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29 minute read
In this episode, Ed Smith and Eric Fitz, co-founders of Amply Energy, speak with Christopher Nichols, COO of HomeWorks Energy, about the challenges and strategies behind scaling an HVAC business. Chris shares how HomeWorks Energy grew from a small operation to a 750 person company generating $150 million in revenue all while maintaining a strong focus on energy efficiency, heat pumps, and customer service.
Chris explains how to build a talent machine in the HVAC industry, the importance of training, and the role of technology in streamlining operations. He also shares key lessons from his own career journey, including the mistakes and successes that shaped HomeWorks into the thriving company it is today.
Whether you're in HVAC, home energy, or looking to scale a service-based business, This episode is full of valuable tips on growth, leadership, and operational efficiency.
Expect to Learn
- How HomeWorks' focus on "energy efficiency simplified" helped drive its rapid expansion.
- How critical it was to “crack the code on marketing” over and over as the company grew
- The critical role of training in the HVAC industry and why HomeWorks created its own hands-on training program.
- How HomeWorks grew to 750+ employees and $150M revenue without outside investment.
- Lessons learned from building an HVAC team and why expertise matters.
- How HomeWorks leverages software to streamline solution-design, quoting, scoping, and quality control.
- Why HomeWorks still gets 30% of its leads from direct mail in a digital-first world.
- When to partner vs. bring services in-house and why sometimes you have to do it yourself.
- Why factoring in callback costs upfront can improve service quality and team morale.
- The importance of respecting HVAC technicians' expertise when scaling a business.
- Why you can’t be everything to everyone and should focus on mastering a few key services.
In Today’s Episode:
[01:13] - Introduction
[03:22] - Understanding HomeWorks & Its Mission
[05:48] - Chris Nichols’ Career Path & Early Influences
[09:13] - Scaling HomeWorks & Building a Talent Machine
[14:07] - Adding HVAC Services & Overcoming Initial Challenges
[10:54] - The Framework for Scaling Multiple Service Lines
[22:11] - Cracking the Code on Marketing & Lead Generation
[26:33] - Leveraging Technology to Scale Skilled Labor
[31:42] - Streamlining Sales & Comfort Advisor Roles
[32:42] - Key Advice for HVAC Entrepreneurs
[36:49] - The Future of HomeWorks & Industry Expansion
[40:53] - Closing Thoughts & Final Advice
Connect with Christopher Nichols:
Transcript:
[00:00:00] Chris Nichols: That first year I came in, did $1.2 million in revenue, and this year we just did 154. Ten years later. It's an interesting story with a lot of highs and a lot of lows, I would say. Some of the things we did that really drove, that was just one Max Berg, the CEO at the time. He really cracked the code on marketing and made us think about scaling this thing sooner rather than later. The next critical step is that we looked at the landscape. We looked at the industry and just said, look like the people are not here. So I would say that we built a talent machine.
[00:00:42] Ed Smith: Quick public service announcement. We just put out our first book. It's our top ten heat pump sales tips that we've gotten from the experts we've had on this podcast. It's totally free, so if you want it, click the link in the show.
[00:00:55] Ed Smith: Notes to get your copy. Okay, on to the show. Hi, and welcome to the Heat Pump podcast. I'm Ed Smith.
[00:01:02] Eric Fitz: I'm Eric Fitz. We are co-founders of AMP energy.
[00:01:04] Ed Smith: So today for our guest we have Chris Nichols. Chris, you're COO of homeworks.
[00:01:09] Chris Nichols: Hello. Yes. Thanks for having me on.
[00:01:12] Ed Smith: Thank you for joining us. We want to get more into you, but homeworks is a pretty unique organization. There aren't ones of its size and scale in many states. So would you just tell us a little bit about homeworks first and then we'll and then we'll dig more into you and Boomerang. Back to homeworks.
[00:01:29] Chris Nichols: Is way more interesting than I am. So let's start there. No. Yeah. It's a unique organization and it's evolved over time and really took off really when we articulated our mission, which is energy efficiency simplified. We had just gotten ourselves into the industry, understood the lay of the land and really saw that, hey, there's all these different product lines out there, there's all these different potential solutions, there's all these different rebates and incentives and a whole host of Rois that are bolted onto all those solutions. But then also so many things that we do help in so many other ways. Comfort, building, durability, etc., etc.. And so like, how do we package this all together and make this easy for a homeowner or a renter or a landlord to adopt? How do we drive that? And so we felt like that was going to be our role in the ecosystem. And so what that really means is we take on all that complexity. So the organization has all the front line folks that you think of. So we have home energy specialists and comfort advisors and weatherization installers and HVAC service on. We also have account management. We have marketing. We have approvals teams and a lot of back end QC functionality. And yeah, I think we're up to 700, 750 folks. And I really couldn't be prouder of the team.
