Siddhartha Ahluwalia 0:44
Hi, this is Siddhartha Ahluwalia, your host at Neon Show and Managing Partner at Neon Fund, a fund that has invested in some of the best enterprise AI companies between US-India corridors. Today, I have one of our portfolio founders with us, Sneha and Graham. Sneha is the CEO at Merlin, Graham is the CPO at Merlin. Welcome to the Neon Show.

Graham Blake 1:05
Thank you.

Sneha Kumari 1:05
Thank you. Thank you so much, Sid, for having us. I’ve heard a lot about this show. So as I was just saying before this, I’m super excited to be here, be sharing more, long time coming. But hello, everyone, whoever is watching from whichever time zone and continent you are.

Siddhartha Ahluwalia 1:20
And you know, we are very grateful to be the first investor in Merlin and play a small role in your journey.

Sneha Kumari 1:29
Oh, absolutely. I keep telling everyone like you took a bet on us. So you will always be the most special investor for us. You took a bet on us when, you know, really like you came on board was very nascent. There was an idea and you truly, really, you know, saw the journey, saw the big picture and you’ve been with us.

Siddhartha Ahluwalia 1:50
You know, I think the journey has been amazing post-Neon. You folks were one of, you know, the best companies in the YC batch, right? And post-YC, you have the revenue, you know, the growth, the trajectory, the team that you have built. So welcome, Graham.

Graham Blake 2:05
Thank you. Thank you.

Siddhartha Ahluwalia 2:08
And so, Sneha, construction is one of the biggest industries in the world. And never the software was built for construction industry, right? Like Netsuit and Dynamics, which are the most popular software industry, they were never built for construction. Why haven’t any, you know, software built and scaled for this industry?

Sneha Kumari 2:32
Yeah. And, you know, I have to start with saying that there are a lot of software. A lot of point solutions. But we are mostly talking about, you know, end-to-end enterprise solutions. And I think I’ve said this before a lot of times, but it just feels very important for everyone to understand that every construction project is a financial project at the end of the day. Right. So what an owner, a builder cares about is end of the day, did I make money on that project or not? Right.

And that picture somehow is far from it. It’s not as simple to achieve when you have been sitting with five different point solutions and trying to, you know, get that picture live. You always, of course, then you proceed to Excel to do all of that.

So point solutions, and I think they have done really good in terms of, you know, being upbeat with what the latest has been throughout the years. But an enterprise solution really would require some domain expertise here. And I think that’s what it’s lacking.

NetSuite wasn’t built for construction, nor is their focus here. There are some like, you know, Procore was built for primarily PMing GC purposes. So again, section and construction is huge. Right. We are talking about many swim lanes. We’re talking about developers, GCs, designers, architects, subs, suppliers.

Siddhartha Ahluwalia 3:54
GCs are general contractors, right?

Sneha Kumari 3:56
Sorry. Yes. General contractors. Yes. Sorry on the acronyms. But all of these people, they all come together to build, and especially when you’re talking about commercial projects, residential, but bigger residential projects. And I think the domain and understanding is important to really hone in on what the pain point is. And that’s what we believe we are able to bring additionally to the table, but not just a strong, not just a strong tech team, but also a good domain understanding, being able to build something that I wish I had when I was running some of my projects for some of these prefab, smaller prefab companies.

They all struggle with these concepts.

Siddhartha Ahluwalia 4:39
And maybe, Graham, you can start with your background and what convinced you to join Merlin?

Graham Blake 4:44
No, for sure. So, you know, I’ve been in industrial manufacturing, but related to real estate for many, many years. So, I started in sort of interior as an interior fit out and moved into land development and a lot of multifamily, high-rise construction, mixed use schemes, residential, hospitality, healthcare.

So, you know, I came from an industry side in terms of execution, but always still with this sort of methodical manufacturing sort of systems thinking approach. You know, as I built businesses in that space, first in London originally, and then in Canada and the US, you know, scaling those contracting businesses was a priority and, you know, and the understanding is, you know, as we’re saying is that this production layer in the sector, regardless of asset class, is where the pain lives, like subcontracting, trade contractors, they own the pain, it’s thin margin, high risk, everything flows downhill to them.

And so, you know, they have an inherent need for coordination and improvement. So, I think that, you know, my background in that was certainly, you know, always kept me actively looking for support from technological solutions. I think, you know, 10 years ago, you know, mobile technology and web apps and things started to enter into the consciousness of the industry and obviously the workforce, you know, again, the younger generation at that kind of, you know, the bottom floor of that process were looking to use their apps and quite frankly, they couldn’t and, you know, so there’s a lot of challenges there, you know, with the ability of the industry to reorganize, you know, change business structures, change processes so that those guys on the ground could actually be enabled in the way they wanted to be.

