1321: David Royce | The Blue-Collar Advantage in the AI Era (Bonus)

1321: David Royce | The Blue-Collar Advantage in the AI Era (Bonus)

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Jordan Harbinger: [00:00:00] This special episode of the show is sponsored in part by the Yap Media Network, the number one self-improvement podcast network. This episode is brought to you by Lufthansa. Lufthansa Allegris is an innovative, elevated travel experience across all classes, focusing on each person with their own individual and situational needs.

Look forward to your own feel good moment above the clouds. Visit lufthansa.com and search for Allegris to learn more. Lufthansa Allegris. All it takes is a yes.

Welcome to the show. I'm Jordan Harbinger. On The Jordan Harbinger Show, we decode the stories, secrets, and skills of the world's most fascinating people and turn their wisdom into practical advice that you can use to impact your own life and those around you. Our mission is to help you become a better informed, more critical thinker through long-form conversations with a variety of amazing folks, from spies to CEOs, athletes, authors, thinkers, performers, even the occasional former cult member, Fortune 500 CEO, legendary, actor, or real life pirate.

Apparently those still exist. If you're new to the show or you want to tell your friends about the show, I suggest our episode [00:01:00] Starter Packs. These are collections of some of our favorite episodes on topics like persuasion and negotiation, psychology and geopolitics, disinformation, China, North Korea, crime and cults and more.

It'll help new listeners get a taste of everything we do here on the show. Just visit Jordan Harbinger.com/start or search for us in your Spotify app to get started. Today on the show, you ever notice how the people who make the most money are almost never doing anything that sounds cool at a dinner party?

Yeah, I built a half a billion dollar pest control company. Nobody grows up dreaming about termites. Nobody's lying on the floor at age eight thinking one day I will dominate the cockroach economy. And yet, my guest today did exactly that. David Royce turned door-to-door rejection into a machine, not just a business, but a system, a lot of systems, in fact, something that scales, something that works even when you're not the hardest working psycho hustle culture guy in the room.

Today on the show, we get into what getting rejected a thousand times actually teaches you about people, why most top performers are useless once you remove them from the spotlight, how to turn skills into a system instead of a [00:02:00] personality trait, and why follow your passion is probably some of the worst business advice ever given, because it turns out the real game is not working harder.

It's building something that works without you. And if you don't figure that out, you don't have a business. You've got a job with a God complex. Here we go with David Royce. So you built a 500 million dollar pest control company. By the way, if I get any of these stats wrong, you gotta jump in. But that's not exactly a business kid's dream about when they're, like, laying on the floor, staring at the ceiling.

Usually it's rock star, athletes. Pest control is like a distant 99th on the top 100 list of sexy businesses to create an, an exit. So why was that the right move?

David Royce: So I got into the industry the way most people do, uh, accidentally, right? It's the last thing on my mind. Uh, I took this crappy summer job, uh, back when I was in college.

I had a friend come to me and say, "Hey, I made 25 grand last summer."

Jordan Harbinger: Pretty good.

David Royce: Yeah, like three and a half months. [00:03:00] Uh, do you want to go out with us? You know, we go out, you know, to Northern California, we surf on weekends, you know, it's like, oh, all I heard was like 25 grand and I'm working like, you know, a minimum wage job.

Jordan Harbinger: Yeah.

David Royce: Tar- movie theater. Yeah, trying to work my way through school and it's not great. So, uh, that's all I heard. And so I, I drove out to Sacramento about 10 hours. I was down in, uh, in Utah. And it was, I showed up and I literally, I couldn't sell. I sucked. Yeah. I was horrible at

Jordan Harbinger: it. Yeah. Do you want to buy this?

Thanks for your time.

David Royce: Yeah, I had zero sales training. Uh, the first five days, zero sales. Uh, and it's a commission only job. Sure. So like my only benefit's free cardio.

Jordan Harbinger: Right, right. Yeah.

David Royce: And all my friends are selling like one to four sales.

Jordan Harbinger: Per,

David Royce: per

Jordan Harbinger: day?

JHS Trailer: Per day.

Jordan Harbinger: Oh my gosh. Per

David Royce: day.

Jordan Harbinger: So you're, you're like- I'm

David Royce: dying.

Jordan Harbinger: Know you suck. You're just, it's not a hypothesis. It's proved, proven.

David Royce: Exactly. I can just look around and go, "Yeah, I'm not great."

Jordan Harbinger: Yeah.

David Royce: So that weekend, I, I, you know, I started to get nervous. I'm like, gosh, you know, I have an apartment out here. I, it's just kind of do or die. I need to make it work. I just went out to a bookstore, bought half a dozen books, and then I just said, "Okay, I'm going to read 90 [00:04:00] minutes every day."

'Cause I know this is my best opportunity as a college student to make this type of money and try to pay my way through school.

Jordan Harbinger: So you bought sales books, yeah?

David Royce: Sales books.

Jordan Harbinger: Okay.

David Royce: Yeah. And it started to click. Like little by little, I started to figure it out. I realized I was horrible at closing initially.

It'd be like, "So what do you think? " Yeah, yeah. As opposed to maybe like, "Hey, we're going to be here in the morning and the afternoon, which would work best for you. " Right,

Jordan Harbinger: right.

David Royce: Be

Jordan Harbinger: assumptive close.

David Royce: Yes. Yeah. Give him some sort of option close, right?

Jordan Harbinger: Yeah, yeah, yah. What, what sales books? I'm curious, because I remember those days-

David Royce: Jeffrey

Jordan Harbinger: Getamer books or

David Royce: whatever.

Yeah, totally. Jeffy Gitmer, Zig Ziglar, Ryan Tracy, Tom Hopkins.

Jordan Harbinger: Okay, so the exact same books that I bought to learn sales, right? Yeah. And remember Tommy Hopkins tapes and he would be like, so my secretary said something, something, something. And I said, "Well, you're going to need three typewriters." And it's like, wait, this guy made all his money selling typewriters and you just listen to these tapes and it sounds like a guy who probably smokes unfiltered cigarettes or whatever.

And he's just telling you this very sort of nowadays, almost like quaint [00:05:00] advice, but it's actually subtly genius and you realize that, oh my gosh, in the '60s when he was coming out with this, nobody had a cl- this was all like space age material. Totally. That, you know, the, the, when is, is morning or afternoon better for you?

Meanwhile, people were like, "What do you think? You want to buy it? " They're like, "Come on in. " And if they didn't say yes, that was it. And this guy's assuming to close and it's like, oh man.

David Royce: So I think sales has come a long way and there's so much stuff that goes into it too, right? Body language is incredible.

That's like a whole other level. It's one thing to learn all the really, you know, sexy lines to be able to close somebody. It's a whole other level to learn how to like read body language and then also ensure your body language is putting people at ease and getting them to actually want to buy.

Jordan Harbinger: Were you going into people's homes?

David Royce: Uh, most of the time we could just do the presentation. I actually preferred not to just because it was a time thing. The more people I could talk to- Yeah. ... the more it could close.

Jordan Harbinger: Oh, true.

David Royce: Yeah. If you go inside, you tend to, you know, sit down, you know, have some coffee or have a drink or something, you know?

Yeah. It just takes a long time, like longer time to close. That's

Jordan Harbinger: true.

David Royce: So yeah, like we r- I really try to be in and out maybe 10 minutes. Like you kind of give your initial pitch for just a couple minutes, you [00:06:00] know, kind of nod your head, smile, get them to say yes, and they're like, "Oh yeah, I'll, I'll give you a shot.

Why not? "

Jordan Harbinger: And were you selling pest control or something else?

David Royce: Yeah, pest control services. Yeah. It's kind of like you, you go out, uh, you know, every other month or once a quarter or whatever. It's very much like gardening services or whatever, right? Yeah. Like or, you know, if you can have a gardener pull weeds once, that's great, but, you know, the weeds are going to come back, so you gotta go back out and retreat.

Jordan Harbinger: Yeah, the bugs always come back. We hired a pest control company in my house, and the reason we did it was because we had ants in the bed. Oh, no. And they were coming and you'd look and they'd go like up over the headboard and then- Ah. And you just go, okay, there's no way to get rid of these. And the line went all the way to these vines and it was like- Yeah.

either I can landscape my neighbor's yard and get rid of these or I can hire a company to come in and spray a little protective barrier. In California, we got bugs, man. We got bugs for days. Sure. So for, no one, your friends were making 25 grand a year. Nobody wants a line of ants through their whole home.

And that's the best case scenario, ants, cockroaches, whatever. I've heard you say business is a sport and I'm wondering what you mean by that in practice, because what's [00:07:00] the scoreboard, you know, what are you measuring that most founders aren't?

David Royce: Yeah, I think you just gamify it, right? Like, so for the sales side, it was exciting to sell more.

Like the best thing about commission, a commission job is that you are in control of however much you make, right? So you can study more, you can learn. And by the end of that summer, I was the top rookie out of a couple hundred sales people.

Jordan Harbinger: Hat's pretty good.

David Royce: That's a good feeling. Yeah, because I made 35 grand, right?

Right. So it's like, okay, like I want to do better. And the next summer I went back, I was a sales manager and trained other people and I got there, I, I went to a new company that was a startup and they didn't have a training manual. And then I was like, "Oh crap, I brought all my friends out. Uh, hey, can I write a training manual for you?

I want them to do well." And the owner was like, "Sure, this is awesome." Yeah.

Jordan Harbinger: Yeah. I, I've been told I need some sort of training manual and you're going to do it for free so that you're not embarrassed that you brought your buddies- Yeah. ... to the company. Hell yeah.

David Royce: Totally. And he had one other location and it was like, okay, well, we got our location, they have their location, how can we beat them?

It's like try to find a way ... If you can create competition in some sort of a way, like a friendly competition, everybody does better. And so our sales team, we did about twice [00:08:00] as many per rep as the other team did. And then the, my boss was like, "Hey, do you want to like recruit for me in the future and, uh, be entire, over my entire sales program and then I'll give you a cut off everybody."

Yeah, that's awesome. You can recreate that here. And so that's what I did for the next two years after that. And I was making, my last summer, I made 225 grand.

Jordan Harbinger: Wow. Pretty good for a college sophomore or junior or

David Royce: whatever. Not too Chevy, right? Yeah. Like, that's like 20 plus years ago. In today's money, it's probably more like almost half a million

Jordan Harbinger: bucks.

Yeah, that's crazy. I, I love commission only jobs. I mean, I shouldn't say I love them, uh, for everyone, but I loved mine. And I remember my business partners at the time, I was making a base and then they were like, "You're not selling very well." And I was like, "I don't know how to sell. I have no training. I'm just sort of figuring this out.

Yeah. I'm asking salespeople how to do it. I'm reading the Jeffrey Gemmer books or whatever all these- Right. ... the Zig Ziglar stuff. I got the tapes. I'm in the gym on the elliptical machine or whatever bullshit non-exercise thing. Right. Like listening to Tommy Hopkins on tape with the static in the background selling typewriters.

And then they were [00:09:00] like, "We're moving you to commission only." And I was like, "This seems unfair." And they're like, well, that was kind of the idea is they were like, "Well, we're not going to pay you if you can't do anything." Even though it was my company, I just kinda got strong armed into this position. Yeah.

And I, I remember making like $42 one month and then, I don't know, fast forward six, eight months later, I was making like a lot more. I mean, add multiple zeros on the end of that. And then they were like, "We're going to cap your. " And I was like, absolutely. If you try to cap me, I'm leaving- Yeah, you're out.

because I'm bringing in all of your money. So no, I, there will be no cap. I'm in charge now. And then it, it eventually turned into kind of a problem in the company and it slowly led to me going off on my own because there's ego involved- Yeah. ... because like why are you making three times, four times more than everyone?

