How to Start a Junk Hauling Business: From $0 to $300 Million and Beyond (Greatest Hits)

0:00Here's an oldie but a goodie from the archives from the Side Hustle Show Greatest Hits Collection. Trash into treasure. This is taking a part-time junk hauling business from zero to$300 million and beyond.

0:17What's up, what's up, Nick Loper here. Welcome to the Side Hustle Show because being willing to fail is the only way to ever get up the courage to get started. WTF, man, willing to fail. Let that be your new mantra. In this episode, you'll hear from the guy whose$1 ,000 investment in a beat-up pickup truck has turned into an empire that's now doing over a million dollars in revenue a day. This is a rare break on the show where we get to see how the CEO of an organization that size thinks and operates, how he got there, and what we as side hustlers and probably smaller-scale entrepreneurs, I don't want to discount that, can take away from that.

0:58I really enjoyed this conversation with Brian Scudamore, the founder and CEO of 1-800-GOT-JUNK, whose portfolio of brands now includes not just junk removal, but also house painting, moving services, and home detailing. You'll find information on all of those at O2EBrands.com, which stands for Ordinary to Exceptional. So O, the number 2, E, Brands.com. And that's the broader story I want to tell here, that there's an opportunity to consolidate and brand fragmented industries. Brian's new book gave me the inspiration for the intro. It's called WTF, Willing to Fail, How Failure Can Be Your Key to Success.

1:44Stick around in this one to hear how Brian started the junk hauling business as a soon-to-be college student, his thoughts on marketing and hiring, and how you can apply nearly 30 years of his successes and failures to your own business. Notes and links for this one are at sidehustlenation.com slash junk. I'll be back with my top takeaways from this chat with Brian after the interview. Ready? Let's do it. I was trying to find a way to pay for college. I was in a McDonald's drive-thru of all places. There was this beat-up old pickup truck in front of me. It had plywood sides built up on the box, filled with junk.

2:22And I looked at the truck and went, ah, there's my ticket. Now, what's kind of interesting is I was one course short of graduating from high school. So my parents weren't going to fund my college education, which put extra pressure on me to find enough money to pay for my own college tuition. So I saw the truck. I get out there, take my $1 ,000 life savings in my bank. $700 goes to the pickup truck. $300 goes to flyers and business cards. And a week later, I have a business called The Rubbish Boys, which it's kind of fun. It was just me, but I had a vision for something bigger. And I started driving down alleys, laneways.

2:57When someone had a pile of junk, I'd offer to cart it away. And that was the birthing of 1-800-GOT-JUNK as we know it today, some 30 years later. The Rubbish Boys. I like going plural from the very beginning. It's like, well, it's just me right now, but I could see into the future. Had a vision. Yep. What was the most effective way of getting the word out there after plunking down the 700 bucks for the truck and some marketing material? I think in the beginning, I really had to learn about sales. So I got out there and literally knocked on doors. I'd see someone had a pile in their garage, would go around to the front of the house, introduce myself, offer to haul it away for a fee.

3:36That wasn't scalable. That wasn't something that would give me a big boost in revenue very quickly. So something I learned a couple of years into the business, my girlfriend at the time said, you have a great story. I said, what are you talking about? She said, you know, you've gone out and made your own job. We're in a tight summer job market. You've gone out and created one. Why not go tell the press that story? So I picked up the phone and I, instead of knocking on doors, I pitched the press and I said, I got an awesome story idea for you. And they said, let's hear it. I pitched them my story.

4:11And later that day, they sent out a reporter. The next day, we were on the front page of our local newspaper. Now, this wasn't a tiny little neighborhood paper. This was the big paper in Vancouver. We were on the front page, our truck, the phone number said 738 junk. And it was like a big flyer. People got this in their front door. And they're like, well, and they called us, we had 100 jobs within 24 hours. And that's when I knew the power of free press. Wow, that is incredible. And I don't know if you planned it that way, but what luck to have them take a picture of the truck in the background and the phone number right there.

4:46Yeah, luck. I think it was, you know, probably a slow news day to be completely honest, but we ended up on the front page and it was free. And it just made me realize the power of storytelling. And today's no different. While the press has changed and there aren't as many journalists or traditional outlets out there, you're still able through social media and through the world's different channels, tell your story, what's working, what's not, share it with the world. And there's a lot more noise out there than there used to be maybe 30 years ago. But getting out and telling stories, I think is the best way to grow a brand.

