The D2Z Podcast
Gen Z entrepreneur and DTC agency leader Brandon Amoroso talks with some of the best in the marketing world. Brandon and guests reveal their top business-growth strategies for anyone in the online space–whether you are a brick-and-mortar business looking to scale or an established online business trying to grow. Consumer marketing is under constant and dramatic change, so Brandon aims to tackle new problems with a fresh Gen Z mindset. The D2Z Podcast delivers insights, strategies, and tactics that you can use and aims to shift how you think about business and your relationships with your teams, partners, and customers.
The D2Z Podcast
Building a Vertically Integrated Billion-Dollar Company with David Heacock - 129
Ever wondered how a Wall Street options trader could successfully pivot to leading a $250 million air filter empire? Our special guest, David Hecox, the visionary founder and CEO of FilterBuy, shares his incredible journey, revealing the strategic decisions that propelled his direct-to-consumer indoor air quality business to new heights. Discover why David chose to focus on air filters and how manufacturing them competitively in the U.S. helped him outsmart import rivals. With insights into FilterBuy's vertically integrated production model, David opens up about leveraging major marketplaces like Amazon for distribution and the innovative marketing strategies that keep his brand top-of-mind.
Growing and scaling a company requires more than just a great product; it demands a clear competitive advantage. In our conversation, David unpacks the nuances of capturing demand at scale through intent-based marketing and how FilterBuy's structure enables them to excel across platforms like Google and Amazon. The discussion shines a light on the challenges of attributing marketing successes in an omni-channel landscape and the critical role of data-driven decision-making tools like Amazon QuickSight. Moreover, David shares the importance and hurdles of running a subscription program in the air filter market, providing listeners with a treasure trove of lessons learned along his entrepreneurial path.
David also dives into navigating the modern workforce landscape post-COVID, balancing remote and in-person roles. With a vast manufacturing workforce, he emphasizes the need for physical presence, while his corporate team thrives remotely, maintained through strategic in-person gatherings. We explore the symbiosis of technology and business strategy, weighing proprietary systems against third-party tools to optimize operations, not forgetting the potential of AI in shaping competitive moats. Wrapping up, David champions transparency and growth, passionately discussing his mission to build an authentic, purpose-driven company, and the inspiration he hopes to offer to fellow entrepreneurs through his candid sharing of business highs and lows.
Here's what you'll learn:
📈 Transitioning from Wall Street to entrepreneurship at 29.
💰 Vertical Integration - Filterbuy manufactures in Alabama.
📦 The air filter market is logistically complex, providing a competitive edge.
💸 Marketing spend is primarily focused on intent-based strategies.
🚀 Scaling requires hiring experienced leaders in key roles.
💼 Remote work has become a significant part of the corporate structure.
🤖 A hybrid technology stack is essential for operational efficiency. AI is expected to revolutionize custom-built solutions in business.
Timestamps:
00:00 Introduction to Entrepreneurship and Air Quality
02:57 The Journey from Wall Street to Filterbuy
06:13 Understanding the Air Filter Market
09:11 Marketing Strategies for Direct-to-Consumer Brands
12:09 Subscription Models in E-commerce
15:00 Scaling the Business and Team Dynamics
17:47 Navigating Challenges in Manufacturing
20:51 Remote Work and Company Culture
23:49 Technology Stack: Build vs. Buy
27:07 The Future of AI in Business
30:09 Long-term Vision and Personal Motivation
David Heacock:
LinkedIn - https://www.linkedin.com/in/davidfilterbuy/
Website - https://davidheacock.com/
Filterbuy - https://filterbuy.com/
Brandon Amoroso:
LinkedIn - https://www.linkedin.com/in/brandonamoroso/
Web - https://brandonamoroso.com/
Instagram - https://www.instagram.com/bamoroso11/
X - https://twitter.com/AmorosoBrandon
Scalis.ai - https://scalis.ai/
Hey everyone, thanks for tuning in to D2Z, a podcast about using the Gen Z mindset to grow your business. I'm Gen Z entrepreneur Brandon Amoroso, founder and president of retention as a service agency Electric, as well as the co-founder of Scaleless, and today I'm talking with David Hecox, who's the founder and CEO of Filtered by, which is a leading direct-to-consumer indoor air quality company. Thanks for coming on the show. Thanks for having me. So, before we jump into things here, can you give everybody just a quick background on yourself and FilterBot?