And then they bring in a consultant and the consultant goes, "Oh, the reason you're making all this money is because this guy's generating $3 million a year and you, what, what was it you said you do around here again? You manage all the spreadsheets? Hire a bookkeeper and fire yourself." And, and remember like that sort of slowly started to fester.

And I think I read and, and looked at a bunch of the stuff you've done. It sounds like [00:10:00] kind of that same thing. You, you eventually realize what, why am I making this guy $10 million a year instead of me making $10 million a year?

David Royce: Yeah, somewhat. Like he was very, uh, encouraging. Yeah. Like

Jordan Harbinger: I,

David Royce: I actually went to him asking him for a letter of recommendation.

I wanted to go into investment banking. I'd been studying finance at school. Mm-hmm.. And he just looks at me, he's like, "Why?"

Jordan Harbinger: Yeah.

David Royce: "Why are you going to go work 80-hour weeks for somebody else? It doesn't make any sense. Go, you should really go do this on your own. You're really good at it. " And I was like, uh, he actually wanted to invest in me.

Jordan Harbinger: Mm-hmm.

David Royce: He wanted me to go start my own company. And then he told me, he's like, "By the way, I'm selling my business." Yeah, if you want to buy- I was like, "Really? You, you've only been doing it for four years and I've been here for three of those." And he's like, "Yeah." I'm like, "Well, how much are you selling it for?

And he's like, "10 million bucks." I was like, "Wait a second, you only invested this much and you made that much." I was like, "Well, all right. Well, maybe I'll think about it. "

Jordan Harbinger: How many houses are you hitting? And is it mostly in California? 'Cause California door to door sales, okay, Michigan door to door sales, ugh.

David Royce: You know, it just depends. I mean, the job, it's crappy, right? Yeah. Like it's hot weather outside. It's just [00:11:00] tons and tons of rejection. I mean, you're probably knocking on like 120, 150 doors a day. You're trying to close maybe two and a half for the average person. I might be able to close, you know, 13- Two

Jordan Harbinger: and a half?

David Royce: Yeah, two and a half accounts.

Jordan Harbinger: How do you close half an account?

David Royce: Uh, just what the averages kind of come out to. I see. Like every other day you get one, three day- Fair. Once a two day, that kind of thing. Some days it's zero day, another day might be five. I was really good. I could get like 13, 15 accounts-

Jordan Harbinger: Really?

Wow.

David Royce: But you just, you learn and, and part of it has to do with time. So the average schedule, you wake up, you have a meeting at nine in the morning, um, at 9:30, meetings over, you drive out to the area and then you're on the doors as long as you want. But most people at work, they take like a couple hour lunch break in the afternoon when it's hottest and then go back on the doors and work until, you know, until dark.

So it might be in the summer, you know, 8:30, 9:00, depends on where you're at.

Jordan Harbinger: I've let your guys eat in my backyard before.

David Royce: Have you really?

Jordan Harbinger: Yeah. Can I say the company name? Is that fair?

David Royce: Yeah, sure.

Jordan Harbinger: Yeah. Aptive. Yeah. Yeah. That's right. I've let them sort of like chill because they're, you, they'll come to the door and they're, so these blonde white guys and I'm like, "You need to get out of the sun."[00:12:00]

It's three pi- you, how long have you been ... And he's like, "Yeah, I, I feel like I'm getting a little red." I'm like, "You are bright, bright red. Go sit in my backyard and sit down and, you know, if you want something to drink," and they'll do, they're just like, "Oh, really? Like, they're stoked because otherwise they're eating in their car or something like that.

Right. Or somebody else's car or whatever. And it's just like, you guys are, you need to go inside.

David Royce: Yeah, like at the beginning of the, like right where they got out of college because there's a lot of them, uh, we started recruiting out of Utah just because that's where alma mater was. They

Jordan Harbinger: do, these guys do look likears.

They do a lot of very

David Royce: white.

Jordan Harbinger: Yeah.

David Royce: White whites, right?

Jordan Harbinger: They arevers like no

David Royce: sun.

Jordan Harbinger: I'm like, you need a hat and, and a bucket of sunscreen. Like this guy, there was one guy, again, the f- recently, and I was like, "You come back if you need to go to the hospital, because you, you're so burned, dude." I, I hope that guy made 250 grand that summer because he was paying for it.

David Royce: Yeah, by the end of the summer, by August, they're, they're very brown.

Jordan Harbinger: Yeah. They tanned

David Royce: up a lot by that. But you know, it's a solid farmers tan.

Jordan Harbinger: Yeah. Yeah. That with the active Polo Tan. Right. Yeah, exactly. [00:13:00] Oh my

gosh.

Exactly. So you were pretty bad in the beginning. How quickly do you think it took you to learn how to sell?

How long did it take you to get to BrownBelt sales?

David Royce: I started to learn pretty quick. I think, so the average person, if you look at the trajectory is sales reps, you know, they start off pretty slow and then by the sixth week in their first year, they're starting to peak. And then there's, there's ways to improve.

We can tell them like, look, if you want to work through lunch or, you know, maybe just take a half hour break instead of two hours, you're going to make a lot more sales over the course of the summer. It's just a numbers game, right? Just depends on how bad they want it. Like our, we have so much training. We have like all of our top 1% of reps filmed, and so they can watch maybe 15 different types of people selling in different ways.

Jordan Harbinger: Wait, how do you film that if they're going door to door? Do you get the, because-

David Royce: We do role plays.

Jordan Harbinger: Okay. I was going to say, somebody's

David Royce: building- Literally set up a whole act and pr- someone pretend to be the, the customer and they'll give like lots and lots of hard objections and then, you know, the sales rep has to get over it.

It's fun because you can see people like, you know, they're more assertive, you could see people are actually a little more soft spoken. There's a lot of different ways to [00:14:00] sell, actually. But the key is like your body language, it's maintaining control and being calm and putting the customer at ease and just, you know, having all the different lines, all the different rebuttals to be able to get through it.

You can take it to a whole nother level. So I, I invented this thing, I call it the rack system, RAC, so resolve, ACE, close. So have at least three different types of rebuttals in case the one rebuttal doesn't work for the customer. Next, you change the subject to what else can you offer that you haven't discussed already?

So you lay down an ACE. And usually I like to have four different things that I could bring up over time, but you just do one rebuttal, one ACE, and then you close again, and try to close in a slightly different way so it doesn't remind them of the previous close where they said no.

Jordan Harbinger: Right, yeah.

Interesting.

David Royce: And that they still can say, "Yeah, I just still don't think I ... " And they're like, "Yeah, I understand how you feel." And then you'll give another rebuttal, a different ace, and then another close. And so you can take sales to a whole different level. Like the people are the top 1%, they eat, breathe, and sleep sales and love it.

Jordan Harbinger: So the next time, because Aptiv comes, I would say every other month, right? Yeah. Or every three months.

David Royce: Yeah, about that.

Jordan Harbinger: So [00:15:00] if I say, "Hey, man, you're not filing the rack system, are they going to know what I'm talking about? " 'Cause I'm very tempted to screw it the next active guy. Yeah, they probably will. Okay.

I'm very tempted. 'Cause there'll be times where they come by and I'm like, "That guy's got skills, like he's, he's going to do well." But other times I go, "That's it? He's gone already." Like I just said no thanks. I already have whatever, I don't even know who we have.

David Royce: Yeah.

Jordan Harbinger: But like, then he's like, "Oh, okay."

David Royce: So you have, there's an attrition rate too.

It's like-

Jordan Harbinger: Yeah. ...

David Royce: maybe, you know, a quarter of the guys who are out there are going to either switch into like a technician position or they might even go home and just say, "You know what, this pest control's not for me. I'm going to, I'm going to bail." So in the month of May, you may have some really poor closing skills or poor- I see.

sales skills, but by August, those are your top people.

Jordan Harbinger: I see. So the, the guy in May, he needs to be encouraged subtly, but the August guy, I can put himthrough the ringer.

David Royce: Definitely.

Jordan Harbinger: All right.That's good to know.

David Royce: By mid, by mid-June, you're in a good spot.

Jordan Harbinger: Good. Okay. I'm, I'm going to remember this because my, as soon as you booked this, my wife was like, "Oh yeah, we see those guys all the time."

And sometimes they give up really easily. And I was like, "Oh, I'm going to, I'm definitely going to rib him [00:16:00] about that. Like, don't give up easily." Maybe it's because I'm a former sales guy, but I don't mind somebody who's like, "Oh, I'll handle that objection and I'll raise you this and I'll do this and how about that?

I appreciate that. You

David Royce: respect it,

Jordan Harbinger: right? I respect it.

David Royce: Totally.

Jordan Harbinger: And sometimes I'm like, "That's actually a really good idea. I actually do want this product or service, which is even a, a better feeling. Like, I love being sold something in a skilled, on a skilled level."

David Royce: Yeah, we respect it.

Jordan Harbinger: Yeah.

David Royce: Like, I, I have a hard time not buying for something from a great salesperson where I'm like, "Yeah, I'm going to reward.

This guy knows what he's doing." Yeah.

Jordan Harbinger: I've definitely done ... I won't say I've bought things I don't want or need from a salesperson- Yeah. ... just because they were really good. I mean, I'm sure it's happened, but I will even say like, "Hey, let me stop you right here. I'm, uh, not on the market for this at all, but you are a really good salesperson and I want you to know that this rejection is not because of like your lack of skill."

And then they'll be like, "Oh, thank you. " 'Cause it's like I would've loved to have heard that a few times when I was getting beat down, making phone calls, trying to sell stuff. Actually, what does getting rejected all day in person feel like when you're young and you're not really calloused or, or skilled yet?

David Royce: I think [00:17:00] the thing is you just learn to build resiliency towards it where you're like, you know, it's not me, it's nothing personal. They just don't, maybe they don't have pests right now, right? Or they already have a competitor service and they're happy with them. You know, it's like, cool, like it's not for me.

I just knew like typically within about 10 seconds, I knew if I was going to take that person all the way through the presentation, I could like read their body language and how they were perceiving me and whether I could actually build a relationship with trust with them and be likable to get in that zone or I'd just be like, "Yeah, I'm going to go to the next door."

'Cause the beautiful thing about it, it's not like you only have one chance. It's like if you don't do well, you just go to the next door. You just keep trying.

Jordan Harbinger: Yeah, you get so many reps in and, and yeah, it's non-personal, I suppose. What patterns did you start noticing after you heard no, you know, I don't know, 10,000 times, 1,000 times?

What, actually, how many doors ... You ever done the math, how many doors you knocked on?

David Royce: We know all that stuff. Yeah. 'Cause our guys, they actually track every single home that they're going to so you know.

Jordan Harbinger: What about you personally when you were starting to do this? Do you have any guesstimate of how many doors you knocked on?

David Royce: Yeah, I knocked about 60,000 doors over the course of four summers. So the average sales rep will knock about [00:18:00] 15,000.

Jordan Harbinger: 15,000? Yeah,

David Royce: in the summer.

Jordan Harbinger: That's a lot. Yeah. That's a lot of talking.

David Royce: If you have 100 days in your summer, you're going to knock 100, about 150 doors across the summer.

Jordan Harbinger: So how many nos is that?

Just tens of thousands of nos over your career.

David Royce: As opposed to nos, much of it, like only a third of the homeowners will actually answer their door. So either- Oh, that makes sense. Either they're not home or they're just, uh, it's another door to a salesperson not answering that door. I

Jordan Harbinger: see. Yeah.

David Royce: So

Jordan Harbinger: yeah. I al- I, man, I always answer.

I'm always just curious. Yeah. And usually I'm not doing anything that important. I'm not, I wouldn't answer when I'm on a show, but otherwise I'm like, "Please take me away from my email inbox." I'm curious, give me the spiel, man, give me the spiel. Um, what did going door to door teach you about human psychology that most people will never learn?

I mean, you mentioned the body language stuff. What other kind of concepts do you think you took throughout the rest of your career?

