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How GreenLite Validated an Outcome-Based Business Model Before Building the Product

Most construction tech companies die building workflow software for buyers who explicitly don’t want workflow software. James Gallagher spent six months discovering who would actually pay to solve construction permitting—and what they’d pay for.

In a recent episode of BUILDERS, James Gallagher, CEO and Co-Founder of GreenLite, explained how his fifth startup found product-market fit by rejecting the SaaS playbook entirely. The insight: when customers say “please for the love of God, don’t build me another workflow product,” believe them.

Why Architects Were Heavy Users But Wrong Customers

GreenLite launched in July 2022 targeting the construction permitting bottleneck affecting 15 million annual permits in the United States. James and his co-founder Ben spent six months interviewing both sides of the transaction: applicants submitting plans and city agencies reviewing them.

Architects and engineering firms became their heaviest early users. They spent the most time in the platform, gave the most detailed feedback, and expressed genuine enthusiasm for the product. When James pitched a CTO at a major architecture firm, the meeting went exceptionally well.

“I was super excited. He said, yeah, this is great. I was like, all right, our first customer,” James recalls. Then came the critical qualifier: “He’s like, I just need to talk to my client, my customer.”

The two-part sale dynamic killed the deal structure. Architects execute on behalf of owner-developers who control the budget. Even when architects loved the product and wanted to use it, they couldn’t sign contracts independently. This meant longer sales cycles, smaller contract values, and dependency on a party that didn’t directly experience the product value.

James made the call by November 2022: architects were users, not buyers.

State and Local Government Sales Would Have Killed Validation Velocity

City building departments represented the other obvious customer. These agencies struggled with backlogs, outdated technology, and frustrated constituents. They knew they needed better infrastructure.

But they also understood their constraints. During customer discovery conversations in Fort Worth and Miami-Dade County, city officials told James directly: “We’ve got these crazy procurement cycles. It’s going to be really tough for you to build a product for us and then kind of go through procurement.”

State and local education and government sales—what the industry calls “sled”—demands specialized expertise. Procurement processes stretch 12+ months. Budgets get allocated in annual cycles. Security reviews require extensive documentation. For an early-stage company needing to validate assumptions quickly, these timelines are incompatible with learning velocity.

James treated this feedback as strategic guidance rather than rejection: “Selling to cities was sort of like maybe eventually, but not initially.”

Finding Economic Buyers by Mapping Financial Pain

With architects requiring client approval and cities requiring procurement patience, James reframed the ICP question: “Who feels the most pain from construction permitting delays?”

The answer clarified when he followed the money. “The people carrying the land, the people carrying the construction loans, the people who are waiting to drive revenue through whatever they’re constructing, whether it’s selling a home or opening a business or renting space commercially, those are the people that feel it.”

Owner-developers—particularly enterprise retailers and quick-service restaurants—carry the financial burden of permitting delays.

Every month waiting for permits means:

• Continued land acquisition costs or lease payments on non-revenue-generating property
• Interest on construction loans without corresponding project progress
• Delayed store openings that miss planned revenue targets
• Compressed construction timelines that increase labor costs

These companies also fit GreenLite’s volume thesis. They needed hundreds of permits annually for standardized store formats: the same kitchen layout, the same electrical systems, the same HVAC specifications, replicated across different jurisdictions.

James identified the specific title: chief development officer. “Generally speaking the real estate search process is treated separately from the kind of construction and development process at these companies. But it all sort of reports into the chief development officer.”

Cold Email That Surfaced Non-Obvious Critical Path Blockers

GreenLite’s outbound motion targeted CDOs at major retail chains and QSR brands with a single-line pain hypothesis: “Are you missing your openings due to permitting?”

This question worked because it surfaced a critical path blocker that store rollout teams owned directly but rarely discussed externally. Most retail development conversations focus on site selection strategy, lease negotiations, or construction costs. Permitting gets treated as a given—an unavoidable delay baked into project timelines.

The response rate validated the acute pain. “They respond back, yeah, what do you got? That’s kind of magic the first couple times that happened, and that’s how it all started,” James says.

The effectiveness came from specificity. The question didn’t ask about “permitting challenges” or “regulatory obstacles”—abstract problems that could mean anything. It connected permitting delays directly to missed store opening dates, a metric CDOs report to their CEOs and boards.

What Customers Explicitly Rejected: Another System to Integrate

By late 2022, GreenLite had ICP clarity and strong inbound interest. But they still needed to validate what product these buyers would actually purchase.

James started showing prospects workflow software—tools to manage permitting processes more efficiently, with integration capabilities to connect with existing ERPs and construction management platforms.

The pushback was immediate and unambiguous. “What I heard from my customer early on was, please for the love of God, don’t build me another workflow product or another system of record. It’s got to match this, it’s got to match that, it’s got to connect API connections. You’re giving me a headache. Like, I don’t want that.”