Speaker 2:Sure, I'm from Talladega, alabama, originally, fast forward and went to work on Wall Street where I was an options trader at Goldman Sachs and, when I was 29, decided that I wanted to do something else and ended up buying a family industrial supply business that I was not entirely clear what I was going to do with it, but I looked for a product that I could sell direct to consumer and manufacturer in Talladega, my hometown, and ultimately settled on pleated air filters and that was the genesis for FilterBuy, and we're now about a $250 million a year primarily direct-to-consumer air filter manufacturer that has locations in seven different states and ships across the country.
Speaker 1:That's some impressive scale and quite the career transition.
Speaker 2:That's some impressive scale and quite the career transition. Yeah, I wouldn't recommend it for everybody, but I knew that I wanted to be an entrepreneur from an early age and I spent most of my life, most of my early days, exploring things like affiliate marketing and all types of advertising strategies, kind of in my spare time, had a lot of side hustles and in that kind of general realm. So it's not quite as random as it looks. It was definitely an evolution over time.
Speaker 1:And how did you go about deciding on air filters?
Speaker 2:Well, I was looking for a product that I could manufacture competitively in Alabama and not have to compete with imports. That was incredibly important to me. In the industrial supply business that I had bought, I saw that we were effectively the middleman. We were buying from big companies and selling to other companies and competing with big companies like Grainger or Uline or whatnot, and we were not really competitive. So I really wanted something that a product that I could build, that I could manufacture and sell direct to end user, with the idea that if I could do that competitively, nobody could build, that I could manufacture and sell direct to end user, with the idea that if I could do that competitively, nobody could out-compete me, and that that ultimately led me to the air filter market.
Speaker 1:And are you uh completely, uh vertically integrated?
Speaker 2:Yes, as vertically integrated as you can be. I mean, we, we buy raw materials and and, um, you know, make a finished good out of them. So you know, we obviously have frame manufacturers and you know media manufacturers and things of that nature, but we're completely vertically integrated from a product production and sales perspective.
Speaker 1:And from like a direct-to-consumer standpoint. Are you primarily selling through, like your own website? Are you selling through marketplaces? What is the… we do?
Speaker 2:all… In our direct our direct to consumer business, we do all of the above. So about 60% of our business ends up originating on marketplaces, which is about consistent with, you know, online search behavior. If you were to look at it, about 60 or 65% of online product search behavior ends up on marketplaces, primarily on Amazon, um, and the rest, rest comes up from our website.
Speaker 1:Got it. Okay, that makes sense. I have a lot of questions, but one of the things that really jumped out to me when I went to your website was the Jeep Wrangler and the sweeps, and I've heard really great things about sweeps and I've heard really negative things about sweeps. And I've heard I've heard really great things about sweeps and I've heard really negative things about sweeps. How has that? How have you come upon like deciding that that's going to be your lead sort of capture method? And you know, what does that whole process look like from from, from your side?
Speaker 2:Yeah, it's something that we started exploring this year and we're actually going to really lead into it next year. So we're so we're going to do a lot more of this. For us, it's purely a brand building type play. You know, I think that within the direct-to-consumer world there are all different types of products. You know, we are in a consumable commodity, necessity product, right, which is very different than you know, maybe a clothing product or some type of toy, or you know, some type of a nice to have gadget.
Speaker 2:So for us, you know, social marketing is kind of difficult, right, because it's not something that I'm going to be able to show up in your Instagram feed or your Facebook feed and you say, hey, I'm going to buy my air filter today, because it's one of these things that either you need it or you don't, and when you do need it, you have a very short consideration window, right. And so, you know, for us, the traditional Facebook type marketing doesn't really work. But we need ways to increase our brand awareness and increase our top of the funnel, and for us, the giveaways are an easy way to do that, because we just want to be considered when you are, when you are in market for our product Right, and so having that giveaway allows us to get your information and just remind you that we exist, and then, when it comes time or when you have the need, then we are the first place that you think of, hopefully, and that's the strategy behind it, and we've seen some success with that so far.
Speaker 1:Got it? Yeah, that makes sense. Got it, yeah, that makes sense. Yeah, you're definitely a unique product within your traditional D2C brands that are out there. There's endless coffee brands, endless skincare and beauty brands. What would you say the competitive landscape and dynamic looks like on your end when it comes to, you know, the the air filter market is it?
