How Flexcavo CEO Benedict Aicher grew Flexcavo to $1.5M revenue and 15 customers in 2024.

hey folks my guest today is benedict eiker he's building flexcavo.de a construction consulting business coming from a family business in construction he moved into consulting at mckinsey after his bachelor's and master's now applying a vision of an able intelligent construction using flexcabo benedictuary takes the top yes sure i mean um if you start a company you always want to disrupt in a certain industry and uh you already said it uh my short pitch is always some construction consulting constructions are born and raised in a construction family i was eager to go back into that industry i'm very passionate about to shake things up a bit so just to be clear you are you're writing code software to help construction uh companies what manage projects easier or what does it do in the end we're building a platform to foster enable intelligent construction and we connect two things we connect equipment and technology so yes we're writing code for machinery fleets these machines are on a construction site the only reliable data source on the other hand we operate as well as asset enabled business so we can provide assets too so it's both sides of the business the asset business and the software business is in the end i truly believe that the world belongs to those who build and if you want to be the number one partner for construction companies only code won't bring you far because does flex cabo own a fleet of trucks and power tools and construction equipment indeed trucks not but the typical power equipment so from from small dumpers loaders to large scale excavators we indeed own them interesting how much if you add up the price you paid right the inventory value of everything you hold on your balance sheet how much is that way above 10 million way above 10 million so are you rich i mean where'd you get the money to buy all that equipment uh obviously not equity um we should kick my ex if i um would spend my equity on machines it's depth so it's a structured depth um the good thing there is i mean we all know car financing um it works pretty much the same way so we secure our assets with put options and then we simply have our partner banks that finance our assets and then we use them over a lifetime of four to seven years um we we act basically as a subscription model here and after four to seven years we give them a secondary market and sell them smart and how many unique pieces of equipment do you have like thousands or over 400 on our own fleet um however we manage over 10 000 pieces or units for our clients oh so if someone else owns three dump trucks they can list them on your marketplace and you'll help them find work we're not in a p2p place so we we exclusively work with construction clients and if you're a construction company the typical split would be 60 your own machines 40 rented machines and we help construction companies in the whole process of planning and then executing a construction site from a machinery perspective so you can allocate your machines and as well in that process of allocation you might lack a machine so we can provide you that machine but we're not in the business of p2p where you say okay i have three idle just that's on our business model and so how what do you make more money on renting out equipment or selling software to construction companies i think from from uh i always look at it from a gross margin perspective i mean if you look at the pure revenue side of the business um obviously the renting part is quite strong because you can change charge quite high daily rates for big excavators however on a gross margin perspective it's a 50 50 split so we always aim for growing both sides of the business however you know sas there are different contracts in place and i mean if i would compare uh 1 million stars ar versus 1 million asset ar different gross margins are there and for us in the end russian contribution margins are key to manage auburn interesting okay so let's just talk about sas for a second move away from assets what do the construction companies pay you on average per month or per year to use your software that pretty much depends on the size of your business um obviously if you're a small company um we're going to charge you a simple small monthly fee and then it scales with the number of units you want to manage so let's say um depending on the framework contract it's a certain fixed amount of euros per month per unit and then you can actually opt for further services like telemetrics or others oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your 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here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview what is the fix per euros per month per unit it ranges uh between uh 200 and a thousand per month um but then obviously uh the the bigger contribution goes towards the number of assets we manage for the client that we help them manage okay got it so i i'm sure i'm following this yet so if someone if someone has like four dump trucks that they want you to manage for them right so they're paying four units times 200 so fixed euros per month per unit it's a base flat fee basically so no matter how many units you've got the base fee for the software itself and then on top per unit and node for four dumb trucks it wouldn't make sense so for dump trucks you simply can manage them yourself we're out in the business of helping clients with 50 plus units up to 20 000 units currently with the biggest client and imagine you've got 100 construction sites and all need to be up and running because as a construction company your key enemy is downtime and managing this network from a perspective i need certain units at certain places at certain times these days it's mainly done by pen paper and whiteboard and we help them in the process of allocating those machines managing their flow within their network and automating workflows because obviously if you use pen paper whiteboard and a phone you can't really digitize an automated workflow however it's always the same workflow i need a unit i request the unit the unit gets transported it arrives i use the unit and then i'm going to send the unit back to my central location interesting so your sweet spot then are companies paying you like around a thousand dollars a month to manage some number of 50 plus units i would say the typical monthly rate um is about a thousand up to a five digit some it really depends on the number of units i mean if you're a client with what i'm really asking though is what does the average customer of flex cabo have in terms of number of units i'm trying to get like your sweets but i understand there's a range oh sweet spot would say uh our sweet sweet starts with like um yeah a hundred units and then up to uh ten thousand units okay so what would i pay for a hundred units for a hundred units um you would pay depending on what kind of service you would opt for um somewhere in between let's say a five hundred and a thousand five hundred euros per month okay fair enough so call maybe like 2000 usd per month now now if we add up all...