David Royce: A lot of it's, if you're anxious, they're going to be anxious. One of the key things I tell by salespeople is, look, the script isn't bad, because I had like a, you know, roughly a two minute script that was written out and it was very like vocabulary wise and it was dialed in.

It's like perfect script, you know, [00:19:00] and, and some sales reps still, they'll kind of freestyle and, and mix around with it, but for the most part, it works really well. And I would tell them, "It's not the script. It's bad. It's your face. You're telling, you're, you're literally looking at them going, please don't hurt me.

Right? You have like the headlights and you're like, "Hi, how are you? "

Jordan Harbinger: Yeah, yeah, yeah. Yeah.

David Royce: So if you're calm and chill, they can come out, you know, and be chill. And that, that goes way back to like our ancestry of tens of thousands or hundreds of thousands of years ago, even like when we couldn't, when we didn't maybe even have a written language or have a language we could speak, we would've had to have figured everything out from body language, right, to know if, you know, somebody was a threat or whatever.

We still, I would say probably two thirds of all communication really is just through body language and the tonality of your voice, you know, the volume, the pitch, all that sort of thing.

Jordan Harbinger: Sure. That's funny, that's, when I used to teach dating stuff back in my 20s and 30s, it was the same thing- Teach this?

David Royce: Yeah.

Jordan Harbinger: It was like focusonality, eye contact, body language. I mean, it was purposed in a slightly different way, but that was also, I used to say like a sale, kind of a sales thing. You're putting your best foot forward, you're handling some objections [00:20:00] in a way that's not hopefully creepy or unethical.

David Royce: Yeah.

Jordan Harbinger: And you're building trust. And it's like-

David Royce: Absolutely. ...

Jordan Harbinger: this is the same thing except at the end of the day, it's, you know, I don't get a pest control contract, hopefully get a girlfriend or something like that or date out of it.

David Royce: I've read probably half a dozen books about body language and I, I didn't read them until after I'd finished selling.

Like there wasn't a whole lot out there about body language specifically with sales. There was some stuff just about body language, this old, old school guy from Australia named Alan Pie.

Jordan Harbinger: I know who you're talking about. Yeah. But it's called, it was called like the Book of Body Language. The

David Royce: Definitive Book of Ldge.

Jordan Harbinger: The definitive book of body language. Yeah. Yeah. Barbara and Allen Piece.

David Royce: And I didn't even find that book until after, but I found some of his really old school books, uh, prior to that. Yeah, it's funny because most of the books that are out there, they're actually geared towards dating.

Jordan Harbinger: Yeah.

David Royce: It's probably a much bigger market than

Jordan Harbinger: sales.

It's a bigger market and also it's like, you want people to pay attention to this. Maybe don't constantly bring up office examples. Like even- Make about

David Royce: sex. Don't make it about sex.

Jordan Harbinger: Married people still want to hear about sex and attraction and dating. I mean, at least so far, at least th- those episodes are still popular.

David Royce: Yep.

Jordan Harbinger: I, I wonder at what point sales started feeling learnable instead of random? 'Cause [00:21:00] surely in the beginning it was like, well, that person said yes, great. Don't know what I did. That person said no. Oh, well, don't know why really, but it's just ... And because early in the game, salespeople always think it's just a numbers game.

You just have to roll the dice 100 times and you're going to, one of them's going to win and that's how it works. But then advanced salesmen are like, no, you're sh- you are counting cards.

David Royce: Yeah, it's pattern recognition, right? And it's being conscious about what is going on and then taking notes. So for me initially, it just started out with objections.

So like I was not very good at understanding other company services. I had no idea what services did and what they didn't do. So I would just write down whatever the objection was, you know, okay, they're with Terminix or they're with Orkin and I'd have to like study up and understand what the other companies were doing.

And then I'd have to ask customers, "Hey, do ... " I was just curious, do they do this for you? Do they do this? Is something our neighbor really liked is we do this and this. And they're like, "Oh, actually I don't, I don't think they do that. " "Oh, that's really cool. Well, what else do you guys do? "And then you're like, " Okay, I'm going.

Like I ... Uh, well, we take care of, you know, the yard as [00:22:00] well. We like done spiderwebs off the fence line. "They're like, " Oh, yeah, they don't do that. "

Jordan Harbinger: That's

David Royce: funny. And then it's like, oh, okay. Yeah. So you start taking notes and you figure out what different services do and-

Jordan Harbinger: I can see that being a selling point because my wife was like, " Yeah, they spray this thing around the house, but then I still have to clean up all the webs.

"So she texted the guy or called the guy and the next guy came over and that's why it's a good company. The next guy came over and he had this basically super long feather duster. Right. Yeah. And he was just like zip. And I go, " That's all this guy had to do to basically beat out the other guy was like, I'm not going to clean your porch.

It's not my job. I just do the spraying. "I was like, " Well, okay, we want the guy who brings a free confether duster in the car- Totally. ... and just gets rid of the stupid spiderweb so I'm not walking through it in the morning and having to stick to my face. Like that's what I'm actually paying for. I don't really care if the pests are dead.

I just don't want them to be in my face.

David Royce: And you know, what we found is it's far more, um, painful for the customer if it's visual. So like when I, when I was knocking 60,000 doors, I basically got out of PhD and what people hated about the pest control industry and you [00:23:00] learn a lot about specifics with different companies.

And so this is nerdy pest control history, but back in the 90s, prior to that, there were no feather dusters, nobody was doing that. But when we were on the doors, it's almost like, okay, this is my stage. What can I point out to help the customer understand? It's also far more engaging when you're pointing and you're talking and you're, you're doing this and you're talking, you know, kind of looking interesting as opposed to just kind of sitting there and droning on and on.

Jordan Harbinger: Speaking of pests, how about a word from our sponsors? We'll be right back. This episode is sponsored in part by DripDrop. I'm pretty serious about staying hydrated. I mean, our bodies are mostly water, so it's clearly something we gotta pay attention to. But hydration isn't just chugging plain old water.

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sixminutenetworking.com. Now, back to David Royce.

One of the things that we had the company, we had a good company and they always took our feedback.

David Royce: Yeah.

Jordan Harbinger: We were like, "Hey, uh, you're an environmentally friendly pest control company. You're laying down these strips, these like really sticky strips- Yep.

near my gym, which is outside."

David Royce: Sure.

Jordan Harbinger: There's 10 lizards stuck to this. Don't they eat bugs? And also they're cute and they were like, "Yeah, we'll, we're going to stop doing that right away." It's like, wait a minute, I'm supposed to be protecting the environment and getting rid of pests. And what I'm doing is killing cute lizards that eat the pests and I have to [00:27:00] look at that and it's like I find one next to my weight rack and it's like half eaten by something.

It's disgusting.

David Royce: It's funny because from a pest controller standpoint, they would go, "Hey, that's actually a good thing for the environment because we're not laying down chemicals or something." Right. You know, it's non-toxic.

Jordan Harbinger: Right.

David Royce: But then, you know, inadvertently, they're killing slizzards.

Jordan Harbinger: Yeah.

David Royce: Right?

Jordan Harbinger: And it's like tho- those are the best-

David Royce: We're supposed to be catching spiders or, you know, whatever else.

Jordan Harbinger: Yes. Those are the guys eating all the spiders. Like why, I love the lizards that live under my deck. There's probably far fewer insects under there creating nests because there's a fat guy that lives under my deck and I'm like, "He's well fed." You know, I don't want that guy getting stuck to a weird orange stripe in my gym and then I gotta deal with that.

What's a counterintuitive sales lesson that most people get backwards?

David Royce: So I think a lot of people, they have this view of a stereotypical salesperson.

Jordan Harbinger: Yeah.

David Royce: Right? So loud, assertive, almost like you have to push your way through the sale. And we really teach our people the opposite. If you're pushy, they're going to feel that.

Instead, like, be chill. Like talk to them like you would a friend or your, your grandmother about the service, like really help them [00:28:00] understand you're there to help as opposed to like force something down their throat. Like if ... And when people put down their guard and they like you, they're much more likely to listen to you.

Mm-hmm. That's a far easier way to get a sale done. If it's just like a one-time sale, like I probably think of like the used car sales dealer, it's probably like the stereotype. That's

Jordan Harbinger: the stereotype, yeah.

David Royce: Right? It's just you trying to get one deal done and get you out, you know, off the lot.

Jordan Harbinger: When did you start thinking beyond your own performance?

I mean, the guy said, "Hey, can you train everyone else?" So did you have to retool things to teach?

David Royce: Not really. No. So I just was like, "Okay, well, I'm already the top person, so how do I teach this to other people? " And having to write everything down and teach it is even a better way to learn it. And I actually got even better at sales from that point forward.

It was just creating processes for it, you know, writing out a script, uh, writing all, all these different rebuttals, kind of coming up with the rack system, you know, how do you teach body language? And then we took it to another level where it's like, let's videotape the salespeople giving their approach.

And then we're going to throw it up, we're going to put a big screen in every office, we're going to mirror it up on the screen, and then we're going to [00:29:00] have the entire group, we're going to go through it and I'll say, "Tell me to press pause whenever you see something you really like or you say, or dislike." And so you actually have the team, you know, edit and go through with the salesperson what they can improve on.

And it's fascinating. We've done that where like someone's got into like a rut and they're getting zeros for a few days and then we'll put them up on the screen, you know, everybody will say, "Okay, this is the key thing. Like notice how you're actually frowning here over and over or you're doing this thing with your forehead.

It's really weird. Let's get rid of that. " Just I want you to focus on that and the smile thing throughout the day and then they'll sell seven and it's like, whoa.

Jordan Harbinger: This is crazy similar to the dating stuff that we used to teach. We used to videotape guys. We had, we would hire, we had to hire the women because you're not going to film strangers without their consent.

That's a bad idea, especially now. But we would hire the women and they would do this in our workshop and they, we'd go, "How do you think that went?" And they go, "Well, I walked up with a big smile and I said this and I said this and I said this. " And we're like, "Let's go to the videotape." And then it would be like him walking up looking like you've just freshly shot yourself.

Right. No smile whatsoever. Like frozen like frozen in fear, acting really [00:30:00] awkward

David Royce: You're in the headlights.

Jordan Harbinger: Kind of looking at the ground, not speaking up, and they're like, "Wow, that's what I look like. " Yeah. And it's like, "Yeah, yeah, but don't worry. We're not done. We're going to build you back up from here." So then they do it like a dozen times- Yeah.

with coaching. And then we, we'd send them out at night. Again, this is a decade ago. I don't do this anymore, but we would send them out at night and then they were really confident when they approached because they were like, "No, now I know what I look like on tape and I know I don't look like that. "

David Royce: Right.

Jordan Harbinger: And so-

David Royce: Yeah, seeing is believing, right? Yeah. It's like you can see it, you're like, "Oh, I sound like that. "

Jordan Harbinger: Yeah. Really? Yeah. It's like when you ... Remember when answering machines were a thing and you would hear your own voice on an answering machine and you would go, "Oh my God, that's what I sound like. " Yeah.

This is terrible. This is terrible news.

David Royce: Totally.

Jordan Harbinger: So you have to get through that kind of whatever that is, that sort of self-conscious anxiety. And then- Right. Then you can really throw yourself into something like sales. What was the first thing you standardized with the sales process?

David Royce: Uh, the script. What do you gotta say?

Because when people first get out there, they have no idea what they're supposed to be doing. And if they get a training manual and it's all, we do this, this and this, well, that's not sales, that's just like technically [00:31:00] telling people what you do.

Jordan Harbinger: Right.

David Royce: And features don't sell. It's like bad marketing.

It's explaining the benefits. Yeah. You know? And how you explain the benefits is what really gets people to want to buy.

Jordan Harbinger: I assume you think that process beats talent.

David Royce: It's a combination. Yeah. What I love about process is you can almost teach, I would say you can teach the majority of people how to be in sales.

