Constructed Futures

Charlie Warren: Advanced Sales Intelligence for AEC Service Companies at Convex

Episode Summary

Construction and the built environment can often make for very complex sales relationships, with multiple addresses, points of contact, and long histories. Convex provides a unique sales intelligence platform that helps services companies to keep track of these complex relationships, better supporting sales and service relationships across the built environment. CEO Charlie Warren provides a fascinating look into this world.

Episode Notes

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Episode Transcription

Hugh Seaton: Welcome to Constructed Futures, I'm Hugh Seaton. Today, I'm here with Charlie Warren, CEO and co-founder of Convex. Charlie. Welcome to the podcast. 

Charlie Warren: Thanks Hugh. Thanks for having me. 

Hugh Seaton: So Charlie, let's start with what Convex does. 

Charlie Warren: Absolutely. We're a software as a service business based out of California. And we're trying to build what I like to call the industry cloud for commercial services.

And by commercial services, I like to think of these businesses that, produce as OEMs, install, maintain, and service, large pieces of equipment. And we're fortunate to partner across the value chain, in industries like HVAC, building automation, fire/ life safety, security/ access control, elevators, facilities, janitorial, roofing, solar.

And all of these, sub verticals of commercial services do one thing. They operate in and around physical structures or buildings. And we think that sort of central tendency here allows us to serve them with purpose-built software in a way that horizontal software players really can't. And so we started the business a few years ago, serving primarily sales teams and we've expanded into marketing operations and strategy.

And the goal is really to build a software for every single user in this entire base serving a variety of needs from sales and marketing, to operations, to finance, to safety, and really become the industry partner for these businesses. And in doing so, build what I hope is a generational software business. 

Hugh Seaton: There's a couple of things in what you just said I want to pull out. One of them is it's kind of fun to have somebody who's talking about a part of the business that doesn't get talked about as much. We were often talking about productivity or, or some of the field execution applications and software, but it's really interesting to talk about the office, the business side of how things get done.

So I'm excited about getting into that little more. Talk to me about what specifically. So you've talked a little bit about the people you speak to and the parts of their business that you service, but what are the functions like? What are you guys? What do you make easier? 

Charlie Warren: Yeah, absolutely.

Let me start with each functional area and then map it to some of the product offerings we have today. So you can think of sales teams, and these are folks whether they work in OEM or a specialty subcontractor, like a mechanical contractor, these are folks selling, typically projects. So sort of retrofits into existing facilities or services, or increasingly with the OEMs digital attached products or sort of digital solutions on top of an existing piece of hardware.

You see this a lot in security access control, and those systems integrators. In those teams we work with both field sellers, which is the still the majority of industry, but also inside sales teams, which are increasingly frequent now, this is particularly post COVID and we can talk about that.

We also work with sales managers, so folks sort of managing those IC teams and then also sales leadership. So things sort of like north America and global sales strategy. As well as increasingly sales operations, and some of the larger companies, they have dedicated folks managing their stack and trying to connect, ERP, CRM maybe some ancillary tooling that they have.

So that's the sales side of things. We also work with marketing teams and so in the marketing world, it's probably even more nascent and we can talk about that, than the sales world, but these are folks who are doing some mixture of either what I'll call demand generation in sort of the software speak.

And then another group that I think kind of transcends, in some cases, both sales, marketing, and a little bit of leadership, is something I would call account managers. These are people who are doing not only growth, but also, maintaining those customer relationships to use a software term, I would think of like customer success. And so there were responsible for the renewal. And we have an offering that's in beta right now that's coming out to serve them as well. And they often sit within sales teams, but thought of somewhat separately. I have different compensation structures. And in some cases manage the largest accounts and kind of transcend sales and marketing is their own functional area.

And so those are the users that we work with now, primarily with, again, ambitions to expand to other parts of the org. 

Hugh Seaton: And I'm seeing on your website, a lot of this is sort of professionalizing the contact, the, what you know about them, a lot of what CRM does, but it sounds like you go beyond that.

Talk to me a little bit about how, what you do relates to what a CRM does. 

