CEO To Rainmaker
CEO To Rainmaker
Your A Young Startup, Hot Or Cold
Curious about how a young entrepreneur is shaking up the HVAC industry? Join us as we sit down with Austin Landy, the ambitious 30-year-old CEO of Heat Pumps Now, who left his father's business to start his own company focused on energy efficiency . Austin reveals the pivotal role of heat pumps in electrification, especially in California's climate, and opens up about the costs and benefits of these systems. He generously shares his journey, including the strategies that helped him solidify a unique business model and marketing plan on a tight budget. From the power of word-of-mouth to the indispensable need for a credible online presence, Austin shares his toolkit for startup success.
But the conversation doesn't stop there. We tackle the real-world impacts of recent LA fires on HVAC businesses, exploring how to navigate challenges like price gouging and make informed decisions in crisis situations. Austin also sheds light on the future of the HVAC industry, emphasizing the shift towards electric solutions and considering the potential for expansion and service diversification. As we wrap up, we celebrate local entrepreneurs like Austin, whose innovative thinking is making a positive impact on their communities. Don't miss this insightful episode that's packed with inspiration and practical advice from a leading figure in sustainable entrepreneurship.
check out episode 83#
on all major podcast directories and You Tube , CEO TO Rainmaker- Gene valdez
Hi you, raymakers, Welcome to podcast episode 83. Before I get started, if you're paying attention, I have a small bandage on my cheek. I had a minor form of skin cancer. I'm cool right now, but I'm all bandied up so I think I'm still a good looking dude, so don't hold that against me. So this month's episode is entitled You're a Young Startup Hot or Cold. If you're hot, you're doing well. If you're cold, you're not doing so well. Hot, you're doing well. If you're cold, you're not doing so well.
Speaker 1:The title of my show is a little bit of a play on words because my guest, austin Landy, is the CEO of an HVAC contracting company who, by definition, is in the hot and cold business. So I'm serving two purposes the hot and cold business. So I'm serving two purposes describing how a young startup is doing and describing what my guest does for a living. So let's do this. It's all about conserving energy every day, isn't it, baby? It is expensive energy out there and what Austin does, in my opinion, can lower the energy bill. Austin is a young entrepreneur whose business is called Heat Pumps.
Speaker 1:Now, not tomorrow, not today. Now, today, we will discuss a myriad of issues Austin undoubtedly has faced as a young startup company, which is probably very parallel to what many of my listeners out there that are startups are going through and confronted with and have to resolve. These issues could be, but not limited to, developing a strong value proposition or a strong USP, which is a unique selling proposition. How to market, to increase your presence, to start developing your brand, what's a business model, why is it important? How do you create one and a business plan, et cetera, et cetera. So today's show is both educational in terms of the lessons we will learn and both informative in terms of how Austin is looking at his business. So, before we get started, I'd like to do a brief little overview of Austin's bio. He's a graduate of the University of San Francisco. Graduate of the University of San Francisco. Now, if you are one of those that has a lot of time on your hands and likes trivia, the nickname for the University of San Francisco is the Dons Right, austin.
Speaker 2:The Dons.
Speaker 1:And if you're really old. In 1957 and 1958, with a center named bill russell, who later wanted to be a star for the celtics basketball team, the university of san francisco won back-to-back ncaa championships, which is extremely hard to do. So are you a basketball fan, austin? Uh, I wish not at all so so that bit of trivia does not ring with you I think I heard it back in the day.
Speaker 2:You know? Yeah, they don't have any more recent ones. So you know, the 1950s was a good year.
Speaker 1:They fill out the face of the earth after he got drafted by the boston celtics, who he led to something like nine championships in 10 years too he was a very good player in any event.
Speaker 1:So austin uh graduated from us usf and then supplemented his degree with advanced courses in HVAC so he could be really knowledgeable about his industry. He's passionate about the economics of climate change. I need to ask him what that means. What is the economics of climate change when he comes out of climate change, when he comes out Before starting his own business? 12 months ago, excuse me, austin worked for his dad for eight years, which has a similar business. Okay, that's Austin, let's bring him out here.
