301 - Best of 2025! From W2 Employee to a $18M Business Owner – Why I Left Corporate Finance to Start a Pool Business with Malcolm Marshall

0:00When I left in 2017, we finished that year around$300 million. Oh my gosh, dude. It was wild. It was work all the time, which is a lot of what motivated me to get here. My understanding is that this year, they'll do somewhere around$900 million. So they've tripled since then. $100 grand a year? Full route company? What were you thinking? So we're sleeping at the office. We're working all the time. My business partner, Michael, said, we're going to work this hard. We might as well just work for ourselves. of. There's no way we could fail if we just work for ourselves. From your perspective, looking back, is it what you thought it was going to be?

0:33When I look at it compared to my W2 job, I couldn't be happier that I made the bet. If today is at 18 million, where do you think it is? In five. We're pushing 35 to 40 million. Dang. Is that all organic or is that through acquisition? Most of it will be organic.

0:51All right, Malcolm, I'm really, really excited to talk to you today because I think you You have an amazing story and you represent the hope that many people who are in a W2 want to see that then transition into entrepreneurship. And so by way of background, you're currently the CEO of a company named called Poolology, which is a central Texas based company. Not only are you building pools, but you also do maintenance. You built that to an$18 million a year operation. Before that, you started as a VP of finance. I can't remember the exact title for a company. I can't remember the parent name of the company, but it's C4.

1:25If anyone's done the pre-workouts, C4. And I think extend is another thing that you take post-workout. So you've seen a lot. You made the transition. You're super freaking accomplished. You've got a large company. Here's my first question I'm going to ask you. You ready for it? I'm ready. If I dropped you into a brand new city tomorrow with$90 ,000, what would your first move be to replicate the success that you've seen at Poolology? You know, well, maybe I wasn't ready. That's a tough one because it's been a grind over the last 10 years. It didn't happen overnight for sure. I think starting a business starts with customers, right?

2:03But I'm probably not going to spend any of that$90 ,000 on customers. If we're bootstrapping this thing, I'm mainly going to focus on starting with the right people. How do I acquire the right people for$90 ,000? I think that's mainly operational at that point. That's interesting. I'm being as grassroots as I can on lead acquisition and customer acquisition. When you started Poolology, how did you get it? Was it acquisition or was it de novo from scratch? So we started Poolology primarily as a service company. We didn't really anticipate doing the amount of construction that we do. And even when we started doing construction, we were like, this will always be a secondary offering.

2:40Now it's become our primary offering. But to start Poolology, all we did was we bought a route, a pre-existing route. It had 43 pools in Austin, Texas. And the guy was moving to Hawaii. So he was selling the route. They sell at about 12 months of revenue and we picked it up. That's how we got started. So it was just pool servicing, 43 accounts? It was just pool service. Yeah. What was the monthly revenue on that or yearly revenue? It was about$180 a month. It's about 2 ,200 times, about 90 ,000 of annual revenue. Wow. It was monthly recurring revenue. And you said we, you said we multiple times.

3:18Who was the we in that equation? Yeah, I have a business partner. His name's Michael Jarub. He runs our service operations still. And we work together at C4. So we've got a long history together. So walk me through this. You're working for a fairly large company. I don't know what they're doing in revenues, but I'm assuming north of$20 or$30 million. You don't have to blink twice if I'm in the ballpark. But we're way off. So we're talking about C4? Yeah. I'll run you through C4. It's a fantastic story. So I started at C4 in 2008 before C4 existed. At the time, it was a sports nutrition brand called Cellucor.

3:55There was about maybe 10 of us. We're doing$8 million in revenue a year. Okay. I can tell I'm already off. Okay. Yeah. I was way off. So we launched C4 in 2011 and we did about 50 million in revenue in 2011. The next year we did 85 million, then 155 million. And when I left in 2017, we finished that year around 300 million. Oh my gosh, dude. It was wild. It was work all the time, which is a lot of what motivated me to get here. How much of that revenue was just C4, just the pre-workout? I can't remember, but. Greater than 50%. Jeez. Greater than 50%. That's a lot of dudes just freaking jacked going into the gym, wired to the hilt off of C4.

