MyClean Founder On How He Reached His First Million in Sales – with Michael Scharf

How does a guy who hated the commute to his corporate job end up building a multi-million dollar cleaning company?

Michael Scharf is the Co-Founder and CEO of MyClean, a full-service cleaning and janitorial company.

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About Michael Scharf

Michael Scharf
Michael Scharf is the Co-Founder and CEO of MyClean, a full-service cleaning and janitorial company.

Raw transcript


Mixergy’s audio transcription is done by Speechpad

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Hey, there, freedom fighters! My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. In this interview, I want to find out how a guy who hated his commute, hated the process of even getting to his corporate job, how he ended up building a multi-million dollar cleaning company.

Michael Scharf, who you see up on your screen, is the co-founder and CEO of My Clean, a full service cleaning and janitorial company. I invited him here to tell the story of how he did it. Hey, Michael!

Michael: Hi, how are you?

Andrew: Hey, we always talk about multi-millions and sell for billions and all that here at Mixergy. Maybe we could start off by talking about that first million. What was it like when you guys at My Clean hit that big number?

Michael: It was an exciting time. About a year and a half ago, the business really started to gain traction, and we would just look at the numbers. I mean, we didn’t look on a year by year basis, of course. We looked on a day by day basis, and we were able to see we were acquiring ten customers a day, 12 customers a day, 14 customers a day, and from doing $5,000 in revenue a week to $10,000 revenue a week, to $15,000.

The business has been on this kind of steady growth trajectory for the last year and a half, and it was really exciting when it began to take off, and it continues to be very exciting.

Andrew: And did you celebrate in any way when you guys earned the first million?

Michael: [laughs] We’ve had a lot of celebrations, lot of funny stories during that, as you can imagine, building this type of business. Yeah, we’ve had a few different celebrations. I think we did a steak dinner when we hit the first million.

Andrew: Congratulations! And it did start with you having a really good job that you were frustrated about the commute far, but what was that job? What were you doing just before?

Michael: Sure. So my background, well, first I was in the equity structure derivative division at Bank of America Securities, which was the investment arm at Bank of America, which was an amazing job and a very exciting platform until about 2008, at which point, it was not an exciting platform anymore.

Then I left there and I went to a company called [??], where I was the fixed income division [??]. I was a broker dealer salesman, and that’s the commute you’re talking to. I was reverse commuting from New York City to Greenwich, Connecticut, and I was there for about a year.

Andrew: And if the market hadn’t gone sideways, do you think you would’ve enjoyed working in finance and continue to do it up until now?

Michael: It’s an interesting question and something that I debate about. There were a lot of positive characteristics in the early days of Bank of America, and I learned a lot. I think longer term now that the corporate world was not for me.

Andrew: It wasn’t.

Michael: I made the right decisions for me personally going into the [??].

Andrew: I shouldn’t have said “sideways.” America just really got a bad hit, bad couple of hits back there.

Michael: The market had a historically bad hit, specifically the structured products market, which had a once in a lifetime what most people [??] would be about an eight standard deviation movement [laughs] in the market. So those were interesting times.

Andrew: I’ve got to tell you, you’re in New York right now. That is one of the ideal jobs to have in New York. You walk into a room, everyone wants to be you, everyone knows you’re going someplace. Then you go and you start a company. In a moment, I’m going to ask you about what it’s like to go from that kind of height to having to scrape by with a company that, in the beginning, wasn’t generating that much revenue.

Michael: Sure.

Andrew: First, tell me about this commute. You were driving into work and what was that feeling like that made you so frustrated that you had to go pick another job?

Michael: Sure. Well, let me start with, I was ready to leave Bank of America shortly after the merger with Merrill Lynch. I was looking for other opportunities. At the time, a lot of these kind of mom and pop startup broker dealers had started to take flight, and the market was actually very well positioned for those businesses, as you saw the mass exodus from larger investment banks to the smaller companies.

So I convinced myself that commuting to Greenwich, Connecticut was not that bad of an idea, because it was such a great opportunity. In the beginning, I was living in the West Village, and you’re not from New York, but basically, the West Village is on the lower west side of the city, and Greenwich, Connecticut is exactly on the opposite end outside of the city. So I was probably about as far from Greenwich, Connecticut as you can be being in New York City.