Charlie Warren: Yeah, it's a great point. And let me just start with the context and the industry and where they are on the I'll use the term digital transformation that I think is overused and then sort of what we're building and why it's different.

In our industry, you can think of by market segment. You know, small, medium sized businesses. So think under sort of 50 employees, sort of a mid market commercial segment, you know, up to about 500 employees and then something, what I would describe it as sort of enterprise over 500 employees. And this covers both specialty subcontractors, which we're grateful to serve, but obviously these global OEMs, the CRM adoption, in this industry varies dramatically on the SMB end of the market, where we don't typically play by design.

There might not be anything, you know, we're talking spreadsheets, post-it notes, physical whiteboards on the other end of the spectrum. Some of our partners have three, four, 500,000 employees. They have, you know, they're spending upwards of 20, 30 million a year on CRM solutions, primarily Salesforce, but not exclusively Salesforce, which I think says something about this industry and the opportunity there.

And so our strategy varies by our segment. In our commercial sort of mid-market segment. We want to provide that sort of account level management and deal and workflow management. And that's the product that we have in beta right now, working primarily with those account managers. In that case, it's, it's often not actually replacing CRM, because CRM doesn't exist at all. In the enterprise segment we have robust integrations with Salesforce, with Dynamics, occasionally there's even HubSpot. And the thinking there is let us be the engagement layer for how folks do their work while you initially, keep the CRM as your core system of record. And one of the reasons why we're able to earn that position to large deployments is that we're coming at this with a completely different data model.

And this transcends all those sectors. And let me explain. Classic CRM is accounts and opportunities, and there are custom objects and hierarchies. Our data model is based from physical locations and that we call the Atlas ID. And this allows us to bring together disparate systems, even in the world's largest corporations, of things like accounting and billing information, a service work order history, classic CRM details ERP information, building information, equipment information down to the serial number SKU. And we can actually co-locate that in one physical space represented digitally. And that allows us to, again, sit on top of the CRM and provide value in ways that are just fundamentally from a first principles perspective, way more aligned to how these people actually do business than the classic CRM.

In the long-term do we have ambitions to after that? Yeah, of course. But in the very short term, it wouldn't be a good go to market to try and rip and replace those systems. 

Hugh Seaton: So if I can kind of feed back something, I think I just heard, which I really like is you've really anchored your business on the project or physical asset nature of the industries that you're speaking to.

And as a result, it allows people to think the way they really think as opposed to. You know, horizontal, vertical, whatever analogy you want, but it allows them to think the way they think about the projects that they're working on or the collection of projects that they're working on. Is that right?. 

Charlie Warren: Exactly. I mean, if you think about what ties this entire industry together, whether you're talking about, you know, solar installations and service agreements or janitorial cleaning, or landscaping, et cetera, is that it's work is done in a physical location.

Yeah. That's often done in or on a building and that is actually a really gnarly GIS problem. We had to set out to solve, build our own data platform of a single unifying record for each physical structure in the United States and ultimately the world. And that allows you to build this sort of knowledge graph of what work is being done where. 

Let me give you a specific example. Let's say I did a new construction project as a mechanical, subcontractor at Kaiser Permanente. There are 45 plus Kaiser Permanente locations in just the bay area or something like that. And I sold a piece of equipment to one of them. And my billing system just says, "Kaiser." 

I need to now map down to the actual address level, like where is this piece of equipment and where is the warranty. As opposed to at the, what I'll call the account level, none of that actually works well in this industry and we don't pitch it that way. Cause it doesn't get to the sort of the, the core pain, but from a technical offering perspective we're unifying all those systems and allowing them to bring to bear all of that equipment information at a significant scale in a uniform fashion. 

Hugh Seaton: Yeah, that makes a ton of sense. I want to geek out for just a second on this knowledge graph idea. I don't know we want to spend forever on it, but it's an idea that I see emerging in the built environment.

Because it obvious once you hear it, once you hear that we're going to map together things that relate to each other as a network, as opposed to lists or tables, I don't know how much you want to get into that, but I'd love to hear a little bit about how you guys have viewed knowledge graphs as a way to organize the information that you're, you're helping people with.

