Get ready to revolutionize your entrepreneurial journey with Alex Kraft, the dynamic founder of Heave. Imagine being a pioneer, leading a new wave of innovation and success in your business. That's exactly what Alex did and he's here to share how channeling the mindset of early adopters and understanding the landscape of 'pioneers and settlers' can make a world of difference. Plus, he'll share his insights on the transformative power of the book Mind Shift, a tool that can spark your journey of innovation and entrepreneurship.
We're not stopping there. Together, we'll delve into the intricate world of the heavy equipment industry. We'll examine the impact of dealer consolidation, electrification, climate change, and the challenges that come with modernizing this massive sector. Listen as Alex shares his unique vision of creating an 'Uber for technicians' and the unexpected hurdles he faced from the Canadian government. Navigating the complexities of both the industry and government policies can be daunting, but with Alex's insights, you'll be able to see the big picture clearly.
Finally, prepare to be inspired as we discuss the power of perseverance and the human mind's incredible ability to overcome adversity. Alex will share awe-inspiring stories about Wim Hof, the Iceman, and legendary surfer Laird Hamilton, both men who pushed the limits of their physical abilities. We'll also hear a touching tale about a woman who spent 74 years at the same company, demonstrating the power of commitment and dedication. We'll wrap up by discussing the major shifts in the heavy equipment market, the need for fair technician wages, and the role of storytelling in driving positive change. Tune in for a conversation that's guaranteed to leave you inspired and ready to revolutionize your own industry.
Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.
We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.
Get ready to revolutionize your entrepreneurial journey with Alex Kraft, the dynamic founder of Heave. Imagine being a pioneer, leading a new wave of innovation and success in your business. That's exactly what Alex did and he's here to share how channeling the mindset of early adopters and understanding the landscape of 'pioneers and settlers' can make a world of difference. Plus, he'll share his insights on the transformative power of the book Mind Shift, a tool that can spark your journey of innovation and entrepreneurship.
We're not stopping there. Together, we'll delve into the intricate world of the heavy equipment industry. We'll examine the impact of dealer consolidation, electrification, climate change, and the challenges that come with modernizing this massive sector. Listen as Alex shares his unique vision of creating an 'Uber for technicians' and the unexpected hurdles he faced from the Canadian government. Navigating the complexities of both the industry and government policies can be daunting, but with Alex's insights, you'll be able to see the big picture clearly.
Finally, prepare to be inspired as we discuss the power of perseverance and the human mind's incredible ability to overcome adversity. Alex will share awe-inspiring stories about Wim Hof, the Iceman, and legendary surfer Laird Hamilton, both men who pushed the limits of their physical abilities. We'll also hear a touching tale about a woman who spent 74 years at the same company, demonstrating the power of commitment and dedication. We'll wrap up by discussing the major shifts in the heavy equipment market, the need for fair technician wages, and the role of storytelling in driving positive change. Tune in for a conversation that's guaranteed to leave you inspired and ready to revolutionize your own industry.
Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.
We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.
Aloha and welcome to another candid conversation. We're joined today by Alex Kraft, aka the heave inventor, innovator, creator, and he put up a blog this week that we'll be putting up on social media tonight about his mindset In preparing for this. we're just chatting a little bit about how we're in a constant battle with ourselves about anything and everything. Alex, why don't you give people a little bit of background on what provoked you to write this? because it's wonderful.
Speaker 2:Thanks, rob, great to be here again. Recurring guests. Yes, what led me to the most recent writing was just reflecting on our company journey. We're now coming up on three years since we started heave. A lot of things have changed from the beginning, which is not uncommon amongst most companies that start something from scratch. It's what you find when you research other companies journeys is that there's an original idea and a spark for a business, but it's a theory at that point. Then, when you get out in the market, customers in the market tell you what they think about your idea and most companies have to change. The term that's used all the time is pivot. It seems to be an overused term, but what it means is you have to adjust to the market.
Speaker 2:I just was reflecting back over our three years of history, because we've now hit some really important milestones. The thought that resonated with me was the hardest part for me over the three years has been a battle within my own mind. It's been my mindset. It's not something that I anticipated. I anticipated the hardest part being building a product or recruiting a team or managing the development of a product, because I had never done it before. But, as it turns out, the hardest part. The biggest lows have just been mental. For me It was just exploring that idea.
Speaker 1:You've got an athletic background, with basketball and other things, and we've talked about that in the past. But when the only person you're competing with is yourself and when you bring innovation let me just call it that for a moment, not invention to the world the audience's response is yeah, why didn't I think about that? Or how come he's always got these good ideas, or it's always envy and that's not a sustainable position. So instantly they start to try and tear you down.