Speaker 2:Yeah, well, the contract can, to contrast us, to say, a beauty brand, um, as you, as you just articulated, you know there are lots of um, you know kind of um, private label manufacturers of beauty products, for instance, or any of these other products that you're talking about, and because of that, then what ends up happening is the only advantage that somebody has is ultimately brand, and so that's why you see a lot of these celebrity type endorsements that are driving product sales.
Speaker 2:For products like that, that, that complexity ultimately gives us an edge. It would be very difficult for somebody to go out and find a first a contract manufacturer of air filters but then, more importantly, to be able to, you know, to be able to warehouse them and then ship them at scale and be competitive with us, because you know we manufacture a hundred thousand units of our product a day and ship them in an average of four and a half, you know, from a customer perspective, to that end user. So there's a lot of logistics involved that go behind that, and that's really where our competitive advantage lies. It's not something that somebody can just go and find a contract manufacturer and say, hey, I'm going to be in the air filter business, whereas I look at a lot of these, you know, traditional direct-to-consumer brands. Whereas I look at a lot of these traditional direct-to-consumer brands, they really are not offering any value other than marketing. So marketing becomes their differentiator, and that's a pretty difficult way to survive over a long period of time from my perspective.
Speaker 1:Yeah, it reminds me I had an internship in high school at a company called PCA, which is one of the few paper manufacturing companies in the world, and it costs like a billion dollars to build a paper plant. So it wasn't exactly a hyper competitive industry and that's not like you could just, you know, snap your fingers and somehow you would have. You know, a paper company and you know, air filters are definitely not at the top of my mind. If I were going to think about building a new, you know, D2C e-com brand, it would not be the first product category that I would be looking at.
Speaker 2:Yeah, I think that the takeaway that everybody needs to get from that, though, is that you need to be able to articulate and understand your competitive advantage in business, like why is it that you uniquely exist and why are you the person to solve that problem? And you know, I think we all have, you know kind of things that suit us, or the things that we have a unique understanding of that maybe somebody else doesn't, and that allow us to have that competitive edge. And for me, it was ultimately you know, coming from a small town where I had a manufacturing base, and kind of being able to utilize that and that infrastructure to be able to go on this unique path where I saw an opportunity, but everybody has their own unique skill sets or unique superpowers that they have to tap into in order to be able to carve out a niche that has a competitive vote over a long period of time.
Speaker 1:From a marketing standpoint, though, albeit you do have that competitive advantage when it comes to everything that you just mentioned, but you still have. Obviously, you have your TikTok. You have some other social channels that most of the companies that we just discussed are reliant upon when it comes to creating their differentiation. How do you think about? Is it similar to the sweepstakes, where you're building that awareness even though the consideration and buying window is very small, and that's why you're investing in some of these channels, like TikTok and others?
Speaker 2:Yeah, I mean, if you were to look at our marketing spend, we spend tens of millions of dollars a year on marketing.
Speaker 2:The vast majority of it is what I would call intent-based marketing. So that means somebody is in market for a product and is searching for that and we are capturing the demand in that. And if you want to be able to do that at scale, you have to have good economics. And because we are completely vertically integrated, we have the economics that allow us to compete in that marketplace of searching air filters on Google or certain sizes on Amazon or whatnot, which is very large. We're able to compete at that at scale and win because we have those competitive advantages. So that's the largest portion of our marketing spend and where that money goes. And then we do experiment with the Facebooks and the TikToks and whatnot of the world, but as a percentage of our marketing budget is very small and we view that and whatnot of the world, but as a percentage of our marketing budget is very small and we view that, as you know, top of the funnel brand awareness. You know, making sure that people know who we are, and that's how we justify that type of marketing spend.
Speaker 1:How do you sort of deal with the measurement and attribution of your marketing efforts when you know you are selling a lot on marketplaces like in Amazon and not all the sales are coming directly through your website? Because I know that's been a challenge for some companies as they get more omni-channel. It's like measuring that halo effect and trying to understand where the actual transaction is taking place versus where the advertising was most effective and actually captured that consumer intent.
Speaker 2:Yeah, I mean at a high level. It's really an art more than a science. I mean there really is no perfect way to do that. In Amazon world, for instance, you do have ways of tracking external marketing that leads to sales. I mean they do actually have the functionality for you to do that now, at least in the last couple of years. So we measure everything that we can when it's something that we can measure.