At first I took the train. That was not for me. Then I convinced myself getting a car would make it easier. That was not for me. Then I moved to apartments within New York City, saying, “Oh, if I move to Murray Hill onto the East Side right on the FDR drive, it will be easier.” That was not for me, and finally, I realized that sitting in a car, train, or whatever for two to two and a half hours a day just wasn’t for me.

Andrew: I got to tell you, I grew up in New York, and I had a floor of office space at 59th and Lexington, and my apartment was within walking distance from it, and one of the reasons that I loved living in New York is that I felt like I didn’t have to commute. I would watch people come off the Long Island Railroad and all those other trains and feel like, “Boy, those are suckers for not living in this city, in the greatest city in the world.” And here you were living there and you had to commute to work. You had to do what all those other suckers are doing. That’s a painful experience.

Michael: It was not a pleasant experience, but I’ve been rewarded now that I walk to work every single day.

Andrew: Well, congratulations.

Michael: [laughs]

Andrew: In fact, you had some Internet trouble at work today and had to run to your place, which is not too far from the office, so that we could record from your apartment.

Michael: We did. We did.

Andrew: Thanks for doing it.

Michael: My Internet trouble, though, people traffic trouble. [laughs]

Andrew: What do you mean? What happened?

Michael: Well, basically, we’ve outgrown our current office space. When I moved into the space, we employed about 20 people, and now we employ just fewer than 120, actually, when you factor in all the cleaners and front office people. We’re in the process of moving to a space that’s a lot bigger than ours now, but it’s not the environment to get on a Skype interview.

Andrew: Wow. Congratulations on such a fast growth.

Michael: Thank you.

Andrew: So did you quit the job first, and then look to see what you were going to do next, or did the opportunity come to you before you left?

Michael: We had the platform built before I left, but the company really wasn’t generating very much revenue before I left full time, and once the software element of our platform — our entire system software system is completely proprietarily built — once that element was built, then I made the decision and left the job and went to My Clean.

Andrew: So where did the idea come from?

Michael: My partner actually, Mike Russell, was sitting on his couch one day and he’d gone through about six different cleaning services and said, “You know, there’s no professional company in the New York City industry. Everybody wants to have their place cleaned.”

He looked online and said there’s really not many companies that have a software platform that allows the consumer to do everything online, [??] communicate, and he just saw the market opportunity and eventually pitched it to me. I was very attracted to the business.

Andrew: What was it about the business that made you say, “Yes, I’m going to go into cleaning”?

Michael: It’s a good question. So I didn’t think in terms of, “I’m going to go into cleaning.” What I saw was the cleaning business nationally is about a $60 billion market, and there was no one dominant player in the market. It was completely fragmented. It was a lot of the tools that were being used, as far as customer acquisitions is concerned, logistics of coordinating cleaners, etc., were outdated.

And I felt like if you could create a platform and systems and processes in that market, there was a tremendous opportunity. There was a huge pot of gold there.

Andrew: All right, I see a big market. I see fragmentation. So what you’re saying is the problem of customer acquisition and lack of systems and lack of consistent product, right?

Michael: Correct.

Andrew: Wasn’t, though, Yelp creating a lot of that solution by being the referral site for most businesses? And we’ll talk about how they’re big for you . . .

Michael: Sure.

Andrew: . . . by making sure that there was consistent quality, or else people weren’t going to get the ratings that they needed. Services weren’t going to get that. Wasn’t Yelp really solving that problem?

Michael: It’s an interesting question. Number one, Yelp has been amazing for my . . . company in New York City that has 100 reviews on Yelp. We have a four and a half star rating and we’re very aware of our online reputation and our reputation with all clients, for that being said. With that being said, Yelp is completely different than MyClean, right? MyClean is a service that certainly is very aware of their online and offline reputation, but we’re a service at the end of the day, and Yelp is a platform where consumers are able to go and rank various services, restaurants, brick-and-mortar places, etc., so two entirely different business models.

Andrew: But the first version of MyClean was going to be, you told Jeremy, who pre-interviewed you, kind of like Uber, right? What did you mean that?