You know, there's probably 20%, there's ... It depends on what the product is. Clearly, some products, you know, take a longer time and it's a harder sale. The previous company I worked for, there was this wet rag mentality. It's like throw, throw them against wall, see who sticks. Oh. If they can't sell, just let them go home.

Jordan Harbinger: That's most sales organizations though. Right. It's like the easiest thing to hire for, right?

David Royce: Yeah.

Jordan Harbinger: You can hire any warm body and then just see who doesn't blow it.

David Royce: Yeah. And I was like, that's a horrible model. Yeah. One for the person, like I felt like that. I'm like, "This sucks." And then two, it's horrible for the business.

It's like if you train them how to do it, they'd all sell more- Yeah. ... maybe more loyal to you and they'd come back each summer, you know, to sell for you or stay working for you.

Jordan Harbinger: Yeah. Well, you're investing in them. They're not just, because if you're just throwing people, uh, to see what sticks, then they just go, "This place pays 50 cents more [00:32:00] per hour-

David Royce: Yeah.

Jordan Harbinger: on it, so I'm just going to go there." Or like, this place is a base and a commission, so I'm just going to go there. Whereas if you're investing in people, they go, "All right, this place might pay a little bit more, but-

David Royce: Right. ...

Jordan Harbinger: when I, every time I spend a couple weeks working for Aptic or whatever, I come back better at this job and that's where I'm making my money is I'm closing more."

David Royce: Yeah. And a big part of sales too is keeping up with it. If you stop practicing, you know, eventually complacency leads to mediocrity, you just get bored. So I, I found like we're happiest when we're striving for our true potential. And if you're constantly learning and you're keeping yourself fresh, you know, and so you can, you know, be at peak performance, that's when you're going to be happiest, is when everybody's going to do better.

'Cause sales is, even though people are out doing their own thing, we would meet every single day and the vibe in that room, like the energy of how well people were doing really had an effect on other people. And so we'd utilize those who were the best at it to work with those who were not doing well and then, you know, film them and have them train them.

Jordan Harbinger: So it's more of a team sport. Yeah. Exactly. Exactly. When did it click that you were helping build a [00:33:00] machine though? Because it sounds like you eventually went, okay, I'm building my own thing, this is a pro- I'm writing these processes. I can train, like you said- Yeah. ... almost anyone to be able to do this, I don't know, to the green belt level- Yeah.

or something, which is good, decent. When did that kind of realization hit and what, because I'm assuming at some point this led to a ramp where you're like, "Wait, we can scale the crap out of this thing."

David Royce: My boss finally convinced me to go do it and I, initially I was, and I'm embarrassed to say this, I didn't think pest control was impressive.

Shocking, yeah. So I, so I just thought, there's no way I want to go do this. Like, I'm going to go work in New York, you know, in a M&A, you know, I, I want to have like a nice office, wear a suit, all that kind of a thing. And when I realized the math on how well he had done, and then he helped me realize, he's like, "Look what you've already done."

This is your- On this side, he's like- Boss. Yeah. Your

Jordan Harbinger: boss, yeah.

David Royce: He's like, "If you play all those skills that you just did on the sales side, and then you take it and you apply it to the technical side, the customer service side, like you're really good at developing processes, you're going to make a ton of money."

Great. And so he finally convinced me to go do it. He sold his business. He actually kept his company [00:34:00] name, uh, Moxie. And I asked him, I said, "Can I license your name because some of the people who are here will follow me to the next one if I go start up." So I went and started up down in Southern California and, uh, I did it for four years, uh, and he was a, a silent investor behind the scenes.

And then I could call him, you know, once a month if I had questions about things. And before I left, I asked him, I said, "Okay, what are all the things you would change if you had the time?" 'Cause he was busy, he had three kids and, you know, he had four different locations- Sure. ... at that point. And in some ways the wheels were already starting to spin off.

Jordan Harbinger: Sure.

David Royce: And I'm like, "What would you change?" And he's, he gave me a list of about 30 different things, you know, to improve the business and tweak it. And over those four years, it was kind of like being in a lab, just getting familiar with the business, learning the financials, KPIs, all that kind of thing. And at the fourth year, I'm like, okay, I'm really ready to go do this on my own.

And so I sold off just the accounts, the book of business, to Terminix. And then the Terminix actually let me keep my Salesforce and my executive team and a key opera- and my key operators. And so I just, from there, my second company, [00:35:00] EcoFirst, we, uh, went into four different states all at once and I said, "Let's see if I can actually scale this.

Jordan Harbinger: Wow. That's a big bite for your first bike.

David Royce: It was. It was very ambitious. Yeah. I, I learned the, in the first company, we, we were in LA and Orange County, Inland Empire and then San Diego. And I learned how to operate from afar that way where I couldn't be at the business every day to, you know, be the manager and be running everything.

So I started to work through people. A lot of people ask, they go, "Well, how do you scale a business, you know, to that size if you're not in every location?" And I'm like, "Well, take a 30-day vacation."

Jordan Harbinger: Yeah.

David Royce: And if you come back and it's still there, you got a business you can scale right?

Jordan Harbinger: Yeah. But if you come back and there's no business, well, I guess you learned an expensive lesson.

Yeah,

David Royce: you screwed

Jordan Harbinger: up. Hopefully you had a nice vacation. Yeah. Right. Wow. Wow. How old were you at this point?

David Royce: Uh, I was in my late, late 20s.

Jordan Harbinger: Wow, okay. So you were kind of always pretty ambitious then, because I, a lot of ... I remember working on my business in my 20s and all these guys who were 30s, 40s and 50s would be like, "You're the hardest working 20-year-olds- Yeah.

I've ever met." And I was like, "We are? 'Cause I, by my measure, we're kind of doing a lot of dicking around, like a lot, [00:36:00] a lot of spinning our wheels, but the fact that we just showed up every day- Yeah. ... before, like, 10:30 AM, we were already beating everybody else in our niche.

David Royce: Totally. There's so many industries that are like that, right, where it's just a different breed of people that fall into these things.

And if you, it, for me, coming out of ... Number one, coming out ... I was a college grad, which is different for the industry probably. Uh, two, I had a finance degree. I mean, I could probably count on one hand how many pest controllers have a finance degree.

Jordan Harbinger: Sure.

David Royce: I had worked at a large regional company. The first company was a, you know, 100 million plus dollar company, so I'd seen what a big company did.

And then the small company actually gave me the lens into, uh, just entrepreneurship. And, you know, you kind of see everything and it's not perfect and you're just like, okay, like, these are the different sizes. How do I get this to this?

Jordan Harbinger: Yeah, wow.

David Royce: I guess I was ambitious. Um, I really threw myself in. I did 16 hour days, like, loved it.

Jordan Harbinger: Yeah, well, if it's fine.

David Royce: Like, for 10 years, it was like, go, go, go. Yeah. I just, I s- for me, I had financial drama growing up. We, we almost lost ... [00:37:00] Uh, my parents almost lost the house when I was a kid.

Jordan Harbinger: Oh wow.

David Royce: And it scared the shit out of me. Sure. To be honest.

Jordan Harbinger: That's motivating. Yeah, it's

David Royce: motivating. So I just thought, you know, so I learned how to save.

That's why I saved all my money thinking I'm going to go to NBA school at some point as opposed to going and blowing it all, you know, on a Laborgani river as a- Yeah,

Jordan Harbinger: sure. ...

David Royce: in college.

Jordan Harbinger: Jeez, a college kid with a Lambo, bad idea.

David Royce: Yeah. So it's like, hey, if there's opportunity and you got a shot, like, go, go, go.

Let's see if you can do it.

Jordan Harbinger: The 16 hour day thing, I can totally relate. I remember I was starting to sales probably like 2011.

David Royce: Yeah.

Jordan Harbinger: And I'd, I'd been in sales for a year or two and they just had come up, this is how long ago this was, they just come out with the ability to put a chat box on your website where somebody who visits you can be like, "Hey, do you want any help?"

But there was no AI. So people would be like, "What is this? "

David Royce: Yeah.

Jordan Harbinger: And I'm like, "It's me, Jordan," and I was doing the podcast and generating leads and also doing sales and people would be like, "No, it isn't." And I'm like, "Yes, it is. Do you want information on our programs? Give me your phone number." And I would just stay on there and it would work on my phone too.

So I would just be like watching Game of Thrones or whatever down, you know, on Netflix and, or HBO, whatever it was. [00:38:00] And it would just go bling and I'd be like da da da da. And I had my scripts all memorized and I had shortcuts and everything. And I remember just doing that from the moment I woke up answering people who probably messaged at 1:00 AM and being like- Yeah.

is this tab still open? And then all the way until 11:30 at night. And I'd be at the bar having drinks with friends and I'd be like, "Just a second guys, blink, blink, blink, blink, blink." And people would be like, "What are you doing?" I'm like, "I'm chatting with website visitors." Yeah. And it was just, they'd be like, "What are you talking about?

Chatting with website visitors." And then-

David Royce: You're so far ahead of the game.

Jordan Harbinger: It was so, it was, it was like, "What are you talking about? " And then I remember get that, we were, we had this, uh, accountant and he was like, "How did you guys go from making $180,000 a year to making three million dollars a year?" And I was like, "Oh, I just sit on this website chat thing and I get every person who responds to give me their phone number unless they are just not interested at all.

And then I call them and then I call them a dozen more times over the period of a year or two until they're ready to give me, I think it was like [00:39:00] $8,000-

David Royce: Yeah. ...

Jordan Harbinger: for the program. And people are like- Oh my gosh. "What?" And I was like, "Yeah, I don't know. This is how sales works because nobody taught to do, like, that it was quick."

David Royce: Yeah.

Jordan Harbinger: And nobody taught me much of anything. I was just like, "Well, you just do it until they say yes or they say, d- please don't call me again. I'm never giving you my money." Yeah. And then you thank them for being honest with you and you just, you know, that's it.

David Royce: Yeah, that's the best- Yeah. ... people just be direct with you.

Jordan Harbinger: But I, I remember, I still have people that I've called so many times and I remember and like they either eventually came through or didn't. And I, I would consider them like friends or acquaintances- Yeah. ... because I talked so much with these people. It's a high ticket item, man. Yeah, it really is. Selling a 20 something, 30 something year old guy, an $8,000 program.

I mean, that's like selling them a car.

David Royce: Well, I think you make a good point too. Being able to hear the customer when they're, it's like a firm no, it's a hard no- Yeah. ... or a no way versus kind of a soft no. Yeah. Where they're like, "Uh, I don't think so. " You're like, okay, I can push forward- There's room here, yeah.

Yeah, there's a bit of room where it's just like, no, I'm not interested.

Jordan Harbinger: Yeah.

David Royce: You're like, got it. Yeah. I got the tonality. I'm good.

Jordan Harbinger: And, but the thing is, see, remember, these people were usually coming from the podcast, right, which is good lead gen. So they weren't like, nobody was [00:40:00] offended that I called them.

They were interested in the podcast, they wanted to talk on the phone, so nobody was like, "Why are you calling me a jerk? Don't bother me again." Yeah. Everybody was like, "Man, it was really cool to talk to you for half an hour. I will never have the amount of money I need to come to your program." And I, instead of treating them like a disposable lead, I was, I treated them like a listener of the show where I actually cared about them.

Yeah. I think that made a huge difference because it was almost like caring about people's experience with your company, but at scale.

David Royce: And if you have their best interest in mind, people can feel that on the other side. And it's like you're trying to help them make a good decision that's going to, you know, increase their value- Yeah.

or whatever. I think that's really important. Like I, I can't stand when you made a salesperson and they're like, "Yeah, I really bent the person over on that one." I'm like- Yeah, sucks. ... what? Like, what are you talking about? I don't want you working for me at that

Jordan Harbinger: job. Yeah. I don't want any repeat business from that guy ever again, even though he was clearly qualified because he closed.

