Why $1T Construction still runs on Spreadsheets (And How AI Fixes It) | Sneha & Graham, Merlin AI

Can AI Rebuild the $1 Trillion Construction Industry?

Construction is one of the largest industries in the world, yet most projects still run on Excel sheets, fragmented tools, and disconnected workflows.
Sneha Kumari (Co-founder, Merlin) and Graham Blake (CPO, Merlin) break down why construction has remained one of the least digitized industries and why that is finally starting to change.

We explore why traditional ERP systems like NetSuite or Dynamics fail construction companies, how Merlin is rethinking enterprise software for builders, and why AI may finally make it possible to coordinate the massive complexity behind modern construction projects.

Sneha also shares her journey from industry operator to first-time founder, how Merlin found early product-market fit, the power of word-of-mouth growth in construction, and what it takes to build a vertical SaaS company in a “non-sexy” but trillion-dollar industry.

If you're curious about how AI can transform deep, complex industries this conversation is for you.

00:00 – Trailer
00:40 – Merlin x Neon 
02:07 – Software for construction
04:37 – What convinced Graham to join
06:25 – Founder insights that discovered the pain points
08:43 – The team behind Merlin
10:15 – Challenges of building tech in construction
11:51 – Biggest pain points for Merlin’s customers
17:16 – Does ERP need a revolution?
17:55 – Merlin’s end-to-end ERP approach
20:39 – Why customers aren’t happy with existing solutions
24:36 – Why an AI-native approach makes sense
28:23 – What % of construction budget goes to tech
30:37 – How Y Combinator changed a first-time founder
31:50 – The role Neon played in Merlin
33:34 – Current players that excite the founders
36:43 – What it takes for Merlin to reach $10M ARR
39:57 – How to build with zero sales constraints
43:06 – Why become a founder?
45:56 – Build only for an industry you truly understand
47:41 – Why construction over manufacturing
48:38 – When customer called previous software a “black box”

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This video is for informational purposes only. The views expressed are those of the individuals quoted and do not constitute professional advice.

Transcript

SPEAKER_00 0:00

We wasted a lot of time as an industry, you know, reinforcing things that should never have existed anyway.

SPEAKER_02 0:05

Construction first is what we add. Our customers value it because we speak the language.

SPEAKER_00 0:11

I for one would love the tech side come forward instead. It's a different way of thinking about how you deliver these buildings.

SPEAKER_02 0:17

There's a lot of moving parts. The people on the side, you're interacting with designers, archives that all position in different places. Now imagine throwing fragmented softwares to them. It's helping no one. It was live training.

SPEAKER_01 0:40

Hi, this is Sidhahat Alwaliya, 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 Corridor. 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. Thank you.

SPEAKER_02 1:02

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.

SPEAKER_01 1:17

And you know, uh we are very grateful to be the first investor in Merlin and play a small role in your journey.

SPEAKER_02 1:25

Oh, absolutely. I um keep telling everyone, like you took a bet on us. Uh so you will always be the most special investor for us. You took a bet on us when um, you know, really like you came on board, was very nascent. It was an idea, and you truly, really, you know, saw saw the journey, saw the big picture, and you've been with us.

SPEAKER_01 1:46

I think the journey has been amazing. Uh post-Neon. Uh you folks were one of you know the the best companies in the YC batch. Right. And post VC, your the revenue, you know, the growth, the trajectory, the team that you have built. So welcome Graham to the rocket ship. And so yeah, uh construction is one of the biggest industries in the world. Uh and never the software was built for construction industry, right? Like Netsuit and Dynamex, uh, which are the most popular software industry, they were never built for construction. So why hasn't any uh you know software built and scaled for this industry?

SPEAKER_02 2:28

Yeah. And you know, um I have to start with saying that uh 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's 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 uh what an owner, a builder cares about uh is end of the day, did I make money on that project or not? Right. And that picture somehow um is far from a sort of it's it's it does it's not as simple to achieve when you have when you're sitting with five different point solutions and trying to you know get that picture alive, you always, of course, then uh you'll 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. Um Net Suite wasn't built for construction, um, uh, nor is there focus here, right? There are some um uh like you know, Procore was built for primarily PMing GC purposes. So again, uh section and construction is huge, right? We are talking about many swim lanes, we're talking about developers, GCs, designers, architects, subs, suppliers.

