ESOPs, Challenge Coins, and Scaling Past 80M: David Jaeger

0:00 · Introduction to David Jaeger and Legacy Utility Group

David Jaeger:0:00
You know, I think the the hardest thing for me as an entrepreneur and growing a business was not all work is good work. And some of my dad had say and I'm like, you're just old, you don't know what you're talking about. And in reality, you have to learn that you can't do every job and not every job is good because you know, top line's great, but bottom line is is gonna be really what carries you forward.

Perryn Olson:0:22
Hey Dave, thanks for being the first guest on deconstructing construction or deconstruction growth. I'm already screwing up the name right off the bat. So thanks for being the first guest. obviously we're gonna be talking about growth in construction, hence the name deconstructing, but the big thing we'll be talking about is go overcoming these growth challenges. And I know you and I have a little history in the past. I've worked with you as a fractional CMO with your company legacy utility group. And I'd love you to kinda introduce yourself, just kind of let people know an audience who you are and what what legacy means. So

David Jaeger:0:51
Yeah, thanks for having me. my name's Dave Jayer. I am the CEO and founder of Legacy Utility Group. it we over or parent company of a few different entities that are focused in utility infrastructure services. So we run vacuum trucks and and clean and TV underground pipelines throughout California, all the way down to Texas, Oklahoma, Kansas right now.

Perryn Olson:1:17
Awesome. so told you we're gonna start with some rapid fire questions, g get the juices going. I'm really curious your first the f answer the first two. So hopefully the one two word answers. So what's your favorite piece of construction equipment?

1:23 · Rapid fire questions and favorite construction equipment

David Jaeger:1:32
Favorite piece of construction equipment. I would say the vacuum truck. I mean it's it's obvious because it's what we do, but it's it's actually such a universal tool and it's it's it's so un it's so cool because you just you never know what you're gonna get into when it feeds really well into my ADG.

Perryn Olson:1:50
Yes. I I was expecting that was my answer just based on what you guys do. And it was funny, they were digging up the yard next to me trying to fix a drain problem a couple weeks ago and I went out looking 'cause I was curious and they're like screaming like, Where's the damn vacuum truck? They were driving they started digging and they're like, No, we we can't, we're gonna hit some stuff and so what what's your favorite equip for construction equipment brand?

David Jaeger:2:20
Ooh, favorite brand? for for our back trucks, I I'm really happy with the the Ram Back and the Sika product, Super Equipment Company of America.

Perryn Olson:2:30
All right. and here's a f here's a kind of a little bit more loaded question. What's one lesson you learned the hard way?

2:39 · Learning why not all work is good work

David Jaeger:2:39
you know, I I think the the hardest thing for me as an entrepreneur and growing a business was not all work is good work. And some my dad had say and I'd be like, You're just old, you don't know what you're talking about. And in reality you have to learn that you can't do every job and not every job is good because you know, top line's great, but bottom line is is gonna be really what carries you forward.

Perryn Olson:3:03
that is a tough lesson for people to understand, especially when call

David Jaeger:3:06
It's really hard, especially because you know as a founder, when you're starting a company, I mean, all you you want every job and it every phone call and every job matters so much. And and you pray for that phone to ring and and and you know how important it can be. And then when you get the opportunity and you're like, This isn't what I was hoping it would be. It's it's it's painful. It really hurts.

Perryn Olson:3:28
It does. And I think I mean, we're kinda jumping ahead a little bit. I that's one of the things I see limiting companies the most is you know, in in traditional construction there's the the go no go of whether they want a project or not. Like you don't always have that l luxury 'cause you're a service company. So you are waiting for the phone to ring and like, Hey, can you come out now? Can you come out tomorrow? And you know, so but some of those clients that you're calling, they might be big names, but they're not good good partners, you know.

David Jaeger:3:53
Yeah, absolutely. And partnerships important and then leaning on those relationships and building those relationships and being able to work. But it's the great thing about construction too is it's still for for all the the world is so I I a lot of white collar and and letter of the law contracts and this this is how it's written and this is how it's gonna go. I feel like construction, you can still look across the table or or on a teams or have a good conversation with an individual, build a relationship and there's still that blue collar, a handshake matters and And and people will live their live up to their world for them or word for the most part. And so you can really, you know, I I I really have had limited in twenty years of doing this and I can d literally probably count the people that haven't lived up to their word on one hand, you know, and and you think about we do thousands of jobs a year. And and so the the the people in the industry are really, really what what it's about.

