Our interview today is with Tooey Courtemanche, CEO of Santa Barbara-based Procore Technologies (www.pro-core.com), which is developing software-as-a-service tools for the construction industry. We talked with Tooey about the firm, his stellar set of angel investors, and the interesting story on how the company grew out of his own efforts to build a house.
Ben Kuo: What is ProCore's software is used for and who uses it?
Tooey Courtemanche: Procore provides a construction project management tool, which a web-based, software-as-a-service tool that contractors can use to manage their projects online. It's currently called SitePro. The site is primarily a web portal that allows contractors to manage their schedules and communications online, and can be used to track who is accountable for a task and when they need to do them. The value add for our customers, over the other solutions in the market, is that it's not an expensive client-server solution. Most other solutions require rack mount servers, an IT support staff, and offsite training. Since we're web based, they don't have to do any of that--it's all available at low cost monthly service. Customers can manage all of their schedules and online collaboration in one spot, and can manage their projects to be more profitable. We've been around for two and a half years, and raised a Series A round of funding in 2004. Since then, we've acquired 62 customers, mostly residential contractors and commercial contractors--we work on both fronts. Project sizes range from the $250,000 range to the $40M range, and we now have 250 customers using our tool to manage their projects. The real differentiator is that because we're software-as-a-service and web-based--very similar to Salesforce.com when they entered the CRM space--is we're trying to displace the client-server market leaders with a low cost, software-as-a-service solution. It's very affordable to the vast majority of the construction industry.
Ben Kuo: What's your background, and why did you decide to start ProCore?
Tooey Courtemanche: I am a frustrated builder. I grew up in the construction trade. I grew up in San Diego, and worked for construction companies in both Jr. High and High School during my summers vacations. Out of college, I started a real estate development company building spec homes in Palm Springs. I then moved up to the Bay Area, founded a technology company, and rode the Internet boom. My wife and I were working in Sausalito, and looking to build a home to start a family in. My wife suggested we look beyond the Bay Area, flew down to Montecito, and found some property--while I was still running the business in the bay Area. I soon found that the construction went awry, communication was non-existent, and figured that since I was running a technology company that we could employ some technology to streamline and run the project remotely. I had some of the software developers who worked for me on what became our product, SitePro, to enable me to manage our project remotely. It did it effectively, and builders in town asked to license the software, and it spread through word of mouth down to Los Angeles, with high-end residential home builders. That's when I decided to make it a business.
Ben Kuo: Now how did you go from construction to running an Internet business?
Tooey Courtemanche: I was working as a construction manager on a large residential project in the Berkeley Hills after the fire. I had been following that craft for six months, when I met a fellow running a firm on the Peninsula. He knew I had a technology interest, and offered a career change for me. At the time, I was just 23 or 24--single, young, agile, so I took the opportunity, and over the next couple of years learned everything he had to teach me. I then started my own technology company, called Webcage, where we implemented front ends to PeopleSoft for 3Com, Visa, and other big companies. I grew that company, hire more and more consultants in the industry, and grew that way. By happenstance, my two loves in life are construction and technology, which is a rare combination. Not too many people have that mix.
Ben Kuo: Tell us a little bit about your venture capital backing?
Tooey Courtemanche: Our Series A round in 2004 was led by Kevin O'Connor, founder of DoubleClick, the Internet advertising giant. He saw the value in what we did, and other customers funded the other half of the round. It was a $950,000 seed-round, to get us started. In the meantime, we have been working on the product, and now have sixty-two customers running the software on two hundred and fifty projects. To date, we have spent almost no money on marketing, are one of the lone players in the space, and have some unique functionality in that we integrate directly with Microsoft Project, the defacto scheduling tool for the construction industry. We have a real leg up on the competition because of that integration. The money we have on hand now will be primarily used for marketing. We've got products, customers, revenue, and will be cash flow break even in August. We have recurring revenue, since we're a subscription services--our bank account just fills up every month, it's like selling annuities. It's going well.
Ben Kuo: How did the angel investment from Kevin O'Connor come about?
Tooey Courtemanche: It was a personal introduction. Kevin was in the process of building his own house, and was running into the same frustrations. He saw right off the bat that simple, web-based tools like Sitepro can really facilitiate building a project like his, on time and on-budget.
Ben Kuo: How has starting a company here been versus up in the Bay Area?
Tooey Courtemanche: Up North, finding the right people is just a phone call away--you could build an organization in a day. Here, it's a little more challenging, but a whole bevy of people have ended up here because they did really well elsewhere. They're now looking for something to do. For example, the President of Procore, Steve Zahm, joined two years ago, and had founded a company called DigitalThink, one of the first e-learning companies out there, which he took public in 2000. He has had experience running a software-as-a-service company and taking it public. He was looking for something to do, and is now a key player in our strategy, which we have really benefited from. Also, UC Santa Barbara has a very strong computer science department, and we get the best and brightest to join our technology team. There are lots of people who want to stay here, who don't want to leave, so it's not hard to attract them. One of our other investors, Dave Gross, is founder of a company called FastClick, who ended up selling for $120 million plus to ValueClick. Dave's on our board, and is a primary investors, and has lots of experience with Internet advertising and building out that segment of our business to make online purchases. Our whole goal is to surround ourselves with the best people. Three out of four have founded companies that have been taken public.
Ben Kuo: How are you responding to the softening in the housing market?
Tooey Courtemanche: Our product is not used for production homebuilding, but is used primarily for commercial, high end residential, one-off residential, remodeling, and industrial uses--all areas that are seeing record increases in the last year. It's not tied at all to the real estate bubble. We're well positioned to take advantage of the growth in the commercial and high end residential market.
Ben Kuo: Thanks, and good luck!