Scaling an Online Service Business with Bryan Clayton

Scaling an Online Service Business with Bryan Clayton

Scaling an Online Service Business with Bryan Clayton

Ed had an opportunity to interview Bryan Clayton who has golden nuggets to share with you. Bryan Clayton is a serial entrepreneur with multiple exits; he is currently the CEO of GreenPal, a web and mobile app that instantly connects homeowners with home service professionals. In this show, Bryan and Ed discussed most of the questions that run through entrepreneur’s minds through their long experiences they’ve had with being successful in personal and business life. This is a must listen to all business owners who want to scale up their businesses because they’ll learn a lot.

Enjoy this conversation with Bryan Clayton!


Show Notes

0:24 – Who is Bryan Clayton?

1:03 – How did you get to GreenPal?

4:35 – What does GreenPal look like now with partners?

6:22 – What did the first years look like for GreenPal?

10:51 – How do you create value and at the same time revenue in your company?

14:30 – Is there any vetting that goes on to the service providers?

19:02 – What service do you sell at the end of the day?

19:55 – Do you view your business as an online business? 

21:11 – What are the challenges of building a tech business? 

23:23 – What did you bring from the first business into the second one?

27:21 – What could you have done to accelerate the software creation? 

28:41 – How do you stay out in front?

32:00 – Do you diversify and do other things that are not in the brackets of what you do?

34:04 – Is GreenPal grow and hold forever, or is it a Build to Sell Company?

37:46 – Where do you see this industry going?

40:45 – What would be the one piece of advice that you’d give to our listeners who are business owners that would have the most immediate impact on their business?

Who is Bryan Clayton?

Bryan Clayton’s from GreenPal, which is an online marketplace that connects homeowners with lawn care service providers. 

How did you get to GreenPal?

When I was 15 years old, it was a hot summer day and I was playing Super Mario Kart in my room and my dad came in my room and said, “Hey, we got a job to do. We’re going to go mow the neighbor’s yard.” And he forced me to go cut the neighbor’s grass. He and I mowed the yard together and at the end of that we got paid 20 bucks and we split the $20. And ever since then, I was just hooked on being an entrepreneur, hooked on being a business owner, and I just took that lawn mowing business and just ran with it. By the end of the summer, I had like 10 or 12 lawn mowing customers in the neighborhood. All through high school, I cut grass and by the time I was in college, I had 10 employees. 

I did lawn mowing all through college as a way to pay for school and by the time I graduated college, I was confronted with a decision is like, “Okay, am I going to cut fold and close up shop on this little lawn mowing business, and then enter the job market and essentially take a pay cut? Or am I going to double down and try to make this into a real company?” Luckily, I took the latter and I decided to try to make a run for it and really make this a real business and developed a little business plan. And three years later, 25 years old, I had 50 employees. Over 15 year period of time I grew that business from just myself and a push mower to over 150 people, $10 million a year in revenue, and all the way to the eventual exit, which almost never happens in that industry.

What does GreenPal look like now with partners?

I don’t typically recommend people take on business partners when starting a business because usually it doesn’t go well, especially friends. Most businesses, you can execute yourself and hire the right people you’d hire to help you get there. However, when it comes to a tech startup, you’re not just executing a known business; you’re literally inventing something new. It helps to have cofounders because you have to bring people with very different skill sets to the table. Somebody with a technology background, somebody with a design background would be helpful, somebody who has built tech products before and then somebody also who might have some domain industry experience to whatever it is problem you’re trying to solve. When I was recruiting my two cofounders, what I looked for was one, people that I could trust and two people that that brought some sort of skill set to the table that we would need to get us through the first three to five years. 

What did the first years look like for GreenPal?

It was really, really tough. The first summer 2013, we knew enough to be dangerous, but we didn’t know how to really develop software to the scale that we would have to. So we paid a development shop in Nashville $180,000 to build the first version. This was our own money. To this day, we haven’t taken on any outside capital. This is our own money that we cobbled together, and we paid this shop and we built the first version of what we thought GreenPal would be and we launched it and it was a total and utter failure.

We thought, let’s even validate, you have to get out from your desk, you have to get out of your office, you have to get out of the building, and you need to go talk to every one of your customers that will talk to you. We talked and met with every single person that had tried the software. And we tried to figure out, when we are solving a problem we’re solving, where did we delight you as a user? Where do we let you down? What do you wish the software would do? And we tried to glean from that. Were we on the right track? Were we actually solving a real problem? Or is the problem that we thought exists? And we were able to get enough validation just to keep moving forward.

We knew we had to figure out ways to grow the product in a technological way and not by just passing out door hangers. So for us, we get a lot of people through word of mouth, but we also get a lot of people just through Google search, organic traffic, people that are searching for, I need a lawn mowing service nearby me. We have crafted our product in such a fashion where we rank for those key phrases. And so that’s how we get at least half of the people that try the platform even to this day.