[00:02:59] Ed Smith: 750 is a giant organization. And what states do you guys operate in?
[00:03:02] Chris Nichols: Well, currently in Massachusetts, Connecticut and Rhode Island. Wow.
[00:03:07] Ed Smith: So that's a lot of people in states with decent population, but they're not giant states. And if you had and you've got a wide array of services like a typical job for homeworks, like what would that look like?
[00:03:23] Chris Nichols: The vast majority of our customers come through the Home Energy Assessment channel, and from there we put together a plan for the customer that can go in a myriad of different ways. But that's where it all starts. And I would say that customer journey, our customer satisfaction levels are really high, and that's really due to the work that we've put into our training, our home energy specialists, because every house that you walk into, especially in New England, is different and presents new challenges and making sure we got an ace team up front is really critical to driving that.
[00:04:01] Eric Fitz: So can you share a little more detail, like when you say home energy assessment, people think of home energy audits. What does that look like and what are the typical things that you're identifying for a residential project like that?
[00:04:15] Chris Nichols: It looks a little different in different geographies because we play like everybody else in the utility space, where they dictate this sort of core assessment that you're going to perform the energy model, specific recommendations, presenting specific, rebates and incentives. And then in addition to that, what we found is that's generally not enough. Like we need to add more value to these assessments. And so we spent a lot of time working with our customers on health and safety, which is, to be fair, a part of the core service. We take that above and beyond in a lot of different ways, and also getting folks ready for at least thinking about heat pumps and electrification and, and different solutions that just go above and beyond what the utility offers. And that can be solar, that can be windows, it can be different remediation types.
[00:05:07] Ed Smith: So super helpful. That is a unique organization, especially at that size. You all are doing a lot of different stuff in a lot of different places with a lot of people. So we want to dig more into that, and that's what we'll spend the bulk of our time. But I do want to talk a little bit about you folks always want to know who we're chatting about. So if you would tell us about you and your career trajectory to getting to the point where you're CEO of a 750 person company doing a lot of good for a lot of homeowners.
[00:05:34] Chris Nichols: Yeah, yeah. And I think like a lot of employees at homeworks, I got out of college and I wanted to do something that would have some sort of positive impact. I didn't really know what that looked like, and I bounced around a little bit, but I ended up landing with a terrific organization, CIT center for Ecological Technology. They're out in western Massachusetts, and it was a really transformative experience. I don't know if you guys know Marc Newey, who played. He was a really important role there. On the operations side, he now oversees airtight, which is a net zero consulting firm. So if any of the listeners are in the market, I would encourage you to reach out. He was a huge influence on me, and so I learned a ton from him and I was doing hers ratings, which is more detailed energy model. I was doing some energy assessments and and I got into managing the field a little bit there and but I made the, I guess, the life choice to move to Boston. And that was right when NeXTSTEP living was really coming into their own. And it was just a no brainer to join those guys. And so I worked with them for a couple of years. I was doing field work, and,I was working specifically on the weatherization side of the business, getting their crews trained up to how to meet program guidelines and standards. And that was great. And but it was that organization scaled so fast, so quickly.
[00:07:09] Chris Nichols: I was feeling a little lost. And so I was doing some networking and and connected with Max and Martin, the then CEO and CEO of homeworks. And they were it was a really interesting meeting. First off, I think there were like 22 or 23 years old, super young, super bright, very ambitious. So I felt like I could learn a lot from these guys. And then also really clear they did not know how to deliver the service yet. Right? So I felt, hey, I can come in and a ton of value out of the gate and let's see where this thing goes. And so I stepped in to start as a really as a player coach. So I was managing a small team of home energy specialists and performing a bunch of assessments myself and helping out on the install side and answering the phones and whatever it took. We thought we'd made it big when we rented out our first 500 square foot office space. We were able to get ourselves out of the warehouse, so those were great times. And then I would just say from there, my career trajectory just really scaled with homeworks. And to talk about my career is really to talk about homework. And,I think that first year I came in, I think we did like $1.2 million in revenue. And, and this year we just did 154. Ten years later. And the stories, it's an interesting story with a lot of highs and a lot of lows.