Speaker 2:He is Austin Landy. How are you Doing well, thanks.
Speaker 1:Good, all right. Austin, I'm going to put you right on the fire. Why did you start this business? You're just a baby. You're only 30 years old. That's really young to take the plunge. Why did you do that?
Speaker 2:to take the plunge. Why did you do that Wishful thinking? I want to change the world. There's a lot there I thought it was the best path for me to success and to having an impact and learning and all kinds of stuff.
Speaker 1:Okay, that's fair, but still you got to admit 30 is young to do that.
Speaker 2:Nobody told me.
Speaker 1:Well, actually it doesn't really matter how old you are. It's your business savvy. If you can get the job done as a high school dropout at 17 years old, god bless you. As long as people are buying from you and you're making a profit, ages are relevant, but it does take a little bit of seasoning to kind of get the spiel of the thing Totally. But good for you. So, um, in 20 words or less, what does your company do? Heat? Pumps now, what do you do?
Speaker 2:yeah, happy to answer it. We design, install and commission best-in-class heat pump, hvac and water heating systems. Heat pumps are an electrification tool to push our infrastructure away from using fossil fuels to produce heat, and they work amazing. Our our climate in california is the best climate in the world. Uh, for heat pumps to provide space cooling and space heating. Um, so yeah, I mean, I've learned a ton about it. I'm a huge nerd, so I really like the technology.
Speaker 1:There's a lot of prideful nerds out there. Sometimes I'm a nerd.
Speaker 2:We might be getting ruled by one soon.
Speaker 1:So heat pumps? They're expensive, aren't they?
Speaker 2:You know the full installation can be expensive. There are situations where it's comparable and upfront cost. But yeah, I mean for me to go buy from the store versus a a home. You know it's thermal properties, space requirements, it's ducting to accommodate this different technology. That can be expensive and that's very dependent upon the application. Dependent upon the application.
Speaker 1:Okay, so for the uninitiated maybe someone that's lived in a cave what does a heat pump do? Yeah, A heat pump pumps heat.
Speaker 2:It's a pretty terrible name. It's clever but it's horrible. A heat pump is a, a refrigerant system same as an air conditioner exactly the same. You have an outdoor compressor, an indoor coil or air handler and an air conditioner makes cold by moving heat inside your house to outside that's how it works okay and a heat pump does the same in reverse.
Speaker 2:It can go both ways, so it can pull heat from outside, even when it's really cold outside, into your home or in in the summertime. It can pull heat out of your home and throw it out outside okay.
Speaker 1:Well, in this day and age where everybody's talking about conserving energy because it's so expensive, and alternative forms of energy, I would surmise that your approach to the business is designed to give maximum heating and cooling and get the bill down, the energy bill down.
Speaker 2:Yeah, it's very difficult to produce an energy model that's accurate and guarantee it. But what I can guarantee, that is you know. And another thing is it's very hard in California to be competitive with the price of natural gas. So those are two things that you know we have to leave on the table and disclose. But what I can say is this system is going to work better, it's going to be more comfortable, it's going to be quieter, it is going to be very cheap to operate and consistently throughout the year You're not going to have a summer peak. You know, right, right, a summer peak. You know, um, right, right, and it can be competitive. But I, I don't.
Speaker 1:I don't promise, uh, that their energy bill is going to be less. That's okay, something, okay. I was just surmising. So I googled hvex contractors in southern california and there's got to be at least 100. I mean, it is almost a commodity. So, getting back to the business model, your unique selling proposition, and perhaps you've already answered it how do you separate yourself from the pack and give a compelling reason why a customer should buy from you rather than the other 99 companies that, in their mind, are essentially in the same business? Is it a me too? Or yeah, those guys are good, but I do this, and maybe you should be aware of that. What is the response? What is your unique selling proposition? How do you pitch your clients?
Speaker 2:I really need to work on an elevator pitch yeah, that's what it is yeah it's not because it's a mouthful, you know, but it really is we have.
Speaker 1:It has to be succinct. You can't go ramble on for about a pair, for you know 100 words.
