
PlanGrid (YC W12) raises $40M - xenadu02
http://techcrunch.com/2015/11/18/plangrid-lands-40-million-investment-to-expand-product/
======
calcsam
PlanGrid is more evidence of the rise of vertical-specific SaaS. Their
customers are basically like, "No one ever made software specifically for our
industry -- can you give us more?"

Result: a software designed to solve one pain point eventually evolves into a
general-purpose solution.

~~~
brudgers
There's been lots of software to serve construction. PlanGrid is successful
because:

1\. It's late enough to the game that it could start as a SaaS company.

2\. It's late enough to the market that it can leverage contemporary Silicon
Valley financial tools.

3\. Mobile computing is now ubiquitous enough that a mobile first strategy is
viable for construction...PlanGrid's creation story is based on the
introduction of the iPad.

4\. PlanGrid has a low first cost (as in free tier) pricing model that allows
initial use by construction company employees without incurring a cost against
the budget of the projects to which they are assigned.

5\. The product was introduced to solve a narrow problem rather than sold a by
four legged meat eating sales team as an office suite.

That said, successfully scaling out to a general solution is a different
challenge because the number of moving parts increases and the edge cases that
can cost a construction company enough money to put them under are
exponentially larger. There's a hard copy fallback for drawings at the
building department and another at the architect's office and various other
copies living out in the wild at the architect's consultants and the
contractor's subcontractors. That's not the case with a contractor's internal
documentation.

To put it another way, there's a certain tolerable error level to a PlanGrid
generated link from a floor plan to a detail because it can verified against
the originals and the actual building. The acceptable error level is different
when the electronic version is the original and there's no external validation
mechanism.

Then again, $40 million is a lot of money to deploy against such challenges.

~~~
jedberg
> The acceptable error level is different when the electronic version is the
> original and there's no external validation mechanism.

But that's true about an all digital business. I mean, I'm pretty sure most of
Google and Facebook's records are digital only. There are plenty of solutions
that exist to make sure that it is backed up and replicated safely.

The trick here is convincing not only the construction companies that it is
safe, but their regulators.

~~~
brudgers
In the US to a first approximation, the regulations regarding construction
companies don't include auditing of internal processes such as those PlanGrid
appears to be tackling. The problem is the relationships between margins, the
potential cost of errors, and the volume of projects a construction company
undertakes. Margins are low, the cost of potential errors can be higher than
the initial contract, and contractors handle a relatively low number of
projects. In other words: small reserves, very bad worst cases, and not much
spread of risk.

If Facebook looses my post of a cat picture, the worst thing likely to happen
is that I rant on Hacker News. If a critical deviation gets lost in the
shuffle, people die...and lawyers get involved. [1]

[1]
[https://en.wikipedia.org/wiki/Hyatt_Regency_walkway_collapse...](https://en.wikipedia.org/wiki/Hyatt_Regency_walkway_collapse#Aftermath)

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dreamdu5t
PlanGrid is doing really cool stuff. I hope the high-speed VC growth
trajectory does not kill them. There's so much money in this space.

~~~
brudgers
There's a lot of money in construction, about $400 billion in a mediocre year.
But it's widely distributed - single family construction is about half of the
total. There isn't a Google/Apple/Microsoft of construction.

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haaen
Is this YC Continuity's first investment?

