From Engineer to Entrepreneur: The All-In Bet That Paid Off

This episode of American Builders features Thomas Stark, Founder of Stark Industrial. 

Stark industrial is a commercial & industrial water treatment and maintenance provider, servicing some of the biggest buildings in the Kansas City Metro. 

On this episode, we discuss:
- Going from corporate job to entrepreneurship
- The importance of mentorship
- The business model of water treatment companies 
- Sales & marketing: what has worked, and what hasn't 
- The future of Stark Industrial

Learn more about Stark Industrial: https://www.starkindustrial.net/

Presented by TradeGuard: https://tradeguardins.com/

Transcript

SPEAKER_00 0:18

I'm here with Thomas Stark of Stark Industrial. Thomas, I appreciate you coming on. Let's start with, like we always start, a little bit of background on who you are, um, and then kind of what your business is, what you do, and then we'll we'll jump in.

SPEAKER_01 0:32

Well, sure. Yeah. Thanks, Garrett, for uh having me on. First podcast for me. So uh glad to be here, glad to uh tell my story a little bit and a little bit more about Stark Industrial and what we do. Um, so yeah, I actually started my business in the beginning of 2024. Uh before that, worked at a large plastics manufacturer specializing in all the uh industrial cooling systems and uh whatnot. Water treatment was a big part of my job there uh and kind of learned the trade through the vendor at that location. Um and did a good job there of turning around the current program that or the program that they had and uh figured, hey, if I can do this at a large $14 billion corporation and their second biggest plant uh nationwide, I can extrapolate this out and do this at other places nearby. So that's that's really where the the vision started. Um not as easy uh as just as what it sounds. Uh every system is a little bit different, every building's a little bit different. Um, so that's where it started. Uh, had a lot of help along the way, and uh here we are.

SPEAKER_00 1:47

I think one thing I like to tell people who are just getting out of college, uh, when they're thinking about like, okay, a lot of people in sort of that entrepreneurship school that I was in, it's like, do I go straight into entrepreneurship? Do I work at a business first? Sure. And I think you have a great example of how you can go and work for a large corporation and find the area where you can then so be you can basically get paid to find your business idea. Um exactly what you did, right?

SPEAKER_01 2:15

Yeah, pretty much. Um, especially in let's say manufacturing, I'm an engineer by by schooling, right? Uh so there are manufacturing, you're combining X number of processes a lot, and they all have to work together in synchrony to make an end product at the end. So there are so many little interdisciplinary interdisciplinary um places that you could go without. You have all sorts of vendors coming in uh doing this, that, and the other to make the whole process work. So there are so many little niche places that you could go with your career. And uh for me, that was water treatment. I found one of them. I'm uh I was a chemistry got chemistry guy uh all grown up. Most people aren't, but I guess I'm weird like that. So uh I kind of just gravitated towards it. And you know, one thing led to the next and uh uh got put in a really good position with a lot of really good people around me, um and kind of fell in love with the game while I was there. I knew I was good at it. That's another thing, too. Find something that you're interested in, recognize your talent, and then just double down on it, get more experience, talk to the right people, and get better and better and better every day.

SPEAKER_00 3:37

Let's talk more about the business. So before we kind of get into a little bit other detail, provide an overview of what it is that Stark Industrial provides.

SPEAKER_01 3:46

Sure. So we are a commercial and industrial water treatment provider, uh, meaning we provide all the chemical equipment and controls to maintain the health of big building HVAC and cooling systems as well as uh heating systems. So uh a lot of these big buildings have water cooled, water heated HVAC. Uh and you have to maintain the chemistry of that water so you don't have scale buildup like the white stuff you see on your faucet algae growth, like you'd see in a pond or um by or uh corrosion. So uh all those things can negatively impact the asset values of the customers and the performance of those systems. So chemically maintaining the health of that water is uh pretty detrimental to their operation. If they don't do it the right way, you can have some pretty uh some pretty negative impacts and some pretty high costs. So uh it's it's all about cost reduction for the customer by properly maintaining those systems.