SPEAKER_01 3:50

They all general contractors, right?

SPEAKER_02 3:52

Sorry, yes, general contractors, yes, yes, without sorry, on the acronyms, but um, all of these people, they all come together to build, and especially when you're talking about commercial projects, um 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 uh we are able to bring additionally to the table with not just a strong tech tech, not just a strong tech team, but also a good um domain um uh understanding, uh being able to build something that I wish I had when I was running uh some of my project for some of these prefab, smaller prefab companies. They all struggle with these uh concepts.

SPEAKER_01 4:35

And maybe Graham, you can start with your background and what convinced you to join MERDIN.

SPEAKER_00 4:40

Yeah, for sure. So I I, you know, I uh you know I've been in industrial manufacturing but related to real estate for 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, uh, residential, hospitality, healthcare. So I, you know, I came from a uh an industry side in terms of execution, but always still with this sort of methodical manufacturing, sort of systems thinking approach. Um, you know, as I built businesses in that space, first at first in London originally, and then in Canada and the US, um, you know, scaling those contracting businesses um was a priority. And and you know, and the understanding is, you know, as we were saying, is that this this production layer in the sector, you know, 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. Um, so I think that you know, my background in that was certainly you know, it always kept me um actively looking for you know support from technological solutions. I think you know, 10 years ago, um, you know, mobile technology and 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, at the bottom floor of that process were looking to use their apps, and quite frankly, they couldn't. And that, you know, so there was 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. Um, fast forward to you know what changed and what has changed for us is that you know AI is that defining you know differentiator. Um, you know, the volume of data required to coordinate all those things from the light fixtures to the every other aspect of the project. Um, there's so much volume and complexity and dependency there. Um 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 and and had the the technological um you know, you know, the the the sort of raw ingredients for that, and and was lucky enough to come across um Merlin and like very happy to join that project because we seem to be connecting at a very important moment for the industry. Um as it's certainly sort of moving from this policing mentality, and now we're really focused on you know orchestrating that that production layer.

SPEAKER_01 7:15

So if you can share, you know, you worked in construction industry for 10 years before starting Merlin. What were your insights that led you to start Merlin?

SPEAKER_02 7:26

Yeah, I think my perspective coming from manufacturing to construction was actually very valuable. And um, 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. Um, and while manufacturing still needs a lot of work, right, construction was worse. And so that uh was a clear, yeah, 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 uh, you know, it's not that we 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 the good part of it. That's the 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 uh panalization 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 smartsheets and using Excel, was a you know phenomenal, phenomenal failure for them. And so seeing that, and slowly we started with financial synops only. And then we said, well, it doesn't make sense. You know, the supply chain has to bring uh be brought in. And that's how the whole journey started. And we were like, well, yes, it all makes sense. Three, four companies, we're 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 uh feedback coming from our customers, um, 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 um thrown at being being at the you know um at the verge where they have a lot of software is added, just validates very strongly the need for what we are building.

SPEAKER_01 9:36

And can you share more about the executive team at Merlin, the co-founder, yes, broader team? Yes, yes. And where are they based out of?

SPEAKER_02 9:43

Yes, absolutely. So I am um here in California, so Southern California Orange County is where my base is at. And um I've been here for some time. We were in Bay Area for Bisic Case, has a Bay Area case who's uh leading the entire tech uh 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 um, he comes from deep tech background. He has built and sold fintech. Zero to one has been his journey for forever. Uh, him being in this whole world of corporate and you know doing uh doing this work. So very strong technically. Um super blessed to have Graham join us here as leading the you know the product, given his experience in both tech. And then uh Anthika, of course, comes from uh deep backgrounds, early backgrounds from Rippling. So a very good mix of what we are doing here in terms of um not just custom, 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. Uh, we are very um happy and I would say somewhere even proud uh 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.

