He spent 5 months working with customers before building—then grew to $10s of millions ARR. | Aviv Leibovici, co-founder of Buildots

Aviv Leibovici (00:00:00):
I'm a very firm believer that you will only understand, the problems that you could solve if you're there. Everyone in product says that you have to speak to your customers and I say that's bullshit. Speaking to your customers doesn't help. Because when you speak to people, you're hearing their idealization of their world. What they want it to be. When you're there with them, you see what reality is. I sit there and already, because I'm not a salesperson, and I suck at this. I'm already apologizing before I give him the number and then I tell him $4,000. And he goes, oh, okay cool. So where do I sign? I call Roy, and we both agree that obviously it means that we underpriced it.

Pablo Srugo (00:00:33):
Before you were doubling, then tripling. Now you're maybe 4Xing.

Aviv Leibovici (00:00:37):
We did between one point five to two year on year. Then now we're doing between two to three. When we look at this year, what's going to happen? Three to four.

Previous Guests (00:00:48):
That's product market fit. Product market fit. Product market fit. I called it the product market fit question. Product market fit. Product market fit. Product market fit. Product market fit. I mean, the name of the show is product market fit.

Pablo Srugo (00:01:00):
Do you think the product market fit show, has product market fit? Because if you do, then there's something you just have to do. You have to take out your phone. You have to leave the show five stars. It lets us reach more founders and it lets us get better guests, thank you. Aviv, welcome to the show, man.

Aviv Leibovici (00:01:17):
Thank you. Thanks for having me.

Pablo Srugo (00:01:18):
Dude, look forward to hearing the story. I mean, you started Buildots in the software, in the construction space. Notoriously not an easy space. I think, to sell into and you went through COVID. Which in some cases helps, but I can't imagine it would have been a good sector to be selling into during that time. Maybe tell me, like you started this. I guess, in like 2018 or so. Tell me a bit what you were doing before then.

Aviv Leibovici (00:01:41):
So myself and my two co-founders, we come from the same code program in the IEF. Which is a weird one, but basically we've known each other at that point for nine years. Including three years of being very much together in school and stuff. And then we had six years of each doing their own bit. All in similar worlds, more in data worlds and stuff like that. In different parts of the Israeli intelligence sector, let's call it.

Pablo Srugo (00:02:10):
And you went in there, what? Is it after high school that you go, like at eighteen?

Aviv Leibovici (00:02:13):
Yeah, at eighteen I started a somewhat weird program that also includes getting your bachelors. Which is the first three years and then you go, and actually do any work. Which is the next six and those six we spent each. Again, me and myself, in one particular place. Them and others, still very much connected. But not really working together, finished those six years.

Pablo Srugo (00:02:33):
What did you do in those six years? Like what? It was in intelligence? 

Aviv Leibovici (00:02:36):
It's all sorts, it's a complicated topic. It's basically called data and cybersecurity stuff. That's a good title for it.

Pablo Srugo (00:02:43):
And we won't go into it more than that.

Aviv Leibovici (00:02:44):
Exactly.

Pablo Srugo (00:02:47):
Cool, man. How do you go from there to construction? Do you know what I mean? How does the idea for Buildots come about?

Aviv Leibovici (00:02:51):
That's a very good question. We had this thing. We wanted to start a company, okay. That was a weird thing.

Pablo Srugo (00:02:57):
For a while, like while you're working in this with your friend? You guys just knew for a while you want to start a company?

Aviv Leibovici (00:03:02):
We were actually kind of almost joking about it for a while and then during the yearly ski trip that we used to do. All the buddies together every year, the wife of Roy. Then not yet wife, but now wife of Roy, the CEO. Looks at the three of us and says, okay, are you going to keep bullshitting or are you actually doing this? Okay, I guess we'll do it then. From company, it turned into, well. Which sector company? It's like, ah, we want a real world thing, a real world problem. Started looking into what people do in the tech spaces of healthcare and agriculture, and this and this and that. And got to construction, somehow just by a friend of a friend, of a friend explaining to us that they think it's a good idea and a good time to look at this industry.

Pablo Srugo (00:03:48):
And by the way, this market exploration you're doing as you're still working full time?

Aviv Leibovici (00:03:52):
No, so we finished at that time and we were just like, okay, I think we were all. At least myself, I was working as a sort of consultant, hourly at the time just to a bit work. But mostly doing this and then decided that it is construction that was like, lets call it New Year's 2018. Stopped everything else that we were doing. Decided to spend two, three months just on understanding what we potentially could do in construction, and then make a decision. And those two, three months started actually doing stuff.

Pablo Srugo (00:04:21):
What made you? So you discovered construction through a friend, but what did you see?

Aviv Leibovici (00:04:25):
Well, first of all. This guy, he works for or worked at the time. For one of the biggest, most importantly, the most advanced general contractor in Israel and his point was, this industry needs new advanced technologies. This industry knows that it needs new advanced technologies. This industry is now very open to that, but it also doesn't have the people to deliver it and therefore, come if you want impact. This is the place to do it. We then went to this thing called Open Doors, which is a UK thing. Where you can sign up online for guided tours of construction sites with general contractors here in the UK. Which is a thing that they do once a year.

Pablo Srugo (00:05:03):
What's the point of that?

Aviv Leibovici (00:05:04):
Very good question. Yes, very good question. Well, basically, I think the main purpose of that is to attract people into the industry. So when we did these tours, most people were doing their bachelor's and what these general contractors were trying to do was. Get them to come work for general contracting and not, I don't know, engineering firms or other things in this industry.

Pablo Srugo (00:05:24):
These are civil engineers mainly that want to.

Aviv Leibovici (00:05:26):
Yeah.

Pablo Srugo (00:05:27):
Learn the industry, right?

