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Anthony Codispoti: Welcome to another edition of the inspired stories podcast where leaders share their experiences so we can learn from their successes and be inspired by how they've overcome adversity. My name is Anthony Codispoti and today's guest is David Grossman. He is the chief executive officer at Renew systems, a company founded in 1991 that specializes in deep cleaning and restoration services. for the hospitality industry. They help major hotels worldwide maintain their carpets, drapes, upholstery, and more, and are proud partners of brands like Marriott, Hilton, Hyatt, and many others. Under David's direction, Renew Systems has expanded to over 30 offices across North America and beyond, consistently growing its range of specialized cleaning solutions. David led the initiative to revamp the company's website, ensuring customers can easily learn about Renew's offerings. He has also shared expert insights through public speaking and thought leadership articles, becoming a trusted voice in the cleaning and maintenance sector. With a PhD and MA from Harvard University and an SCB from Brown University, David has been guiding Renew systems since 2010, driving its international growth and reputation for quality. Now, before we get into all that good stuff, today's episode is brought to you by my company, AddBack Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line. One recent client was able to add over $900 per employee per year in extra cashflow by implementing one of our innovative programs. Now, results vary for each company and some organizations may not be eligible. To find out if your company qualifies, contact us today at AddBackBenefits.com. All right, back to our guest today, President and CEO of Renew Systems, David Grossman. Thanks for making the time to share your story today.
David Grossman: It's great to be here, Anthony. I appreciate the opportunity.
Anthony Codispoti: So before RenewSystems, David, your playground was the world of finance. Tell us about the kind of work that you were doing.
David Grossman: Yeah, I was doing a few things, but primarily what's generally known as private equity. So we would invest on behalf of big pots of money. We would invest in other companies and take a board seat and try to help them grow. So I did that for a number of years. And prior to that, I actually was in management consulting. So I had the experience of helping guide, give advice to companies. And then on the investing side, so those are the two primary skill sets that I have.
Anthony Codispoti: And what was the biggest challenge that you learned from your time in finance? And how did that sort of translate into some of your leadership styles today?
David Grossman: Yeah, so certainly in the finance area, we'd look heavily at numbers, right? We'd kind of come up with projections of companies that we'd evaluate and look at their history and then come up with projections. And that's all well and good. In theory, does it always come out in practice? Not necessarily, but some of the things that I saw then that I'd liked or I'd rather say were issues with companies is that some of the companies we looked at were technology companies. So they would be very favorable at a time, but they could go obsolete very quickly. Probably that life cycle sped up even since the time I left finance. And then other companies just had to take every dollar that they spent and put back into capital expenditures or had high overhead. So even if you had some nice gross margins, you often were not able to really grow the business profitably very well.
Anthony Codispoti: And so you were able to see kind of a range of different businesses and different sort of outcomes, know, tech that was highly favorable. You could make a lot of money with a handful of employees and things at the other end of the spectrum. And I think sort of the, the perception is that private equity, very lucrative, very profitable career for someone to be in. Help us understand why you got away from the world of finance and decided to purchase the Renew systems. How did that come?
David Grossman: You're absolutely right. It can be very lucrative on the private equity side. I worked, I did it for several big banks and I was fairly early in my career and three times has happened to me. We would just get going and the group was shut down. I was laid off three times and as a young... I recently married an individual whose wife was pregnant the first time and we had young kids the second and third time. It was very difficult to have to devastate, lose income and try to find something else. And then when I did start over again. So that was a very eye opening for me and set me down this path of, yes, it's risky to go out on your own and try to do something, but It's also risky sometimes to be part of a big organization where you could be doing great and suddenly things change for reasons well beyond your control. So that set me down the path. I mentioned earlier, I had the consulting background kind of helping run or I could say more advise companies. And in college, I ran a small business and just had a lot of fun doing that. So that was always in the back of my mind. If I could ever get back into that. So the stars were aligned after the third time. my three strikes, you're out. Well, that was definitely what hit me. So I started looking for a business. I was very careful what I looked for. I had a pretty strict criteria. So it took me a few years to find something, but ultimately I found this company, which is now called Renew Systems, which seemed to be a good business, just had gotten sleepy. And it met a lot of the criteria that I was looking for. And ultimately it was able to to purchase it going in big on my own, really putting a significant amount of my net worth as well as taking out a loan. So I was in pretty deep, which helped motivate me to try to help it succeed once I purchased it.
Anthony Codispoti: So let's go back and kind of unpack a few things here. You mentioned that you started a small business in college and had a lot of fun with it. What was that business?
David Grossman: That was actually the university newspaper. We were a separate company that we had to sell advertisements. That was the days where you could actually sell advertisements in newspapers and sell subscriptions, but we didn't receive any outside money. We just had to make it on our own. So I just had a lot of fun doing that and building a team and seeing us grow was just thrilling.
Anthony Codispoti: Was this at Harvard, at Brown? Where was this? At Brown. OK. And so this was the student newspaper that didn't exist before? Or just like an alternative? OK.
David Grossman: This is at Brown, yes. It did exist. It did exist. And I joined it early and took over early and did it for an extended period of time while I was there and then turned it over after I left. just, you know, we grew nicely and just part of the real reason we did it was the people that we brought in and motivated them. It just had a lot of fun doing that. And some of these lessons were things that I always had in the back of my mind, which
Anthony Codispoti: Mm.
David Grossman: I've been able to deploy on a more meaningful basis with Renew.
Anthony Codispoti: Like what? How are you bringing people in? How are you finding the right folks? How are you motivating them?
