The Underwater Hustle
Building (and selling) a niche business in milfoil removal
The Come Up highlights successful business owners’ & operators ‘come-up’ stories in an easy-to-read, written interview format.
All content is transcribed from live interviews.
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For this issue: Joe Markman, who - prior to Markman Capital Insight - built and sold Lake Defense Force!
Lake Defense Force Quick Stats: (prior to exiting)
👥 Headcount:
📆 12 (year-round max)
🌞 21 (peak season)
💰 Annual revenue: ~$450,000
📈 Average annual profit margin: Between 0% and 60%
🏢 Years in business:
⏳ 3 years full-time
📆 12 years total
⚖️ Total milfoil removed: ~3 million lbs
🌱 Annual milfoil removal at exit: ~1 million lbs
On starting your first business…
Yeah, it's like a true traditional entrepreneurship story, right?
It's me in high school, making flyers on hot pink or hot blue paper, sticking them on my target demo's doors, and knocking on houses to see who'd hire me. Then, asking friends of friends if their parents might hire me for this thing. It was really just word of mouth and literally guerrilla marketing.
But maybe I should provide some context…
Milfoil is a blanket term for invasive freshwater aquatic foliage. It’s native to Eurasia but not to Seattle — where the business was based — or most of North America. There's an argument that, since it's so populated, it could be considered a native plant. But that's more of a boring etymology question than what it really is.
I've always been a huge scuba diver, and really into fish - I worked at the Seattle Aquarium for about two years as a volunteer, and even won Volunteer of the Year once, which was hilarious.
Anyway, I've always loved scuba diving and rowing. Rowing on Lake Washington, I always saw milfoil. A friend on the team, who was older than me, told me he made a lot of money removing milfoil by scuba diving.
Even though he was older, I was more qualified as a scuba diver and more business-minded, so, I basically said, "Hey, you keep Mercer Island," — the place in Seattle where all the Microsoft execs and famous people lived — "Let me take the rest.”
He taught me how to do it, and away I went.
How long the business lasted…
For the first eight years, it was a summer job or something I was trying to pass off. I even sold my client list at one point. I lived in Colorado at the time and didn't want to continue.
The job is very niche.
It’s scuba diving in lakes, which is unrelatable to 99.9% of people. Then, you're removing plants — another thing not relatable to most. It stirs up all the silt, so you can't see or hear. You're working exclusively by feel with plants that grow up to 18 ft tall, at the base of them, pulling thousands of pounds of it manually underwater. It's completely unrelatable to anything most people have ever done.
It was crappy work…
For the first few years, I had to calculate the amount of money I was making per minute just to motivate myself because the work was that awful.
You smell terrible, and it's not enjoyable at all.
But back in high school, I had one person I called the “surface guy”, who laid in a floaty, collecting the milfoil at the top when I threw it up. It was just him and me, and I would charge clients between $150 and $300 an hour. I'd pay the surface guy $50 an hour to go get a tan, and I'd keep the rest.
At that time, it felt like an unreasonable amount of money for a kid to be making per hour. That's the only reason I was able to keep going, or how I motivated myself to continue with that style of work.
Beyond that, I didn’t have any employees in high school. I wanted to make all the money, and was never overwhelmed with too many jobs. It was more like, for a month of the summer, I'd have one to two jobs a day, and if I pushed it, I'd do three. Doing three jobs a day was a lot — I’d be scuba diving from 10 a.m. to 7 p.m, but there were also other limitations…
I didn't own a truck or have storage, so I was somewhat constrained by when I could rent a U-Haul truck in the morning.
Every day, I'd be at U-Haul when they opened, and then my schedule was constrained by when the dump closed at 4:00 p.m. I had to fit everything within the time I could rent a truck and before the dump closed, or I'd need to postpone the dump load to the next day.
Storing too much material at my parents' house wasn't an option, especially when it was literally thousands of pounds of rotting plant matter in garbage bags. It wasn't until I returned to Seattle post-college, around 2016, that I actually hired employees to run jobs without me being there.
This was the era when SEO became a big deal, and you'd name your company based on common search terms. So, I named mine Seattle Milfoil Removal — which worked great for SEO. Each summer, the website would attract dozens of free hits. I'd pass the work to a friend, and he'd give me a percentage of the earnings.
