The following interview is a conversation we had with Marc Minor, CEO & Co-Founder of Higharc, on our podcast Category Visionaries. You can view the full episode here: $80 Million Raised to Build the Home Building Cloud Category
Brett
Welcome to category visionaries, the show dedicated to exploring exciting visions for the future from the founders who are on the front lines building it. In each episode, we’ll speak with a visionary Founder who’s building a new category or reimagining an existing one. We’ll learn about the problem they solve, how their technology works, and unpack their vision for the future. I’m your host, Brett Stapper, CEO of Front Lines Media. Now let’s dive right into today’s episode. Hey everyone, and welcome back to category visionaries. Today we’re speaking with Mark Miner, CEO and Co-Founder of Higharc, a home building cloud platform that’s raised over 80 million in funding. Mark, welcome to the show.
Marc Minor
Hey, thanks a ton for having me.
Brett
No problem. Super excited for this conversation. Let’s go ahead and jump right in. Talk to us about what you’re building today.
Marc Minor
So Higharc, a web based platform for homebuilders. We help them design houses in three d and then we help them take the data from those houses and do some amazing things for their business, like estimating all the parts and pieces that are needed, giving their homebuyers a full 3d sales platform so you can configure a house, kind of like a car. And then we actually produce the blueprints that are used in the field to build the house. And the reason we do all those things is to help home builders move a whole lot faster and be a lot more agile and long term, our goal is to help bring the actual cost down for houses and the quality up.
Brett
Trey, take us back to the founding of the company. What is the backstory?
Marc Minor
So its an interesting one. There are four co-founders, but one of them I started the company out of my own kind of deep sense of pain and feeling of being lost. When I was starting my own home build project, I was working in 3d printing at the time. And 3d printing is part of a broader world known as digital manufacturing. This idea that you can kind of have a, they call it a digital thread, a kind of direct connection from a data and sort of software perspective, from the design and specification of a part in a product all the way down through the manufacturing and distribution of it. And that kind of connectedness, that digital connectedness creates the capability to make better choices further upstream, be a lot more agile.
Marc Minor
So anyway, thats the world I was living in, 3d printing and digital manufacturing. I went to build a house here in North Carolina with my wife. We were looking at land, trying to figure out like, should we buy this land? What can we build on it. Is it worth it? What would it cost? And the mindset we brought to that experience was like a shopping mindset. It’s like I want to know if it’s worth it for me to buy this land. And so I want to look at different options of what I could build on it. I want to know what they would cost and I want to have a sense of confidence in what I’m going to get when it’s all done. The problem is in home building, there’s no really quick path to solve those problems.
Marc Minor
So we ended up spending, I don’t know, 15 or 20 grand, kind of like just trying to figure out what can we build here before we bailed on buying the land. And that was a really formative experience for me. It really clicked that we could take a lot of whats happening in digital manufacturing from a software enablement perspective and we could apply that over to homebuilding to solve these kinds of problems for homebuyers as well as for home builders. So thats where it got started. I was really fortunate to be able to raise capital from a range of outstanding vc’s. Most notably, well, theres a whole bunch of great folks. Pillar led the round and as part of that I brought on three other co-founders.
Marc Minor
What’s interesting about the co-founders that I brought on was that I didn’t know any of them before we started the company. I actually went out and recruited each of them based on sort of what I thought we needed in the business.
Brett
That’s interesting. I don’t hear that very often. It’s normally two people kind of coming together and forming it. So what are the titles or responsibilities, I guess, of those other three co-founders?
Marc Minor
Yeah, I mean the cool thing is they’re all three still here, you know, six or seven years later. And they’re amazing. I feel very fortunate. They’re all better than me actually, which is pretty cool. And so the original thought was, hey, were going to do something very hard here. Were going to build a CAD system on the web. CAD is computed design, right? So AutoCAD, just to give you a little bit of background here, 90% or more of all houses are built and designed using AutoCAD. Autocad is 41 years old. Its one of the older pieces of software out there. Obviously been maintained and updated over the years, but we haven’t really done things very differently over the last several decades in home building. Meanwhile, the world of web based software has moved forward a whole heck of a lot, as you know.
