PlanGrid Answers Daniel Gross

And why the mission of improving construction productivity is literally the foundation of the tech industry.

Recently Daniel Gross, a partner at Y-Combinator focused on AI, posted an article outlining 7 questions that he thought all data scientists and ML engineers should be asking when they are interviewing. The premise around his article is that working for a company means investing your most valuable asset — your time. Therefore, he encouraged engineers to make great investments in great businesses rather than invest their time in great technology companies that don’t have proven business models.

When we read these questions, it hit us over the head like a ton of bricks. First, it reminded us that we’d been underutilizing one of our most valuable recruiting assets when talking with candidates: the strength and mission of our business. Second, with PlanGrid, candidates don’t have to compromise on business vs tech. At PlanGrid, engineers essentially get to have their cake and eat it too.

Sound too good to be true?

Here are PlanGrid’s answers to Daniel’s questions:

1. Why does anyone need PlanGrid? Construction has a productivity problem. As McKinsey puts it, construction is one of the least digitized industries and 20 years behind manufacturing. Furthermore, construction is fraught with risk, is highly regulated and riddled with logistical challenges. However, the mobile era is changing things (fast) and the industry is waking up to the fact that they are leaving a lot on the table. In fact, this article from Harvard Business Review states that, “If global construction productivity were to catch up to the total economy over the past 20 years, the industry’s added value could rise by $1.6 trillion — and one-third of that opportunity is in the United States alone.” Clearly, there’s a lot of opportunity for growth. Our customers, and the industry for that matter, need PlanGrid to stay lean, productive and competitive in a market which is rapidly modernizing and innovating.

2. How was this problem being solved before PlanGrid? Before PlanGrid, there was paper. For all it’s longevity and reliability benefits and still being our biggest competitor, paper has some major drawbacks as an information medium. The biggest of which is that it’s almost never up to date. Fun fact — one of our cofounder’s first jobs as a project engineer was to walk the site each night to update the plans. This was one of the original motivators behind founding PlanGrid. In addition to paper, PlanGrid also faces competition from incumbent software companies offering back office project management solutions.

However, when you consider the fact that 90% of the costs are in the field, it’s easy to see how PlanGrid’s field focused productivity approach tackles the heart of the problem. When customers buy our software, it actually gets used.

3. How many users have you spoken to? What have you learned from them? We talk to users every day. In fact, we even get to go on site with them and follow them around to gain a deep level of empathy for their work. In the last year within the R&D organization alone, we’ve worked closely with hundreds of users and conducted dozens of site visits. When we talk to our customers we learn about the problems they deal with every day — some are as old as time, while others are incredibly unique and complex. The steadfast opportunities tend to be around universal constraints: our customers want to build the highest quality product without losing time or money. On the other hand, we are constantly amazed by the level of thought and consideration that each trade (plumbing, electrical, etc) will invest in problems that they may never see again. One of the best things about working at PlanGrid is learning about the wide spectrum of problems our customers deal with every day.

4. How does PlanGrid make money? We make money by selling subscriptions to our service. We’ve been charging for our service since 2012 with pricing tiers based on sheet count. Our app ratings echo a strong, growing stream of revenue. Want to learn more? Our answer to question 7 contains stats that should help you find a range of possible figures. Hint: lean towards the strong side of the spectrum.

5. How will PlanGrid grow? How will anyone find out about you?
The need for solutions in the construction industry like PlanGrid is dire and we’ve developed a strong brand recognition in the space as a result. Therefore, many of our new paying users sign up organically or through word of mouth via the web. However, we‘ve long recognized that a complementary approach will be necessary to allow PlanGrid to continue growing in the long-term. The industry is heavily fragmented as most construction firms operate regionally. Luckily, we’ve built amazing sales and professional services teams distributed across the US. This allows us to execute on a regional basis and expand our strategy, rolling out PlanGrid across an entire firm once adoption is strong. Finally, we also supplement new customer acquisition with industry PR, online community engagement and high ROI ad campaigns.

6. How big is the market for construction productivity software? Total Addressable Market (TAM) calculations in construction are hard to come by because of market segmentation. However, the most coarse grained numbers do point to a large trove of opportunity. We know that the typical technology budget on a construction project is at most 1% of the overall project budget. We also know that this is a reliable number, because many of our employees come from jobs where it was their responsibility to set this budget. Additionally, $10 trillion is spent globally every year on construction goods and services — multiplying these two together comes out to $100 billion at the top end.

7. What is defensible about the business? PlanGrid will remain strong against our competitors because of our customer centric approach to design and our continued investment in our core technology. Everything from our deployment processes all the way down to the mobile clients is built with scale and rapid development in mind. World class design, and a strong investment in our core allow us to make better use of yet another defensible moat — our data. We’ve got over 60 million construction drawings (and other documents too), taking up over a half petabyte of data within our VPC. We think this is the largest repository of construction data in the world. However, even if that turns out not to be true, we’ll continue to be successful because we’ll make better use of the data than anyone else.

Our Mission is literally the foundation for all others

We’re on a mission to make PlanGrid the construction record set on every jobsite in the world. Many software engineers who get excited about trendy tech startups — self driving cars, VR/AR, drones, etc — are surprised to hear about the types of problems that we deal with and the scale upon which some of these projects work. We hear questions like:

It’s cool to hear how much time can be saved in construction using modern ML approaches. And you’re saying that only a small percentage of the market has moved from paper?

Wait, your customers have how much data on their projects?

And you’re saying the app works just as well in offline mode too?

Our customers are building tomorrow’s modern marvels. It’s true — they work on some of the planet’s largest and most well known construction projects including:

• Major roadway systems (which autonomous vehicles will rely upon)
• Modern factories (where drones are built)
• Critical data centers hosting well known services

And yet, in the tech world, PlanGrid remains an unsung hero as far as engineering brands go. We’ve decided that ends now because we know that PlanGrid shines where it counts — our tech and a mission which will outlast any trend.

Want to learn more? Come interview with us — we expect you’ll be pleasantly surprised.