When the Workflow Forces Adoption

A vertical SaaS company most investors are mispricing as a generic AI casualty with 95% gross revenue retention in one of the most underdigitized industries

In 1992, most small businesses in America were still doing their books on paper.

Some had graduated to spreadsheets.

An enterprising few repurposed Quicken, a personal finance tracking software, as a business accounting tool.

They were already using Quicken to better understand their personal cash flow and balance sheet and immediately recognized the benefit of using an accounting program in their businesses. The problem was that none existed, and Quicken became their workaround—even though it wasn’t the best fit for business accounting.

Intuit recognized the opportunity and launched QuickBooks to immediate success. It soon became the platform for small business accounting. Accountants standardized their practice around it, and their clients—small businesses—followed them onto the platform.

Intuit continued to build upon its platform, entrenching its users further. They added payroll, payments, tax solutions, and third-party integrations. Each new addition made the ecosystem more valuable to its users and harder to leave.

Intuit digitized small business accounting and became the industry standard.

Thirty-four years later, I see a similar pattern and opportunity forming in a $13 trillion industry.

Construction is 13% of global GDP and McKinsey ranks it the second-least-digitized industry, behind only agriculture.

Project schedules live in spreadsheets. Requests for information (RFIs) sit unorganized in email inboxes. Budgets get reconciled manually across disconnected point solutions, sometimes weeks after decisions have already been made in the field.

The industry isn’t under-digitized because it doesn’t need software. It’s under-digitized because no one has solved the operating system yet, like Intuit did with Quickbooks.

Until this month’s selection.

The company has spent the better part of two decades making the same bet Intuit made in 1992.

And like Intuit, the core product is just the base to build incremental layers of operational value for its customers, increasing the value of the platform and increasing the costs to switch, while also making it hard for owners, contractors, and general contractors to operate their businesses without it.

The company is still in the early stages of building its competitive moat and becoming the industry standard. This creates a large opportunity, but also increased risks and a wider variance of potential outcomes.