Aviv Leibovici (00:05:28):
Yeah, and they wanted to. This is mainly about drawing to them the right talent, and also a bit the local community comes to see what it is that is being built around them. And making them all this noise, and stuff. And it's kind of a way to, you know, to make them less anti.

Pablo Srugo (00:05:43):
It's actually smart. It should be done more, to be honest.

Aviv Leibovici (00:05:46):
I think it's very smart and the funny thing is that we arrived for a week. We signed up for loads of them. Which people don't generally do, we were told and then this guy. The site manager asks, okay, can we just click, you all say who you are and why you're here. So this person lives here, this person is just finishing their civil engineering studies, this person considering to go say civil engineering. Me, oh, we're three software people from Israel. He goes, what? Oh, okay.

Pablo Srugo (00:06:14):
You're in the wrong group, yeah.

Aviv Leibovici (00:06:15):
Yeah, moving on, but in that and what we also did is we emailed all of them asking for their time. One company agreed and we sat down with the project director of that project and just had a chat with him. And he basically said, look, my biggest thing, you see this? He draws out an Excel out of his drawer and says, this Excel is my tracking of what's going on here. And this thing takes unbelievable effort to create. And I will tell you that it's far from accurate. And this is how I run this job. He then also agreed to call, truly open the doors for us and he said that anytime I want. I can come in, sit in on these meetings, do this, do that and you suddenly see this industry that works in a way that you sit there. I'm a very firm believer and I actually took that from back then. And it's still true today, that you will only understand the problems that you could solve and the potential solutions if you're there. Everyone in product says that you have to speak to your customers and I say, that's bullshit. Speaking to your customers doesn't help. Because when you speak to people, you're hearing their idealization of their world. What they want it to be. When you're there with them, you see what reality is and I was there with them. And I see one of his managers walking into one of the apartments that's being built. Just sticking his head in, looking around saying, I think this is done. Now, this is an apartment with three bedrooms and a living room. He doesn't know it's done. He just looked around and said, yeah. I guess, because he doesn't have enough time.

Pablo Srugo (00:07:43):
How long did you spend with them, by the way?

Aviv Leibovici (00:07:45):
I would be there at some point. Kind of every other week, for like a day or two. I had this deal with that guy, one of his managers. That I walk around with him, I ask any question that I want, I carry anything that he needs carried, and I bring a pastry in the morning. That was the deal, and they took.

Pablo Srugo (00:08:04):
Why do you think he was doing that?

Aviv Leibovici (00:08:05):
I think people, especially in industries that don't experience this a lot. It's fun to be the expert. It's fun to be the person who's teaching someone else and sharing your wisdom. Who doesn't want notes, what's the problem? And you get a different experience. And you get this weird person who doesn't understand construction at all, but understands all sorts of things that you don't. About technology and stuff, why can't he walk around with you? Why not? So that, and then I sit in on his project director's meetings. And you see a meeting that is being run by hearsay, let's call it. They argue, if something was done or not done on the fourth floor. Between themselves, the general project, the subcontractors, everybody, different managers of the same company even. Just saying it is done, it's not done, it's not done, and this is an attempt to plan next week. But you're arguing about what is already done or not. How can you plan next week?

Pablo Srugo (00:08:52):
What's the dispute? How does that? How do you? Is it not just a known fact?

Aviv Leibovici (00:08:56):
No, one person is saying it's done. The other person is saying it is not done and then they send the youngest person in the room. Well actually at some points I was the youngest person in the room. But lucky for me, I don't count. So they send the youngest person in the room to run out, go to the fourth floor and call them, and say if it's done. Now, this takes like twenty minutes and by the time this guy calls. They're already on a different topic. But this guy calls, and then you see this all the time. And in this industry, also, you see it in a very colorful way. What one of those subs tells this project director, I think we're going to get it done. There's this moment where he stops and he looks at him, and says, think. That word, I do not like that word. Sometimes you think you're going to fart but you end up shitting yourself, and it's this industry that operates this way. In a, what has or has not happened, we debate. What can happen, we debate. If it didn't happen, whose fault is it? We debate and in a world where everyone. You have dozens of companies involved in this project and every company is trying to protect its own interests. And not be at fault for anything, because then they incur a cost. It's just crazy. Once we saw that, we were like, okay. The opportunity here is obviously ginormous.

Pablo Srugo (00:10:20):
By the way, is it just you that's spending that time there? Or are your co-founders with you as well?

Aviv Leibovici (00:10:24):
I was doing most of that.

Pablo Srugo (00:10:25):
Because you're on the product side? Was that kind of the idea?

Aviv Leibovici (00:10:27):
Because, kind of but also just because I think of where we're each inclined towards. You know, when we started it was the very first days where the three of us sitting in our living room. Each looking into different texts. So at that time, for instance, I was responsible for looking at other construction tech firms. What it is that they're doing and why. So that we get an understanding of what could be done. Funnily enough, I always say about starting a company at that moment. When you're not starting with an idea, but you're looking for one, That it's the most painful experience in the world. Everybody was telling me, oh, you'll love this when you're after. When you have a company to run and responsibilities. I'm like, no, no, no. It's the most painful experience in the world, because you're sitting in a room not knowing what you're doing. The only reason that you're not constantly just on Facebook or something. Is because you can see your two mates and you can't be the ass, that doesn't actually try to do something and you do that. But anyhow, we had these things of what we each could do. I was more that. Yakir, the third co-founder, he's our genius and when we realized that to do this. We need to build a whole computer vision engine and none of us have any experience in any type of AI. But Yakir is Yakir. So he will just learn and build it because that's who he is, and he did.

Pablo Srugo (00:11:47):
How many weeks are you doing this kind of in-person discovery for? How long?

Aviv Leibovici (00:11:51):
In total, but obviously doing also other things while it's happening. Call it something like four or five months.

