I realized a while ago, that on my blog I have done only sporadic updates on how things are evolving with my own startup, GenieBelt. Too bad, because things have been more than normally exciting especially the last one and a half year, and the journey so far is a good story of persistence and ambition, which I think startup interested people can learn from.
As I wrote back in 2013, the starting point for GenieBelt was that Construction is a huge industry hurt by quality & cost problems, and it seemed straight forward that modern day technology and product usability focus could help massively – and on the back of that we could “easily” build a great company. Things turned out – as you can expect – to be a bit more complicated. But hey, that’s what makes these journeys entertaining and educational.
First of all, it took us three long years to go from idea to a beta product that really worked well for customers. For three years we walked through the desert having endless product iterations and strategy discussions. Tenacity, ambition and a great internal partnership made us get through it all. And maybe also having a bit more luck than un-luck!
We have been fortunate, that a number of visionary customers understood, what we tried to do and wanted us to succeed because they felt the pain themselves from communication and coordination flows not working in Construction. They gave us one of the the most valuable things for an early stage startup: hands-on, detailed and credible product/use-case feedback. But even with valuable data on the intricacies of Construction workflows, then it took us three years to get there. Why?
Construction is not only a huge USD 10 Trn. industry, but it is also a complicated sector to understand, e.g. the many different roles (clients, main contractor, multiple subcontractors, adviser this, adviser that, etc.), all projects having different participants, the participants changing roles between projects, etc. etc. One of my partners, Gari, calculated that there are 70 Million different kinds of Construction projects that all have their unique set of characteristics. So of course there are challenges in figuring out how to make a platform, that can tie things together without getting too complicated.
Another of the big challenges in Construction, is that 80% of work/costs are used at the Construction site, but it is at the office most decisions are taken, and where the involved parties have digitized most of their processes. The link between site and office is broken, and that is one of the main sources of the industry’s trouble – and this goes for almost all of the 70 Million permutations. From the beginning, we focused exactly on the “site-to-office” link, since that is what no-one has fundamentally solved. The established solutions targeting Construction are PC-era products that does not cater for a good mobile experience. New “ConTech” startups are using the mobile revolution to close the gap in various ways, and we have followed our own, unique path.
What started to be clear for us end of 2015, and more and more so during 2016 were a number of learnings, that fine tuned our product and commercial strategy:
A: Use a visual expression that is familiar. My first idea for how we should structure and visualize the data flow on a project was influenced by the kanban model also used by Trello. However, when we got our product wizard, Bob, on board, he came up with an obvious idea that has worked incredibly well for us: in Construction you are used to Gantt charts, so use the same structure for all the communication, i.e. build a living, dynamic Gantt structure for how you communicate and share data. Totally logical when you are being presented for it the first time, but someone needs to get the idea and execute on it.
B: Clarification of our Why/Product Road Map. From the beginning, we talked about improving workflows on construction projects and over time build some kind of analytics around this. In the beginning, I personally positioned our solutions end-result as “Construction Managers need to look good and sleep well”, and that is still an effect of our offering, but over time we came to a better way to describe what our platform brings: transparency, accountability and overview to Construction. So much of the problems in Construction is because the participants don’t know what’s going on. They know what the plan is (or at least what the outdated plan said), but they don’t know actual status/progress update. Designing a platform that creates transparency on progress and performance would be a tremendous achievement. This is not only about launching a new solution to the industry, but it is becoming a thought leader on how the culture in Construction regarding collaboration and communication needs to change. We need a behavioral change and our solution and go-to-market approach should facilitate this in the most user friendly way. This is a much bigger challenge, but building the platform that can achieve this inherently also brings bigger benefits to Construction than just adding digital tools to an existing, yet imperfect process. Good – our ultimate ambition is to build a great company that can change construction for the better, and the opportunity is right in front of us. We are not just digitizing an existing process, we are facilitating a real change on how to manage construction projects. This deeper insight pushed us forward.
C: Shifting customer segment focus. Originally, we believed our core market would be small & medium sized ( SME) main contractors. In our journey, we realized that even though there are clear benefits for all participants in the construction value chain, then the part of the value chain that most clearly has benefits from more transparency and accountability in construction are the Clients & Developers. The Main Contractors also benefit, but they are at the same time more nervous for the effects of transparency, therefore some of them are not ready to change. The most strategic thinking General Contractors get it, but some are still focused on preserving the old and broken habits of the industry. We can therefore see, that even though we sell to all participants, then the majority of our customers are either Clients/Developers or those Main Contractors really willing to modernize and improve. And our customers are mainly mid-sized and big, because they are the one’s that best understand the need for systemic change. The smaller players will join as the industry changes, but it will be the mid-sized and bigger ones that will push the hardest for this change.
