Construction Tech: Bringing Digital Solutions to the Building Industry

Construction Tech: Bringing Digital Solutions to the Building Industry

The construction industry is only just beginning to embrace tech tools that simplify the process of constructing homes – and building a business.

May 2, 2022

The construction industry is primed for technological innovation. With over a million general contractors in the United States, construction represents 6.3% of GDP. But the industry is only just beginning to embrace tech tools that simplify the process of constructing homes – and building a business. 

We sat down with Donny Wyatt, Founder of CoConstruct, to learn best practices construction tech entrepreneurs are using to build disruptive companies. CoConstruct is a top-rated software solution that over 100,000 home builders and remodelers rely on to deliver successful building experiences to their clients. 

Donny pinpointed five key areas that have helped CoConstruct achieve success in scaling: 

  • Understanding your customer’s needs 
  • Looking to other industries 
  • Building integrated solutions 
  • Optimizing the sales process 
  • Shipping before you’re ready 

Let’s take a closer look. 

Understand Your Ideal Customer 

 

Developing effective software solutions starts with understanding your target customer. CoConstruct found success by targeting small construction firms that make up the bulk of the market. “Most of them were between 2 and 50 employees, but really concentrated in the 2 to 10 range,” Donny notes. “Most were family businesses or close friends that had gotten together. And most were multigenerational businesses as well, so there were interesting friendship and family dynamics in the mix.” 

Knowing the ideal customer meant accurately understanding their needs and goals, as the CoConstruct team discovered. “It took us a long time to figure out that we were projecting our own business growth desires onto our prospects. We were anxious to grow CoConstruct, we had a good thing, and we wanted more customers to bring it into the industry,” Donny recalls. “But we started to realize that only really 20% wanted to grow their business. The other 80% wanted to optimize their business, make their margins a little better, and work fewer hours.” 

Over time, the CoConstruct team saw that reluctance to embrace new technology was a key barrier holding back many construction firms. “They’ve been doing estimates using the same spreadsheet for a long time. Obviously, they weren’t thrilled with it, but it’s the devil you know versus the devil you don’t. They’re afraid to even let go of what they have now. So there was a lot of resistance to trying a different way of thinking about and approaching estimates – even when it was often really beneficial to their businesses.” 

Because many contractors were resistant to tech adoption, providing education on best practices was essential for CoConstruct. “Our software was built around best practices – but that can look totally nonsensical to someone who doesn’t understand best practices,” Donny notes. “We realized we actually have to teach people best practices and then explain, you’ll have a software tool that makes that easier to do. And along the way, we were also connecting builders with each other. Most of our builders are in local markets, and the other builders they could talk to are people they’re competing against. It’s incredibly lonely. And so we’re starting to build that community and connection.” 

Look To Other Industries 

 

The slow pace of tech adoption in the construction industry opens up lots of opportunities for entrepreneurs. “One of the beautiful things about construction is that it’s a tech lagging industry. Sometimes you just need to look at another industry that’s five or ten years ahead, and you get a pretty good feel for what’s possible, what’s coming, and how you can be the one to simplify it and bring it to market.” 

The building supply chain is an area ripe for disruption, as Donny observes: “Amazon is the easy example. In my family, we buy as little at the store as we can, because now you can just pull it up on the app and it shows up at your door. It may not always be the best deal, but it’s super convenient, and so it’s worth it. But that dynamic hasn’t been happening in the building industry. The frictionless piece of procurement is worth a lot. Clients are used to buying this way, so they can’t get their head around why their builder can’t do it.” 

Create Integrated Solutions 

 

The most useful construction tech solutions are all-in-one platforms. “That is what our customer base wants. They don’t want to link systems together. They just want one login. And they want to do it all there,” Donny says. “That way, they’re not putting in stuff multiple times. They enter information once and it shows up in their accounting software, and they’re able to do things on the fly. You want to be a one-stop platform and put everything there.” 

To make products simple and usable for contractors, construction tech startups need to develop a solid integration strategy. “Depending on how you define your market, there will always be different business processes and other pieces of software that need to come together. Having a good integration strategy is good for those cases.” 

Optimize Your Sales Process 

 

CoConstruct found success by rigorously qualifying prospects and selling only to prospects who would take advantage of their platform. “One of the things we always worked really hard on was the disqualification process,” Donny recalls. “We give them many ways to run their business. But we knew there were certain things that if they refused to do, if they insisted on running things in a very backwards way, it was just never going to work. And so the best thing we could do was to be honest with them.” 

“As it evolved, we got very good at having scripts for our Sales Development Representatives (SDRs), so as people came in, we knew how we would qualify them and hand them off to different sales executives based on their size and sophistication. We were constantly refining the sales process, so the customer always gets what they need – but they’re not getting other stuff that’s getting in the way of making the decision that’s right for them.” 

Go To Market Before You’re Ready 

 

As their company grew, Donny and the CoConstruct team saw the advantages of going to market quickly. “As a founder, I always had one more thing I needed the product to include before we really poured gas on the go to market engine,” Donny recalls. “And eventually I realized: there’s always one more thing. If I could do it over, I would have accelerated the investment on the go to market side far earlier. And we would actually have an even better product, because you can pay for a lot more product development if you have more sales coming in. And higher velocity of sales gives you a higher level of feedback, which is really important for the product side.” 

With many contractors just starting to explore how they can benefit from digital solutions, the construction industry is ripe for digital transformation. Founders can build thriving companies by truly understanding contractors’ needs and bringing innovations from other industries to the construction space. At Serent, we have the insights from our partnerships with construction technology companies like CoConstruct and BQE and the resources scaling companies to accelerate their go-to-market – and help them bring the building industry into the digital age. Learn how we’ve helped construction tech companies like Donny’s, build their foundation for long-term, sustainable growth.  

Serent Capital invests in growing businesses that have developed compelling solutions that address their customers' needs. As those businesses grow and evolve, the opportunities and challenges that they face change with them. Principals at Serent Capital have firsthand experience at capturing those opportunities and navigating these difficulties through their experiences as CEOs, strategic advisors, and board members to successful growing businesses. By bringing its expertise and capital to bear, Serent seeks to help growing businesses thrive. Learn more about our portfolio companies.

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