Private Equity in Construction for Builders to Navigate the Fallout from Autodesk’s $25B Deal

0:00 [SPEAKER_04]: from groundbreaking innovations to industry shaking updates. [SPEAKER_04]: This is your construction technology news of the week. [SPEAKER_04]: Join us with our guests of the week as we dig into the latest news shaping the future of construction. [SPEAKER_04]: We have to talk about some of the interesting cool public policy that's happening and there's been a push now and this is this is tried to happen a few times where you know presidents have tried to push for innovation in the construction [SPEAKER_04]: process, which by the way, it goes far longer.

0:28 [SPEAKER_04]: Nathan, you said this earlier on, there's permitting and there's code enforcement that which we've talked about and things. [SPEAKER_04]: So this came out that, you know, President Trump's unleashing permitting technology for the twenty-first century. [SPEAKER_04]: So basically, there's been a mandate put out that we need to improve the permitting process and the environmental outlook and the environmental quality consulting of everything.

0:52 [SPEAKER_04]: And so the push is to do this all [SPEAKER_04]: with a better plan, a better process. [SPEAKER_04]: And I think that's what's interesting here that I'm hearing in how it's measured is that it's measured more on the time and less on, hey, if you use BIM or if you use X, which we have seen in other, we saw that in the infrastructure bill, we've seen it in some earlier bills where, hey, here's thirty million dollars, fifty million dollars.

1:18 [SPEAKER_04]: Tell us how you're going to use a technology to improve something and it's like, well, that's not the right KPI, the KPI is like, [SPEAKER_04]: does it actually work and can it actually help the permitting process? [SPEAKER_04]: And I think this one's huge reaching. [SPEAKER_04]: Like this is a first time we're seeing it focused on the outcome, not necessarily on the tech itself.

1:38 [SPEAKER_04]: And I mean, I know pre call a few of us were jumping in. [SPEAKER_04]: What are your thoughts on it? [SPEAKER_02]: I like the fact that they have it oriented towards the results. [SPEAKER_02]: I think that that is a huge shift because usually like even you bring in technology with bad process, you just do the wrong thing faster.

1:55 [SPEAKER_02]: So like this really encourages you to get your act in order. [SPEAKER_02]: And I think it, I think there is the need for funding to do that in that space. [SPEAKER_02]: You know, it's a very well-established space in permitting. [SPEAKER_02]: It's gotten very, you know, normalized. [SPEAKER_02]: We're already starting to see it a little though.

2:09 [SPEAKER_02]: Like Jeff, your friend at Union Map added [SPEAKER_02]: Uh, permitting to his maps. [SPEAKER_02]: All right. [SPEAKER_02]: I was working with the company named shovels to get an API for permitting to add some other things that I was building. [SPEAKER_02]: So like some of the base level like technological infrastructure is starting to build.

2:25 [SPEAKER_02]: So giving in to kick a money, I think is awesome. [SPEAKER_02]: I think with the the environmental side, it's all going to be how much do you trust the system. [SPEAKER_02]: like right now you want to change because you don't trust the existing systems going as fast as it could and do trust the new system or not so I like I think for that focusing on the results is again the right the right answer is okay we're talking about helping you get rid of duplicate entry that's not going to hurt thing it's it's just going to help the efficiency within the mechanism so I do think he did it because he was a [SPEAKER_02]: here's a developer and that is the most one of the most painful parts of development.

3:00 [SPEAKER_02]: You've probably got in there as I just get rid of it. [SPEAKER_02]: We just want to get rid of it. [SPEAKER_02]: We just need no purpose. [SPEAKER_04]: Make it fast. [SPEAKER_04]: I'll challenge because then I'm going to throw it over to Jacob here, but I'll challenge because the one thing we do need is and I think the government does this very poorly in the process in general is that we look at fraud and we build into the beginning of the process so much to prevent fraud when actually the percentages of fraud are lower than they should be then they then they are believed to be and we should actually focus on [SPEAKER_04]: catching it at the far end, processing it when it's made it there and making that upfront process faster and more efficient with less duprechaon entry a better process.

3:43 [SPEAKER_04]: This is also about multi-disciplinary teams inside the federal government working together on a systems level and then actually attacking [SPEAKER_04]: fraud and like you said Jonathan when you come when it comes to the environment any set of flags that you can turn that level up high and say okay we don't have to look at all of these.

4:03 [SPEAKER_04]: Fairly mundane use cases when you're talking about certain farmlands, etc. [SPEAKER_04]: expanding those guys thanks. [SPEAKER_04]: But hey, we're looking at mining in places. [SPEAKER_04]: We're looking at drilling in new places. [SPEAKER_04]: Hey, by the way, we have a whole new process for that that can be more stringent because we have more time, right?

4:18 [SPEAKER_04]: It's what we've always said. [SPEAKER_04]: Stop working in the business and start working on the business, stop working in the paperwork and start working on the environmental impact of anything we're going to do. [SPEAKER_04]: So that's my, that's like one of the things I'm, but I'm with you like I'm, I'm fifty-fifty.

4:33 [SPEAKER_04]: I'm not exactly sure I love it yet, but I mean, we keep trying. [SPEAKER_00]: So to me, and it's funny, because we had the conversation before the show. [SPEAKER_00]: And as I thought on this, I've kind of flipped here, but first intention, like what's the intent of this being pushed through?

4:53 [SPEAKER_00]: And the intent of this being pushed through is to get a lot of things done quicker. [SPEAKER_00]: His things done quicker, I'm assuming. [SPEAKER_00]: Hopefully it's for the good and then we all been through permitting it is so tough and so hard. [SPEAKER_00]: The other problem for me though is what is the increase to risk of this.

