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Again, the West Coast doesn’t actually get our business that well. They’re, they don’t have law and it’s like out here in the Midwest, so when we talked to Vcs, we find the most interesting out of Midwest based firms, but we’re really looking for the right partner right now.
Jay Clouse: 00:00:12
Startup investment landscape is changing and world class companies are being built outside of Silicon Valley. We find them talk with them and discuss the upside of investing in them. Welcome to upside.
Eric Hornung: 00:00:40
Hello? Hello? Hello. Welcome to the upside podcast. We’re finding upside outside of Silicon Valley. I’m Eric Hornung. I’m accompanied by my cohost, Mr. Oh my God. I forgot a nickname himself mr. Jay Clouse. How’s it going, man? What’s going on with you?
Jay Clouse: 00:00:59
I thought for sure you’re going to go with Wasabi peas. As I told you right before we got on this that I just crammed a ton of Wasabi peas into my face and do too many. Too many our wasabi peas. I was in tears calling you on this interview.
Eric Hornung: 00:01:15
I had a great one before and it just, it just blanked on me. So now you’re. You’re Mr. I, I forgot a nickname for you because you’re still memorable.
Jay Clouse: 00:01:27
We can and everything. I don’t. I don’t expect perfection from you. I know you’re trying your best man.
Eric Hornung: 00:01:35
Well, how you doing today? How’s it going? Besides crying? I think that I can literally see the tiers via skype.
Jay Clouse: 00:01:43
Yeah, it’s, it’s sticking around. It’s lingering. I’m out of milk so I don’t have the basic cure. I’m talking chemistry here. I’m talking like real basic talking Ph levels, milk, very basic cures. The Wasabi pea woes. And I’m out of milk so I’m over here drinking some room temperature, tap water and it’s just not doing the job, but we’re getting through it. We’re going to get through it. We’re going to have a great interview and we spicy. It’s coming in hot.
Eric Hornung: 00:02:09
Were coming in hot. Well how about you tell the audience what we’re doing here, why are we here and what’s going to be hot about this.
Jay Clouse: 00:02:16
So Eric and I fundamentally believe that the tides are shifting and there are incredible investment worthy startups happening outside of Silicon Valley in the midwest and you know, anywhere inside the coast.
Jay Clouse: 00:02:31
So we talk about this a lot, we talk about the startups that we’re seeing and that we’re finding the deals that are happening and we said why not bring that to a broader audience? And so here we are, we have a podcast and we talked to founders outside of Silicon Valley who are building businesses with upside or sharing that with you that I miss anything.
Eric Hornung: 00:02:48
No, I think that you did a great job of that. And the way that we go about doing everything just laid out is through a three part episode every single week. So first Jay and I are going to talk through some of the research we did independently of each other, um, and independently of the founder we’re going to talk to in the interview is our second phase and we’re going to learn from the founder how good our research was, what are some of the things that we could not have found out through research. And maybe just through hearing the founder’s story, the company story or the outlook. And then finally we’re going to debrief on all of that, crystallize our thinking and what’s called a deal memo and we’ll talk about that when we get there.
Jay Clouse: 00:03:28
It’s fascinating to me week to week as we go through this, the differences in information availability we have and looking at these companies. I’m talking from talking from like traction to press to bio’s of the founders. Real information disparity between companies. It’s super, super interesting, but really excited about today’s guest. Today we’re talking to Sky Durrant. Sky Is the CO founder and president of Lawn Guru in March of 2014. Sky had the idea for lawn guru and pitched it to his business partner, Brandon Bertrang. They were doing a landscaping company at the time, Lawn Guru provides on demand lawn care and snow removal services for clients in Metro Detroit, Atlanta, Cleveland, Chicago, Houston, Philadelphia, and Washington DC. Through its mobile and web based applications. Lawn Guru connects consumers with local outdoor service providers to take care of their lawn and snow removal needs within hours of each request. It is essentially uber for outdoor services and lawn care.
Eric Hornung: 00:04:30
Awesome. So what are you looking forward to hearing about from sky today in our, in our interview?
Jay Clouse: 00:04:39
Well, part of what’s fun about this show, sky was referred to us by another guest, Seth Miller of rap chat. Both of them were in batch 15 of 500 startups and you know, you and I both buy into the thesis of founders help you meet other founders that you should meet and that’s going to be a really fun, uh, ongoing part of the show. So for one I’m excited to meet sky because that speaks highly of him and referred him to us too. I think he has experienced as a midwest founder being from Michigan that also saw what the ecosystem looks like in the valley by going through 500 startups. I think that’s really interesting and it’s, this is a big idea. This is a consumer play and fundamentally consumer plays in this area of the country are more rare and difficult and a lot of ways just from an ecosystem standpoint and support standpoint. So I’m interested to hear how they’re doing. But I pulled up their 500 startups demo day pitch and saw some impressive traction numbers, which I’m excited to dig into and they’re about almost two years old at this point. So it will be interesting to see and hear where they are now. What, what stuck out to you?
Eric Hornung: 00:05:49
So some things that I do. You have a dad, you have a dad, right?
Jay Clouse: 00:05:53
I have a dad.
Eric Hornung: 00:05:56
Okay. And does your dad really care about
his.
Jay Clouse: 00:05:58
Yes, yes he does.
Eric Hornung: 00:05:59
Okay. So my dad also cares about his lawn and I grew up cutting the lawn and getting berated for cutting the lawn incorrectly for at least the first five years I did it. So I feel like lawns or such a thing that people care about, trust, they’re landscapers when they actually have them
Jay Clouse: 00:05:59
its personal
Eric Hornung: 00:06:21
it is very personal. Like dads would have beers like in our backyard and like compliment my dad’s lawn or everyone talked about whose lawn was good, who is bad, who had lawns. It’s just like such a weird suburban, like point of pride and the quality control aspect. I’m really curious to hear how they’re handling that or if their target customer actually cares about that
Jay Clouse: 00:06:46
really interesting perspective and I had similar questions and so I. I went to the APP store and it looked at reviews to yelp and I read some reviews and there are some mixed reviews and I think some of that is to be expected from a consumer product that’s going to be going to a lot of consumers. Anything that has reviews is going to have the, the, the bias of people are going to either review something because they had a super positive experience or a super negative experience so we’re likely not seeing the bulk of people who had just like a satisfactory experience. But that’s. That’s a really interesting point. I wasn’t thinking about it from such the personal aspects. I mean, you know the, the phrases when people talk about social media and how you compare yourself to other people on social media, you’re comparing your backyard to someone’s front lawn, which is like at a societal level. It’s in us that front lawns are. This man occurred. Pretty best version of ourselves. I also like that from everything I see sky came from being in the industry, even as a highschooler. He was knowing he was doing lawn care services with his business partner brandon portraying whenever an idea like this comes around and you know, there’s a period of time where there was just the attempted Uber fication of everything, right. The question to me is why wasn’t it done before? Why isn’t it being done elsewhere? Is it really something where there’s enough user demand to drive it and you know, obviously these guys think so. So I’d love to hear some of the reason and the data behind it.
Eric Hornung: 00:08:20
I’m curious, I don’t know if you found anything to the contrary, but the last time that they were referred to as the Uber for landscaping or whatever in any articles I could find was in late 2017. So I’m wondering if they’re trying to get away from that kind of catchphrase or if they’re going, if they’re still utilizing that, um, and if they’re trying to get away from it, why? Because the uber for blank is a really nice shortcut to teach people. Like initially what your idea is, but it also can seem a
Jay Clouse: 00:08:56
well you’re putting your brand equity and the equity of another brand. Right? And so you’re playing second fiddle by definition. By doing that, you’re also assuming that people have a positive and good understanding of what Uber is and where it’s gone through some turbulent times. So maybe you don’t want to come sit and compare yourself to uber over the last eight to 12 months
Eric Hornung: 00:09:16
of course. And I think that any company that wants to be to take the exact same business model of another company and apply it to a different industry needs to provide some incremental services that are different and specific to that industry from whatever that base business model is. Um, so I’m really interested to hear what specific or special about lawn guru and how they cater it to that specific niche, right? Because it’s a very different niche than driving a taxi cab.
Jay Clouse: 00:09:48
Something else I want to talk to sky about and I’m excited to hear about, from what I can see, they’ve raised about a million dollars of investment to this point between 500 startups. And uh, other investors, and that’s been stretched over a long period of time. They have a team of nine on the website, he said 35 and is Demo Day pitch. So they must be bringing in some significant revenue. What I couldn’t find easily without signing up was what the cut is from lawn guru from the services provided by the third party lawn care providers that are local, you know, are they taking like a three percent transaction fee is at 10 percent, is it a set dollar amount? What’s, what’s the model there for them and what does that equate out to in terms of revenue because it must be offsetting their costs quite a bit. And maybe a case where they’re, they’re doing so well that they’re not actively raising right now.
Eric Hornung: 00:10:40
Yeah. And I’m really curious as well because two years in one point, $1,000,000 to build out an infrastructure in something like seven or eight cities is seems a little. I’m a little light. But if they’re doing it and they are making money while they’re doing it, then that’s, that’s awesome. It’s actually really funny because we have started to converge a lot on our research where you pull up something that I’m like, oh, that was one of my key points that I wanted to. Um, so we’re starting to notice the same thing, which is really interesting as this podcast continues to grow. Looking back at long guru there expansion strategy going forward is really interesting to me. When we think about do they need to raise and can they grow slowly through operating leverage or if they raise, can they jump from seven or eight markets to 70 or 80 in the next two years? So that is, that’s, that’s a point that I’m interested in hearing about what is their expansion strategy?
Jay Clouse: 00:11:42
Yeah, same. I would assume that from a pure technical moat, we, we’ve talked a lot about modes lately that seems like something that if they did try to grow slowly, but if it was picking up steam and six or seven states and someone saw that, that they could pick off six or seven other states and start there and create a little bit of a war chest and try to move faster. I mean, that’s what, that’s why these sharing economy startups do raise so much money and grow so quickly is because the advantage is just breadth and capturing the market as fast as you can. So interested to here what, what he has to say,
Eric Hornung: 00:12:18
and I have one more point on that expansion strategy and capturing a market is the target customer businesses and I mean it’s a marketplace, right? So they obviously have the landscaping company on one side, but on the other side, is it my dad in, in uh, in some suburban Westlake Ohio, or is it parish churches and schools and all these other things that need landscaping services that don’t want to have to deal with hiring a landscaper and just want to be able to submit recommendations. So there’s more institutional side. And then there’s residential and I’m curious if they’re going more of the comeback back to uber, the Uber Black car model first where they roll out a ton of institutions and then get into the residential or the uber x space. So I’m really curious to see what that kind of breakdown is of their one half of their marketplace.
