The following interview is a conversation we had with Ryan Fink is the CEO and Co-Founder of Digs, on our podcast Category Visionaries. You can view the full episode here: $14 Million Raised to Power the Future of AI Collaboration for Builders
Ryan Fink
Doing well, Brett, how are you doing?
Brett
I’m doing good, and I’m super excited for this conversation. So I see that you’ve had two exits so far, and I’m sure there’s more that are going to come in your career, but I want to start with talking about the exit. So take us back to 2015, when your first company was acquired. What was that day like for you?
Ryan Fink
Yeah, I mean, it was a really exciting day. We had been building a computer vision machine learning company for about five years, made a lot of kind of pivots and micro pivots over those five years, and started to hit a nice little vein and grow our customer base. And so a larger company, Bay Area company, came along and acquired us, and we’re a team of, yeah, like five or so folks, and it just was a really great strategic fit.
Brett
Was that a no brainer to sell, or did part of you want to keep going and try to build the company bigger?
Ryan Fink
Yeah, I mean, there’s always that part of you that being an optimist and entrepreneur that wants to keep going, but it was a no brainer. This one was a no brainer.
Brett
What did you see in the world that others were missing? That’s pretty early on to be involved in computer vision and machine learning and ar. Like, what did you see that others weren’t seeing?
Ryan Fink
Yeah, so, I mean, what got me into computer vision machine learning was augmented reality and being able to interact with Ardental back in 2010 to 2015, you had to pull out, you know, a separate device to interact with this AR content, especially if it was in heads up displays. So we wanted to solve that user experience gap and create a gesture interface where you can reach out and interact with the augmented content. And, yeah, as were doing that, heads up displays and smart glasses were becoming a little more prevalent and so I think we just kind of hit really good market timing.
Brett
And then let’s talk about that second company that you founded and then also sold. So tell us about stream.
Ryan Fink
Yeah, so actually at the acquiring company of my first company, OTG helped build and launch remote collaboration software for heads up displays and brought on some of the first marquee customers like Porsche and GE and others. So kind of got my feet wet in remote collaboration. And so with stream, when I end up leaving the acquiring company with Stream, I wanted to apply those learnings, plus my background in computer vision machine learning to the consumer space. So at stream, we connected homeowners to remote experts through augmented reality video call so that the remote contractor could capture job specs on a seemingly simple, like, FaceTime type call. And our machine learning would be working in the background and computer vision to capture more additional content so they wouldn’t have to go out and roll a truck.
Ryan Fink
So things like as they were on the video call, a 3d model would be generated in real time so they could interact with that 3d model and take measurements, or I drop in an arrow as a guidance tool, or capture serial number and model number of different appliances, things like that. So they didn’t have to roll a truck and they could just capture those job specs and then go on site and do the work the first time with the right parts, tools and folks.
Brett
To do the work with that second company. Were there any lessons that you took from that first company?
Ryan Fink
Yeah, absolutely. So in the first company, kind of made every mistake in the book. I remember going through this accelerator and they had a one pager on things not to do while you’re building a company. And being a green entrepreneur. I looked at that and I had made every single mistake on that sheet. So going into stream had really painfully learned from some of those mistakes. And so we applied those to building out stream all the way from how we hired to our tech stack to how we scaled and scaling stream. We went from my co-founder and I to over 120 people. So internal communication and bringing people along became a challenge at 1020 5100 plus people. And those were some really good learnings going through that.
Brett
What did you learn about negotiation when you were negotiating that exit?
Ryan Fink
Yeah, so, I mean, negotiating the exit was really fun challenge, if I’m being honest. We had at stream just raised a round of financing and so we’re in a position where we had the Runway and the timeline to keep executing. We had some really great partnerships with Google and Samsung and we’re actually a launch partner with Apple for their new Lidar device. So were kind of hitting our pace and so were in a position where we didn’t really need an exit. But the leadership of the acquiring company frontdoor had spun out some really valuable assets out of service master this whole marketplace of professionals, and they’re a home warranty company, so they had a real applicability for our technology.
