How Tommy Mello Built a $250M Home Service Business Empire! | A1 Garage Door | Paul Giannamore

Paul Giannamore:
I don’t either. I mean, it’s great to finally be here. You know, I don’t know if you remember this, but we had me booked on your show in 2020, and my mom passed away and I had to cancel. And so it’s been, what, almost four years now in the making? But here I am, out in Phoenix Metro.
Finally! Finally, dude. I threatened to come out here many times over the years, but just never made it. It was always so far from me. I was either in Europe or in Puerto Rico, dude — I might as well fly to Europe to get out here from PR. Literally, it’s an all-day affair. But it’s good to be out here, and it’s good to be here in this weather, this March cool, crisp weather. My lips and hands are drying out out here. I’m used to the dewy, sweet, moist air in PR. I come out here for a couple of days, it’s rough.

Tommy Mello:
I can’t do that, man. A lot of people prefer Florida over Arizona and California. I like low humidity. You know, I’m from Detroit originally.

Paul Giannamore:
Are you? I didn’t know that. So when did you leave Michigan?

Tommy Mello:
In ’99. I was 16.

Paul Giannamore:
And you came out here?

Tommy Mello:
Yeah. It’s a much better place, I think.

Paul Giannamore:
It is.

Tommy Mello:
And this area is blowing up. Phoenix — Amazon’s putting a mega center here. There’s the new Taiwan chip plants going in.

Paul Giannamore:
Taiwan Semiconductor, yeah.

Tommy Mello:
It’s everywhere. Google, GoDaddy — everything’s here. There’s all these massive plants opening up. So I feel good about this market. Even though they say there’s water and other issues, I think they’ll work it out. This place is growing, what, like 10% a year out here?

Paul Giannamore:
I don’t know exactly the growth, but it’s—

Tommy Mello:
It’s weird — you can go to certain areas and get a taste of everything here. You go to Flagstaff if you want winter, go to Sedona if you want to get in touch with mother nature.

Paul Giannamore:
Yep. So you’re relatively new here, and this is a beautiful house. I haven’t taken the tour yet, but I’m looking forward to it.

Paul Giannamore:
But what area of Phoenix were you in prior to moving out here?

Tommy Mello:
So I still have the other house in Scottsdale. It’s about 10 minutes away — my dad lives there now.

Paul Giannamore:
Okay.

Tommy Mello:
That’s where I had really close neighbors. The houses are stacked, and I love my neighbors over there. We still go over there a lot. But I like this, because every lot in Paradise Valley is on at least one acre, so you get a lot of privacy here. And the per-square-foot rate averages about 800, but houses are selling for $1,500 to $1,700 per square foot here in Paradise Valley.

Paul Giannamore:
Yeah. That’s beautiful.

Tommy Mello:
It’s a beautiful area.

Paul Giannamore:
So you came out here when you were 16. I know you’ve told this story many times before, but we’re going to do it again, and try to do it a little bit differently. So when you got out here, you were 16 years old. Why?

Tommy Mello:
Well, my mom and dad got divorced when I was about eight. And in 1996, my sister and dad moved to Phoenix, because my grandpa retired in ’74 to Lake Havasu. Six of the kids weren’t old enough — there were 12 kids, and six of them went with my grandpa. They migrated over to Phoenix over the years, so we were always coming out here. At 16, my buddies were great guys, but, you know, selling weed, stupid stuff. And I knew I was going to go to ASU, so I needed to get two years of residency. I needed a dad, I needed, you know, puberty, so I wanted to be closer. I love my mom — there’s no one better than mom — but it just made sense. So I moved out here. My dad took me to every high school in Phoenix, I think, and he’s like, wherever you want to go, we’ll just get an apartment till you graduate. And I had enough credits when I was 17 to graduate — government and economics and summer school — graduated. And yeah, it was interesting, because the school was mostly Mormon. Best people ever, by the way. So cool. These guys are great.

Paul Giannamore:
And they’re cheap dates too. They don’t drink, so it’s always nice taking them out, right?

Tommy Mello:
Yeah. Latter-day Saints. I learned a lot about that religion, and I’m still friends with a lot of people that I went to high school with for that last year. But I started up a landscape company. And then I got a job at Cheesecake Factory as a busboy.

Paul Giannamore:
Okay.

Tommy Mello:
And then I started the landscape company. I mean, I was always doing something. I was hustling, I was mowing lawns, doing water conservation analysis. I just figured out a way to make a lot of money my whole life.

Paul Giannamore:
Was this after high school? Did you go to ASU?

Tommy Mello:
Yeah, so I went to community college, then I went to ASU for some courses, graduated from University of Phoenix, then I got a master’s from the University of Arizona.

Paul Giannamore:
But you didn’t do typical recruiting in college. You just got done and started something.

Tommy Mello:
Yeah. No, I was bartending all the time. I was flipping cars, flipping Bowflexes. I flipped over a thousand cars. Me and my dad used to just find broken-down G20 Infinitis or Honda Civics — I had like three or four cars going — and we’d fix them. And a lot of times I drove them off the lot from who we bought them from, got them detailed, changed the oil, found them for a couple grand. And like I said, money was easy to make until I’d go on vacation. And then it stopped. I stopped making money. Even the little businesses I had, it was like I was the business. And I always tell people, you don’t really have a business, you have a job. The business is something that works when you’re not there. Wealth is created when you sleep.

Paul Giannamore:
Yep.

Tommy Mello:
And I got a job painting garage doors. My old roommate was a manager at a garage door company, and he goes, “Man, I can’t find any good painters. They always flake out. Would you be interested? You do anything for money.”

Paul Giannamore:
You had like 15 jobs. You had all sorts of stuff.

Tommy Mello:
Yeah, yeah. So I said, well, how much would you give me? He goes, “100 bucks a door. You cover the paint.” I went to Home Depot. I found this Glidden Speed Coat, 12 bucks a gallon. I’m like, done. So I hired this old man to teach me how to paint the first three doors. Went to Home Depot, bought a Magnum Five painter. Had a ’96 G20 Infiniti. And I got so good at painting, I could paint 10 doors a day on Saturdays and Sundays. And now, this is 2005, so I’m 22 years old, knocking out $1,700 profit on the weekend, plus I was bartending that night. So, you know, I was making $2,500 a weekend, and then still working the weekend and doing stuff.

Paul Giannamore:
Yeah.

Paul Giannamore:
So was the birth of A1 related to your experience painting garage doors?

Tommy Mello:
I’d go meet up with these technicians all the time to get the color samples, and one guy — this is 2006 — he goes, “I think I’m going to make 90 grand this year.” And I go, oh my gosh, really? And I had the landscape company, but I’m allergic to grass, and it was like, I’d go to Home Depot and just pick up guys. I had a couple full-time guys, but it wasn’t a very lucrative business. I was building back then about 30 grand a month, and it was profitable, but it wasn’t a game changer. And so we started up — me and my other roommates started a garage door business — and we called up his cousin, and he’s like, “Dude, you know A1 falls first in the phone book.” And I looked it up, and I’m like, that’s great. We’ll get a Yellow Book ad.

Tommy Mello:
So we did the Yellow Pages. It was really cool for about three months, until Google died. And then we ended up paying all this money to the Yellow Book. Got into ValPak. I mean, we learned the hard way. I did all the work — my partner liked to answer the phones, I ran all the jobs. And we had this used truck that was so crappy. We just made ends meet. We barely got by. And in 2010, I was like, dude, I can’t do this. You could either have the business and take the debt.

Paul Giannamore:
Didn’t it make more sense for you to be painting garage doors back then instead of doing this?

Tommy Mello:
Well, it was way more lucrative. You know, considering — I knew how to form an LLC, I knew how to get a business license. I went and took the test to get the contractor’s license, which was really simple back then; it was just a business license. I knew how to get our employer identification number. I knew enough to get going. I knew what marketing was. He was good at sales, so we had something. I was good at booking calls, he was good at booking calls, we showed up to the jobs. But mind you, this is going into the biggest housing crisis of all time, and Phoenix and Vegas got hit the hardest.

Paul Giannamore:
I remember.

Tommy Mello:
So I’d go out there, and I’d meet a single mom, and she’d be like, “I’m giving this house back to the bank. I just need to get my kids’ clothes and furniture out.” And I’m like — so I was just wheeling and dealing, just taking care of people. That’s how I built a really good reputation. I was on Craigslist; that’s how I started. I posted 500 ads a day on Craigslist. I had a system that would take the modem, the dial-up system, and it would change the IP address and move the mouse around and post for me, and it would have different email addresses. This is a long time ago, but I figured out a way that used to feed me 15, 20 jobs a day. And that was really cool, because by the time Google really became the algorithm of choice, I was on top of that stuff. I was putting stuff on YouTube. When I went into my master’s program, I sat next to five guys who all they did was search engine optimization, video editing. This is when it was really easy to win on Google. The top ads were super dark yellow — you knew that was an ad. It didn’t even make sense; stuff would pop up there that didn’t even belong. So organic won all day. That’s really when I started to take market share. And in 2014, I got a great right-hand person, Adam, my integrator. 2017, I got on ServiceTitan, which — you were one of the — I was the only one.