How do you create value and at the same time revenue in your company?

The way we are adding value and what is the intensity and thrust of your value proposition is something that even like, no matter where you’re at in the stage of running a business, it’s something you always have to circle back to. It’s a fundamental just life of the principles of businesses. What is your value proposition? And is it intense? Is it not? Is it growing? Is it getting better stronger? Or is it getting weaker? For us, we have two sets of value proposition. So we have to have a strong value prop to the vendor side, the lawn mowing service professional side, and also the homeowner side, the demand side. And we have to orchestrate a delicate balance between the two because a lot of times the things that each side of that transaction that they want, don’t necessarily align. 

So we have to, through trial and error figure out what is the striking a good balance and how do we orchestrate this delicate balance so both sides of that transaction get value and also that our platform is bringing enough value to where we can extract the small piece of the transaction as a fee to run the platform.  So this makes running a marketplace like this very complex. And not only that, but it’s never been done before. And so you’re trying to have to invent it as you’re going and the only way to figure out your way through the darkness is just through trial and error. So that was one thing. It took us a long time, several years to figure out, okay, how do we strike this balance between adding value to the service provider and also to the homeowner? 

Getting paid on time and quickly is a big part of the value proposition for our service providers because a lot of times in a traditional business context, they’ll have to come out and mow a client’s yard all month long, mail them a paper invoice at the end of the month, hope that that person like mails them a check or PayPal them or your cash app or however they like to pay and then they have to keep track of who paid me who didn’t. And then a lot of times, the lawn mowing guy is at the bottom of the stack of bills to get paid. This is a big part of our value prop to vendors, is that, okay, when you go out and mow Mrs. Smith’s yard, you upload a picture of that completed work and in 24 hours, you get paid.

Is there any vetting that goes on to the service providers?

When you’re building a marketplace, that’s always tough because you have to figure out the balance of, it’s the Wild West and let Invisible Hand of the market, like decide who sucks and who’s good. And for us, it’s somewhere in the middle. We vet these guys and gals on the front end in terms of, we make sure they have proper equipment. We make sure they have a few customer references, there is a bank check and a credit check done on them to make sure that their business is in stable condition. And then we bet that they have a good social security number. So we bet that they’re an actual human being and that they’re legitimately in the business and that they are operating in the lawn mowing business because it’s not like Uber where any person that can operate a motor vehicle can be a supplier, you actually have to have like a minimum threshold of equipment and experience to run a lawn mowing business. You don’t want just any person with a push mower showing up to come cut your grass. That’s not a good experience. So we do vet them to a degree on the front end, but then, like the mechanics of the marketplace govern and dictate a lot of who’s successful and who is sidelined. 

What service do you sell at the end of the day?

We sell time at the end of the day. Many businesses are in the business of selling time, they just don’t know it. And we sell time in the sense of you’re not actually having to cut your yard but also like you said, you’re not going to have to hassle this person to show up and do what they’re supposed to do.

Do you view your business as an online business? 

Absolutely, it’s a digital 100% online business and making the transition from a blue collar entrepreneur to a tech one, it was tough.

What are the challenges of building a tech business? 

If you have dreams of building a tech startup, you’re going to have to learn to a degree, how to build software. And I was just so resistant to it, because that’s not the way my brain is wired. But when you’re delegating something, you have to be able to, like delegate it from a position of stewardship, and not one of abdication. So what I mean by that is like, education is like, “Oh, I don’t want to do this. I don’t know how to do it. It sucks. It’s hard, you handle it.” It’s not a good position to delegate anything from but if you can delegate it from a standpoint of stewardship, it’s like, “Hey, I’ve been doing this for the last six months or a year. This is my process and my recipe for how it works and how we do it here. I need for you to follow this process that I have laid out for you.” And you didn’t delegate from a standpoint of stewardship, it’s a much more likely good outcome. And so for me, I had to like get in the trenches and learn how to write software. I didn’t want to, but I forced myself, I went to a boot camp and learned how to do code, and I’m still a crappy programmer, but I learned enough to be dangerous and to also just be able to delegate from stewardship and not from abdication, and also be able to call bullshit when somebody was blowing smoke and telling me that something wasn’t possible. 

What did you bring from the first business into the second one?

A lot of people talk to me and say, “Ah, well, you have 15 years experience in lawn mowing. So that was your silver bullet, your secret sauce. And no wonder you’re successful because you knew the business from the inside out.” Part of that is true, but it wasn’t just the thing that just solved all of our problems. A lot of times when you’re in a tech startup, and you are inventing something that has never been done, you’re always at a loss, and you’re always wondering if you’re even building something worthwhile and if you’re solving problems. That was never really a problem for us because I did spend 15 years in the industry, I did see firsthand how difficult it was for a small service provider to run their business, and also how difficult it was for just a homeowner wanting a basic lawn mowing every week or every two weeks to find and hire them. I saw these problems manifest on a daily basis. 