Fast forward to, you know, what changed and what has changed for us is that AI is that defining differentiator, you know, the volume of data required to coordinate all those things from the light fixtures to every other aspect of the project. There’s so much volume and complexity and dependency there and quite frankly, you know, AI is the only thing that can solve for that. So, I was out there looking for companies that understood that and had the technological, you know, the sort of raw ingredients for that and was lucky enough to come across Merlin and like very happy to join that project because we seem to be connecting at a very important moment for the industry as it’s certainly sort of moving from this policing mentality and now we’re really focused on, you know, orchestrating that production layer.

Siddhartha Ahluwalia 7:20
Sneha you can share, you know, you worked in the construction industry for 10 years before starting Merlin. What were your insights that led you to start Merlin?

Sneha Kumari 7:29
Yeah, I think my perspective coming from manufacturing to construction was actually very valuable and as people who have been with me know that I started in the, you know, off-site construction, so industrialized construction side, so it was so valuable to bring my understanding from what I did in manufacturing to here where the customers were able to, you know, unlock our operational efficiencies and while manufacturing still needs a lot of work, right, construction was worse and so that was a clear, you know, that was like right there open on the table laid out for me to go solve for and then KS came in and it was like a perfect mix where I understood what the problem was and we did, we did go through our own round, our journey, right, it didn’t just happen in a day, we went through, we did some side projects, I did a lot of side projects, I pulled KS and he was going through his own exit and, you know, it’s not that we figured and we had a dream and okay, we gotta solve for the whole and, you know, the whole enterprise, it doesn’t, it wasn’t like that and that’s a good part of it, that’s a fun part of it where all of this, a lot of this came through and from the customers.

So, when I was running an ops floor for a prefab trust and panel penalization company, they had bigger problems not just on the manufacturing floor but on the financials as well and they were constantly using smart sheets and I believe Dynamics was their source of record, right, despite having Dynamics also using smart sheets and using Excel, it was a, you know, phenomenal failure for them and so seeing that and slowly we started with financials and ops only and then we said, well, it doesn’t make sense, you know, the supply chain has to bring, be brought in and that’s how the whole journey started and you’re like, well, yes, it all makes sense, three, four companies, we are seeing the same, it’s repetitive, it’s the same problems and that’s how this, the company came into being but the journey in it, a lot of organic feedback coming from our customers solidifies that the need is there, there are a lot of, there’s a lot of pain in how they’re running the business today despite being thrown at, being at the, you know, at the verge where they have a lot of softwares at it, just validates very strongly the need for what we are building.

Siddhartha Ahluwalia 9:40
And can you share more about the executive team at Merlin, the co-founders?

Sneha Kumari 9:44
Yes.

Siddhartha Ahluwalia 9:44
The broader team?

Sneha Kumari 9:45
Yes, yes.

Siddhartha Ahluwalia 9:46
And where are they based out of?

Sneha Kumari 9:47
Yes, absolutely, so I am here in California, so Southern California, Orange County is where my base is at and I’ve been here for, for some time, we were in Bay Area for BicyCase, has a Bay Area case who’s leading the entire tech and a little bit of product along with Graham is based out of Bangalore but he has his base here in Bay Area as well. Again, a little background on him, you, he has been on your podcast, I’m sure some of the viewers have already heard about him but he comes from deep tech background, he has built and sold FinTech, zero to one has been his journey for forever, him being in this whole world of corporate and, you know, doing, doing this work.

So very strong technically, I’m super blessed to have Graham join us here as leading the, you know, the product, given his experience in both tech and then Ayantika, of course, comes from deep backgrounds, early backgrounds from Rippling. So a very good mix of what we are doing here in terms of not just, not just, you know, building great tech and in the time that we have, and of course, AI has facilitated being able to build so much product so fast. We are very happy and I would say somewhere even proud about what the progress we have made but also the expertise that we have as customers, as, you know, as being so close to customers and understanding their pain points so well, makes us very uniquely positioned to solve for our customers.

We speak their language, they believe in us, they believe in the product because they know we are speaking their language.

Siddhartha Ahluwalia 11:17
And in your journey to build this far, right? So what have been the biggest challenges till now?

Sneha Kumari 11:26
So, there have been quite a few, right, but bigger, we have our own execution challenges within the company, which is a growing pain point for any company. I would say that we did not have to do a lot of convincing when it came to AI, because I would say OpenAI did a great job there. People understand the value.

I would say right now, the bigger challenges are how do we, you know, scaling fast, being able to serve all these different swim lanes that I was talking about, the customers and bringing them on our platform. The adoption and change management is a thing in construction. I mean, let’s be honest, let’s face it, right?