Paul Giannamore:
Yeah.

Tommy Mello:
And that was a whole story within itself. I worked directly with the CEO, Ara, and everyone said no. I begged on LinkedIn, and he called me and said, “We’re super focused. You’ve got to understand that.” And I said, you bet on me, I’ll have a thousand technicians on this. We talked for an hour, and he goes, “Dude, I don’t know why, I’m going to take a flyer on you. I’m sending out 10 success managers.” And Adam worked with these guys that made it all work. And then the next year I started my podcast, and I had Al Levy on. We met for lunch in Scottsdale, and he comes into my office and just tears me apart. He’s like, “Show me your manuals, show me your standard operating procedures, show me the structure. How do you delegate? Where’s your org chart? Where’s your depth chart?” And I had nothing.

Paul Giannamore:
How big were you at the time?

Tommy Mello:
We had 17 million. But we were serious firefighters, and I wasn’t making a lot of money. Revenue is for vanity, profit is for sanity. So I thought I would walk into a room — I’m like, 17 million. And he’s like, “How much are you keeping?” Like three percent. It was good, though. We had better months. A lot of it was reinvesting into the company, and we were over-hired a lot of the time, we were burning through jobs, just a lot of stupid mistakes. ServiceTitan was not meant for a garage door company, so that took a couple years of dialing in. And I’ve always been an early adopter. I’ve always bet on things before people do. I think that’s part of the success — I try to find the industry leader, and I beg and plead my way into it. And so he hooked us up. Three years with Al, several hundred thousand dollars paid to him: manuals for every single job, how to win, standard operating procedures, tattoo policies, how to get PTO, what happens if my truck breaks down, facial hair — you name it. If you want new shirts, what’s the process? Processes, systems, checklists. And that was really where the company started getting legs. And then in 2020, Al takes a picture of my old truck, and he goes, “Dude, I’ve been meaning to tell you this, but your trucks look like crap. By the way, I want you to have one install truck and one van. Nothing else, but the same models.” And he showed me the picture, and I go, yeah, you’re right. And I go, what should I do? He goes, “There’s a company called KickCharge, guy’s name is Dan Antonelli. Just let him do his thing.” And I called Dan. He gives me his price, and I’m like, do you know I’m a pretty big influencer? I could probably get you out of business. Tried to will him and deal him. He didn’t really negotiate.

Paul Giannamore:
It’s not his style.

Tommy Mello:
No, no, he’s just take it or leave it. And he knew who I was, we knew of each other, and I did it. And that was a game changer, because I did that at 40 million. I changed my brand at 40 million dollars. So Al Levy hooked me up with all the structure, the SOPs, the manuals, and then Dan hooked me up with the right brand. I was already on the right software. And then — we didn’t have a great CFO. And that’s the last thing I think most home services get, the right CFO. Probably two and a half years ago, I got the right CFO. Went to a recruiter, got a guy named Dan Miller, and then he helped me get the right CFO. So he’s the president, then I got the CFO. And all of a sudden, now we’ve got three FP&A people just digesting numbers. We’re using Power BI. We’re using some crazy technology that’s just — our competitors don’t stand a chance. I mean, like Rilla Voice — have you ever heard of Rilla Voice?

Paul Giannamore:
No.

Tommy Mello:
So our conversation, I put on my iPad — it records us talking — and it follows our sales process. It tells me how many times you said “um,” like, “you know.” It tells me how fast I spoke versus how fast you spoke.

Paul Giannamore:
Oh, really?

Tommy Mello:
It tells me how many open-ended questions I asked. It tells me how well I told the company’s story. And it’s all a feedback loop. It’s the end of ride-alongs, is what it’s called. And now you’re literally working on your one-on-ones each day with the technicians and our sales.

Paul Giannamore:
When did you recommend that — when did we get heavy into it?

Tommy Mello:
About four months ago. Did a test of 40 techs, murdered it, and now we bought 350 licenses. And the newest technology — I’m on a yacht party next week in Miami for Rilla Voice — you’re going to be able to ask it, what would I need to make Paul just as good as Jimmy? And it’ll tell you everything — what kind of training I need to do to bring you up to the level. If I want to take a market, it’s going to take all of ServiceTitan’s data: what am I doing wrong in Denver versus Colorado Springs? And it’ll go through all the data, AI and machine learning, to do it. And a lot of people don’t have the money for ServiceTitan. They’re like, oh my gosh, that’s expensive. Dan Antonelli’s expensive. Why would I pay for manuals? Rilla Voice is not cheap. It’s a million-dollar investment a year for us. But we’ll probably double. We’re at 24.7% bottom line right now. I don’t even know where we could go.

Paul Giannamore:
I didn’t think you could do better than that.

Tommy Mello:
But I think we could get, you know, north of 30.

Paul Giannamore:
Is this thing for phone, or for live, in person?

Tommy Mello:
So it’s made for the person when you’re in the garage. It’s literally on the iPad — it’s recording the job on the iPad. There are 12 states that require two-person consent. The other 38 don’t, so in the 38 you’re just going to go one consent. In the other 12 you’ve got to say, you know, our call may be recorded. And the experience when my technicians are out there may be recorded — they’ve got scripts. I’m not in any of those states, but it’s a game changer, because it’ll go right into the call of what went wrong.

Paul Giannamore:
How’d you get into that to begin with?

Tommy Mello:
Aaron Gaynor with Eco Plumbers, he’s over this. His son’s going to ASU, so he comes and kicks it once a month out here for like three days, and we’re always helping each other. Me and a lot of the big HVAC, plumbing guys — and I’m the only garage door guy — and he goes, “Dude, have you ever heard of Rilla Voice? We just implemented it like a month ago, and our top three guys have doubled their sales. They’re eating it up. They hated it at first, like somebody’s watching them, but they’re getting better. They’re actually listening, and they’re listening to each other’s calls, and they’re working with each other.” And I go, yeah, yeah, I’ll call them. And then I got into it, and I’m like, man, roofers are getting into it. Door-to-door guys. It’s crazy how effective it is when you spend — now, here’s the deal with the software: it won’t do anything if you’re not paying attention, if you don’t make the guys record it, if you’re not listening to the calls, if you’re not coaching them. It’s a coaching platform.

Paul Giannamore:
I would imagine you would have to feed the machine information, such as, did you actually get the sale? So it talks to ServiceTitan. Okay.

Tommy Mello:
So it knows what’s working. It studies conversion rates. It works with HouseCall Pro, it works with Service Fusion, it works with a lot of the other CRMs. But you know as well as I do — I don’t know about pest control — but if you’re not on ServiceTitan, HVAC, plumbing, electrical, garage doors, your multiple will be affected significantly.

Paul Giannamore:
Well, you know, look, even ServiceTitan has made inroads into lawn and pest now, right? They started buying them.

Tommy Mello:
They bought Service Week, and I think they bought pest routes too.

Paul Giannamore:
Yep. And I think they’re going to integrate it all into that one same platform.

Tommy Mello:
Eh, they’re trying to figure out how to do that, but we’ll see. They’re about to go public in the next year, so IPO around the corner.

Paul Giannamore:
What were you using before ServiceTitan? I literally remember having conversations with you years ago — you’d been on ServiceTitan for a while, but not that long, and it was a game changer for you. But what were you doing before that?

Tommy Mello:
So from 2007 to 2010, we were on a notebook, a calendar that we’d write in. Literally.

Paul Giannamore:
Yeah, yeah, yeah. Like a book. Okay.

Tommy Mello:
We’re like, where’s the calendar? Where’s the book? Where’s the book? This was before you even had phones with pictures or anything. And then we got onto Excel, and we started using Excel. And then we went to another one. Then I ended up on this one called Abtora, which was from like the ’90s. But it was cool, because he figured out how to have GPS on the trucks. It had an integrated finance department, but you still had to have your own servers. And then I found ServiceTitan. And I remember my right hand, my COO — back then it was general manager — he said, it’s not the software.

Paul Giannamore:
And I’m like, dude, I think it is the software.

