The SiteVisit

Adapting Finance for the Construction World with Kyle Friedman, CEO at Quickly

• James Faulkner

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Ever wondered how a tech entrepreneur could revolutionize the construction industry? Join us as we chat with Kyle Friedman, co-founder and CEO of Quickly, about his journey to co-founding this groundbreaking platform designed to solve industry-specific financial challenges.

Prepare to have your perspective on the construction industry's payment systems completely transformed. Discover how Quickly’s innovative model, which eliminates upfront costs and subscription fees, has delivered significant savings to its clients over the last four years. This episode explores the lag in B2B financial tech compared to consumer finance and how Quickly is closing this gap with its cutting-edge approach.

Don't miss this episode if you're curious about how technology is driving change in construction finance.

Learn more about Quickly following the link https://www.helloquickly.com/

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Speaker 1:

all right. So you are here from Kelowna, you're calling in from today. We're doing this online. I don't usually do many of these things, kyle.

Speaker 2:

How you doing, uh, I'm doing well, how are you doing today?

Speaker 1:

uh, well, I'm a little under the weather, to say the least, so yeah, that uh is unfortunate, but thanks for making the time hey, no, no problem, no problem. Yeah, we tried to get together last week and then had some complications with some other stuff and, oh my goodness, yeah, it's kind of can get pretty nasty. But so, yeah, you are, it's cool to talk to another tech person, we can talk shop, which is very, very cool to do. So, yeah, what's what's the motivation of being in Kelowna? Have you grown up there?

Speaker 2:

No, no. So I think really we probably just got the COVID itch, as many did, but we always have this plan and aspiration to move to Kelowna. Just, I grew up in New Brunswick on the water so I wanted to be around water and my wife and I, you know, once COVID hit and we were locked in a house for a bit, we were like, well, why don't we just hit the now button? So we did.

Speaker 1:

Oh, the now button Nice.

Speaker 2:

Yeah, it exists. Who knew?

Speaker 1:

So were you in tech before this.

Speaker 2:

I was in tech originally in 2011. I had an online school for music production called Recording Essentials. It was a peer-to-peer based educational platform so much like a master's class. I was ahead of my time and scaled that to a thousand users at 10 bucks a month and still managed to crash and burn. So that was my first time in tech. And then I was in construction and then back in tech.

Speaker 1:

In construction. So you're building stuff.

Speaker 2:

Um, I was on the building side, so I had a, an insurance and restoration company. Um, we were focused on multifamily dwellings that withstood the damages, so we'd build it back, um, you know, and then uh, and then sold out of that in 2016 and then put the chips to the table in a little uh painting business, um, and then scaled that uh until uh, until I got to where I am now. Quickly. About four years ago is when I started quickly all right.

Speaker 1:

So now you're in it hard, I'm in it hard, I'm in the tech life, all right, welcome to the site.

Speaker 2:

Visit podcast leadership and perspective from construction your host James Falkner Business as usual, as it has been for so long now that it goes back to what we were talking about before hitting the reset button.

Speaker 1:

You know you read all the books, you read the email, you read Scaling Up, you read Good to Great. You know I could go on. We've got to a place where we found the secret serum. We found the secret potion. We can get the workers in. We know where to get them.

Speaker 2:

One time I was on a job sale for a while and actually we had a semester concrete and I ordered like a green finished patio out front of the site show yesterday.

Speaker 1:

I was down at Dallas and a guy just hit me up on LinkedIn out of the blue and said he was driving from Oklahoma to Dallas to meet with me because he heard the Faber Connect platform on your guys' podcast. And we celebrate these values every single day. Let's get down to it. All right, kyle, let's talk about quickly. So, looking through this, obviously there's huge issues in terms of payments, et cetera, and multi-types of industries. Obviously, we're going to be talking about construction today. Did you get to the? Just give us like the impetus of, like what made you start this? Was it from the painting business or Well, I saw it from both sides.

Speaker 2:

So I was the, you know, basically the GC paying people and kind of saw, you know, waiting for the draws and having to, you know, really at the mercy of being paid when, when it gets paid, and realize like there must be a better way. And I looked around there. There wasn't a solution other than just offering earlier payment terms to your customers and none of them really would take it. So I decided to build my own.

