May 3, 2023

#036 -Eric Helitzer- Transcript

Bricks and Bytes
Bricks and Bytes
#036 -Eric Helitzer- Transcript
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Show Notes

What’s your story, Eric? You have a construction background, so tell us a little bit about that.

Oh yeah, my story starts in construction. I come from a third-generation builder, so my father and his father were builders. I’m one of the few who can actually say that I went to study building construction, specifically construction management. So, I have two degrees from the University of Florida, and I’m going to give a shout out to the Gaiter Nation. I graduated from the Ranker School of Construction, which is a specific school that I went to study construction management, and I graduated in 2011 with a Master’s and went directly into the Miami construction workforce.

I started working for a subcontractor, and I was forced into that role because my family business told me, “Look, you’re not going to work for us; you’re going to learn how to build, and you’re going to learn how to build the right way.” So, I took that opportunity to work with a phenomenal company, which is today still operating as the nation’s largest concrete shell contractor on the subcontractor front. I really learned the pre-construction side, operations, and about building major structures. This was right at the time of the tail end of the Miami condo boom, so I got to see, you know, a lot happening.

From 2008 to 2014, that time in my career was really learning how to build and learning at the subcontractor level. In 2014, my career took a direction towards the general contractor construction management side. This is when the family business called and said, “Hey, we’re getting extremely busy. This was a company of eight people. We need you to start implementing some technology because you’re young, you can use Excel and email pretty well, and we’ve got this software called Procore that we want to test on a job.” At that time, Procore was not the tool of choice; not many people knew about it, and they had very little modules. That was the first day I remember in 2014, coming in, I was the one in charge of implementing it, and from there, things started to change.

The family business was a mid-sized commercial general contracting and construction management firm, specifically in South Florida. So, my career jumped from the subcontractor world into the GC/CM world. The partners were young, my father was one of the partners, and he’s since retired. But the partners were young, they had a vision for the company on how to streamline business processes and workflows, and they have done a phenomenal job building the company. That’s where I got exposed to my first reality of what technology can do to streamline processes. So, we did that; I was in charge of rolling that out, and it was a major success, and from there, we doubled down on technology.

I was primarily, at first, using Procore, and then someone called me and said, “Hey, I need you to look at this; this is a new device that you can capture real-time photos and videos of the job site.” It was called OpenSpace. At that time, walking around a job site with a hard hat and a camera on your head, people laughed at you, and I was the guy walking around getting real-time footage. The first job we did it on, I saw, “Wow, we can actually have things updated in real time,” and that’s where we really doubled down on technology in the workplace because we saw a lot of needs for what we could do as a business. That’s where my passion for tech evolved from, and maybe it was the early conception of Subbase.

Yeah, so what happened was, honestly, after everyone went home and was working remotely due to COVID, people realised that they could still manage job sites and do a lot of things. It opened people’s minds to realising that there might be other tools that need to be built or that they can use to manage and streamline their business. In 2021, I got a call from my father-in-law who wanted me to speak with a family friend who was building software. He’s still building with me today, and Subbase was born from him showing me what he wanted to build. He built a phenomenal MVP, which took him some time to understand the workflows, which he did. From there, I was managing operations in Grycon, the company that I used to work at on the construction side, and I was giving feedback on this platform that was starting to come to life.

I started to see people interested, specifically subcontractors and vendors who we were using it with, and quickly saw that we could solve a major need and a major problem for the industry as it relates to managing the day-to-day nuances of material procurement, from requests coming from the field, vendors looping into one workflow, and then obviously tying all that information and data back into accounting systems to streamline operations on that front.

Before we dive into the detail of that, I teamed up with someone who was good at technology but had no experience in construction. The only experience he had was when his family was building a home, and he realised there was a lot going on. To get him up to speed, he had a good concept for construction in general, and that’s what I gravitated towards. What we had to do was dive into understanding the workflows and how every stakeholder uses a tool to enhance that workflow. We had a hands-on approach, going to a job site, seeing the email and touching and feeling the stacks of paper that were required to track things. This helped us understand that some companies could be doing hundreds of millions of dollars in revenue and still managing 40% of their business with pen and paper or maybe just phone calls.

As you get into construction technology, you also have to understand that building something that’s going to provide two times the value is not enough; you have to provide ten times the value to get someone to change their ways from what they’ve been doing for the last 10, 20, or 30 years.

So, Subbase was born to solve problems related to managing the day-to-day nuances of material procurement and streamlining workflows and operations in the construction industry. The idea was born out of conversations and discussions not just with technology but with users up front, where the platform was presented to them. The problem being solved today is material management, which is one of the most complex workflows imaginable. Even in different trades and trade verticals, it’s different. The problems being solved at very high levels include solving inefficiencies when it comes to real-time visibility and organisation of where things are moving up and down the supply chain. Solving problems of manual data entry for items that come and originate from the field or office and tying that back to the accounting system in real time is also important.