After graduating in 2015 and working in Denver for a year, I went back to Seattle to work in property management. Despite having a full-time job, my old, somewhat forgotten website was still pulling in dozens of hits daily. That's when I began hiring people to handle these jobs on the side, without any real ambition to scale it into a larger business.
It was surprisingly profitable…
In the first year back, we netted about $10,000, which felt great for what seemed like minimal effort.
Then, the next year, revenue jumped to $30,000 - that got my attention.
Even though I was working full-time elsewhere, the following year we saw an increase to about $100,000 in revenue. At that point, it began to resemble a legitimate full-time job.
During those first three years back in Seattle — even without updating the website or having a clear mission — the business grew as I outsourced the work and hired additional people.
And once you establish trust with clients in high net-worth home services, they often refer you to others, knowing you respect their property and won't take advantage of them. There's a huge trust barrier to overcome to get hired by those types of clients.
But really, the biggest thing was me winning a huge government contract — one I hadn't even anticipated getting. It was for Lake Bellevue, a real lake in this neighborhood surrounded by concrete, with a bunch of restaurants, apartments and things like that.
It was a $50,000 contract, and I was looking at a 60-70% profit margin, so essentially, I was about to make roughly $30,000 in just six days, which was insane.
Winning that is what made me quit my job. I resigned in April, with the contract scheduled for May, to get everything in order, hire the necessary staff, and establish relationships. Around that time, I switched the company's name from Seattle Milfoil Removal to The Milfoil King.
At that point, it became a real business, and I needed to hire more divers pretty quickly. The Divers Institute of Technology in Seattle was my go-to because they train divers in skills intended for jobs on oil rigs. Even the manager I hired had a background in extreme conditions — jumping out of helicopters to fix pipelines in Alaskan ice storms.
These guys are pretty hard - used to being in harsh, demanding environments, and here they were in mild weather and calm waters, working in front of luxurious homes.
It created an interesting dynamic at work for sure. laughs
Later that year, I secured another big contract - a three-week job that netted about $60k.
We started winning these high-value deals, but ironically, I wasn’t that profitable because of a ton of rookie mistakes. Even still, at the time I'm thinking, these contracts are here, it's my first year full-time, and it's amazing.
Why isn't anyone else doing this?
Rebranding again…
I had already changed the name once, but I had a potential client ask why we were called "Milfoil King" when we were bidding on had nothing to do with milfoil.
That's when I realized the job was about more than milfoil; it was about full lake health, controlling algae, managing different plants, and improving fish habitats — so I had to rebrand again to Lake Defense Force.
The term "environmentalist" can be politically triggering, so I avoid it, but I've cared about the environment since I was a kid, and that ethos was there even before I realized that my work offered an environmentally sensitive solution to managing freshwater issues.
Rookie mistakes…
Overconfidence was a factor…
In my first serious year, I had a team of twelve, running three teams a day.
Despite my marketing degree and belief in digital advertising, none of that was effective.
What actually worked surprisingly well were AM radio ads, which brought in five to six calls daily. It was a huge lesson to use whatever works without judgment.
But by the season's end, I realized I hadn't tried extending our working season before. I always just accepted the season ended at the end of August — but eventually, I learned we could push that timeline by dealing with things like lily pads and doing beach projects.
But yeah, I was too confident...
I told my staff, "You're on my team, I'm on yours, we're going to start a non-seasonal business."
I thought boat cleaning would be it.
I looked at what we were good at: water, divers, being eco-friendly. And in Seattle, what's there a lot of?
Boats.
These guys knew how to clean, so why not boat hulls?
So I'm thinking, Yeah, we got this. Let's send it. I'll cover everyone's full wages, and we'll hit the ground hard. Guerrilla marketing at all these boats, just pound the pavement.
But here's where I tripped up: I was way too confident thinking we could just dive into a new service offering, with all the employee overhead.
Floating everyone's wages? Huge regret.
I burned through like $15,000 in just a couple of weeks.
The other thing I learned the hard way?