5:16 [SPEAKER_00]: So I like the outcome but I think it's still a risk to measure time as your KPI because people will cut corners then to meet that. [SPEAKER_00]: And the last thing we want to do is have them [SPEAKER_00]: Well, you only have eight hours to review this mechanical set versus the twenty four hours you had before.

5:39 [SPEAKER_00]: Well, that doesn't make anything more efficient, right? [SPEAKER_00]: Like now you're just shortening the actual time of review and it's making it a problem. [SPEAKER_00]: Are things going to be missed more or are people going to turn to technology to say, [SPEAKER_00]: Hey, we need, you know, technology to help review these things before we even get in there, identify issues before we actually start with our eyes.

6:04 [SPEAKER_00]: I know there's still plenty of permitting offices out there that do paper-based permitting. [SPEAKER_00]: You still have to print eight different sets, send them to them, and they review. [SPEAKER_00]: What's going to happen there? [SPEAKER_00]: Because the day that you tell the guy down in Miami, Florida, who's been doing it for fifty years on a piece of paper that he's now got to do it in blue beam.

6:31 [SPEAKER_00]: Oh, I mean, Jeff's got a great opportunity here. [SPEAKER_04]: Yeah, listen, it's got to be done somehow, but I mean, I remember James Benham doing it back in the day with Ben, during a council meeting, trying to get some things approved for building. [SPEAKER_04]: He was working on, or a group he was working with, the building, and they were, it's sped it all up, just to get consensus from a local zoning committee or something.

6:55 [SPEAKER_04]: So there's it, but you're right, it could be used for good. [SPEAKER_04]: You see, bad and all and all, it requires change. [SPEAKER_04]: And well, we've proven we're really great at that, huh? [SPEAKER_00]: Here in Charlotte, back in twenty fifteen, I was on a team. [SPEAKER_00]: We permitted through Ben with the Charlotte McLean bird permit office.

7:13 [SPEAKER_00]: It was a VA clinic that was a public private partnership. [SPEAKER_00]: And they, it was incredible. [SPEAKER_00]: They literally had us update the models daily. [SPEAKER_00]: And if the contractor wasn't built what they were seeing, they would say, hey, you know, we need to talk about it.

7:29 [SPEAKER_00]: It was an incredible process. [SPEAKER_00]: It was amazing. [SPEAKER_00]: But the force adoption across the country like this is is really, really tough. [SPEAKER_04]: Yeah, the hope is that it's not a forced adoption that it's actually approved process that, you know, can be replicated and at least start to improve, you know, but but we can see anybody else thoughts on on that or other parts of government policy that maybe we we haven't really looked at.

7:55 [SPEAKER_03]: I don't know, I don't want to do the nasi here, but the more I read through this article, I mean, I know they say technology like in the title of it, but what it sounds like is slashing the permitting and environmental requirements to allow for expediting of energy and infrastructure projects.

8:10 [SPEAKER_03]: And so yeah, if you are pro infrastructure and [SPEAKER_03]: anti-environment, and this is a great thing for you. [SPEAKER_03]: And in many of us are, but if you happen to be pro-environment, you probably are very scared by this, because I think there are a lot of environmental impact reports and things that do really slow down these projects.

8:29 [SPEAKER_03]: And that's essentially what he's saying without saying, he's like, oh, yeah, I'm just going to slash that stuff. [SPEAKER_03]: And so what are the unintended consequences of not doing those environmental impact reports? [SPEAKER_03]: I mean, America is the greatest pyramid, right? [SPEAKER_03]: I guess we'll find out.

8:45 [SPEAKER_04]: I would rather us not not do the environmental impact reports. [SPEAKER_04]: I would rather we get to them faster and we allow more time for them and more review of them and there are more of the focus of the process and less of Jacob, that person going through all that paperwork that you just handed them.

9:02 [SPEAKER_04]: And actually focusing on what will this do the local environment and how, how can we make sure that we've dottedizing cross t's now we do nowhere came from so every every group has its own leaning with him. [SPEAKER_04]: You can't get away from with him no matter how you feel anybody else got thoughts Jonathan or Travis.

9:21 [SPEAKER_01]: I was going to tack on to Nathan, like, I, you know, and we've talked before about how my mind works with, with government. [SPEAKER_01]: I don't like anything from a federal level that just applies across the board. [SPEAKER_01]: It's the unintended consequences that are always in that type of stuff.

9:36 [SPEAKER_01]: I would have probably, I think Jacob, you, you're, and then Jeff, you, you, iterate reiterated. [SPEAKER_01]: This was like, start, start with the test case in a region. [SPEAKER_01]: Let's work it all out a phone. [SPEAKER_01]: We just, [SPEAKER_01]: wave our wand and say, this is how it is.

9:50 [SPEAKER_01]: That's the always the unattending kind of consequences when you're doing something for those, you know, for a country's biggest odds with close to fundamentally people. [SPEAKER_01]: There's just so much in there that you don't know, that's what's going to happen. [SPEAKER_01]: On the surface, yes, if it speeds up to building process, I, you know, again, on the surface, I could be for that.

10:08 [SPEAKER_01]: It's just kind of what what all happens in that process that that we're not thinking of. [SPEAKER_02]: I think it's a lot about where do you think the process is today? [SPEAKER_02]: And in is the process effective, if the process was effective, would we be going after this still? [SPEAKER_02]: Or is it just like you said?

10:22 [SPEAKER_02]: Is it just, hey, we don't like that you're saying no to environmental protection in these areas when we are going to make something that is a mechanism to get at it? [SPEAKER_02]: I'm probably pretty close to Nathan's view on it and I think they kind of said we're gonna cut down all the time with permitting and then they said how are you gonna do that and still be safe and they said technology and then left it at that right like that's a great way to like I'm gonna cut my time I'm just gonna call a technology it's great [SPEAKER_02]: Maybe we can call it AI.