Speaker 1:

um, none of them really would take it, so I decided to build my own. That's pretty awesome. So, um, let's just chat a little bit about um, like the, the early days of of starting this. Like was it? Was it the? How did you get started doing?

Speaker 2:

it, let's put it. Let's put it that way Like what? What was the first kind of moves that you did? Yeah, I'm very much like an MVP, so minimum viable product CEO. So what's the cheapest way that I can test my assumptions and kind of come up with a hypothesis and test it and then take a bit of a scientific approach? You know a hypothesis and test it and then take a bit of a scientific approach. So first things first. What I did was I just set out to see, like, would people take an earlier payment at a discount and then, if so, what would that discount rate be? So I started to kind of experiment with that, just in conversation and discussion, and and then try to identify are there companies that are already doing this? Which there are some um and uh, and then try and kind of talk to them and learn. So I really, you know, really tried to challenge it in theory. Um, where the first steps?

Speaker 1:

I see. So I mean it's from a regulatory point of view. Did you have to deal with any sort of banking rules on that kind?

Speaker 2:

of stuff. No, like, the spot that we're in is we're not actually any type of lending platform. So what we're doing is we're either you know, either giving the software for a to take the earlier payment. Then we brought in a banking partner to be able to uh facilitate that. So it's, it's never in a lending spot, it's actually purchasing the receivable and then being paid back um by the company, uh, if it goes into that situation. But the the happy path is is just giving a company the ability to to offer it for themselves, um, so that that's our preferred method when possible.

Speaker 1:

Oh, I see, Okay, so, so in order. So I mean, on the risk side of yours on, on your side, you have to, you have to buy the receivable from the customer and then you're essentially just paying it sooner.

Speaker 2:

That's exactly it. So thinking about what we do is we're really focused on the builder, the developer and the GC. So we came in and we partner with a GC or a builder to be able to give them this you know solution, this technology, to be able to offer earlier payment at a discount to any of their vendors and service providers. Then those companies can, you know, for the first time, have visibility into the approval process, because we're connected directly to their accounting software and and and indicating when they're going to be paid or when they think that they'll be paid, and then, from that point, they can take part in an earlier payment if they choose.

Speaker 1:

Oh, I see Okay.

Speaker 2:

So it's really focused on a partnership with the buying entity so in construction, the buying entity so in construction, the builder, the developer and the GC, so very much working together to really give that end result for the sub trade or suppliers or vendors.

Speaker 1:

Ah, I see Interesting.

Speaker 2:

Yeah, we flipped it on its head. So when people think about a problem right, like waiting to be paid, naturally try and come up with a solution for the company that's waiting. But the real way to solve a problem is to find out who is taking part in this and what's preventing or holding it back. And you know, in the kind of GC world it's waiting for that draw to be funded or whatever it might be. So that's where this, you know, banking relationship can be really valuable. And then you know, on the home building, you know it can be.

Speaker 2:

You know different types of cash situations, just the business model overall, or just really not knowing about you know business model overall or just really not knowing about. You know the need from the vendors, suppliers and trades and kind of the opportunity at hand where it can really be a win win right, you know helping a company that works for you so that they can build more homes or execute more projects or supply more materials, being able to increase the profitability on your projects or homes at the same time, we're pretty happy about what we're doing, so it's pretty beneficial to everyone, included.

Speaker 1:

I see. So let's just take a scenario, just so everyone can be super clear on how this would work from a transaction point of view. So let's say you have a GC who is hiring an electrical contractor to do the electrical for, let's just say, a five condo flex, let's say so. Then you have um. So let's say that the electrical is, I don't know a couple of hundred grand, so that the take me through how the let's say, let's just say, just to keep you around numbers, let's say that $200,000, um submittal has been put in, and they basically know how much that is. At that point, how, where, where does your software start and take us through, like the life cycle of that $200,000?

