Andrew Smith - AxisPointe
Our spotlight this week is on Andrew Smith, President, CEO and Founder of AxisPointe. AxisPointe is based in Lehi and leverages technology to make post construction services more effective and affordable for residential and commercial builders. The company closed its first acquisition of Orem-based Asset Evolution in January, positioning itself for significant and sustainable growth in the near future.
Silicon Slopes: For those who aren't familiar with Axispointe, tell us a bit about your products?
Andrew Smith:The first product developed by AxisPointe is called HomeProfile™, and was introduced in 2003, with a process and software patent filed in 2005. Since then, we have introduced additional products: BuilderOnCall, HomeWorx and BuilderCertified; all under the SmartBuilder Suite™.
The HomeProfile is a builder branded closing packet will home specific information provided in three formats: Printed Manual, CD-Rom and Online. This information includes manufacturer use and care manuals for all products in their home, manufacturer warranties, subcontractor data, home plans, CC&Rs, HOA docs, closing documents, change orders, etc. The online portal provides all this in electronic format as well as has a Service Request System that is available to homeowners to submit warranty tickets to their builders and have it documented that they did so.
BuilderOnCall is an outsourced-customer care center for all post-construction warranty and customer service calls for our homebuilders. It is an intelligent call-back processing center as we have all the information on the homeowner’s home in front of our agents via the HomeProfile system. Being able to talk about specific products, subs or manufacturers with the homeowner is unheard of in this industry. It is truly red carpet service.
HomeWorx is an actual service that performs the homeowner orientation walkthroughs for builders and developers. In these orientations, we explain the use of the HomeProfile and BuilderOnCall services and then give an orientation of their new home while creating a punchlist with the homeowner for the builder to close out the home. We also provide 3rd party warranty management where we will handle all the 1st year warranty tickets and claims that come in from each homeowner. The builder is then completely hands off. How refreshing!
Lastly, BuilderCertified. It is a service where we gather all of the necessary and required insurance information from each subcontractor that works for each of our builders. This is a requirement of the insurance companies and we take this burden off the builder’s shoulders and monitor compliancy with their policy. It is a great outsource service for builders that typically don’t do a very good job at monitoring their subs.
Since 2002, the company has serviced over 20,000 new homes and has secured contracts for an additional 32,000 homes to be built over the next 24 months. As we saw in 2002, we continue to see prime opportunities in this industry and feel that the timing is better than ever to capture additional market share.
Silicon Slopes: We are very interested in the background of your company. How did Axispointe come about?
Andrew Smith: In 2002, I realized there was an opportunity to provide the rapidly growing residential market with a product and service that would address the growing demand for new home construction documentation, customer service and warranty solutions. I completed a home a year prior, and received no assistance from my builder during my one-year builder warranty period. Many of my neighbors were in the same boat. Making things worse, I had no information on my home other than what was stuffed in my draws from my builder. Lack of organization was obviously the problem. When I started to research how other builders did it, I realized that the status quo for the industry was to do NOTHING. Thus, the opportunity.I had just sold my company, CaptureQuest and was looking for my next venture. A friend and past client of CaptureQuest, Frank Tate, was a builder of 15 years and we discussed the identified opportunity in the marketplace and he confirmed that it was a major problem that no one had done anything to take control of. Thus, the creation of AxisPointe and our HomeProfile™ product.
Silicon Slopes: How has the current state of the real estate market in the U.S. affecting your company?
Andrew Smith:: Recent changes in the residential construction market have increased the demand for our HomeProfile, BuilderOnCall, BuilderCertified and HomeWorx services. Builders are cutting back and cannot carry the costs of a warranty or operations staff like they used to. Instead they need sales. But when they sell a home, the still have the warranty cycle that they need to deal with. With our services, we will handle EVERYTHING from close to end of the first year entirely. It is a complete outsource model. Plus, builders are already used to the outsource model since they do it with every other part of the building cycle. Our services allow builders and developers the ability to outsource the necessary, costly and risky task of warranty service.With the recent changes in the homebuilding market, builders are rapidly realizing that a new homeowner is the most inexpensive and necessary source of marketing necessary for their company to survive. If homeowners are happy during the warranty period, they are 41% more likely to recommend you to their friends and family. Builders need all the sales they can get, so why not get a fleet of marketers talking about how good you service them? Smart marketing.