10:50 [SPEAKER_02]: I'm surprised even to AI will allow us to make it better. [SPEAKER_02]: Yeah, AI was not mentioned once in the whole article. [SPEAKER_03]: That's amazing. [SPEAKER_04]: I think there's a couple other things that's interesting too is we're seeing some of the some of the changes and maybe our renewable taxes and the renewable energy space right now, even though we're seeing such a huge push on the grid.

11:08 [SPEAKER_04]: I've seen a couple a couple of projects, a couple things get started to be scrapped. [SPEAKER_02]: I think that's a huge impact. [SPEAKER_02]: A lot of the projects that are being scrapped that were environmental in nature, especially in alternative energy, there's been in planning for years.

11:24 [SPEAKER_02]: There are work forces being developed. [SPEAKER_02]: There's a bunch of materials being consigned to that. [SPEAKER_02]: It shouldn't be something that can be switched off that fast. [SPEAKER_02]: I mean, I think that the fact that you could try to switch off that much work that fast is pretty dangerous from a society standpoint.

11:39 [SPEAKER_02]: I just think it's a bad move. [SPEAKER_02]: But you're definitely seeing it. [SPEAKER_02]: Like, I remember I was working on Brooklyn biodiesel for a while. [SPEAKER_02]: And right, well, I'm working on it. [SPEAKER_02]: I'm modeling. [SPEAKER_02]: I'm literally going to New York and really taking scans of a remodeling stuff to get the biodiesel plant up and running biodiesel.

11:55 [SPEAKER_02]: took a tank on its value and they're like, well, we'll just stop that project and I'm like, we're working on this project for two years, okay? [SPEAKER_02]: And we got all the like, we're ready to go and you're like, no, no, temporarily down in the market, we're just gonna drop. [SPEAKER_02]: It does sort of smack a really, really, really, really short-term thinking.

12:13 [SPEAKER_04]: That is a huge one too, especially given that you're trying to bring all those things back and our grids are ready taxed. [SPEAKER_04]: And we're not saying get rid of maybe some of the current methodology, but like you said, if we don't start working now, [SPEAKER_04]: And developing those products and perfecting those products and making them efficient.

12:30 [SPEAKER_04]: And understanding, right, some of them won't work. [SPEAKER_04]: There's this, there's this idea. [SPEAKER_04]: A lot of stuff's not going to work. [SPEAKER_04]: We got to find ones that do. [SPEAKER_04]: By the way, we also have to find ones that do safely, right? [SPEAKER_04]: It's not like we've ever invented anything that well, well, went the wrong way when we started using it.

12:45 [SPEAKER_04]: So I agree with you. [SPEAKER_04]: And that is an effect right now of the current economic climate and the current government policy climate that I think is really short. [SPEAKER_04]: short-sighted and needs to be focused on. [SPEAKER_04]: And I would hope going back to our associations, Nathan, and Senator that they might think about in the process saying, like, listen, we've got to keep focusing on this.

13:04 [SPEAKER_04]: And those, some of those renewables for a lot of the industry are profitable. [SPEAKER_04]: They're getting efficiencies out of them. [SPEAKER_04]: They're really growing in the way that they're doing it. [SPEAKER_04]: So I think it's an opportunity that we might, we might be losing there.

13:19 [SPEAKER_04]: Well, we've nailed it on that. [SPEAKER_04]: And now I want to kind of draw us into the financial world. [SPEAKER_04]: I know we don't dive into there very often, but there are a number of things and financial indicators that we're seeing that kind of look ahead and [SPEAKER_04]: Gosh, do we have a lot of uncertainty, right?

13:41 [SPEAKER_04]: Again, financial markets are uncertain. [SPEAKER_04]: However, if you're watching construction tech, we're starting to continually, we're starting to see people get back in the game, starting to see funding rounds come back up. [SPEAKER_04]: Now, sure if I love that in some respects, but I do see a lot of that.

13:58 [SPEAKER_04]: I also see, I mean, if you've been watching the mergers and acquisitions market is pretty hefty right now, and pretty crazy. [SPEAKER_04]: I'm wondering what, you know, sort of the pulse of maybe other people are looking at right now that on the financial world. [SPEAKER_03]: I mean, I think it's inching the whole scale of it.

14:15 [SPEAKER_03]: I mean, I threw one of the links in there to, I know Auditask, I hadn't heard of this company peer PTC mainly because they're not directly in construction. [SPEAKER_03]: They're more of a manufacturing was a PLM product life cycle management. [SPEAKER_03]: solution. [SPEAKER_03]: But I mean, we talk about big numbers of what was like, a hundred and seventy something or a hundred and sixty billion that are sort of a million that the plan grids and the building connectors were going for.

14:38 [SPEAKER_03]: This PTC is a possible twenty five billion dollar deal. [SPEAKER_03]: That ought to be a quiet. [SPEAKER_03]: I mean, just the scale of Auditask and like we complained to them of like, why don't you care about us? [SPEAKER_03]: Like we are such a small section of how big they are. [SPEAKER_03]: I feel like we don't have to realize sometimes how big of a company they are relative to a pro core relative to some of like what we would appear to be their equal competitors.

15:05 [SPEAKER_03]: And it's yeah, like again, we don't often think about what drives their decisions and how their world works because at the end of the day, money drives everything. [SPEAKER_03]: So, yeah, I think it's an interesting context in all of this and just to show the, yeah, there is still some crazy money getting thrown around.

15:21 [SPEAKER_04]: We forget that in construction, especially when we talk about Autodesk a lot, you forget that we are a very small portion of the business that they do. [SPEAKER_04]: Anybody who's been to AU has had that kind of reality check when you get there and you're looking around going away. [SPEAKER_04]: Where are we again?

