There is typically more than one way to complete a construction project. The key
is finding the best way to complete the project, especially when adjustments
need to be made midway through. That’s exactly the problem that Alice
Technologies is solving after developing the world’s first generative
construction simulator. Alice’s software is a form of project management that
the construction industry has never seen before.
Alice Technologies founder and CEO Rene Morkos joined the Midstage Startup
Momentum Podcast with Roland Siebelink this week to talk about this cutting-edge
technology and his startup’s progress.
- The journey of developing new technology and building a product that’s useful for construction projects.
- How Alice Technologies was able to determine its ideal customer profile.
- Why a product that is useful for everyone shouldn’t be sold to everyone.
- The method that Alice Technologies uses to identify and fix bottlenecks within the company.
- The factors that determined Alice’s price points and go-to-market approach.
- Why startups should be saying no to customers while trying to build a pipeline.
Roland Siebelink: Hello and welcome to the Midstage Startup Momentum
Podcast. My name is Roland Siebelink and I'm an ally and coach for many of the
fastest growing startups around the world, one of which is with us in the studio
today. It's Rene Morkos, the founder and CEO of Alice Technologies. Hello, Rene,
thank you for joining us.
Rene Morkos: Hi, Roland. It's good to be here. Thanks for inviting me.
Roland Siebelink: Excellent. And for once, we're both in the same time zone,
West Coast, that makes it so much easier.
Back to Alice Technologies, Rene, tell us, for those that haven't heard of your
company yet, what does Alice do? Who do they serve and what difference do you
Rene Morkos: Alice technologies has developed the world's first generative
construction simulator. What that means is if you're unfamiliar with generative
technology, it's a relatively simple concept. Imagine you draw a cup. The two
circles and the plane. And a bigger cup is bigger - you'd redraw it every time
the size changes. If your tool is generative, you can change these parameters
like height and radius and it redraws the object. That's what parametric
regenerative technology does. It's been done in design for 30, 35 years and was
a big revolution in mechanical design, architectural design, electrical design,
et cetera. It's never been done for construction and that's what we've managed
Roland Siebelink: Interesting. Very good. I'm imagining that this is related
to use cases in lots of change requests in construction projects in the costs
that actually come from those change requests, as I understand that industry.
Rene Morkos: You've pretty much hit the nail on the head. The change is a
change of parameter. Today, there's a delay or the design changes or the crew
doesn't show up or I need to accelerate. Do I add a crane? Do I add overtime? Do
I add crews? All of these questions, you're crunching them in your head. Let's
assume that you're a genius and you've managed to crunch this problem. It's not
really crunchable, by the way. A thousand tasks, 14 parameters per task, over
700 days, you're getting the size of the problem that you have to crunch.
But humans have got sense. They approximate stuff, but the issue is even if you
have the correct answer, you don't have information from other parts of the
project. And so, that changed - our system is literally, you can tell the system
add a crane, add a delay, re-sequence around the delay, change the design. It is
very, very easy to simulate the most optimal way to build something.
Roland Siebelink: Interesting. It's not just a blueprint of the building or
the house, it's actually the entire project management plan that is affected by
this. It's like project management software on steroids?
Rene Morkos: Exactly. The thing is that the design part is not what we do.
The design is complete. You figure out what you want to build. The big question
is how do you build it. Today, technology and construction are based on charts.
It's a manual process. What we've done is we basically take the design as our
input - you put in the 3D model or the 2D drawings - and you then can generate
hundreds of millions of ways to build it.
When you generate lots of solutions in a computer, then you compare them to
solutions generated by hand, you tend to see about a 20% improvement. It's
rough - maybe 25, maybe 40 - but that's roughly what you'll tend to see. And with
Alice, what we're seeing is roughly 17% faster and roughly 13% cheaper.
Roland Siebelink: How have you landed on your particularly well-suited
Rene Morkos: I have an advisor. I have many advisors. I try to work with a
number of people that give me opinions on how to do what I'm supposed to be
doing. But I worked with one gentleman in particular called Peter Krivkovich. He
is a chief operating officer at a company called AdRoll. And he told me the
point of a business is: Find your ICP, figure out how to generate value to that
ICP, figure out how to expand to other ICPs or within ICPs. It's so deceptively
simple. The question you asked me, where do you get customers? The one thing
that I've learned is you've got to be so brutal in identifying your ideal
customer. And if your answer is "I can serve anybody or I can serve almost
anybody," then go take a look at that.
