As a general contractor for 10 years, Joshua Engelbrecht experienced first hand the skilled labor problem that he says plagues the residential and commercial construction industry. So, he set out to build a solution — using technology.
Engelbrecht is the co-founder and CEO of Vancouver, Wash.-based ToolBelt, a digital network that connects contractors with skilled laborers. He launched the company with Ross Barbieri, a tech veteran who serves as chief technology officer. Barbieri has developed staffing technologies in tech, healthcare, and now construction and is an active angel investor and mentor in the Portland startup community. He’s also a entrepreneur-in-residence at Portland State University.
Engelbrecht and Barbieri first met at the beginning of 2019 when Engelbrecht was raising capital in Portland. They hit it off immediately and by Sept. 1 launched ToolBelt as an online staffing marketplace. The startup has 9% of all residential contractors in Portland on its platform and is now live in the Seattle market.
Engelbrecht was frustrated by the tedious process of trying to find construction labor and how it slowed production capacity. He relied on leveraging his personal network — depending on a project’s needs — reaching out to other general contractors, trusted sub-contractors, manufacturers, supplier reps, the local building supply store or placing ads on Craigslist.
“I come from a problem-solving industry where every project is different and has its challenges,” Engelbrecht said. “Software in my eyes is very comparable. In both industries, you are building an end product that is always full of things you didn’t expect until you start to break ground.”
While he misses working directly with customers and seeing their faces light up over a completed job, Engelbrecht finds joy in building ToolBelt with the startup’s 10-person team, servicing more than 2,000 contractors in the Pacific Northwest.
And the company is seeing a huge uptick in project demand during the pandemic.
“The restricted travel measures have allowed homeowners to spend more of their disposable income on their homes,” Engelbrecht said. “A lot of requests for additions, remodels, and exterior work. We have had record months for postings on our platform in July and August.
ToolBelt has raised more than $1 million from investors including Elevate Capital, Bellingham Angel Group, Cascade Seed Fund, Portland Seed Fund, and Alliance of Angels. They hope to expand to the rest of the West Coast in 2021.
We caught up with Engelbrecht for this Startup Spotlight. Continue reading for his answers to our questionnaire.
What does your company do? Give us your 2-3 sentence elevator pitch. ToolBelt is the first digital labor solution for the construction industry. We connect general contractors and builders to skilled labor whether its crews or tradespeople.
Inspiration hit us when … The inspiration came to Josh when he was struggling to find new crews to keep up with his project demand during the busy season. He then realized that all labor is procured through word of mouth and both contractors and skilled labor were limited by their direct network. He knew that if there was a digital solution to connect both sides that everyone could do more production.
VC, angel or bootstrap (and why): Josh and Ross originally put in their own money to develop the app and then raised capital from notable angel investors and VCs in Portland such as Elevate Capital and Portland Seed Fund. We bootstrapped as long as possible in order to prove out that we could build a two-sided marketplace and have contractors adopt new technology. During COVID, we raised our first series seed round led by Cascade Seed Fund and have been growing since.
Our ‘secret sauce’ is: Being grounded in our customer, the contractor. By leveraging Josh’s industry expertise and incorporating customer feedback we have been able to build a product that is EASY to use and brings instant value to both sides.
The smartest move we’ve made so far: We are a firm believer that the solution cannot be more complicated than the problem. Historically, the construction industry has been technology adverse and found current technologies hard to use. The smartest move we have made so far is creating an easy to use interface for the contractor and reducing the friction for connecting. We built ToolBelt to be the modern-day word-of-mouth solution for the industry.
The biggest mistake we’ve made so far: The best advice I received was from my first VC investor Nitin Rai. He told me in business it’s best to crawl, walk, and then run. There have been moments early on when we tried to run before we’ve walked. Crawling and walking allow you to be patient and then see the opportunity to run towards.
Which leading entrepreneur or executive would you most want working in your corner? The entrepreneur I would want to work with me would be Howard Schultz. What Howard was able to accomplish from a visionary standpoint changed American work culture. He had a vision for the cafe being the third place between the home and the office that people met and socialized. He is a sales and marketing genius along with being a great operator. What I admire most is his commitment to making his customers and employees feel valued. Early on, he was constantly capturing feedback from his employees on how Starbucks could innovate, and then would actually incorporate those changes. I feel that Howard could help me learn how to scale a business profitably while maintaining its core values.
Our favorite team-building activity is … every week we do a meeting where the whole company meets and everyone shares their “big win” for the week. This is important so everyone can see how they’re contributing to ToolBelt’s success. It also allows insight into each department and we are able to learn from each other.
The biggest thing we look for when hiring is … having great character. People who possess great character add value to our company culture and are able to represent our brand well for our customers.
What’s the one piece of advice you’d give to other entrepreneurs just starting out: Your first product or service doesn’t have to be perfect. It’s important to figure out what is the minimum you have to create in order to fulfill the need in the market. Iterate your product/service if it only is going to add value to your customer and be scalable.
Company site: toolbelt.work