With a $300,000 Run Rate, Lawn Care Marketplace GreenPal Processes $5M in a Single Month

Nathan Latka:

Hello everyone. My guest today is Bryan Clayton. he’s the CEO and co-founder of GreenPal, an online marketplace that connects homeowners with local lawn care professionals. GreenPal’s been called the Uber for lawn care by Entrepreneur magazine, and has over a hundred thousand active users completing thousands of transactions per day.

Nathan Latka:

Before starting GreenPal, Bryan founded Peachtree, Inc., one of the largest landscaping companies in the state of Tennessee, growing over $10 million a year in annual revenue before it was acquired by Lusa Holdings in 2013. Bryan, are you ready to take us to the top?

Bryan Clayton:

Hell yeah. Let’s do this.

Nathan Latka:

How many times did Lusa tried to buy GreenPal?

Bryan Clayton:

Well, it took about two years to get that first deal done. But they were the best fit, and that’s why we worked with them.

Nathan Latka:

I love that. All right. Let’s jump into GreenPal. So I want to dive into the first metric you gave. So what does it mean when you say 100,000 active users completing thousands of transactions per day? What’s a user? What’s a transaction?

Bryan Clayton:

So for us, users are homeowners, people who need their grass cut, like consumers on the multisided marketplace. And so, these are people that come onto the platform to get their grass cut. And then on the flip side, service providers, we have about 10,000 of those guys and girls that use the platform to run their business.

Nathan Latka:

Okay. So 10K service providers, the user is a homeowner. So [inaudible 00:01:09] in the marketplace now. Help us understand sort of scale today. So the last full month of business, how many homeowners paid at least one of your service providers to do some sort of work?

Bryan Clayton:

Yeah. Right now we’re actually over 100,000 people actively using the platform to get their grass cut.

Nathan Latka:

Oh, wow. So what that means is last month, in September of 2020 you had 100,000 homeowners pay to get their grass cut at least once.

Bryan Clayton:

That’s right.

Nathan Latka:

That’s incredible. Okay, take me back to day one. When did you launch the company?

Bryan Clayton:

Yeah. So rewinding, my first company was a traditional landscaping company that I grew from just myself and a push mower to over 125 people. So I spent 15 years in the landscaping business, understanding how that business worked and growing from zero revenue to $10 million in revenue.

Bryan Clayton:

So when I sold that business in 2013, I saw what Uber was doing for ride-sharing, what Lyft was doing for ride-sharing. So then I decided, okay, GreenPal needs to exist. Recruited two co-founders, and we just started hacking on the project, passed out like $100,000 door hangers and got the thing going in the summer of 2013. And just kept grinding and hustling on it to now where we have hundreds of thousands of people using it.

Nathan Latka:

How many door hangers?

Bryan Clayton:

Oh god, over 100,000. I got bit by a dog in the summer of 2013. We just sweated it out and just hustled up first few hundred people to use it. Then after that, we started getting feedback. We started talking to people, understanding, okay, this is where we’re actually adding value, this is where we’re not adding value. We just kept using that user feedback to drive how we built the product.

Nathan Latka:

That’s incredible. So tell me first about your co-founders. How did you find them and did you guys decide to just split the company 33-33-33 or were you like, “Listen, I just sold my company, I’m bringing cash to the table, I own majority.”

Bryan Clayton:

Yeah. So the two co-founders I recruited were just lifelong friends of mine. So they were people that I could trust. People that I knew wanted to work hard, people that I knew wanted to start a business. And so, that’s really what I was optimizing for in those early days, was who can I trust? Who will I know stay in the trenches with me and got this thing out?

Bryan Clayton:

The problem was none of us had any technology background. None of us knew how to build software. None of us knew how to design software. None of us knew how to market and distribute software. So while we came to the equation with hustle and we came to the equation with domain experience, we didn’t have any of those other things.

Bryan Clayton:

And so we had to really re-tool and reinvent ourselves as business owners, as entrepreneurs, and start learning how to write code, how to design, how to market. And so, that took several years in the early days of just trial and error, figuring out how to do that stuff. And six, seven days a week of working in the product and working on the business and also learning the skills that we needed to learn to actually execute.

Nathan Latka:

So did you guys split it evenly, 33-33-33?

Bryan Clayton:

Yeah.

Nathan Latka:

Oh, wow.

Bryan Clayton:

To today we have three owners of the business and we have no outside investors. So we have a very clean cap table and we are all third owners in the company.

