How Getgreenbadger CEO Tommy Linstroth grew Getgreenbadger to $771.2K revenue and 200 customers in 2024.

hello everyone my guest today is tommy linstroth he is a lead fellow and has a career has spanned both private academic and non-profit sectors in the midwest west and now east coast where he's the founder and ceo of green badger a green construction software automation firm tommy you ready to take us to the top i am all right so did you come from software or did you come from construction or both i came from construction actually started in real estate development in the sustainability field i was the director of sustainability for a developer in the southeast we managed our portfolio uh back in the early days before sustainability was really the buzzwords that it is now and from there built that into consulting and after slogging through consulting for a while realized we could automate a lot of the things that we had to do in this manual process and that launched software so when was the consulting from launch to what year uh 2010 okay 2010 and how long did you do that before you started working on sas primarily uh it took about three years for the idea to click and then in 2014 went all in with it and one okay so this is like a critical moment there's a lot of people that start off as an agency they never actually go all in on the sas why did you know in 2014 it was the right moment to go all in on sas and give up the agency revenues uh it was just one of those things i was looking at the impact i could have that i was having on a day-to-day basis and it was okay i could work on a dozen projects successfully at any given time or as i started building this tool out which was really ended up it started as a tool that i thought i'd just be using on the consulting side of things and then once we got the framework of it as like oh my gosh well if we can use this everyone can instead of 12 projects we could be on a thousand projects and so it was really just that ability to scale and have that much bigger of an impact through software than i could ever have as one person so what did you grow the agency to before you started software how many people what was revenue about uh it was always just me and everyone else was through contractors and we did uh we were probably in the the 400 000 a year range okay and then now if we look at our trailing 12 months today your total revenue you're saying it's basically 100 sas there's almost no consulting exactly yeah 100 sad fascinating okay so you launch in 2014 tell us what the product does sure so green badger is uh in short a turbo tax for green construction compliance and so uh we are working with all of the builders and and general contractors who are working to have a green certification lead is sort of the buzzword the industry standard for that and basically you've got to do all sorts of product verification and in-field reporting and track all of these things over months or years of construction and much like with your tax return you do all that you'd have a box of receipts shove it under your bed income tax time you hope to make that disappear into your 10 40 well that's what turbo tax did for your taxes we're doing the same thing on the construction side of things interesting and help me understand pricing model here so what's an average customer paying per month for this or per year uh we charge 200 per month per project so we do project based subscriptions since that's how 99 of the construction world is working yeah projects don't have credit cards though so who's the actual buyer usually uh the general contractor so typically it is it's a project team has made the decision that they're going to use this software to streamline their workflow okay so you're selling to you're selling a project manager or sorry general contractors um how many so help me understand because i don't i don't know how many projects might they be putting through you at one time so like what's the average gc going to pay you per month so and this is part of our challenges we do it each as a project so each project is literally their own customer so right now again we'll do a subscription for a project they're they average across the board about 18 months so our average contract is about 3 600 uh which is typically paid in full uh but contractors you know the big contractors will have anywhere from 50 to 500 of these projects going on a year depending on their size and their regional scope so help me understand why you built your billing information architecture around a project instead of a gc because by building it around projects it's hard for you to answer what an individual gc is a general contractor is worth to you if you don't know what projects are theirs and what aren't that's true that's that's true so we were having a two-phase revenue approach the first is project based and we hope to escalate that to the enterprise-wide adoption and we did that because in our customer discovery and when we explored a number of pricing models to a t they said look we need to build this back to a project that's how our cost accounting works we do not have administrative budget corporately that we build these things to it's got to have a project cost or it's not going to fly and so just for ease of adoption and to get into there and start generating revenue quicker that's the approach we took so last month how many projects were going through your system we have about 200 active projects right now okay so i mean can i do the math 200 times 200 though you do about 40 grand a month yep so how do you deal with the this really weird incentive structure hey listen tommy if your software is good it should take me less time to knock out a project which means i'm going to turn from you faster so in other words if you do well they pay you less money uh that theoretically could be true in the real world with construction that's not true what we are doing is offsetting a task that they don't want to do and don't need to do they're still our customer wants to get a building built on time and on budget and green the green compliance is a necessary contractually obligated evil that they need to do not to say it's bad it's great i'm a huge green supporter it's my background but this is just something that a lot of teams aren't well equipped to do and they're doing it while they do everything else so our roi to them is look we can free up instead of you spending 10 or 20 hours a month on this you can spend two and you can use those other 18 to do higher value activities that involve getting your building built quicker we're recording this in january 2019 you're doing 40 grand a month today what were you doing exactly a year ago in january 2018 18 000 a month oh good okay so nice growth and was most of that coming from adding new general contractors or just getting your old general contractors put more projects through last year was a combination of both we really expanded our reach we've got now about 60 of the top 25 