5:20If you're doing that today, do you think the same strategy would work? Hey, I've got this story to tell. Hey, I created my own job. Who would you pitch that to if not the main Vancouver paper? So I'm doing that today, but I'm pitching and And often myself, we have a PR department, but sometimes I find me telling my own story and that initial stage can really help get someone's attention. But I'm pitching CNBC and New York Times, the Wall Street Journal. We're very, well, I wanted to say lucky, but I was going to correct myself. We were very fortunate to have a good story, but to have the storytelling confidence behind ourselves to get out there and tell the world.

5:58So we were on the Oprah Winfrey show and that actually came not from me pitching, but our first PR hire. We had a fellow named Tyler Wright, young PR intern who knew nothing about press, but had all the energy and enthusiasm in the world. We taught him how to pitch. He picked up the phone and pitched constantly to Harpo Studios where Oprah was recording out of. And ultimately, we ended up getting a big hit in front of 35 million people. I was live on the Oprah show. And again, it just reinforced the power of free press, but at a much, much bigger scale. What was the, now I'm curious, what was the story that he pitched Oprah?

6:38He kept talking about a bunch of different angles, our business, our growth, and the cleaning up we were doing, not just in profits and business growth, but in helping others and a service in the junk removal space under 1-800-GOT-JUNK that never really existed as a branded category in a previous life. And so what I found interesting is Tyler pitched them so much through email and through the phone that Harpo got back in touch with us and said, we had a viewer who wrote us who said that their mother is a hoarder who's surrounded by junk and really can't get on with her life and is paralyzed by all the belongings she has.

7:17Can you help? And Oprah's show, they did an episode called It's About Time. And this one in particular was about time you get rid of your junk and move on. And so we came in as the heroes who cleaned up and helped her organize and get her life back in order. Wow, that's pretty cool. Have you seen a spike this year or in the past couple of years with all the Marie Kondo, the life-changing art of decluttering and stuff like that. Yeah, I think that has existed for a long time. I know Marie Kondo is definitely popularizing the idea of tidying up and freeing yourself from all the things that are holding you down in terms of possessions.

7:55I think Oprah said it even earlier. She said, hold on to what you love or what is beautiful in your home and get rid of everything else. Sorry, what you love, what is beautiful or what is useful. And I thought that was interesting because North Americans, so I say, you know, Americans and then myself, Canadians, we just buy and have too much stuff. And in an Amazon instant world where you can have Amazon Prime deliver anything you want anytime, it's just even easier to buy stuff. And people are living in smaller homes and want fewer things, even though it's easier to buy them. So I think that trend is increasing and people are starting to realize, I think, that we've gone a little overboard a little excessive, we're a little excessive in our spending habits.

8:43Absolutely. All the Amazon stuff is job security for 1-800-GOT-JUNK in a way. Exactly. So you're going out this summer, you're hustling for customers, you got the phone number emblazoned on the side of the truck, you get this press deal that obviously makes the phone lines blow up. How did you figure out how to price this service? So that Vancouver province newspaper article came out and I remember our pricing at the time was$130 for a pickup truck load. So there we are covered on the front page. And the article in the business section talked about how these guys are great. They're rubbish boys.

9:19It's only $138 a load. And I thought, oh no, they've got our prices wrong. Look at that. $138. No, that's going to sound too expensive. And we actually ended up keeping our prices at$138 because that's what the province said. And so the newspaper could say it, I guess we better keep it. Nobody seemed to blink an eye. It would have been much worse if they were like, and it's for just 95 bucks a truck. Exactly, exactly. So we took the opportunity. And then we started to realize that it came down to a game of, we were the best out there. We always did such a great job. And we paid our people more than the competition.

10:00So let's charge more than the competition. And we would gradually increase our rates to a point where the profitability margins made sense. And one thing I've learned over the years is that if you watch companies out there in retail, in any given market in any city, it seems to be that the number one player in a market is the low cost provider. A Walmart, that kind of idea. Computer equipment, who's selling it the cheapest? Now, when you look at home services, the service-based business, it seems to be in any market, the ones that are doing the best are generally the most expensive or close to it because service requires the right people.

10:42and those people require decent salaries. And so you get what you pay for in the home service market. It's not like a Walmart where you can really have technology and processes and systems and distribution that you can scale and get efficiencies in your model. With home services, you really need great people who understand being friendly and trustworthy and so on. And that has a premium to it. I think I learned through pricing that we don't want to be the cheapest. We want to make sure we've got a healthy enough profit that we can sustain ourselves and continue to grow and be around for a long time.

11:17Absolutely. That's interesting that the competition, the competitor you saw in front of you in the McDonald's drive-thru wasn't a red flag. Oh, that's a cool business idea, but somebody else is already doing it. It's like, shoot, somebody else is already doing it and they've got a pickup truck filled with stuff. So there must be demand there. Was there anything else that went into your thinking on the competition side, aside from the pricing? For me, it was just about building a business where I could do something to pay for school. I don't think I overthought it. Hey, I started a business within a week and off I went.