SPEAKER_01 11:14

And in in your journey to build this far, right? Uh what have been the biggest challenges till now?

SPEAKER_02 11:23

So um there have been quite a few, right? But uh bigger, uh we have our own execution challenges within the company, which is a growing pain point with for any company. Um 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 um swim lanes of that I was talking about, the customers and bringing them on our platform. Um 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 uh build a home or a building. That's what they do day in, day out. And that's where us as build, you know, as software providers have to come in and understand and make that part easy. Nobody, like, you know, we a lot of fat fingering happens on site, right? They 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 as so as long as we are focused in making their life easy, where uh minimal touch point 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.

SPEAKER_01 12:48

Uh 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?

SPEAKER_02 12:57

Yes, no, absolutely. I think our very early on customers, again, for I have to say modular guys, I mean, they have been with us. We 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 uh, 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 you know, laptop or phone and be able to tell, okay, you know, I've already uh for this particular cost code in my budget, I'm already over or under. And I'm able to take decisions proactively versus being reacting to it is something that they feel super powerful about. I mean, I'll give you an example. Like there was a custom home builder trying to build uh, you know, a home from scratch, and there the lights that we see here were not placed properly. And so these the contractor, and by the way, they didn't own um uh 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 uh the lady and uh who was sitting in back office who would usually verify, got a notification, and she 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.

SPEAKER_01 14:28

And in the last uh, 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?

SPEAKER_00 14:40

I I think it's actually, I think it's um 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 customers, you know, for companies like ourselves that have you know carry the power and the potential of this tech and have commercialized it, um, you know, our go-to-market really needs to figure out and and work well with that, those customers to help them, you know, bridge that. We're talking about the um the production layer, the manufacturers, the you know, the small businesses essentially that are that are powering all this output. Um, 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 um, and so I think again, as a as a company, that means that we're we have to be always focused on bringing you know not just the tech, but the knowledge and 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. Um, it just um there's some contradiction in 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.

SPEAKER_01 16:02

Uh yeah, Merlin's website says ERP space needs a revolution, so we built one. What do you mean by that?

SPEAKER_02 16:08

Uh I think um this term was coined long, long back when you know the sages of the world and uh these netsuites of the world we're starting up. I think the ultimately what we want to call ourselves is we are an end-to-end enterprise operating system for uh, you know, for any you know company that exists today. Uh 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. Um, we we are not your marketing um you know partners, sure. So no problem there. We 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 takeoff. That will lead to a bill of materials, which you will use to go buy and tell you that you have enough of you don't. And if you don't, then this is when you should buy based on your lead time and then you know, mini 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 PL, 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 um, you know, our 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.

SPEAKER_01 17:57

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

SPEAKER_02 18:11

Yeah, so I think um I would say ERPs are very prevalent in manufacturing, lesser here, right? Uh again, as I said, like a lot of people don't even know what that is. Procore is not really an uh an enterprise solution. They're really very popular and very uniquely positioned to solve for general contractors from a project management, a little bit of financial side. And that's what the role, and you know, I will, of course, um have Grump speak a little bit about general contracting, but it's mostly about PMing. Uh so I will leave a ProCore a little bit aside. But as far as NetSuite and you know, dynamics and SAPs and Pro and Epicore, Sys Pro, all of which we have replaced, oh do also, by the way, uh, 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're 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 by 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 uh 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 um, you know, there's money involved. We know that, you know, you know, these ERPs are a billion-dollar company and there is an adjacent consultant in the 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 uh 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 uh the space for us.

