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The $5M Lesson: Why Giving Away Your Product for Free Is Your Biggest Mistake

In a recent episode of Category Visionaries, Eric Helitzer, CEO and Founder of SubBase, a construction materials management platform that’s raised $5 million, shared a confession that most founders don’t want to admit: “That was probably one of the biggest mistakes I made. We were giving the software away for free because, and we didn’t know how much value we’re providing yet.”

That mistake cost him a year. But more importantly, it taught him one of the most valuable lessons in B2B go-to-market strategy.

The Year-Long Pricing Mistake

Eric’s journey into construction tech came from 15 years of industry experience. He’d seen the inefficiencies firsthand, built internal software at his previous company, and knew he was solving a real problem. When he founded SubBase in 2022, he had confidence in the product. What he didn’t have was clarity on who would actually pay for it.

“We were trying to build fast, and to be honest with you, we gave it away for free for way too long,” Eric explains. The turning point came when they finally started charging. That’s when reality hit: “We got into a pigeonhole where we didn’t understand who the real ICP was and we’re getting false positives. People would say they’d use it, they wouldn’t pay for it.”

The companies that did pay? Those were the ones making phone calls when features weren’t working. Those were the ones seeing real value. The free users? Radio silence.

For founders building in construction tech or any relationship-heavy industry, Eric’s advice is unequivocal: “You need to start charging much sooner because that’s when you’re really going to find out if you a, are solving a problem, but b figure out who your right ICP would be.”

Selling to an Industry That Doesn’t Want Change

Construction companies are profitable. They’ve been running successfully for years without your software. Eric faced this reality head-on: “How do you get them to understand, right, this is again, the education and peeling back the onion and understanding the industry so well that we’re able to show them that they could be more profitable.”

The software stack these companies use? “Email, text and excel. That is what they’re using,” Eric says. These aren’t unsophisticated buyers—they’re running multimillion-dollar operations efficiently. They just don’t see the need for change.

Eric’s approach wasn’t to disrupt their workflow violently. Instead: “We don’t flip it on its back and disrupt it so abruptly. We wedge into their workflow and we layer on the pieces of software that allow them to streamline and organize themselves.”

But wedging in requires more than a good product. It requires understanding relationship dynamics. “It is such a heavy relationship based business that if you don’t start by understanding that first, and no matter what product you’re building, you’re not going to have the success upfront and it’s going to take you a lot longer to figure that out.”

The Multi-Funnel Go-to-Market Reality

SubBase’s current go-to-market approach spans four distinct channels, each requiring different strategies. Word-of-mouth and network referrals drive significant traction—the two-sided network effect between subcontractors and vendors creates natural advocacy. Outbound works because Eric’s team speaks the language of contractors. Marketing focuses on education rather than hard selling. And events provide relationship-building opportunities.

The education piece is critical. “People in construction don’t just want to be sold software. They want to be educated. They want to understand why this piece of software that didn’t exist a couple years ago is going to beneficial now,” Eric notes.

This educational approach extends to their thought leadership strategy. Eric leverages his industry background actively: “I come from the industry. I love speaking about what we’re doing. So let’s call it that thought leadership approach has been very helpful and it’s really about getting ourselves out to educate the masses that have a problem in construction material procurement.”

The On-Site Demo Strategy

In the early days, Eric employed a relentless approach to customer acquisition. “We would only do on site demos. Like, there was no virtual. It’s, I’m coming to your office and I’m going to show you the system.”

This wasn’t just about showing off features. It was about commitment. “I almost let myself not leave their offices unless I had a commitment.”

But commitment alone wasn’t enough. Eric had to figure out pricing through experimentation: “We actually started testing pricing by sending out contracts to see, hey, is this worth it? Is it worth this amount of dollars? And for the most part, when people signed fast, we knew that obviously it was worthwhile. But we also second guessed ourselves to understand, are we underpricing ourselves?”

This trial-and-error approach eventually led to clarity on value proposition. But Eric emphasizes it took time: “It was very much a question mark half the time until we got into a flux where we can actually show the value and really be able to show what the ROI was when they came into sub base. And that took over a year for us to figure out.”

Why Construction Tech Is Different

The venture capital world is pouring into construction tech, attracted by trillion-dollar market opportunities. But Eric warns that many investors get it wrong. “A lot of them are coming without prior knowledge, and they’re trying to, in my opinion, and I’ve talked to a lot of investors, they’re trying to take what other industries have done and bake it into construction, and that’s not the way it is.”

The fundamental difference? “Every project in construction is unique. Every process in construction could be tailored to a specific company because the projects are so unique.”

This means there’s no playbook. No cookie-cutter approach. “Construction isn’t a playbook,” Eric emphasizes.

The complexity extends to every level of the industry. “A single building that gets built has so many different pieces and so many different parts and so many different people. It’s all custom. Every building that is built in the world is custom.”

This complexity has historically deterred technology adoption and investor interest. But it also creates massive opportunities for founders who truly understand the industry.

The Catalyst Moments

While construction has been slow to adopt technology, external forces are accelerating change. Eric points to COVID as a major catalyst: “Covid really boosted the awareness of material price changes. Most people that were buying lumber pre Covid didn’t really care that pricing was fluctuating a little up and down because it didn’t really matter as much.”

Post-COVID, the game changed entirely. “You’re in a world where vendors are not holding their material pricing. You have commodity fluctuations that have gone down a little bit that are so crazy that most people needed to gain a hold of that.”

SubBase entered the market at exactly the right moment to solve this pain point. But timing alone doesn’t build a company—execution does.

Building Toward Financial Infrastructure

Looking three to five years ahead, Eric’s vision extends beyond workflow digitization into financial infrastructure. “We want to move heavier into the financial piece of material procurement, we want to go deeper into the integrations with our vendors and we want to go deeper into the integrations with our own customers.”

The goal is seamless integration across the entire ecosystem: “I can come into SubBase and not just onboard within minutes, but be able to really loop in my entire ecosystem from the precon planning phase all the way post to payments to a vendor.”

And the opportunity isn’t limited to the United States. “This is a global problem that we’re solving for,” Eric says.

The Two Non-Negotiable Rules

After all the experimentation, pivots, and lessons learned, Eric distills his advice for construction tech founders into two core principles.

First: “You need to start charging much sooner because that’s when you’re really going to find out if you a, are solving a problem, but b figure out who your right ICP would be.”

Second: “Learn the relationship game in construction.”

These aren’t revolutionary insights. But they’re the kind of hard-won wisdom that only comes from experience—from making mistakes, learning from them, and adjusting course.

For founders building in construction tech, Eric’s journey offers a roadmap. Not because it’s the only way to build in this space, but because it demonstrates the realities you’ll face: customers who don’t think they need change, complex sales cycles, relationship-heavy deal-making, and the critical importance of charging early to find signal in the noise.

The construction industry is massive, fragmented, and ripe for disruption. But disruption doesn’t happen through force. It happens through understanding, relationship-building, and solving real problems for people who didn’t know they needed your solution. That’s the lesson from SubBase’s journey—and it’s one that applies far beyond construction tech.