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Why Targeting Contractors Is The Wrong Approach: OnSiteIQ’s Upstream Strategy
Owen Drury
June 25, 2025 • Estimated Reading Time: 12 minutes
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Why Targeting Contractors Is The Wrong Approach: OnSiteIQ’s Upstream Strategy
"Construction companies aren't innovators – they’re implementers," Ardalan Khosrowpour.
As the founder and CEO of OnSite IQ, he's built a construction intelligence platform that most of us would assume targets contractors.
He doesn't.
In fact, Ardalan walked away from what could have been a healthy amount in contractor revenue to focus exclusively on owners, developers, and private equity firms.
The reason? A single conversation that changed everything.
TL;DR: Why Selling to Contractors Might Be Killing Your Startup
OnSiteIQ’s CEO Ardalan Khosrowpour is flipping the script on construction tech go-to-market:
Contractors = users, not buyers. They’re margin-strapped and incentivized to hide data.
Owners & PE = the real customer. They have the money, the pain, and the power.
Construction’s biggest flaw? Information asymmetry between builder and buyer.
OnSiteIQ’s strategy:
Target $200M+ portfolios, not one-off jobs
Sell to owners, activate contractors downstream
Build sticky network effects across all stakeholders
GTW tip: Cold calls > cold emails. Old school wins.
The result? Higher margins, less competition, and monopoly potential.
The $12,000 Wake-Up Call
Picture this: You've just spent months walking a 100-million-dollar construction project in New York. You've captured every corner, tracked every trade, documented everything. You approach the contractor and ask for $12,000 total for two years of service.
The room full of project executives and VPs says no.
After the meeting, Ardalan's champion pulled him aside: "We do not want this data to exist, because if the owner knows it exists, it'll be all over us. But here's something interesting – go sell to the owners. They're gonna love it, because we intentionally don't give it to them."
That was OnSite IQ's origin story. And it reveals the fundamental flaw in how most construction tech companies think about their market.
To us, this story almost seems unbelievable. But anyone operating in the construction industry will know why it is that way.
The Information Asymmetry Problem
Here's what Ardalan realized: The construction industry has a massive information asymmetry problem that's only getting worse.
Twenty years ago, real estate development was regional. You built in New York if you were based in New York. But today? Private equity firms are deploying $2 billion across 30 states with no infrastructure to oversee that capital.
"As I'm deploying more money, I need to hire more people, fly them around, hire more consultants," Ardalan explains. "And as you're growing, over time, your performance just goes down because you have less information, less visibility."
Meanwhile, contractors are boxed into 3% margins with GMP (Guaranteed Maxium Price) contracts. They're incentivized to hide problems, not share data.
The result?
A systematic misalignment that creates opportunity for anyone smart enough to target the money, not the user.
Target the Money, Not the User
This is where most construction tech companies get it wrong.
They see contractors using the tools daily and assume that's their customer. But contractors "don't have much money to spend, to be very frank," Ardalan says. "Number two, they're bombed with so many shitty products every day – 20 chatbots that analyze floor plans."
Owners think differently. A contractor sees a $50 million project and worries about protecting their $1.5 million margin. An owner sees that same project as a $150 million machine generating 20% IRR for the next decade.
"Upfront little cost is nothing compared to the 10 years that this asset has to be successful," Ardalan explains.
OnSite IQ's minimum customer threshold? $200 million in active construction. Why? Because construction has inherent churn. Projects end, revenue ends. You need customers with staying power.
The Network Effect Strategy
Here is where IQ’s strategy gets quite interesting...
Every project is an LLC with three parties: a GP, LP, and lender. All three become OnSite IQ's customers.
"Every time we touch an asset, we get connected to three nodes," Ardalan says. "As we're growing in a market, the network effect is pulling us in as opposed to us pushing the product."
They start with the developer, give access to everyone downstream (contractors, architects, subcontractors), then work their way up to private equity firms and lenders. The stickiness is incredible – their Net Promoter Score is 77 compared to the median SaaS score of 40.
"Once we sign an enterprise deal with these owners, it is so sticky, I'm going to make a claim it's almost irreplaceable," Ardalan says.
Why? Because now architects, contractors, private equity firms, and owner reps are all relying on the same data source.
Old School Tactics That Work
OnSite IQ's go-to-market approach is refreshingly analog in a digital world:
Phone calls over emails. "Phone works better than emails or anything," Ardalan says. Good old-fashioned cold calling.
Strategic capital. They took investment from RIT Ventures, a multifamily fund whose LPs include major developers. This gave them credibility and pilot opportunities.
Intimate dinners over trade show booths. They bring customers who invite their peers from other companies. No razzle-dazzle, just relationship building.
Partner leverage. They work with owner reps and architects, offering free monthly walks in exchange for introductions to new accounts.
The Contrarian Bet Is Paying Off
While 80% of construction tech companies fight over contractor dollars, OnSite IQ operates with minimal competition. Their take rate? Double-digit basis points compared to Procore's 10-12 basis points. And they're targeting 30 basis points long-term.
"If you fully activate this network effect, I think you can build a very, very solid monopoly in this industry," Ardalan says. "We can do what Carta did, but just the only difference is in this industry, it's just easier because it's a vertical and you don't have as many players."
The Takeaway
Admittedly, at Bricks & Bytes, we’re on the fence about some of Ardalan’s arguments. The logic behind his points makes sense and he has the scars to prove it.
However, to say it is the only strategy is obviously not right. There are tons of customers with tons of pain points that need solving.
But to summarise Ardalan’s points - most construction tech companies are building for the wrong customer. They're optimizing for daily users instead of annual budgets. They're solving workflow problems instead of business problems.
Ardalan's approach is simple: Find the information asymmetry in your industry. Target the party with the most to lose from that asymmetry. Build a network effect that makes switching painful.
As he puts it: "Target the money, not just the user."
The construction industry is full of these asymmetries. The question to always ask yourself: Are you building for the right side of them?
Watch the full episode with Ardalan Khosrowpour here👇👇👇
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