Perryn Olson:4:45
Yeah, I remember I had a client years ago, I was pretty early in my career, and he's like, I'm gonna sign this contract, I'm gonna shake your hand 'cause that means more. Like just old school, salt of the earth kind of guy, and and the handshake was pretty firm, to say the least. But it was just it was meant. And I remember it was actually a point where like the it was the relationship was going down. Like we weren't getting things done. I wasn't getting response from them on things and like I remember even mentally saying, like, I gave him my word, I shook his hand that we're gonna get this done. Like I was like I went a little extra and yeah, we we delivered the you know, something really impressive in the end. But like it was just interesting is like he flat out said, I'm gonna sign this contract, but I'm he stood up and w I'm gonna shake your hand and that means more to me. Like I I I wish do that. That's the things I actually kinda heard of like because I work naturally, like you and I've worked for months together, we never actually met in person. So that I don't have that, you know, handshake moment necessarily. So so I want to talk a little bit I kind of told you before the show, we'll kind of talk a little bit more past, present, future of growth and challenges and stuff. So obviously the past ones will be things that you've overcome. and I think you have a really interesting one is like you started the business with your dad. It wasn't your dad started the company, you joined in. So I'd love to hear kind of like w what were kind of the early days of that like of because I mean you introduced yourself. You're the founder, but I think a lot of people looking at the company probably assume you're the second gen owner, but you're not.

6:07 · Founding Legacy Utility Group with his father

David Jaeger:6:07
Yeah, no, I was I was in the industry actually. I grew up in construction. My dad was a traditional contractor. My grandfather was a contractor. so I'm a third gen contractor in California. Yeah. But my dad and my grandfather ran traditional underground companies that actually would be like a client for like the for some of the legacy companies. And I I had a different a different career path. I worked for somebody else. in in our industry and started to build a decent client list and a and a and a Rolodex. those of you that don't know what a Rolodex is, it's a list of of anything that you used to keep on your desk and not that I'm super old but it it you know everything used to not be stored in cell phones, right? my companies are older than cell phone or the the iPhone I could say. but but yeah so we used to keep you know I I started to build a good Rolodex of of clients and and I just never felt like I was really my vision and my compensation didn't really match up to where I worked and so I went on a vacation with my dad and we talked about going into business together and you know here we are fast forward it it just it just happened and clicked really quick and but early days it was, you know, we named the first the the the the the mothership, the the first entity NorCal, thinking that we would never leave Northern California. And It was one of those things where I I really wasn't thinking big enough and I was I was thinking like, okay, like let me just you know, my Rolodex is Northern California, let me jump around Northern California, bring on what clients will continue to use me and just do some work and then quickly within a couple of years expanded to Southern California and said it was like, Okay, now we've we've we've taken on all of California and I was down there for a long time and and working with your dad is is fun it it it creates different challenges. The conversations are different when your business partners and father son.

And it it definitely makes for interesting times and you know, good times and bad times. It's been fun. I've been lucky to to ride the wave with him, but it's it's definitely definitely a different different animal.

Perryn Olson:8:10
Yeah, it's definitely very unique. I don't I don't see that very often. I've actually seen one company where the grandson essentially pulled the grandfather out of retirement to be more of an advisor. But like the grandson was the founder still, but he was using that grandfather more as just that business advisor. but he was in the company they're very active, but but I haven't seen kind of the scenario you have and and you know, I knew that we probably talked about this in a minute, like what led to the ESOP as well. You're the but let's Let's kind of talk a little bit more about the past. Like you mentioned Southern California. Like like one of what's changed. You know, what worked then when you were smaller, when you were essentially in the Southern California team, maybe your dad was on the Northern California group. Like what worked then that's not didn't scale. How do you guys have grown now multi state, multiple more s more sites, things like that?

David Jaeger:8:58
yeah, I mean, there's a lot of things that change, but a lot of things stay the same too. So it's I always use this phrase that like you just add a zero or add a comma. in reality it I have the same issues that I had. you know, they're just a little bit bigger at times, right? So you know, oftentimes I talk to a person that maybe is self employed and they're just a you know, a one man show or they're maybe a handful of employees, three, four, five, and the a lot of the struggles are the same.

The the only thing that's different is this now I think on a longer term basis. you know, initially you're thinking week to week and you're worried about making payroll and those sort of things and taking your paycheck last. And, you know, granted to you know, luckily now we don't necessarily have that problem as as frequently. It's it's always a cash struggle, but it it's not is not not quite as dire as it was when you first started, right? When you're living off credit cards.

You know, but it's it's a little different when you now now I'm able to get a little bit of a viewpoint on on a quarter or an annual basis. And and I don't think when I was an operator at a smaller level I I really thought that far ahead. And some of that might have been my age. but I was really focused on week to week and month to month and like I just gotta make a truck payment. I gotta I gotta make you I gotta I gotta make payroll this month, I gotta make rent this month, all those sort of things.