SPEAKER_00 4:48

Let's talk about the first job that you got. I also know you have a bit of a mentor in the space. So I'll throw both these questions at you at once. I'm not sure if sort of the mentor is related to the first job that you got. Um, but talk to me about the first job, how you got it, and the mentor.

SPEAKER_01 5:06

Exactly. Uh lucked into it completely. Um, Robert, Chemical Solution, my mentor in the process. Uh so I started this thing, uh, and a couple months later, he's like, Okay, I've got I've got an account that you might be interested in. Um, it was a previous account of his. Some things had gotten shaken up in the management there. Um, so he wasn't going out to that account anymore on any sort of regular basis. And uh he basically asked me, Do you want it? I said, sure, not really knowing anything about uh what it would take to maintain an account. Uh so we we went in there and we basically went through all of their uh their cooling systems. It was a mid-sized plastics manufacturer in the area. So we went through and did a walkthrough. Okay, here's what you need, here's the equipment you need, this, that, and the other. And uh the first sale I made was huge and it was kind of strange. It was a strange feeling. Uh like once you get that that first big paycheck, you're like, Do I really deserve this? Do I what have I done to what have I done to accomplish this? And it um it was kind of a wild feeling, but still got that customer to the to this day. Uh they're doing great. Um but yeah, pretty much, pretty much luck into the situation. I feel like you you throw a couple feelers out there and you never know what's gonna come your way, and that's kind of what happened in this scenario.

SPEAKER_00 6:34

Well, and then kudos to you for for jumping on it because I do think there's something to be said about the fact that so much of probably what you've done in the past you know one to two years, you've kind of been learning on the fly. It is such a specialized industry and a specialized skill set. Talk to that a little bit and kind of just what the process has been like. Obviously, you knew a little bit coming in with your work, your sort of work background, but talk to me about how much of it was learning on the fly.

SPEAKER_01 7:05

Um you know, it's been a lot, there's a lot of research. I I've had to do a just a ton of research on all of the nuance. Uh at my previous employer, there's a specific set of issues, right? That were kind of here, but the actual whole realm of water treatment encompasses a lot more than, let's say, the specific issues that we faced at that plant. So it's been a lot of research, a lot of talking to people that have a lot more experience than I do to get to that point to where I feel like I'm at now, and I I know that I'm pretty good at what I do. Um so I've had a lot of help along the way, done a lot of digging through research articles and uh a little bit of chat GPT along the way to point me in the right direction. Um, so that that's that's primarily where I've where I've learned it. Just digging into the digging into the books, calling people that know more than me, um, and figuring out the solution to the problem.

SPEAKER_00 8:13

The reason I ask it is just because for the people who are thinking about getting into the trades or starting their own business, it's like you don't have to know everything to get started, right? You can, you know, nobody who ever started any business knew everything before they started. Um so it's almost just don't let that be something preventing you from going all in. Um let's talk about your business model specifically, okay and sort of the recurring revenue aspect of it. Uh, just how does the the pricing work? How does the business model actually function?

SPEAKER_01 8:47

Sure. So I basically bid all my jobs based on chemical and chemical usage, which comes from their uh water usage, load, uh that sort of thing. So I do I've got a pretty good way of estimating how much chemical they're gonna you they're gonna use of each specific type uh in a given year's time. And I'll basically build my price off of that. I've got margin built into each one of the each each of the sale prices on those given chemicals. Um and then whether or not they need equipment, uh, how much time I think I'm gonna be spending at that building per visit. Uh it all gets kind of factored into that one monthly price that they're paying. Uh but the primarily the primary driver of that is definitely chemical usage throughout the year.

SPEAKER_00 9:39

And then it's that recurring sort of monthly subscription, right?

SPEAKER_01 9:42

Right. So they're paying me the same price uh every month. Um yeah, based on based on that usage and and what they need. Now, if they need some extra equipment, something that's out of the scope of the initial proposal, that's when I'll come back in and I'll make I'll make that nice equipment sale that everyone loves. Um, but the the core business model is based on recurring revenue going out to these customers on a on some sort of frequent basis to service their equipment, make sure their chemistry is right, and uh keep them running right.