Jay Clouse: 00:13:10
Good questions. All right. You ready to get into it?
Eric Hornung: 00:13:10
Let’s do it.
Jay Clouse: 00:13:18
Alright, Sky, welcome to the show. Hey, thanks guys. I saw that you had a degree in neuroscience from the University of Colorado Boulder. Could you give us a little bit of a background on you and where you’ve come from, how you’ve gotten to be here, where you are?
Skye Durrant: 00:13:33
Yeah, absolutely. So my name is Skye Dorrant. I’m the president and cofounder of Lawn Guru. Grew up in south Lyon, Michigan. And uh, I actually met my cofounder, Brandon and the sixth grade. So I’ve been friends with Brandon and partners with brandon going way, way back, went to school out in Colorado, studied psych neuroscience. You know, brandon and I have always kind of shared this passion for entrepreneurship. And so while he was going to school, Michigan State, he was studying finance. I was studying on Colorado, but we’d have conversations every week, every two weeks about different ideas and startups we were thinking about and we just kind of always shared this bond and this spirit of entrepreneurship and in high school we had actually started our lawn care company together, so we were cutting lawns back in high school and then when we graduated we were both kind of going down are our different fields. I moved out to San Francisco, I was seeking a job in tech. Brandon was doing a finance role here in Michigan and I came back over Christmas break and we started talking about this industry, the lawn care industry and the opportunities that we saw with it and few months after that I decided to move back and partner with brandon again and we kinda started chasing this dream for a new space and the outdoor service industry.
Jay Clouse: 00:14:46
So I want to touch on this. The business that you guys started in high school a little bit. One of my biggest, biggest insecurities personally is that I don’t have this childhood entrepreneurial story. I didn’t realize that that was even an option that I had until I got to college. What was your realization? What was your moment to realize that you could do your own thing? Show agency and like make money as a high school kid?
Skye Durrant: 00:15:08
Yeah. You know, I didn’t say that Brandon lead that. So his story starts with his bike getting run over by. His dad left his bike in the driveway. His Dad’s backing out to go to work or something runs over his bike and his dad goes, hey man, you left your bike in a super stupid spot, you know, you gotta you gotta find the money to get it fixed or to get a new bike. And he was like, okay, well how do I do that? I can’t, you know, I’m 12 years old or something, what do I do? So you got a lawn mower and he started cutting lawns. So Brandon really was cutting lawns way before I ever did. I mean that was kind of my parents while I’m. But Brandon was going door to door before he had a car before you can drive cutting lawns in his neighborhood. In high school we actually partnered because I’m a year older than brandon, so I had my driver’s license. I could actually drive and expand outside the neighborhood. Before it brandon wanted to get additional clients. He had to get his mom or his dad on board to actually bring them there. So you know, that didn’t work out too well. They weren’t, they were trying to drive around their son and wait for them to finish cutting a lawn. So I came on with and then. And uh, yeah, in the early days it was, you know, we were just super scrappy. We’d go door to door, we drop off flyers in the spring and try and pick up as many customers as we could. Our favorite customers were the ones who’d leave cash under the doormat. It was just a way to have a little spending money to put gas in the car and be able to have a little fun on the weekends.
Eric Hornung: 00:16:23
So like how much are you making it for? 13, 14, 15, 16 years old. I know. It’s not like. No, but I’m just curious.
Skye Durrant: 00:16:32
I can’t even remember like the dollar amount. I like our total client lists, which we probably had around 25 or 30 lawns, so that time and so average lawn was around 30 bucks, so 900 bucks a week or something between the two of us. It was like that, you know,
Jay Clouse: 00:16:49
that’s so many playstation. Two Games.
Skye Durrant: 00:16:53
Yeah. Like what did I spend my money on? It was like Qdoba. I was getting burritos. I remember when the first, you know, opened up out here. I was so excited about it. It’s this weird was just getting lunch and stuff like that. You had a lot of people didn’t have that luxury to go get Qdoba, you know, a couple of times a week if they wanted to. Yeah. Yeah.
Jay Clouse: 00:17:13
So what was the moment that you guys said, okay, we’re cutting lawns, we think there’s an opportunity to add a technology layer to this. Can you talk about that?
Skye Durrant: 00:17:22
So in 2013 when we decided to partner again, we actually had a different model and it was more of a franchise model and what we did was we standardized pricing, we added technology but it wasn’t custom built technology was, it was just using, you know, third party solution. So we integrated a crm system and this was with our legacy business, so it wasn’t what lawn guru is today. It was more of a traditional lawn and landscape business through these kinds of third party integration and satellite imagery to map out lawns and give prices over the phone instead of going to give quotes, we able to grow really quickly. So in 2013 the company had done like 250. The next year we did 700 k. The year after that we were up to 2 million. So we kind of doubling or over doubling the company each year just in Michigan, just through kind of introducing these efficiencies through technology and really focusing on the core business and and route optimization and building density neighborhoods and get word of mouth and that sort of stuff. And what we realized during this time was that there was a lot of pain points that customers experience that we can improve through kind of a custom solution and there was a lot of pain points that we were experiencing as owner operators will not operators anymore, but the owners running multiple crews that we could really improve on with, with some technology and nothing out there really existed at the time for what we wanted to do. So that was the impetus to seeking out designing and building the lawn guru platform. Did you say you were using satellite imaging to put quotes out there? Yeah. So traditionally a lot of guys, if you want to get a price for your lawn, you’re gonna try and get one of these guys on the phone, they’re going to arrange a time to come out, they’re going to walk the property and then they’re going to shoot off a number and it’s going to be, you know, arbitrary based off what they’re estimating and what they’re doing for clients nearby. Uh, what we did was we use Google maps and tracing feature, actually trace out the square footage of a lawn. And then we had a pricing matrix and we just supply that square footage to our pricing matrix and be able to deliver a quote over the phone. It’s really cool.
Jay Clouse: 00:19:19
So for you to introduce that service to the Michigan market that you were in, did that hurt any other parties in that circumstance? Like we’re by doing that and by growing your business so quickly, who was suffering? Was it the inefficient businesses that were going and still trying to do things by walking the walk in the yard and quoting things offhand? Or was there no loss in that sort of change?
Skye Durrant: 00:19:43
You know, this industry is so fragmented. I don’t, I don’t think we were affecting anyone on a direct level at this stage. I’m at that, at that level. At that time we were definitely picking up clients from other service providers and we actually started buying out smaller operations. And one of the biggest things customer would thank us about was just standardized invoicing. Um, so this industry, a lot of these guys are owner operators and if you think about the responsibilities that these guys have to, I mean in addition to doing the work, actually physically cutting the lawns, they’re also their marketing team, their invoicing and a back end operations team. They’re doing everything, maintenance, sharpening blades, and so their time gets spread really thin. It means that they can’t do everything as well as they’d like to. So when we buy out clients from other businesses, one of the things we think for the most and what customers were most excited about was just being able to pay their invoices online to view an itemized invoice each month. Just stuff like that, which hadn’t really been introduced to on a, you know, the, this industry was kind of lagging in terms of customer expectations and what was being delivered two or three years ago.
Eric Hornung: 00:20:49
You mentioned that the industry is fragmented. Do you have any kind of metrics behind that for the audience that we can get kind of a sense of how fragmented this industry is?
Skye Durrant: 00:20:59
So in US registered lawn and landscape companies two years ago it was around 400,000 registered and they estimate it’s closer to about 700,000 with all the unregistered guys out there. And of those, about 70 percent are owner operators, meaning that it’s one, two, maybe three guys, three man operations just kind of rolling around in a single truck
Jay Clouse: 00:21:21
and at the end of the day these people are making their money by going out onto the grounds and doing the work. So you guys were introducing these efficiencies to get them just more time out doing the work that actually paid.
Skye Durrant: 00:21:33
Yeah. So we’re, uh, we’ve always been focused on improving the businesses for owner operators. Are Platforms really directed to the smaller operations generally, if the guys are operating two, three, four, five crews, you know, we’re probably not going to be the best solution for them because they probably figured out the pain points that we’re solving already. We’re going after the smaller guys and we’re focusing on efficiency in terms of billing a cashflow. So these guys are paid. Actually the the payments are captured the same that they complete the job and the money’s in their bank two days after that we’re focusing on route efficiency, so we’re giving them jobs and the routes are close to the routes that they’re already working in. It’s really just optimizing and growing the guys businesses and improving their cashflow.
Eric Hornung: 00:22:14
So I just want to make sure we’re all kind of understanding on the timeline here. It’s started with this partnership that was doing 250,000 in first year or so and kind of grew into almost this private equity roll up slash franchise strategy where you were introducing efficiencies into the model, buying out smaller competitors and growing to this $2,000,000 per year business and then there was some sort of light switch to your click that you pivoted almost or evolved however you want to look at it, into this uber for landscaping, which is what everyone’s calling you on. The articles that I’ve researched. Is that that. Is that a fair representation of the timeline and.
Skye Durrant: 00:22:57
Yeah, and because we actually. We still operate, so Brendan and I own two companies and they operate independently now, but there was side of this gray transition period where it’s like, okay, we have lawn guru and then we have lawn guru, the APP, and they were kind of, they were developed, you know, side by side, but in 2015 is when we officially launched the APP. All law related services were moved over to the APP and then all landscaping, design, build services were moved over to our other business which has ventures, design and build.
Skye Durrant: 00:23:28
And you still own those two companies or did you sell them off to someone else in the. We still on both those companies. Yeah.
Jay Clouse: 00:23:35
Super. Interesting. So what I’m hearing from you is that you think of your customer predominantly as the owner operator and not as the individual who needs their lawn mowed. Is that, is that accurate?
Skye Durrant: 00:23:45
We’re in a market place and so it’s really both sides, but we focused on making these guys as good as possible because we know if we can own supply and improve supply then we can get customers. And so we really focused on helping these guys become better at doing their business and if we can do that, we know that we can win the more customers.