15:36 [SPEAKER_04]: And they're like, what are you with? [SPEAKER_04]: Construction. [SPEAKER_04]: So you're going to need to get on the tram and go that way. [SPEAKER_04]: Now, I'm kidding. [SPEAKER_04]: Autodesk. [SPEAKER_04]: I'm kidding. [SPEAKER_04]: Actually, they've done well and have different sections on their floor.

15:50 [SPEAKER_04]: But you do start to realize just the enormity of that company and to look at a twenty five billion dollar acquisition. [SPEAKER_04]: Wow. [SPEAKER_04]: Yeah, I was I was looking through that, but but then again, that that shows, you know, the mergers and acquisitions I was talking about, I'm interested to Travis, what do you think?

16:08 [SPEAKER_01]: Well, there's a, you know, a couple of thoughts that come up. [SPEAKER_01]: It is kind of something that you don't we have, you know, a half a billion dollars. [SPEAKER_01]: You're revenue mechanical contractor and we think we're large and then you realize you got to put twenty five of those in the room to start to sway an auto dust to be like, you know, we're important and even even twenty five of those type of contractors in the room is really like, yeah, okay, game of thrones like drop right.

16:34 [SPEAKER_01]: But I was thinking of the mergers and acquisitions. [SPEAKER_01]: We've talked about this in some text threads that we have, but we're starting to see within construction companies themselves. [SPEAKER_01]: We're starting to see more private equity, more venture capital start to make our way in there, which is interesting to me.

16:49 [SPEAKER_01]: I had Alice the young. [SPEAKER_01]: We've talked about this before, where people are still looking for their Black Swan moments, right? [SPEAKER_01]: Traditional investing that those are fewer and fewer. [SPEAKER_01]: You're not going to have a lot more pro cores at the IPO on that. [SPEAKER_01]: So you've started to see that money creep in.

17:06 [SPEAKER_01]: You're starting to see we've talked through construction in years that, you know, once you kind of get around third fourth generation of a construction company, those family owned businesses, they don't want to continue. [SPEAKER_01]: And what I've seen [SPEAKER_01]: in there that is disturbing to me is there are starting to treat it like they would treat just about any other acquisition they make in private equity.

17:27 [SPEAKER_01]: They kind of let the business run as it would for the first one to three years and then they start to really slowly [SPEAKER_01]: Silo them off. [SPEAKER_01]: They pull back their interactions with other contractors. [SPEAKER_01]: They pull back their activities in industry events. [SPEAKER_01]: They pull back their, you know, some of this stuff is in process.

17:47 [SPEAKER_01]: So it's yet to be seen with the end goal is, but when we all kind of know what [SPEAKER_01]: the private equity mindset typically is, right? [SPEAKER_01]: Like you're just kind of, you're going to hollow out the business stuff with with debt and poof, right? [SPEAKER_01]: And I'm hoping that we're not going to see a lot of that in construction.

18:05 [SPEAKER_01]: We do love the giant contractors, right? [SPEAKER_01]: Those guys do some really cool work. [SPEAKER_01]: They're really fun to work with. [SPEAKER_01]: But there's a lot of that mom and pop to mid-sized contractors. [SPEAKER_01]: And I would actually know that I think about I think that the middle could end up more hollowed out.

18:21 [SPEAKER_01]: I think that the smaller guys are still going to be okay and the giant guys are going to be fine, but kind of that middle is is kind of I don't know where it's going to go and I don't really know if I have two great thoughts on it, but it's just something that I'm starting to observe. [SPEAKER_04]: I mean, I think the middle is going to be interesting when you talk about that private equity when you even talk about acquisitions.

18:38 [SPEAKER_04]: We're seeing it, right? [SPEAKER_04]: We saw M core just acquire Miller this year and Miller electric and we're seeing more and more of those acquisitions. [SPEAKER_04]: I think wasn't Cupertino involved in one recently too and I excuse me if I'm wrong on that one. [SPEAKER_04]: But there's been a couple in that world where we're seeing acquisitions and [SPEAKER_04]: sort of creating these larger companies and eventually we'll have large and small and the middle will be lost and there's a ton of innovation in the middle.

19:06 [SPEAKER_04]: It's really hard as a as a five person you know this or that or a you know a small local GC to innovate and take risk. [SPEAKER_04]: If the middle gets to take the risk right because you you have a little bit less people impact you have a little bit more control over it. [SPEAKER_04]: in my opinion.

19:25 [SPEAKER_04]: So I'm interested too because mergers and acquisitions is not something for just contact. [SPEAKER_04]: We're seeing it consistently and I think on the dorks we've talked about a John that, you know, it's the reality right now. [SPEAKER_02]: I think it's the reality, especially for people that have ARR associated with service.

19:41 [SPEAKER_02]: If you can prove that you have annual recurring income, that's what's attracting private equity. [SPEAKER_02]: The construction as a whole like commercial construction when you look at our margins, [SPEAKER_02]: You know, everybody come in that actually sees our bottom line and private equities going to look at your bottom line is going to go, why are you even still doing this?

19:59 [SPEAKER_02]: You know, like it's not it's not sexy and certainly if you're going to try to basically pull money from the bottom to the top, which is what typically happens, there's not a lot to pull from, but if you have ARR and want to develop ARR, I think that's why they're going after it. [SPEAKER_02]: I'm so negative on the subject that I feel like I should just almost stop myself so I don't rant.

20:20 [SPEAKER_02]: I do think that, you know, on the positive side, there are a lot of people looking to get out and they have a way to get out now. [SPEAKER_02]: I do notice that I have yet to run into a firm that fundamentally did better after they were acquired. [SPEAKER_02]: Lake Lake like when this oh my gosh, we got the acquisition and now everything's just wonderful and beautiful.

