The iPad app PlanGrid isn't even a year old but it's already cash-flow positive and boasting some of the biggest names in construction as clients.
It's not sexy, and the idea isn't even new. But this iPad app proves that if you do it right, you can start a tech company even in the most unlikely markets.
The Y Combinator alum is basically like Google Docs, Box, or any number of other file sharing and online collaboration tools except it's an iPad app and cloud platform tailored for construction plans (formerly known as blueprints before CAD came along).
After graduating from Stanford with a master's degree in civil engineering and an itch to start a company, PlanGrid co-founder and CEO Ryan Sutton-Gee first got a job with a large construction firm, where he identified a big problem--the information bottleneck that results from many people working off different copies of paper plans.
"The information is constantly changing and so you can imagine a situation where you have six sets of building drawings out there in the field and you make a change and you have to then distribute it to all those people," he says. "What very commonly happens is that people will build off of outdated information or they'll change things slightly to fit field conditions and [someone] won't notice until later."
Make It Simple
Sutton-Gee's solution: Put plans in the cloud so that when someone annotates one everyone can see the changes and have the most updated information, as well as access to previous versions. While it's not a terribly original idea, the platform actually works better for construction plans than anything else out there. That's because plans are saved as extremely large PDF files and any other PDF loader you can use on the iPad is maddeningly slow.
By optimizing PDFs in the cloud PlanGrid is able to provide users with drawings very quickly, not to mention offer other benefits such as version control and the ability to push out changes, photos, and RFIs to everyone working on a project at once.
"It turns out there's a lot of other nifty stuff we can do on the cloud side that shifts the computational burden away from the tablets which are underpowered [compared with] our cloud system which is obviously very beefy," Sutton-Gee says.
With more than 40,000 sign ups, PlanGrid is now being used on some major building projects including several Kaiser hospitals in northern California not to mention a number of large Silicon Valley campuses (which Sutton-Gee won't name but claims they're big guns).
Want to emulate Plan Grid's success? Sutton-Gee has three pieces of advice.
1. B2B success depends on domain expertise.
While it might seem simple to take ideas that already exist and tailor them to a large and lucrative vertical--a strategy that Y Combinator start-ups often employ--it wouldn't have succeeded without hardcore knowledge of the space and how it works. "It required great technical and UI/UX chops, obviously, but also somebody that really understood that vertical," he says.
2. Don't let the market scare you.
When Airbnb launched smack in the middle of the recession, Sutton-Gee points out, consumer spending on travel was down. It's the same thing with PlanGrid--housing construction is still pretty much dead in the water. While PlanGrid has plenty of small contractors using its platform, it's the large construction projects that are paying the bills.
"Construction companies are excited to spend money on new technologies," he says. "At the same time they're so concerned about cost because a lot them have had to lay off a lot of people. If you understand what our thing does and you try it out it's pretty obviously a cost saver."
3. Get into an incubator.
If it wasn't for Y Combinator, PlanGrid might not exist. "Typically the starting age of founders that have domain expertise are going to be a little bit older and so maybe it's harder for them to take the risk to just drop everything and do a start-up," he says. "But if you can go through an incubator I think it really reduces the risk of building a team. It's like 'let's apply and if we get in, we'll jump in full blast,' rather than 'let's quit everything right now and hope that we can get basic funding.'"