Building a winning business strategy with David Arnold

Tom Houghton:

You’re listening to “The Building Code” your guide for a better way to run your business. I’m Tom Houghton.

Paul Wurth:

Hi Tom. It’s Paul Wurth over here.

Tom Houghton:

Hey, Paul. Long time no see. We’re doing this over the Zoom waves now.

Paul Wurth:

Over the zooms, yeah. Who’s tired of Zoom already, huh?

Tom Houghton:

Right? Raise your hand if you’re tired of Zoom, don’t take your hand off the wheel. We know you’re all out there, tired of Zoom ready for back in person contact again.

Paul Wurth:

Correct. What a wild intro. Let’s keep the ball moving here.

Tom Houghton:

Sounds good. Well if only we would have had a strategy coming into this podcast. Speaking-

Paul Wurth:

Like our first episode, you mean?

Tom Houghton:

Yeah. Like our first episode.

Paul Wurth:

Or ever.

Tom Houghton:

Yeah. Hey, speaking of first episode, up online, just in case you missed this, all those great listeners out there, our podcasts are now on YouTube. So you can listen to our podcasts on YouTube. You won’t actually get to see Paul and I. Some might say that’s actually a benefit of watching it on YouTube, but we’ve got that up on YouTube and you can stream the episodes there. So while you’re working, if you want on your computer, you can pull up YouTube, “The Building Code” and you’ll find us there. So pretty great.

Paul Wurth:

Tom is our podcast strategist, or do we plan on having a video of us up soon?

Tom Houghton:

We are working on that. Yeah, it would be great. We’re working on that hopefully before the end of this year is probably our tentative timeline. Before the end of 2020, you might get to see Paul and Tom in action with our guests. So stay tuned on that one. All right. Well, we won’t tease any more. We’ll get straight on into it. We’ve got our Chief Strategy Officer David Arnold joining us today. David Arnold is the chief strategy officer at Buildertrend. He’s been here for a number of years, started just after me actually. So that means something to about two people on this call, me and David Arnold. I’ll let him do the introduction though. Letting us know the background on his work. David Arnold, welcome to the Buildertrend podcast.

David Arnold:

Yeah, I appreciate the big day. You know I dream often about spending time with Tom and Paul and especially on the podcast and you know, it’s a big day for me, big day for the podcast. So yes, I’m David Arnold been here about four years and I have the fortunate opportunity to be the chief strategy officer, which is a really glorified and obnoxious title that I’m sure we’ll talk about here in a second. But at the end of the day, our team is trying to answer a couple simple questions that are simple to ask, hard to answer things like, what else should we do? Who should we do that with? And often those questions lead to new growth opportunities, partnerships and things like that. So it’s a small but mighty team that has the fortunate benefit to have the machine that has Buildertrend paying the bills so we can spend time thinking about new opportunities.

Tom Houghton:

Yeah. David Arnold and his team here at Buildertrend are responsible for some of the best parts of Buildertrend. I mean, there’s lots of great parts, but one of the parts is all of the partnerships that we have with other great companies. So we’ve previously talked with The Home Depot about the partnership on episode I think that was 83. We had them on to talk about the partnership there. And again, your team was instrumental in working with The Home Depot to create that partnership.

David Arnold:

Yeah, it was a fun one. We first met Home Depot about four years ago. About the time I started, I think the infamous Paul Wurth actually gave them a demo a month after I started. And there’ve been a ton of conversations between now and that first point, where both companies were getting to know each other, trying to figure out how we could work together from a theoretical perspective. And then we start to test it. So we spent a lot of time getting to know them, talking to our customers about the way that they order products and learned a lot and are really excited to take all those learnings and discussions and turn them into something that we think will add a lot of value for the folks that work with both companies. But that’s maybe an extreme example of what we do day-to-day, but it is I think, representative of how we can get to a partnership and what happens before it gets to the limelight and our customers and employees.

David Arnold:

And that’s really to take a look at the needs of our clients. We know that they spend money and time on things beyond software. And so our team starts with that. We try and identify what those things are that contractors need to be successful, to be highly productive, understand where they’re getting those things from today and hopefully find a business model and a partner that results in a better deal for them that can be accessed directly within the software. So it requires a lot of patience, a lot of curiosity. But for a person like myself that likes living in the gray, it’s a lot of fun.

Paul Wurth:

Yeah. I that’s what I like so much about your team and the partnerships is that, I think the general strategy is we’re trying to become much more than just a software to our clients. I think, and this comes from you and your team is that the idea would be, we want to build a community. And then because you’re a part of this community of Buildertrend you get access to all these great companies. So I think that’s really cool. How does some of these ideas come to you, you and your team? Are they sourced from our clients directly or kind of a mix of everything?