Michael: That’s a great point. Well, it’s an excellent question. So when we initially launched MyClean, what we felt that we could do is we felt that we could subcontract the work, meaning we wouldn’t directly employ the cleaners. We would work with local New York City cleaning companies who maybe didn’t have our expertise, experience, or desire and online marketing, software development, etc., and we would focus on doing the marketing and software development aspect of the business, as well as the customer service, and they could focus on what they were great at, which was the cleaning aspect of it. We were going to do everything under our platform.

So the reason I equate that to Uber is Uber basically works with independent black cars. They’ve launched a technology that these black cars can use as another revenue source, just like we would view MyClean as another revenue source for local cleaners or cleaning providers, and we were going to go into this massive market. What we found was, though, and what makes us considerably different than Uber, is that cleaning is a very subjective business, and without actually being the people who employ the workers, it’s very difficult to have processes in place to offer consistent service every single time.

Andrew: OK. All right. So that was the original idea, though.

Michael: Sure.

Andrew: Did your co-founders launch that?

Michael: Yes, we all launched it, yes.

Andrew: You all launched it. And how did you know that that wasn’t going to be the right model, that you were on the wrong track and needed to pivot?

Michael: It’s a great question. We actually got to about $60,000 a month of revenue with that model.

Andrew: Wow.

Michael: But what we were finding was our customer retention numbers were not where we wanted them to be, and we didn’t have that reliability feeling that we were looking for. So I met a gentleman, Ken Schultz, who’s now our Chief Operating Officer, one day. He’s a lawyer by training, actually, and has an ILR, Industrial Labor Relations, degree from Cornell, and he had this vision for building a cleaning business, building the actual operational aspect of the business, which was what we were lacking.

Andrew: OK.

Michael: We went through a period of time, some various negotiations, eventually he came to the MyClean team, and we hired our first cleaner about a year and a half ago.

Andrew: I see.

Michael: That’s when the transition began to take place.

Andrew: And Ken is an Ivy League educated guy with a law degree. Can you tell the audience what it was like when he had to go tell his parents what he was going to do and how much he was going to earn for it?

Michael: Sure. Yeah. I mean, number one, Ken, not only is he Ivy League educated, but he has a law degree from NYU, he was an insurance attorney for AIG before coming to us, and we entered into an arrangement, we had no money to pay him at first, where he would work strictly for equity for the first six months as we built this business. He had a wife, he had two children, he took a major risk, and it really paid off for him.

Andrew: How do you as an entrepreneur convince someone to take that kind of a risk on you? And I ask because there’s someone, at least one person, in the audience right now who’s in a similar situation or who knows someone who’s maybe not as impressive as Ken, because Ken’s pretty damn impressive, but someone who’s really impressive, and they want to recruit them. What do you say? What kind of advice do you give that person?

Michael: Well, here’s what I said to Ken, and here’s Ken’s situation. Ken was unhappy as an attorney, and he was looking at doing a number of entrepreneurial things, of which one of them was going to be to open a cleaning franchise in Long Island. And part of opening this cleaning franchise is he would have access to like 200,000 households or something like that. What I said to Ken is, “Ken, look outside. It’s New York City. There are seven million households we can clean.” I said, “We’ve got the marketing aspect down. We’ve got the customer service aspect down. We have a website built. We have an online marketing plan. We can acquire customers. I need someone who can build the operation. You have the vision to do it. Why not build a cleaning business in the biggest market in the world?”

And that was really what it took. He believed in me. He backed me. He saw where the business was, despite offering a horrible service. When we subcontracted, I admit, our service was horrible. Most of our negative reviews are from the early days. And that was it. It worked out really. I mean, there certainly have been pain points along the way, but here we are at [??] started hiring cleaners, like I said, a year and a half ago, and we have about 120 people right now.

Andrew: All right. That brings up another question, which is how did you get customers? You had an idea. You had a market. How do you get the first customers?

Michael: So early on we did a deal with Gilt [SP], and again I really want to thank Gilt as a partner company. Gilt and Yelp have been two huge referral sources for us. We did a deal with Gilt early on, and people started using the service. People started talking about the service. We got an amazing write up from Thrillist early on, we leveraged some different free PR services that we knew, and that was how we got going in the early days. When we got a write up from Thrillist, I think within three days we had 400 sign ups.