Speaker 2:You're going to lose them know, and I don't want to do that here, so maybe let me practice I. We have a process. We have a process that is very careful, it's it's very detailed and you know it's it's all led by design and it's it's technical, you know. But in doing this process it doesn't increase the labor but increases the efficiency of the system, its lifespan and your comfort in your home. As long as you have this, that could be 20 years. So you know it's, it's we're cost competitive on a on a time basis, but it takes us a lot more time to do this stuff, and that's, that's what I say okay, so it takes you more time.
Speaker 1:Do you then price your service in the middle of the pack at a premium, or do you lowball it? Because it seems to me that you have a premium approach.
Speaker 2:You should be charging a little bit more yeah, I, I, I itemize and this is something I have been experimenting with. Different people want prices presented in different ways, but I itemize what we do. I itemize, you know, blocks of stages, like the design, like the installation, like the ducting, like the installation, like the ducting, like the air sealing, like the insulation, and we break it down where people could say, hey, this one's a little expensive. I haven't seen this before. Why is this so much? What are you doing? And we could start a conversation.
Speaker 1:Which is exactly what they're going to ask you.
Speaker 2:Yeah.
Speaker 2:Right Because they think it's a commodity and it's not. I mean, you know I don't like selling by talking down on other people's hard work, but the state of the industry is, you know, pretty poor. You know pretty poor If you know that there have been many blind studies I could point people to with almost like scientists, hvac scientists, expert guys that go out and they use expensive tools to test you know just the landscape of residential systems out there and they are performing far below their potential, you know. So there's a lot to improve on.
Speaker 1:Well, that's my that was. My next question is what's kind of the dirty little secret in the HVAC business that you have now become aware of that maybe the general public doesn't know that you could share with them?
Speaker 2:That's a that's a really awesome question.
Speaker 2:That's why I asked it. I get wish everyone knew is what private equity has done to this industry and many other industries. And it integrates their brand into a high pressure, overpriced sales process where they send someone to your grandma's house and have two or three you know young Christian looking men sitting across the table from them and selling things in a you know, I believe, manipulative way for an incredible profit. For I've been the victim of that Really. Yes, I mean so many have, and their market share is absurd. Their reach is absurd.
Speaker 2:I don't want to compete with any like mom and pop people doing their best I want to compete with. I want to. I want to take customers from those kinds of companies and give them something that they're selling at the same premium I'm selling for, selling for like. Their prices are often still higher than mine, but their jobs take half a day to day and a half in. Mine take, you know, a week to put in and you know a couple days to design, and it's just a completely different product. Their, their equipment's cheaper than mine, not because they buy in bulk, because they buy crappy stuff.
Speaker 1:You know there's a lot there so it's like if you went to a bar and ordered a martini and they gave it to you in one minute and they charge you five bucks, as opposed, if they order a martini from you, it's going to take you about an hour and you're going to charge 10 bucks.
Speaker 2:I don't think the price. I have seen their quotes and I don't understand. I mean I should probably go into some of their sales classes, you know, because like they're really good, but their prices are so high. They're so high, you know, I would say the same or higher than mine. And yeah, let me ask.
Speaker 1:Let me go to some other basic questions yeah, absolutely real, briefly, uh, in your bio you stated that all gas appliances be banned by the year 2030. Why and what should homeowners do about that? Why is that important to homeowners?
Speaker 2:Yeah, so it's.
Speaker 2:You know that at the time I made that claim the political environment was a little different, but the idea it's it's.
Speaker 2:It was something passed by the clean air quality, clean air quality, some air quality board in California and they passed this thing to make it very difficult in the future to purchase gas appliances residential gas appliances, commercial, is a different thing.
Speaker 2:It's going to take a lot longer but California is committed and many other places are committed to moving away from gas as a utility and you know I've helped sell utility programs for half a million dollars to put many, many water heaters in for you know a facility that are heat pumps. And as this transition happens more and more, it's still much slower than it needs to be to meet our projected quota. But as this transition away from gas happens in our state, like it or not, the way gas is priced now, there is a per unit cost and there is a infrastructure overhead baked into that per unit cost and as more and more gas customers get off of gas, that infrastructure cost is going to be distributed proportionally more to each user and there are very interesting projections about just the cost of our gas infrastructure and how expensive that can make it with less and less users. So there's a lot of. It's like a very slow ball that's going to start rolling and is projected to pick up speed.