Pablo Srugo (00:11:58):
Was there times there where you're like, maybe I'm wasting my time? Or was it pretty clear right from the get-go? That this is exactly where you need to be and you're gonna find gold here, so to speak?

Aviv Leibovici (00:12:08):
The moment I saw, which was very early on. The conditions in which they are trying to manage it. I said, there is the gold here. Now I need to figure out everything that I need to figure out to solve it, by the way. I could not have, I had no clue how much I don't know. Today, I know to say just how much I didn't know then. Obviously, I still find out about things that I don't know but just looking back today. Honestly, if I knew everything that I know now, probably wouldn't have started this company. We would have said it's insane, that's too difficult, there's naivety.

Pablo Srugo (00:12:43):
Well, sometimes that's the beauty of being, you know, first time founder. You're naive, you just see the next thing. Well, when you just do this. It's gonna be great and you do it, you're like, oh, my God. There's a whole other mountain.

Aviv Leibovici (00:12:52):
Exactly and I don't regret it at all. And I think that naivety really helped. Because otherwise, as you say it. But you talk about products and understanding the problem that you solve, and what it is you're solving. I can tell you about the first time that we actually had a working product with a customer. That's almost a year later, that's September 2019 and this first customer is here in London. Mind you, back then I am still living in Tel Aviv. So I fly every week for a couple of days, spend time with my first customer, then turn to customers to understand about this product and how to deploy it. And how to help them, what it should be, and everything. And this is the very first product, week two or three of them having this product. And in a nutshell, Buildots tracks progress on site and it tracks the sequence of the different activities that need to take place for you to complete. Whatever, in that case, an apartment. I come up to this guy and I go, Nathan, this is showing that you did the second thing in your sequence on two floors and didn't do the first thing in your sequence at all. So what's going on? Is something happening? He looks at me and just tells me, well, Aviv. Because your freaking stupid product is showing something stupid, why the fuck did you do that? Now, this is my first customer, yeah? I'm like, what? You know, I almost shat myself. Like, what's going on here? And I tell them, well, because that's what your schedule shows. So yeah, sure, because my scheduler doesn't understand construction. So you put that, it can't be built that way and suddenly you realize that what you're talking about. I'm talking about helping them manage a process in which there are different people involved. Each with a limited understanding of the process itself and therefore you have a schedule that isn't really something that can be done. Based on how that schedule is written and you have a design of the thing that's being built. That can't be built exactly as it is designed and you have people who are meant to deliver both of these things. Who don't fully look at these two things completely, because they know that there are problems with that and they use a lot of their knowledge, and brain, and experience, and whatever, to get around that. Like, oh, my God, this just became so much more complex.

Pablo Srugo (00:14:58):
Man, hearing this. You're surprised that anything gets built, to be honest. It just sounds like complete chaos.

Aviv Leibovici (00:15:03):
I got to tell you, after all this. I have found such new admiration to the fact that I am currently speaking to you from an office, in the UK that is working and then I will go home. And my home, I'll live there, and it will be okay. And I keep saying that the only reason, and I think why I love working with this industry is that. The only reason that this happens. Is because it's such a shit thing to do. to be honest. To manage construction, it's such a pain, but the people who stick to it and do it are truly passionate about doing it. And therefore they get it done. And you see these people, you know, you walk around with them, and they tell you, oh yes. They all tell you the stories about how they took their kids to a tour in London and told them daddy built this, and daddy built that. You know, stuff like that.

Pablo Srugo (00:15:46):
So we moved to kind of your first customer, but you're discovering the problems. Tell me about the time, where you start realizing. What kind of the solution might be. Which piece of this problem you want to actually go in and solve.

Aviv Leibovici (00:15:58):
So very early on, this was about, in essence. That Excel, that first guy showed us from his desk. It's about, we need to give them the proper information about what has happened and has not happened. Where and is that according to schedule or not. And really the very first version of this product and the very first feature in it. Was a big table, that has the activity. The different activities in the sequence and the different floors of the building, and progress percentages on all of them. Colored red if it's behind schedule and green if it's on schedule, and blue if it's ahead of schedule.

Pablo Srugo (00:16:29):
Is this like project management, kind of software?

Aviv Leibovici (00:16:31):
Yeah, and blue, which never showed up. Because nothing is ahead of schedule in construction. So the first few customers that we show this to, start laughing at us and saying, well, what did you design the blue for? That will never show up, it's pointless.

Pablo Srugo (00:16:44):
And was there not? Because like Procore is typically kind of the project management Goliath in the space. Where do they fit? Or how come these people are using Excel versus some other project management software?

Aviv Leibovici (00:16:57):
In terms of managing the actual delivery of the project itself. There are three main things. There's project management software. That is the Procore of the world and Procore is by far the leader of that. And that is typically things where. That's where you have all your documentation, be it design, be it to inspect, be it other things. That is where communication happens. So let's say that I am the contractor and I have a problem with the design. I need to do something called request for information. So that the designers reply, that is done through this tool. That is where all the permits sit, and all of that. It doesn't do at all anything about managing the actual process of construction. The activities that come into place. For that, you have two things. You have scheduling software. The leader in that is Oracle, with a tool called Primavera. Which is basically where they build the Gantt charts and where you have functionality to update where you are against that Gantt chart, and sort of re-plan. And do things like this.

Pablo Srugo (00:18:01):
This is like, plumber comes in on this day and electrician comes in on this day. And they work for this long on this thing, and whatever, right?

Aviv Leibovici (00:18:07):
Exactly, but that is kind of high level and it's more used for. I always equate that to a product roadmap, you know? Something high level that you have just to like. To check yourself that you're on the right track, but not the thing by which you manage tomorrow and that they typically do in Excel. Because they don't have other mechanisms and more so than in Excel, in talking about it. Let's call it, that meaning that I tell you about with four floors, done or nada.

