Today we’d like to introduce you to Erich Schoenkopf.
Erich, let’s start with your story. We’d love to hear how you got started and how the journey has been so far.
At the age of 31, I founded Vertigraph. My previous employers gave me outstanding experience that helped with our success. I grew up in Doylestown, Pennsylvania, was working with various employers since the age of eleven, graduated in 1982 with a BS degree with Distinction in Accounting from Penn State and was recruited at college to work in the audit department of the Dallas office of Deloitte. I moved to Texas because Dallas had an exceptional business environment and working at Deloitte was a great place to learn and start a career.
After becoming a CPA and progressing to senior accountant at Deloitte, I was offered a controllership position with a client that was a NASDQ listed company with numerous subsidiaries engaged in oil and gas exploration, single board computer development and telecommunications equipment design. It was a small conglomerate with public company reporting requirements, a lot of moving parts, with operations in many industries and many parts of the world. As I quickly progressed to Chief Financial Officer I learned a lot from the many talented people associated with this organization. Managing this small, entrepreneurial business was a real bearcat however as resources were limited and costs frequently exceed sales. Due to my concern with its long term prospects, I decided to move on and seek a new, more promising business environment.
I was entrepreneurial, willing to work and had valuable, real-world business experience. In December of 1990, I came in contact with an individual that was seeking funds to re-establish a business that provided takeoff and estimating (i.e. preconstruction budgeting) software to the commercial construction industry. Building plans were normally created by an architectural firm and then distributed to contractors to bid on the cost of labor and materials. Many general contractors and subcontractors would competitively bid the proposed project. The value in automating this business process appeared critical to any contractor’s success. As a result, I established Vertigraph, Inc. in March 1991, purchased the existing source code and borrowed money from a collection of angel investors.
I quickly learned that the source code Vertigraph purchased needed significant enhancements to be competitive and I initially underestimated the costs and challenges required to breakeven. Within three years, the business was down to one person, myself, struggling to survive. I owed money to the angel investors and I was thinking, should I quit or try to make it work? I truly wanted to succeed.
In order to make the business work, I needed new, enhanced product since everything was moving from older DOS based software to the recently released Windows software.
I was trained as a CPA with no talent or interest in software programing. I needed a professional that could develop this new BidWorx for Windows software.
At this time, the World Wide Web was not tapped and on-line communication was done through forums found on subscription services such as CompuServe and AOL. After interviewing several programmers, I posted a message, on a CompuServe software forum, seeking a programmer to move our DOS based software to Windows. A gentleman, Ken Bailey from Maine, contacted me and said he was interested in developing the new BidWorx for Windows software. We hammered out an agreement where he would earn a percentage of revenues along with an ownership stake in the company. Ken was a god send. He was off the charts intelligent, hardworking, MIT educated and creative with substantial experience as a research and development executive. He would write the code, I would concentrate on sales and operations. Ken has been with us since 1995 and is key to Vertigraph’s success.
It took some time to write the new software, create the documentation and prepare the software for market. It was not easy. When completed, the software was unmatched in its capabilities. We believed and knew it was the best software product in the marketplace. The database driven, high level assembly takeoff and estimating software field was highly competitive however. I learned real quickly that sales is the key to success and often more important than product quality. If you can’t sell it, it doesn’t matter how good the product is. Vertigraph, as a startup, was not well known, had limited marketing dollars, and the sales closing cycle was very long as it involved changing a critical business process. Educating the consumer regarding the software and benefits often took many calls, product demonstrations and many months to close the sale. Revenues and profits again were not as expected, cash was tight and we had to raise additional funds from the existing investors which diluted our ownership interest.
Financially, I struggled and I was eating a lot of Kraft Mac n Cheese to survive. Before I started to cover my costs in 1999, I averaged less than $18,000 per year in cash compensation. After paying the bills and mortgage, there was virtually no spending money available. Many would have walked away. I refused and believed in Vertigraph’s long term prospects.
In addition to Ken, I was also fortunate to find Ms. Kim Border in 2001 who heads up the office administration and support functions. She has consistently lead and developed the company ever since. Today, Ken, Kim and I remain the core leaders of Vertigraph.
