CIBC Innovation Banking Podcast

Michael Hainsworth:

This episode was recorded in the summer of 2019. Since then, Bridgit has been recognized as a top growing Canadian Company, received a 9.4 million dollar strategic investment led by Autodesk, and co-founders Mallorie Brodie and Lauren Lake have been called one of the MaRS Discovery District’s 20 Canadian “entrepreneurs to watch” in 2020. And this is the story of how they got where they are today.

Announcer:

Today on the CIBC Innovation Banking podcast.

Lauren:

The feedback that we consistently got outside of the construction industry was, wow, that's a great idea in theory, but it will never actually work in those first couple of site visits. The main thing we wanted to prove was, is that actually true?

Announcer:

Bridgit built a foundation of a successful software startup by cold calling construction sites, but how did two friends from university take an entrepreneurial accelerator program idea and turn it into an international success story? The answer to that question and more on this episode of the CIBC Innovation Banking podcast. Here is Michael Hainsworth.

Michael:

Bridgit is an innovation economy success story. More than seven years ago, Mallorie Brodie and Lauren Lake met at the accelerator program, Next 36, and 48 hours later had an idea. Take the tech from the back office, put it on the job site, replace clipboards, binders, untold reams of blueprints with laptops and tablets. The pair has never looked back. In the last five years alone, Bridgit has averaged a 313% growth rate. I sat down with chief operating officer, Lauren Lake to learn about the early days, how the pair scanned the skies looking for cranes, dropping it on job sites with coffee and donuts. And through early trial and error, created a minimal viable product they could take to potential customers and investors. It all began with a name that Lake admits was intended to draw attention.

Lauren:

Yeah, definitely. So Bridgit was intended to be, yup, the female named Bridgit. We were both female founders, definitely not common in construction tech, but we just thought that the name had a lot of personality to it. We thought we could kind of bring this new brand to the industry that was a bit more personable, something a bit more friendly, and really had more of the human element to it versus being totally software first.

Michael:

Did you encounter friction from the construction industry over two women walking into such a male dominated industry and telling them that they needed to change the way they do their business?

Lauren:

We really didn't, because we were never walking on site saying that we had a better way or that we knew better. It was always us going to site and asking questions and trying to understand what the challenges were. And so if anything, people were the complete opposite of that, which was extremely welcoming, accommodating because they wanted to be part of creating a solution and they were interested that someone was there asking those questions. And they were excited to be part of that discussion. And so we were showing up on site, not really there to say anything other than ask those general questions and listen. And so it was really mostly us onsite listening and understanding what the problems were. We knew right from day one that we were never going to know better than the people actually onsite doing this work every day. And so we definitely look to those people to teach us versus us trying to teach them.

Michael:

And that sounds like a life lesson, let alone an entrepreneurial lesson that you walk into a room acting like you know better than everyone else. That room is just going to shut down on you.

Lauren:

Yeah, exactly. And that was never our intention and never what we did. We knew that we had to get a better understanding of what the challenges were before we just went out there and built something. And so the first six months we didn't do anything other than show up on job sites and ask questions like, what's the biggest challenge that you have day-to-day or what's the most frustrating part of your job? And then we just spent those six months listening to this long winded answer from people from all levels of construction. Everyone from the owner to the architect, people from the general contractor. We just wanted to understand every single perspective and how those all work together. And so it was always us seeking the information. We were never there to say we know better.

Michael:

And did that help you as well? Because I can imagine you've got a certain amount of pushback as any industry would when it comes to adopting new technology. I believe you were quoted as saying in 2014, you talked to these construction industry folks and they'd be reluctant to adopt new technology. So asking the questions I can imagine helped with you persevering. How else did you get over that hump?

Lauren:

That's a good question. So one of the first things that we heard when we started talking to people about this idea that we had for Bridgit, which was bringing some sort of mobile technology to the job site, and this was when we were talking to people outside of the construction industry, people from more of the business or startup community. The feedback that we consistently got from those people was, wow, that's a great idea in theory, but it will never actually work on a job site. People in construction are too resistant to technology, it's too old school and so on. And so that was something that we had heard early on and we really wanted in those first couple site visits. The main thing we wanted to prove was is that actually true or is that just what people perceive?

