The Change Order Chaos for Construction Leaders to Reduce Cost Blind Spots with Cameron Page

0:00 [SPEAKER_00]: On this week's show, clarifying the story with Kim and Paige from Clear Story. [SPEAKER_00]: All right, Nathan Wood, we're back on the mic again. [SPEAKER_00]: You got that 25 AEC integration summit on there today, showing that off last year's event, but probably the most comfortable of the T-shirts.

0:22 [SPEAKER_01]: How's it going, man? [SPEAKER_01]: I got to put on a golf shirt after this and brush off all the rust and see if I can go play what is 18 holes? [SPEAKER_01]: How many holes do you play in golf? [SPEAKER_00]: You play 18 and everybody listening now. [SPEAKER_00]: It's been that long. [SPEAKER_00]: I think we're playing 18.

0:39 [SPEAKER_01]: I don't know. [SPEAKER_01]: I got dragged into it last minute. [SPEAKER_00]: Nice. [SPEAKER_00]: I'm jealous. [SPEAKER_00]: Enjoy the swing and that is Cameron Page from Clear Story Cameron. [SPEAKER_00]: What's happening, man? [SPEAKER_02]: A little bit of everything. [SPEAKER_02]: It's a crazy time in the world right now.

0:50 [SPEAKER_02]: Yeah, excited to be an off-y guy. [SPEAKER_00]: Where is the Clear Story office? [SPEAKER_00]: Where are you coming from? [SPEAKER_02]: Yes, we're in Walnut Creek. [SPEAKER_02]: I mean, our team's all over the US. [SPEAKER_02]: We've got about 95 people now. [SPEAKER_00]: but we have an HQ here in one of the creek was just outside of the sermons let's go use put on calm in from HQ yeah nice from HQ got the hard hats in the background we'll get into it all yeah it's going to be a lot of fun but before we get in all that you guys know the drill come on youtube dot com four slash at the contact crew [SPEAKER_00]: Follow us on the socials, like the show, share the show with your friends.

1:26 [SPEAKER_00]: If you're interested in getting on the show, well, find one of us on LinkedIn, find one of us on those socials, or better yet. [SPEAKER_00]: Tap us on the shoulder in person and who knows you might be the one that gets on the show. [SPEAKER_00]: All right. [SPEAKER_00]: We're back. [SPEAKER_00]: Cameron Cameron Cameron.

1:40 [SPEAKER_00]: It's been a long time. [SPEAKER_00]: A comment. [SPEAKER_00]: I think we were talking in the pre call. [SPEAKER_00]: We started talking about this at a ground break years ago. [SPEAKER_00]: And then, you know, it took a little serendipity to get back here. [SPEAKER_00]: But we're back here.

1:53 [SPEAKER_00]: So tell everybody a little bit about you and your history in the business. [SPEAKER_02]: Yeah, definitely. [SPEAKER_02]: Well, yeah, it's great to have fun at the end. [SPEAKER_02]: It's six hits, it'll be fun. [SPEAKER_02]: I've been in construction my whole career. [SPEAKER_02]: I've always wanted to build things, you know, and I back at high school.

2:06 [SPEAKER_02]: I was applying for colleges and college counselor told me there was this thing called construction management. [SPEAKER_02]: And I was like, that sounds like something, you know, that would fit my interest. [SPEAKER_02]: And so I had never worked in construction and no one in my family was in construction.

2:19 [SPEAKER_02]: So I had this lucky sort of epiphany where I was like, [SPEAKER_02]: If construction management is the major, that means I'm gonna be managing construction. [SPEAKER_02]: And I was like, I should probably have done construction at some point in my life. [SPEAKER_02]: And so I grew up in Sacramento.

2:33 [SPEAKER_02]: My mom actually found this like trades program where they're taking high school kids as a parenthesis and getting them into the industry. [SPEAKER_02]: And so I joined a commercial wood framing company and started to end to high school worker for a couple summers, which was really great.

2:48 [SPEAKER_02]: And I still encourage anyone who's like, [SPEAKER_02]: to do something like that, to actually wear a set of bags, swing a hammer, like, understand what it's like to work on a field group. [SPEAKER_02]: So I did that for a few summers, then I studied construction management in Cal Poly, graduated in the amazing time to graduate with a construction degree in 2009, when the market was completely crashing.