20:40 [SPEAKER_02]: So I might live in a bubble where everybody else is having wonderful beautiful time, but for me it was like the owners got paid off and half of us got laid off and at the end of the day, I get the argument that that things are about money, but like [SPEAKER_02]: There's communities in people and a kind of planet that we are living on, that it's to live with each other.

21:01 [SPEAKER_02]: And if everybody's unemployable and unemployed and getting laid off all the time, it's not a positive. [SPEAKER_02]: I actually personally, and I'll stop my rant after this, can't see a lot of difference between this and trusts. [SPEAKER_02]: back in the industrial revolution. [SPEAKER_02]: So like the idea that anti-trust doesn't apply to this is disturbing to me because it's going to do the same thing.

21:24 [SPEAKER_02]: And you're right, it's going to wash out the middle. [SPEAKER_02]: The beginning or the small company is only survived if we don't legislate the amount of existence which you can do. [SPEAKER_02]: And I would say that's on the software side too. [SPEAKER_02]: We have software that used to cater to small businesses.

21:38 [SPEAKER_02]: It now caters to peas and the peas know it and you can see them pulling the levers on the features. [SPEAKER_02]: This is a feature that's only going to work for big companies. [SPEAKER_02]: This is a feature that's only going to work for big companies. [SPEAKER_02]: This is a feature that's going to actually cut out small companies and I don't know how intentional it is and how much it's just if you're going to support a big company and stuff to support small one at the same time.

21:58 [SPEAKER_02]: Hold on, we want that. [SPEAKER_04]: Now I'll go to Nathan here, but in to that point, Jonathan, like it's a, it's a, a dollars investment thing, you know, you don't see a ton of them. [SPEAKER_04]: I think that talk about it when it works. [SPEAKER_04]: They talk about it when it doesn't work, right?

22:13 [SPEAKER_04]: That's part of it. [SPEAKER_04]: But I'm interested in anything. [SPEAKER_03]: What was your counterpart? [SPEAKER_03]: I'm not going to argue the PE side of things because we've had that debate and I'm with you on that. [SPEAKER_03]: But M core, for example, is a publicly traded company.

22:25 [SPEAKER_03]: And there are a few others that AECOM and Jacobs, again, more on the engineering design and program side, but more as more and more large construction companies go public. [SPEAKER_03]: How does that change how they're now held accountable for financial reporting? [SPEAKER_03]: What is their overall health of their projects?

22:43 [SPEAKER_03]: How does that change their requirements of what they need to report? [SPEAKER_03]: There's questions that I think if you talk to economists, they don't know the answer because financials don't track to that level of granularity. [SPEAKER_03]: But again, that's another thread, I think, with [SPEAKER_03]: relationships that, you know, CPC is building with a construction financial management association, CFMA, and other groups to try and pull on that thread of the money, because, again, I've always been operations efficiency people first who cares about the money, but the longer you, you know, have to defend for yourself out there.

23:14 [SPEAKER_03]: You realize that the mighty dollar does, you know, [SPEAKER_03]: hold true and it is that that that we have to pull and so the more we can tie this stuff to where it was in fact in the the bottom dollar and create systems like publicly traded companies that have to use that xbrl financial reporting standard you know can we actually fund that into a good thing so yes that there are a lot of bad things to consolidation and large companies and the the little man but there are some some potential good good sons this is what I was thinking about Jonathan and I lost my train of thought there for you but [SPEAKER_04]: You were talking about whether it's venture, whether it's PE, whether it's M&A, and then influencing what they're designed.

23:53 [SPEAKER_04]: Things that we're designed for smaller companies that are then focused on the larger companies. [SPEAKER_04]: That is a problem with the way we look at total addressable market and the way that people buy software in this industry as a whole. [SPEAKER_04]: We have it wrong. [SPEAKER_04]: We have fully wrong.

24:07 [SPEAKER_04]: They always go after the big ones because they see a total addressable market. [SPEAKER_04]: They just take a number, hey, you're a five billion dollar whatever. [SPEAKER_04]: we want to go after you because that means if we got our share at point even point one percent you know we're we're getting this out of it.

24:23 [SPEAKER_04]: What you don't realize is you know your those companies don't it doesn't work out that way and in fact the small dollars add up over time with those smaller contractors medium contractors that are actually growing and you grow with them [SPEAKER_04]: And you can make that money off of them.

24:41 [SPEAKER_04]: And that man I have sat through that room. [SPEAKER_04]: I have sat with people looking at that. [SPEAKER_04]: And it is next to impossible to get money people because they go out and do charts and graphs and they look at it and you go it's just and I think there's also still at this point a misunderstanding that a ten billion dollar [SPEAKER_04]: GC, how many people they have versus a billion dollar mechanical, electrical, anything.

25:14 [SPEAKER_04]: The impact that the software can have on efficiency is so much higher when it comes to taking all the way down to small trades, they just have more people. [SPEAKER_04]: when software can impact people and what are we talking about people people people people that gc's numbers are just bigger but they're a lot of times the shell corps right not not to say there's a shell corporation but they're they're passed through so yeah I think the financial model is still one of those things and I'm I'm in the middle man like I do think there's certain things in the software side of things that acquisitions are really good for that especially because you see them right wrong time [SPEAKER_04]: maybe not fully baked didn't really get it, but have some IP that would be really powerful.

25:57 [SPEAKER_04]: Those are some of the acquisitions that, yeah, it's not great, but they look good later. [SPEAKER_04]: I mean, I think I hate to say, but like an unearth for Procore. [SPEAKER_04]: Like that was a company that was really struggling to just get over the hump and going in there and taking some of that IP and then putting inside of platform like Procore was a good move for that.