Silicon Slopes: How much have you raised, and are you looking for more funding?
Andrew Smith:A total of $12.5MM. This has been mostly private equity money from in-state and out of state investors. We raised a $1MM line of credit that we retired over 3 years ago. We are a debt-free company and not looking for any new funding at this time.
Silicon Slopes: Tell us about your recent acquisition of another Utah-based company, Asset Evolution. What kind of synergies did you find between your two companies that led to the acquisition?
Andrew Smith: On January 24, 2008, AxisPointe acquired Orem, Utah-based Asset Evolution, Inc., to continue its expansion and growth plans into the new and existing residential and commercial markets. Our Asset Evolution division currently appeals to the existing commercial real estate market, namely government, university and airport facilities nationwide. We also see this as a prime opportunity to invest in this market segment, as it is not subject to the volatility of the new construction arena and will help diversify AxisPointe for future growth potential.
The main synergies we identified is the ability we have to gather all the asset and product data in new commercial properties and document it for the facility and operations managers and their ability to take that data and give a 5-40 year preventative maintenance, lifecycle, renovation and retrofit plan to the facility and finance managers to better budget their maintenance plan. This is unheard of in this industry and is truly an innovative approach to facility asset management in the commercial real estate market. We expect great things in the next 3-5 years for AxisPointe.
Silicon Slopes: Is this AxisPointe’s first acquisition?
Andrew Smith:Yes. We have contemplated others in the past, but none of them fit like this one did.
Silicon Slopes: How has the process been so far of incorporating Asset Evolution products with your current suite of products?
Andrew Smith:It has been a challenge as we are moving so rapidly in so many different areas that to slow down our pace to fit their product set in nicely has been a ton of work. However, we are now on the back end of that process and we are happy with how it is fitting in. No doubt it will be two different arms of the company (AxisPointe Inc.), but there will be a ton of overlap from the sales, operations, implementation and development departments moving forward. Our new company launch as a combined company is scheduled for March 27th, and it will all be wrapped up under the AxisPointe brand.
Silicon Slopes: Can you describe your growth strategies going forward? Can we expect more acquisitions in the future?
Andrew Smith: Our growth strategy for the future is to stay focused on our core product sales. They are best in class in the construction arena and commercial facility management hands down. Instead of innovating new products and services, we have nearly $50MM of immediate opportunity with the products we have today....with already more than $8MM invested into the development of these products. We are also going to push our newly formed HomeWorx Franchising arm nationwide to provide door to door service for our builders and their homeowners. With already 17 franchises sold in 17 major markets, we are looking to add an additional 15 by end of year, 2008.
Silicon Slopes: You founded another notable company, CaptureQuest, back in 2000. What are some of the lessons from that experience that have led to successes with your current company?
Andrew Smith:I actually started the company in 1999. The most notable change I made from my CaptureQuest days is finding the right type of money at the right times. I didn’t raise the right money with CaptureQuest, and because of that, it burdened me with unreasonable expectations. I also lost control of my own company early on. AxisPointe has had a fairytale episode of raising money. We raised what we needed, when we needed it and maintained control all along the way. If you can produce results along the way and raise money as you hit different benchmarks, it is always easier to raise more money and with better terms. Lastly, people. I had a tremendous team at CaptureQuest. However, I feel AxisPointe has the edge because of the tremendous talent we have recruited. It has made for a great culture and one that works very cohesively.
But to be honest, at the end of the day....starting any company and getting it to this point is hard, takes a lot of time, takes a toll on your family, and challenges you almost beyond your expectations. That has been the same for both CaptureQuest and AxisPointe.
