My startup was acquired for $875 Million after I scaled it to 450 employees. I'm Tracy Young, CEO & Co-Founder of PlanGrid
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My startup was acquired for $875 Million after I scaled it to 450 employees. I'm Tracy Young, CEO & Co-Founder of PlanGridFeatured
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Hi Elpha! I'm Tracy Young, CEO & Co-Founder of PlanGrid. We build software for construction teams so they can build better. To date, over a million projects across 85 countries use PlanGrid, and we've raised $69 millions in funding and scaled the company to 450+ employees. Last November, Autodesk acquired us for $875 million. Before co-founding PlanGrid with my friends, I worked as a construction project engineer for Rudolph and Sletten. I majored in civil engineering and graduated from California State University in Sacramento in 2008.Ask me anything about the construction industry, working for hundreds of thousands of superintendents :) , scaling a startup to 450+ employees or something else!
kuan·Aug 12, 2019kuan·Aug 12, 2019Thank you, Tracy for being here! Post your questions for Tracy before Thursday. She may not have time to answer every single one, so upvote the ones youโd most like her to answer.
tracyyoung·Aug 16, 2019tracyyoung·Aug 16, 2019Thanks for having me here. All questions answered. Cheers!
Tracy, you mentioned on the YC podcast that you called your first users every week for months. Eventually, when you started hearing feedback like "I love it," you knew were building something people would likely pay for. How did you approach those weekly calls? And how did you review/digest the feedback afterward?
Excellent question. Following.
Goal of these calls was to get them to use the software and get feedback. me: "Hi, how are the new updates working out for you?"them: "It's fine. I haven't really checked it out yet. I've been busy."me: "No problem. Let me know if you need help, okay? I'll check back in with you next week."them: "Sure"Pre-1m in revenue... We ran our business of google drive. Including stuff like keeping track of product feedback.
Thanks, Tracy!
Hi Tracy, thank you for your time!1. How did you land your first customer?2. At what stage did you hire help with Sales?3. How did you manage to grow as CEO, so you are a great CEO at all company stages and the board didn't fire you (I am afraid I read too many books about board firing the founding CEO :))?4. The best book to work with customer objections? ("Thanks, we don't need your tool, we already use...").Thank you!
1. Our first customers were our friends from university and people we had worked with in the field. 2. After Series A. Founders and early employees (non-quota carrying) sold our first $4m ARR.3. I was never a great CEO. At the best moments, I might have been a good CEO for the company if I could timewarp back 6 months. You have to understand that at any given moment of my last 8 years, I was literally in the biggest job I had ever done before. The only way I scaled was 1. being honest to myself and my team about my weaknesses, 2. surrounding myself with people who would shore up those weaknesses, 3. asking for help, 4. forgiving myself when i fucked up and did my best to adapt and learn from them.4. When you find that book, let me know.
#3 is really nice to hear. I'm CEO of my founding team, and it's not the most natural position for me, and it's just as you say -- every moment of it is the biggest job I've ever done. Nice to hear that it's possible to succeed even when you're a fish out of water feeling around in the dark.
1. How did you divide the workload between the co-founders2. How much did you raise and when and how many customers did you have when you raised?3. How many customers did you have when you started scaling sales? 4. Can you talk about your key hires?5. What are someone of the pitfalls we should watch out for between pre-seed and seed and A?
1. We were 2 construction engineers and 2 software engineers building tools for the construction industry. In general our work could be bucketed into three categories: writing code, talking to users, selling software. If we weren't doing one of these three things at a given moment, we were supporting our co-founders in some way so that they could completely focus on writing code, talking to users, or selling software.2. Seed: $1.5m (~10 customers), Series A: $18m (~1k customers), Series B: $50m (~5k customers). 3. VP of sales joined after Series A.4. Key hires at early stage (less than 50 team members): Generalists who wore many hats in 1 hour, had high pain tolerances, and who could be resourceful and unblock themselves. 5. Lying to yourself about the importance of problem your solving for the world and the TAM.