David Arnold:

Yeah. All of the above. Step one when I came on was to come up with the processes to evaluate things that were coming to us from clients, from employees, from, random companies that reach out. And as you do that at the same time, you’re getting to know our customers and their non-software needs. You start to come up with, for lack of a better word, a strategy, and really more accurately a list of things you want to learn more about. And so today, after a few years of doing that proactive work, we have kind of a roadmap of things that we want to continue to explore, partnerships we want to evaluate by talking to other companies.

David Arnold:

But we still get ideas and I mean, I think when it comes to strategy or really any new line of business, whether you’re a software company or construction company, you have to make sure that you don’t just come up with an idea and think it’s the best thing in the world. You have to talk to as many people as possible. You need to search for why you’re wrong. And if you start to look for ways that you may be wrong or start to try and convince yourself, it’s a bad idea and you can, it really shows you’re onto something. So it’s really a long process. But to your question, Paul, ideas come from everywhere. That’s the way it should be. We’re fortunate to have a number of clients, a number of employees where ideas are a no short supply.

Tom Houghton:

We do have a lot of creative individuals here at Buildertrend. So, and that’s great. We actually just had our internal hackathon. So that was great. We got a lot of ideas from that. That was our third annual hackathon that just took place. We take our engineering department, but not just them, anybody in the company can join a team and basically put together an idea to help make Buildertrend better. So the idea of feedback and listening to others is crucial. We’ve talked about on a number of episodes before this about, great ideas don’t always happen in a vacuum. Most of them require some sort of feedback and ideation to continue moving forward. So you’ve obviously, you’re one man, you’re at the top of the totem pole there, but you’ve got a great team that’s working alongside you to make sure that you’re delivering the best partnership and value to our customers.

David Arnold:

Yeah. And I think you touched on a really important point. If any one person tells you they own strategy or ideas, then you should immediately stop listening to them because they obviously aren’t doing it right. Strategy at Buildertrend is a team sport. Ideation is a team sport. And frankly, that’s something that we’re putting a lot of tension on right now, getting ideas from anyone in the company and making sure that they can actually get over the finish line. It’s interesting as the company grows, like we have that, it gets harder and harder to get ideas done quickly because you want to not take undue risks. And so as our team has grown, we’ve tried to build a little bit of a separate process. The hackathon is similar in the sense that you want to do things quickly. You want to test, see if you’re onto something and then you can always build upon it later.

David Arnold:

And so at this stage of Buildertrend’s life, like I said, it’s not a problem of ideas, it’s just a problem of understanding exactly how to treat each of the long-term, short-term partnerships internally. There’s just a lot of variables. And so we hear a ton from our customers. We’d love to do them all immediately. That’s not possible, but we do think we can give better and quicker at giving feedback, taking small bets, all those things. So hackathon is really critical to that because it allows all of our employees to be really creative. And to Tom’s point, we’ve got a ton of really talented folks.

Tom Houghton:

Definitely. So we’ve obviously talked about how long this process takes. You know, having a strategy is a key to any successful business. So businesses across the globe have had to make quick short-term strategy shifts to cope with the COVID pandemic that we’re having. So now we’re six months into this unprecedented pandemic. They might’ve had a short-term strategy. So in your opinion, do you think businesses need to shift to a longer term strategy in this new reality that we’re living in?

David Arnold:

You know, I don’t think anyone knows what the long-term looks like. I mean, I think that’s what’s hard for every business, whether you’re a restaurant, Buildertrend or one of our clients, is no one has a crystal ball. So what you have to do is triage. And then once you triage and you feel like things are maybe a little more stable, you have to do a balancing act between short and long-term. And honestly, I think that’s what a company should be doing anyways. It’s just harder when things are going well to pop out of the business and think about what else you could be doing. But I would argue it’s critical. And one of the hardest things that I’ve seen for owners of companies, whether it’s tech companies, like the ones I’ve worked with in the past or our clients is finding time to just take a breath and think about what else could we be doing?

David Arnold:

And these can be big things, small things, hiring a new product line. But I think you have to assign it like it’s work. And if you’re an owner of the business and you literally don’t have time for it, you need to think about firing yourself of certain functions. And that’s really hard, especially if you’re good at those things or you have trouble trusting somebody with your baby, that happens all the time, but I don’t think you can plan well, unless you’re taking the time to think about the longterm. So I think that’s one thing that is really hard for founders, big small companies. But I think it’s critical to just assign it as work, block it out on your calendar, whatever you have to do, but make time for it.

Tom Houghton:

Yeah. That’s crucial. So you obviously kind of mentioned some tips there of like blocking out time. Any other tips that you can … I mean, I know as a business owner, right? When you’re in the weeds of it, it’s like you don’t have time and I guess ultimately you got to prioritize what’s more important the here and now, or the future of the business. Any thoughts on that?