Marc Minor
And so how might we solve the problem of design specification, sales, marketing, home building from a first principles perspective, knowing what we know today about 3d graphics on the web and about design systems, right, homes are essentially collections of repeated patterns. And so to do that, to sort of solve that problem, we need to build a CAD system for the web. We replace autocad. Theres a handful of people in the world who can really do that effectively. And so I needed someone on the engineering side who really deeply understands CAD systems, especially sort of parameterized CAD systems, right. And especially who can do that on the web. Those two things usually don’t come together. And Peter Boyer, our CTO, fills that role. He was at Autodesk prior to joining me.
Marc Minor
Hes been obsessed with web based computer design for a long time, and he happens to be based in Durham as well, actually North Carolina, where im at. Michael Bergen, who is our vp of product right now, came on to lead design automation. So his background is in architecture. He worked at Autodesk as well in the office of the CTO, where he was focused on generative design. Generative design is the application of basically algorithms to the problem of goal driven design, where you express your goals for a part or a product, and then the design kind of is like a solver, and it solves the design of the part based on goals and constraints. It’s a really neat approach to design versus sort of the old way of doing it, where you design by hand.
Marc Minor
So Michael was kind of steeped in that world of the, like the digital thread, but has an architecture background. And I actually found him through his graduate degree work. I read his paper from his graduate work at Berkeley, which was all about mass customized housing, and it felt very much like simpatico with my mindset about it. And sure enough, like, zoom out. Seven years later, we’re besties. And then Thomas came out of video gaming. So what video games have done really well is procedurally generated content, right. They have a really great capability to kind of randomize environments and generate these incredible, believable worlds. And we needed to bring some of that into our business. And so that’s what Thomas brings. He had been aaa video gaming. So it’s a pretty neat combination of different disciplines that went into making Higharc what it is today.
Brett
That’s an amazing team. Let’s talk about your market category, then. So I had introduced you as the home building cloud. Is the idea that’s the category, or what is the market category that you’re in?
Marc Minor
Yeah. Right. I think just as unique as the product that we’re building is the kind of go to market that we’ve taken. And that is kind of roll ups type approach right to the category. Whereas today there, you know, I don’t know, dozen different pieces of software that are used, especially manual kind of tools like Excel, that kind of thing. There’s a handful of point solutions and sort of maybe the most meaningful large player in the market of design software is Autodesk, who produces AutocaD. As I mentioned, 90% or more of all houses are designed on autocad and home building. AutoCAD is, you know, it’s a horizontal solution. In home building, it’s focused on the design side, so it’s not full stack.
Marc Minor
What we’ve done is we’ve taken the bits and bobs, the various point solutions and rolled them up into a new category we’re calling the home building cloud. And it’s not dissimilar to other vertical SaaS type businesses that have taken a similar playbook. I would say we’re slightly evolved version of the old school vertical SaaS, meaning we didn’t approach the problem from a let’s leverage pre existing tools and techniques and just verticalize them. So project management, accounting, that kind of thing, that’s how you would typically see a vertical SaaS company begin in a given industry. We actually took a different route of building software that’s fundamentally unique to the industry with this computer aided design software, and that creates this kind of unique dataset that only we can maintain.
Marc Minor
Nobody has data about houses the way that we do, and then we can take that data and we can add all kinds of services around it. And so I think that it’s a slightly different path to maybe the most interesting comparison would be like a toast in that or square with spike to pay. I don’t know what they call them. Point of sale as a kind of wedge. In our case, computer design is that kind of wedge. Yeah. So it’s hard to build, takes some time, but it’s very defensible and it allows for us to have multi decade long relationships with our customers.
Brett
What are you doing in the market to make customers have demand for a home building cloud solution?