People are very well equipped to be able to build a home or a building. That’s what they do day in, day out. And that’s where us as, you know, a software providers have to come in and understand and make that part easy.

A lot of fat fingering happens on site, right? They’re not used to picking their phone and looking at those, they don’t want to do that. So how about deploying voice agents, which is what we are doing, right? So people on site just pick up their phone, talk about their status and leave. Right, as simple. So as long as we are focused in making their life easy, where minimal touchpoint and we pick up all the data, I think they’re happy about it. But yeah, of course, we have to make sure that we are growing fast and we are able to scale the team.

Siddhartha Ahluwalia 12:52
And can you talk about like a couple of your customers and how you have solved problems at scale for them and how you have grown with them?

Sneha Kumari 13:00
Yes, no, absolutely. I think I’m very early on customers again for I have to say modular guys. I it’s our very soon, very fast within six months. It was our bread and butter. Also, given my network, it was easy to acquire those customers. And if you go back to them and you ask them and you know about us, I think the best part for them, again, was being able to see their budget for each project live at any point. He’s on the road. He’s able to pick up his laptop or phone and be able to tell, OK, you know, I’ve already for this particular cost code in my budget, I’m already over or under and I’m able to take decisions proactively versus be reacting to it is something that they feel super powerful about. And I mean, I’ll give you an example like there was a custom home builder trying to build a home from scratch and the lights that we see here were not placed properly. And so the contractor, by the way, they didn’t own a section of the contractor who was doing the electrical and the light side.

And he just spoke and took a picture and he uploaded. And the lady who was sitting in back office, who would usually verify, got a notification. I was like, well, this is all wrong. It was not placed correctly. And they didn’t probably read the design correctly. And they could catch it within the same hour that he updated it. And they were able to change the connections and, you know, change the placement. Otherwise, imagine after the drywall and everything done and this being able to caught at the inspection time. It’s hard because owners are not visiting the site in progress every day.

Siddhartha Ahluwalia 14:32
And in the last, you know, eight months since you have been with Merlin, what is the biggest pain point that the customers tell that they face in this industry from a technology perspective?

Graham Blake 14:44
I think it’s actually, I think it’s they run up against a moment where they understand that it’s not necessarily the technology and that there is some fundamental gap or lacking in their own business system. And I think what’s really important for companies like ourselves that have, you know, carry the power and the potential of this tech and have commercialized it. You know, our go to market really needs to figure out and work well with those customers to help them bridge that.

So, you know, we’re talking about the production layer, the manufacturers, the small businesses, essentially, that are powering all this output. We need to be very real with them about how to bring them into a way where they can leverage the tech for what it is. And so I think, again, as a company, that means that we’re, we have to be always focused on bringing in not just the tech, but the knowledge and the ability and sort of leveling up or helping our customers to level up their thinking around that.

So I say, I think that’s, it’s no longer an adoption challenge. It’s not, it’s not an objection. It just, there’s some contradiction in the way these businesses operate today.

That means they need to adjust to really get the benefit. And I think that’s where collectively we’re heading now. We’re just getting to an inflection point where those things are going to be somewhat rationalized and figured out and we can all move forward.

Siddhartha Ahluwalia 16:06
Merlin’s website says ERP space needs a revolution, so we built one. What do you mean by that?

Sneha Kumari 16:12
I think this term was coined long, long back when, you know, the sages of the world and these netsuites of the world were starting up.

I think the, ultimately what we want to call ourselves is we are an end-to-end enterprise operating system for, you know, for any company that exists today. But because ERP is a more known term than calling an enterprise software, it just made sense that we put it out there where, look, we are not that point solution where you can come in and place a purchase order or maybe come in and map your scheduling or process flow or some kind of project management. No, we are everything. We start with your CRM. We are not your marketing, you know, partners. Sure, so no problem there.

We start with your CRM, your customer, true customer relationship management to then actually taking your designs. And again, we don’t do designs, but we’ll take your designs and do your estimating and take off. That will lead to a bill of materials which you will use to go buy and tell you that you have enough. If you don’t, and if you don’t, then this is when you should buy based on your lead time. And then, you know, many agents coming and doing that job that will impact your schedule to then impacting your labor, your material costs, all of them sitting on your P&L, on your books. So we own that whole execution side from customer to finally you being able to deliver it and seeing if you made money or not. And if you didn’t make money, we’ll also be able to tell you in three months that, hey, looks like, you know, a utility isn’t working out very well for you. You’re losing money. You might as well focus on a single family or something else like that’s the insight that you will value and you want to be having at the, you know, at your fingertips to be able to sit down in that business review meeting with your leadership and take those decisions.

Siddhartha Ahluwalia 18:00
And, you know, enterprise resource planning has existed for the longest period of time in construction. So why are not customers happy with the old solutions like NetSuite and Oracle in this industry or even with Procore?