Speaker 2:

Yeah, yeah, very cool, great example. So, so, yeah, so what we try to do is we we stay out of the entire approval process just because we know how critical it is for the general contractor and how much of an ask it would be to change it. So essentially, they have an invoice intake or an approval process that this electrical contractor and the other trades as well as their company internally knows how to perform and execute. So this electrical contractor submits their invoice and a statutory declaration, schedule of values, whatever it might be. So the supporting documentation it runs through into their company to be able to kind of approve and prepare for their draw request or whatever it might be. Once it's been approved then it gets entered into their accounting software and that's where it quickly comes in. So we come in once the invoice or bill for them has been approved and entered into their software. We then take that approved bill and we mirror it into the Quickly Network as an early payment opportunity for that electrical company to see. So now that electrical company can be notified and see that they have an invoice that's been approved for $200,000. And they can take, you know, $97,000 today or whatever it might be. So depending on what the discount fee is, and obviously there's always a holdback on this style of work, so they can't take earlier payment on that full back portion. Then that's what they have the opportunity for.

Speaker 2:

The cool part about what we do is it's a software, it's a technology. We've now presented that opportunity, which is great. Maybe they don't want to take part in it. So let's call it a 2.9% discount, which is fairly common in the construction industry, for 30 days, so two weeks passes. Now it's you know, 7%, sorry, point seven, so 70 basis points. And then that's where you see that a company might be really enticed to take it. It's one week before the payment date. It's 70 basis points and they could get you know, close to $200,000 right away.

Speaker 2:

So Quickly is completely dynamic, giving them the flexibility to take an earlier payment if they choose, and every day that it's getting closer to the payment date it gets cheaper, and that's why so many people love using Quickly to have that option, should they choose, as well as to have visibility into the approval process and have a better idea of when they're going to be paid.

Speaker 1:

I see Okay, so interesting.

Speaker 2:

Yeah, did that all make sense? I know I stuttered on that. Yeah, no, it kind of did make sense, I think.

Speaker 1:

Yeah, so you guys are, let's say, the first, right away. It's $97,000 that the electrical contractor could take. Let's say that was the first. It was basically half of the bill, yep. And then there would be $3,000 that would have been absorbed by Quickly as a fee. Yep, that's correct, okay. And then, um, so you are paying them the ninety seven thousand dollars and then waiting for the gc. What's the, what are the terms for the gc to pay?

Speaker 2:

you guys, just the the the same payment terms that they would have already. So the whole concept of quickly is to make sure that a GC isn't changing anyway. If they pay by check, it's paid by check. If they pay on the fifth, then it's payment on the fifth, and so on. And if that GC is using their own funds as well, then you know they get the bulk of that discount, Um, and then there's just fees to use quickly.

Speaker 1:

Um, so yeah, so that's kind of that's kind of cool. So, oh, that's that's neat, okay, so rather than you guys taking the fee there's, uh, if they, if they were to pay it right away, you guys just pay them like a system fee, or is it a transaction fee?

Speaker 2:

A transaction fee so quickly. It's completely transaction fees. There's no subscription and it's a completely free software for builders, developers and GCs. So, being in construction for so long, I realized there's a bit of you know. Just prove it. You know, do what you say is a big thing that goes across. So we know how successful this will be. So we actually don't charge a subscription fee or any type of upfront cost currently to be able to onboard and offer early payments via quickly, so you can spin up quickly early payments as any company for no cost and then start saving. So and the savings are astronomical. It's it's pretty incredible to watch.

Speaker 1:

That's pretty cool. So so you, in order to so you raise some, some money to be able to, for this working capital to be able to, you know capital to be able to, you know, pay for these, these bills up front, obviously, because it's pretty, pretty, pretty capital intensive operation you have, because that's really all you're doing is lending. Well, yeah, you're kind of lending money or you're moving money around but, yeah, definitely moving money, definitely capital intensive.

Speaker 2:

But as more and more companies come on that offer earlier payments themselves or off their own balance sheet, then you know it, it it really takes away the the capital requirements there as well. But again, you know you have to prove out the model. So now we're four years in. People have seen how successful you are and the growth and all of the customers that have come on and you know, more and more offering, you know, early payments themselves to be able to take advantage of the bulk of the discount. So that really helps.