Jay Clouse: 00:24:03
And for your marketplace, are you finding that customer demand is driving adding suppliers to your marketplace, or are you guys working through the owner operators first to help use them to start pushing the lawn guru as a service?
Skye Durrant: 00:24:18
It kinda depends on the, uh, the maturity of the market that we’re in. So for instance, in Michigan Right now where we’ve been here for a number of years, we’ve got a waiting list of providers to come onto the platform because we’re, we’re, we don’t want to oversaturate our platform where no one guy is really benefiting from it. We really want these guys to have a direct impact on their business by joining. Um, and so what that allows us to do is really ramp up our quality. So now we have set standards that these guys have to meet. If they’re not meeting them, they get bumped and get a warning that it will get removed from the platform. And we bring in a new guy to try it out. So once the markets mature supply, we don’t really have to spend anything on bringing in supply because we built up a reputation in the early days of a market. That’s when we’re taking a shotgun approach. We’re saying, hey, come on, try it out. If it works out for you, great. If it doesn’t, you know, it’s, it’s free to join. You’re not, you’re not gonna lose anything. And that’s where, you know, the earliest days or when it’s the most challenging when you’re trying to get a market up and rolling.
Eric Hornung: 00:25:14
What are some of those kinds of quality control standards that you guys put in place? Because I know this is a pretty emotional area, Jay and I were talking about how dads love their lawns are a lot of people. So what are some of the quality control standards you guys have in place to make sure that these owner operators are complying?
Skye Durrant: 00:25:31
Yeah. So, so right off the bat, if you’re going to be come a long goober provider, you’re going to have to carry commercial grade liability insurance. You’re going to have to have commercial equipment for the cutting. We also want you to have a kind of upkept appearance in terms of the truck you’re rolling around with overall branding that you’re using, so we want that right off the bat. Then once you’re actually on the platform, every time you complete a job, that customer’s going to rate you on what they. What their experience was like a. If they rate under three stars, we ask or if they rate three or below. We asked what was wrong. When we measure communication, quality of work, timing, responsiveness, those are the four that I can think of. I think there’s one or two more that I’m forgetting right now, but we track and measure all those, so it’s really about the customer satisfaction and then there’s issues. What part of that experience Kinda did the provider fall back on?
Eric Hornung: 00:26:23
So getting customers to your app once they’re in, they have a really good sense of how validated a certain provider is. It’s going to come out to them in terms of those stars, but getting them to the APP, the itunes store and yelp kind of are the two that I saw in doing some initial searching. Is there anything that you guys are looking at in those spaces in terms of reviews?
Skye Durrant: 00:26:47
Oh yeah. We also have google reviews. We have all of our internal, so our internal reviews aren’t publicly published unless you’re actually looking at the star rating for provider, but then if you’re looking on our website, you’ll see all the reviews. So if you dive into France, well we’re not in Columbus, but if you were to dive in the Cleveland market, you’d be able to see the top providers in the Cleveland market and then you’d be able to see all the reviews for those top guys. And then we’re actually this summer we’re releasing our provider web pages where you can actually start reading bios on these guys and learn a little bit more about the individual providers themselves.
Jay Clouse: 00:27:18
While we’re on this topic, let’s say that, uh, I’m Eric’s dad and I love my lawn and I’m going into lawn guru. What’s my user experience? Can you walk me through my experience with the product? Getting someone out to cut my yard?
Skye Durrant: 00:27:29
Yeah, so it was Eric’s dad. Is He someone who cuts his lawn already or is he. Is he a guy who’s looking for a service provider?
Eric Hornung: 00:27:36
A, he uses our next door neighbor for free.
Skye Durrant: 00:27:38
Okay. So he’s going to be a tough sell already. But what is it going to be looking at? Uh, in terms of the onboarding experiences. First thing is entering your address. If you’re doing it through the APP, we’re going to bring up a satellite image and you’re going to be able to trace out your lawn. From there, you’ll be able to choose your service. So if you want to do knowing you can choose a onetime cut, which just means, hey, we’re going to have a guy come out and cut your lawn. Within 48 hours you can choose occurring service. And for that you can choose weekly or biweekly cuts or in some markets we even offer monthly cuts. And from there you’re going to get paired with a service provider. They’re going to notify you of the service day that they’re going to be coming out on if it’s recurring, so it will be weekly, Thursdays, something like that. When the providers actually on their way, you’re going to get a notification that we’ll call him John. John’s coming out to mow your lawn. You’re going to get a notification when he starts and then you’re going to get a notification once he’s finished with the picture receipt, so that’s what the first cut’s gonna look like
Jay Clouse: 00:28:32
and you guys offer a pretty wide range of services at this point. I think I counted like 11 on the website. Is that because the owner operators you have offer those themselves too, so it was just an easy like, yeah, and we offer this to because it’s the same people or do you have to look at each of those opportunities individually and see if they made sense the same way that lawnmowing did
Skye Durrant: 00:28:51
through our network Obviously we can fulfill all of those different services on an individual provider level. They don’t necessarily all perform each one of those service. For instance, air aeration is something that requires the kind of specialized tool. Some of the guys own that tool, other guys will rent that tool if they can stack up a bunch of aeration jobs and kind of knock them all out in one or two days. But for the most part, all of these guys are doing things like yard clean up. They’re all do mulch installations. So there’s a, there’s a wide spectrum of jobs there that everyone performs and then there’s some kind of specialty jobs that only a handful of our providers in each market perform. Um, but it’s all based off of customer demand. So those are the most popular services over the years. Customers have reached out saying, hey, you know, we love John Cutting our long, but we want them to install some mulch this week. Can you do that?
Eric Hornung: 00:29:37
And how does snow plowing play into all of this?
Skye Durrant: 00:29:41
Snow plowing a, obviously it’s only in our northern markets, but it works in a very similar fashion to how all our wine demand one works just on a tighter timescale. So when it snows, we’ve got two options. You can sign up for what we’re calling auto plow, which is basically our recurring service, meaning that anytime it snows two or more inches, we’re automatically going to dispatch a guy out to your property and have them clear your driveway, shovel your sidewalks if you request that. We also offer salting as well, and then we have our on demand aspect where if it’s snowing and you know you just don’t feel like going out today and clearing it, you can push your button and have a guy come and that’s within a 24 hour window. Most of our jobs are getting completed within six to eight hours on the on demand side. Some some of them depending on where you are and where the provider Ed’s. Sometimes it’s 15 minutes as the owner operator.
Skye Durrant: 00:30:27
I think the value prop is really compelling. I’ve seen some numbers like on average these guys make $400, $700 more a week. I think that was embraced. I saw. Is that close? Yeah. Our, our average is $700, so it depends on what time of the year you’re looking at, but for lawn mowing or averages 700 a week for snowplowing we had guys who were doing $3,000 in a day. So it really depends on how eager you are, how, how much room you have in your existing routes to kind of fill up with these jobs. But there’s some guys out there who last year brought in an additional $90,000 for the platform. So it’s really making a big difference to these guys’ lives.
Jay Clouse: 00:31:04
And so are they insisting that their customers go through this platform? Are they turning away some of the more traditional, like people just call them up and try to arrange these services? Where do you see that trend going?
Skye Durrant: 00:31:15
You know, a lot of these guys has kind of stopped doing their own marketing. So if they have customers who are reaching out to them and saying, hey, we want you to cut her along this year. Yeah, they’ll bring them on. Sometimes they’ll add them to the longer platform providers can bring their clients into our platform. So that they have all the additional benefits of it, like the fast payments and they in app communication and skip features and those sort of things. But a lot of these guys have just relied on us to build a rouse because we deliver jobs that are right in their existing routes and they can easily build up this density and they don’t have to do the, you know, traditional knocking on doors, handing out flyers, going door to door to build those businesses anymore.
Jay Clouse: 00:31:53
And so from the consumer side, what’s the core problem that you’re solving for that person? Is it saving money? Is it convenience? What’s driving the trend towards, I want to go to an APP for this versus I as the consumer just want to call and work one on one with a company.
Skye Durrant: 00:32:08
So for the consumer, we really focused on three things as transparency, control and convenience. So on transparency, it’s pricing. We give these guys a satellite image. We’re saying, Hey, this is your law and this is how big your lawn is, and because your lawn is this big, this is how much it should cost. And that’s standard across this region where a lot of these customers, depending on the neighborhood that they’re in, affluent neighborhoods where you know, it’s a six, $700,000 home lawn care guys traditionally kind of gouge though, so where they may be cutting a 6,000 square foot lawn across the street for 20 bucks. They’re charging these people 40 bucks. So by standardizing pricing and making that transparent so it’s a better experience for the customer, then we give them control. So we like to describe our APP as a remote control for the lawn. And the truth is lawns don’t need to be cut every week, but because it’s simple for providers as generally what most customers sign up for. And then they’ll have guys coming out in July and they’ll pretty much just be running over grass that doesn’t need to be cut and they’ll be charged for it. So we allow customers to push a button to skip cuts they don’t need. And what we found is that if you’re really savvy and your lawn isn’t over fertilizer, open water, you can on average save about 30 percent through skipping unneeded cuts in the middle of the summer. So that’s a savings and control feature. And then convenience, we handle all the payments. Either you’re not getting invoices on sticky notes, you know, on your windows or in your mailbox at the end of the month. You don’t have to, you know, write a check or high cash underneath the doormat. You’re just automatically charged after the job’s completed.
Jay Clouse: 00:33:36
That’s great. And so last question on this point is how aware are the customers of their needs for transparency, control and convenience because they have to be aware that those are problems they’re feeling right? How painfully do they feel that problem? Where, how, how painfully do they want a better solution for that? Or is it an an education effort from you guys to say, Hey, there’s a better way.
Skye Durrant: 00:33:58
It is an education effort, but it just fits so easily. It’s something that once you explain to a customer, they’re just like, yeah, that makes sense. And so when we get these, we sell to customers in a traditional sense where if they call us up, we’ll explain the benefits, we’ll explain what we’re doing, why we’re doing it, and then we’ll close the sale and every time. So we actually found this when a woman during that transition period when we were still having customers call into our old business looking to sign up, we were pitching the alternative and 99 percent of the time they said, yeah, let’s do the APP. That just makes sense. And that’s when we knew that we were onto something because nobody’s going to say, hey, I don’t want a button to skip. Everyone knows that in the middle of the summer, they don’t always need their lawn cut. No one wants to get a bill at the end of the month. They’d rather just pay per cut. It’s kind of a no brainer brainer for their customers. There is a little bit of an education, but I wouldn’t, I wouldn’t really say it’s education. It’s more just saying, hey, there’s a better way of doing it. And uh, it makes sense.