3:12 [SPEAKER_02]: and it was wild. [SPEAKER_02]: I mean, tons of my friends were, had gotten offers, offers were getting rescinded, people were taking bartending jobs. [SPEAKER_02]: You know, it was an interesting time that you guys recall. [SPEAKER_02]: But I was lucky enough to get a job with a company called DevCon construction, which is the largest builder in Silicon Valley.

3:28 [SPEAKER_02]: So, [SPEAKER_02]: started there as a field engineer. [SPEAKER_02]: I was there for nine years and great company to work with tons of like kind of upward mobility to take on a lot of different work. [SPEAKER_02]: And so I was doing everything from small, thin and improvement projects to ground up corporate campuses kind of everything in between.

3:45 [SPEAKER_02]: You know, first I was always like a forward thinking on tax. [SPEAKER_02]: I was always like an early person adopting new software tools and trying to make my process better. [SPEAKER_00]: But at the same time, I was also a little bit frustrated because I was like not every tool is really solving the biggest challenges that I have.

3:59 [SPEAKER_02]: And so my biggest challenge was always just I want to understand our cost exposure. [SPEAKER_02]: And for a general contractor, that's changers. [SPEAKER_02]: We have a little bit of direct cost on our projects. [SPEAKER_02]: But for the most part, we subcontract. [SPEAKER_02]: And the volatility there is what's changed.

4:14 [SPEAKER_02]: And for me to understand my change exposure, [SPEAKER_02]: was quite the manual ever. [SPEAKER_02]: And I would ask for some, for change or logs from every setup, I had, you know, frisk my superintendents, make sure he hadn't signed any team and tickets. [SPEAKER_02]: I wasn't aware of new way to reconcile everything.

4:30 [SPEAKER_02]: And obviously, we had Project Financial Software who were trying to house everything, but the question was always, do I have everything in there? [SPEAKER_02]: And so, [SPEAKER_02]: That was kind of the idea behind starting clear story. [SPEAKER_02]: I was creating really a business network for change orders.

4:43 [SPEAKER_02]: So whenever I set me a change order, it was logged automatically and I have to go hunt it down later and we had complete visibility and so. [SPEAKER_02]: Yeah, launched Closure in 2018, you know, I was like, hey, I've managed subcontractors in my whole career. [SPEAKER_02]: How hard could it be to manage an engineering team and like build software end?

4:59 [SPEAKER_02]: Turns out, especially with the tools back then, it was actually quite challenging. [SPEAKER_02]: And so learned a lot, which was actually great because it obviously brought in my worldview and I got to learn a whole bunch of new stuff and it totally different side of the construction industry.

5:14 [SPEAKER_02]: So yeah, but now it's crazy, you know, we've been at Clershire for eight years now, which is pretty wild and reach to scale that, you know, I [SPEAKER_02]: Thought would be maybe like where we would get to and now we're thinking obviously beyond that. [SPEAKER_02]: And so So you guys been quite the journey But yeah, and here we are on the contact group podcast.

5:34 [SPEAKER_00]: Yeah, I mean all the way back I love the the advice to get out on a job site in the summer I'm actually having the same conversations with my son right now about like you know He's been doing Landscaping and then it's like do you do food and beverage and I'm like well [SPEAKER_00]: You might want to know how the real world lives and hard labor and going out and carrying a bag and doing things and learning how to install stuff is pretty key not just now, but into your future.

6:01 [SPEAKER_00]: And it gives you an idea of how the world is built. [SPEAKER_00]: So I think that's sage advice to anybody, especially given, you don't have a family history in it. [SPEAKER_00]: So we hear that over and over all of the lives exposed to it by my grandfather's, [SPEAKER_02]: So how do you get exposed to what the world's going to look like when you get there?

6:24 [SPEAKER_00]: And then at DevCon, how did that help you at DevCon in the beginning? [SPEAKER_00]: Like once you get out of school a lot, we see this all the time. [SPEAKER_00]: People get out of construction management and it's like, you don't really know how the work gets done. [SPEAKER_00]: Do you?