It's like, uh, this is not-

David Royce: Yeah, you gotta create the right culture.

Jordan Harbinger: That's actually gotta be kinda tricky. I've definitely hired salespeople in my old company who are not a good fit, but still close and you f- you have to fight your [00:41:00] business partners- Yeah. ... to get rid of them because they're like, "He made $10,000 last month."

And I'm like, "I guarantee you a bunch of those guys are going to refund." All of them had a bad experience registering and all of them have a negative, uh, a more negative view of our brand than they did when they made the call. And that's not good. Like that's your chipping away at brand equity for dollars short term, not good.

David Royce: I learned that lesson really early. We, we had a, an individual on our sales team, he was one of the top salespeople, but he was just so negative around everybody else. He had a hard time working with everybody and he, he would make comments like, "I'm not here to make friends."

Jordan Harbinger: That sucks.

David Royce: I'm just like, "I have to let you go.

Like- Yeah. He's like, "You're going to let me go. " I'm like, "Yeah, I'm like, I'll help you get a job at another company, but I can't have you here with us. It's just, you're just not part of our culture."

Jordan Harbinger: People don't understand the value, how important the team thing is. I know, uh, a couple of trainers, I, I don't know what their exact role is.

I guess they're like master chiefs in the Navy or whatever, and they train Navy SEALs, these guys. Yeah. And they, I won't repeat the name, but there's [00:42:00] a very big influencer who's like a well-known tough guy. Sure. And he's always, his whole thing is how tough he is, but he's also a jerk. He- you probably do.

He's, he's, uh, he went through BUD/S, which is the SEAL training program, and they kicked him out every time, and I was like, "Oh, why?" And they would go, "It wasn't even his athleticism, but everybody hated him. Nobody trusted him, and it was almost like he went out of his way to be a terrible person." Yeah. He couldn't help himself.

And it was like, that's the last guy we want on the teams. We'd rather have a guy who is a mediocre swimmer, a mediocre relative to the SEALs, runner who's not charismatic, who doesn't get, but is going to play on the team, but we don't want an all star who's a piece of crap. And so they kicked this guy out multiple times.

Yeah. Like he went through multiple times. He just can't control himself.

David Royce: Yeah.

Jordan Harbinger: And it's funny because it's like, wow, this guy actually met all of the physical and mental sort of tests that the US Navy can throw at you for the tough, one of the toughest units around, and he still screwed it up just because he can't work with other [00:43:00] people.

Imagine having your life is in this person's hands, he's going to make a choice that makes him look like a hero or feel good as opposed to like, I don't know, saving his comrades. Like the last guy you want watching your back is somebody who can't function like that. And it's like, yeah- And

David Royce: the thing about the problem too is those who are new that come in, they're rookies- mm-hmm.

they're looking at the top sales people going, "Okay, how do I emulate right?" Yeah, I want to do

Jordan Harbinger: everything they're

David Royce: doing. So I'm going to be this way, and the more of those that he recreates, the worse off that you're like, it's spreading like- It's a cancer. Yeah, it's a cancer.

Jordan Harbinger: Yeah, that's a good point. The new guys and gals come in and go, "Well, I gotta emulate everything about this person."

And it's like, oh, I, I tell people to take the good with the bad. They're new. They don't know what the bad is.

David Royce: Right.

Jordan Harbinger: They think that you're cocky, arrogant, annoying, impossible to work with, uh, take no prisoner's attitude is what is making you successful. They don't realize that this is your chief handicap and your vice- Yeah.

that you need to get rid of.

David Royce: You're doing, you're achieving all this in spite. In

Jordan Harbinger: spite of

David Royce: these things.

Jordan Harbinger: Yes. Right? Right. So you're giving them your biggest [00:44:00] handicap and that's the thing that they're emulating first and then they're trying to shore up all the other ... It's like, no, this is not

David Royce: going to work.

It's like a cancer. Yeah.

Jordan Harbinger: Hang on. The active pest control guys are at my door again. We'll be right back. This episode is brought to you in part by Lufthansa. When people talk about travel, they usually focus on the destination, the hotel, the restaurants, all the stuff that happens after you land, but the flight is part of the experience too.

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If you can't remember the name of a sponsor, you can't find the code, email me [00:46:00] jordan@jordanharbinger.com. We're happy to surface those codes for you. It is that important that you support those who support the show. Now, back to David Royce.

JHS Trailer: You mentioned a college

Jordan Harbinger: professor who influenced your thinking, and I'm curious what that said, what that person said to influence or, or trigger you.

David Royce: There's a few things. Like one, I had a teacher in the sixth grade that really helped me- Okay. ... to believe in myself. Some college professors, like I, I had one college professor that I was, I was asking like, "What's, so what's the secret to wealth creation?" I may have been asking the wrong type of person.

Yeah.

Jordan Harbinger: Ask a guy with a essentially government job. Well, depending on the school, what's the secret to wealth creation? T- if you find out, please tell me.

David Royce: Yeah, his, his thing was, look, what I've seen is people who can do something the longest and stick with it. Yeah. Those are the ones who ultimately make the most.

And there's, there's a lot of truth to that, right? Like a lot of people, they don't succeed. It's because they just quit. They end up giving out. Or they run out of money, uh, that sort of thing. Yeah. I, uh, I'm friends with, uh, this famous DJ, Cascade or- Oh,

Jordan Harbinger: he's great.

David Royce: He lives down the street from me.

Jordan Harbinger: Nice.

David Royce: And we went [00:47:00] to, on a spring break together.

We're sitting on the beach and we're talking to each other and I'm like, "So what, what makes you great?" I, I don't really listen to a lot of his music personally, but-

Jordan Harbinger: Oh, it's

David Royce: so straight. Like what, what makes you like great? Like you're known and you make tens of millions of dollars- mm-hmm. ... as a DJ. And he's like, "You know, just stuck with it.

And I'm like- Yeah. ... that's it. He's like, "There were so many people who are better than me, but it's a hard lifestyle." Yeah. It's a lot of late nights- Yeah. ... you know, and being on the road, you know, away from your family. And he's like, "I just kept sticking with it. " And he's like, "It's my true passion. It's what I love."

And I was willing to put up with, you know, the difficulties of the job, whereas other people that I really looked up to, they just decided to get out of it.

Jordan Harbinger: It's so funny to hear somebody like Cascade say, "Eh, I just didn't quit." It's like, well, and also you seem to have a supernatural sense of what is going to be like a great hook or a great trial- Right.

or interesting soundbite to sample and you are constantly smashing hits. But okay, fine, just don't give up. Maybe refine that if you're going to give a commencement speech, uh, cascade.

David Royce: For sure.

Jordan Harbinger: [00:48:00] Yeah. It's uh, it's up there with follow your passion. Just don't quit. What if you suck? Uh, I haven't though this far ahead.

All right. So you start your own company. Obviously things start to scale, but I'm curious at what point you start to feel real momentum or are you always in your head the poor kid who can't let up off the gas?

David Royce: No, you know, so I learned my first year in business that you can be killing it and also dying at the same time.

Yeah, for sure. I almost bankrupt the business.

Jordan Harbinger: By scaling?

David Royce: Yeah, by scaling too fast. Okay. Because the way the commissions were, you paid out the commissions ahead of the revenue coming in-

Jordan Harbinger: Oh,

David Royce: that- Even though we, we paid them out in portions over time. Sure. It still wasn't enough to catch up. And I had enough saved up between myself and, uh, my silent investor, I'm like, okay, we'll probably put on 4,000 or 5,000 new customers this year.

And we ended up doing 7,500. I wasn't paying attention to the financials. Yeah. I wasn't looking at my bank accounts week because I'm like, oh, we just have all this big cash pile- Yeah. ... you know, in there and it just keeps emptying and I'm like, "Uh-oh, it's time to pay out the final bonus check and I can't do it.

Jordan Harbinger: Right.

David Royce: I'm like, "Oh my gosh, I must just [00:49:00] killed the company."

Jordan Harbinger: Isn't there, there's a phrase in Silicon Valley and they call it like the warm hug of death or something. And it's when you scale so much and you go to your VCs and you're like, "Look at what we have 10 million users." And then it's like- Yeah. ... yeah, but your bill for this LLM in the backend, your, your Amazon server bill is 28 million dollars.

David Royce: Yeah.

Jordan Harbinger: How are you going to pay that? And it's like, well, that's why I'm standing in front of you. Look at all of our users and they're like, "I'm not giving you 28 million dollars."

David Royce: Yeah. "

Jordan Harbinger: I'm giving you eight million. Where are you going to get the rest?" And it's like, "Oh, we are going to go bankrupt because we are too successful."

David Royce: Yeah, it's like you, you gotta pay attention to both sides. Yeah. You can't just be great at one thing.

Jordan Harbinger: I can see how tempting it is to just go, "Look, I'm here to grow the thing. I'm not here to worry about how you pay the people. That's ... Well, there's no, that's actually nobody's job. Maybe we should look into that.

David Royce: It really has to be a combination of both things. And it, it was tough. I had to go to them and say, look, I went to my main salespeople, the sales leaders that made the bus and I said, "Hey, Ken, I pay you in two months from now, but I'm going to pay you 10% interest on your money." I just, like, we, we did way better than I thought.

That's good

Jordan Harbinger: deal.

David Royce: And they had such a great summer. They're like, [00:50:00] "Yeah, that's great. I, I'm going to ... I can't make that in the market or wherever else."

Jordan Harbinger: Wow.

David Royce: Yeah, I'd be happy to do that. I was lucky that we had a great summer to be in that position. It was a

Jordan Harbinger: good- That's, is a good problem to have. That is a good problem to have, but also you are so lucky they said that that was okay.

David Royce: Yeah.

Jordan Harbinger: There was during-

David Royce: It could have been the

Jordan Harbinger: end. Man, I'm telling you, during COVID, this podcast network, Podcast One was like, we don't know what the ad market is going to do. I have a decent monthly sort of guarantee from them, and they were like, "Can you take, like, a 40% pay cut?" And I said, "For how long?" And they were like, "Uh, I don't know- Indefinitely.

in a while." And I, and they go, and the owner back then, he's since passed, but Norm Pattis goes, "You will be made whole." And I was like, "Well, that's good enough for me. " So I took this pay cut and then, like, three months later, he goes, "Actually, we're still making a bunch of money. Here's all your money. Here's a bunch of e- extra interest, da, da, da."

And I remember being like, "Holy crap, that was close. That was the close call." But he told me, everyone agreed to it, but I thought, "What happens if I say no, and Adam Corolla says no?" [00:51:00] Right. And I, I don't know, the other big show, like, what if we just say, "Sorry, it's COVID. I need the money. I've got kids." It's like, "What are you going to do?

And he, he was like, uh, "Go to a bank and put on my best behavior and ask for a fat loan. I don't know. Like, what are you going to do? You don't want to close your company, you're successful. You just have to go to, I don't know, JP Morgan and go like, here's the thing, I can't afford to pay anyone." That's a tough sale.

David Royce: Yeah. You, you would have to figure something out like that.

Jordan Harbinger: Yeah.

David Royce: It's like you, and if you can prove, "Hey, I got the customers and here's what the attrition rate is. " But that wasn't my first year, so I don't think anybody would have given me money.

Jordan Harbinger: No, no.

David Royce: It's like I'm still proving the model right now.

Jordan Harbinger: That's like one of those Shark Tank pitches where they're like, "Have you ever done anything businessy before?" And it's like, "No, but isn't this a great idea?" And everyone's like, "I'm out. " I'm not touching this, not touching this deal, even on TV. So what started breaking first? Was it just that cashflow thing?

David Royce: Yeah, it was really just cashflow. And from there, I was very lucky, like, it only got better from there. Like, we kept tweaking things, we kept improving things- mm-hmm. ... coming up with new processes, new systems, and, [00:52:00] you know, at the four-year mark, I'm like, okay, I'm really ready to scale this, uh, at least regionally.