David Grossman: Yeah, the one of the things I learned between that and then frankly at when I was later as a consultant and an investor is that we would really to try to have a small team, a small team of high quality people that would be compensated well, although compensation hopefully is not the only criteria that they look at. where they're really empowered. And that's what we did is we, and then that's been a key philosophy that we've taken to renew where Kenway, I've got a small team that really is very outwardly focused to our customers. And in our case, also our franchisees, we spend very little time internally meeting. Everyone's empowered to talk externally, in fact, encouraged and has the ability to interact with all. all of our external shareholders, stakeholders, again, customers, employees and partners. And I find that sometimes it is as you grow, you get too inwardly focused. And that's really been just a bias in the back of my mind to really try to keep the small business flair even as we've grown renew. And I think a lot of that is just finding good quality employees, treating them well. And when you treat them well, you know your customers are going to be in good hands.
Anthony Codispoti: So now I want to dive a little bit more into the three layoffs. You touched on it a little bit. It was really hard. Your wife was pregnant. You had kids, know, little kids each time that had happened. But I want to kind of pull back the curtain a little bit more and like really go into that because a lot of people listening have been through this. And if you haven't, like if you're without work for a period of time, it's really stressful. If you're without work and you've got a family like, you know, just kind of pile on the layers of stress there. How were you coping and getting through these times?
David Grossman: Yeah, it wasn't easy. Fortunately, each time got a little bit easier, but it was it was difficult. And you know, like you stop and what is you're running hard and suddenly you're let go. I was literally about to head to the airport for for a board meeting the first time it happened. And first, you don't recognize it's happening. then once you do, realize, oh, boy, it doesn't help to mope. So let's just focus. on the future and just put my head down and started networking as much as I could. I was fortunate to get a few couple little consulting projects here and there. But I think a lot of it is just the attitude that you have. then that just forced me to double down on my efforts to try to find something. I think it also teaches you that the power, the need to network, the need to treat people well, because you never know when that's gonna come back to help you, which it did in my cases. So that and perseverance and keeping a positive attitude was very helpful. At the end of the day, I went back into relatively close to my career, the first two times it happened. The third time, that's when I realized this isn't working. And I just need to take more control over my own destiny.
Anthony Codispoti: What was happening each of those three? Were they just all completely different things or is this just sort of normal pattern for the industry that you were playing in where they just, I don't know, somebody just sort of decides on a whim.
David Grossman: It's... Yeah, it's fairly, it does happen fairly often. The, was working at big banks, Canadian bank once, and they decided, hey, this is just too much risk for what we want to do. And that, so, so that was one example, but it's not uncommon on Wall Street. Was it my particular performance? They all said it wasn't, and in all cases, it wasn't just me let go, but regardless if it was or wasn't my performance, I just had to face reality that when you're working for a big company or whether it's on Wall Street or otherwise, sometimes you can be performing well and you just get unlucky. So it didn't help for me to dwell on why I was let go. I I tried to analyze, did I do something wrong? Could I learn something from it for the future? But beyond that, it really is, hey, let's look for the future and... I got some nice experiences and let me try to leverage that to something else.
Anthony Codispoti: So you mentioned, you know, the importance of networking and a lot of people hear the word networking and it feels like a little dirty and a little slimy because of some of the experiences that they've had in the past. I'll certainly raise my hand for that. You know, it felt like, you know, going to these, uh, mixer events when I was a young professional and everybody's handing out business cards and they're asking what you're, what you do. Um, but really they're just waiting for an opportunity to talk about what they do and can you, you say, know, and it just, So how do you approach it? Like what's a more genuine and useful and real way to pull that off?
David Grossman: Yeah, yes, dirty word. I guess that's a, sometimes that's an appropriate way of looking at it. I think that in my view, I try to, I'm not always good at this, but I try to be helpful. Maybe really see if I can help somebody and form a goodwill with them. Maybe make an introduction for them somewhere else or what, give them 15 minutes on the phone, giving my two cents on a situation, even if it's not going to at that time directly benefit me, you're creating goodwill and not too many people do that. So you would be remembered in that case more likely. And, they're likely to someone that may come around to benefit you at some point. So I think it's trying to stand out by really just helping them. offering to help them, the other side. that's just the way I've done it. Sometimes that benefits you, sometimes it doesn't, but it's still just the way that I like to treat people.
Anthony Codispoti: I like that. You know, I had a guest on recently Brad Feld, who's releasing a book, or maybe it's out by now called Give First. And it's very much this idea of what you've just described here. It's, you know, giving, knowing that at some point somewhere you're going to get something, but it might not be directly from that person. It might not have anything to do with that interchange, but sort of giving first without sort of, going, you know, starting with your hat out. kind of a thing. And I think that's exactly what you're describing here. And I think it's a nice way to approach life is, you where can I add value to this person? How can I be of service in this instance? Right. So I want to hear about, because you said, you know, when you got laid out that third time that you were like, okay, this isn't working. I got to find my own thing. And there's risk in that. And you spent years looking. What was it when you saw Renew systems or whatever it was called at the time, what was it that you saw in that that you were like, oh yeah, this has got legs, this is the kind of thing I've been looking.