Tommy Mello:
Software is a game changer. I understand software wasn’t a big deal in the ’90s, really the early 2000s. But now, more than ever, with AI and machine learning — Dispatch Pro is going to change the game with ServiceTitan. We are helping them build it. We’re giving it data. We’re loading it with credit scores. We’re loading it with pre-approvals. We’re giving it anything you could do with regression testing to make the machine learn. The secret sauce is, like for pest control, you’d want to have like 25 different types of jobs. Even if it’s mosquitoes — let’s just say it’s mosquitoes — you want to have what type of mosquito job, because it’ll learn what guys do the best, the highest conversion rate. It might recognize these people, it could pull their age, and you want to send someone close in age to them. It might recognize, eventually, that they’re from Canada — let’s send out one of our Canadian folks, somebody that talks funny. They can match that stuff up. It’s insane. And people are like, yeah, that’s not going to happen. And I’m like, dude, it’s here.

Paul Giannamore:
So if we take a stroll down memory lane for a second — it’s circa 2014-ish, you’re doing around 17 million in revenue—

Tommy Mello:
No, 2017, 2018. I was doing that when I met Al Levy.

Tommy Mello:
It was 2017, 2018.

Paul Giannamore:
So that’s when Al came in to help you with all that?

Tommy Mello:
I was doing 6 million in 2014.

Paul Giannamore:
Okay. He helped you standardize all this. Outside of him coming in — checklists and all that standardization — what were some other big takeaways back in that era for you, where you were like, holy shit, I’ve been doing this wrong? Or maybe there’s too many to recount.

Tommy Mello:
Well, here’s the biggest: starting the podcast, talking to smart people, and then getting on ServiceTitan — they have their annual event called Pantheon. And that’s when everything changed, when I went to Pantheon and met all the HVAC, plumbing guys, and I’m one of the only guys in there in garage doors. They’re talking about service agreements, financing — which we call promotions — they’re talking about things like — I’m like, these guys are light years ahead of us, like light years.

Tommy Mello:
And after that, I just started flying to their shops, $100-million shops. And I’d go in very humbly, and I’d ask questions, and I’d smile, I’d buy everybody lunch, and I’d just go apply this stuff. And I’m like, I want more. So I go fly, fly, fly, fly, and I just go implement. And we’d be working on ServiceTitan together. You know, I helped develop Marketing Pro. I signed NDAs, and basically I just gave them feedback. I didn’t develop anything, but that was something that changed everything — walking into a business, watching the people work, because they started in the early ’90s to build best practices, what we started a few years ago in garage doors. So they were 30 years ahead. I said, wait a minute — that guy’s got a private jet, that guy’s got a private jet, that guy’s got a private jet. This is the industry I need to start following.

Tommy Mello:
And it’s the exact same thing. It’s just a different widget. And then I figured this out: if I don’t start training and start a best-practices group and start posting everywhere, there’s no way I’ll build a company that’s worth anything. People are going to think I’m price gouging. So I stood in front of 40 garage companies and said, do you guys not drive brand-new trucks? Can you afford 50 billboards? Do you pay six figures to your people? Do you have insurance, PTO, all that good stuff? No, hell no. Can you afford ServiceTitan? No. I’m like, well, why does every plumber and HVAC guy get to have a private jet? You see that guy’s got a Bugatti. Why are we worth less? And they go, oh, that’s price gouging. I’m like, you’re paying your guy $45,000 a year, he gets no benefits, his kids are stuck living in an apartment — why is that price gouging? You’re not even making enough to get by. You’re still in the truck running jobs. This is not — you have a career, you don’t have a business. And so people started listening to me. Either you hated me or you loved me. You were like, this guy’s right, or this guy is just money-hungry. And I’m like, no, I want to pay people really good. I believe a good business should bring home 15, 20%, because that’s a healthy company. And that was just unheard of. “No, blue-collar guys, you’re not allowed to make that. We’ve got to hold you down.” And I was just like, I want to follow the HVAC guys. I don’t really care. So before people would find out, we trademarked our own parts, added the cycle life that’s eight times longer than anybody else. And there are still people on Facebook who are like, oh, that Tommy Mello guy, yeah, don’t be like him. They don’t believe in wrap trucks. They’re like, I’ve got enough business just to keep my truck white with lettering. And I’m like, I’m proud of you, we’ll call you MacGyver — you can fix anything, and you’ll never be able to help anybody out. My goal is to help enough people in my business. My dream’s so big that all their dreams could come true.

Paul Giannamore:
You talked about wrap trucks. I remember what your old trucks used to look like, and I, of course, know what your new brand, your most recent branding, looks like. How big of an impact does that really have on your business, particularly in garage doors?

Tommy Mello:
So here’s what I learned: the trucks and the vehicles are number one — they’re driving billboards. The trucks need to look like the billboards, they need to look like the yard signs, they need to look like the website, the stickers, the ValPak, your email signature. When I got it all symmetrical, when everything looked the same, my average ticket went up dramatically. We looked like a premium brand. We showed up differently. We had uniforms. We had the exact same tools. Our trucks looked immaculate. And I’ve got two layers on my trucks — I’ve got lettering on top so it reflects at night. And then what I noticed is the clientele got way better. And people started applying way more. They said, I see you guys everywhere. And we started to become a brand name. My cost per click went down, my conversion rate on ValPak went up. Everything started gaining this crazy momentum, because — mind you, it wasn’t just a few vans driving around — I was doing TV, radio, billboards, yard signs. It was like the machine. It was omni-channel marketing. It wasn’t just this one thing, and it all looked the same. They’re like, we see you everywhere, we see you at the fair, we see you at the home shows, we see your trucks. I call it parking — I’d park at a busy corner and leave it there overnight, or leave it at a Costco. Instead of marketing, just parking stuff everywhere around the city. And yeah, this stuff works. It gains momentum. How often does somebody need garage door services? It’s an interesting question, because you’ve got your opener and you’ve got your garage door, right? A lot of people hit them. A lot of times they come down on a rake. A lot of times kids are playing hockey on them. And if you were to look at the wear and tear of a non-insulated builder-grade door, you know, 8 to 12 years, springs break. If it’s 10,000 cycles, you’re using your door, let’s just say 10 times a day, 300 days out of the year—

Tommy Mello:
3,000 times — 300 times 10, 3,000. You’ll get three years out of that before your spring breaks, if that’s a standard cycle. So you’ve got rollers, cables, bearings, hinges — you’ve got a lot of things. There’s hurricane-rated, wind-load-rated. And then there’s also the 40% of your curb appeal. We trademarked it: it’s the smile of your home. Remodel Magazine, seven years in a row, said it’s the number one investment into the home, more than your kitchens or bathrooms. So there’s a lot to be said about the garage door. That’s when you drive up and people ask, did you redo your landscape? Did you paint the house? No, I got a new garage door. So I’m pretty passionate about garage doors.

Paul Giannamore:
I can see that. The smile of your home, is that what you said? So basically, these things might last three years on average? A garage door usually lasts about 10 years, but the deal is now the openers — you’ve got spring issues and pulleys and all sorts of other stuff. So you’re saying — I guess the reason I ask is that I think about garage door versus other resi services.

Tommy Mello:
It’s the same thing — garbage disposal, hot water heater, air conditioning — they’re ready for 7 to 15 years depending on how efficient you buy it. And then are you keeping up with the upkeep? Lubricating, adjusting, tightening everything on the door. Just like an AC unit needs to change filters and needs you to check things on it and clean out the condenser, garage doors need work too.

Paul Giannamore:
When you started this business — I mean, you’re painting garage doors, and now you’re doing garage door replacement service — did you ever really think it was going to turn into what it’s turned into today? Realistically, Tommy. Were you the guy that was like, man, I’m going to blow this up?

Tommy Mello:
You know, I was actually kind of disappointed in my first six years, because my dad said 2% of every mailer you do will get answered. He used to do ValPak and different things. He ran a thing called American Transmissions, and then he worked for AAMCO. So I started doing the math on ValPak, and I’m like, I’m going to blow it. I found a file — I sent out a hundred thousand pieces, that’s two thousand. I did all the math, and I’m like — I’ve always been a dreamer. I never had an idea that I could potentially, before 45, become a billionaire, hopefully multi-billionaire. But I’ll tell you this: the money comes. It’s not about the money. You’d think it is. It’s about who I’ve become, getting the information, because if you took the money away, I’d be right back. It’s who I had to become to be worthy of that. And it’s not even worthy of money, it’s what the money — this house is going to build so many memories. Each and every one of my co-workers is invited over here. My parents come here all the time. My dad had a 70th birthday here, my mom came over here for her 70th. That’s what this is about. This is a great investment. It’s not going to ever depreciate. It’s just going to go up, up, up, up. But with money — the reason people get their hands on money — and by the way, money’s not the root of all evil. The Bible doesn’t say money’s the root of all evil. It says the love of money is the root of all evil. And I think we’ve got a fiduciary responsibility to make as much profit as possible while still doing good by the client, staying ethical, and having high morals to stand on. But it was a lot of money. I remember it was Christmas Eve 2022, and I was like, I guess I’m done. And that lasted about three hours. And then — they had a great team — I got with Goldman Sachs, I got the lawyers, I formed the trust, I did all the hard work, and then I formed a family office, just dialing things in, making sure we’re doing things tax-efficient. And I don’t know, I’m not done yet.