Jordan Harbinger: Mm-hmm.

David Royce: You know, we're like, let's go kind of west of Mississippi and we'll go into four states initially and start expanding out from there. And so we did that for another few years with EcoFirst and things are going incredible. And then Terminix calls me and says, "Hey, do you want to sell this company?"

I'm like, "Yeah, we could use more cash to, you know, grow even faster."

Jordan Harbinger: I might not even have a choice but to sell this company and say more.

David Royce: No, it's just like if the more, like the first one I sold for, uh, Forbes said I sold it for 13. I have NDA, so I can't say but- Yeah, that's right. Forbes says 13, so it's like I've got millions of dollars now to spend on the next company.

And then I sold eco first for tens of millions according to Forbes.

Jordan Harbinger: Mm-hmm.

David Royce: And so it's like, all right, now I can, you know, just ramp up. And then it was like, let's do some really cool shit. Like let's get a head company headquarters with like a NBA basketball court- Oh no. ... a golf simulator. So

Jordan Harbinger: it begins.

David Royce: You know, like all this really fun stuff because I was watching companies in pest control and it's just, it's just very boring. It wasn't exciting.

Jordan Harbinger: Sure.

David Royce: And I knew as we were ramping up, it was going to be hard and harder to recruit the right talent.

Jordan Harbinger: Was this [00:53:00] during the Google era where everyone's like, "You need a slide.

David Royce: Yes.

Jordan Harbinger: I need a slide in the office."

David Royce: Yeah, because initially in 2000 when I graduated, the, one of the reasons I went and I was thinking investment banking and then I did pest control was tech was like at all time low right then, right? Like if you come up- Oh, okay. Bubble had burst, you know, NASDAQ down 80% in the early 2000s, it just wasn't great.

Jordan Harbinger: I got an idea. It's something, something.com and they're like, get out.

David Royce: Yeah.

Jordan Harbinger: Get out of here.

David Royce: Totally. And then, you know, by like 2010, 2011, things had really turned around and they have incredible offices, you know, they're recruiting the very best talent, right? Yeah. 'Cause there's only so many software developers out there.

And I started going to these different company locations, like these headquarters and toured Meta and

Jordan Harbinger: Google and the Nike headquarters,

David Royce: which

Jordan Harbinger: is insane. Like baby giraffes walking around or whatever. Like, what if, and it's like, okay, I need, I need what, what was it, golf simulator, what was the other thing?

NBA course.

David Royce: Yeah. Yeah. Had like a movie room, you know, and all the other like ping pong foosball, all like pool tables. Uh, but it was just a really cool way to differentiate ourselves. And then the offices were like super te- like, it looked like a tech company. So people would walk in and they go, "Oh, [00:54:00] this is awesome.

What is it? " Like it's a tech company and they're like, wait, pest control? What?

Jordan Harbinger: Yeah.

David Royce: So like, tell me more. I, I know like the owner cares about these people clearly and you guys have a cool company culture. I'm, I'm in at least interested. Tell me more. Whereas if it's just pest control, most people wouldn't, you know, be into it.

Yeah,

Jordan Harbinger: that's true.

David Royce: Unless you knew what the actual offer was like, "Hey, you can make a lot of money at this. " So we started looking for ways to just differentiate and we did like really cool company retreats. We had a NBA suite you know, we could take everybody to.

Jordan Harbinger: I mean, hey, enjoy your money, I suppose, right?

A little bit. Sure, why not?

David Royce: Totally. And all this stuff, it helped to stand out, but they're really, like the perks are just sugar, you know, the- Sure, yeah. The protein is really, it's like the sales program and the training and the sales program or the training and the technician side or whatever else.

People become loyal to you when you, you teach them how to fish, like, and they can fish forever. Yeah. It's like, look, I, I will never go hungry at this point. Like I can do this, I can make tens of thousands or hundreds of thousands. We have some guys that make a million dollars a year- Yeah. ... doing this where they're selling.

They're like sales leaders and then they become regional managers over sales because you can make commissions off everybody- Yeah. ... that's [00:55:00] working underneath you. Um, so it's wild like what it's become.

Jordan Harbinger: That's really cool. I mean, I think sales is the coolest skillset, one of the coolest skill sets to have in business.

There's a guy who teaches sales stuff on, I think his name's like Jeb Blount or something. Does that name ring a bell? I don't

David Royce: know.

Jordan Harbinger: I think he wrote a book called the 800 pound gorilla of sales. It was one of those things I got early on- Yeah. ... I was like, "I need to figure this out. " He need a podcast and it was like five minute sales tips or something like that, the sales guy, whatever.

And he said, "Salespeople are the elite athletes of the business world." So it's not like, yeah, you've got the CEO, right? You've got these people who are in the spotlight, but they're going, okay, who's making the most money in any ... If you look at any organization, the people that make the most money, sure, the people in the C-suite, and then it's like everyone else is a distant third and the salespeople are, are right up there.

Yeah. And you even find that there's sales people who make more than people in the C-suite and, and if anyone- Yeah. ... wants to complain, they just need to look at that guy's Salesforce, uh, profile or whatever. Yeah. And they're like, "Oh, he generated $11 million in revenue last year. [00:56:00] Okay. Now again- It's

David Royce: really easy to understand why, right?

Yes. It's like, okay, well, there's proof.

Jordan Harbinger: Yeah.

David Royce: This is valuable, so we're going to pay the individual X."

Jordan Harbinger: Exactly. And, and it's like I get emails from salespeople, we do an advice segment and I'll get an advice right in from a salesperson and they're like, "I generated half a million dollars in revenue last year or five million dollars in revenue last year."

Yeah. And some of these tech guys, it's like 30 million dollars in revenue. Right. And they're like, and my boss is doing ... And I go, dude, you don't, I don't think you realize since you've been at this company the whole time, you can go anywhere on planet earth.

JHS Trailer: Exactly.

Jordan Harbinger: And they will hire you in a New York minute if you have generated this much revenue.

And if you threaten to leave, your boss isn't even going to be in the meeting where they decide to give you the raise. They're just going to be like, "You stay, don't, don't do, you, you don't report to that guy anymore. Like, they can't afford to lose you. " Totally. They, I don't think you realize this. It's just, it's one of the most powerful skillsets you can have because you just write your own ticket.

It's just how it goes.

David Royce: It really is. One, the other thing we got into was tech. So like 17 years ago, like there's no pest control company creating their own technology. Uh, there was maybe-

JHS Trailer: What

Jordan Harbinger: did you-

David Royce: Maybe [00:57:00] Tarbinex or Orkin, like the two very biggest, but it's like we had extra money, so we're like, well, what can we do to kind of standardize things?

And like, well, if we had technology, you know, on a, a website the guys could go on that was private or an apps eventually, you know, we could have all the training videos there so they could see them at any time. And then we started thinking, well, you can create sales tournaments because the problem is in each location, you know, you might have maybe 15 salespeople or whatever, but the very top, they're not really competing against anybody because they're so good.

Right.

Jordan Harbinger: I see. And

David Royce: then they have this big middle section and then the guys at the very lower end. And so we said, "Well, what if we get the top guys from this location to compete with these guys and they could see it in real time?"

Jordan Harbinger: Right. It's like a NBA

David Royce: v- Mar- March Madness.

Jordan Harbinger: Sorry. Yeah, March Madness. Yeah, exactly.

Yeah, yeah.

David Royce: So that's what we did is we created individuals where we would say, okay, our system could figure out, okay, who sells about the exact same, at the same rate as, uh, someone else in another place, anywhere in the country. And then we would team them up and we'd have all these brackets and then there was all these different, you know, like leads- Yeah.

or whatever, uh, that the guys could go do. And it got really crazy. Like now you can like win a [00:58:00] car or. I was going to ask if you had

Jordan Harbinger: prizes or if it was

David Royce: just like- Yeah, all these different prizes-

Jordan Harbinger: They're going to see each other in Vegas in the annual conference and gloat in the, over drinks, like, you know, what's-

David Royce: Totally.

Jordan Harbinger: 'Cause it's, that actually is still worth it.

David Royce: It's worth it for us too- Yeah. ... because sales will increase like 30% on tournament days.

Jordan Harbinger: Really? Wow.

David Royce: So we make way more money as a company just by incentivizing them. And for some of them, it's funny, like swag can even be exciting for them, right?m. On the lower end they're like, "Oh, I'm going to get a shirt or free hat or whatever."

Yeah. But, you know, then it goes up to laptops or iPads- Sure. ... or cars.

Jordan Harbinger: Salespeople are like this though, right? Like it's, you me and I get a chance to beat David- Yeah. ... and then when I see him, I go, "Oh, tough March, huh? Tough March, David, tough March." And I get to drive away in my Cadillac Escalade or whatever, and it's like a rounding error in the company revenue, but I, yeah, I made 13 million dollars in extra like revenue that year- Totally.

because I worked 17 hours instead of 16 hours- Right. ... because it was worth every ounce of effort to be able to pull one over on my like rival across the state. I mean, I- We

David Royce: respect each other for it too, right? Of course, yeah. 'Cause like you drove me to [00:59:00] make this much more thank you for-

Jordan Harbinger: Yeah. ...

David Royce: being competitive with me.

Jordan Harbinger: Right. Yeah, no, it's totally scratches this weird itch in I think a lot of people have this, right? There's no-

David Royce: We typically do it more towards the second half of the summer.

Jordan Harbinger: Sure.

David Royce: When, you know, some guys, they made a bunch of money already and they're like, uh, they kinda start slowing down. I see. You know, we're like, okay, we see the slowing down and it's normally this week, we're going to pick it up, we're going to do this kind of tournament here, we're going to make the tournament bigger the next week and then-

Jordan Harbinger: Smart.

David Royce: Yeah. So you kinda almost

Jordan Harbinger: gamified it.

David Royce: We did.

Yeah,

Jordan Harbinger: that's really strong.

David Royce: Yeah. It goes back to your question of how do you gamify business. Yes. This is one of those ways we did it.

Jordan Harbinger: I like that. You're right. If I made ... I mean, I'm a motivated guy, but if it's July and I've been out there for two months- Yeah.

and I got my summer- Super hot. ... I'm already peeling under my peel from last week. You're in

David Royce: Florida.

Jordan Harbinger: Yeah. Yeah. Like

David Royce: it's just hot, sticky-

Jordan Harbinger: chased by alligators or whatever. It's like- Yeah,

David Royce: bugs.

Jordan Harbinger: Yeah. I've got mosquito bites. I'm thinking, you know what, maybe I'll take a week off. Right. Maybe I'll go to Vegas with my friends, maybe I'll go up to New York and hang out and then it's like tournament, win a car and brag forever, at least until, you know, next quarter-

David Royce: Yeah.

[01:00:00] Yeah.

Jordan Harbinger: It's like, nah, I'll stick around another couple weeks. I can handle this.

David Royce: Gotta distract him with something. Yeah. Some new flashy object.

Jordan Harbinger: That's so funny. I t- that would totally work on me, man. I love this stuff. All right. Did the competition stuff ever create maybe bad incentives or any backfires?

Like uh-oh, we got some throat cutting going on.

David Royce: There's probably a few times where you wondered if somebody was giving somebody else sales because maybe there was such a big tournament and, uh, someone might be like, "Hey, use this sale so you can beat the other person." We had to watch that. I

Jordan Harbinger: see.

David Royce: Kind of close.

Jordan Harbinger: Like, "Hey, if I get three more sales, I get a- I'm

David Royce: going to get a car. I'm

going

Jordan Harbinger: to get an SUV."

David Royce: Hey, do you mind giving me one of your sales so I can beat this other guy?

Jordan Harbinger: Yeah, I gave you 600 bucks for that sale, man. Yeah. Yeah. Oh, that's interesting. I'd never thought about that,

David Royce: but- We put a lot on the line. Yeah.