6:37 [SPEAKER_02]: Oh, 100%. [SPEAKER_02]: I mean, I think. [SPEAKER_02]: to your point, it's just great grounding for anybody. [SPEAKER_02]: Even if you don't go into a career in construction, like having worked on a crew and, I mean, construction is a people industry, and that's like the main thing that matters with anything.

6:53 [SPEAKER_02]: But, and especially being going through a general contracting side of the business, but even if you're in a specialty contracting side of the business, like, [SPEAKER_02]: The amount of stakeholders you interact with every day is the the the widest range of I think any industry right and so if you're a project engineer field engineer starting out like you're going to be working with your superintendent.

7:13 [SPEAKER_02]: your project manager, the client, the architect, and then all the field crews that are actually installing the work. [SPEAKER_02]: And every single one of those stakeholders is completely different background, completely different way of communicating. [SPEAKER_02]: And so yeah, I think being on that field crew gave me a lot of like understanding of how the industry works, particularly how the field perceives messaging from the office and at what that dynamic is really like.

7:38 [SPEAKER_02]: And I think it's really a good grounding for anybody. [SPEAKER_01]: I mean, this is exactly what I was going to ask about. [SPEAKER_01]: Because the whole arc of your progression from working in a trade for a framing contractor to then working at a GC to then building software that I think was primarily trade contractor kind of focus.

7:53 [SPEAKER_01]: But now I think it's progressed into having a GC function. [SPEAKER_01]: Right? [SPEAKER_01]: I'll tell us more about the progression of the product itself and what problems within the larger world of change orders you attack and how it's grown. [SPEAKER_02]: Yeah, we have. [SPEAKER_02]: Definitely.

8:07 [SPEAKER_02]: I mean, that's the thing is like change orders are sort of the nexus of like basically every workflow and construction, right? [SPEAKER_02]: Like whether it's a schedule change or a design change or trade damage out on the job site or you're working over time, you know, everything funnels back to like a change and, you know, again, it touches all different stakeholders.

8:26 [SPEAKER_02]: So it's a really broad question, but like particularly how it relates to like our philosophy on [SPEAKER_02]: You know, one part of our application and one part of the change order workflow is field directed extra work and which is primarily done on like a time and material basis and there's a standard workflow across our industry where you write down the extra work that GCE or whoever's supervising the work signs off on and verifies yes you did that scope of work, but we're not agreeing to like the cost or anything like that.

8:57 [SPEAKER_02]: And so, you know, but that process is super painful. [SPEAKER_02]: It's one of my biggest pain points in my career is just like, what the heck have we signed? [SPEAKER_02]: Who's priced it? [SPEAKER_02]: What's the cost exposure? [SPEAKER_02]: And so the one of the big, you know, pain points we saw is like we give the foreman a really easy mobile app to document the extra work and get a really easy workflow for the superintendent to sign off on it.

9:21 [SPEAKER_02]: But the bigger problem that solves in the back office is complete visibility because those things are automatically logged rather than waiting for the paper document to come back or like a fillable PDF form to be saved downloaded and set. [SPEAKER_02]: But in order to get that outcome and solve the problem for the back office, you have to make it insanely easy for the form and to actually do that work and use the mobile app and so I think, you know, that's an example of where my background at having like empathy for the field and one of our core values of the companies like keep it simple.

9:54 [SPEAKER_02]: And you know, I think that's driven reason why I think we're the leader and digital scene M tags today is like we just focused on making it as simple as humanly possible to automate that that workflow. [SPEAKER_01]: So that's just I think one of many examples and what I love about it and why I find myself talking about you guys all the time is because you are bridging that gap between the needs of the trade and the needs of the GC and kind of I'm always curious of like which side of the coin.

10:23 [SPEAKER_01]: kind of did you approach it from like was it always kind of hey at the end of the day the GC is going to have to manage the stuff and if we don't make it easier for the trade we're never going to get by so that that was kind of the ethos of it or was more like hey trades have this all this ability to capture all this data and make their lives more efficient and then kind of there's there I don't know the mayor may not be a pitch to kind of the whole trade coctor contractors own benefit to [SPEAKER_01]: using this product.

