q&a

With fresh funds, this Houston entrepreneur plans to scale his industrial e-commerce startup

Tim Neal, CEO of Houston-based GoExpedi, shares how his company plans to scale following its recent series C closing. Photo by Colt Melrose for GoExpedi

Consumers are getting more and more used to picking up their laptops or phones and ordering everyday items in just a few clicks or taps — and seeing those items delivered in just a few days. To Tim Neal, CEO of Houston-based GoExpedi, ordering parts and tools for industrial businesses should be just as easy.

GoExpedi, which just closed a $25 million series C round, has seen rising demand for its e-commerce platform focused on industrial orders, and Neal credits this demand on a change in mindset within the industrial sector. Additionally, he says he's seen clients more and more focused on cutting costs.

Neal shared his company's plans for growth and scale, as well as how fundraising during a pandemic went, in an interview with InnovationMap.

InnovationMap: What’s the challenge GoExpedi was founded to change and what’s the game changing element the company provides the industry?

Tim Neal: We really focus on the industrial MRO space. The mission for us is to make procurement of these goods simple and efficient. That means taking out the human process and the back and forth. It's not too dissimilar to how, if I order from Amazon, I have an expectation when that order arrives. The industry has not historically had that. So, we wanted to take a tech-first approach, really make sure people getting these things, but then also track what they're spending to help them more effectively run their business.

IM: What were the early days like?

TN: We're a bootstrap business. We had a drive our pick up trucks 3,000 miles a week, not taking salaries. There was a uphill battle for sure in the beginning because it was a psychological shift. Again, if you look at Amazon going in the bookseller market, people were used to going in a store and getting books. It's similar. People are used to picking up the phone and getting an order done. So we had to really go through an evolutionary process of educating the user on what is the technology and how the technology is actually make their life easier.

IM: What do you attribute GoExpedi's growth to?

TN: I really think it's the change in psychology. And a lot of it is timing too. The labor pool in the oil and gas space in particular — 50 percent of it turn it over. Now you're no longer having these tradesmen who are 60-plus years old and walking encyclopedias. You have a younger workforce that's used to buying on eCommerce and their daily life. So, it's helping them by technical parts in a not technical way. We just had a pool of clients who were more tech native and who had more familiarity with transacting online.

IM: You recently closed a Series C round — what was it like fundraising during a global pandemic following the fall in oil prices?

TN: It's a little weird, cause I'm used to doing road shows — spending four days in San Francisco or New York meeting a bunch of people, rather than sitting in my office on Zoom. So it was a little weird, in that sense that you didn't shake people's hands.

We were in a fortunate position — it's kind of counterintuitive — but we really decoupled from the COVID-energy side where you've got a double whammy, especially in Houston. COVID put people on a remote basis, and then you've got negative oil for the first time ever. But what that did is it really presented this psychological shift in our end user. Companies reduced their traffic 30-plus percent and had to lay off people. They're focusing on cost saving and how do you grab a hold of your business, especially in this work from home environment. And that really resonates with our value proposition. With that, we were able to get a lot of demand of people wanting to have live analytics at their house and see what the net assets are spending. And then we'd be able to get manager reports on benchmark expenditure. We saw a big push in the market there.

IM: How are you enhancing and expanding your technology or team with the funds?

TN: We're seeing massive amount of market demand — folks really being able to fully capture that and start hiring more talent. But, the big focus for us is twofold. One is on our technologies. We have a tool center that really helps bridge the operational transactions at the field level and the management kind of reporting workflows, so really working on our technology, increasing our machine learning and our AI usage, and building out that team. But then on the supply chain side, because we're getting more demand, we want to focus on increasing the efficiency with adding robotics to make sure we can get even more packages out quicker to the market.

IM: Do you plan on expanding into other industries or markets?

TN: We've gotten a ton of demand, and we've been serving some markets to due to demand. We just hired a strategy team and we're making a really concentrated effort to — probably in Q1 — go after some other adjacent industrial markets, because we have a very similar dynamic that buying in terms of corporate structures, demand drivers and value proposition. That's a big focus for us.

IM: Do you already have plans for another round?

TN: We're still very well capitalized now. We weren't out of money, and we still had a large amount of cash from the last round, so this was more an opportunistic approach because we were seeing good market demand that we raised right now to further capture that. I wouldn't be surprised if, in the next 18 to 24 months, we raise again.