Pablo Srugo (00:18:33):
Right, this is where, again? Back to my stupid and I have a very naive view of construction. But, you know, the plumber is going to do this for three days and the electrician is going to come in. So on day three, they call him, hey, do you finish? No, man, actually, I had this thing come in. So I'm another day. OK, call the electrician. Tell him, hey, don't come tomorrow. Come a day later, but times a million of all the different things that are happening.

Aviv Leibovici (00:18:50):
Exactly, that times a million and then you figure out. That because everybody knows the dynamics of this industry. When the plumber says they'll finish on Wednesday. When they know they probably won't finish on Wednesday. But they think that's a good thing to say and the electrician knows that when he says Wednesday. He's not actually going to be finished on Wednesday. So he's never planning on getting there on Thursday. He's not even planning his resources that way and all of that happens.

Pablo Srugo (00:19:13):
This is like, by the way. I'm from Argentina, right? So we're late to everything. So if you want people to show up at 8 p.m. for dinner. You don't tell them 8 p.m., you tell them 7 p.m.. Because you know they're going to be an hour late. Everybody adjusts to the reality of things over time.

Aviv Leibovici (00:19:26):
But basically, the actual sort of day-to-day management of the process and progress just happens in Excel. Now, some teams use saline construction management software, which is basically about that. Just day-to-day task management or what's happening. It's very difficult, because of the information. Because the people actually doing the work are subcontractors, of subcontractors, of subcontractors, and they're not going to report what's done. What's not done in the now and then that means that to know what's going on. You need somebody to walk around and check everything.  But you can't really do that to that level of detail, not even once a week. So that's why that doesn't happen and that's why it all fails. And that's where we came in. And so we are integrated with the Oracle planning software. And we are integrated with the Procore for different reasons. This covers a different thing.

Pablo Srugo (00:20:15):
And was it always computer vision driven? Or was it first just kind of pure software where somebody would write in what's done, what's not done?

Aviv Leibovici (00:20:22):
No, from day one, it was computer vision. When we saw this, we said, I get why it doesn't work for them. There's no way that anybody will input here what's done, what's not done. It is just not realistic for that to happen in such a fragmented industry. It has to be automatic.

Pablo Srugo (00:20:36):
So the idea was what? Somebody would take a picture? Or how did you envision this working?

Aviv Leibovici (00:20:40):
So first of all, we said it has to be automatic, and therefore we took Yakir. And sent him saying, okay, figure out some fancy tech to do this. Because you're the smartest and what we saw at the time was that there were solutions called reality capture in this construction world. In which you walk around with a 360 degree camera, and you get sort of a site view, if you will. Kind of like Google Street View. Where you can walk around and that's useful. Because if you're a developer from California, but the project that you're currently building or that is being built for you is in Texas. You don't want to just fly there every week. You want to be able to see it and if you want to document your project. So that you eventually have a documentation of, what's happened to be able to sort of figure out things of claims and such that happened, and that. And we saw that and we said, okay, so this is the mechanism to capture the data. And now we'll need computer vision to analyze that. So that's the solution today. Somebody walks around with us, 360 degree camera, and the tech will sort out understanding where that camera is at every point in time. Therefore, what space is it analyzing it then? What's done, what's not done.

Pablo Srugo (00:21:41):
So fast forward to that first customer. What exactly had you shipped?

Aviv Leibovici (00:21:44):
Funny enough, that same customer in terms of company, not project. We were in contact with them about an actual project six months earlier. So around even more around January, February of 2019, and eventually, they didn't use us on that one. Because we need a specific format of designs called BIM and in that project. They didn't have that format and then they reached out to the architect. Who told him, oh, yes, I have produced your designs from this BIM file. So I can give it to you, but in this industry, nothing comes for free though. Because it wasn't in his contract to give such a thing. So he says, I already have it but if you want it. That will be $250 grand.

Pablo Srugo (00:22:23):
Oh, my God. We have tens of thousands of people who have followed the show. Are you one of those people? You want to be part of the group. You want to be a part of those tens of thousands of followers. So hit the follow button.

Aviv Leibovici (00:22:34):
They didn't want to pay $250 grand for the glory of testing this new product built by us and therefore, that didn't happen. And lucky me that that didn't happen. Because, we so didn't really have a product yet back then, and this industry has no time for games. Eventually you work with a project team. That project team is working on a project that will be delivered in two, three, however many years. They don't care testing something new if it doesn't help them. Because by the time it will be tested, even if their company continues to use it. It won't be them. They're going to be off on another project, maybe in another company. So I'm very lucky that didn't happen and then, in September. We already had a proper product. So you walked around with this camera, and you would get. At the very least, this sort of table and I'm just talking about, showing the progress. Obviously, at the time. A lot of the computer vision was very early for us and not completely working. So there was loads of manual help that it needed. The very first capture that happened, I did myself. For the first few months, I would. When I went there, as I said, for those few days. I would walk around with the camera. So I walked around with the camera and the entire company, fifteen people. Back in the office in Tel Aviv, are waiting for Aviv to upload the videos. Just to check what's going on to help the system process it and then I tried to upload it from their guest network. On that construction site and it's not working. It's too slow. So I run off to the nearby mall and it's not working, it's too slow. So I rushed to my hotel to upload it. Because they're all just sitting there waiting to do this and it's a surreal experience. Because I sold AI, but it wasn't full AI yet and now I got to rush to upload it so that the human beings can do something with it. And yeah, that worked out. It was already a good enough product and a good enough AI mechanism that allowed. With the help of those people, to get it done in days and not weeks to analyze that.

Pablo Srugo (00:24:20):
And what was the idea? Ultimately was somebody, would do this every day? They would every day kind of take a video of whatever is being built?

