Alex Kraft brings us up-to-date on his technician program on Heave

All right.

We've got a new office. I'm overlooking a marina now. It's nice. White background. Things are popping. So I appreciate you having me on. And, you know, we worked hard for a couple of years on the online rental and purchasing procurement. And, you know, I wrote today that we were making progress with it. But in my gut, it just wasn't taking off like we had hoped. And even though we were helping rent and sell equipment, and so in my gut, I felt like it was, we were helping what was an inconvenience more than what some people, I like the phrase hair on fire problem, even though I don't have hair. But, and so, yeah, I mean, we were making it easier to rent and buy equipment. But, you know, at one point, as some people pointed out, it was still getting done. And yeah, it was an inconvenience, but we just weren't, you know, we were struggling to, to, to find those kinds of like wow moments with it. And so we had some tough conversations internally and we went back out and talked to customers more and we asked them, you know, what is the biggest pain point that you have? And every it's, it's not,52% reply. It was 100%. It is service. It is, you know, people reference a tech shortage, lack of skilled labor, longer lead times for dealers to get out there, high labor rates, parts availability, you know, all of these things go under the umbrella of service. And so we, And we kind of kicked around the idea of, you know, could we do something here? Could we solve this pain point? My first concern, frankly, was, are there enough technicians out there that have the diagnostic software that can offer a dealer type experience? Because we all know that electronics are playing a larger part in heavy equipment. A lot of people don't like that, but it's necessary. And thankfully, and we're fortunate that when I started talking to technicians who are working independently in the market, every single one of them had software. Either they had the OEM branded software they acquired, I don't know how, when they were with the dealer. Or I found this company called Diesel Laptops, where they've built a business supplying laptops. first for on-highway trucks, and then now for off-highway for heavy equipment that can plug into any manufacturer's computers. And so my fear initially was I was able to kind of move past that. And then we started finding more and more technicians and onboarding them and then had the app built, rolled it out into the market. And we've been facilitating customer repairs now for... You know, a month and a half.

That's right.

Yes. The versatility of an independent technician is unmatched because you're right. If I call, if I have a cat machine down, the cat technician comes out, he fixes that. And guess what? Because of the backlog, he's immediately dispatched to another customer's job. That's just the way it works. And one of the huge wins that we had early on that I didn't necessarily think through the impact of was we had a cat excavator was down. Customer put it in through the app. Technician gets assigned, goes out there, fixes it. And then the customer says to him, hey, while you're here. On this job site, can you look at this John Deere wheeler? Sure. Looks at the John Deere wheeler and now what was one service call? He fixes two machines while he's there, maximum efficiency, and then is off. And so that's just something that, you know, the dealer can't do. You are limited to the one brand. And it's a great overall service experience from the customer's perspective.

That's right.

They've loved it. There's, which is a big difference between what we're doing prior to service. And this drove me crazy because it doesn't make sense to me, but I'll still, I'll take the L on it. What I couldn't believe was when we had the sales and rental procurement tool, salesmen weren't telling anyone that they were using it. Like they wouldn't tell another sales rep that was within the same dealership. They weren't competing. They had different territories. There's no risk of like losing business. But they just wouldn't tell anymore. And I think maybe, you know, if you break down the psychology of it, it's well, maybe the dealership will think that I'm expendable because if they find out that I'm getting a lot of deals through this, you know, technology company, they'll just fire me and then they'll just my job will be replaced. I don't know. But they weren't telling anyone with the technicians has been complete opposite. Obviously, they know that it's their skills that. are the most important. Like we're not going to, we have no chance of replacing technicians, but they love that we are, we're solving two big problems for their two biggest problems, frankly, is number one, finding new work. Every independent guy that you talk to, they have the same profile. They most, more than likely they started at a dealership and then decided to go on their own. And so Typically, they will work on the same customers that they used to service their equipment when they were at the dealership. But they have a small book of business. And so they, in order to get new customers, it's all word of mouth or they're driving just like a salesman. They're putting a business card on a piece of equipment. So that's the first problem we solve right away. There is a steady flow of customer repair requests that come through our app. They see it. They see who the customer is, what the issue is, the machine, and then where it's located. So they can choose to answer whichever request they want. And then the second piece that we solve for them is payment. So the technician invoices Heave. When the work is complete, we invoice the end-use customer. So now we eliminate the accounts receivable function for them. We just pay them. We pay them quickly. With those two things in practice, technicians have been telling other technicians about us.

That's right.

Yeah, I'm not sure either.

That no one has asked me. You hit me with a question that I...

