In business, the odds are against us: the failure rate for startups ranges from 75 percent to as high as 90 percent. For every runaway success story, there are a few entrepreneurs wondering what went so wrong.
I know because I’ve been there. At 24, I’d already been in business for five years hauling junk. We had 11 employees and were pulling in a half-million dollars a year. But I was out of ideas to grow the business, felt I had the wrong team, and just wasn’t having fun anymore. I was ready to throw in the towel.
I’m glad I didn’t. Fast-forward 20 years and 1-800-GOT-JUNK? has hundreds of locations around the world. More than 3,000 people work for our franchise partners, and we have over 300 full-time at our head office in Vancouver. What I didn’t realize all those years ago was that I was a lot closer to succeeding than I suspected. I just needed a few tweaks to take my business from ordinary to exceptional.
Here’s how 1-800-GOT-JUNK? made that leap, and how your company can too.
People come first
When I was starting out, I hired people I knew—the ones I had easiest access to or who responded quickest to a call-out. While it seemed like the best solution at the time, failing to consider cultural alignment ended up being a huge mistake.
You’re probably thinking, “A junk removal company doesn’t have culture.” But that was the problem: At first, mine didn’t. I hired people to drive trucks and load junk and—not surprisingly—I ended up with a bunch of guys in it for a paycheck, not partners committed to growing the business with me.
A look at more than 100 startup failures found that “not having the right team” accounted for almost a quarter of all flops. Some entrepreneurs think that having the right people is the biggest influencer on future success. My friend Tony Hsieh of Zappos offers employees who don’t fit in a $2,000 bonus to quit, purely so that his team is made up of people he believes in.
With the future of my company in mind, I took the hardest step I’d made to that point: letting my entire team of 11 go, and rebuilding my business from the ground up. The second time around, I invested in hiring the right people. It wasn’t easy—junk removal isn’t an obvious magnet for the best and brightest. My first challenge was convincing people this wasn’t about junk, but about creating a new industry and doing something revolutionary.
Once candidates were in the door, I focused less on resumes and more on personality. I wanted self-starters with big dreams, who showed a “spark” when I shared my vision. The best culture fits were people I could see myself inviting to my house and having a beer with, so I developed a hiring hack: the backyard barbecue test. If a candidate is someone I could see having a burger on my porch, they’re probably a good culture fit. It’s a test I still use today.
When it comes to dreams, size does matter
Napster founder Sean Parker is now famous for saying, “A million dollars isn’t cool. You know what’s cool? A billion dollars.”
In the tech world, this isn’t an incendiary statement—dreaming big is par for the course. These days, every entrepreneur styles himself or herself an innovator or revolutionary, promising to overhaul an industry and generate mountains of cash. There’s much more to a business than just a bottom line, but I think the underlying idea of setting ambitious goals—even impossible ones—is important for entrepreneurs in any sector.
By 1997, I had been in the junk business for nearly a decade, but I couldn’t figure out how to expand. I was rubbing shoulders with other successful CEOs, but I was also constantly second-guessing myself and comparing my own modest success to others’ home runs. I felt like an imposter at best, and an imminent failure at worst.
Eventually I realized that I had to stop stacking my business against other peoples’ and to start envisioning it the way I wanted. That critical moment happened one afternoon on the dock of my parent’s cottage. I silenced my inner critic, closed my eyes and dreamt about what the future could look like, without blockers or limits imposed by me or anyone else. Here’s what I saw: My business wasn’t just in one city anymore; instead, it had spread to the top 30 cities in North America. I called this my “painted picture.”
Making that dream a reality was less straightforward, of course. I had to find a way to expand beyond Vancouver. Franchising was the obvious choice, but everyone I consulted said it couldn’t be done. Anyone with a truck and a few strong guys could start a junk hauling business—why would they pay to be associated with my company?
If my dream was ever going to get off the ground, I had to find a way to stand out from the pack. One advantage I knew I could offer was professionalism. In an industry with an unsavory reputation, I wanted to create the FedEx of junk removal. I insisted on clean, shiny trucks; friendly, uniformed drivers; on-time service; and upfront pricing.
Meeting those requirements put a serious strain on my resources, but it wasn’t something that just any guy with a pickup truck could offer. My other differentiator was less visible but just as important: Backend systems. I invested in a centralized customer service centre to handle inquiries by phone and email faster and more efficiently than anyone else. This data pipeline, though costly to set up, truly set us apart from anyone else in the industry.