#StartupsEverywhere: Edwin Williams, CEO, ZenHammer
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Turning Roadblocks into Stepping Stones in Construction Tech
ZenHammer's journey from a contractor-homeowner matchmaking platform to a cutting-edge construction data tracking tool is a story of resilience and innovation. Initially, on the brink of closure, the team pivoted in response to contractors' feedback and has since worked tirelessly to refine their product. We sat down with the founder, Edwin Williams, to discuss their challenges in raising capital and finding talent, as well as their strategic plans for ZenHammer’s upcoming launch, national expansion, and industry impact.
Tell us about your background. What led you to ZenHammer?
ZenHammer initially started as a 2-sided platform to match contractors with homeowners, but it didn’t gain traction as expected. As we were preparing to shut down, we learned contractors liked their side of the platform and wanted us to build a platform that was more tailored to their needs. The plan is to finish ZenHammer this December, and onboard our first companies that are ready to get on, but it's been a longer journey than expected for many reasons, and it's not unique to me. It's been a rough road.
I also co-founded a nonprofit, FoundersForge, here in Johnson City. We help people get their ideas to the stage where they can launch their company and then move on to accelerators or programs to help them scale. Our frustration grew out of the lack of resources for startups in the region, and, being entrepreneurs, we decided to tackle the problem ourselves.
What has been your experience raising capital?
Raising capital has been exceedingly difficult. As Brookings reported, minority founders don’t receive the same funding as their white counterparts. I’ve watched competitors with less progress raise more capital. It’s hard to pinpoint exactly why this happens, but there’s a noticeable decline in investment in minority-founded startups.
The other issue is our location. No one wants to invest in startups in the rural U.S. because we don’t have the resources or the money. Appalachia has an issue where there are a lot of wealthy individuals who qualify as angel investors, but that wealth does not translate into new tech businesses, instead it primarily goes into real estate. There are many reasons for this, with most related to tax benefits that come with real estate and real estate being more well-known. Also, real estate is generally considered a safe bet whereas venture capital is more risky, and in places like East Tennessee or even the Midwest, the investment appetite is more conservative compared to New York or California. Investors here tend to give less money, and they’re especially averse to funding pre-revenue startups. In Johnson City alone, there are at least sixty potential tech startups, but only three are generating revenue. That’s because they are either self-funded or have friends & family/early-stage capital to support them. The rest, no matter how great their ideas, don’t have that access to funding. As a result, the region has almost sixty high-potential businesses struggling to make it across the starting line due to a lack of capital.
What changes could be made to improve capital access and encourage innovation?
I've been through one angel investor course and will start a second one soon. The Angel Capital Association offers a class covering what it takes to become an accredited investor, including how to perform due diligence and the steps needed to analyze a potential opportunity. That said, the drawback is that angel investors will still invest in who they like.
I would suggest intentionally targeting wealthy minority and rural groups to teach them how to angel invest because when I'm in these classes and looking around, it is 98 percent white men and I hardly see women or people of color. Intentionally targeting these diverse, wealthy individuals and thus widening the pool of investors would be one way to address that disparity we see in rural and minority tech investing. Education is helpful, but ultimately, it’s up to the individual to decide where to invest their money, and the current trends aren’t moving the needle enough. Also, having a more diverse investor class will lead to more diverse investments.
What challenges have you faced finding talent in your area?
One of our significant issues has to do with talent acquisition. I've had a very rough time finding talent in East Tennessee. The team I'm using right now is actually out of Madrid, Spain, and we were referred to them by another company out of Atlanta. The team in Spain gets referrals from startups that they’ve worked with and they’ve gotten good at getting startups across the finish line.
One of the most significant issues that early-stage startups face with many development shops is that they agree to build something at a set price, but as the project progresses, the finish line keeps moving due to scope creep, technical debt, and other related variables. They often come back asking for more money to complete the work, and it feels like the goal is always just out of reach. Then, two years later, they’re out of all the capital that they’ve put aside or raised based on the initial proposal and still not across the finish line to generate revenue and for non-technical founders, it’s even more challenging. So that is the trap, particularly in rural communities, where the talent pool isn't as big and entrepreneur budgets are smaller.
What are your goals for ZenHammer moving forward?
We have companies that are waiting to use ZenHammer, so our first goal is to get everything up and running. Once we get that going, we'll start onboarding companies in our region first and then across the country and as we get user feedback, we will use that to improve ZenHammer. Our goal is to be up and running in December in preparation for the International Builder Show in Las Vegas in February.
All of the information in this profile was accurate at the date and time of publication.
Engine works to ensure that policymakers look for insight from the startup ecosystem when they are considering programs and legislation that affect entrepreneurs. Together, our voice is louder and more effective. Many of our lawmakers do not have first-hand experience with the country's thriving startup ecosystem, so it’s our job to amplify that perspective. To nominate a person, company, or organization to be featured in our #StartupsEverywhere series, email advocacy@engine.is.
