Building a $1,000,000 Business for a Stranger in 69 Minutes

SUMMARY

Alex Hormozi coaches Philip, owner of a struggling trash collection business, on refocusing on scatter customers via door-to-door sales and a restructured offer to achieve profitability and cash flow positivity.

STATEMENTS

Philip owns Garvey Disposal Services, providing residential trash, recycling, and yard waste collection with 642,000 in revenue but -151,000 in net profit.
The business has been operating for under two years, serving 2500 customers with negative 23% net margins due to underutilized assets and inefficient routes.
Philip left a high-paying Amazon software engineering job to start this venture, working 16-hour days for two years with negative results.
He has a wife, one child, and another baby due in six weeks, making profitability crucial for family support.
The business targets two customer types: scatter (individual homes) and HOAs (homeowners associations), split 50/50 in revenue.
Scatter customers receive weekly collection for $29.67 monthly, billed quarterly at $89 with three months free as an intro offer.
HOA customers have once- or twice-weekly trash collection on three- or five-year contracts, priced variably based on home type and units.
About 70% of the service area is HOA-dominated, with scatter customers representing the remaining market share.
Customer acquisition channels include door-to-door (50% of recent leads), Meta ads ($600/month), cold outreach, and referrals.
Door-to-door efforts yield a 26% close rate from 300 weekly knocks, with a new salesperson closing five to seven deals daily at $50 commission each.
Total monthly leads average 217, closing 72 at a 33% rate, including organic from visible bins.
HOA leads average two per month, closing half, often from outbound efforts to property managers.
Gross margin is 8% due to $100,000 in unexpected repairs last year; blended CAC is $67 with LTV of $1,300 (gross margin).
Monthly churn is 0.4%, with low overall churn but potential increases from price hikes.
HOA segment: $300,000 revenue, CAC $1,200, LTV $23,000, 18:1 LTV/CAC, 23% gross margins, 13 customers.
Scatter segment: $300,000 revenue, CAC $51, LTV $4,000, 21:1 LTV/CAC, 26-40% gross margins.
Meta ads: $7,500 spend, $2.12 CPC, 3,500 clicks, 153 sales, CAC $63, LTV $4,000, 20:1 LTV/CAC.
Cold outreach yields low CPL due to public data but undervalues time; one effort cost $174 for $12,000 LTV from nine HOAs.
The business needs cash in the first 30 days exceeding COGS ($42 per customer for three pickups) and CAC ($67) to solve cash flow issues.
Alex recommends focusing on one avatar (scatter) and one channel (door-to-door) to simplify and scale to $1M without spreading thin.
HOA acquisition risks commoditization via low-bid auctions; scatter allows aggressive pricing and higher margins.
Restructured offer: A/B testing 12-month prepay at $360 (free bin) vs. 3-month at $189 (includes $99 bin fee), both with three months free.
New offer collects $189-$360 upfront, covering $42 COGS, $50 commission, and $116 bin, achieving cash flow positivity.
Sales training involves modeling, role-playing openers, scripting four questions, and drilling objections for 2-minute closes.
Hire commission-only salespeople via Indeed/Craigslist ads targeting hungry candidates; screen for work ethic, not polish.
Scale to 3,000 customers for profitability; current capacity handles 3,500 before needing another truck.
Focus solely on door-to-door sales team of 10 could yield 1,500 monthly customers, overshooting goals 8x.