People might work for you, but that doesn't mean they're going to care about your business the same way you do. These guys weren't all in. They were just hanging out, smoking cigs, chilling on the docks instead of pushing our services. They were supposed to be hustling, and there they were, just wasting time.
So it was a real lesson: don't get too cocky and jump into a new business just because you nailed it with something else you built over a decade.
That success doesn't automatically transfer. We dove into boat cleaning after all that effort, and what did we get?
Two clients. That's it.
The revenue?
About 450 bucks against the 15 grand I spent.
Problems with the business…
At one of these lake management conferences, I connected with a guy who had unique methods for managing freshwater foliage. He introduced me to a technique targeting invasive lily pads. We experimented with it during my first full-time year, and ended up deciding to focus on it heavily. By the end of that year, our services expanded from just scuba diving to installing underwater blankets, utilizing organic, unbleached burlap and thousands of pounds of sandbags.
The method works because lily pad root systems require sunlight to thrive. So, if you block the sun, these lily pads just can't survive. They die off, break down, and don't pop back up for ages.
So our plan was to pretty much just keep the sunlight away. Once we did that, the pads died, decomposed, and then the burlap we used broke down over a few years, depending on what was going on with the lake's bottom.
What you end up with is just sand, which is awesome for fish, salmon - so, it's a solid outcome for everyone involved.
We shifted from just yanking plants out while diving to putting down these huge barriers. And by the end of all that, I needed space for all our gear and stuff, so I ended up getting a warehouse and office.
All that to say - I went from zero fixed costs to suddenly dealing with inventory, holding costs, plus a warehouse to pay for. I went from a zero-cost fixed cost, service business, transitioning to having to cover these constant expenses throughout the year for a seasonal business. Sure, I made good money during the active months, but you're also spending throughout the off-season just to store your stuff.
Despite these new costs, the next year turned out great.
We tripled our business, which was awesome. Everything was running smoothly, and we began securing more high-end contracts. I went all in on the business, knowing I'd be moving to Austin with my soon-to-be wife in a couple of years.
It was like, if I'm going to do this, it's now or never.
I just couldn't take Seattle anymore – so next thing you know I’m running this business remotely, which is an entirely different beast.
It's all about setting up systems and processes so you can ensure everything is smooth while still providing top-notch service. But that year was super tough.
Sure, we tripled the business, but we as I mentioned, also dabbled in areas we had no business in.
Dock building? Nightmare. The liability? Insane.
All these little things started stacking up. I was just over it with these minor annoyances and the stress that comes with running a seasonal business. You might have an $8,000 day, which is great — but that's only for three to four months of the year.
What was the goal?
My big dream was to establish a lake defense certification for any development or apartment located by lakes, setting a standard they could meet to be certified. That was the aim. But man, diving into government contracting opened my eyes.
"Nepotism" might not be the exact term, but let's just say things weren't exactly clean.
You're not outright bribing anyone, but you definitely need to win over the biologists. It's all about who you know and how you navigate those relationships. And It's not just about getting any biologist to listen, either - you need the one who influences state decisions.
It's like a game where you have to position your solution as the best or only option.
Then there's the influence of chemical companies…
They sponsor state conferences, throwing big money around to push their solutions for public projects. The whole scene is pretty disheartening when you see it up close. And there I was: pitching my service, a natural solution, which is always going to be pricier.
My goal was big — I wanted to be like UL Solutions, with a presence in every state, setting the standard for lake health.
But navigating that world? It's a whole different ball game.
On selling…
I had everything lined up to launch this big plan, but then I hit my breaking point dealing with a client who just refused to pay on a huge contract. That was it for me; I decided I didn't want to face another season of it.
I really wanted to focus on real estate, which I feel offers a clearer path to generational wealth and asset building. The lake business could grow over time, but not as easily as real estate. I realized I could achieve my financial goals faster by focusing elsewhere.
I figured I'd see if I could sell the business before the season ramped up again.
So, I got a business broker, listed it for sale, and waited to see what offers might come in. If all else failed, I was prepared to run it for one more year.
From broker to closing was like five months — it felt longer than that, but it was pretty quick.
Yeah, I should give myself some credit for managing the business from afar. It was an incredible training ground for understanding how to run a business with necessary systems.
