How We Raised $13M To Build An Engineering Design Software
I’m Adam - Chief Customer Officer at Transcend Software.
We founded Transcend in December 2019 to help engineers, equipment suppliers, and asset owners build more sustainable, innovative infrastructure using our generative design software.
Firms that use our software can lower costs, increase revenue (bid on more projects, faster, with more detail in less time), and free up engineers to evaluate innovative technologies and sustainable design approaches, transcending the standard and sub-optimal solutions of years past.
We’ve grown from 12 people to 54 in less than three years and have raised over $13M to date.
What's your backstory and how did you come up with the idea?
We were able to sign up one of the largest engineering firms on the planet as a first paying customer. With that, we raised a $3M seed round to kick start the business.
I started my career as a microbiologist in the food industry… and hated it! I found myself spending more time with colleagues who were in sales and marketing, and I always had an interest in entrepreneurship, so I decided to get an MBA to transition into sales/marketing roles and learn more about business instead of science.
While in grad school, I stumbled into the water industry, which led me to a job as a water innovation leader at General Electric, then I went into water venture capital.
Eventually, I founded my own water robotics company, raised VC funding, and moved to San Francisco to live the ‘traditional’ silicon valley startup lifestyle, where I grew that business to the point of acquisition.
I love water as an industry - the dynamics are extremely complex, technically challenging, and ripe for innovation. Most people aren’t aware that water infrastructure around the world is in really bad shape. In the U.S. specifically, the American Society of Civil Engineers gives water infrastructure an average of a ‘D’ rating!
In 2019 an old General Electric colleague called and asked if I wanted to help spin a design software business out of a wastewater treatment company. I didn’t know much about the engineering that went into water/wastewater infrastructure, but I did know that it took YEARS for new facilities to be designed, constructed, and operational… which is way too long to solve the freshwater crisis that’s happening all over the world.
In the early days, I was responsible for sales, marketing, and customer success - and we were able to sign up one of the largest engineering firms on the planet as a first paying customer. With that, we were able to raise a $3M seed round to kick start the business.
Take us through the process of designing, prototyping, and manufacturing your first product.
The software was originally developed in 2012 as an internal tool for an innovative wastewater treatment company.
As they started automating their design processes and growing their business with the tool, they started layering on features and functions that became valuable to a broader market of wastewater equipment suppliers and consultants.
The people who built the tool - water & wastewater treatment engineers & in-house programmers - were solving their problems first, which lent itself well to helping other waters & wastewater companies solve theirs.
Eventually, the CEO decided that the software should be a standalone company, which is now Transcend.
We could’ve spent a lot of time, energy, and money building something nobody wanted. I’m glad we went to them first and then configured the tool to meet their needs.
Before we created a separate company we approached many prospective customers and interviewed them about their needs and wants, and also started testing out business models to create the product and business strategy we needed to form our first pitch deck. Once we had a first customer and a pipeline of good prospects, we were able to tell the story to investors.
People tend to complicate investing (and especially venture investing). Simply put - the only thing investors need to know is how much money to invest and how much they expect to get out - and on what timeline. With a solid story and a list of industry investors, we were off to the races.
Describe the process of launching the business.
We started selling the concept of ‘Transcend’ before the business even had a name - it was simply called WWTP (wastewater treatment plant) design generator.
We went to the biggest names in the water/wastewater industry and started to float the concept of automated design software.
One of the first companies we spoke to, Black & Veatch, signed up as a first pilot customer. On the back of that, we were able to raise our Seed round to officially form Transcend.
We’ve found that it’s really important to get feedback from your ideal customer early on - we found the company who we thought this tool would be a ‘slam dunk’ for and talked to them before we had a tool that was tailor-made for them.
We could’ve spent a lot of time, energy, and money building something nobody wanted. I’m glad we went to them first and then configured the tool to meet their needs.
Since launch, what has worked to attract and retain customers?