Speaker 2:But if we're doing just brand awareness top of the funnel type stuff, we're really looking at marketing spend as a percentage of sales and looking at that over a few month forward basis, and we have different models that we kind of utilize to just take a guess as to what the impact is.
Speaker 2:But anybody that's giving you exact numbers in that world is is, um, I think, not being factually honest. Um, but you know we have, um an established framework for for thinking about these, and I think it's important to spend the time just understanding what is your framework going to be? How are you going to measure it? Um, so that you at least, when you're tweaking something, you're doing it with as much information as as you possibly can. And so you know, we use Amazon QuickSight, which is a business investment intelligent tool that we actually take down all of our Google analytics data and all of our transactional data and use that to then build a model that allows us to, you know, attribute this, based off of different factors, to the best of our ability, given the data that we have access to.
Speaker 1:How do you um, I got one or two more questions for you that are specific to e-comm, and then I would definitely want to talk a lot about. You know how you've scaled the company, because you know you're quite a sizable organization, and, uh, you know I had my own pain points when, when, when building my my first business. That I definitely want to pick your brain on. But I noticed you have a subscription program on your website and a lot of the people that are listening also have a subscription business, albeit for, most likely, different products. When did you launch that? How do you get people to buy into? I want to be on a subscription program for an air filter, which is not necessarily the first thing that would come top of mind for me when thinking about a subscription program.
Speaker 2:Yeah, we've had a subscription from the very beginning. We started about the same time as, say, like a Dollar Shave Club or a Harry's, and so that was definitely something that was top of mind when I was founding and thinking about it, and originally I thought subscription was going to be a huge driver for us and it's extremely important. It's about 15 to 20% of our revenue comes from subscriptions, and that's a very sticky 15 to 20%. But the problem in the air filter market is that the economics don't really lend itself to a subscription model, because it costs us about the same to ship you six filters as it does one filter, and so ultimately we have to pass that shipping cost on to a consumer, right? So you'll see that we give consumers meaningful discounts the more that they buy, because the shipping economics are that way, and so because of that, our average subscription is about nine months, because people are generally buying about nine months, which is four to six filters, depending on.
Speaker 2:You know how many units you have and how often you change them, and so on average, that's when a consumer purchases from us on a subscription, but it's it's really not as meaningful for us as as I originally would have thought when we went into it because of the shipping economics.
Speaker 2:So for everybody it's different. If you have a supplement or something like that where it's very cheap to ship, then a consumer probably is happy buying it once a month from you, because you're not going to give them that much a discount if they buy a year's supply at a time, whereas we're in a position that we can pass on a significant discount the more that you're willing to buy in one go. And because of that that actually discourages people from subscriptions. But for us, as an aside, our business-to-business market is actually where we see more success with the subscriptions, because they're generally having to buy more at a time and are changing them more often, and so subscription lends itself more to kind of the small business world than it does the direct-to-consumer residential Do you have a completely different sort of experience and insight for those B2B purchasers or is it all funneling through the same sort of front-end e-com experience?
Speaker 2:Well, the small business, b2b customers oftentimes use the same front end experience that you might see. But, like, one of our biggest growth opportunities, and where you know we've invested heavily in the last year and a half, is hiring a outside sales team that just focuses on business to business customers, to consumer business. So we have about 30 outside salespeople that call on, you know, hotels and gyms and industrial complexes and car companies and kind of run the gamut of all these. You know industrial type companies that use air filters and that customer base has a completely different kind of sales platform that is hosted on Filter Bycom but when you log in they have the ability to get quantity discounts and you know appropriate pricing based off of whatever volume it is that they're ordering.
Speaker 1:Got it, got it. That's a nice segue into your team and how you've thought about sort of growing and scaling that. Because you mentioned the outside sales team, so how do you determine at this point, you know, whether it's a function or a role that you're going to internalize and actually bring like in-house, or something that you're going to look to external parties to, you know, spin up?
Speaker 2:external parties to spin up. At this point we mostly in-house. Anything that's meaningful enough to be worth doing and that's kind of an advantage of being our size now is that it doesn't make sense to outsource too many aspects of our business, but early on that might have been quite different. For me, it ultimately comes to when can you budget or when can you afford to hire a really solid manager that has a lot of experience in the function that you're looking out to build, and once you have the budget to be able to budget for that as well as the team members that they're going to need to hire, that's when it makes sense to make that investment internally and internalize it, if that makes sense.