Eric Hornung: 00:34:53
What percentage of the customers on the platform are residential versus like institutional, so that can be maybe like rec centers or parks or schools or people that are much larger presences.
Skye Durrant: 00:35:07
I don’t know the exact percentage, but I’d say it’s over 98 percent residential. We’re almost exclusively residential or commercial properties or commercial customers I should say are primarily property management companies where the work is still on a residential property. It’s just a commercial owner. We do have a handful of gas stations and that sort of thing which are privately owned. Again, it’s commercial, but it’s almost all homeowners at this point.
Jay Clouse: 00:35:32
How are you getting in front of those people? So this, this is awareness. I become aware and like, oh, that’s definitely the smarter way to do that. What are your guys’ is marketing or customer acquisition strategies that you’re getting in front of these people?
Skye Durrant: 00:35:43
Yeah, so in terms of paid, we’re using, uh, you know, the traditional ones, so facebook, instagram, ad words, we’re getting in front of customers and those ways. We also buy leads from different aggregate. So there’s things like home advisor, thumbtack that’ll actually pipe UN leads for customers and land on their pages. We have our referral program where, uh, to give 15, get 15, similar to, you know, everything that Uber and Lyft we’re doing, we’re also releasing this new hoods feature which we’re really excited about. And hoods is basically neighborhood discounts simplified. So before we would get requests from Hoa presidents being like, Hey, I’ve got 10 customers, I’m trying to get everyone or 10 neighbors. I’m trying to get everyone on the same day. What kind of discount can you do do for us? We’ve made that automatic now. So if you, uh, we set up geo fences around high density neighborhoods. When you enter in your property, we know you’re in that neighborhood and we can display your, your discount rate instantly for you now.
Eric Hornung: 00:36:36
So what’s like an average cost of acquisition?
Skye Durrant: 00:36:39
Yeah, paid channels. We’re right around $45 when we’re entering a market first year, like year one, month one, it’s around $45 at peak maturity, which we consider the target market. It’s as low as 15 through our paid channels.
Eric Hornung: 00:36:53
And how long has the customer staying on?
Skye Durrant: 00:36:55
Right now? Our Year over year is over 90 percent. We’ve been doing this for three, going on four years and that’s what it’s been. So it’s pretty good. I do. I don’t know when they’re going to get. There’s going to be a day where they’re just going to say, okay, I’m done here, but it hasn’t happened.
Jay Clouse: 00:37:12
So something that Eric and I talked about in the intro was you guys went through 500 startups. One, I’d love to hear about that experience, but you, you’ve raised something like a million dollars at this point and it seems obviously you guys are doing fairly significant revenue. Are you guys in a position where you’re no longer in the need to fundraise?
Skye Durrant: 00:37:31
So we’re fortunate in the sense that we don’t need to fundraise. The businesses aren’t going to go anywhere. I’ll put it that way. We view capital is purely an accelerate now and we’re looking for the right investors who share our vision and can add dollars in a way that’s more than just dollars. Um, so we’re talking with strategics and we’re talking with big players in this space. We’re really looking at, again, the west coast doesn’t actually get our business that well there, they don’t have lawns like out here in the Midwest. So when we talk to Vcs, we find the most interest out of our, out of Midwest based firms, but we’re really looking for the right partner right now. So yes, we’re fundraising, but if we don’t fund raise in a year or two years or three years, the business is still going to be healthy and growing.
Jay Clouse: 00:38:12
So then my question is what is, what is your expansion strategy? How do you guys move quickly, state to state? Or how important is that to you? How big is the region that you want to attack? Is it the midwest? Is the whole country?
Skye Durrant: 00:38:25
You know, Right now we’re focused on going deep in our existing markets because that’s our best Roi. Once you’ve actually established a market, then you can get. So the, the hardest part of any is opening up a new market. That’s when your turn is going to be the highest. That’s when the customer experience is going to be the worst. That’s when providers are going to be the most frustrated as as you’re trying to get that ball rolling. Once that ball’s rolling, it really. Everything just gets so much easier. So now that we really have seven balls across the country, we’re just trying to make these balls as big as possible. That’s terrible.
Eric Hornung: 00:39:01
Thatll be the clip that we played at the beginning of the episode.
Skye Durrant: 00:39:08
Anyways. Yeah. We’re going deep in our existing markets because financially it’s the best return right now. So what? Then I’ll extend on that a little bit. Within that we track what our, what our CAC is, right? So we anticipate that at some point, yes, we we’re going to hit saturation where it’s going to cost more to acquire a company or a customer in our existing market than it would be to go spawn and new market. So once we kind of hit those benchmarks and that’s what we’re looking for, that’s when we’re like, okay, let’s start expanding outside of these walls.
Jay Clouse: 00:39:37
Who are your competitors and is there anybody who’s focused on starting other markets right now? And in trying to just do the land grab approach because I would think that would be a threat or something you guys have certainly thought about and considered,
Skye Durrant: 00:39:51
you know, I’d say our biggest competitor in terms of dollars raised is a company called tax task easy or to Utah. Then there’s a handful of other guys, Moses and is one lawn starter and lawn love. These are all guys who are doing similar things to us and most of these guys have taken to nature. There’s also green pal. Most of these guys have taken the land grab approach where they’re opening up markets all the time going everywhere. And what we found is that in the markets that these guys are in a world in, which is just about everyone now, we’re pulling providers from them all the time and providers are saying, yes, you guys, platforms is the best. You delivered the best jobs in areas that I’m already working on. I can grow my business easily through you guys. We like your features better. In return. Customers are having a better experience too because we’ve got the providers that are there working and we’re focused on density and efficiency instead of just trying to be everywhere at once. And I imagine our, our CAC numbers are probably better than these guys too, but that’s just based off of what we’ve seen. So maybe they’ve got some secret sauce I don’t know about
Eric Hornung: 00:40:51
within the markets that you’re currently operating in, what are the biggest areas for expansion right now?
Skye Durrant: 00:40:59
You know, our penetration rates in all of our markets are easily below one percent right now. This industry is so big. That’s one thing we haven’t talked about. Talked about just some lawn mowing. It’s estimated $30 billion dollars a year in the United States once you start factoring all the additional services, uh, outdoor services, they’re saying over 70 billion and growing to 100 billion by 20, 22 or something like that. So this is just a massive industry and our penetration rates are, you know, nowhere near what they could be. So all of our markets have huge opportunity. I’d say our best markets right now where growing the quickest, the top three are going to be Detroit, Houston, and Atlanta.
Jay Clouse: 00:41:37
What expands the lawn mowing or outdoor services market to over 100 billion by 20, 22. We’re not, we’re not creating more lawns, right?
Skye Durrant: 00:41:46
We’re not creating more lawns, but more people are outsourcing the work or looking to hire the work. So the, they’re estimating that the, uh, I think it was like a three point four compounded annual growth rate or something like that. So there’s a lot more people who are just looking at hiring this work than doing it themselves.
Jay Clouse: 00:42:03
It sounds like an industry trend to me. So that’s something to say that people are just trending towards convenience. Do you think what’s, what’s driving that?
Skye Durrant: 00:42:12
No, I think that I think that people are getting busier. People are spending more time at work, the time that they do have with our families at home, they don’t want to be, you know, cutting the lawn or plow the driveway or installing mulch. I think overall just there’s more people working, there’s more double income families out there. They view this as kind of a dirty job. It’s, it’s hot, sweaty, you know, you’re, if you’re actually doing weed whipping, that sort of stuff, it kind of sucks because you’re getting blasted with rocks and grass clippings and you know, it’s a dirty. It can be a dirty job. So
Eric Hornung: 00:42:41
is there any seasonality in your guys’ revenues? I know that you hedged winter with the snow plowing, but in either spring or summer or fall, is there any noticeable seasonality?
Skye Durrant: 00:42:55
Absolutely. Um, yeah, seasonalities yeah, huge. So we really view our business, like our anchor business is lawnmowing because that’s the longest recurring aspect of our business. So we, we try and land the customers on that service and then we upsell them basically any outdoor service they need after that. But yeah, if you look at our actual revenue, things really start ramping up. April continued climbing through July at July. That’s where most people have kind of found a solution, uh, if they’re looking to hire one. So things kind of start plateauing around there. And then the recurring aspect is gonna start dipping in October in our southern markets, it’s November, December when things really slowed down, but in the spring and fall there’s also a handful of additional services that lots of people order. So leaf cleaning it up or yard cleanup, sprinkler startup or sprinkler, winterization, aeration, overseeding our particular during those times because that’s what’s best for the lawn. It never goes to zero. But there are months where it drops down and then in the snows, just kind of when it snows there’s huge spikes. But if it doesn’t snow, there’s nothing.
Eric Hornung: 00:44:00
So this has been a nice year then
Skye Durrant: 00:44:04
this year has been crazy. Yeah, it’s been very, very unusual compared to the prior years. But it’s been a lot of fun for us.
Jay Clouse: 00:44:13
Can you hit me with the volume number? How many, how many transactions do they call? Column or services are being run through lawn guru on a weekly, daily basis.
Skye Durrant: 00:44:23
Weekly. We’re doing thousands of lawns in each of our markets. And then like for snow, you know, it’s several thousand lawns or several thousand driveways and during every storm
Jay Clouse: 00:44:34
I was gonna say, what’s that growth been like for you guys?