D: Commercial strategy based on hybrid sales approach. As a starting point, we assumed that we would use online channels to generate leads, and that the majority of those leads could be closed via low-touch channels. As our product- and customer focus evolved, we can conclude that our commercial strategy de-facto is much more of a hybrid. For sure, we have shown a very good ability to create traffic and leads online (and we will further improve that), but most of our revenues are closed with a sales force working online or in the field, i.e no touch only has a marginal impact on our revenue growth. Our commercial strategy will be a hybrid model of no-touch, low touch and some high touch sales, which is absolutely fine, since our unit economics are very healthy (MRR pr customer multiple times higher than anticipated helps a great deal), and we have people on board that have experience in scaling commercial organisations.
There are obviously many more details in the story, but the above four adjustments to our original battle plan have been pivotal in getting product-market fit and a commercial strategy that accelerated GenieBelt.
There have been plenty of errors along the way. One of the classical errors we have made is to let the product stray off course when the main direction had problems getting traction. We did a bit of snagging features in the beginning which we should not have done – closed down again. We did a bit of documents & drawings, also shut down. Classic start-up stuff when you get impatient iterating on your core use case.
So plenty of problems, but ultimately we have come far even though we of course know there is still a long way to go. Some of our achievements really make us proud, and they are part of the foundation for the coming years.
1: Our Ambition. Both the original founder team as well as the partnership team we have build over time is very ambitious. For most people it must sound crazy to have a small group of people deciding to change a big industry – but building a Great Company that can do that, is exactly what we want. One of the effects of that has been to deliberately not build the obvious products, that other ConTech companies built. The ConTech software startups have in general focused on snagging, health & safety and other products where an existing workflow is digitized. That is smart, since it’s more straightforward to design the product, and get customers engaged. Quick pay-off, and it of course moves Construction forward. But the basic problem of transparency, accountability and wider collaboration is not attacked head-on to the same extent, and therefore the transformative nature of the solution is not as the platform GenieBelt is offering. Our ambition meant we had to do something that no-one had done before: creating a platform that “connected site to office, and data to decision makers”, and that took longer time. But now that it works, then it is a transformative solution, more uniquely positioned and more significant in it’s impact. And better chance for building a truly Great Company. Having this ambitious mindset caused trouble the first three years, but now it is paying off.
2: Our Partnership. Today GenieBelt is run by a partnership of five guys (and yes, sorry – we’re all men!). Three Danes, two British. Two with Construction background, three with none. Four with good sense of humour, one with non-classified and very troublesome sense of humour. Four with plenty of startup experience, one has GenieBelt as his first startup. Three in their 40’s, two in their 30’s. Three that are hunters, two that are not yet, but secretly wants to become hunters. One and a half who are a football fan, three that just doesn’t get it. And all five of us are fathers with daughters and sons. So, we are a mixed bag, with very different backgrounds and mindsets. But we are glued strongly together by our shared ambition & vision for GenieBelt as well as a strong respect for each others professional and social contribution. We have already seen plenty of difficult moments, and we have come through all of them getting tighter in the process. One of our achievements is, that we have been able frictionless to change CEO twice, first in the initial year from me to Gari, and then in 2016 when we started building scale and commercial activities from Gari to Ulrik. Every time we have come out stronger. Personally, the partnership is a big reason why I enjoy the GenieBelt journey, and it is essential for my belief that we have a chance of achieving our ambitious goals.
GenieBelt partnership September 2017 when we celebrated taking an important decision – no further comments!
3: Our Culture and Organisation. With solid roots in our partnership philosophy, we have build our organisation from 12-14 people one and a half year ago to now 40+, based mainly in Copenhagen, but also London and Lodz. As is the norm for startups in Copenhagen, our organisation is very international with nearly 20 different nationalities, so at HQ the Danes are outnumbered. When growing the team from a small group of people to platoon sized and beyond organisations typically experience “cultural shakes” (more about that in a blog post some other day), and often the culture changes for the worse. To counter this, we have been very value driven. Due to some of us experiencing growth journeys before, we have focused on steering through the shakes to come out on the other side, with an organisation that is well glued together. One of the things we have done is to define and be explicit on our values; CotB, BIW, BoB, Respect and NoBS – values we try to stick to when taking HR and strategy decisions (NB: humour is deliberately left out as something we value, since too many laughs at the office has a tendency to create inefficiency and lack of focus – and is in general boring). So far we have succeeded in maintaining a vibe good people thrive in, and we intend to work hard to secure this as we move towards a company sized organisation, because the soft assets are usually the hardest assets in the long run.
Random GenieBelt’ers 2016-17
Four and a half year in, but it’s still early days. We have hardly scratched the surface of what can be achieved, but the snowball is rolling now. Together with many good people among Main Contractors, Subbies, Construction Clients, Developers, Advisors, other ConTech startups and Construction Industry influencers we are certain that change is now finally coming. We can all look forward to better housing, infrastructure, office space and anything else that the fascinating Construction industry produces. On time, on budget, quality spot on, less waste/environmental impact/injuries – what’s not to like!