Speaker 1:The idea is no, damn good, you'll never get anywhere with that Plenty of people have tried that. Yeah, that's what people want.
Speaker 2:Plenty of people have tried that and failed Yeah.
Speaker 1:And you must have heard that a lot A ton. Where, in the early days, who were your biggest supporters? You, but no, it's not excluding me.
Speaker 2:You know, we found some customers who were big supporters. The terminology there's an incredible book called Crossing the Chasm. Jeffrey Moore wrote it and it's really helpful for people starting a company because it defines how people and customers, the lifecycle of product adoption, and so what you have to find, or what are referred to as early adopters. So they're the personality types who are looking for, like, the next big thing, you know, who are open to new ideas, like, and that's one of the things yeah, once again with mindset is that when we started it was, you know, we thought, because of the industry was so old school that, hey, everyone would see this new idea, because there hasn't been that many new ideas that there would be. We're greeted with open arms Like, oh, this is refreshing And it couldn't be further from the truth. It was, though, hey, you know you, so many people have tried something like this and they failed. And who are you to think that you can succeed? you know, or you know, this industry has operated this way for a reason for this long. You know, this is the way it goes. It's a relationship business, all this other bullshit But what you realize is that this industry is no different than any other And you just have.
Speaker 2:There's all of those people, but you just have to keep trying to find the early adopters. And that's what helps a company get off the ground. It's just by finding more early adopters. They're the ones who are open to it and just surface. Those people Don't care about trying to change the minds of all those other people because they, their category, are what are called pragmatists. So there's a huge category of people who they just wanna see it having been flushed out. They wanna see it working for a certain period of time And then the pragmatists will come on board. So it's just understanding like hey, you're not for everyone upfront and just go find more of the people who are early adopter mindsets and opens new ideas, cause those people are out there.
Speaker 1:We use videos in our classroom training, starting, i guess in the 80s, and there was a guy by the name of Joel Barker you might've heard his name. He's kind of a a leader. He called leadership, leadership, leadership And he defined leadership as someone who will go to places that other people would not go by themselves And he called those early adopters. He used the parallel of settlers and pioneers, and the pioneers go out there first. They don't always survive And the settlers are watching And they keep asking the question is it safe out? there is kind of, i think, in the video And at the end of this little discussion, three to five minutes of a film yeah, it's safe out here, but it's too late. And the other aspect of what you did with and I think there's a book called Mind Shift might not be mindset, but Mind Shift that you need to find influencers because you're not the one that's gonna be successful on creating the movement. You created it, so you're the target.
Speaker 2:You're 100% right, and that's something I didn't understand, and so it's. And then I think this is we all have strengths and weaknesses.
Speaker 2:I think this is one of the weaknesses of people who are super competitive and been raised in athletics is that when and I had to grapple with this like when we come to market and people are telling us that it's not gonna work, my instinct that I've lived with for 30 years was, oh, i'm gonna show you, but that doesn't to your point, that doesn't matter And you're not going to, you're not gonna win that battle. The only way you win that battle is just by finding other pioneers who will then do the work for you.
Speaker 2:Like they are the ones like go make them happy And, instead of trying to argue, try to continually sell to this group that doesn't really wanna be sold to. And so that was something that was difficult for me for a while, because the instinct is like no, no, you're just not getting it. Like, no, they don't wanna get it, and so that's okay. But that's also the beauty of having a tech company. We're not like. If I was, i was thinking about it in terms of dealer brain. I call it where. It's. Like if I'm in Tampa, where I am, and there's 50 customers in the market who buy equipment, everyone that says no is one fewer that I can sell to. Well, we don't have that environment anymore. We can be nationwide. And so what if every customer in Tampa said we don't need heave for service?
Speaker 1:Okay, it's a big country, there's a lot of customers, it's gonna go fine And just to continue to be a bit of a pain in your butt it's not national baby.
Speaker 1:It's. You know you made a statement a while back that there's a reason this network of dealers works this way. It's been. That's what the success is Okay. So how long has it been this way? It's been since World War II. If you look at the proliferation of equipment and then the consolidations that have gone on, that's the only thing that's really changed. Canada used to have 10 caterpillar dealers when I was in the caterpillar family. There's two today. There's one John Deere dealer in Canada. Today There's two Volvo dealers in Canada. Today There's one Commancer dealer in Canada today.