Charlie Warren: Yeah, and we could spend a whole podcast on this. And I also think about it fundamentally as a competitive mode for our business and why we've sort of earned the right into the very large deployments and sort of best-in-class growth is you have to be doing something fundamentally different and better, not just a lot of the industry, but just so much better than what's out there.

So the way I would think about it is in kind of buckets of base layer information, relationships on top of that and I'll get to what I mean by relationships and then sort of workflow around that information. And this covers not just sales and marketing, but other fundamental businesses. And then asset information, which I use is like a bucket for equipment information.

So at the base layer, you have to understand things like what is a building, not to get too philosophical, but the boundaries of the building. Buildings have multiple addresses. This is like a non-trivial GIS machine learning problem that we've been solving for the last three or four years. What about multiple properties within a campus, for instance? 

There's always edge cases. And then there's this really thorny relationship element between, let me just throw out some terms, an owner of a property. Property manager, a tenant in a property which may control the whole property, or may not, may just have a floor, people and the people are both the owners of the facilities, ultimately the tenants, but the tenants sometimes work across multiple locations.

You can see how complicated this can get very quickly. And then the work I might do as a commercial services provider, let's just take the HVAC mechanical subcontractors example. I have customers, my customer might be the only. It might be the property manager. It might be the tenant. These are also all humans with numbers, phone numbers, and email addresses and feelings, et cetera.

And I might have an account, within an account I might have an opportunity, you know, the service contract or the chiller replacement or the cooling tower retrofit. And I also have leads, so new business, which is coming in from my new construction side or from my sales team. And then I have all my records of the work that I've done. Either tied to the location, the tenant, the person, the property manager, it gets more complicated. 

And then there's all the sort of asset information. When you work with OEMs, this becomes incredibly important for some of their corporate goals. And so these include the serial number of the equipment, the equipment family, what service line it's tied to, all the payment billing information, all the contracts, all the contacts around the contracts themselves, which are probably not your customer point of contact, and then all the sort of telematics and truck routing and sort of where who's going what delivering what service where. 

If that doesn't sound complicated, I don't know what is complicated. We've tried to solve exactly all those, fundamental relationships in an elegant way.

Hugh Seaton: And what happens when you have those relationships mapped? What kind of benefits do you see to users when they've got that, that ability to look at relationships and look at their data, you know, at 90 degrees, instead of just a bunch of tables that are linked to each other?

Charlie Warren: Yeah, exactly. I love that language you're using, sort of tables linked together, if you can even get that. So let me start at the user level and then kind of the management level and the corporate level. At the user level, it leads to better adoption of the software. It's fundamentally sort of like, it hits that a what I like to call like the reptilian part of your brain, there's just something really right and evolutionary about it. And this is because a lot of our software is map-based. And so these people in terms of maps, so they will use products like you and I use products like Netflix that are just a joy to use and adoption of technology in this industry, which I'm sure you've covered on many other episodes of this great podcast is, is a real problem.

And there's really low tech adoption, which leads to bad ROI. And so you get users and we have extremely high NPS score in all of our offerings who just really like using the software and will like pay for it, you know, with their own corporate credit card. 

What that leads to is better ROI outcomes. And we haven't talked about this, but we measure that a variety of ways, but if you don't have any usage, you can't get to the core value prop. And then this rolls up to the sort of corporate goals that we try and align ourselves with. And let me just throw out a couple. Growing service revenue, increasing recurring revenue to drive the value of your business and doing so in a way that's fundamentally labor constrained. And we haven't talked about route densification and how we work on that. But, you know, there are fewer and fewer people going to these industries doing the technical work, and I'm sure you've covered that before.

And then in things like increasing wallet share, that's a big focus both at the OEM level. And at the, again, mechanicals subcontractor example, to say nothing of, some of these trends around healthy buildings and COVID-19 mitigation strategies across a number of different verticals or sub verticals.

And so once you get the use cases right, and the adoption right, because of that first principle software development around the way that these people actually think, and actually do work, then you earn your right to solving these huge business problems for these companies. And that's how you become the trusted long-term partner, as opposed to just a vendor.

Hugh Seaton: That's great, and how do you stay close to it? Once you get to a certain size as a company, and you've got rolling, you've got contracts, you've got internal imperatives, internal pressures often will make it harder to stay close to what customers need.