Andrew: Really?

Michael: So I really have to thank the [??] at Thrillist.

Andrew: You don’t have to pay Thrillist for that, right?

Michael: We didn’t pay Thrillist for that, no.

Andrew: They just cover you because they’re a media outlet?

Michael: They covered us because they were a media outlet, and they thought that we had something interesting and innovative within this market space, the fact that we allowed our . . .

Andrew: What’s the innovative twist?

Michael: Allowing consumers to do everything online. I think the title of the article actually was “The Internet Will Clean Your Home.” I would think most people who probably read it, they’re like, “Wow, they developed a robot for cleaning the home.” But what they saw is we actually do send people.

Andrew: Gilt, though, they do take cut, right?

Michael: Gilt did take a cut, but they gave us very favorable economics in the early days, far more favorable than any of the discounts [??] giving to local businesses now, and I really have to thank them for that.

Andrew: How did you get that? How did you even get your foot in the door when so many people were trying to get their attention?

Michael: We had some personal contacts over there.

Andrew: I see.

Michael: So we levered some relationships that we had, which is really how we did pretty much everything early on, and they were looking for a reliable cleaning service that could clean. They felt we’d get hundreds of customers pretty quickly, which we did, and it worked out well.

Andrew: Yeah. You told Crain’s New York Business, I think it was about two years ago or so, that your plan was to not spend money on the launch and to lean on your friends as much as possible, and you gave a few examples of how friends introduce you to companies that got you a lot of customers. What about one on one? Did you pitch your friends before you pitched to anyone else?

Michael: We asked our friends to try us. Yes, we certainly did ask our friends to try us, and we’re very lucky we have a lot of friends, all of which have their apartments cleaned in the city, which is why we went into the market in the first place. We knew who our consumers were because it was us beforehand, and, yeah, they gave us a shot. Then slowly, but surely, we started to acquire more and more customers.

Andrew: I’m always afraid, maybe not afraid. I’m a little embarrassed to ask my friends to try my stuff first. I know that they’re the easiest people to get to try it, but I also feel like my relationships with my friends are going to last forever. If I give them something now that’s not ready, I’m going to kind of sour their opinion of me. I think let’s go talk to strangers first, and then after it’s a little bit better, I’ll come to my friends. But you didn’t make that mistake, and I call it a mistake because you want to get as much support from people who care about you when the rest of the world doesn’t care about you. So how did you avoid the mistake that I just described?

Michael: We didn’t.

Andrew: You didn’t.

Michael: We did not avoid the mistake. We said, you know what, we’ve launched the service. It’s a subjective service. Some people are going to love it, others are going to hate it, and we began cleaning our friends’ apartments, or hiring people to clean our friends’ apartments. Or, to say it more accurately, subcontracting people who hired people who cleaned our friends’ apartments. Remember, the early days . . .

Andrew: Oh, so then you didn’t make that mistake. You did go to your friends. Why weren’t you embarrassed to say, oh, my friends should see me at my best, and I’m launching; I’m not at my best yet? Why didn’t that stop you?

Michael: My feeling is if a friend is unhappy and it affects a friendship because of a bad cleaning experience, then it’s not that strong of a friendship.

Andrew: I see. And you did have some bad experiences?

Michael: And I just took that approach. We’ve had some very bad experiences, yes [??]

Andrew: With your friends? Can you talk about that?

Michael: Yeah. I mean, just friends being unhappy with the cleanings, especially early on before we had control over the labor pool. I don’t know if there’s one particular story or reference.

Andrew: I’ve got one example. I mean, there are several, but here’s one that’s kind of funny, and this is not your fault. The doorman at a building gave the wrong key to the cleaning people. Some random person at your friend’s apartment building got a clean apartment building, and your friend walked home to an apartment that didn’t look any different.