Speaker 1:Yeah, no, that does make sense. That was similar to how I built the agency. As soon as we had enough money coming through that particular channel, that's when there was the department head and then the investment in the team members that would come underneath that person. But until then it was all outsourced or other things like that, as we sort of scrappily grew and grew and grew the business. So that definitely makes sense. When it comes to yeah makes perfect sense.
Speaker 1:When it comes to when you were first starting out and creating this company, because obviously the way that you think about things and do things right now are a lot different when you're at the size and scale that you are. But when you were first starting the business, what were some of the biggest pain points or challenges that you had that you didn't necessarily expect.
Speaker 2:Well, for me the earliest challenges were manufacturing related. Were manufacturing related, I significantly underestimated just how challenging it is to build and operate a manufacturing business in the US in the you know the timeframe that I that I started and I was very naive going into that. So you know, in retrospect I think I, you know, kind of bought off, bit off more than I probably should have and you know I would not have the energy to go back and start that exact type of process again. But that was the thing that I underestimated by far the most was just how tricky manufacturing the product at scale was going to be Got it and from a team perspective, as you've been, as you've been scaling and growing, are you fully in person?
Speaker 1:Are you remote? Are you, are you hybrid? How have you dealt with some of the some of the ramifications that have come out of out of out of the COVID period when it comes to you know where your team is located how you like, keep and build that company culture and ethos?
Speaker 2:Yeah, that's a good question and I think it's one that a lot of us are wrestling with and struggling with. You know, we have about a thousand employees and the vast majority of them are located in one of our manufacturing facilities. Right, you can't, you can't be a remote manufacturing employee. So you know that, by definition, those those are, you know, in-person jobs. You know in-person jobs. But we do have about a 70-person you know corporate and management team.
Speaker 2:Now that really came to age during COVID, like most of those jobs and people did not exist before COVID. So because of that, a lot of those hires were remote and so we have a pretty kind of robust remote workforce. In the last couple of years we've started to have two centers, one in West Palm Beach, florida, where I'm based, and one in Atlanta, georgia, where my chief of staff is, and we're mostly hiring in those centers for any new corporate roles. But we still have a pretty remote workforce and because of that we do try to have quarterly get togethers with, you know, each of those remote teams, so that teams do have some in-person you know interaction. But it's, you know, we're kind of figuring it out as we go along, to be honest with you.
Speaker 1:Yeah, I think the cat's sort of out of the bag when it comes to that side of things, especially if a lot of the growth happened during COVID, similar to my previous business we ended up in like 12 different states and at this point you know it's very hard to then centralize upon a few locations because you know then people either have to move or the people have to change, whereas if you're starting a business from scratch today it's a lot different. You can be a little bit more intentional with the hiring that you're doing. But we were all San Diego and then COVID hit and then now all of a sudden we're in 13 different states and there's no really going back. It feels like in person.
Speaker 2:Yeah, I mean, I think for every company and every situation is going to be different and I think ultimately we all have to figure out what works best for our you know situation.
Speaker 2:I don't know that there is a right or a wrong. I do think in-person interaction for certain jobs and certain roles is extremely important, like I just brought a CFO in-house here with me in West Palm because that's a critical function and it's really important to have that kind of you know, regular interaction and trust, to be honest, with you. And so for those types of roles, I think in-person is really important, whereas, you know, like for development roles and things of that nature, it's probably less important because you can kind of track people and track progress in more measurable ways, can kind of track people and track progress in more measurable ways, and that allows people to work at their own pace or at their leisure and whatnot and ultimately leads to more productive workforces in those areas. So I think you just have to figure out, based on the role in your company, what makes the most sense for you company.
Speaker 1:what makes the most sense for you when it comes to like your commerce stack, how much of it is you know build versus buy? Are you investing a lot in sort of creating custom solutions or are you trying to leverage you know off the shelf technologies as much as possible?
Speaker 2:Yeah, so I started the business off a completely custom backend and basically managed that myself. And going back to your subscription question, earlier, believe it or not, when I started the business, shopify did not have a good subscription solution. It was not native, and you didn't have the third party solutions that you have now on a platform like that. So part of the reason why we did not start on a Shopify install in the beginning was because they would not offer subscriptions, and subscriptions was extremely important to me, and so I use that as an example, because early on, you know, we did not have the luxury of having a lot of these third-party tools that exist today, and so we actually built our own custom-built system that we still use for all of our warehousing and order management and all of our core functions.
