Owned and Operated #45 - Jon Matzner and the Anti-Franchise

On today’s podcast, John welcomes in, Jon Matzner. Jon is the CEO of Garage Excel. They are garage remodeling and organization specialists based out of Southern California. Mr. Matzner, originally from the East Coast, came from the National Security world, where he spent time in Africa and the Middle East for the better part of a decade. He went from working for Uncle Sam to marketing to owning businesses, and now into the SMB world. They’ll dive into how each lesson Jon learned along the way helped and led him to where he is today. You’ll hear his passion and excitement for buying and building businesses as it radiates through his voice while he talks a little bit about the Geographic Growth Model, or as he likes to call it, the Anti-Franchise.

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Announcer: On today's podcast, John welcomes in John Matzner. John is the CEO of garage Excel. They are garage remodeling and organization specialists based out of Southern California. Mr. Matzner, originally from the East Coast, came from the national security world, where he spent time in Africa and the Middle East for the better part of a decade.

Announcer: He went from working for Uncle Sam, to marketing, to owning his businesses, and now into the SMB world. They'll dive into how each lesson John learned along the way helped and led him to where he is today. You'll hear his passion and excitement for buying and building businesses as it radiates through his voice, while he will talk a little bit about the graphic growth model, or as he likes to call it, the anti franchise.

Announcer: Enjoy the show.

John Wilson: It's no secret that Brandon and I have cleaned up a lot of poop in our career. Unfortunately, we don't clean up crappy bookkeeping. That's where today's sponsor comes in. Appletree Business Services handles bookkeeping, payroll, and taxes for small businesses. Appletree Business Services is the go to choice for growing service companies so they can manage cash flow, know their numbers, and save on taxes.

John Wilson: The U. S. based team has taken care of small business bookkeeping and taxes since 2005. Find them online at appletreebusiness. com or email patrick at appletreebusiness. com. Welcome back to Owned and Operated. Today I have John Matzner on with me. Welcome, John. Thanks for having me. Yeah, that's gonna be pretty sweet.

John Wilson: So you're in sunny California. Is it actually sunny right now?

Jon Matzner: It is gorgeous. I don't even want to really talk about it publicly or else more people will move here. So just keep thinking about the high taxes and stay

John Wilson: away. I'm going to do exactly that. Yeah, it's 40. It was 80 over the weekend and it's 40 today.

John Wilson: So yeah, I jumped in

Jon Matzner: the ocean this morning. That's all I'll say. Oh my God. Oh my God.

John Wilson: All right. Yeah. You're kicked off the pod. Pod's over. Yeah. All right. Thanks for coming on. All right. John, how about you give us a little bit of an intro to what you're up to and how you got here?

Jon Matzner: Sure. So my name is John Matzner.

Jon Matzner: I'm the CEO of a company called Garage Excel. My background grew up on the East Coast. I was in the kind of national security world for the better part of a decade, taught me language, did all that kind of fun stuff, lived in Africa, lived in the Middle East. And then at some point, I wanted to get back to the States.

Jon Matzner: I didn't really want to work for Uncle Sam forever. And so just, I think I like stumbled across it. Walker D. Beal, I can't say his name, his book, Walker Diable. Yeah. Diable. Thank you. I think I maybe ran across his book or something. I was like, Oh, I could do this. This seems very doable. And so started my self funded search, which I didn't even know that was a word or a completely foreign topic to me while still living in the middle East.

Jon Matzner: And then looked at a bunch of different stuff, which I'm sure we'll talk about and ended up buying this company in Southern California called garage Excel. And we've been Growing and changing and doing all sorts of fun stuff. But that's a short punchy

John Wilson: history to date. Yeah, that's great.

John Wilson: When did you exit your last career? And when did you actually buy the business?

Jon Matzner: So we bought this company about 18 months ago. And I left the government in the late teens. I don't exactly remember when, but yeah, like late teens. So I got out and I was living in Dubai at the time and was doing some marketing and raising some money for some us based like real estate folks.

Jon Matzner: And I remember talking to, and I don't mean this pejoratively, but I remember talking to a lot of old guys about marketing and I was helping them with marketing. And then at some point I was like, if these guys are that bad with this much money, I can go compete with them. I'm not going to try to sell them like marketing retainers anymore.

Jon Matzner: I was just like, I'm just going to go compete with them. And so that's how I started pulling on the thread of actually owning a business and operating it, which I really enjoy. So

John Wilson: how were you qualified to help raise money for real estate? Like, how did you get that experience?

Jon Matzner: Yeah.

Jon Matzner: So in my previous career, I was spending a lot of time for lack of a better word, networking. And so building relationships with affluent folks, because you don't network with cab drivers, you network with the affluent in various parts of, The world, right? Especially the emerging markets.

Jon Matzner: And so it was a fairly easy transition to turn that networking relationship instead of, advocating the objectives of the U S government and do advocating the objectives of commercial real estate development that needs mezzanine debt in Orlando, Florida. It's not that difficult of a transition and there's lots and lots of flight capital that looks for a home in the U S.

Jon Matzner: And so there's a whole ecosystem based on that

John Wilson: and it's really interesting. Yeah. I just have so many more questions. I know that this isn't the point, but no, we can talk about this as extensively as you want. You're going to regret saying that. So was it like 1099? Like you got a percentage per X amount of dollars you brought or?

Jon Matzner: Yeah. So that's how it started. And then what ended up happening, which is how I was able to build some of my marketing creds, which ties into what I currently do now was I realized that there was this whole kind of agent based private placement model where it's like lawyers and accountants in Istanbul, Turkey, or Mumbai, India, who all get paid.

Jon Matzner: 5 or 10 percent of what they raise and, people fly out and they do these road shows and expensive collateral. And I did that a little bit because I knew how to do it. That's how I got my start. But then I realized that there was this direct to consumer model, which used the Internet. And so I ended up working with a lot of these folks in the US to buy Facebook ads in Mumbai or in Islamabad, Pakistan, or in Lagos, Nigeria, looking for wealthy people and help them build an inside sales process that didn't rely on these kind of sketchy intermediaries.

Jon Matzner: And so I was able to build up. My marketing kind of reps and inside sales process as a way to go out and compete. It was a way for these commercial real estate folks to compete with people who had better networks than them because these are like back slapping throw an event for me at, the four seasons in Istanbul and that guy gets 50 grand for every investor that he brings.

Jon Matzner: But the upstart guys can't do that. So I'm like, dude, just buy Facebook ads, build an inside sales process. You're not going to pay 50 grand in commission, but you are going to pay for clicks. And, now I like to think at least first of all, I'd say I got out of the industry. I sold the company, but with COVID they couldn't travel anymore.

Jon Matzner: So I think they all had to adopt the methodologies that we were using. And then second, it's just a much better model because. Your agent gets paid a thousand dollars more commission. You just lost your distribution. Whereas the inside sales process is controllable and predictable. And I spent 10, 000 on ads.

Jon Matzner: I raised 1 million. Go. And so I think it's actually a superior kind of emerging market fundraising model. And so I did that for a couple of years and was just like, okay, that's fun, but money. Isn't that fun for me? And so I was looking for what was next and I wanted to go back to the States.

Jon Matzner: So

John Wilson: Yeah. Are there less regulations if you're not taking money from us investors?