Nathan Latka:

That’s great. So you’ve raised no capital for the company. And so you’ve totally bootstrapped.

Bryan Clayton:

That’s right. Yeah.

Nathan Latka:

Oh, man. I love that.

Bryan Clayton:

So the first version that we launched, we actually paid a development shop in Nashville around like $140 grand to build the first version of GreenPal, and it was a total flop, total failure. It didn’t get any sort of traction, but we learned a lot of hard lessons launching that first version. And that was all of our own money that we brought to the table to bring the business to life. We’ve been bootstrapped ever since. For us, we believe that revenue is the best form of financing there is.

Nathan Latka:

I agree with that, Bryan. There’s a lot of founders listening right now, getting started, wondering if they should pay a similar agency $100 grand to get their MVP launched. And they’re wondering, what do I got to watch out for? What did you learn from that money, it basically went down the drain it sounds like.

Bryan Clayton:

Yeah, it did. We learned really quick that if we wanted to be in the technology business, we needed to be able to build and execute and distribute technology. And so that was a really hard lesson for us to learn if I could have done it again, I just would’ve liked bypass that step altogether. And I would’ve just stepped started day one, learning the skills that we needed to learn to-

Nathan Latka:

Literally learn how to code.

Bryan Clayton:

Literally learn how to code. Yeah. I think even you need to have those skills in-house, it needs to be part of your core competency as if you want to be a tech startup. You need to be able to build and distribute technology. That’s just table stakes. I under-indexed on that in the early days. I really felt like that I knew the business inside and out that we would pay a shop to build this thing. We would market it and we would just be off to the races. And that’s not how it works. We came to the equation with a bunch of untested assumptions that didn’t turn out to be true. And so we had to really rebuild this thing 20 times in the last six years. And so having the ability to do that in house is really, really table stakes in opinion for any kind of tech startup.

Nathan Latka:

I just find it fascinating that you went through that any of you guys watching the YouTube videos, see what I’m looking at here. I mean Bryan, his biceps are popping out of his GreenPal logo T-shirt, his chest is huge. He’s got a slight tan, which means outside a tiny, bit by dogs. And oh, by the way, he taught himself to code in his free time. Bryan, it’s shocking to me you had the motivation to do that, especially considering you just exited a company. So you could probably afford to pay anyone any amount of money to do what you needed.

Bryan Clayton:

Yeah. After selling that first business it freed me up to kind of do what I wanted to do. And so I no longer had to go work a business or do a job. I was kind of financially independent.

Bryan Clayton:

But I didn’t also didn’t want to sink all that money back into this other unproven business. So it was really hard, it took a lot of discipline to not take the easy way out. But for me personally, my businesses have always been kind of the forcing function for my own personal growth and developments. And that was one thing I noticed when I sold my first company was I became lackadaisical. I got sloppy, I got fat. And it was kind of funny that for me my business is the vehicle for my own personal growth and to be tuned, and to be smart and to always constantly be getting better and better and better and all aspects of my life. So it was the thing that caused me to have to force myself to learn how to do this stuff. Looking back six, seven years later I’m so glad I did because now I’m a completely different person than I was starting this company. And that’s one thing I love about business is that it causes you to level up as a human being.

Nathan Latka:

Yep. Let’s go back to the business. It’s a marketplace model. Marketplaces are two-sided. You send out 100,000 door hangers, you get your first 100 customers that way, but you got to have people to mow the lawns. Were you basically filling the need on the other side of the marketplace until you’ve found other people that could mow lawns that you could basically bring on a service providers?

Bryan Clayton:

Yeah. Great question. In a marketplace, you’ve got this chicken and egg problem. Everybody knows that. And so for us the way that we solved it was just sheer hustle, dialing for dollars. We figured out that we could call every advertiser on Craigslist on Sunday when they weren’t mowing yards and actually get five seconds of their attention and kind of pitch them on the idea to use GreenPal.

Bryan Clayton:

And then the thing that kept them around in the early days was I gave free consulting to people on how to run their lawn mowing business, how to grow their lawn mowing business. Because I know innately how to be successful in the lawn care business. And so I would give free consulting to the first 500 service providers that used our platform as a way to kind of be the honey and the glue to keep their attention in the early days when the product was just got awful.

Bryan Clayton:

And so developing that early relationship with them allowed me to kind of keep their attention to where we had the service providers that homeowners could hire off the shelf, so to speak. And then also learn from them about the things that I didn’t know, where the product really sucked and where we needed to improve. So for us that user feedback constantly coming in like a river has just been core to our success. Even to this day with hundreds of thousands of users we’re able to always be using user feedback to grow and make the product better and better and better.