Skye Durrant: 00:44:36
It’s been really exciting. I’d say snow is the biggest challenge because it’s kind of an all or nothing event and so you’ve, you’ve got this, you see it coming and you’re doing all the marketing, like it’s very easy to market and target towards customers when there’s a big snow event on the horizon. And so you build up all this, all these purchases and everyone was ready and then the snow starts and then it stops and everyone wants their driveway cleared up the exact same time and that’s when it becomes really painful and you’re trying to, you know, you’re doing your best to meet everyone’s expectations and some people are going to be thrilled with it. Other people are going to say, hey, this is taking too long. I was expecting this to be like an uber where I pushed a button and they’re there in 10 minutes. So that’s a challenge for the lawn stuff. It’s really nice because we give these guys the flexibility to really build their own routes and so from an efficiency standpoint, these guys are taking jobs and they’re saying, okay, hey, this is next to my job on Tuesday are my route on Wednesday or whatever, and they plug it in. The customer’s getting notified. The customer doesn’t have that same kind of immediate expectation that they do with snow. It’s not like you need to. If you’re not cut on the date the same day that you expected it to be cut, it’s fine. Right? Like what? It’s grown another eighth of an inch. Maybe over the course of the day, no one’s really going to be that fussed about it. So law is pretty easy. Snows. The more challenging aspect of our growth.
Eric Hornung: 00:45:55
Jay. I want to give it over to questions about 500 startups and the difference between San Francisco and Michigan. Do you have any questions that you’d like to ask before we do that yet?
Jay Clouse: 00:46:05
Right there with you. I had one more question. I was just going to ski. How big is your team at this point?
Skye Durrant: 00:46:12
We’re at, including our interns were at 11 people right now
Jay Clouse: 00:46:15
and do you have like a, a marketing whiz who’s really good at these campaigns?
Skye Durrant: 00:46:20
So last year we are working with a marketing company and they were great. Uh, it was a company out of Detroit called marketing supply co and they basically taught us everything that we need to know to do it on our own and that’s what we wanted. So marketing still in house, but we received some awesome insight on, on how to set up our campaigns on instagram and facebook and what we should be tracking in terms of our email open rates and click through rates and setting goals and benchmarks there. Um, so yeah, right now it’s all in house, but we worked with a partner to get to where we are.
Jay Clouse: 00:46:50
I don’t know if there’s a midwest thing or an everywhere thing, but I so rarely find people who are exceptional at executing marketing campaigns and understanding how to do those ad spends and getting down that CAC really low and optimizing across the different platforms of facebook, facebook, instagram, ad words, knowing how to do email and measure email properly. It’s told me a ton of people who do that, so I was. I was interested to hear. That seems like a huge strategy for you guys in terms of acquisition as interested to hear how that’s been for you guys and if you had like a secret person in in house or if it was an agency.
Skye Durrant: 00:47:24
Actually this is kind of a good segue into 500, but one of the core things that they taught us there is marketing’s and experiment and you always have to treat it as an experiment, so we take a really scientific approach to it and it’s all just about knowing our benchmarks. Measuring are setting goals, measuring against that and just being open to experimenting and trying new things and kind of having a line of, okay, yes that worked, that didn’t work and if it didn’t work,
let’s forget it and let’s move onto something else and try and always uphold these standards.
Eric Hornung: 00:47:51
What percentage of your team is focused on marketing of those 11 people?
Skye Durrant: 00:47:56
I’d say everyone in our team is focused on marketing to a certain extent, you know, we collaborate on ideas day in and day out, customer, you know, a lot of our marketing is directly driven through the things that we’re tracking and then what we’re hearing over the phones, you know, we’re always asking customers and providers how they heard about us learning about channels that we haven’t explored and then trying to optimize those and introduce new channels. Um, so it’s really a collaborative process, uh, across the entire team and we’re always just looking for new solutions and trying to set new experiments.
Eric Hornung: 00:48:26
Do you have someone who’s dedicated to the tech and tech updates or how’s that work?
Skye Durrant: 00:48:32
Yeah. Or so our development team, um, we’ve got our android or Ios and that our web developers and a handful of interns, but those guys, because they’re also setting up the tracking applications within those, they’ve got insights that some of, uh, you know, some of us don’t also have in terms of where they’re seeing downloads coming from or what pages aren’t working or are working. Um, so those guys have really good insight too in terms of marketing.
Jay Clouse: 00:48:55
So I’m interested to hear having gone through 500 startups, what are some of the things you learned there that are contrary to the way of thinking here in the Midwest? What, what did you take out there that is different from what people around here are doing or how they’re thinking and how has that affected your business
Skye Durrant: 00:49:13
different from the Midwest? I don’t know if there’s anything that I, that struck me. I was like, Whoa, this is way different than what were the, that how we’re thinking about things here in the Midwest. I mean, one of the biggest shockers out there is just the cost around everything and why we came back to Michigan is because the amount that they’re spending, the amount that companies have to raise out there just to keep the doors open. Not even for growth. I mean I’m just talking about rent and employees and everything else is just so much drastically higher that when we went out there and we raised, we said okay, we could last a year with this in the bay area or we can go back to Michigan and we may never have to raise a gun because it’s, we can dump it all into growth basically. And so that’s the biggest thing and that’s why we’re like, you know, what are we doing out here, this, this place is overpriced. It’s oversaturated. And, and I think that’s the biggest opportunity the mid West has right now for startups is that you can get a lot further on a dollar out here. Then you cut out there.
Jay Clouse: 00:50:13
Something I’ve heard seth say before when he was in fundraising was similar points, what you just made, but also he was comparing himself to other companies in the cohort which you were in the same code, the same batches he was where, where are some of them on like their necessary fundraise from needing to be out there? Are they like on series b at this point or are most of them still at series a?
Skye Durrant: 00:50:38
No, from our cohort I think, I don’t know of anyone who’s announced to be. There’s definitely several that have announced a’s in. Some of them announced a shortly after ending the program so they could be on b and I may not be aware of it, but also a lot of. I feel like a lot of our cohort isn’t necessarily in the bay area anymore either. For instance, one of the guys who just announced her a sales huddle, those guys are actually New York, uh, New York and New Jersey. Off the top of my head I really don’t know too many guys who actually stay out in the bay much longer after the program ended. I feel like a lot of them Kinda, but 500 is known for, for recruiting companies from all over the world. Um, so we had founders from Thailand and Japan and India and all over the place. A lot of them actually went to Toronto. Interesting. You know, one of, one of the companies who is looking to stay in the states, they decided Toronto is a better fit for them. Um, and they moved out there. I know, I think there’s like three of our cohorts are in Toronto right now. Interesting. No, it’s not quite the midwest, but they’re close.
Eric Hornung: 00:51:48
It’s only a five hour drive from Cleveland. No big deal. Yeah.
Jay Clouse: 00:51:52
So how did you become aware of 500 startups? You know, I’m thinking guys who start a lawn care business in highschool. Normally the trend isn’t for them to get into tech and normally it’s not necessarily for them to learn about, you know, startup accelerators. So what was your intro to $500 and what was the thinking behind this is something we should do.
Skye Durrant: 00:52:11
So we have launched the platform in, it was May 11th, 2015. It was completely bootstrapped. We hadn’t raised any money, we were only ios. We are only in 12 zip codes of the time in Michigan. Um, that first year a lot of our supply was being self fulfilled by our existing business. It was about halfway through the summer that we started bringing on third party providers. And so we were like, hey, if we’re gonna, if we’re gonna grow this, it is going to require some capital in terms of the prior acquisition costs, building out the rest of the platform because we didn’t have an android solution. And it happened that most of our service providers are. Most of the guys who are looking at coming on the platform at that time were on android devices, you know, we have been dumping in nominal. It was somewhere around like $5,000 in marketing or something just out of our own pockets. Just kind of experimenting with early channels. So we knew that we needed to raise money and we were looking at. We are applied to Yc, we applied to 500. We were going through what was called a accelerate Michigan business competition, which is a big kind of fundraising event out here in Detroit and yeah, we got a call back from 500 and we went through the interview process and it was like a week before the program started and literally one week before they called us back and they said, yeah, you guys are in and we had an existing business and we had 35 employees in Michigan and we were like, you know what, we got to pack up and move out to San Francisco. We’ve got to do this in a week. So that was crazy. Uh, brandon and I drove straight from Michigan to San Francisco nonstop. It was 36 hours straight and it was brutal. We got there, we were exhausted and then the program started like two days later and it was just a whirlwind.
Eric Hornung: 00:53:49
You didnt even get to stop anywhere in between?
Skye Durrant: 00:53:52
We didn’t stop once, we didn’t take a sink, we stopped fill up with gas and that was, it was just straight through. It was brutal.
Jay Clouse: 00:53:59
That’s unbelievable. How do you, how do you transition away from a 35 person company? What, what type of direction did you give as as the owner there for, for them to keep things going smoothly?
Skye Durrant: 00:54:10
We had to trust our employees. I mean we’re really fortunate in the sense that we have great employees here and we knew they’d guys who could lead the company and we put them in position to lead and said, hey these, you know, this is your responsibility, and they were excited and eager to step up and they did an awesome job and yeah, it was just trusting our guys.
Eric Hornung: 00:54:27
So you just mentioned accelerate Michigan and we were talking a little bit about some of the benefits of being in Midwest, including the fact that the costs are lower. We actually have lawns here, so that’s good for you guys, but one thing that a lot of venture capitalists and people in the space talk about around the Midwest is the ecosystems that are developing. So Columbus is really big on ecosystem. Cincinnati, I know it was really big on ecosystem. What’s the ecosystem like in Ann Arbor and is it tied? How high does it to Detroit and how, what’s that ecosystem like?
Skye Durrant: 00:55:03
Yeah, that’s a great question. So I’d say both Ann Arbor and Detroit have amazing ecosystems and developing ecosystems right now and there’s a couple people who are working really hard to kind of bridge those two ecosystems and bring them together right now. They do kind of operate independently of one another. Uh, the one in Ann Arbor that we participate in is called spark and arbor spark and it’s just amazing. I mean these guys will give them to us grant money that we’ve been able to put towards marketing. That’s, I mean that’s how we paid to bring on this marketing consulting firm. Um, and so that was, you know, we are in $40,000 dilution free money. They also gave us an additional $10,000 that we could use towards legal fees, relocating expenses into Ann Arbor. They brought us into Ann Arbor. So it’s just been ann arbor spark and the people over there, it’s an open door. Anything that you need, you ask for and they do everything they can to kind of bring it to them. So they’re really focused on bringing startups into Ann Arbor and helping the startups that they get here in Detroit. There’s similar programs. Dan Gilbert’s leading some is his whole ecosystem over there, you know, introducing some really, really awesome things. There’s also this, um, kind of coworking space called bamboo where Amanda, she’s running bamboo and she’s doing a great job in terms of bringing collaborative workspace and hosting tech related events and kind of building up her own little. I, I shouldn’t even say little. It’s huge now, but her own accelerator is coworking type space where she’s hosting awesome talks and events and everything every night. So it’s great
Jay Clouse: 00:56:34
What type of role. Has mentorship played in your life or in the life of Lawn Guru because everything you’re saying sounds like, you know, even even from hiring the marketing firm or realizing that you can apply for grants, I have to think you’ve had some strong mentors who have helped you identify some of these opportunities.