When we released our BidPoint software, which addressed the spreadsheet estimating marketplace, in 1997, the business started to roll. For general knowledge, BidPoint automated the quantity takeoff process from paper blueprints in Excel workbooks.
BidPoint became the leading product in the industry for automating the takeoff process. Demand was from all fifty states and internationally. By 2007, it was realistic that in the US, a portion of every commercial construction project with a value of over $1 million was being estimated by at least one contractor using Vertigraph’s popular BidPoint XL software. Finally, the business was paying off and Vertigraph was rolling.
Vertigraph constantly responds to the marketplace by introducing new software and releasing timely updates and version enhancements to its existing software. We started with BidWorx, a high-level assembly database driven application, migrated to Excel estimating using a large format digitizer tablet with BidPoint XL, was the first to release on-screen measuring from PDF and CAD files into Excel with our BidScreen XL application and successfully automated the takeoff of site excavation quantities from PDF and CAD files with our SiteWorx/OS software. Today our two main products driving revenues and profits are BidScreen XL and SiteWorx/OS.
Today, life is good for myself, our family and Vertigraph. With family and friends and an eight figure net worth there is a lot to be thankful for. Some of my experience that may be of interest to others in starting a business include:
• Work hard and do the best you can in everything you do.
• Constantly learn. Try to understand all aspects of your current business.
• Surround yourself with good people.
• Sales is the key to success.
• Do not quit and have confidence in yourself.
• Think big but live small. Less is sometimes more when building a business.
• Do not fear change. Keep the big picture and embrace change.
• And finally, keep swinging. Good luck may result. You won’t get a home run if you are not swinging.
We’re always bombarded by how great it is to pursue your passion, etc – but we’ve spoken with enough people to know that it’s not always easy. Overall, would you say things have been easy for you?
There is never a smooth road when developing a business from scratch. Overcoming struggles and challenges are part of the game and it separates the winners from the losers. Business challenges included staffing, product development, marketing the software internationally, training users and supporting customers. These challenges are also compounded by capital restraints. If you do not have the capital, the biggest challenge is how to manage the business, yourself and the product portfolio so that the business continues to grow and gain market share.
In addition to the business challenges, there are also personal challenges that arise. Personally, my wife and I experienced several miscarriages while attempting to start our family. This stress was reduced with the adoption of our son, Adrian. Additionally, I was diagnosed with Type 1 Diabetes over 50 years ago, the burden of the disease caused some problems. In June of 2002, I traveled to Colorado on a business trip and experienced low blood sugar and crashed head on into a F250 pickup truck. I was near death and it took many months in the hospital to get back to work. Kim and Ken drove the business while I was recuperating. Again, good people are important.
As a result of this experience, I contributed financially and joined the board of the JDRF (Juvenile Diabetes Research Foundation) Greater Dallas Chapter.
We’d love to hear more about your business.
Vertigraph is engaged in the development, sale and support of its takeoff and estimating software sold primarily to the commercial construction industry.
Every commercial construction project is different with different quantities and different pricing. Takeoff is the process of measuring and calculating quantities from construction plans. Estimating is applying the costs to these quantities. Properly estimating the construction costs is a critical part of any commercial contractor’s success.
Our products are affordable, easy to use and offer features that are not found in other solutions. Our BidScreen XL software automates the quantity takeoff process from CAD, PDF and other file types directly in Microsoft Excel. The SiteWorx/OS application is feature rich and creates 3D models of the existing and proposed site while calculating cut and fill volumes.
What were you like growing up?
I liked to challenge the rules growing up. I strived for independence. I enjoyed participating and following baseball, basketball, tennis and football. I enjoyed a party and good time with my friends. I really did not have much interest in any profession going to college. I only majored in Accounting because there were many jobs and opportunities in the accounting profession at this time. I did want to get educated so that I could be employed and have a career.
Contact Info:
- Website: www.vertigraph.com
- Phone: 214-340-9436
- Email: support@vertgraph.com
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