Speaker 1:Okay Now, for many young startups, the name of the game is I have a good company, but nobody knows I exist. And many startups' resources are somewhat limited. So, on a shoestring budget, how are you marketing your company to increase your exposure and maximize your brand? Or are you not doing it yet, but you're thinking about doing it? What are you doing now?
Speaker 2:I put minimal effort into the website and we are working on a version two. I think the website is important, not for cold leads, but to help qualify us with new people researching us.
Speaker 1:Yep.
Speaker 2:And I'm 100% word of mouth, 100%.
Speaker 1:I think that's the best way to do it Myself. Awesome, okay. So here's the number one question that I wanted to ask you today, drum roll, you know, classic entrepreneurship calls for seeing a need and then filling it. Very simple what opportunities did the recent LA fires create for you, good or bad? A corollary question what insights can you share with Southern California homeowners relative to their HVAC system when their house burned down? That's a big one.
Speaker 2:I think I specialize in home performance efficient, tight, comfortable homes and a well-performing home in a fire zone has a higher likelihood of not burning down. So that's one thing. Now, my specialty is not the whole home, it's not the building envelope. These are the most important components. You know, using alternative materials and all kinds of really awesome stuff that I think is going to take off. But for the areas that right now were most affected by the fire and I think where hvac is at the forefront of that is is the smoke damage, um, there are estimates that between 12 and 15 000 homes burned down, but what are the estimates of how many were smoked out? You know there's this carcinogenic, you know toxic stuff. It gets into your air conditioning system and gets into your house. How do we fix that? How do we keep that from happening in the future?
Speaker 1:And you address that through your company.
Speaker 2:I do that through your company.
Speaker 1:I do, okay, okay, what are you know? Are homeowners who have had their terrible misfortune of having their homes burned down. Are they being? Are they being telling the true skinny from the hvac person ultimately comes in? Or are they being taken advantage of because of their plight, or is it all in the up and up.
Speaker 2:I think what I'm hearing in the question is is when, if your house burns down and you're getting quotes to rebuild and the air conditioning guys come in there and tell you what you need is is that information correct come in there and tell you what you need. Is that information correct? Yes, that they tell you.
Speaker 1:Or they're trying to pad their profits.
Speaker 2:I think that it's well. There's going to be price gouging. I mean, I've already seen it. I've seen absurd price gouging and you know that's inevitable. And you know that's inevitable. You know there's an argument to be made. If we're trying to help people and tailor our business model, that takes energy, that takes time and money, so maybe there's a slight increase in price there, but there is absurd price gouging right now.
Speaker 2:I think that the information the HVAC guys will give the people whose homes burn down is going to be the same as the information they give your grandma across the dining room table. And that's we know what we're doing. We're going to take care of it. This is what it takes. We're the specialists and they're going to deliver something that's the same as most other people. And the way that you mitigate that is by doing your research. There are professional people that you can hire just to help you design, just to help you learn and vet the companies. This can be a $20,000, $30,000, $40,000 investment. You got to live with it for 40 years maybe not 40 years, 20 years, 25 years. You should know what you're buying. Do your research. That's what's going to bring up the industry is more informed clients. So what I have to do is I have to educate and then they have to like. Well, you're trying to sell me and teach me. Do I want to learn from you? It's a difficult balance to strike.
Speaker 1:I understand. I understand. So, whether it's due diligence or vetting a homeowner because this is a large investment, should research the issue in terms of what's it going to cost me, what are the benefits, what are my alternatives? Is there a different approach, rather than just unilaterally saying well, the HV guy who's an expert told me I should do this. I guess that's what I should do.
Speaker 2:Yeah, and then you get all done.
Speaker 1:You know, all doctors are not great doctors, all attorneys are not great attorneys.
Speaker 2:And then they say to get all doctors are not great doctors, all attorneys are not great attorneys.
Speaker 1:And then they say to get three quotes and is, and where they would like to be. What do you see is the future of your industry and what new ideas are you pondering for your company Heat pumps. Now, what are you thinking about?
