Why the Wealthiest Investors, Nobody Talks About, Are All in This Industry

Executive Summary

The conversation focuses on building durable, sellable businesses—especially in real estate education and home services—rather than optimizing for short-term revenue or founder lifestyle. Cody Sperber describes how real estate taught him marketing, sales, systems, negotiation, and capital raising—skills he later applied to education and flooring. Tommy Mello emphasizes operational discipline: validate growth before expanding, prioritize profit and service quality, and build the financial and management systems needed to scale.

Business Strategies and Playbooks

• Choose a strong business “vehicle.” Sperber favors industries that are scalable, sellable, and valuable, with substantial demand and room to differentiate. He saw flooring as attractive because most consumers could name few flooring brands, leaving an opportunity for a strong marketer to build brand awareness.
• Build enterprise value, not just owner income. Sperber says his education-business exit changed how he viewed entrepreneurship: the goal is to build an asset that can be sold. Reinvesting rather than extracting cash can support growth and future value; an expensive lifestyle can turn a business into a cash-consuming lifestyle business.
• Test expansion in stages. Mello describes a private-equity-style approach: test an initiative in one market, prove it with data, then expand to three and five markets. He recommends expanding only when the core operation is working consistently and profitably.
• Get the operating foundation in place before adding complexity. Sperber advises against layering on software before the call center, training, and core systems are ready. Mello similarly stresses that scaling requires clear processes, financial visibility, and capable teams—not just more sales or marketing.
• Treat marketing as a repeatable capability. Sperber credits direct-response marketing and lead generation for selling more than $160 million in online education. He argues that technology can accelerate the work, but relationship-building, offers, negotiation, and sales still require human skill.
• Use experimentation without ignoring the numbers. Mello encourages teams to try initiatives and learn from failures, but says mistakes should be affordable and informative. He calls the willingness to keep testing campaigns “marketing stamina.”
• Focus before diversifying. Both speakers warn against chasing shiny objects or switching industries without a clear reason. Mello describes past moves into commercial work, new construction, box stores, and home warranties as distractions from the company’s core business. His advice: tighten operations when things are unstable; expand when execution feels repeatable.
• Define the customer and service level. Mello advises Floor Daddy to decide whether it wants to serve premium customers or compete for lower-priced, higher-volume work. Premium installation requires a different crew, quality standard, and price point; the company should not assume one service model fits every customer.
• Build credibility through evidence and authenticity. Sperber says consumers should verify a real-estate educator’s track record rather than rely on social-media claims. He points to public property records as one way to validate a real estate operator’s history and cautions against promises of easy, automated returns.

Operations, Leadership, and Organizational Tactics

• Use real estate as an entrepreneurship training ground. Sperber says it taught him to build systems, market, negotiate, influence, form relationships, and raise capital. He applied those skills across later businesses.
• Create a quality pipeline for installation work. Mello says it is harder to train flooring installers than technicians in a classroom setting. One possible path is using new-construction work as a training ground, with experienced foremen checking workmanship before installers move into higher-value jobs.
• Manage people through clear expectations and performance. Sperber compares running a company to driving a bus: people may join, move roles, or leave, but leaders should aim to leave them better off. He argues that loyalty is mutual and performance must be earned continually, rather than based only on tenure.
• Recognize that the team must change as the company grows. Mello notes that some people who helped build an earlier-stage company may not be suited to its next stage. He emphasizes putting the right people in the right roles and being willing to adjust responsibilities.
• Keep leadership focused on direction and culture. Mello sees his role as sustaining the vision, motivation, and cohesion of the team, while operational leaders manage execution. He also describes his priority order as employees, customers, community, vendors, and then investors.
• Build financial discipline alongside sales and marketing. Mello says businesses often overemphasize sales while lacking a controller, CFO, or financial-planning capability. Daily cash-flow awareness, budgets, KPIs, and profit tracking help leaders see whether growth is actually healthy.
• Protect personal capacity and integrity. Sperber describes using therapy, routines, and clearer boundaries to regain alignment after a difficult period. He says business success and public status do not compensate for poor personal decisions, and advises entrepreneurs to protect their character and avoid letting “yellow-light” behavior escalate.

Metrics and Timelines

Cody Sperber and His Businesses

• His first real-estate deal took 14 months to complete. He had accumulated about $30,000 in credit-card debt while pursuing deals and earned a $40,000 wholesale fee on the first transaction.
• His next deals came faster: the second took about two months, and the third about three weeks.
• He said he made $1.3 million within 12 months after his first deal.
• The video introduction cites more than 2,000 properties worth over $500 million; Sperber later refers to completing about 2,500 deals.
• Clever Investor was founded in 2010, grew to more than 100,000 students, reached the Inc. 5000, and was sold in 2023.
• Sperber says he sold more than $160 million in online education over the period discussed.
• He says Floor Daddy had operated for nearly two years since taking its first customer. Revenue had reached $1.5 million per month, then fell; at the time of the conversation, it was back above $1 million per month.
• Floor Daddy had 37 internal team members and roughly two to three dozen installers.
• Sperber says he has more than $200 million in commercial development underway, operates three funds, and is opening a fourth.

Tommy Mello and A1

• Mello describes A1 as having about 1,200 employees, operating in 43 markets across 23–24 states, and handling about 25,000 households and 34,000 leads per month.
• He says the company’s market share is below 2% and sees a path toward 10%.
• He cites a goal of reaching $500 million in EBITDA.
• He says A1 was about 4% above budget as of the previous day and had generated $8.1 million in EBITDA in the prior month. He also cites a current bottom-line figure of about 27%, with a path toward 35%.
• Mello recommends scaling back if a business cannot make at least 15% profit, and later emphasizes targeting roughly 15–20% profitability before aggressive growth.
• A1’s training center was expanding to a capacity of about 110 new technicians per month, with cohorts of 60 and then 90 planned in the following months.

Concrete Recommendations

• Validate a business or expansion opportunity with data before committing to multiple markets.
• Build core processes, training, and customer-service capacity before increasing software or growth initiatives.
• Track profitability and cash flow frequently; revenue growth alone does not show whether a business is healthy.
• Choose a clear customer segment and align pricing, labor, and quality standards to that segment.
• Use small experiments to learn, but define what success looks like before scaling the experiment.
• Reinvest in the business and control lifestyle spending when building a company intended for sale.
• Vet educators and business partners by checking their operating history and results, not just their marketing.
• Stick with repetitive work long enough to compound results; both speakers argue that disciplined execution beats constant novelty.

Presenters and Sources Mentioned

Presenters: Tommy Mello, host of The Home Service Expert; Cody Sperber, founder of Clever Investor and Floor Daddy.

Sources and works referenced: Lyall Wall (Sperber’s early mentor); Adam Coffey’s The Private Equity Playbook and Empire Builder; Chris Voss’s Never Split the Difference; Robert Kiyosaki’s Rich Dad Poor Dad; Og Mandino’s The Greatest Salesman in the World; The Psychology of Money; Gino Wickman’s EOS and Rocket Fuel; Simon Sinek; Ed Mylett’s The Power of One; and the 5x CEO podcast.