Nathan Latka:

So to speak there you would go on to Craigslist and you would see someone that said, “Hey, hire me to cut your lawn.” They were paying for ads. You would click the ad, you’d get their phone number. You’d call them and say, “Hey, you should use GreenPal to get more business in addition to Craigslist ads. And oh, by the way, I just sold a company called Peachtree, I can help you consult to grow your business in the landscaping world.” That’s how you build a relationship to do that 500 times, first 500 lawn cutter service providers on your platform.

Bryan Clayton:

Bingo. It was exactly that way.

Nathan Latka:

Wow.

Bryan Clayton:

Yeah. And now to this day we have over 10,000 service providers. So we have a more automated approach to it. And we have a little bit of mind share in the lane landscaping business. If you mow yards odds are you know about GreenPal. So we have more of an inbound strategy today. But in the first day, in the early days, when we had to manufacture that momentum, that was how we got the attention and frame the proposition to these folks to try out the product.

Nathan Latka:

In September of 2020, you said there was 100,000 homeowners that paid at least a dollar to a service provider to get a lawn cut. How many of your 10K service providers in September of 2020 made at least a dollar through your platform?

Bryan Clayton:

So as of right now we have 10,000 active service providers. Now, some of them are only doing one yard a week. Some of them are doing several hundred. So our sweet spot is, let’s say you’re mowing 10 yards a week and you want to get to 100 yards, that’s where we can really add value. The really big companies that are doing four or five crews out there, mowing yards. We don’t really add a lot of value because they already have their systems, but it’s a smaller service provider that’s doing a handful that wants to do this full time. That’s how we get them from here to here.

Nathan Latka:

So just to be clear in September of 2020, all 10,000 service providers made at least a dollar through your platform doing one to hundreds of lawns per month.

Bryan Clayton:

That’s right.

Nathan Latka:

Fascinating. Okay. Let me then ask a different question. I’m curious what portion of your full marketplace is “active monthly.” So if you look at all of your signups since 2013, how many total service providers have signed up relative to the 10,000 that are active?

Bryan Clayton:

Yeah, so we add about 40 or 50 a day. So roughly 70% have entered the year with us. And so they’re legacy users. We don’t like to scale the supply side too much, because then you have too many people at the party. So we kind of have to throttle it. And we kind of have to be careful especially on a market by market basis. There are some places where we desperately need service providers, but there’s other places where we really don’t. And so we kind have to be really careful about, we don’t let on too many in some markets and we get just the right amount between the delicate balance between supply and demand.

Nathan Latka:

So how many total service providers have you had sign up over the past seven years?

Bryan Clayton:

I don’t really know that number. It’s probably somewhere around 20,000 to 30,000. If a service provider comes onto the platform and they are able to get five or 10 yards in their first month, they stick around. If we’re not, if we’re not able to drive them that they then flush out.

Nathan Latka:

Yep. Okay. Say that one more time, sorry.

Bryan Clayton:

So if they can get five or 10 yards in their first month, then they stick around, they run their business on the platform. If they don’t, then they lose interest and then they don’t use the software anymore.

Nathan Latka:

Smart. Same question on the homeowner side, how many total homeowners have signed up over the past seven years?

Bryan Clayton:

Roughly 500,000, 600,000 have tried the product. And to this day, we’re able to retain around 100,000 of them to continue using it.

Nathan Latka:

Interesting. When you say tried does that mean they just put an email address in it, or they actually paid someone to do one lawn cut?

Bryan Clayton:

They’ve actually paid, that’s what we consider active. Because we don’t really like to look at vanity metrics. We get a lot of people to just look for free quotes and that’s kind of the value proposition to the homeowners they can sign on and in less than a minute they’ll get five bids from lawnmowing services nearby them. They can read our reviews and pick the one they want to work with, but we don’t actually ring them up as active user until they pay [inaudible 00:12:51].

Nathan Latka:

I got that. So now monthly active, about 100,000 extra homeowners getting paying for at least one lawn cut.

Bryan Clayton:

That’s right, yeah.

Nathan Latka:

Okay. This is great. I think I fully understand the marketplace. We haven’t talked about the one thing though that makes the whole thing work, money. So walk us through an average transaction. I’m using you, I get a quote to cut my lawn for $100. Who gets what of the cut?