10:48 [SPEAKER_01]: Are you seeing benefit on both sides is mostly just the GCs that benefit and the trades find it easy to use. [SPEAKER_01]: What do you see in the progression? [SPEAKER_02]: Yeah, I mean, you know about 75% of our customers are specialty contractors. [SPEAKER_02]: And so we have specialty contractors use clear straight across their whole company.

11:04 [SPEAKER_02]: So we have, and then about, you know, 20, and this is by like count of customers. [SPEAKER_02]: Obviously, the count of specialty contractors is way larger than the count of general contractors. [SPEAKER_02]: Um, but let's go back to their story and just the change order process and haul is like there's a way to make it better for everyone and not have any trade offs between each stakeholder.

11:25 [SPEAKER_02]: And so when it comes to change orders for a specialty contractor, it's primarily revenue, right? [SPEAKER_02]: It's your top line revenue that you're trying to get recouped. [SPEAKER_02]: when it comes to a general contractor, it's cost, right? [SPEAKER_02]: These changes represent cost, but you also of the budget, you're trying to reconcile with your client.

11:43 [SPEAKER_02]: And the client's trying to understand, hey, what allowances and contingencies do we have remaining? [SPEAKER_02]: And again, the way you draw down those allowances for the most part is from the change orders. [SPEAKER_02]: And so really like what's cool about ClearShore is like we give the subcontractors the tools to process the stuff faster in a more organized and simple format and I built it self selfishly as a GC of like, hey, this is the easiest way to paint this picture for your GC, which helps the GC reduce risk and understand their cost exposure and then what that does is allows the owner to be like, okay, I have the full picture and it allows the GC to help reconcile those alliances.

12:24 [SPEAKER_02]: Because during a project, there's always, you know, if it's a GMP contract, there's savings that, you know, depending on how they've negotiated it, that the client is going to get. [SPEAKER_02]: because there are money, and but what happens so often is the GC's nervous about their costs exposure, so they hang on to those allowances to the very end, and then they give their client back a bunch of money, which sometimes can be great, but oftentimes the client would want to spend that money while they have it budgeted to maximize the value of this asset that their building is going to last for 30 years, right, because if they don't make those upgrades during the project, [SPEAKER_02]: and they have to go do a remodel to make any of those changes.

13:03 [SPEAKER_02]: And so it's cool with clear stories, like there's incentives for everyone to use the platform, for subs, like our live clear story, without being, there's much in negative connotations with change orders, but in reality, most subs just simply want to get paid on the actual work they're doing, and get paid in a timely manner.

13:20 [SPEAKER_02]: And the reason why they over-inflate changes is because they were worried they're gonna get negotiated down or their cash flow is gonna be delayed for 180 or days or a year. [SPEAKER_02]: But if we give the tools to do this efficiently and transparently, it actually changes that dynamic quite a bit.

13:37 [SPEAKER_02]: So I think that's a really unique thing for ClearStory. [SPEAKER_02]: And one thing I'll mention too is, when we set out to build the project product, [SPEAKER_02]: We decided very early on the only way this would work for a general contractor is if it's easy for the subcontractors to like adopt and use that product and then on top of that the only way it network works in construction because Turner, you know, they hire the largest specialty contractors in the country, but they also hire the smallest.

14:07 [SPEAKER_02]: And so when they're using it on a project, it has to work for like a small mom and pop subcontractor, the same way it would for, you know, one of our other customers for formance contracting group. [SPEAKER_02]: So it's like how the heck do you build a product that every stakeholder can use and remove all the friction so they could stand it up on a six week tenant improvement project or a five-year data center.

14:30 [SPEAKER_02]: And so, somehow, over the last eight years, we've accomplished that, but that was like the challenge of, it's not an easy product to go build as it turns out. [SPEAKER_00]: Now, it sounds like on the outside that it would be easy, but it really isn't, and I think you're hitting on something too over time that's always been this, there's a negative connotation to change orders when, you know, just like the same thing with with our FIs, it's like, well, honestly, it's a question, right?

14:56 [SPEAKER_00]: That's an RFI. [SPEAKER_00]: Honestly, a change order is alerting somebody to something that either we didn't plan on or that we need to get done. [SPEAKER_00]: And good trade contractors actually want this kind of visibility for exactly what you're saying. [SPEAKER_00]: They want to limit the exposure.