Paul Giannamore:
But you partnered up with Cortec, and you’re still a very significant shareholder in A1.

Tommy Mello:
Yes, I rolled half of it.

Paul Giannamore:
It’s not like you turned around and sold out and went off. You are all in on this thing. You’re a big shareholder. What’s the plan for it now?

Tommy Mello:
So the bare minimum they want to do is—

Tommy Mello:
Triple. I think I could get it to 4x after three years — this north of a hundred million of EBITDA. Still think we’ll get one of the highest multiples in the industry after we roll 30% more. I don’t want to be the CEO of that company. I want to be involved every day, but maybe like a chief visionary officer — just really close with my technicians, involved in the operations, heavily involved in marketing, more involved in motivation than anything. Just helping people figure out their why, dream a little bigger.

Paul Giannamore:
I want to talk a little bit about that. It appears to me that your team members here at A1 are actually super excited to be a part of this organization, and you put a lot of resources behind education and growth. So I want to talk about how you’ve dealt with team members from inception to today. What are some of the things that you’ve done to really create this team?

Tommy Mello:
So we have a dream manager. It’s a great book. You can get certified as a dream manager to help people come up with their dreams. You’ve got daily morning mojo calls. You’ve got a Thursday morning meeting. One meeting once a month, “bring the fire,” with the entire company. We’ve helped fix their credit, helped them figure out homeownership. We’ve got a Pinnacle trip — it just took 61 people to Puerto Vallarta. Recognition. We’ve got profit units that are available all the way down to the technician level; there are now 25 technicians with ownership. Really, where you start is, what do you want? How big is your dream? How many houses do you want to own? Don’t tell me you want to go to Disney World — tell me you want to go first class, what rides you’re going to go on. Let’s manifest these things, and then let’s build a detailed plan, a personal budget. And then, rather than me saying I’m going to put you on a write-up or a performance improvement plan, my goal would be: Paul, these were your dreams, right? We do these few things, you do a ride-along, we get someone in the MAT team — the market acceleration technician training — we get you to these numbers, you not only make clients happier, you not only have more job security, but we accomplish these dreams faster. You told me you wanted that. I have ultra-competitive people who like to win. And they’ve got to write their goals down, because it’ll never happen if they don’t write them down. We know that. And it’s not month to month, quarter to quarter. It’s day to day.

Paul Giannamore:
Let me ask you. Say I’m a technician, I come on board with you. You’re asking me, “Paul, what are my goals? What do you want to buy? What sort of house do you want to live in?”

Tommy Mello:
Yeah, not really that. What do you want to do? Do you want to become a better father? How’s the relationship with your wife going? Do you need to be home for Sundays? Where do you want to go for a family trip each year? Are you close to your dad? Do you want to take him on a fishing trip or a golf trip?

Paul Giannamore:
Okay.

Tommy Mello:
Let’s line everything up. Let’s try to give you everything. Are you happy being 27% body fat, or do you want to get down to 15? Let’s do everything.

Paul Giannamore:
Oh, I’m at 15 now, Tommy.

Tommy Mello:
You look great, yeah.

Paul Giannamore:
Not you — that’s a bad example. So you write these things down. I want to delve into this a little bit, because it’s a really interesting concept. So I’ve literally got my personal financials, I’ve got all these — you’re really getting into who I want to be as a person, what I’m aspiring to do. How are you tying these goals to what I’m doing at the organization? Have a conversation with me. You’ve gone through my goals. I want to buy this house, I want to go on this trip. Profit First — Mike Michalowicz — revenue minus expenses equals profit, typically.

Tommy Mello:
In this case, revenue minus profit equals expenses. It’s a different way of looking at it. So we say, okay, here’s your child’s tuition fund. Your kids are six and eight. We do some math. Here’s how much you need. This accounts for — you want to take them on an African safari, it’s going to cost you 30 grand, let’s call that 14 months. How much do we need to pull out of each check? Here’s what you need to cover your bills. Here’s how much we have to put into these buckets. These are all separate bank accounts. And this is what we’re working on with Mike Michalowicz. So that’s the budget side of it. We’ve always got to carry good credit. So you’re literally helping each team member with their various different buckets. We’ve got a lot of work to do, so that’s where it starts. And there’s a lot of discipline built into that. So that’s the beginning of it. And then I would tell you to go to calc.a1garagetools.com, and we’ll put in all the KPIs and show you how much money you can make as a junior tech, tech, senior tech. And then we’re going to go through and help build a plan. And guess what — I want to get to, and it’s not always me, but let’s get to know your wife. If your kids are over 12 years old, we can talk to them as well. The dad’s got a big dream. Let’s make sure the whole family knows. Let’s make sure if you’ve got to pick up a Friday, you want to work a little bit later, you’ve got to pick up a Saturday.

Paul Giannamore:
Work on Easter. That’s why you’re doing it.

Tommy Mello:
They understand why, because this is helping them. What’s in it for me? What’s in it for the family? Why is dad always working? Because you can’t have it both ways. You want to spend time with family, you want to work. I know nobody ever says when they die, do I wish I worked more? But they also don’t say, I wish I lived in poverty more. You know what I mean? So I think the people who say, man, I wish I could have made it to my kids’ games — there is sacrifice. And we talk about these things. It’s something nobody wants to talk about: when’s enough enough? I don’t know. People always ask me, when’s enough enough, at what point is enough enough? And I go, if Tiger Woods won four majors in a year, should he quit golfing? Is he done, or does he love it so much that it’s just part of his life? The golf is part of his life forever. Business is my golf, for Tiger Woods. So we start with these people — and I don’t call them employees, I call them my co-workers — and I try to lead from up front. And like I said, I’m a work in progress. You’re hearing this thinking, man, it must be amazing. It is good. We try, and everybody’s putting forth their best effort, but I truly believe we could always be better. We’re one percent better each day. I’ve been talking a lot about — until you feel good. I’m on peptides. I was putting up 245 for 10 on the incline yesterday. I feel great. They see that I feel great. I took a cold shower and I’m like, guys, cold showers, cold plunge, cardio, eat right. And I say this: you look in the mirror, if you’re not proud of yourself, your kids aren’t proud of you. Imagine when you’re your best self, when you walk into a room and you’re the baddest ass that walks in, like, I believe in me. And it helps the company, it helps them, it helps their relationships, their energy levels, their health, their longevity of life — it helps all these things. And the same thing for religion. I mean, listen, if they want to be closer, we’ll do that. I don’t care what religion it is. But family, faith — the whole onslaught.

Paul Giannamore:
You’ve been super into physical fitness for a long time. What sort of things do you do at the organization to help these guys with that?

Tommy Mello:
Almost everybody opts into the insurance, right? And they’ve got the — what is that called, the HSA, or money—

Paul Giannamore:
Health savings plan. Yeah, health savings.

Tommy Mello:
So they’ve got that left over. So I’m working on a program that really builds accountability and helps you with dieting. We’ve got a gym at the office. I’m very sensitive, because some people have genetic issues, and a lot of women have hormonal issues — men do too, with their thyroid. I don’t judge people, because I see people literally try so hard. But here’s the problem: they don’t eat. You need to eat more protein. You need to eat more often. You need to get your system going. And I want to have somebody inform them, because I think a lot of people would change if they knew how.

Paul Giannamore:
Let me ask you, speaking of protein — how many grams of protein are you eating a day?

Tommy Mello:
I’m trying to get a gram to two grams. I’m following somewhere around 260 to 300. But I’ve got a guy coming out here next month who is — and this sounds so bad — but he’s a modern butler. He’s a driver, a Michelin chef. He’ll run the house and work out for an hour a day.

Paul Giannamore:
He works out for you?

Tommy Mello:
No, he calls it the power hour. The dude’s in shape. He bikes 40 miles a day. He does triathlons. The biggest thing — look, you get it done in the kitchen. That’s where you get it done, period. Supplements I’m on. And sleep. If you’re not getting seven and a half to eight hours of sleep — I think a lot of people fail there as well. If I had to go in the order of importance: sleep, number one. Some people need help with sleep. So sleep is number one. Number two is diet and water. Number three is supplements. And the last thing is working out. But I’m like, you don’t need to work out that hard. Park as far away as you can when you go to Costco. Walk your dogs. Don’t use the elevator. You don’t have to do much more — like, walk and talk. The working out — I know people at 10% body fat that don’t work out, their body’s just a machine. I think it’s helpful to have. If I had to tell you, is HIIT better? No, heavy weights are better, because you’re breaking down your muscles more, and that’s your muscle rebuilding. The healing itself lasts 24 hours versus cardio.

