Wednesday, August 24, 2011
This is the most honest interview our CEO, my brother, Aaron Steed has ever given. It really shares some of the unknown history of Meathead Movers. Forging Leaders was created by Jeremiah Miller who is on a mission to help individuals with self-leadership, living a better life story, and how to be a remarkable husband, father, and business leader.
This is the true story of the rise of one of Central California’s most celebrated businesses. In this article, I talk with Aaron Steed, founder of Meathead Movers, about his Hero’s Journey.
It’s funny how other people’s successes look effortless. From a distance, we see only a series of inevitable victories. We don’t see the innumerable challenges, the litany of frustrations, and the heart stopping moments that threaten to bring it all crashing down.
Aaron Steed’s story is like that. From a distance, it went like this: Aaron and his brother Evan started Meathead Movers in 1997, during Aaron’s junior year in high school. Because they did a great job moving people, their customers loved them and they grew. Within a couple of years, the business had dozens of employees and started winning business awards; Aaron won a few “Top 40 under 40? type business leader awards. Before long, they bought moving trucks, expanded into the mini-storage business, and spread to markets outside of San Luis Obispo County. From a distance, it looked like success after success with the outcome never being in doubt. The truth is much different.
Last week, Aaron and I talked about the journey he has been on since founding Meathead Movers in 1997. Here is his story.
Aaron, in every story, there is a Call to Adventure, a moment where the person has a decision to make. He can either continue doing what was comfortable and familiar, or he can decide to take on some new challenge. What was your Call to Adventure?
When our phone lines were shut off by the state of California because they thought we were operating illegally. At the time, I was 20; I was supporting myself, without a relationship with my parents, employing about 25 guys. All of a sudden, we had no phone number, we had no business, we were shut down by the state, and all of our competitors had hired attorneys and gotten affidavits and gotten us shut down for being unlicensed. That moment was kind of oh s***, what do we do? It was either, I continue to wrestle and go to school, and get a job, and my brother goes off to college, or, we really try to get organized and put everything we have into the business. That would mean getting the proper license and going through the process to take on our competition legitimately. And that’s what we did. Getting shut off by the state caused action, either we were going to fizzle, or get legit. But we couldn’t continue to operate as kind of a disorganized, under the table labor service, which we did for the first couple years
Wow. That’s crazy. How did you and your brother make the decision to accept the Call to Adventure and embark on this adventure?
It was basically Evan and I having a heart to heart, saying “Hey look, we’re either in or we’re out.” As silly as it sounds, we felt like we were like the knights in shining armor of the moving business. We felt that we were like heroes saving our customers from bad moving experiences. We were addicted to the immense amount of gratitude we got from our customers from doing a good job for them.
We didn’t even have a fee structure back then. Our pitch was “you pay us whatever you think were worth. Me and my wrestler and football friends will come in and give you the best move you’ve ever had and you pay us whatever you feel like we’re worth.” What would happen is, every single time, we would create a customer who was ecstatic about our service and about being able to control how much they had to spend. They would tell us about bad moving experiences they’ve had in the past, and as we learned more and more about the industry and how other moving companies compete, we felt more and more confident about what we were doing, the level of service we were providing, and how our employees sized up to the competition.
Despite being disorganized and young and not having a license or a recognizable brand, we knew the end product was going to be so much better than any of our competitors. Also, we were able to offer more valuable employment to our friends than anybody else in San Luis Obispo. We offered them the ability to work their way through school. They were basically our family since Evan and I hadn’t communicated with our parents since we got out of high school.
I felt like Meathead Movers was so much more than a way for us to just make money, it was a way for Evan and I to provide a service that we felt great about, and to offer good employment to our friends.
So, did you have any doubts about dropping out of school, quitting the wrestling team, and pouring all of your energy into this business?
Not really. Keep in mind we also didn’t have anything to lose. Neither Evan, nor I had a mortgage, or a wife, or a kid.
In any Hero’s Journey, there are moments of sheer terror, where the hero and his allies face impending doom. What was the closest you ever came to this with Meathead Movers?
That’s easy! It was 2002-2003, at the time, our workers comp insurance went from $60,000 per year to $300,000 per year. We had to come up with $75,000. That literally took us down to our last $1,000 in the bank. We had no line of credit or anything to fall back on. This was when I was 22 or 23 years old and Evan was 21.
