How a classroom idea led to $2.4 million construction startup Varicon
James Baker came to Melbourne Business School to be an entrepreneur. His classmates helped him make it a reality.
Having spent more than a decade in the construction industry before starting an Executive MBA, James is now CEO of construction services company Varicon alongside his fellow students and co-founders Siddhant Shrestha and Ofer Assor.
"I always wanted to get into something entrepreneurial and thought doing my MBA would be the logical step," James says.
"I started thinking about Varicon in Don O'Sullivan's marketing class, and that’s when I met Ofer and Sid. We started talking about how we could apply what we were learning to a business, and it's grown from there."
Sid and Ofer were Full-time MBA students at the time, with the right experience, skills and connections to get a business off the ground that tracks construction site activity in real-time.
Ofer has a strong background in Israel's world-leading software development industry, where he worked for global companies Intel and Applied Materials before moving to Melbourne and joining Aconex, and then ANZ Bank. He's now Varicon's Chief Operating Officer.
Sid, who studied a dual MBA/Master of Marketing degree and is Varicon's Chief Product Officer, is also an entrepreneur with links to a network of Nepalese software developers through an outsourcing business he started in Melbourne.
The idea was given a jump-start thanks to yet another connection at Melbourne Business School. As it happened, two of James's classmates were senior executives at national construction company Delta Group.
Delta's Chief Operating Officer Mark Welsh and Chief Finance Officer Jatin Rangras knew James well from their Executive MBA studies – but convincing them wasn't easy.
"Tough customers are usually the best customers," James says. "They told us they had a problem they'd been dealing with for years but hadn't found anyone with a product or the understanding to solve it.
"We offered to investigate the problem as consultants and either leave them with a report for someone else to pursue or convince them to invest in us as an early partner, while we developed a solution."
Delta's decision to back Varicon was courageous, given the team didn't have a fully developed product at the time – just the skills, experience and right attitude to take on the problem.
"A typical construction company would have information about what they've spent that's four to six weeks old," James says. "Delta explained that it's like flying a plane, but you can only see out the rear-view mirror. That's the state of the industry."
Varicon's solution replaces the manual, paper-based process of tracking who's on a construction site and what they're doing with an app and platform that tracks resources and progress in real-time.
"From an engineering perspective, we integrate technologies from mobile to web to cloud-based, which allows us to be much more innovative than our competitors and develop a full end-to-end solution," Ofer says.
But it’s a work in progress, Sid adds – and that's the secret to Varicon's success.
"We're not so much about imposing our own solution as building one with the construction industry that works for them. From Delta to everyone we're working with, we're living in their world and understanding their problems. And being lean, we can make changes at lightning speed. That's one of our core strengths."
Varicon is steadily building a site-monitoring solution that could save construction companies millions – and their Melbourne Business School connections continue to come in handy.
"Our first client was an MBS alumnus," Sid says. "And this client, Montdami, whose project site we're standing on, is from our MBS network. Our biggest last-round investor was through a connection we met through another MBS classmate, who introduced us to his founder, who introduced us to the investor. MBS is everywhere in what we have achieved."
The trio have also been working with the School's Career Management Centre to employ students as interns to help them work through their growth challenges.
"We have an MBS intern working for us now, and Dave Tan in the careers team can connect us to more in the future, which is great because start-ups need different talents at different points," Sid says.
James is very clear about how much his Melbourne Business School connections have helped make a classroom idea real.
"If it wasn't for our network, it might have taken us 12 to 24 months longer to get started, or maybe never."
To learn more about James, Sid and Ofer's construction services company, visit the Varicon website.