Paul Giannamore:
So how often are you hitting the weights?

Tommy Mello:
Right now, three to four days a week. I try to hit 100 push-ups a day. When I’m all in, I’ve got to bet, I’ve got to have a contest, I’ve got to have accountability. I need accountability just like everybody else. I probably need it more. So I come up with these pretty outlandish bets. And we go get the DEXA scan, and we’ll find out where our body fat is. And I’ll probably get five guys involved, probably about 15 grand a pop. So whoever wins, 75 grand — it’s not going to change my life, but winning will. Bragging rights will. And my dad is a very, very sore loser. So my whole life, I’ve been a sore loser, and I will fight to win. But I’ve got to say, I hate losing more than I like winning, because my dad was so antagonistic. He antagonized the crap out of me. Even still, we’ll go golf and he’ll be like, give me a stroke a hole. And I’m like, a stroke a hole? You’re getting 18 strokes. So if I shoot an 82, you could beat me with a 100. And he’s like, yeah. And then he’ll get 17 strokes or whatever, and he’ll beat me by one, and he’ll go on Facebook and call everybody and brag that he won. I’m like, yeah, you didn’t mention the 17 strokes. But that’s what makes me — I look for competitive people, I look for people that want more. I ask people all the time, what’s your favorite sport? Who’s your favorite athlete? Why? Work ethic, tenacity, just wants to win, willing to practice, has four personal coaches. Those are the people I want.

Paul Giannamore:
How many co-workers do you have now?

Tommy Mello:
Oh, we’ve got 42 coming in next month. I think we’ll be just over 800, but we should be about 1,200 by the end of this year. Acquisitions aren’t a big play, because you can’t say I’m going to do two companies a month. It’s whoever you can do.

Paul Giannamore:
You’re opportunistic, yeah.

Tommy Mello:
Yeah, so we’re getting very good at green-fielding. We’re getting very good at going into a market, starting out with four or five techs and getting into 20 within a year. And green field is more of a strategic play — it’s harder to do, but when you get good at it, the world’s your oyster. You kind of build a plan to take over.

Paul Giannamore:
What considerations do you make when you think about green-fielding versus going out and doing a deal?

Tommy Mello:
So we study a market. We look at the competition. We look at the opportunities in Google. We look at the average income. We’ve got all this garage door data. And then we look, is there a player we want here, purely residential retrofit garage doors? And the main thing that I love buying the most is when they’re older companies, in their late 50s, early 60s, could be late 60s, could be 70 years old. I’m willing to pay up. Here’s what’s weird, Paul: everybody says, I’m worried about my employees, this is my life, you’ve got to treat my people right. Then they get all the money, and guess how much did the people get? Oftentimes, nothing. Zero, zilch, nothing. All that talk, and they didn’t even give them $1,000, didn’t even send them a thank-you card.

Paul Giannamore:
Yeah. Well, they’re expecting you to care for them. That’s the issue.

Tommy Mello:
And that’s okay. And I do. The thing is, we’ve got a whole amazing integration team. Anybody who thinks buying companies and integrations and doing the work you do and shifting cultures is easy — it’s not easy. Green field’s not easy either, but think about this: if you’re doing a million dollars of EBITDA and I’m paying you 6.5x, 6.5 million — if I can figure out a way to put $3 million into marketing and become just as big and get a good market, either way I’m going to pay off the debt, the $6.5 million. But what’s nice about acquisitions is you’ve got an existing list, you’ve got a database of customers, you’ve got some technicians you can turn, you’ve got your phone ringing, you’ve got goodwill in that market, you’ve got stickers, you’ve got old invoices. So they’ve got 40 years of goodwill. It’d be easier to buy an existing company that’s been around a long time. I would rather buy a company that’s been around. But if somebody said, hey, it popped up in 2017, I’ve been spending a million dollars a year in advertising, I don’t think it’d be as good as a company that’s been around for a long time.

Paul Giannamore:
This industry is extremely fragmented. I would imagine most of those players are super tiny now.

Tommy Mello:
Yeah, so we’re willing to buy anything over 500,000 of EBITDA now. There are a lot of companies getting in. 93 companies sell our kind of deal, and they think this is the next HVAC. Part of me wants the whole industry to do better, but PE’s different. I kind of want these guys to shit the bed. I want them to see how hard this industry is. Because they look at me and say, that Tommy Mello, that A1, we’re going to build something bigger and better. I’ve never wished — and this is general, it’s not like I’m hoping this one company does bad — but when somebody says it’s easy and then “he got lucky.” Listen, I got lucky that it happened during COVID, and everybody — you know, nail salons were failing, multiples went up, we were considered essential. No doubt my timing was impeccable, and that was luck, that was divine, that was Jesus. But it’s just like all these rich PE guys coming in, raising, you know, family offices, whatever, venture capitalists, they go in with these black ties and they go, we’re smarter, we’re Ivy League. And they get in there. They are very smart. They understand how to raise debt. They understand how EBITDA works and how to make the finances look good. But they don’t know how to speak the same language. They don’t know how to care for these people. They don’t know how to be a mentor. It’s so much different communicating. These guys are out of a truck 12 hours a day. They’re not going to look at the note you sent them via email. They need calls all day. They need text messages. They need check-ins. A guy needs you to help him pay his rent. Oh, we’re not a bank. Okay, good — you lost him. Done. Replace him now. You just lost 50 grand. They don’t understand what these guys are going through. They never lived that life. There’s the separation. I think I’m a bridge, because I can speak that language. I got a master’s, blah, blah, blah, but I’m one of these guys. I’m one of them. So I’ll never forget where I came from.

Paul Giannamore:
So obviously other financial sponsors are sniffing around this industry. But I remember talking to you, maybe we were chatting about this last year — you were on the road, you were looking at acquisition targets, you were going around meeting with folks. How many deals have you gotten done since you closed on your transaction?

Tommy Mello:
I’m going to say 10.

Paul Giannamore:
Okay, that’s more than I thought.

Tommy Mello:
Yeah, some of these were very, very few hundred grand of EBITDA, all the way up to three and a half million of EBITDA. You know what’s interesting is every garage door guy happens to do Home Depot, Lowe’s, new construction, and commercial. And gates. Sometimes fireplaces, sometimes windows. And we’ve got a very disciplined buy box. Now, I’m willing to flex a little bit on the multiple, depending on the company, but I’m not going to try to take on something we’re not the best of the best at.

Paul Giannamore:
I’m interested in your thoughts on what you just raised. You guys are very focused. You’re not jacks of all trades doing all sorts of different services. Was there ever any desire for you to get into other lines of business as you were growing this? You’re doing garage doors — did you not look around? You’re hanging out with all these HVAC and plumbing dudes. Did you ever just say, I’ve got all these relationships with customers, why don’t I do HVAC too, why don’t I become a diversified home services business? You remained disciplined, and there’s a reason for that, because you could have done that. You understood those businesses.

Tommy Mello:
Yeah, you know, there are two ways to grow: own the audience or own the industry. You’ve got Paul Kelly with Parker & Sons, who decided to own Phoenix. He’s going to do $260 million this year, Parker & Sons. I wanted to own the market across the whole land. And I figured I could build specialists. Any time I’ve tried to go in and just tiptoe into epoxy flooring or whatever, we’re not built for that yet. It requires a new layer. We always say, okay, we’re just going to give that to that manager, we’ll launch it. It requires a specialist, a master of one thing, a different department, completely run differently, on a different set of books, a different call center. You could blend the call center eventually, but I got so good at garage doors that it was just across the board.

Paul Giannamore:
And you must have been tempted, though.

Tommy Mello:
Yeah, I’ve tried some stuff. And I still think there’s a real opportunity, like just insulation with the Inflation Reduction Act. We’re looking at a lot of good stuff. But every time I try to grow too fast or go into something I shouldn’t, I kind of got spanked. And I’ll tell you, the one big thing we’re working on now is, how do we get more from the customer? There are only three ways to make money: new customers, charge your current customers more, or keep them coming back more frequently. I want to sell insulation. I want to sell some storage stuff. And I say, you’ve got to nail it and scale it, right? You’ve got to get this going. And I think we’re in a different position now. You know why racehorses wear blinders? Because there’s so much going on in that race — the Kentucky Derby, wherever the racehorses are. Wear blinders, stay focused. Because these distractions, man — I’m ADHD.

Paul Giannamore:
Yeah, I know that.

Tommy Mello:
I’m a dream guy. I’m a vision guy.

