GTM lessons from a construction tech pioneer | KP Reddy

**KP Reddy** (0:00)
This is not one of those businesses that you get to learn on the way.

**SPEAKER_3** (0:06)
Welcome back to another episode of Builders. As always, this show is brought to you by frontlines.io Silicon Valley's leading B2B podcast production studio. If you're bringing technology to market and want to learn from your peers, we have a library of more than 1200 interviews with venture-backed founders and marketers where they talk all things go to market. Of course, if you want to launch your own podcast, we offer podcasts as a service to more than 80 tech startups. The idea there is very simple. You show up and host and we do everything else. Now, with all that said, let's jump into today's episode.
Our guest today is KP Reddy, founder and CEO of Zero RFI. KP, welcome to the show.

**KP Reddy** (0:45)
Hey, how are you?

**SPEAKER_3** (0:46)
I'm doing great. Looking forward to this conversation. So you're a founder turned investor, now you're back to founding again. Talk to us about what you're founding.

**KP Reddy** (0:52)
Yeah, so we're doing a AI roll-up of construction services businesses. So we started it with, in partnership with General Catalyst. So they're kind of my primary backer to date. Obviously, as we continue to raise money, there'll be other people around the hoop hopefully, so we're already experiencing tremendous growth and we'll continue to grow.

**SPEAKER_3** (1:15)
Amazing. I feel like everyone right now is talking about AI roll-ups. That seems to be the buzz word or the buzz thing all over on my Twitter, at least I recognize I'm probably in a bubble. What's the key to really getting that right and nailing that?
Whenever I see people talk about it in the comments, people say it's very hard to actually pull off.

**KP Reddy** (1:32)
It is very hard. I would say you actually have to have been in the shoes of the founder that you're buying.
This is where PE experience doesn't really help you that much. Because a lot of times what you're doing is buying companies that you're sitting across from the founder and they're like, look, how are you going to make my life better post-acquisition? I think these require a transfer of knowledge and all of that. So I think it's really important to understand their business and have been there, done that.
Then you get really far. I think you have to have a technology team that's world-class. If it's like, oh, we've encoded some stuff or we're, that's a big so what. What's interesting with a lot of the firms, it's not like they've never heard of AI, right? They're trying different things. So we find that they have to grab a great tech stack. Then honestly, you had to have been an operator. I took one of my companies public, I took another one of my companies and sold it to a large public company. So I know what zero to 1,500 feels like. I think it's very hard because the pace at which you acquire companies, I mean, by the end of the year, we might be a 5,000 person company, like who knows, right? It's really how many deals can you get done? And it's not one of these things that the speed, it does not allow you to grow into the role. Most tech founders, they have the benefit of growing into the role, right? They control the pace, they get to learn along the way.
This is not one of those businesses that you get to learn along the way.

**SPEAKER_3** (3:00)
And what would you say is the average profile of the type of company that you're having conversations with, that you want to acquire?

**KP Reddy** (3:05)
Yeah, most of the ones we talked to are 50 to 100 people. We've done three deals so far, those were under 50 I would say those were kind of our experiment acquisitions to see what works, what doesn't work, within a very controlled environment, so to speak.
But 50 to 100 for us right now is a good spot. And then probably next year we can start doing the 500 and up type acquisitions as well. So there's a little bit of, you have to continue to build your team and your technology. I mean, you are building product along the way, right? And it's important to pattern recognize, what are you building? What's the benefit? Everything from the technical deployment models to the cultural deployment models becomes really massive. So it's all the above, right? So once again, experience rules.

**SPEAKER_3** (3:53)
And what's that integration look like? Is it being merged under one brand? Do you keep it separate? What does that look like?