SPEAKER_00 10:14

So yeah, I think that's a really valuable thing for trades businesses who are primarily sort of project-based, um, thinking about how can you adjust your model to where there is some sort of recurring aspect to it. I've got a client in the window washing, and they're putting together sort of as opposed to knocking on people's doors, getting random bids, how can you knock on that same door and say, hey, sign up for six months of it? We come back every two months, whatever the case may be. And you can, I mean, obviously there's some industries where that doesn't necessarily work, but there's certainly a lot where it does. So um, I think that's just another reason why your model works so well is because of that recurring aspect. Talk about sales a little bit specifically. Um, how do you go about sales? What is kind of your current sales strategy?

SPEAKER_01 11:03

Sure. So um, and frankly, I had zero experience in sales when I started this thing. That was probably my weakest engineering, right? Yeah, that was my weakest point by far. I didn't even know what a CRM was when I started this business. So I basically had to had to learn all that. I take, I basically scour LinkedIn and find specific people in roles that I'm targeting, primarily maintenance managers or general managers, people that are running these big buildings who are making the decisions. I'm scouring them. I've I got a software that lets me pull their phone number and email address from LinkedIn into my CRM. And I just do a combination of cold calling and cold emailing to each one of those people on a on a recurring basis to uh give myself the most at bats, right? Um, so that's where a portion of my leads have come from. Uh, another portion has actually been from a lot of referrals in this industry. It seems like people just want someone who's reliable and someone who can be trusted. So building up that reputation, especially with like some of these mechanical contractors, the guys that are going out fixing the pipes, working on the pumps, working on the chillers and whatever else is in that system. Uh, so building the those good relationships with with those crew members uh has proven to be valuable, as well as just talking with as many people as I can in the industry uh who may need help. So uh the referrals have been uh a little bit, they've had a higher conversion rate into actual meetings, obviously, compared to uh the cold call and cold email, warm warm leads versus cold leads, right? Which one's gonna do better? So uh love referrals, but also I'm doing the cold call, cold email, cold outreach thing to uh help generate some leads as well.

SPEAKER_00 13:08

You mentioned the that people just want somebody they can trust. Absolutely. There is an interesting aspect to your business where it's kind of like an invisible service where you really, as the customer, you don't you almost don't want to know that it's even happening, right? You want it to just kind of run in the background and not have to worry about it. Talk to that a little bit and just kind of how you go about kind of being adding value in the background so they never really have to deal with anything.

SPEAKER_01 13:38

Yeah, usually as water treaters, you don't really ever get calls unless there's an issue and or they're wanting to do something new. So um, yeah, a lot of the stuff that we do is pretty much sight unseen. And the customer knows when there's a problem. They don't really when when things are running right, things are right, and like you said, we're kind of invisible in the background, making sure that things don't go bad because they can go bad very quickly if not properly managed. Uh so yeah, uh as water treaters, it is kind of our goal to lay not necessarily lay low. That that's probably the wrong terminology, but to we're not on the front lines doing the doing the sexy work that a lot of these other companies are. We're we're in the background um doing the stuff that matters, or doing some some stuff that matters, not like it's the only thing.

SPEAKER_00 14:41

Um what do your operations look like in terms of of the day-to-day? Like how do you go about actually servicing? Just walk me through sort of your operations, how do you keep things organized, keep them clean? What have you seen kind of helped you dial in the operational side of things?

SPEAKER_01 15:00

Sure. Well, having a bunch of an abundance of spare parts to combat any issue uh definitely helps um initially because there are so many different problems that you can run into. But day to day, let's say I'm going out to a customer's first thing I do is I test. Testing is very important in the industry. You have to, every water system has a story on any given day. You have to listen to it and ask what it's telling you. If there's a little bit of an art to it, it doesn't always, it's not there's never a one size fits all solution. So doing that proper testing to realize uh what potential issues may or may not be there in that in any given day is vital to the uh the operation uh of these systems. So that is something that I pride myself on. I do not I I I basically give all of my customers a nice blanket uh panel of all the tests they could need every time I go out and I visit them. Um so yeah, definitely very important to do your testing, go out, check the operation of all your equipment, making sure everything is working and synchrony to uh to deliver your product.