Ryan Fink
And our vision at stream was always to create a digital twin of the home and plug into a marketplace where you can get on demand expert help and advice as a homeowner. And so it just seemed like a really great fit. So as were going through that acquisition negotiations, we really ran it open and transparent, just around. We’re not really for sale, but the strategic fit felt really good. So as were negotiating that acquisition again, we just got to a place where it had to make sense both for our team, for us, and then also make sense to protect our vision, because we felt like we still had a, a lot to accomplish. So front door ended up keeping us as a wholly owned subsidiary, which was really important to us.
Ryan Fink
And then, of course, we got the price right for the team and investors and everybody involved in. But I think one of the key learnings that I had was I’m a very transparent person. Kind of what you see is what you get. And taking that into negotiation and not posturing and just being really transparent and honest throughout the entire process really helped pay dividends, not only during the process when things got tough, but also post acquisition. It established a really great relationship between our company and the acquirer.
Brett
Trey, what can you tell us about patents? I see that you have 30 plus patents to your name. What have you learned about that process?
Ryan Fink
Yeah, so, I mean, I grew up in the age of shark tank and my dad was always a tinker and I like, take things apart and build things. So I always wanted to be an inventor. And so ever since my first startup, one of the first things I did was I filed a patent. I thought that was just so cool. But there’s so much more applicability to having an IP portfolio than it just being cool or just having patents, because as a small startup, you’re not going to be able to afford to really defend them, but it’s more about protecting your approach for your product. And then also what I learned as we scaled stream, for instance, is we had a really great patent portfolio protecting our approach.
Ryan Fink
And when we brought on large partners like Lowe’s and Best Buy and Traeger, our IP portfolio became really important to them. Because although us at stream was a small target, those large brands become targets for patent infringement, et cetera. So an IP portfolio actually really protects not only you, but the partners and clients that you bring on. And so that’s just been a continued part of our strategy and we’ve brought it over here to Digs as well. I think we filed eleven or twelve patents in our first about year and a half.
Brett
So after the second exit, I hope you got a little bit of time to relax and take a breather. But as you were thinking about what’s next, what was it about Digs and everything that you’re doing there? Like why Digs? What was about that problem that just made you say, yep, that’s it, let’s do round three?
Ryan Fink
Yeah, great question. So I was supposed to take some time off. I told my wife, I’m going to take a year off, kind of recoup from the grind of being a founder, and that lasted all of about, I think, three months. So my wife is an absolute saint and she married an entrepreneur. When we met, I was building my first company. But coming out of stream, one of our visions, our long term visions, was creating a digital twin of the home, a real semantic understanding. And our approach was to do it through these micro video calls, through support and maintenance calls, and even folks giving bids. So we’d get these little snapshots into the home. Other folks in the market, like Matterport, send somebody out to scan the space, so no one’s really captured substantial piece of the market from a digital twins perspective.
Ryan Fink
So after stream got acquired, I also built my first home. And going through that home building process saw that it was not digital whatsoever. And at the end of the build, I was left with a physical binder with very little of the information on my home. So between that vision that I still had an itch that I wanted to scratch, and going through a personal situation of going through a home build, came up with the idea for Digs by proposing to my current co founder a challenge, which was, how do you create a digital twin of the home so that the homeowner’s empowered with all this information without making anyone go out and capture it. So kind of a audacious challenge, right? So my co founder is a former residential home builder.
Ryan Fink
And so between me being a homeowner and him being a former builder, we put our heads together and we felt like we came up with a pretty novel approach, which was all the information on the home flows freely and exists throughout the build process. But it’s not captured organized in any meaningful way. So at the end of the build, it’s lost out into the ether.
Ryan Fink
So what if we could apply our background in computer vision machine learning, essentially AI, and have it run in the background of an existing builder’s workflow, and then we can ingest all that information, all of that data, so that at the end of the build, our AI could generate a true semantic understanding, both spatial information from the blueprint, and then a semantic understanding from all the inventory, like the lights, flooring, the countertop, all the way down to grout and paint color. Could our AI take all that information, organize it in a meaningful way so that the homeowners empowered with a full understanding of their home at the end of the build? So that kind of inspired us to say, hey, I think we’re onto something here. The next step was, okay, we have to solve real pain points for builders.