26:14 [SPEAKER_00]: What we see in this article, it's very much of what is that IP and PTC. [SPEAKER_00]: It's a very interesting, I don't know, number that they acquired for because it doesn't even mention AI. [SPEAKER_00]: So the only time you're seeing these large acquisitions at that price point is with AI right now.

26:37 [SPEAKER_00]: to tell you the truth when you sent me the article, I was like, think, God, on it has went and bought something for AI, because they still haven't cracked their night on what they're doing with AI. [SPEAKER_00]: And I'm like, all right, great. [SPEAKER_00]: No, it's a product lifecycle management, which they have inventor for.

26:57 [SPEAKER_00]: So it's a very, very odd one for them to go do, but that it's not out of [SPEAKER_00]: They're, they're right. [SPEAKER_00]: Odessa's done this before. [SPEAKER_00]: they've then brought it in or it died off because it was competition in the market. [SPEAKER_04]: We got to wrap this up and get into the future.

27:16 [SPEAKER_04]: So what I wanted to do with all of these three themes is create the final theme for folks listening because we're headed into my favorite season of the year, right? [SPEAKER_04]: By the time this thing comes out, some of we will have been at AGCIT, the innovation and technology conference, and then we'll be going into the Fab conference for MCAA.

27:36 [SPEAKER_04]: And into the national conferences, into the big AUs, into into ground break, and not to be left behind unbound for blue beam, use your code, unbound the crew. [SPEAKER_04]: Yeah, that's right. [SPEAKER_04]: Selfless plug. [SPEAKER_04]: Before we do that though, Travis, I know you have a little something to share with people, and we'll make sure this gets out over there.

27:55 [SPEAKER_04]: But you and CPC got some work you're doing. [SPEAKER_01]: We are doing some work. [SPEAKER_01]: You know, one of the things that... [SPEAKER_01]: people always complain about, in the industry, a large, but, uh, human health contractors and specifically is who put the damn walls up already, right?

28:09 [SPEAKER_01]: Um, so, and that's, that's just a, a jab there, but, um, the real issue is what is the, what is the proper trace tracking? [SPEAKER_01]: And if you ask, ask each trade individually, the proper trade stackings, the one where I go in first, because I can do all my work the fastest. [SPEAKER_01]: And we've partnered with Nathan at the CPC just to start doing some surveys and kind of get down to, [SPEAKER_01]: what is that that the right sequence and then from that if I'm impacted by the project going out of sequence what can I say what can I bring back to the project team to be saying hey you know maybe there's no way to get it in the change order whatever book but saying hey on that last project you went out of sequence in it it

28:49 [SPEAKER_01]: changed my efficiency by a coefficient of three. [SPEAKER_01]: Whatever that formula is. [SPEAKER_01]: So if you do it again on this next one, I'm going to build it into the contract. [SPEAKER_01]: You know, whatever that language kind of comes out. [SPEAKER_01]: So it's a long way of me saying that Nathan has put together surveys on LinkedIn.

29:04 [SPEAKER_01]: I'm sure Jeff will share it out with the show notes and everything else, but there is a survey that we are sort of looking for. [SPEAKER_01]: We sponsor with the CPC. [SPEAKER_01]: This Macna is [SPEAKER_01]: to start to get some industry data on what do you think that proper sequencing of the trade is in and will produce a white paper that will show that information out.

29:24 [SPEAKER_01]: Nathan you want to add some more color to that. [SPEAKER_03]: Nobody hates taking surveys more than me, which is why we made it super short. [SPEAKER_03]: It's like four, maybe five questions. [SPEAKER_03]: But I think, yeah, if you have any experience, then field otherwise with the struggles of, especially in complex interiors projects of the top track, bottom track, the different components of framing and how that goes in with your overhead in wall, MEP.

29:50 [SPEAKER_03]: I mean, there is no right answer, but we want to collect as many different kind of experts of what's not working today, what challenges are you seeing from your perspective and how would you in a perfect world fix it? [SPEAKER_03]: And then again, we'll compare our contrasts those together and put that into a white paper.

30:07 [SPEAKER_03]: And hopefully keep rising the tide for everyone and advancing the industry forward. [SPEAKER_03]: So thank you Travis and Smackna for coming up with the idea, shout out to Kurt with Digg and Cole and the, yeah. [SPEAKER_03]: Having that need in the first place starting kind of poke poke in the eye a little bit and so yeah, it started a really good discussion through Chad Pearson in Plexus and Aaron Khan as well as through a lot of the walled ceiling associations to bring everybody together and realize that yeah both sides have their their side of the story and into a collect all sides we can't really have a proposed a good solution moving forward [SPEAKER_04]: And we'll report out on it.

30:42 [SPEAKER_04]: So once that way, paper comes out, you'll see a new episode here, because hopefully you've already noticed that the CPC and the contact crew have come together. [SPEAKER_04]: If you're reading your newsletter, you know that now. [SPEAKER_04]: And if you don't, well, then sign up for the newsletter, people, the contactcrew.com.

30:56 [SPEAKER_04]: We're wrapping up. [SPEAKER_04]: So I want each of you to sort of give like your two minutes. [SPEAKER_04]: Hey, you're headed out. [SPEAKER_04]: You're going into conferences and you're getting your bag packed. [SPEAKER_04]: You're getting your mind ready. [SPEAKER_04]: What should you be focusing on?

31:11 [SPEAKER_04]: And Travis, I want to start that back with you after your nice plug here. [SPEAKER_04]: What are some of the things you try to tell people before they hit a show floor and sort of get overwhelmed? [SPEAKER_01]: The thing that I've always learned from or take, try to ways like, you know, [SPEAKER_01]: Like, some people say, like, bring away three things, like, one, if there's one on concept or idea that you can get from wherever you're going, that you can come back and actually implement that that's that's important.

