Digital Social Hour
CEO Reveals: Why Smart Leaders Are Often The Problem | Tommy Mello DSH #893
Sat, 16 Nov
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CEO Reveals: Smart Leaders Can Be the Problem! 🤯 Tommy Mello shares game-changing insights on leadership, business growth, and why being the smartest in the room isn't always best. 🚀 Tune in now for a candid conversation packed with valuable insights on: • Why smart leaders can hinder growth • The importance of investing in yourself • How to build a team that challenges you Tommy drops truth bombs on scaling businesses, the power of personal brands, and why money isn't everything. Don't miss out on this eye-opening episode that'll make you rethink leadership! 🔥 Join the conversation and learn how to elevate your business game. Whether you're an aspiring entrepreneur or seasoned CEO, this episode is a must-watch! 💼 Watch now and subscribe for more insider secrets. Hit that subscribe button and stay tuned for more game-changing conversations on the Digital Social Hour with Sean Kelly! 🎙️ #LeadershipTips #BusinessGrowth #DigitalSocialHour #TommyMello #EntrepreneurshipAdvice #businesscoaching #ceoinsights #howtodealwithleadershipchallenges #businessautomation #projectmanagement CHAPTERS: 00:00 - Intro 01:25 - Overhead Door Company 02:16 - Hiring the Right People 06:51 - Scorecards 17:57 - Starting Your Personal Brand 19:37 - Overcoming Limiting Beliefs 22:17 - Health and Wealth Connection 24:57 - Business Growth Through Debt 28:05 - Reading Two Books a Month 30:28 - Exploring Spirituality 34:38 - Achieving True Happiness 36:05 - Benefits of Buying a House 37:40 - Understanding Government Assistance 39:50 - Importance of Mental Health 42:50 - The Value of Winning 44:19 - Insights on the Olympics 44:50 - Concept of Meritocracy 46:02 - Challenges in Hiring 47:01 - Finding Tommy 47:49 - Outro APPLY TO BE ON THE PODCAST: https://www.digitalsocialhour.com/application BUSINESS INQUIRIES/SPONSORS: [email protected] GUEST: Tommy Mello https://www.instagram.com/officialtommymello/ https://linktr.ee/realtommymello https://www.tiktok.com/@officialtommymello LISTEN ON: Apple Podcasts: https://podcasts.apple.com/us/podcast/digital-social-hour/id1676846015 Spotify: https://open.spotify.com/show/5Jn7LXarRlI8Hc0GtTn759 Sean Kelly Instagram: https://www.instagram.com/seanmikekelly/ Learn more about your ad choices. Visit podcastchoices.com/adchoices
Chapter 1: Why can smart leaders hinder business growth?
You should be investing in yourself and find the best. You want people that want to go where you haven't been, especially in the C-suite and the VP level. And a lot of times when they're learning with you, it's actually going to really slow down growth. At one of your direct reports, that means you're the smartest one in the room. That's a problem.
You should have bringing out people that are teaching you and reporting to you and doing the R&D, giving you three options and telling you this is the best option based on my experience. All right, guys, Tommy Mello here today. Thanks for coming on, man. Sad to be here. Yeah, you're on a little PR tour, I noticed.
You know, I'm out here for the Morgan Wallen. I really love Morgan Wallen, but just what I learned from Dan Martell is kill 10 birds with one stone. So, yeah, he's a beast. He's doing great. You know, he's learned a lot from a lot of people. I call it R&D, rip off, and duplicate. So, yeah.
Yeah, you could apply his teachings to any industry. That's what I like about what he teaches. Yeah. Because he did it with software. Yeah, he did it with SAS Academy. Now he's doing it with muscles and working out. But what I like about him is he actually lives it. He actually is like... he actually has his personal time. He's a good dad and a good husband.
Yeah, because a lot of these coaches are just all in on business, but they don't have the full 360. No, you look behind the curtains. A lot of these guys are not that happy. Yeah, money won't do that. You need more than just money. It's true. And you're speaking from experience. I mean, you've got over 700 employees now with the garage door business.
Yeah, you know, we got one other big acquisition coming this year. I think we'll do about $270 million. But I used to really get excited about revenue. And then I learned revenues for vanity, profits for sanity. So we're at 25% of the bottom line. So that's what I'm prouder about. Yeah, at that level, that's unheard of.
Yeah, a lot of things. We got a lot of economies of scale. I think when you grow this size, a lot of people still have things siloed. We've got one call center. Any one of our techs can go to any market, 40 markets, same price book, same truck, same tools, same shirts. It's like, well, that doesn't work in our market.
Well, we've taken the top 10% of our guys, sent them to every market to prove that it's possible. We're in America. Yeah.
Absolutely. So I was listening to one of my favorite shows yesterday, Diary of a CEO. And the CEO of Netflix was on there. And he was explaining how the people that start the company aren't necessarily the ones that are good for the growth when you're in the later stages. So do you have the same team that you started with?