IDEAS

Capital-intensive businesses like trash collection thrive on asset utilization, turning underused trucks into profit centers through efficient routing.
Leaving a stable tech job for entrepreneurship mirrors a "Rocky" underdog story, where desperation fuels innovation but risks family stability.
Splitting focus between two customer avatars dilutes efforts; concentrating on one unlocks scalable acquisition.
Door-to-door sales in local services can achieve 26% close rates because proximity builds trust faster than digital channels.
Free intro offers like three months free tip switches when competitors match prices but can't replicate the incentive.
Visible branding elements, like colored bins without QR codes as an upsell, turn customer assets into passive marketing tools.
Prepay commitments (6-12 months) convert variable costs like bins into upfront cash, bridging fulfillment gaps in quarterly billing.
Commission-only hiring lowers risk but demands hunger screening, as necessity drives performance in sales roles.
HOA markets commoditize services into price wars, while scatter allows differentiation through speed and convenience.
A simple A/B offer structure—yearly prepay for free bin vs. quarterly with fee—boosts average cash per sale by 80%.
Training via real-time role-plays and shadowing accelerates sales skill acquisition beyond traditional observation.
Organic leads from branded bins create network effects, where visibility in neighborhoods drives inbound inquiries.
Undervaluing time in cold outreach skews metrics; assigning opportunity costs reveals true scalability limits.
Scaling door-to-door with 10 reps at five deals daily generates 1,500 customers monthly, leveraging low CAC without ads.
Businesses reach critical mass at 3,000 customers, where fixed costs dilute and margins expand naturally.
Processing fees disguised as convenience charges can be waived for dual payments, ensuring 100% collection without friction.
Neon-colored bins break category norms, sparking curiosity and memorability in a bland industry.
Sales scripts limited to four questions suit quick, need-based services, reducing cognitive load for reps.
Hiring "crazies" filters are unnecessary; group interviews and spot offers prioritize volume over perfection in commission roles.
Circuitous growth paths with multiple channels create noise; one focused lever solves cash flow in 90 days.

INSIGHTS

Simplifying to one customer type and acquisition method eliminates dilution, allowing rapid scaling in resource-constrained startups.
Upfront cash collection exceeding immediate costs (COGS + CAC) creates debt-free growth, turning liabilities like bins into assets.
Hunger in salespeople, driven by personal stakes like family needs, outperforms polished resumes in high-effort roles.
Visible service artifacts, like branded bins, generate free marketing through social proof in tight-knit communities.
A/B offers anchor high-commitment options, pulling average transaction values up even if uptake is low (20%).
Door-to-door's low barrier (12 doors per sale) scales exponentially with team multiplication, bypassing ad saturation.
Commoditized markets like HOAs force efficiency battles; non-commoditized segments enable premium pricing strategies.
Training loops—model, demonstrate, duplicate—compress learning curves, enabling solo owners to build sales armies quickly.
Quarterly billing gaps expose cash flow risks; prepays align revenue with fulfillment, stabilizing operations.
Metrics like LTV/CAC ratios (20:1) signal untapped ad scaling potential, limited only by perceived market size.
Family pressures amplify entrepreneurial resolve, converting potential failure into epic turnaround narratives.
Organic churn at 0.4% underscores service stickiness; price increases must balance retention with margin gains.
Commission structures tied to upfront collections incentivize reps without owner capital outlay.
Critical mass thresholds (e.g., 3,000 customers) mark inflection points where economies of scale dominate.
Blending intro incentives with commitment tiers maintains perceived value while engineering profitability.

QUOTES

"I'm definitely in the thick of my rocky cut scene right now where um I left my highpaying job at Amazon as a software engineer to start this."
"By the time you leave, you'll feel absolutely clear on what you need to do in order to be profitable."
"You knock on 12 doors, you get a sale."
"If you had 500 HOAs which represent 70% of the market is not a cold email play."
"The business that I think you're really in is the efficiency business."
"If only this were true, then what stops me from doing that? Not a ton."
"We have to get $42 no matter what. Period. Because that's what it costs."
"You get the free bin when you commit for the year. Cuz listen, it costs me money to do this, but if you commit to us, we'll commit to you."
"The first 5 seconds of them opening the door is like that's the only shot you really have."
"A contract without a payment clause means nothing."
"If you're tired of things like increasing bills every year, crazy prices, unreliable pickups, then we might be the ones for you."
"Why married men with kids make more money than guys who are single without being married and don't have kids? Because they have to."
"The outcome of all of this is that your cash flow positive and babies have food."
"I think I was doing way too much. Of course you were doing way too much."
"You either get an epic outcome or an epic story. Both mean you win."