On top of that, our monthly worker’s comp premium jumped from about $3,000 each month up to $20,000 each month. That straight wiped us out. That was the worst thing. We had 11 administrative employees at the time. We had to fire everyone except 3 people. Having to fire Joe, my best friend, and Bret, my room-mate and good friend, was one of the hardest things I’ve ever had to do. Bret had just had a kid too. I was in the office, crying, telling them “Look, here’s our financial situation. Either we have to make these drastic moves, or we aren’t going be in business.”
We had to cut every expense. I remember we stopped the water, the filtered water that came into our business. My brother Evan and I paid ourselves nothing, we were eating Top Ramen. Evan even moved into the office. It was gnarly, we literally had no money.
That had to be incredibly stressful, how did you handle it?
At the time, Meathead had gone from doing a couple hundred thousand dollars a year to doing $1.7M a year. My identity was so wrapped up in having a successful business, it just about killed me when it all came crashing down. I was having panic attacks, I stopped working out, and I wasn’t eating very much. I had gone from being a competitive athlete, to becoming a young millionaire, to, all of a sudden, firing all of my best friends, having panic attacks and feeling like crap.
So, how did you do it? How did you claw your way back out?
Even though all this bad stuff was happening on the administrative end, our customers were still getting the same great experience during the move. Our gross revenue continued to grow, even as our cost of goods sold skyrocketed because of workers comp. Also, this all happened in 2003-2005, those were the good years for the economy. In San Luis Obispo County, people’s homes were gaining equity at the rate of tens of thousands of dollars each month. So luckily, we had as much work as we could possible handle. We were constantly trying to hire more Meatheads because we had unlimited work for our employees. That’s basically what it was. Had we dealt with this crisis during a different economic and housing cycle, we would have been forced to cave in, but fortunately we didn’t.
Every hero has allies that help him through the most difficult challenges along their journey. In fact, without those allies, the hero wouldn’t have a chance. Who has been your most valuable ally on your journey?
Without question, my greatest ally is my wife, Erin. She has been an integral part of my life and my business over the past five years. From building the mini-storage business, to launching Princess Packers, Meathead’s box packing service, Erin has contributed to every recent business initiative. I can’t even tell you how many times Evan or I have gone to her for advice and support.
If you had to pick one area that she has helped you the most, what would it be?
She is truly gifted as a relationship healer. She has helped me rebuild some relationships with family members and others that I thought were beyond repair. When you go through the family stuff that Evan and I went through with our parents (we broke off contact after high school), you tend to have your guard up when new people get too close. She has this crazy ability to help me see situations from a different perspective and ultimately make better decisions. I couldn’t ask for a better partner.
What are the things you’re most proud of from this whole journey?
I would say that Jeremy, our head of operations, and Scott, our head of sales, being able to afford buy homes and get married. One has been with us since we started and one has been with us for 11 years. So, those guys being able to be successful within the system is extremely gratifying. Also, becoming the largest independent mover in Southern California is something I’m really proud of.
I’m also fulfilled by the work that we do with the youth wrestling program. We started the Meathead Wrestling Club along with Jeff Barksdale. We raise money and pay Cal Poly wrestlers to coach the youth wrestling program in San Luis Obispo County. It’s opened up a lot of people to the sport of wrestling. We never turn kids down because of cost, and we offer free memberships to boys and girls clubs.
Why do you think this is such a passion of yours?
I remember what it was like being in Jr. High and high school. As confident as people thought I was, I really was just insecure. I was just trying to prove myself and find an identity; wrestling was the perfect thing for me. So now, I love being able to help other young kids harness that energy and turn it into something that is positive and constructive. The same energy that makes someone a good wrestler can also get someone in a lot of trouble. Putting that kid who could take a wrong turn into a situation where they are being recognized… oh my god, it is the best thing you can do to keep them from getting in trouble.
Meathead Movers also sponsors the Cal Poly wrestling program. So, even though I never wrestled for Cal Poly, I feel really connected to the program. I’ve practiced with them hundreds of times, and I know all the wrestlers from the past 15 years.
Another thing that is really rewarding is moving women out of violent situations for free. We teamed up with local women’s shelters to provide this service. We are part of their process for getting a woman out of an abusive situation. When someone calls the shelter, they receive counseling and all sorts of other support. When it comes time to move them out of their home, we come in and do that at no charge.