contractors using us and seven of the top 10 at least using us on a project or a pilot project so we've had a good bit of new folks but we are also seeing uh when i last look it's about 40 percent is either repeat customers so a team has finished a project and they started a new one and they just said hey we're going to use you or an inter office referral tell me do you say the top the top seven of the top 10 general contractors in this in the united states seven of them are using you correct on at least a project not wide again one of the challenges we have is that the construction vertical is one of the slower adopters of technology so we are getting foot in the door which is great and working our way up have you raised capital or bootstrapped we raised a small bit of capital back in 2014 and have bootstraps since then okay how what's small like you're talking 100 grand or something 200. so i mean let me ask you a question when someone leads with we've got seven of the top 10 in any niche i don't care what you're doing i i would hope since that penetration is really high that's 7 out of 10 the revenue should be really really big i mean you're almost you only have three customers left to close right to have the top 10. but when i look at your revenue relative to the number you just gave me i'm going holy crap this business is only worth at 100 penetration 70 80 grand a month sure and uh so the number's a bit misleading so we got seven of the two we're in with seven of the ten unfortunately for us that market is expected so the number one contractor might have 40 offices so we have a project with them as a pilot or a couple projects in them with a pilot now our challenge is we need to be able to replicate that because they have you know 500 or so projects going on so we've got our foot in the door which to us is the challenging part and so we're going with a land and expand strategy to get our foot in prove our use case and then get this these companies that are slower adopters of technology to say wow this this is worth my time this is worth my effort sure sign us up so the 200 products going through right now that's across how many general contractors that is probably across about 90 or so 90. okay so you're because you basically already have some sort of relationship with most of the big contractors your number one goal over the next year to five to ten years is really driving massive expansion revenue having them manage one project to manage going up to managing a thousand projects yes for sure interesting who's driving that what's your team look like today so right now we've got uh two outbound sales guys and all they're they're dialing they're burning the phones up with a lot of outbound and again that's how we were getting introduced getting our name in front of a lot of folks being bootstrapped you know we had a very minimal adwords campaign we've done a little bit of linkedin advertising but we had virtually zero outbound marketing or pr uh at the beginning of this year we just brought on somebody to help us manage our marketing so we've got a a campaign some campaigns were beginning to roll out but it's been a lot of what's pushing team size tommy uh five okay five total interesting okay and do you know your fully weighted acquisition cost to get a new 200 a month project we're at about 600 per customer for acquisition costs but not per customer because like that would be a general contract that's 600 for a new project right per product yes that's still good economics your payback there's three months right yeah yeah and again we've got about an 1800 or 3600 dollar contract value so it's it's paying for itself quite well yeah so what does that mean that's an 18-month lifetime value so what's that mean churn is so again we'll have that contract for months you're working through to find either those teams that are going on to other green projects or getting them referred in which is again why we're trying to get into with the larger ones that enterprise side so we're not going project by project we always will have project by project because there's a lot of smaller general contractors that are doing you know fire stations and police stations that have to be green they're never going to say well we've got 20 projects we need a platform they need it for that project the larger ones we're trying to prove our use case so they say look we're using you on 20 projects why don't we standardize this and use it on every project and save both of us and cast so it's hard to measure churn though around the projects because that's not really actually churn is usually measured around the actual general contractor in your case i mean so how do you think about what churn is at a customer level not a project level for us uh it has not been one of the higher metrics that that we're really waiting against because of that exact factor again everything on the the project level we're at it makes lifetime value assessments hard it makes churn hard because you'd have to track them you'd have to have them say oh well we have another green project and we're just choosing not to use you yeah right now anecdotally that's not happening again we're getting a ton of of inbound and repeat business which which is great what does that look like in terms of expansion so if someone signed up with you a year ago and they start with two projects last year or they were in 2017 how many did they expand to in 2018 i don't have a great metric on that i'd have to look into that further yeah again annex we will see a lot of projects will sign up with one or two because you know you're you're making commitment you know this project's going to last two years you don't want to sign up 20 of them and then say oh man this is a stupid mistake now i'm stuck with 20 projects so i don't want to i get that i'm trying to get a sense of how you think about expansion revenue i mean that's what i'm trying to get a sense of right so if you do that you know they go from two and then six months in when they after they start the first two they sign up for more and there's expansion there i'm just trying to understand how you think about this sir from it's not linear right so right now again as i mentioned these guys are really fragmented and they've got all these offices so what we're trying to do is build a use case and be able to demonstrate that success those teams have had so we can get into those other offices unfortunately a lot of it is timing uh when that construction project's gonna start you know if you we'll we'll talk to somebody in their project six months out they're not gonna be a customer for six more months but when that six months come that's when they call us up and say okay we're ready to go so yeah but if you've got seven tell me the top ten i mean they're launching new projects every day i mean i mean just to be clear i mean there are i imagine millions of projects going across these seven people you already have a foot in the door with every single year so