David Grossman: Yeah, and fortunately I was able to do a little bit of consulting in the interim, which helped and gave me the opportunity, the time to find something. What it was is that, again, dating back to the times when I was in finance, about the characteristics of a business I was looking for, I had done some technology investing, and I was a computer science major in college, so I have some technology background, but... I didn't want to take that risk, all right, that technology could go obsolete and put us on a very short fuse. Similarly, I didn't want to take a risk of having to raise more money frequently. So I wanted a business that I could not only afford at the time, but didn't require ongoing capital for growth or for expansion and so forth. The bottom line is I wanted to find a business that, not that I'm an egomaniac, but I could control as many of the variables to success as possible. So that's really just execution in my mind is putting your head down, getting to work, hopefully having a couple or more, you know, good team to help you on that and do that. And so I knew nothing about what Renew does, which is a specialized cleaning company to... the hospitality industry. Yeah, I'd stayed in a bunch of hotels before, but I certainly didn't know cleaning. My wife will tell you I still don't know cleaning. you know, coming from a very academic background, basically I'm the only, until very recently, the only one in my company that has a serious academic background, most very blue collar, but I knew that was fine. I knew I could relate to, lots of different types of people. So it was really just execution and I'm happy to bet on myself any day of the week. And that's really what I came down to is that, that doesn't mean that for sure we're gonna succeed, but it means we got a better chance of succeeding. I was looking for a business in this case, I got lucky, it did take me a while, but I think I got lucky in that the... The business is a very non-sexy business that's below the radar screen. And it really just comes heavily down to the execution side, the focus side and customer service is it. that's, while it may sound simple, the many companies out there that are competitors or were competitors just are not that successful at it. It's again, it is sound simple, it was shocking to me that while it sounds simple, just isn't a lot of companies just fail at just simple execution and simple customer service.
Anthony Codispoti: Why? Like they don't know how to clean properly and they have to come back and do it twice? Or is it the sales process that they don't have down?
David Grossman: Yeah, so, yeah. To say, you know, they'll get a phone call and, you know, take two weeks to call back. I just find that, I mean, that's a lot of it. And yes, sometimes it's a service issue. Your team's not well trained, your team's not well motivated to do a good job, and we work hard at that. But I think a lot of it is also how you interact with the customer. We're not here. Maybe it's similar to the networking approach that we talked about where kind of building relationships for the longterm. That's what we do with our customers. We tell them and we often do, we'll go out and do little education seminars for their team, even if it's not gonna put money in our pocket at that point. We do things like that to really help them and build the sense that we're here a trusted partner, we're here to help you. We don't need to sell you this cleaning. You really don't need cleaning six times a year. You can get away with it three times a year. That's really what we think is in your best interest. And customers really respect that. And that goes a long way. And we tell them every time we go in there is that we may fall short one time. We may not do a great job on this one area of cleaning, regardless if it's our fault or not. We'll make it right. come out within 24 hours and fix it. So we're a company that runs at problems. We don't run away from them. And that goes a long way with our customers to building that rapport with them.
Anthony Codispoti: So you guys are not doing the day to day cleaning. Right. Right. Check out of a hotel and they come in they clean the bathroom and they change the sheets. That's not what you're doing. You're coming in a few times a year to do more of a deep clean. Is that in the rooms is that the lobbies. Like what do you cover.
David Grossman: Yeah, yeah, you characterize that right. We, Anthony, we do a wide range of services. So we started out just doing carpets in the hallways and the guest rooms, and we've added a number of services over the years. So we can handle almost any part of a hotel, almost any surface, whether it's coming in a few times a year, like you say, to do the carpets in the hallways or the... drapes and furniture in the guest room or the tile and grout in the bathroom, or maybe in the lobby we're doing marble or some other, some natural stone. And we've added a number of other specialty needs because being very close to our customers, being very focused on the hospitality industry, we've gotten to know them well and answer any issues they have. So things like we can do odors when a guest cooks in a room, some of the kitchens that are in the room or brings a pet. in a room or smoking, or we can handle the kitchen deep cleaning in the main kitchens there. Sandaliers, escalators, you name it, power washing, we can do some external windows. We keep adding services as our customers identify or mention a need, and then we see if we can come up with a solution and then train ourselves and train the rest of our team. We're very focused. mean, just a few things that we don't do because we don't think we can do them well. And we tell our customers that, but it's just a wide range of services. And I think a lot of our success has been because of our focus.
Anthony Codispoti: So your clients, these hotels, they have their own cleaning staff, right? Because they're doing it on a daily basis. What is it that you can do that their staff can't?
David Grossman: Yeah, it's an important question. There's a few reasons why we're used. One of which is that hotels do have their own staff, but not their own staff that does this type of work. It's kind of more off the, since it's not everyday work, it's more typically off the corner of the desk, so to speak, where they'll have a few people when they have time do some of the cleaning. But often, and I don't say this at all disrespectfully to our customers because operating hotel is just going to be one of the most challenging tasks out there. But often the people that are doing this just don't have the right training, don't have the right equipment, the chemicals added. And so when they do have the chance to do it, they're just sometimes not getting the results, nor frankly, they don't have the experience. That's right.
Anthony Codispoti: They just don't have the experience. They're not working with the same equipment or the same cleaning materials and they just don't know how to use them.
David Grossman: That's right. They don't know how to use it. And frankly, it's just not as efficient. You know, we've measured ourselves. We're because we've done, been doing this for almost 35 years. We've, we can clean at least three, if not five times as much per day per one of our technicians. so when we can turn the rooms over quickly, the hotel is appreciated. And I think having the knowledge of hotels is very important. So all of our chemicals, our equipment, our processes are designed for the needs of our hotels, which are very demanding. And I don't. And they should be because they're open 24 seven people spend a lot of money to go into the hotels and they want them clean. we, you know, our, our equipment is generally just as a quick example, we use, just small portable units, which work very well. They're much less intrusive. don't have long, primarily we don't use long hoses that run throughout a hotel because you can imagine, hotels don't want to have that. And we can get in and out of rooms quickly by example, cleaning drapes. Typically they would take them down, send them out to a dry cleaner, can't rent the room out for 24 hours and then install them again. So, so we developed a process we can clean them while they're hanging on the rod. It's 20 minutes, they can rent the room out that day and they work very well. So knowing our customers, yeah, we, we, we think so and our customers seem to think so. So that's just, those are just a couple of examples.