No, I mean, it's finding enough technicians to handle the demand would be the first thing off the top of my head. That would be an impediment. You know, there are resources to better qualify technicians. You have some of those as well available that I think we're going to leverage. You know, we're going to start. We're starting in a certain area. We're starting in Florida. So we can manage the expectations and develop the playbook that we can roll out in other markets. But we've been building a wait list in other markets just to gauge how many technicians we can onboard that are interested in trying out HEAVE in other key areas of the country. So we always have our eye in other places.

Yes. A couple of guys early, and I love that too, because it shows that they're engaged. They're thinking through it. So, you know, one guy was asking about like being able to, you know, take the job notification and have it speak to his Google calendar. We have that functionality, which is great. You know, if you click on a link, it gives you the direction straight from your phone to the job site where they have to go. Where we'd like to be in the not so distant future is I'd mentioned that the technician invoices us. I would like to give them the software within the app where it's just all right there and it helps them invoice us even faster because that ultimately means a faster invoice to the customer, which everyone likes. So we've had some suggestions along those lines already.

We've had some, yes, which we are working on. We've started with non-warranty repairs, but there's no reason why it has to remain that way. That will be fun because we want to be able to complete any kind of repair. We've had customers ask, and offer suggestions about certain products. Like, hey, can you have guys who do on highway? So now a customer can go to one place, regardless of brand or type of equipment. Hey, do you have crane technicians? Hey, do you have road technicians? Can I get a guy to repair a forklift? So a lot of suggestions have been about type of product.

So interestingly, so no one from the rental industry, but some of the independent technicians who are on our site have done work for rental companies. And also a couple of guys have been hired by dealers, funny enough, to do some of their internal. So, but not, we haven't had a rental company reach out to us yet.

It hasn't happened yet, but I knew it was going to take some time. People have to warm up to the idea because I call it our crazy idea. And I've pitched it to a few customers. You can tell they sit back and they had never thought about it. And I'll use the words carefully because you were very careful when you introduced it as some say, I forget the exact words, but you said some say there's a tech shortage, which you disagree with. But yes, so we think that we could introduce new supply of technicians to the overall market. By allowing contractors who have their own technicians on their payroll, if those guys aren't utilized, like there's a customer here in South Florida we've been working with, they have eight of their own technicians. And when we asked them, like, well, how often are they utilized? You know, there's not a specific percentage they told us, but there's a lot of idle time. Well, if I'm paying those technicians, whatever, $30 an hour or $35 an hour. And six of the eight aren't working on something right now. How about I sub them out on the Heave app? And now there's six more technicians in the South Florida market who can fix something. And the way I approach it, too, is like I'll ask a customer who downloads our app, who puts something in. I'll ask him, hey, who's your biggest competitor in the market? If you're a utilities contractor, who's your biggest competitor? Oh, it's so-and-so. Hey, would you have an issue if your Komatsu excavator was down, if that contractor's technician worked on it? And it's something that they've never thought of before. They're like, you know, no, I wouldn't. As long as it gets fixed right, why would I care? It's like, exactly. Because right now, a lot of the time when they call in for field service on that Komatsu excavator, it's, hey, we're one to two weeks out. Well, if we can get you somebody. You know, within 24 hours and he just works for your competitor. You know, isn't that overall a great thing? You've got your machine up and, you know, the contractor had an idle technician. You know, he just kind of paid for himself.

uh we do a few uh most of them are dedicated field service though right but we do have some who have their own shop i mean these guys it's it's a similar profile they love They have property. They have their own little shop. They love working on stuff. They love working on cars. They love working on their own stuff in their time off. So it's interesting to meet some of these guys.

Yeah, it's a good question. When I say warranty, I'm talking about the third-party warranty companies. A lot of the OEMs offload their extended warranty to third-party providers after that first year. We used to sell, at Flagler, we'd sell a brand new Volvo L90 wheel loader. Typical extended warranty term would be three years. And it would typically be through EP &G or Glen General was another, or Amanta or Specialty, I think now. They're a big warranty provider as well. So a lot of those extended warranties in the market are not necessarily OEM branded. They're administered by someone else. And that's what we want to, I see us doing is be able to do repairs for those machines.

Yes, they can.

Yes, they can.

I have not. Not there. Not to that level yet.

I agree.

I think customers would say yes.