Sneha Kumari 18:15
Yeah, so I think I would say ERPs are very prevalent in manufacturing, lesser here, right? Again, as I said, like a lot of people don’t even know what that is. Procore is not really an enterprise solution. They’re really very popular and very uniquely positioned to solve for general contractors from a project management, a little financial side. And that’s what the role and, you know, I will, of course, have Graham speak a little bit about general contracting, but it’s mostly about PMing. So I will leave Procore a little bit aside. But as far as NetSuite and, you know, Dynamics and SAPs and Epicore, Syspro, all of which we have replaced, Odoo also, by the way, the latest to join the bandwagon, like all of these were not built for construction. Let’s be honest. They came from a different industry. They are trying to be able to, you know, I mean, rightly so they would like to, you know, capture all the industries.

But when you’re not uniquely built for this particular industry, you really don’t understand the pain points that well. And that’s where we are different because we were built built by and built for. So construction first is what we are claiming and we are.

And that’s where our customers value it again, because we speak their language. And so when you’re not able to uniquely able to understand what the pain points are, you’re really truly not solving for it. And if there is feedback from the customer to solve for it, you will take time and, you know, there’s money involved. We know that, you know, these ERPs are a billion dollar company and there is an adjacent consultant industry that is sitting only because the ERPs are not working the way it’s supposed to be functioning. There’s a whole suite of add-ons that exist today just to keep up with the functionalities. So there’s a lot of gaps I’ve just highlighted about.

And that’s what we feel is ready to be revolutionized, changed, disrupted in many, many ways, with especially AI coming in the space for us.

Graham Blake 20:03
I think there’s another aspect of that worth highlighting, which is that, you know, it’s just fragmented. So if you really profile who those participants are in a typical construction project, you know, they’re highly interdependent on other entities, their collaboration with multiple businesses, the project is collaborative, the risk is distributed. And so again, coming from a very linear manufacturing mindset or sort of traditional ERP doesn’t really map well into that business dynamic. And then you bring into the question of scale, like who these SMBs are, what their resources are, how sophisticated they are, what their reality is, and it’s about prioritization. You know, obviously at some point earlier on, you know, the large ERPs probably just said, well, it’s not worth it. We don’t focus. These guys got no money. And, you know, so it’s a kind of compounding problem. You’ve got businesses that are high risk, thin margin, struggling, suffering with poor process.

But that means that have very little resource to then reinvest in their own future. And I think, you know, that often gets lost is that we tend to not, you know, as an industry, we focus on the sort of aggregation of that with large, you know, general contractors and people like that. But the reality is their businesses all exist on the, you know, on the shoulders of a small business.

And so I’d say that’s another reason why you haven’t seen that adoption. And when you do see a business that wants to professionalize its processes, you know, they’re only ever in control of a piece of it. And so, you know, the results can be limited by, you know, their ecosystem, their network, everybody else that they depend upon.

And so I think that really you need to think about how with something like ourselves, which is a little bit more porous, you know, a lot of network effects, we can expose people through projects, environments, and as a way to kind of like, level up that group in a way that it’s just never happened before.

Siddhartha Ahluwalia 21:56
And why does AI native architecture of Merlin make sense by timing for this industry, like this industry is not like the biggest adopter of technology or AI?

Sneha Kumari 22:09
As you know, Graham highlighted a very good point that came to mind was we all if construction isn’t something that is sitting in a, in a factory, and done, there’s a lot of moving parts that people on site, there are people, you’re, you’re interacting with designers, architect, they’re all positioned in different places. Now, they’re already fragmented teams. Now imagine throwing fragmented softwares to them. Nobody, it’s helping no one, it’s definitely not helping the owners. So that’s, that’s the unique value prop that we are solving for.

Siddhartha Ahluwalia 22:36
And let’s say if you talk about the entire construction industry in the US, what are the different players like general contractors, folks who build modular homes, if you can detail that out?

Sneha Kumari 22:48
Yeah, I think there. So there is a whole swim lane we talk about, but of course, we started with modular and, you know, a lot of people don’t understand modular. So any, anything that’s any setting where you are able to build a home or a panel or a pod or whatever that is within a factory setting is pretty much off site construction is how we talk about it, it could be volumetric, industrialized, you know, hard making, we have shed, shed builders on our platform. So that’s off site, I would say construction. And then there is a site build aspect of it, which is what we are all familiar of, wherever we are living, it was probably built on site, which involves a lot of players, which is there’s a developer, there is an architect and designer, we’re talking about GCs, who will be PMing your project, and then subs and suppliers involved in the whole value chain.

So these are all the different user personas. And thankfully, we have been able to work with uniquely with a lot of these people that I just named here.