Labour is figured out in terms of knowing that it needs to be paid every week, but on the material side, materials are tracked differently. Payments for materials are not on a weekly basis, which adds complexity. There’s a two-sided marketplace, for every buyer there needs to be a seller. No matter the size and complexity of the order, it touches a minimum of six people.

Subbase is solving for the ability for teams and stakeholders on both the subcontractor side and the material distributor side to work in commonality in one centralised place. This provides the best data and best resolutions for both teams deep in those workflows to move material data back and forth, solving the inefficiencies of today’s analogues.

As a subcontractor, one has to deal with tons of materials from various suppliers. It’s about tracking these materials from the moment the order is placed, through delivery on site, and back into the accounting software systems. Subbase is streamlining the data flow but also the accuracy of what the actual material is. At the end of the day, many hands are touching data multiple times, and Subbase is trying to streamline that data flow back and forth.

Subbase has now raised its first external round of funding, which has allowed them to accelerate product growth. They have thousands of orders moving through the system and users on both sides of the platform, ranging from national players at the subcontractor level and national players on the vendor level. Subbase is currently rolling out into more markets.

The long-term vision for Subbase is to connect the very fragmented material ecosystem, providing not only real-time visibility in terms of orders but also facilitating much faster and seamless payments. The aim is to provide more analytical tools so that people on both sides of the platform can ultimately make better decisions on materials in general. There is a global need for this, and the focus is currently on doubling down on what’s working in the United States and taking it one step at a time to prove that there is a true solution for solving those pain points.

A great plan is essential, but it’s easy to get distracted by long-term goals. It’s crucial to focus on short-term tasks and what’s happening in the immediate future. When discussing construction tech and startups, if someone were to build a startup in construction tech, they should start by learning the local culture and customs, such as making Cuban coffee in Miami. The most important thing, however, is to deeply understand the problem they’re trying to solve. In construction, you have to live and breathe the problem and be sure you’re addressing a real issue. To validate an idea in construction tech, you need to ask tough questions and be prepared for rejection.

To find the right problem to solve, spend time on job sites and observe how people work. Be prepared for a hands-on approach when rolling out software in construction. Understand that even simple solutions might require users to change their established ways of working, which can be difficult. Make sure the product you’re building meets both digital and physical needs, and provides significant value to users. Aim for a 10x improvement over existing solutions. Additionally, create an experience that helps companies retain talent and attract new, younger employees by demonstrating a willingness to embrace new technologies.

Validating an idea in construction tech involves understanding the users’ needs, observing their current methods, and ensuring your solution provides significant improvements. Be prepared to iterate and adapt based on feedback from users and the reality of the industry.

Yeah, so validating your idea can be done without building software. You can validate an idea by talking, by sending emails, by getting responses back from people you’re talking to, to see if they’re even interested. One of the things we tested was invoice reconciliation and accounting integrations because we knew that that was a major pain point. But that’s a pain point for controllers, not necessarily superintendents.

Going back to validating an idea, you have to validate it with the right person that you’re talking to. If you’re not targeting the right person, it’s going to be very hard to find validation, and it’s going to be hard for you to make sure that you’re actually building the right product. You can test certain things, like the responses you’re getting, asking the right questions. There’s a phenomenal book called The Mom Test which taught me how to validate ideas by asking those very tough questions and getting to a simple yes or no answer very quickly. The maybes will kill you, and the maybes are not people that you want to be associated with as you’re building technology.

You’ll know a user adopter or early adopter if they’re willing to try anything without having a fully built product. What I noticed worked very well is when I send out calendar invites and ask people certain questions to see if it piques their interest. If they accept my calendar invite very quickly, knowing how busy they are, I know that I’m onto something.

Once you’ve got a minimum viable product, sit with the user and watch how they’re using the system. You have to take it very slow but really witness how they’re using the product because the biggest thing you can do with new products is to iterate very quickly to make sure that it makes sense from a workflow perspective. Once you’ve got the minimum viable product at a point where you see repeatable use, double down on it and become a champion of that person.

The go-to-market strategy in construction is geographically focused and centred. It’s about iterating fast, experimenting and not running out of money because you need to find product-market fit very quickly to not just survive but to validate that you’re on the right path.

Differentiating from similar solutions can be challenging because there’s a lot of similarity between software that exists. We are in the early stages of technology adoption in construction, and there’s a lot of people trying to get a bite of that. It’s important to focus on delivering unique value and understanding the specific needs of your target audience to set yourself apart.