I'm so excited to learn by your example.-What were the unknowns about scaling your workforce you wish you knew when you were still small?-Do you mind disclosing what your pre-seed/angel/seed rounds were like (size, timing, difficulty & composition of investors)?-Did you try to convince/convert sexist VCs or did you move on to the next one?
1. Hire an HR person when you hit 50 people. 2. https://www.crunchbase.com/funding_round/plangrid-seed--9de15ba5#section-overview3. We were lucky, we found product market fit early and had revenue so we got to choose the business partners we worked with.
Ah. And Y Combinator connections didn't hurt either. Thank you, Tracy.
What great story and congratulations! My question is: How did you manage to get a foot through procurement at such large companies, especially as construction is quite legacy?
We wouldn't talk to corporate procurement teams, or CIOs until there was enough critical mass of PlanGrid users in the field who would vouch for us. We focused on getting our end users to love our software so the enterprise conversation would happen easier.
I have a few questions: 1. What were the steps leading to the acquisition? Were you looking or did they approach you?2. Can you talk about life after being acquired by Autodesk? Do you have the same responsibilities? Do you earn the same amount of pay?
1. Companies are bought, they're not sold. They approached us.2. Well, we were a 450 person startup integrating into a 1k person new construction business division, as part of a 10k person public company. No, I don't. And Yes.
How did you come up with the idea and validate it in the early stages? i.e. Did you create a product for yourself/ colleagues? Did your employer pay you to develop the product? Did you try to sell it to other people/ organisations immediately?How long did the validation take? Were there pivots along the way?
We solved a problem we experienced ourselves in the field as construction engineers. It started off as a fun project. No pivots. We nailed product market fit immediately, which I understand is rare. We were lucky.. we were in the right place at the right time (Steve Jobs announces first generation iPad) and it was a miracle the founders knew each other.
Thanks for telling us your amazing success story! Do you have any advice for someone just starting out and building a client base? Tips for cold emails? Thanks!
Cast a wide net, build a huge top of funnel, and understand that everyone gets a lot of no's. Do not let the no's bring you down.
Thank you!
What was your biggest blind spot in hiring? How did you go about selecting co-founders, senior executives, first hires (all as you scaled each round)? What was the biggest mistake you made that you wish you wouldn't have made before? What due diligence did you have for team that was unique to PlanGrid?
First 25 employees have to be generalists, people who could wear multiple hats and do at least 3 people's worth of work each. At some point, the company grows to a large enough size (100) where team members have to specialize (1 person is in charge of 1 specific thing) or else it's complete chaos of who is responsible for what. Hire a good recruiter who understands the type of people founders are and what they value. Your recruiters are your first line of defense and filter for getting the wrong people away from the bus.
Thanks Tracy!
This is insanely impressive. What were some of the biggest early challenges in getting up off the ground?
Biggest challenges.. no money, no team members, no customers, too much to build, no revenue..
Solve problems and add value for people. Add enough value that they'll pay you for it.
Very inspired by your journey. What advice would you give to new startups trying to succeed in construction tech, given that the industry is slow to adopt new technology?Also, with the gender ratio on a construction site down around 3%, do you have any advice on navigating this male-dominated environment and getting people to buy in to your sales pitch? What's your advice on embracing customer-facing roles vs handing that task off to someone who looks more like your target customer?
The world has changed a lot since we founded the company. Construction in 2012 was slow to adopt technology, no one even had iphones or ipads in the field. Construction teams today are all talking about how to leverage technology to do their jobs better and address the labor shortage. Build someone so valuable for them that they'll give you money for it. Understand that human are judgemental creates, including ourself, but don't focus on it. Focus on the value you're offering them. Don't do business with assholes.
Pretty sure I worked at the competitor you mentioned. And yes, PlanGrid was the topic of conversation a LOT. So what's next for you?
