When professionals in various industries approach me about starting companies, I almost always ask them to engage in a simple exercise. I ask them what the most frustrating thing they did at work was and if software could fix that problem or at least make it less frustrating. The answers usually run the gamut from, “yes, software could fix my problem and I want to build it” to “no, it’s still too esoteric a problem to benefit from software” and everything in between. When someone wants to build software to solve a particular pain point that they have experienced at work, that’s when my eyes light up.
As an investor, I practice something similar to this method. My friend Paige Craig of Arena Ventures has written extensively about what he calls the “hunting” method for finding great startups. His approach is “imagining future solutions and then focusing my time on finding founders who fit within those theses”. Now Paige is a very successful generalist investor and has myriad interests. He is able to imagine these types of scenarios across different industries. This is a difficult skill to master. However, for mere mortal investors, I suggest engaging in the “hunting” method to find companies that address (and hopefully solve) unique pain points that you have encountered in your day to day business life.
One day several years ago, I was sitting in my office minding my own business when I noticed that everyone was tense. My office is typically a pretty quiet place but on this day people were pissed and I wanted to know why. I found out that a subcontractor’s bid for a very important building material had come in significantly higher than we expected and caught us all off guard. I felt bad for my colleagues for a while but then decided to see if there was a way to use software to provide greater transparency and efficiency to the construction bidding process. The workflow had been done for centuries with paper and pencil and only recently integrated what I would call “disorganized email solutions”.
I put on my Paige Craig hat and decided to do some “hunting”. I scoured the web to see if I could find some software that general and sub contractors could use to simplify and streamline the bidding process, and thus save money for developers in the long run. I struck out, found nothing, and got back to work on whatever other project I had in front of me that day.
Later that very evening I was bored and trolling Angel List. I have found a few startups in my portfolio by just looking on Angel List, and then cold emailing those companies, but not many. Nonetheless, I like to see what people are investing in and what cool companies are coming out so I visit the site almost daily. Most of the time it’s easiest to see startups that are trending. However, for some reason a company called BuildingConnected popped up on my feed. The company was solving EXACTLY the problem I had experienced first hand at work that day. It seemed too good to be true.
I asked for an intro on Angel List and the founder, Dustin DeVan, replied to me within seconds. Within 15 minutes we were on the phone chatting. I liked him and the fact that he had extensive experience in the construction industry as well as a team of talented technologists building the platform. I was sold! He asked me if I wanted to see the product before cutting a check and in one of my gutsiest (or stupidest) moves ever as an angel I said, “I don’t need to see a product. The fact that you HAVE A PRODUCT puts you leaps and bounds above everyone else in an industry that desperately needs it”. I signed papers for the round that night.
Dustin has become a good friend, a mentor at MetaProp NYC, and a pillar of the nascent construction tech community since then. He has signed up many contractors to use his platform and they just love it. I continue to be incredibly excited about what BuildingConnected is doing because it is solving discreet, very painful pain points that developers and contractors experience across the world on a daily basis. So, if you are looking to find a potential investment, look to turn your own pain into gain. Happy hunting!