Keeping the startup flame BURNING
AS THE leader of high-growth startup Builk One Group, Patai Padungtin (Bote) is setting out on a mission to make Builk the exemplar of a breakthrough technology company in Thailand.
What makes his ambitions even more noteworthy is that he didn’t come from a background in technology. Yet, as chief executive of Builk, Patai, 40, has shepherded a company that is recognised as being among the pioneers in the Thai startup scene.
Builk One Group began life in 2010 as a small pilot project of a traditional software house named Longkong Studio.
Patai, who graduated with a degree in civil engineering from Chulalongkorn University, spent just three years in the traditional construction industry as an employee after competing his studies. That was when he realised that, aged 23, he wanted to become an entrepreneur. His first venture was in the construction field, but the business failed.
Undaunted, he kept his entrepreneurial mindset alive. Turning to the software industry, he established Longkong Studio as an operation to develop an enterprise resource planning (ERP) program, called Pojjaman, for large contractors.
He enjoyed success in building up the company as a small and medium-sized business over the years. But Patai felt that the software business, as a service- oriented operation, was not easy to scale up.
With this in mind, he founded a project called Builk in 2009, requiring an overhaul of the business model from selling software to providing it for free to small and medium-sized contractors under an advertising-base business model. Builk was launched on the market in 2010.
“At the time, we wanted to do something that was ‘big and bulky’ for the industry – and that was Builk,” Patai says. “We started Builk by submitting Builk into a business model competition operated by Chulalongkorn University and it was judged the winner. Builk turned into a reality in the market in the following year.”
Even though Builk had been declared the winner in the business model competition, the transition to the real world was not easy.
The first two years were difficult as Patai and his executive team members had no experience in startups. Then in 2012, the term “startup” started to become fashionable, and Patai submitted Builk into a regional startup competition and, again, it was named the winner.
The first concrete steps towards success came from that point.
“At the time, we really began to realise just what a startup is and how funding investment and speed are so important. It is totally different from being an SME,” Patai says.
After that second success in a competition, Patai was invited to have Builk join the 500 Startups accelerator programme for a taste of a real experience of the startup ecosystem in Silicon Valley for four months. He had received that break after Builk was deemed one of the 30 best startups from around the world
It proved a valuable time for him and he learnt a lot more about the spirit that drives startup operations, and Patai retains much of what he learnt from that experience.
In particular, he learnt that one can start and fail many times until landing on the right business model. And for Builk, that is to offer software for small and medium-sized contractors while getting revenue through sponsorship by construction material companies.
“A startup is a speed-driven business. We were forced to be fast and to move quickly, otherwise someone will disrupt you. We learnt to fail and restart quickly, learning to discontinue products that did not work well and to start up with something new,” Patai says.
However, even after the company had achieved a number of milestones, he strove to find a new model rather than rely on the company’s assets, data, ads, and platform. Once he made a thorough assessment of the company’s strengths, he moved beyond data analysis to do e-commerce for the construction business.
At the beginning, the move to e-commerce was difficult, given his lack of experience on the commercial side rather than with his strengths in data analysis, Then, Builk gained a partner investor, Milcon Steel, to transfer corporate knowledge to Builk. Success followed, with growth at a rate of 10 times for top-up revenue streams from ads. The operation reached revenue of Bt480 million from e-commerce in 2018.
“It is still a very small portion when compared with the whole construction industry. But we came from zero; we had no stock. We have been driving the e-commerce business by the day and have a community that we have built up over many years.”
The success of scaling the e-commerce business for construction material products was helped by the use of Julibi, a customer relationship management (CRM) solution for construction material shops. Patai allows such shops free use of the software and has invited them on to the network to do e-commerce. Now, some 25,000 contractors are in Builk’s database.
“We do not want to sell construction materials on online. We just want show it can be done. We would like to encourage the traditional construction material shops to transform their operations to a digital level with the use of our software and benefits from being on an e-commerce platform,” Patai says.
In 2019, he aims to increase e-commerce revenue from Bt480 million to Bt1 billion. He believes his e-commerce platform, called Yellow, will bridge the offline and online construction worlds to empower off-line shops to benefit from the online platform.
E-commerce is not the final destination for Builk. He has sights set on Big Data in the construction industry, saying the next big move is to become a financial-technology service provider for the construction industry.
“We want to be a lending partner with partners who are banks, non-banks, and even peer-to-peer lending service providers. Our data can be analysed and used for credit scores for loan applicants in the contraction business,” Patai says.
He says that moving money is easier than moving materials. “Builk is in the right position to do that well. With the Big Data that Builk has collected for almost 10 years, we know the stakeholders in construction industry well,” he says.
“Our dream is to digitise the construction and real estate industries. Currently, Builk helps some of them but this proportion is very small when compared to the whole industry. However, it has made an impact to help SMEs save on operation costs by 2.6 per cent. In 2018, the value of total business operations on Builk’s platform was around Bt100 billion.
“Creativity plus innovation equals construction united; the company’s mission is to unite the construction industry.”
Expanding the business into the regional market is another ambition that Patai holds for Builk.
His first moves to do business abroad, in 2013 and 2014, failed. But he now realises that different markets need different approaches.
Now, Builk focuses on Myanmar, Laos, the Philippines and Indonesia. In Myanmar it is focusing on helping local business embark on construction standardisation with a construction business academy approach.
He stresses that challenges lie in wait at every stage of a business. For a startup to become a corporate entity, it needs a startup spirit across the organisation, and that is a challenge to sustain, he says.
Blending of cultures
“Our business keeps growing and we need to blend corporate best practice into startup culture. We try to always keep the startup spirit in the company,” Patai says. “We have not yet succeeded in all our ambitions, but have achieved some milestones. We have a lot of work to do and many challenges to overcome, so we need the team to help us to move forward.
“There are no real successes in the world, just always new challenges to overcome.”
He admits that one of the main motivations behind his active work schedule is the fear that the business will be disrupted.
Patai aims to have Builk listed on the Market for Alternative Investment (MAI), on the Thai stock market, in 2020 or 2021. Towards this goal, he hopes to conclude a big round of fundraising by late this year or early next year.
Under Builk One Group, there are six business units: Pojjaman, an ERP solution for large construction companies; Builk, an ERP solution for construction SMEs; Jubili, a CRM solution for construction material shops; Ploy, a CRM solution, and Kwanjai, an after-sales service solution, for condo that is used in 40,000 units in Bangkok; and Yellow, the e-commerce platform.
Patai manages all the six business units as startups. Each unit is headed by a team lead (acting as CEO) and C-level in sales and marketing. Patai plays the role of mentor for all the units.
“We give them the tools and decision-making authority to get them to run their own business unit like they would run a startup,” he says. “We teach them to dare to fail and restart. We always keep the startup spirit in the company culture. Every week, we have a town hall activity to get CEO and the C-level to share their failures and learn together.”
Under Builk One Group, it is likely to have six engines running, but sometimes one engine may not be firing, Patai says. However, the other performing units can shore up the rest of the group.
By ASINA PORNWASIN
THE NATION WEEKEND