SPEAKER_00 19:59

I think there's a there's another aspect of that worth highlighting, which is that you know it's just fragmented, you know. So if you you really profile who those um those participants are in a typical construction project, you know, they're highly interdependent on other entities. They're collaboration in multi-bit businesses, the project is collaborative, um, 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. Um, you know, obviously at some point earlier on, yeah, the the you know, the large EFPs probably just said, well, it's not it's not worth it. We don't focus, these guys got no money, and they and you know, and so it's a kind of compounding problem. You've got businesses that are high risk thin margin, struggling, suffering with poor, poor process. Um, but that means that they have very little resource to then reinvest in their own uh future. And I think you know, we that often gets lost is that we trying to not, you know, as an industry, we focus on the sort of aggregation of that with large, you know, general contractors and and and people like that. But the the reality is their businesses all exist on the you know on the shoulders of of you know small business. And so um I'd say that's another reason why that you haven't seen that adoption. And you know, when you do see a business that wants to professionalize its its processes, you know, they're only in ever in control of a piece of it. And so, you know, the the results can be limited by you know their ecosystem, their network, everybody else that they 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, which um, and there's a way to kind of like level up that group in a way that it's just never happened before.

SPEAKER_01 21:52

And why why does uh 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.

SPEAKER_02 22:05

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. There are people on site, there are people, you're you're interacting with designers, architects, 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.

SPEAKER_01 22:33

And let's say if you talk about the entire construction industry in the US, who are the different players like general contractors, folks who build modular homes? If you can detail that out.

SPEAKER_02 22:44

Yeah, I think there so there is a whole swim line 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're 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. Um, we have shed shed builders on our platform. So uh 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, we was probably built on site, um, which involves a lot of players, which is there's a developer, uh, 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. Um and uh thankfully we have been able to work with uniquely with a lot of these uh people that I just named here.

SPEAKER_01 23:47

And and as as Merlin, you work with all of the stakeholders and different kinds of construction.

SPEAKER_02 23:52

We have we have uh we are working with developers slash who also also do their own GC work, right? And that's where replacement of Pro Core comes in, right? Lots of uh subs and then custom home builders are uniquely positioned to be used just again. Uh some of these they are forgotten players, we call them, right? Uh 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-rises. I've not, I have not even, you know, spoken about it. And uh Graham can allude more on that, which we are super excited about where we are heading there.

SPEAKER_00 24:30

Yeah. I mean, obviously, there's all shapes and sizes of construction project, but I think you know, for us, we're 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. Um, but on the customer side, then then it is it is contractor and supply side, right? We're looking really at um 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 cut end user, or you're a commercial builder or uh or a developer, um, you know we really want to look to that production layer and and and for the people that are actually uh have a uh a duty of fulfillment around the project. Um so that that it encapsulates a large profile, but we then you know narrow that down to like who's actually who's on the execution side, who's responsible for delivery. Uh, those are our customers. We have to help them satisfy all their stakeholders, but that that's something different. Um, so I'd say that we're not, you know, we're not looking to sell to everybody, but we need to um have a lot of empathy for for everybody's you know needs.

SPEAKER_01 25:41

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?

SPEAKER_02 25:54

So, you know, it's I would say we are seeing it differently for um different, again, these user personas that we we are talking about. Um, and it also depends. Um, something uniquely we have learned ourselves is the value add, right? We're talking about uh the bigger projects. Clearly, you can see two to three percent of the overall project is going to technology and doesn't have to be just Merlin, there's a lot of uh other stuff. But then people who are recurring building this, uh, technology sits at the core of what they are building, right? It could be, you know, 5% depending. But I 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. Uh, but then bigger projects where we're talking about um developer projects, I do see one to two percent of the spend going.

SPEAKER_01 26:46

So for example, in a developer project worth$100 million, would they be spending like 1% on Murlin?

SPEAKER_02 26:52

I I would say that a definitely uh a good person, not just on Merlin. Again, we don't solve for some of the others, but definitely one to two percent of their spend definitely goes on technology.

SPEAKER_00 27:01

Yeah, I think I think there's also a way to think about this. So it's not just about saying, okay, what's available as a technology spend, you know, 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, you know, there is a substantial piece, like again, in terms of the level of waste, inefficiency. Um, so in that, you know, in that hundred million dollars that's getting spent today, um, I would say that there's a much, there's still a much bigger um available slice. So whoever wants to um 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 of margin in and padding and risk and waste. Um, and I think you can, you know, it's fair to say that that's that's the that's the technology spraying, that's what's available. Whoever sold for that um has a has an entitlement to to a piece of it, you know.