Aviv Leibovici (00:24:28):
Maybe one day, not then. Certainly not then, still not now. I think that it's just eventually our cost is very much associated with, how much is being captured? Because we pay a buttload of money to Amazon and to do that every day. Isn't important enough for the extra cost that, that would be. 

Pablo Srugo (00:24:48):
Interesting. 

Aviv Leibovici (00:24:49):
Now, as things improve and costs go down in the future or whatever, maybe. But right now, this is more about sort of identifying your risks in the project and where performance is lacking. And that just doesn't change on a single day. Most of our customers capture once a week.

Pablo Srugo (00:25:05):
And how did it go, by the way? In that first deployment, in terms of ROI and value? I mean, the product sounds like it worked but what did the customer think about it?

Aviv Leibovici (00:25:13):
I think, well, it would be a joke to say that first project. The first quite few projects taught me a very valuable lesson. Which is there's a difference between a product that is providing the right tool. That can drive tremendous value and a product that most users will actually get tremendous value from. The product was the former, was not the latter. Which meant that, essentially, if you manage such a complex project and I give you very accurate data about what's going on. Information about what's not done, what's done where. You could do fantastic things with it and ten percent of my customers did fantastic things with it. And ninety percent of them did next to nothing with it.

Pablo Srugo (00:25:53):
Why is that?

Aviv Leibovici (00:25:54):
Because you're suddenly telling people, oh, here's this data platform and if you change how you think. And if you now, before you make decisions. Look at the data and try to analyze what's going on. And if you don't do just that, you change the type of decisions that you make. So that these are the type of decisions that can rely on such data. So, you know, basically, if I give another example, that same Nathan. At some point, I'm in one of his meetings and they're also discussing this thing of if something is done, not done. And then they say, okay, electrical works on third floor, and the electrician tells him it will be done on Thursday. What do you mean Thursday? You can't, you have to finish on Tuesday. This guy needs to come in after you, I can't delay that. You have to finish on Tuesday, you can't do Thursday. Tuesday is just two days away, we're on Friday. You think I can finish on Tuesday? I can't finish on Tuesday, there's no way and they agree Wednesday. Because that's a compromise, fast forward the next Friday, and Nathan asks him what's going on with electrical works on the third floor. The same third floor. He tells him, we'll be done on Wednesday and I'm sitting there like, oh my God, what just happened? But nobody else is responding like me. It's all business as usual. So I then walk with this Nathan. I tell him, Nathan, you had this whole back and forth last week about Thursday or Tuesday. Ended up agreeing Wednesday, we are now two days after that Wednesday, and he told you Wednesday. You didn't flip out tells me, oh Aviv, when he said Thursday. He didn't know when he could finish but he thought that that's something that I can hear and I can accept. I said Tuesday, because it's a knee-jerk reaction. I take what he says and take two days less to apply pressure and now we're in reality. And in reality, it was never going to be done this week. As I look at him, he tells me, you're looking at me like I'm insane. So I'll explain and he goes, all I'm trying to do is have three to four meeting summaries. In which he did not deliver the thing that we agreed, so that I can go to his director and say, you have to resource this job more because you're failing on me. I am playing a long-term game. Because I'm playing a long-term game. Because I don't have the information needed to play a short-term game. That's why you're here and that moment you realize that there you go. They need to change the things that they're trying to do. Because suddenly this information is here and most people just don't do that.

Pablo Srugo (00:28:06):
So he can't, just so I understand it. He can't make this person work any faster, because he doesn't know enough to have that true debate with that person. The best he can do is show that deadlines are being missed, go up a level and say hey put more people on this project. Deadlines are being missed.

Aviv Leibovici (00:28:22):
Yeah, if you think about it. They're being provided a service to say do the electrical works and they never talk about how much work will be done. They talk about how many men will be here. That's what they negotiate. No, no, no, you need to have twelve men here. No, I'm going to have eight and when you think about it. Wait, that's ridiculous. They should be saying, no, you need to finish two floors a week, or one floor a week. But they're debating manpower, because that's the only thing that they can measure and so anyway. So then that was it and this product did that. But people don't just suddenly get up one morning and spend the effort needed to learn how to do things anyway. And that's not construction people, that's just people.

Pablo Srugo (00:28:59):
Because what did they have to do? There's a behavior change element, but all they had to do was what? Just check your report? Or was there something they actively had to do to get the value?

Aviv Leibovici (00:29:06):
It's check, but it's check and learn how to check that. Learn how to check the fact that that is what happened specifically in the last week and that depends on them having doing these captures. You have to do it consistently at the same, roughly time of the same day. So that you get a week's worth. If you're doing this meeting Friday afternoon, and you did the capture on Wednesday. Because that's what they were doing, then now you have information from Wednesday afternoon and Friday morning or afternoon. And you get an account for that. And you have to do this whole thing. Never mind the fact that you typically run a meeting with a very fast-paced meeting talking about it.

Pablo Srugo (00:29:43):
Yes, right.

Aviv Leibovici (00:29:44):
The only way you can make it as fast-paced with the data, is if you pre-prepare yourself with the data. Which means you have to sit down and prepare for this meeting, but you don't do that. Because you're busy with all sorts of other things. And you're not proficient enough in the tool to run it quickly during the meeting. So when Aviv is there with you and becomes your. I call myself the data monkey, and helps you show things during the meeting when you ask, then it works. Once Aviv is not there, it doesn't work and we ended up realizing that even to the level of viewer tracking. Like the minutes that they use this product every week as a metric and that is such a wrong metric. Because the thing that you need is to succeed, to deliver to them what they need in ten minutes of use every week. Because that's the time they have and that's the shift that we had to do in the product, and understand how to do that.