4:46That's insane. $350 million by the time that you left? From my understanding, so that I left in 2018, 2017, 2018. So about 10 years after I got there, my understanding is that this year, they'll do somewhere around$900 million. So they've tripled since then. What was your role there? I was vice president of finance, which really developed as years went along. So when I started in 2008, I was the only accounting and finance person on the team. I was fresh out of college, didn't really know what I was doing. But I learned as I went. And then it was so fast paced, I had no choice but to keep up. So by the time I left, there was probably 30 people in accounting and finance.

5:30And about 2015, I stopped working in the accounting function and became primarily FP &A. What's P &A? FP &A, Financial Planning Analysis. So not CFO though, because a lot of FP &A is a CFO role, right? You're just on that team. I was the leading finance role. I left when I was 30. I'll fill in the blanks. Malcolm is hemming and hawing around is like, cause I've been a part of companies who have done this. You've grown, you're at the scale where the company needs a CFO and a COO and a, you know, CIO, all these C level suites of people who understand how to manage a hundred, 200,$300 million businesses.

6:11And you've been the guy who's been doing it since day one. And you're 30 years old, but you don't necessarily meet the qualifications or criteria to be CFO, but you've been acting like the CFO the whole entire time. Exactly. You know, I didn't have the boardroom experience. I didn't have the relationships. It was the only company I'd ever worked at. And I understood the company very well, understood what we need to do to grow and how to execute that growth. But compared to the rest of the management team, I would have been pretty green. I'm really curious. So 2008, 8 million, 2017, 350 million?

6:46Yeah, around that. That's nine years. That is not a long time. That's an insane amount of growth. I'm going to tell you a story and then I'm going to ask you a question. When I was getting my MBA at UCLA, I had a professor who was the CFO of a company called Packard Bell. Have you heard of Packard Bell? I think so. Okay. Yes, that is the exact answer. So Packard Bell was a company that manufactured a computer manufacturing company. And the reason they chose Packard Bell is because it sounds like Hewlett Packard, and it also sounds like Alexander Bell Telephone Company, Pacific Bell Telephone Company.

7:19and so they picked those names very intentionally Packard Bell so that people would think like oh yeah I've heard of that company that's an existing company but it wasn't it was founded in the 80s and within a course of like 10 years they went from zero to a billion dollars in revenue this guy was the CFO and so he talked about their experience and so their experience going from zero to a billion and I can't remember if it was 10 years but it was a short period of time I think it might have even been shorter than that he was like we were robbing Peter to pay Paul because it was a capital intensive business, right?

7:47They had to have actual pieces to do the manufacturing. And so all he was doing was like, Oh, I know our terms are net 30, but I'm gonna have to pay you in 90 days. He was just literally negotiating with vendors the whole entire time. He said it was insanely stressful, but they ended up IPO-ing and they're now defunct, but it was a whole thing. So video is cool, but I have what scientists call a face for radio. And so it's even cooler is long form audio via my podcast and my newsletter, nickonomicspod.com. Go there for free. Subscribe to my newsletter. It's one email per week, super tactical. And then go to my audio podcast.

8:20I do three to five episodes a week, depending on how curious I am. And it's stuff like this. It's all free. No sleazy sales pitches. Nickonomicspod.com. Whenever I hear of people with that growth, like you just did, I think of that professor because I'm like, that's got to be super stressful. It doesn't matter if it's a SaaS company that has really high margins or a company that does manufacturing. It's just stressful, that kind of growth. So what was the biggest stressor during that period of time, like as you were growing? I think it was how many things we needed to do at one time. Not necessarily one thing, but how many things we did at once.

8:54So in 2014, we sold a third of the company that was eventually bought back, which is how they sold a third of the company again. But in 2014, we implemented a new ERP. We built a new facility, which greatly intensified accounts payable. while going through a nine-figure transaction. And all of those things at one time was just, how fast can you get all this done? And so I slept at the office a lot and those sort of things. And there wasn't a large team around me at that point either. And me being, I was the most experienced, maybe the oldest person on that finance team at 27 years old. So what's so interesting is most people on the finance team, are the guys who say no.