Speaker 2:But then we will hook into third parties where it makes sense or where there's a solution that's been put in place for us, but we would much prefer to use a third-party solution in a lot of cases. But as our tools developed, a lot of times there was not a third-party solution in a lot of cases. But as our tools developed, a lot of times, there was not a third-party solution at that time, which caused us to create an internal solution for that. But if I was starting today, I think I could build a business almost solely on third-party solutions, and it's likely what I would do.
Speaker 1:Do you envision yourself migrating some of those components that you've built in-house to third-party solutions over the next three to five years, or do you think that you'll continue to invest in some of the proprietary technology like?
Speaker 2:our.
Speaker 2:When I talk about our core systems, I'm really talking about our, you know, order processing and warehouse management and stuff that we've really made very efficient for our specific business.
Speaker 2:So, you know, it's not the kind of thing we could go and buy off the shelf and and since we've already built it to where we are today, it's something we're going to continue to manage and build on our own. But, like you know, we're really investing heavy in a service business on top of our air filter business. For instance, like, we have a HVAC service business in South Florida that we intend to take nationwide, called Filter by HVAC Solutions, and in that we use a third party software called Service Titan, which is basically the the you know it's big in the service industry, it's like an ERP for for service businesses, and so in that, in making that investment, we are deciding to use third-party tools from the get-go, and so that's kind of how I see it going. We'll we'll continue to invest in maintaining our kind of core functionality for our core business, but as we expand into other things, um, we're going to leverage third-party technology as much as reasonably possible.
Speaker 1:Yeah, it feels like for the more like niche product categories that have very specific requirements, the proprietary technology is almost necessitated Because you know, to our earlier point, you know there's thousands of skincare brands out there, and so it makes sense that you know a Shopify would be able to easily support their needs. But the needs of a business like yours are far more complex and more specific, and so it would make sense that they don't have. You know some of those features and functionality just off the shelf, but the needs of a business like yours are far more complex and more specific, and so it would make sense that they don't have.
Speaker 2:You know some of those features and functionality just off the shelf, Correct, and it's part of our secret sauce, to be honest with you. I mean, like I said, we manufacture 100,000 pleated air filters a day and we ship them, you know, in 20,000 or so boxes to end customers at the end of every single day. And you know we keep about two weeks of finished goods inventory in our whole system and we're constantly making product to replenish inventory and keep those levels where they need to be, and in order to do that it takes a lot of moving pieces that we've developed a custom system to allow us to do that and that's part of the reason why we have the competitive advantage that we do.
Speaker 1:Would you ever license any of your technology? Because a recent trend I've been seeing, even from some VC investments, is in buying or having a business where you develop proprietary technology to better effectively service your customers. But I'll use a pool cleaning company as an example. So there's somebody I'm connected with who they bought a pool cleaning company and now they've built technology for that pool cleaning company to be able to better service its customers and now they're licensing it to other pool cleaning companies. Is there anything you know comparable or similar here that you would ever think about doing?
Speaker 2:Yeah, when I was younger and maybe more ambitious or naive depending on how you look at it I would have said yes, and now I would tell you no, partially because you know we're a unique business like you're not going to go out and find another business specifically like ours, and you know I don't think that there's a huge market for a lot of those things that we've actually built, because it's kind of a one-on-one use case, year or so time horizon, because you know it's going to allow companies like us and you know, yours or anybody, to create custom built tools in a, in a way, um less um intense way than has been required in the past.
Speaker 2:So the ironic thing about AI, I believe, is going to be that a lot of the complexity or things that have kept people from building custom tools in the past is now going to be unlocked because it's going to be so much easier to have purpose-built solutions. And so I would be very nervous to go and be investing heavily in a, you know, saas type of software business that did not have a big competitive moat of some kind, because I think it's going to change a lot over the coming years, so I would be reluctant to go too heavy into that personally.
Speaker 1:Yeah, I was out in San Francisco, I want to say, two weeks ago for Tech Week and it was interesting listening to one of the talks about how to build a moat as a business. And there's sort of the old way where there's high switching costs and there's network effects, but the new way is in data, you know, because everybody has access to the same LLMs, the same AI. But if you have a proprietary data set that you know Google can't see or any of these massive, you know AI providers cannot have access to, then that is really your competitive mode is you have data that can then train the models to be able to be more effective in whatever you're actually doing. And so it's just very interesting how the business building or creation of that moat, is changing over time with AI.