Ryan Fink
And fortunately, Ty has walked a mile in their shoes. He used to build luxury homes in Big Sky, Montana, and so he’s felt some pain points from the builder perspective. So we came up with a hypothesis of some pain points we think we can solve. We did a market analysis around who’s solving these problems, and it turned out there’s very few people focused on solving what we decided to go after, which ended up being a collaboration between the client and the builder.
Brett
Why do you think that is?
Ryan Fink
I think a lot of folks have looked at some of the builder pain points, specifically from the builder perspective, and have approached solving them from that viewpoint, where we had both a homeowner perspective and a builder perspective. And it was a very crowded space of people solving builder problems from the builder perspective. So we wanted to flip it on its head and start with the client experience and then work our way back. So I think it was just a little bit of a unique approach, and we’ve always been ones to focus on the user experience, just making a really delightful, easy to use product. And so starting from more of like a, b, two, c approach, a lot of us to do that. And a byproduct is our product is so simple to use, that builder adoption has been phenomenal.
Brett
What’s it like selling to homebuilders? Are they open to new technology like this? Does it require a tremendous amount of education? What are those conversations like?
Ryan Fink
Yeah, so, I mean, went into our go to market approach with this being top of mind, because traditionally you hear builders are pretty adverse to technology. Now, what we found, and I don’t know if it’s more of just the market timing had shifted. But builders are actually, they’ve been really receptive to new technology. I think the key is it just has to be really simple to use. So I think we hit the nail on the head there. And of course, one of the first things we did is we interviewed 25 or more builders before writing even a single line of code, just to get like our prototype out in front of them, have them test it, use it, and then we would iterate before we wrote any code.
Ryan Fink
And so we did a lot of user research around usability, around the pain points we’re trying to solve before ever building a product and then releasing it out into the wild. So I think we did a pretty good job of ingesting and distilling all of the builder feedback and then building a product that they actually need.
Brett
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Ryan Fink
Yeah, so we launched publicly our free beta in February of last year. So over the last year we’ve brought on over 5000 homes onto the platform. Again, just in a little over a year, we’re in all 50 states and a handful of providences in Canada. We’re seeing about 20% of our users are coming into Digs by just word of mouth referrals. So builders and vendors and contractors are referring our product to other builders. And then once folks are on Digs, we’re really sticky. So our stickiness ratio is right around 41.4%. And just to give you kind of a benchmark, world class is right around 16%.
Brett
What do you attribute to that success? What do you think you’ve gotten right?
Ryan Fink
So I think number one is probably focus. So we’ve really stayed true to who we are and who we’re not. So what I mean by that is Digs is not a project management software. There’s great companies out there like builder trend who have really captured that part of the market. And it does get tempting when you hear from builders. Well, if you just had this feature or that feature, I would adopt your platform. So really staying true to we’re not a project management software. We’re focused on the client experience layer for pre construction design, handoff and warranty. And then we’re going to partner with project management software for the in between the construction process. So I think that’s been a huge part of our success, is staying away from some of those temptations.
Brett
How do you do that? That sounds so easy when you say it like that. But how do you stay away from those temptations? How do you stay focused?
Ryan Fink
I mean, you’re right, it’s one of the hardest things that we wake up and do every morning. It takes a village, as they say. So it’s our EPD team, our engineering, product and design team, really making sure that we’re ingesting customer feedback and then doing the distillation process, making sure that we’re distilling it against who we are. Our company vision and the core pain points were trying to solve. And if the feedback doesnt fit one of those three things, we just have to be okay saying no.
Brett
What about the marketing philosophy? How would you summarize the marketing philosophy and really just the approach to marketing?