9:43No, we can't do that. No, we can't do that. Was that your initial inclination when stuff was happening like this? It was like, hey man, we got to build a new facility. And you're like, with what money? Everything we have is in inventory. We don't have a line of credit. You know, at first it was. So by 2014, our cash stresses weren't as bad as probably 2012 and before. 2008 to 2012, I was doing a lot of accounts receivable or accounts payable management. A lot of that, hey, I can't pay you this week. Yeah, yeah, yeah. I can't pay you this month. I have this coming in. Don't worry, I'm going to pay you first type of stuff.

10:19And in 2012, sorry, what was revenues in 2012? It was 85 million. So that's about the time where we started seeing some cash flow. So for entrepreneurs who are like, oh, it must get better once I'm like past 10 million in revenue or 5 million in revenue, even 85 million in revenue, you're still playing that shell game sometimes of like, don't cash that check yet. Oh, shoot, payroll's about to hit. Oh my gosh, is our ABL backstout? I don't know. Let's go check. Like, dude, it's so funny when you're hyperscaling. You think it's going to be so much better because you have so much more revenue, but it's still the same problems.

10:50Right. Yeah. So there was a time where, and Doss was an extremely aggressive entrepreneur. Just always, you know, he always has a very optimistic outlook of how things are going to turn out. and he's going to put the necessary pieces in place and he's going to figure out how to, you know, if he runs into financial stresses because of he's going to figure that out later, but he's going to make the moves that he thinks is going to help him grow, which is why the company's been so successful. But there was a time where I was like, what are we doing? We can't hire this outside sales team because I can't pay for the labels that we bought for these, you know, C4 canisters.

11:31When did it flip from like, no, no, no, to you realizing you can't say no to business? After I left. Oh, really? It was really after I left. At some point, I just realized he wasn't going to listen to me. It didn't matter if we had the money or not, you know, so we were going to figure it out. I don't think it really flipped until after I left and I started running my own business and started thinking about it. And I was like, I see his approach now. And then sometimes I have to push myself to mimic that approach, right? I have to push myself to stay that aggressive in the face of risk. Do you ever think how lucky you are to have that guy as an example?

12:10I'm not going to put words in your mouth. I'll give you my anecdotal experience. I worked at a company. They were part of a publicly traded company, but the segment of the business was doing like$15 million a year in revenue when I joined. Three years later, they were doing$250,$200 million in revenue. Massive growth, right? And it was similar to your experience. I call it the pulse test where they're like, oh, we need someone to fill this role. Well, what's the test? Well, does he have a pulse? He's alive. Okay, throw him in. You know what I mean? So I'm grateful looking back that I had that experience because I wouldn't have gotten that experience if I wouldn't have been within that company.

12:43But when I left, there were a lot of things where I was like, man, they should have done this different. Oh, I can't believe they did. I just had a lot in my mind. I wouldn't say animosity, but yeah, probably a little bit, probably a little bit of animosity. It wasn't until years later when I had a business that I owned where I was like, oh, that's why they cared so much about collections. Oh, that's why bad debt was a thing. Okay. It gave me just a whole other level of appreciation for those people. Did you have a similar experience? I did. Yeah. Like I said, I really didn't realize how lucky I was until I left and what that approach was until I left.

13:22But especially looking back now, I may have, you know, started a business. Had I not started there, I may have started a business one day that was more of an operation, more of a job, right? Versus the way I look at business now, which is this platform to grow multiple things on it, just see where, you know, where I can take it. And I feel like there's no limits to what can be accomplished. and I really contribute that to my time there at C4. How much money were you making in your last year at C4? About 200 ,000. The point I'm making is you're making good money. You had some equity in this business and it was a massive business.

14:05Why the freak would you buy a 43-person account or however many pool route? That doesn't make any sense to me. I would understand if you left and you're like, I bought this company and now it's a platform and it was doing 5 million a year. But 100 grand a year, pool route company, What were you thinking? So we started Poolology in 2015. So I actually stayed on at C4 for two years after. So we're sleeping at the office. We're working all the time, me and my business partner, Michael. And at some point, I made it kind of a statement about the future of us at C4. It was something that was like, well, one day when we do this, and he said, we're going to work this hard.