As as the business starts to starts to roll and you you start to kinda get the snowball effect, it really starts to to gain some momentum. You can kinda go, Okay, like, you know, I have a certain amount of customers that are gonna continue to call me so I can at least make sure my my bills are paid and then let's let's work on trying to be as profitable as possible and do it the right way and make sure we're taking care of our team and safe, right?

8:59 · How operations and mindset shift as you scale

Perryn Olson:10:33
Yeah. Yeah. Work with a contractors your size of kind of see the risk is different. It's not are we risking the company anymore or risking paying myself? The risk becomes we know this is manageable. We can now afford to go, you know, do a new business unit, a new service line, a new market, and take it at calculated risk because you kind of know your base is there. And I know you guys though you've grown out of Hydrovac in other sectors and you know, so I want you why don't we talk about how do you make some of those decisions? I mean, are you looking for parallel moves? Are you looking for and then I'm trying not to answer the question for you as well? So like when you're looking at expansion, is it just copy and paste almost like a franchise model? Or is it and I know you guys aren't franchise, but like you you kinda copy pasting one site to another, or do you look yeah, and do you you've gone to other service lines? Like what make what is that conversation like with you and the leadership team?

David Jaeger:11:24
Yeah, no, that's a good question. So for us, I mean, the in an ideal world, sure, you know, the rubber stamp we call it or or copy and paste like you were alluding to is great. and I think that the the you strive to get there to where you can kind of just drop, you know, some equipment into a into a population and you know, and and say, Hey, we're gonna we're gonna go ahead and be in this market now and but you know, we're still growing and we're still not, you know, we're still privately funded. We're not, you know, venture capitalist backed or You you know, publicly traded or anything like that. So we have to be strategic in those opportunities and we have to identify, you know, if we're gonna go to a new market, we have to really pay attention to the right person and make sure we get the right person in the right seat and go, hey, these people or this person aligns with our with our vision, this person aligns with our core values. And this is a a market that we really f see as a is a good opportunity for us. Cause especially getting outside of California, I mean.

I feel confident in California because I've done everything in California that I that I I've always my career's been here, right? and so I look at it and I go, Okay, so we start looking to venture out with with the other entities that we have, right? And you start to look at other map dots and you go, Okay, like let's make sure we're servicing the map dots we have and doing a good job, you know, with what we've already got. Cause we did an acquisition last year of a company in the in in Dallas, as you know, Dallas, Kansas, Oklahoma.

And when we do that, you know, you're looking at making sure that that's a good fit as well and putting them through the vetting process. And they're also doing the same with us. But then you start looking at it and going, okay, we've got, you know, a a good, you know, foothold there. Now let's go ahead and start looking at what those other expansion dots look like. And when we're talking through that stuff, it's like, okay, is the population there? Is the work there? Is the opportunities there? And then it's like starting to look for individuals that maybe fit what we're trying to do and and want to be a part of something unique and fact that we're an eSOP and I think we're the only one or one of the only ones in our industry that that is an employee owned and you know, use that as an opportunity to try and find the right people.

Perryn Olson:13:26
I I think that's definitely an interesting leverage and also it wasn't came in after that acquisition was but I was helping with that transition team. you definitely was you could tell you were looking for right people, the right leaders in that space and and vice versa, which was great. And they were looking for that option as well, not just to do a VC buyout or so I wanna I wanna talk specifically about that. I'm glad you brought it up because I was a little hesitant because I didn't know how much you wanted share. I mean that's a big jump to go from California to Dallas Fort Worth.

Oklahoma, Kansas, where most contractors as they grow, they kinda go, All right, let's go to Nevada, let's go to Oregon. Like they're gonna go very close to home. What I understand talking to you and and Nick, like it what was a very specific move to almost de risk, you know, geographically. Is that what that was? Or like why Dallas Fort Worth?

13:45 · Geographic expansion and de-risking outside California

David Jaeger:14:13
Yeah, I mean, Dallas Fort Worth for a couple of reasons. one, it's there's a there's a lot of work going on in in Dallas and in the in that general area. and Texas is a is a state that we feel is, you know, advantageous to us for growth and and very business minded and business forward. love California, love working here, never leaving here. This is this is home. but in we have we have done a little bit of work in Nevada. We had an office in Reno at one point.

We've done some work in Vegas. We've done some work in Oregon. We're licensed in other states surrounding California. But it, you know, for us, the the the biggest, the biggest jump was was was really getting into Dallas. And then our president, Nick, who you alluded to earlier, lives in the Dallas area. So it was a natural fit. and then kind of pieced together the the ECS acquisition and it was like, okay, well, if we're gonna take this chance, like that's that's best and makes the most sense from a geographic standpoint. have anybody in Vegas or Phoenix or Denver or any of those other larger s the large cities that are in between. Doesn't mean we won't get there at some point, but the time being, it it made sense to to, like you said, de-risk outside of California, be, you know, being that we can, you know, kind of operate in another state and and see what that market brings and and give us some opportunities outside of California and some talent outside of California. just to kind of get some other perspectives and and see, you know, kind of branch out a little bit and And see what we can find.