Jon Matzner: Yeah. It's not exactly the wild west. The us based projects have lots of regs that they need to deal with and broker dealers and all that kind of stuff. But if you're abroad, it's pretty fast and loose, especially in these emerging market economies, a lot of finders fees and things like that.

John Wilson: Okay. Yeah. I was mainly thinking of accredited and unaccredited and, Oh yeah. There's none of that. Okay. And you don't have to you can just publicly advertise investments. It sounds like, whereas you Can't really do that in the States without, yeah, there's,

Jon Matzner: you asked 10 lawyers, you get 10 different answers.

Jon Matzner: There's some like securities attorney who just fell out of his chair with my answer, but, generally speaking, it's it depends on the type of offering. And was it, what's it called? Reverse solicitation or not? There's it's not the same in the U S where it's like, it varies by what country you're in.

Jon Matzner: Do they enforce it? Did you really market the security or did you just market a program? And then the security was after you'd been, so there's lots of nuance there that I just casually blew through that. Like I said, some securities attorney just blew an O ring, but generally speaking, it's a more loose environment.

Jon Matzner: Someone call an ambulance. There's someone on the floor somewhere. Any issues with what I said, please email John, not me. So he wants to hear, right? Yeah, exactly. John Wilson.

John Wilson: Yeah. Yeah. Don't email me. Yeah. Also don't email me. Okay. All right. So that's pretty interesting. One last question on this. You raise money, you find random people that want to, Put money wherever what was average check size.

John Wilson: These are

Jon Matzner: like high retail. So maybe a million bucks. It's about right So yeah, probably about a million bucks. Gotcha.

John Wilson: That was fascinating. Okay, so you bought a garage business 18 months ago you were in Dubai you said yep, so you weren't really based in San Diego, but are you born and raised?

Jon Matzner: Nope, I grew up all over, but I wanted to know, I wanted to live on the beach because I've lived in crappy places. And so I was just like, where is the nicest place in the entire world that I can live? That's where I shall buy a company. That's what I did. So

John Wilson: it was the other way around.

John Wilson: That's optimizing for lifestyle. So that's great. Yeah. So you bought 18 months ago. What is that? August of 2020. I might've

Jon Matzner: messed my math up. I thought it was December of 2020. Okay. We bought in December 2020, whatever. I might've messed my math up. So however many months, what is that? Like 15 months maybe?

Jon Matzner: Who knows? Please count them. Let me do the math.

John Wilson: Yeah. Yeah. Quick. Alright. Alright. So you bought this thing a few months into the pandemic. I find people that buy companies, maybe aside from me, because I bought a few, but like people that bought companies in 2020, I think are really interesting. Yeah. Why did you do it?

John Wilson: Sure.

Jon Matzner: I bought it because I thought it'd be fun. That's the real reason. But, Okay. In terms of you mean why we bought this specific company or why did I buy a company? Cause I could give you their answer.

John Wilson: I guess we'll dive into the specific company aside from living on the beach, but 2020, like what was going through your mind at that time we were dealing with, I'm just trying to place myself into our mindset.

John Wilson: Like shutdowns were a few months ago. I'm looking for a deal. I don't own a business, so I didn't get PPP. I didn't get the windfalls. So I'm just like a normal guy about to buy a company. And that seems like a leap to me.

Jon Matzner: Yeah, because this was in construction, it was a critical industry or whatever they used to, I forgot what the, that's a very COVID term.

Jon Matzner: I forgot what it was called. Oh yeah. What

John Wilson: did they call it? There's some name for what it was called where they didn't have shut down.

Jon Matzner: So that was a piece of it in terms of my mindset. And I, when I read, I do love my Twitter, I love reading and hearing different people's opinions, but I just wanted to get in the game.

Jon Matzner: I wanted to make sure I wanted to get in the game somehow because I knew once I was sitting at the poker table and I've been right that sitting outside the casino for small businesses and analogy to a casino is probably not a good idea, but, sitting outside the playing field, let's say I just wanted to get in the game because I knew it would let me.

Jon Matzner: Do more deals or do or meet people like you or whatever. And so I was eager to find something that was, a responsible choice. I didn't want to buy a restaurant, but that was a responsible choice that put me in the game because I knew I could execute. I had that confidence maybe misplaced, but ultimately I think it has been successful and I'm super happy I got in the game.

Jon Matzner: And so that was my mindset going in, which was just like, I want to get in the game, just get in the game. Because there's no fun sitting on the sideline, so yeah,

John Wilson: that was

Jon Matzner: the mindset.

John Wilson: I totally agree. That was the mindset at the time. And you agree with your mindset at the time?

John Wilson: Sounds like you do.

Jon Matzner: Yeah,

John Wilson: for

Jon Matzner: sure. I'm really happy with the journey that I went on. In terms of all that, my belief is a little bit again, maybe I have misplaced self confidence, but my dad and I have joked often how much fun it would be to open up the yellow pages and put your finger down and try to start or buy a business in that category and see if you could grow it within a year.

Jon Matzner: I actually have an active

John Wilson: bet right now of doing that.

Jon Matzner: Really?

John Wilson: Yeah. And it's mainly for Twitter, but I think we're about to launch a company. I think we're about to launch a company and give it away within six months, but try to get it to 30 grand a month. And so that's like a funny, like my idea of a good time.

Jon Matzner: Like I want to make money. I like nice things. I don't really care though. Like I want to pay my bills. Like I'm about to have my first kid. Like that stuff's important to me, but I love the game. I just, I don't know. I like the action and the action to me is like Rubik's cubing businesses, like looking at them closely, where's the money, where's the liability, where's the growth.

Jon Matzner: That's what I like. And the yellow pages bet with my dad or what you're talking about is just I get excited about everything. I just love the game. So it's I get excited about the action. It's not necessarily the result, which is really fortunate. I think a lot of people are like, if I'm not feeding starving babies, I'm not interested.

Jon Matzner: And I'm like, dude, I get so stoked talking about the most random stuff. Oh, you could do duck cleaning and then you could upsell. And I'm just like, man, this is like a drug to me. So I'm in the game for sure. And, unabashedly in the game. So yeah.

John Wilson: Nice. All right, so walk me through the journey over the past however many months this has been.

John Wilson: Sure. How'd it go? How'd the first six months go?

Jon Matzner: Yeah, so we were intentionally why we bought this one was, drives the next last The first six months or next six months, which was, I was intentionally bottom feeding. We didn't really buy a business. We bought into a sector when I say we, I have a couple of partners, but I'm like the enlightened dictator of the group.

Jon Matzner: Yeah. Is that the title? Yeah. That's not a democracy. It's a good title. It's enlightened dictatorship, but we bought into the sector. The big kind of tailwinds that we're taking advantage of is the work from home stuff. Yeah. Yeah. Which is people have a second bedroom, they move all their crap out into the garage because they want to work in that second bedroom and now their garage is a nightmare.

Jon Matzner: So there's some kind of primary market growth that we're taking advantage of. We like this business a lot because it is really a marketing and sales business in the garage space, meaning our labor is not especially skilled. Our products are not especially difficult to install or manage.

Jon Matzner: And so part of the reason we bought it was because we saw what we assess to be unsophisticated vertical from a marketing and sales standpoint. It's a lot of like Chuck and the trucks and guys who think they're in the cabinet business when in fact they're really in the marketing and sales business.

