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...