Perryn Olson:15:43
Yeah, and I've been impressed with how much you've you know allowed him to have a voice within the company. It wasn't, you know, we're the mothership, we tell you what to do. Like you've brought him in as a you know a leader, and really let him do that. I was really impressed. And that's kind of what I want to talk a little bit. It was like the two things I've seen with you guys, you know, seeing kind of an inside view was you're very strong in EOS, lean on that, you know, entrepreneur entrepreneur operating system, and then also just adding key people to that executive room. I mean, You probably double the people naming the leadership team this past year, right?

16:16 · Using EOS and executive leadership to manage multi-state growth

David Jaeger:16:16
Yeah, roughly. It's it it's definitely a lot bigger than it was. and and I think there's a lot to that, right? So going back to the EOS point, I mean EOS is really good at at taking us as you know, as a founder led company, going back to when me and my dad started it, oftentimes we found ourselves working on the same thing separately and and then lacking visibility throughout the whole company. And then on top of it, my dad and I, I mean, love us to death, but We're not sophisticated individuals we' who started a company with a with a you know a giant playbook for for a business and had all these you know metrics and KPIs and all this data and all this kind of stuff. It was more of just a hey, you know, we we know how to make money with some equipment and we know how to do the work, so let's go to work. And and so EOS allowed us to kind of bring something in that that brought in our data, showed us some visibility into as we grew the other operations and and and what was going on that didn't make us have to necessarily get down in the weeds and go talk to individuals and it was it was right there in front of us and we could have a weekly meeting and say, hey, you know, we're not hitting revenue here or we are we're killing it here. This guy's doing great or we're having a a trend that says this and we need to identify that. So getting all that stuff in front of you and getting visibility as you especially as you continue to grow and you get, you know, two locations, five locations, ten locations. without getting in the truck and driving physically to those locations and spending a week or a month in those locations, you know, it's hard with sometimes you're depending on a lot of word of mouth or you're waiting to the end of the month for financials to come out. This gives you a live data and this gives you a live, you know, perspective of what's going on and allows you to move a little quicker.

Perryn Olson:18:00
Yeah. And that that's the biggest issue I see is is so she I mean, you can be a construction company working out of your truck and then eventually you get the office and the office manager and then accounting, like and you start building, but the further you get away from the construction, because that's what you're good at generally at beginning, is you know, swinging the hammer essentially. it's how do you continue to grow that and it's it and then you always feel detached. Like it's it's interesting of I I've seen some good family businesses in construction where yeah, people do start in a field or you mentioned working at a competitor or another company for a while to get a different perspective and like kind of force some of that, but then they work their way up. But that is one of the biggest issues I see is just from that founder person is they go from I used to know everything, every project, every square foot of anything I've ever touched, to you know, every invoice, every employee, and now you're like, I don't even know some of our best clients. And how do you do that? I know you you and I've talked like, let's talk a little like I know you you guys are kind of doing a roadshow as well with the leadership team as well as you've grown and can talk about what's the importance of that. Like what was the catalyst for that roadshow?

19:05 · Internal communication and keeping field teams connected

David Jaeger:19:05
Yeah. I mean, no, so you're you're hitting the nail on the head. There's like we, you know, call letting go of the vine and all those sort of things that you have to do as a leader and you have to start trusting your team. And even goes back to your previous question about the EOS and the transparency and the growth of the leadership room. you know, like we were talking about the the the transparency of EOS, like there's also that transparency with your team and and allowing them to kind of see the finances, see the good, see the bad and Yeah. And in so many years before, like my dad's generation and and before him were very guarded with everything. And I feel like I find that people want to know and they want to be educated and they and and if you have the right people in the room, they're they're gonna get in the trenches with you and do those sort of things. And so no to your point, to your question about you know, kind of going on the road or or or you know getting to getting in in there and and driving conversation with your team and and kind of being around the like you call it the roadshow. I think it's important to get in front of your team as much as you can and and communicate. I we've done some internal surveys and some of the feedback was, you know, a lack of communication or feeling like you know in the dark. And it's it's unique in our industry because and I'm sure a lot of service contractors can relate when you have like what you talked about earlier, kind of little franchises, even though we're not really franchised.

