Anyone who has ever been involved in a construction or renovation project is familiar with two truisms: it usually costs twice as much and takes twice as long as you expect.
The spotlight in our week-long series on the startups of Waterloo, Ont. today turns to BridgIt, a company that believes it can solve those truisms with software that connects contractors with sub-contractors.
Launched by University of Western Ontario graduates Mallorie Brodie and Lauren Hasegawa in 2014, BridgIt seeks to make large-scale construction projects run more smoothly and therefore faster and cheaper.
Brodie sat down to discuss their effort—and their plan to conquer the construction world.
What’s the company all about?
We have a platform that helps contractors manage their sub-contractors on-site. It helps with general task management and quality-control items.
Who are you selling to?
To contractors and developers. In Toronto, for instance, a lot of builders and developers, somebody like Minto, who do both. That’s who our customer is and they end up rolling out our platform on the project and it will incorporate all the sub-contractors as well.
We sell it on a per-project basis and then usually after a project our clients end up rolling out either within the city or across the company.
How does implementation work?
Say you have a condo project, maybe 400 units in the building. The installation of all the different fixtures needs to get done, the stove, the fridge, the moulding and so. Once that gets installed, there’s usually a number of things that went wrong and need to be fixed, so we help the contractor both with the installation schedule and going back to find the issues and communicating those back to the sub-contractor.
Right now, the way that usually works is hand-written notes, Excel spreadsheets, lots of email. You’re managing thousands of items all going to 30 to 50 sub-contractors. We help them automate that. When you’re on site, the project manager can take a picture of whatever needs to be done, marks where it’s supposed to happen and that automatically goes out to all the sub-contractors. The sub-contractor then says, “Okay, we’re done the work, here’s a picture,” and the general contractor can then approve it.
Are these workers generally using apps to do this?
Yup, we have a mobile and web platform. The team on-site would normally use their mobile or a tablet, while the team at the office, which might be overseeing multiple projects, would use the web platform.
So this is obviously better than the old, analog method of managing projects?
Yes. You’d see lots of hand-written notes. You’d walk onto any construction site and you’d see them with their clipboards and they’d have a checklist of things getting installed in every unit. Sometimes in the offices you’d even see a matrix taped up on the wall to track the installation schedule.
When you get to the deficiency stage, you’d see hand-written notes again that would be input into a spreadsheet, split up by sub-contractor – the dry-waller has 20 things to do, the plumber has a hundred things to do. They’d manually email that out to every sub-contractor.
The hardest part is once the sub-contractor is done the work, how that information gets communicated back. It could be by phone call, by email, by yelling to someone on-site. It’s very difficult to keep track of where you are on the project.
The other thing in construction is no one gets paid until the work is done, so everyone would like to finish as soon as possible. The sub-contractors love using our solution because they now have images to go by so they can figure out what they have to do and to communicate back to the main contractor.
How did you get interested in this?
Both Lauren and I come from construction families. Our grandfathers were contractors of different sorts. Her grandfather was a specialty trade contractor out in Winnipeg and my grandfather had a steel and demolition company, so we both grew up in the industry.
Lauren is a civil engineer and I was in business at Western University at the same time. They were putting up the new Ivey building there, a $200 million project, and that’s where we first started our research [around 2013]. We went on site and did our initial interviews and then we went “crane hunting,” where we’d drive around London, Ont. and look for cranes.
We’d go on site and ask for any sort of feedback and questions about what people found frustrating. After interviewing nearly 500 stakeholders, we really narrowed it to the fact that it’s the communication between the general contractor and the sub-contractor that really delays projects.
Was there anything out there, any other types of software, that you used as a reference or influence?
It really was the research that guided us. At every point in the research, we’d put together wire frames or initial designs of the product and we’d go back to the site and show the teams and get their feedback, and go back to redesign.
One thing we observed with other solutions in the industry is that they were these bulky, end-to-end solutions that were being sold top down to the companies. Whoever was on top hadn’t necessarily worked on-site before and wasn’t there day-to-day, yet they were purchasing it for the day-to-day [staff].