Jon Matzner: And We did a lot of that analysis up front. We were doing things like looking at click costs is a big thing that I did, which was we looked and saw what they were paying for traffic or what their competitors were paying and saying, with your average gross margins, with your average sale price, with what this click costs, you should be spending freaking six figures a month on lead gen as long as you convert through your funnel well, and so that was what we were doing going in.

Jon Matzner: So in the last, his best year ever was probably about a million bucks. He was the only guy who did sales. He had one crew, small little facility. We did that in Q4. So we grew pretty aggressively within a year. And we could geek out on all the shit that broke. Cause everything broke when you grow up.

Jon Matzner: Yeah, let's do it. What broke what happened? Let's see just our professionalization. There was nothing there. There was no business there. It was, for example, we got completely out of anything involving contracting. So all we do now is sell products. He used to do drywall and marking up labor kind of stuff.

Jon Matzner: And it's too hard to quote. It's too hard to protect your margins in, and it's not really critical to our business. And so we dumped all of this kind of ambiguous margin eating stuff. That's really difficult to hire crews for really difficult to do timelines to schedule and over the course of the first six months.

Jon Matzner: We were selling it because I was like, we need the revenue. We need the revenue. And what we ended up figuring out was that we'd rather just refer that out to somebody else. And then we'll just sell these nice set of high margin products, specifically cabinets and things like that, which is just a more simple, straightforward, global business.

Jon Matzner: But that didn't reveal itself overnight. I got kicked in the face over and was eventually, cowering in a corner saying, please no more paint. And then we're able to fix that. So that's an example of one. Another one was we had some really nasty cash conversion cycle stuff where we were getting 10 percent upfront and then all of our costs were coming before we got paid the back 90%.

Jon Matzner: And so we just dug a huge cashflow hole. Because we grew so fast and we were just like begging suppliers to send us their stuff. So we were paying them quickly and those kinds of things. And then all of a sudden it was like, Oh, we have an extra million dollars in cash in this business. Whoops.

Jon Matzner: And so we've now since fixed kind of our contract terms and our terms with our key vendors and stuff like that. But we fixed our cash conversion cycle, it was skimming the wave tops in terms of Ooh. Oh, this right again, we've structurally fixed that at this point, but for the first year, that was all, he didn't think about that kind of stuff.

Jon Matzner: He didn't take credit cards, the previous owner. So all sorts of different challenges associated with growing a company like that, we don't have recurrent revenue, or even reoccurring revenue. We basically sell one thing to the customer that we leave. So it's a very different.

Jon Matzner: Business. Then I think a lot of the other people you've had on the pod, which were a want, not a need, and we're not recurring or reoccurring. So it's a marketing and sales art. We grow by our marketing and sales feed the

John Wilson: beast. So are you only regional? Or do you sell wherever? Because you say you're basically productized now.

Jon Matzner: Yeah. So we pretty much cover Southern California right now. In fact, we're actually seeing some fraying at the edges of our model because geographically, once you start getting farther and farther away from a warehouse, it's just like they forgot one thing and there's three hours of overtime to fix it.

Jon Matzner: So we're pretty much in Southern California right now because we're vertically integrated. We both sell the product and install it. I'm sure we're going to talk about some of our non Southern California growth stuff, but there's different ways to attack that problem, but centralized corporate growth is probably not one that we'll pursue.

Jon Matzner: It's just too tricky if you're not in your backyard, so to speak. So walk me through how you are planning to grow. The classic way to grow a business like ours, and I think, we'll talk about this extensively, I think, but the classic way to grow a business like ours is franchise.

Jon Matzner: Which is, here's all the playbooks. Here's all the software we built. Here's all the CRM marketing stuff like that. But I think a couple of different things. First, setting up a franchise is expensive and time and capital intensive and a pain in the butt. And now I have to be in the franchise business, which is not what I really want to be in.

Jon Matzner: And so we wanted to see if there was a different way we could attack the geographic growth model. And what we landed on was what we're calling like the anti franchise. And we, I put up a basic site. We just signed our first one this week, actually, after launching it like two weeks ago, it's franchise disruptor.

Jon Matzner: com. And essentially what it relies on is we're turning ourselves into a B2B company. And so it's no co branding. So that means that you're not a franchise according to the SEC. If there's no co branding, you're not a franchise, right? There's a three part test in everywhere other than New York state, and one of the three is co branding.

Jon Matzner: But this one in Connecticut, for example, this wonderful guy named Jim, who would have normally have done a franchise, it's called Garage Experience, but everything under the hood is us. And so we can put him in business. We don't have to do a lot of rules because we don't have brand equity. We can basically show here's how you run a profitable garage upgrade company.

Jon Matzner: Now, if you want to tuck in a HVAC company later, we don't care is your company. And we've seen a lot of resonance because these home service companies are really relying on this idea of a national brand. But the fact is, people would rather buy from, Steve San Francisco garage upgrade company than garage dreams located on the other coast.

Jon Matzner: Now, franchising is a basic model isn't bad. It's just in this particular sector, people would don't want to buy from a national company. They want to buy from Cleveland garage upgrades, not. Garage universe headquartered in Silicon Valley or something. So we're taking advantage of that kind of localization aspect.

Jon Matzner: Walk me through how like

John Wilson: you make money off this anti franchise thing.

Jon Matzner: So we take a little bit of money up front, nothing crazy. So we make some money on that, not a lot. We have some shared services that are optional. In that we have some economies of scale on things like answering the phone or doing bookkeeping, or, at some point, we might even build like a little in house marketing company that we could, self refer these guys to right now we're doing it through kind of outside vendors.

Jon Matzner: So shared services, I'm a pretty good offshore. So I can bring a lot of power to bear and that might be really valuable for somebody. Who's never done it before. I can access that talent pool. We've done it. We do it a lot. But the real way we make money is we take 5 percent of the top one. So we just take 5 percent and it's, just garage upgrades.

Jon Matzner: It's not the whole company.

John Wilson: What is it if you have shared services? Is it seven or?

Jon Matzner: No, they're just paid a la carte. So it's just Oh, you want me to answer your phones? Great. 1200 bucks a month. Oh, you want to sign a 12 month contract? Great. 900 bucks a month, or, it's just, we'll price them out on a need basis.

Jon Matzner: What we consider as we've thought through it, the shared service model is really protecting our investment in that I want them to be successful. And I don't want them spending time worried about, they only have, their phone answer or called in sick. No, I can do that. I've got a bunch of those, or I don't want them stressing out about bookkeeping.

Jon Matzner: I'm like no, I got those. I want them focused on what are actually the levers of the business, which is marketing and sales and making sure the installs don't get messed up. So for me, it's not really a profit center. It's really about trying to make these guys or girls successful locally because I know what they need to be focusing on and it's not categorizing expenses and making sure the SKUs line up with the invoice.

Jon Matzner: I can do all that. No problem. So we're not quite doing it as a loss leader. We want them to take advantage of it. And it's priced below what they could get it independently anyway. So we ever get bought by private equity, they'll probably jack all the prices up, but for now it's, it will keep them low.

Jon Matzner: That is interesting. So when did you start launching your first one? We literally just signed our first contract at the end of last week after we talked about it. I think I wrote like a tweet about it, three weeks ago. And everybody I've got, we haven't marketed or anything. It's just been like Twitter.

Jon Matzner: I've talked to I'll keep his name anonymous, even though I know his name, the franchise wolf, retweeted us. So we got some kind of early action. And we've been really impressed. Our first guy was like a former Goldman Sachs guy. So we're getting smart people who are interested in this because they're like, do I really want to pay a quarter of a million dollars for a three ring binder and someone telling me to wrap my truck?