Speaker 1:I mean, dear Lord and that's a rather large country Very much. Somebody told me that the caterpillar has publicly stated I haven't seen the public statement anywhere. I've looked that there will be 17 dealers in North America. Well, there's two in Canada, which means there'll be 15 in the United States. That means the number of dealers will cut in half again. And every single dealer Alex and you chuckle at this has seen their performance measure be the revenue line. Well, if your competitors are pressing to the degree of 50%, wouldn't you expect your revenue line to go up? So congratulations, you're doing better. But you got half the competition. I mean go away, that's right. So what are you going to do next?
Speaker 2:What are we going to do? Yes, we're on a high growth trajectory right now, which is very exciting. But to your point about consolidation, i used to try to think of okay, this is very similar to auto. Not really, it's the cable company business, it is the cable business. That's what it is, and we've all seen the cable business shift drastically And we would have never thought that it would. But when you move into an area, it's like and I want digital cable, well, here's the only three providers, there are no other choices. And then we all know how that has played out with Netflix and streaming. And so if the heavy equipment goes towards that consolidation, then I think it's really good for us.
Speaker 1:Can you name me a major company that trades in a stock market in the United States that was in existence prior to 1900?
Speaker 2:I can't.
Speaker 1:General Electric is the only one to my knowledge, and the last statistic I saw was 44% of the Mazdec 500 is no longer in business in 20 years. Things are changing. Our industry is a little retrograde capital goods, but we're starting to see it. Mining now today has basically three companies Comance Academy and Hitachi. The construction equipment world, from whence you came maybe, has 10, advolvo and Deer and Case and JCB, et cetera, et cetera. And then you go down to the smaller side and you've probably got 500 acres and Bobcat and that kind of thing. And that's kind of been the history.
Speaker 1:So here comes electrification, that everybody seems to be excited about, or here comes climate change, that everybody seems to be excited about. What in the hell has that got to do with any commercial activity? Nothing, nothing. So aspartame, which is in? it's a sugar replacement in soft drinks. Right In the last week they've determined it's a carcinogen. Why are we in So? all I'm trying to get at is our society is fraught with people that are trying to make a buck out of something rather than trying to make life easier for people.
Speaker 1:You are making life easier for people and that scares people.
Speaker 2:It does because the nature of the business is a protectionist right Get to a certain point and then build a wall around it and now only the existing players can benefit from it. But that's what happens in every industry. Where that's the environment, those companies. They don't improve, they don't really value their customers, they don't, and the customer suffers. The customer's pain points grow, they become heightened, and then when there's a new entrant who actually is aligned with the customer and shows them a better experience and a new way, that's what wins the day. And then the protectionist cartel you could call them. It's too late for them, because they can't just all of a sudden flip a switch and then, oh no, this is now we're going to embrace technology and now we're focused on this customer service. No, it's too late. It's the same story in all these other industries.
Speaker 1:It's the same story in the history of men. My daughter's a teacher, as you know. We've talked about her in the past and the federal government in the United States doesn't control education. That's a state responsibility. But, as with everything else, the federal government tries to influence things, and you do it with money. So here comes No Child Left Behind. Which started in the Clinton era, was implemented in the Bush era And today, in Caroline's commenting on it, the schools are teaching the kids not to think, to memorize, not to understand, to learn to attest, and the teachers are now being evaluated that way.
Speaker 1:So the hanging on you talk about the leadership of this industry that we're in, that your family was in, is about protecting themselves, preserving their control, preserving their power. And we're involved in education and we're starting to have pretty nice success getting schools to add our classes to their syllabus and curriculum across the country. But we hear and it's really interesting the people that are participating are under the age of 40. Anybody over 50, they're waiting it out. Don't bring that to me. So here's some interesting protectionist approaches.
Speaker 1:Canada has a law, pipeda that says any product that's at any school has to have student information maintained on a database in Canada. So I ask the schools? I say, fine, how do they respond when your data is up in the cloud? Well, where is the cloud? And then your state of Florida requires there be a proctor, somebody in the room with final exams. How do you do that on the internet? when it's two o'clock in the morning on a Sunday, it's interesting. There's roadblocks put up everywhere. Thankfully, i lovingly called it Uber for technicians, and Uber was the inventor. You're the innovator. And look how many different. You started with equipment sales. Yes, now you got technicians. God knows where you're going to go next. I'm excited.
Speaker 2:We are too. There's a lot more room for building out the technician piece. Yeah, that's what we're focused on. We are not distracted by selling or renting equipment. We are 100% focused on service, and there's a lot more we can provide. We have a lot of good ideas that are going to be coming down the road. So, yeah, the service piece. It's crazy to me. Still, if you want to get your wheel loader breaks down, your excavator breaks down, you have to call. You have to call a service department. It's 2023.