Marc Minor
So I don’t think you ever want to be in a position where you have to drum up demand, like you don’t want to be a vitamin. And so the benefit that we have with our go to market is that theres already such deep pain for the sort of disconnectedness of how home building processes work. Right. Whats unique about homes is in the US is they are pretty productized. Like the customers we serve build more than 50 houses per year. So they’re building communities of houses that vary in certain ways, but they’re kind of standardized, just like products in other industries. But because they have very kind of old software to manage the design, Autocad, plus a range of other things, they’re stuck in a constant loop of kind of fire drilling, trying to connect the parts of their business.
Marc Minor
And that kind of disconnectedness creates a lot of pain, a lot of waste that we can step into with a pretty exciting value prop. I think the challenge that we face isn’t so much creating demand or awareness of that pain. It’s creating the confidence that we can meet it, you know, and solve for it.
Brett
How are you building that trust and building that confidence with customers?
Marc Minor
Whenever you are a kind of system of record, you know, or like a mission critical type tool, the path is always going to be through successful customers. And so we’ve invested pretty heavily in implementation, onboarding, and support, and in the sort of creating alignment between our own business model and our customers success. And that means its going to take longer than it would be if were kind of PLG style motion where we could draw up demand and through ad sales or whatever. But its much more efficient for us in the long run. And its also going to be much harder for the business because its more organic. And the other thing ill mention is home building is quite local. Everyone kind of knows each other.
Marc Minor
And so if you think of home building in the US as a kind of network graph and there are these nodes of trust, you know, we want to tap those nodes of trust and then leverage success with those nodes to reach the other parts of the market.
Brett
What else, from a marketing perspective, are you doing not just to build trust, but just to build the brand, to acquire customers? You know, what’s the marketing strategy look like at a high level?
Marc Minor
Jeff, it’s been fun for us to explore top of funnel activities. We are enterprise SaaS in our average contract value is $300,000. So we’re not selling cheap software, we’re not selling seat based software. That said, homebuilders don’t have the kind of, they don’t behave the way like the typical enterprise customer behaves for software sales. Do you know what I mean? You don’t reach them in the same way. They’re very boots on the ground type people, type companies. And so it presents challenges and some interesting opportunities for creativity in marketing. Certainly marketing being tied at the hip to sales is really crucial. So we’ve definitely invested primarily in extremely strong and strategic AE’s. We don’t have any BDRs.
Marc Minor
We’ve invested in a kind of cross selling or excuse me, like a multi Persona type sales cycle where we have solutions because we have actually people from the industry on our team, right? Like often they come from customers of ours, which is interesting, or prospects of ours. They have a history there. And so marketing team’s job then is really to enable them and to give customer prospects a reason to spend some time with us because they’re just so busy. The challenge is typically getting in the room. And so one of the things we’re really excited about right now is kind of ABM approach. Like a pretty aggressive, might be the wrong terminal if you think of like account based marketing coupled with extreme kind of product personalization. You know, that’s the kind of thing we’re doing right now.
Marc Minor
One of the neat things about our software is that we can take your plans from 2d into three d and show you a kind of configurator online real fast. So we’re using that to our advantage. What we did was we actually put one of our implementation people onto the marketing team. And I say the marketing team, it’s two people, you know, just to be clear, they’re amazing. Most three people anyway, we have an implementer on that team and what they do is let’s say we’ve got 15 prospects who we think would be great customers, right? We’re very focused on ICP. Sort of narrowly identified ICP right now. Again, it’s all about making successful customers and using that to create a flywheel. So customer product fit is like everything.
Marc Minor
Anyway, so let’s say we’ve got like 15 or 25 targets right now for this kind of campaign. We’re going to go to their website, grab a bunch of their plans that from their website and we’re going to actually like set up, we’re going to set up an accountant Higharc with their plans and then we’re actually using new right now to create a customized landing page, you know, for them so that they can encounter Higharc in the context of their own business, which is really cool. And it’s actually Persona based. So if you are consistent, we serve different parts of the value chain. We serve the person who’s responsible for designing, and we serve the person who’s responsible for selling. For example, you want to hear something different if you’re one of those two Personas.