Direct, B2B consultative selling is our most common approach - which probably isn’t too interesting for the Starter Story family but something I’m happy to geek out about with anyone interested.
We have a strong LinkedIn presence and our water/wastewater specific webinars have been an important source of inbound leads for us. In the last year alone we’ve gained over 1,150 high-quality followers by promoting in-house generated content, especially blog posts from employees.
One unique method we’ve used for content generation is to set up 5-minute meetings with leaders in the company, interview them about a topic of their choice, transcribe the interview with a tool like Happy Scribe, and then create a blog post about it. It makes the writing process so much easier for employees who don’t like to write or don’t feel inspired to create content.
Most of our follower base is organic, as you can see here:
On a product level, our software is technical and our users are oftentimes highly educated, experienced engineers.
One of the biggest keys to our success has been building trust and relationships with those technical customers by bringing our technical team to the table. If they have a wastewater process engineer on a call, we bring our wastewater process engineer to the table.
We’re proud of being experts in water/wastewater treatment, backed by a world-class team of computer programmers, and make sure our customers know from day one that we are ‘one of them.’
How are you doing today and what does the future look like?
Things are going well for our company. We’re generating considerable recurring revenues and hiring rapidly to support that growth. We started the business with about a dozen employees, and just 2 ½ years later are almost at 60.
We’ve had over 1,000 new users of the tool in the last 9 months alone, with over 13,000 people added to our newsletter subscriber base. One of our company goals is to measure how many people are positively impacted by designs run in our software (access to basic water and sanitation services, reuse of treated water, etc.), and we just eclipsed the 40M mark this month - which is an incredible milestone for us.
While our bread and butter are in water/wastewater, our engineering clients are asking us to enter new verticals like energy, transportation, and others so we’ll be expanding the platform to include the design of new types of critical infrastructure.
One of our big goals from a marketing POV this year is to ‘up’ our SEO game. So if you happen to be searching for terms related to water/wastewater treatment… our goal is to be the first one that pops on your search engine of choice.
Through starting the business, have you learned anything particularly helpful or advantageous?
Given that our company is fully remote, one of the most important lessons is that of making company culture a priority. If it’s not a stated value and constantly discussed, the company culture becomes the ‘default’ which is hopping from virtual meeting to virtual meeting and never really getting to know anyone.
Our dev team recently hosted an all-company Minecraft event that was a TON of fun and had everyone participating, including our CEO. We’ve also had in-person board game nights when possible, and try to see one another in person at various conferences and client meetings to keep the in-person spirit alive.
What platform/tools do you use for your business?
In addition to the standard Microsoft 365 type tools, some of the more interesting are Mailchimp, Happy Scribe, Adobe Creative Suite, Canva, Instapage, Wordpress, Salesforce, Yoast SEO, and SEMrush.
One of our favorite tools (which is more of a business operating system) is called Scaling Up. It’s a company goal-setting methodology and framework that helps keep our fully remote team working towards the same ‘north star’ every month/quarter/year.
What have been the most influential books, podcasts, or other resources?
I’m a huge book nerd…
Think and Grow Rich changed my life in college. The 4 hour work week was influential when I first moved abroad.
Any sales books/material from Jeb Blount is incredible. And when I’m looking for random inspiration, scrolling through marketing/business TikTok usually gives me some great ideas.
Advice for other entrepreneurs who want to get started or are just starting out?
Sell it before you build it. Go to your target customer/user and pitch them the idea as if it were already built - including pricing.
The closer you can get to taking payment the more you’ll learn from the process. Only once you’ve determined the real customer requirements (and objections!!) should you start building your product/service.
Are you looking to hire for certain positions right now?
We’re hiring! Front and back-end developers, salespeople, customer success professionals… and we’re fully remote.
Any global talent interested in the future of sustainable design and construction should check out our company page for the latest openings, and if you think you’re a fit for something not listed just send us a note at [email protected].
Where can we go to learn more?
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
