Zach Johnson:

Nice. And then you guys roll it back. I mean, is it when you're going, basically October through April, you just cut it back with the same level of campaigns? What happens in the off months?

Chris:

Exactly, right. We cut it back. There's only a finite number of people out there looking to move. It doesn't make sense to overspend on advertising, dilute your CPA. And so for us, yeah, it makes sense to move it back, and then really spend our advertising budget in the months when people are looking to move.

Zach Johnson:

That's cool, man. That's cool. Well I'm excited, let's dive into it today. Let's dive into this Rich Ad segment. Tell us what's working now for you guys.

Chris:

What's working for us is all digital, baby. So we thought about going, doing stuff like brochures and sending them out to people who are buying new homes. We thought about reaching out to real estate agents personally, and trying to make those connections. But at the end of the day, it all comes down to how much time you're going to spend, what the return is going to be. And for us, when we have someone like Dylan run our Facebook ads, and we operate on Google heavily, as well, we can get these ads going and reach extremely large audience very easily with minimal effort on our end, and get a great return on it. So for us, we do everything through Google and Facebook.

Tom:

Yeah. If we can't track it, if we can't measure it, we don't do it. And that's why digital is right up our alley.

Zach Johnson:

That's awesome, man. That's awesome. So Dylan, you got the winning ad rolled out?

Dylan:

Oh, I do. I mean, it's more of a kind of concept, I'd say. We have a lot of ads that have absolutely killed it, but the concept is there. And Chris, I think you're the one who mentioned it, but it's just being very transparent, very upfront out of the gate on labor-only moving. Sitting at that $45 an hour range to where that really unique selling proposition is, "Hey, don't have to pay an arm and a leg to get super high end movers." And that kind of concept there, more or less. So, I mean, it's just being very transparent on the costs. I feel like the big benefit we have in the ads themselves, of course, there are dozens of variations. But it's don't over pay for moving, or don't get overcharged like other moving companies.

Dylan:

So that usually raises some eyebrows like, "Hey, if I could save an extra $120 here or something, I'm going to check this out." So that winning ad concept, it's just being really transparent, showing the costs upfront, and that's been quite a game changer for us. And of course, you got to showcase these college students in the ads, moving these, of course, just because people want to see who's moving that gear, or their home items, more or less. So on that kind of winning ad side, I wouldn't say it's necessarily an ad, but more of a kind of a concept on just being really, really transparent upfront. Save hundreds with Undergrad's specialized labor-only model. So it's just very obvious, very upfront where there is not much hiding in the fine print, I would imagine. Would you all kind of say the same thing?

Chris:

That's exactly right. Our number one value prop as a business itself, is the fact that we only charge $45 per hour, per mover, no fees attached. So we put that front and center on the website, because as a consumer, the big pain points people have is the extremely high cost of moving, as well as the fact that many moving companies add all these crazy fees at the end of your move. So if they drive 30 miles, they're going to add $1.50 a mile. They have to go up and down stairs, they'll charge you $5 to up and down stairs. Whereas, we just say, "You know what? We're not going to do that. $45 an hour, we'll get it done no matter what."

Chris:

And then it's kind of funny you mentioned the showcasing the college students. We got a request, or a message on Facebook from one of our ads that has two bigger guys on it. It was a lady and she said, "Yo, can I get the number of these people?" And we thought it was the company, so we're like, "Yeah, ma'am, our number is blah, blah, blah, blah, blah." Turns out, she was asking for those guys' specific numbers. And so, having those nice young college guys front and center, along with a great price, we think is what's the winning combination for us, just like Dylan said.

Zach Johnson:

Is timing and turn around here a factor? So I just went through a move last weekend, maybe the weekend before. And yeah, we went through the whole sales process, right? Buy the truck, they try to upscale you on, "Do you need movers?" And we've had some bad experience with movers in the past, so we're like, "No, don't mess with our stuff. We'll get some of our own buddies to handle it." But then, moving day comes, right? And you're like, "Oh gosh, this is a bitch." And so then we're, I don't know, maybe 60% of the way through the move, and we're like, "We got to go hire some movers." So we started Googling same day movers, next day movers. Are people just more prepared in moving than I am, or am I just completely unorganized in my moving?

Tom:

No, the typical person looking to move, typical customer is usually about 7-14 days out. So the buy cycles really quick, but it's also not that long term. You're booking the customer, you're following up, and then they're immediately on your schedule. You'll meet them next week.

Zach Johnson:

And what's the average number of hours? How long does it take, on average, somebody to move?