People start coming up with, you

Jordan Harbinger: know. Yeah, exactly. Especially clever people who are really, who really want that car.

David Royce: One of the things we did is we actually started to film, uh, the very top people because everybody throughout the company would want to see the very, very top dogs- Yeah. ... that are like fighting for, you know, maybe like a BMW- Yeah.

or whatever the car is. And it was really cool. Like they would have someone [01:01:00] walk around the whole day filming so people could actually see them closing, how many they did. 'Cause a lot of people, like, it's almost hard to fathom somebody selling like 20 in a day.

Jordan Harbinger: Yeah.

David Royce: You know, pest control, just like, I'm used to selling two a day.

How on earth does somebody do 20? And you just, you hear them and you see it- Yeah. ... you see how positive they are the whole time and how many hours they work. It's just wild.

Jordan Harbinger: The riz is off the charts if you're selling 20 a day.

David Royce: Right.

Jordan Harbinger: It's gotta be. It's gotta be. So actually, I'm curious, but this is totally neither here or there, but so someone's filming them.

So I'm answering the door. Is somebody off by my garage filming this person?

David Royce: Yeah, a lot of times they'll be out the side like filming. Yeah. And then they'll ask the person after that, "Hey, we're, we're filming this because it's at sales tournament day." Yeah. "Are you okay with us having that? "

Jordan Harbinger: I don't mind that at all.

I just thought- Oh,

David Royce: so everybody's like, "Yeah, we don't."

Jordan Harbinger: Yeah. I just wanted the logistics of that because I'm like- Yeah. ... I don't know if there's a camera when I open the door, then I'm like, "What is this a prank?" YouTube prank show, get out of here.

David Royce: Yeah, then, and technically, legally, I think there's 13 states you have to tell them no matter what, but we always tell people because we don't want to-

Jordan Harbinger: Yeah.

David Royce: you know, have them on our film if, uh, they don't want to

Jordan Harbinger: be- Yeah, on private pri- I don't know that- Fad way to start a

David Royce: customer

Jordan Harbinger: [01:02:00] relationship. Yeah, yeah. Hey, hey, by the way, we, we wiretapped you. We, we've, we broke the federal wiretapping law or state wiretapping laws. Everybody's going

David Royce: to

know you have ants.

Sorry.

Jordan Harbinger: Yeah, sorry. Exactly. I, it, it'd be more like ... I suppose there's people who, like, "Hey, I don't really want the whole world to know I have a Lamborghini and where my address is in the shot."

David Royce: We only keep, that's only for internal stuff too. We never, like, put it outwards so that people could see it. I think it might freak some customers out.

For sure. Some customers probably hear this and like, "Wait, what the hell? They do this? "

Jordan Harbinger: My house is blurred on Google and I don't want a video of a sales guy selling me pest control with my address in the shot. Yeah. Although I don't have a Lambo, so I have nothing to worry about. Sometimes the best pest control is just the fast forward button, but don't even think about it.

We'll be right back.

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companion to the show, Jordan Harbinger.com/news is where you can find [01:03:00] it.

Now, for the rest of my conversation with David Royce.

Uh, well, I guess, how do you gamify this without turning the place into Lord of the flies? Like you said, you had to please some of the sales, but was that really the only kind of thing? Like nobody, there wasn't really-

David Royce: Yeah, for the most part. Like that's it.

Huh. There's not a whole lot you can do to, to screw this up. Like, you know, people have to have a signed agreement. When we go to the doors or whatever, there's a checklist- mm-hmm. So that the customer goes through everything with a different person who doesn't have the same incentive to get the sale. So it's like, you understand, you know, it's a one-year agreement minimum, you understand these things are going to be done at the home, you know, that kind of thing.

Jordan Harbinger: So the salesman can kind of gloss over-

David Royce: Yeah. ...

Jordan Harbinger: eh, it's a one-year agreement. You know what, I'm not going to say that, that's going to be ... I'm just going to hint that or maybe I'll just ... Did I forget to mention it's a one-year agreement? I'm so sorry about that. Anyway, you did sign it. So, uh, because I, I looked up some reviews and I had, and my wife was like, look at the reviews for, uh, Aptiv.

And I was like, "Well, this person just didn't read the contract."

David Royce: Yeah.

Jordan Harbinger: You might want to read the thing that you're buying. Like, I get not looking at every bit of fine [01:04:00] print- Yeah. ... but surely that's not that hidden if they're going to be back

David Royce: every few months. Well, it's impossible, it's impossible to get through because we always have a second person when the technician shows up- Yeah.

that person goes through and that person doesn't get any payment. There's no commission for the technician- Right. ... and get it to go through. And we, we do that intentionally because we don't want a customer who's not going to, we're not going to be able to retain long-term.

Jordan Harbinger: No.

David Royce: And so maybe like somebody, this, maybe the salesman wasn't as clear, but the technician stopped him and so then maybe they want to do a review.

The most reviews we get that are negative though are people like, "Ah, this idiot knocked on my door." And I don't want people coming to my door.

Jordan Harbinger: I saw

David Royce: a lot of that. I saw like a, a first amendment, so I'm really sorry. I know some people are annoyed by it. Yes. But you don't have to answer the door, like-

Jordan Harbinger: Some of them were like, "Yeah, our neighborhood has a no soliciting sign near the gate."

And it's like, well, okay, but no. Well, first of all, no, we're going to try and sell to you. It's not a gated combi- not like a locked

David Royce: door. Yeah. Unless, unless it's a gated community, has a no soliciting sign on it, has like penal code or whatever. Like we always tell our guys respect that. Yeah. And same thing, if there's no soliciting sign on the door, don't knock it.

The person clearly doesn't want you there. Why would you knock and then piss somebody [01:05:00] off? It only gets us bad reviews. Don't do it.

Jordan Harbinger: Yeah. I don't even, like I said, I don't even, it doesn't even bother me. Like I'm not so important. I can't answer the door. I hope that day one arrives at some point, but I, my time's not that valuable

David Royce: s.

I have a note soliciting sign in my house. Yeah. And if they knock, I'm like, I'll be the first thing I say, I'm like, "Oh, so you didn't, you avoided the no soliciting sign, this must be really important." Yeah. What's so important that you're ...

Jordan Harbinger: I'll

David Royce: see how they react because I want to see if I can throw them off or if they're so confident they're going to work around it.

I'm like, "All right, you're good."

Jordan Harbinger: Yeah, yeah, yeah. Look, I wish I could have followed that rule, but this deal we are having right now is too good for you to pass up. I knew you'd make an exception if I told you that you were going to get 40% off pest control for one year. For this, you've transferred this playbook several times to different companies.

I mean, it seems like- Yeah, four times. Four times. I mean, that's ... Are you sick of founding companies

David Royce: at all? Yeah, I'm, I'm actually done. I'm officially out. Okay. Yeah. So I, I just sold my company last year or whatever, you know, it's 20 years in the industry. Yeah. We're actually 24, if you include my, my old sales years, we [01:06:00] might have to go public on the next round, uh, and I just didn't want to be the owner of a public company.

I also got to the point where I just didn't feel I was learning anything new. It's like we were in 5,000 cities and 34 states, you know, we're the third largest residential pest control service in the country, probably the world. And I just thought it's just time.

Jordan Harbinger: It's a good time to ... Yeah.

David Royce: Yeah. It's what, I want, I've always wanted to do other things.

Um, and the next thing will probably be something more creative or more philanthropic. I decided I was just going to take a year off, you know, and just kind of get it out of my system. Okay. And then just think. And so, um, now I'm like in this, uh, just exploratory mode. Yeah. You're just looking at different ideas, friends will bring business ideas to me.

Sure. I'll get on ChatGPT and just start setting different industries. It's not a fun. It's just so many rabbit holes you can go down, especially with chat. It's amazing.

Jordan Harbinger: I do wonder, because a lot of people I know that have exits, they're like ... For me, if I were doing a company that, I don't know, like a SaaS company, I don't think I would be in a hurry to start something else, but they'll start like a podcast or they'll do something- Yeah.

where they're starting another business or they'll, they'll [01:07:00] start investing in businesses. Other people jump right into founding the next thing, which to me sounds kind of exhausting. I don't know.

David Royce: So what it is, is I think it's like a dopamine addiction.

Jordan Harbinger: Yes, I agree. They're addicted

David Royce: to it. And like when you go from 100 miles an hour to zero, you're like-

Jordan Harbinger: Yeah.

David Royce: freaking out going, "What am I going to do with all this time?"

Jordan Harbinger: Yes.

David Royce: Yeah. Uh, but I had slowly started winding you down. I, I became chairman of my last business and I was really just involved in more in strategy and hiring key people and eventually helping find a buyer. And I, I, you know, replaced myself as CEO because even then I was starting to get bored with them just like I'm not, there's nothing really new.

Like I want someone who's animated and excited about it to continue it. Um-

Jordan Harbinger: Yeah.

David Royce: So little by little, it's like I went from 80 hours down to 40 hours and that was the hardest thing. Really? I love working, you know- Dang. ... really long days. And I started to have my family and that's what I was- Wow, I was going to say you have

Jordan Harbinger: kids, so-

David Royce: Yeah, and my wife was like, "Hey, can, instead of, you know, 10 o'clock at night, can you come home at like eight, you know, seven, you know, just kinda start working back because I'm sure

and

Jordan Harbinger: hear me out here having dinner at home once or twice a week.

David Royce: Yeah. Yeah. And I, [01:08:00] I wanted to watch my kids grow up. Sure. You know, I had created a life for us that I could, you know, and it, it's my fault if I'm not able to be around them.

Jordan Harbinger: That's a really good realization. I kind of had this same thing. Look, I didn't sell a, a huge company, but I built this life ... It's a lifestyle business in many ways, right?

I work from home. I can choose to go to LA to do something like this. Right. Or I can say, you have Zoom, I have Zoom, you know, whatever.

David Royce: Totally.

Jordan Harbinger: And I can write off cool trips, like I can get a speaking gig in Anaheim and it's like, okay, time to go to Disneyland. Yeah. You know, I can do that kind of thing.

And so like you said, I really did come to the realization it's like, oh, look, my parents were busy. They worked outside the home. My dad worked for Ford, he came back late, he left early, and then he retired early and we hung out after that, but it was a little bit like he was gone a lot earlier in my life.

But I, it's like, I don't have that problem. So you're right. It is totally my fault if I end up missing my kids growing up when they're young. That is 1000% on me. I don't have the luxury of going, I work at an automotive factory. I [01:09:00] cannot work from home. I have to commute long distance because I gotta drive to Detroit from the suburbs.

Like those are pretty decent excuses to not see your kids as much. Like it still sucks, but it's a, you have a reasonable excuse. If I'm just in my office a lot with the door shut, man, that's kind of a pathetic way to screw up the relationship with your kids.

JHS Trailer: Yeah, for sure.

Jordan Harbinger: Yeah.

JHS Trailer: You know, they, they don't need any more trauma than maybe you or I had

David Royce: like growing up or whatever, right?

Jordan Harbinger: Exactly. Exactly.

David Royce: So like, it sounds like a Hallmark car, but like love is spelled T-I-M-E for kids. Exactly. You know, we're constantly talking about exit values and like for financial forecasts and like our kids, they just want us home for dinner.

Jordan Harbinger: Yeah. Did you have a moment where you were like, wait, I have enough?

'Cause you said you grew up with financial uncertainty and so it's hard for guys like-

David Royce: But to be fair, like my, so my dad was an executive. He was the CEO of Motel six and then a private equity group purchased it after, I think he was there for about four and a half, five years, and then they had a disagreement about how they were running things.

And so about six months into that transition, he was out and then he thought I'm going to go try to work for other businesses and kind of take some [01:10:00] equity in the different businesses, but he didn't spread himself around enough businesses in my opinion. I think that's what happened. When you're kid, they never really tell you-

Jordan Harbinger: Yeah,

David Royce: they're not

Jordan Harbinger: getting in the weeds on that.