How do you lead for that? How do you make sure that that continues to be true? 

Charlie Warren: Yeah, let me touch on it in kind of two levels. In the way I run the businesses, we are adamant about reiterating our mission, which is to be the most important partner to digital first commercial services businesses. And all those words were selected by design, but we repeat that again and again and again, and it undergirds some of our core values.

And so you can always come back to like, is what we're doing right now, really serving those customers to be their most important partner or not. Right. Because there's all sorts of trade-offs that get made. And so if you just hammer the mission. Yeah. I think people fall in line with customers come first and then all else is secondary. 

On a personal level, I like to lead by doing with my team. And so I will join any call, go on any road trip, spend as much time as possible and as appropriate with our team while still giving them the space that they need to do their job. And so I like to be a little bit more, hands-on a little more active, and that includes listening to call recordings again, going to a conference, even if I don't have a star role, because I want to stay close and fundamentally aligned with our broader vision here is I want to know what the customers want us to build next. 

We spend a lot of time talking about that because we plan to launch 20, 30 products. So like what, what else is top of mind? What else is keeping up at night? Those sorts of questions. And you gotta earn your way there and build a lot of trust.

But once you're in and you're trusted, we can build software for them for decades and decades to come. 

Hugh Seaton: I love it. So what, before somebody meets you, before somebody adopts Convex, what do you, and you, you talked, I think really helpfully about different segments. Let's ignore for a moment that the higher end segment that probably has a team that you're adding to, but when you're talking about kind of mid-level, middle segment that you have, what are you often helping them with?

Like where are they before they meet you? 

Charlie Warren: Yeah. In terms of their technology adoption journey or just the... 

Hugh Seaton: I'm saying like their business, let's assume that like you said, there was some hodgepodge of, of Excel spreadsheets and maybe there's a CRM in there. Maybe there isn't. And if it is, it's probably not a Salesforce level, but, but from a business standpoint, you know, they say yes to you because things aren't as good as they could be.

What, what are you often finding when you get there? 

Yeah, let 

Charlie Warren: me share a couple thoughts on this, in that segment. One is competition. It's an, it's an extremely competitive market, particularly for regional sort of number 1, 2, 3 4's, in a given market. Like you're based in Austin and the top five mechanical contractors there compete aggressively on all things and they also compete on price.

So that's one thing that you hear time and again. It's just the pressure in the industry. Another thing you hear, and this is true of both sort of the present GM level, but into the leadership of the service divisions. We really do need to grow the service base. We're not quite sure we have necessarily the right team structure, right.

Incentive structure to achieve that, let alone the right technology stack to go alongside it. But that sort of people process technology maelstrom there and there it's sort of circular in a bad way. Like we might not have the right people, we can't quite metric them correctly. And we don't quite have the technology to know whether or not they're on track for said metrics. And so when we land an account like that, it's a lot of listening and understanding, can we, or can we not help? And I'd say we do, you know, walk away from relationships where we think we actually don't have a solution because it might be so fundamental as having to replace a whole team or build a whole division before they can leverage our software. And that's again, how you earn trust. 

And we've had a number of those customers come back to us after they built out that team, after they changed their comp structure and led to very large deployments. And so I think is being patient and making sure that we're aligned with solving their business problem.

And we might not be able to solve right now, but we'll either wait or build a product that can. 

Hugh Seaton: That's awesome. So let's go back into the specifics of the product itself. We talked a little bit about kind of diving in through, through the lens of a mechanical, like HVAC contractor. How do you find you engage with an HVAC?

Obviously, I'm thinking about a mechanical contractor here. How do you find that you were engaging with them and helping them get done what they need to get done. 

Charlie Warren: So in terms of users and sort of their pain points, we work in this segment primarily with sellers, be them field or inside sales and we'll use field. And an example now, and then sales leadership. And these are people typically managing our teams of 10, 20, 30 people, sometimes smaller.

And they're reporting into the, either the GM of service or in some cases, the president. And the pain points vary, depending on the level of the business, if you're an individual contributor, you need to hit quota and you need to sell. If you're a sales manager, you have slightly different challenges around, metricing motivating the team.