Marc Minor
And so that’s the way we’ve set it up, and I’m really excited about it. So that’s, I think one of the more interesting things we’re doing is this kind of AVM type approach. The other thing is obviously events. I mean, that’s going to be the way that you get your boots on the ground. You have efficient use of your resources. Events are always really good for us.
Brett
What other top of funnel tactics have you tried that did not work? Wow, you can get that coffee break, by the way.
Marc Minor
Yeah, exactly.
Brett
Coffee.
Marc Minor
I looked at it and realized it’s already gone. You know, one of the neat things about our marketing team is they have tried a lot within the last. They’ve only existed for a year and a half or so. Our marketing team, maybe a year, and they’ve done a lot in that time and shows it what hasn’t worked as well as we had hoped. So cold outbound sequences don’t really work for us at all. And I suppose it’s not surprising when you look at home building the kind of boots on the ground industry that it is. We still encounter a lot of customers who have link web addresses, if you remember, at Earthlink.
Brett
Yes.
Marc Minor
And so cold outbound sequencing has not done well for us. We, that’s the big one that really, LinkedIn ads have really not been very good for us either. You know, targeting accounts through that has not been as beneficial as we expected it to be. Ads in general have not been. We haven’t figured it out yet. You know, we’re thinking about how we can retool our ad strategy, given our new ABM approach. Interestingly, direct mail worked pretty well for us, but not just any direct mail. We did this, like, video mailer. We actually screen built into the mailer. And so when they open it starts playing a case study. And again, this content, like the format, matters less than the content in many ways. And it’s like, if you can’t get great case studies and customer references, then what’s the point, you know?
Marc Minor
But that wasn’t it. We spent like, I don’t know, $30 to $50 per unit and you send 50 of them out. If you get one deal out of that, it’s worth it, you know, which, we got a bunch. So I think, yeah, email has been probably the least useful tool for us. Followed by ads. Yeah.
Brett
What about building out that marketing team? So I know you said it’s only three people today, but what have you learned about building marketing teams? I know that’s something that a lot of the founders I work with, they struggle. It’s very hard to build a marketing team. What’s that journey been like for you, and what have you learned to.
Marc Minor
There’s a lot to say here. I was a marketing guy before I started this company. I built marketing teams and product teams at two other startups prior to this, both printing companies. And then before that, I led marketing teams in the agency world. And so, I mean, let’s use marketing with a broad brush, and so I should know what I’m doing, you know, but I failed a lot. And first of all, one of the main things I learned from my own experience prior to starting Higharc was that the marketing’s usefulness and form really is different depending on the industry you’re focused on and your go to market. So if you’re selling a deeply technical product to a professional user, and the tam is small in terms of number of users, do you know what I mean? Marketing is less critical.
Marc Minor
Actually, marketing in this case becomes sales enablement. Do you know what I mean? Obviously, if you’re more direct to consumer, or you’ve got a consumerized B2B product, then marketing becomes a lot more crucial. If you’re in a fast moving market where there’s a bunch of competitors, marketing becomes more important. If you’re sort of standing alone on the back of some serious R and D, then it’s a little less crucial. So there’s not like a one size fits all approach to building that team.
Marc Minor
And so the other lesson I would say that’s worth hearing is that chasing media is a drug that works if you know how to use it, you know, but I’ve had a lot of experience with getting tons of incredible media coverage, but weren’t prepared as a company to take advantage of all the demand that came out of it. And so even though it’s a great kind of, it feels great, you know, you should use it when you’re ready to leverage what it gives you. And so, being in a rush to get media coverage is not a very useful thing for most startups, in my opinion, unless you feel like you actually need it to try and, I don’t know, like juice the vc world or something.
Brett
Do you have an in house proms person or do you hire a pr team? How did you get that media?