Tommy Mello:
So I think we can do the world. So I’ve got to stay out of my operator’s way. I know I need to do that, but I’ve also got a lot more resources now, and I’ve built a decent reputation. I’m a decent influencer, so now people want to work with us. So I see there are a lot of opportunities, and Cortec is pretty disciplined too. They don’t want me going into HVAC — they’ve been buying HVAC companies across the country. But mini-splits in the garage, I’m working on that, especially in Phoenix, Vegas, and Tucson.

Paul Giannamore:
Tommy, when you think back to the things that made A1 successful, from the very beginning — I know you’re a sales and marketing guy, you’re not a finance guy, you’re certainly not an engineer — but really, what are the key ingredients you can trace back to the success of this business?

Tommy Mello:
Four KPIs that I can fix any company on the planet with. Any company. Booking rate — your call center, every single form fill, every single Angie lead, every single phone call, no matter what, call center booking rate. Conversion rate — face-to-face with the customer, how much are you converting that into a customer? Job average, or average ticket. And cost per acquisition. Those four, I can change a company with. I’m obsessed with those four. People always call me up, they’re like, my marketing’s not working. I’m like, what’s your booking rate? They’re like, probably 70%. Probably. You don’t have attributes, you don’t know what your booking rate is. Every company I get involved in, I need to know down to the decimal point what their numbers are, and I’ll find massive amounts of money. And then the marketing. I say, if I had to tell you what I am, I’m 10 times better at marketing than I am at sales. And I’m no slouch when it comes to sales. So if I gave you an order, I’m right here in marketing, I’m here in sales, and I’m here in finance. Like, I cannot speak to my CFO at the same level.

Paul Giannamore:
Okay. So how did you educate yourself in marketing? How’d you get your marketing chops?

Tommy Mello:
You know what I’ve always found? I find the number one person, like on Angie’s List or Nextdoor or Facebook. And I do this crazy thing — call them up, tell them I’m impressed by them, tell them I read their book, whatever it might be. I get a hold of anybody. Marcus shared it. I’ll get a hold of them. And now as I’ve grown, they’re like, how do you become number one on Google? Go in your market, search HVAC repair in your city name, find that top company, call them up, show up with flowers for the front desk girl — you’ve got to get through the gatekeeper, do something spontaneous. Find out, go on the guy’s Facebook page — what does he love? He loves, you know, Dave Matthews. Get him tickets. Say, hey man, can I take you to dinner, give me one hour, I’m trying to learn more about this. Success leaves clues. So networking, having conversations, getting really close with ServiceTitan — they know who’s winning. I’m very close to a lot of people at ServiceTitan; they’ve got all the data. It’s not like they’re advertising the data, but usually they’ll have someone, they’ll bring them into Pantheon or whatever. I’m just good at connecting with those people. And listen, I watch a lot of videos, I do a lot of self-help, I’ve got a lot of coaches, I’ve hired a lot of consultants.

Paul Giannamore:
What kind of consultants have you hired?

Tommy Mello:
I just hired Dan Martell recently — Buy Back Your Time. He’s several hundred thousand a year for one hour a month. But he opened up everything to me, his kingdom. And, you know, don’t tell him this, but I’ve probably got 10x ROI already. You know, Al Levy, Joe Cressara, Jonathan Wissman. I’ve got two speaking coaches. I’ve got a trainer. I’m bringing in this guy to help me around here all the time. I got a ping pong coach, because I used to get beat at ping pong, and I got mad about it, so I found the number one guy west of the Mississippi to train me. I’m the first one to ask for help. I want help. Someone’s better than me, just teach me. I’m not going to learn the hard way. That’s probably my number one attribute — I ask for help when I find the best. I’m not super smart at all. I’m just a guy from Michigan. I just learned how to ask for help. ASK are my favorite three letters. And I tell everybody at A1, my co-workers, just ask. Just ask. We’ll get you anything you want.

Paul Giannamore:
I remember years ago you calling me up, saying, Paul, who’s the best door-to-door guy you know? If you could think of one dude, who would it be? I said, probably Lenny Gray. And next thing I know, you called him up, you flew him down here, had dinner, and you guys were off to the races.

Tommy Mello:
Yeah, well, he is a great guy, by the way. Unbelievable, humble. I really — I love Lenny. I guess he’s like a brother now.

Paul Giannamore:
You guys attempted to do some door-to-door, which is weird, because you never think about — I remember first talking to you about this years ago, thinking to myself, I don’t know if that’s going to work, but Tommy’s going to figure it out.

Tommy Mello:
We’ve done — so the idea was, people call us from stickers. The idea was, knock on the door, we’re not here to sell you anything, you might open up the garage door, we’ll lubricate it at no charge, we’ll leave you a sticker because your neighbor just used us down the road. Those stickers become money. It takes us about six months. And the latest thing we’re working on is, what can we sell them to just break even on the door-to-door guy, so we can pay them a ton of money?

Paul Giannamore:
And there’s a lot of money in storage, especially if there’s no drive time. So we’re going to start selling storage. You know, you’ve got all these door-to-door guys going out selling solar, alarms, pest control, all this other stuff. Couldn’t you just hijack on top of them instead of having your own exclusive door-to-door guys to do it?

Tommy Mello:
Maybe.

Tommy Mello:
I mean, Lenny’s a pretty smart guy. We tried a lot of things. We made a lot of money in the program. At one point he had 60 guys door-knocking. But you know, it’s more of a summer program usually, and if someone fails at solar or cable or windows or pest, they’ll make it in the garage door space, because it’s free, you’re just bringing that on the door. But I need them to start selling something to get it paid. That’s the hardest part about door-to-door. Like my buddies at Moxie — the first three years, Austin just spent a fortune. You don’t know Austin?

Paul Giannamore:
Yeah, yeah, I know. I wrote an endorsement for his recent book, the one with Michael Gerber.

Tommy Mello:
Yeah, yeah. Dude, Austin’s great. I’m becoming really close with Cam, with Green Mango. They’re killing it. I love that. I love the idea of pest control. In fact, you know what I’m working on — I do those videos, and now I’ve got the software to do it — we’re using the software called Chirp, and it’s automations, so every time I don’t book a phone call, they get a text message. Between Chirp—

Paul Giannamore:
Rilla Voice, Power BI — dude, you are all over every software that’s like in prototype somewhere. You’re testing it. You love this.

Tommy Mello:
Well, you know what I love? I love human beings, but—

Tommy Mello:
But I like processes more than humans. People say it’s the people. I say the processes pick the people. We do drug tests, DMV records, background checks. There’s a process to pick the people. So the processes and the automations — I don’t want to get rid of human beings, I just want to be able to get more out of the people I’ve got. I’d rather them make a lot more money and get the A-plus. A-players hate B-players, number one. So I’d rather the top people — I need economies of scale. And I do believe, with the technology, the AI, the machine learning that we’re working on, I’m bringing an atomic bomb to a knife fight. And if people don’t start conforming and coming to my event — this sounds very cocky, but if they don’t start learning what we’re doing, it’s not only that they don’t stand a chance, they’re going to be bankrupt very soon. I believe they’ve got three to five years to catch on. And we’re so early on this stuff. It’s two years before it’s an AI call center. The AI dispatch is already in motion.

Paul Giannamore:
Are you guys developing your own software and AI internally?

Tommy Mello:
We’re doing a lot of stuff internally. We’re doing add-ons to ServiceTitan. We’re doing API webhooks into a lot of stuff. We’re building our own way. So we’ve got a virtual product specialist when you transfer from a service call to selling a door. It’s actually machine learning on who to transfer that call to. That’s internal. We’re asking the client to send us a picture of the door and open it, so we get the right technician with the right parts and the right tools. It recognizes if that door needs to be replaced and sends the right technician. There’s all this stuff we’re building internally, and I’ve got really, really grade-A, high-level, top-echelon developers that we work with.

Paul Giannamore:
Well, so where do you see the home services sector going at large with regard to technology?