Anthony Codispoti: That's a big deal. You know, and as you're talking, David, it reminds me, you know, my wife and I were perfectly capable of cleaning our own home and we do it on a day to day basis. And then once every two weeks, we have a couple of professionals come in and they do a deeper clean and they're in there for, don't know, the two of them, maybe two or three hours. And from top to bottom, our house never looks better during, you know, the, those two weeks. And how are they able to do it so much faster? This is what their experts in. They know how to move quickly. They know how to move efficiently. And so I think it's, it's a similar kind of thing with, what you're describing with your team. But what I'm curious about is why specifically hospitality? If you guys have this equipment, you have, you know, these specializations, would it make sense to offer these to more businesses or to private residences?
David Grossman: Yeah. Well, when we started in 1991, predating me, our founder was very young, 21 at the time. He taught himself how to clean carpets for homes, for restaurants, kind of general cleaning company, but just saw how competitive it is to be a generalist. It's only gotten more so over those 30 plus years. So he thought, Hey, how do I get an edge? And soon thereafter picked up a, a new customer, a small hotel. so. you know, the light bulb going off. And ever since then, we've been highly focused. In our case, it's the hospitality industry. Could it have been something else? have been healthcare? Yeah, possibly, but just sort of worked out that way. And we've just by taking a deep dive in it, we've just gotten very good at it. the long answer to your question is we can service lots of different types of customers. We can, and we do service some outside of hotels, but We like the fact that we focus, we've created a lot of, I wouldn't say barriers to entry, but we've created some barriers to competition because of our focus and the expertise and the relationships that we've developed over the years. So that's what we do. We do service some other types of customers that are somewhat similar oriented to hotels, healthcare, some education, some stadiums, things like that. But our focus, and we find it's important to have a focus, our focus is on the hospitality industry, which we know very well, and we've gotten good, as I mentioned, a good reputation there. So we don't wanna be a generalist, it's a tough business, and we think it'll, by taking our eye off the ball of what we know well and what's working for us, probably won't be great. Yes, is there a risk with focusing on one area? Yes, but. It's a pretty broad area of hotels and us having so many different services in a number of geographies, it means that there was talk as an example that hotels, you know, five, six, seven years ago, we're going to really start replacing carpets with tile or hard surfaces. And that's happened a little bit, but we can also clean the tile. We can clean the carpet. So there's a lot of different services we have. Sometimes a hotel doesn't need their carpets cleaned. They want their marbles. So we start there. We do a good job, they like us. Then the next time they need their kitchens cleaned, we'll start that. So having so many services also help. There are many of them are door openers or it's a way of expanding once we start to serve customers with one service, they like us, we get a second one.
Anthony Codispoti: Yeah, you mentioned relationships and that's a big deal. Your relationships with the hotels is what, you know, kind of get your foot in the door, kind of keeps you there. How were these relationships established? Is it sort of each franchise locally kind of goes out and, you know, forms a relationship with the local hotel operator? Or is it that you've got, you know, some sort of a national or a global relationship with some of the big brands?
David Grossman: Yeah, it's more the latter where we have established. We've been in the fortunate position to establish some nice long-term relationships with these big hotel brands. And that's really helped us then feed business down to the locations where we're at. mean, we cover a lot of the U.S. We still have some nice cities available and we're now expanding internationally. We're in five countries. So we're looking to continue to expand internationally with good franchisee partners who we find and train and support quite a bit. the more, it's somewhat, know, the flywheel, so to speak, is something that I've always tried to find where the more locations that we are, say the more Hilton hotels that we can service, the more valuable our brand is and the more our franchisees benefit from that. So. If we can help our big customers in more locations, then it just increases the value of the entire brand. that's why we're looking, one of the reasons we're looking to continue to expand geographically is it increases our value throughout the entire company.
Anthony Codispoti: So let's talk a little bit more about the franchise opportunity. What is it that you're looking for in a franchisee? Whether it's, I don't know, previous business experience, personality, what have you found makes kind of a good fit?
David Grossman: It's something obviously we focus a lot on and try to get better every time we bring somebody in and occasionally we don't succeed. We bring in someone, it just doesn't work out the way we all hoped. And it's unfortunate when it does, but we just, it's just part of the, we just have to expect that those are going to happen. I think we're getting better at it, but what we found is yes, there's a certain skill set of people that can manage a small team. of blue collar workers, yet in our case interact with white collar hotel managers. And we teach them all how to do this because we're not looking for someone who's done this. We're looking for people that we think have the right skillset and importantly mindset, the right, that'll fit with our culture, which is a very collaborative with our franchisee, very, we run the business really as a servant model where we're really here to help our franchisees succeed. So was very collaborative. We're very responsive to them and encourage our franchisees to help each other. And we're doing a good job of that as well. So it's a skillset, just kind of highlighted at the high level, the skills that we're looking for, being able to manage a small team, but really focus on more relationship-based sales and doing that with our support. We open up a lot of doors with these relationships. that we have in our marketing resources. So I think that's at a high level, the types of folks are looking for. Internationally, we tend to look for bigger teams, maybe companies that are in facility services or in cleaning or something in the hospitality industry. And then because they typically have even bigger territories. So those are people that we're tending to look for internationally.
Anthony Codispoti: Where are you internationally right now?
David Grossman: Right now we are in, aside from the States, we're in Canada, we're in Paris, France, or in Madrid, we recently opened, we're in the Middle East in two places, we're in Qatar, and we have an agreement that we're in the process of finalizing to enter the Emirates as well. So we want to continue to expand Europe, you can pretty much identify the largest cities is mostly where we want to be. the pretty good western europe i should say and a little bit of central europe and then the middle east is a few more locations there and then asia and australia there's about a six or eight locations that would like to be and and and that'll grow over time because it's really where they are big customers are and and the the high-end hotels are and to travel industry is growing very nicely and and hotel quality is increasingly important and that's really what we're looking for.