This feedback revealed why construction and AEC had proven resistant to software adoption. These buyers already used multiple systems: Autodesk for design, Procore for construction management, various ERPs for financial operations. Each new tool created integration overhead, required user training, and added another system to maintain.

The insight shifted GreenLite’s entire product strategy. “We focused on delivering outcomes for customers and the outcome they cared about was I want a faster, more predictable, more transparent permit.”

Customers didn’t want better tools to manage permitting internally. They wanted someone else to deliver finished permits while they focused on store rollouts.

Validating Business Viability Before Product Sophistication

The outcome-based model changed GreenLite’s build sequence entirely. Instead of spending 18 months developing comprehensive workflow software before testing willingness to pay, they could validate the business model immediately.

James describes GreenLite’s platform as three components: regulatory permissions to operate as private plan reviewers, licensed architects and engineers distributed across the country, and software to augment their review work.

The sophisticated AI capabilities came later. “The business was super viable well before the product was, you know, even way back like early 2023. And that really was a reflection of just sort of listening to the customer.”

This sequencing proved critical for capital efficiency. GreenLite could sign contracts and generate revenue while the product team built AI and machine learning infrastructure in parallel. The licensed professionals delivered quality outcomes manually, and software automation improved unit economics over time without blocking go-to-market.

The model also solved the field work problem inherent to construction software. “It’s a unique industry. There’s a lot of field work. There’s a lot of not being behind a desk. It’s not like financial services or fintech,” James explains. Construction teams don’t want to spend time in systems—they want problems solved.

Capitalizing on Disaster-Driven Regulatory Expansion

When GreenLite launched, Florida was the only state permitting private construction plan review. This privatization model—where licensed private providers review plans and issue permits instead of city building departments—had existed in Florida but represented a single-state market.

Within two years, the regulatory landscape transformed. “In the last couple of years, nine states have passed laws that mimic Florida’s and are even stronger than Florida’s. Texas, Tennessee, California, Georgia, Virginia, D.C.,” James says.

The catalyst wasn’t startup lobbying—it was natural disaster reconstruction. “When you have large swaths of a state that are destroyed by natural disaster, you know, every couple of years, be it wildfires, earthquakes or hurricanes, you know, think about what that does to the system of plan review, of permitting,” James explains.

When hurricanes destroy 10,000 structures in Florida’s Gulf Coast, every developer’s existing project gets compounded with reconstruction demand. Permitting timelines that previously took months stretch to years. California faces similar dynamics with wildfire reconstruction.

The second driver was talent shortage in city building departments. “The finite talent gravitates toward the private sector anyway because you can get paid three or four times as much than working for a city,” James notes. Cities increasingly lack the licensed structural engineers, mechanical engineers, and architects needed to review complex commercial projects.

States passed privatization legislation because cities couldn’t fulfill their civic service obligations without private sector capacity. GreenLite positioned itself to scale as each new state opened, rather than fighting to change existing regulations.

Platform Shift from Vertical SaaS to Vertical AI

James sees GreenLite’s journey as coinciding with a broader platform transition in B2B software. “This has all coincided with this platform shift from your traditional vertical SaaS workflow software to AI. And you know, you could say vertical AI is sort of the term du jour.”

The construction industry’s resistance to workflow tools became a competitive advantage. GreenLite could build AI-native infrastructure from inception rather than retrofitting machine learning onto legacy workflow software.

“We started to chip away at how to make that more efficient, more repeatable, more data driven, how to capture and develop data and leverage a knowledge graph to do that with agents,” James explains.

The AI strategy focuses on augmenting licensed professionals rather than replacing them. “Our goal is not to automate away claims adjusters, it’s to empower them,” James says, describing how the platform reduces cognitive load for expert plan reviewers.

The outcome-based pricing model also aligned perfectly with AI economics. As machine learning improved review efficiency, unit economics improved while maintaining consistent pricing to customers. The value capture came from operational leverage, not from charging customers to use better software tools.

Private Sector Infrastructure at Scale

James believes the private sector will review plans and issue permits for the vast majority of 15 million annual U.S. permits by 2030. “We want to be the best private sector, you know, reviewer or permitter in the country for sure. And that means hundreds of thousands, if not millions of permits processed by Greenlight every year.”

This vision extends beyond software. Faster, more predictable permitting unlocks housing development constrained by approval bottlenecks. It enables electrical grid capacity expansion needed for data center growth. It accelerates clean energy infrastructure currently stalled in regulatory review.

For B2B founders in industries resistant to software adoption, GreenLite’s path offers a replicable framework: spend six months testing who feels pain acutely enough to pay, validate what outcome they’ll purchase rather than what tool they’ll use, and build business viability before product sophistication. Sometimes the best go-to-market strategy is selling exactly what customers ask for—even when that means rejecting the SaaS playbook entirely.