Ryan Hammond
MBA ’15
FX Jammes
MBA ’15
Nick Hershey
BS CS ’18
Brock Petersen
MS CEE ’15
John Basbagill
PhD CEE ’13
Spectrum
Automated building performance feedback
for early stage commercial design
Week 9: 11 Interviews (119 Total)
8 Architects
3 Engineers
Opportunity Size: $105M
Week 6: 13 Interviews (84 total):
10 large architecture firms
3 medium architecture firms
Trends in Design/Construction
Building Information
Modeling
Green Building /
LEED
Architecture firms’
use of BIM for billable work
has grown
Green building starts as
% of all non-residential buildings
have increased
76%
in 2012
64% 2%
in 2005 in 2005
41%
in 2012
* Figures from “2012 AIA Survey Report on Firm Characteristics”, American Institute of Architects
Spectrum Team
Ryan Hammond
MBA ’15
Hustler
●
●
Bachelor of science, Building construction, University of Florida
Five years experience in construction management
Francois-Xavier Jammes
MBA ’15
Product Picker
●
●
Master of engineering, Civil and environmental engineering, MIT
Four years experience in engineering design and consulting
Nick Hershey
BS CS ’18
Hacker
●
●
Founded The NHS Network, networking website for National Honor
Society chapters
Three years experience in web and mobile application development
Brock Petersen
MS CEE ’15
Domain Expert
●
●
Bachelor of engineering, Civil engineering, Vanderbilt
Two years experience in building energy analysis
John Basbagill
PhD CEE ’13, Postdoc ’15
Designer
●
●
Bachelor of science, Mechanical engineering, Harvard
Founded Spectrum based on PhD research in life cycle assessment
and computational methods applied to building design
Initial Concept
Failures
Successes
0
0
Customer Segment
Week -1:
Developer
s
Week 0:
Contracto
rs
Week 1:
Engineers
Week 1:
Architects
Week 2:
Large
Firms
maximize returns by
reducing costs
Failures
Successes
0
1
2
3
4
0
1
“I have many other parts of a project other than
cost that I can adjust...to ensure feasibility.”
cost estimation is a
guessing game with slim
profit margins.
“I feel comfortable with cost estimation: the bigger
issue is finding qualified subcontractors who can
cut my margins enough”
gain greater insight into
the energy efficiency of
early stage designs
“I’m often not included in the early stages of
design. I have more sophisticated ways to measure
energy efficiency anyway.”
realizing artistic vision
while meeting the
budgetary needs
use BIM and use
additional software
“This could be very helpful!”
“We’ll buy when you’re ready!”
Customer Archetype
Failures
Successes
0
1
2
3
4
0
1
0+) architecture firms
Characteristics
1. Tech savvy: use of Building Information Modeling (BIM) sof
2. Sustainably minded
3. Negotiated contracts
4. Focus on owner occupied commercial construction
5. U.S.based
Firm Organization
Failures
Successes
0
1
2
3
4
0
1
CEO
Decision
Makers
Partners
CFO
IT Manager
Principals
Project
Managers
Project
Architects
Users
Influencers
Jr/Sr
Architects
Jr/Sr
Designers
Recommenders
Tech-savvy, In-house
Architects/Designers
Saboteurs
Engineers, Cost Estimators,
In-house Developers
Failures
Successes
0
1
2
4
5
0
1
106,000 U.S. architects
Market Size
59% (63,000)
in large firms
50% (31,500)
users
15%
(4,725)
capture
●
●
●
4,725 architects
$5,000 = price/year/seat
4,725 x $5,000 = $24M
Low-Fidelity MVP
PowerPoint
Failures
Successes
7
8
2
3
Value Proposition
Week 2:
Iterations
we reduce the number of
design cycles by aligning
architect-owner views
Week 3:
Feedback
we provide real-time
feedback to help architects
design more efficiently
Week 3:
Budgets
budgets constrain artistic
vision. we provide
budgetary leeway
Week 5:
Rework
we would prevent rework
by providing more
information earlier on
Failures
Successes
5
6
7
8
1
2
“Repeated discussion with owners leads to a design that
more accurately meets their needs”
“Real-time feedback would interfere with my natural
workflow. I’m also worried it would hinder creativity.”
“Working toward a budget is part of the process because
facets of the design process constantly change.”
“Rework accounts for 10% of an architect’s time a
budget.”