Marc Minor
A little bit of both. Yeah. At my last two we had an in house pr person. We had one here. So getting to like hire, I don’t believe you should build a marketing team until you have really strong product market fit. You know, the Founder, the founding team needs to be doing that work and that’s what we did. We didn’t do it very well. To augment that we hired. The thought was we will hire very senior ics like director level people who can eventually grow to potentially be the VP or a manager, but could start as ICS. And it did okay. But for the most part I think it was probably a mistake. Like I didn’t do a great job.
Marc Minor
We hired people that were very talented but often what we needed wasn’t what they really wanted to be doing or what they were great at. So I eventually just got lucky. A guy that I used to work with at Apple came, he was just in town and we got together. He was at a company called Shop Monkey at the time and I got him to come on board and join us like a year ago as our vp of marketing and now we have a proper team. It’s, you know, we have a growth person, growth marketing. We have a customer marketing person who is a home builder by trade. Right? That was what we did prior to this. And then we have our vp of marketing who’s like a product marketing background and we’re currently in the process of hiring a partnerships person.
Marc Minor
So if that gives you some sense for the kind of business we are and strategy we have.
Brett
Yeah, it definitely does. What about fundraising? So as I mentioned there in the intro, over 80 million raised to date. What have you learned about fundraising throughout this journey?
Marc Minor
It’s a game, first of all. Like, that’s something I often tell people. I don’t mean that in a negative way. What I mean is like it’s not personal. Do you know what I mean? You have a product you’re on the market with and there’s a market for that product. Do you know what I mean? And I think it’s really beneficial for founders to really internalize that reality, you know what I mean? And so for me, the other thing I would say is lean into what you’re, lean into your strengths. You know, every startup should not go and pitch the same way or with the same idea of what’s going to move the needle for the VC’s that they’re targeting.
Marc Minor
My perspective generally is that like you’re looking for VC Founder Fitzhen, you know, and so if like, and that’s good for the business obviously in the long run. And so if you can kind of get a sense for what kind of business you are, like in our case, we’re very much a kind of category defining visionary type business, right, or deep tech, whatever. And so VC’s that are very metrics oriented, very SaaS oriented are not going to be a great fit for us in the early stages because of the square pay ground whole thing. We’re looking for folks who can have a different risk profile, like the shape of our business, like businesses trying to focus on hard problems and hard industries. Understand the upside to that, you know what I mean?
Brett
Yeah, makes sense. What about the fact that you’re not in Silicon Valley? So I think after Covid post Covid, it’s changed a little bit. But there’s still, I think, a belief of some people that Silicon Valley is where companies are built. You’re building in North Carolina. Let’s talk about that and how you navigated that.
Marc Minor
Yeah, well, first of all, we’re a remote company. And so even though I’m based in North Carolina, we have, we’re about 100 people today and we’ve got people all over the United States and we even have people abroad. We’ve got a team of like twelve in Brazil, for example. And so I think that brings with it some very unique challenges, the most important of which is how you scale your product and engineering velocity and effectiveness. And I would even broaden that to include your kind of go to market. Your sort of cross functional executional capability becomes more difficult as you grow when you are a remote business. And it’s a real challenge that we have faced. And so I just want to go back to your question you asked about Silicon Valley versus building somewhere else.
Marc Minor
There is also something there, but I think in many ways there’s two parts. The first part is like building in person, right. Regardless of where you are remote versus in person, theres some unique benefits and challenges to being remote. And then theres the building a company in the valley, for example, in the Bay Area versus anywhere else. And theres no chance that I would’ve built this company if I hadn’t already worked in the valley, had some startup successes, and then networked in, I would give it exactly 0% chance of it happening. And so I think thats a really important point. You know, I’m very hopeful that SF can continue to export its ecosystem to other places. I think it’s going to be good for the US if that can happen. Certainly, like Boston and New York, have an ecosystem.
Marc Minor
It’s hard to compare it with Bay Area. You know, from a staffing perspective, mainly, remote has helped a ton. Remote has unlocked a lot. But again, if I were starting a company today and I didn’t have any background working in startups and valley, I don’t think this would happen.
Brett
That’s a really important caveat for people to understand that you did have that experience, you know, working with Silicon Valley companies, and, you know, being in Silicon Valley, to really build that experience first, that’s incredibly important to point out.