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Chapter 2: What are the benefits of investing in yourself?
Yeah, it's a tough dichotomy because you want to be loyal to those that were there early, but at the same time, you want to grow fast.
Well, it doesn't mean they got to get kicked off the bus. I had this meeting with my COO recently. I said, I think you're going to be better off as their chief revenue officer. Oh, so you just moved him around? I haven't moved him yet, but I'm letting him kind of decide because I said, you've got 10 direct reports. You're spending all your time. So you're the bottleneck now.
Chapter 3: How can you overcome limiting beliefs?
The visionary is rarely the bottleneck, but a lot of times the visionary doesn't dream big enough. It doesn't have the right people, doesn't have the integrators. And that's when they get stuck. Like, I feel like I'm just starting out. Literally, I feel like this is the first day I'm in the business. You're doing hundreds of millions in revenue.
Yeah, I mean, it's a lot, but there's so much room to grow. We're only doing garage doors. We could get into hot water heaters in the garage. We could get into water purification. We could get into storage. We could get into a floor. We'd match your garage to the front door. There's three ways to make money. More clients, which is marketing.
You charge your clients more, which is other services that they want. And the third one is more frequency. And that's why we sell service agreements. And we want to be there out there once a year to lubricate, adjust and everything on the door. Right.
Chapter 4: What is the connection between health and wealth?
And if they're loyal to us after a few years, they end up replacing the door and wanting more from us because we show up when we say we will with a smile and build a relationship. Have you not scaled other services because you wanted to master just garage doors first?
Chapter 5: How can debt lead to business growth?
Yeah, you know, a lot of people say, man, I could do this, this, this. I'm really, really like racehorses wear blinders. They want to win the race. A lot of people say yes to everything. And they're a jack of all trades, a master of none. So I chose instead of owning my audience, I'm going to own my industry. And they both work. I'm really happy the route I went.
Going back in time, I probably went HVAC or roofing. a much larger average ticket. We run 20,000 jobs a month. Holy crap. And I'm here. That's the beautiful thing. I'm going to be out of town most of the next two months. I'm still on meetings, but the business, the bigger it gets, the easier it runs. I don't have to worry about guys showing up sober.
Everything marketing, there's three types of CEOs. The one that started out as a CFO that's just obsessed with the numbers. The next one is operations, the COO mind that loves to get involved in operations. The next one is the marketing CEO. I'm by far like, how do I market to get great clients and how do I market to get great people?
And that's not in the unemployment land, an Indeed Glassdoor Zip Recruiter or Craigslist or Monster or LinkedIn. It's going out and actually finding people and recruiting them. Old school. Yeah, I like people with jobs. I like people that already chose their career and they say, I could build a better one under this company. Interesting. Another thing you do with employees is scorecards.
Chapter 6: Why is reading important for leaders?
Yeah, big into scorecards. That's really cool because a lot of people don't track their employee output.
I mean, KPIs are what I live by, but a scorecard lets them know how they're doing. You know, if you go look at the back of a baseball card, I apply everything to sports. You'll notice that in this conversation. It's like, who's winning? And who should trade me? Like, who's got the highest conversion rate? Who's got the highest booking rate? Who's the best dispatcher dispatching for dollars?
And what are they doing? So you could study the best and then you could share it with everybody because no one loses if everybody else does their job better. Like if one guy gets a better average ticket because he offers better things, it doesn't hurt the other player. And I don't think people understand that a lot of people are selfish about what like what's making them win. Right.
And that's not the culture we have anyone. Yeah, it's easy to get selfish, want to get promoted, want to make more money than your coworkers.
I'd rather lift somebody up that's willing to share, but not everybody in sales is meant for management. I learned that at the Harvard about 10 years ago. What happened there? I took some of my top people, and I'm like, you need to manage other people, but they're kind of lone survivors. They're very good at generating revenue, but they're not great at listening to people. and coaching them.
They want to find their perfect alike person. Sometimes they're extroverts, and you've got to be able to train an introvert. Sometimes you've got to be very patient. Teachers are special. And then I do always say those that can't make it in the real world, usually they teach, especially when it comes to social media.
There's a guy that flipped houses for two years, and now all of a sudden he's a VRBO expert or something. You know, and then they don't make it in the real world. They brag about how they made $10 million, which was revenue, not profit. They sold, you know, 20 houses.
And then they decided to build a course around it because if they were that good, I'll be honest, I make all my money in my garage doors. Yes, I put out courses and other things. I'm building a team. And I'd rather not take the money I make into my garage door business and feed this when I can sell, like, tried and true, I'm still in the game. Right.
And every business I get involved in goes straight up.
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Chapter 7: What role does mental health play in leadership?
Hmm. And it's pretty simple math. If I increase their booking rate, their conversion rate, their average ticket, and lower their cost per lead, it's undeniable that I'll double, triple, quadruple the company very quickly. So you can enter any business. Dentists, I could go to any country. I could go to any type of profession. Restaurants, I could go to online.