Michael: Yes. Yes, Aaron Maday [SP]. Yes, a friend of mine I worked at Bank of America with, we were supposed to clean his place. He shot me a text when he got home. He’s like, “Are you kidding me?” And I was like, “What are you talking about?” He goes, “Did your cleaner even do anything?” And I was like, “Yeah, she should’ve been there.” And then, we called the cleaner, and she’s like, “Yeah, I went and cleaned the place.” He asked his doorman, and the doorman gave her the wrong key. So we randomly went into a person’s apartment who didn’t hire us, cleaned it, left our MyClean brand and materials there, and left. So that person was either really happy with us or really upset. I don’t know because we never heard from that person.

Andrew: One of the advantages I think that you have as a guy who went to work on Wall Street for a while, as opposed to taking the usual route of just starting a tech company, is your friends were also on Wall Street. They had money. They weren’t these 20-year-old kids who had just left school and were ready to start businesses of their own and didn’t have any money. That did help you, right?

Michael: The fact that we understood our consumer base and we knew there was a demand for our product definitely helped us.

Andrew: OK. You’re not willing to say that the fact that you had friends who had jobs was a big advantage? It seems like it would be. It seems like an OK thing to say, no?

Michael: I mean, you’ve got to remember, our friends are such a small part of our business.

Andrew: That’s that [??] I see.

Michael: So, you know what I mean, they’re a tiny, tiny portion of the business by this point.

Andrew: OK.

Michael: But, yes. How about this. I think what helped us more was understanding who we were before launching a cleaning business and what our needs are. I knew, like myself for example, part of the reason I went into the business was for six consecutive years I had the same cleaner come once every two weeks. I would leave $60 on my table, she’d come once every weeks, she’d clean, and she’d leave. I knew there was nothing that special about me. I was just a regular guy who was working on Wall Street, and I knew there were millions of people out there like me who did the same exact thing. I wanted to get involved in that part of it, the business part of it.

Andrew: I see. It’s a consistent revenue flow that you can . . .

Michael: Consistent revenue flow, recurring nature of the clients.

Andrew: Yeah.

Michael: I felt that we offered something a little bit different with the insured and bonded element, and ultimately with the processes we put in place with our 50-point checklist and really defining our service.

Andrew: So here’s the other aspect of friends. I went to NYU business school. A lot of my friends went to work on Wall Street. They had great jobs. If, heaven forbid, they left work after hours at like 6:00 p.m., a black car would drive them home a few blocks away. And, of course, it was a nice home because they were working on Wall Street, didn’t have kids, didn’t have wives, didn’t have many expenses, didn’t have husbands, and here I was struggling to basically eat $2 meals because I had a different lifestyle. I had to conserve my cash. You were in a similar situation. Share what that experience was like so that someone who’s listening to us understands they are not alone.

Michael: Sure. I like to say it like this: I moved forward financially for six years and backward for the last three. If you look at core earning years on Wall Street, a lot of times they’re 28 to 35. When all my friends were entering into those big years, I made very, very little money, and I’m now just starting to make a comeback on that. Yeah, I mean, I had to take a step down in lifestyle. My friends, a lot of them live in beautiful one- bedrooms in the West Village. I have a roommate in Murray Hill. My friends go out to dinner Thursday, Friday, and Saturday nights. I don’t, or I didn’t, I should say. So there certainly were cutbacks that I had to make. I haven’t contributed to my retirement account for three years, but now the tides are starting to turn and things are really starting to swing in my favor, fortunately.

Andrew: I remember going out with a bunch of friends who all worked on Wall Street. Every one of them had a different BMW, and they were all driving around in Connecticut with me in one of the cars, showing all the technology in their cars, and I was thinking I’m not here, but I’m going to fight like mad when I’m back in the office so that I can get there. Everything that I was procrastinating on, I’m now going to get done five times faster than I ever did it before.

Michael: Sure.

Andrew: Did that similar situation happen to you?

Michael: No, honestly. I’m not motivated by material things, but I’m definitely motivated by [??] we got into this zone. I said I’m going to lock in and build this company and do whatever it takes. I liked the entrepreneurial life. I liked being my own boss, not having to wear a suit every day, and being the creator of my own destiny. I really just kind of focused in on what I had to do. I blocked out external forces. Look, it’s certainly not hurt, but it certainly is a blow to your ego when you see guys who were in similar income ranges to three or four years ago buying $2 million, $ 3 million, $4 million homes and you’re not.