SPEAKER_01 27:55

And you went to to YC, right? So how did YC shape up your uh thought process?

SPEAKER_02 28:00

Yeah, VC was huge. I would, I 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 founder, right? Um, KS knew a lot about YC, I have to say that, uh, a lot before he came in. But for me, it was all new and being able to meet some. Um, I think that there's something about the whole community of YC. There's something about being around some very, very intelligent people, um, thinking um very differently than what you would not usually come across. And then getting access to uh some of our partners in YC are phenomenal. They've already lived this journey, done their IPOs, um, and also grounded us a lot in many sense, being able to talk, have some very normal conversations while outside uh, you know, uh there are people being able to hear journeys of Brian Cheskies and uh and and Sam Altman firsthand. It was, you know, live training, I would say, uh, has shaped a lot thinking about building what people want and our zero-to-one journey, they have uh huge impact on all of us as founders.

SPEAKER_01 29:07

Amazing. And and what role did Neon play, if any, in your journey?

SPEAKER_02 29:11

Of course, yes, yes, yes, yes. And again, I said like Neon came to us with us and uh been supporting us even before YC. You were the one who actually pushed us to uh like literally top of uh on top of us to go apply to YC. So we are we'll always be, again, I you're super special, we'll always be. Uh I have KS and I recognize that you believe, I'll say, like, not a lot of investors understand the player vertical SAS and forget about understanding the world of construction. A lot of investors would come us to build their own thesis. Uh so you were able to understand us, the problem we are solving. Uh, 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.

SPEAKER_01 29:57

A belief in UN case rather than the bet on the construction industry.

SPEAKER_02 30:01

Yeah, I mean, and you understood, right? We 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. Um, we we got we got some early contracts even before getting into YC. And Sid have to say, like your direction, we we talk a lot. So it's we have we have our own relationship with K with myself, with KS. So your guidance, your network has been very um, I would say, um, you know, monumental and uh impactful in us getting to know some, not it's not always about getting to know other investors, but also some great founders that we keep talking about. So uh I whoever is whoever is watching has to know that uh uh it's it's been great working with you all, but the support that we get from Neon is uh phenomenal. We are blessed and thankful for that.

SPEAKER_01 30:51

Thank you for that. Uh if you if you see from you know uh 30,000 feet apart, right? Uh who are the current players in this construction industry from tech wise or non-tech wise that are following a specific that you respect a lot.

SPEAKER_00 31:11

Your early tech in interest in in construction, um you know, came with a lot of um ability, um, but made too many assumptions about the the industry knowing what it needed. And so a lot of early deployment of capital went to, you know, 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. But and you know, so much of the last 10 years, and so you can say wasted, it it's moved, it's changed, no doubt. Procor, without doubt, has finally broken through a level of you know digitization of a section. But at the same time, what it's done is actually um crystallized and cemented and locked in and embedded you know the existing behavior. Um, I 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. So I think we wasted a lot of time as an industry um actually just you know reinforcing things that should never have been you know existed anyway. By that I'm saying that now I start to see a shift in focus. I'm seeing um, and whether it is in point solutions, but there is definitely um a sentiment towards looking at how the work actually gets delivered. Um so the ones that um the ones that excite me, I would just say, you know, like uh you know, Kojo, I think, is a good example. People that are um you know, are active in the supply chain side, who are thinking about how the work actually gets done, how to enable that process, you know, and take out some of the ridiculousness of that. Um so now seeing those companies getting funded, seeing them getting their traction, seeing their potential as sort of strategic partners in bringing that, you know, enabling that, I think that's what really gets me excited. Um, I think, again, we're at this moment the point solutions are challenging. So there is, you know, I get excited by um what these point solutions are capable of, how they're able to take a very small wedge and solve for it and and and you know, create those workflows. Um, 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. Um, 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. Um, 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 the the control layer or the policing layer. Um and uh now we're obviously are you know we're waging um after futures based on those things consolidating somewhat and um and I think you know moving no one's there yet, but this this step towards true agentic, you know, proactive orchestration um that has to be next, right?