Speaker 2:And we all know that's the other thing. We all know how critical downtime is for customers. Everyone has been saying it for my entire career, yet nothing has really changed or really been done about it. And so that's what we decided to do is that let's try a new method, let's implement technology and give customers an active role in getting their equipment fixed. Instead, i view dealer service as going to the grocery store and pulling a number at the daily line. You have number 74. But you have no transparency to where you are in the line. You call in and then say, hey, i need somebody on this job site And then, hey, somebody will call you when we can get someone to you, and that's insane to me in this day and age.
Speaker 1:When do you think we'll have the machine calling?
Speaker 2:I need help Send the mechanic. I don't think it's that far off, a few years. Yeah it's, You know it can be not now.
Speaker 1:The technology is there today.
Speaker 2:I know. I think the difficulty is that no OEMs want to share information And everybody's got their own telematic solution. There's a ton of telematics companies and softwares, Yeah, so I think that'll be interesting to see how it evolves.
Speaker 1:There's a start difference between automotive, which people share data, and construction equipment, where everybody creates their own and makes it difficult for customers to have more than one brand. They think by restricting the customer's options they will control a customer. The customer doesn't want restrictions, no.
Speaker 2:It's. That, to me, is a great point too. You're misaligned with your customer. It's alsoI've always viewed it as OEMs and dealers not appreciating customer's intelligence. They're going to tell customers the waythat's not the way good businesses operate. Customers want choice. Customers want information. Customers want access To fight. That is kind of nuts to me, And especially in today's age. Everybody has access to more information. Customers want multiple brands because they don't want to be captive to one sole supplier. Customers are smart. They want leverage for purchasing power for the best terms, And to try to restrict is right, to repair right.
Speaker 2:You have OEMs who are engaged in a lawsuit with their own customers. The whole point of the lawsuit was hey, I want to be able to determine where I send this. I don't want to be locked out of my own machine. I want to be able to diagnose it and then determine where I go. I don't want to be in a position where the only party who can service this and unlock this machine is you and you're three hours away from me and I'm beholden to you, And if it takes you a week to get to me, then that's what I have to live with. That is right to repair. And whenever I read some of these statements of dealers and OEMs still fighting over it. It's just laughable.
Speaker 2:And they try to make it seem like it's for a different reason. Oh, we just don't want customers to unlock and change the safety requirements They're not interested in that. That's ridiculous.
Speaker 1:I might have told you this story if I have stopped me. I've done a lot of OEM training over the years and I had one room and the brand will be nameless. There was nothing but people involved in purchasing. And we're looking at and talking about back orders and satisfying needs, and so you know, we have this chart. You know a search sequence to find a part I'm going through my store, then I'm going through my other stores, then I'm going through the region, blah, blah, blah, and I get to the end of the discussion and say okay, i can't find it anywhere on the planet And the guy's machine is down. And then let me give you an illustration that's real.
Speaker 1:A mine in Jolette, wyoming, purchased their first Kamatsu tractor for an open pit mine And it goes down and everybody was excited not the caterpillar dealer, who had all the brand there before. Within the first six months the machine went down. So the mine hauled the machine out of the pit, put it up beside the hole and left it there And it was there for weeks because the supplier couldn't find the part. And I'm in there with the supplier looking at something else. I said what the hell's that? Well, we're having trouble getting the part. I said why is it still here? And they looked at me. I said every single day everybody goes by that damn machine. They know that you failed. Take it out of there Visibility. So you talked about downtime. We assault you in the marketplace, you customers saying our only concern is you're down.
Speaker 1:We're here to reduce your owning and operating costs, And downtime is a bad thing And I promise you we're the best at it.
Speaker 2:We're a service company that sells machines, like all this other names.
Speaker 1:And we think it's worked. It did for a while, but they caught on. To us, the right to repair is a beauty. Another one is that certain states I think there was five or six the last time I looked by state law requires a manufacturer to reimburse a dealer for warranty work at retail prices. And I always used to ask the manufacturers how come the dealer has to subsidize your quality failure on warranty. And it's everywhere they go. So innovators like you are rare And that's why I welcomed them. That's why I applaud them. I want to see more of it, because we can do a hell of a lot better than we have so far. The customer is buying a whole, they're buying a ton, they're buying a mile, they're not buying a machine, And we're going to get to that point where that's how we sell the machine.
