I made a change - Technology Solutions for the Construction Industry with Wissam Akra

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue strategies and their 10x ROI B2B growth guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint podcast. I am your host, Mark Osborne, and today I'm very excited to welcome my guest, Wissam Akra. Now I'm going to read his bio because it's really rich and I want to make sure I get it right. Wassam is the founder and CEO of Tuffleaf. They're a pioneering platform driving diversity and empowerment in the construction industry. Wassam has a passion for innovation, a deep commitment to inclusivity. He's been instrumental in reshaping the way that small and diverse businesses access opportunities and resources. And we're going to talk a little bit about what that means in the construction space. Wassam's extensive knowledge and experience gained from more than 15 years of dedicated work on construction projects has given him a really uniquely positioned space in the industry. And we're going to talk a little bit about how he's gained insights from that to pivot his business a couple of times for growth. He's a professional engineer, graduate in civil engineering, and he further honed his skills with a master's degree in construction management and an MBA. So, Wissam, welcome to the show.

Thank you, Mark. It's a pleasure to be here. Thanks for having me.

So, That was a mouthful to talk about sort of your background and expertise. Tell us a little bit about, you know, what you do there at Toughly Fit and your founding story. Like, how did you get there?

Yeah, it was an interesting path to get there. So as you mentioned, I did my master's in construction management at Columbia. I then moved to manage mega infrastructure and development projects around the country, mostly on the Eastern United States. So I managed about $1 billion on Second Avenue Subway as a resident engineer with the WSP and Parsons Brinckerhoff. I then worked on Hudson Yards, managed projects there, which was, you know, a private development. Moved to Drogados where I was managing their business development in the eastern United States for mega projects. So everything over $500 million. Was part of the team that won that $3.6 billion Hampton Roads-Bridgeton Tunnel down in Norfolk, Virginia. And I mentioned all of these to kind of highlight the red thread between all of these jobs is that we always had diversity requirements.

Okay.

When it came to minority-owned, women-owned, disadvantaged, small, veteran-owned businesses being a part of those construction teams. Now, the difference between, you know, 2010 while working on Second Avenue Subway versus 2018, '19 working on Hampton Roads was earlier on, these requirements used to be goals. So there wasn't really— there was a carrot if you meet them, but there was no stick. And a lot of times contractors, developers, construction management companies were not able to hit these goals, but there was no significant penalty along with it. However, as time went by and we saw, you know, a lot of changes at the turn of the decade making those into requirements, and if you don't meet your requirements, then you started paying fines, penalties. We saw contractors, you know, getting disqualified from projects that they won, getting kicked out of jobs. getting barred from bidding on future government projects. And at the, you know, end of the spectrum there, and this might be surprising to some people, is that construction execs ended up in prison for trying to fraud the requirements and trying to present themselves in a different way. And that was anywhere from 2 to 10 years, which I'm sure no construction executive wants to find themselves in that position. And At that time I was like, well, here's a very big problem that we are facing as a contractor. And, you know, me being in a business development position, I can see our competitors, our partners, our, you know, our joint venture partners facing the same issue. And at that time I was like, well, everyone talks about it, but no one's really doing anything to really use technology that we have at our fingertips. We use it for a lot of other You know, functions of our life, of our business, but we're not using it to solve this problem. So at that point, I was doing my MBA at Columbia. I was like, again, big problem. Whoever can figure it out is set for good financial returns. But at the same time, this is my chance to do well by doing good, because at the end of the day, I needed to have something to drive me other than like, hey, let me just create a company. And it had to have some altruistic motive. And that was toughly for me. It was kind of the intersection of those 2 things. And at the time I was like, okay, well, I'll quit my job and I'll start a company to particularly focus on this solution. And here we are 3 years later.