Anthony Codispoti: So if somebody wants to find out more information, whether it's domestic or international, where's the best place for them to go?
David Grossman: And go to our website and I'll get contact him for like and learn more and then they can contact me that way as well. And our website is the name of our company, which is renew systems.com and that's spelled R E N U E R E N U E systems with an S.
Anthony Codispoti: Okay. You know, one of the interesting things you were talking about was you guys developed a system that didn't require the curtains to be removed and taken to a dry cleaner. You can knock it out in 20 minutes. They can rent that room out that day, you know, which is a huge money boost for the hotel. Anything else cool like that, that you guys have been able to introduce specifically to the hotel space that, you know, maybe some of your competitors haven't been able to?
David Grossman: Yeah, the and just having this wide range of services is very unusual because a hotel typically will have a company maybe if they're not using us, they may be approached by a company that can just do the soft surfaces like carpets or upholstery or drapes or the hard surfaces, tile and marble. Very few can do both and things in between like odors and stains. So we
Anthony Codispoti: And...
David Grossman: We, I'll give you two quick examples. We inadvertently were copied on an email by one of our customers who said about replacing their mattresses. And so we called them and said, you know, not sure this is for us. And they said, hey, but maybe you can help us. So that led down the path of when hotels replaced their mattresses every anywhere between three and eight years, they, It's a big project. They don't know how to remove their old ones and install the new ones. So we developed a service where we can meet the new mattresses off the 18 wheel trucks, install them in the guest rooms, remove the old ones. And in most cases, we can actually recycle them and give them a certificate showing how much we save from the landfill. And that's a big project. Yes, it's cleaning per se, but it's another way of helping our hotels. And we've now leveraged that, now we've expanded that mattresses, box frames, bed frames, even televisions, mini bars. So small appliances we can handle as well. So that was one example. And one other, the second example is we were talking to hotel and they said, we've got this laundry chute that's just causing problems. It's ripping our linens we're putting in there. And so we said, all right, well, why don't we investigate? we did some research and we said, hey, what they probably need to do is just clean them more often. And they were also having odors and things like that. So we said, all right, let's start to clean them. And let's go buy the machine to clean these laundry shoots, which subsequently can be used for trash shoots too. And it just didn't exist. So we had to invent, we've got a great engineering team. and put together the equipment that we now use to clean laundry and trash chutes. And not only does it make it get rid of odors that are in there, but we found that in this case, they don't rip. And there's just been a lot of savings on that. And we can now even do inspections of them. We've been able to, so we can take a little camera and run it down there and show them. if they need any help or not. that was a lot bigger project than we thought it would be, but it's kind of a neat service that very few people offer.
Anthony Codispoti: I love this because as entrepreneurs, you're always thinking about how do I grow my business, right? More customers. But, you know, oftentimes it's just listening to the customers that you have now and what are their pain points. And it's like, well, I don't know, we never used to replace mattresses for companies before, but maybe there's a place for us to figure this out. And, you know, we never dealt with laundry shoots or trash shoots before, but hey, we're in the hotel. We're providing a service. We've got the relationship already. Let's. see if our engineering team can figure something out. I'll tell you the other thing is I want to find out which specific hotels you guys are servicing because that those are the places I want to stay. I'm looking at your website here and you've got a little video going and I'm like good like they actually do like they're cleaning the mattresses they're cleaning the couches because sometimes I go in a hotel and I'm not sure like what happened in here before you know what level of cleaning has been done and I can see from what you guys are doing that it's a pretty deep clean. So I'd feel more comfortable staying at your places is what I'm saying.
David Grossman: Yeah, yeah, that's it. I appreciate that. And, and, sometimes the hotels are surprised by their own property. So just two quick examples, often if you go into a hotel and ever since I got in this business, I don't look up, I look down and look at the floors and, and sometimes example, the Thailand grout, the grout so dark, it's black that the hotel, and it's been that way for so long that the hotel
Anthony Codispoti: you
David Grossman: is convinced that's the natural color of the grout, but that's not it. But that's often not the case. But what we do, and this is actually a big selling point that we do, is that sometimes we'll offer to do a demonstration. they can, we'll clean one guest room carpets as an example, just so they can see the quality of the work that we do. They can watch the videos that you're seeing, but they often want to see it on their own property and that's fine. So we'll do that. And then we will take, we'll open up our machine and just take a sample of the water, of the dirt, of the water that we extracted from their carpet and put that in a see-through container. And so many times it looks like a motor oil. You just cannot even see through it. And the hotel is just like shocked. How could you extract that much dirt from my carpets when they don't even look that bad?
Anthony Codispoti: what a great selling point, right? You don't even have to say anything. You just hold that up and it does the talking for you. You know, we mentioned in the intro about the work that you did to revamp the company's website. Why was that such a big deal? What were you trying to accomplish there?
David Grossman: Yeah, it is. would do. Yeah, we actually, even before we did that, because we did, at the same time we did that, but then we subsequently did the website is we actually changed the name. That was one of the early things I did just because our name, we'd outgrown our name. And so we changed our name to Renew Systems. It was called National Appeal. It was started, originally was Appeal Carpet, then started growing nationally and put National Appeal.
Anthony Codispoti: What was the old name? Okay.