What we saw was that the team on-site wanted something that was simple to set up, easy to use and would integrate the sub-contractors in a pretty seamless way. That continual integration with teams on-site allowed us to build something that people would actually use.
What sort of success metrics can you share?
We’ve been exceeding our sales targets, so I can tell you that. We probably have over 50 per cent of the top builders in the Toronto area using our platform, so we have a lot of the big guys. Minto is an example of one I can mention.
What’s the size of your market opportunity?
Just in Toronto alone there are over a hundred condos going up. That’s just one city in Canada. There’s a ton of opportunity for both residential and commercial. We’re starting in Toronto and a few initial sites in the U.S. We’re going to start looking at expanding more aggressively in the U.S. in 2016.
Are you targeting only big operations or can individual contractors make use of BridgIt too?
We don’t really have a lightweight version at this point but it’s definitely something we’re exploring. We started with large-scale projects and I think it’s something that will be easy to pare down for small operations.
What’s the cost of it to a buyer?
You’re looking at a per-unit fee and it really depends on the complexity of the project. I’d just stick to a per-project fee.
This is your first startup?
Yeah, same with Lauren. We finished school, were doing research while we were still in school and were part of a business accelerator program where they give you some initial capital and mentorship. That helped us get off the ground.
Were you always planning to do a startup?
I really wanted to do my own business and so did Lauren. I was at the Ivey School of Business and the normal thing to do is go to the recruiting sessions to either be an investment banker, accountant or consultant. My friends were a little shocked when I decided to go to none of those sessions because they just weren’t the positions for me.
When I heard of the Next 36, which is the accelerator program we were part of, I instantly knew I wanted to apply. Lauren had the same sense, she didn’t want to go the regular path after civil engineering. It gave you a more structured approach than if you were just trying something on your own. It was nice to be part of a program that helped guide us along for the first few months.
What about funding – where are you getting it?
We have a number of investors in the Toronto area. Some angel and institutional investors. We haven’t disclosed how much we’ve raised.
Is your plan to be the biggest multinational corporation in this space?
Yeah, we absolutely see construction as a massive opportunity. We’re biting off a very small piece of a very specific workflow between specific stakeholders, but every day in the early days it was hard to stay focused because every person we talked to had new ideas for how we could improve efficiencies. I just think there is endless opportunity for us to grow our product and overall across the industry.
How did you manage to stay focused?
We really looked at the data after every interview we did. We quantified every piece of feedback we got and ranked it, then we went back to everyone we interviewed and had them verify the rankings. That was to get an idea of what the absolute biggest pain point was.
The first few months we didn’t have a technical co-founder so it would have been extremely expensive for us to go out and build something that wasn’t absolutely necessary. That helped us stay focused because we couldn’t go back to our office and be like, “Hey, let’s build this right now.” We had to be absolutely certain and then we hired our engineering lead so that we could start building.
What’s your biggest challenge been so far?
Learning how to sell into the construction industry. It’s a very complicated industry with a lot of stakeholders and almost every one of them is involved in the process. We had to distill down who exactly do we want to target on-site and why that makes sense.
There’s also a lot of education involved because a lot of the people have never bought software before.
Do you find a lot of resistance to your product?
Surprisingly, no. When we were starting everyone that was outside of the industry was saying, “Good luck, you’re never going to be able to do it.” Once we got on site and actually talked to who our potential users were going to be, sure they’d never purchased software before but they weren’t against it. They’d just never been exposed to different solutions because nothing had been built specifically for them. Everyone we talked to knew there was a better way.
Are you concerned that a better-funded American startup could copy what you do and then grow really quickly to take over the market?
I think that’s why Canadians need to be thinking bigger and about having enough money to grow at the same rate that a U.S. startup would. We’re aware of it and we don’t see it as a threat because we’re going to overcome it by how we plan out our company’s financial plan.
It could happen at any time to anyone. You never know who’s going to be given tens of millions of dollars to do the same thing you’re doing, so we try not to worry about it.