That's such an interesting story. And, you know, I'm sure, you know, a lot of our listeners like you and me, like, went through that business training of, you know, regulatory changes can create market opportunities, but it still sort of, you know, requires a business that can sort of understand what that opportunity is and then capture it in order to really make a market. I'm curious, so you saw the change in regulatory, you saw everyone's talking about it. I love the idea of, you know, really starting with an ideal of doing good in order to do well. How did you sort of turn, you know, a changing market environment into a real opportunity for the company and create a real value proposition around that? Because I'm sure there are other ways to, you know, sort of mitigate this risk or satisfy these requirements and be compliant. What was it, you know, that you saw as the opportunity for Tuffleaf?

Yeah, and that's a very interesting question because everyone thinks when they find an opportunity, at least first-time founders, that whatever they think is the right solution is going to be the right solution, and it very rarely is. And that's the case with us. I'd love to sit here and say, yeah, I knew this was what we're going to do from day one, but we did not. We really started selling. We understood what the problem was, which is contractors don't have access to data on diverse businesses.

Okay.

So if you don't have data on a company, how are you gonna hire them and give them millions of dollars worth of contracts if you don't know what they've done in the past? You don't know what insurance they have. You don't know if they're in the union or not, you're gonna have to go through and, you know, call hundreds or thousands of businesses and ask them a ton of questions that they're not gonna want to answer over the phone.

Right.

So that was kind of our problem statement is like, well, if we have the data, that makes everything much easier.

Sure.

We collected that data and at the time our value prop versus what's existing in the market is, you know, they, The consultants, which is basically the alternative to using Tuffleaf, is using a consultant and paying them an hourly fee to kind of find these diverse businesses for you. The consultants were doing everything manually. So your bill is going to stack up. The results are going to be lackluster because, you know, how much, how much can they really do in that period of time? Because we all know that, you know, the bidding or submitting a proposal on a construction project is very limited in duration. You know, that was our value prop is, hey, we have that data, we can provide you with that data to the general contractors that they can use to accelerate the process and find the right diverse businesses. But obviously that's not where we end, the solution that we ended up selling today.

Okay. So that's a really interesting pivot. So you started as essentially a database, an aggregation of all this information that they needed, which obviously has a great value proposition of saving tons of time, removing the need to hire a consultant that's probably overcharging, particularly in this high-pressure environment where they, you know, have to bid quickly and they have to, you know, have all of their, you know, sort of orchestrated partners lined up for the project quickly. But today, as we've been talking, you told me that today you're more of an end-to-end solution. So how did you know that that's really what the market wanted instead of just this database? Because I'm sure the database You know, there's not a lot of overhead in kind of maintaining that database. Like, that's a lot of technology solution that scales really well. End-to-end solution, yet you gotta like add some more services on top of that data, probably some more technology and, you know, get a little finer interface. How did you recognize that that was the real opportunity for growth and not think that you were just jumping to a new idea? Because a lot of time founders are You know, they're innovators and they want to, you know, focus on new ideas. And I've even, you know, worked with some startups where they have a great idea and then they get bored with it even though it's still the right idea for the market. So then they jump to something else and then they jump to something else. How did you know that was the right pivot?

Yeah, I would say 2 things. One is having hundreds of conversations with our customers.

Okay.

And 2 is asking them to put their money where their mouth is.

Okay.

And, you know, I'll tell you the first time we're doing this, it's not like we, or the first solution that we launched, it's not like we didn't talk to customers. But, you know, as a founder being from the construction industry, sometimes I felt like people are telling you what you wanna hear. And then we had, you know, tons of letters of intent signed that they're gonna pay once we build this solution. And that was kind of it the first time. And then when after we built it, obviously not all of the letters of intent very small number of letters of intent ended up being customers or else we wouldn't have had to pivot.

Sure.