Jon Matzner: It's it seems a little silly and I'm like a crazy small government guy too. And so I also like that. I don't have to put a lot of rules in place and things like that. So I'm like, nah, man, it's your business. Like you want to make it a garage upgrade slash cannabis dispensary. Like Best of luck, just pay me my five points on the garage stuff.

Jon Matzner: So whereas in the franchise system, it's Oh, you can't do that. You're going to destroy our brand. You can only sell in this town or else you're going to. And I'm just like, I just get like the ickies again, in some businesses, it's wonderful in our business. It's not. How quickly do you turn this into the full model?

Jon Matzner: I think I want to stay lightly in the game in Southern California so that I can stay close to the market. But in terms of nationally, it's the only way we're grown is this model, which is, I think it's a powerful growth model. And I think I can do them, and I think they can be successful.

Jon Matzner: I think I can be successful. And it's resonated as somebody who sold a lot of stuff over the years, you know when you got a product. Like the questions we're getting, the kinds of people we're attracting, it's not like 16 year olds who are like CEOs of crypto companies, it's like smart people who are like at the right phase in their life to know what they're taking and those kinds of things.

Jon Matzner: So yeah, it's pretty much. I want to stay a little bit in the game in Southern California because I want to be near the market. I don't want to completely exit, but ultimately outside of Southern California, I think this is the only way we're going to do it. What do you think, by the way, it's still,

John Wilson: Oh, I'm interested.

John Wilson: So we launched something similar a few months ago. Our biggest hang up was Candidate Pool. So we got a ton of people interested. A lot of people. And we didn't even charge royalties, but we took equity. So that's a little bit different. Royalties might even be easier versus getting into bed with someone, basically.

John Wilson: And equity in a small business is like It's tough. Yeah, it's tough. Because then you have to Like the vetting process gets really involved. Yeah. There's a lot going on with the equity thing. The royalty thing, that's pretty interesting. Yeah. So we tried our thing. Our biggest thing was struggling to vet out people that we wanted to, share a cap table with, and, co invest basically a quarter of a million dollars each, this is very different.

John Wilson: I'm into it. Yeah, I'm really into it. I'm wondering about some of the problems that we have. Like, how do you, obviously you don't have to vet as much because it's almost not your problem. You want them to succeed, but correct. How are you going to fill the funnel with more people?

Jon Matzner: Yep. It's funny, it's nice.

Jon Matzner: I have a couple of really smart partners. And so you're asking the same kind of questions that we've been talking about endlessly, which is my role in terms of vetting. These is the ultimate answer is to some degree. We don't really care. It's, at some base level, I would say we don't really care.

Jon Matzner: Meaning it's like you decide you want to co brand with a strip club, dude. That's probably what not I would have said, but it's your business, right? It's, I don't have to worry about you bringing down the national brand. Cause there's no national brand. I think the answer that I've essentially landed on is.

Jon Matzner: They have to convince me that they've got a really good chance of being successful. And that's like my ethical, I'm not going to take some trust fund baby who doesn't know what he's getting into. And he's so this is like a passive thing, right? I'm like, dude, no, keep your money. But if somebody is asking the right questions, they have a good background and I think I can help them, then ultimately I'm not going to tell them to do anything.

Jon Matzner: I'm going to be consultative. Now, the two things that we have essentially set are mandatory, even though they're not necessarily filled by us is they got to hire a bookkeeper that's like non negotiable. Now it doesn't have to be me, but not only to protect my money, but I'm not going to let you being disorganized with your books, crater the company.

Jon Matzner: And then the second thing is that they have to engage a marketing vendor. To buy their traffic because ultimately at the end of the day, if you're not in our business, this is not a network your way to millions business. This is a disciplined customer acquisition strategy. And if you're a affiliate in Cleveland, you probably don't know how to manage a serious, internet campaign.

Jon Matzner: And so I'll introduce them. We have preferred vendors. I'll walk them in the door. But at the end of the day, they need to convince me that they can consistently generate customer inquiries because everything else I can teach them. But that is, a core part of the model. Yeah, that's our vetting and our kind of judgment process, or at least, it's a work in progress.

Jon Matzner: I might be convinced I'm I need to charge 5 times as much and, completely changed it. But I've been surprised by the quality of the people that we've identified. They're all the same too. They're all like. 40 to 55 years old guys with pretty good W2 income who've been there, done that.

Jon Matzner: They don't want to SMB assets are a little bit pricey for them. They've got, a kid or two, they've got responsibilities. They can't just do a startup. They maybe don't have access to the capital to acquire and they need to, but they're too old to have a boss, right? They're not like, I don't want to be a glorified employee of John.

Jon Matzner: They want to be their own. center of gravity, not just playing by my rules. And so this kind of package appeals to the guy who has always wanted to start his own business, but didn't want to take a second mortgage on his house to pay for that franchise fee with marginal value in the home services space.

Jon Matzner: But conversely, didn't want to pay six times earnings and get into the HVAC business completely clueless. Cause he's man, I got bills to pay. I can't take a PG on my house and buy an HVAC company. So I think that there's lots, I've seen your stuff. Tim in San Diego, Tim Ludwig is doing the kind of equity based search model.

Jon Matzner: So I think we're all talking around the same challenge, which is like, how do I magnify my knowledge in a way? Is that Supporting searchers. Is it supporting acquisitions? Is it this anti franchise model? Is it frank, so I think we're all playing around with this same thing, which is I would love to partner with John on an HVAC and then the terms and the structure and the cap table.

Jon Matzner: And so the services. I think you have a back office company, right? Yeah.

John Wilson: Yeah, we do. So we have a shared services model and in our version of this, it was optional access because I don't think you can force it. That becomes a conflict. We basically thought about doing this. We wouldn't be calling it an anti franchise, but we thought about doing what you're describing non royalty based mastermind.

John Wilson: Yeah. So it's like a mastermind group and we're in one right now. It's like a business system, basically. Okay.

Jon Matzner: EOS kind of thing.

John Wilson: Yeah, but industry specific. Got it. Because when someone showed me your tweet on it and I was like, Oh, that's interesting. And that reminds me of this, which is something that we're a part of, which is not a franchise.

John Wilson: There's, no co branding. I don't know what else makes it not a franchise, but it's not.

Jon Matzner: Yeah. There's like a three part task. Like I talked to the lawyers, co branding is the big, is not the same brand and it ain't no franchise. So

John Wilson: gotcha. Gotcha. Yeah. But we had, what was it like 40 grand buy in or 30 grand, something like that a couple of years ago.

John Wilson: And we pay maybe 20, 000 a year total. So it's not percentages, just like flat fee. And what else is included in there? There's like random upcharges. So you'll have there's a training module where if you want to send people to training, you have them out.

Jon Matzner: Yeah, we were going to do the same. Like you want to, I'll

John Wilson: train your guys for 500 bucks a day and how to do sales.

John Wilson: Like just right.

Jon Matzner: So

John Wilson: they made it a recurring revenue thing where Hey, we'll sign your company up. So theirs was really interesting. I liked the model a lot. And again, we're thinking about doing something similar where you charge, it's a flat dollar amount per week per trade that you participate in.