14:44We might as well just work for ourselves. There's no way we could fail if we just work for ourselves. How old were you at the time? 27. When he said that, we started digging in more pretty much immediately. So we started looking around. We started looking at businesses, trying to understand different opportunities. I have like an idea a day that I'm throwing out at him and he's shooting most of them down and telling me that they're stupid. And one day I saw this pull truck drive by, a pull service truck. And I started digging into that industry a little bit. And I thought I had a really great marketing plan.

15:20I thought it would be really easy to scale. I thought it would be really easy to get people to clean a pool every day because how hard could that be? And I thought the margins were a lot stronger than they were. Pretty much everything I thought was wrong, all the research that I did. One thing that I was sure of was the market. The industry is very fragmented. It's still pretty fragmented. It was very fragmented at the time. There were almost no large players, maybe no large players. And so I was like, hey, we can roll some of these up. And I think we can do really well and scale really fast. And when you say no large players, you mean nationally or do you mean locally where you were looking in Austin?

15:58Nationally. Locally, a large service company is more than 300 accounts even still. So there weren't a whole lot of large companies even in the market. and we're relatively young and experienced and thought we found this industry that we were going to be able to scale quickly in and have higher margins and be able to do some consolidations. And so we jumped in. Okay. So it was thought about more of a, this is going to be something we scale. You said something in there that I always say are the famous last words of any entrepreneur, which are how hard could it be? How hard could it be? We'll get someone to clean the pool?

16:37How hard could it be? And then you get into it and you're like, oh, I knew everything I knew now. Holy crap. I do love that. But you also had this mentality of like, dude, we're contributing so much value, right? I was working at a company where I was supposed to get 3 % equity. And when I first got that, I was like, this could turn into like$3 million. Oh my gosh, this could be three, like that's life-changing month,$3 million. And then by the end I was like, all this for$3 million. So it's a kind of a weird mind shift change, right? Is that the point you're speaking to? Is like that shift? I was, you know, I had equity and I, and I knew that the equity was growing quickly and that it was going to be worth a lot of money from a career choice in finance.

17:19I was also starting to question that I like finance, accounting, I like numbers, but I was noticing the the payroll of the people around me was growing faster than mine especially on the sales front right especially when you go from selling eight million to 85 million and and you're watching you know these salaries and commissions grow around you and it wouldn't call it indious but it was more like okay maybe I should have made another career choice if I really wanted to be as successful as I want to be. And so I wasn't unhappy with my salary compared to the industry and especially people my age.

18:02I was doing really well, but I was seeing that, you know, even when we added a CFO later, I was like, oh, this is one of the lowest paid executives on our staff. Is this where I want to be? Is this where I want to grow my career? So I get the thesis, right? Hey, we're going to roll up the pool space or pool maintenance. Was it pool maintenance at the time, not construction? Yeah. We're going to roll up the pool maintenance space. What I don't understand is the entry point. Usually if you're going to do a roll up, you will target a larger company that has systems and processes that have a management team in place because you're trying to scale pretty quickly and you need that deep bench of talent.

18:41You need those systems that can scale. You don't want to have to be the one to create them. $90 ,000 or$100 ,000 business is not that. Do you regret buying that first business for$90 ,000? Would you do it differently? Or walk me through why you made that decision. Yeah, I do it differently, knowing what I know now. I don't think I understood that then. I didn't understand that then. I didn't really understand this concept of a platform business. And, you know, we're really relying on what we thought would be a successful marketing plan, targeting individual pool owners in an aggressive way that wasn't all that special in hindsight.

19:20And so we thought that that 40 puller out was going to be sufficient. We also thought that understanding pools was going to be a lot simpler. Maybe it was a bit of arrogance. Maybe, you know, I don't know. But it was, we were wrong on a lot of fronts. A lot of fronts that really required us to grind and really work our asses off in order to overcome some of those things. I think almost any entrepreneur has this moment or this saying of like, oh, it was way harder than I thought it was going to be. So I don't think you're unique in that sense. Scott Galloway is kind of this famous media personality now, but he has this saying, and he's invested in a lot of companies.

