Their Parents Struggled as Plumbers So These Founders Built a Billion-Dollar Startup for Home Businesses

INC.com

June 2019

 

 

 

 

By Emily CanalStaff writer, Inc.com

 

 

Bombs were rocking Tehran when Ara Mahdessian was born in 1985 in a hospital bunker lit by backup generators, the war between Iran and Iraq raging above him and his mother.

 

Meanwhile, northwest of Iran, Vahe Kuzoyan's family was preparing to flee the poverty and lack of opportunity that defined Armenia in its final decade as the poorest of the Soviet Union's Trans­caucasian republics.

 

Both families, ethnic Armenians, soon left their respective countries for a safer life in Southern California, which has been home to the largest Armenian expat community in the United States for generations. (Perhaps you've heard of the Kardashians?)

 

There they followed a path familiar to so many immigrants who came before them: Take whatever work is available. "Our parents brought us here with no money, no language, no connections, and no idea of what to do," says Mahdessian. "They did all kinds of odd jobs to put food on the table." They worked at those jobs until they figured things out and started their own businesses. Both of their fathers became successful building and plumbing contractors but still struggled with English, as well as the logistics of running growing service companies.

 

Their sons solved that problem by launching Service­Titan, a software platform and mobile app that helps entrepreneurs in the service trades operate their businesses– from taking service calls to dispatching technicians, accepting payments, and managing payroll, as well as producing and analyzing their P&Ls. It even allows potential customers to apply for financing for big jobs.

 

Ara Mahdessian with his father, Hovik, in California. He was a toddler when the family left Iran. CREDIT: Courtesy Company

 

Mahdessian and Kuzoyan run ServiceTitan in a way that reflects both their status as immigrants and their status as West Coast tech entrepreneurs.

 

For starters, ServiceTitan is diverse in both gender and race–about 34 percent of the staff identifies as female and 32 percent identifies as white, while another 38 percent describe themselves as unspecified. When the company made improvements to its health care plan, it added fertility benefits, and also transgender services. Gender-neutral lavatories have been installed as well.

 

Is that so SoCal? Maybe, but the message is unmistakable: Everyone is welcome here. "For us, the immigrant experience is really tied to the notion of diversity, and we pursue diversity because we think it results in the best performing teams," Mahdessian says. "We believe people can come from any part of the world, and that the best decisions and ideas come to fruition through a diversity of experiences and perspectives."

 

They offer competitive benefits, including unlimited personal time off, daily catered lunches, six weeks paid parental leave, equity in the company, and rewards to recognize high performers, like vacations to Hawaii or ski trips.

 

Given what their parents went through, as well as their own experiences, Mahdessian and Kuzoyan believe great outcomes require taking great risks. "I saw my parents decide that they wanted a better life and then take that huge risk moving to America," says Kuzoyan. "That was a big inspiration for me, and made me want to take that type of risk by starting ServiceTitan."

 

That's why ServiceTitan's performance reviews can reflect negatively on those who don't fail at something– because it might mean they're too complacent. The co-founders want to see their staff striving to achieve ambitious goals and learning from mistakes. This practice extends to bosses as well: Mahdessian and Kuzoyan get 360-degree reviews from their employees to understand where they excel, where they suffer, and where they need to improve as leaders.

 

Vahe Kuzoyan (left) and Ara Mahdessian. CREDIT: Rozette Rago

 

When interviewing job candidates, the co-founders ask them to articulate a challenge that they've weathered. Mahdessian and Kuzoyan understand that running a fast-growing startup is inherently high risk and comes with unrelenting challenges–amplified by the fact that they are dealing with the livelihoods of their customers. They want their own employees to connect with that urgency,

 

"We reflect back on how much our parents sacrificed and what kinds of struggles they had to fight through–failure was never an option for them," Mahdessian says. "We filter for people who have faced moments of adversity and have persevered, because that is going to be every day at ServiceTitan."

 

Vahe Kuzoyan, then about 5, in Yerevan, Armenia, with his father, Harout, who fled with his family in the 1980s to seek a better future. CREDIT: Courtesy Company

 

 Mahdessian and Kuzoyan met on a college ski trip for Armenian students–benefactors, of sorts, of their fathers' successes. Mahdessian was studying at Stanford while Kuzoyan was at the University of Southern California, and both were pursuing degrees in software engineering. After graduating, they teamed up on several consulting projects before building ServiceTitan. Word quickly spread throughout the Armenian immigrant community that the co-founders had a tool that could ease some of the most annoying operating problems of many entrepreneurs, and soon business swelled.

 

They launched their Glendale, California-based business in 2013–Kuzoyan's parents served as the beta customers– and it has experienced 1,437 percent growth in the past three years. (It is No. 347 on the 2018 Inc. 5000 list of America's fastest-growing private companies.) ServiceTitan booked $59.5 million in revenue last year.

 

To accommodate that kind of surge, the company is moving to a larger office space this year. The new office decor includes features such as unfinished wood and exposed piping. It's a reminder to the staff of who their customers are: plumbers, carpenters, and other tradespeople.

 

"The goal of the aesthetic is to further the emotional relationship between our team and our customers," says Kuzoyan. "We are using things like the environment to make them feel like they can understand the lives of our customers." After all, Kuzoyan and Mahdessian know exactly how hard their customers have to work.

 

FROM THE JUNE 2019 ISSUE OF INC. MAGAZINE