SPEAKER_00 16:21

Love that. Um you've mentioned this year that you want to hire somebody in a different conversation that we had, but you also were talking about sort of the the complexity that comes with finding somebody who has the specialized knowledge. How how are you thinking about going about that?

SPEAKER_01 16:39

You know, I've got I've got two people that I know in the industry that I'm gonna try to uh I'll probably send some feelers out to later this year. Um you know, I think the main thing is gonna be paying these people very well. Uh gotta make it worth their while. And frankly, I'm of the belief if I make somebody else rich, they're gonna help me get richer along the way too. So uh I'm prepared to give a big portion of the earnings that the that that person is generating on a monthly or annual basis back to them because frankly, they're the ones making those or closing those deals, uh doing the work. And um, yeah, I'd love to I'd love to bring somebody in who's uh definitely qualified and someone that can also help me kind of grow the culture. I want to grow the culture of this company that is that uh speaks to our reliability, our trust, and the personal relationships that we build with our customers. Um, I think that's the foundation of any sort of uh sales and service-based business. You you got to be able to talk to people, uh understand their problems, and and give them kind of what they're asking for in a sense, and leading them in the right direction. So uh that's definitely gonna be a big part of it. Finding someone that's very technically savvy and at the same time is good at building those personal relationships. Uh, like I said, I've got a couple in mind. Um and looking forward to that. I have no idea what that's gonna look like at that at this point in time. Um, with 2026 just starting, like I said, is a goal of mine this year. Um I'm excited to go down that path, frankly. I know it's gonna be a there's gonna be a lot of hurdles to cross over, but uh excited to take them on as they come.

SPEAKER_00 18:33

Oh yeah. I mean, I've throughout all these different episodes that we've done, you can kind of see the people in the different stages that they're at. And when you are sort of the 20, 30 years in, everybody's talking about how you know how much more of your time gets devoted to instead of managing a specific job or a customer, you're managing the people on your time. So uh definitely something that you can't avoid, but it'll I'll be uh interested to follow along, uh see how that goes as well. Yeah. In terms of the person you hire, is it most so traditionally in the industry, is it kind of like everybody is a salesperson and a technician, or is it is that sort of just uh a founding role that you're looking for?

SPEAKER_01 19:16

Uh I wouldn't say it's necessarily traditional. A lot of these big companies will have uh just solely technical guys that are going out doing the service work and whatnot. Um now some of the smaller account or some of the smaller players in the industry probably look for more of that hybrid role of that guy that can do a little bit of both or does a lot of both. Um yeah, big players mainly just hire hire for the service initially, and then they kind of work their way up into an account manager role or whatever, someone who's doing more of the selling, going out and getting accounts. But yeah, like you said, I'm looking for somebody who can kind of help me grow this thing at the same time as uh doing a little bit more of that service too. I think that's gonna be what it takes to grow this thing. Um if I get some other idea that sounds better, maybe I just hire a service guy and I continue selling myself. Um, but yeah, I am looking for probably some sort of co-founder that I could uh work and grow this thing with initially.

SPEAKER_00 20:23

Would you say the the human capital is the biggest bottleneck? Like, what do you think the biggest bottleneck for maybe your business, but also kind of like the industry at large? Where are the bottlenecks?

SPEAKER_01 20:36

Yeah, it it depends. So a lot of it is market-based. Kansas City's a decently sized market. Uh, you go down to let's say Texas, where all these big oil refineries are at, there's a lot of market down there. Um and what I've seen too is a lot of these larger players in the industry are only targeting larger accounts, uh, which is which is just an interesting development here of late. But I think a lot of these companies, like you mentioned, are struggling to actively get people. I've I I've got a couple friends in the industry, um, and they're always getting hit up from XYZ company to go and jump ship and and join the other team. So I I think manpower definitely is a bottleneck to growth for a lot of these companies for sure.