Lauren:

And so we started asking questions when we saw people doing these crazy manual processes on site and asking, why can't you use some sort of technology for this or is there a reason you would do this manually when there's other solutions? And they said, well of course we'd like to do something different or we'd like to automate this or we'd like to use technology for this or that. But those solutions don't exist in the way that we need them. They're not designed for how we do work on site. They're designed for somebody back in the office. And so it was this total disconnect between what people assumed people on site were resistant to versus what people actually were looking for on site. And so there's just that mismatch. And so that really played into how we started to look at designing our product. We knew that people onsite hadn't used technology for the most part before, certainly not in the type that we were looking to build.

Lauren:

And so we wanted it to be as user friendly, as easy to use as possible. And we knew that we needed to make it especially easy for the general contractors trades, so their subcontractors, because those were the people that were going to be sort of the reactive users on the platform. And so for them it needed to be totally barrier-free. So for them, for one example is they don't actually need to create an account on our software or they just get integrated through their email address. So there was a bunch of decisions that we made to make that onboarding and that kind of use for them as easy as possible. And so yes, there's still friction whenever anything is changing and that goes for any industry or anyone, people resist change typically. But once people started to use the system, they saw how easy it was, then that was not as big of a hurdle as we thought it would be.

Michael:

So between 2012 when you and Mallorie met at Next 36, and the point at which you were going to these industry players, asking them what they needed for a 21st century business model. Throughout that whole process, I guess you were building a relationship with each other as well. Fair to say?

Lauren:

Yes, definitely.

Michael:

So then as that relationship builds early on, how did you two decide who gets to be the chief executive officer and who's going to be the chief operating officer?

Lauren:

So that was a decision that we actually didn't make until a little bit later on. So early on as we started working together, we started to develop the product. We started to sign on our first customers. During those first, I'd say six to nine months, we were doing a lot of these things together. We were learning together, we were learning how to work together, we are showing up to meetings together. So everything was kind of in that pair. And then as we got further along, probably by nine to 12 months into the business, there started to be too much to do for both of us to do everything. And so that's when we really started to divide and conquer. And also at that point we had more time working together. We understood what each other's kind of strengths and I guess, preferences were. And understanding what type of work we each wanted to focus on. And so at that point we started to focus a little bit more separately.

Lauren:

So I kind of went more the customer side looking at the sales and the customer experience, the support and kind of everything that would happen to bring on those accounts. Mallorie went more of the investor finance and product side. And so it just became this natural split as we started to work on those things. And then a couple of years in as we were raising our seed round of financing, that's when it really made sense to like formalize that and make sure that we had clear titles for both of us. And so that's when we had that discussion. But it was really as easy as you know, Mallorie is doing the financing, she's the one talking to investors, she's the one that is kind of out there in the public and more external facing. And so being the CEO makes sense. I was more internal working with the customers and so that that was never really much of a discussion other than it was kind of obvious.

Michael:

Tell me what that experience with Next 36 where you and Mallorie had first met? What did that experience teach you?

Lauren:

I think for me, Next 36 was really life-changing. I was coming from an engineering background and so I hadn't had that business background. I wasn't really planning on starting a company right out of school like this. It was definitely a dream, but something that I thought wasn't doable. I definitely didn't have my bar set as high. And I think for me, Next 36 really changed the way that I looked at that. It changed this idea that I had in my head where I had to check a certain number of boxes before something was possible.

Lauren:

And it changed it from that to anything is doable if you just kind of get out there, put yourself out there, take a chance and try something until you find something that works. And so I think it just made it much more approachable. This idea of entrepreneurship or starting your own business, even though you on paper don't have the specific requirements that people think you need to have. And so I think it, yeah, it taught me to set my bar really high and to dream a little bit bigger than I would have, I think allowed myself to before.

Michael:

And you were quoted as saying when you started up, Bridgit, that you weren't just interested in finding people that were 15 years ahead of you, but also those that were six months ahead of you. What do you mean by that?