Yeah. You have like, you know, you know, the the corporate office or the we have a corporate office, regional corporate office is we have one in Sacramento, one in Dallas. But within those, you also have smaller locations and then kind of like a franchise. And then those those individual franchises have individuals that go out just one man teams by themselves and go work for a lot of different co contractors on individual job sites. So they're like, they're almost like a little you know, franchise themselves going out to work for these other contractors. And so they they they sometimes feel like they're left out. And for us and our our communications team right now is trying to figure out the connective tissue to in order to create that communication so that everybody feels like they know what's going on as it's happening. And so we're trying to start bridging those gaps. And some of that is just like what you and I had a conversation about earlier where I'm kind of sending out a weekly message and just talking to people about maybe things that I'm going through or the company's going through.

David Jaeger:21:19
Or good or bad, or things I'm seeing or you know, events I might have went to and things I might have heard or things I witnessed from being out on jobs, like but our team in general, getting out in front of the teams, attending safety meetings, attending dinners or lunches or events with the team and showing what, you know, like having relationships and not just, you know, being focused on end results and and being like, Hey, you know, this this is, you know, having conversations because we're not meeting the the the you know the expectation or having conversations 'cause we're exceeding expectations. Let's just go out and just be normal two human beings and and go to an event together and and you know, whether it's a golf tournament or whatever, and and talk and and just put the human side in in front of everything, right? And and start realizing we're all just, you know, doing our job and try to do the best we can and and let's try and you know move the company forward together collectively. And I think the best thing to do with that is, you know, maybe get away from the keyboard, get away from the computer and get in front of people and and face to face.

Perryn Olson:22:14
And it's it's more of that long term relationship versus the short term to get this tap done. and I think, yeah, what we're talking about is is one of those biggest issues that we're seeing in c I see in construction because communications, internal communications sometimes fits in the marketing, sometimes it's running side by side it. because we're dealing with job sites, they're not at the main office. I mean, at the very least, we got job sites, we got remote locations. We we have people that a lot times were not on Teams or Slack, they're not even on company email.

They're on a company phones, like how do you communicate with these people? Then you can even add in the language barrier in some cases. so it's it's this communication gap that's kind of going through. And I've seen different companies trying to solve it different ways. And I think one of the best ones is what you guys are doing is just the leaders are going to them and just sharing like and that's a good way. You're I know you're big on the core values and the culture. And I think you being out there and letting them see see you and talk to you, like that's one of the best ways to share and maintain company culture.

And making sure those core values are and I I mean if you're okay talking about the challenge coins.

23:17 · Building core values and culture with military challenge coins

David Jaeger:23:17
Yeah, absolutely. So no, it's it's funny you bring that up 'cause oftentimes like you know, as I transitioned into the the the CEO role, oftentimes I'm like, Well, nobody cares. Like we don't like they they don't care. I had this bet with a former HR person, like that I used to work here and and it was like have lunch with the boss and I was like, Nobody's gonna want that. Like nobody gives a crap about me. Like they don't care. Like they just wanna do their job and go home. And but but it's funny like you say that because now I get like when I when I show up and stuff, like It it I it's positive feedback and good conversation and and I and and people are appreciative of, you know, be being open with my life and and having conversations with them about like the struggles that I have as a husband and dad and or, you know, 'cause I share everything on my weekly stuff that I share with the team and it's internal, it's not external, but it's it's letting them know that, you know, there's a human over here and we're all just just trying to do our job and And but yeah, the challenge coins are are unique things. So basically we have three core values. It's think big or as we call it leveling up, integrity, you know, just doing the right thing and then teamwork. And the the the program was adopted. I was lucky enough to take a class through a leadership course through UConn, which is an agency out here in California that that we work with. And they they offered a a c a class for me that was taught by a Navy SEAL. And at the end of the two days that we worked with this Navy SEAL that gave us a military challenge coin. And I it was really cool. I I it still sits on my desk. And I thought it was really neat. And and and so I was like, man, I gotta figure out how to bring that into our culture, that feeling and then that that accomplishment I had just for doing that. And and so I I started, you know, brainstorming and came up with this idea that if we could get people to do things that were examples of the core values, that we would then present them with a challenge coin.

And so what we did is we took the the challen the coins or the the challenge, sorry, the core values, put them on a coin, and then if people do things that exemplify the the the core values, then they would win that and they would have to be nominated. So we've had people save people's lives. It doesn't always necessarily have to be some some end result bottom line thing. And we've had people save people's lives, we've had people maybe help put out a fire, we've had people

David Jaeger:25:36
Call 911 that's, you know, that helped, or maybe you administer CPR, or I mean it you can have all these extreme examples that of things that happen, but being that we're so spread out, I alluded to earlier these miniature franchises. Oftentimes people in San Diego, for example, don't know what a guy does in Sacramento. And it'd be really cool if we could share that across the company.

And so we thought about that and we was like, Okay, well let's get these coins, let's get out in front of these individuals. Let's present them to people who do these amazing things and then share it company wide. And then we've given we have like a internal employee recognition platform and it allows us to reward people with points and those points will be able to be used to buy things, right? So everything from company swag to an airplane ticket if they want to go somewhere with their family.