Skye Durrant: 00:56:51
Yeah. And uh, you know, a name that I haven’t dropped yet is todd and todd’s, our advisor. We met todd, actually. Brandon met todd at a birthday party. About a month after we had launched our, uh, our APP and Michigan, so his, his girlfriend, the girl that she was nannying was having look at three year or third year birthday party or something and brandon got roped into going into this thing and he knew nobody there and you just kind of sitting on the sidelines and he bumped into this guy and this guy happened to be todd and Todd’s a serial entrepreneur. He said a number of businesses over the years, exited several of them successfully. And uh, they just got to get talking and brandon showed them the APP and todd was like, this is an amazing idea. Like I want to help you guys in any way that I can in. And he started mentoring us back in, you know, the summer of 2015. He’s actually the one who introduced us to the accelerate Michigan program where that was another. We, we took second place in 2015 there. Um, and that was a $25,000 dilution free checking. And Todd helped us with our pitch and putting together materials and really guiding us through that whole process. Um, so yeah, over the years we’ve had awesome mentors and todd’s been one of the most significant, uh, and beneficial to us. Absolutely.
Jay Clouse: 00:58:05
That’s great. I’m a big believer in the power of mentorship and it’s just obvious hearing from you and, and the way you approach things, uh, that you, you have some maturity in understanding beyond your years. And so I usually attribute that to some strong mentor. Of course there was a chance that you could have been like, nope, learned it all myself and I wouldn’t be having having this a monologue, but, but
Eric Hornung: 00:58:27
You’ve got that psych and neuroscience degree
Jay Clouse: 00:58:33
Actually I’d love to dig into that. So why, why neuroscience?
Skye Durrant: 00:58:36
You know, I don’t have a good reason why I thought it was just incredibly interesting while I was going there. So I started off in the psych program and in my favorite classes. So in high school I loved biology classes. I’ve always just wanted to understand how things work. I’ve always been taking things apart and just seeing the inner workings of them. And so trying to understand how the brain works and how memories are formed and how understanding speech and cognition and all these things actually work is what I was drawn to. I also realized my senior year that there’s no way I could go through 30 years of school to actually apply this to anything in a professional manner. And I was really more just chasing like this. Like, okay, how does this work? I want to learn more. But I was, I reached a point where I was like, I love business. I was for the small business called, what was it, a small business anymore. But it was this um, company in Boulder called rocky mounts which made a products for vehicles to carry outdoor equipment. So bikes and skis and snowboards and that sort of stuff. And I was working with these guys and it was a small operation at the time when I joined, there was like three of us. This was during the 2008 kind of crash. And so the team had gotten really small and it was just me, the founder and one other guy. And over the next four years we grew this into a team of, I think what I left there was like 12 or 15 employees, but I just been involved in so many aspects of the business from prototyping and working with prototypes that were coming from China and stress testing them and you know, making design and recommendations and working with the engineers and doing customer service and just all of these things. And I just had fallen in love with business and that’s when I realized like, you know, I’m not gonna do anything with psych or neuroscientists. It’s just not in my professional, you know, outlook. But business definitely is
Eric Hornung: 01:00:18
in a way though. You kind of are doing something with psych. If you think about it from a behavioral psychology standpoint, with all of the AB testing you’re doing in marketing and tinkering and optimizing. I mean, you’re really learning about humans indirectly, which is kind of fascinating that it comes full circle.
Skye Durrant: 01:00:36
Yeah. And the. And like I said, the scientific approach to what we do, where, you know, it’s, it’s about experimenting and Really Measuring and basing your decisions off the best outcomes of those experiments.
Jay Clouse: 01:00:49
My last question, Skye, obviously growing and going deeper and markets and expanding to more markets is a challenge in and of itself, but what are the challenges facing your business now or you as a founder, whether it’s marketplace challenges, geographical challenges, what, what’s holding you guys back?
Skye Durrant: 01:01:06
I’d say the biggest challenge we faced was last year when we went into six new markets all at once and, and looking back, I wish that we hadn’t done it all at once. I wish that last year we said, okay, let’s tackle three, but we, we looked at this opportunity and you know, I think we were maybe a little optimistic and what we’re capable of doing. And we said, hey, we’re gonna, we’re gonna launch six. And it was a real battle to do six simultaneous markets all at once. And so we’ve kind of gotten over that and now it’s, we’re at a really exciting point because we’ve, we’ve overcome all of the major challenges and now all of these markets are really ripe to grow. And so this year we’re really excited about just doubling down on all our existing markets and it kind of blowing these ones up when it comes time to start launching new markets. I think we’ve learned a lot. It’s still gonna be a challenge every marketplace opening a new marketplace always is. And that’s going to be the biggest challenge is the opening new markets down the road. But from everything that was learned, I think we can do it a lot better and I’m excited to start doing it again.
Jay Clouse: 01:02:05
That’s all I got. Eric, you got any last questions
Eric Hornung: 01:02:08
no That was awesome. That was a really eyeopening interview.
Jay Clouse: 01:02:11
I guess the last question would be, is there anything that we’re not asking that we should be asking?
Skye Durrant: 01:02:15
I’m not asking that you should be asking. I think you did a good job. I mean I feel like we covered all the major bases there.
Jay Clouse: 01:02:22
Oh, that’s the question where I just seek validation, so thank you. Alright, Skye. Thanks for joining us. We appreciate your time. I’m excited to see the future for lawn guru with this year. Awesome. I appreciate the time guys. This was a lot of fun. Cool. All right. Eric, we just spoke with skye Durrant of lawn guru. What’d you think?
Eric Hornung: 01:02:50
Well, we had our first genital joke, so that was nice.
Jay Clouse: 01:02:59
I just keep trying to sweep it under the rug and you’re like, no, let’s embrace it. Let’s embrace the CAC and balls.
Eric Hornung: 01:03:09
Were gonna have a couple of those, so why not just, you know, why not just embrace it? No, but the, the interview itself was, was awesome. You can. You can tell that sky and his co founder really have down the things that matter to their business and how to grow that business and they are focusing with laser attention on those things and it’s the seven markets that they’re in that they’ve got a foothold in and then it’s really a intense focus on Seo, instagram, facebook, all that marketing to get new customers in at the lowest cost possible, so they’re really trying to optimize. What did you. What did you think?
Jay Clouse: 01:03:48
Yeah. What’s really fun for me is when we talked to some of these founders who know their stuff so thoroughly that we ended up asking two or three times as many questions, but just because they’re like, Yep, I got this answer is on the writing and I’m going to give it to you economically, so I’m. I’m down. You’re looking at like, okay, well we’ve got an hour here. Let’s keep going. And Sky was one of those guys. He, he knows, he knows their industry. He knows their market. He knows their product. He knows what they need to do. He’s that kind of one of those points where it’s in execute execution mode, you know, they, they’ve honed things in, they’ve had some challenges as they’ve expanded and getting through those challenges. They’ve come out the other side with a playbook of how they want to expand and they seem to be in a pretty good spot, but before we get too far into this, Eric, what does this lasts a segment of our show look like?
Eric Hornung: 01:04:39
Yeah, so this is the deal memo that we referenced on the Upfront and the deal memo serves to let lps know what you’re thinking about a certain investment that you are either about to make are not about to make and crystallize your thinking to your investors. Now, Jay and I don’t have any investors. We are just running a podcast, so this is a hypothetical verbal, very informal deal memo. Nonetheless, we want to think about for specific questions as we’re walking through this. Jay, did I miss anything before I dive into the four questions
Jay Clouse: 01:05:16
only that this is intended to make us smarter. You, you said, crystallize our thinking, which is absolutely correct. We want this to help calibrate our instincts and the way we evaluate companies and opportunities over a period of time. So we’ll look back at these deal memos, six months, 12 months, 18 months down the line, check in on these companies, see how they’re progressing as compared to our thoughts and start to get a better sense for what we’re looking at at this early stage, which is, you know, a tough stage to evaluate. So on that note, the four questions we’re going to informally address
Eric Hornung: 01:05:50
how committed is this founder? What are this founder’s chances of success in this business and in life? What does winning look like in terms of revenue and my return? And why has this founder chosen this business? So as those four questions being laid out, Jay, what were some of your big picture takeaways on the positive side of things?
Jay Clouse: 01:06:15
Skye’s been in this industry and in this business for a while. This wasn’t, hey, I saw uber. This was cool. I saw a lawnmower and I figured, why not match these things up? It was, I started a company doing lawn care with my best friend since age six and or knew him since age six and as a natural evolution to our business as we got more savvy and understood the market and understood how technology could enable our business. A natural evolution of that was this technology platform that just so happen to look like on demand lawnmowing services. So to me that’s. I love narratives like that. The narratives of this was just a natural evolution and technology was an accelerant and an enabler for us versus we wanted to build an app and this was the idea that we came up with, you know. So to me that’s always a positive, positive sign on the founder and you know, that clearly answers. Why is the founder chosen this business? It’s just been his world has been what he’s been in for awhile. I didn’t get any indication that he wasn’t totally bought into it. You know, it’s not sexy and that’s, that’s something that I think we like to embrace and celebrate here in the Midwest as well as looking at some of these founders who are doing businesses that aren’t sexy but can be highly profitable businesses. So that was. That was my first takeaway. How about you?
Eric Hornung: 01:07:34
I love the industry makeup of this industry. It’s half a million landscape whats it called lawn and landscape registered companies up to flex that up to 700,000 if you count all the unregistered ones and 70 percent are owner operators, which means that they have an inherent time crisis when you’re an owner operator, whether it’s a truck or a lawn care company or whatever it is you are going to have. Time is your most valuable resource and they are really solving a problem for these individuals who are owning and operating their own lawn and landscape companies. So I think that being essentially the back end, the marketing, the invoicing, the bill pay or anything like that, potentially equipment financing one day, who knows, right. They, if they can be the back end and make an owner operators job easier so that they can do more work or hire more people to do more work than that’s a longterm wind. For me.