Speaker 2:The corollary to that, you know, which is why you know I'm in the business I'm in and intend to really focus the rest of my life on building it is that I think that you know, it's going to be a long time before you have AI robots that are, say, installing an HVAC system and things of that nature, and so, you know, I'm really focused on building the most efficient company that allows me to offer those types of services at scale. So you become a bridge between the technology and the AI that it takes to run these things efficiently and the people that are actually making these services or these products happen. And so, you know, I think that that's where I see the biggest opportunity is actually that intersection between the you know people that are actually doing services and whatnot and building the systems that allow you to do that efficiently at scale through technology.
Speaker 1:Yeah, it feels like AI is really, at this point, sort of disproportionately impacting you know, your traditional knowledge workers, and it hasn't really touched the service industries, which are also, you know, woefully understaffed At least has been my experience, you know, in Miami dealing with, you know, house remodels contractors, things like that. There's no plumbers, there's no electricians, there's no availability of any of these resources. And it makes me think, when I have kids and they're going to be that age to go to college, are they actually going to go to college? Are they going to go to trade school? Are they going to look at other alternatives? That 10 years ago was sort of your golden ticket. If you got an undergraduate degree from an esteemed university, you were sort of off and on your way. I don't think that is going to be the case for very much longer. Yeah.
Speaker 2:I 100% agree with you and it's why I'm in the business I'm in and in our HVAC business we have a big apprenticeship program where we're taking people that went to a basic training trade school and then giving them the skills that they need to be effective technicians for a company like ours. And that type of training and skill building, I think, is a place that way we as a company can differentiate ourselves. But I think that there's going to be more and more demand for that type of work in the future, and so it's why I'm trying to get ahead of it with my new business.
Speaker 1:There's things that we're doing today that are only possible as of three months ago, both from a product development standpoint, but also things we're just doing internally as a company. How are you leveraging it or how are you thinking about that?
Speaker 2:Yeah, I mean, I think that first you have to be self-aware about, hey, is my business going to be replaced by this anytime soon?
Speaker 2:And like, where am I vulnerable?
Speaker 2:So we all need to take internal look at that and say, maybe I need to rethink my strategy or what my mode is.
Speaker 2:So that's the first thing I think we all have to do. But for us, for me, internally, I'm constantly looking at our teams and our systems and our processes and saying is there a way that we can do this better or more efficiently? And that, as you say, changes quite often and so, like, whether that be within customer service or whether that be within, you know the tech tools that you're using and building and the sizes of the teams that are needed to do that. You know making sure that you have people that are focused on understanding what is possible and implementing that quickly with a quick, biased action is really critical, I think, if you want to scale and survive and it's something that we do religiously here and it's something I spend a lot of time thinking about and studying myself company back in 2012 to today, as your team has gotten bigger and bigger, because I've met with a lot of founders who have trouble delegating or transitioning from what they were doing to what they need to be doing as the business continues to grow.
Speaker 1:So what does that evolution look like for you and how have you been able to manage and handle that?
Speaker 2:Yeah, I mean I don't know that I've always done the best job of it. To be honest, a lot of times I've been that founder that does have a tough time walking away because I know every little nitty management team and consciously went out and found people to help me to hone in certain processes of our business, and that's really what has now allowed me to take my vision even bigger. And you know, I'm on a mission to build the world's leading indoor air quality company and I'm documenting that through YouTube and YouTube, and we started that about two weeks ago and it's something I'm spending more and more of my time on. And really the process over the last 18 months of going through every major department and bringing in a solid leader that has experience, doing something similar to what they're being tasked with here, has really been game changing for me and is what is allowing me to kind of think bigger and invest in bigger projects than I ever have before.
Speaker 1:One last question for you. You know, in 10, 20 years from now, what is like your sort of North star, what, what is a you know success look like for you as as a business owner? And like what are some of the motivations that lead into that as well? Because I think there's quite a few people that look at entrepreneurship for all the ritz and glamour that might be portrayed in the media, but more often than not it's a shit sandwich of a daily what, I guess what gets you up out of bed every morning. And you know what does that like 10, 20 year North star look like for you?
Speaker 2:Well, you know, the last couple of years I really did a lot of soul searching. I was kind of trying to answer that question for myself. You know, I just turned 41 years old and and you're thinking, well, I built this big business, I could, I could sell it. And um, you thinking, well, I built this big business, I could sell it and retire and live happily ever after. Is that what I should be doing? Is that what I want?
