Any given real estate project often has more than one contractor or project manager involved in the process. Oftentimes, it’s difficult to keep track of the stages the multiple parties are at, leading to delays and misunderstandings over costs.
“The problem is rooted in the fact that no one truly understands how little things can snowball into big things on construction projects,” says SmartPM CEO and co-founder Michael Pink. “Building a building is a complex thing. There are a lot of moving parts and a lot of things that have to happen in a specific order over a specific time frame that all need to happen in order to reach the end goal, both from a time and budget standpoint.”
SmartPM’s construction data analytics platform taps into the project schedule data and analyzes performance, delays, budget costs, and overall progress of the project. You can see all of the smaller building projects and their status, in one place to help keep everyone on track. Using artificial intelligence, SmartPM also skims through historical performance, possible risks, and feasibility of deadlines.
According to the company, most large construction projects involve disputes, 20 percent of which end up in litigation. The platform alerts the project manager and provides visibility on escalating issues before they become costly.
Here, Pink shares more about how the Flashpoint at Georgia Tech accelerator program helped them focus their idea, how SmartPM’s data platform can help prevent scheduling mishaps, and how customer discovery helped them focus.
How did you come up with this idea?
When I worked in the construction industry as a consultant, my job was to essentially help people understand why they were losing time and money on these giant construction projects over $10 million dollars. Most of what I was hired to do was help people understand risks of overruns and delays and also help them argue out in a dispute scenario, but really what I saw in the process is we’re dealing with a very inefficient industry. My job is to understand the data and when you do understand the data, good things happen.
What I realized also is, why isn’t everybody doing this? It costs a lot of money because they have to hire humans to do it. So I started to dig into the idea of taking the data that I know exists and turning it into what I know that they need. We needed to highlight what to be concerned about based on what’s truly happening on this job over time. With SmartPM, we created a system that actually analyzes that and does it seconds instead of months, which solves a whole other slew of problems.
How are you using the CPM, the project schedule, to analyze data with SmartPM?
Usually I got involved at the “actually what happened” stage, and I had to reverse engineer how did we got there (delays, higher costs, etc.). The money is gone, the problems have happened, now they’re just fighting over who caused it.
All of the necessary data is out there in the schedule. The schedule is a document that is used to manage a project and that schedule is a contractual requirement between the owner and the contractor to explain and over time update it with ongoing progress. Generally speaking, every project is different. There are different things that need to be built, but getting from point ‘A’ to point ‘B’, from the beginning of the job to the end, all that data is organized in what’s called the CPM schedule. That’s how we understand the information. Generally speaking, what I learned as a consultant was that we had a plan — and then there is actually what happened.
How are you implementing artificial intelligence to crunch these schedule data points?
We’re using artificial intelligence in the platform by taking actual data that’s going on in the job and using that to predict future risks. At the beginning of a construction project, an owner and contractor agree to a potentially $50-100 million dollar deal; there are all of these different moving parts, yet everybody’s agreed to a budget and a timeline before anything has even happened.
The reality is, until you get all those people in the room working together, you don’t really understand true risk. We analyze through the schedule updates to better understand what’s actually happening out there and provide more transparency for all parties involved.
When building your platform, what customer feedback did you keep in mind?
What we learned while at Flashpoint is we were trying to reinvent the wheel of data collection, but what we found is that no one was looking for any sort of reinvented wheel; they wanted to keep doing things the same. What we had to do is shift gears and really focus on what data do we know they already have and how we could analyze that.
The owners are struggling with this the most, particularly because they’re the ones who are paying for the project and they’re the ones who are dependent on the end date to run a business afterwards. However, they don’t have access to any data, so we created a model that helps them ultimately control their own destiny as opposed to being told what’s happening with no support or understanding.
What’s your revenue model?
We have two phases — the pilot phase and enterprise phase. Our revenue model is based on the amount of projects they have running and the size of those projects. We ultimately get paid on a monthly subscription pricing, because it is a cloud-based product.
What’s your current funding status?
We are in the process of finalizing a seed round. We raised a bunch of convertible notes last summer, but now we’re rolling them all in with our current investors into a seed round that we’re anticipating is going to close in the next couple of months. We’re reaching out to our current investors as well as additional investors to close that round out, and then the next round we’re anticipating will be more of an institutional Series A at the end of the year.
How did Georgia Tech’s Flashpoint and the surrounding Atlanta tech community help you scale your startup?
Flashpoint was huge for us. We had a product and it wasn’t selling the way that we thought it would and we just didn’t understand why a contractor wouldn’t love to have a data analytics system to help make a better business. There were issues we weren’t seeing at the time and that’s really what Flashpoint is all about.
It’s getting into the minds of the people that you’re trying to sell to and understanding who they are, what their problems are, and what they need in return. That’s what shifted our focus on the products and the customer. We started working with the owner and finding that low-hanging fruit; now we’re starting to get more contractors interested in what we’re doing, too, because they’re realizing that there is a big benefit here. The more sophisticated the contractor, the more interested they are.