Ep.3: Joe and Laura Wood on building two premier HVAC brands

In this episode of the Heat Pump Podcast, Laura and Joe Wood tell the story of how they went from one person in 2008 to over 100 in 2022 with a successful exit to private equity. When they finished, they had not one but two premier HVAC brands in the competitive Boston market. 

They founded Boston Standard in 2007-2008 to be a standard-setting plumbing + HVAC + electrical brand, and they achieved that. Then, while traveling abroad, they realized that the rest of the world uses heat pumps to provide both heating and cooling. To capitalize on that untapped heat pump opportunity, they founded New England Ductless as a completely separate entity. It was a remarkable experiment that paid off. 

Laura and Joe have unique insights from their experience, having personally managed a traditional HVAC business side-by-side with a heat pump-focused business. Their lessons about the differences between these two companies are essential to anyone building a heat pump business and to anyone looking to grow and scale to 100+ employees. 

Show notes

• Laura's LinkedIn
• Joe's LinkedIn
• ACCA's mixed groups
• Business Development Resources
• New England Ductless
• Boston Standard

Transcript

[00:00:00] Joseph Wood: the New England Ductless guy walked in there, spec'd an entirely different and superior solution and grabbed the job for something like $9,000 more than the Boston Standard guy had even offered. You didn't get the job because you didn't offer enough of a solution to this client would be the only thing that we could learn from that

[00:00:22] Ed Smith: Welcome to the heat pump podcast, where we tell the stories of are building or have built the businesses that are fueling the transition to fully electrified homes. I'm Ed Smith. 

[00:00:33] Eric Fitz: And I'm Eric Fitz. We're co founders of Amply Energy.

[00:00:35] Ed Smith: Today we are thrilled to have. Joe and Laura Wood, the founders and former owners and operators of not one, but two premier plumbing and HVAC companies in the Boston area, Boston Standard and New England Ductless. Thanks for being here guys.

[00:00:53] Laura Wood: Thanks

[00:00:54] Joseph Wood: Thank you for having us. 

[00:00:56] Ed Smith: So we'd love to start with your story. Every entrepreneur has a quite unique story and you two operated together. So I'd love to just hear like Joe and Laura, how'd you start the business and how did it evolve over time? 

[00:01:11] Joseph Wood: I was a plumber working for my brother's company. He had a great shop in the city of Boston. That was a great place to be for a while. And then it started not to be a great place for me. And I realized I had to, make a shift, make a change.

And decided in 2007 that, that was going to be the end. Struck out in 2008. Laura and I have been together since what, 2000, 2001, I think. we were already together for many years at that point, but kicked off this business out of the apartment we were living in Savin Hill and just hung the sign out and started getting to work.

[00:01:46] Ed Smith: And it's something that I never really wanted to do any side work or believed in side work as a thing that was good for our industry. So I didn't have a group of people to call on. We just little by little started to gain customers and keep customers. And that was really the philosophy for us was to find and keep customers. Were you guys married at that point or just together? And.

[00:02:06] Laura Wood: the same year.

[00:02:07] Joseph Wood: Yeah, same here.

[00:02:08] Laura Wood: Let's do it all in one year. Let's do it all in one year. 

[00:02:11] Eric Fitz: Just jump right in.

[00:02:12] Ed Smith: Get married, start a business. Okay. And Laura when Joe went out on this adventure, were you thumbs up or thumbs down or somewhere in the middle?

[00:02:21] Laura Wood: Oh, thumbs up. A hundred percent thumbs up.

[00:02:23] Joseph Wood: No, it was a good time to start a business. A lot of people thought it was a bad time maybe because it's, the great recession, all that stuff, but we were pretty small and nimble and didn't need much more than the tools we had and the skills that we had. 

And I think Laura came on maybe in 2012 or 13, is that right?

[00:02:41] Laura Wood: Yep.

[00:02:42] Joseph Wood: And we just kept growing it. There was no office, obviously it was just the place we lived. And then I found a parking lot of a fish purveyor that had burned down South Boston and they rented out the parking lot to us.

So that was great because we had a place where the trucks could meet up. And then from there, we found an office in Fields Corner in Dorchester. And then a few years later, a few buildings up in the same street. And then in 17, I think, we moved to Mattapan. And we bought the facility there that housed us through the period in which we sold the business. So it was a wild run.

[00:03:18] Ed Smith: And when you started it, it was just Boston Standard was the brand, right? 

[00:03:22] Laura Wood: It was actually Boston Standard Plumbing and Heating. we realized pretty quickly that not having HVAC or cooling in the book of business was not a good idea. So we went through a little bit of a rebrand to make sure that cooling was included in there from an expansion standpoint. And that's something that I think is important when people are starting out make sure you think of everything.

[00:03:45] Eric Fitz: Totally. And speaking of thinking of everything, what kind of conversations you have when Laura, you were thinking about joining on and you were going to be colleagues in this business. How'd you navigate that to think it was a good idea to, to work together, husband and wife?

[00:04:00] Laura Wood: We're not sure it was a good idea. No, we remember talking about it a lot. I think I was in business development and healthcare and was leaving for work at seven in the morning and getting home at seven at night. And the discussion was, I wanted to do something different and I had a skillset that we could use to grow the company.

And if we were going to stay in Boston and grow the company, let's jump in and do it now. So we moved pretty quickly without a lot of discussion. I would say in hindsight, maybe we should have talked about how we would work together a little bit better. But it ended up working out pretty well.

