's called Service Avengers. Okay. Listen to me. Service Avengers. There's about 6,400 contractors in there. 99% of 'em are CEOs, owners or general managers or high level managers that, that are operators.
Okay. Service Avengers on social media on Facebook is probably the dopest fucking group. It's a free group that I give, that I'm doing for, that I did for the last four years for contractors. We talk about marketing, we talk about p and ls, we talk about recruitment, we talk about paid plans. Mm-hmm. We talk about ve, we talk about other o, other tech industries, other tech, uh, companies that, that help us out.
So service ventures, if you guys wanna get in contact with myself, NuVet home, if you wanna demo on, on the thermostat.
John Wilson: I, I think the move to a product is really interesting. Um, and I, I agree. I mean, it looks like a great product. We'll check it out. But what does it look like to, that's a totally different selling audience, right?
So like, Hey, I'm gonna go get a thousand contractors and I'm going to, you know, create distribution channels. Is it all direct to the contractor percent?
Ismael Valdez: I would never go to Home [00:46:00] Depot. I would never go to, to the supply houses. Mm-hmm. And the reason why I would never go to Home Depot, and the reason why I'll never go to Lowe's or retail is because Nest did that to us in 2015.
In 2015, nest was launched as a product to retail. And they fucking sold millions of these nests to the consumers. Mm-hmm. And skipped the contractor. And I'm like, fuck that. They skipped us. We should have been making money on the thermostat.
John Wilson: Mm-hmm.
Ismael Valdez: Now guess what? Get, guess what happened? Guess what happened to Google?
Three years later they call contractors. They're like, fuck, we got a ton of warranties. The fucking, the, the customers are wiring them wrong. They're burning 'em. And, and we got three leads. No, no, no, no, no, no. You fucked up. Mm-hmm. And that's why I will promise that I would never go through a, through a, a distribution like that.
It will always be to the, to the contractor. So what it looks like, you guys go on hub it home.com, get a demo, the demo's 30 to 45 minutes on it. You make a commitment to us, you can get your thermostats the next day. So it's, it's, it's, it's super, super frictionless and super simple. Um, we are [00:47:00] literally booked out probably, I wanna say.
About a month and a half to two months with leads of people just pouring in from referrals. Mm-hmm. Or pouring in from social media to, to try to get the thermostat. But if you guys go on Newman home.com, I promise you, we'll take care of you for sure.
John Wilson: This was, uh, this was awesome to have. Jan. If you had any message for anybody that was wanting to cross that hundred million dollars mark, what would it be?
Ismael Valdez: If I had one message for the a hundred dollars, a hundred million dollar mark? It's not for everybody, ma'am. It's not for everybody. What happened at NextGen was a, was a, was a mixture of perfect timing. Of grinding muscle. Mm-hmm. And, and just grabbing the, the perfect team to be able to, to be able to sustain that kind of growth.
So what, when, when, when you hear about the NextGen story and when you hear about what we did in the, in the seven year span that I, that I had NextGen and how I sold it to private equity and all that, that sounds fine and dandy, but I, but I'm telling you, from the bottom of my. I lost a lot of relationships.
I lost a lot of time with my daughters. I lost a ton of fucking time with my friends and family. Um, there was, you know, for [00:48:00] almost five years nobody knew of me. I wasn't on social media, I wasn't on Facebook. Mm-hmm. I wasn't on Instagram. I, nobody knew of of me. They just knew of what kind of, what was going on over there.
But dude, it was because I was from, you know, 5:00 AM to 9:00 PM was. I, I, I, I, you know, I couldn't, I slept, I, I, I, I couldn't sleep. I, all I thought about was NextGen. My obsession was NextGen. And now I have the same obsession with Nuen, right? So it's not for everybody. Guys, I promise you guys that out, you could make a fucking ton of money at 10, 20, 30, 40, 50 million.
Mm-hmm. And, and still be able to sustain those dope ass relationships and still be able to have a, a good life. Um. Well, where my sweet spot is the next company that I grow, which, you know, in my, my non-comp should be over in a couple years from now, I'm gonna grow a plumbing company. I'll do, you know, I'll get it from zero to 50 million and no more than one or two years, and then I'll flip it.
But the, uh, uh, 25 to 50 million, it's sustainable. It's chill. Mm-hmm. It's not fucking, you can still have a life outside of [00:49:00] work. You can still enjoy life. Right? So a hundred million school, 150, 200, all that sounds good. Like super dope guys. But the amount of pressure that you're under, the amount of, you know, things that you gotta be looking for in the business, people stealing from you, lead generation, customers taking advantage of you.
All that just gets bigger and bigger at that scale. So if I could have one message, it's not meant for everybody, I would, I would focus on what. Where I, where you find your happy spot. Once you find that happy spot, just enjoy it, man. The journey's dope. If you guys, if you guys, you know, enjoy with your team for sure.
John Wilson: It's a good message. Awesome. Thank you so much. Yeah. Thanks for coming on today, sharing your story about next Gen and lead gen and everything else we got to get through. Um, and if people wanna find you, they're gonna go to Service Avengers or check out the thermostat product@nuvahome.com.
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