David Royce: Yeah. No. But all I know is my mom, she really leaned on me around the house because my dad was gone traveling five days a week from fifth grade through almost 12. Ew. And so I just never saw him. So my, and my, my mom had to get a job so that we had medical insurance and she's working full-time. She'd wake up at five in the morning, had this brutal schedule where she'd make us lunches, you know, work all day, come home, do the laundry, clean the house, so we didn't have housekeepers or anything like that.

And so it was, it was a lot and she leaned on me, you know, to be able to help out around the house because I was the oldest. And it's funny because now I look back and I'm like, you know what, that was really a gift. She got worried in some ways I was probably a surrogate dad.

Jordan Harbinger: You have a bunch of younger siblings.

David Royce: I have two, two younger brothers.

Jordan Harbinger: Okay. Yeah. How

much

Jordan Harbinger: younger?

David Royce: Uh, j- just like a year and a half. Oh okay. Three years younger.

Jordan Harbinger: You

David Royce: just had to be pretty close. Burning

Jordan Harbinger: the house down.

David Royce: Yeah. But it was just like, all right, here, you're going to back in the house. You're going to do the dishes every night. You're going to help me with dinner.

[01:11:00] She just leaned on me because it was easier.

Jordan Harbinger: That was your first CEO real-

David Royce: Yeah. It's like that discipline- COO maybe., Right? Yeah. Like someone could say, oh, it's traumatic. And then she told me something she shouldn't have. It's like, "Hey, I think we're actually going to lose the house next month." She's freaking out.

Oh my God. Yeah, sure. It was a really tough time. But yeah, I look back now and I'm like, as opposed to like being frustrated with it or going, "Oh, it wasn't fair. I didn't go through that. " It's like, no, that was a gift. Like that made me work really hard. Good question is would I have even done what I did.

Jordan Harbinger: I always wonder that about people that come in here and I know for me, I also saw my parents working so hard at jobs that they did not love.

I was like-

David Royce: Yeah. ...

Jordan Harbinger: even if I have to make less money, I'm not working a job that I don't like. No way, not doing it. So I started this creative thing, which is like a terrible way to make money. I mean, when, whenever people are like, "Oh, podcasting, you make so much money." I was just like, I can actually not think of a worse way to make money than podcasting.

Maybe, and this is an, a maybe bold underline, maybe writing a book that nobody wants to read is a, is a slightly worse way to make money than podcasting, but podcasting is like, [01:12:00] if I had to rank shitty business ideas, this is like one of the top shitty business ideas is make a podcast because you almost always never make money.

It's like there's three million of these and 2.98 million of them make zero dollars. Right. And,

David Royce: and family- Yeah, it's like a winner take ball thing. There's, there's only so many. It's like you gotta be the top 1% at 1%. Yeah.

Jordan Harbinger: I bet you it's not even top 1%, you're right. It probably is the top 1% of 1% that make like a, a, a nice amount of money doing it.

And then there's like the top half percent make a living doing it and it's living asterisk, not in a major metropolitan area- Yeah. ... inside the United States kind of thing. It's like, it's pretty rough.

David Royce: Passion is one of those things where if you're really trying to make a lot of money-

Jordan Harbinger: Yeah. ...

David Royce: don't follow your passions.

Jordan Harbinger: No.

David Royce: Right? 'Cause everybody else is following their passions through or a large majority of people are following that path- mm-hmm. ... because that's what's exciting to them. And I get it. I totally understand. But, you know, the reality of like going out and be like a famous rock star or an actor or a restaurant owner or whatever is like creative, [01:13:00] it's a really tough sell in my mind.

It is. And then I think a lot of times too, it's like you don't have experience that you really gotta be in the top 1% and 1% to make it in that industry. And then a lot of people do it and they don't have any experience before they try to go do it on a much bigger level.

Jordan Harbinger: Yeah.

David Royce: It, it, it's like this idea that, uh, if you challenge LeBron James to basketball, but you never play basketball, you've just watched it your whole life- Right, right.

I love basketball. It's great. I should go do this. I'm passionate about it.

Jordan Harbinger: Yeah.

David Royce: You go and you get into it, but you're clearly going to lose playing LeBron. Mm-hmm. Like nobody would make that bet and invest their life savings into that business except for LeBron.

Jordan Harbinger: Right. Right.

David Royce: I think

Jordan Harbinger: it was Scott Galloway.

You know Scott Galloway?

David Royce: Yeah. Yeah, he's great.

Jordan Harbinger: He, he said something like, the person standing on that podium at the commencement speech telling you to follow your passion, made their billions on iron smelting.

David Royce: Exactly.

Jordan Harbinger: And it's like, what do you

David Royce: do? Yeah, it's like the only, I think he says the only people who tell you to follow your passions are those who already are rich.

Jordan Harbinger: Mm-hmm.

David Royce: Right? 'Cause then it's kinda like me. Now I'm like, oh, I want, maybe I want to do something more creative or more philanthropic or do something else, but I've kind of like earned that at this point- When you earn vaccines today. ... worked in a kind of a boring [01:14:00] business and I tried to like put my spin on it and make it fun.

You want to tell you too, blue collar businesses, a lot of people are like me where they initially look at them and you're like, "No, I don't want to go to that. " But the crazy thing is the margins, the secret is, is that unsexy businesses often have sexy margins.

Jordan Harbinger: Really?

David Royce: And if you look at the average restaurant, the margin, like the net profit margin's only like three to 6%.

Mm-hmm. Best in class is 10%. Whereas if you look at like a porta body business and they're at like 25%.

Jordan Harbinger: Really?

David Royce: Yeah. And so it's- And money is all shit. Not only are your odds so much more difficult because everybody likes this idea of starting a restaurant, it's just really hard to make money in- mm-hmm.

because it, there's so many people trying to do it. Whereas a lot of people, they don't want to go do like plumbing or whatever else. And the other advantage I see in blue collar work is AI.

Jordan Harbinger: I was just going to say, AI is going to replace all the lawyers that were looking down- Yeah. ... at all of the tradesmen. And the tradesmen are going to be like-

David Royce: Totally.

Jordan Harbinger: Yeah. Uh, I will take fries with that. I'm on my way to my next job and it's like, damn, you law school. Yeah.

David Royce: Yeah. A lot of people are worried about [01:15:00] like, well, the white collar work, right? Yeah. Like so, you know, software developers, AI can code now legal documents, it can do a lot of entry level work and it'll continue to progress, but it ain't cl- unclogging your toilet- No.

anytime soon. It's not going to on your roof. That's right. You know, it's not treating termites inside your walls.

Jordan Harbinger: That's right. No, no. AI will not anytime soon crawl down in my crawlspace and take- Right. ... the rag that my kid flushed down the toilet, right? No, that's on, that I gotta hire a real professional. So yeah, the irony is all the

I went to like one of these l- elitist, and I, I don't, not elite, elitist, schools, law schools, and people were like, "Oh, you know, these guys, uh..." And they all went and worked on Wall Street and we, they're all, to your point, investment bankers and stuff. Right. But now, yeah, they're getting automated, man, first year associates, oh, that sounds kind of expensive.

We have an LLM that does that now, so we only need three, not 30 or 300 or whatever. And yeah, all the guys that are out there welding and stuff, no, the demand is going up instead.

David Royce: Yeah. It's almost like shifted. I see the same thing in construction, right? Like we have [01:16:00] this massive housing shortage.

Jordan Harbinger: Mm-hmm.

David Royce: And so we, we probably need at least a million more construction workers that we just don't have- Geez,

Jordan Harbinger: wow. ...

David Royce: you know, the 2008 crisis just killed it.

I

Jordan Harbinger: didn't know that.

David Royce: Yeah.

Jordan Harbinger: Wow.

David Royce: Yeah. It's one of the reasons that housing's so expensive right now.

Jordan Harbinger: I just thought it was because of zoning laws not letting you build anything anywhere.

David Royce: Huh. No. No, if you go look at a chart just online of, you know, where we're at in terms of housing needs versus what we have- Yeah. ... it's, it's crazy how much more homes we need.

Jordan Harbinger: Well, I know we need more homes. I just thought it was because we couldn't build them due to zoning laws, right? Like you can't-

David Royce: Well, some places make it more difficult like California is- California.

one of them.

Jordan Harbinger: Exactly.

David Royce: But it's more just, we don't have enough people. I think we're at least a million people short.

Jordan Harbinger: If only there was a way people could freely come into the country to work here and- Yes. ... use blue collar-

David Royce: Well,

Jordan Harbinger: you should be that way. ... construction jobs. Yeah. Huh. There's an idea. Maybe you should run for president, David.

David Royce: Yeah, right.

Jordan Harbinger: Yeah. Thanks for coming in, man. This is fascinating conversation. I didn't expect to go the sales rep, but I'm so glad that we did because I just, I love the psychology of that whole thing.

David Royce: Yeah, for sure.

Jordan Harbinger: I love a lot of fun.

You're about to hear a preview that may completely reframe how you [01:17:00] think about nuclear power. What if the energy source we've been taught to fear is actually one of the safest and cleanest tools we have?

JHS Trailer: We're very familiar with electricity. You get home, you turn on the lights, you charge your phone, charge your computer, do all the things that we do without thinking twice about electricity, right?

But electricity is a secondary source of energy. The primary sources of energy that we use are coal, oil, methane gas, solar, wind, hydro, geothermal, and nuclear. Nuclear is actually the largest source of clean energy in the United States. It's the second largest source of clean energy in the world. And what I mean by that is that whenever we make electricity with nuclear, we're not releasing greenhouse gases into the atmosphere or even particulate matters.

So there are no emissions that happen whenever you're creating electricity with nuclear. So it's just to say, you know, everything that's related to nuclear accidents internobo is completely overblown because people tend to think generally like everybody died and it [01:18:00] became this waste land that nobody can go in.

And so it's interesting, right, that we have all this weird fears about nuclear when the facts and reality just point to it being actually extremely safe. The biggest energy disaster in history was actually a hydropower dam collapse, so entire villages were swept away. It's estimated that 200,000 people died.

He would need, like, at least 200 Chernobyls happening every single year for nuclear to be as dangerous as fossil fuels. What about the four million premature deaths from burning fossil fuels? Why are people so afraid of nuclear?

Jordan Harbinger: Hear the science behind the stigma with Isabelle Boemeke on episode 1277 of The Jordan Harbinger Show.

Big takeaway here, business is not just about effort, it's about design. You can grind for years and still be stuck, or you can step back, build systems, track the right numbers, and create something that actually compounds. That's the difference between a top performer and a builder. One burdens out, eventually, the other [01:19:00] scales.

And the scary part, most people never make that transition. They stay the hero in a story that only works as long as they don't stop running. I should probably take some of this advice myself. So if you've got something from this one, think about where you're still relying on effort instead of structure, because the scoreboard just doesn't care how hard you tried.

It only reflects what actually works. All things David Royce will be in the show notes on the website, advertisers, deals, discount codes, ways to support this show all at Jordan Harbinger.com/deals. Please consider supporting those who support the show. Six-Minute Networking is at sixminuteworking.com, and I'm @JordanHarbinger on Twitter and Instagram.

You can also connect with me on LinkedIn, a. K.a. Facebook for adults. This show is created in association with PodcastOne. My team is Jen Harbinger, Jase Sanderson, Robert Fogarty, Tadas Sidlauskas, Ian Baird, and Gabriel Mizrahi. Remember, we rise by lifting others. The fee for the show is you share it with friends and you find something useful or interesting.

In fact, the greatest compliment you can give us is to share the show with those you care about. If you know somebody who's interested in business, scaling systems, definitely share this episode with them. In the meantime, I hope you [01:20:00] apply what you hear on the show so you can live what you learn and we'll see you next time.