20VC: From Construction Worker to Billionaire CEO; The 21-Year Epic Journey of Procore to an $8.6BN Company, Advice from Tobi at Shopify on Being a Great CEO & Why The Idea of "Becoming an Entrepreneur" is BS with Tooey Courtemanche
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The PitchMon Dec 04 2023
Procore's Founding and Early Struggles:
- Tooey Courtemanche, the founder of Procore, initially struggled with personal identity and purpose before being encouraged by his wife to stop trying to be someone else.
- Between 2002 and 2015, Procore experienced slow revenue growth due to challenges in market timing and adoption, as well as the absence of internet access at construction sites.
- The company faced financial difficulties during the Great Financial Crisis but persevered through custom development work for customers to stay afloat.
Market Timing and Persistence:
- Market timing risk is significant for founders, especially when multiple factors need to align for success. For Procore, it took over a decade for the industry to adopt their technology after facing skepticism from investors in earlier years.
- Tooey emphasizes that successful founders are resilient and have an unwavering belief in their vision despite obstacles. He advises struggling founders to focus on generating revenue to survive tough times.
Fundraising Challenges and Lessons Learned:
- Bessemer had initially underestimated Procore's potential value at $300 million, showcasing how investors can miscalculate upside. This underscores the importance of not solely relying on external assessments when gauging a company's future worth.
- Tooey acknowledges his tendency to build strong relationships during fundraising processes but doesn't offer specific advice he would give himself if he could advise himself again.
The Journey to $8.5BN Company:
- Procore's slow initial revenue growth, taking 13 years to reach $9.6M in revenue, then rapidly scaling to over $890M by 2017.
- The intense focus on business operations and rapid growth led to a lack of reflection on the company's unprecedented progress.
Lessons in Scaling Product Line Without Losing Focus:
- Procore initially had one product but expanded due to customer demand for an all-in-one platform for their core business needs.
- A pivotal realization in 2019 prompted Procore to halt feature development for a year to re-architect a financial product line, ensuring enterprise-grade quality.
International Expansion Lessons:
- Building brand loyalty and referenceable customers is crucial before expecting scale and growth in new markets.
- Patiently establishing a brand is essential as it took years to build the brand in the US, reflecting the time required for new markets.
Pricing Model Decision & Cultural Insights:
- Procore opted for a volume-based pricing model instead of per-seat licensing due to construction being a team sport where everyone needs access.
- Hiring based on values (hungry, humble, smart) ensures cultural fit, emphasizing that culture maintenance shifts from CEO responsibility once set.
Leadership and Delegation Challenges:
- Transitioning from doing everything to leading requires learning how to delegate effectively while allowing employees room to fail and learn from mistakes.
- Recognizing weaknesses and hiring complementing strengths has been critical for Tooey Courtemanche's success at Procore.
Insights into CEO Reality vs. Perception:
- The Instagram version of being a CEO contrasts with reality; running a global multi-billion dollar company remains high-pressure and demanding.
- Toby Lutke's advice on leadership emphasizes continuous skillset scaling within the team when the business scales at 100% annually.
Authenticity and Self-Identity:
- Tooey Courtemanche experienced imposter syndrome as a college dropout turned successful CEO.
- His wife's advice to embrace authenticity and vulnerability led to personal liberation and positive reception from others.
- He emphasizes the importance of knowing oneself, acknowledging strengths and weaknesses, and delivering one's authentic self every day.
Parenting and Values:
- Tooey Courtemanche instilled values of responsibility in his son at an early age by setting clear boundaries.
- He believes that empowering children to make responsible decisions within set parameters fosters well-adjusted individuals.
Work-Life Balance and Overwhelm Management:
- Tooey Courtemanche prioritizes alone time for introspection when feeling overwhelmed.
- Engaging in focused activities like building complex Lego sets helps him clear his mind from work-related stress.
Marriage and Work Commitment:
- Maintaining a successful marriage while being a public market CEO involves creating space for each other's individual pursuits outside their shared world.
- Navigating the demands of both roles requires understanding, support, and compromise from both partners.
Career Success Factors:
- Tooey Courtemanche attributes success to following passion, persistence, luck, skill, mentorship opportunities, pivotal life moments, learning from disagreements with colleagues.
Procore's Founding and Growth:
- Tooey Courtemanche founded Procore in 2002 with a mission to connect everyone in construction on a global platform.
- The company experienced slow revenue growth, taking 13 years to reach $9.6M, but then rapidly grew to over $890M in revenue within the next 8 years.
- Tooey faced challenges when seeking investment, being laughed out of VC offices in 2008, highlighting market timing risk for founders and investors.
Advice on Success and Productivity:
- Tooey emphasizes the impact of an advice he received in college about doing five-minute tasks whenever idle, leading to high productivity and contributing significantly to Procore's success.
- Despite never doubting his ability to be successful or okay, he never envisioned reaching the level of success Procore has achieved.
Personal Lifestyle Choices:
- Tooey shares his passion for construction by owning a ranch and purchasing a Caterpillar bulldozer for personal use.
- He reveals modest spending habits despite Procore’s massive success, driving a beat-up Toyota Tundra pickup truck and recently acquiring his first decent watch due to his son's influence.
Future Plans:
- In ten years, Tooey envisions continuing work at Procore while also enjoying building projects at his beloved ranch before considering retirement.