John Wilson: So they have four trades, but it's like 400, 500 bucks a week. So just automatically on the credit card. And then if you go through the training thing, you can send unlimited people to any of these trainings for 200 bucks a week. So 10 grand a year, you still have to fly in hotel on a, You get access yeah.

John Wilson: As well as a bunch of videos to train to.

Jon Matzner: Yeah. So we've got crazy like notion stuff. Cause we've got checklist. We built no code apps that they'll have access to marketing, all that stuff. The thing, I, when I originally thought about this, I was thinking about not doing the royalty, but then locking them into a service contract.

Jon Matzner: Like for 20 years, you can only buy your CRM from me kind of thing. I like software almost, but it didn't feel as aligned as I wanted it to. And I think it's pretty easy for people to say, look, when I make money, I'll pay them. When I don't make money, I won't pay them. Whereas for me to extract enough kind of fixed service costs, I have to be like, you're locking into a CRM contract for 9, 000 a month for the next 20 years.

Jon Matzner: Or I have to tear it. And that's just a de facto royalty, which is for one person. 2000 for five. That's a royalty by another name. And we played around with a fixed service cost model with different tiers. And it just, I don't know, for me, it's felt more aligned to say, look, you just pay me when you get paid.

Jon Matzner: We'll do these services at pretty much cost. And you pay me a little bit upfront and off we go and we're nice and aligned. And, we'll see. I might be vastly undercharging this. I might be leaving money on the table with services, but. I know that I can really help somebody build a profitable garage business.

Jon Matzner: And so this seemed to, I'm protected in terms of my contract deliverables are very specific. I'm not, I don't have to inject my own cash, for example. So I'm happy with how that kind of came together. These affiliate agreements. How did you

John Wilson: know you were ready to go to market with

Jon Matzner: this product?

John Wilson: Yeah. That's always been the thing that I thought about, over the years I've thought about doing a full franchise. I've thought about Obviously we're doing a version of this, but the biggest question was always like, am I totally confident that what I have is bulletproof so that when I sell it and someone gives me their money, like that, I know that they're going to succeed using these practices.

Jon Matzner: I think my like political philosophy gets brought to bear here, which is, I think by the way that I'm at least positioning it and trying to present it, I am not guaranteeing success at all. And it's a very kind of like free marketing type pitch, which is here's exactly what I'm going to tell you. Here's exactly what we do that might not work in Cleveland, full disclosure might not work in Cleveland.

Jon Matzner: I think it might. Here's the things I'd be looking at. Here's all the resources. But at the end of the day, you're the man you might figure out. Like I think I listened to somebody in California. We get lots of Yelp. I would be an idiot to tell a guy in the Midwest to do Yelp because Yelp is just for restaurants in the Midwest.

Jon Matzner: So I'm going to say, here's what percentage of our revenue we spend on marketing. It might be direct mail in the Midwest. It might be referral partners, but I can tell you what we do in Southern California. I can give you the tools, but ultimately I'm not going to do this central top down, I'm not going to do this top down control.

Jon Matzner: I'm going to do this bottom up support you and being successful. I made this mistake with salespeople in our company, which was, you said I can curse, right? Yeah. Okay. I used to pay, like 7 percent commissions plus expenses. And then at some point I was like, this is just a giant pain in my ass.

Jon Matzner: You want to know my expense policy? I'm going to pay you 9 percent and do your own fucking miles. Like I'm not going to tell you how much you need to drive. I'm not going to tell you go hunt. You're a hunter. And I realized it's much, I can sell it better because I believe it. I'm like, I don't care how much you drive, there's no way for effort in business.

Jon Matzner: And so for me, it's this top down methodology of the franchise system is false precision. It's intellectually, it's like, how do you guarantee I'm going to, I'm like, I'm, I can't guarantee that. It's no. So I don't think I was looking for certitude. I think I was looking for, can I add as much value as I'm going to chart or not just as much, but five times as much.

Jon Matzner: I'm like, I think with a straight face, I could charge a quarter of a million dollars for something that I'm going to charge 19 G's for no doubt I could hold it up to what my competitor is doing in the franchise space and say, I'll put my hand on a Bible and say, I'll take my stuff over there as any day of the week.

Jon Matzner: And so that's how I built my, that's just the approach that I took in my head, which is, can I build a lot of value that doesn't guarantee success that doesn't guarantee you're going to run an HVAC company? The stuff I'm sure that you've done or that I've done to make a company successful is infinite.

Jon Matzner: You plunge toilets in the beginning you do what you got to do. But. At least I can be intellectually honest and just say, tell the truth. Here's what we're doing. Here's what I'm going to give you access to. I'm super aligned. I don't make money when we sell these things. I make a little bit of money, but I'm aligned with you because I want an annuity, baby.

Jon Matzner: And I just tell them, I'm like, why am I doing this? Cause private equity values royalties at 10 to 20 times what's in it for me. That's what's in it for me. I just tell them the truth. And I found that these kinds of the types of people I'm trying to attract. Believe me, cause I'm not lying.

Jon Matzner: One of my partners has the phrase, it has the added benefit of being true. He says that all the time. It's just I just tell them the truth and I'm like, this might not work. No, I think it's going to, it's worked for me. Here's my data, here's my processes, here's my checklist, here's my controls, here's my financial management, here's my cash conversion cycle, and I'll be available as a resource to you moving forward.

Jon Matzner: But at the end of the day, your name's on that lease, not mine. So run your business like you think you need to. So it was just kind of like, I gave you a really long answer to a short question, but I think, and my previous career was like this too. I've always was most convincing when I was most congruent and when I was most, consistent with my philosophy or my kind of approach.

Jon Matzner: And Approving mileage sheets for salespeople is not congruent with my approach. My approach is I'll pay you more when you succeed, track your own miles. And it's a better for me, for my personality, I can sell that to my salespeople. I don't care how much drive there's no participation awards. So yeah, philosophically, that's how I approached it.

Jon Matzner: This is fascinating. I figured you'd be into this. Yeah,

John Wilson: I am into this. It's like a better version of what we were doing, like hands down a better version, but wait, you guys have more, you

Jon Matzner: guys need to like, you have more. Cash that you need to outweigh, right? Like you got to buy stuff, don't you? I don't really know.

Jon Matzner: Yeah. So our model is a little bit different. Like we can't grow through acquisition. For example, we can't grow through what am I buying? I ain't buying shit. I'm buying a crappy garage company in Texas. So I can't MNA my way to growth. I think you can, right?

John Wilson: Yeah, you basically can. So one of the advantages for us, like we're looking at what's next to, and all of our deals have been in Northeast Ohio. And we're starting to branch out from there. But if we go too far without someone having a significant portion of whatever we own, the farther away you get from headquarters, the more that company's going to struggle. That's just how the game works.

Jon Matzner: Yeah.

Jon Matzner: They need PNL type accountability, not like a quarterly bonus plan in order to run one of these outside the nest. Exact

John Wilson: problem we had. Yep. So I'm like, okay. And the markets that we're in, this makes sense. Like we can wholly acquire, we can do whatever we want. It gets vastly more complicated when we are trying to manage from Akron, these five to 10 million P& Ls.

John Wilson: So this was our version of some M& A and some like helping other people succeed in life. Same as what you're trying to do while also benefiting ourselves, benefiting our portfolio and making use of our shared services. So that was the dream. But yeah, there is more involved in starting up. I think We've probably overcomplicated it.

Jon Matzner: Were you trying to start them or convince people

John Wilson: to buy them? Both. We're still open to either. Buying makes a little bit more sense because then you can walk into a 5 Right off the rip.