David Arnold:

I mean, the answer is both, and that’s the problem. If you spent too much time on the short term, you don’t have a North Star that’s clear, and you don’t have anything guiding those investments you’re making. If you’re only thinking about the long-term things, don’t get done, people don’t have guidance, they’re not held accountable. And that’s why a person has to think long and hard about what’s the highest and best use of their time. And often as a founder or the person who is the one person that can lead the company, you have to get rid of the things that someone else can do. Even if that means accepting that they’re going to do 70% of the quality that you would do. You allow them to do that 70, you coach them and get them closer to what you could do.

David Arnold:

But what’s critical about that handoff is then you get some time back that you can put through the things that only the owner only the CEO can do. And I think that’s how you pay attention to both. It’s hard. And on one of my past jobs, I worked with technology founders, right when they were getting going, often when they were starting to have success. And it was the hardest thing for them to do successfully. Fire themselves of key parts of the business, but the ones that made it did that. And I think that’s the only real way to address both the short and long-term.

Tom Houghton:

So let’s pull on this thread a little bit, right? Moving from one owner to firing yourself. I love that idea. The biggest challenge, I think, as a business owner is it’s like, how do I make sure I’ve got the right person in control of that, that can handle the strategy?

David Arnold:

Yeah, I think it’s like any hiring decision. You don’t know for sure. You have to ask questions on the front end, you have to have an ideal type of person on the front end. But ultimately you have to give them a shot and give them discretion. At the end of the day, what’s probably most important is that you trust somebody’s judgment. And the only way you can really get a feel for someone’s judgment is allowing them to make decisions. So you can start small, but you have to see what they’re made of. And fortunately, and unfortunately the only way to do that is to let them make a decision and deal with the consequences. That’s really easy when you talk about it academically, but in practice, it’s very hard because you know you can get something done, you know you can make that decision, but it just gets back to that highest and best use of your time. And like I said, I truly think that principle applies, whether you’re running a pool-building business or a tech company.

Paul Wurth:

So it sounds like we’re talking directly to owners who are listening to this right now. One of the strategies that I’ve seen work in this industry is construction owners talking to other construction owners, their peers, whether they’re physically in the same area, or have a common denominator like Buildertrend. Is that a good strategy? If you’re an owner who just doesn’t know where to start?

David Arnold:

Yeah. Hands down. I think that’s also one that’s hard because a lot of people think asking for advice means you’re not up to the task, but being a founder and an owner is a lonely role because you have to project that you know what you’re doing. You have to make decisions. There’s a lot of responsibility. And to your point, when you can talk to somebody who inherently gets that, they know what it’s like to make those decisions, to manage a budget, a company, you can cut through a lot of the BS and just get the good feedback. So I think on top of making sure that your planning is continuous and kind of a part of your weekly, monthly activities, getting feedback from people outside your organization, whether they run a similar company or just have a perspective that’s valuable, I think is another really key way to be successful.

Paul Wurth:

If you want to connect with other builders, owners, we have a Facebook group don’t we?

Tom Houghton:

We do, we’ve got, so you’ve got a couple of different ways to connect with other owners. One of them is of course, to join our fan club page on Facebook, the Building Code Crew. Because there’s other groups.

Paul Wurth:

I should have led with that.

Tom Houghton:

You should have led with that. That’s OK. I’ll take care of that. Yeah. So join the Building Code Crew, and that way you can interact with other builders, other construction professionals like yourself, but also our guests will be on there. They’re joining that and you can continue the conversation there. There’s a lot of ways to engage with us. We have social media channels on every platform you can imagine. And so you can interact with us that way as well. We also have Buildertrend Online Conference where you can join that and participate. We’re in a unique position because we can actually kind of be the middleman here in connecting people. And so that’s kind of what we’re doing right now. We’re doing that through a lot of different ways. So check the show notes, buildertrend.com/podcast for a ton of ways to connect with other builders. That’s a great point, Paul.

David Arnold:

Yeah. And I think that’s been one of the coolest things about Buildertrend University. Obviously that’s on hold right now. And as we just make sure that we’re being safe, but it was really awesome to see the owners talk to each other and candidly, that wasn’t something we were really focusing on when we started. But a lot of the feedback shows that that was one of the things that was most valuable. So whether it’s Buildertrend Online Conference, the virtual consulting or any of our in-person stuff, that’s also a great way to learn from people who also have been proactive about getting Buildertrend and making themselves a better business. So hopefully to Tom’s point where we can help facilitate some of those connections.