Speaker 2:And I realized that for me, it's important to wake up every day with a mission and a purpose, and I really believe that you can impact the world by how you interact with the people around you and how how you build opportunities for those people around you. It's very important to me and I decided that I wanted to be building something for the rest of my life. And you know, if I sold it now, that I would probably always regret it, because you never, never, really can recreate that kind of first baby that you, that that you build in in in business, and I've seen a lot of people try and fail at that, and it's something that I wasn't interested in doing. And so that's how I ultimately came to my, my mission, which is to build the world's leading indoor air quality company, and I, you know, spent the first, you know, 12 years of my business career not sharing anything on social media, not being, you know, not having any social media presence or web presence at all. But now I actually want to share my mission with the world, show people how I'm doing it, show exactly what you said.
Speaker 2:You know, entrepreneurship, to use your words, can be a shit sandwich and that's oftentimes reality. And I want to show that. I want people to understand that, because if they're going to go on a, on a big journey, they got to be prepared to, you know, withstand that and live with that. And you know, I think, that there is so much fakeness out there. And so I'm going to document my journey of building something big, a multi billion dollar a year indoor air quality business. And you know I want to take people along for the ride, good and bad, and for me, that that journey is something that gets me out of bed every day and I'm excited for it and that's why I'm doing it.
Speaker 1:Yeah, that transparency is awesome, Because if you went on LinkedIn, you would think that everybody had a billion-dollar company and that money was raining from the sky, which I mean, I'm definitely not saying that I'm any different. You're not rewarded for being transparent and showing the negatives, because that's not the way that the current like social framework is is set up. And but I always, I always joke with my brother who's who's a co-founder in this business, like it'll be really funny. And you know, five to 10 years, once we're sort of through this stage and you know we're, we're past having to portray that on on on social media, like being able to share and shed some of the light around some of those days where you're like, holy shit, you know how am I going to make payroll today? Or you know, something happened with a team member and you know all of the sort of nitty gritty behind the scenes that nobody actually talks about or is public with, because you know it is. It could potentially be, you know, damaging to what you're trying to achieve in that particular moment.
Speaker 2:Yeah, well, part of the advantage now is I've I have a big enough company with big enough scale and don't have, you know, any investors that I that I have to answer to, and I'm in a in a unique position to be able to share more than I think that the than the average person can.
Speaker 2:And you know, my challenge is to be really authentic as I show it and take people through it, both good and bad, I mean. And obviously there are some things you can't share but you might get sued or you know impact people and whatnot, and so I mean, you know full transparency is not realistic, but you know, I do think that you know we can all be honest about. You know what it really takes to run a business and to scale a business, and it's not for everybody, and I think people need to understand that because I think a lot of people get sucked in that probably would be better off being the second or third in command at some other business and not having to deal with what it really takes to scale a business, and I think people need to work on that self-awareness.
Speaker 1:Yeah, I heard a term the other day called intrapreneur, where it's somebody who is very passionate about entrepreneurship but they don't necessarily want to take on the risk associated with it or some of the stressors that come with it, and so they join early stage startups, or they'd even join an organization like yours, where they're provided the platform and the framework of which to innovate, but without some of the negatives that come with. You know, having to, you know, run the whole ship.
Speaker 2:Yeah, I mean, I think that for a lot of people, that is a very smart strategy and I would counsel you know a lot of people in that, you know to do that, but I want to show people an example of what's possible. And if you, if you want to sign up for it and you have the stomach for it, then you need to dream bigger and that that's kind of, um, you know, the example that I want to show.
Speaker 1:Well, I really appreciate you taking the time and sharing all these insights with us. Um really amazing what you've done um so far, and I'm looking forward to seeing you build that billion-dollar company. Before we hop, though, can you let everybody know where they can connect with you online, where they can follow along with this journey of yours as well, on YouTube and whatnot?
Speaker 2:Yep, I'm just David Filterby on all platforms. So if you go to David Filterby on YouTube you'll find me. We've posted our first couple of episodes, but every week we're updating you on our journey and gonna take you along for the ride, so I'd appreciate it if you followed me.
Speaker 1:Awesome. Well, again, I appreciate you taking the time for everybody listening, as always. This is Brandon Amoroso. You can find me at brandonamorosocom or scalistai.