Tommy Mello:
With regard to technology, it’s going to be a lot of AI. There are no robots going to be doing this stuff anytime soon. I could see pest control happening, where it could go spray a yard, but not high-end stuff. I think what’s going to happen is the OEM manufacturers are going to start teaming up and buying companies, like these big PE companies. I think it’s going to get a little bit commoditized over the next — I think we’ve got five, six years. You know, if I partnered with Chamberlain, that’s owned by Blackstone, I would know about the garage door problem before you could go to Google or go to a sticker. Same thing exists for HVAC. Same thing exists for hot water heaters. So if I knew there was a problem and I could be out there within an hour, and I’ve got the most trucks, and I’ve got cameras on the trucks and the ServiceTitan software, I’m in 23 states. If I get to 35 states, same trucks, same vans, same tools, same software, background check, dual cameras — what’s going to happen? In my opinion, it would be foolish not to partner with a company like us, because they’ve got all the technology. They know that you’ve got a problem before you do. And for me, it’s better customer service. What’s the customer going to win? The reason Google does so well is because the customer wins. It’s all about giving the customer exactly what they’re searching for. So if a customer says, sure, if I can’t get out of my garage, you’ll ensure that I’ll have somebody out here within an hour to get it working. Now you go into antitrust laws and invasion of privacy and certain things — we’ll work through that. By the way, your cell phone’s recording all this. It knows what we’re talking about. All the apps do. There’s probably a Ring in here that’s listening. You know, with this gunman that got away, the Rings are what they used to find the gunman. They saw a guy going through a neighborhood from the Rings. The CIA — you’ve got Siri and everything. So I think it’s going to be the next five years of the golden era. The next five years, there’s going to be generational wealth transferred like you’ve never seen before. It’s going to be 10,000 baby boomers a day retiring, or 12% on a business. Massive amounts of wealth are going to get transferred. I plan on being heavily involved in that.

Paul Giannamore:
When you look at financial sponsors, private equity firms getting involved in firms just like yours — you mentioned earlier in our discussion that the difference between you now and you before is you’ve got the same ideas, the same drive, you just now have a lot of additional resources. And that’s happening across a variety of industries, as private equity firms make investments, giving guys like you additional resources to go out and do crazy stuff. What do you think the impact on private equity investment in home services will be from a competitive perspective? For me, I look at it and think it’s much more difficult to compete with A1 now than it was five years ago, and it will continue to get more difficult because of the resources you have. You think we’re going to see that across the industry?

Tommy Mello:
Yeah, here’s the thing. I think what’s going to happen is, you don’t want to sell, I’m going to only ask you three times, then we’re going to smash you. And that’s where I believe we’re going, because the technology is going to get that much better, and they’re not going to be able to afford new trucks, no one’s going to want to work for them, they’re not going to pay as much, they’re going to have turnover like crazy, and the multiple is going to go down for them. But yeah, I think it’s going to get really hard. Look at digital marketing right now — if somebody could outbid you because your KPIs are that much better. Remember: booking rate, conversion rate, average ticket, and cost per acquisition. And this is where I think A1 wins bigger than anybody I know, because I’m doing PR. All the charities we give to, I require a backlink you give to us for at least a year. The number one company in North America for LSA built an algorithm that talks to Google, so we dominate that. The GBP, or Google My Business page — no one can keep up. I like PPC — I mean, PPC is a wild game, and that’s your most expensive marketing. I’m working with the chief revenue officer at Angie’s List. He’s a buddy of mine. He wrote in the Home Service Millionaire book — this is what I do. I’m a better networker, and I’m better at asking, like I said. So, yeah, the biggest nightmare I could have is Google somehow shutting down our account, because that just happened to a buddy of mine who’s part of the Cortec team. And that won’t happen, because we just got this new relationship with Google where they’ll never take us down. We don’t even need to do advanced verification anymore. And the second thing is, we train our guys to be ethical, do the right thing. And in the last decade, there have been like 25 catch-a-contractors.

Paul Giannamore:
What do you mean, catch-a-contractor?

Tommy Mello:
They’ll set you up. They’ll do the garage, they’ll put the lock on, they’ll misalign the safety eyes, see if they sell you a new opener. And we’ve been through these a few times. It happened to another large franchise garage door company, and they lost 30 across the country the day that came out, like Dateline NBC type stuff. And I know we would pass, but I can’t — you know, with these hundreds and hundreds and hundreds of techs — and we’ve got Rilla Voice, we’re doing all these things, but I can’t be the guy in every single garage. We talk about ethics and doing the right thing and taking care of the client and helping grandma get the Christmas tree down and playing with the dog, learning about the family. But that’s one thing I always — I’m always doing SWOT analysis, math. I’ve got my calculator out all day, every day. And I’m thinking, what are the threats? What could bring us down? I’m not worried about competition. Competition is great. I love capitalism. I’m not worried about the employment industry, you know, millennials. I’m not worried about lead gen, I’m not worried about our suppliers. And just this morning I started thinking, what can stop us? Really, there’s not a whole lot. I’m very, very confident. And one of the buddies of mine who runs the Cortec fund, he goes — a lot of companies, six months after we got you, called me and asked me what it was like to work with you. They said, were you able to tame that guy? He’s wild. And he’s like, here’s what I told him: Tommy is astute, he’s not too proud. But they came in, Cortec, really good. They treated me like gold. They make sure that everybody answers to me. I’m in control. They’re there to support me. They’ve really done a fantastic job. I’m so happy we picked them. They don’t pay me to say that, either, because you hear these nightmare stories.

Paul Giannamore:
Let me ask you this. Speaking of Cortec, now that you’re financial-sponsor backed, you’ve got formal board meetings in that entire process. What’s that like for you now? It’s a different era.

Tommy Mello:
So Cortec doesn’t believe in formal board meetings. They meet once a month. We go over about a 200-page PowerPoint. They dig in. Doug and Michael spent four hours going through it before, so they know exactly what page to flip to. They ask great questions. I think we’ve got the best CFO and FP&A people in the industry. So we’re giving them — they go, you guys have given us the best deck we’ve ever had. And I’ll always add two or three slides of what I want to see. And they let me — they’ll start the meeting and then I’ll say what I need to say. And I’ll tell them what we’re working on internally. And then we’ll go through the CFO’s notes. And then we’ll bring in the COO for his section. We’ll bring in the CFO, or the VP of marketing. And we’ll talk about our e-mod score with workers’ comp, any lawyer stuff going on. You know, it took four hours the first few, and now it’s like three, and it’s getting down to two. And I just told those guys, I want to set a record for three years — and you guys got a hold for three years. I said, no offense, but why? I still got hair, and — not totally, you know, it’s the gray coming in — but I said, I don’t know if I’m cut out to be a CEO of a several-hundred-million-dollar company, and I don’t have too much pride, I don’t care. I’m not the guy who’s going to go to a formal board meeting and argue with lawyers and sign off on a quality of earnings or an internal audit. That’s not me. Keep me in the marketing, keep me in the motivation, keep me in sales. Let me be that guy. I don’t care. I mean, the CEO could be going in his brand-new car, or I’ll be flying in my, you know.

Paul Giannamore:
Yeah, Tommy, I wanted to ask you, what sort of advice could you give to some of these young business owners who were once in your shoes? We talked about how you’ve educated yourself — crazy networking, picking up the phone, calling people, asking questions, taking people out to dinner — but what’s some other advice you could give younger business owners who are really trying to do similar things to what you’re doing?

Tommy Mello:
2008 changed my life. CPA. Go meet him. I got referred to him by a friend, and he goes, “Tommy, I only work with 10 clients. They’re all worth at least 10 million. I’m sorry, but I’m just uninterested.” And we got to talking, and he goes, “I don’t know why I’m doing this, but I kind of like you. You’re just very curious. Here’s what I’m going to do — take this book. It’s called The E-Myth Revisited, by Michael Gerber.” I’m like, The E-Myth Revisited. He goes, “When’s the last book you read?” I said, To Kill a Mockingbird, 11th grade. And I said, before that, Lord of the Flies. I said, I’m not a big reader — this is before Audible. And he said, would you read this? I came back, I devoured this book. I didn’t know this kind of book existed. And he smiles. He goes, “Do you want another one?” And I’m like, what do you got? He goes, “I call this one the Red Bible. It’s called The Ultimate Sales Machine, by Chet Holmes.” Two days later, come back. I go, what else? He goes, “This one’s called The Richest Man in Babylon.” And this proceeded for like two weeks. And then I just started.

Paul Giannamore:
And at some point you wanted to go to Barnes & Noble yourself.

Tommy Mello:
Oh, yeah, I guess, right?