The second time, you know, while we're thinking about the pivot, we went ahead and, you know, we spoke to all the customers we spoke to the first time. We went to more than 15 different conferences that have to do with construction, construction technology and solutions for, you know, compliance in construction. And we started presenting this new solution of like, okay, here's what we're thinking of doing, this end-to-end solution where the contractor, all they need to do is fill a form on Toughleaf saying, hey, this is what we're looking for. We're looking for, just as an example, an electrical company that's minority-owned that can do work in the Bronx. They need to be in the union. They need to have under 1.1 EMR rating. and a lot of other basically characteristics. And all they need to do was fill that form. And then our system is going to match these requirements with the capabilities of the diverse businesses that we've collected in our data. And then on top of that, we've built an outreach platform that will then outreach to the companies that match and let them know, hey, our client X is looking for, you know, a partner just like you. Are you interested in working with them? And if so, can you provide a bid by July 31st. And doing so now became an end-to-end solution because we're not only giving them data, we're giving them companies that are going to provide bids on their projects. And then it later developed to like, yeah, we can collect the bids ourselves so we can, you know, get you on average 3 bids per trade that you give us. And then we built on top of that a good faith effort documentation or the outreach documentation as well. But so that's number one is we went and we spoke to a lot of people. Number 2 was we asked them to put their money where their mouth is. So we're like, okay, if you're saying this is great and you'd love to see it built, you gotta pay something, even if it's, you know, $1,000, even if it's $2,000. But we want to make sure that there, you, you know, this is something that people are serious about, that they're willing to pay for, not just, you know, you're brainstorming together.

So that's really interesting. And, you know, I do a lot of study in sort of like, you know, business design and And those things. And you're obviously hitting on all of those best practices of get out of the building, go talk to the customer. And then it seems like you probably had sort of like a prototyping scenario where you had a bunch of conversations which led you to believe, oh, they don't just want the database, they want a matching and outreach solution. And so then you kind of described that as a sort of a verbal prototype. of the software that you would design and then had, you know, sort of feedback on that. Were there other kind of verbal prototypes that you discovered from those conversations that you tried out and then sort of validated that one was better than the other? Or was this one really sort of the clear winner from all the conversations that you had?

No, there were others. Like at the beginning, we were thinking of just doing the matching.

Yeah.

And, you know, let the outreach be done by the contractors.

Right.

We actually did have a couple of customers I felt very strongly about that and we tried it. But what we found was it didn't really work because, you know, we matched them with companies, but then a different person—

Yeah.

And a different email coming from a different email address. So like they can't link that, okay, this is the same thing that's going on and led to the customers not finding enough value because they're like, hey, you said this company is interested, but when we spoke to them, we never got a reply. So that's, you know, we're like, okay, or this is definitely not working. We don't want to sell something that the customers don't like. So we discontinued it. But yeah, we did try a couple of different things to end up here. And again, it's all thanks to our customers. And I'll give a shout out to, you know, the founder who actually helped me with this, and he knows himself, so I'm not gonna name him, but told me like, even if you need to ask them, hey, do you have $20 in your pocket? Give it to me now and I'll build it. Just take something. Don't build something for free. And that was honestly very, very helpful because we got a lot of ideas. But when we ask people to, you know, again, put their money where their mouth is, people change automatically. You see their change. They're like, oh, this is not just a conversation. This is actually leading somewhere.

That's right. That's super interesting. And again, really great application of, you know, best practices and business design and all that sort of agile business building. And clearly you made the right bet because, you know, as we've been talking, You know, you went from being just sort of the founding team to 10 folks to now 30 folks in the space of, you know, just 3 years. That's a lot of, you know, really accelerated growth and a lot of, you know, you're kind of creating a new market that didn't really exist before. So I'm sure that that leads to some challenges with scale. And we've talked in the past, like, How did you sort of mitigate the risk of, well, instead of it just being one person who's responsible for the marketing and the sales, now you've got some marketing dedicated folks, you've got some sales dedicated folks, they're kind of going to market potentially in different ways. How are you mitigating the maybe friction or, you know, different, you know, what's the phrase, intelligent people can disagree on the right way. And so it doesn't mean either is wrong. How do you mitigate that? How do you sort of synthesize and sort of create a business around that without it becoming too much friction?

