How Brex’s Co-Founders Went From Teens Hacking iPhones To Running A $7 Billion Start-Up
August 20, 2021
August 20, 2021
Inspiration can strike at any moment. For Brian Scudamore, the 50-year-old multimillionaire founder of junk-hauling company 1-800-GOT-JUNK?, that “Eureka!” moment just happened to come with a side of fries.
In 1989, Scudamore was a 19-year-old high school dropout who still had his eye on a college degree and was on the lookout for a side-hustle that could finance his education. One day, while waiting in the drive-through lane of a Vancouver McDonald’s, Scudamore spied an old, beat-up pickup truck with a sign advertising Mark’s Hauling, a trash removal company.
“I can do that,” Scudamore thought, he says.
Within a week, Scudamore had put his entire life-savings — about $1,000 — into starting his own junk-hauling service, which he initially called The Rubbish Boys (even though the business was then a one-man operation — “I wanted it to sound bigger,” he says.)
“I spent $700 on an old Ford F-100 and the rest on fliers and business cards,” Scudamore says.
Within the first “couple of weeks,” Scudamore says he was able to break even. And in his first year in business, Scudamore says he made a profit of about $1,700, which he used to cover his college tuition.
Since then, The Rubbish Boys grew up to become 1-800-GOT-JUNK?, a $300 million business that’s the main part of a bigger family of brands launched by Scudamore. The company operates junk-removal franchises in roughly 160 locations in the U.S., Canada and Australia under the umbrella of Scudamore’s O2E Brands, which he says is “a half-a-billion-dollar business” in Canadian dollars — or about $368 million in U.S. dollars. The parent company also now includes house-painting company WOW 1 Day Painting and home-detailing business Shack Shine, which Scudamore founded in 2010 and 2015, respectively.
“O2E Brands, by the way, stands for ‘Ordinary to Exceptional,’” Scudamore says. “We’re taking ordinary businesses like junk removal or painting and making them exceptional through customer experience.”
Of course, as a teenager waiting for his McDonald’s order, Scudamore wasn’t expecting to have a life-changing business idea. He just wanted a way to make some extra cash.
“Did I know that day that this would be something much bigger than just a way to pay for college? No,” Scudamore says. “But I knew that if I picked something and I committed and stuck with it, the passion for building a business would soon follow.”
“Sometimes it’s just taking that step and getting out there and doing something.”
Scudamore says he was a “troublemaker” in high school, who dropped out with just an algebra class remaining. “I was often skipping classes, and then I fell very far behind,” he says.
Still, most of his friends were headed for college and Scudamore didn’t want to be left out.
Scudamore says his parents “thought I was crazy to not finish high school.” In fact, his father — a liver transplant surgeon in Vancouver — was so disappointed in Scudamore for dropping out of high school that he told his son he would have to pay his own way through college.
That provided the impetus for Scudamore to start his own side-hustle, and he managed to attract his earliest clients by placing classified ads in local newspapers that touted, “essentially, a guy with a truck willing to haul junk.”
“It was just, ‘The Rubbish Boys will stash your trash in a flash,’ was the slogan,” Scudamore says. “I had phone calls the first day I ran my ads and I had three jobs the first day. Things started to build [from there].”
Aside from bringing in his own clients, one of the earliest business lessons Scudamore had to learn on the fly was how to effectively price his services.
At first, Scudamore looked to the classifieds section of the newspaper to see how much his competitors were charging customers, so he could follow suit. “They were anywhere from between $80 and $120 a truckload,” he says of his competitors at the time. “I decided to go in at the low end because I was the new competitor and we charged 80 bucks.”
However, while Scudamore was able to quickly break even on his initial $1,000 investment, he also realized he’d need to charge more in order to turn a profit and eventually start hiring employees to grow the business. He slowly started increasing his rates.
Two years after starting The Rubbish Boys, Scudamore was back in Vancouver after transferring from Concordia University to the University of British Columbia, where he was studying business. His girlfriend at the time suggested he drum up more clients by pitching the story of his successful side-hustle to the press.
“I called the Vancouver Province, our largest newspaper,” Scudamore says. He told them how he’d eschewed getting a summer job and bootstrapped his own junk-hauling business.
“We were on the front page of the newspaper the next day,” he says. “It must have been a slow news day, but there was our truck, the phone number emblazoned on the side. We had one hundred phone calls within the first 24 hours [after the story ran]. A lot of jobs.”
What’s more, when the front-page newspaper story came out, the article mistakenly printed his rates as $136 per truckload of junk even though the business was charging $120 at the time.
“I thought, ‘Oh no...no one’s going to use us.’ [Instead], everyone called and they were fine with 136 bucks a load. So I learned over time that I could start to increase my rates. What I’ve seen is the most expensive customer service businesses out there are the ones who are able to do a great job.”