SPEAKER_01 34:00

And uh today, uh you know, if you think from perspective that 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 to reach there?

SPEAKER_02 34:15

That's the investor question, but okay, let's answer that. Yeah, uh I'll be honest. I mean, I I think about the next milestone, and I don't think about, you know, I'm thinking about the 10 and will the 50 will come from there, right? Uh we we thought about the one and then the 10 and the 50.

SPEAKER_01 34:32

Yeah, yeah, but you're thinking right, yes.

SPEAKER_02 34:34

So that that's how I think about it. And um I do and I think that helps me break the problem down and see how we we scale there. And we talked about the percentage of uh, you know, projects. Uh that will play a bigger, bigger part. But not only that, as we start um, 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 um uh and and Graham will also be able to add to that. So we see that playing a bigger role, but not only that, uh, there is a scale here, right? We are talking, we own the whole transaction piece, right? And we are not even doing anything about it. That's right there for us, money on the table, uh, and we will get there. So there's a whole marketplace right there uh 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 uh 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, uh, and have the right support and be able to deliver value to the customer. So that's definitely um a thought in my head on how I'll get to my next 10 that we're talking about. Yeah.

SPEAKER_00 35:55

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, the um you know, word of mouth and network, you know, more than word of mouth, I mean, network is the is one of the very positive things about our sector. You know, the the um uh the the pervasiveness of having one customer and that customer touches 10 or 50 projects a year, and every one of those projects, you know, uh ultimately um incorporates or includes another 10x of users that could benefit from what we're doing. So um, you know, I think that to answer your point of how we get there, that's the root. And and I think that you know, you at the very beginning of this conversation you said about you know our growth and execution and and competency at doing that. I think you know, um consistency in execution, onboarding, and and operational to make sure that we can um support and convert all those opportunities as they come. But they will they will come through a very um organic project network as you know, exposure, you know, our ability, and it gives a very natural contrast. If you know people will see, okay, well, this vendor, you know, this vendor is using this system, this other vendor has no system, you know, first thing they're gonna do is is is advocate for for uh you know a change, and that proof of you know, proof of concept is gets out there quickly.

SPEAKER_01 37:13

And you know, what Molin is a very unique company uh in neon portfolio where you never have a sales constraint. Yeah, there's more than always sales to deliver. Right? The delivery is the pipeline that you're always trying to solve for. How did you solve for the sales constraint?

SPEAKER_02 37:30

I think it happened because I said like we were not an overnight uh think, oh, we dreamt about it, like let's do it. No, we did. We we probably failed early on before coming to this, which I think has held both KS. So I still come from there, and I I it took me uh, 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 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 it did it did need some uh, 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 uh that that just changed uh you know the the thought process there. Um 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 uh perpetuator of your um 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 playing a very big part of our growth. So I'm happy. Again, I'm grateful for that. But then um, 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, um, when they talk to us, they they sense that uh I'm not just talking code, I'm talking their language, their technology.

SPEAKER_01 39:08

Can I remember initially uh when NEON partnered and much after that, the case or you were the forward deployed engineer?

SPEAKER_02 39:15

You were the forward deployed engineers, yes.

SPEAKER_01 39:17

So, how how did you get the insight of being the FDs for your initial customers or even the customers today?

SPEAKER_02 39:24

So, because I was doing some um, you know, I would say, um say as a, you know, uh on the side, some I don't like using the word consultant, but consultative uh kind of work, that uh helped me a lot, right? And um, 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 sheet? 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, uh the answers coming to you instead of waiting for someone to answer your phone call. I think that changed somewhere the 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.

SPEAKER_01 40:24

And as a first-time founder, what kept you going? Because you know, you had a great life, you know. So why it takes so much pain as a founder?