there should be new opportunity every day for you it's true and again that's what our outbound sales team is is working to do it's the same i guess in in any industry where we have it and it's you know when you're sitting out in a job trailer trying to get your building built the last thing you're doing is sitting there for a sales call and then a then a sales demo so i think we're still going through some of that learning curve of the best way to get through to some of these people um on the project level as we elevate that discussion up to try and get it to a broader but are you are your outbound people calling on to new general contractors to land is that what they're doing no they're doing both so we're they're calling some of the existing again in different offices different project managers different project teams uh try and get our foot in the door with them because again it is literally at this point each project team can make their own decision what route do we want to go with this yeah but i mean look this is just like enterprise sales land and expand strategy right the one person you land with becomes your sales person for all the other departments you want to expand to so i'm trying to understand how you're accelerating that process how do you accelerate the one early adopter that uses you they're six months into their project they've paid you 1200 bucks at that point 200 bucks a month or so how do you incentivize them to have so much delight and joy that they introduce you to three other departments like that's a that's for me that's the critical thing for your business it sounds like right and right now we're trying to do that by handling them all with kid skin gloves i mean we are trying to be more than a software provider we're providing uh we think anyway a lot of customer success we provide a lot of resources a lot of insights a lot of market analysis and strategies besides just that because we need that we need that success story to tell the challenge being again six months might not be sufficient what is the success story though that's what i'm trying to get to what is the success story how do they know if it's working well or not working well some depends on you know their own experience with it and again it's what they have going on and where their project is if you finish a project in 12 months it's a lot easier at the end of 12 months to say hey we went through this we got our certifications with zero feedback life is good but for a lot of folks until they hit that threshold things might be good along the way but you know you might think your accountant's great until you file your tax return and you get no refund and a huge audit right so these guys want to finish the project and get it certified which can go anywhere from again on an 18-month project if we sign them up at the beginning of uh 2018 they're not gonna have that feedback until the end of this year that's that is crippling i mean that to me is totally crippling for what you're doing you instead of using that as an excuse you like i feel like you have to figure out where to get around you can't wait 18 months to go from one project to three if you already have seven of the top ten there's nowhere else to expand you're basically saying i can't expand the top seven until they all spend at least 18 months on the first project i mean your your business is going to be flat until anything else happens and i'm not saying that's the case we're having success growing within those companies it's not as fast as we'd like obviously we'd like to be beating down all of their doors and so we're working we're working to get the referral as best we can that is the best foot in the door and we're you know we're pushing through that's what i'm trying to ask you though the people that the people that jump that 18-month curve and make introductions in month three why are they do they say um wow we're able to get like our engineering team our contract team the bricklaying team they're all using this platform and loving it of course i'll introduce you or we're four months ahead of schedule right now yes we're gonna like there's some measurement of utility value of why these people are introducing you before the 18-month thing is over i'm trying to understand if you understand what that acceleration metric is some of it is uh the the inter-accompanying resources they have some of these companies have people that are focused specifically on the green construction management a lot of them don't and so where we've got those facilitators we've seen much more rapid adoption because those people have their fingers in 12 projects so they're able to come and say hey we need to be using it on all these projects depending where they are on the schedule versus some where it's literally project team and a silo with blinders on worrying about nothing else out there so again part of what we're trying to find is those inner office uh connectors that we can use to to leverage those conversations we gotta wrap up here quick last question um are you guys break even today or profit were you burning cash still uh we're profitable in 2018. that's great but monthly today like last month you profitable still we're profitable on a month basis that's great okay let's wrap up with the famous five number one what's your favorite business book favorite business book uh we use predictable revenue a lot i like that for when we're building our strategies like one minute manager for constant feedback right now i'm neck deep and let my people go surfing number two uh who name a ceo you're following or studying ah we follow my ask on twitter that's about it number three what's your favorite online tool for building the company google suite we use for almost everything number four how many hours i'll sleep to get every night i get a good eight hours of sleep a night and what's your situation tommy married single kiddos married to kiddos oh great and how are you i am 41. 41. last question what do you wish your 20 year old self knew you could write about a book on that on its own um if i was sitting with my 20 year old self i'd say go and go enjoy this time to travel while you can take that extensive amount of time and probably go learn a second language while you're at it guys travel early on when you still have freedom tommy launched his company in 2014 after success running his own agency again full sass in 2014 now 200 projects going through his lead project management system called green badger 200 bucks a month is that what people are paying so it's 40 grand a month right now in revenue up from 18 grand a month just about a year ago there's 90 general contractors using him for at least one project they're profitable 200 grand raised back in 2014 five people in georgia again six hundred dollar cac so payback period about three months there each project lasts about 18 months so it's worth about 3 600 bucks to them healthy economics there tommy thanks for taking us to the top thanks for having me