Pablo Srugo (00:30:29):
And when? By the way, when is this happening? Is this end of 2019? What's the timeline when you're learning these kind of usage problems?

Aviv Leibovici (00:30:35):
Learning it over time. Finding a solution, something like 2021.

Pablo Srugo (00:30:40):
When did you deliver these first few projects?

Aviv Leibovici (00:30:42):
First few were Q4 2019. Obviously, then COVID hit.

Pablo Srugo (00:30:46):
Yeah, exactly. What happens during that, like Q2 2020?

Aviv Leibovici (00:30:49):
Three major things happened with COVID. One is suddenly everyone needs something to give them, any type of information from projects. Because they can't go to them. If you're not the most essential personnel, you cannot be there. So everybody starts scrambling for, say, these. You know, what I call site view, reality capture solutions. Because you have to have something to be able to see your own construction projects. Because you can't go there and that drives some stuff. The other thing that happens is that we were very big on the fact that you have to sell to people and deliver to them on a local basis. But suddenly it doesn't matter anymore. Because our guy in London, when he speaks to a company in London or a project in London. He could very just as well speak to a company in California. Because he's got to do it on zoom anyway. He can't go to see them. So we had a very regional approach that completely got lost when COVID started, and we started selling all over the place. And the third is I, and people like me, and my team. Couldn't do this thing anymore, of being there with them and seeing how it works. And you just can't do that on Zoom. Okay, they'll spend an hour with you on Zoom, but that's not the same. You can't sit there with them, seeing how they work and how this can help them during their work with this tool. So there was a long period of time there that we just couldn't do that and I think that really slowed our product understanding, and our market fit down.

Pablo Srugo (00:32:06):
And by the way, what's the? Cause this, I assume during this time. Revenues are probably pretty low since you're just kind of figuring out, you're doing a few projects here and there. Correct me if I'm wrong, but then how are you funding the company? What's going on on the fundraising side?

Aviv Leibovici (00:32:19):
So yeah, revenue was. I don't recall exactly, but we're talking. Yeah, not high at all and nothing that is too relevant to fund this company.

Pablo Srugo (00:32:26):
Sub a million? Under a million?

Aviv Leibovici (00:32:28):
Oh, yeah, maybe. Call it a million and not only that, by the way. At the time, every time we signed a project. We essentially lost money, because our margins were negative.

Pablo Srugo (00:32:40):
Just because of the compute? The compute needed to run to do the vision? The computer vision.

Aviv Leibovici (00:32:45):
A combination of the compute. The fact that the algorithms fail a lot, and then they need a person to come in, and intervene. So we have people that do that, and this, and this, and that, and the other and everything, yeah.

Pablo Srugo (00:32:57):
And how did you price it, by the way?

Aviv Leibovici (00:32:59):
Something between how much it costs them to hire a manager. Which is kind of sounds relevant, to how much do they currently pay for tech. So that it was anyway more than they ever paid for tech, but we just didn't want it to be obscenely more. Because that would be very difficult. And honestly, Roy and I kind of winging it was the real pricing structure.

Pablo Srugo (00:33:24):
What was it? What was the ACV at the beginning?

Aviv Leibovici (00:33:27):
Well, it very much depends on the project. But to give you an example, that project I talked about before is like $50K projects, but it's funny.

Pablo Srugo (00:33:34):
And projects were $50K to $250K range? Most projects would fall in that bucket?

Aviv Leibovici (00:33:40):
In ACV terms, they could fall into 20 to 200. Really depends on the size of that construction project. But I think, you know, how do you learn these things? The very first project, we didn't want to give it any time for free. Because we said, nobody will try to even do it if it's free. We don't sound about the money with that. So the first project I'm talking about, we first agreed with them thousand pounds a month. Because it was a nice round number and they first listed us on two of their eight buildings. And then it started September. In December, the project director sits with me, when I'm there once a week and tells me, Aviv we want to put you on the entire project. Come back to me, I do this whole like, Oh my God. A, I don't know how to sell anything in my life. What's going to happen now? How do I go to this person with a proposal? I don't know how to do that. I consult with this person, consult with that person, I have it all in my head and speak to Roy, and this, and that. And I come to him the next morning, I'm going to tell him that it will be $4,000 a month extra. And I have it in my head the justification that I will give him. And then that I will drop to $3,000 extra a month, and that's my plan. And then I sit there, and I tell him, and already because I'm not a salesperson. And I suck at this, I'm like already apologizing before I give him the number even. 

Pablo Srugo (00:34:57):
Right.

Aviv Leibovici (00:34:58):
And then I tell him 4,000. And he goes, okay, cool. So where do I sign? And then I call Roy and we both agree that, fuck! Obviously it means that we underpriced it.

Pablo Srugo (00:35:08):
And then tell me on the fundraising side. You guys, when did you raise a seed round and then when did you raise an egg?

Aviv Leibovici (00:35:13):
Yeah, seed is August of 2018, roughly.

Pablo Srugo (00:35:18):
So very early on. How much was it?

Aviv Leibovici (00:35:20):
Three point something million dollars. Very early on, but it took a long time. Mind you, we started exploring this in January of 2019.

Pablo Srugo (00:35:31):
Oh, 19' or 18'?

Aviv Leibovici (00:35:33):
We started in January of 2018, thinking about it. Raised the seed in October of 2018. So nine months.

Pablo Srugo (00:35:39):
Got it.