Lauren:

When you're starting a company, there's so many things that you don't know what's going to happen. You don't know how to look at pricing or what your first customer is going to look like. There's all these unknowns. And so yes, it's great to see a company that's 15, 20 years ahead of you and you can see their success or where they're at. But it's really hard to break that down and see what does the path look like to get there? And nobody's path is the same. But just seeing some example can be really reassuring or at least teach you something. So for us it was really important to look at companies that were only a little bit ahead of us, maybe one or two steps ahead of us. And so we could see, okay, here we are now and in six months we could be at the stage that this other company is at.

Lauren:

And what did the last six months look like for them? What were the key decisions that they had to make? What were the changes that they went through? And so on. And so I think for us, it's always been a matter of looking at companies that are ahead of us, but not always just the ultra successful companies that are 20 years down the road. But looking at people that are maybe even just a couple months ahead and understanding what the next couple months could look like. So I think it's just making it more tangible, making it a little bit more approachable versus seeing some massive company and just sitting back and saying how are we ever going to get there?

Michael:

And you've been quoted as well as saying you have to get very comfortable with trying and failing, but how do you develop that comfort level?

Lauren:

For us, I think it came over time. I think in the beginning its easy in a way because you don't have anything to lose. For us, we felt like we just wanted to see something succeed. We were just showing up on sites. We were asking these questions. We didn't really feel like we had anything to lose at all. We were doing this on the side while we were still in school and so worst case scenario, there wasn't going to be an opportunity here and we would try something else. As you get further along, that risk tolerance probably changes a little bit depending on the stage of the company or where you're at.

Lauren:

But I think we got comfortable with that just by practice, by doing it, by being in situations all the time where you had to make some sort of tough decision, and there was always a risk that it wasn't going to work out. And then being able to see the aftermath of that and understanding and building the confidence that this has happened before. Something has failed before and we've made it out alive. And so I think it just comes with practice and having a partner there. So having Mallorie there as well, I think for both of us, that adds a lot of reassurance, I guess. That we have each other and so if something fails, we always feel like together we can put our heads together and come up with a solution.

Michael:

What role did mentorship play in getting you to where you are now?

Lauren:

Mentorship played, I would say a huge role, but it wasn't all through one specific type of mentorship. I think it came in waves and it always has been a little bit different depending on what the challenges of the business were.

Michael:

And you mentioned that you didn't get everything right the first time. What did you get wrong the first time and how did you make sure you got it right the next time?

Lauren:

So we got lots of things wrong. We're still getting lots of things wrong. I'm trying to think of some good examples. We got our pricing model very wrong multiple times, probably three or four times before we kind of landed on the pricing model that we're on today with our first product. We got things wrong in terms of how we built out our product early on. We've gotten things wrong in terms of how we hire people, how we onboard people, how we build the teams. Like literally you name it, we've done something wrong in that area. And I think it's always just a matter of looking at the situation and saying we made the best decisions we could have given the information we had at the time.

Lauren:

And so it's not a matter of, oh, we wish we had done this, we wish we had done that. You know, the decision was made and it was a good decision for whatever reason. Point is it didn't work the way we thought it would. And so why didn't it work and then what's the alternative? So I think in each case it's just really problem-solving and trying something again. And you don't always get it right the second time, either which is okay, as long as you're not doing the same thing wrong over and over again.

Michael:

Right.

Lauren:

You're still learning something, even if it's not perfect the second time around either.

Michael:

Well, the pricing model things particularly interesting, because I can imagine a lot of us in this world have difficulty trying to put a price tag on the product or service that we're providing. How did you figure out what the sweet spot was for you?

Lauren:

So for us it was a ton of trial and error, and it lasted over an extended period of time. It wasn't just one week and we had a price. Probably took about a year before we really had a true understanding of what the pricing was going to be. And that was also because the product was changing. We were adding new things. We're understanding how people use the product. But I think the main thing was, Mallorie was coming from business school, I wasn't. But I know when we look at a lot of cases and pricing cases and you look at what different companies have done, there's all of this data that you can always look at and you can kind of get an understanding of what competitors are charging and kind of base it on that. For us, we didn't really have any of that information. We were coming up with it with a pricing model sort of out of thin air.