Definitely. There's a couple inherent advantages in running an independent network. This is one of them. We've seen this play out time and time again. So from the time that a customer submits a request, I need service on this machine. I'm located here. On average, we are getting a tech assigned to that job within 10 to 15 minutes. Here's the inherent advantage. The customer is talking directly to the technicians. And that is something that the dealer experience is. Customer has an issue, calls into a service department. You have to talk to a dispatcher. Dispatcher looks at the TV. Everybody brags about having the TV that shows all of their service trucks and everything. Well, the downside of that is that that person has to synthesize all this information. I have to see where these guys are located. I have to talk to them. I have to figure out where they are in their current job. And then I have to take all that information and then be able to come up with a plan for this guy who just called. That's what takes so long. to get communication back about when you can have some more. And with running the independent network, and it's through an app, the customer speaks directly to the technician. And technicians, from what I've seen, the independent guys, they don't overpromise because they're the ones showing up face-to-face with the customer. And we've been able to get guys, hey, everybody's responding very quickly. and then they're working with the customer you know not every field service request is immediate 911 so we've had specific instances where you know they put in the request the technician gets assigned they talk right then and there and say hey you know i got a hydraulic leak but the machine we can still use it you know any if you can get out to me by wednesday morning that's fantastic But what I love is, so that's happened sometimes. What I love is that the customer knows that someone is assigned and they know when that person is going to be there within 10 to 15 minutes of sending in the request. That does not happen with the dealer experience.

Yes. The other inherent advantage, right? You have to do good work because it's your brand. It's you as an independent guy. If you take too long, if you screw it up, there's no hiding behind that. The customer is not going to hire you. That's not the experience with the dealer, right? And so we want to have that Uber type. When the job is done, hey, rate the technician who just worked on this.

Yes, we are. We're doing it manually, building in the technology now. Like, I can't wait for six months from now for a customer to be on the app and see, oh, Robert Gray has performed 63 jobs on heave. Average rating 4.9 out of 5, you know. This customer says, quote, you know, Robert is super professional, showed up, you know, on time, you know, had this, had our excavator piece back together up around the same day or whatever. It's like, that's going to be really cool.

Well, you know, these, these engineers, they always tell you, oh, it's really common. It's going to take us a while. We'll crack the whip a little bit.

Definitely. I love it. It's going to be a really cool feature. And I can't wait. Whereas there's more repairs done and there's more ratings accumulated and you just, it will provide trust. It will provide. And also, I think it's going to help us, you know, kind of put people into buckets. I think you kind of alluded to this earlier. Ultimately, the vision, I think they're going to be pages where it's like, all right, I need a welder. OK, boom. Click on welding. Boom. Here are six guys in the area. You know, I want a PM tech. I want a crane tech. We've got a couple of crane techs already. You know, I want to. I need somebody who can do undercare. Here's the list of these guys. So it's exciting.

We do not showcase statistics yet, but we're starting to. Like on LinkedIn, we're going to start posting like daily. Hey, repair completed with some of those statistics. Technician assigned less than 10 minutes. Technician assigned five minutes. Time from request to finish repair,24 hours. And we're going to start highlighting a lot of that stuff.

That is interesting. It's something I don't have necessarily a timeline. But that's something that we want to help because I think what we're going to be able to do is provide an opportunity for those that want to go independent, to go independent. And so that would be, hey, diesel laptops I'm building a relationship with. I was just on their Founders podcast last week. So they love our mission. They sell these. technician laptops. They sold, I think,75 million of laptops last year. So there's a natural partnership there where they will sell the laptop, technician invests to go in their own business, and then Diesel Laptop says, hey, oh, by the way, you just spent X thousands of dollars for this laptop. Here's a way that you can get more work. It's through the Heave app. You should sign up. Service truck vendors, I'm sure we could build relationships with service truck vendors where we can help. I already have finance company relationships that used to finance equipment through our first product. So I've already had those conversations where they'd be happy to help underwrite service trucks for technicians who want to go out on their own. Absolutely. who are entrepreneurial themselves.

No, it is exciting. Thank you for your support.

No, you know, I think we got the full picture. You know, it's pretty, what I like about, you know, I mentioned we're solving a real problem. We are. What I love too is that it's such a clear value proposition. We are, we haven't talked about cost at all, but we are a cheaper alternative to dealer service. You know, so it's. Irrefutable. I will share one really good use case that happened a couple weeks ago that would not happen prior. Is that, you know, we had a customer who had a water truck down. They tried their hardest to fix it. They couldn't get it up. They put in the request. They had somebody, you know, the next morning. The guy responds right away. They scheduled it for the next morning. And he calls on the way. And they kind of give him the download. And he just knows it's going to be an easy fix. He's dealt with this before. So he gets out there. It took an hour. Got it up. Everything's working. And they got an invoice for one hour and I think $75 for one way trip. They got a $230 invoice, which they've never had before. I'm sorry, but the OEM captive dealer experience is, all right, we're going to send this $175,000 truck to you. It's a four-hour minimum. It's $145 per hour of drive time. And then, oh, it's 83 miles. So that's at another $4.10 a mile. And there's like five line items. And the thing that customers say a lot is, well, damn, I mean, it's... It's $1,000 before you even touch my machine. And it doesn't have to be that way. And so what we want to do is be a service company. And a repair is just a repair. We want it to take one hour. We want customers to get up and running fast. We want to help facilitate that and then not overcharge and all the other nonsense.

It's exciting. It