Aviv Leibovici (00:35:40):
And there's also this thing in Israel where. Especially when the three people like us from our backgrounds start a company. It's like, yeah, they just raise a seed round and we had a different experience. Because of this construction thing. The thing I most remember, and I won't forget this. Is how two partners of a VC, one speaks to us and is all in. All interested and said, OK, come and meet my partner. And we meet this guy, and he opens up his notebook. And he makes notes as we are explaining who we are, and introducing ourselves. And then we say, OK, so what we do is we're building a solution for construction. And the moment we say the word construction, the guy closes his notebook, he doesn't stop the meeting and I'm like, oh, OK. There was another meeting in which we explained and then this VC guy. He looks at us and says, look guys, I'm not going to invest in construction. Okay, what the hell? What you on about? Now, you guys with your background, say that you're going to start a cybersecurity company and I'll write you a $4 million check.

Pablo Srugo (00:36:33):
I was going to say, you guys got to do cyber, man. What do you do? What do you waste your time for? Yeah.

Aviv Leibovici (00:36:38):
He goes, say that you're going to do cybersecurity. I'll write you a check for $4 million and then you figure out what you do with the money. But construction, no.

Pablo Srugo (00:36:47):
No way. Did you take that?

Aviv Leibovici (00:36:49):
No, obviously.

Pablo Srugo (00:36:51):
But is that who ended up leading the round then?

Aviv Leibovici (00:36:52):
No, no, no, the round eventually was led by TLV Partners and specifically a guy called Shahar in there. And he just, he has an eye for this sort of thing. And he said, look, you guys are going to disrupt the industry here. And I don't fully understand it because what do I know about construction? But it sounds like you guys know what you're talking about. It sounds like this is revolutionary. So let's go on with you and to this day, he is very much.

Pablo Srugo (00:37:15):
And then if I have it right, mid-2020. You raised a, I mean, this is based on Crunchbase. $13 million Series A also from TLV, is that right? And kind of how did that happen?

Aviv Leibovici (00:37:24):
Yeah, mid-2020, we raised that A. It was TLV and then others joining it that are more like called niche players. Basically, I think that our whole history of fundraising is that we have investors that really believe in us. Really believe that we're doing something very big here and the moment they sniff, that we have taken another step. They start putting us in front of other people that they know, and to this date. We have never gone and said, this is when we're going to go and raise money. And started a process that way, and was always starting from an opportunity that came because somebody introduced someone. And also, not to take credit, Roy, the CEO, is just freaking amazing at this. And he manages all those relationships, and he gets everyone bought into our story. But it was never like a purposeful, we are now going to go and start around.

Pablo Srugo (00:38:13):
So it kind of just happened. Because at that point you were still like mid 2020. We were just talking about this time, still very early. You were still trying to figure out, what did they see that made them feel like you kind of checked another box?

Aviv Leibovici (00:38:23):
First, it was this first project. That was having a really good experience that did that thing with the expansion within the projects very easily. I was talking crazy about what this thing can do to their own industry. Then, as a result, there was also some interest coming up from other main players in the UK, where we started. But also, let's be fair. I think that we are very lucky that we started a crazy company that is difficult to fund. But we started that company just before 2020, when the world went insane with funding and it could very well be that had we started this company now. It would not have succeeded to take off. The funding needed to make it something viable was a bit crazy.

Pablo Srugo (00:39:04):
When did things really start kind of taking off? 2020, you're still figuring things out. We said, you ended the year maybe at a million or so. What clicked and when?

Aviv Leibovici (00:39:13):
That's a good question. I'm not sure, I know how to answer that very well. Because it's all asking me to look back. I've gone through a lot since, but I think. Look, I think things were increasing nicely with time, just consistently. Until we cracked this thing of, what is this product really, and what is this thing really that we're selling people. And started talking about performance, identifying risks early, and the ability to change your fate as a construction project. As opposed to just having information for your day-to-day management and when that happened. Suddenly our salespeople, for instance, started saying, whoa, every time I speak to a project director, nine times out of ten, within minutes, they get it.

Pablo Srugo (00:39:54):
Yeah, tell me more about that. What could just expand on that change?

Aviv Leibovici (00:39:57):
Basically, up until that point, what did we sell? Let's say that I was selling to you. What was I selling? I told you, look, here's this platform. Here's this information and imagine that you run a weekly meeting with your subcontractors with this data, and how much it can help. And imagine that you're doing an end-of-month valuation of the works. And their worth, because there's a commercial process. With this information and how much it can help that process. And how much can this information help you do the things that you do? Which is great, but it's very difficult to buy for businesses that make like two percent margins. Which is what construction does and you're asking them to spend a non-trivial amount of money on a tool that will help them do their things better. Suddenly, we shifted, and we said, we understood some things that allowed us to say, this is the performance in which you are doing, and each of your subcontractors is doing. And if you continue this performance, you will finish this much late. So basically, you have a spark here, you can step on it now, or it can become a fire and you know what a fire feels like. Because you experience those often, and suddenly, it clicked. It's a very simple concept, to be fair. Think about something like, I tell you, you need to paint this entire building. You have, I don't know, one million square foot of things to paint, right? Walls, ceilings, whatever. you're painting a certain amount every week. And if you continue this way, this is when you'll finish painting. And if you finish painting, then what will that do to your entire project? It's a very simple concept, but it took us time to get there.

Pablo Srugo (00:41:31):
So, but it was kind of this change from reactive to proactive. From you need to look at the information and think about it, and use it. When it's relevant to, you know, what? We're going to just look at the information all the time and we'll give you the highlights.

Aviv Leibovici (00:41:42):
Precisely.

Pablo Srugo (00:41:43):
Like, hey, if you don't fix this now, you're screwed moments.

Aviv Leibovici (00:41:46):
You have an opportunity now to tackle this. When it's still easy, because the accelerate to do a bit more paint is not that difficult. As opposed to when you'll realize that you're in the dumps, and then the level of acceleration that you will need is be unbelievable. And that just clicked immediately.

Pablo Srugo (00:42:02):
This goes back to what you mentioned about worrying about how often people are using it and time use. And just flipping that, and saying, there's ten minutes. What can I give you in ten minutes, a day or a week, whatever it is. That's most impactful and obviously, versus a dashboard of showing a bunch of things. This is obviously just saying like, here's the thing you can do right now to have max impact on the outcome.

