PlanGrid, a Sequoia backed company, Finds Success by Throwing Paper Up Into the Cloud

Tracy Young, CEO of PlanGrid, once walked into a Sequoia Capital conference room, her arms full of bundles of construction plans seeking venture capital funding. Each bundle consisted of dozens of 30″x42″ paper sheets, had the diameter of a small tree, and weighed more than a gallon of milk. Her vision was to throw these plans into the cloud by providing a SaaS product that would eventually revolutionize the construction industry. The idea was simple, the customers were defined, and their revenue was consistent. $18M of Series A funding from Sequoia in 2015, four years after the company was founded, was simply the icing on the cake of an already successful journey (https://www.crunchbase.com/organization/plangrid#/entity). The funding served as a step stool, allowing PlanGrid to add features and expand their user base. PlanGrid now has over 300 employees and has hosted over 50M blueprints on their platform (https://www.plangrid.com/about/).

I’ve had the pleasure of hearing Tracy Young speak twice now. Once as part of Stanford Technology Venture Program’s (STVP) Entrepreneurial Thought Leaders seminar series (http://etl.stanford.edu) and another time in a more intimate setting at Sequoia’s office. Through both of these experiences, I’ve received some general insight into the technical climate during which PlanGrid was conceived. Amazon Web Services (AWS), launched in 2002, saw consistent, but linear growth for the first decade of its existence. At the time of PlanGrid’s founding, AWS revenue was around $250M. Since then, it has exponentially exploded to an anticipated $13B of revenue this year (http://www.informationweek.com/cloud/infrastructure-as-a-service/amazon-the-self-fueling-perpetual-motion-machine/a/d-id/1327840?). Combine the proliferation of cloud storage, Apple’s release of the iPad in 2010, along with new 4G cellular technology and PlanGrid had a recipe for success. The ultimate mobile SaaS interface was born. Companies with both vision and technical prowess were well-suited to take advantage of this new platform and deliver true value to customers.

The main pain-point of the construction industry, for as long as things have been getting built, has been the management of design drawings. For centuries, the people who designed things weren’t usually the people building it. Architects would traditionally draw building facades while engineers would design structural skeletons. Then, construction crews were expected to decipher these instructions from paper and transform them into reality. Naturally, there are a plethora of issues concerning constant revisions and document version control. Now with the introduction of the cloud and the iPad, everyone could be building off the same set of drawings, instead of multiple wrinkled bundles of paper.

The digital transformation of construction drawings has been revolutionary for the industry and the benefits have been immense. PlanGrid is now the world’s leading provider of construction software. Easier collaboration and fewer construction mistakes due to PlanGrid’s product have resulted in reduced negative impacts to both schedule and budget. As technology, both software and hardware, improves, it will be interesting to see what other ways disruptions occur in an industry commonly stereotyped as being old fashioned. Augmented reality, virtual reality, drone image capture, and LIDAR have already begun to infiltrate this space. They will undoubtedly help shape how the places we live, work and play get constructed in the future.