Speaker 2:

But we did raise some equity. So we are backed by Thin Air. Uh, james lockery, um, the founder of thin air labs, was a co-founder of of um, wave financial, which was, uh, you know, quickbooks challenger, so the canadian challenger to quickbooks and and many other accounting softwares. So that was a big feather in our cap to have him and his team, you know, so supportive to what we're doing, as well as plug and play out of the Silicon Valley and and then a handful of other family offices and high net worth individuals. And then, when it comes to, you know, the capital intensive uh element of the business, as you put it, uh, we're backed by ATB financial, which has been a fantastic relationship with the Alberta treasury branch, um yeah, atb.

Speaker 1:

Yeah, they're from Alberta, right.

Speaker 2:

Yeah, exactly, they've been so supportive of what we're doing and it's it's been a great uh relationship.

Speaker 1:

That's awesome. Um, excuse me for the cough. Um, so I I really like this, uh, sliding scale. Do you have a? Do you have like a clock that they keep logging into that say that this? There's like a countdown clock for the difference in, uh, in percentage savings.

Speaker 2:

Yeah, so it's every day. So, uh, so it's every day. So at midnight it changes. So, yeah, completely dynamic, going against the grain of what we've seen, and as we're trying to book our flights or hotels, where it just keeps going up, the amount of times we look at it and the closer we get ours just gets lower and lower, and what that's doing is just giving people more optionality and accessibility to that capital, because we've seen a correlation between companies that are in a growth pattern that are the ones that are absorbing more capital and wanting to take earlier payments as well, as companies tend to take earlier payments in less than two weeks to the payment date. So you would think it would be a company with 90-day terms or 60-day terms, but actually companies aren't taking them as much on day one. They're actually taking it once it gets closer to the payment date, where it's a lower cost of capital.

Speaker 1:

Yeah, that's pretty cool. So, in terms of the GC, do you find subs doing this with their subs quite a bit?

Speaker 2:

We see it time to time. Yeah, so it really just depends on how big the company is. So if it's a big subcontracting company, so a big sub, then they will have subs as well. But everything's based on B2B, so one company working for another company. That's where there's been a lack of advancement in the entire kind of finance and payment and technology in general. Right, the employee side, or the consumer side as it comes has had a lot more advancements, but B2B has been very lagging behind.

Speaker 1:

So do you have a cap on the amount that you can?

Speaker 2:

Yeah, we identify, so we assess and kind of understand the supply chain and then set a cap or a limit.

Speaker 2:

It can change kind of, you know, based on repayment schedule and all sorts of other things, as you would think. But that's something that we built and built out as proprietary technology. But when you think about the true cap, the cap is a bit more really understanding the utilization. So we see that in the first coming weeks to months, 30% of the vendors and service providers or sub trades will actually sign up to quickly, which is crazy and it's time after time. So it just shows that that sheer demand for what we have that, you know, nobody really knew existed, just because there isn't really another option or options that are commonly known in the construction industry. So once that 30% signs up, that number can grow and grow. We have one company in Alberta that's now at 47% of their sub-trades are on the Quickly platform being able to take part in earlier payments, should they choose, and then from there they'll see a portion of those companies that'll take earlier payments at different times when they choose it. But it's completely optional and completely flexible that's cool.

Speaker 1:

So on the, I noticed that uh, you know on your website. Obviously I'm going through it. If you have uh on the buyer solutions, then seller solutions, so how often is it? Is it the sub trade that's saying to the gc hey, you know, can you uh, can we do this?

Speaker 2:

they're starting to say it more and more. Uh, but typically the the the person that they might be talking to might not necessarily be the person that can drive that change forward.

Speaker 1:

Right.

Speaker 2:

And that's why you know companies that have offered you know early payments internally are seeing such low utilization. Maybe like one or 2% or a few percent of their trades are taking it time to time, maybe it's the same ones. But once you bring in a platform that kind of disconnects that conversation and makes it accessible, that's where you see the utilization really jump up, because it shows the true demand without the friction. So again, you know there's lots of trades that want it, but who do they really voice that to? And there's also this kind of negative stigma or in the industry where, as a sub trade, you're worried that if you ask for an earlier payment it might be a signal that that you're not in a good position or that you know you're worried that you might lose your work on the next tender or whatever it might be. So a lot of them just don't Um, so it's chatter that happens on the sub trade side, but maybe the GCs or the builders aren't, aren't hearing it.