We have opposite work styles and opposite personalities. So that actually worked well because we didn't want to get in the other person's lane. .

[00:04:45] Ed Smith: That's how Eric and I operate. It's amazing the things I love to do and hate to do, and the things he loves to do and hates to do are like perfectly opposite. So we just the lanes are very clear and we're able to stick to it.

[00:04:59] Laura Wood: It 

[00:05:00] Joseph Wood: I think one of the cool things about and I don't remember Laura, which year it was, you got your MBA, but. She brought that to the table and I didn't bring any of that and it was something that we both recognize and whether it was spoken about or not, it was, I was always happy to stay in the land that I needed to be in and do those things I had to do. Laura picked up the other side. So maybe I was front facing and she was, the back end or that sort of thing, but it worked out really nicely. And I do remember 1 conversation that we had that a lot of people go out and get an MBA just to have it on their resume, but few of them go out and actually work boots on the ground and actually run a business and start something and push it forward.

And that's. I remember because I think we're having a rough day or a week at work or something like that, and customers being terrible, things like that. And I think I had to say that to Laura at that time Hey, listen, don't forget, like you're in this part of your MBA where most others aren't going to go.

And it will be hard at times, but it will reward others. It was a good choice. 

[00:05:57] Ed Smith: That's great. One of the things I know about Boston Standard, if you're in downtown Boston where, there's like brownstones and high end Boston Standard is like the single most frequent truck that I see, We talked about this before we started the pod, Eric and I are both happy Boston Standard and New England Ductless customers.

You guys just, the reputation for excellence by customers is unbelievable. How did you build, let's just start with Boston Standard. How did you build that brand to stand for that? 

[00:06:31] Joseph Wood: I think it was just a matter of we weren't going to do anything halfway. And we knew we weren't perfect. If we made mistakes, we're going to make it right. And I think that's a pretty simple formula. Cause most stories about contractors don't start off with, let me tell you this awesome contractor I ran into, it's usually the opposite.

It's I've got a horror story I'd like to share with you about someone that you should avoid. And why would you ever want to start a business to wind up being that company? And, when we chose what sort of business we were going to be, it was always going to try to be a premier grade business a benchmark sort of business that other people would try to follow after, and I were very fortunate that became the case because it's like in all things, you create your own reality.

And you were talking to Eric earlier before the podcast began about former guy, Brad, and just put good people in good positions, do good work, and I think the results will normally follow. 

[00:07:22] Ed Smith: That's what I was going to ask about next, which is the hiring. It's often as you grow and you hire more folks, Joe, I imagine when you were on every site you could personally make sure that it was exceptional. How did you maintain that standard as you expanded the team and you personally couldn't cover all that territory?

[00:07:41] Laura Wood: Communicate, communicate,communicate. Over communicate. Communicate 18 times. I think that's the answer. The more you communicate what your expectations are, the more people know that is what is expected of them. And if you're not going to meet the bar, someone's going to come and train you. And if you're not going to, you know, learn from the training, then maybe this isn't the right place for you.

Building and fostering a culture of communication and accountability, I think, was key to that and ongoing training, people ask all the time, what kind of training did you send your techs to everything? And they went to and they would come back and part of what we implemented was if you went to a training, you had to come back and then the next staff meeting, you had to tell everyone.

What you learned, like the top five things you learned that you didn't know before that you thought would be interesting. And so I think that was what kept quality high, was really continuously focusing on that.

[00:08:36] Eric Fitz: Well, it's, it's amazing. Definitely came through from, at least from my experience as a competitive advantage, I worked with your team back in 2012, and I'm an engineer. I'm a technical guy. I ask a lot of ridiculous, hard questions when I'm talking to contractors that are doing workAnd I will say, I probably talked to five or six different companies at the time. And I remember Joe, when you came through the door and you could immediately speak my language. We were talking about turn down ratios, wall hung gas fired condensing boilers.

And I was like, this guy knows what he's talking about. And then when Brad, he actually did the install. I just remember when he finished the project, I came down and he wanted me to see it, see how, when I wanted to walk through the equipment. I just remember standing there just looking at it being like, Yeah.

This is like a piece of artwork, like all copper was polished, like everything was, it just like every single inch of that install he cared about and he had took pride in it. And man, like I've told, I told all kinds of people about your business because of it. So man, you definitely did something right. 

[00:09:37] Joseph Wood: we put a lot of effort into that and it's not just the success of Laura and I, it was everyone that worked with us and for us and around even vendors, people that, you just had relationships with, they can make you or break you. And we were in a good position where I think we carried a lot of respect for our team, they did for us and for the customer, and we didn't create an environment where anyone could win without another person winning.

It couldn't be that the company won, the customer lost. And we talked about stuff like that because it's not uncommon for the guys working in the field to feel like they're up in the ivory tower, making all this money and doing all the, they don't care about us. And if that's the way they feel they quickly care less about the job and less about the customer and they start to feel like they're not a cog in the wheel you have to avoid that at all times.

[00:10:23] Ed Smith: Just for a trail of breadcrumbs, Laura, when you, so I know 2007, 2008, it's just Joe, when you join in 2012, how big was Boston Standard then? Like number of people or,

[00:10:36] Laura Wood: goodness, I'm going to say we had five technicians and one person in the office. Yeah. I think that's right. So there are about seven people, 

[00:10:46] Ed Smith: and then when do you all start New England Ductless?

[00:10:51] Laura Wood: 2015.