Andrew: Yeah. All right. Thanks for bearing with me. We lost the connection there for a bit. What I was asking you about was about Yelp. When I went to research you on Yelp, I saw that someone was answering every single question, and it looks like you. Are you doing that yourself, or do you have an assistant go in with your account and make sure that everyone gets a response?

Michael: That’s an excellent question. I answer every review myself.

Andrew: Just give them a response. Here’s what I saw. One person who said, her name is Marisa in February 2013, “This is my first Yelp review, but the service was so horrible that I have to comment on it. Honestly, I haven’t hired another professional cleaning service after my experience with My Clean.”

You respond couple of days later, a few days later. You respond to her and she is then happy. What do you do to make someone who’s that upset happy? How do you fix that?

Michael: I think it’s just kind of listening to the client and understanding their needs and not getting too wrapped up in the emotional response that you get. You say, “OK, I understand that we’re horrible or we did a horrible job. What areas were you unhappy with and how can we make it right for you?”

And that’s our answer. We always ask what can we do better. How can we make it right for you? And usually, it’s something as simple as, “Well, you know, she didn’t clean under this area or we thought this was going to be included and it wasn’t or we thought that was [??].”

But it’s never that there’s a real subjective element to the business. I mean, certainly, with our 50 point checklist, we’ve tried to eliminate the subjective element, but it still is cleaning. And we basically do what the client tells us to do. It’s that easy. You’re unhappy with My Clean? Call us. Tell us how we can make it right, and we’ll make it right for you.

Andrew: How do you create a checklist that will get a cleaning person to clean every different kind of house? They’re all different. They all have different needs. How do you create a checklist to make sure that they all are taken care of right?

Michael: I think if you look at our checklist, you’ll see there are certain basics that are covered in every house. It doesn’t go as specific as “clean the glass on the counter on the back left hand corner.” It basically says, “lift, clean, replace and wipe down the counters.” It’s having a broad enough set of processes and checklists in place, but yet that’s detailed enough to do a great job. Our checklist is right around 50 points for the keep it clean, which is one of the lowest of our three levels of service.

Andrew: So one person was complaining about, and she ended up being very happy, but she was complaining about how a cleaning person walked into her place wearing earphones, talking on the phone laughing and etc. How do you correct someone like that without giving them offense and having them say, “This guy, Michael, doesn’t get me. I hate my boss. I hate my job. He keeps complaining that I’m just on the phone.” How do you do it right?

Michael: You just treat people like people. We really just speak to them. I like to say a lot of times, “Put yourself in the customer’s shoes. The customer’s being kind enough to allow us into his or her home. Let’s not walk into someone’s home speaking on the cell phone or blasting our headphones.”

Honestly, with the My Clean process, again, we put these processes in place and we train our cleaners on and we really want them to execute it on it every time, is that the My Clean shirt and logo should be showing every time before they go into a home. All headphones should be off. They should never be on the phone. And they should really be kind of ready to clean when they walk inside.

With that being said is, it’s a people business, right? And when I talk about processes, we’re into people management business, and you really have to have processes in place to incentivise employees to do the right thing, and we do.

Andrew: One of the things that several people commented on was how easy it was to buy on the website and to schedule and so on. You’ve said it several times here in this interview, but you guys aren’t developers, right? How do you, as a non-developer, who works with an outside company, get a site that works this well?

Michael: Sure. Well, for starters, the old site, not only are we not developers, we don’t have any user interface, user experience, for lack of a better word there. So we really just went based on our intuition and tried to be really detail-oriented in how we spoke to our external developer. So a lot of what we have right now was accommodation of utilizing our instincts, and [laughs] as poorly as I believe the current site is designed due to our lack of experience.

Where at as a company now and where we’re going is, we’re going to be completely relaunching a new site, which has a far more favorable customer experience, customer interfacing thing, and I think our numbers are only going to improve as a result of it.

Andrew: So, the user experience is something that you learn; it’s something that I see people online just spend hours every day feels like, reading blog posts about how to improve it, learning how to get feedback from customers and use that feedback. How did you do it, as someone who’s not focused on it, how’d you get it right?