11:49But I iterated very quickly and realized certain things that I needed to tweak in the model, whether it was pricing or how we marketed and got PR or even the size of our trucks. I realized we needed bigger trucks, but not too big because we were still a residential business and needed to get into people's carports and that sort of things. So I took the business. I don't think I ever overthought it. And to me, like you're thinking, your thought process, I do believe that if you see a business out there that seems to be working, why not get out there and do that business, but do it better? I think we're in a world where too many entrepreneurs wanted to discover the next big app, the next Instagram.

12:30They want to find the next Apple Music, whatever it might be. And I think that those are really cases of lightning in a bottle. And maybe they weren't even lightning in a bottle because someone started a business and kept iterating as the climate changed or as they would figure out how to best grow that business. and I think that entrepreneurs that want to go start a business shouldn't overthink it. Do something. The story I love to tell is I met Joe Gebbia, one of the founders of Airbnb, a few months ago. I was fascinated when I was chatting with him and hearing his story of Airbnb, a company everybody knows, the largest hotel chain in the world and they don't own any hotels.

13:10They started by renting air mattresses at the Democratic National Convention in Denver. Now, here's guys that were renting air mattresses that people could just put in an apartment and stay with a bunch of buddies and then reuse these things. And to me, that just seems like a silly business model. But if they didn't start that and they didn't tweak their model very quickly, it would never have gotten them to be Airbnb and who they are today. Yeah, that's really powerful stuff. Look at what people are already spending money on. That's a good sign. Figuring how you can do it differently. How can you do it better?

13:45and one thing I'm curious about is what do you do with the junk after you pick it up? Brian's answer plus a whole lot more coming up right after this. New year, new systems, right? It's the time when we all look at some of the messier parts of our business and think, well, what would it look like if it were easy? There's got to be a better way. Streamlining your communications is one of the quickest and easiest upgrades you can make. That's why today's episode is brought to you by Quo, spelled Q-U-O. This is the smarter way to run your business communications. Quo, formerly OpenPhone, is the number one business phone system on G2 with over 3 ,000 reviews.

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16:09That's shopify.com slash side hustle. And here you're first, this new year with Shopify by your side. Our latest audited data from an independent third party is 61.3 % of what we haul away gets reused, recycled, donated. 61.3 % essentially gets diverted from landfills. and that happens in full transparency based on how we choose our transfer stations. So let's say we're in New York, we're taking a truckload of junk somewhere. It's usually taken to a transfer station that we've selected for their amount that they divert and they will sort through with either human beings or machinery or a bit of both and they'll take the cardboard to one place, the wood, the metal and so on to some other places.

17:01they'll do the recycling, the reusing, the donating. Our business is really the carting from one location, point A, the customer's home or business to the transfer station. Okay. Yeah. I didn't know if there was a treasure hunt element to it where somebody is just like, it's junk to them, but you're like, shoot, I should resell that. Like I can get inventory for free or better than free. They're paying me to take it away. No, it's really paying by the truckload or portion of a load. and it's just not worth the time and energy to take it to a bunch of different locations. We've had franchise partners try and do that with very, very limited success.

17:38It's got to be a time-consuming process to sort through everything. Time-consuming for not a lot of money and it just doesn't fit our model. And I'm a big believer in focus. Stay focused, find one thing and do it exceptionally well before you layer on more ideas. Yes. Okay. So you operate in the margin between what it costs you to get rid of this at the transfer station and how much you can charge for the service. At what point are you comfortable dropping out of college to be a full-time junk guy? Yeah, it was three years in. I remember sitting down with my dad and in the same way that I called the press and said, oh, I got an awesome idea for you.

18:16I sat my dad down and I said, dad, I got some good news. And he said, what is it? and it's funny because I'm having dinner with my dad tonight actually but I remember sitting him down and I said I got this good news I'm dropping out of college to pursue this business full-time and he just looked at me like I was absolutely out of my tree and I said listen here's my thinking I'm learning more about business running a business more than studying about business in school my business opportunity might not always be here but the University of British Columbia will likely be there years from now if I choose to go back.

18:52And my dad sort of thought about it and said, you know, you're a grown adult and I disagree with you, but that's a decision you want to make. And I went off and made it. And I remember he had talked to an entrepreneur buddy of his a couple of days later saying like, my son's crazy. Look what he's doing. And this buddy of his said, no, your son sounds smart. Let him go do it. And sure enough, of course, my dad and I sort of settled our differences, if you will. And he certainly believed that I made the right decision today. Yeah, obviously it's worked out very well for you. What kind of volume was the business doing at that time?