Bryan Clayton:

Yeah, so we take a very small transaction fee, 5% of all of the money that comes through the platform. So the vendor gets to keep 95% of all the money they make. Now. They still have to pay the credit card processing on top of that, but we keep 5% to run the platform.

Bryan Clayton:

We also have some additional tools that service providers can upgrade to if they want to such as like routing tools. And there’s some other things that we’re building into the future to where they can operate their entire business on the software. And so there is kind of a SAS play there, but for the majority of the revenue it’s the small transaction fee.

Bryan Clayton:

For the homeowner what the price they see is the price they pay. There’s no additional fees, there’s no additional upgrades or anything like that. They pay what they see on their quote. Now, after that first lawnmowing goes well, then they can book them for lawnmowing for the rest of the season. And they can also add on additional services like shrub pruning, mulch, seating, fertilizing, things like that. And so we also get a 5% fee for that as well.

Nathan Latka:

Yep. Okay. That makes sense. And give me a sense of monthly. So average sort of transaction value through your system is about what size?

Bryan Clayton:

For lawnmowing it’s usually around 50 bucks.

Nathan Latka:

Okay. Got it. So, I mean, can I take 100,000 homeowners times 50 bucks? You guys processed $5 million in transactions in September, somewhere around there.

Bryan Clayton:

Yeah, that’s a good ballpark.

Nathan Latka:

Okay. Got it. The SAS products you just mentioned, have you started charging anything for that yet? Or that’s still in the roadmap?

Bryan Clayton:

Yeah. It’s still on the roadmap. We have some beta users using it. We want to really dial it in before we roll it out system-wide. And so one of the kind of conundrums that you face when you’re building a marketplace is you kind of almost have to bet, am I a marketplace or am I a SAS business? There’s very few examples of people doing it well at the same time. And so you might think about like Upwork is a marketplace, but they also have some upgrades on both sides of the transaction for SAS. But there’s very, very few examples of players being able to do both well, we’re really dialing it in until we roll it out.

Nathan Latka:

Yeah. I mean, so just to be clear on 5 million of transaction volume through your platform on a month, that’s about $25,000 to you guys in terms of revenue. So you guys’ run rate right now, it sounds like it’s something around $300,000 a year?

Bryan Clayton:

It’s a little more than that, but yeah, that’s in the ballpark.

Nathan Latka:

Okay. On processing volume of something $60 million.

Bryan Clayton:

That’s right.

Nathan Latka:

And can you take more than 5%

Bryan Clayton:

You can but the problem is that the more that you take, the increase that you get in terms of disinterest in the platform, disintermediation. You also don’t get the value of suppliers bringing on their demand because we also have that occur. We call that vendor led traction. And so for us we are building the platform to make this entire industry runs so much smoother. And so if we start dialing up the like 10%, 15%, 20%, then the whole thing starts to unravel. And that’s kind of we’ve seen in the last six years there’s been some other Uber for lawnmowing service, startups come and go. And between all of them they probably crashed about a half billion dollars of capital into the ground. And it’s because they’ve been a little too greedy on the take rate. So for us, we have a long view of, okay, we’re going to take a very small piece of the transaction. We’re not going to be too greedy about it. So the service provider can run their entire business on our software and make material income doing.

Nathan Latka:

Interesting. Yeah, because you’ve been bootstrapped. Now, if you’re doing sort of a $300,000 run rate today, where were you exactly a year ago?

Bryan Clayton:

Right about half that. So we’ve been doubling every year. And so in the early days the numbers were very, very, very small, but at least we were still doubling. And so we’ve set out an objective to double every single year and we’re going to continue to as long as we can, at some point we’re going to reach the law of large numbers. But for us if we can double year over year, we’re doing good.

Nathan Latka:

I mean, and I will tell you I know you stated and you’re right actually on a net basis, there are very few companies that get marketplace plus SAS right. But I can also tell you, there’s a lot of, some of the fastest growing SAS companies are ones that start off as a big agency or a marketplace because the second you build software for these landscape folks, your service providers, you already have a base to sell it into. And if you can add enough value, they’re willing to pay 20, 30, 40, 50 bucks a month. So if you get 10% of your 10,000 paying 30 bucks a month, boom, you just doubled your business, that’s another 30K a month in MRR.