Because that's how we started. The technology works for everyone. It literally
does. We've done a $12 million parking lot, $3.7 billion airports, and
everything in between. But to answer your question, for us, what we found our
sweet spot was infrastructure projects. Now that we've released what we call the
Manage product - the ability to update progress and reschedule, re-sequence in
real time during construction - we are now starting to see success with
commercial builders as well.
Roland Siebelink: Okay. Very good. For those listening to this podcast who
may be themselves a little bit earlier in their founder journey - or later,
however you want to call it - a bit behind you, I'm guessing many will not
understand why if the software could be used by so many different target groups,
why not just sell it to all of them? I agree with you. Usually, the technology
does but the go-to-market doesn't. But from your perspective, can you illustrate
a little bit what made you realize that that's actually true?
Rene Morkos: Yeah. Happy to share. Let me kind of set the stage. We have a
technology that really does work for everybody. We've run parking lots,
high-rises, data centers, oil and gas facilities, wind, solar, you name it. It
doesn't care. It eats these projects for lunch. To us, if it can run anything,
why not sell it to everyone? Here's what we learned. The truth of the matter is
that different types of customers do business differently.
Here's a really simple example. In our field, I mentioned infrastructure
companies, I mentioned commercial contractors. Commercial contractors tend to
subcontract the work. Correct. They go out and they hire smaller contractors
that will do the plumbing, that will do the electrical work, et cetera. When you
have a product like ours - we hadn't released the Manage product, the ability to
manage construction throughout - you're selling something that's a
pre-construction tool to a company that subcontracts the work, their response
is: "I'm not really optimizing the work at this point. I don't really care about
When you take that same tool and you sell it to infrastructure companies,
infrastructure companies tend to own their own equipment. They really care about
optimizing it upfront and the bidding. Same tools, same capabilities, but a
completely different value proposition to two different people.
Roland Siebelink: That's a great example. Thank you.
Rene Morkos: The thing that we learned - and it seems obvious - the way that
you are selling to this type of client is going to affect your pricing, your
messaging, your marketing, your customer success, your level of service, your
product, what are they focusing on? And the issue is that I don't believe that
it is possible or feasible for a human mind to crunch all those variables live
across six or seven different types of customers.
What's going to kill a small company is a lack of focus. If you focus your
company onto a specific type of customer, the messages that you're going to
start getting from your clients that are gonna resonate into your customer
success department and your product department and your marketing department -
everyone else is going to be solving the same problem.
If you focus on a given ICP, what will start to happen with the advent of time
is that your departments start to become aligned and you start getting closer
and closer to that product-market fit.
Roland Siebelink: Absolutely. And I'd say the other reason that startups in
particular need to bear this in mind is because trying to crunch all those
variables at once doesn't work. Even if you do run three, four, or five business
lines, you lose all your agility and that's your big competitive advantage as a
startup, to really serve one customer group extremely well and be able to change
your product very quickly, compared to all the corporates that cannot do that.
You mentioned the alignment between the different departments. You mentioned
customer success, products, and marketing. How far is Alice in building up all
those departments? And where are you focusing your recruitment, your buildup at
this point in time? How do you feel about balancing resources between the
product and the go-to-market side of the business?
Rene Morkos: Building a go-to-market engine - to me, the go to market engine
is marketing, sales, customer success - takes several years. It's not something
where you're going to wake up in the morning, flick a switch, and you're done.
There are examples of companies that hit it on Day One and God bless them; 99%
of entrepreneurs don't have that experience. To us, we have a fully
functioning - each separate department has been up and running and standing on its own feet
for six, 12 months. And we've been at it for seven years.
Everything has a plus and a minus. But for us, it took us three and a half years
to craft the technology. It took us two years to build a product with the right
technology. And it took us a year to commercialize it and build up the
departments around it.
The next question you asked me was about where to focus. Something we've noticed
is - we call it the bottleneck, and the bottleneck tends to move around
departments. And the way that you can tell where the bottleneck is, is just
literally listen to who's currently the one that's being blamed for most of the
things that aren't right. It's funny because throughout the history of the
company, I remember, "Oh my God, those product guys, they're just idiots.
They're completely not understanding what the customer wants."
What do we do? Fire all the product guys? Then you sit with them and you start
working on the product because the product is where the pressure is landed at
this point. You fix it. You fix that issue. Suddenly products are up and
running - I'm not kidding you, I remember this clearly, this is an example from our
company's history - and it was three weeks later, it was customer success. Those
guys were really messing it up. Then you're like: "Wait, but did all of you
forget that it was the product three weeks ago?" And then you fix the customer
success piece and suddenly it becomes sales. It's usually, in my opinion,
relatively quick and easy to figure out where the bottleneck lies.