Matter of fact, running that business as it grew, we no longer did residential lawn mowing. It just wasn’t profitable for us. As the business grew, we attacked more the commercial sector; we would do apartment complexes, office, parks, malls, hospitals, things of that sort, big 100,000 million dollar contracts. One of the values that we ran that business by was to always be helpful no matter what. And even to this day, it’s just something like an ethos I run my life by is like to always be helpful if you can be, even if that person can’t do anything else for you, always try to be helpful.

What could you have done to accelerate the software creation? 

What could have helped it go faster is by trying and failing on something like this three times. If you have built software before, and tried to go swing for the fences before and just like crash into the ground over a two or three year work, you have knowledge that will help you do it better the second time.

How do you stay out in front?

It’s one of those things like you watch the battle as it unfolded, like Uber and Lyft battle. Those two companies just threw billions of dollars at this thing and what was amazing, one time I read that one of Uber’s competitive advantages was a cost of capital competitive advantage. And what that meant was that they could raise money cheaper than Lyft was so therefore they could beat Lyft. That’s how intricate these fights become. It’s like, that’s their competitive advantage. They can raise money cheaper. For us, there was and still is a competitive aspect to building this marketplace and becoming like the Uber for lawn mowing, to build the button that you push to get your grass cut. There are two or three other startups that are similarly oriented to us. But the reality is, all of our competition is just the status quo. It’s people that don’t think to go to Google or go to a digital means to download nap get this done. They’re still conditioned to thinking they have to call 20 people and leave 20 voicemails and meet somebody out in their front yard and haggle over the price and then get it done and then mail them a check or leave cash under the doormat, or then mow and then who pays the Venmo fee and all this crap.

Do you diversify and do other things that are not in the brackets of what you do?

It’s a tough balance, because I don’t think there’s one simple answer. Go wide or go deep. I think it depends on what your strategy is and what your focus is. For us, because we’re self funded and we’re bootstrapped, we’re like constrained to focus on being the best in the world at one thing. We are the best, easiest, fastest, cost effective solution to get somebody to do a basic grass cutting service for you. Now, after that lawn mowing goes well and then you hire them for the rest of the lawn mowing season on your Greenpal app, then there are other options to add on after, you can get mulching done, trimming done, seed, fertilizer, gutter cleaning, snow removal, it unlocks all of these ancillary services that go into needing to get your yard maintenance taken care of. But we don’t offer all of those things on the front end, because when somebody gets to our app or our landing page on our website, we need for them to be able to understand in three seconds what Greenpal is and what it can do for them and literally get signed up in less than a minute. That relentless focus on one simple thing is why we are where we are is because it just makes sense to the person who has the problem that we saw. As a startup, you have to focus on one use case, one thing and literally do it better than anybody else in the world.

Is GreenPal grow and hold forever, or is it a Build to Sell Company?

We are year six or seven right now, it just depends on when you when you started the clock. And so for us, it’s more profitable, we’re making money, we invest other profits back into the business to grow it. It’s working. We get acquisition interest quite regularly from people in the lawn mowing. What’s interesting is like, people that manufacture lawn mowing equipment are interested in buying our platform because they can position themselves in the platform, and so we do get interest. But for us, it’s not something we’re entertaining right now because we have so much more land to conquer that we’re just going to keep at it. Greenpal is still a big part of my identity, who I am, is something that I’m most proud of, but to a degree because it’s technology based, it’s less hand to hand combat. It’s less so emotional to that degree.

Where do you see this industry going?

I think we’re in minute one of day one of what you’re going to be doing online and particularly in marketplaces. I think there’s minute one day one of marketplaces that get stuff done. So whether it’ll be a marketplace to get a dog walker, right now there’s a great marketplace called rover that you can jump on and get somebody to walk your dog. It’s a marketplace, tech product focused on that one thing, push a button, and get somebody to walk your dog. I think we’re going to start seeing way more of these traditional analog business transactions, particularly when it comes to services, get ported online and get done in a more efficient manner because doing it this way makes it run smoother, makes it get done right the first time, makes it run easy for everybody, it saves everybody time and money.

What would be the one piece of advice that you’d give to our listeners who are business owners that would have the most immediate impact on their business?

One piece of advice would be to do things that don’t scale. So a lot of times you get into this idea you’re going to start this business and you want to like do it all from behind the scenes and you want to like just build the thing to make it run on autopilot and you want to do the glamorous stuff, but the reality is when you first get started, you’re going to have to do things that don’t scale and then figure out ways to automate those things.

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