[00:08:36] Chris Nichols: I would say some of the things we did that really drove that was just one max of Eggerberg, the CEO at the time. He really cracked the code on marketing, and it made us think about the business very differently, and it made us really think about scaling this thing sooner rather than later. And so once we nailed that, the next critical step is that we looked at the landscape. We looked at the industry and just said, look like the people are not here. Like you cannot go out and get a degree from maybe you can't now, but at least then you couldn't get a degree in residential energy efficiency. There were just a handful of weatherization contractors out there doing work. And so we really I would say, I guess I would call it I would say that we built a talent machine. And so we brought in our own recruiters and we developed our own training team. We have a training facility out in the center of the state right now that has a residential home sitting in a warehouse. And every employee that comes in, depending on what their role is, they can come into a training that lasts up to six weeks, and it's a huge investment. But there really was no other way to do it. And so I think that was really important. And then lastly, along the way, we felt a everything we're doing. We're not going to do anything with it right now, but let's get all the data we can on where these customers homes.
[00:10:03] Chris Nichols: And so we just kept accumulating and accumulating data. And then then once we were able to take a breath, like once we got that talent machine up and running and folks getting trained up and getting out in the field, we were able to really start to digest and synthesize that data, figure out what our customers wanted, what they didn't want, where we should be spending our time, where our pricing was too low, where it was too high, etc., etc.. So and then for the purpose of this podcast, I would say that another critical, a critical step in our progress was really starting an HVAC department, and we built an HVAC department de novo. And if I knew then what I know now, I would have done it very differently. And I would say that there's a few things that came out of that. And one was a lot of failure up front. And but in really personal failure on that end. I think one of the that HVAC department has made me such a better leader in a lot of ways, because when we scaled up the weatherization side of the business, those that didn't realize it at the time, but we were making changes so quickly and the team was just so flexible, right. Because we're pulling folks from all different industries and they'd come in, we'd get them skilled up on weatherization work, and they're off and running, and we'd come in, we'd say, hey, we want to do it this way.
[00:11:29] Chris Nichols: And they've only been doing this for four months. So if you want to change your process, right, like they that sounds great to them. That's fine. And then, stepping into the HVAC world, I just was not prepared upfront for the cultural differences, which are really these are people who have dedicated their lives to a craft. And so they have real opinions and they have real insight on how you should operate. And we were just pushing and they were pushing back. And I think a couple of things came out of that. One is what they were offering was actually really insightful when it comes to a skill trade, I think listening to the boots on the ground is so much more critical because there's so much more nuance, and then two, it's just made me a better leader overall. I think it's really comes back to the just the idea of listening to your team, making sure everybody feels heard. Getting everybody on board and getting a consensus and then moving forward. So yeah, my first time through, Max and Martin handed me the keys and I think six months later they took him back and they probably should have taken him back earlier. And then I think, I don't know, maybe six, 12 months after that, we tried again and it went much better the second time around. So yeah, so that first couple of years we like we lost money. It was really challenging.
[00:12:49] Ed Smith: Tons of on HVAC in particular.
[00:12:52] Chris Nichols: Yeah, Yeah. A lot of callbacks. And we I think to our credit, I think we really, as a leadership team dug in and made it a core competency. And from that point on, I think we really started to take off. And we're we're in a better place now, thankfully. But yeah, it was a really it was both the most challenging and rewarding point in my career.
[00:13:13] Eric Fitz: And just to give us a little more sense, can you like Broad Brush? What was the timeline from you started off focused really on weatherization. At what point did you add HVAC service line? And today, again, super high level, like what percentage of your revenue is HVAC versus weatherization versus something else that you're offering? Yeah.
[00:13:31] Chris Nichols: So we're let's see. We when I came into the organization, it was January 2014, and we were doing just hcas and,in weatherization and energy audits. What's that?
[00:13:47] Ed Smith: Home energy.
[00:13:47] Chris Nichols: Audits. Home energy audits.
[00:13:48] Ed Smith: Yeah. Home weatherization does.
[00:13:50] Chris Nichols: The heat pump. And actually. Yeah.
[00:13:52] Ed Smith: When you joined in 2014, how many people were there?
[00:13:55] Chris Nichols: I think I was the ninth guy in the door.
[00:13:57] Ed Smith: You're the ninth guy in the door. You're doing 1.2 million then, and just ten years later, you have 150 XT in revenue. And I can't do that math. I guess 75 XT in people. So now you're 750 people in 150 million in revenue.
[00:14:10] Chris Nichols: You're better at math than I am. But that sounds sounds directionally.