Marc Minor
Yeah, and I knew that too. Going into it, like, I realized I am fortunate that I’m networked and I’m a known quantity, so I can get out there and raise capital.
Brett
Let’s go back to the origin story, just to wrap up the conversation here. So you and your wife are looking for a home. Is there a happy ending there? Do you guys find the land, build the dream home?
Marc Minor
Yeah, I’m in it. You can see it here as part of it. Is the backside nice?
Brett
Look at those woods.
Marc Minor
Yeah, man. So what we ended up doing was buying 50 acres with my brother and a bunch of friends. We subdivided it was wooded. We subdivided it, we built a little community, we have a little trail. And that’s one of the, in the long run, the reason we’re in business at higher is to actually improve the quality and connectedness of communities. That’s what it’s about. We’re trying to use technology to do that. We’re taking an economic path to do it. So by empowering builders, the folks who are responsible for these communities and houses, as a starting point, we want to be able to have a seat at the table so that over time, we can influence and change the communities themselves and improve the quality and the cost of the places that we live in. That’s the reason why we’re in business. Really?
Brett
Wait, that’s epic. I have to ask about that. You guys have 50 acres. How many homes did you put on the 50 acres?
Marc Minor
So there’s nine lots right now. I think, like, six homes got built. Oh, yeah.
Brett
That’s no epic. That’s awesome.
Marc Minor
It’s pretty great. And our kids are all running around playing with each other. We have a pond. You know, we have a bunch of animals.
Brett
Nice.
Marc Minor
Yeah. The whole goal is to have a kind of connectedness to place as well as to, like, the people that you want to have in your lives. You know, like, living close to each other matters. And for us, personally, in our family, being close to our food was also really important. That’s why we raise a bunch of animals. A bunch of food, that kind of thing.
Brett
That’s my wife’s, like, dream. We just had our kids. So we’re having these, like, active talks now about, you know, leaving downtown San Francisco and having that kind of life. So I hope she’s not eavesdropping on this conversation. Otherwise.
Marc Minor
Sooner than I want. That’s what happened to us, by the way. We were in Redwood City, and we had our baby, and were like, wait a second. Our family’s back east. That’s the only difference. We’re like, what are we doing here?
Brett
Yeah, makes sense. All right, final question before we wrap here. Let’s zoom out three to five years. Maybe we can go ten, however long you want to go. You know? What is that? Big picture vision?
Marc Minor
Yeah. Well, from a, like, Higharc success perspective, every house that is built from scratch or that is remodeled, good. Use hire. That’s where we’re going. And it’s very practical because that reality already exists. Autocad represents 90% or more of all of those. So I think that’s the first thing I would say is every home should, whether it’s new construction or remodeling or renovation. Right. Should go through hire. I think from a outcomes perspective, if you could go around to different states in the US or in a country that we’re operating in outside of the US, and you go neighborhood to neighborhood, and it feels different, and it feels there’s a sense of belonging. You know, that is a sign of tools like Higharc being successful. Right.
Marc Minor
If you have a sense of, like, utter sameness, whether you’re in Arizona or Massachusetts, then that’s us not doing what we hope to do.
Brett
Amazing. Love the vision. Really love this conversation. Before we wrap up, if there’s any founders listening and that want to follow along, where should we send them?
Marc Minor
Yeah, I mean, you can definitely check out me on Twitter or LinkedIn. Mark Minor. I would love for you to email me as well. I really enjoy talking to other founders. I gain a lot from it. So yeah. marcminor@higharc.com
Brett
With a name like that, I feel like you’re just destined to do epic shit in your life. You have to, right? Mark Meyer gets famous name people used.
Marc Minor
To make fun of me because I used to be a singer, and they’d be like, oh, major minor. I love it.
Brett
This episode of category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit frontlines.io podcast. And for the latest episode, search for category visionaries on your podcast platform of choice. Thanks for listening, and we’ll catch you on the next episode.
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