Siddhartha Ahluwalia 23:51
And as Merlin, you work with all of the these stakeholders and different kind of construction?

Sneha Kumari 23:55
We have we have, we are working with developers slash also also do their own GC work. Right. And that’s where replacement or Procore comes in, right, lots of subs, and then custom home builders are uniquely positioned to be used just again, some of the they are forgotten players, we call them right people, nobody has really catered to them or the remodelers uniquely. And there are many of them that we could easily scale for. And then comes the complex ones, which is the high rises, the mid rise, I have not I have not even, you know, spoken about it. And Graham can allude more on that, which we are super excited about where we are heading there.

Graham Blake 24:33
Yeah, I mean, obviously, there’s all shapes and sizes of construction project. But I think, you know, for us, again, just to narrow it down, like, you know, you there are, you know, there are stakeholders that we’re solving for, we have to deliver to value to a lot of those constituents. But on the customer side, then then it is, it is contractor and supply side, we’re looking really at who who has a physical deliverable into a project.

And if you if you have owned that at any scale from a home builder in a relationship with a, you know, with a user, or you’re a commercial builder, or a developer, we really want to look to that production layer. And for the people that are actually have a duty of fulfillment around the project. So that that encapsulates a large profile.

But we then narrow that down to like, who’s actually who’s on the execution side, who’s responsible for delivery, those are our customers, we have to help them satisfy all their stakeholders, but that’s something different. So I’d say that we’re not, we’re not looking to sell to everybody, but we need to have a lot of empathy for everybody’s needs.

Siddhartha Ahluwalia 25:44
And right now, what, let’s say a construction project is worth $100 million, what part of their total project spend would be spent in technology and solutions like Merlin?

Sneha Kumari 25:57
So, you know, it’s, I would say we’re seeing it differently, for different, again, these user personas that we are talking about. And it also depends, something uniquely, we have learned ourselves is the value add, right?

We’re talking about the bigger projects, clearly, you can see two to 3% of the overall project is going to technology, and doesn’t have to be just Merlin, there’s a lot of other stuff. But then people who are recurring building this technology sits at the core of what they are building, right? It could be, you know, 5%, depending, but I mean, definitely not more than that, I haven’t seen them spending more, and then rightly so, because the margins are thin.

But then if you’re doing repetitive modeling, technology has to be there to enable them see the efficiencies through. But then bigger projects, when we’re talking about developer projects, I do see one to 2% of the spend going.

Siddhartha Ahluwalia 26:50
So for example, in a developer project worth $100 million, would they be spending like 1% on Merlin?

Sneha Kumari 26:55
I would say that a definitely a good person, not just on Merlin, again, we don’t solve for some of the others, but definitely one to 2% of their spend definitely goes on technology.

Graham Blake 27:05
Yeah, I think there’s also a way to think about this. It’s not just about saying, okay, what’s available as a technology spend? But if you look at that same $100 million, and you say how much is still left on the table, how much of that value is currently up for grabs to any business, there is a substantial piece, like again, in terms of the level of waste, inefficiency. So in that $100 million that’s getting spent today, I would say that there’s a much, there’s still a much bigger available slice to whoever wants to deliver that value. And so the value exchange is there. Everyone wants to see the cost of construction coming down. But in that layer upon layer of margin in and padding and risk and waste. And I think you can, you know, it’s fair to say that that’s the technology spend that was available. Whoever solves for that has an entitlement to a piece of it.

Siddhartha Ahluwalia 27:58
And you went to YC, right? So how did YC shape up your thought process?

Sneha Kumari 28:04
Yeah, YC was huge. I would I cannot like it’s a, it’s like a life event that has happened to us as founders. There’s so much to learn, especially for me, because I’m a first time, right? KS knew a lot about YC, I have to say that a lot before he came in. But for me, it was all new and being able to meet some, I think that there’s something about the whole community of YC, there’s something about being around some very, very intelligent people thinking very differently than what you would not usually come across. And then getting access to some of our partners and YC are phenomenal. They’ve already lived this journey, done their IPOs.

And also grounded us a lot, in many sense, being able to talk, have some very normal conversations while outside, you know, there are people being able to hear journeys of Brian Chesky’s and Sam Altman firsthand, it was, you know, life changing, I would say, has shaped a lot, thinking about building what people want. And our zero to one journey, they have huge impact on all of us as founders.

Siddhartha Ahluwalia 29:11
Amazing. And what role did Neon play for any in your journey?