Michael: Well number one, I should say thank you for saying that we got it right.

Andrew: It’s your own customers. I was hunting in the elk for complaints; I thought it would be so much more interesting if I could mix it up…

Michael: Yeah.

Andrew: By showing some of the complaints here. But they were all happy.

Michael: Well, we’ve got it right for the industry, let’s say that. I think that the technology surrounding the cleaning space was so poor that we could’ve pretty much launched with anything, and it would be right. So I like to say, where we are right now, we’re sort of the best of the worst, for lack of a better way of saying it. Where we’re going is: we’re going to have a really good side. We have, we actually have a gentleman, we brought him full-time, named Brody who’s heading up that effort who’s really going to be in charge of our user interface, user experience. Trying to design, as well as work with our developers to narrow the back ends.

Andrew: You saw that I did an interview with the co-founders of G-Maids?

Michael: I did, yeah.

Andrew: What’d you think of that, by the way, as an insider?

Michael: I say congratulations to them and their business, and I wish them the best luck. You know, they’ve done something similar to us, a different market in the Dallas market. And I wish them the best of luck.

Andrew: So that’s the thing: they’re doing the Dallas market, I interviewed another founder who runs Maids in Black who does the DC market, you’re doing New York…

Michael: Right.

Andrew: Why isn’t there a national company that does it?

Michael: Well, there are national cleaning companies, for starters, there’s Merry Maids and Mollymaids, The Cleaning Authority, and MaidCo, those are kind of four national…

Andrew: Yeah actually that’s right.

Michael: They’re franchise-oriented cleaning services, and I think they’re a little bit different than we are. They’re more suburban-based; they do a lot of their marketing offline. They don’t offer the online booking experience-at least not from what I know; I think you have to call-they’re very happily subscription-based, etc. There is no one national, dominant, urban player right now and that’s where we’re hoping to go, let’s put it that way.

Andrew: I see. And why hasn’t there been one up until now? Why have those other companies stayed away?

Michael: Because scaling operations in human-based businesses is very, very challenging. That’s the main reason I can see. It’s an operational issue. I mean, certainly the market is there.

Andrew: I see. What else do I have? I guess that’s everything. Have I missed anything? Journal you were in. You were going to talk to Bloomberg later today. How’d you guys get to Bloomberg?

Michael: We’re talking to Bloomberg tomorrow, actually.

Andrew: Tomorrow OK.

Michael: Yeah, (?) and Fox. Tune in. It will be a fun experience

Andrew: Congratulations, how did you get that?

Michael: We got that, actually, one of our clients, she wanted a hash, we did a hashtag-free contest on Twitter. And she just so happened to be a Bloomberg analyst, and she had read a little bit about us. She read our article. I don’t know if you read our Bloomberg-our blog post recently, which became number one on Hacker News: how we turned a $20,000 website into a $4 million business.

Andrew: Yeah, that’s how we got you to do this interview, we saw that.

Michael: Oh, that’s right, that’s right, that’s right. And so, yeah she saw that, she thought it was an interesting story and, you know. She liked the idea. It’s a good story, you know?

Andrew: So actually, one last question.

Michael: Sure.

Andrew: Some of it we missed when the connection broke earlier. Which is: the revenues. What’s your current revenue?

Michael: Last month we did right around $350,000 in sales. And I think this month we should be right around the 400 mark. So, we’re growing nicely.

Andrew: OK. And you’re taking a salary?

Michael: I do. I do.

Andrew: Everyone now in the business is taking salary?

Michael: Yes.

Andrew: Congratulations!

Michael: I (?) that in myself at this point and it’s big, big!

Andrew: Congrats on the business and all the success. The company is MyClean. If people want to connect with you and say thank you, what’s a good way for them to do it?

Michael: Sure, you can reach us at 855-MyClean, that’s 855-692-5326. Or if you want to connect with me directly you can reach me at my email, which is: adamscharf@myclean.com.

Andrew: Thank you for doing it, thank you all for being a part of it.