19:29Or was it more like, hey, if I had all this extra time in the week from not doing my studies, I can take it to the next level? Yeah, I was doing about$100 ,000 in revenue at the time. So not a ton of money, but enough that I could see a vision for something bigger. And at 24 years old or 23 years old, when I dropped out, 100 ,000 in revenue is still a significant amount of money to a kid. I was just learning so much. I mean, I really, I love learning. I'm a curious person. As a kid, I was one of those kids that you wanted just to tell to stop talking because I'd ask question after question, really wanting to learn.

20:09School just wasn't the place for me to learn. I needed to learn out on the streets running a business. And that was the passion that I wanted to pursue was learning about business by running one. Yeah, that's the only way. It's the only way to do it. The theory only gets you so far. You got to get your hands dirty at some point. What happened after that? I ended up leaving school, had one truck, started to go, okay, well, how do I expand this and grow this beyond this point? second year at a university, I added another truck. Third year, I added a third truck. And things started to really grow.

20:44One of the big turning points, now this is going to come across as a big negative in my book, WTF, Willing to Fail. This would be one of the first big failures. But I see it today absolutely as a real blessing in disguise. I had 11 employees and that old expression, one bad apple spoils the whole bunch. I had at least nine bad apples. And so I decided to bring all 11 people together in a room. And I started by saying, I'm sorry. I'm sorry that I've let you down, haven't hired the right people, trained you, given you the love and support you've needed to be successful. And I think the only way forward is for me to start again.

21:24So I went from five trucks and 11 employees down to just me able to drive a truck and rehire at the same time. And off I went to rebuild a business. It was not easy. It was a painful, I don't even remember it. It was so bad, but three to six months of rebuilding. But what I learned that day is a company or a brand is only as strong as your weakest employee. So why not hire rock stars? Why not get out there and just build a business with people you love working with, you want to take care of and work together, and you want to build something special with. And I changed my philosophy on how I hired.

22:01And I started to hire people that were more like friends versus employees. And that didn't fail me. That got me to a place where we started to build a special culture. And we started to come up with a vision of growth that people wanted to be a part of. That sounds terrifying to be operating at the volume that you're doing, the trajectory that you're on, and just put a stop in it, fire everybody, and essentially start over. I mean, hindsight, of course, looks good with that decision, but what else is going through your head at that time? Yeah, it was terrifying on many levels. I've always been one to take the road less traveled and go against the grain on some decisions, where many people would not have sat down with my dad, who is a very strong personality and a successful transplant surgeon to say, I'm dropping out of school.

22:58I mean, something that just probably infuriated him. Many people wouldn't have done that, but I did that. So I did the same thing when I sat down with these 11 employees. While I was terrified, I still knew it was the right decision or it was a decision that I had to make for my own happiness because I wasn't happy working with these people. They didn't believe in me. I didn't believe in them. They weren't clean cut professional. They weren't the people that I saw as these happy, awesome truck team members in my mind. And I needed to rebuild. So while it was terrifying, and I talk about this in the book, that the right thing is very rarely the easy thing.

23:36If building a business was easy, everybody would do it. But it's not easy. It's freaking hard. And it's those events that we learn from where we make mistakes that teach us something that I believe is why it's all worthwhile. As entrepreneurs, we don't just sign up for the money by any means because in most successful entrepreneurs' lives, I've gotten to experience money comes last. You get the pain, the disappointment, the regret, the bad mistakes, the people hating you. I mean, all sorts of stuff happens way before the money starts to roll in. And you've got to weather that storm. But you've got to be, again, willing to fail, willing to step up and make those tough decisions if you want to be an entrepreneur.

24:22So that when you get to the other side, you start to realize that, or I hope people do, as I have, that failure is a gift. And I feel grateful for all the mistakes I've ever made. And I will feel grateful for the mistakes I continue to make because they will all allow me to grow as a person or as a business owner. And I try to inspire our teams to feel that same way. Right. A friend of mine put it this way. He's like, you know, I'm embarrassed by the work I did a year ago and a year from now. I hope to be embarrassed by the work I'm doing today. Tell me about this shift in hiring philosophy, because everybody in theory wants to bring on these rock stars, these A players, but doing that in practice is a little more challenging.

25:05Can you speak to what changed with the hiring aside from bringing on people that you wanted to be friends with? I think on the outside, it seems more challenging, but I've started to believe the more time I've spent recruiting people and getting to know people. I just wonder if we overcomplicate it. So the way I would hire someone is think of the way you meet someone at a, I don't know, at a party or at a bar, you're just chatting with someone, you kind of hit it off. And there's a little bit of connection. There's something you found in common. You dive in a little bit and you start asking questions in a way that you would try and just to get to know someone.