And then the sort of the president/ GM often concerned more with EBITDA and recurring revenue and that sort of thing. But for the individual seller when they're going to market now, and they're tasked with selling, let's just something very specific, a new service contracts. To existing customers and net new, they're met with often limited to no information about how to go do that.

And when you come back to the knowledge graph example that I think Hugh, you rightly touched on, this is actually really complicated. It's not just like, oh, am I going to go sell a new maintenance contract to Kaiser? It's like, okay, we have a piece of equipment at this Kaiser location. I don't actually know where that is.

And then we didn't get the bid on the new Kaiser, you know, construction project down the street. I didn't even know who to reach out to. And so Atlas, our product can do a few things out of the gate. One, it can give them that base level information of extremely rich data on properties, owners, tenants, you know, who is the service manager, or building engineer in that Kaiser location, for them to build outbound sales campaigns around. But most importantly, I think it can bring together all that information that's already within their system. So give us your equipment data, give us your service history, so we know that actually there was a, a big mistake at that other Kaiser building, which is why we didn't win the bid for the new construction project.

But there's a new Kaiser, you know, head of building engineering who's recently joined the company. You know, Barbara Smith and we've got Barbara Smith's contact information, and we're going to go to Barbara Smith with a plan for deploying service contracts, to all of the, you know, chillers and cooling towers and all of the Kaiser locations and so on and so forth.

And so we're able to bring in that context. And the third thing we can also do, and this is more relevant for the sales managers and for these GMs of businesses, is we can actually drive route density and allowing those individual contributor sellers to pinpoint using our map-based tooling, parts of the region or territory... I mean, down to the address levels, zip code city block county level, where they ought to sell, based on where they have previously sold in the past. 

And we have a recommendation engine working behind the scenes that will actually serve up opportunities for those sellers that are more geographically closer to, if you will, the existing base. The thinking there is if you can send trucks to one part of the city to deliver work, as opposed to crisscrossing the city, right? Your margin is probably much, much better, and this is very attractive to the GMs and the EBITDA oriented folks. And so it's not this scattershot of selling new work all across the city. It's to take Austin as an example, let's sell right around whatever Rainey street and every single block they're in, not sort of scattered and the tooling and that sort of fundamental knowledge graph allows us to do that in the hands of those sellers, coordinated with the broader corporate strategy. And so those are the kind of the three areas where the actual use cases and the, the buttons, if you will drive to those business problems. 

Hugh Seaton: I love that. And I think, you know, this speaks to, especially the route density, something you alluded to earlier, and that is, you know, we're in a, we're in a place of talent scarcity that is unlikely to get a lot better anytime soon for pretty much everybody that you're servicing. I mean, do you find that that's one of the areas that people just twig to is like, man, I don't have enough people to get out and do what I need to get done to, to make the register ring. And this is going to allow me to get more done with fewer people or, you know, fewer people that don't have quite so much training.

Charlie Warren: Yeah, and I'll, I'll take it a step further. And this is true, I think, both at the OEM sort of enterprise scale of our market down even SMBs is they know they need to grow. Like, no one's saying they don't need to grow, but that's in fundamental tension with delivering of the actual work, you know, way that they feel proud of.

And that meets their sort of what I'll call SLAs. And that is a fundamental tension we are setting out to solve. As you said, do more with less or sort of sell smarter, sell higher margin work. that's fundamentally better from a recurring revenue perspective and then allows you in some cases, as you rightly point out to pair more senior technicians with more junior technicians to do some of that service work, and scale your base versus taking on a, to again, to use the mechanical contractor example, extremely complicated ammonia projects that have actually pretty crappy margins, and require very specific technicians to do it. Why not sell, you know, the equivalent of 10 recurring revenue service contracts that can be maintained by someone that we brought in from a residential service business, who's relatively proficient in the product lines. Everyone sort of wins in that scenario and we think we can be part of that solution. 