Jon Matzner: And then, do they do a 7A?

John Wilson: And then

Jon Matzner: you help with the equity? Or how do you guys do the

John Wilson: Basically

Jon Matzner: is what it is. They do the 7A and you take 19.

John Wilson: And we would do 19%, right? So small stake that works though, man. That's a, it works. There's good and bad to it. But again, the vetting both ways like, Hey, is this someone I can invest in? And Hey, is this someone that I want to actually work with? Those are real. And then when you start to attract real talent, intelligent talent that could Accomplish this that has the capital to go in They have other options and those other options are usually more attractive than running an HVAC company.

John Wilson: And that's just the reality. So half of the people that we've lost through the process of our funnel, they've taken, quarter of a million dollar sales jobs for SAS companies or something like that. So it's like crushing it. Yeah. Or like investment bankers, the amount of IB guys that have reached out because they want to get out of their career makes sense.

John Wilson: I would too, if I was an IB, they're walking away from God knows how much money just fallen into their lap. And it's like, why would I go run a plumbing company or a septic? I think the

Jon Matzner: fundamental premise that I've thought a lot about, and I read about it on Twitter, which is like people who say like small businesses.

Jon Matzner: The reason why these things don't happen isn't because of access to capital. Yeah. Like it's, you need to come up with an answer to who the hell is going to run this thing. Like you have to answer that fundamental question. There's 10 different ways to answer that question. It could be like they don't really run it.

Jon Matzner: We run it centrally, but okay. That's one answer. Or it could be like mine, which is they run it, but I don't make that much money on each one of these. I can make way more money if I go into a market directly, but I'm giving 95 percent to the, so I think, when people are just like, Oh, I'm interested in SMB, but I don't want to run them.

Jon Matzner: I'm like, then what do you bring to the table, dude? Like the hard part isn't other than you may be putting your nuts on the line with a PG because you've got low cost of capital. And then you're going to have somebody run it after you PG it best of luck with that dude. My general manager is wonderful, but if I had my freaking house on the line with my kids sleeping in it, that takes some cojones that I don't have.

Jon Matzner: So it's I think we're all trying to answer the same question, which is how do you make mutually beneficial ways for the people who are capable of running these? Cause you could hire a guy to run one of these tomorrow. But the fact is that there's weird alignment and there's weird upside. And you're going to You know, restrict your talent pool.

Jon Matzner: So Tim with the self funded search model is a great answer to that. Your model, my model, we're all working on the same problem, which is how the hell do you get some scale around all this stuff you've learned and attract the kind of people who will sit in this business for, one to 10 years or, and have nice aligned incentives and care.

Jon Matzner: In a way that you care, not just say, Oh, oops, now you've got the turd to clean up. So this is one answer to the question. It made sense to me, but it's peculiar in our industry. I'm into it. So how many more people do you have in

John Wilson: the funnel?

Jon Matzner: I've probably done maybe 15 or 20 calls.

Jon Matzner: And so we'll probably sign up our second one this week, our third one next week. It's game on. I haven't really, are these

John Wilson: startups? Cause you don't really need to buy it. You just start.

Jon Matzner: No,

John Wilson: you

Jon Matzner: just

John Wilson: start.

Jon Matzner: You just put your shingle down and we've got a launch checklist and a 30 day thing.

Jon Matzner: And it's here you go. Here's your installation checklist. Here's the job description to find a guy who can hang cabinets for you. But ultimately it's arm's length for me. I'm not their business. We'd originally called the partner network. It's I ain't their partner. They're the boss. I'm a consultant who sits behind my desks and gives unsolicited advice via email at the end of the day, at the end of the day, they're going to sink or swim on their own.

Jon Matzner: They can't blame me. It's that's how we haven't really started marketing it yet or anything like that. I don't think we will. It's a great product for Twitter because anybody who wants to know what kind of person I am, just read my feed. Like it's all out there. You I've basically explained our whole business over the course of the last six months I've been on Twitter.

Jon Matzner: So it's don't read a fancy marketing packet, read my stuff, visit our website, read our reviews. Like I'm not a marketer. I'm actually running a company in this space now. So it gives a, I think people are hungry for authenticity. Usually when I do my calls, there's like trucks pulling in and out of the background, so it's I'm not an internet guru on Facebook telling you I've got red hot leads.

Jon Matzner: If you just give me 20 grand, I'm like, nah, man, like you're going to eat shit in the beginning. Like it's called running a business, but you might be able to build an asset and leave that w two within six months. If you're good. How's that? There's my pitch. It's like an understated pitch.

Jon Matzner: And so it's really good for Twitter.

John Wilson: That's a really good, like Twitter pitch. And you've sourced nearly everyone off of Twitter so far.

Jon Matzner: A hundred percent. I talked to a business broker today. I don't think I'm going to do that. Sell them. Yeah. He's I have some clients. It's just feels a little weird.

Jon Matzner: I don't really need it to be honest. It's and there's not enough money for him. He's used to making a 50, 000 commission. I'm like, dude, I can pay you like two G's. I don't have any money. I'm not charging these guys anything upfront. Cause I don't want to make money on the sale. I want to play a different game.

Jon Matzner: I've talked to, this might be interesting to you. I think he's in Ohio, Peter, the property management guy. He's on Twitter. He's big on Twitter. Yeah. Him and I had a great call about this. And he's Dude, this is definitely the thing that I want to do for property management because property management, people want to work with a local company, not a national company.

Jon Matzner: And he's but I know how to run a property management company. I'm like, yeah, and I also like having an enemy, in the franchise industry is there's wonderful people in it, but there's also a lot of not wonderful people in it. And I just get a little industry. It's a funky industry.

Jon Matzner: And I love having this enemy. It's just something about me, and so I love kind of Being like the guy shooting spitballs in the back of the classroom at this, look, they're rolling in their money, getting all rolled up by private equity. And I'm sitting here undercharging probably, but I don't know, it'll be fun and everybody can make some money.

Jon Matzner: So yeah, it's, we can probably talk about this outside the pod too. I'd love to hear about how you're processing all this stuff I'm saying.

John Wilson: Yeah. I'm just totally fascinated by it. I'm thinking about what does this look like in 10 years? How do you get to 500 contractors? Yeah. So everybody knows market it to be effective.

Jon Matzner: I'm looking at John on zoom right now and I can see like the gears in his head turning as I'm explaining, like he's got like my brain is worrying. He's trying to, ask those questions. So I have the luxury of zoom. But if somebody's listening to this, yeah. How do you get to 500? I think is a great question.

Jon Matzner: This could definitely be done internationally. No doubt about that. It's business in a box, man. Yeah. That's really what it is at the end of the day. It's HVAC business in a box. We're plumbing business in a box or, like you're training a cat. I think I've heard you talk about like you don't have a in house training.

Jon Matzner: Yeah. So we

John Wilson: have a tech training Academy. I think our weakness and where we always lose track of this stuff is we start looking at these businesses like, Hey, we should launch this mastermind thing. Or, Hey, we should launch a franchise and not just Hey, am I sure I'm going to provide enough value?

John Wilson: Do we know that? We have it locked, but also it's like, what stage do you be the expert at? I think I'm probably overcomplicating it because if I came out with something, I would want to focus on where I'm at or what's slightly ahead of me. But the reality is the vast majority of people that as I'm listening to you you're just trying to help people get to a million dollars in sales, maybe two.