Roland Siebelink: It's like the weakest link in the chain.
Rene Morkos: Absolutely. And the weakest link is whichever one you need to
work on at this point. What we've done as a company is we've all sat down, and
then what I've said is: "Look, guys, this bottleneck is going to move. At some
point, you're going to be the one that looks like you've completely screwed
everything up. You're responsible for everything not working." Let's also
understand that that's going to happen now.
And that bottleneck, by the way, has landed on me. But let's all understand that
that's happening. And when that happens, let's try to not listen to our
instinct, which is jump the person that this turned on but realize we all need
to pitch in and help that current department not become the bottleneck. You know
that once you do that, it's going to move somewhere else. When that happens,
let's all do that. I think that's been really, really effective for us.
Roland Siebelink: A little bit deeper on that go-to-market, how do you
actually approach those potential customers? What are some things you found that
really work? Because I know a lot of the audience is struggling with those very
tactical questions. We know our target group is, how do we actually get in
contact? How do we start selling to them?
Rene Morkos: There's a simple exercise I would recommend. Draw a three by
three grid. And the three by three grid is, on the X axis, you've got price,
which is high, medium, low. On the other axis, you've got the level of service,
which again is high, medium, low. And you've got to look at your product and
there's a couple of questions that you want to ask.
If your product is something that someone can literally log on, click the
button, and use it … Great, if that's the case. Then you have a pretty low level
of service, which means that you can charge a low amount. For us, for example,
we know that it's a high level of service. Our product is not a simple, press
the button product. It requires training. It requires some handling, some
support. Our level of service is high. That said, don't forget that we invented
a technology; it didn't exist. For us, two and a half years to invent the
technology, two years to build a product. What does build a product mean? We had
a year where the mantra of the company was usability, ease of use, automation,
make it easier, make it easier to make it easier. Reduce the amount of time
required to set up our system. But the reason I'm mentioning this is that if you
have a high level of service that's required, then you probably want to be at a
high price point.
Roland Siebelink: Can you talk a little bit about the traction you've
experienced so far? Whatever you're comfortable sharing with us in terms of how
the company's been growing.
Rene Morkos: You hear product-market-fit, product-market-fit. I've been
hearing it for a few years. When you have it, you know it. We increased revenue
3.5X in 12 months.
Roland Siebelink: Very good. Okay. That's a sign of product market fit. But
I agree with you, it's never an absolute black and white. You just get to get
better and better at it, if you're lucky, of course, and good and competent.
That's very good. Another question, Rene, is how do you think about building the
pipeline for the business? Rather than just the go-to-market strategy, how do
you actually build up a steady flow of deals coming in all the way from initial
leads to closed contracts?
Rene Morkos: It's a great question, Roland. Here's one thing I can
guarantee, if you build it, they will not come.
Roland Siebelink: I wish more founders understood that, Rene. Did you know
that from the outset or was that a hard and tough lesson you would have to
Rene Morkos: I think I learned it. I wasn't the first that learned it, I
wasn't the last, I was somewhere in the middle. One of the things is I've had a
group of advisors around me. When those advisors tell me something, I can't tell
you that I listened the first time. But maybe, six months in I'm like, "Wait a
minute, maybe there's a point here." I think that's the key thing. You've gotta
realize that having a great product doesn't mean that you're going to have a
Roland Siebelink: What are some of the things you've learned or picked up
from your advisors over the years on how to actually build your pipeline?
Rene Morkos: Identify an ICP. Literally, pick something. Pick a size of
company, pick a type of company, pick a type of project, something segmented and
say, "Hey, this is what we're going after." And then we say no to everybody
else. That's the most important thing; you've gotta be brutal. The question you
gotta ask yourself as an entrepreneur is how many times a day are you saying no.
How many opportunities have you said no to? And if you're saying yes to
everything, that's wrong. I can almost guarantee that. You should be saying no
fairly regularly. "Sorry. You're not the right size company. We tend to focus on
companies that are this size." and it's not personal. Me, I would love every
single person in the whole world that's in construction to access Alice. That
would make me happy. But you have a business to run.
If the company is bigger than this size, I'm going to give it one point. If the
company is this, I'll give it two points. If I'm talking to the VP of
construction, I'll give it three points. You create some system where you need
six out of eight points to continue. It turns a lead into a marketing qualified
lead. Then they move forward and we asked them, "Do you guys have a project, do
you guys have a budget." These are things that people that have done this, it's
relatively straightforward for them. Then you move it to sales qualified leads.