20:05He's been on the board of a lot of companies. And he's like, I've learned that when I became an activist investor and I wanted to get on the board of the company, once I got in the room, I wasn't as smart as I thought, and they weren't as dumb as I'd hoped. And that's like a quote that's always stuck with me, but it's the same in any of these spaces, right? Like you're evaluating the pool space. You're like, well, well, how hard could it be? Like, we'll go get business. Well, Oh, it's easy to differentiate. And then you get into it and you're like, Oh crap, I'm not as smart as I thought. And they're not as dumb or as bad at this as I had hoped.

20:35It's like, you just had this realization when you did that realization, did you go by or did you just double down on growing organically? The primary realization was it's going to be really hard to staff this business. And so we immediately had people issues. We weren't ready for that. It wasn't something that we had really experienced at C4. Hey, I don't know if you remember this, but when we started this podcast, we entered into a social contract. I would spend time, energy, and money producing this podcast, interviewing these individuals and giving you insights into how to build, buy, start, grow your business.

21:12And you would like subscribe and leave me five-star review. Now out of that, we both get to talk to really cool people and hear really cool insights. We both get a ton of value, But I just want to help you keep your word. So would you do me a favor? Will you go leave a five-star review for me on Apple or Spotify? It would really help. And if you want, even share this with a friend. So when we realized we weren't going to be able to staff as well as we hoped, and the marketing plan wasn't coming to fruition quite the way we wanted, we did slow down a little bit. We really did focus on organic growth.

21:49We did primarily door-to-door. It was the primary means to grow. door to door. That first year sales, you bought it, it was doing 99 ,000. What did you do for year one after you bought it? We grew from 43 accounts to like 83 accounts. About double the business. Okay. Yeah. 100 ,000 to 200 ,000. And then year two, what did you do year two? We grew to about 200 accounts. Okay. I believe it was about 400 ,000 in revenue with repair revenue that year. When was that moment of like, okay, we're just going to double down on organic. We'll go knock doors. Was that early or did you end up doing that later?

22:24I wouldn't call it a moment. So it was kind of a slow transition. It was like, we slowly gave up, slowly gave up on, on, on what we thought the plan was. Well, because those first two years you were still working at C4, right? So it's like, yeah, maybe it is kind of a slow, a slow trickle. Yeah. So my business partner, Michael, he was here running the day to day and I was primarily working at night on lead acquisition and marketing type things. So it was after that second year you did$400 ,000 that you jumped in full time or what was the impetus for you saying like, I got to do this? So in 2015, C4 hired their first CFO.

23:06This was before they hired the CFO. I had gone to a DOS, the owner, and I had said, hey, I need to adjust my schedule a little bit. I'm going to move back to Temple and I want to be remote two days a week. And so we had to work through that. But I continued to run the day-to-day of the finance and accounting operations, hired our first CFO, fired him about a year later. I stepped back in. And then when we hired the second one, that was really what drove me out of the business and drove me here to get started full-time focusing on this. Was it getting passed over or was it like, oh, I'm not going to get the opportunity that I thought?

23:41It was dealing with another CFO. It wasn't that my feelings were hurt. It was that I had just gone through somebody come in for their first hundred days and want everybody to change the way they're doing things and work around the clock. And then here we were six months later and I was about to do it again. And I was just like, I don't think that this is something that I want to go through. I think that I would rather go and drive this business that Michael's been able to grow the operation. We've been able to push on the marketing side. I think it's big enough to support both of us now. Let's go ahead and jump in.

24:19And so at that point, it was about 200 accounts. You had just done$400 ,000 total in revenue. It still wasn't at the space where it was able to pay you what you were making at C4, right? No, no. I'm not sure what the income gap was. It was big. It was a lot of years of just taking the absolute bare minimum. Walk me through the growth of the company, because obviously you're at$18 million now. you're about 10 years on, maybe eight years from when you left C4. What did the growth pattern look like in terms of top line revenue? In 2017, so we had grown to about 200 accounts. We had a fairly slow growth year.