31:37 [SPEAKER_01]: Being able to report back to your people, I think that sometimes we lose focus on the fact that, you know, [SPEAKER_01]: If you're working for a company, they send you to a... Send you to a conference, right? [SPEAKER_01]: It's not just for your own personal growth, right? [SPEAKER_01]: You need to be able to report back to the people.

31:52 [SPEAKER_01]: And I will also say, as we're kind of getting into... We've hidden on a couple times like the age of AI and everything like that. [SPEAKER_01]: I think that there's... We are starting to also see a trend where... I can't remember. [SPEAKER_01]: I've heard it on somebody podcast and written so many articles where people are kind of getting dumber from using AI way too much.

32:11 [SPEAKER_01]: So when you go into these, and most of us growing out of these tech conferences, really be mindful about what their AI says it's going to do and where's the human involved, where's that context, where's that decision point? [SPEAKER_01]: Because we really, we really don't had tools that are going to dump our people down, right?

32:31 [SPEAKER_01]: And I think that, and we don't, in any way, you just don't want to fall into the hype. [SPEAKER_01]: So really be careful and do some real research on, you know, [SPEAKER_01]: Okay. [SPEAKER_01]: It's, it's, uh, whatever. [SPEAKER_01]: It's a chat bot that that, um, accesses my project data.

32:45 [SPEAKER_01]: That's not terrible. [SPEAKER_01]: Like, just, you know, be fine with that. [SPEAKER_01]: Let it is. [SPEAKER_01]: But if it tells you that it, it'll manage your project for you. [SPEAKER_01]: Be, be skeptical. [SPEAKER_03]: I like that. [SPEAKER_03]: That's good advice. [SPEAKER_03]: Nathan, what do you got?

32:54 [SPEAKER_03]: You know, I think I'm going to still one from Charlie Dunn. [SPEAKER_03]: So starting with the problem, I think it's such a big thing before you even sign up for the conference in the first place assuming that you're going and paying and want to get something out of it. [SPEAKER_03]: If you don't have it looked kind of internally at the organization and listed those one to three problems, like here, here's what we need to solve as an organization.

33:15 [SPEAKER_03]: And then go to those booths and then go to those conversations and they're going to sell you everything. [SPEAKER_03]: Okay, within the context of this problem I'm trying to solve, [SPEAKER_03]: How does this and how do they respond to that, right? [SPEAKER_03]: I think that it's a way easier to vet all these shiny, you know, bells and whistles that are out there.

33:29 [SPEAKER_03]: Because you can get very caught up in it if you just want to go there to be impressed. [SPEAKER_03]: You're going to be impressed if you want to cut a show to be impressed. [SPEAKER_03]: But if you have those problems of what you need to solve, it gives you, I think, a much, much better context for those conversations and it'll be a lot more productive and you'll better know us to bring back to your organization and show the value and, you know, be able to come back again.

33:49 [SPEAKER_04]: post conference, you know, recap is really is really important piece, but the pre-conference find and fact like I'm going, what do you guys worried about? [SPEAKER_04]: What's our biggest problem? [SPEAKER_04]: That's another great one. [SPEAKER_04]: Especially two if you're gonna do that in the middle, you can connect it like, hey, I saw this and I think we should dig in more.

34:06 [SPEAKER_04]: Jacob, I'm interested, you know, what do you got for folks this year? [SPEAKER_00]: It's actually becoming more real, so you're gonna even hear more about it. [SPEAKER_00]: Once again, it's another buzzword though. [SPEAKER_00]: you can probably replace it with microwave also and see if it really works.

34:21 [SPEAKER_00]: But go out there, learn about it. [SPEAKER_00]: I think I'm going to go on top of Travis and Nathan here for this. [SPEAKER_00]: But what's it solving? [SPEAKER_00]: And actually, I asked, did they go and do the research and figure out what the problem was before trying to solve it? [SPEAKER_00]: So there's a lot of solutions out there that they think they know problems and they think they created a solution for it.

34:44 [SPEAKER_00]: Did they intentionally go do something or did they just ask AI if we could solve a problem with this? [SPEAKER_04]: That's a sweet wrap right there. [SPEAKER_04]: Jonathan, what do you got, buddy? [SPEAKER_02]: I'm super systematic on this one and if you've seen me at conference, I'm super systematic about it.

35:01 [SPEAKER_02]: I first Nathan's definitely right. [SPEAKER_02]: Jacob's definitely right. [SPEAKER_02]: Know the problem statement of your company. [SPEAKER_02]: There's a ton of them, but know them well. [SPEAKER_02]: But I would say this, you're going there to find like digital workforce. [SPEAKER_02]: You're adding to your digital workforce.

35:18 [SPEAKER_02]: So go there with the list of jobs that you're trying to fill. [SPEAKER_02]: These are jobs that already exist in my company that are being done by a person or being done poorly by technology. [SPEAKER_02]: that I'm going to fill. [SPEAKER_02]: I want to deliver drawings to my job site. [SPEAKER_02]: All right.

35:31 [SPEAKER_02]: That's the job that I need to be done. [SPEAKER_02]: Can you do that job? [SPEAKER_02]: And when you talk to the software providers, it's very specific. [SPEAKER_02]: And I would actually say talk about it as if you were going to hire a person, write a resume. [SPEAKER_02]: You know, you're going to do a Trimble.

35:43 [SPEAKER_02]: You want to Trimble? [SPEAKER_02]: Well, do you want to work at eight hours a day? [SPEAKER_02]: Because if you do, you're going to take two batteries. [SPEAKER_02]: That's going to cost you more money. [SPEAKER_02]: So like understanding what are the jobs that need done in your business, writing up a resume, absolutely you should do that before you walk in there.