[00:10:54] Joseph Wood: 15. Yeah. 

[00:10:56] Ed Smith: And why?

[00:10:57] Laura Wood: Great question. So I think, and Joe jump in, if you disagree, I think we started it because we had been traveling and realizing that the rest of the world is using ductless for heating and cooling and why isn't the United States using this was one. And then two coming back and realizing. There is a complete void in our market for selling that product and people don't understand what the product does or how it could benefit them in their own home. And so recognizing those two pieces together, we thought there's something here that can serve the population that we live in. And so that was how we started and it took off.

It took off gangbusters.

[00:11:42] Joseph Wood: Yeah. I think, other part of why we started that was, we talked about Boston Standard and then plumbing and heating was the, the bottom side of the logo. We changed that to plumbing, heating, cooling, and I'd be standing there with a customer, we'd just wrap something up and then go, Hey, do you know anyone who does air conditioning and point right to the emblem on the shirt and. Became clear that sometimes people only know you as what they met you as or called you for. And, they weren't probably going to shift their mindset that you're not a plumber, you also do HVAC or whatever it was. if we did a single discipline business, we could pick up ground a lot faster rather than, and it was a theory, we also wondered if we had started a, maybe a ductless arm of, Boston Standard, maybe it would have been the same.

I don't know. We don't have the ability to go back now, but it certainly launched us forward fast in my opinion because At the time, 2015, you were still trying to convince customers that they could be used for heating. And in fact, the manufacturers were still trying to convince contractors.

They could be used for heating. So it was a funny period in time. and we didn't even know, I was the 1st person out there doing sales and install and service if there was any, we didn't even know if people were going to call us through the winter because no one thought about heat pumps for heating usage. Laura and I had gone to a Mitsubishi conference where they had economists speak about, market penetration for heat pumps that period in time, what it would look like over, X years of double digit growth.

But I remember coming home from that with the mindset that there was a ton of runway industry. So those were the reasons I think that we kicked it off. 

[00:13:20] Laura Wood: The other pieces that we saw that energy efficient homes were going to become a thing, and that the federal government and certainly Massachusetts state government was starting to care about that. And so that dovetailed really well. And Also, it gave us an opportunity to have this stream of a whole team who they just knew how to do ductless and they were experts at installing ductless and sizing systems and then we could be more nimble and move more quickly, which that did turn out to be true.

You made me think of one thing, which was that New England Ductless was looked at by the Boston Standard team, a little bit like a redheaded stepchild at the outset. Everyone was like, ah, you don't know how to do anything, but ductless.

[00:14:00] Joseph Wood: And, you don't know anything about boilers and about my antiquated steam knowledge or whatever it was. And the Ductless guys and girls wound up running circles on the Boston Standard crew as far as their skills in the ductless market. the other thing that we thought about with starting a ductless only brand was the repeatability of it and we often would travel at Boston Standard from, the sixth floor brownstone of some ladder system hydronic setup where, we put in a new boiler and we did a great job in the basement.

There was an unknown issue in the wall between the 3rd and 5th floor and it became your problem. Yeah. And when we started doing this kind of the single discipline ductless only, not heat pump only, really not ductless only. But when we started doing that end of the spectrum, we owned everything from, soup to nuts.

It was all us. And as a result of that, there were no callbacks. Very few, I can't say there were none, but there weren't many callbacks. There weren't a lot of dissatisfied clients. You know, Eric, you talked about Brad showing you with a lot of pride, the work you've done in your basement on a boiler and all the piping.

And I think, almost all plumbers feel that way. There are a lot of customers that are just like, all right, cool. You're done. Let's go. Heat pump people have never new clients for heat pumps have never owned the technology before. So when they walk into the room after it's been installed, they might've had some fear and trepidation, things like that, but when they come in and they're like, are you going to turn it on?

You're like, it is on. They're like, Oh my God. transformative sort of feeling that you don't get with any other form of installation or service that I have seen. So a couple of other thoughts about. That industry it's neat.

[00:15:34] Ed Smith: Love that.

[00:15:36] Eric Fitz: And you touch on this a little bit, but it sounds like. You mentioned you were doing some ducted, but why did you call it ductless? Why ductless versus ducted heat pump systems? Why'd you focus on those?

[00:15:47] Laura Wood: We were maybe erroneously trying to differentiate that company specifically worked on heat pumps and at the time ductless heat pumps were really what was out in 

[00:15:59] Eric Fitz: Viable. Yeah. 

[00:16:00] Laura Wood: Yeah. 

In hindsight, would I go back and name it ductless? Probably not. But at that time, naming it New England Ductless, we thought got the message across that this is a ductless air conditioning system.

This is not your unitary system that you have sitting in your backyard right now.

[00:16:17] Joseph Wood: Yeah, I think that's correct. there were names flying around. You may remember, they were calling Mitsubishi Mr. Slim, and then there was Mini Split And there were all sorts of names, and we were trying to settle on one. I remember one of the Mitsubishi guys had advised, You should just call it something, heat pumps.

And I was like we want to do heat pumps. Because there were unitary heat pumps, and we didn't really want to get, confused into that realm cause they carried a bad reputation. But yeah, I don't know if we'd name it the same again. 

[00:16:41] Laura Wood: And what's funny is now there's a great company out of Cape Cod called Cape Cod heat pumps, which is a big company and this is all they do. So that was a viable option. 