Speaker 2:

Um, so then once you bring in this completely streamlined option, it's like oh, wow, yeah, we've always thought about that and that would be so great. That's why they sign up so quick, because it really just takes that pressure off and says it's fine if you want to take an earlier payment. It can be smart to inject this capital into your company to be able to buy more trucks, to be able to purchase more equipment, to be able to hire more staff, to be able to actually grow and manage the working capital the way your business requires, without you know being short in situations and failing on a contract or whatever it might be. So it's really this kind of you know balance that was missing in terms of talking about money and construction.

Speaker 1:

So what happens when there is a situation where you have, let's say, the electrical contractor same scenario we were talking about earlier where you have, what if the electrical contractor now they've got, let's say they took the early payment? There's obviously the whole backside. But on the first 100K, let's say, what if there's like crazy delays, like something that the gc didn't anticipate was going to happen, and then it pushes all the timelines and it pushes your timelines too. How does that all work?

Speaker 2:

yeah. So I mean we're just right there in the same situation as as anyone else would be. So we understand, uh, pay when paid and in the provinces or states or whatever it might be that that it exists. But you know, the real goal in the beginning is understanding what are the actual kind of payment habits and then being able to set up that dynamic discount at the right rate. So maybe it's 30 day terms, but with the payment approval cycles, the draw submission and the actual payments it's more like 45 days. So we make sure that what we do is we understand what it actually will be is the first method and then to be able to have that discount priced accordingly so that it doesn't take into effect.

Speaker 2:

The other thing we have is that there's secondary approval, so a GC. You know they've entered into their accounting software, it's mirrored into the quickly network. The electrical contractor requests an early payment and the GC has one more opportunity to be like okay, I can approve this earlier payment or decline it or request revisions. And I see that the payment date here is on the first. A pushback to the electrical contractor to be like the estimated payment date is actually been changed to this. The fee has increased slightly to this amount, would you still like to take part in it? And then they have the opportunity to decline or move forward. And then it moves forward. They actually got paid earlier.

Speaker 2:

And then when the hold add on a new company or work with companies or see instances, we build it into the code so that we can kind of release a new feature or or solve or or kind of give flexibility to the GCs and and builders based on what we've seen in other situations. Just like you know, I want to record this to a project or I don't. I want to settle it completely to a project and have it recorded to another account. Or you know, we have supplier credits that we need to apply or whatever it might be. So we we push out a release on average every second week where we're advancing small updates or features based on all the different things that we're seeing and what our customers are actually asking for.

Speaker 1:

So I guess it doesn't. Does there need to be a mobile component to your product?

Speaker 2:

Yeah, so that's a great question. The buyer side uses the desktop more, and then the seller is a combination of desktop and mobile, so the whole thing is built as a web app so they don't have to download an app to keep the friction low, and then, yeah, it's really that. That's kind of how we see it. We also have an approval workflow and other items that are built in, so potentially that approval workflow on the buyer side includes a site manager or supervisor or someone that's.

Speaker 2:

Oh yeah that makes sense work. They are potentially using it on their phone as well, so it really jumps around on the different use cases. But yeah, it's completely flexible.

Speaker 1:

I mean it would also make sense for there to also be some sort of is that the workflow there's essentially approval milestones essentially approval milestones.

Speaker 2:

Yeah, it's, it's what happens is it's been approved to be able to get into the accounting software, but potentially there's other stakeholders that want to work on that secondary approval when the early payment comes through, because they do have the flexibility to be like. We only want to approve 50% of this or whatever it might be. So you could technically approve, you know, a portion of the early payment. Potentially there's something that you want corrected on the site or whatever it might be. Or you know just total kind of flexibility as people typically would operate. So we see in instances that they'll have a site manager or someone that can physically see the work added in that workflow. Then potentially it could be going to somebody that's checking on, you know, is their statutory declaration complete and did they submit all of the appropriate additional supporting documentation? And then finally the controller or whoever it might be, for the final say, You're essentially creating leverage features or leverage utilities.