[00:14:14] Ed Smith: Right directionally. Right. Okay. Sorry, but back to Eric's questions, which were great. So you're 2014. You're just doing acres and weatherization.
[00:14:22] Chris Nichols: Yeah, yeah. Home energy assessments.
[00:14:25] Ed Smith: Home energy assessments, not audits. Okay. Sorry, sorry.
[00:14:27] Chris Nichols: Thank you. And and we just started gathering data like, hey, what do our customers want? And we took a, like, a lean approach. And first we just started like, basically understanding. Hey, look like how many customers would actually hear out a comfort advisor. And then we would just sell off leads to, to partners. We had. And then we brought in a sales team and then we brought on an install team and then a service team. And that process started in like 2015, but we really didn't have an HVAC team until 2017 or 2018. And then we brought in a few different rounds of leadership. Right? Hiring is challenging in that space. There's only so many skilled HVAC leaders to go around. And so we cycled through a few and, and to a lot of their credit, honestly, like they really moved the needle. And then the business scales up and now it's a completely different skill set. And so we went through a couple rounds of that. And so 2022 we did 18 million in HVAC. We did 30, 32 and 23. And we did 54 last year. And then we did maybe 80 million on the weatherization and home energy assessment side. And then the remainder was like additional services Is mold remediation. Remediation, vermiculite, things like that.
[00:15:56] Ed Smith: And is your HVAC business all HVAC or just pumps?
[00:16:00] Chris Nichols: It's somewhere between. We also provide gas solutions, natural gas solutions for customers. Just given the geography that we're in and the current cost of electricity, we still think that for certain customers, gas is at least a part of the right solution. And my home I purchased five years ago, I had an older gas boiler in there. I put in a heat pump and so I set my switchover temp a little bit lower. But yeah, I still have an integration and I still heat with gas on the coldest night.
[00:16:31] Ed Smith: So Chris, you mentioned some of the the things you've learned, and you said a line that was super intriguing to me, which is if I knew then what I knew today, I would have done HVAC like quite a bit differently. If you were going to start a de novo HVAC department today, what would you do? How would you do it? Okay.
[00:16:56] Eric Fitz: Yeah.
[00:16:57] Chris Nichols: I think what we didn't appreciate at the time, we just didn't know, was just how nuanced and how technical the trade is. And so if I were going to if we were going to do it over right now, we would just we'd save up, we'd break open our piggy banks and we'd do a lot of interviewing and we'd find like a really small, bright team of HVAC specialists and bring them in to start the business.
[00:17:22] Ed Smith: And would that be do you think that would be an acquisition or that would be a higher?
[00:17:25] Chris Nichols: I think I've heard a term like an acqui hire. I think if you're doing an acquisition, it's a larger organization. I think that can work. And but I also think that they then come with their own culture and they come with their own set of expectations and that sort of thing versus if you're able to acquire or acquire a smaller team that is aligned with your leadership values and the company's overall goals, and I think you have a much better chance of succeeding there.
[00:17:54] Ed Smith: So great.
[00:17:54] Chris Nichols: Answer.
[00:17:54] Eric Fitz: Yeah. And I feel like embedded in your what you just said. And you correct me if I'm speaking for you incorrectly. It sounds like you're saying you would just be more humble and say, hey, we don't have this core competency. We need to hire great people that are already experts in this, and we need to learn from them and help them grow into this business as opposed to like, hey, we're going to hire you. We're going to tell you what to do kind of thing. Is that what you're saying?
[00:18:19] Chris Nichols: Yeah, I think there's probably some of this is humble. I think a lot of it was actually just ignorant how I think it was just we really didn't understand the nuances. Not that we felt like we knew the nuances, but we already knew how to drive that. Like that difference. But but either way, I think the outcome is the same. Yeah.
[00:18:36] Eric Fitz: Got it. You mentioned NeXTSTEP living. There's a lot of folks that probably don't know that story. I don't think we need to get into a great detail. I'll just say that you alluded to this, that NeXTSTEP living scaled very quickly and ended up not really working out for a bunch of different reasons, and some is no longer an operating business. How at home works have you scale up your business so quickly, so successfully across multiple services weatherization, HVAC, adding in knob and tube remediation? It's a non-trivial thing to include as well as part of your business. How are you doing this? How did you.
