Zach Scheel, CEO of Rhumbix: $46 Million Raised to Transform Construction Workforce Management

 

Rhumbix is pioneering the field workforce management category in construction, transforming how contractors capture real-time data from job sites. With $46 million in funding raised, the company has evolved from a wearables IoT startup to becoming a leading mobile-first SaaS platform serving mid-market and enterprise construction companies. In this episode of Category Visionaries, we sat down with Zach Scheel, CEO and Co-Founder of Rhumbix, to explore the company's journey from Stanford dorms to creating an entirely new software category for the construction industry's underserved field workforce.

Topics Discussed:

• Rhumbix's pivot from wearables IoT technology to mobile workforce management software
• The challenge of digitizing paper-based processes in a traditionally analog industry
• Building founder-market fit in construction tech through authentic industry experience
• Navigating the 2022 funding freeze and achieving profitability through strategic cost-cutting
• Creating the "field workforce management" category and educating the market
• The evolution from founder-led sales to scalable go-to-market operations
• Strategic decision to move upmarket for higher ASP and better unit economics

GTM Lessons For B2B Founders:

• Let the market dictate product-market fit, not your vision: Zach emphasized that "the founder doesn't get to dictate product market fit. The market dictates product market fit." After conducting 100+ customer discovery calls, Rhumbix pivoted from their original wearables IoT concept when customers consistently said they'd pay immediately for digital time cards instead. B2B founders must listen to market signals over their initial product vision and be willing to pivot when customers clearly articulate a different, more urgent need.
• Find intrinsic motivations in early customers: Rhumbix secured their first customers by identifying intrinsic motivations beyond the product itself. One customer was a tech-savvy IT director excited about digitizing workflows, while another was a fellow veteran who wanted to support Zach's veteran-founded company. B2B founders should look beyond product fit and identify personal or professional motivations that drive early adopters to take risks on unproven solutions.
• Be intentional about market segment alignment: Zach's most important go-to-market decision was pivoting upmarket to focus on customers willing to spend $5K-$10K rather than trying to serve everyone. Small customers were "a drag on professional services and customer success" compared to larger ones. This strategic focus led to higher NPS scores, more evangelistic customers, and increased referrals. B2B founders must align their product development, pricing, and go-to-market strategy around a specific market segment rather than pursuing a "sell to anyone" approach.
• Leverage founder-market fit for category creation: In construction, an industry skeptical of technology vendors without domain expertise, Zach's authentic background as a Navy veteran who managed construction projects was crucial for credibility. His "workers first" positioning wasn't just marketing—it influenced product decisions and resonated with industry buyers who could spot inauthentic positioning immediately. B2B founders entering traditional industries should leverage authentic domain expertise as a competitive advantage in both sales and product development.

Embrace pivots as smart business strategy, not failure: Initially viewing pivots negatively, Zach learned that "almost all successful companies have pivoted" and that experienced entrepreneurs use pivots strategically to find product-market fit. When they updated investors about moving away from hardware to pure SaaS, the response was overwhelmingly positive due to better unit economics and reduced complexity. B2B founders should reframe pivots as intelligent responses to market feedback rather than admissions of failure.

 

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Sponsors:

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