HABITS

Knocking on 300 doors weekly personally to generate leads and close deals at 26% rate.
Working 16 hours a day, seven days a week to sustain the business despite losses.
Tracking contract end dates for HOAs in an Excel spreadsheet for timely bidding.
Hiring and shadowing new salespeople door-to-door to demonstrate sales techniques.
Sending handwritten letters and cold emails to HOA managers for outbound leads.
Offering referrals with one free month per successful neighbor signup.
Following up on invoices to ensure 100% payment from contract signers.
Role-playing sales scripts between doors to reinforce training for reps.
Screening candidates via group calls for normalcy before in-person offers.
Maintaining low churn through reliable weekly pickups and customer service.

FACTS

Trash collection business requires $14 per pickup, totaling $42 for three monthly pickups per customer.
Bins cost $116 each, including freight, with a 10-year warranty.
Service area has 70% HOA coverage, leaving 30% for scatter customers.
Meta ads in a small local area yield $2.12 cost per click and $63 CAC.
One cold outreach effort cost $174 to acquire nine HOAs worth $12,000 LTV.
Current portfolio serves 2,500 customers: 1,000 scatter and 13 HOAs (representing 1,500 homes).
Unexpected repairs totaled $100,000 last year across trucks.
Blended lifetime value is $1,300 in gross margin per customer at 0.4% monthly churn.
Door open rate in door-to-door is around 30%, leading to one sale per 12 knocks.
HOA contracts last three to five years, with low bids often winning renewals.
Scatter revenue equals HOA at $300,000 each, despite volume differences.
Capacity reaches 3,500 customers before needing a second truck.
Profitability threshold hits at 3,000 customers due to fixed cost dilution.
Competitors charge up to $180 quarterly for similar scatter services.

REFERENCES

Rocky movie (mentioned as "rocky cut scene" for entrepreneurial struggle).
Amazon (Philip's former employer as software engineer).
Vanderbilt University (Alex's graduation reference in intro, but not core).
UseAlan software (Alex's past company).
Gym Launch (Alex's gym business).
Prestige Labs (Alex's supplement company).
American Pacific Group (buyer of Gym Launch at $46.2M).
Acquisition.com (Alex's family office).
Skool.com (Alex's co-ownership for online business tools).
Indeed and Craigslist (for hiring salespeople).
Stripe (payment processor).
Mastercard and Visa (mentioned for processing fees).
QR codes (tool for bin marketing).
Meta ads (Facebook advertising platform).
Excel spreadsheet (for HOA contract tracking).
Door hangers (marketing tool with 1.2% response).

HOW TO APPLY

Select scatter customers as the primary avatar to avoid HOA commoditization and enable aggressive pricing.
Restructure the offer into A/B tiers: $360 for 12 months with free bin, or $189 for 3 months including $99 bin fee.
Maintain three months free intro across both offers to incentivize switches from competitors.
Shift billing to upfront prepay for commitments, ensuring cash exceeds $208 (COGS + CAC + bin) per sale.
Focus acquisition solely on door-to-door, cutting Meta ads and fragmented channels to concentrate efforts.
Hire five commission-only salespeople via Indeed/Craigslist ads targeting hungry, work-ethic-driven candidates.
Screen applicants through group calls for 2-minute intros, then in-person meetings with spot job offers.
Train reps via document-demonstrate-duplicate: script four questions, role-play openers, shadow on doors.
Drill sales mechanics intensely, including 5-second openers and objection handling for 2-minute closes.
Collect payment details at the door if legally permissible, or invoice immediately post-contract to minimize drop-off.
Add QR codes or neon coloring to bins for passive lead generation via neighborhood visibility.
Monitor progress toward 3,000 customers, preparing for a second truck at 3,500 capacity.
Duplicate top performers by pairing them with new hires, offering $60 commission for trainers.

ONE-SENTENCE TAKEAWAY

Focus on one avatar and channel with a cash-flow-positive offer to scale a struggling service business debt-free.