SPEAKER_00 21:29

Hmm. Very interesting. Any other trends that you like what's happening in the industry that that you're finding interesting? Um, I sort of, you know, the tr the trades as an entire sort of scope, there's a lot of trends that are happening in there. But specifically for you, what are you saying?

SPEAKER_01 21:46

You know, I think a lot of the smaller to small to mid sized accounts are getting overlooked. I don't think it seems like to me that the big players don't even want to stick their foot out to help the little. Guy in this industry anymore, which frankly leaves room for me. I started this company to kind of service that those people. They're great accounts. They're high margin, low volume a lot of the time, but uh definitely need help and uh here to help all those people that I can. Uh another thing is the that uh automation. The automation just keeps getting better and better and better. So I think that also uh plays into technical, the technical roles being less competent, less competent, less competent because we're relying basically on the electronics to do our job for us. When in reality, it's a combination of, like I mentioned earlier, doing that testing, figuring out what that system is telling you and putting that information, let's say, back into your controller to get the result you want. You still got to be really technically savvy in this game. Um, and I think a lot of people rely too much on the controller to do their job for them. So those are kind of the two biggest things I'm seeing, at least changing the game right now. There's all sorts of new technology trying to push the envelope and do uh the next latest and greatest thing. Um, and at the same time, a lot of these big players are stepping away from smaller accounts.

SPEAKER_00 23:22

You mentioned technology, and obviously, sort of the biggest place technology is being talked about right now is in the AI world. Sure. There's uh so much investment going into it. I mean, you see it at a sort of a government level and just every from a you know VC level, there's so much money going everywhere. A lot of that is going to impact the people in the trades. There's people who need to build those data centers, right? Um, and there's a I think a big piece of those data centers is the water system. Have you seen any sort of trends, any talk in the industry about how this explosion and the amount of data centers is going to impact it?

SPEAKER_01 24:03

Um yes. Uh I wish I had a data center account. Currently do not, counting for that one day. Uh yeah, these these data centers use a ton of water. Uh their water treatment bill is going to be immensely high just based on water consumption alone. Um definitely will be a positive or positively impact the industry from a uh from an overall from an overall uh capital standpoint. Um water treatment's got to be on it's gotta be basically perfect in some of these data centers. They don't really care what the cost is, they just know uh these systems are vital to the operation of those data centers and they can never go down. It's interesting. So, like I mentioned before, I know quite a bit about cooling systems and whatnot. So if you just Google Maps, one of these data centers, the amount of redundancy they have is absolutely insane. They've got a backup to the backup to the backup, they've got so much damn redundancy, it's crazy. Um, which which highlights uh water treatment as well. Um, just even that a little bit more. These these these data centers cannot go down. That's basically written into their contract, right? They uh they must be operable at all times. And if you have poor water chemistry, uh cooling uh cooling those processors or whatever's inside of them, the computers in there, um, there's gonna be a lot of big problems, but definitely a positive for the industry overall in terms of uh in terms of money.

SPEAKER_00 25:46

So that's awesome. Yeah, there's there's you you do know a lot about the the water treatment, and it's you know, we had a conversation just breaking down how the whole thing works, and it's one of those technologies that exists that sits in the background of your life but impacts a lot of things. So thanks for coming on. Uh this was a great conversation. Where can people find you and then who do you want to reach out? You you mentioned you're looking for some talent, so maybe people in that space. You mentioned having partners and the sort of the HVAC space. Where can they find you and who do you want reaching out?

SPEAKER_01 26:18

Sure. Um yeah, you can find me on LinkedIn, uh Thomas Stark. Uh I got a Stark Industrial page up there too. Also, you can find me at uh www.starkindustrial.net. I'm a dot net guy. Whatever. Um and uh yeah, feel free to drop me a link on either one of those at either one of those locations. Uh always happy to talk to anybody in the industry. Uh, or if you're someone who's young looking into the space, would be happy to be uh or would be happy to have a conversation with you uh as well. Um so yeah. Thanks for watching. Thanks for having me on, man. Appreciate it, Garrett.

SPEAKER_00 27:00

Bye, everybody.