Speaker 2:Yeah, it's, you're right, dealers don't want to admit that. But that's like getting back to the mindset piece. I was listening to an interview of a really well known venture capitalist, mike Maples Jr, and he was talking to the Spotify founder, daniel Eck, and like that's where, kind of, i had clarity, where you say innovators, like breakthroughs, happen because someone is contrarian and it's hard to be contrarian because of what we were actually talking about off camera. Right, our desire as human beings to be a part of a group, be a part of a tribe, be a part of a consensus, but breakthroughs don't happen within large groups because everybody just always agrees.
Speaker 2:Everything is just move forward the way it always has been, and so that was what was difficult for me was understanding that the only way to innovate and to achieve a breakthrough is to be on the outside, and there's a lot of negativity that goes with that People ignoring you, people telling you that you're crazy or you're stupid or your idea is dumb, It's never going to work. But that's just. The people who achieve the breakthroughs are the ones who understand that that's what comes with the territory And they don't let that kind of stuff slow them down. If anything, it's more fuel. It's like it's no, i'm on the right track, because if everybody agreed with me then I probably wouldn't have that big of an idea or a breakthrough. You know, because it just is, it's consensus at that point And so it just comes with the territory.
Speaker 1:It's rather remarkable that Japan, with Edward Demings and Duran, started the continuous improvement movement. It wasn't in America. What was the guy's name? Dr Christian Barnard, i think, was the first heart transplant in South Africa. Why wasn't it in America? A couple of years ago I started a book and I gave it to my daughter, called the blue mind. We might have talked about it.
Speaker 1:They're now starting to physiologically evaluate your brain. that they are finding, you know, freud and the boys did it back in the 1800s, but it was more. how do you feel? Now they're looking at the actual electrons and blood movement in your brain and noticing that with different pictures, that you see different images, different music et cetera, your brain adapts differently, to the point that they're now saying they can teach your brain to change your genetic makeup. There's a guy by the name of Wim Hof. They call him the Iceman. I'm familiar with him. He can change the pH of his blood with his. Stanford is studying the hell out of this guy. He's a, you know, and he says look, i can teach anybody to do this?
Speaker 1:Have you ever tried following what he does with his breathing?
Speaker 2:I have not. I'm familiar with it, I've been reading about it. I mean he's, he's a savage.
Speaker 1:Go on YouTube. He's got a breathing exercise on YouTube That's set in a calm place and do exactly what he tells you, and I bet you you're going to be able to hold your breath for three minutes within 15 minutes.
Speaker 2:Have you tried it?
Speaker 1:Yep. Two and a half, without you know, within five or 10 minutes. I'm up to two and a half minutes in a normal circumstance, You know, and as a swimmer, that's something that makes a big difference for guys like me. And so we're, we're learning all of these things. Wim Hof is a weirdo. He, he, he just lived his life and found this. He's been up Everest barefoot in shorts. Yes, I've seen He's done a marathon in the Sahara in shorts. You know, there's, there's examples like you and Wim all over the place.
Speaker 2:Laird Hamilton, the surfer I'm a big fan of his Pardon. I'm a big fan of Laird's His, his, his workouts are gnarly too.
Speaker 1:Oh, they're terrible, And he still does it. You know it's so it's. it's the mindset issue. It's lonely, isn't it?
Speaker 2:It is 100%. You know, not many people understand it. Yeah, because there are. You're so many days, especially early on, where you're home or you're driving home and there's just nothing seems to be going right And and you just have to keep. You know, that's my belief is so important, like commitment to what you're doing. That's why I do think that and I think you can be successful either way. But I think the path of founders who have lived and have industry experience is a better path. Yeah, because there's plenty of founders who are just entrepreneurial by nature and like oh, i saw this problem within our culture and I'm just an opportunist, so I'm going to create a company that tries to solve that problem.
Speaker 2:I think it's a lot harder that way, because when times are tough, you know what? why are you going to cling to that idea and keep pushing forward if you don't like? it's one thing, like with me I didn't. I didn't seek to start a company, but I just. I've been in this industry so long and it just was insane to me for there to be no movement and no improvement in different facets, like we've been talking about, you know, a shortage of technicians for my entire career, and there's nothing that's been actual actually done about it. So it's just the same conversations over and over again and I'm just. I have the personality where I can't take that kind of stuff. I can't just. It's just like my worst nightmare to be sitting here 10 years from now. Like you know, there's a shortage of technicians and just the regurgitate the same stuff.
Speaker 1:So when you started to heave the day, it was incorporated. How old were you?
Speaker 2:2020, I was 40.