Tom:

Typically, it's about 2-4 hours. It really depends on what they're doing.

Zach Johnson:

What? Oh my gosh.

Tom:

Yeah. I know, right? Sometimes we're loading up their house into a truck, load only's range between 2-3 hours. Unloads, usually a little bit quicker, because you don't have to play Tetris in the truck and sit there and figure out how to pack it.

Zach Johnson:

Wow.

Tom:

So you can unload a truck in about an hour, hour and a half, two hours. So all in all, depends on the size of the house, but we like to speed them up because we've got the manpower. We've got a team of 200 guys right now spread across five different locations, so if you say you need movers, we've definitely got the movers. And we like to keep-

Zach Johnson:

You're saying 2-3 hours of how many dudes, right? How many guys?

Tom:

Exactly. So it really depends on the size of the house. If it's a pretty large move, we'll send six guys out there sometimes. But you've got to think, these guys get really tired. So if you've got guys out there, 6-8 hours all day long, they're going to be upset. They're not going to be happy to be out there moving all day long in the heat of South Carolina. So we like to keep the timeline down, it improves quality. The customer stays happy and the move gets done just considerably faster.

Zach Johnson:

I mean, so [inaudible 00:09:28] Number one, our move was probably over 50 man hours, because we have just so much shit. So there was a lot of people involved. I think my sister, though, did moving the absolute best. I mean, she literally called up 35 of her friends, everyone rolled up right at 11:00, each person picked up two things, and the move was done in 15 minutes.

Tom:

Yep.

Zach Johnson:

That was the coolest thing I've ever seen. I don't even have that many friends.

Chris:

I was going to say, your sister is pretty popular. I don't have 35 friends.

Zach Johnson:

I know. [crosstalk 00:10:07].

Dylan:

So I mean, something really interesting, I feel like that kind of stems from this on how fast people are booking this is, I mean on Facebook, of course, we can see everything on a one day click, seven day click, 28 day click basis, to where, even on a one day click window, we're putting a dollar and making $6-$7 on that very first day. So I mean, people are deciding very quick, whether they're booking out a week from now, they're seeing the ad and really converting immediately. So the direct response aspect to it is pretty, pretty freaking killer, I would say.

Zach Johnson:

Would you say, like if it's $45... Sorry. Would you say if it's $45 an hour and there are four hours, are you talking about a customer value of $180, or are you talking about four hours with several guys and they're throwing down $500 or $1,000 on moving?

Chris:

It varies, but for us, it's a little different. So the reason our moves are shorter is simply the way our business operates. So when you have people who are renting their own truck and moving themselves, you're typically not going to get the people with the $1 million houses. And we're very well aware of that, they want a white glove service. Our customers are your more standard people who have a, let's call it 1,000-3,000 square foot house. And that's why it's so much faster. Also, we don't do any packing, we don't do any unpacking. It's just moving your boxes and your furniture around. But as far as the value goes, our average customer value is right around $300, and our average room is, like Thomas said, 2-4 hours. Three hours with a little under three guys.

Zach Johnson:

Yeah, that's cool. Very cool, I love it. And talk to me about some of the advertising strategies that you guys are deploying locally. Are you targeting U-Haul locations, you targeting Home Depot? You just targeting a certain demographic? Who do you guys like to get in front of?

Chris:

Oh, that's good. Demographics is a big one for us, so 40% of the movers for us are between the ages of 25-44. So there's an easy one right there. The second one is, we actually had a guy recently call us and he's like, "Yeah, I just bought a new home, and as soon as I went online and said, 'I bought a new home,' I started immediately getting spammed by your Facebook ads," which means Dylan's killing it. And so, there's another demographic. Someone buying a home, someone renting a truck, and exactly, we've got it narrowed down to the types of customers we're looking for, and all we have to do is get our ads right in front of them.

Zach Johnson:

Nice. That's cool, man. I love it. Should we talk about... Go ahead.

Chris:

I was going to say, the other interesting aspect that is different in moving than a lot of industries, so let's just compare it to, say, online retail or something like Herschel Backpacks. So someone can look up a Herschel Backpack on a Monday, and then three months later, get an ad from them and still be interested in a Herschel Backpack. But for us, like you were saying, the buying cycle for moving is typically 7-14 days, someone's making a decision, even as early as one or two days. And so we know that we need to get in front of those customers as many times as we can in that short timeline. And then once they hit that timeline, we drop off. And so Dylan's got his Facebook ads set up so that once they get past that 28 day mark, we won't send them any more ads because we know they're going to be a dead lead.