Lauren:

We didn't have many competitors that were doing what we were doing, so we couldn't really look at any comparables that way. So for us it was really understanding, the price of our product is going to be whatever it's worth to someone and we don't necessarily know what it's worth to someone. Is it $10? Is it $500,000? We didn't really know. And so it was really spending that year as we brought on our first customers testing different things and trying to figure out what resonated the best with the industry. And that changed of course, depending on the type of company we were selling to. And how big they were, how big their projects were, different people had different levels of priority in terms of what they would put on software. So it took some testing and it took some time to really understand what the value was that our product was bringing to the sites in actuality. And then looking back at that and saying, okay, then this looks like this price could make sense.

Michael:

So we fast forward seven years from day one, more than seven years, and you've got money coming in the door in the form of outside investors and debt financing, seeding you this money to take the company to the next level. How do you deal with the stress?

Lauren:

So we both definitely feel the stress, we feel the pressure, and that doesn't go away over time. I think early on we were naive and thinking that later on we'll have more money in the bank, we'll have more team members, it'll be easier, it'll be less stressful in a couple of years. And that's definitely not true. The level of stress and worry and all those things is still there. It's just a different type. So in terms of dealing with the stress, I think again, we really lean on each other and we are good at kind of giving each other the needed pep talk when things are feeling particularly dismal.

Lauren:

But I think the biggest thing is we've made it this far. We have a ton of grit, I would say between the two of us. And just we can persevere. So yes, it's stressful, but we also have a ton of confidence that you know what we're doing makes sense. And so I think we can break it down and just look at the steps that need to happen and kind of act on those and feel like we're making some amount of progress every day. And that's really all you can do.

Michael:

So what was CIBC's contribution to the success of the company?

Lauren:

So CIBC was part of our most recent round of financing. So it was an addition to our series A round of financing, that happened a couple months ago. And CIBC has a debt facility for us. And so that's a really great option for us to have access to more capital. That's not part of the traditional equity financing that we did with other venture capitalists.

Michael:

So why did you go that route?

Lauren:

So we wanted to have a couple of different options available to us when it came to our financing. Most startups really rely heavily on venture capital, especially in the tech sector, which is great. And that's definitely what we've done as well. But having some debt instruments is something that can be there either as a bit of a backup or something that can provide some more optionality. It's also non-dilutive. So it's something that definitely made sense for us and we were considering it for a while before we realized that CIBC has this great innovation sort of team that was able to lead this with us. So they've been great to work with and it's really great to be part of everything that they're doing.

Michael:

And as I understand it, it's just not a function of cutting you a credit card kind of scenario. That there's more to that relationship than just the financing of debt?

Lauren:

Yeah. So there's more to the relationship and it's also great to see CIBC working with more early stage companies like us. A lot of the larger banks aren't doing that. And so this is great to be part of some of the new stuff that CIBC is working on.

Michael:

And this gives you two tracks for the use of your capital. You're planning to use this for promotion and sales in the U.S. but also research and development. I can imagine having that multi-track approach to your financing is critical.

Lauren:

Definitely. We're in an interesting part of our business right now. We just launched a second product, and that happened about a month ago. And that's the first time that we've had two products on the market, each tackling different challenges within the construction industry. And so this is a really interesting time for the company as we build on two products and sell two products. So it's a great time to have that additional capital to put to work so that we can scale up the new product and continue to develop it and add to it.

Michael:

So how does it feel to go from thinking on a week-by-week basis or a month-by-month basis in the early days of survival mode to where you are now?

Lauren:

It feels good. We think back to that quite a bit. Thinking about in the early days we didn't have the luxury of thinking longer term. It was just as you said. It was day-by-day survival mode. It never really felt like we were going to last many more days. So it was very much just living in the present, never really thinking longer term.

Michael:

You do recognize though, that like this is remarkable. This is your first company and you're still going seven years later. Most of them fail within the first two years.

Lauren:

Yeah. It's been a long haul, but no, it's been great. So, yeah. So it's been great for us to think now a little bit longer term, to have those larger strategies in place and to be able to really plan for the future.

Announcer:

Learn more about the innovation economy, how a life sciences startup grows through the early stages of commercialization, and why you don't need to move to Silicon Valley North to launch a tech startup today. Subscribe to the CIBC Innovation Banking podcast with Michael Hainsworth, at cibc.com/innovation banking.