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  • http://tradlands.com/ Jeremy

    31:15 Michael has done his research on his potential competitors and and knows the strengths and weaknesses of his and their companies.
    Very smart. Great interview.

  • Michael David Scharf

    Thank you for the kind words and support Jeremy. It is definitely appreciated! Mike

  • Sandy Blonsky

    Smart Guys…I can say I knew Michael then!

  • http://www.myjobsit.com/ Mike Kawula

    Impressive story and great successes. Made me laugh about cleaning the wrong home as I had the same thing happen a few times with cleaners going into the wrong home (though ended up getting a client once from it)

    Would be interesting to see if the model could be expanded across the country. Works with larger commercial companies who put managers in place, so should work with the right managers in place for residential. Be interesting to see how quality continues, which is key.

    Great story and love the systems.

  • Michael David Scharf

    Thank you for the kind words Mike. We’re planning on expanding into Chicago around October. You nailed it on the head in outlining the challenge ahead of us in developing management processes to scale our operation while maintaining quality. It is going to be tough but we’re in it for the long haul. Once again, appreciate the support. Mike

  • Michael David Scharf

    Thank you Sandy :)

  • Michael David Scharf

    Thanks Eddy and congrats on your business!

    You outlined some important points below.

    1. In an objective semi-skilled business like cleaning we found that having employee’s was the only way to ensure quality. There are other companies who are trying to build scalable platforms by 1099 their workers and I think they are going to run into issues. For higher skilled businesses (like outsourced accounting for example) my assumption is that contracting works fine.

    2. We are constantly managing supply of our cleaners with the demand of the marketplace. We only employ full-time workers.

    3. You are right. A healthy operating margin is crucial for financial health :)

    Thanks again Eddy.

    Mike

  • http://www.myjobsit.com/ Mike Kawula

    Chicago, nice. Great dense market with tons of labor to pull from.

    I know ABM has nailed it in the National Janitorial space, so I’m sure with a similar quality control system in place you guys will also.

    Good Luck!

  • Eddy Hood

    Mike:

    Yeah, we learned the same thing. We started out using contractors and over time realized that you have to have employees to ensure the highest level of quality. I’m glad we made the move on that. It has made a huge difference.

    Take care!

    Eddy

  • Nick

    Mike, have anyone running business development out here in Chicago for you?

    Thanks,
    Former Manhattan Finance Monkey

  • Michael David Scharf

    Hi Nick, we’re actually in the process of looking to hire the person to head up this market. Are you interested or would you know someone who may be interested? If so, can you please send me your resume mscharf@myclean.com ? Thank You, Mike

  • Patrick Curtis

    awesome interview. I love this business that takes something service / people oriented and can use technology to give them an edge. Michael, do you use any CRMs like Salesforce or InfusionSoft to automate your communication / follow-up, etc? I run WallStreetOasis.com and a few months ago we jumped onto InfusionSoft (mostly because it integrated our email marketing with our shopping cart) and it’s already making a big difference.

    Wishing you the best of luck – I just got a new cleaner yesterday (in Boston) after my original one cancelled for the sixth time in a row (not exaggerating) :-)

  • wilsonreps

    great interview, I really like his view of the market he decided to attack as well as his reasons for going for the business model he set up + Andrew drinking out of that Mixergy mug is pretty boss

  • Michael David Scharf

    Thank for the positive comments, much appreciated. Andrew really is the boss with his self-promoting Mixergy mug. Lol.

  • Michael David Scharf

    Thanks Patrick. We had planned to build our own CRM system which integrates well into our current software. We looked into Salesforce and found that it didn’t really meet our needs. I am going to look into InfusionSoft however. It’d be great not to have to re-invent the wheel.

    Congrats on WallStreetOasis. Hopefully we can clean your home in Boston soon :)

    Here is my recent Bloomberg interview:

    http://www.bloomberg.com/video/house-cleaning-means-big-business-myclean-ceo-CS630CrNRNWjAB85GcJ2OQ.html

    Mike

  • http://www.perezfox.com Prescott Perez-Fox

    Just signed up for my first cleaning session for my Manhattan studio. I hope to return with a glowing recommendation.

  • http://mixergy.com Andrew Warner

    That’s great. Let me know how it goes.