[00:16:51] Ed Smith: So you guys did set it up as two separate businesses. Tell me more. And you said it was an experiment, but I didn't catch the, did you have a clear rationale for why separate and how separate were they? 

Did you run different P&Ls? How separate were they? 

[00:17:06] Laura Wood: Completely separate. 100%. The only overlap was that Joe and I were the senior leaders for both companies, but they had their own management team. Everything was completely separate. P&L they're different corporations. Marketing was the tactics were different. Everything was different. The reason that we proceeded that way was because we wanted to take two swings at the same job. So if we could get someone in the Boston market to call Boston Standard for a ductless job and call New England Ductless for a ductless job, we're swinging twice at the same job. And we thought that was an opportunity for us to increase our market penetration as a umbrella.

[00:17:50] Eric Fitz: Wow. So wait a minute. You were installing ductless units under the Boston Standard brand. Was it that, was it the New England Ductless staff that were doing those installs? No. 

[00:18:03] Joseph Wood: Yeah, there were competing staffs and again, myself being the first person installing out there and doing sales, cause we didn't know what the volume would be. That's why I call it the experiment because to our knowledge at that time, there weren't any ductless only businesses. There were some businesses that were heavy into it, but it was still just a part of their core and they could send a core employee off to do it. the last thing we want to do is hire people and then lay them off or something like that. That was never been our. Mindset that people were expendable, so we wanted to make sure it was gonna survive and thrive we didn't feel it could be like woven in as a part of Boston Standard, only if it was separately staffed and that caused higher overhead.

Other things like that were redundant, people would say, but we think it worked. We think it was a good selection. 

[00:18:47] Ed Smith: I'm just, I'm amazed you went abroad. You saw everyone else was heating it this way. An economist presents at a Mitsubishi event and forecasts it out. Most people would say, let's experiment with ductless with their existing one.

But you guys set up a whole nother LLC and team. That is commitment to an idea. That's super impressive. 

I'm wondering the two swings of job makes complete sense to me. What did the sales teams think when two different sales guys competing against each other, both under the, the Wood HVAC 

[00:19:20] Joseph Wood: I have an interesting story about that. The New England Ductless pricing model, we didn't know everything right at that time, but it was a little bit cheaper. It's day rate for whatever they were doing was a little bit cheaper than the Boston Standard. And I also functioned as the sales manager, sales trainer, whatever it might've been for the teams.

And I think maybe we had one or two under the New England Ductless arm. And then Yeah, I was doing the sales training and there were maybe three or four under the Boston Standard arm. And I remember one of the longer term Boston Standard guys saying, Hey, this isn't fair. Ryan's got to go to the same job as me and sell it.

And they cost basically less per day. This isn't fair. And then. I told them what I'd always tell them, which is listen, the customer's buying you, they're not buying Mitsubishi system or Fujitsu or whatever, they're buying you really. And if you get the job, it's because of you, if you don't get the job, it's because of you, but let's not blame the weather or the price or whatever. And then a meeting later, like every week we had the sales meeting and that next meeting, that situation had come true at a home in Dorchester. And the New England Ductless guy walked in there, spec'd an entirely different and superior solution and grabbed the job for something like $9,000 more than the Boston Standard guy had even offered. And I was like, what better bit of evidence to present? And when anyone would ever say this to me again, that, You didn't get the job because you didn't offer enough of a solution to this client would be the only thing that we could learn from that. It wasn't that the pricing had anything to do with it because they paid more so that was I got one and done.

No, no one complained about that anymore to me. was great.

[00:20:58] Ed Smith: was a great story. How is that? Yeah, that's amazing. So we started out. At the 2007 2008, you found it, 12, Laura comes in. Did you say 15 or 17 you started New England Ductless ‘15?

[00:21:13] Joseph Wood: where does the rest of the journey go for you all after 15? What happens then?

[00:21:20] Laura Wood: We start really focusing on hiring. Our volume for both companies was more than we could handle. And we had been doing pretty limited marketing up until that point. So we started putting the word out that we were hiring, we started doing more robust marketing.

And between 2016 and 2022 was our largest growth. Grew very quickly, double digits every year. 10 to 20% depending on the company in the year. But a huge part of that was we had the base already built and we had a really solid team. And so we really worked with our team to say this is the team you like working with.

This is the team we like working with. If we're going to grow, help us find more people like you let's make sure we're bringing in more people that are going to grow this organically in a positive way. Because you see, or at least I see so many companies that grow, but they're, just hiring whoever comes in off the street and trust me, we had some bad hires, but like trying to be really deliberate about that was really helpful as we grew, because you may or may not know, we ended at like almost a hundred people when we sold, which was a lot of people to, to work with.

[00:22:34] Ed Smith: That's in 14 years from Joe to a hundred. 

[00:22:38] Laura Wood: Yep.

[00:22:39] Ed Smith: That's remarkable.

[00:22:40] Laura Wood: 

[00:22:40] Eric Fitz: Can you talk more about sort of the differences between the two businesses and, spend a little more time just talking about the ductless business or some of the challenges of the Ductless business in particular, 

[00:22:51] Joseph Wood: YeahI think Boston Standard still carried for probably the first 3 to 4 years, an air about them. Maybe that they were technically superior to the New England Ductless crew. And I think that watched out in the long run, which was great.