Speaker 2:

We create the features that the customers are looking for, based on how they typically operate their business in the normal payment flow, so we just try and really simplify it. It's crazy how much we've solved for normal payment and we've just like put it into the early payment world.

Speaker 1:

So I'm looking at your user interface here and for those, that's basically what the website or the product looks like. So I'm looking at your user interface here and for those, that's basically what the website or the product looks like. Yeah, it looks pretty slick. I think you've done a good job there.

Speaker 2:

Thank you so much. Yeah, we got an incredibly talented team that builds that and, yeah, we're really really proud of the UX and UI. The simplicity we're really really proud of the UX and UI. The simplicity, you know, that was like a core requirement was making it easy enough and intuitive enough that you know companies at any type of computer or phone skill level would be able to use, as well as creating something that doesn't commonly exist and having it feel somewhat second nature.

Speaker 1:

Yeah, so where are you taking the? Do you have anything to share about where you're taking the product from here? Is there anything new you're going to be doing that you're excited about?

Speaker 2:

I mean, we just expanded through the US, so we've been doing that throughout the year, so we're really excited about that. You know, canada has been going really well for us and, just, you know, really excited to work with, you know, the different GCs and builders throughout the US and handle that and handle that cross-border. And there's been a lot of partnership announcements that you can watch for in the coming weeks and months, but we've really been partnering and integrating in with some fantastic software that exists within the construction industry. So, you know, just really being able to build those, those streamlined connections to the different softwares that that that construction is using. So that's probably what we're most excited about. It's it's Q4, right. So we're just working on finishing the year strong and and executing everything that we said we would and then, um, you know, re, re gear and and, uh, be able to set our focus and intentions for for 2025 wow, that sounds.

Speaker 1:

It sounds pretty exciting. Sounds like you got something really good there. Obviously we'd like to chat with you regarding uh, cymax and uh and integration there too, um we would love that.

Speaker 2:

Yeah, happy to continue that conversation right after this. That would be a perfect fit yeah, no, totally okay.

Speaker 1:

Well, that sounds pretty cool. Well, this is uh. The good thing is is you have a very simple product and you've been able to describe it quickly, which, without a terrible joke, is true. So I mean, you've been able to do that succinctly and that's pretty awesome. So I think that this was really informative. So the best thing for people to do like any potential customers of yours just to book a call Some people can run them through the platform so they can see how it all works.

Speaker 2:

Yeah, you can book directly demos on the website. So you can book through any of the demos that we see coming through in the coming weeks. I'll try to attend and join as well, to attend and join as well. And then you can always request myself and I'd be happy to talk to you via video call or in person. Definitely old school like that. I like to meet with clients and kind of talk through the use case and really understand the nuance of their business. So definitely go on the website, reach out to us at helloquicklycom and we'd love to show you the platform.

Speaker 1:

All right, well, this has been awesome. Thank you very much, and obviously people can get you on LinkedIn, kyle Friedman.

Speaker 2:

Yeah, kyle McLaughlin Friedman on LinkedIn, so just look up quickly and you'll find me. And uh, yeah, it'd be great, great to have a conversation all right.

Speaker 1:

Well, this has been awesome. Thank you very much. I appreciate uh us getting together and and uh talking to you about your product yeah, thanks for making the time, james, and, uh, I appreciate it.

Speaker 2:

It was like a little bit of a journey to get here together. So, yeah, the buildup was worth it, so thank you.

Speaker 1:

You're welcome. Well, that does it for another episode of the site visit. Thank you for listening. Be sure to stay connected with us by following our social accounts on Instagram and YouTube. You can also sign up for our monthly newsletter at sitemaxsystemscom slash the site visit, where you'll get industry insights, pro tips and everything you need to know about the site visit podcast and Sitemax, the job site and construction management tool of choice for thousands of contractors in North America and beyond. Sitemax is also the engine that powers this podcast. All right, let's get back to building.