Ryan Fink
Yeah, so weve taken a relationship based marketing approach. And what I mean by that is weve identified some really targeted events with our icps, which are residential home builders and contractors and vendors. And so we attend these events like international Builder show. We meet with builders, we build relationships, and then we also sponsor various different podcasts in the industry. And then we’ve identified several folks in the build industry that really resonate with our vision around building a better client experience, both during the construction process and post and partnering up with them just to amplify our message. So, for instance, Mike Rowe is somebody that’s really aligned with our messaging.
Brett
The dirty jobs guy.
Ryan Fink
Yes.
Brett
I haven’t watched that in so long, but I love that show.
Ryan Fink
Same here. Yeah, I grew up watching that show and I have been a huge fan of Mike’s for a long time. And he was actually the keynote speaker last year at International Builder show. And I just remember going to the keto and there’s probably eight to 10,000 build professionals in the audience. And Mike’s message just resonated so well with that audience and with us as well. There was myself, my co founder, and our head of marketing there. And I just remember turning to them and saying, we’re going to work with him one day. And they both kind of chuckled at me. And you know, eventually we got ahold of his folks and, or his team and we sponsored his podcast and over about a year just built up a relationship with Mike and his team.
Ryan Fink
And it just came to a point where we both said, hey, what Mike’s trying to do in the trades and getting more of the upcoming use into the trades if college isn’t a good path for them, and then what we’re trying to do on the technology side with amplifying through AI, amplifying the existing workforce that builders have, our software can also become a really great recruiting tool for the up and coming generation. And so, yeah, we decided to partner together. And now Mike’s a spokesperson for Digs.
Brett
What’s he like in person? That’s so cool.
Ryan Fink
Yeah, I’ll say. His voice is even more epic in person, really. But what you see on tv with Mike is exactly what you get with them behind the scenes. He is just a down to earth guy who really cares about the trades and just making the trades a viable and better place to be for everybody. So, yeah, if I could hang out with him more, I absolutely would.
Brett
Yeah. But those were fun conversations and fun meetings.
Ryan Fink
Yeah.
Brett
How do you think about messaging the ROI of this to the home builders? Is there an ROI story? Are you saying that this will give your customers a better experience and that’ll make you more money? Or like, what’s that type of storyline look like?
Ryan Fink
So, yes. So we’re focused on the pre-construction, the design handoff and warranty. So for the pre-construction, there’s also a sales component there on the front end of the build process. So we have builders like Masarosa out of Oklahoma who he sold ten more homes this year because of Digs. So hes using Digs as a sales tool, telling these homeowners, hey, we use a digital experience to better help you track all of your decisions. For us to collaborate and communicate more clearly and concisely together, and then at the end of the build, youre going to get a full digital version of your home for better maintenance and home ownership. And its been a great sales tool for Masarosa and many other builders alike.
Ryan Fink
And then of course, the efficiency gains as well during the build process for the design phase, having one single source of truth that the builder can bring in all the stakeholders. So the flooring, lighting, electrician cabinets, bringing in all of those vendors and the homeowner into one area where they can collaborate, make decisions when changes happen, notify the relevant stakeholders. There’s just a lot of efficiency to be gained. And then also our AI with something like ask Digs, which is our AI chat, allows anyone in the build process to ask the digital home a question, and Digs will give that person answer. So things like, well, is the grout color in the kitchen that was chosen? Digs would be able to answer that. And then on the backside, ask.
Ryan Fink
Digs can answer warranty questions for the homeowner, so the homeowner can be empowered with information on their home without having to reach out and talk to the builder or a contractor.
Brett
What do you think has been the most important go to market decision that youve made, apart from partnering with Mike Rowe, of course.
Ryan Fink
Trey. I think all the upfront market research that we did and defining our ICP before we even had a product. So one of our first hires was VP of marketing Danebial, and her mission was to come on from day one and help us create our go to market strategy and really deeply understand our core target audience. And then how do we reach them? Because traditionally, builders are pretty difficult to reach. It’s a pretty fragmented space, and so how do we get in front of them? And, you know, the dream is to always have kind of a word of mouth flywheel type of effect. But how do you do that in such a fragmented space? And so putting together that strategy and then testing and iterating early and often, I think, has been one of the best things we could have done.