But I think it was interesting to see Boston Standard continue to focus on modulating condensing boilers and duct retrofits and steam systems and, plumbing remodel things that they had already done also ductless. And we got to put some of the legacy Boston center guys up against some of the newer New England Ductless guys and see who could really run the quickest. And that was where I think the attitude began to shift to wow. These guys are really getting superior at this end of the game. but the New England Ductless thing was a great business to operate as well. The repeatability of it was nice. It was easier to put it in a box.

And, this is what we're going to order for these jobs. This is what we're going to, a need for time. There wasn't a lot of. And Laura, correct me if I'm wrong in that, but there wasn't a ton of spillover. We didn't have that time where you found a cracked pipe in a wall. It took an extra four days and it was already Friday sort of stuff. There weren't many of those. And I said earlier how people had never owned these systems. God forbid something like that did happen on a Friday. Usually it was the case they could wait till Monday. So it was a bit more forgiving in that regard. And yeah I think the ductless only, and I say ductless heat pump, but that business was I think a bit easier to scale than the, the five tool players who were required to play on the Boston Standard team of, knowing enough about boilers and HVAC and plumbing or whatever it might be.

It was. Easier to attract and retain people when you're in a single discipline environment.

[00:24:34] Laura Wood: I also, one of the things that was a definitely a pro in the heat pump business was that the state and the federal government were creating programs that were really supporting this. And so there was an opportunity to get in on town or state funded programs and work very collaboratively with these green initiatives and say, let's all work together and let's get this community to be a green community.

And that helped us obviously scale and grow and that helped that town meet their green initiative targets. And so that was something that was not available in a traditional unitary installation setting that had to be a heat pump. And so that was something that for many years was a big driver. And we looked to partner with towns, communities, the state, in order to grow our business while helping them meet their green initiative. 

[00:25:33] Joseph Wood: think to piggyback on that, Laura, and I'm glad you brought that up the heat smart programs that were sponsored by MassSave and my towns applied for grant money to run these programs to install more heat pumps in their towns. That was a place where the choice to name it New England Ductless was a godsend because we were going up against. Joe's Mechanical or something like that. And we were looking like, way up here, just based upon our name and our image. And they may have been in business for 40 years and doing a fantastic job, but their image did not represent what those towns are going after. And I think that probably I'd like to think it was just us, but I also think our branding had something to do with why we're selected for those heat smart programs, which some of them were the fizzles out and weren't much at all. And some of them were incredible. 

[00:26:21] Ed Smith: No, some of those pros you both named make me think there may have been like differences in the P & L's of those two companies. Was one more profitable than the other consistently?

[00:26:34] Laura Wood: New England Ductless was more profitable. Yep. From a net standpoint. 

[00:26:42] Ed Smith: due to repeatability, less likelihood to find a mistake in a wall that was someone else's, but now you knew it or inventory, simplicity, kitting. Like just all the ops, basically all the opposite makes a ton

[00:26:56] Laura Wood: It was everything that

[00:26:57] Joseph Wood: Yeah, probably 

[00:26:58] Laura Wood: I mean, it was all of that. Plus the fact that your labor's cheaper. So when you look at the plumbing union drives up the cost of labor for plumbing, even in a non union shop, and there's not an equivalent in Massachusetts right now for an HVAC union in the residential setting.

So there's a difference in the labor itself. So your direct labor is cheaper, 

[00:27:24] Ed Smith: Makes sense.

[00:27:26] Eric Fitz: Can you talk a bit more about, particularly, one of the big differences between I'll call it a conventional plumbing heating company and a heat pump companies. You got to build a lot more expertise around managing electrical issues. How did you navigate that? Did you have subcontracted master electricians?

Did you all in house? How did you kind build and solve that problem?

[00:27:49] Joseph Wood: We had a combination of those solutions, including in house. And even when we had in house, it wasn't enough to keep up with capacity. So we've always worked with subcontractors as well. But I think our approach was always to make sure you never want to leave a customer like, can I put this in the panel?

Yes, but you can never run your toaster again. That's not like a good way to leave your client. So we tried to be ahead of that and make sure that we had a professional in that environment set eyes on the situation that we're looking to do tell us, is it a yes, but you're on the edge or it's a no, absolutely not.

And then provide options, upgrade panels or install sub panels or whatever it may have been. But yeah, that was something I think that led us to eventually start a electrical division at Boston Standard. And that division is still there today and doing great because electrification's great. On the rise for sure. And it's something that everything you do uses it. Yeah, big part of the job. 

[00:28:46] Eric Fitz: Nice. And a follow on to that. what were your design best practices? What was your, workflow? Did you have a comfort advisor? For New England, Ductless or the salesperson, but they, the ones making that initial assessment, like we've got sufficient panel capacity. Oh, we're actually going to need a sub panel. Talk to me about the process, whether that's the electrical issues or the layout system design, all that kind of stuff. How did that work Within New England. Ductless.

[00:29:11] Joseph Wood: Yeah, that was all our project managers would meet the client, find out what it was that they wanted, see if there was something that might impart to help them make the solution better, improve it in some way, provide options, review the job site, take photos, reviewing the panel, and I didn't put it on the project manager's shoulder to know all about electrical, but they had to understand, obviously, if they're opening up the panel and it's chockablock full and, or they see fuses like, hey, that's a do not pass go scenario. Versus they're in an application and it's got, 30 open slots on the bottom and the stove is gas and the dryer like they knew enough just to be dangerous. But before any job, whatever get to a place where it makes it to our install schedule, it would have had to have been reviewed. We carried a weekly meeting where every job was put forth and it was a nice learning experience because we'd put it up in front of all the project managers from both Boston Standard and New England Ductless.

