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- Founder-market fit, or the edge that a founder’s personal and professional experience brings to a startup, is one of the most important principles of venture capital investment.
- Construction tech has seen a rush of startups looking to put a disruptive tech spin on one of the world’s biggest industries.
- The buzzy niche of startups has attract founders from both inside and outside the traditional construction industry.
- We spoke to five founders from four construction-tech companies about their varied backgrounds, and how their professional experience has factored in as they tried to break into a buzzy field.
- Visit Business Insider’s homepage for more stories.
Founder-market fit is one of the foundational principles of venture capital investment. It’s sometimes described as the “edge” that a particular founder has in a market. The fit can come from working directly in a field and knowing its intricacies, or it can be a result of a unique perspective brought by someone from another industry.
Construction tech, which has seen a rush of startups looking to put a disruptive tech spin on one of the world’s biggest industries, is no different than any other vertical, in that founder-market fit is an extremely important factor. But in construction, the combination of regulation, convention, and the physical complexity of the work adds specific challenges for someone who is unfamiliar.
We spoke to five founders from four construction-tech startups about how their legal, gaming, financial, and construction experience has helped them build companies, and what advantages and disadvantages they had when getting started.
Yves Frinault, CEO, and Javed Singha, COO, of Fieldwire
Yves Frinault and Javed Singha met at Ubisoft, the video game production company, where they worked together to restructure part of the company. Frinault, a product manager, said that his time at Ubisoft was his first entrepreneurial experience.
“Running a game team inside a company is very similar to running a company,” Frinault said, highlighting the challenge of recruiting the best internal talent and keeping a budget as some of the overlaps.
While they met in gaming, Frinault already has an MS in construction engineering management from Stanford University, inspired by his family’s history of purchasing and remodeling residential real estate.
As Frinault and Singha kept talking, they realized that they wanted to make technology for construction workers in the field.
“We wanted to replicate tools that are available to us in gaming to the construction space,” Frinault said.
They used some of the principles of the gaming industry to inform their design.
“We were putting a product together that we can deliver directly to them, and that they can work on immediately without any training,” Singha said, explaining that the need for rapid adoption in the field made a simple user interface and design extremely important. If they can’t convince the workers in the field to use their product, it would be impossible for the product to grow.
Another asset was their shared experience working on social games at Ubisoft, where they had to make sure that the games worked for both mobile and desktop users. They wanted Fieldwire to be totally functional in the field, and that experience designing cross-platform was invaluable.
Singha said that his biggest challenge was making sure that he understood enough about their potential users, construction workers on the ground, to design a product that was actually useful to them.
“It was a rough crash course for me personally,” Singha said. “I had to learn a whole new lingo.”
Khalid David, CEO and cofounder of TracFlo
For Khalid David, construction is a family business. His grandfather immigrated to the US from St. Kitts in the late 1960s and became a carpenter. His dad and uncle followed in their father’s footsteps.
David’s said he was 12 years old when he first stepped onto a job site, sweeping up while his dad worked side jobs.
“One hundred bucks in a weekend at twelve, that was crazy,” David said.
David knew he wanted to work in construction, but he graduated during the recession when construction companies weren’t hiring. He ended up working with his father and uncle’s subcontracting business, and remembers “hacking together” Google Sheets to keep track of expenses.
He got the initial spark for TracFlo during his time working for Turner Construction. The company was renovating Madison Square Garden during the summer offseason, and because of the tight timeline, they had to work three shifts a day, working around the clock.
“In a week, you did three weeks of normal paperwork,” David said. “It was such a huge problem that the paper process didn’t work.”
David worked on a digital tool to track and approve change expenses, or the additional costs that come up during a project. Eventually, Turner shut the program down, but after David went to MIT for an MBA, he realized that the idea would have legs as its own company.
David’s previous experience was invaluable to him, as he realized that he had spent most of his own life doing market research for TracFlo. His contacts in the industry have been another important advantage. He said that construction is often a business where “you have to know a guy who knows a guy” to get someone’s attention and that attempting to use other kinds of marketing is “naive.”
“You might need to go to a bar or need to have a cigar with a VP before you get an introduction,” David said.
While his history in construction has been largely helpful, his lack of experience in the VC world has sometimes held him back.
“Certain things about startup and venture capital that are industry standards, haven’t cracked the construction market yet,” David said.
He gave the example of a referral program that someone on his team suggested, where customers who referred another customer could win tickets to a hockey match or a similar event. David instantly thought of kickback laws in construction, which have made people in construction “touchy” about any program that gives something back to them.
Knowing these norms have been helpful for David, but he thinks that they also may have hindered him from trying new ways to market the product.
Kyle Slager, CEO and founder of Raken
Kyle Slager has his own family lineage in the construction and real estate world, but it took a trip to Denver to visit a friend in construction to bring him back to the industry.
Slager’s father was a real estate developer, his grandfather was an architect, and his great-grandfather was a structural engineer. He had multiple summer jobs on construction sites in high school and college, but Slager wanted to work in finance.
“At that age, I saw the ultimate freedom in people like Warren Buffett who basically just use public information and are not dependent on anybody else to build these incredible businesses,” Slager said.
He spent years in finance, but started to feel the “itch,” to do something else. Around that time, he visited a friend from college who worked in construction in Denver, and left motivated by the possibilities of applying technology to manage a construction business. He was still considering staying in finance and getting an MBA, but he couldn’t deny his desire to start a company.
“In most cases like mine, it’s more like it chooses you than you choose it,” Slager said.
While Slager had family knowledge of construction, he spent the next eight months interviewing people from more than a hundred construction companies. He asked them what their biggest pain point, and found that their responses were extremely consistent.
“The disadvantage as an outsider is there’s a lot to learn before you can provide value to the people who work in the industry,” Slager wrote to Business Insider.
He had the additional challenge of making sure that he provided enough of a value proposition to construction experts in exchange for their time.
While his lack of experience made it more challenging to learn about the space, he also considered it an advantage.
“This may sound counterintuitive, but when you’re naive, you’re less prone to making assumptions about the actual problem you’re solving and the people you’re serving,” Slager wrote.
Slager’s outsider status led him to ask about his potential client’s pain points, which led him to create a mobile product that workers could use in the field.
Scott Wolfe Jr, CEO and founder of Levelset
Scott Wolfe Jr’s first true introduction to construction came during Hurricane Katrina. Wolfe was a newly minted lawyer in New Orleans right as the city began to rebuild. His family worked in retail real estate, but after Katrina wrecked New Orleans’ retail market, they began to work in construction.
Wolfe, who had previously worked in software development, started to practice construction law.
“I would see this problem that was arising in my law practice where contractors come to me constantly with troubles with cash and troubles with payment,” Wolfe said.
This problem eventually led Wolfe to create Levelset.
Wolfe’s legal background made it much easier for him to start, and scale, a business.
“As we’ve grown, my legal background has helped me fully understand fundraising deal structure, equity options, fiduciary duties of boards, etc. — all things you need to know as the CEO of a scaling org,” he wrote to Business Insider.
These benefits would have been applicable to any industry he worked in, but given his background in construction law it’s effects were multiplied.
“The legal background has been helpful because this industry has a lot of compliance, regulation, and litigation. A lot,” Wolfe wrote. “And this is especially the case when it comes to the stresses that the industry has around money and payment.”
Without his legal experience in the field, he may have never been aware of the challenges that face contractors who are trying to get paid.