Chris Roth built his Las Vegas-based HVAC (heating, ventilation and air conditioning) business, Climate Control Experts, into a $100-million company against all the odds. With 600 competitors in his market and a very low barrier to entry, growing to that size was far from a given. But with hard work, determination, and savvy marketing, Chris made it happen in record time. Climate Control Experts biggest impediment to growth wasn’t, in fact, finding enough customers as it expanded regionally. It was finding the talented technicians he needed to meet the demand.
Chris found a unique way to develop his talent pipeline: teaching at a local college. Better yet, Chris made a point of teaching the final semester of the HVAC program. This gave him an opportunity to evaluate and recruit the best new technicians before they even graduated.
After a few years of teaching, Chris’s company still couldn’t fill the positions fast enough, so he pivoted into an entirely new business — by purchasing a struggling local trade school. Now, he owned the pipeline But Chris’s ingenuity didn’t stop there. Most higher education institutions seek what’s known as Title IV funding, which allows students to receive financial aid. The catch was that the funding came with a lot of strings attached, including the requirement that programs provide a minimum number of hours of instruction. As a result, Chris explains, most trade programs take too long and rely heavily on class time vs. hands-on learning. “Those schools work for the government,” he explains. “I wanted a school to work for the contractors” like Climate Control Experts. “Our customers are the contractors, and the students are the products we ‘sell,’” which benefits the graduates as much as the employers. Chris actually funded student loans himself, which, he says, incentivized him to ensure they found successful careers.
“Those schools work for the government. I wanted a school to work for the contractors” — Chris Roth, Climate Control Experts
the school, National Technical Institutewas another home-run, growing from 71 students to 1,500 in three years and increasing tenfold.
But there’s another twist in Chris’s story, and it’s the most important one of all. The HVAC business was earning a gross profit of about 55%, with a net of 10-15% — about three times the industry average. By contrast, National Technical Institute’s gross margin was closer to 70%. And yet the school had one thing in common with the HVAC company: It was a regional business that needed to open in more and more cities to grow. “I quickly realized that the way to scale my school was to get it online,” he says.
It was at that point that Chris made a crucial decision. He would sell his money making HVAC business to fund a moonshot: a hybrid online/hands-on trade school focused on giving students the skills that employers were looking for. His total addressable market (TAM), once limited to a few cities, was now essentially limitless. And here’s the real kicker: Gross margins for the online portion of the school were 85-90%.
I talk about Chris’s story a lot, because it is the perfect representation of the moneymaker-to-moonshot Trajectory. He built a solid, profitable business that continued to grow, then used his experience, insights, team — and profits — to pivot toward a business model that met the criteria for a successful moonshot.
- It was built upon a money-making business that met a strategic need in the market. That business provided a brand and reputation, deep industry knowledge, a seasoned team, and access to capital.
- It leveraged proprietary technology to reduce headcount, increase profitability and expand TAM
- It created an entirely new potential revenue stream with a technology offering: Chris is now in a position to market not only his school, but also the technology that makes it work.
In a post-Covid world, Chris’s trade school is on the path to surpassing the revenue of his former HVAC business. He’s teaching a monetizable skill, he’s experiencing increased demand as the workforce looks for new opportunities, and he’s teaching digitally so people can learn anywhere, any time. What’s more, he has transformed his business from a service organization that sold for a nice multiple of EBITDA, to a technology startup that could be valued at a huge multiple of gross revenue.
If you’re working your butt off building a successful, money-making business, it’s time to ask yourself: What aspect of my business has the potential to blast off as a moonshot? Once you’ve identified that winning idea, it might be time to head for the launch pad.