- What traction did you have when you raised your first round of funding?- How much of your MVP did you have built out before you started letting customers into your product?-How'd you set expectations with them that the product might be underdeveloped?
We had about $40k ARR when we raised our seed in 2012. Macroeconomic and funding environments change, so not sure if that is relevant today.In general, get the product, even if it's just a design prototype or hacked together spreadsheet, in front of your beta customers for feedback as soon as possible. They'll forgive you if you can take their feedback and iterate back a better version for them as fast as you can.
Iโd love to know your top tips for getting seed funding. How long it took to scale to 450 and sell your startup? Thanks for dropping by and answering the questions for us all - itโs incredibly valuable and great to share learnings.
Either be in 100% fundraising mode, or 0%. Timebox seed fundraising to 2 months max. Time kills all deals. If you cannot raise a seed round, lazer focus on adding value for your customers. So much value that they'll pay you for it. 4 to 450.. 7 years.
How competitive was your industry and how well funded were you relative to competitors? What do you think were the 1-2 things you got right when you were scaling go-to-market to be able to break away from competition and win new business? What were the 1-2 things you did right to further scale into the later stages of the company? Thanks!
We were the first construction software for the field available on mobile. We created our category. We had 1 competitor that eventually raised 3x more than we did. They will likely go public as a standalone company. We pushed best of breed software against a broad solution that didn't do anything great. Our users use our software because they love us, other people use our competitors because they were told to. In later stages, recruiting and retaining an executive team that has not only seen the current stage but has done what you need the company to get to in 24 months is crucial.
That's absolutely incredible. Congratulations to you! My question is this - as the CEO of a startup (that is also a nonprofit - eep!) my biggest struggle is dealing with back-office and admin stuff that comes up all the time. We deal with part of this by using a PEO (Gusto) but the rest of it I struggle with. So my question is this, in the early days how big was your team and what was your ratio of admins to C-level or director level people? Also, what was your best strategy for dealing with back-office stuff like bookkeeping, getting people paid, insurance, etc?
In general, if you can afford it, hire someone to do back office work, so you can focus on solving the hardest problems. If you cannot, (and understand that we couldn't in 2012, we couldn't even afford to pay ourselves a salary), founders have to do everything. Another option is bringing on another cofounder who is strong on operational front.
I understand that you and your co-founder are life partners. I happen to be on the same boat! Would love to know your take on how you guys managed a work/personal balance. Thanks!
The smart thing to do is to not complicate your life this way. But we're proof that it can work. Some tips: 1. Clear delineation of responsibilities and who ultimately makes what decision when there is an argument, 2. Be kind, patient and love each other, 3. Don't yell, ever, 4. Have sex
What was your biggest challenge when hiring for your team, and what did you do to solve it?
Different problems at different stages. Early on, it was convincing really great experienced people to join our little startup that no one had heard of before. We focused on hiring people who were non-tech, humble beginnings, didn't mind doing hard work and were high potential for learning.
Did you start PlanGrid while you were still working at Rudolph and Sletten? What was the biggest challenge from being an employee to an employer?
No, I started afterwards. If it's a problem worthy of your time and effort, every cell in your body will move you to quitting your job and building it. I loved being my own employer. First year was hard because I had no money to pay myself.
Hi Tracy, congrats & thank you so much for doing the office hours :) 1. What was the hardest thing about managing people? Especially when it's at that scale. 2. What helped you solve that problem? Any process and/or tools?
Keep 1:8 max ratio manager:team members. Set clear expectations. Give clear feedback when expectations are not met. At scale.. communication gets harder. With 10 people in 1,000 SF office, communication is just talking loudly.
@tracyyoung Hi Tracy, thank you for sharing. How did you find your co-founders and what's your advice on finding right technical co-founders? How did you validate your ideas in the beginning? What are the biggest learnings you have got from your entrepreneurial journey? Thank you!
3 of us went to college together, 2 of us worked together, 2 of us married.Find a problem to solve that is worthy of a decade of your life.
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