And the jobs would be, brought forth and filleted up in front of the whole team. And if there was something going on that, you think you're going to lift a unit 30 feet in the air, the whole team would ostracize you and make sure that it's self corrected because there was no hiding your work.

And it wasn't, I think there are other companies that, of who people sell things, they make it directly to install without any oversight, or maybe it's one person's oversight, and if they don't do a good job it's getting installed that way. And so we had a lot of times where we had to pull audibles from the moment where someone had said, Hey, we're going to do X, Y, and Z, and we'd have to say no, you have to go back and speak to the customer and say, we're only doing X and Y, Z is not possible without the following additional or whatever it might be.

But that was how we handled the sales side of it, if you will.

[00:30:50] Eric Fitz: Got it. So you had this someone would visit the home, the project manager, they kind of design, propose the system and then come back to the office. You do this design review process with the other project managers. That's all in the office and you did you ever send somebody back out again? 

[00:31:10] Joseph Wood: Many times. And specifically if there were jobs that had a higher level of complexity, it would usually warrant a walk through with a project manager, maybe an electrician. And it could be the lead installer, things like that. So if it wasn't a one and done sort of situation, it almost always got to walk through.

[00:31:30] Laura Wood: But just to clarify from a process standpoint when the project manager is out speaking with the customer, it was a requirement that you took photos of the job site and you mocked those photos up to say here's where we talked about this being on the wall. Here's where we talked about this being outside.

I'm worried this spot's too small or and then there always had to be included a picture of the panel for the electrician to see at least to get a jump start on what was happening. So that was required as part of the workflow. I would say maybe 10 percent of the project someone had to go back for a visit. So it was a heavy lean on the information gathered and the photographs taken on the first visit.

[00:32:11] Joseph Wood: We always said the job should be Bahama proof, meaning you should be able to be in the Bahamas. No one has to call you because they can't figure out what your plan was. used company cam you could sketch all over everything. And if I couldn't show this to my kids and they would understand what's going on and we have a problem in the design and, it was also you didn't ask about Eric, but I can tell the engineer and he was probably leaning towards the design side of it.

And that was a big part for us was to make sure that it was designed well, because it wasn't okay to earn business that makes customers unhappy a year later or to find out that they weren't offered something better that they should have been. So that was all part of that install review and that sales review is where we got to talk about all these sorts of things because we didn't want quick hits.

We wanted, customers to refer us.

[00:32:56] Eric Fitz: That's amazing. Because that's where you get this. That shared learning is so important across the team that you're you already talked about how important training is and there's nothing better than seeing. Not textbook example, but this is a real project where we just sold this to a customer. And we got to figure this out and make sure it goes right. That really like resonates with people. If you're seeing something for the first time, you've never experienced, like we got to understand that process. So when they're out in the field, the next time, selling that next project they'll remember it.

[00:33:23] Ed Smith: On the journey from one to a hundred and Laura, you're now advising folks who are building their businesses, but I imagine you hit a series of roadblocks or ceilings that y'all were able to break through. As you look back, were there one or two particularly tricky ceilings? What were they? And how'd you break through them to get to such a large company with such unbelievable customer satisfaction.

[00:33:50] Laura Wood: That's a good question. BDR, business development resources, a lot of organizations like that set those plateaus at revenue marks, right at 5 million, you're going to run into this at 10 million, you're going to run into this. And I think what I found is it wasn't a revenue mark for us.

It was a staffing mark. So it was a number of human beings that needed care and attention and training. And that was the point where I think the biggest plateau for us was when we had reached about 45 or 50 people and we didn't have any management in place. So it was Joe and Laura and 50 people.

That was the moment where we were spinning our wheels saying like, why are, why is this a Like, why does it feel like something's wrong every day and nobody's happy? And it wasn't that, it was just that there are 50 people all telling you what was going on in their life. And so that took us a little while to realize.

Oh my gosh, we need some managers in here to help, make sure everyone is supported and make sure that we can focus on growing the business. , they say work on the business, not in the business. That was the huge plateau for us. And it took us honestly, probably two years to find the right management compliment because we didn't, we made some missteps along the way.

We thought we knew what we needed. And it took a couple of years to just find the right people to set that in motion. And once we had, A great install manager, a great service manager, and a super GM, the whole thing took off because you had everyone on their seat in the boat rowing in the same direction. But that was a huge, we sat for longer than we should have in hindsight in that, oh my gosh, what are we doing moment.

[00:35:44] Eric Fitz: How did you figure out that was the problem? that you had hit this plateau and the solution was, we need some management in between.

[00:35:52] Laura Wood: To be totally honest, we belong to a group of a national group of contractors that meets twice a year. And we meet and we do audits on everybody's company. And we share best practices and we swap information. And it was that group who very nicely knocked us upside the head and said, Guys, Like you need some management here.

You can't do this all yourselves. You're doing great But you need to keep you know, and that was a moment of oh, yes. That's what we need So that group, I mean that group has been invaluable to us in many ways But that group of it's 12 contractors from across the country They were the ones who really said the reason you feel this way is because you need help And that was it That was that.

Then we embarked on our two year journey to find the right help.

[00:36:38] Joseph Wood: There were many walls in that BDR concept. And I think the Trane comfort specialist manual kind of borrows that concept. There are many walls. There's always another 1 coming. 