Speaker 1:I was 33 when I started the consulting business And I remember and I say this to people a lot I remember sitting in the second floor in our house in the bedroom for guests using a Commodore 64 that we got from my daughter because you could get software for kids to help them learn in school, looking out a window by myself And we're social animals. That's really difficult for people to do. Several of our contributors that writer in the same boat as you that are owner operators, entrepreneurs, starter, breakthrough people and they, they experienced the same thing that your. Your blog has been exceptionally helpful to a whole bunch of people.
Speaker 1:A guy in Portugal, you know he said that was the most influential piece that I've read in the last three months. Oh, as he's starting his own business over there is Canadian Nice, you know, and they're, they're all over the place And everywhere you go where you're breaking the mold, you're, you're dealing with sacred cows. There's people that are going to protect it. There was an announcement a couple of days ago. There's a lady who was 90 years old, who just retired from Dillard's.
Speaker 2:You're familiar with Dillard's right Yep, the shopping, the store.
Speaker 1:Yep, she worked for them for 74 years and did not miss a day of work. She started when she was 16. Wow, isn't that something? It is. That's a bygone. You won't find people doing that today. No, you know, i'm 77 and still working. There's something wrong with me. Everybody keeps saying what's the hell's the matter with you? Don't you want to retire? I got things to do, baby, but it's so.
Speaker 1:The challenge of protecting your mind, staying focused on what you're trying to do, rather than the negatives that are all around you saying give up, go away, stop that. The success comes slowly And it's like walking in sand, isn't it? You're elated one day because something happened that was good and the next week or month you're down in the dumps. That's right. Think about sports again, because you and I can to talk about that. It's awfully hard to go from being in last place to a championship. It's awful hard to repeat as a champion. And if you want a really good example, as Vince Lombardi cooks at the Army, then he goes into the Packers. And Barth Starr was a fourth-wing quarterback And he came out with all of his philosophies and took a last-place team to the Super Bowl. They're all over the place. Or show me a superstar athlete who was a good manager or good coach. There's hardly any.
Speaker 2:Yeah, there's reasons for that. Because you have to in order to go from the bottom to the, you have to do it in a certain order And you have to have small wins that just keep adding up and piling up And that's what helps you get through the early and the hard times. It's just is those small wins. For us, the enthusiasm from customers was what got us through, and that's something that I didn't really experience when I was with the dealership. Like we didn't have customers who were like, oh my God, thank you so much for these four wheel loaders. We wouldn't be able to live and do all of these projects without them. And then, because you're just one of a bunch of other people, dealers just sell them the same thing. And with this, the enthusiasm that we have received and still receive from customers because it's new and it's a fresh idea And it actually solves customers pain is oh, it's like rocket fuel for us. It's unbelievable. It just makes it makes all the hard times worth it. When you talk to a customer and they're like you guys saved me, we had a customer It really is kind of like it sounds like a fairy tale And hopefully we'll be so successful down the road where there's like case that is written.
Speaker 2:And because this story is so powerful, we were after a customer for a while just to try our app And even though he is an early adopter, it just took a little while to get his attention to try it. So he calls me and he's like hey, i've got a good test case for your app. He's like I have got a. He had a hundred thousand pound excavator and it was down And he got a quote from the dealer to repair it And it just didn't sit right with him. He didn't tell me at the time like how much the quote was for and everything, and. But just like, like all of us, you know if we take our car into a mechanic shop, sometimes when they're like, hey, you need to do X, y and Z, sometimes you don't feel right about it. So he's like how do I get started? So like, ok, just download the app and put in the request and we'll see who who ops into the job. And so he did.
Speaker 2:A mechanic answered it within five minutes and was out there the next morning, looks over the machine And he's like you know. He's like I know what the source of the issue is. There's metal and the hydraulic tank, this and that, and he he fixed it that day. It was like seven hours of labor. We invoice the customer is like 1500 bucks. And he calls me the next morning and he tells me that the dealer quoted him $28,000. Had to had to replace like these four major components And then it was going to take like three weeks for them to get to it. And you know, just in that one and that was his first job with us And we saved him, you know, $26,000. And it was just the in through it. Like I'm so thankful that you guys exist And just getting those type of reactions and moments, it doesn't get more gratifying than that.
Speaker 1:I would like you to create a bulls and board as as an adjunct, as an add on to your app. OK, that mechanics and clients post stories And that you once a month Have a poll of everybody who uses your system That determines who's got the best posting on the bulls and board and give them a thousand bucks. I like that idea. Declaring house It's a magazine company. It's a million bucks. They don't even need to advertise anymore. Right, that's right, i like that.
Speaker 1:So that's the other part of life. The early adopters, the innovators, the pioneers. How do they get the word around? Everything is difficult without spending a lot of money, so you need bridges.