Zach Johnson:

Dead, dead. Gotcha, gotcha. So your frequency is 30 plus on the re-marketing, there.

Chris:

Yeah.

Dylan:

27.6, to be exact.

Zach Johnson:

Oh.

Chris:

Repeating, of course.

Dylan:

It's less than four, so it's not bad at all.

Tom:

And it's super geo-specific. So we only operate... We'd like to target within the 10-20 mile range of each city. So it's not like we're some, say Herschel Backpack. We're not some national retailer where we're advertising to the entire US and it's very broad. We can narrow down exactly where we're looking for these people. It helps to kind of hone it in.

Zach Johnson:

Yeah, I love it. I love it. All right, let's dive into the next segment.

Dylan:

Gosh, y'all, buckle up, buckle up. All right, y'all. Check y'all's email, as well. I just sent off the very poor ad. Now this is a poor ad. Honestly, I think it would have some killer thumb stopping power, but I want to hear from y'all first. Go ahead and open this bad boy, enlarge that, and let's get those first reactions. What's going through your mind?

Chris:

Pulling it up right now.

Tom:

Pulling it up.

Dylan:

We did some contacts, we got DripDrop. It's a dehydration relief, but it's not the copy that's very poor, but more or less the image being used in the background. Very, very-

Chris:

Oh my God. Looks like you took a shot of Tequila.

Dylan:

Wow, man. Yeah, that's a very constipated look. I think it would actually work somewhat decent in an ad, but I could just imagine all the negative feedback the comments would be, to where I don't even think I'd want to run this in an ad if it was my brand. But hey.

Zach Johnson:

It looks like the guy's just disgusted with how the product actually tastes.

Dylan:

Yep.

Zach Johnson:

I don't-

Chris:

Exactly.

Zach Johnson:

He's looking at the product. I mean, this is a poor ad, for sure. Good find.

Tom:

He's directly looking at how disgusting that product is. It looks like someone just went into paint, and just selected all the text up top, and then kind of tried to color it in. Because they left out the first quotation mark and it's white, so I don't know.

Zach Johnson:

And what's what the dashes? What's with the hyphens?

Tom:

I don't know.

Zach Johnson:

Forgetting, dash two, dash refill, dash the, dash water, dash bottle, dash dehydration, question mark. And then just a random end quote with no starting quote.

Chris:

There is a starting quote, you just can't see it because it's white. They forgot to color it blue.

Zach Johnson:

Oh gosh, this is so funny.

Chris:

Yeah.

Dylan:

I'm sold. I really think they did go to Clip Art, type in, "Guy working out, exhausted. And, 'Hey, let's just go ahead and select the first one, dude.'" All right. Well hey, that's a fun little segment of our Rich Ad, Poor Ad segment.

Tom:

15% off, is that enough to get you to try that?

Dylan:

I mean hey, deals for days. I'm always a happy camper.

Zach Johnson:

That's amazing, that's amazing. Oh my gosh. All right, let's dive into this other piece. One thing that I'd love for you guys to share, we're all about helping marketers understand more of the financial principles of capitalizing their business, and scaling up. So with you guys being as early stage as you are, and the stage of business that you're at, what advice would you guys have for funding your ad spend? How did you go about ramping up to $20,000? Did you guys bootstrap it all? Did you put cash in, just reinvest the revenues? Did you take on investors? How did you guys get up to $20,000 spend?

Chris:

In a couple different ways. Number one, we have bootstrapped the entire company. We've never taken an investment to get where we’re at. We've tripled revenue after the first year, we're going to almost triple revenue again this year. That's all done completely by reinvesting our profits. That's one of the biggest pieces of advice we'd give someone, is go as absolute long as you can without taking on investment. It's just going to dilute your equity if you take it on earlier. Secondly, as far as your ad spend, you want to find ways to defer the payment of the money you're going to spend on ads. So if you know you've got a killer ad that's going to get a return, get something like a credit card with a 0% APR for a certain amount of time, do something where you can defer payment, whether it's through ad card or ad spend, et cetera. And then just get that money to work for you, knowing that you're going to get your return on it and be able to pay it back at a later date. Easiest way to do it.

Zach Johnson:

Yeah, what card did you guys use early on?

Chris:

We have one with Chase, the Chase Ink card. It's a 0% APR, 12 months. We've, got a great credit limit on it and it's basically funded us all the way up to where we're at right now. And it's done wonders for us. Also, Chase as a whole is just a great bank. Shout out, Chase.

Zach Johnson:

Okay, insert Chase sponsorship here.