[00:19:11] Chris Nichols: Yeah,I think we take the same playbook with each service line, which is first we're going to set up a referral process. We're going to build a network in the case of remediation of electricians. And we're going to make the referrals. We're going to kick them over to them, and we're going to learn something. And if we feel like what we learned is that, hey, we can sell and scope this then and maybe capture more of that margin, then we're going to do that and then maybe we decide that we stop there, which is currently what we've done. We have a very we have three electricians right now. They're primarily replacing bath fans at this point. It's a long non-sequitur, but so then we'll sell on scope and we'll capture some additional margin there. And then if we feel like, hey, we can provide or we can be like a differentiator in this market, we can bring something that others can't, then we're going to bring this in-house and we're going to do this internally. Soup to nuts. And they're different service lines that we offer right now that are full service all the way through. And then there are others where we just simply refer out to partners.
[00:20:17] Eric Fitz: Nice. That makes a ton of sense to partner. First, see if it's a space you really want to go further into. And maybe you do and maybe you don't. Maybe it's great to just partner for a long time and your partners are happy. You're happy. Your end customers are happy. Yeah. Very interesting.
[00:20:31] Chris Nichols: Yeah. And sometimes a couple of circumstances we found we just can't find good partners. So we're going to have to do this ourselves. Right. So there's, there's a lot that goes into that. Yeah.
[00:20:41] Eric Fitz: Okay.
[00:20:42] Ed Smith: And on that question about scale up, you mentioned before that Max cracked the code on marketing and I know a lot of entrepreneurs in the HVAC space were At-X, who then go out on their own, and suddenly the technical aptitude is amazing. But then there's this question of like, how do I drive leads? How do I drive leads cost effectively? What are marketing channels? All this stuff. So I'm just curious, how did he crack the code? What did that look like for you guys?
[00:21:10] Chris Nichols: It started with the three of us and a few others. Literally handwriting letters. Yeah, we'd send out, like canned postcards and that kind of thing. And then it was just iteration. So we sent out a canned postcard, and then from there, we sent out a canned postcard with a handwritten signature on it. And then we'd send a letter. And it's just this iterative process. And early on, we were to the point where we had like a 2% response rate on direct mail. Everybody's playing in this digital pay per click space. And for us, we just found that was just so much more effective. And then as time has gone on, we've gotten more and more sophisticated. I think now direct mail is probably like 30% of our marketing. Now it's really driving. What we're doing is talent partnership work, which is challenging for somebody who's obviously just getting into the business. And frankly, it's a really challenging time with all this private equity money. I don't know where we would be if we had to, like if we had to like scrap and claw for digital leads right now, that'd be really challenging. I was talking to a friend of a friend who's in private equity. They work in home services, and they have some HVAC contractors that are putting up 20% of their revenue in marketing. That's just really challenging to compete with. And so we've been pretty fortunate by being able to take this energy efficiency path and start working with towns. And we're doing tabling events where at your farmer's market or places like that, where we're able to build more immediate trust and credibility with folks where we have your town logo on our vest, or maybe we send you a mailer and it has your mayor signature on it, for instance. So yeah, we've been really fortunate there.
[00:22:51] Ed Smith: I was reaching for I thought I had it right here, but somewhere on my desk is the last letter I got from homeworks. So you guys are still doing the direct mail. And it was very thoughtful. Like I have to say, it was very well done to the private equity point. We had Mike Cappuccio on the pod and he's become a good friend. When he sold to Private Equity, I forget if it was five x or ten x, but they it was five times or ten times his marketing budget. Immediately it was like the first thing they put him on Servicetitan that was number 15X ten x the marketing budget. That was number two. But I think there's a your comments in there would sound a little disheartening, but I think there's like a real truth there, which is your optimal channel is always going to change depending on what year and moment you're in and what your organization looks like. I think at any Eric and I go through this right now with like, our cold calling was what I was doing when before ACA approval and and just it changes and evolves over time. So there's a real you've got to have a it sounds like Max had a passion for it and you've got to have a passion for it, and then you've always got to be experimenting with new stuff as the market shifts around you. Because, yeah, pay per click right now, like that's a rough way to get leads.
[00:24:01] Chris Nichols: Yeah. And I would say if you want to talk about the real all stars at homeworks, there's a couple folks that really come to mind. And one is Chief Marketing Officer Bill Graham. He came from Homeserve, and he's really just revolutionized the way that we look at marketing and think about it and measure it. And early on, when we started to see this initial response rate, 2% response rate, which for direct mail is like incredible, by the way. And then like over time, you just start seeing it come down and come down. And we were concerned, we were trying to figure out like, hey, what? How do we evolve? What does this look like? And Bill came in and pretty immediately implemented some solutions that got us right back on track.