Everything needed to be self-checking and transparent — from the work to the customer, to the employee, to me. I became proficient at building documented systems. My operations were dialed in — from customer acquisition to getting testimonials, covering everything A to Z and involving all the employees so it made for an easy handoff, despite me not being there, reducing any key man risk.
In the final year, I was breaking even with the high costs.
I had still been trying to start other ideas - and launched a marijuana consulting company during the offseason under the Lake Defense Force umbrella, called the Grow Guides.
It didn't generate the expected profit margin, and hurt the overall business numbers a bit, so eventually I had to settle for an asset sale. That actually had a ton of tax and legal advantages for both parties, and I had at this point a huge amount of physical assets, though the final sale price was about 0.8 times the revenue.
I just wanted out…
I realized it wasn’t the opportunity that was going to get me closer to my goals in life.
But, it was still an incredible training ground for understanding how to run a business with necessary systems. Everything needed to be self-checking and transparent — from the work to the customer, to the employee, to me. I became really great at building documented systems.
The hiring process I developed, I believe, is one of the best out there, surpassing even those at other companies I've known.
I managed 21 people remotely at 28 years old!
There's nothing better remotely, so I couldn't imagine a better work experience.
On current goals, repositioning etc.
Well, I've completely reverse engineered where I want to go in life.
I’m going to recommend the book "The E-Myth," despite it being the worst titled book of all time — it's an invaluable resource for entrepreneurs.
What it taught me was that business should serve your life goals, not the other way around - it made me more goal-oriented and forward-thinking.
Now, I have my goals for the next 20 years displayed on my computer screen as a daily reminder of where I am going.
Prior to this, I did have goals for the business within each year, and tried to work backward from them, but there were also many reactionary decisions because I just dove in without a clear plan.
After selling the business and learning more about what drives equity and multipliers, I realized there's a whole private equity market that I didn't even know about!
It was a revelation to discover there are companies specializing in different industries that pay above market value because they have synergies with other businesses they've acquired.
I knew nothing about any of that while building Lake Defense Force, and only learned more through the actual sale process. It's something I want to explore further in the future.
My dad's been running his own company for about 30 years, and he never even considered selling it until now. He doesn't have any employees; it's a research firm.
So he asked me to help him build out a back end, similar to what I did at Lake Defense, and explore the possibility of selling it. Before, I was going from zero to one and selling at one, and now we're looking at trying to go from one to ten.
What you’d do differently…
If I had known everything, I probably wouldn't have done it. *laughs*
So with that being said, I would change nothing.
There's this book called "Range; Why Generalists Triumph In A Specialized World” that explores the idea that specialists often make more money quickly by going deep into their field. But generalists make connections between different areas of expertise, which can lead to unexpected opportunities and greater financial success over time.
I’m a generalist — I know a little bit about a lot of things, so the question for me is, if I would have focused more on specialization, would I be better off?
Would I have gone deeper instead of wider?
I don’t know.
Entrepreneurship is exclusively what I'm looking at, even what I'm doing now.
I'm technically a contractor at a company, so I think the way I look at it is extreme ownership. Not to quote Jocko Willink's book, but anything I do, I need ownership of it and I need to set the goal and I need to take it there.
And I want to lead the team that does it.
On entrepreneurial role models…
I don't know…
I was really into Richard Branson until I read his autobiography - I thought it was kind of gross.
I had looked up to him for a while, but after reading it, I was just like, “Does he suck?” I don't want to say he sucks, but something about it was just too self aggrandizing.
Honestly, Gucci Mane - that's the guy. laughs
He’s just always hustling, always trying to figure out the next move. Granted, some of his ethics aren't where it's at, but the Gucci Mane Guide To Greatness is a fantastic book.
His first book is also fantastic. I think he's really like a great business mogul.
And I laugh because some stuff that he got into wasn't that great. But you look at the scheme of what's going on — whatever he's doing, he tries to put 100% into it. And it’s hilarious — he releases trap raps about how great his wife is.
Like, fantastic…I'm here for it.
He needs his credit. I'm here to give him his credit in the business community! laughs
That’s it for issue this issue!
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Interview by: Alex Tribe
Edited by: Angus Merry