David Grossman: A lot of people were confused. thought maybe we were a fundraising charitable organization. so we changed our name. We did a little research. even back then, 2010, it was hard to find a good website. But we found something we liked and renew and we added the word systems because it really is systems. It's not a simple business. It's finding the systems that we've developed over now 30 years that really work well, whether it's systems, how to do this type of cleaning. or how to do this type of marketing. So we really wanted to have the name systems in there. So renew as in renew your venue systems is really where we came up with this. And that was a good opportunity to change our website. But we did it, I think what you're referring to more recently is that as we've grown the number of services, we wanted to display them. So that was a lot of it is that, and we're seeing people becoming more more visual. So we've really minimized the amount of text, put a lot of bullet points, put a lot of, as you said, videos, we're putting more videos in there and a lot of visuals because people really want to see those. They jump out right away as opposed to reading lots of text. And then showcases some of our interesting projects, showcasing a lot of the different services we do because... A, they get captured on SEO when we talk about different services, and it just broadens our appeal. I use that word again, appeal, broadens our appeal, but also just separates us from our competitors. And lastly, it shows our customers, the hotels, that we really know what we're talking about.
Anthony Codispoti: Yeah. You know, you've you've written some articles, you've spoken at industry events. What kind of topics are you covering? Like are you getting into sort of the minutia of here's how you clean something? Are you talking about sort of general importance of doing these, you know, four times a year cleanings? What kind of topics can people get from you?
David Grossman: Yeah. Yeah. I think it's, there's, would say there's a couple of different areas. I don't get into the minutiae of the cleaning. If we're in one of those settings, I make sure that I bring in one of my trainers to do that. That's right. It's not me. That's right. We wouldn't be in business very long if it were up to me, but I've got a good team that does know it.
Anthony Codispoti: Cause as your wife has told us, you don't know cleaning even till today. Okay, go ahead.
David Grossman: I leave the details to them when I talk about those things. But I focus on a few things. One is either talking about growth strategies for growth or marketing ideas, things like that, which is really where I focus a lot of my effort on that and people. Those are the two areas that I focus on, growth and people in general, and not really in that order. But I think what I also like to talk about is We're talking about that cleaning, know, helping the customers, the hotels. So that's one area, you know, how we can help hotels. The other areas were franchise or as you mentioned. So I like to really talk a lot about franchising, not something I knew about and what I wasn't looking for a franchise business per se, when I was looking for a company to buy. But the more I learned about it, I just thought it was an interesting way for a couple reasons. One is it is scalable. So for us to grow, can, we need less. If we want to set up a new location, that's fine. And we have done that company owned as opposed to franchise you did, but it does require more operation focus and requires capital. And so that is, is, is, is, is an issue. can be an issue. I'm not saying it's not worth it, but that's a consideration as opposed to being much more scalable by bringing hopefully a high quality franchise partner who will be there to run and own the business. Obviously we support them a lot, but that's the case. And we think that that's good for our customers because they're gonna benefit from a team that's very well trained, but yet they're gonna have the tender love and care of the local team. So we talk a lot about franchising, how that helps our customers, but even more so, and how you can scale a business by franchising, but even more so just the benefits to the broader benefits of franchising. It's a great way for people to go into business ownership. People like myself who was looking at the time, granted I'm the franchisor, but finding a franchise is a good step for a lot of people who maybe are used to working corporate America, want to do something more entrepreneurial. but yet this is sort of a halfway there. They own their own business, but yet they're gonna get a lot of help every step of the way.
Anthony Codispoti: So you mentioned one of the things that you talk about David are growth and marketing strategies. What are some things maybe for our listeners, kind of some low hanging fruit that you see a lot of people miss that could be helpful in their businesses?
David Grossman: Well, in our case, not to repeat myself, but maybe it helps the cause is the focus is that we've, we talked about how we really service heavily the hospitality industry, even though we, we know how to service lots of other types of customers and occasionally do, but we find the focus is really what keeps us as part of the reason we've been successful because We know our customers, don't go astray and it keeps us, it's certainly enough opportunity for us. So I think the focus is a lot of it, focusing on our customer base. And another thing that I get, maybe I'm overly fixated on is just being very responsive with a small team. Getaway is a small team as you can. Just as an example, the company on location that we have in Chicago that we operate, the original location. Prior to COVID, we had a large team of the cleaning technicians and each worked roughly 40 hours, 35 to 40 hours. We, after COVID, when a different world, although we made it through COVID, fine. when we came out of COVID, we changed our model where now we have a smaller team of technicians that all but two of them want as many hours we can give them. So we're doing a lot of overtime. So it simplifies our business from that because there's less to, fewer moving pieces, more fewer people to schedule to do the cleaning. And we're able to attract higher quality. of technicians because they're paid well and they're paid certainly over time. They're paid more time and a half or double time depending on the situation. So they're making a lot of money. Frankly, they deserve to because they're good. And so we'd rather be able to bring in a smaller team of well compensated, well trained, high quality people than maybe people that are the other end of the extreme and a bigger team. That's just an example of kind of one of the things that we really try to focus on. A lot of our franchises do that as well. They realize the fewer moving pieces, the better, and you'll get higher quality results with higher quality people who hopefully will benefit as they should because they're working hard.
Anthony Codispoti: So what was COVID like for you guys? You know, the travel industry was decimated. Were hotels having you come in less often because they're trying to save money? they having you come in more often because they're worried about the virus?
David Grossman: Yeah, I had a feeling you were going to ask that once I opened the door about COVID. But it's a great question. It's an important question. So at the very beginning, it was tough. There's no doubt about it. But we got as much warning about it as possible, if anyone could, just because we had a company on location. So we started to see some of our customers are canceling. And then that became a lot in a very short period of time, unprecedented. So we huddled up. We got very close with our franchisees. We were We had very frequent phone calls, all hands calls several times a week and we encouraged them. were some services that we did, particularly disinfecting that was very much in demand. And we really, that's when we expanded beyond hotels. A lot of companies were coming to us. They saw us on our website. So we expanded beyond hotels because office buildings and things like that. And we did a lot of disinfecting. We helped the hotels where we could. they saw that even though we weren't necessarily making a lot of money off of them, we would try to help them whatever ways we could. the good news about our model is there's not a lot of overhead in it. So we were able to hunker down. We encouraged our franchisees to hunker down as much as they can. And after a couple of months, things started to pick up and got a little better. And by the end of 2020, we were basically at the... more or less the same level of sales as we were at the beginning of the year and learned a lot from there. So we, I won't say it wasn't easy and it was scary and of course for all of us not knowing how long it would last and we did have to let go a number of the workers, unfortunately, but many of them have come back and we've been able to keep our customer relationships. In probably strengthen them because they saw we did whatever we could to help them in a short time, in a difficult environment. And even when we weren't making a lot of money doing it. Plus it broadened us a bit out of hotels, even though that's still our main focus. But some of those customers we picked up then we've been able to maintain. So that's it. And I think we got smarter. think we were always lean, but I think we've gotten even leaner, better business practices. I mentioned one example of how we treat and view our workforce.