Brett
As I mentioned there in the intro, you’ve raised 14 million to date. What have you learned about fundraising throughout this journey?
Ryan Fink
Yeah, so raising the first seed round was actually a pretty funny story. When I left stream to take some time off, I decided to get into venture as a venture scout, learn the other side of the table. So I joined a VC out of Seattle called Fuse. They’re about a $250 million fund. Now I’m investing in B2B software. So I was doing some venture scouting with them, which essentially means I just meet with founders and I help source some deals and participate in due diligence and whatnot. But I was meeting with one of the founders of Fuse, actually, all three founders of Fuse, at breakfast, catching up one day in Portland, and they asked, you have to be noodling on something, Ryan, do you have any ideas? Do you have anything you’re working on?
Ryan Fink
I said, well, matter of fact, me and my co-founder are working on something called Digs. And so I shared Digs and the vision and how it could become this digital twin and build a marketplace around it and whatnot. And in that meeting, Brendan, one of the partners, took the receipt for breakfast, turned it over, and wrote terms for a term sheet on the back of the receipt. I since negotiated them up. That was a very unique experience and probably pretty rare. But the first two companies that I fundraised for it was a numbers game. So I had hundreds of conversations with VC’s. And you learn a little bit from each conversation.
Ryan Fink
You don’t probably want to take everything word for word and take it a bit with a grain of salt, but one of the things you do get is you get a sense of the VC environment through all these conversations. And one of the things that I think we did really well throughout the past couple of companies was even when an investor would say no, we would ask them if we could keep them updated on a monthly cadence with a friends of insert company name email. And a lot of the investors that we identified as good fits, but they just needed more convincing. We put them on this email list and were really diligent about sending out an email at least once a month, religiously.
Ryan Fink
And what we found over the years, both at OTG and stream and then even here at Diggs, is some of the investors who said no ended up coming back around six months, twelve months later and actually investing in a subsequent round. And that’s because we had built a relationship over time. We had kept them up to date on our progress and traction and execution over months or a year, and that had just been such a great tool in fundraising. So with Diggs, it was no different. We raised our first pre seed round of 7 million from some VC’s that invested in my last couple of companies. And that was really to build this really talent dense team that we have. And then once we had enough market validation, we raised another $7 million seed round just to give us the time and space.
Ryan Fink
And that’s when we brought on some net new investors and formalized a board. And we’re off to the races.
Brett
Robert, and we’re up on time here, so we’ll do just one final question. That question is, what’s the big picture? What’s the three to five year vision look like?
Ryan Fink
Robert yeah. So in three to five years, we hope that every new home in the US is generating a digital twin for the homeowner. We have things today like Carfax for your car, but there’s nothing like home facts for your home, where you have this complete record of everything that’s in your home, so that you as a homeowner can better support it, maintain it, and even have better resale value and more confidence when you’re purchasing a home. So that’s really important to us is to create a really accurate record of the home when it’s handed off to new homeowners. I would also say builders increasing their existing workforce’s output and happiness. Just continuing to raise the happiness for the builders and everybody who works so hard to build a home. And then finally the digital twin of the home.
Ryan Fink
Once you have that semantic understanding, I think there’s a really fantastic opportunity to create the API of the home. Where then brands that homeowners love, whether it’s a retail brand, furniture, et cetera, or products or services, can plug into the home and provide new experiences that we haven’t even imagined today.
Brett
Amazing. I love the vision. All right, we’re up on time here, so we’re going to have to wrap before we do. If there’s any founders that are listening in that want to follow along with your journey as you build and execute on this vision, where should they go?
Ryan Fink
So you can follow us on Instagram at Diggs HQ, on LinkedIn at Digs HQ, or you can check out our website and follow our blog@diggs.com. So dash g s.com dot what was.
Brett
It like buying that domain? I have to ask.
Ryan Fink
It was a harder negotiation than negotiating our stream exit.
Brett
That’s awesome. All right, Ryan, thanks so much. Really appreciate it.
Ryan Fink
All right, thanks, Brett.
Brett
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