Marketing hands it over to sales.
Roland Siebelink: Because now sales has talked to the clients to understand
that there is a concrete opportunity, right?
Rene Morkos: Exactly. Sales says, "Okay, we're going to take a look at this.
And we're going to look at what are the key projects that you have. What are the
key problems that you're trying to fix? Is there a real opportunity? Is there a
budget?" That's what good salespeople do. And then it moves through your
pipeline and it gets handed over to customer success. Each of these stages in
your life cycle, you have to figure out what are the entry criteria, what are
the exit criteria? What are the questions that you need to ask? Who in your
organization is responsible for that stage? And then which documents support
For example, in marketing, we have a one pager. What is Alice? Another one,
which is how does it work? In sales, for example, we've got common key
objections. Here's the stuff that the clients push back on, so here's the
answers; we've heard this before. Here's how we fixed it. Here's the case
studies about that. Each of those stages is going to have entry criteria, exit
criteria, who's responsible documents. Now you can mirror that in your sales
force and you start to get something that is relatively manageable. You're going
to have a business if you can improve what you're doing. But you need to know
what you're doing.
Roland Siebelink: You have to draw the line in the sand first to start from,
Rene Morkos: Right. These stages are how we do business. Target these
companies. These are the hundred companies we're targeting. Here's the people in
those companies we target. Here's how somebody makes it from the first stage to
the second stage. For us, for example, we've got nine stages in total; three for
marketing, three for sales, three for customer success.
Roland Siebelink: How big do you think Alice could become over the years?
Let's say 10 years in the future, January, 2032, where do you want Alice to be?
Rene Morkos: Construction's going through a major revolution.
What's happening is there's a new ecosystem that's being built and that
ecosystem is going to be based significantly on a new form of currency. That
currency is data. Knowing who's building what, when and where, and who can build
what, when, and where is going to be the name of the game in the next 10, 15
years. To answer the question, I think Alice 10 years from now will be a key
player in orchestrating the global supply chain for construction. That is the
way I see it.
Roland Siebelink: Okay. Very good. I will not press you to put numbers on
that, but I can imagine that they're going to be very high. How can people help
you realize that vision if they're listening to this podcast episode? Maybe
they’re interested in Alice. What are you looking for most? How can they help?
Rene Morkos: For us, we want to talk to people that are building
infrastructure jobs. Anybody that is involved in building jobs at one hundred
million and up in infrastructure or commercial. They should shoot me an email
[email protected]. Alternatively, look us up online. Alicetechnologies.com.
Go to [email protected]. Shoot us an email
and make the intro. I'm confident anybody seeing it will be "Wow. That's really
cool." It's only 98% of the meetings that we ask for that get accepted. People
do want to see what we've built.
Roland Siebelink: Very cool. And if somebody is listening and they know me
but not Rene yet, of course, I'm also happy to provide the introduction.
The other question I do want to finish with is talking about those entrepreneurs
that come behind you, what is the most valuable lesson you could impart on them?
Rene Morkos: The one thing that I would recommend that would be useful is
don't underestimate how many other people have solved aspects of what you're
doing. Leverage that knowledge, leverage advisors, consultants, books - there's
just a lot of information out there. Like I said, there are certain things that
are unique to your business. No one is going to figure that out. That's why you
are doing that business. What does your value add?
There's a certain stuff that's not. Pipeline, how do you think about pipelines?
What's an SDR? How do you think about marketing? How do you think about sales?
How do you commission sales? Those kinds of things, what are the metrics you
want to look for? How do you build a product? How do you manage a product? These
are things that if you pick up two or three books in any one of these subjects,
you'll be like, "There's a pattern here." Anybody that has done this has figured
out that these are the things I need to think about.
Roland Siebelink: You don't have to reinvent the wheel on everything, right?
Rene Morkos: I would not. You should not reinvent the wheel on this kind of
stuff. You got way too many other fish to fry.
Roland Siebelink: Exactly. Focus on the stuff that makes you unique. I like
how you link the two. That's the reason why you're doing this business in the
first place. That's very good.
Thank you so much for your time and your superb insights, Rene Morkos, founder
and CEO of Alice Technologies. It was a pleasure to have you.
Rene Morkos: Yeah, it was great to be here, Roland. Thanks for having me.
Roland Siebelink: Thank you, everyone.
Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders
across the world.