RECOMMENDATIONS

Prioritize scatter homes over HOAs to sidestep low-bid auctions and leverage pricing flexibility.
Implement A/B prepay offers to collect $189-$360 upfront, covering all immediate costs instantly.
Hire commission-only door-to-door reps aggressively, aiming for 10 within weeks via low-bar screening.
Cut all non-door-to-door channels like Meta ads to eliminate distraction and focus resources.
Train sales team through relentless role-playing and shadowing for rapid proficiency in quick closes.
Brand bins with QR codes or neon colors to turn them into free, visible marketing assets.
Secure upfront payments via contracts with payment clauses to avoid invoice follow-up friction.
Target hungry candidates—young go-getters or family providers—for unbeatable work ethic.
Anchor offers at higher commitments (12 months) to boost average cash per sale by 40%.
Prepare infrastructure for 3,000-customer breakeven by budgeting for a second truck early.
Use group interviews and spot offers to scale hiring without overcomplicating the process.
Document sales scripts rigorously, limiting to four questions for efficiency in 2-minute pitches.
Nurture referrals more actively with escalating rewards like annual free service after 10.
Consult legal on door collections and processing fees to streamline transactions legally.
Track LTV/CAC weekly to validate scaling, adjusting offers if margins dip below 20:1.
Shadow top performers exclusively during training to duplicate success without solo effort waste.
Wave minor fees (e.g., setup) strategically to close deals without eroding core economics.
Hit critical mass fast by committing to 300 daily doors collectively from the team.

MEMO

Philip, a former Amazon software engineer, launched Garvey Disposal Services two years ago, betting on the steady demand of residential trash collection. With a wife, young child, and another baby imminent, he poured 16-hour days into the venture, only to face $151,000 losses on $642,000 revenue. Negative 23% margins stemmed from underutilized trucks, inefficient routes, and $100,000 in repairs. Serving 2,500 customers—split between individual scatter homes and bundled HOAs—Philip juggled fragmented acquisition: door-to-door knocks, Meta ads, cold emails, and referrals. Yet cash flow strangled growth, as quarterly billing lagged behind fulfillment costs.

Enter Alex Hormozi, the serial entrepreneur behind $200 million annual portfolio companies, who zeroed in on the chaos. "You're spread thin with two avatars and five channels," he diagnosed, urging a ruthless focus: scatter customers via door-to-door only. HOAs, dominating 70% of the market, invited commoditized bidding wars; scatter offered pricing power and weekly collections that maximized truck throughput. Philip's 26% door close rate—one sale per 12 knocks—promised scalability without ad saturation. The pivot? Ditch distractions, build a commission-only sales army.

The breakthrough was the offer overhaul, engineering upfront cash to eclipse $208 per customer (covering $42 COGS, $67 CAC, $116 bins, $50 commissions). Anchor with a 12-month prepay at $360 for a free bin, or core 3-month at $189 including $99 bin fee—both granting three free months to seal switches. "Commit to us, we'll commit to you," Alex framed, blending incentives with reciprocity. Blended, this nets $270 average per door, turning liabilities into liquidity. No debt, no bins financed endlessly; just debt-free velocity.

Sales training became surgical: document a four-question script, demonstrate via shadowing, duplicate through role-plays. Drill openers for those pivotal five seconds, handle objections like "talk to spouse," and close in two minutes. Philip's new rep, already hitting seven daily, proved the model; multiply to 10 reps at five each yields 1,500 monthly customers, rocketing past 3,000 breakeven. Hire via Indeed ads pitching six figures to the hungry—young hustlers or family men—screening groups for sanity, offering spots on-site.

Infrastructure hummed: 0.4% churn signaled stickiness, capacity to 3,500 before a second truck. Branded gray bins, soon neon or QR-stuck, sparked organic leads as neighbors spied switches. Referrals? Escalate to annual free after 10. Alex's mantra: "One thing true solves it all." Philip emerged clear, noise silenced—cash flow positive, family secured.

This blueprint transcends trash: any service business choking on cash learns to prune avatars, forge upfront economics, and clone sales hunger. Hormozi's touch? Epic stories from epic struggles, where focus forges fortunes.