Jay Clouse: 01:08:35
I agree. I really liked that aspect of here is the pain problem that we’re solving for these owner operators who are our supply for this marketplace and you and I’ve talked about this before in a marketplace, generally supplies what needs to come first, even though it’s a real chicken and the egg sort of situation. The general knowledge or the generally accepted idea is that for businesses in this way, you want to start with supply and so for him to show this very clear Roi for them of $400 up to $700 on average per week, that lawn guru was helping them make as incremental revenue in their businesses. Super easy value prop to get the supply on on there. Something else that really struck out to me was they are intentionally controlling that supply because they don’t want to oversaturate and gets to the point of diminishing returns for the suppliers on the platform, which is really interesting and economically interesting. Do you happen to watch dirty money on Netflix by chance, Eric? We talked about this already.
Eric Hornung: 01:09:33
I don’t, but you have referenced dirty money at least three times on this podcast now and we only recorded seven episodes.
Jay Clouse: 01:09:42
so there’s a great episode of dirty money about the the Canadian in in Quebec there is a consortium of maple syrup producers and that existed because maple syrup is becoming commoditized and people couldn’t make a living doing maple syrup, so instead they banded together and they control the supply, so it’s a. it’s a falsely controlled supply of Maple Syrup which raises the cost, which means people can make a living on it and
Eric Hornung: 01:10:05
dont they have some like really ominous name.
Jay Clouse: 01:10:07
Yeah, I forget what it’s called. A. It is ominous.
Eric Hornung: 01:10:11
The consortium
Jay Clouse: 01:10:13
I’m not sure. Maybe we’ll look it up, but it made me think of that a little bit to say there are. If there are suppliers who are trying to get on this platform that can’t get in, but they want to, I wonder what their temperament is. I wonder what their sort of attitude towards lawn guru is a because that could be damaging if there’s a lot of people who want to get on and they can no longer make the same living they were, but the people who were in the system are making a really good living. We didn’t get that far and I probably would’ve thought about that if it wasn’t for the Maple Syrup Industry in Quebec, but that is. That is the the thing that I would look at as, let’s monitor this. Let’s see if we start hearing some dissonance there. Some discourse between these two groups of people
Eric Hornung: 01:10:56
and that. That brings up another question which is that we didn’t ask and we probably should have, which is that he said that they have less than one percent penetration rates in all of the markets that they’re in from A. I’m guessing we didn’t ask about the basis, but I’m guessing that means one percent of lawns, one percent of properties with lawns, what do they think Like the maximum number of that is, is it 30 percent of lawns? Is it because there’s some that they’ll just never get right. It’s just, it doesn’t make. It doesn’t make sense. You’ll never get them. Is it 20 percent? Is it 10? What is that? And then that’s going to Max out what your Max supply is. So I think that that’s an interesting question that we probably, and I don’t know if there’s a right answer to it, but what percentage of lawns in a given area are actually like professionally manicured?
Jay Clouse: 01:11:50
Something I didn’t do a great job of researching before the interview that he readily gave us this data where his competitors. Did you find any of those competitors you mentioned in your research ahead of time?
Eric Hornung: 01:12:01
I actually found. What was it? Easy, easy task or task? Easy. When I typed in a search, but I did not find plows and shovels and all these other ones, Greenfield, whatever he was saying, I didn’t. I did not, those did not come up in my basic searching. I will say that I did not dive super deep into competitors once I found that first one, but task easy didn’t seem like that strict of a competitor to me.
Jay Clouse: 01:12:27
Yeah. Well, and I’m thinking from the same standpoint that you are of if they’re at one percent penetration, what is the top line, actual addressable market and with all these competitors competing for, it sounds like they’re in the same markets that he is. And also in other markets, how meaningful does that become if, if the, uh, US lawn care market exceeds $100,000,000,000 by the year 20, 22, but they’re sub one percent. You know, what’s, what’s the total cap out where, where, where can they really get to.
Eric Hornung: 01:12:56
Yeah. But I agree. I also think that $100 million dollar number is a little frothy to me. Now this is very subject to the narrative fallacy and all of that, but I think that in my estimation, the recent growth in lawn care is probably tied to. And I think if you went back far enough is probably tied to the recent wealth that Americans feel and right now Americans in general have been in an essentially a eight to nine year public bull market, which means that their savings accounts and retirement accounts look very nice, so they feel like they can probably skim a little bit or they can probably splurge a little bit and get their lawn care done and not have to do things like that. So $100 billion in two years. That’s a three x number in two years. That just seems a little frothy to me
Jay Clouse: 01:13:47
four years. I do want to say that I was at 2020, 22.
Eric Hornung: 01:13:50
I thought I was 2020. Okay.
Jay Clouse: 01:13:51
Well yeah you thinks about 70 billion by 2020, I believe you said or maybe it’s 2018. I do appreciate how the rise of cryptocurrencies has brought the vocabulary term, frothy back to the forefront. Big Fan of the word frothy and a well placed frothy.
Eric Hornung: 01:14:07
But I believe yeah, public markets, people love the term frothy. It’s because it doesn’t, it doesn’t say bubble. It’s just like there’s a lot of little bubbles and it’s like frothy, but it’s not like a bubble because if you call a bubble then you know, you’re crazy.
Jay Clouse: 01:14:19
Something that we routinely hear as a response from these founders and don’t often touch about or touch on in the deal memo, but I wanted to address was his experience with some of the, uh, the investors on the coast specifically related to his business. Something he said that really struck me was sometimes we hear that people don’t understand the business, but when he said they just don’t have lawns and they don’t get it. To me, that’s kind of a, Oh yeah, that makes sense to me intuitively. But also what a, what a blind spot. It seems like you make 10 phone calls to people in the Midwest to have lawns and you, you, you get some data from them. It just seems like if you looked at some of the traction numbers, he has of thousands of services being run through the APP on a weekly basis. Traction should speak for itself in some ways. And I wonder if it’s. I wonder if the investors are saying, I can’t really add this business because I don’t understand it and they’re saying I want my money to be smart money versus just money or if a lack of understanding, it equates to a lack of capital investment
Eric Hornung: 01:15:24
and that’s really interesting because we tend to think about a lack of understanding, equating to a lack of investment from the opposite perspective where vcs or investors on the west coast understand something so well because it’s been done out there so much that they can’t. It just doesn’t work the same way here where we talked about this with consumer plays all the time and we talked about this with rap chat where it was hard to explain this thesis to people in the Midwest, but on the west coast they were like, yeah, we get it. So it’s like it brings up that difference in geography and. Yeah, I don’t. The lawn model is, is kind of fascinating that they, they just don’t. It just doesn’t. It’s not a thing that they do.
Jay Clouse: 01:16:06
Getting back into the numbers a little bit, I’m what gives me pause or what is still interesting to me and challenging to me is acquiring customers. I think from the supply side, the value prop is very clear to the user. We are going to make you x number of dollars of incremental revenue per week and we’re going to take away some of the administrative work from your plate. Super clear what I assumed and what sky kind of validated was getting in front of the end. Consumer isn’t a hard sell once you’re in front of them, but to go to a mass market is a difficult and expensive task. Right? So his value propositions to the consumers was transparency, control and convenience and he thinks that they have data to backup. You can save 30 percent over the year of your outdoor services cost by pausing some, some of the services, not doing some of the services, which I believe still it seems like it’ll be a difficult and expensive task. So to get those customers, they need to have a incredible first experience, which it sounds like he’s focused on and it sounds like you focused on these things. Exactly. It’s just, you know, that’s, that’s going to take some money.
Eric Hornung: 01:17:16
Yeah, I completely agree. They are absolutely focused on acquiring customers and that seems like it seems like it’s a no brainer right now for any owner, operator or supply side person that they could reach out to. They have backlogs in some of the cities. They have wait lists. It’s really now turning into, okay, how do we get individuals and residents residential people onboard and how do we grow that one percent higher while keeping our customer acquisition costs low. That’s the challenge right now in this business. So that’s the. That’s the place that they have to figure out over 2018 and I think it’s where the focus is and it’s why they’re not expanding like crazy right. Now.
Jay Clouse: 01:18:02
That being said, if the customer acquisition costs is somewhere in the neighborhood of $45, but their year over year retention is 90 percent over the last three to four years, they’re recouping that customer acquisition costs, in which case, again, that should be a pretty simple model. I would think, you know, we put $45 in, we get $20 out. That’s obviously not taking into account all the other overhead. That’s actually probably a part of that customer acquisition cost and running a team, etc. But it seems like they’ve got a nice little engine moving there and expansion is the big priority and. And the challenge ahead of them.
Eric Hornung: 01:18:38
Yeah, and I think one thing that we didn’t do well, I love critiquing us in these Because it’s not part of the deal memo at all, but I just mostly it’s mostly critiquing us and praising them and it’s like, okay, well great. We didn’t ask about what the average revenue for one new user over the course of a year or lifetime value or something like that is so we can get a better sense of that $45. Like if, if the average user that comes on their platform brings in $55, then that’s a $10 margin and sure they’re profitable from a additional users standpoint, I’m marginal profit, but if it’s $180 then it’s like, whoa, you, you’ve really liked, did everyone you bring on is really important. So you’ve got a little bit of wiggle room in that $45 if you need to move it up a little bit more, move it down a little bit more and then retention from there we can calculate things like how, what’s the payback period on that customer acquisition? Is it two months or is it a year and four months? Right. That is. So we, we definitely missed a question there in terms of average user revenue that I think if we would have asked, we would be able to have a lot deeper insights right now.