Product-Market Fit
Failures
Successes
4
5
6
8
1
2
“Rework typically accounts for 10% of our time and budget.”
Mark Smedley
Perkins Eastman
Mark Herman
Cannon Design
Kat Park
SOM
Charlie Williams
LPA
Lloyd Ramsey
DLR Group
$350 Billion Commercial
Construction Cost (US/Yr)
$28 Billion
8% Architect Fee
Failures
Successes
0
1
2
3
8
2
3
Market Size
$2.8 Billion
10% Rework
$700 Million
25% Large Architects
$105 Million
15% Captured
$105M
Channels
Failures
Successes
10
8
9
3
4
Week 4:
VARs
value-added resellers are
an effective channel
Aside from AutoDesk, most architectural software
providers do not sell through VARs.
Week 4:
Direct
Sales
although cost-inefficient,
direct sales are the best
channel
The majority of architectural software providers
use a direct sales force.
Week 5:
Online
we hoped to innovate in
the space by leveraging
the web for leads
Given our relatively small initial market (~1000 architecture
firms). We can directly pinpoint the firms we want to target
and who in those firms makes decisions.
Channels
Failures
Successes
10
7
8
2
4
BuildSpectrum.com
Sustainability
Operational Costs
Materials Costs
Users
74
Users
58
Users
66
Emails
4
Emails
4
Emails
6
Conversion
5.41%
Conversion
6.90%
Conversion
9.09%
Customer Relations
Week 5:
GET:
Various
Webinars, trade shows,
conferences, industry
events, demos
Week 5:
KEEP:
Support
Support and updates will
be our primary way of
keeping customers
Week 5:
GROW:
Refer
Referrals will be a key
growth mechanism
Failures
Successes
10
4
5
All of this information was confirmed.
Customer Relations
Get
1. Awareness
- Trade shows
- Website
- Social Media
2. Consideration
- Webinar
3. Consideration
- Demo/Trial
4. Purchase
- Direct (Inside) Sales
Force
Failures
Successes
10
3
5
Grow
Keep
Product Updates
Dedicated Support
1. Unbundle
- Separate cost and
environmental
estimation
2. Cross-Sell
- Sell along with BIM
software
3. Referrals
Revenue
Week 6:
SaaS
$5000 per seat per year
Week 6:
Service
$50-$100/month for service
Failures
Successes
10
11
5
6
We heard mixed reactions to price, but
$5000/seat/year seems to be a reasonable price
Increasingly often, service is included in SaaS
models, so we will probably have to include it.
Left Canvas
Week 8:
Software
Dev
Week 8:
Customer
Dev
Week 8:
Marketin
g
Week 8:
Fundraisi
ng
Failures
Successes
11
12
7
9
6
8
Resource: Project data
Partner: Developers and
industry partners
Obvious software development is needed for a SaaS
business. To build the software, we need project data.
Resource: MVP feedback
Partner: Industry partners
Customer development critical at ALL stages.
Resource: Webinar
Partner: SOM Architects
Webinars are a perfect platform to disseminate information
on a new product, and SOM offered us a spot.
Resource: $500k
Partner: Grant agencies
We should not raise $500k at this point. It is much smarter
to raise less and build something small
Partners
30+ large architecture firms, including:
Gensler
Failures
Successes
10
11
12
5
6
9
Final BMC
Key Partners
Key Activities
Value Proposition
Data:
-Architects
-Cost Estimators
-Contractors (DPR)
Obtaining/updating data
Software Development
Customer Development
Designing UI/UX
Fundraising
PA/PMs:
-Data gives confidence in
meetings with clients
-Prevent costly rework
-Facilitate higher quality
design
Key Resources
Principals:
-Enhance firm brand and
can upsell
Industry Partners:
-Architects (SOM)
Software Development
-BIM Platforms (Rhino)
-Co-creation Team
-Stanford Grad Students
Marketing
-Architects (SOM)
-BIM Platforms (Rhino)
Advanced Payments
Webinar Platform
$500K seed funding
Cost Data and BIM Models
Cost Structure
Salaries- 3 Founders, 4 Product Engineers,
1 PR/Marketing
Product-Servers, Data Licensing, Support, Advertising
Overhead-Rent, Utilities, Equipment/Software,
Conferences and PR, Other Expenses
Feature:
Reliable local costing
Failures
Successes
12
9
Customer Relationships
Get:
- Direct Sales
- Webinars
- Online Advertising
- Trade Shows/Conferences
Keep:
- Service and support
- Expanded product offering
Grow:
- Network effects
Channels
Web
Direct Sales
VARs
Revenue Streams
Subscription SaaS
-Pay Per Project (Small/Medium Firms)
-Pay Per Seat (Large/Very Large Firms)
Service (Customer Support) fees
Consulting
Selling Data for Market Research
Customer
Segments
Project
Architects/Project
Managers employed by
Architecture Firms
-Medium/large (50+)
-Commercial project
Firms
-CAD proficient
High-Fidelity MVP
adapt.tech.cornell.edu
Failures
Successes
12
7
8
2
9
2015
Business Strategy
Timeline
2016
Product
Developers x10
Sales & support x10
Lead
Developer
Develop beta version
Beta testing
Testing
Revenue
Developers x20
Sales & support x20
Develop V1.0
Fundraising
Patents: rule sets,
visualization methods
Co-creation team
Marketing partners
$500K seed
2
9
2018
2019
$1.5M Series A
$3M Series B
Developers x80
Sales & support x80
Develop V3.0
Testing V2.0
Licenses x1,500
Data partners
Partnerships
12
7
8
Developers x40
Sales & support x40
Develop V2.0
Testing V1.0
Initial licenses x750
IP
Successes
Profitability
Webinar
Hiring
2017
Failures
Develop V4.0
Testing V3.0
Licenses x3,000
Testing V4.0
Licenses x6,000
Next Steps
This week Recruiting software developers
This week Fundraising: 7 grants, competitions, VC pitches
Ongoing Additional interviews with high-fidelity MVP
May 1 White paper: data visualization methods
June 1 Initial prototype completed
Failures
Successes
12
7
8
2
9
Questions?
Quantifying our VP
Failures
Successes
12
9
Spectrum
Current design process
project
goals set
initial design initial design
completed
selected
design refined
CD complete CD complete
High
LEVEL OF COST
UNDERSTANDING
10%
TIME
$2.8B
SAVINGS
ANNUALLY
within 21%
of actual costs
COST FEEDBACK
Low
UNINFORMED
DECISION-MAKING
Conceptual
Design
COST ESTIMATION
Design
Development
REWORK
Construction
Documents
DESIGN PHASE
Bidding
Construction
Administration
Failures
Successes
10
11
12
5
6
8
In most classes,
failing 50% more often than succeeding = F and
In Lean LaunchPad,
failing 50% more often than succeeding = A
and
Current Design Process
PreDesign
Conceptual
Design
Design
Development
Architect and
owner select
design scheme
Building owner
defines budget
and project
objectives
Construction
Documents
Budget exceeded
Cost estimator
performs first
and subsequent
cost analyses
• architect wastes time
reworking design
• owner and architect pay
rework fees
Architect
refines design
Architect refines
design to meet budget
Bidding
Construction
Administration
Spectrum Design Process
PreDesign
Conceptual
Design
Design
Development
Construction
Documents
Architect and
owner select
design scheme
Building owner
defines budget
and project
objectives
Architect
iteratively
refines design
with cost
guidance from
Spectrum
Spectrum
Cost estimator
performs
subsequent
cost analyses
Budget Met
• architect saves time
reworking design
• owner and architect save on
rework fees
Bidding
Construction
Administration
Quantifying our Value Proposition
Sample Project
Construction cost = $50M
Project duration = 2 years
Architect’s Fee (as percent of construction cost): 8% = $4M
Current Fee Allocation Scheme
Design
Phase
Schematic
Design
Design
Development
Cost /
Duration
15% = $600K
(3.6 months)
20% = $800K
(4.8 months)
Spectrum
Construction
Documents
35% = $1.4M
(8.4 months)
Bidding
Construction
Administration
5% = $200K
(1.2 months)
25% = $1M
(6 months)
Revised Fee Allocation Scheme
Design
Phase
Schematic
Design
Design
Development
Construction
Documents
Bidding
Construction
Administration
SAVINGS
Cost /
Duration
15% = $600K
(3.6 months)
20% = $800K
(4.8 months)
25% = $1M
(6 months)
5% = $200K
(1.2 months)
25% = $1M
(6 months)
10% = $400K
(2.4 months)
Interview source: Mark Smedley, Perkins Eastman Architects, February 11, 2015
Financial Timeline
Channels
Failures
Successes
10
7
8
2
4
The Rook
Breaking Bread
LoveTap
●
●
●
●
FREE
Drove 190 unique users
All self-identify as architects
Conversion rates:
○ 5.4%, 6.9%, 9.1%
Product-Market Fit
2.