Yeah, so validating your idea, you can do without building software. You can validate an idea by talking, by sending emails, by getting responses back from people you’re talking to, to see if they’re even interested. So, one of the things we tested was we knew that we had to get into invoice reconciliation and accounting integrations, which is where our platform is headed today because we knew that that was a major pain point. But that’s a pain point for controllers, not necessarily superintendents.

So, going back to validating ideas, you have to be validating the idea with the right person that you’re talking to. You can waste a lot of time talking to people, and that goes back to another point of not knowing the industry and not knowing how workflows, money moves, and how materials move. If you’re not targeting the right person, it’s going to be very hard to find validation and to make sure that you’re actually building the right product. So, how can you do it without building a product? You can test certain things, you know, the responses you’re getting, asking the right questions. And there’s a phenomenal book that my partner had me read called “The Mom Test”, an awesome book, and it really taught me how to validate these ideas, not just reading a book is how you’re going to validate the ideas, but asking those very tough questions and getting to a simple yes or no answer very quickly. The maybes will kill you, and the maybes are not people that you want to be associated with as you’re building technology.

You want to get those first early user adopters, and you’ll know the early adopters if they’re willing to try anything, without having a fully built product. And what I noticed worked very well was when I sent out calendar invites and asked people certain questions to see if it piqued their interest. If they accept my calendar invite very quickly, knowing how busy they are, I know that I’m on to something.

Okay, interesting. So, we found a problem, we’re on track to validate, how do we then get that from our head or various like interviewed pieces of paper or excel spreadsheets and documents and whatever it is into the market?

So, once you’ve got somewhat of a product developed, and I would say that you have to have at least a minimum viable product, something that someone can physically touch, physically use, and does not break because as soon as it breaks, you’ve wasted that person’s time and their excel or emails are working better than your system. They’re not coming back to construction. And once you’ve got that minimum viable product, to me, you sit with the user and you watch how they’re using the system, you watch how they’re interacting with the product, you see where they’re stumbling. The confirmed order button they miss three times, and you need to take it very, very slow but really witness how they’re using the product because the biggest thing you can do with new products and how do you get taken before you even take it to market is you know there’s a lot of experiments, you have to iterate very quickly to make sure that, you know, certain buttons are in certain places but that this actually makes sense from a workflow perspective. Once you’ve got the minimum viable product at a point where you see repeatable use, you see the person who calls you in a text and says, “Hey, this doesn’t work,” that’s a good thing. Them calling you and asking you, “This doesn’t work,” means that they’re trying and they want to use it. If they’re not calling you at all after you sent them anything, it means that you’re not solving a problem for them.

The way construction generally releases payments, but what we’re noticing too is that if you really see how the back offices of a lot of subcontractors are paying, they require a lot of documentation. That documentation is living on phones, emails, job site floors, trailers. SubBase is simplifying that. Our invoice reconciliation module, which is live now, is leveraging all of that to use artificial intelligence to streamline reconciliation and digitise the workflow approval.

Yeah.

Sink back into accounting so that we can get vendors paid a lot more seamlessly and a lot quicker, and that’s ultimately where we are going to provide a lot more value to for vendors to get them paid, which is a big industry struggle.

Ah, that sounds like all the motivation they might need anyway, so sounds like a good angle to attack it from. Okay, and any thoughts on how people incorporate technology into existing workflows?

Yeah.

It’s a topic that I can probably spend an entire podcast about; it is what I do all day. So, the biggest thing is you have to start with a good culture. If the culture from the top is not receptive to technology, you’re already lost. So, number one is culture, and what I mean by culture is really setting up from the top down, you know, not just a champion but an overall company culture that you are ready to embrace technology that is going to help your business succeed.

So that’s the number one thing with implementing into a workflow is culture. And then once you’ve got the culture behind you, and you’ve got owners and that’s what I saw, I saw the owners of the company I worked for embrace technology, and it took the company to another level. And once you’ve embraced it from that level, the next is like we talked about before, is this gentle disruption of the workflow. You cannot break the workflow, and you can only gently disrupt the workflow.

Once you’ve figured out that you’re solving a problem for that user, once you have solved the problem, you can start slowly layering on different types of enhancements. And a great example of this is when we started building SubBase, we always envisioned that we were going to be tying into accounting systems and invoice reconciling. But how we got there was very methodical because we knew the steps needed to get them ultimately to a place where they can leverage artificial intelligence, which, to some, is very scary, but to others is a major opportunity to start doing the manual tasks that don’t need to be done anymore. And so, layering on that type of tech as you get deeper in the workflow is where we’ve seen the most success, and that’s really our goal here, is to generally disrupt it.

And so, you know, those are some of the key technologies and our key roles of implementing.

Yeah, how do you… could you maybe explain the developing of culture slightly? Is this just like… how does that look? Is that some people at the top just saying, like, each year we’re going to spend X, or is it, like, really driving people to say, like, think technology first before you start spending hours trying to solve something? How does it look?