And so these people earn these points over for core value things, or it could be as something as simple as just an anniversary or a birthday or a shout out, you know, from another coworker and say, Hey, hey, man, you've been really kicking butt at work this week. And I just want to recognize you for helping me out as as your leader. You know, I appreciate what you're doing and what you bring to the table, or the consistency that you show and all these sort of things, and the way you're a good example. And so here's fifty points. can you, you know, here you here you go. Thank you. Right.

And it's those small things that the the pat on the back 'cause oftentimes we find that people aren't necessarily so happy or motivated by, you know, an incremental raise or a you know, a coli increase and those sort of things. They're great. They appreciate it. But the reality is people want recognition. They wanna be they wanna be they wanna be seen and they wanna be they wanna know that what they're doing makes a difference and Even if it's small things and and just being consistent and showing up on the day to day or week to week, you know, people deserve to be recognized for those things and and you know, doing the best that they can.

Perryn Olson:27:26
Well think especially in your business, consistency is a big deal. You know, somebody consistently showing up is a big aspect what you guys need. And that's I mean, it's interesting to see how big companies adopt that. And like one of the companies I generally look to is even Disney, is like they they have awards for employees, they have separate name tags for certain employees at one. And one of the guys that was getting kind of popular for a while, like on social media for just his consistency was this like photographer at Hollywood Studios.

He's just super friendly and nice and like I mean he's older. He's literally like sits on a chair half the day because he can't stand as a photographer all day. But like he's the most recognized employee at Disney because he's the one who gets the most kudos from f you know, the guest and other employees and all of it. Like he's not like people walk up to him now, they like know him because now he's getting a little bit of fame on social media and all, which is which of course he's so humble and doesn't want. But like and then and no, you g you guys have talked too of like, you know, how do you recognize past the challenge coins or, you know. even we talked about hard hat stickers and things like that for different recognitions of different leaders or awards or mentors or things like that. So I think it's really cool what you guys are doing. So I kind of want to transition a little bit. We've been talking kind of past and present. Let's go into a little more the future of like like what are you worried as CEO like isn't going to scale? Like what's going to break if you double the company in the next few years?

28:45 · Preserving company culture and personal connections while doubling in size

David Jaeger:28:45
Yeah, I think I think the the the biggest thing is as we grow is continuing to build the culture and and and maintain the aspect of you know, i i it's been tough to go from zero to, you know, eighty million or whatever roughly revenue we're gonna do this year and maintain that family feel to a certain aspect to where I know as many people as I can and our team knows as many people and we we get to have interactions with as many people.

I worry that as we double or if we double and double, right? The double and double again, right? It it are we gonna be able to maintain that and I and there's always gonna be an aspect of as you grow, you're going to corporatize a little bit. And as we expand across other states, and I'm only you know, our leadership team is only eight people roughly, give or take right now. And, you know, we can only, you know, get out and see as many as we can. But how do we how do we maintain that and and communicate so that people feel like they're a part of the family and a part of the team and And the ESOF is a great vehicle for that, but the reality is is like the the face to face or the the handshake that we kind of talked about at the beginning or or just the the the the the in-person time is so important and and it's I think it's lacking in a lot of a lot of teams and as you get bigger that that can be lost. And I I worry about that is the CEO and culture being a big part of my job duty. is really really focusing on making sure that, you know, I try to get to know people as much as I can and not just shake their hand and not just like, I know that person's name. No, I I I like ask them a question or ask them how they're doing and, you know, get get to know where they're from or some have have genuine conversations and just be two humans interacting versus, you know, just checking a box. Hey, I know that person's name. I shook that hand, shook that hand, shook that hand. And that you know, as we continue to grow, I think that can be that can be a little bit concerning.

Perryn Olson:30:34
Yeah, 'cause I've I've been to a company picnic years ago for a pretty big contractor, multi generation, and like they gave out they were giving out all the anniversary awards and like a lot of the one year, even the three year anniversary awards, like they're shaking the president's hand, it was like nice to meet you was kind of the attitude. You know, now as you got into the ten twenty, there was some recognition, but you got to the guys who are like twenty five, thirty years, you're you know, there's familiarity, like in it part of it is 'cause some of those guys they were on the crew back when they started in the family business and they were working their way up. And But like that's something I was noticing was like they weren't making the rounds. They weren't, you know, hitting getting to the job sites. They were very much working in the the company. I think that's one of the challenges when you you mentioned corporatizing the company is like you get very driven on those KPIs. And I think this potentially the danger of EOS because you're focused on those KPIs is you're forgetting like, you know, I need to go see these people because you're so focused on getting this task done or driving this KPI and especially as you're building in the kind of middle management, which is really what you're doing.