[00:24:47] Ed Smith: And that's.
[00:24:48] Eric Fitz: Cool. It's amazing. Yeah, I think it's all parts of the business need to continuously evolve, especially a really technical trade like HVAC. The technology's constantly changing. The tools are changing, homes are changing. You've got to stay up on on all those pieces. And just like we're talking about. Same thing on other parts of the business, whether that's marketing, sales process, the tools, technologies are all changing and got to be dynamic. You got to be listening to how the market's shifting and be able to respond to it.
[00:25:17] Chris Nichols: Yeah. Absolutely. Absolutely.
[00:25:19] Ed Smith: So Chris, on our when we first met we were talking about homework to scale up. And you said a line that has stuck with me since then, which is as you guys are scaling, one of the unlocks you had was that you found a way to let your most seasoned team members be both at their desks and in the customer's homes at the same time. Tell us what you meant by that and what it looks like, because that does sound like a bit of magic. That would be quite powerful.
[00:25:48] Chris Nichols: It's definitely not magic. But yeah, I think it was, as you're looking at, hey, here's where we are, here's where we're going. What are going to be the potential bottlenecks on the HVAC side? It is talent and aptitude. And I think everybody that probably comes on here would tell you the same thing. And so we thought about this and we said hey look like how do we overcome this. And so we did this a few different ways. And so one way we looked at some positions that interact with the customer along their journey and said, hey, is there a way that we could implement some software to make their job easier and to not require them to be a 20 year seasoned veteran? And so I'd like to think we did that on the scoping side of the business on the quoting tool. And then I also would like to think we did that on the install side of the business and on the QC side. And so maybe to separate those two firstly we a really scrappy way I think we built like a almost like a poor man's amplifier to say the truth. So what we did, I'll take credit for this. I really put a lot of my own blood, sweat and tears into this was to say, hey, how do I turn this coding tool into something where it's not about coding equipment, it's about inputting the conditions of the home.
[00:27:04] Chris Nichols: And then this tool gives you the equipment that you should be installing. And so we got that pretty far along the way. It's still not perfect, but it's pretty good. And it's allowed us to bring in people, put them who have some adjacent skill set to HVAC or to home services, and maybe they have, but maybe they have more of a sales background. It allows those types of folks to come into the industry and make an impact. And so to the comment, the person that I was thinking of was to your comment was or a couple people, but one was Seamus Carey, who he's been at home for, I don't know, probably too long, probably should have moved on at some point, but he's a really bright mind. And so we we have him sitting in a QC role where when our comfort advisors go out to the house, they input all these conditions as this cooling tool. They take a ton of pictures, a ton of videos. They get a ton of measurements. You take all that data. We try to package that up and we put it on Sheamus's desk. And then we say, Sheamus, based on what you're seeing here, is this the right scope? And he does his own review.
[00:28:12] Chris Nichols: And I think early on when we first rolled out this cooling tool, I think we had about 30% fail rate or something like that. And now we're in the single digits. And and that's what. So take Sheamus career. You take him from being a comfort advisor, and you put him in a position to where he can be this comfort advisor liaison on every single job that we quote. And that's how I think you leverage folks talents. And that allows the organization to scale and grow and not be bottlenecked by that. So he's certainly one he's been critical to the to success. And then two. And there's a few different folks here, but one person I would want to call out is Mario Valente, who actually started with us as a kid. he was I think he was 18, like fresh out of high school as a weatherization installer. But it was clear this guy was destined for bigger and better things. And as the HVAC department opened up, we brought him in. And then he learned how to install heat pumps. And now he sits in a place post install where we have all of our installers they're installing on the field.
[00:29:17] Chris Nichols: And we use this incredible technology called FaceTime. Right. We we just we get him on site while they're on there. He has a checklist on his side. The installer has a checklist on their side. They're going through their checklist together to make sure everything got done. And and that checklist has gone through a million iterations. In the first time we rolled that thing out, it was awful. And I would say, hey, like, if you're going to try this, do not get discouraged. Your first attempts at this are going to be awful. You just have to keep doing it. Every time you identify a foul point, you just get it onto the checklist and you move forward and you do the next job. And then yeah, so so that's happening on site. And then they also do we leverage like a really basic software company Cam has like a it has an installer checklist on there with pictures and the input, their gauge readings and their line set lengths and all that stuff. And then we have somebody on the back end who's doing the same thing Shamus is doing on the quote, but they're looking at the install. And so, so again, like we just take those folks who have those skill sets and you just get them to touch every job.
