Scale Up in a Hurry

When does fast growth become too fast for a startup company? Ara Mahdessian, co-founder and chief executive of ServiceTitan, a Glendale software developer for the home services industry, said that the only time he thought the company was growing too fast was if it could not make its customers successful. Luckily, he said, ServiceTitan is growing fast and its customers – plumbers, electricians and other home improvement professionals – are successful and happy with the product it provides for scheduling, billing and organizing projects. “We are growing at just the right level of fast,” Mahdessian added. The past year has evidenced that growth. Since last April, ServiceTitan has received about $227 million in private equity financing, opened an office in Armenia, acquired a software company in Kansas and hired its first chief marketing officer as well as a former Netflix Inc. executive as its chief financial officer. And Inc. magazine named ServiceTitan to its list of fastest growing private companies for the second year in a row. Just a month ago it announced it was taking 125,000 square feet, or about five floors, at 800 N. Brand Blvd., right across the street from its headquarters at 801 N. Brand Blvd. Assembly Member Adrin Nazarian spoke at the event announcing the lease. The company needs the space to accommodate new employees. In December 2016, it had a workforce of about 200 employees. By the end of this year, it will have a workforce of 1,000 with plans to reach nearly 2,000 next year. Personnel expansion Supervising such fast growth requires careful hiring. New workers come to the company because of its environment, Mahdessian said. ServiceTitan does go the traditional route of investing in its brand to get the name out and it has a big recruitment team that looks up online profiles of people they think would be a good fit and reaches out to them. “Those are all table stakes,” Mahdessian said. “What really makes this engine work is creating a great work environment.” Mahdessian and firm co-founder and President Vahe Kuzoyan create that environment in several ways. It starts with building a culture so people are excited to come to work with others who are masters of the craft. Second is giving the employees the autonomy to exercise their craft and build results for the company. Lastly, there is the compelling mission that ServiceTitan presents of changing the lives of entrepreneurs in the home services industry, “That mission is attractive for a lot of people who want to do something that is rewarding and gratifying and has great impact,” Mahdessian said. Eric Falconer, general manager at Dutton Plumbing, in Simi Valley, said that his company has used ServiceTitan software since 2014. The previous software Dutton used had hampered and handcuffed employees in tracking customer calls, dispatching and accounting, he said. ServiceTitan software, by comparison, was easy to use, Falconer added. “You can put someone in front of Service- Titan and it is pretty intuitive and easy to figure out,” he said. From an operations standpoint, the company’s product has made operations at Dutton much more transparent. “I could see in real time what everyone was doing and how everyone was performing and who was good at what,” Falconer said. 2 percent accomplished Mahdessian admits that he, Kuzoyan and the entire ServiceTitan team have a big mission in front of them. Having achieved only about 2 percent of their vision, there is still 98 percent to go. Achieving that requires a huge investment in new products and features to the software and in scaling the company. That is where the private equity financing comes in, he said. He and Kuzoyan have been fortunate in being able to pick financial partners that were aligned with their vision, values and how they operate, Mahdessian said. These partners have not just given money. They have been helpful in terms of giving guidance and helping the pair think through certain paths and opportunities they had not been familiar with, Mahdessian said, adding that the investors have also been helpful in referring employee candidates. ServiceTitan makes money through monthly subscription fees. Depending on the size of the company and the types of features included with the software, it can range from several hundred to several thousand dollars a month. While the company does spend on traditional forms of advertising, it has formed partnerships with trade associations and influential companies in the home services industry to get the word out about its software. But the most powerful form of advertising, according to Mahdessian, is plain old word of mouth. “We have built a great reputation for really helping home services businesses become more successful,” he added. “They all know each other and want to help each other, and they often will refer ServiceTitan.” Falconer agreed with that assessment. In the home services industry, the professionals look to their peers to see which vendors provide the best products, he said. “Generally, we are tight with our pocketbooks and skeptical of someone trying to sell us something,” Falconer added. “So, that is where the word of mouth gets a lot of power.”