Speaker 2:Too much. I need to chill, I need to go put these things in and sell them give me some ideas.
Speaker 2:I know you're thinking about something yeah, I think the future is electric, so that's my brand right. I think that I think that a higher there. Customers are showing up to meetings more and more educated. Through online influencers and resources like yourself, you're helping new business owners. There are people helping customers learn about HVAC. I get wonderfully informed clients and as that increases, it's going to drag the industry with it, and so I'm trying to position myself to be, you know, a trusted expert.
Speaker 1:You know and that's the future. Are you satisfied with just doing this in Southern California? Would you consider maybe some geographic expansion or some tweaks on your product mix, or you're happy where you are now?
Speaker 2:I'm exploring other adjacent services. I think that there are certain trades that I need to take more autonomy over, rather than finding subs and stuff for electrical and insulation and framing, like you know, we we need to do more. Okay, but yeah, so, but I also, you know, I think that there's a path to integrate this into my family company and have a nice life okay, I got it.
Speaker 1:So, um, as we're getting close to the end, uh, irrespective of what business you're in doesn't have to be hvac, could be any business. Uh, you're at a young age, you have a young company and undoubtedly, on your entrepreneurial journey, you have learned things, some best practices, and you've made some boo-boos, like we all do. What insights could you share with my young audience as a takeaway? In terms of best practices, I guess that you have learned personally from your own company.
Speaker 2:We really needed a better hiring filter and we needed to set better expectations with new employees.
Speaker 1:Okay, that's. That's an important one for any company. Yeah, okay, good people are hard to find, are they not?
Speaker 2:I think they are relatively. There's a lot of people wanting to work in the trades. I had in a month over 800 applications.
Speaker 1:Yikes.
Speaker 2:Yeah. And and I filtered through them and I the resumes don't tell you much. And so, you know, I think I should have been more intentional and careful with how I filtered through these people and gave them a chance, you know.
Speaker 1:Yeah, yeah, I gotcha.
Speaker 2:Yeah.
Speaker 1:Okay. Well, that's. That's certainly a really important tidbit, because if you own a small business, it's a young startup. Unless it's a, it's a sole person operation, you can't do it all. You got to have a few people that you trust and that are capable, otherwise your product or service will not meet the snuff of what, your specifications, your standards, because you're not doing it all yourself, you're delegating, so okay. So, austin, how do people get a hold of you if they're just um interested in your opinion on something? What's the best way to get a hold of you relative to an hvac question?
Speaker 2:they look me up and they give me a call. My personal phone number is on the internet, which I don't know. That maybe that's. A second insight is get it get a. Voip system or something you know? So you can control these crazy people, but no, my customers aren't crazy. All the other ones are, though, but we, yeah, and I get a lot of phone calls, I do.
Speaker 1:Well, that's good that's good, because to me you know, you mentioned it it's what I call educational selling. You know, someone will come up to me and say, gene, why do I want to hire you? Okay, let me educate you why you need to hire me. Because they may not know why. Now that you know why you need to hire me, because they may not know why, now that you know why you need to hire me, will you hire me? That's two-step. You don't have to ask a CPA why do I need to hire you? Because the CPA is going to keep their butt from getting in trouble with the IRS. It's a no-brainer. There's no educational marketing there, and sometimes the most difficult sell is the educational one, because you have to tell them, without sounding like you're trying to sell them something, why you need a solution to this challenge doesn't necessarily have to be me, but you need somebody. That's okay.
Speaker 1:Well, austin, that is a wrap. I'm gonna go home and check my heat pump and see how it's doing. Um, and for all my audience out there, this is a wrap. This podcast is available to all the major podcast directories, including YouTube under CEO Terrain Maker, gene Valdez. So with that, thank you Austin, thank you audience, and I will see you next month with another compelling, in-depth story of a local entrepreneur. Compelling in-depth story of a local entrepreneur because, in my opinion, the guys like austin and there's many of them out there they don't get a lot of publicity and they do wonderful things and they need to have some exposure. So, with that, see you next month.
Speaker 2:Bye-bye thank you.