Speaker 1:I'm going to build a bridge from here to there to get us there, but then you need help. So it's remarkable, and we're moving Alex into a world where everything is going to be a subscription. And you've seen it best, i think, with television, which has only been 70 years roughly, and you started at two or three channels. Now there's 500. You started with rabbit ears, then you went to antennas, then you went to cable, then you went to high-speed internet Whoa, we had theaters. Then here comes Blockbuster, which is gone to be replaced with Netflix. We've got so many examples of making life easier for people, which is exactly what that client told you. Yes, and it took him a long time to try it, didn't it?
Speaker 2:It took a couple months.
Speaker 1:And that's fine.
Speaker 2:Yeah, absolutely.
Speaker 1:What's the old deal You want to sell to somebody? find a salesman Because they're easy to sell to. They're more interested in your technique than what you're selling. Right, i agree with that. My wife and I, everybody wants to sell to the man. The best story I've got is in Istanbul and Turkey. I'm looking at Turkish, afghani, actually rugs, and the guys are all you know. They're doing everything in their power three or four of them all over me And they finish everything and I'm excited. I said that's really good. But you got to sell it to her And you know they couldn't believe it. You mean to tell me she's going to make the decision? How can you do that? It's everywhere in life You meet resistance. Resistance to change is really unbelievable And it's filled with cliches. Yes, that might work in the short term and we'll never lost.
Speaker 2:What's funny is, to that point, like we posted this success story and we had it. I don't want to. I think we're all hard water, focused more on negative than positive. But there were a lot more super positive comments about it. But there were a couple of people who were like what would have happened if your guy screwed up the repair? Well, he didn't. He saved the cost for 26 grand. And like why are you asking me questions about what would have happened if X, y and Z? It's just funny how people they just yeah, they don't want. There always is resistance. They don't want things to work out really well. People are always want to believe something's too good to be true. It's like no, you know what It's not.
Speaker 2:Independent mechanics have been working in the market for a long time. We didn't create the concept of an independent mechanic. We've just made them visible to the large market. We wanted to give customers a choice and competition so that they didn't have to just wait for two weeks for a dealer to get to them for field service. Here's five people who are trained, qualified, insured and they're available tomorrow. You know what's bad about that?
Speaker 1:What do you think the market share is for labor at the original dealer that sold the machine? What do you think the market share is as a percentage of the labor that is put on the machine?
Speaker 2:My answer today is a lot different than what it would have been if you asked me that question five years ago.
Speaker 1:What would it have been five years ago?
Speaker 2:I would have said, oh, when I was working at the dealer. We get 95% of the service business Today. You know what? I would probably say it's around 50%.
Speaker 1:What do you think?
Speaker 2:my answer is Probably less than 50. 15. 15? Holy.
Speaker 1:Who's the biggest competitor for labor in the market?
Speaker 2:Customers.
Speaker 1:Yes, who's second?
Speaker 2:When you say biggest competitor to us Just labor.
Speaker 1:Oh, an OEM dealer sells a machine and there's a thousand hours of labor put on that machine over its life. 500 hours go to the customer themselves. How many hours go to the next biggest competitor, and who is it?
Speaker 2:You're saying 15% would be the dealer. I guess that you don't need to agree with me.
Speaker 1:You can take whatever you think.
Speaker 2:I think you're more knowledgeable on this than I am. I would say an independent mechanic then would be second with probably 30%.
Speaker 1:Okay, so the 50% and 30% is 80% of the hours that are put on machines are done by mechanics other than the OEM dealer. Where did those mechanics come from?
Speaker 2:The dealer.
Speaker 1:Yes, who has the problem of finding mechanics today?
Speaker 2:The dealer.
Speaker 1:The independent mechanic is out there making a buck. You're facilitating that. Typically, the independent mechanic was at the top of the pay scale, that he wasn't going to get any more money and that's ridiculous. So he went out on his own. That's right. And he had a group of customers 6, 8, 10, to keep him busy. That's correct. He doesn't know how to get bigger. There's a few that do That's fine, but you're going to facilitate that person's business.
Speaker 2:Yes, we give him choice. We give him and our choice. They opt into jobs And that's what we found with independence is that they really kind of just whoever called they had to take the job And we found that they were driving really far distances, driving three hours each way because they didn't have anything else on the docket. So, yeah, that's one of the things that we seek to change, but this is the. I like talking about this too, because the economics have been broken for a long time in the industry And for all the cliches we mentioned earlier, right, service is so important, blah, blah, blah. Sales sells the first machine, service sells the second. Yet the talented skilled laborer was not getting paid very much. They paid the dealer mechanic $40 an hour, bill him at 180. And then meanwhile the fourth best salesperson in that same branch made 150 grand, just because by nature of selling machines for an average price of 200 grand. And so it's all wrong.
