Overview of Practical Founders Podcast #197: Scaled His Niche Vertical SaaS ERP with Growth Equity - Marc Sanderson
In this episode, Greg Head talks with Marc Sanderson, founder and CEO of INNERGY, a vertical SaaS/ERP platform built for architectural woodworking and millwork companies—the custom shops that produce high-end woodwork for stadiums, performance halls, banks, luxury interiors, and other complex construction projects. Sanderson shares how he built software from inside the industry, turned it into a scalable business, and later brought in growth equity from Mainsail to help accelerate the company’s next stage. The conversation focuses on niche-market specialization, customer intimacy, education-driven go-to-market, and why AI is a tool—not the strategy.
The Business: INNERGY and Its Niche
What INNERGY does
- INNERGY is a vertical ERP system of record for architectural woodworkers and similar engineer-to-order businesses.
- It supports the workflow from:
- CRM / opportunity tracking
- estimating and takeoffs
- proposal creation
- purchasing and materials planning
- engineering / design
- fabrication
- field installation and project planning
- Marc describes the company as serving the “sexier part of construction” — the aesthetic, custom finishing work that ties everything together.
Who it serves
- Primarily:
- architectural woodworking firms
- high-end residential custom shops
- commercial/institutional millwork companies
- The common thread is a custom workflow with strong scheduling pressure and thin margins.
Marc’s Origin Story: From Woodworking Operator to Software Founder
The business started in the industry, not in software
- Marc and his partner Walter Wilkie bought a woodworking company in 1997 after a long search process.
- They originally believed the real value in the business was not the sawdust—it was the information flow, process, and “ones and zeros.”
- That insight led them to build internal software to run their own operation.
From internal tool to commercial product
- They started on FileMaker Pro, building the software themselves.
- Over time, outside customers became interested in the system.
- That interest helped validate the idea that the industry had a real need for a modern ERP designed specifically for this niche.
- INNERGY eventually became the software business spun out of that operational knowledge.
Why This Vertical Is Hard
Architectural woodworking is a difficult operating environment
- Projects are custom and engineer-to-order, not repeatable inventory products.
- Work happens late in the construction process, so woodworkers often face:
- schedule compression
- delays from upstream trades
- margin squeeze
- coordination complexity
- Marc says the average EBIT in the industry is only about 4–5%.
The key challenge is not just software
- The real problem is change management:
- getting the customer to adopt better processes
- changing how they think about estimating, planning, and execution
- aligning the entire organization around a new workflow
- That’s why INNERGY combines software + education + thought leadership.
The Go-To-Market Strategy: Education Before and During Implementation
INNERGY’s differentiation
- Marc says the software is important, but the educational component is the strategic tip of the spear.
- The company doesn’t just sell tools—it teaches customers how to run their business better.
Implementation philosophy
- Start where the customer is willing to start, not where the company thinks they should start.
- Ideally, implementation begins in estimating, then works forward through the workflow.
- In practice, customers often want to start in project management first.
- INNERGY adapts to the customer’s readiness while still pushing them toward best practices.
Customer intimacy as a moat
- The company uses:
- onboarding programs
- certifications
- weekly report cards
- peer forums
- learning management systems
- customer-led training
- Marc says this creates intimacy with customers and makes the business more AI-resistant and highly sticky.
Growth Equity: Why Mainsail Made Sense
The Mainsail deal
- Mainsail acquired 51% of INNERGY in a deal worth a little over $40 million.
- Marc and his wife rolled their equity and took some cash off the table.
- He emphasizes this was not about needing capital to survive; it was about finding help to scale.
Why he said yes
- Mainsail had been knocking for years.
- The relationship was built over time, including an in-person visit to Marc’s woodworking facility.
- Marc says the key value was not the money—it was:
- sales help
- marketing support
- talent support
- operational scaling experience
- broader board/governance expertise
Result so far
- The partnership has worked well:
- the company has doubled since the deal
- growth has remained strong
- the team has expanded significantly
- Marc says he would make the same decision again.
Company Scale and Growth
Current scale
- INNERGY has roughly 180 employees
- The company is 100% remote
- It has a global footprint, including employees in:
- the U.S.
- Poland
- Australia
- New Zealand
- Oceania
Financial trajectory
- The company was around $8M when Mainsail entered the picture.
- It later reached around $25M in annual revenue.
- Marc expects to end up in the high $30Ms to low $40Ms next year.
- The long-term goal is to scale much larger, potentially into the $100M+ range.
Retention and stickiness
- INNERGY’s customer retention is very high, around 95% retention.
- That reflects the deep operational embedding of the software.
Marc’s Operating Principles
1) Value equation
Marc repeatedly returns to this formula:
Value desired × Value created × Value captured
- If any one part is zero, the whole equation fails.
- He uses this as a framework for product, sales, and pricing decisions.
2) Meet customers where they are
- INNERGY learned not to force customers into a rigid implementation path.
- Success comes from adapting to the customer’s readiness while still guiding them forward.
3) Name the crucibles
- The company gives names to major failures and near-death moments, including:
- Crucifixion Sunday
- Deb Disaster
- Ticket Turbulence
- Trainwreck Thursday
- The point is to learn from failure and preserve institutional memory.
4) Value creation must reach the customer
- Marc argues that many AI initiatives focus too much on internal cost savings.
- He wants INNERGY’s AI work to improve customer value, not just internal efficiency.
Marc’s View on AI
AI is a tool, not strategy
- Marc is blunt: AI is just a tool.
- He rejects the idea that companies need a chief AI officer any more than they needed a chief Internet officer.
- His view: strategy, customer value, and workflow intimacy matter more than the tool itself.
Practical AI use cases
- INNERGY is actively investing in AI, but with a focus on:
- reducing customer workflow time
- making processes faster and easier
- increasing customer value
- One proof of concept reduced a workflow from 45 minutes to 6 minutes.
AI won’t replace the human constraint
- Marc notes that in every major technology shift, humans are still the bottleneck.
- Adoption, training, and change management still require people.
Advice for Founders Considering Growth Equity
Think of the relationship like a marriage
- Marc recommends doing serious due diligence on the investor.
- He stresses that the best partner is not just the one with money, but the one whose style, values, and support model fit your business.
Test the relationship before closing
- His team had the final candidates spend time with the whole leadership team.
- They also did a real case study around pricing and packaging.
- The goal was to see how the investors think, not just how they pitch.
Don’t get fixated on ownership percentage
- Marc says founders should remember:
- you don’t take percentage to the bank
- you take dollars
- A smaller slice of a much bigger pie can be the better outcome if the business can scale.
Key Takeaways
- Vertical software works best when it is deeply embedded in a real industry pain point.
- Education and process change can be as important as the software itself.
- Growth equity can be the right move when the business is ready for scale, not just capital.
- AI is useful, but customer value and strategy still matter most.
- Customer intimacy and implementation discipline are the real moat in a niche ERP business.
Notable Quotes
“AI is just a tool.”
“Just because you can cook rice infinitely at no cost doesn’t make you a Michelin star restaurant.”
“It wasn’t about the sawdust. It was about the ones and zeros.”
“Value desired times value created times value captured.”
“You don’t take percentage to the bank. You take dollars.”
Final Thought
Marc Sanderson’s story is a strong example of how a founder can build a highly specialized vertical SaaS company from industry experience, layer on education and customer intimacy, and then use growth equity to scale without losing the practical roots that made the business work in the first place.