33 Year Old Quickly Closes 100 Customers For His Construction SaaS, Gets $10m+ Valuation
Nov 12, 2024
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Eric Helzer, founder of Subbase, leverages his third-generation construction wisdom to tackle procurement issues in the industry. He shares insights on launching a construction tech startup, highlighting the importance of collaboration and funding. Helzer discusses their ascent to nearly 100 paying customers and the evolution of their pricing strategy. He also reveals key lessons from user engagement and the exciting potential in fintech. The conversation wraps up with his reflections on maintaining work-life balance amidst rapid growth.
Eric Helzer's entrepreneurial journey highlights the importance of understanding industry pain points, particularly in material procurement during the pandemic.
Subbase's unique equity arrangement and initial pricing strategies emphasize flexibility and adaptability in addressing market needs and customer feedback.
Deep dives
Revolutionizing Material Procurement
Eric Helzer founded Subbase to address the challenges in material procurement faced by subcontractors, which became particularly pronounced during the COVID-19 pandemic. His journey started with an internship in construction in 2008, leading to a deeper understanding of industry pain points by 2020, as pricing fluctuations and management inefficiencies became evident. In 2021, Eric, with a technical advisor, began writing code for Subbase, aiming to streamline procurement processes and improve efficiency. The resulting software manages thousands of orders and millions in invoices, revolutionizing how construction companies handle material procurement.
Navigating Early Business Challenges
The equity split among Eric and his co-founders was notably untraditional, as it involved not equal shares but rather a structure based on capital input and time commitment. Initially, Eric and his technical advisor contributed part-time to building Subbase while also working other jobs, which complicated ownership stakes. This arrangement evolved as the focus shifted towards the product itself, leading to a non-standard split without much formal structure. Through their early interactions, they emphasized solving immediate problems over strict equity considerations, which proved critical during the company’s formative phase.
Building Customer Relationships and Revenue Growth
Subbase's first customer was onboarded for free, allowing the team to test their MVP without pricing friction, although this led to a year of providing the software for free. Their first paying customer, a plumber, accepted an initial pricing model that was lower than ideal, which taught them valuable lessons in pricing strategy. Currently, Subbase serves almost 100 customers, with average fees ranging from $20,000 to $30,000 annually, depending on transaction volume. The team continues to focus on expanding their enterprise customer base and adjusting pricing strategies to reflect the value provided as the product matures.