Anthony Codispoti: I want to ask a little bit more about that because you talk about getting lean and I can see, you know, one of the advantages of kind of reducing your head count is you've got a stronger core of people, right? And the people that you have are more reliable. But the if I'm doing the math in my head, right, the cost of your payroll is going up because you're paying those folks more because, you know, overtime is time and a half or double time. Am I? Sort of thinking about that in the right way? OK.
David Grossman: That's right. That's right. The absolute, that's the trade off, but sometimes for those extra projects, we may charge more. know, if it's night work as an example, we'll charge more for it. And other times we're still finding that they're just more efficient. We're just, because sometimes, you know, the work isn't always consistent. So if you've got less work one week, this way they'll just get less overtime or maybe no overtime as opposed to trying to find hours for some people that we don't have hours for. So there's definitely that trade-off as well. I I'm not saying this approach works well for every business of going that approach, but for us it does because that way we pretty much know, they'll always get roughly 35 to 40 hours, usually get more. But in the previous world, there would be some weeks where things were quieter and they'd be getting a much less paycheck or we would... top up their paycheck anyway. So there's some of that. And I also think that we've now, to your point, gotten a better quality team and they appreciate what we're doing. Not saying they don't deserve to make the money, but they appreciate this structure and that we're working hard to get them as many hours as we can. And I think they're just more efficient because we're able to pay them more, get a higher quality team. there's a lot of... there are some benefits of this, even if occasionally it may cost us more.
Anthony Codispoti: Gotcha. So payroll might cost you more because you're paying time and a or double time, but you like being able to give your employees more regular, more steady hours and in some cases extra hours because it helps keep the good people with you longer. And that's, that's really what is most important here. Yeah. David, what's your superpower set humility aside? What is it you do the best?
David Grossman: That's right. Yeah, the, it's funny. I went to this exercise a few years ago, which I'm not sure why I did, but I sort of got roped into it I'm glad I did. mean, I think I'm a very disciplined person. That's one thing. And, but, but at the end of the day, kind of a more formal, more formally put it is that, you mentioned my education and, part of the back of my mind possibly of going and getting a PhD, maybe I want to teach. I realized midway through getting a PhD that certainly I didn't want to stay in academics or become an academic because of the research. It just wasn't something I wanted to do. But I did always kind have in the back of my mind the teaching aspect and like that. So I think for me is that just modeling productive I'm going to read what it was because it's probably just better to come from here is that modeling productive behaviors needed to help people achieve their goals. And when this person that does this for a living kind of came up with that, I think there's a lot of truth to that. And that combines the aspect of teaching and that combines the aspect of franchising, setting examples for our franchisees. So I think that's a lot of it. It's discipline, it's repetition, it's hopefully modeling good behavior. So it's a combination of all that. But I think that's a lot of it. And I enjoy doing that. I love to see people grow, people succeed. It's great when we start a new franchisee. They're often very nervous and as they should be. And get their first customer, get their second customer, get repeat business and go from there. So helping them learn how to do that. teaching by example, I think that's really probably what I like to do and I'm probably decent at it.
Anthony Codispoti: daily practices or habits that have become an essential part of your success.
David Grossman: It's a discipline. mean, from my personal perspective, someone told me this, you know, first I have to take care of myself and I think I do, I work very hard, but I love doing it. And part of it is just I'm very disciplined. I get up early in the morning, I go running for an hour every day, pretty much without fail, even if I have the first flight in the morning. So I think the discipline really helps me a lot, make it through the day, but also just, yeah, I've been doing that for for over 40 years. So it was pretty ingrained in me. that also feeds into a franchise system where hopefully you've got good systems, not to say you can't tweak them and shouldn't tweak them over time, but it's really just repetition. I mentioned starting a new franchisee, it's teaching them all the different systems, how to clean, how to market, how to grow your business. what you should be doing year one, year two, year three, those types of things. So it's this repetition and saying it, when I first joined Renew, I thought if I say something to our employees once, they get it and should never be an issue again. But certainly learn how naive I was on that. So it's repetition. I may try to narrow it down to the three most important messages I want to get across and keep repeating those until they're kind of internalized and then come up with three new ones. But again, it's about repetition and discipline and hopefully being consistent while I'm doing those.
Anthony Codispoti: What's something fun you like to do outside of work?
David Grossman: I mentioned I like to run. It's not always fun, but most of the days it's fun. I read a lot, a lot of nonfiction, things like that. And just like being with my family. I mean, I travel a lot for work. I travel every week. You can see today I'm in my home office, but I travel a lot to visit franchisees. I travel a lot to visit customers. And so if you like, I've got three offices, one on the road, one here, and then American Airlines is my third. travel a lot. haven't yet expanded that too much on the personal travel, but we do take several really nice, try to make nice personal vacation. So I've got the travel bug. Part of that is just by visiting all these hotels, but I love to travel, love spending time with my family and my running and a lot of reading is. probably the things I do the most outside of work.