Speaker 2:And so we started in Texas in May. We keep adding more mechanics there, technicians there, and when we closed June business I looked through our kind of log and we had paid a guy 14 grand in June. His first month started on heave, incredible, yeah. So like to your point about the technicians and the clients posting stories. We have it on both sides. Here's a talented tech who he was running Google ads. I think he still does run Google ads, but he was paying like $300, $400 a month or a week. Actually, i'm sorry, $300, $400 a week for Google ads And who knows. I mean, i think we have an idea of how many jobs that would have that leads to. And then all of a sudden, here's our app that comes in the market. We found them And first month, 14 grand Boom. Like doing jobs that he wants to do.
Speaker 1:So think about Google. And how do you know that Google is working? He's paid that $300, $400 a week for Google Labs, et cetera, and they come back with the reporting on SEOs and all the rest of this stuff. So they're trying to give you a report card on themselves that makes them look good.
Speaker 2:Right And also just like and I, you know, i respect someone who's trying to get more business in the door, but the reality is, is that customers, when they buy the machine, that's when their service decision is made, like a customer who buys a caterpillar when it's broke doesn't then go to Google and say, oh, caterpillar service near me. I mean, they already know where they're gonna either they have their own mechanic or they're gonna go to the dealer And so it's. I have to think that the Google ads for these guys are is letting money on fire.
Speaker 1:So you know how crazy I am, or weird. You buy the machine, mr Customer. I'm gonna sell you $1,000, or 1,000 hours of labor over the next five years for your maintenance and repairs And I will charge you $200 an hour for that 1,000 hours And I will guarantee I will be at your machine in 24 hours. Or I'll charge you $80 an hour and I'll guarantee I'll be at the machine in 72 hours And let the customer make the choice. What do you think they choose?
Speaker 2:The $200,000.
Speaker 1:You know it's really perverse. And you're opening a door in a room that has never been populated before. Mechanics are excited. Your $14,000 example, Customers are excited. Your guy who saved 28 grand, they're all over the place. So keep it up.
Speaker 2:We are, And the best thing about early adopters is that they tell other early adopters.
Speaker 1:That's what the grass fire is about. Yes, no, that's the best thing. Yes that's the influencer that I was talking about. And you build those influencers up, you got a winner And sooner or later somebody's gonna come to you and say, alec, is there anything I can do to that? How can I help you? And they're gonna start coming, babe.
Speaker 2:We've had some of that. It's funny. It seems like the switch has flipped Ignore, ignore, ignore. Now people want to help us.
Speaker 1:This has been wonderful, alex, and I applaud your success and your courage and your mindset, and I want you to keep writing blogs and keep bringing your perspective, because it's wonderful and there's a lot of people that are gaining from your sharing your wisdom.
Speaker 2:Thank you, i appreciate that I enjoy writing. I'm a little bit of a perfectionist, though, so I prefer I just like I sat on the mindset one for like five weeks, just refining it.
Speaker 1:I was talking with. In the last month or so I've had maybe 30 Zoom calls with a dozen people on each, And that comment has come back to me a lot, where people are perfectionists And I say no, you're not a perfectionist, You're a control freak And you're not gonna be successful being a control freak because you're limiting your influence on the world. The only way it becomes successful is you, if you can leverage your thinking, and the first role of a leader is to create a bunch of followers And then the second role is to find which one of those followers you're gonna turn into leaders and get the hell out of their way.
Speaker 2:You're absolutely correct. I understand that, yes.
Speaker 1:So don't be such a perfectionist. Okay everybody that's listening. Mr Kraft is gonna commit to giving me one blog a month. Yes yes, did everybody hear that? Mark it down here.
Speaker 2:So my next one is gonna be about not being a perfectionist.
Speaker 1:Perfect, perfect. Thank you so much. Anything you wanna say in closing, i think this has been a wonderful discussion.
Speaker 2:Just if you own heavy equipment and you need 24 hour service. that's what he provides 100% of the time. We can get somebody to you within 24 hours. That's what we do.
Speaker 1:Thank you very much, mr Kraft, alex, it's a pleasure And I hope everybody listening to this candidate conversation got something from it. I think it's a really important message We are our own worst enemy. Take a chance, go for it and recognize they're not always gonna be wins, but enough of them will be. Hello everybody, thank you for participating. We'll see you next time, mahalo.