Sneha Kumari 29:14
Of course, yes, yes, yes. And again, I say like, Neon came to us with us and been supporting us even before YC, you were the one who actually pushed us to like, literally top of us to go apply to YC. So we will always be again, a super special will always be, KS and I recognize that you believe, I’ll say like, not a lot of investors understand the play of vertical SaaS and forget about understanding the world of construction. A lot of investors would come to us to build their own thesis. So you were able to understand us, the problem we are solving. And I’m guessing that we are, you know, one of very, you know, the only construction portfolio that you have, right? So the fact that you took a bet, you really truly played the role of an investor where you’re taking the risk.

Siddhartha Ahluwalia 30:00
A belief in you and KS and built on the construction industry.

Sneha Kumari 30:04
Yeah, I mean, and you understood, right? We were talking construction and even like you being able to take a bet on us, I think it was very important. And it propelled us in the right direction. We got some early contracts even before getting into YC. And Sid have to say like your direction, we talk a lot. So it’s, we have our own relationship with myself, with KS. So your guidance, your network has been very, I would say, you know, monumental and impactful in us getting to know some, it’s not always about getting to know other investors, but also some great founders that we keep talking about. So whoever is watching has to know that it’s been great working with you all, but the support that we get from Neon is phenomenal, we are blessed and thankful for that.

Siddhartha Ahluwalia 30:54
Thank you for that and if you see from 30,000 feet apart, who are the current players in this construction industry from tech-wise or non-tech-wise that you respect a lot?

Graham Blake 31:14
The early tech interest in construction came with a lot of ability, but made too many assumptions about the industry knowing what it needed and so a lot of early deployment of capital went to, hey, we could do these things, we could do it for you, what do you do, tell us about it, we can make it faster, and so much of the last 10 years, I think you could say wasted, it’s moved, it’s changed, no doubt, Procore without doubt has finally broken through a level of digitization of a section, but at the same time, what it’s done is actually crystallized and cemented and locked in and embedded the existing behavior. I for one would love at that moment if the tech side had come forward and said, here’s a different way of thinking about your output, here’s a different way of thinking about how you deliver these buildings and gone to that level. I think we wasted a lot of time as an industry actually just reinforcing things that should never have existed anyway.

By that, I’m saying that now I start to see a shift in focus. I’m seeing, and whether it is in point solutions, but there is definitely a sentiment towards looking at how the work actually gets delivered. The ones that excite me, I would just say, COJO, I think is a good example. People that are active in the supply chain side who are thinking about how the work actually gets done, how to enable that process and take out some of the ridiculousness of that. Now seeing those companies getting funded, seeing them getting their traction, seeing their potential as strategic partners in enabling that. I think that’s what really gets me excited.

I think, again, we’re at this moment, the point solutions are challenging. I get excited by what these point solutions are capable of, how they’re able to take a very small wedge and solve for it and create those workflows. But by their go-to-market strategy and by entering in the market the way they do, very focused on a very small piece of the problem, again, it’s exhausting. It’s exhausting to spend. It creates a lot of white noise for buyers to figure out how to navigate that. So I think, yeah, good things happening with the actual tools.

Good things happening at a high level, moving towards a different area of the business and going beyond just the control layer or the policing layer. And now we’re obviously, we’re waging our futures based on those things consolidating somewhat. And I think moving, no one’s there yet, but this step towards true, agentic, proactive orchestration, that has to be next.

Siddhartha Ahluwalia 34:05
Today, if you think from perspective, what would it take Merlin to become, let’s say, a 10 mil ARR company and then 50 and then 100, what would, as a CEO, you think what is needed to reach there?

Sneha Kumari 34:18
That’s the investor question, but OK, let’s answer that. Yeah, I’ll be honest. I mean, I think about the next milestone and I don’t think about, you know, I’m thinking about the 10 and the 50 will come from there. Right. We thought about the 1 and then the 10 and the 50.

Siddhartha Ahluwalia 34:36
Yeah, but you’re thinking right.

Sneha Kumari 34:37
So that’s how I think about it. And I do. And I think that helps me break the problem down and see how we scaled it. And we talked about the percentage of, you know, projects that will play a bigger, bigger part. But not only that, as we start, you know, working with some of these bigger projects out there, people see value. There’s a lot of network effects right there happening for us. So and Graham will also be able to add to that. So we see that playing a bigger role. But not only that, there is a scale here. We are talking, we own the whole transaction piece. And we are not even doing anything about it.

That’s right there for us, money on the table. And we will get there. So there’s a whole marketplace right there where people are coming to us where we could play a very nice role in bringing that segment to some of the builders. And it will be mutually beneficial, not just for us, but our customers as well on both sides. So bringing that swim lane to talk to each other will also be helpful. So these are right there for us that I see us being able to scale, enable and have the right support and be able to deliver value to the customer. So that’s definitely a thought in my head on how I’ll get to my next 10 that we’re talking about.