Aviv Leibovici (00:42:21):
Exactly, my customer success managers today, know how to do this. They come to a new project, they onboard them and they tell them, I'm going to explain to you this entire tool and all of its features. But here is the five minute thing, that if you do this once a week. You get eighty percent of what you need to get from Buildots.

Pablo Srugo (00:42:36):
And was that? By the way, a product change? Or more than anything, just a positioning and messaging change?

Aviv Leibovici (00:42:42):
It involved a product change, some actual new feature that exists there and a new insight that you can see that you couldn't see before. But also, that product change was driven by an understanding of a new thing. Which included also a new positioning and everything. We had to figure out that, that's the thing. Which again, going back to my example from before happened, because people in our team just, you know, worked with particular projects. Week in, week out, trying to understand how to give them something that will actually impact the project and figured it out. Then that became, I mean, we had customers using this concept before it was in the product. Because this person, Amir, who's our VP of Industry Transformation now. Just built this from our data, this same sort of insights in Excel and gave it to them, and saw that it works. And then we went and productized it.

Pablo Srugo (00:43:29):
Got it and give me a sense maybe just of revenue growth. Before and after, where were you more or less before this change? And then how did that inflection show up?

Aviv Leibovici (00:43:38):
I can tell, I don't know the exact numbers, but I can tell you is. That if before that we did between one point five to two year on year,. Then now we're doing between two to three year-on-year and when we look at this year, what's going to happen? Then three to four.

Pablo Srugo (00:43:57):
Sorry, is that in terms of growth? You're growing 3 to 4X? 

Aviv Leibovici (00:44:00):
Growing 3 to 4X. 

Pablo Srugo (00:44:01):
Growing 3 to 4X. Okay, so before you were doubling, then tripling, now you're maybe 4X-ing. You're over here.

Aviv Leibovici (00:44:07):
Yeah, something like that.

Pablo Srugo (00:44:08):
Got it and where are you at, revenue-wise? High level, you're kind of in the tens of millions, I assume?

Aviv Leibovici (00:44:12):
A hundred, yes about 150, 160. I don't remember the exact number.

Pablo Srugo (00:44:16):
And you've raised, what? $150 million in total?

Aviv Leibovici (00:44:19):
Yeah.

Pablo Srugo (00:44:20):
That's pretty epic, man. Cool man, well, listen, let me stop it there and I'll ask the kind of like last few questions that we always end on. The first one we touched on it, but I'm curious on your specific answer. When was the moment when you'd say you felt like you found true product market fit?

Aviv Leibovici (00:44:34):
So within this thing that, yeah, indeed we talked about. I had a number of experiences. Where I would go to senior people in this industry. So, say, VPs of operations and stuff like that. They were all within the same. I moved here to London in May 22' and the course of those first couple of months, I did loads of meetings. Because I was here suddenly, easier access and everything. And in those, five for five, the first five, I had an experience of people saying, holy shit. Also telling me, that's what my team needs to do with this. This is so simple and that sentence, this is so simple. Like, yeah, okay, here we are and then those projects signed up, and indeed that happened.

Pablo Srugo (00:45:16):
And what about on the flip side? Was there ever a moment you thought things just weren't going to work? And maybe the company was just going to fail?

Aviv Leibovici (00:45:22):
Definitely, there was a point in time. Somewhat before I moved here. Where I had a, I can't forget this. I was on a phone call with Roy and I told him, look Roy, I'll tell you something, okay? I am sure that this company is heading towards being a ginormous company. What I am though also fearing is that potentially between us and this industry, and everything. It's doing it at a pace that nobody will ever fund and we will run out of funds way before we get there. And that was, call it late 2021 or something like that. Where it just felt like everything we do is so complex, selling this is so difficult, and delivering it is so difficult, and then expanding with them is so difficult. Because really, you're actually selling again. Because you sold a project, but they have projects going to finish, and this company has more projects. But they need to make a very new, it's a renewal. It's a new decision for other business that they have. Every time and all these things put together that I was like, man. I am still sure that this product can change this industry. I'm just not sure that we will succeed together. Yeah, that was a challenging time.

Pablo Srugo (00:46:31):
And then last question, you know, having learned everything you've learned over the last six years or so, seven years. What would be your number one piece of advice for an early stage founder?

Aviv Leibovici (00:46:40):
Two very different ones.

Pablo Srugo (00:46:42):
Okay.

Aviv Leibovici (00:46:42):
Number one, be strong personally. Which to which point I think you have to do this with people that you can rely on and be strong with. I'm lucky to be doing this with two. Two people who are very good friends and I trust, and everything. Obviously, at that point, you might have already decided if you're a first-time founder. But I'm just saying that people are extremely important. Your strength is extremely important. I had maybe a couple of years in which I could not do anything else. Not because of time, but just because my mind would be worried with other things. But the more important one, build it around your market and be there. That's my point from before. I now tell my product people, I've been saying it for a long time. Basically, you will not send anything to development until you will show a customer that experienced this value without the actual product. Hack it in Excel, in Power BI, be the person for them instead of the product. I don't care what you do, but show that the value happens, and then go and build the feature.

Pablo Srugo (00:47:42):
Perfect. Well, man, thanks so much for sharing your story.

Aviv Leibovici (00:47:45):
Thank you very much for having me.

Pablo Srugo (00:47:46):
Wow, what an episode. You're probably in awe. You're in absolute shock. You're like, that helped me so much. So guess what? Now it's your turn to help someone else. Share the episode in the WhatsApp group you have with founders. Share it on that Slack channel. Send it to your founder friends and help them out. Trust me, they will love you for it.