With his business continuing to grow, Scudamore realized that he much preferred the hands-on education of running his own business to learning about it in class.
“I was studying business and there I was learning more running a business than I was studying textbooks,” Scudamore says. He remembers being asked by one of his favorite business professors to serve as a guest lecturer during a class.
“It made me realize that ’I’m actually teaching the class here. And, while I had fun, ... [I was] learning more out on the streets.”
So after three years of college, Scudamore made the decision to drop out of school … again.
“My dad thought I’d absolutely lost it — that his oldest son was dropping out of college to become a full time junkman. But certainly he’s onside with where things went today.”
Scudamore’s junk-hauling business took eight years before it hit $1 million in annual revenue, which he admits “sounds incredibly slow.” But Scudamore says he used that time to “learn how to systematize the business and get it ready for franchising,” which is to say he had to work out some of the kinks that he feels kept the business from reaching its potential.
One of the toughest decisions that Scudamore says he had to make in order to turn his college side-hustle into the multimillion-dollar operation it is today came just a few years in. In 1994, Scudamore’s The Rubbish Boys owned five trucks, employed 11 people and was bringing in about $500,000 in annual revenue.
“I realized I wasn’t having fun any longer,” Scudamore says. The reason, he adds, was because most of his 11 employees frequently complained to him about nearly every aspect of their work and just generally seemed unhappy with their jobs.
“I decided to fire the entire team and start again,” Scudamore says.
“I said, ‘I’m sorry. I’m sorry that I’ve let you down as a leader.’ I might not have found the right people or trained them right. Given them the love and support they needed to be successful,” Scudamore says.
Scudamore was temporarily back to a one-man operation, which meant hauling and driving junk by himself while also recruiting employees. Scudamore has said it took him roughly six months to fully rebuild the company while also rebranding.
Scudamore realized he needed “clean cut, friendly professionals ... to revolutionize a very dirty industry.”
He began hiring employees who came to work with positive attitudes and who he would want to spend time with himself — people he now describes as “optimists who will see problems as opportunities versus just challenges that they need to fight through,” Scudamore says. Many of his new hires were younger people working their way through college, just like he had been when he started the business.
In rebuilding the company, Scudamore renamed it 1-800-GOT-JUNK?, because he wanted something catchy with easy-to-remember contact information.
Today, “with all of our franchise partners, the No. 1 thing we tell them is: Hire happy people. If you hire happy people, the rest just falls into place,” he says.
The rebuilding and rebranding of his business not only made Scudamore happier to go to work every day, but it also helped the company grow. 1-800-GOT-JUNK? reached $1 million in annual revenue by 1997, at which point Scudamore says he finally realized just how big his business could become.
That year, Scudamore says: “I set a painted picture, a vision, of what the business could look like in the future.”
That vision included expanding 1-800-GOT-JUNK? into the top-30 metro areas in North America, reaching $100 million in annual revenue and getting on “The Oprah Winfrey Show,” which Scudamore calls “the mother of all media hits.”
In order to achieve those goals, Scudamore once again turned to McDonald’s for inspiration. Scudamore loved the idea that McDonald’s grew its brand through franchising its restaurants, giving each of its franchise owners “skin in the game,” he says.
“I wanted to do the same thing with junk removal,” he says. “We said we’d be the FedEx of junk removal [with] clean, shiny trucks, friendly uniformed drivers.”
Scudamore’s first franchise partner, Paul Guy, “did $1 million in revenue in his first full calendar year,” Scudamore says of Guy, who he says now owns multiple franchises that bring in a total of roughly $60 million annually. “That’s when I knew that the franchise model was one that would scale.”
Between 2003 and 2006, Scudamore’s company attained all three of the ambitious goals he’d laid out in his vision in 1997, starting with a 2003 appearance on “The Oprah Winfrey Show” in which the show enlisted Scudamore’s team to clean out the house of a hoarder.
“Today, we do $1 million [from] 1-800-Got-Junk? alone on any given day,” Scudamore says.
Meanwhile, his visions for the future of his company have only gotten grander, as Scudamore says he pictures O2E Brands eventually becoming a multibillion-dollar empire between the three franchised brands.
But even with those grand ambitions Scudamore still describes himself as “just a guy having fun every single day.”
Scudamore, who CNBC previously featured as a “Blue Collar Millionaire,” lives in Vancouver with his wife and three kids, and though they have a second home in Whistler, British Columbia (a town known for its luxury ski resorts), he says he has trouble even thinking of himself as a millionaire.
“I’m just a guy,” he says. “I drive a little Toyota pickup truck. I’m always wearing jeans and a t-shirt.”
Scudamore says he’s never really been all that motivated by making money himself. “It’s all about seeing people within the business grow opportunities and watching things get bigger and better,” he says.
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