Graham Blake 35:58
No, I think that’s right. I mean, I’ve sort of made several points that are sort of to the detriment or the negative side of the existing industry. I mean, word of mouth and network, more than word of mouth, I mean, network is one of the very positive things about our sector, you know, the pervasiveness of having one customer and that customer touches 10 or 50 projects a year and every one of those projects ultimately incorporates or includes another 10x of users that could benefit from what we’re doing.

So, you know, I think that to answer your point of how we get there, that’s the route. And I think at the very beginning of this conversation, you said about our growth and execution and competency at doing that, I think, you know, consistency in execution, onboarding and operational to make sure that we can support and convert all those opportunities they come, but they will they will come through a very organic project network because, you know, exposure, you know, our ability and it gives a very natural contrast is, you know, people will see, OK, well, this vendor, you know, this vendor is using this system, this other vendor has no system. You know, first thing I’m going to do is is advocate for a change and that proof of proof of concept is gets out there quickly.

Siddhartha Ahluwalia 37:16
And, you know, Merlin is a very unique company in Neon portfolio where you never have a sales constraint. There’s more than always sales to deliver, right? The delivery is the pipeline that you’re always trying to solve for. How do you solve for the sales constraint?

Sneha Kumari 37:33
I think it happened because I said, like, we were not an overnight thinker or we dreamt about it, like, let’s do it. No, we did. We probably failed early on before coming to this, which I think has helped both KS. So I still come from the It took me, you know, some time to make sure that he was also on board and he saw it firsthand. Me just telling him about these problems for years wouldn’t have convinced him to join me, right? Because he comes from tech, right? He’s solving some for some very smart people in tech. And so for him to come in and take this, I say, you know, non-sexy industry and take on this problem is something it did. It did need some, I would say, eye opening pain points where he could see it firsthand. He was here sitting with the customers at their plant, seeing it firsthand.

That was that that just changed, you know, the thought process there. Again, being able to go after the customers who were in my network helped initially. And then as we highlighted, word of mouth is phenomenally a very big perpetuator of your value in construction even today. So if you are my competitor, I’ll go to your website. I’ll see who you’re talking to and I’ll go use that if that has if I’m seeing you grow faster. So we still have customer referrals being a very big part of our growth. So I’m happy. Again, I’m grateful for that. But then but then I would say I’m sure they’re seeing value somewhere.

I’m sure they’re seeing that this was built by us. When I talk to, you know, when they talk to us, they they sense that I’m not just talking code. I’m talking their language, their technology.

Siddhartha Ahluwalia 39:11
Sneha, I remember initially when Neon partnered and much after that, the KS, you were the forward deployed engineer.

Sneha Kumari 39:19
We were the forward deployed engineers, yes.

Siddhartha Ahluwalia 39:20
So how did you get the insight of being the FDs for your initial customer or even the customers today?

Sneha Kumari 39:27
So because I was doing some, you know, I would say, I would say as a, you know, on the side, some. I don’t like using the word consultant, but consultative kind of work that helped me a lot. Right. And I was actually running the project on the floor like, hey, did this material get ordered? How did you do it? What are you doing on that smart shapes?

Sometimes even building the pivot tables and things like that because they were not ready for the software and then slowly transitioning from that. Imagine me sitting down and doing that Excel and now you can do it on your own. All the data being fed and, you know, the and the answers coming to you instead of waiting for someone to answer your phone call.

I think that changed somewhere the idea of the customers and they could see through, I would say that, yes, it’s possible. Yes, I don’t have to sit down and hire someone to just do, you know, data crunching for me. So that early journey has been super valuable.

Siddhartha Ahluwalia 40:28
And as a first time founder, what kept you going? Because you had a great life, you know, so why take so much pain as a founder?

Sneha Kumari 40:38
It’s exciting. It’s fulfilling, I would say. I have to say KS’s journey has definitely had some influence on me, you know, kind of liking this and probably having a journey of my own. I sometimes feel that I could have started sooner, but, you know, there’s always there’s always a right time. What keeps me going is a passion to change this industry. I feel we are underserved in terms of there aren’t very many intelligent people who are trying to solve for us. And we are the people. Yes, great. I mean, go solve for those tech companies, but they’re already tech enabled. How about looking at us?

We are we are doing some really hardcore jobs out there. We could use some help in improving efficiencies. And I think even today I’m still as passionate and I probably will. And I and I hope to continue that. And I see I’m able to reflect that passion in my co-founders as well. We are solving for some very important people, I would say. Everything around us was built by someone somewhere. And you probably don’t get to see the journey as often. If you ever have time, go see go to a construction site, see the pain points for yourself. It’s not easy. And being able to solve for them is very gratifying. I have to say that.