Bryan Clayton:

Yeah. That’s really kind of exactly our thought sequence as well. We were always having to tell investors, no, thanks. We get VC interest on an ongoing basis. But that’s something they always point is like, you got to figure out the SAS piece of it. And so for us that’s something that we’re looking to tackle, but it hasn’t even been in the conversation until now because we still needed to distribute this thing nationwide. We’re now in every major city in the United States and we’re going after the smaller markets now, because we have to grow this thing on a city by city basis. And so we’re just now at a point where we’ve got several thousand service providers using it. Now, we’re at a point where we can start thinking about, okay, how do we layer on some premium tools that we can charge 10, 20, 30 bucks a month for?

Nathan Latka:

And do you have plenty of runway? I mean, are you profitable today?

Bryan Clayton:

Yeah. We’re profitable. We’re growing through COVID, we’re riding the wave of kind of this contactless ordering of wave that we’re seeing. And so for us we’re profitable. I’ve slept well at night during this crisis. We’re default alive, I guess you could say.

Nathan Latka:

That’s great.

Bryan Clayton:

That’s a great place to be. Now, the first three, four years really, really, really sucked because my co-founders were living on like $10 a day food budgets and there were no salaries for a very long time. It was like, “Hey, can you live on $200 this week?” It was really, really hard in the early days. But luckily here we are now, we’re kind of in charge of our own destiny. We don’t have this convoluted cap table. We can make the decisions we want to make. And so it’s a good spot to be in now, but it was very much an exercise, like a leap of faith in the early years.

Nathan Latka:

And what’s your team size today?

Bryan Clayton:

So three co-founders that work in the project. And we have 20 contractors that we use for software developers, designers, content writers, things of that sort. So we’re completely distributed except with the exception of my two co-founders and it works well for us. Being able to outsource these things all over the world is one of our competitive advantage.

Nathan Latka:

All right, Bryan, we’re out of time. Quick answer if you can, famous five, number one, favorite business book?

Bryan Clayton:

Ooh, The E Myth.

Nathan Latka:

Number two, is there a CEO you’re following or studying? You can say none.

Bryan Clayton:

None that mapped to exactly what I’m trying to do nowadays.

Nathan Latka:

Number three, what online tool do you use the most?

Bryan Clayton:

Upwork.

Nathan Latka:

Number four, how many hours of sleep to get every night?

Bryan Clayton:

Oh, I sleep well, nine, 10 hours, as much as I want.

Nathan Latka:

And what’s your situation? Married, single, kids?

Bryan Clayton:

I’m single, and that’s a competitive advantage too.

Nathan Latka:

I bet. Any kids running around or no.

Bryan Clayton:

No.

Nathan Latka:

How old are you Bryan?

Bryan Clayton:

I’m 40.

Nathan Latka:

40. Last question. What do you wish you knew when you were 20?

Bryan Clayton:

What do I wish I knew when I was 20? Focusing on what matters, looking at the one, two or three things I can work on this week and only doing those and not even worrying about anything else.

Nathan Latka:

Guys, GreenPal processed $5 million in transaction volume in September year of 2020, that’s from 100,000 homeowners paying 10,000 service providers to come cut their lawns anywhere between once and many more times per month. They’ll process and do over $16 million in transaction volume this year, growing, they’re doubling year over year now, available all across the United States. They’ve done this all bootstrapped, they’re profitable, which is obviously a great place to be. Team of 20 folks as Bryan continues to scale the company. Bryan, thanks for taking us to stop.

Bryan Clayton:

Hey, my pleasure. Thanks for having me on.

Nathan Latka:

One more thing before you go. We have a brand new show every Thursday at 1:00 PM Central, it’s called Shark Tank for SAS. We call it deal or bust. One founder comes on, three hungry buyers they try and do a deal live. And the founder shares backend dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it. And the buyers try and make a deal live. It is fun to watch every Thursday, 1:00 PM Central.

Nathan Latka:

Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2:00 PM Central. To make sure you don’t miss any of that make you click the subscribe button below here on YouTube, the big red button, and then click the little bell notification to make sure you get notifications when we do go live.

Nathan Latka:

I wouldn’t want you to miss breaking news in the SAS world, whether it’s an acquisition, a big fundraise, a big sale, a big profitability statement or something else. I don’t want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SAS founders, you want to get in there.

Nathan Latka:

We’ve probably talked about your tool if you’re running a company, or your firm if you’re investing. You can go in there and quickly search and see what people are saying. Sign up for that at nathanlatka.com/slack. In the meantime, I’m hanging out with you here on YouTube. I’ll be in the comments for the next 30 minutes. Feel free to let me know what you thought about this episode. If you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We got to push them away, put the thumbs up below to counter them and know that I appreciate you guys’ support. All right, I’ll be in the comments. See you.