Builk walks where few tech startups tread: Changing the construction industry

Ten years of experience in the construction business and enterprise solutions for the industry — this formed the foundation of the Builk team that today, aims to bring the traditional industry into the Information Age.

Builk Asia is a free management software and professional network for the construction business. With this bold ambition for a traditional industry, coupled with an interesting business model, we had to chat with Patai Padungtin, the company’s principal and co-founder.

SGE: What led you and your co-founders to start Builk?

We are serial entrepreneurs who come from the construction business and enterprise solutions for the construction industry. We have  experience in developing construction-specific enterprise resource planning (ERPs) for leading contractors in Thailand and overseas.

Builk initially came from our passion to help local SMEs in the construction industry access better management tools online. These small and medium contractors have not much budget spending on ERP, but they do need professional Time-Cost-Quality control software rather than a blank spreadsheet.

Doing business with the “Bottom Of the Pyramid” segments becomes our challenge and opportunity. We want to change the construction industry landscape.

SGE: In the media, we seldom hear of IT startups tackling the niche construction industry. Care to share Builk’s experience on gaining users?

Unfortunately, we are in one of the most obsolete industry — people and businesses in the Thai construction industry are not IT-familiar and slow in adopting the technology. Our user acquisition strategy is to educate them with a series of offline activities.

During the first year, we had bi-weekly open house events that offer free training at our office during weekends and went out to meet the contractors on site to hear from them directly. It was tough but worked out well.

After gaining sponsorships, we could manage better and bigger offline activities with their support. Some of these were bundled with the sponsors’ marketing campaign.

We plan to put more effort online into user acquisition after launching the next version of Builk that will include more social features later this year.

SGE: How has Builk’s revenue model (free SaaS model and ad-supported) been working out so far?

Free SaaS with an ad-supported revenue model sounds a little crazy for B2B applications in a niche domain. Also, there is no obvious successful example for us to follow.

But we realize that we cannot survive on freemium model in the early stage as well. We are in very niche segment that hasn’t become global yet. Theoretically, less than five percent paid user rate of this niche market would not be enough for our business.

Hence, we chose the “free-service” method, and focused on creating a community of users and businesses in the industry instead. We’re shifting our offerings to construction material manufacturers and service providers who have marketing budgets. Honestly, it was painful to gradually acquire users in our first year after our launch in 2010. We had no revenue.

In early 2011, our community became bigger, and Builk had proved that a large number of SMEs contractor in the construction industry are willing to change the way they work to adopt our SaaS. Then, we got sponsored officially from the major construction materials brands in Thailand.

Things are much better now in terms of business. We have solid revenue from sponsorships as well as from industry-specific (B2B) digital media. With the industry information we have, we have also become the go-to-company in the construction industry. Some portion of our revenue is channeled from market research reports.

Throughout the years, we have never sold ourselves in terms of pageviews and unique visitors like other web businesses. Instead, we offer higher user engagement, and position ourselves to be the digital media with a right target audience and at the right timing (for example, contractors are working when using Builk). Our growth scale is measured by the value of the construction project started and the amount of purchase order on Builk. These two reflect the real purchasing power of our users.

SGE: What is the team’s vision for Builk for the next five years?

We want to connect the dots in the construction industry in Asia, creating a social network that leverages the industry knowledge we have. With the coming of AEC 2015, the construction industry will become more free as the region moves into a single market and construction products and services can easily flow across ASEAN countries. We hope our industry knowledge will be of benefit then.

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With an experienced team and strong vision for the construction industry, Builk Asia is an example for other enterprise software businesses in Asia. Come 11th June at Echelon, the company is seeking for partnerships and VCs who are familiar with enterprise products to expand Builk to other Asian countries. On a side note, being avid learners, the team hopes to also learn from other startups in the region.

Builk is a top ten finalist at Echelon 2012 and was a participant of the Vietnam Satellite event at Echelon 2012. Organized by tech blog e27 for the third year running, Echelon 2012 is a key startup launchpad in Asia with over 1,100 delegates in attendance and 50 startups exhibiting in the Marketplace. Check out SGE’s coverage of Echelon 2012.

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