Jon Matzner: So that's what I also figured out too, which was. And

John Wilson: I'm like, why am I trying? I'm thinking about this. How do I get people to 50? And I'm like,

Jon Matzner: Who

John Wilson: actually wants

Jon Matzner: to run a 50 million company? So I've got a small army of overseas folks. And when I looked at building out like a pro forma for these guys, I'm like you're going to need a purchasing department.

Jon Matzner: And it's do you know how many people would be so tickled to have a million dollar business with 40 percent gross margins? And they don't have to work that hard and they're their own boss. And I'm sitting here like an asshole being like at a certain point they're going to need. And then you have to do the commissions in the pro forma.

Jon Matzner: And I'm like this, how do you go? And it's Dude, this guy would name his first child after me if I let him get out of this job he hates and showed him a way where he can make 300 G's a year, not, de risk it for him because of all the value that I bring. And that doesn't mean that he might not become more than that one day, but it's just like my obsession is in this, when a business starts, it's like in the Nick you.

Jon Matzner: It's like this, it's a preemie and you just have to get them until they have enough cash to solve problems. And they know what the hell they're doing. And my goal is that eventually these guys teach me stuff. They're like, Oh, in the Midwest, this is how we generate leads. I'm like, sweet, but up to a million bucks, I feel like I can say Nope, you don't need to do that.

Jon Matzner: Nope. Yep. Do that. Nope. Do that. That's it. You've written about that, right? Like different phases of businesses and years, right? Yeah. Different tiers. And it's No, just be an owner operator till you do a million bucks a year. And then at that point, then you do this. And at that, there's somebody listening right now.

Jon Matzner: Who's Oh my gosh, if I could just have John tell me, this is what I need to do. And this is what I not need to do to get to a million bucks. They would come over the wall to work with you. Just based on your Twitter audience alone, I'm sure,

John Wilson: I think judging by my DMS, I'm sure you're right.

John Wilson: And that's why we keep rolling through this. There must be a way there must be a way to help them and do something that is just interesting to me. Because this sounds interesting. I would love to help someone launch in markets that I can't be a part of. I can't easily be a part of Dallas, but it'd be fun to be a part of Dallas.

John Wilson: Like that'd be sweet to have a Dallas spot.

Jon Matzner: And to hop on a zoom. And he's Oh, we had this. And you're like, Oh dude, this is how we solve that. But in Dallas, you can't do that because the licensing is different. So dude, what do you think? It's the kind of stuff I like to do, which is just comment on topics. I know a little bit about, but not a lot about. It's it's what a podcast is. It's like opining on things where I have a little bit of knowledge, but not so much that it's crippling. For us, the other thing I'm thinking about for me is, I'll keep my head down on this stuff, but it's I'd love to build a company where I help people do this.

Jon Matzner: Like I was listening to your squeegee God guy. And I'm like, dude, that would work for this in a second. He's talking about his apps that he uses. And I'm like, do you know, there's a kid sitting on the other side of the country right now who would die to have access to them. And if you're not charging them a quarter of a million dollars or even 50, 000, come up with an offering, structure it, get all your stuff, give them the notion, give them the backend, give them all the tech that they need to be successful, and then let them go build an awesome window cleaning company.

Jon Matzner: So I really think it's a fun model to play with intellectually in different industries

John Wilson: for sure. This might've been on a show that we just did. I don't remember. I was just talking with someone about this though, about the mastermind concept. Maybe it was Girdley, whatever. It doesn't matter.

John Wilson: So we're talking about this and two things came up as one, every company eventually becomes a media company.

Jon Matzner: That's why I'm working with Cody.

John Wilson: Yeah, that's just how it works. And then two in my industry, this is like a super common path. Yeah. This is how it works. So you get your company to 20 or 30 million a year in sales, and then you just start creating a ton of content on how to get your company to 20 or 30 million in sales.

John Wilson: There's probably 30 other guys that I know that have followed that path with books and masterminds and courses and training. And it is funny. And I remember you

Jon Matzner: hamper your reach. If you don't make that move, you hamper your reach. You're saying I am done making impact if you don't do that.

John Wilson: Yeah, I think so. I think you're right. But at the time, when I first saw that we were like 2 million in sales or something, and I was like, Oh, that's weird. Like, why wouldn't they just grow a larger company? And now that we're in a larger company, I'm like, all right, I get it.

Jon Matzner: I'm seeing it. It's if you made so much money, why don't you just go to Southern California or Cleveland or whatever?

Jon Matzner: And I'm like. Nobody who runs one of these would ever say that because, these are human beings. These are leases. These are buildings. These are plumbing overflows. These are drunk people. I think, there's like this concept in, once you've been exposed to like existential philosophy, the only way is out the back of it, meaning you can't deny that once you've been exposed to these ideas, it'll mess with your head and you have to make your peace with it.

Jon Matzner: And I think it's the same. I consider myself that within like small business, which is it's really shitty, but it's worth it. It's not that it's not shitty. It's not that you can hire an operator right away. And it's no, you have to get through that though. Like I'm telling you right now, you're going to need to take a bite of a shit sandwich.

Jon Matzner: If you need to launch an HVAC company, like a big old bite. But it's totally worth it. And I'm so glad I'm doing it. So I want to like message the far end of that scenario. And you can talk about, all the naps. Nastiness, the realities, let's say, of running a company like you do, just like I can, and I can be, I think, fairly specific and say, and I wouldn't change it for the world.

Jon Matzner: It's like being a parent. It's oh, and then they blew out their diaper. It's but it's the most rewarding experience in my life. So that's how I think about some of this stuff, which is no. I'm not guaranteeing you success. If you want guaranteed success, don't work with me. I give you an opportunity.

Jon Matzner: It's I think maybe you might be underselling how much value, you could almost write a day by day guide on how to build a million dollar HVAC company almost day by day. I imagine with what, right? Like day one, a

John Wilson: million would be the easy one. And that's the hard part. And now I'm like, fuck, I, now I have to go do this

Jon Matzner: day by day,

John Wilson: right?

John Wilson: You

Jon Matzner: could say

John Wilson: day one. Yeah, so that was this project we were going to do. We were going to launch one of three companies. I'm letting someone like choose it. And there's three different companies we're going to launch, and then I'm just going to go launch it and then write a day by day. And then we were just going to get a videographer, make it a newsletter, follow you around or whatever, or sticking a mic on.

John Wilson: It'll be pretty entertaining. So I think that's starting the next couple of months.

Jon Matzner: Yeah. Your audience is hungry for watching you go out and business for reals. I'd watch that in a second. This is great. I don't know anything about this. Celtic HTTV. It's like the undercover billionaire thing, and I think you have a voice in the community. Cody does Michael does, there's folks who it's. I spent a life where I didn't really talk about anything I ever did. And I still don't, but I'm now in a position where I see the impact that I can have on somebody earlier in the journey.

Jon Matzner: And so I think it's our responsibility to do these kinds of things. It's not like I'm in it for the month. It's it's our responsibility to be like, you can change somebody's life. Like no joke, you can make money, you can do well, but you're like, you show a guy how to start a company like this. You changed his life.

Jon Matzner: You changed his kid's life. You showed him and it's not a con. It's not a scam. It's just like you can build so much value. So I think it's our responsibility as business owners to do it once you hit a certain size,

John Wilson: especially with your audience. You have me convinced we're relaunching our mastermind.