They're focused on their KPIs and they very s let things slip because it's hard to quantify the relationship versus you know, the spreadsheet.

David Jaeger:31:44
Well, it's hard too. Like you don't want to be overly like we have a business to run and everybody has a job to do and I understand that. but on the same point, we're all human and there's an aspect of it where, there it you know, sometimes it's a season of life. Sometimes maybe somebody's having a tough ninety days or a tough quarter and you know, you get to know those individuals, you find out really what's going on in your life and and maybe maybe there's something there that, you know, mm and and not everybody that works here, you know, was meant to work here forever and that's okay too. I understand that. This isn't for everybody and I get that. But there there's also things that, you know, people maybe are going through some stuff and there's something to be said that, you know, sticking with people or people sticking with it, you know, through a tough time and and being able to see it out the other side, you know. And and so that's why I think it's important to humanize each other and really, you know, get to know the individual before you, you know, you know, just start judging people based on an result. Sometimes the result isn't necessarily indicative of of what what they're actually capable of.

Perryn Olson:32:40
Yeah. No, I'd I had an employee I worked with years ago and he was feast or famine, I would say, with good or bad. He was just he he had some personal demons as we would call it. And I I made a comment like, why don't we what why do we deal with this? And they're just like he's saved the day, he's jumped on a few grenades, but and I'm like, Okay, why does he stay with us if we're asking him to jump our grenades? They're like, We literally paid for his heart surgery, like as a company. Like it was he he's never leaving.

Like he knows we took care of him. We we did more than the medical leave. He's he feels indebted to us. And that's why when he is healthy and strong, he kind of works his ass off, but then he it relapses. So like that was a big thing we were working with him on. It was like maintaining a little bit more consistency and not trying to be the hero every day. And but it was like this idea. But I'm like, how did you even know that? Like that was but that was a CEO that knew his team. And It was he he knew what was going on. He's like, I didn't know initially, I just knew something was off. And I took him to lunch and just like, hey man, you're not yourself. What's going on? And he mentioned his heart tonight. He's so he's he encouraged them to go get our you know, go get a test. They even paid for like a special t like test and they paid for part of the surgery because it went under his insurance. Like it it it was an interesting relationship, and this guy had been the company over ten years at you know, at this point, but all that happened like in year two. Like it was It was really interesting to see, but it was just it took a leader to kind of have a, you know, human to human conversation with somebody. And look, he did it the right way. He didn't call out in a meeting. He didn't, you know, to interrogate at all. He took him to lunch and like, hey, what's going on? Like, and it it's interesting. It was just sometimes those little things add up, you know, or you can catch something little. And I think I mean that's even a w I guess what is something you even did in the past that you're kinda glad you did now? Like that you're bigger.

And you're continuing to grow and you like what is that kind of that foundation you put in years ago that's now you're like, Man, I'm glad we did that. Any thoughts on that?

David Jaeger:34:37
Yeah. That's a good question. That's a deep question.

Perryn Olson:34:42
It's not even on my cheat sheet. I just came up with that one, so

David Jaeger:34:45
yeah, I think I think the biggest thing for me is is I've always tried to not not really burn bridges or or eliminate relationships. And you just you you just you you never know. And I and I've said this before about other individuals that we've competed against and how they maybe reacted. or acted towards me upon meeting me, once they figured out who I was in in terms of the industry and stuff like that that are competitors and the way they kinda and I and I always thought like you you never know when we're gonna need each other, right? Or we never know we're gonna we're gonna be in the, you know, I always say be in the desert and I would be the one holding the canteen, you know? And and so it's like and you just never know. And so like when we were smaller, I would go I had no problem going to competitors' offices and just going and saying hi to the leader and And or running into at an event or something and saying hi to and and just saying, Hey, you know, I you know, respect what you do and and I just, you know, if you ever if there's ever an issue or you ever have a a job that maybe you can't do and you need some help, I would love to be, you know, somebody that we could be allies and work together. And some guys were fantastic and and I can I can I g I I can give you names but and then some were maybe maybe the other way and and took it a little too hard and a little serious and you know got a little little ruffled feathers. And I just feel like the the industry is small. It's it's there's a lot there. There's a the market's big but the industry's small and there's no reason to to just make enemies and go around. There's there's opportunities for everybody. And I think that you can you you know you can always find a a a way to to befriend each other like and and not necessarily doesn't mean we have to love each other and and root for each other, but at the same point, there's no point to root against each other. It is what it is. You go do a good job and I hope it works out for you.

