Name: John Dugan
Title: CEO
Company: Liberty Supply
Number of Locations: 1
Number of Employees: 10
Year founded: 2021
Main Lines: Bell & Gossett, Taco, Armstrong Fluid Technology, Grundfos, NIBCO

John Dugan brings HVACR experience, a background in software, and a strong sense of purpose to Liberty Supply, a Minneapolis-based distributor focused on the commercial market. We sat down recently with Dugan to discuss his new company and the state of the industry.

DT: You founded your company during the pandemic, and you face related challenges in addition to all the challenges that confront a new business during the best of times. So why now?

Dugan: When you have so much turbulence, dealing with a global pandemic, dealing with the supply chain, dealing with, now, inflation, as well as longer-term changes in terms of the future of work, remote work, or hybrid work, the way that I look at it is through an optimistic lens of opportunity. I think all of those factors are going to change the way that we do business into the future.

And so as a younger company, our benefit is that we don’t have to deal with change management. We don’t have ingrained habits. We’re in the process of forming those habits, and we can be very agile in terms of how we adapt to a changing climate.

DT: What is your background, and how are you leveraging that with Liberty?

Dugan: My background is software engineering. So it’s not a traditional route in terms of where I sit now. I worked for a small [HVAC] wholesale house here in the Minneapolis-St. Paul area. It was a multigenerational business.

The e-commerce landscape was really in its infancy at that point, and especially in the industry as a whole. So I had the opportunity to be an — I would call it an “intrapreneur” — at that organization, and really operate with a high degree of autonomy.

I leveraged my skill set there in terms of search-engine optimization, application architecture, user-experience design, to give us a competitive advantage in terms of discoverability on a nationwide scale.

One of the themes where e-commerce has been so effective and continues to be is reducing friction in the buying process. … So understanding that and applying that concept of reducing friction has been something that I’ve carried with me here.

DT: So did you have an HVAC background as well?

Dugan: I grew up working in underground construction. So dealing in an industry that was more hands-on was always something that was part of my background and what attracted me to the trades.

The [HVACR] industry as a whole operates very slowly in terms of the adoption of technology. So there was an arbitrage there to leverage a skill set that I had and apply it to the space now. Technology is great, but it’s not particularly effective unless you have a really good understanding of the domain that you’re operating in.

DT: What is your sales forecast for this year, for Liberty and for HVAC as a whole?

Dugan: Ours is growth. We’re benefiting from the economics of scale, right? We’re a startup, so we can grow very quickly on a relative basis compared to someone who’s much larger.

In terms of the macro picture, there’re certainly concerns over what’s happening with COVID. How it continues to linger and affect the supply chain. We had a lot of discussions about that at the AHR show. Some manufacturers were transparent in when they think things will clear up. Others could not give an answer. … Most are still trying to work their way back to early 2019. So the supply chain will remain complicated.

I have concerns about inflation, certainly. As inflation continues to creep up, well, then you only have limited levers. So then you have to start raising rates, right? That stifles growth; money is more expensive now. So that may slow down, particularly new construction.

There’s certainly concern that with the shift to remote work, the entire commercial office segment is going to be subject to the significant reduction in occupancies. There’re a lot of headwinds right now for distributors.

DT: You have an interesting post on the company blog that challenges the premise behind the concept of work life-balance. How do you help employees achieve what people are talking about when they say “work life-balance”?

Dugan: The way that I think about it is, when you’re allocating a majority of your life away from your family and away from your loved ones, that there has to be purpose with the work, that it can’t be an environment where you are going to work only for the purpose of providing a roof and food for your family. It has to be something bigger.

It’s very important to me to have a culture that’s constantly in a state of growth, that’s constantly learning. Once it starts having meaning, there’s your implicit balance.

DT: What’s the best business advice you’ve ever received?

Dugan: It was from my uncle. He told me, he said, “John, you’re gonna work your ass off either way. So you might as well build a big business instead of a small one.”

It’s such a simple statement. And for some reason, it’s stuck with me.

DT: And how about the worst?

Dugan: “Never hire someone smarter than you.”

I say that because when you’re building a team, it needs to be additive.

DT: Beyond the obvious goal of earning money and growing a company, providing for your family, what keeps you motivated to do what you do?

Dugan: My dad passed away at age 49 from an autoimmune disease called scleroderma. Seeing the impact that that he had in his life, and how that persists long after he’s been gone, is a driving force, I think, behind my desire to have a long-term impact.

Life is really, really short. But the impact can have a really long life.

DT: If you weren’t working in HVAC, what is your fantasy career, however realistic or unrealistic?

Dugan: I’d be a farmer. ... I like the tangible progression of the work that gets done.

I mentioned that I was in construction for several years. I like that you could leave a job site and the work was done. That you were physically exhausted. That felt good. That felt like progress.