SPEAKER_02 40:34

Um it's exciting, it's fulfilling, I would say. Um I have to say KS's journey has definitely had some influence on me, you know, kind of liking this. Um and probably having a journey of my own. Uh, I sometimes feel that I could have started sooner. Um, but you know, there's always always a right time. What keeps me going is the 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. Uh, we are solving for some very uh important people, I would say. Uh, 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, uh, 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.

SPEAKER_01 41:52

And how did you convince KS to join you as a co-founder initially? Because like he was one of the first engineers in Swiggy. So at Frigi IP, he already made the money.

unknown 42:01

Yes.

SPEAKER_02 42:02

Yes, with his IP, he already had made the money. Um, I I mean, you know, I mean, we are we all for all the viewers, he's my brother too. So there is some uh, you know, influence uh with within the family. But uh we talk a lot. We 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 them. Yeah, uh, we'll we'll get to that sector as well. So he he knew about it and we used to, you know, throw ideas around, but it never materialized. But when this kind of work started, the whole prefab and panelization work started coming out.

SPEAKER_01 42:33

What of prefab and panelization?

SPEAKER_02 42:35

Um, so uh prefab is again a one uh an 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 remanufacture 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 um, you know, lived in uh at a customer site for a few months uh and seen the journey himself to appreciate the pain point and uh the product that we are solving for.

SPEAKER_01 43:13

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, tough vertical. What would be your advice, right? How would how to navigate such a tough industry?

SPEAKER_02 43:30

I for um in general, if from my journey, again, I don't know it all. Trust me, we are all 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. Um I would always have built for something that I knew about because uh customers appreciate your unique insights. Of course, they appreciate they probably appreciate your product, but you have to first instill confidence and belief uh 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 healthcare, right? Um, and you want to go solve for it, take the time to understand the industry before jumping on, um, you know, and just trying to build something because um don't make it more academic, right? 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 uh your due diligence and you know, don't shy away from actually doing the work, right? It doesn't hurt actually going to the factory floor and probably uh it didn't hurt me uh to pick up some of those labs and help people. There's nothing that's nothing wrong. And when you do that, you there's so much and you know, enlightenment and awakening of okay, this is the problem. Nobody is talking about. I think that helps in the founder journey.

SPEAKER_01 44:59

And let's say you had experience both in manufacturing and construction. How did you choose construction over manufacturing when in your journey as a founder?

SPEAKER_02 45:08

Uh I think construction loved me more than manufacturing, let's say that I love my, I love the I love the people here. I I I think the community around me was very supportive, right? Uh, they were very happy to see someone from manufacturing appreciating construction. Um, I would say construction is a far like a trillion dollar industry across the world, right?

SPEAKER_01 45:28

It's bigger than manufacturing in the US.

SPEAKER_02 45:30

It's it's I mean, in well, it depends on what sectors we are talking about. But overall, I mean, US cannot be the only market we are serving for, right? If as a founder, I'm thinking it's 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 they 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.

SPEAKER_01 45:56

Yeah, I remember uh at Neon when when we uh was speaking initially and decided to partner, uh KF was at one of the construction sites and he made me talk to the customer. And the customer called the previous software black box.

SPEAKER_02 46:11

Yes, yes.

SPEAKER_01 46:14

So I think that clicked for us that hey, this is an industry where people don't like software.

SPEAKER_02 46:20

They don't. I mean, and it's not, I mean, go if you go look for construction software, there are many porn solutions, but it it hasn't worked for anyone. And I guess the the gap is also from our side as a tech industry. Um, we haven't solved uniquely.

SPEAKER_01 46:33

We haven't taken the solve for Microsoft, nobody wants to solve it.

SPEAKER_02 46:36

Nobody wants to want to solve for that uh builder uh in your neighborhood. Nobody wants to do that.

unknown 46:41

Yeah.

SPEAKER_01 46:42

Well, thank you so much, Asnea and Graham. It's it was amazing, you know, to drive uh this conversation with you. And I learned so much, even though I've been an investor for the last couple of years uh during this. And welcome again, Graham. Thank you so much.

SPEAKER_02 46:58

Thank you so much for having us. Um super excited and uh looking forward to seeing the outcome.