Yeah, I mean, yeah, definitely, definitely interesting because scaling is a different challenge, right? Like one challenge is get the customers what they want. The other challenge is do it at scale so that, you know, you can get enough customers and it's always hard for especially everyone on the founding team to kind of give away responsibilities specifically when things are going well. Right? So our founding team, we had myself and someone that was managing sales and marketing and someone that was managing engineering and product. So we had to split out the sales and marketing functions and get to, you know, one new person that's managing marketing. The same thing with engineering and product. And that process, you know, was hairy at the beginning, but ended up, you know, working out. Specifically to your question of sales and marketing, we had a challenge of, okay, where do we draw the line that this is the difference between what the sales function is and what the marketing function is?

Yeah.

And how do we try to align on goals because they each have their own different goals to hit at the end of the year. And sometimes, you know, they can be somehow conflicting because marketing in our organization at least is really casting that wide net and trying to generate demand for the product. And at the same time, it's a very big educational aspect to our marketing team because what we've built is something that didn't exist in the market specifically in the construction vertical. So marketing was responsible to kind of educate the broader construction market on what is Tuffleaf, how does this work, what, you know, why does it make sense for Tuffleaf to exist?

Yeah.

And sales was more responsible for like, okay, how can I close this particular customer or this particular segment? And how can I get them to become a paying customer? So just maneuvering the space and the interactions between these 2 departments was obviously a challenge at the beginning. But then, you know, through a lot of different conversations, we now have alignment meetings every week just to make sure that we're always aligned. We're able to kind of get past that and now, you know, they're working perfectly together.

It's so smart of you to sort of recognize that there's the potential for friction and then to sort of tackle that head on. So oftentimes we see companies just sort of kind of operate them in silos.

Mhmm.

And so one of the things that we always do with companies that we work with is really encourage, like, don't necessarily have a marketing team and a sales team and even a customer success team, but we emphasize like a revenue team and they, and they have different sort of functions and roles within that revenue team, but they're all part of the same team. And just like you talked about having these like regular alignment meetings. We like to, you know, sort of build like a shared scorecard so that there's objectives around, you know, creating, you know, opportunities and leads and generating demand. And then there's other objectives around, you know, moving opportunities to the sales pipeline and even others around renewals, upsells, and referrals. But you create alignment between everyone so that they're all working on, you know, maybe different parts of the same system, but it's all the same system instead of just, well, we gave you a bunch of leads. If you didn't close them, that's your fault. Uh, and otherwise, well, all of your leads suck. And so what are you even doing over there in marketing? Whereas creating this alignment just changes the dynamic so much more and leads to a lot more success. Absolutely.

And yeah, an exact example of that is like, you know, uh, inbound leads, right? Like if we're doing Google Ads or LinkedIn Ads and marketing is really responsible for that part, and then they go over to the sales pipeline and exactly what you said, right? Like, oh, they're bad leads. No, you don't know how to close, right? So it's having that alignment, meaning we're like thinking about, okay, what kind of leads do we want? What kind of keywords are we using? And it's not just marketing coming up with these keywords, it's with the help of, you know, the revenue team, as you call it, or we call our go-to-market team, so that we're all kind of a part of this process. So it doesn't feel like, oh, if I get a, you know, an ad from Google Ads, then this is separate. No, it's all the same thing. We're all working together. To get to the same goal, which is, you know, that what comes before or after the dollar sign, right?

That's right. Well, and it's, you know, it's a business objective, not a, like a little fiefdom. Like marketing isn't just measured by the volume of leads, whatever the quality is, and sales isn't just measured by the number of deals they close, even if they're deals that are terrible that you can never renew. You have that sort of consistency and alignment across, which is so smart. So tell us about something that's on the horizon for Tuffleaf that you're excited about. I know you've got some new developments coming out.