Tommy Mello:
I became obsessed. Readers are leaders. And so, self-help, having an accountability partner, holding yourself accountable, but making someone else — put it out in the world. You want to quit smoking? First of all, the four people around you, you become them. You’ll never quit drinking if you’re hanging out with four alcoholics at a bar every day. You’ll never become a better father if the fathers just work 12 hours, seven days a week. You’ll never become a more faithful person if every one of your best friends that you hang out with cheats. These are the simple things. You are who you hang around with. You are what you read. You ask more questions. Success leaves clues. And be careful who you let train you. Because here’s what I would ask for: you’re successful, I saw you all over Facebook, you’re all over Instagram, you’re all over TikTok — can I happen to see, do you have any balance sheet, income statement, of how much you sold for? Is there something? Because I see you rented a Porsche and you rented an Airbnb. Because I think one out of 10 of these influencers and coaches and mentors are actually the real deal. Most of them went into that because they couldn’t make it in the real world. So be careful who you hire and confide in. Read the right books. Hang out with the right people. And success leaves clues. That’s what I would tell someone younger. And I get — free shop tours. You go to TommyMello.com/shop. We let 80 companies a month come in. I don’t charge you. I give away a bunch of books. We’ll probably feed you. As many questions as you want. I do that because people did that for me. I do that because my team feels validated. I do that because the place looks immaculate. I do that because it’s my way of giving back. And by the way, these 80 people — and sometimes they bring their employees or their loved ones — they look out for me. They call me up and say, did you hear about this? Did you know this is coming? This guy’s looking for this. So this is my way of networking — just come in. They come to me. They fly to me. It’s a lot easier. And when they leave, I hope — the best comment I ever got was somebody messaged me and said, I was getting ready to get a divorce; if I hadn’t come in and seen you, I would have killed myself. I’m closer to my wife than ever, I’m my kid’s soccer coach, and the business is thriving. And he knows this — we get messages like this all the time. And the truth is, I’d rather get that from my co-workers. I don’t believe in charity before every single person in the company. The single moms are driving good tires on their car. They’ve got a reliable vehicle. Everybody’s got a Thanksgiving dinner. The kids have a decent Christmas, they get to go see Santa Claus. People have had a vacation for at least a week, if nothing more than driving to Sedona or wherever you’re at. People — is charity actually the right thing, or are you trying to get in the news and do something to show your neighbors what you did? If not, give your people what they deserve. I can’t stand people who either underpay their people and brag about how they can charge less, and I can’t stand the people who give you charity to try to keep up with the Joneses and get in some type of article.

Paul Giannamore:
Tommy, this has been an awesome discussion. And before we wrap this up, I’ve got one final question. You’re paying this guy, Dan Martell, tons of money. I’m not paying Dan Martell any money. So what can I learn from you that you’ve learned from him?

Tommy Mello:
Yeah, so what he did was, he said, “Tommy, what you write down matters.” He said, we’re going to pretend you’re 75. He goes, we’re going to go into your health. We’re going to look at your free time. We’re going to look at your work, your religion, your community. And he named off all these things. And he said, I want you to feel like you’re 75. I want you to go into a dark room. I want you to visualize. He goes, you’re going to blink, you’re going to be 75. Listen, that’s not that long from now, it’s 34 years. He goes, I want you to write down the relationships you’ve built. If you’re buying a plane, what does the plane look like? I want you to write it down. I want you to write down the exact plane it is. He goes, did you go to Italy? Who’d you go with? Where did you visit? Do your research. He goes, we’re going to start manifesting and building the life. We’re going to start building your own reality. How much are you working out a day? How much are you golfing? Who are you golfing with? What time of day are you golfing? Everything in the most precise detail you could possibly get. And when you’re done with it, we’re going to do it to the next dimension. When you’re done with that, we’re going to get to the next. Then we’re going to bring it back from 41 and start putting dates on that stuff, and we’re going to figure out a way to make this a reality. We’re going to make your future. We’re going to design it. It’s designed with a purpose. Everything that you want, you will have. And we’re going to change the way your brain is functioning. We’re going to wire it up for success. Anything and everything you want. And just know, the plan is, you want to be known for something, you want to leave a legacy, you want to do something bigger, you want to change lives. So make sure that’s at the heart of it. So that’s what I’m working on. That’s one of the many things. He’s given me access. We’re building a team of about 15 people doing videography, and we’re going to 20x our following, because I believe we have a good message and anything people could grow from. I’m good at home service. I’m not a jack of all trades. I stay in my lane. But yeah, that’s the best thing. I think if you can manifest, write things down, have a plan. Instead of thinking year by year, think day by day, think hour by hour.

Paul Giannamore:
How far have you gotten into that planning with him?

Tommy Mello:
I mean, it’s like 20 pages. They’ve got a lot of notes on it.

Paul Giannamore:
Are you going to publish that at like tommysplan.a1services.com?

Tommy Mello:
I’m publishing. I’m writing a book only for A1. There’s a company called Morris-Jenkins — what Mr. Jenkins told me — they give this out to their employees. So I’m writing one all about A1. And I don’t think I’m going to sell it, but it’s going to get out there. And it’s all about why we hire who we hire, the Pinnacle Club, how you earn equity, meeting Al Levy, the timeline, our company story, our core values.

Paul Giannamore:
There are a lot of companies — Ogilvy & Mather did that years ago, I think in the ’60s or ’70s, after Ogilvy passed away. They kind of put together his letters and drafted them.

Tommy Mello:
Debaso letters, yeah. There are a lot of these out there. I’m excited about it, because I can write this book without even thinking. But you know, this has been great, man. When we talked a couple years ago — not even, maybe last year — I said, man, you’re like the international man of business. You understand tax structures, you’ve been all over, you live in Puerto Rico. It’s like, I’m just learning about the United States — the Augusta tax rule and accelerated depreciation and cost segregation studies and cool stuff — but you’re at this next level, you’ve got access to way more. So I’m like, man, I’m here learning about all this stuff. And we like to pay our taxes, but we like to pay as little as possible that’s legal.

Paul Giannamore:
And you’re everywhere. You’re in Singapore. Where have you been in the last year? In the last two weeks, I was in Doha, Saudi Arabia, and Istanbul. I’m going to be a Turk now, too — I actually just did my Turkish citizenship application, so I’m going to be Turkish, hopefully, in the next couple of months. Why all this stuff? I don’t know. You know me, Tommy. I travel around a lot. I like it. And I just find it really interesting.

Tommy Mello:
So the last thing here. You could only be in the United States six months out of the year. You could be anywhere outside. You could travel.

Paul Giannamore:
Yeah. So for me, from a tax perspective in Puerto Rico, it was never really an issue, because I’ve been out of the United States for so many years. But for somebody like you, if you move to Puerto Rico, you have to basically have a closer connection to Puerto Rico. It has to be your tax home. And if you spend more than 90 days per year in the U.S., you have to be in Puerto Rico for at least 183 days a year, or 81, something like that. For me, I don’t really have those requirements, because I’m rarely ever in the United States for more than 30 days a year. So I just have to be in Puerto Rico more than I am in any other single place.

Tommy Mello:
So you’re considered still — where’s your, what do they call it, the origination of citizenship? Where would you be, even though you’ve got all these dual citizenships? Is it still the United States?

Paul Giannamore:
Yeah, so I am a U.S. national, yes. At birth, I was Irish, Italian, and a U.S. national. But that’s why, you know, Puerto Rico has its own tax system, which is part of the United States, but it’s separate.

Tommy Mello:
You pay 4%, correct?

Paul Giannamore:
4% income tax. Zero capital gains tax.

Tommy Mello:
There’s a lot of — dude, there’s a lot of guys. Every time I turn around, there are guys moving down there.

Paul Giannamore:
Well, Bitcoin’s doing better now, so now they’re all coming back. They all left for a while, they’re coming back. You know what I like about Puerto Rico is — obviously the weather’s awesome — but the most important thing for me is there’s a tremendous ecosystem of thousands of people who’ve moved down there. And if you’re going to move for tax purposes, you’re probably pretty successful. For the most part — you know, we get some Bitcoin bros or whatever, but most of these guys actually have real multi-billion-dollar businesses. And so the ecosystem down there has been great. And everyone’s an expat there — well, everyone who’s moved there, I should say — so people are very interested in meeting other folks, and it’s just been great. I had lunch with an LDS buddy today, and we were talking about some of the mutual people we know who are down there. There are tons of folks from this area. You were talking about Cam — I saw Cam down at Green Mango.

Tommy Mello:
Yeah, I had dinner with him in Puerto Rico last year. He’s got a brother or sister that lives down there. He was down there.

Paul Giannamore:
Yeah, man. So there are a lot of these people going down there. It’s a great opportunity.

Tommy Mello:
You said we’ve got to go to the Four Seasons, right?

Paul Giannamore:
The Ritz. Ritz-Carlton, Dorado Beach. Yeah, you were going to come down a couple years ago. It was in 20— I don’t remember when it was, 21, I can’t remember what year. You were going to shoot down there.

Tommy Mello:
I was going to come down at the opportunity, because my CPA was begging me to look at going there, and he’s running all these things and working.

Paul Giannamore:
It wouldn’t have worked for you at that point in time.

Tommy Mello:
No.

Paul Giannamore:
But it can work for you now. You’ve got to come down, spend some time down there. We’d love to have you.

Tommy Mello:
I will.

Paul Giannamore:
Well, do you golf?

Tommy Mello:
Not really in public, although I’m a member.

Paul Giannamore:
If you golf, I’ll take you to some awesome places.

Tommy Mello:
Yeah, I will.

Paul Giannamore:
Thanks for doing this, man.

Tommy Mello:
Thank you for being here. Great, brother. Appreciate it.