Jay Clouse: 01:19:47
Yep. Should have asked about that. I should have asked about the k factor on the referrals. You know, how many referrals is a single person generating? Um, because that usually leads to showing what level of vitality your product can have is how many word of mouth referrals do you get from one person and what is that worth? I forget the definition of or the formula for a key factor, but if it’s above a certain threshold, then it means that it’s going to spread without you needing to put a whole lot of effort into it. But you know, it seems like uber, lyft, instacart, these companies that have gone and kind of written a playbook for expanding to other cities, it seems like lawn guru is taking some of the best practices that they see in companies like that. But the, the intentional sort of throttle down and going deeper and markets before expanding is an interesting approach. And I wonder if it’s an approach driven by maybe even a little bit of conservatism, right? Because on one end you say, we’re going to do the land grab approach. We’re going to get An every market as fast as current as we can. And then work, work on going deeper. Maybe they’re saying, you know, the outcome that we’re looking for is $500,000,000 company versus a billion dollars, you know, maybe maybe it’s not important to them to be the biggest thing or run a company that big, or maybe they just believe that they can actually do that approach of going market by market, do a handful a year, go really deep over that year and then replicate it that way. Or maybe it’s neither of those things and they’re saying right now we’re going slower and deeper and then we will ramp that up as we get better and more efficient at doing it.
Eric Hornung: 01:21:24
So as we think of, as we think about revenue and return one of those four questions, it’s a question that theY obviously asked themselves, right? Because they started off with $250,000 a year with their business that they were building up. Then they went to 7:50, then 2 million pretty much by removing inefficiencies and doIng a very classic private equity roll up strategy, which is by smaller players, put them on the same standardized process processes, use their books to expand your business. Keep on going. they could have rolled that thing forward from 2 million to, I mean probably a lot more money. Right. So I think that more money. Yeah. I’m not going to like put a number on it or anything, but they could have taken those processes, continued to buy out. Smaller owner operators continued to grow that business to the point where they were doing $100,000,000 a year
Jay Clouse: 01:22:15
Well they’re still doing that business.
Eric Hornung: 01:22:17
They are still doing that business, but it didn’t seem like that was the private equity focus anymore. It seemed like everything, and maybe I’m. Maybe I misinterpreted this, but it seemed like they have this kind of cashflow machine over there that subsidizing their lives and their livelihood and it’s kind of like their primary. I’m guessing that they used lawn guru on the lawn guru. Same names. What the way, whIch is very confusing.
Jay Clouse: 01:22:39
Well, I think they changed it. I think they changed it over to him. He was saying in 2015 they moved it over to be called designed ventures.
Eric Hornung: 01:22:45
Oh, okay. So maybe that business isn’t growing as aggressively as it was when it went 10 x in two years. So looking at what they’re doing now in terms of ramping back a little bit. I think the bigger vision is in the billions. It’s not in the tens, millions or hundreds of millions because they had a, they had a path to that and they made a very conscious decision to go a different way and now they’re making a very conscious decision to slow down going a different way. So it wasn’t speed. That was the reason they launched this. It was, this is a bigger opportunity in their eyes.
Jay Clouse: 01:23:26
Yeah. And it’s a little. I don’t want to speculate too much on that front,
Eric Hornung: 01:23:31
That’s literally all we do in this.
Jay Clouse: 01:23:32
And you’re right, you’re right. It’s just what we do in this segment of the time. It’s like here are the questions we should have asked at the beginning of this year, the question that I want to ask and then the end is like, just on these. Yeah, I would agree. And I guess implicit in, in my thought exercise that I was saying is the assumption that they have the money to go all those markets at once, so that’s an expensive proposition to build out that infrastructure. So it could very well be that they need to do this approach to generate the revenue possible to, to do that. That’s very likely. And in something that we see in the midwest all the time.
Eric Hornung: 01:24:08
Yeah, putting revenue before growth, which is why, and we talk about this a lot, a lot of companies who are just starting up, we’ll have consulting arms mostly just for revenue and so that they can continue to grow, but they launched some sort of development revenue or marketing consulting arm or whatever it is to get that cash flow so they can sustain their business, um, so that they can grow it, but it then it takes a little longer because they’re not pedal to the metal on growth. What else about sky in particular impressed you or gave you maybe a bit of pause about either his commitment to this venture or his chances of success?
Jay Clouse: 01:24:48
No real pause on sky. As a founder, I thought he was really impressive if they are running designed ventures and that’s take a significant amount of time. There is the question mark of split attention. You never really want split attention, but I didn’t get a feeling that that was difficult and he almost. You addressed that in a way. Talking about how on a hat drop of a hat, they moved over to California for 500 startups and lead a company of 35 do its own thing. Like I was really interested to hear what do you as a ceo, as a, as a founder of a company do to move, let the ship run without you on the drop of a hat and what he talked to was trust and the quality of his people. So that speaks to him as a leader, that he attracts good people and that he trains them well and that he trust them to do their job. So to me that was really, really telling of him as a founder. Anything. Anything that strikes you
Eric Hornung: 01:25:40
that I took away? The exact same thing is that he can definitely lead people and empower them to run full divisions of essentially a company. Um, and that is, that’s awesome. And that’s not easy. A lot of founders end up micromanaging their firms either to death or to constriction. And it’s, it’s impressive that he can do that. So I think that that is awesome. I think that he knows his stuff. He, you can tell he’s polished. yeah. I’m, I was very impressed. I was very impressed.
Jay Clouse: 01:26:12
It takes an interesting and unique person to go from being an entrepreneur or to saying, yep, I’m still going to do college and not only am I going to get a degree, I’m going to get a degree in neuroscience because I’m intensely interested in it. I think that speaks to is curiosity as well as his intelligence
Eric Hornung: 01:26:28
with the full understanding that he might never use it again. Right. Like did that just for, for fun essentially. Like he didn’t even realize how it was like playing into maybe his life and his future because he’s like, no, it’s like really interesting stuff.
Jay Clouse: 01:26:44
I think also something that stood out was the focus on marketing and the focus on marketing as an experiment and approaching it like a scientist and not only just him but at some. At one point you said, I think everyone has a focus on marketing on his team, which I think again speaks to his leadership and his influence and I think that’s commendable for a business that is going to be very much dependent on a strong marketing engine for customer acquisition, which is, you know, the drivers of my business. It’s cac and ltv.
Eric Hornung: 01:27:14
So what are looking forward six to 18 months, what are the key indicators, key things that you want to think about and see from lawn guru?
Jay Clouse: 01:27:26
I think it’s pretty straightforward. I think it’s how many markets they’re in, what the growth in each of those markets has looked like. Yeah. And you know, their, their, their customer acquisition costs versus lifetime value. You know, I want to see if they’re, if they’re growing and going into a lot of markets and running a lot of transactions, but their retention drops steeply from that 90 percent. You want to know why, but assuming they keep that relative retention rate and start expanding, I just want to see what’s. What’s the rate of their growth, what markets are they going into, how that strategy becoming more efficient and what are their customer acquisition strategies, how are they performing, how about you?
Eric Hornung: 01:28:06
I think if there were one kpi, key performance indicator that I could focus on in six to 18 months, it would be the cac recovery time because as they try to dig deeper into markets, my guests is that cac relative to revenue per average user is going to increase and that’s just the, you know, a basic kind of upside down j curve. So I would be curious to see how they’re handling that and how dramatically it changes over time or if it or if it goes down or if it goes up and what kind of the trend has been in their cac recovery time. Obviously we don’t know the base question, that base rate because we didn’t ask that in six months. Maybe we could see like a six month chart or something. That would be really compelling to me.
Jay Clouse: 01:29:00
It’s going to be real fun six months from now when we start doing reinterview interviews or follow up interviews with some of these founders.
Eric Hornung: 01:29:06
Yeah. Well don’t. Don’t give that away, man. You got to keep something for the listener. Some sorta surprised
Jay Clouse: 01:29:11
foreshadowing. You’re right. All right. Well, eric, this has been fun. Let’s go about the rest of our weekends and I’ll talk to you soon. Oh Wait, sorry I didn’t give the sign off. did
Eric Hornung: 01:29:21
I know I didn’t know what you were doing. I thought we’d maybe just popped back on, but yeah, we’re. We’re still learning. You’re still learning. Guys.
Jay Clouse: 01:29:29
Thanks for listening to the show. We’d love to hear from you. This is a conversation. We want you guys to get smarter just as we’re trying to get smarter, so if you have thoughts, if you have ideas, if you have questions, tweet at us @upsidefm or shoot us an email. Hello@upside.fm. We’d love to hear from you. We’d love to make this a conversation. If you love our show, please review the show on itunes. Give it a five star. Preferably say something nice. Give us some feedback, we’d love to hear from you about what we can do to improve the show, but your ratings and reviews help us to continue to bring high quality guests to the show. Am I missing anything?
Eric Hornung: 01:30:02
And if you, and if you want to say anything mean, just say it to jay on twitter, don’t say it on itunes, that’d be cool.
Jay Clouse: 01:30:02
Yes. Tweet @JayClouse or @ekhornung and say the mean things there
Eric Hornung: 01:30:02
later.
Jay Clouse: 01:30:14
So you guys, that’s all for this week. Thanks for listening. We’d love to hear your thoughts on today’s guest. So shoot us an email at hello@upside.fm, or find us on twitter @upsidefm. Will be back here next week at the same time talking to another founder and our quest to find upside outside of silicon valley. If you or someone you know would make a good guest for our show, please email us or find us on twitter and let us know. And if you love our show, please leave us a review on itunes. That goes a long way in helping us spread the word and continue to help. Bring high quality guests to the show. Eric and I decided there were a couple of things we wanted to share with you at the end of the podcast, and so here we go. Eric hornung and jay Clouse are the founding parties of the episode podcast. At the time of this recording, we do not own equity or other financial interest in the companies which appear on this show. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinions of duff and phelps llc and its affiliates on your collective llc and its affiliates or any entity which employ us. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. We have not considered your specific financial situation nor provided any investment advice on the show. Thanks for listening and we’ll talk to you next week.
LawnGuru provides on-demand lawn care and snow removal services for clients in metro detroit, atlanta, cleveland, chicago, houston, philadelphia & washington dc areas. through its mobile and web-based applications, LawnGuru connects consumers with local outdoor service providers to take care of their lawn and snow removal needs within hours of each request.
LawnGuru enables its consumers to instantly view and track the location and estimated arrival time of their service providers. consumers automatically receive a receipt and picture of their freshly mowed lawn upon job completion.
LawnGuru is based in ann arbor, michigan.
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skye durrant is co-founder of LawnGuru, which was part of batch 15 of 500 startups. skye graduated with a degree in neuroscience from the university of colorado, boulder.
learn more about LawnGuru: https://lawnguru.co/