Yeah. So one thing that, you know, our customers were consistently asking for throughout the past 6 months is the ability to track their diverse spending. And we kept on getting these requests, you know, when sales was doing demos with customers, that question always came up. Do you do diversity tracking? Same thing with marketing, you know, when we're doing— they're doing a webinar or sending out mass emails, we kept on getting those questions. So we're like, okay, let's actually start thinking about this now that we have the matching outreach, you know, working well. And we've been building a diversity tracking product with one of the largest GCs in the country, top 5 in the ENR, that is, you know, acting as our design partner. So that we can build this system that allows contractors to track their diverse spend across different geographies, across different certifications, and across different, you know, business units, and then be able to kind of aggregate them when they wish to make a presentation to the board and disaggregate them when they wish to figure out, okay, which office is performing better than the other office and try to figure out Why is that happening and how can we improve it? So that's something we've been building. We're excited to launch that very shortly. It's gonna be in this quarter, in Q3, as we're continuing to kind of work through the kinks with our design partner and producing a solution that everyone wants to see. But we're very excited about it. And so are our customers. We tried, we did kind of a preemptive Pre, like early email to say, hey, this is coming. Would you be interested to try it as a pilot? And we got great responses back.

That's great. Well, and that highlights such an interesting thing where, you know, marketing can be such a vital strategic role within the organization if it's done right. And clearly you've done a great job of building a feedback mechanism so that marketing isn't just out there you know, leading webinars and sales isn't just out there doing demos. They're listening for what's that next, what's that market intel that's gonna shape the product vision so that you can really sort of innovate and grow for what the market really wants rather than the engineers just thinking, well, we think they want this or we think they want this feature. Instead, you're using that marketing and sales function, that go-to-market function as you call it, as that intel which allows you to create the thing that they really do want and the thing they'll actually be willing to pay for, which will fuel that next stage of growth. So smart.

So smart. Yeah. And I think that's critical for any startup to do that and do it right. Like, I can't claim that we're doing it right. Maybe I'll tell you when we do this podcast in 3 years if we're doing it right or not. But I think it's very critical because that's the only way to kind of grow in a manner that makes sense for the market.

Yeah. So let's just assume that maybe someone on the podcast is actually dealing with some of these regulatory issues and looking for a solution. Give us the pitch. Why should they work with Toughleaf instead of other options out there?

All right, fun. So basically, if you're trying to find diverse businesses for your project, which, you know, at this point you understand why that's very important, working with Toughleaf basically enables you to do that in a very cost-efficient and time-efficient manner because all you need to do is provide us with your requirements for diverse businesses and then our platform is gonna match those with diverse businesses that make sense for you and then outreach for them to get you on average 3 bids per trade. So you're not only getting— you're not only meeting your compliance requirements, which is why most customers start with Tuffleaf, but the reason why they expand and they become enterprise customers is because they see that that allows them to win more business themselves. So we— they start thinking of us as a compliance tool and then they start thinking of us as a business development tool. And that can be highlighted, you know, with one of our customer structural technologies. they wanted to go into the Seattle market and they tried to do so without Tuffleaf, but they were way more successful with Tuffleaf because we were able to give them a full read of the market, find them partners that can fulfill that 30% compliance requirement in a cost-efficient manner. Because if you're only getting one bid from a diverse subcontractor or a small subcontractor, then you're going to have to take that bid so you can comply, right? Even if it's—

That's right.

50% more expensive. Whereas if I'm giving you 3 different bidders, and 3 different proposals, then, you know, you're going to find one that's more expensive and one that's, you know, exactly what you thought and maybe one that's cheaper because creating a competition will give you optionality and then you can build your team in a way that makes sense for you so you can win that project. And once customers start seeing that, that's when they really understand the value of Duff Legal. Like this company, we can help you really win more projects through compliance because you're getting any bid that's out there in the market, whereas your competitor is not.

That's great. And what's the old phrase? From quantity comes quality. When you have those options, that's when you really have the ability to make the smartest decisions. Whereas if you only got one option, that's kind of— you can't be smart. You just have to do what you got. This has been an awesome conversation, Wissam. I really enjoyed the time to catch up. We could talk all day, but I got to be mindful of your time. How can folks get in touch with you?

They can email us at info@toughleaf.com. If it's specifically sales, they can email Neha directly, our head of sales. Her email is nehah@toughleaf.com. You can go through our website, take a look, schedule a demo directly with us at toughleaf.com as well.

Awesome. Thanks so much for the time, Wassam, and I look forward to seeing how this continues to grow.

Thank you, Mark. Really enjoyed the conversation and really, you know, appreciate you having us on your podcast.

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