Features
1.
2.
3.
Immediate
cost/carbon
feedback
Many design
comparisons
Benchmarking
3.
1.
2.
3.
Pain Relievers
Facilitate data driven
conversations
Transparent costs:
facilitates budget/design
vision balancing
Rapid design iteration
feedback: improves client
relationship
Rapid design option
generation: shortens
design cycle time
Capturing parametric
relationships: improves
owner architect
communication
Transparent cost
estimation: facilitates
balancing of budget
Successes
4
5
6
7
1
2
Gains
Gain Creators
1.
Failures
1.
Achieve faster feedback
time on design options
2. More efficiently manage
budget
3. Expand design
possibilities
1. Realize client’s
4. Obtain more
vision
client work
2. Achieve artistic
vision
3. Design code1. Delayed feedback
compliant
2. Communicate poorly
buildings
3. Balancing budget and
design vision
Pains
MVP
1) Iterations
we reduce the number of
design cycles by aligning
architect-owner views
2) Feedback
we provide real-time
feedback to help architects
design more efficiently
3) Budgets
budgets constrain artistic
vision
4) Rework
we would prevent rework
by providing more
information earlier on
Failures
Successes
4
5
6
7
1
2
“Repeated discussion with owners leads to a design that
more accurately meets their needs”
“Real-time feedback would interfere with my natural
workflow. I’m also worried it would hinder creativity.”
“Working toward a budget is part of the process because
facets of the design process constantly change.”
“This would save 10% of my costs!”
Failures
Successes
4
5
6
7
1
2
Industry Gap
Intuition
Business as
Usual
Design
Feedback
Engineers
Contractors/
Cost estimators
Spectrum
Design
Feedback
Additional Slides
Market Trends
Technology
Data Availability
Sustainability
Market Trends
Technology
Sustainability
Spectrum
Shared Data
Informed
Decision-Making
Product-Market Fit
Features
3.
1.
2.
3.
Cost/carbon
feedback
Many design
comparisons
Benchmarking
1.
2.
3.
Pain Relievers
Prevent rework
Transparent costs:
facilitates budget/design
vision balancing
Rapid design iteration
feedback: improves client
relationship
Rapid design option
generation: shortens
design cycle time
Capturing parametric
relationships: improves
owner architect
communication
Transparent cost
estimation: facilitates
balancing of budget
Successes
4
5
6
7
1
2
Gains
Gain Creators
1.
2.
Failures
1.
Achieve faster feedback
time on design options
2. More efficiently manage
budget
3. Expand design
possibiltiies
1. Realize client’s
4. Obtain more client work
vision
2. Achieve artistic
vision
3. Design code1. Delayed feedback
compliant
2. Communicate poorly
buildings
3. Balanceing budget
and design vision
Pains
Product-Market Fit
Features
1.
2.
3.
Cost feedback
Design
comparisons
Visualization
Decrease design cycle
Transparent costs
Improve design
1.
2.
Prevent rework
Visualize parametric
relationships
Transparent cost
estimation
3.
Pain Relievers
Successes
4
5
6
8
1
2
Gains
Gain Creators
1.
2.
3.
Failures
1.
2.
Efficient design process
More efficiently manage
budget
3. Expand design
possibilities
4. Obtain more client work
1. Realize client’s
vision
2. Design within
owner’s budget
3. Design code1. Limited feedback in
compliant
conceptual design
buildings
2. Efficiently creating
owner’s vision
3. Balancing budget and
design vision
Pains
Original Hypotheses
The World – market/opportunity, how does it operate
The Characters – customers/value proposition/ product-market fit, pick a few examples to illustrate
Narrative Arc – lessons learned how? Enthusiasm, despair, learning then insight
o Quotes from customers “we loved it” or “stupid idea”
Show us – images and demo to illustrate learning = diagrams, wireframes & pivots to finished product)
Editing – does each slide advance the learning
Theater
Point me at what you want me to see
Ought to be self-explanatory
Use analogies
Failures
Successes
0
0
Partners
30+ large architecture firms, including:
Failures
Successes
10
11
12
5
6
7
Initial Concept
MARCH
APRIL
Enhance Communication
Reduce Design Cycle Time
Failures
Successes
0
0