Tom Houghton:

Absolutely. So I want to try to leverage your experience here, David, you’ve been with us for a while. You’ve been in your role and we’re now giving our listeners kind of access to somebody like yourself. Who’s got a lot of experience in the past three plus years, four years now almost, it’s probably got to be close to that. What’s been something that you’ve learned in the process of dealing with our strategy, something that you didn’t know before or one of the things that stood out to you as kind of like the biggest wow moments.

David Arnold:

I think the business model of the contractor is one that’s not super well understood in the sense that the person that a consumer would pay to build or improve their doesn’t always do a lot of the work or sometimes any of the blocking and tackling of the project. They sub it out, as you all know. And I think the complexity from that is really interesting. And one of the reasons Buildertrend exists to bring everyone together to be on the same page. So I think walking in to this company in this industry, that was an eye-opener. But there’s some big benefits to it, you can be quick, you can be nimble. And I think it allows contractors to bring in partners maybe a little bit easier. So I think that was one of the things that was really interesting walking in.

Tom Houghton:

To that point of having partners. Obviously there’s a whole bunch of partnerships in the process of building a home and builders are, depending on their location right now, specifically in the pandemic, some are struggling with shortages of supplies or workers, but some are obviously having success in those areas, just again, based on where they’re at in the world. How can the businesses that are doing well now, have they’ve gotten back into the swing of things, how can they maintain that success moving forward in your opinion?

David Arnold:

Yeah, and I think understanding the investments a company is making, the job costing, the financial management piece of running a contracting business, are somethings that I think separates the good from the great businesses, and here at Buildertrend, we’re putting a renewed focus on that financial management piece. Like our software is very broad, very deep as everyone knows, but at its core, we started with project management, which is organizing all of the stakeholders, those subs that I mentioned, the homeowner and making sure that everyone knows who needs to do what next. And we still want to focus on that. But to a point getting to the next level is really understanding the money that’s coming in, where it’s going and how to improve and be more efficient with the management of the flow of funds.

David Arnold:

So we have some great financial features. We have some really exciting financial partnerships coming online that we think will take that to the next level. So, the evolution of Buildertrend, it’s almost getting back to something that we address as we broadened our set of features. And that’s, after you get project management in place, let’s get your financial management in place. So you can understand how to make the investments that help you grow to the next level.

Tom Houghton:

The next level. That’s where I always like to be.

Paul Wurth:

All right, let’s go to questions. I want to learn about David.

Tom Houghton:

All right. So David, obviously your internal employee of Buildertrend. And so all of our internal employees in order to help our listeners connect with them, we ask a series of questions. So three questions that lead to fun facts about you. That’s our series title.

David Arnold:

That’s so confusing.

Tom Houghton:

So the first question is, tell us a sport that you like to play in your spare time.

David Arnold:

Basketball. True story, I played pickup basketball really actively when I came to Buildertrend up until I broke my ankle before work one day. But for the record, went to the doctor and got some medicines and crutches hopped in a car with one of our founders and drove to a meeting. So not even a broken ankle stopped me from helping BT.

Paul Wurth:

That’s true.

Tom Houghton:

It shows the dedication.

Paul Wurth:

Your commitment is noted there. David.

Tom Houghton:

Awesome. Next question. Where can we find you around town, favorite restaurant?

David Arnold:

Well, right now it’s our kitchen. Because there’s a couple of things going on. But in a normal environment, I’d say Pitch it’s this local independent Italian place that I think is the best in town. Anytime that we have birthdays or something, we usually end up there,

Tom Houghton:

Nice. Final question for our intellectual type, just like yourself and a learner. So what’s a book that you’ve read recently or you’re currently reading that you’re really excited about.

David Arnold:

There was a book on John Rockefeller, the guy that started Standard Oil and it was fascinating. That’s probably the best one I’ve read in a while. And I’m convinced that Jeff Bezos read a book, this book or one like it, and then just is copying the playbook because he’s kind of doing a lot of the same things that Rockefeller did back in the day. So that one’s probably top of the list.

Tom Houghton:

Fantastic. Well, David, thank you so much for coming on the podcast and sharing your knowledge in the industry and with our company here, with our listeners. I know they get a lot out of that. So thank you for doing that. And again, thanks for all that you’re doing to make Buildertrend even better.

David Arnold:

Of course, thanks for having me. As I mentioned it’s a big day. I’m going to go downstairs and talk to my wife and just go through the whole play by play,

Tom Houghton:

Celebrate with a glass of wine or something.

David Arnold:

That’s right.

Paul Wurth:

You did a great job, David.

Tom Houghton:

Love what you heard. Don’t forget to rate and subscribe to our podcast. So you can hear from more guests that will benefit your business. Also, please check out our show notes page for more information on what we discussed on this episode, you can find it at buildertrend.com/podcast. Thanks for listening. And we’ll see you next time on “The Building Code.”