Technology Spotlight: An Interview with Higharc

As part of Beaumont Bailey’s mission to connect founders, innovators and key players that make up the fabric of our industry, our latest Technology Spotlight series highlights the successes of our incredible members and wider network. In this instalment, we speak with Marc Minor, CEO and Co-Founder at Higharc.

Tell me a little bit about Higharc and your role there…

I started Higharc about six years ago. At the time, I was in an executive leadership role for a 3D printing company. 3D printing fits into a broader world of digital manufacturing, which includes applying software that is tightly linked with hardware to tune up and improve how things are made. At the time, I was also building my own house, or at least trying to build my own house and it was terrible experience. I had this kind of “tale of two cities” experience where my work contrasted with what I was doing with my home build. They are very similar in terms of process, in many ways, houses and other products. Both essentially are created with a collection of patterns and repeated functions. And theoretically, they can take advantage of the same kinds of software-enabled tooling to make them better, but homebuilding was using basically none of the tools that you see in advanced and digital manufacturing. So, I came up with the concept for Higharc—a company to apply that same idea with those tools over to homebuilding. From there, I went out to raise some capital, and I was fortunate to have a track record as a startup guy, I suppose. I found some awesome investors to back the company and brought on three other co-founders. Two of them came out of Autodesk, and the final came out of video gaming.

Looking a little closer at the technology, what problem does Higharc solve?

I’ll go back to the metaphor I gave you, comparing advanced manufacturing of products and houses. The major difference is that houses must change constantly. So, imagine you’re trying to ship a lineup of iPhones, but you can’t standardise exactly how they’re manufactured and gain all the benefits of scale. You gain this by having one set of tooling to make it scalable. Homes are similar in that there are patterns that are repeated. For example, homebuilders might only have five different ways that they do a kitchen. However, each of those five ways changes a little bit every time you build a house, and buyers have different choices. Additionally, local areas have their own code overrides and then there is the land itself that might force changes to the design — for example, you may need a different foundation type or stylistic variation to the house to fit on a particular lot. So, change is a kind of constant challenge in controlling complexity in homebuilding. That is really what our software platform aims to help with.

We help builders manage the effects of change across the whole business. For example, design teams who typically would manage drawings in traditional CAD software — and often maintain thousands of drawings — can eliminate most of those drawings and complexity with automation in Higharc. We replace traditional CAD software. This, in turn, makes it 10 to 20 times faster for them to work. For estimating teams who have to take that information from the drafting and design teams, we automatically produce a set of take-offs so they can bid and understand the cost of their homes better.

This concept of generative design and automation is what enables us to deal with constant change. Practically, if you’re a builder, it means we cut a lot of time out of the cycle of construction, sales, design, estimating and purchasing, and even field operations. We do that by automating things that today are having to be managed by people and often third parties. We can tighten up homebuilder operating margins and help them build faster. We can also make their internal teams far more productive, eliminating several steps along the way.

Our product helps builders go to market 75% faster, we found, which is pretty insane. This has allowed 1000’s of homes to be built just over the last two years with Higharc. And what Higharc’s system produces is not just great looking 3D visuals, even though that’s part of it. Higharc software is mission critical. We replace construction documents. We replace estimates. We replace traditional CAD software and the tedious parts of the drafting process. This is all very fundamental. I describe our business as creating a sort of rising tide effect for homebuilders. Every part of their business gets lifted over time, if we do this right.

How does your technology differentiate from others in the industry?

There are three differentiators. Firstly, recall that concept of the rising tide, right? That’s critical, because that means every group associated with the process gets a benefit and a meaningful one. It’s hard to focus on a particular group as there are many, but the big one that stands out in terms of the builder’s profit is that Higharc really transforms the business on the bottom line. Go to market for homebuilders is always a huge one. So, by cutting that time by 75% — essentially 120 days down to 30 days — it’s a big deal.

Another large one is what’s known as the soft schedule cycle time. Our product cuts that down by at least 30%. Soft schedule cycle time is the period between when a buyer signs a contract and when the house starts construction. These are just dead days where you’re just wasting money.

The other big area is top line growth. Builders using the platform can sell more, faster. The value per house is higher when you sell with Higharc. That is because we produce houses with a car-like configurator. When you are shopping for a car, everything is available and laid out for you to select in 3D, online. We can essentially produce the same thing for homes. For buyers, this means that instead of looking at a 2D floor plan, which is what they get today, they can see a 3D version of the house. Whatever changes they make to the design, can be seen in real-time 3D.

This “what you see is what you get” 3D configurator gives buyers more confidence to sign off on higher ticket, hard to visualise items like a wraparound porch, extended rear patio or something like a covered sunroom. So those are the kinds of options that builders are selling a lot more of because of the ability to visualise. These are higher margin items for most builders as well, meaning you can not only increase top line revenue, but you can also improve your bottom line and your operating margin. All of that together increases what you take home as a builder, which is great.

It’s a better experience for the buyer too, because they see what they’re going to get. They have a stronger hand in the actual design, more so than they do traditionally. All in all, it’s a good thing for the industry when you can represent a house accurately in 3D on the web, which is what Higharc does.

How does this differ from the digital twin solutions we are seeing in the market?

A large problem with digital twins is that it presumes there is a 3D model in a BIM tool like Revit. In CRE, there is wide adoption of Building Information Modelling, which has really taken off, and they have more advanced processes and technologies. But 90% of homes are designed with AutoCAD. AutoCAD is primarily a drawing tool. There’s no information. It’s not standardised or scalable. Change is this constant loop in homebuilding and, since most homes are in CAD today, nobody else is able to keep up with data and a true digital twin just doesn’t exist.

How is the funding industry currently?

There are some tips I would suggest for founders… I think watching your cash balance is the most important thing a founder can do. Don’t get cute when it comes to fundraising. If you have access to cash, you should go and take it. That’s one of the best pieces of advice I’ve received, and I can give. Your goal is to get through to the other side of this slump that we’re in. That’s really the goal. If you are outperforming, and you’ve got a strongly differentiated technology product, then you can still go out and raise. It might not be on like 2021 terms, of course. I think one of the good things about this market is it has reemphasised actual technology, not just clever marketing and business models.

What do you find the most challenging about the talent market right now specific to your industry?

For the most part we have not had any challenge with scaling our teams. We have hired around 19 people over the last three months, mostly across go-to-market, sales and customer success with some engineering. The talent market today is just so different than it was a couple of years ago. You know, in engineering and product, top-tier people are still very hard to get a hold of. And we’re a unique challenge, because we do 3D graphics, we do CAD, and we do web all smashed together. So that’s pretty unique and hard to find a person that can do all of that.

However, I think challenges that are applicable to more and more companies in terms of hiring will just know that the best people are still in demand. You have to have a really strong vision, value proposition, and compensation package to attract them. At the same time, I think it’s even more important now to filter for passion for your business, given how many people are in the market. Even if you feel like someone is great, they’re hot on paper, and they come across well, you want to really look out for genuine passion for your mission. Because it’s easy right now to hire people that are great but are like mercenaries and will jump to the next best thing.

If you would like to discuss any of the topics raised in this piece or if you need support with your leadership resourcing strategy, please get in touch with Emma Callahan on: emma.callahan@beaumontbailey.com