IM: What has it meant for y’all to be based in Houston?

TN: I'm from New Jersey, and I always kind of had a different view of Houston until I actually moved here. But, Houston is going to be the third biggest city. It's got a massive labor pool, great universities, and it should be a great breeding ground for talent. The other thing is that, since we started in 2017, I'm seeing a big shift in Houston as a whole, especially from an innovation standpoint — you have Station Houston, The Cannon, and others. You see more entrepreneurial spirit than you've seen in San Francisco and others.

I think the biggest shift that I've seen even the last three years, and especially now with COVID, is where people coming out of college in Houston want to work. I went to Oregon for college — all my friends are in San Francisco pretty much. When we got out of college, I saw people wanting to work for a startup. But in Houston, it was, "I want to work for Oxy or Shell — a big corporate." But that's shifting. We're getting a lot of younger talent that want to work in a startup. They now see that startups work in Houston and that it's a good career path.

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This conversation has been edited for brevity and clarity.

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Building Houston

 
 

Ty Audronis founded Tempest Droneworx to put drone data to work. Photo courtesy of Tempest Droneworx

Ty Audronis quite literally grew up in Paradise. But the Northern California town was destroyed by wildfire in 2018, including Audronis’ childhood home.

“That’s why it’s called the Campfire Region,” says the founder, who explains that the flames were started by a spark off a 97-year-old transmission line.

But Audronis, who has literally written the book on designing purpose-built drones — actually, more than one — wasn’t going to sit back and let it happen again. Currently, wildfire prevention is limited to the “medieval technology” of using towers miles apart to check for smoke signals.

“By the time you see smoke signals, you’ve already got a big problem,” Audronis says.

His idea? To replace that system with real-time, three-dimensional, multi-spectral mapping, which exactly where his company, Tempest Droneworx, comes in.

When asked how he connected with co-founder Dana Abramowitz, Audronis admits that it was Match.com — the pair not only share duties at Tempest, they are engaged to be married. It was a 2021 pre-SXSW brainstorming session at their home that inspired the pair to start Tempest.

When Audronis mentioned his vision of drone battalions, where each is doing a specialized task, Abramowitz, a serial entrepreneur and founder who prefers to leave the spotlight to her partner, told him that he shouldn’t give the idea away at a conference, they should start a company. After all, Audronis is a pioneer in the drone industry.

“Since 1997, I’ve been building multicopters,” he says.

Besides publishing industry-standard tomes, he took his expertise to the film business. But despite its name, Tempest is a software company and does not make drones.

That software is called Harbinger. Audronis explains that the real-time management and visualization solution is viewable on practically any device, including mobile or augmented reality. The system uses a video game engine for viewing, but as Audronis puts it, “the magic happens” on the back end.

Harbinger is not just drone-agnostic, but can use crowd-sourced data as well as static sensors. With the example of wildfires in mind, battalions can swarm an affected area to inform officials, stopping a fire before it gets out of hand. But fires are far from Harbinger’s only intended use.

The civilian version of Harbinger will be available for sale at the end of 2023 or beginning of 2024. For military use, Navy vet Audronis says that the product just entered Technical Readiness Level (TRL) 5, which means that they are about 18 months away from a full demo. The latest news for Tempest is that earlier this month, it was awarded a “Direct to Phase II” SBIR (Government Small Business Innovation Research) contract with the United States Department of the Air Force.

Not bad for a company that was, until recently, fully bootstrapped. He credits his time with the Houston Founder Institute, from which he graduated last February, and for which he now mentors, with many of the connections he’s made, including SBIR Advisors, who helped handle the complex process of getting their SBIR contract.

And he and Abramowitz have no plans to end their collaborations now that they’re seeing growth.

“Our philosophy behind [our business] isn’t keeping our cards close to our vest,” says Audronis. “Any potential competitors, we want to become partners.”

The company was just the two founders until five weeks ago, when Tempest’s size doubled, including a full-time developer. Once Tempest receives its SIBR check, the team will grow again to include more developers. They are currently looking for offices in the city. As Audronis says, Tempest Droneworx is “100-percent made in Houston.” Paradise may have been lost, but with Harbinger soon to be available, such a disaster need never happen again.

Dana Abramowitz and Ty Audronis co-founded Tempest Droneworks. Photo courtesy of Tempest Droneworx

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