Siddhartha Ahluwalia 41:55
And how did you convince KS to join you as a co-founder initially? Because he was one of the first engineers in Swiggy, so at Swiggy he already made the money.

Sneha Kumari 42:05
Yes, with his IP, he already had made the money. I mean, you know, I mean, we all for all the viewers, he’s my brother, too. So there is some influence within the family. But we talk a lot. We used to talk a lot. So he knew my pain points even in manufacturing. It’s not that manufacturing has cracked it. They need help, too. And we’ll get there. We’ll get to that sector as well. So he knew about it. And we used to throw ideas around, but it never materialized. But when this kind of work started, the whole prefab and panelization work started coming.

Siddhartha Ahluwalia 42:36
What is prefab and panelization?

Sneha Kumari 42:39
So prefab is, again, one aspect of manufactured construction. Now, they don’t really prefab, some people could prefab a full, fabricate the full home. Some people will only do truss and panelizations. Some of these panels actually, if you go to your downtown buildings and all of that, your wall panels and all of that, be manufactured in a factory setting and ship it and then install it on site. That journey influenced KS a lot because he was able to sit on site with my customer and build it for them. He has actually, you know, lived in at a customer site for a few months and seen the journey himself to appreciate the pain point and the product that we are solving for.

Siddhartha Ahluwalia 43:16
And any founder that is going to start in a hard industry like construction, they can be manufacturing, it can be shipping, for example, any tough vertical. What would be your advice? Right.

How to navigate such a tough industry?

Sneha Kumari 43:34
I, in general, if from my journey, again, I don’t know it all. Trust me, we all have our own story and I have my own story. But if I had to share, I would always say that build for something that you know about. I would always have built for something that I knew about because our customers appreciate your unique insights. Of course, they probably appreciate your product, but you have to first instill confidence and belief that you it’s normal. It’s like human. You’re again selling to human. So if you understand your industry, I’m sure you’ll find a pain point and solve for that first. I would say once you solve for something that you understand deeply and say, you know, you’re very passionate about health care, right? And you want to go solve for it. Take the time to understand the industry before jumping on and just trying to build something because don’t make it more academic, because you heard about it from five people.

I think doing your due diligence with customers will give you so much more insights. I’m not saying anything that is different, that differently heard. I’m telling you from personal experience, solve for something that you truly understand.

Do your due diligence and don’t shy away from actually doing the work. It doesn’t hurt actually going to the factory floor and probably it didn’t hurt me to pick up some of those slabs and help people. There’s nothing wrong. And when you do that, there’s so much enlightenment and awakening of, OK, this is the problem nobody is talking about. I think that helps in the founder journey.

Siddhartha Ahluwalia 45:03
And let’s say you had experience both in manufacturing and construction. How did you choose construction over manufacturing in your journey as a founder?

Sneha Kumari 45:12
I think construction loved me more than manufacturing. Let’s say that I love the people here. I think the community around me was very supportive. They were very happy to see someone from manufacturing appreciating construction. I would say construction is a far like a trillion dollar industry across the world.

Siddhartha Ahluwalia 45:31
It’s bigger than manufacturing in the US?

Sneha Kumari 45:33
It’s I mean, well, it depends on what sectors we are talking about. But overall, I mean, US cannot be the only market we are serving for. If as a founder, I’m thinking it’s a huge market. So market is one part of it. But I also think that manufacturing has grown leaps and bounds in their productivity. So their appetite has grown. That disruption is ready for construction, is ready to happen in construction. I want to be part of that journey. That’s why construction.

Siddhartha Ahluwalia 46:00
I remember at Neon when we were pitching initially and decided to partner, KS was at one of the construction sites and he made me talk to the customer and the customer called the previous software black box.

Sneha Kumari 46:15
Yes, yes.

Siddhartha Ahluwalia 46:17
So I think that played for us that, hey, this is an industry where people don’t like software.

Sneha Kumari 46:23
They don’t. I mean, and it’s not I mean, if you go look for construction software, there are many point solutions, but it hasn’t worked for anyone.

And I guess the gap is also from our side as a tech industry. We haven’t solved uniquely.

Siddhartha Ahluwalia 46:37
Everybody wants to solve for Microsoft. Nobody wants to solve for..

Sneha Kumari 46:39
Nobody wants to solve for that builder in your neighborhood. Nobody wants to do that.

Siddhartha Ahluwalia 46:46
Thank you so much, Sneha and Graham, it was amazing, you know, to drive this conversation with you. And I learned so much, even though I have been an investor for the last couple of years doing this. And welcome again, Graham.

Graham Blake 46:59
Yeah, thank you so much.

Sneha Kumari 47:00
Thank you so much for having us. I’m super excited and looking forward to seeing the output.

Siddhartha Ahluwalia 47:06
Yeah.