I could go to e-commerce, anything you could think of. And that's a skill that, how did you learn that? Well, one of my coaches years ago, his name's Jim Krautkramer, kind of showed me this matrix to figure out your marketing. And when I did the math, I mean, my most open app on my phone is probably my calculator. Really? Like, I'm a mathematical guy.
Like, all the time, I'm just doing the numbers. And when you got your numbers dialed in, you figure out you put a dollar in, you take $1.50 out. So you just need to put more dollar bills in. And I think that's why I love marketing so much. Right, but at scale, those numbers can change, right? Yeah.
Yeah, I mean, there's obviously a kind of, there's, when you get really big in a market, there comes a time where there's diminishing returns. And you got to go to your next market or find something else to sell. Right. You cannot squeeze blood out of a turnip. Like, there's certain, like in Phoenix, we'll do, we're monsters there. And we just bought another company. And so what's the next step?
We're going to go commercial. We're going to start doing similar to residential, but it's just B2B. Similar doors, but just a little bit bigger. But I know everybody in Phoenix, so we'll turn it on. We'll do $10 million in commercial within our first year. Damn. And that's a higher margin. Yeah, that's impressive. So you're just buying smaller garage door companies?
We're greenfielding, which means organic growth to new markets. We're buying, which is acquisitions. And then we're growing organically the existing markets. So this could scale into a billion-dollar company.
Yeah, I mean, a billion in revenues, it's just a math equation. It's not that hard. But really, where the cool math comes in, if you're at, let's just say you go down to 20%. That's $200 million of EBITDA. Yeah.
If it's integrated properly, everything's good, you're going to get a high teens multiple. Wow, high teens. Yeah, let's just say it's 15. And let's say you got to that $200 million. That's a $3 billion company. Holy crap. And my goal is to get it to $15 billion. But I'll get to loot it along the way. I'm not going to own 100%.
Yeah. Right now, do you still own a big chunk? I own 49% right now. That's impressive at this stage. Nice. What revenue is Gettle doing? Because I see their vans everywhere. Gettle does about $250 million. I mean, they're struggling in California. Oh, so they're doing similar numbers to you. Yeah. I thought they were the biggest. Are they the biggest? At home service?
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Chapter 8: How can personal branding impact your business?
So it's almost not even worth getting it for your house then. Well, let's say if you could buy your own equipment, then it starts to become more economical. But interest rates really matter for lending purposes. With a car, they'll pay you. If you've got an automotive shop or a dealership, they'll pay you. But the lending company will charge us a dealer fee because they can't just go repo.
a garage or a solar system. It's very hard to get that stuff off. So they charge us what's called a dealer fee. It fluctuates anywhere from 2% all the way to 30%. If it's same as cash for 25 years and it's solar, I mean, there's a great chance you're not going to get that. And then everybody's counting on all these... There's what's called the Inflation Reduction Act.
It's 30% tax credit, but the laws aren't very clear. And everybody's balking and all this other stuff. They're like, well, I could get you this HVAC unit. I could get you the insulation. I'm going to add this roofing stuff. And you've got to be very careful because some of these companies have only been around six months. And they are the Wild West.
And they've got it in their wife's name because they're felons. And they figure out a way to make a lot of money really quick in a few years. For a lot of customers, they go under... And it takes a while, but it always catches up to them. Yeah, the get money quick thing, what's your stance on that? Because I've heard some interesting opinions there.
Well, I would say I'm an overnight success of two decades. You know, I stuck to something and stayed very focused. But I don't know anybody, the lottery, most people aren't ready for the money. When the money comes, they're so busy thinking about how they're going to spend it versus retain it. Like it's one skill to make money, and I know a lot of people that make money.
I know a lot of people that make a lot of money, but they don't keep it. I tell all my guys that work with me, my coworkers, I say, if you can't save money at $50,000 a year, you're not going to save money at $200,000 a year. Because the more you make, all of a sudden you buy the Harley, buy the second house. Your kids are in private school.
And the minute you start making more, you figure out how to spend it. There's a great book by Michael McCullough. It's called Profit First. It teaches you to keep separate bank accounts, to transfer into a savings account. Just never look at that account. Smart. And you might transfer to a spending account. And you might make sure there's $10,000 there. once a year for your family vacation.
You might have seven accounts. You might just divvy it up to different accounts. You might have one for your daughter's 18th birthday to put her into college, whatever it might be. But very few people have discipline, especially when it comes to money. They're like, oh, but I need this. And it's like, we really deserve this. And especially business owners.
They're like, we worked our butt off for five years, so they start divesting out of the one thing that's making them money. If they put all this equity into, they're like, we're going to go flip houses like our friends. We're going to invest in this bar. Let's make sure we got money in the S&P 500. Oh, that's a good deal. Let's buy that. And then all of a sudden,
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