Also, we have something called the Cinderella Fund. It’s a fund that is associated with Princess Packers, our box packing service. We donate a dollar from every box we to a local women’s shelter.
How did the partnership with the women’s shelters come about?
In 1999 and 2000, we were getting calls from women, frantic to get out of bad situations; they would ask to pay us later for moving them out. We decided that helping women move out of a dangerous home situation was definitely something we wanted to be part of, so we partnered with various women’s shelters to offer that service free of charge. Now, Meathead Movers is part of their process.
You mentioned something called Princess Packers. What’s that?
Our student athletes do a great job with the physical aspect of moving people, but we felt that there was a big area to improve in the quality of our packing service. Erin took this idea and ran with it. She created Princess Packers to do as good of a job with packing customers for their move as Meathead Movers does with the move itself.
A big part of this was training women to do it, thus Princess Packers. The Princesses have more attention to detail than our Meatheads; they know the difference between a hardboiled egg and a Faberge egg. They have better handwriting, and they take the time to do it right. For instance, when they pack a box of clothes, they put a dryer sheet inside so the clothes smell nice when they are unpacked. When the Princess is done with each box, she seals it with a sticker and signs it so the customer knows exactly who packed that box. There is personal accountability. For each box packed by Princess Packers, we donate $1 to a local women’s shelter. We call this the Cinderella Fund. Even though it is only a few months old, there is already over $3000 in the fund.
What’s been the most surprising thing of this whole journey you’ve been on with Meathead Movers?
I’m surprised that more people don’t start their own business. Working towards a dream than just working for a paycheck, it’s amazing.
Why do you think more people don’t start their own biz?
I think most people are smart and they are able to assess the risks. Because I didn’t even know what I was getting into, I didn’t know what the risks were. Also, as you get older, you have more responsibility and the risk goes up.
So, you attribute your success to your naivety and lack of responsibility when you started it?
Yeah, I had no idea. Also, being willing to work my a** off. Because it’s not just about getting in business, it’s staying in business that counts.
What is the climactic scene in the story of Meathead Movers?
My vision is to change the standard in the moving industry and make student athlete movers the norm. Right now, the bar is so low. You see these crazy, felon, drug user guys when you look in the back of a lot of moving trucks. These aren’t the guys you want in your home alone with your wife.
I also have this vision of a nation-wide network of student athlete moving companies. Meathead Movers now has an offering where we can help people set up their own, locally branded, student-athlete moving company. We provide the structure, the software and the expertise that we’ve acquired over the last 14 years. I believe that our tools and support can give them a 10-year shortcut.
After we have this network of student athlete moving companies in San Jose and in Texas, and all over the place, we are going to connect them. We will create a trucking network where “Longhorn Movers” in Texas is connected with “Meathead Movers” in San Luis Obispo, so they pack the customers on that end and we unpack them on this end.
How has this whole thing changed you?
It’s made me a lot more cautious. I used to be the first to tell a dirty joke in public, or do or say something inappropriate. I can only imagine what I would have been like with Facebook at 18 years old. Could you imagine?
Yeah, we would have been screwed. (laughing)
It has also tested my character, and my integrity. I am constantly taking positions with my values and principals in handling conflicts with my employees, our investors, our customers, or our competitors. Instead of having a win at all costs mentality, I’ve learned that you may win the battle but lose the war. I have a longer term approach with everything. We have hundreds and hundreds of reviews about us on the internet. This has helped hold us accountable to everyone we do business with. There are a couple of barometers that I use to make decisions, the first is how I feel about it, the second is how a judge feels about it and the third is how the public would feel about it. Does that make sense? I don’t know if you want to call that maturity or what, I’m not exactly sure.
It’s also made me, more confident, but less cocky. I feel more settled within my own skin, and more at peace with who I am because I feel like I’ve been able to create a life and identity and stuff like that. Yet, I’m less cocky than the kid who was 19 years old, wrestling, partying and doing all that stuff.
Thanks so much for sharing your story; I didn’t know most of this stuff. It’s awesome to see everything you’ve had to overcome in order to build such a successful business. I look forward to following the next chapters of your story. Thanks Aaron!
Thank you for including me in this. It’s been a lot of fun.
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