[00:30:21] Ed Smith: That's awesome.
[00:30:22] Eric Fitz: Yeah. Super cool. That's it's interesting too, because thinking on the sort of the comfort advisor side, that also means you're probably have shifted your sales process from stepping away from like, the kitchen table close. Got someone who's collecting information, building a relationship with the homeowner, but then it's going back to somebody else in the office. You're trying to figure out the scope of work, and then you're coming back to the homeowner. Is that right?
[00:30:44] Chris Nichols: No. Well, we're we will definitely close the deal at the kitchen table if, we will present proposals right then and there. We are very upfront with our customers in terms of what our process is. And hey, if you're one of the single digit percent of folks that need a revision, we got this guy in the back end. He's going to take a look and we'll be back in touch. So.
[00:31:04] Eric Fitz: Okay. Got it. So you're setting expectations like, hey, we're pretty sure this is dialed in, but maybe we'll need to go a size down or size up depending on the details that we're going to analyze about the loads or the exact configuration of your home. Exactly. Yeah. Got it. Okay. Very cool.
[00:31:22] Ed Smith: Because this has been awesome. We've hit on a bunch of stuff. If we've got heat pump entrepreneur listening, is there anything that you think was essential to homework success that we haven't touched on? Because I think most people would hear like 750 people, 150 million, like it's a wild HVAC, HVAC success story, especially without private equity involved. Anything else that we haven't touched on?
[00:31:45] Chris Nichols: No.I think there might be a point or two worth reiterating, which is we talked about this a little bit, but I would just one is look like you're going to step into this space. Don't be afraid to try new things. A bunch of them are going to fail and talked about a couple isolated incidents, but I would layer that over everything that you're doing. And I think this space is going to get really competitive. And we're going to start to see pressure. You're going to see that like pricing elasticity shrink up a little bit. And so we got to get more efficient right. You got to get more efficient. And you can leverage some really basic technology to save on windshield time, save on customer facing time, and be able to preserve your margins, even while maybe that your price point is coming down. So I would say that's one piece. And then also I would say that it's part of your pricing strategy. Make sure that you're building in the core if you're especially if you're scaling, I think it's different if, your growth is maybe in the single digits, but,build in the cost of the callback, right.
[00:33:00] Chris Nichols: And so we talked through some like what I happen to think are really great processes. But given the fact that we're still bringing on new installers, we're still building out our subcontractor network, like our callback rate is still higher than I want it to be. And as that, I don't expect us to double again. And as our the baby fall into like a 10 to 15% growth rate over the next few years. As that happens, our callback rate will drop, and it will be that pool of money that we set aside for that callback will shrink. But if you're scaling like you have to just accept that the callback is going to happen. And if you have the money in there, you are going to have the biggest smile on your face when you go back to solve that customer's problem. And I think the place you don't want to be is you don't want to have these, like, financial burdens that make it really hard to carve out time in your technician's day to go back and resolve those issues.
[00:33:55] Eric Fitz: That's amazing, because that creates a space for learning for your business and for your teams. And also, when you're sending that person back out in the field, they're like, maybe they're not necessarily excited about it, but they're at least like, hey, this is part of my job. We expected some of this to happen. We're going to go out there and we're going to learn, and we're going to make sure the customer is happy. Instead of like going into it being like, shit, this is not going to be profitable. I need to make this like this, visit as short as possible. I need to do as little as possible. It's the opposite. And that's that's amazing from a brand building perspective. And for your team, it's that's so cool that you figured that piece out.
[00:34:32] Chris Nichols: Yeah. And that was good advice as you were saying that I, I guess maybe that would be the other thing is throughout your entire process, just building in feedback loops in a systematic, organized, operational way. Every job has a scope review, every callback that came in is reviewed by your install teams, etc. etc..
[00:34:53] Eric Fitz: You brought up these different I'll call them SOPs, standard operating procedures over and over again. Maybe that's what you were just about to say. It is. And it's like, I think a lot of people think, all right, we're going to finally write down the SOP and then we'll be done. And it's going to be like locked in for the next several years. But it's like just the same. Yeah, it's it's the standard operating procedure we're using today. And it's going to evolve over time. And that's that's so important.
[00:35:17] Chris Nichols: Yeah, it's going to evolve over time. And if you're not living the SOP, like writing it down is one thing. But if you're not verifying the execution of the SOP, then what was the point anyway? Right? So getting that thing down on paper is just the start.