John Wilson: Check out my newsletter.

Jon Matzner: Look, I'm not going to say, I want points. I'm going to say, I don't know,

John Wilson: I want 5 percent of revenue, right? I'm not saying look, I want 5 percent

Jon Matzner: of your

John Wilson: 5%.

Jon Matzner: Yeah, that sounds good. But yeah, I think there's so much room for like. To use a fancy, it's like for intellectual innovation around this ecosystem, like we don't have to do franchises don't have to

John Wilson: like,

Jon Matzner: there's other ways to.

Jon Matzner: And so it's why I like working on this Rubik's cube. And I think it's what it appeals to you as well is how do I keep building value, keep challenging myself, keep growing our company in a way that's not like what the old guys did in the 80s.

John Wilson: Yeah, this is fascinating. I'm going to follow up with you in a couple of days.

John Wilson: Yeah, man. Let's get on to it now. It's now I have to do it now. We actually have to do it. Okay. All right.

Jon Matzner: That's like me. So I used to be in really good shape. I played sports in college or whatever. And now I'm not because I'm an idiot. But before I get going, I'm like, ah, I'm going to have to do this because I know what it means when I commit to something.

Jon Matzner: I'm just like, all right, I'm going to have to go to Costco once a week. Cause if you're like, if this makes sense to you, you're like I'm going to have to rewrite this document. You know what you're agreeing.

John Wilson: It makes sense. Like it's a better version. Again. I think the equity thing was tough, but having nothing to do with equity and just, yeah, it's a better version of even the mastermind thing that we were thinking about.

John Wilson: We're

Jon Matzner: doing a zoom call like office hours every week. And that's part of how we're because I could have 20 people on and they're like, how do you deal with the low performing tech? And I'm like, easy done. I know the answer to that. And I can do one to many instead of having to do one on one consulting, which is I'd be 50, 000 a month for something.

Jon Matzner: I'm like, now I have a way to continue that and other members of my team too. So I'm looping in other members of my team. Like my sales manager knows how to train salespeople better than I do. It's mhm. You train them. We got it. So yeah, we'll talk post pod.

John Wilson: Yeah, I'm going to bother you about this in a few days

Jon Matzner: post pod, man.

John Wilson: Yeah, this will be good.

Jon Matzner: Is there anything else for you? I'm trying to think any other ways to build value for your audience because we went down a deep anti franchise hole. I

John Wilson: think this was good. I think we're pretty much at the tail end.

Jon Matzner: I would say maybe one quick thing that for me was, it's a pretty easy thing for, is your community mostly like searchers or operators?

Jon Matzner: Or is it mostly

John Wilson: operators? Honestly, it's large. There's a lot of people in there, but it's mostly operators or people trying to become operators.

Jon Matzner: So for me, the big thing that we did was using Google click cost as a proxy for market sophistication. I can't recommend that enough, which is before you buy a company, look and see how expensive the keywords are.

John Wilson: You can

Jon Matzner: hire a marketing agency to do this for no money. And that is a wonderful proxy for how dense competition is within your geography.

John Wilson: Yeah, it's like

Jon Matzner: you take nothing away from this pod other than that John and John like to geek out about growth models. Look at the click costs because you can tell how competitively dense a particular industry is based on click costs.

Jon Matzner: And that's why we bought this is because we're like cheap clicks, whereas, if you look at mesothelioma, it's a 70 click. That's a really good keyword. Yeah. Wow. Yeah. So yeah, if you're looking at a market, use Google click costs as a proxy for sophistication of your competitors. Because even if there's a competitor, if the click costs are low, that means that they're not that sophisticated marketing wise and you can beat them.

Jon Matzner: So a truck and a truck isn't buying Google. Or

John Wilson: Facebook or, and I think you've got the perfect industry for that too. There's a great industry for it.

Jon Matzner: Do you guys do like print radio? You probably do everything given how big you are, right?

John Wilson: Yeah. We have to do it. We're large, so we have to do everything to keep the funnel full.

John Wilson: The answer is yes. The answer is yes. It's you can pretty much guess. And they're like, yeah, answer's probably it's either a yes or like soon.

Jon Matzner: Do you think you're going to stay in like the HVACs? Is that what you like to what, do you want to do more invested? Like I'm just.

Jon Matzner: And you can end the pod. Yeah, by the way, but I'm just curious about what gets you excited? Is it more of what you're doing? Is it becoming a media company? It sounds like you'd like some of this stuff or invest it.

John Wilson: Yeah, I like both. I just enjoy new challenges. So I enjoyed like chasing things that I've never had to do.

John Wilson: And I enjoy figuring out things that. I wouldn't normally have to figure out. So if that's buying a company, great. If that's buying three in a year, great. If that's a new trade, sounds great. If it's like, how do you close your first 10 properties? Awesome. And now the media thing is really interesting.

John Wilson: Mentorship is interesting. All these, sort of new ways to grow, but still use domain expertise, I think it's interesting. So usually I just enjoy new challenges. The same way. The new challenge could also just be, Hey, how do we get this thing to a hundred million. That's a new challenge. I've never done that.

John Wilson: So I don't know. I'm into a lot of different things.

Jon Matzner: I think I'm like a grower though. Like I like to get in when it's ambiguous and unformed. I'm not a great it's more of what we're doing, but I think I know myself enough to know I'm good when it's broken and you're losing money and you have no growth strategy.

Jon Matzner: And then I've been thinking about how for us to grow geographically for the last eight months. And I've just been, Oh, that wouldn't work. Nope. They wouldn't pay that. And out pops this. But once I've done the first five or 10 of these. I'm going to turn it over to an affiliate manager and you go do the next hundred I'll be, bugging John about his thing or something, I don't think I have the disposition to be the a hundred million dollar guy.

Jon Matzner: I just don't think I do.

John Wilson: Yeah. I don't think I do either. It doesn't really attract me. I know that we can get the company there. So that's interesting. But being the guy that runs it when it gets there or even halfway there, Count me out

Jon Matzner: or solving the problems, but in a scalable way, like that problem set doesn't, I don't know.

Jon Matzner: It doesn't get me as excited as maybe doing some of the early stuff. I just like when it's janky,

Jon Matzner: Yeah, I pretty much agree,

John Wilson: John, this was awesome. And now I have to figure out how to launch a mastermind and my wife's going to kill me. Now you have a to do list. Now I have a to do list.

John Wilson: You gave me the

Jon Matzner: most positive, this

John Wilson: was great. If people want to follow you, where can they find you?

Jon Matzner: I am on Twitter. I should probably know my handle off the top of my head, but I don't. That's why I don't have that many followers. Matznerjohn, M A T Z N E R J O N. Awesome. John, you gotta throw me a big follow too, man.

Jon Matzner: A lot of people, I've been pop cracking wise about this for a while, so if you don't mind following me.

John Wilson: All right. That's my trade. I'll throw you a follow right now. I'll make this happen. I honestly can't believe I don't yet, because your stuff is interesting. I get made fun of for how few people I follow.

John Wilson: Oh, wow. Okay, it's just not many

Jon Matzner: I like there's such richness in the community. It's gonna get messed up at some point But for right now, it's like the golden era man Like I'd learn it every time I log on because I've cultivated who I follow so much Yeah, really add value and I got to meet you too, man.

Jon Matzner: Yeah, this was great.

John Wilson: All right. Thanks

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