So I'm glad I never really made in the enemies. I mean, people might not like me, but I don't I never felt like I went out purposely to make enemies or

Perryn Olson:36:39
Yeah. No, it's it's one of the interesting things about this whole industry is some days you I and it took me a while to even wrap my head around this, is there's days you're competing, there's days you're you're joint venturing, there's days you're prime and their sub and vice versa. And like I've seen that happen with the same two companies in the same week. Like just they had f like three or four different relationships going on on different projects that they needed each other, and then the other times they're competing and you and sometimes even suppliers, vendors turn into competitors one day. Like I've talking to a company the other day that was a it's a trucking transportation company and they've started a heavy silicon. I'm like, Aren't there your clients on the trucking side? Like, yeah, we've pissed off a few people. But but there's a few that actually like it because now we understand where they're coming from. Like we we we understand them better. So you know I it's it was a lesson I learned early in my career. One of my mentors told me early, it was like don't burn bridges, man. It's I'm very glad I have it. So I've I've let other people burn them for me. But myself

David Jaeger:37:39
We every year we we so the ADC, the Association of General Contractors, does a gala out here in in San Francisco every year and and we've gone I think for the last few years. And one year I went and I was sitting next to somebody's wife and they they worked from the tech industry and she said she leaned over and she's like, This this event's great. She's like it's so so different from what we do in tech. Tech is so secretive and You would never collaborate to be really be tent intentionally in the same room as your competition. Whereas it's weird for me to look across at these tables in the con construction world, all these tables, the these guys might be bidding jobs against each other and they're over there having a beer talking about a job that they did and are open about it. And and that's that's the kind of cool thing I think about construction in general for the most part is you can you you know, you can sit there and know that, you know, hey, you got that job and I got that job and You know, some of the guys have worked for you and they worked for this guy and all that kind of stuff and

Perryn Olson:38:36
Yeah, there's definitely some movement between companies sometimes. If you could pick up the phone and call a competitor like, Hey, can you tell me about Mike? You know, is y you know, I know he worked for you two jobs ago or whatever, like is he legit? And you know, so it's yeah, I I think you you're doing that the right way. let me leave you kind of with one last question. Like what are you trying to solve now before it becomes a bigger problem as you grow?

39:02 · Streamlining tech and leveraging AI to drive future efficiency

David Jaeger:39:02
Tech, our tech, you know, it's construction tech is is behind in general. but you look around the world and the catchphrase everywhere is AI, right? and and and it's not the I don't think there's a plug and play real right now immediately. I'm sure there's somebody that's gonna see this that maybe disagrees with me, but there's there's not we're we're a unique animal in in how we operate as a service contractor. And finding that that, you know right now to this point we've had to throw people at a tech problem. And I think that there are efficiencies that can be made up to to help people with tech. And and so whether it's utilizing AI, right now we're in the the middle of starting to launch an initiative internally with with Claude on AI to where our team can utilize Claude and instead of having some outside person build an AI chat or a bot for us, We're actually allowing the the internal we're gonna allow our internal teams to have their own AIs and build it out themselves, pick up tools and efficiencies. We're just still building out the the the the guardrails for what that looks like the framework for it. So that way people aren't uploading like individual social security operations and all this kind of stuff in there. Yes. But also is underutilized and really can be a tool overall just to pick up things because you know I think we have like twenty five or thirty different logins for different things from everything from fleet and safety to HR and payroll and accounting and all these different things that people need to log in for in order just to do their job. So if we could pick up efficiencies in tech and allow people the things a little more lined and make the job a little easier for individuals, I think be a massive win in terms of culture and I mean, some of the things I talked about earlier where I was talking about the the core values and the points and I had like three different logins just to do the different things that I was talking about. And if we start making those things easier on individuals, I think it would it would make things a lot better.

Perryn Olson:41:12
No, I didn't I've seen a lot of constructive company building up better dashboards 'cause AI is now helping integrate where there wasn't integrations before. And I even my own company is a fraction of those. I'd I had more fractal CMOs. Like I'm building up my AI piece 'cause like I want to keep each client, you know, walled off, but there's some things that like we're solving with each client that I need to be able to push to like a what I'm calling like a lessons learned section or a framework section and research and The other thing is as I'm doing research, I want to be able to push that back to the clients of like how does this connect the dots and relate. So yeah, it's it's an interesting game right now with or just where we live in the world of and as long as I'm hearing contractors say they're using AI, I'm usually pretty happy regardless of where they're at. So it's the ones that are I call it sticking their head in the sand and thinking it's gonna go away. I think that's the wrong mentality when it comes to anything tech, especially AI, because you're just gonna get obliterated in the f near future. Yeah. Yep. So Cool. Dale, it's great to catch up with you and we've learned some things as well. you know I really appreciate you being our first guest on Deconstructing Growth and we'll share with you soon when the podcast is with this episode's out.

David Jaeger:42:20
Thanks, Barry.