Startup Crash Course for Facility Managers: How Do Startups Grow?


As facility managers, we can make our activities and facilities increasingly smarter and more tech-driven using innovations in artificial intelligence (AI), big data, internet of things (IoT) and many other cutting-edge technologies. A lot of these “tech”  are innovations from growth-fueled companies called startups.


But what are startups, by the way?

How do they grow and become a source of innovative solutions for us, facility managers?


The definition of startup

If we look up the definition of a startup, it can range from the simple “fledgling business enterprise” or to the more comprehensive “company or project undertaken by an entrepreneur to seek, develop, and validate a scalable economic model”. In the broadest sense, any new company is a startup. But what is the best definition of a startup? The description given by Paul Graham, the founder of the world’s most successful tech incubator, Y Combinator, is by far the best.

Graham defines a startup as a “company designed to grow fast”. He adds that being newly founded does not in itself make a company a startup, nor is it necessary for it to work on technology, take venture funding or have some sort of exit. Graham emphasizes that the essential thing is that a startup is growth-fueled in addition to having a sort of different “DNA” from other businesses. This “DNA” can be seen in their innovative, even revolutionary, product or solution, company culture or the way the founders are leading the company.


Startup Verticals

If we look at the most successful startups emerging from Y Combinator, you will see Dropbox and Airbnb, whose products revolutionized file storage and home rentals, respectively. Startups, like Dropbox and Airbnb, address the masses in general, but startups can also address specific “verticals”, which means that they are focused on a particular industry.

This is where we find terms like “Fintech” for startups working in the financial sector, “Edtech” for any digital startup working in the world of education, and for us facility managers well-known ones like “Constructech” or “Proptech” for construction and property management.


What about the vertical “FMTech”?

You may think it is strange that there is still not a concept like “FMtech'' coined, while our industry is huge and many startups are seeking and finding opportunities to digitize our sector. I would say, we are worth such recognition!

 It can be explained by the fact that FM is so broad in its activities, touching many different verticals in one go: the food tech sector through catering, cleantech through waste and recycling (yes… Cleantech is the name for technologies that focus on a less contaminating world - not for technologies that have to do with cleaning activities), even HRTech for massive payrolling at FM service suppliers, for example. 

Another explanation is that we, as a sector, are not as top-of-mind as others. But let’s give it some time, and FMTech will be a well-known vertical, worth investing in.


The startup growth trajectory

Just like any business, a startup begins as an idea which is then verified for feasibility via a proof of concept (POC) exercise. A POC is an unpolished digital solution that is already working, but not to be presented to the public yet. It allows idea creators and managers to evaluate, in a focused group, the feasibility of the idea and to take the correct next steps in its development. A POC investigates the supporting technologies and the necessary physical components needed to complete the idea. This allows companies to determine its viability before putting production-level resources behind an untested idea.

Once the concept is roughly tested, the next step is getting a product-market fit. This step evaluates being in the right market with a product that can satisfy that market. Many people interpret product-market fit as creating a so-called minimum viable product (MVP) that addresses and solves a problem or need that exists. After the MVP and the product is validated, it is now time for the startup to GROW!

The growth stage is where more exciting things are happening. This is when startups acquire clients and generate sales. As startups are growth-fueled companies, it will take no time in getting from POC to MVP to paying clients. During this stage, startups refine their products, increase their client base, mature and prepare to scale. Scale is typically measured in terms of revenue, number of employees and valuation, although there is no standard definition. In terms of revenue, number of employees and valuation, there is a set of metrics popularized by Techcrunch’s Alex Wilhelm called the 50-100-500 rule. This means that a startup graduates into the “big leagues” if it has achieved or surpassed any of the following:

  •       $50 million (around €41.9 million) revenue run rate (forward 12 months)
  •       100 or more employees
  •       Worth more than $500 million (around €419 million), on paper or otherwise


(Photo credit:  BridgeforBillions)


FM startups

Another great thing about startups, aside from their ability to grow fast, is that they permeate every aspect of our lives. You can name a “pain” or “problem” in our daily lives and for sure, there is a mature startup already providing a solution. Facility management is no exception!

We have energy tech startups that help us, facility managers, efficiently monitor and reduce the energy consumption in our buildings. There are AI and data-driven startups that can help us with intelligent maintenance and energy management of our buildings and facilities.

Workplace management startups help us optimize the use of spaces in our buildings – from booking meeting rooms to managing access to rooms, to using biometrics for secure access. Startups that offer innovative solutions for facility management also include those for the well-being of its occupants like employee experience platforms that track and measure employee satisfaction and engagement.

There are also food-tech startups that help diversify offerings in company cafeterias and catering venues.

Startups embody the Fourth Industrial Revolution - and what that means for Facility Management you can read here.


Where Facility Managers Meet FM Startups

At the Global Alliance of Facility Management Innovators, we introduce facility managers to startups with solutions for FM.  We connect you with not just any FM startup, but mature startups that are offering proven and innovative solutions for every aspect of facility management.

Members have unlimited and direct access to our FM startups and database. With our trend radar, members are kept up to date on which and how new technologies are relevant to the FM industry. We also share features on inspiring facility management innovators – those who have successfully implemented FM innovation programs and adapted innovative FM solutions.


Easy access to the latest innovations and the most powerful startups from around the globe plus benchmarking on FM best practices - that is what we go for!


* The image of this blog post has been provided to us by Bridge for Billions, an organization that builds entrepreneurship and innovation programs with companies.