Anthony Codispoti: kind of reading. You got a book you want to recommend?
David Grossman: Yeah, there's one probably my well from most relevant to here. Probably the author I like the most and have learned the most from is Jim Collins of great by choice fame. Yeah, I love the Good to Great. I think that's just a great book about it. And I think great by choice, even though probably less famous may even be a better at least resonate with me, but.
Anthony Codispoti: good to great.
David Grossman: They're both terrific books and I've learned a lot from that. I've read them more than once. And I just think pretty much everything he does, I just really respect very heavily and try to learn from his writings.
Anthony Codispoti: David, sometimes our biggest mistakes in the moment become our greatest teachers. You think of a moment in your career that seemed like a setback at the time, but actually propelled you forward.
David Grossman: Yeah, I think the biggest is, as I mentioned, certainly about the layoffs and, you know, it's tough and it's a personal blow. But I think it also teaches you to re-evaluate and say, hey, maybe there's other things that I, know, ways of looking at the world or it broadened me, shall I say, because while I was always thinking maybe someday I could run a business, this forced me to do it. And so I think sometimes there's resiliency and I'll take that kind of at a lower level is that there are many times like we'll go to a project to a customer and we just fall short. It's often not our fault, but it happens. it's how you deal with the aftermath. I think whether it's a layoff or in this case, a project that goes south, that I think is how you deal with that that really separates you and you can learn. We often will come out better, stronger relationship with the customer after we have an issue than we did beforehand because they see the way that we handle it. know, this turning lemons into lemonade is something we talk a lot about. And I think that's something that, you know, it sounds horrible at the time you make a mistake. But I think you're always going to make mistakes, certainly in our case, for a service-based industry. working in a live environment, these are gonna happen. But it's setting the expectations of the customer and then dealing with it in a very responsive manner. So, and why I tie that again back to my layoffs is it's just sometimes bad things happen. Maybe they're your fault, maybe they're not, but it doesn't make sense to dwell on it. Just deal with it. Try to address it as quickly as you can and learn from it, frankly.
Anthony Codispoti: You know, I love this. This came up in an interview I had earlier this week too. Excuse me. And I do think it's, if people have the right mindset, it becomes an opportunity to deepen the relationship with the client. know, everybody's embarrassed, upset. There's some hard feelings when a mistake is made. But how you handle that in that moment says a lot to your customer about who you are. and how you're going to continue to show up for them in those hard moments. And so from my own experience, as well as talking to countless others, and example after example after example of when a mistake happened, they stepped up, they owned it. Sometimes they took it on the chin financially to fix it, but that relationship is deeper, stronger than ever. They've gotten more referrals from those types of customers. And so I'm glad to hear your story kind of. echo that message that I think sometimes other people are sort of hesitant, reluctant to take those kinds of proactive, those kind of active steps in the moment that you need to fix it.
David Grossman: Yeah, I don't disagree and you know, we're trying to teach our team to do that. I think we're doing a pretty good job at it. But you're right, it's not necessarily your first instinct to do that.
Anthony Codispoti: David, I've just got one more question for you. Before I ask it, I want to do two things. Excuse me for everyone listening today. Just pause for a second. Open up your podcast app. Go ahead and hit the follow or subscribe button. I want you to continue to get more great conversations like we've had today with David Grossman from Renew Systems. And it's also a great way to help the show, help other people find us. And if you've got a spare moment, you can even leave us a comment or a review. David, I also want to let people know the best way to get in touch with you or the company or to follow your story, what would that be?
David Grossman: Probably the best way, certainly our website, I mentioned, renewsystems.com, LinkedIn, we're very active. I'm very active. I'm happy to connect with you and follow each other. But that you'll see a lot, could do a lot of posting. It might not only renew, but my personal one. And then also happy to give out my email address and speak or connect with any of you. It's my name, David.Grossman, G-R-O-S-S-M-A-N at renewsystems.com. As you can tell, I really enjoy talking not only about our company, about franchising, about business. So we don't have to speak directly about something, again, that's going to benefit me. I'm happy to connect and talk if you find that all helpful.
Anthony Codispoti: That's very generous of you. We'll make sure we include links to all of those items in the show notes. So last question for you, David, as you look forward, call it the next two years in your industry, what are some of the most exciting changes coming that you can't wait to be a part of?
David Grossman: You know, my industry, I don't want to sound naive or taking things for granted or just dense, but we don't have a lot of change in this world that we're in where there's a lot of change. We're not a sexy industry. again, where there's no technology comes very slow to us. I'm not too concerned in the near future of what we do about being replaced by robots. just because it's very customized to what we do. They'll have heard some areas of cleaning, but not us so much. So there's not a lot of change that comes to us, which we like and not saying we're not aware of it. We go to the trade shows, we see lots out there, we do a lot of testing, but we like the fact that our strategy, I'd be surprised, is not the same in two years, four years, two years ago, four years ago, it is now. It's just this blocking and tackling. occasionally adding new service here or there, treating our employees well, who will ultimately treat our customers well, treating our franchisees well, really controlling, largely controlling our own destiny, not so much worried about potential customers, because if we're servicing our customer, ultimately servicing our customers well, and our franchisees are gonna grow, our number of franchisees is gonna grow, and this flywheel will happen. I kind of like that in this world, a lot of our success is really up to us. And that's pretty refreshing and gives me a lot of confidence. And I'm as energized now as I was when I began over 15 years ago.
Anthony Codispoti: David Grossman from Renew Systems. want to be the first to thank you for sharing both your time and your story with us today. I really appreciate it.
David Grossman: Anthony, this was great. I had a lot of fun doing it. Thank you for the questions.
Anthony Codispoti: Folks, that's a wrap on another episode of the Inspired Stories podcast. Thanks for learning with us today.