35:58 [SPEAKER_02]: But the thing that I don't say in the class and now I've sort of started to double down on it is you want to pick a couple things to experiment with also. [SPEAKER_02]: We can solve problems by sitting down and planning how we're going to solve that problem. [SPEAKER_02]: And we can solve problems very systematically from looking at the problem at the end and working back through the means.

36:17 [SPEAKER_02]: But sometimes you get to the answer by experimentation. [SPEAKER_02]: And so going in there and being passionate about a technology you want to experiment with, I'll give you money for that if I'm your owner. [SPEAKER_02]: Because you will take that and you will experiment and you will have those problems in your head and you will start to solve them for me.

36:32 [SPEAKER_02]: And I don't think it should be your core focus. [SPEAKER_02]: But if on, if on one side of the barbell is jobs to be done on the other side is experiments that I want to do. [SPEAKER_04]: I absolutely love it and you guys did a wonderful opportunity because that's what I always say to people when you go in is there's a duality of getting there right you got to pack your bag with your problems you got to know what those problems are you got to have the highest and have them ranked so so that when you're hitting that showroom floor right you're going and looking for specific things and I and I tell people go into it and set your mindset when you're going on of the showroom floor [SPEAKER_04]: for hey, these are the problems I've packed, these are the problems from my other people.

37:10 [SPEAKER_04]: These are my standard operating procedures in the way I do things and focus and go in and really search out those things that are looking as though they may be able to help you with it and have those deep conversations like you said, Jonathan, I love the fact that you give everybody a job description and it's a digital workforce.

37:28 [SPEAKER_04]: We're hiring them not to replace that person. [SPEAKER_04]: We're hiring them to do a job [SPEAKER_04]: that it can do better, so they can go do other things for us. [SPEAKER_04]: We said, we have a deficit. [SPEAKER_04]: We're not trying to replace you. [SPEAKER_04]: We're trying to amplify you.

37:39 [SPEAKER_04]: And that is a great, you know, really good way to go about it and prepare. [SPEAKER_04]: And then I think you leave and you do your favorite kind of reset thing, whether that's an amuse bush and you eat something or you have a cocktail, [SPEAKER_04]: And you open up your mind to what's out there from an R&D perspective that I should really look for.

38:00 [SPEAKER_04]: And that's where you walk in looking for trends and there's always ten new of them, right? [SPEAKER_04]: They have right now.ai at the end and they solve all your problems. [SPEAKER_04]: but but but there's a truth to looking at that and to just knowing that future and really being ready to absorb it so you get both and then to me guys I say this all the time go through the program [SPEAKER_04]: Pick some of the hot ones, but pick some of the boring ones, please.

38:32 [SPEAKER_04]: I hate to call them boring because they're not, and I know John teaches a lot of them, but it's like, this is how you do your process map. [SPEAKER_04]: This is how you look at your construction technology stack. [SPEAKER_04]: This is how you do this, because by the way, [SPEAKER_04]: We don't sign up to do those things that he doesn't sign up and a lot of the other people don't sign up to do those things.

38:50 [SPEAKER_04]: You know, at ours, Detroit, the group, it's going to be out there teaching a lot of the essentials. [SPEAKER_04]: They don't do that to hear themselves speak. [SPEAKER_04]: They do that because they really care about making a difference and teaching and changing. [SPEAKER_04]: So make sure you get that nugget out of every one of them and go to one of some of the more I hate to call them boring because they're not the real tactical.

39:08 [SPEAKER_04]: So that's my thoughts. [SPEAKER_04]: Guys, this is so much fun. [SPEAKER_04]: We don't do it enough. [SPEAKER_04]: We're gonna have to split this up into two episodes. [SPEAKER_04]: Travis, thanks for joining us today, man. [SPEAKER_04]: I know you gotta get rolling. [SPEAKER_01]: Yeah, thanks for having me.

39:19 [SPEAKER_01]: It's great to talk to you all, you guys. [SPEAKER_04]: Nathan would thank you buddy for sitting down and enjoying us, man. [SPEAKER_04]: And enjoying the time with us. [SPEAKER_04]: I love the contrarian in you. [SPEAKER_04]: It's just getting stoked more. [SPEAKER_04]: I like it. [SPEAKER_04]: But I do like the rounded out beard.

39:32 [SPEAKER_04]: I'm going to be on. [SPEAKER_03]: Yeah, it's fun. [SPEAKER_03]: The mustache had its time, but it's back to business. [SPEAKER_04]: See you in November with that one. [SPEAKER_04]: And you'll have a better excuse. [SPEAKER_04]: Jacob Delbora, my digital twin. [SPEAKER_04]: Thanks for joining us today, my friend.

39:45 [SPEAKER_00]: Absolutely. [SPEAKER_00]: And our IP, Hulk Hogan. [SPEAKER_00]: Legend. [SPEAKER_00]: Good thing I'm not going to just rip my shirt off here for everybody on the podcast, but I appreciate the time Jeff. [SPEAKER_04]: And probably the only one who can do that flex better Jonathan Marsh. [SPEAKER_04]: Man, I just really enjoy the way you break these things down.

40:05 [SPEAKER_04]: It's always fun to have you in this little news. [SPEAKER_04]: I know you don't give yourself enough credit, but in my world, I learned a lot from you, man, and I appreciate it. [SPEAKER_02]: I love being on here and hopefully private equity doesn't keep my car, so we're good. [SPEAKER_04]: Thank you for tuning in today to geek out for the construction technology news of the quarter, the year, whatever you want to call it with the crew to read all our new stories to learn more about our guests and listen to this show, visit dcontechcrew.com.

40:32 [SPEAKER_04]: This is the content crew signing out. [SPEAKER_04]: Until next time, enjoy the ride and geek out.