Tom:

Exactly, come on, Chase.

Zach Johnson:

Let's get some of that bank money out here. That sounds awesome. Well, cool. Congrats on bootstrapping the business thus far, and being smart in terms of using your own personal credit score to get a decent line and ramp up thus far. So you guys are in the process of, you've seen some pretty killer traction. You're also looking to raise some money right now, is that right?

Tom:

Yep, exactly right. Yeah, about $250,000. So it's not a lot, but that's what we've dialed in on the team that we need to get us to the next level.

Zach Johnson:

So what's the next level for you guys, and why raising $250,000 right now?

Tom:

That's going to be for the technology, not necessarily build out, because we've already built out about 75%-80% of it. That's going to be to improve the technology stack that we have, building out the team. We'll probably bring on about nine new employees to take on all the business that Dylan has been pumping us over the past couple of months. We're going to be launching into 4 new markets, in addition to the five markets we have now. So we just really need a solid infrastructure to take on all of that. It's a little bit different than Chris and I doing as much as we can right now with just the other couple of hands on deck helping us out. But yeah, that's what's really going to want to build it out, is that the team that we're going to create with it.

Zach Johnson:

And what's it cost to open up a new market, you think?

Tom:

It's almost negligible. Since we have such low overhead, we don't own any trucks, we don't own any office space. Getting into a new market is literally just putting out ad spend in that specific market, and building up a solid mover base. So it can be as little as $0, if you want it to be. All you have to do is find a few guys up there that are willing to work, you get them on the platform and then it just snowballs.

Zach Johnson:

Yeah. And what's the ask on the $250,000? What's the range of equity that you guys are willing to give up for the $250,000?

Tom:

Yeah, that's a good question. On the $250,000, we're looking to give up between 5%-15%. We don't want to give up any more than 15% on our first round. We'd love to keep it below 10%, so somewhere around that valuation.

Zach Johnson:

Yeah. And how has the response been so far? How long have you guys been raising, and what's been some of the feedback? I know you guys mentioned you've been chatting with a few investors so far.

Chris:

Yeah, we started about two weeks ago really looking at it. We've lined up a few meetings with investors. We just got out of one that ran a little late to this, that's why. We just got out of a pretty lengthy meeting. We've got a next round meeting with a guy who seemed extremely interested. So it's nice to know that the interest is there. It's just, do the turns line up?

Zach Johnson:

Yeah, what's the reason for the interest? What do you think is catching their attention? Is it more your market, or the early traction, or you're dominating Facebook ads? What's really the standout in their response?

Chris:

It's a couple of different things. The first one being that we do have traction. So as an investor, it's significantly less risky to invest in the company that's proven the model works. Which has basically been our plan for the last two years, is take a business model, prove it can scale in one location, and then prove you can scale to multiple locations. Analysis, us going to an investor, saying, "Hey, we've sort of got this thing figured out. Now we just need money to grow faster." And so that's what's been working. And then from a business model standpoint, we think that the fact that we are so asset light, don't have a lot of inventory. We're able to scale extremely quickly into an extremely large market. The moving market is an $18 billion market. And so those two, that combination of things is what we think is piquing investor's interest.

Zach Johnson:

Nice. Nice, cool. And how can those that are listening get in touch with you guys, if they're interested in investing?

Tom:

Shoot us an email, you can send me over an email. Tom, T-O-M @undergrads, with an S, .com. I'm also on LinkedIn, Chris and I are both very active on LinkedIn. Or you shoot us a contact message on our website, undergrads.com.

Zach Johnson:

Nice, nice. And if somebody wanted to give you guys, let's say, the $250,000, but they wanted to take maybe 5%-15% of the revenue and do more of a revenue share style model, are you guys open to models like that, or are you looking for straight equity?

Chris:

We're open to whatever. We'd like to go the equity route, but if someone came to us with a debt finance that made sense, we'd be more than happy to discuss that, as well.

Zach Johnson:

Nice.

Tom:

Yeah, the terms are on the table. We're open to whatever makes the most sense for us and the investor. So send it our way.

Zach Johnson:

Very cool. Well, there you have it. I love it. Congrats on your guys' early traction and success. I love the fact that the maestro over here is rocking the ads, and you guys have been able to scale up to $20,000 a month here, over the summer months. And congrats on the early traction with investors, raising $250,000. Let's circle back in a couple of months and see how that goes. Thanks for being on the show.

Chris:

Absolutely.

Tom:

We appreciate it.

Chris:

Thanks guys.

Zach Johnson:

Thank you.