It’s not even about the money upfront. The money always is obviously important, and when I’m dealing with this, we deal with a lot of subcontractors who never imagined budgeting for software in their lives because they don’t have any software. So where the cultural starts at the top is as simple as, “Hey, you know, we’re using this new system called XYZ, and the reason for using this is because it’s going to help our business succeed in these ways.” Implementing it hands-on, meaning taking a hands-on approach to actually touching and feeling it in the field with people is a major factor in building a culture. But what we’ve seen work too is complimenting people for simple tasks they didn’t do before. So, what that means is, you know, someone at the top who notices that Eric, for example, uploaded a delivery ticket into the SubBase platform – “Well, Eric, great job, this is phenomenal.” And celebrating the small successes is a major part of that culture.

Another thing that I saw worked very well was pairing seasoned professionals with what we call these digital natives who come into the workforce, who already are using a mobile phone and an iPad. And then you have maybe a little bit more of an experienced guy who has never used it before. But culture means embracing the two and letting the two work and figuring out on a job site, “Hey, I know, you know, Carlos, who actually worked with this real superintendent of mine who I worked with back in the day, Carlos and Maxwell, right? Maxwell, super, super tech-savvy, really good at understanding it, Carlos, not so much. But let’s pair the two together on a job because that is going to make them bond, and that bond will create a better overall culture for the business.”

So, pairing that and really understanding who works well together, and not taking every tech-savvy guy, putting them on one job and taking all the non-tech-savvy guys and saying, “You lot figure it out.” That really is what I’ve seen work from a cultural standpoint. And, at the end of the day, numbers don’t lie. The data that we are providing to our users in terms of how much quicker we’re sending things out, the seconds it takes to reconcile invoices versus the minutes it took before, embracing data in your culture to show the real facts of how we’re improving efficiency is also helpful as well to just always resort back to.

Nice. Okay, I’m glad I said that last because I feel like we could have got stuck on the whole podcast on that discussion point, but sadly we have to move on. So, okay, cool. So, Eric, we’ll do some off-topic questions, which are just some random, fun little questions we ask at the end. So, outside of SubBase and family, what do you get up to? Do you have any cool hobbies?

Yeah, for sure.

Yeah, I have a lot of hobbies. So, besides the family, I’m a very avid fisher, so we fish a lot, and mainly like fishing. We like to catch a lot of fish down in South Florida. It’s been a hobby and passion of mine for a while. A couple of other hobbies I don’t do as much – I used to golf a lot, but since I had the kids and work, and SubBase as a founder, finding time to golf is hard.

Have you been watching Full Swing on Netflix? Yeah, it’s great. There’s a lot of it in Florida. Well, that’s like my wife noticed, so Jupiter, a place called Jupiter.

Full Swing, yes, yes. Yeah, I like Jupiter. Yep, Jupiter’s where all the major golf is. Full Swing for me is great. Actually, I like Drive to Survive. I’m a big Formula One guy, so Drive to Survive. Yeah, I couldn’t make that one. I had it, it was last year. But in terms of other hobbies, I love mountain biking. So mountain biking and skiing are the two that we really enjoy.

Okay, cool. At the Miami Grand Prix last May, was it, I think?

Oh, yeah. And obviously, we don’t do much skiing in South Florida, given the weather, or mountain biking for that matter. But we do travel a lot to make sure we get out and take time away from the day-to-day working to really live our life, and those are some of the things we enjoy.

Okay, if you weren’t working in construction, what other industry do you think you’d be in?

That’s a great question that I never really thought about. If I wasn’t working in construction, I would, well, construction tech. I would like to be in the, I’ve always had a knack for real estate development. So, I know it’s kind of the same in terms of construction, but real estate development was one that I really always had a knack for because I just love seeing visionaries come and be able to take a piece of property and have a vision for what they ultimately want. So, I think on the real estate development side, that’s probably where I would have gone, to be honest with you.

The other thing I would have done, as I think I would have done well on the New York Stock Exchange, very high-intensity. Being a stockbroker to me sounded like a lot of fun back in the day. I invested a lot. So that would be the other one. I don’t know, I think it would be great to have a lot of high energy, which is what I’m used to.

Nice, Wall Street stuff, cool. Okay, great, thanks for the answers. So where can people find out more about you and SubBase?

Sure, so our website is www.subbase.io. You can reach out to us on LinkedIn. You can reach out to me personally; my email is just eric@subbase.io. You can find me on LinkedIn. Anyone who is interested, I would love to talk, even if you want to learn a bit more, and you’re not in the industry. I would love to share, and obviously, if you are in the industry and you’re hearing about the struggles of material procurement, we’d love to chat. But that’s where you can find us.

Well, okay, Eric, great, thanks very much.

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