Hugh Seaton: Yeah, that's and it's really in line with what I've heard from some folks in the trades, this expansion of what value they can offer, whether it's, you know, some of this is personal where people are saying that, you know, when you're in your fifties and sixties, Or, or later there's still value to be added or you can still be contributing even if you're not climbing up 70 story buildings by providing services and providing consulting. And I think at the contractor level, there's so much knowledge locked up that can be provided as services, not just as, as installation services. So it's really interesting. 

how much do you think of your engagements, I mean, obviously it's a software company that they want to minimize this to some degree, but you're educating people on a new way to do things. How much of that, of your to market involves that involves saying, look, you know, you can get a lot more done with us, but you're going to have to change a couple of things. 

Charlie Warren: A fair amount. It depends on the segment. And then it also depends on the reception to that sort of change. Right? Where we play best is, there's already some resourcing and I'll call it like philosophical approach to this change. And I have no correlation there between the size of the company. We work with companies that are, you know, 75 employees that have just made this a major mission point for them. And we work with companies orders of magnitude larger than that, that don't quite have that frame of reference. And that's partly on us to figure out where they are on their journey. 

But yeah, we spent a lot of time doing that sort of consultative work upfront. A lot of which we just don't charge for it because it, it just aligns with our mission to be their most trusted partner. And the way you do that is, is to figure out where are the business problems and how can we solve them. But you're absolutely right there's a spectrum of where companies are on this transition and we want to meet them at the right time. With the right set of products, which is also why we've launched at this point now, five different offerings, because not everyone's at the same stage, your sales team might be very sophisticated, but we need inside sales, lead routing, but you haven't really spent on marketing. The reverse can also be true. You have a ton of field sellers, but that organization is in turmoil and we can land in their marketing and strategy organization with a separate offering and an earn our way into the field sales deployment over time.

Hugh Seaton: And it's interesting that you put your finger on this loose at best correlation between size and sales sophistication, but at the end of the day, if you've got more, more revenue, you have more space for allocated resources like a marketing department, but beyond that, it's, it's all over the place.

And you see this across, across the industry. And look, it's probably true in a lot of industries that it's about who's running the company and how they're running it as much as it is, you know, their, their, their revenue. But it's interesting to hear you say it from your perspective as well.

Charlie Warren: Yeah. And there's no relationship between some of the stereotypes. I think we work with a lot of private equity backed businesses. There's not like crazy cost cutting going on there and defunding technology projects. And the other end, we work with some companies that have some of the most sophisticated technology that they produce for their customers, really high end stuff, but internally are lacking in anything beyond maybe basic ERP, they just don't have it. And so that's the other thing we're serving is that these particularly the OEMs have really sophisticated offerings externally, but internally that's actually not mirrored. And how can we come to bear and help kind of merge those two worlds?

Hugh Seaton: Yeah. It's funny how that can happen. Right? As you've got people that are geniuses at one thing, but that does not mean they're good at anything else. It might just mean they're fantastic at making the thing that they're fantastic at making. 

Charlie Warren: Yeah. And like, how can we bring that institutional rigor and focus and in some cases, actual product offerings and data into our products.

Right. And the way we do that is if you're, if you're selling a new widget, you're actually competing for sellers' time and attention on that. And so we want to make sure that the people in the field and inside teams or the marketers actually aligned with what the product teams are releasing in these really large companies.

And I think we've got a, we've got a great solution to do that. 

Hugh Seaton: Excellent. Well, Charlie, thank you for walking through an aspect of this industry that I think on the service side is set to grow. But also just kind of getting out there and, and, and selling better among other things is, is really great to hear about how can people learn more about Convex and what you guys are up to.

Charlie Warren: Yeah. And Hugh, thank you again for having me. It's really enjoyed talking about this part of the industry. I think globally it's one to $2 trillion, but only in the construction world can that seem sort of off the beaten path, given how large things are? The best thing to do would be get a and see some of our offerings.

We have a pretty active blog and LinkedIn presence and are going to be a publicly releasing a couple of products in the next quarter or two so stay tuned there from my marketing team, but excited to share some customer case studies and ROI around those as well. 

Hugh Seaton: Yeah. I checked the website out there, some really useful tools and stories of there all that will be in the show notes.

Well, Charlie, thanks again for being on the podcast. This has been great 

Charlie Warren: Hugh. Thank you so much.