[00:35:30] Ed Smith: That was exactly what I was going to say, Eric. So I'm going to move us on to the next, next topic. Chris, what is the future look like for homeworks.
[00:35:40] Chris Nichols: Well, I'm glad. I'm glad you asked about homework specifically, because the broader future, I have no idea. But for homeworks, I think for us we love the energy efficiency space. We love this space where we can partner with towns, we can deliver energy assessments, and we can bolt on the services that we choose to those assessments, which just really drives value and keeps our marketing costs down, etc., etc.. And so we expect over the next five years that we're going to drive more value by geographic expansion than by driving more and more value in our current geographies. The challenge there is,how many of us are out there. And so these home performance contractors were far and few between. And the Home Comfort Performance contest a national conference every year. And all these folks come out and, you're reminded that there's an ecosystem here and that I think there's folks that that want to partner up. And so I think that's the goal is to find those folks, find folks that are like minded, mission driven, and hey, let's see if we can,come together and form Voltron.
[00:36:48] Eric Fitz: Nice. And maybe you're referring to the Building Performance Association's national conference. Yes. Which is coming.
[00:36:55] Chris Nichols: Up.
[00:36:56] Eric Fitz: It'll be in New Orleans this year.
[00:37:00] Chris Nichols: So.
[00:37:00] Eric Fitz: Yes. Yeah.
[00:37:01] Chris Nichols: We'll see you there. We're holding a contractor happy hour.
[00:37:07] Eric Fitz: Excellent.
[00:37:07] Chris Nichols: Please come by.
[00:37:09] Eric Fitz: Sounds good.
[00:37:10] Ed Smith: We're doing, we're doing a talk on Manuel S, which will also be,we'll do on,one of these pods coming up to. Or. I actually think we've hit on our final question a couple times already. Eric. So do you have a final one?
[00:37:22] Eric Fitz: I feel like there's so many interesting insights you've shared around growing a business, around developing skills, around operating a business. I guess I would just say, is there anything else, particularly for someone who's starting out, that you would say, like, don't do this thing. Like, are there key lessons that that came out of your own experience as when you were small and trying to figure things out, like, what can I avoid? What can I avoid?
[00:37:49] Chris Nichols: Yeah, I would say especially now, you can't be everything to everybody. Simplify your product offering. There are so many good solutions out there. You can solve the same problem 15 different ways and become an expert at that solution that you're offering. And hey, you won't capture everybody, but you were never going to capture everybody anyway, right? So nice. And that was that was definitely a hiccup for homeworks early on.
[00:38:16] Ed Smith: I feel like you deliver that directly to Eric and I. That's like the thing we struggle with every every customer. We don't convert. We're like, what should we be for that person? But it's yeah, you can't be all things to all people. Chris, this was awesome. You told a great story. Thank you for all of that.
[00:38:31] Chris Nichols: Yeah. No, it was a fantastic connecting with you guys. And I also I hadn't taken a peek, really, at what you guys were doing when we first chatted. I talked to some folks and perused your product a little bit, and you guys offer a fantastic product. You guys should be plugging that on these podcast episodes.
[00:38:48] Ed Smith: We specifically try not to. We have found three years of working on amplify that the industry and people in it have been so shockingly generous to us. We would have died a thousand deaths if I couldn't, if I didn't rattle off the number of people who have helped us on the way. That's I don't know, we just wanted to, like, keep learning ourselves and then share that out. So anyway, that's thank you for saying that. It's why we don't do it here. And yeah, we're just frankly, we're just psyched to have the conversation and have it be an excuse to get on the phone with you for 90 minutes. If I had said, like, can I get a 90 minutes on your calendar, you would have said.
[00:39:27] Ed Smith: But the podcast just lets us like rap for a while, so we really we're glad you're here.
[00:39:30] Chris Nichols: Yeah, yeah, yeah. And I think your product is really was like the dream that I was trying to build right with this. Like off the shelf saw called The Forms on Fire. It's like one of those low code. No code? Yeah, like it serves its purpose. But it seems like you guys are, like, on the right track to really just drive all in one solution. And once you guys get there, give us a call.
[00:39:57] Ed Smith: Thank you so much for joining.
[00:39:58] Chris Nichols: It's such a pleasure. Thanks, guys.
[00:40:00] Eric Fitz: Yeah, it was so much fun. Thanks, Chris.
[00:40:05] Eric Fitz: Thanks for listening to the Hip Hop podcast. It is a production of Amply Energy. And just a reminder that the opinions voiced 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 on 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 thanks a lot.