And I think even before our mixed group there. We knew we needed it and we were trying to hire people, but we were failing or maybe weren't dedicated enough, or we also maybe had some of the wrong people there. There were maybe we were the wrong people at that time, right?

There were different reasons, but we knew we needed it. And I think one of the turning points in our business, we were connected to some good available players that, you know. We're just starting to talk about, could we bring them in? And I remember hearing people's salaries and we can't afford that.

And then I think Laura and I spoke for a while, like eventually it was like, we can't afford not to do that. What are we doing here? Are we trying to grow our business? And keep it successful and keep employees happy and customers forget about the customers, but employees, right? And we realized that you couldn't do it much longer.

It's just Laura and I, 10 plates up in the air trying to spin them all. And I think embracing that and spending money to make money. We spent tons of money in the growth of the business through the years, but I think there are times you just have to spend more and those paid off well.

[00:37:52] Laura Wood: And I think that's a really good point to anyone looking to get into anything heat pumps included, is as you're growing your business, you have to get comfortable with the idea of you are going to pay people who work for you more than you pay yourself. That's okay. Like you have to do that. And that's hard to wrap your head around as a small business owner. But I'm the owner. And so I think once we wrapped our heads around it's okay if there are, and actually this is great because these people are bringing so much expertise to the table that quite frankly we don't have. And so that was the other piece don't be afraid to hire people that are smarter than you because there were three or four guys, probably more, but that were smarter than us in areas that, we never would have succeeded to the point that we did if they had not been there.

[00:38:37] Joseph Wood: I think, Eric, you'd said earlier about, how do you maintain quality? And, Laura talked about communicating and training and all those sorts of things. But the part probably no one ever wants to say on camera is you may not always maintain the quality exactly where you want it to be.

We're not, I don't want to say we're not building Boeing jets here because they're not a good reference point right now. But, we're working, sometimes you put in a water heater and it leaks, something happens like whatever, you have to get all right with that too, in the stages of growth, because you're going to go through periods where someone says in an interview, I'm really good at this, that and the other thing, and you don't have a skills test to give them the skills test eventually, as they go out in a truck and if customers are happy and if their work doesn't get callbacks, you're going to hire the wrong person at some point in time, and you're going to have to lick your wounds and go.

Fix that work at no charge and whatever it may be. But that's all part of it too, is I've seen people who are frozen because they're so focused on perfection that they can't make any progress 

[00:39:30] Eric Fitz: Totally. Nobody's perfect. And everybody makes mistakes. Every person, every business and a huge part of it is not, Oh I don't want to just prevent all mistakes. It's how do you respond to mistakes, you know, and that's where the magic is in terms of growth and learning and everything else.

[00:39:47] Ed Smith: So much of what you both said resonates with Eric and I, and we're building a software business that's in the HVAC space, but whenever Eric and I are saying to each other, once we get past this, it's going to be easier.

We catch ourselves. We're like, it only gets harder. We just don't know what the next thing is, but it's just guaranteed to be harder than whatever we're facing right now. It's just great entrepreneurial advice . 1, that's on my mind that I want to make sure we cover in the transition to heat pumps and electrification which I've heard you both say are things that really tailwinds behind New England Ductless and things that you think will continue a quality install is really important.

Because a poor install on the heat pump can lead to a worse outcome than if you had just swapped the boiler sometimes. For quality installs, are there certain things, hallmarks, parts of your SOP that you wanted to follow to make sure, like when you put a heat pump, when you switch someone from a boiler or furnace to a heat pump, like it really went well. 

[00:40:53] Laura Wood: I leave that to you, my technical guru. I know what my answer is. 

[00:40:57] Joseph Wood: mean, first I had to be designed. And there were things that we didn't know at the outset, when the wave of heat pumps were crashing on American shores, and everyone was looking at oh, it's this many BTUs at 5 degrees, but no one was talking about what it could do it like 50 degrees, which is a real scenario that you need to prepare for.

In fact, far more common than the 5 degree scenario. And I think the marketing of manufacturers had the whole industry tricked for a bit and, so we went through that and really learned to improve our design and we worked more on designing, of course, to carry that really bad day, but also to operate really well when it was mild weather.

And as we have seen over the past few years, it's often mild. So design was important, but Laura and I had come up with a thing that we implemented for our install teams, and it was a bonus. And I think it gave. I don't know if you remember, Laura, around a 5 to 10 an hour raise over the course of the year to the installer to follow this.

And it was our perfect install checklist. And it came with a photograph evidence of the system being held at a pressure test, the system being held in a deep vacuum They had to weigh in the refrigerant charge according to line length. We also made our own stickers that we put on the inside of the units that had every branch, how long it was, because all of that stuff, if you went back there eight months later, and there was no evidence of that, how would you know how much refrigerant to put back into it?

We did a lot of things like that. They were pretty small in each, component, but they added up to be a much better install and the proof was in the pudding for us that the callback ratio is very low. I think, Laura, you remember the industry average? It was like 3 percent or 

[00:42:40] Laura Wood: it was 3 percent and we were running at about one and a half.

[00:42:44] Joseph Wood: Our only callbacks, of course, were the worst callbacks, which are like, ah, this thing leaked and wrecked my ceiling. because there was no way to do a gravity test of how the drain was working so much. But yeah we had a really good track record with that.

[00:42:56] Laura Wood: But I think the perfect install bonus was great for the installers to do a great install from the project management side. Those guys were always, running the. Manual J. Is that the right word? I'm not the technical lady here. you. But you

In order for the job to get pushed through.

So when we talk about what they need to submit, that has to be submitted every single time with their pictures and their quote and that's getting reviewed prior to the installation. So it starts there really. And then ends with the perfect install. So trying to tie the quality together on the front and the back end.

[00:43:29] Joseph Wood: We had almost competition for the install schedule, it's like everyone will do anything to get it done by the 4th of July. If you wanted to reserve space as the project manager, you brought forth the Mrs. Smith's job and you want to put that on the schedule. And there was a single, component that you were missing.

It was like, boop, you're back, end of the line. Bring your job back here when it's actually ready, because we got so busy at those times that it, It was really frustrating if a project manager brought a job forth that wasn't ready for prime time. It was just a bad use of everyone's time because we're all, sitting in this room to do an audit and it should be flying right through without any yellow flags or red flags.

And so that kind of self corrected. It was nice.

[00:44:08] Eric Fitz: Nice. I love how you touched on that, design and the quality of the install, you got to have both if you completely misdesign the system and you do an amazing install, you got a bad outcome. You can have an amazing design and a terrible install. You got a bad outcome.

So it's those two together working in concert where the symphony and all the magic happens. That's great. And you just reminded me, can you talk for a second about the seasonality of the ductless business, at least in Massachusetts did you. Talked about July 4th as being like, everybody wants AC, before, before then, before the start of July it was the seasonality different running the ductless business versus the Boston Standard.

The seasonality for the heat pump business, we thought it would be huge. In fact, we kicked off the heat pump business in January, thinking we're going to start really slow. Cause nobody wants a heat pump in January and it was quiet and a good build, but from that point forward, 12 months out of the year, Fully booked the whole time.

[00:45:15] Laura Wood: There was no slowdown. There might be a slowdown around January because people like Christmas and there was a snow storm. You couldn't really do an install, but the schedule was full. So yes, there was seasonality in that in July and August, everybody and their mother wanted it installed.

But from the standpoint of keeping a team busy and growing a business, there was not a lull that you could really speak of, A lot of traditional HVAC companies use maintenance as their filler during the slow seasons. And we hadn't built a maintenance plan yet, which was okay because we didn't have time to do maintenance.

So it, in the end there was a maintenance plan, but in the beginning there was not. So it turned out that That you could just spread out over the year. The other piece being, and Joe touched on this earlier, people don't have the system already, so they're not calling you in a panic saying, I have no heat or I have no air conditioning, please get out here immediately.

It's a more proactive decision. So you can start to manage how you use your capacity and when you get to your clients, because they're not in an urgent situation. So from that standpoint, I think it's great for anyone going into the business because you get to manage your own capacity a little more than you do on the traditional unitary side or with a boiler.

[00:46:31] Joseph Wood: I would compliment that with the Boston Standard side, it's not a lot of, there are people doing planned projects, including Ductless on that side, but a lot of it was reactive work where my heat went down, my boilers out, whatever it might be. you always did reach a period of the season where anything that was going to break broke. And people were like, just hanging on like just another month till I can shut this boiler off or whatever it was and the New England Ductless side because it was planned people were pushing along all year. So that was a really nice part of it.

[00:47:05] Eric Fitz: Very cool.

Laura, Joe, this has been awesome. Thank you so much. We've been ending the pod by asking folks for questions tactical recommendations. Imagine you're talking to someone who is starting a heat pump business on their own a book, an organization to be a part of whatever might be something pretty tactical that they can go and learn from what would you point people towards?

[00:47:28] Laura Wood: I think if you are looking and you have started a heat pump business and you're looking to grow and expand, the best thing you can do is get involved with ACCA's mixed groups and get involved with best practices with other contractors around the country that are trying to do the same thing you're doing.

Thanks, everybody. And share information and knowledge because in our industry, unfortunately, people aren't as likely to share information in the same geography. I, for one actually think we should, because there's enough work to go around and learning from each other is very valuable, but I understand that people aren't comfortable with that.

And so from that standpoint, I think the faster you can get involved with the best practice group, the faster you can learn and grow and scale and build a better organization.

[00:48:21] Joseph Wood: Clearly. I second that, 

[00:48:23] Ed Smith: you.

[00:48:24] Joseph Wood: My advice would be to make sure that you own and operate a sales based culture. And I think there's a misnomer with sales and people often think it's something you do to people. I think it should be something you do for people. If you ever violate that, you are doing it wrong. And there's a lot of companies out there that are hamstrung by employees who feel like offering a customer something more than just the bare minimum repair. Or bare minimum ductless or bare minimum anything is like taboo and it's the other way around you are in a solutions based business and you should be seeking to offer your customer solutions. It's their choice whether or not they buy. You don't need to put anyone to anything. So I think that is the thing that will drive your business forward.

And I don't just mean you're making more money. Literally, you're thinking about things that customers can benefit by owning and you're presenting them.

[00:49:20] Eric Fitz: Hey , that was amazing. That's great advice.

[00:49:24] Ed Smith: Joe and Laura, thank you so much for being on the heat pump podcast.

Thank you 

[00:49:31] Eric Fitz: thanks for listening to The Heat Pump Podcast. It is a production of Amply Energy. And just a reminder that the opinions voice, were those of our guests or us, depending on who was talking. If you like what you've heard and haven't subscribed, please subscribe in your favorite podcast platform. We'd love to hear from you.

So feel free to reach out. You can reach us once again at hello@amply.Energy. No .com, just .energy. Thanks a lot.