15:14 [SPEAKER_00]: They know how the process works and they want to get moving. [SPEAKER_00]: The worst thing that can happen with change orders is to take the risk of moving ahead on something to keep the project moving and not have it be approved. [SPEAKER_00]: Not have it be visible to everybody. [SPEAKER_00]: You know, and those, I mean, when you think about how those projects are changing and where the scopes are changing to, I mean, a lot of that is going to a limited number of, you know, mechanical or electrical and most cases electrical is it's landing on their shoulders and so the clarity of information and the speed.

15:52 [SPEAKER_00]: of information is can increase the relationship. [SPEAKER_00]: It's a relationship business, you set it. [SPEAKER_00]: Every crew operates different, every group operates different, but ultimately it's a relationship. [SPEAKER_00]: And this is a tool to improve the relationship. [SPEAKER_00]: And [SPEAKER_00]: I think more importantly, prevent the paper work slowing down the work because we can't slow it down the work.

16:15 [SPEAKER_02]: Well, the other thing that like, I think there's so many different, you know, because again, the change was like the focal point of so many things in construction, but the other like common sort of misunderstanding is, [SPEAKER_02]: while a lot of teenagers are like purely design change directives and things like that.

16:33 [SPEAKER_02]: A lot of it's actually just design evolution, right? [SPEAKER_02]: Because right now in construction, lead times are really long. [SPEAKER_02]: Projects are moving faster. [SPEAKER_02]: Everyone wants to build, you know, quickly get those items released. [SPEAKER_02]: And so why is that happening is a social GMP contract is the GCs brought in early.

16:51 [SPEAKER_02]: You're going through pre-construction. [SPEAKER_02]: But what the architect is doing is they're saying, hey, how soon can you get these trades awarded because for the no work contract? [SPEAKER_02]: Like, I want to work with the mill work contractor to understand the design details of how we're going to build the mill work.

17:08 [SPEAKER_02]: And by the way, we also want to get some of the material released. [SPEAKER_02]: And so what winds up happening is the GC is you have to take a point in time where we got a word a contract so we can bring that trade partner in who has all this specialized knowledge on that trade and work with them to finalize the design.

17:24 [SPEAKER_02]: which is great and that's the collaboration we want in the industry. [SPEAKER_02]: But the challenge is as soon as they're under contract, it's no longer a competitive bid situation and every change and design evolution is gonna have some cost. [SPEAKER_02]: And so again, back to your point, Jeff, of like speeding up to time to visibility is really what like every GC's under pressure on right now because I gave them no work example but that happens with structural steel.

17:50 [SPEAKER_02]: Like you gotta get the steel awarded, [SPEAKER_02]: get the materials on order, but then you're also finalizing the the shop drawings and everything else behind it, which not only triggers changes within the structural steel package, but it triggers changes in the drywall package and every other trade that's affected by that scope.

18:08 [SPEAKER_01]: Well, and let's use the example that we've been using of drywall and MEP of kind of this this interior and just the simple re-sequencing of work because everything you just said is completely true and you get guys on board early and then they got to get pricing based on an assumption of, you know, drywall going before MEP and then all of a sudden, you know, your duck works up in the ceiling before freight framing and how do you at that point as a framework [SPEAKER_01]: You know, estimate the cost impact of that said resequencing because we know it's slower when somebody went in before you.

18:40 [SPEAKER_01]: But how much slower like is there a coefficient? [SPEAKER_01]: Again, I mean, there is no answer to that. [SPEAKER_01]: I mean, that's what we were debating. [SPEAKER_01]: But I'm curious. [SPEAKER_01]: Yeah, like how close you guys are that those are discussions that are happening on the just the pure resequencing side of cost and trying to get to some numbers of how do we quantify that stuff is challenging to do.

19:01 [SPEAKER_02]: this AI-reasing category feature. [SPEAKER_02]: So every change you submit automatically gets categorized. [SPEAKER_02]: And a lot of systems you don't have like drop down selects where you can like categorize the change. [SPEAKER_02]: But what you need about clear sure is like when you're using a change management software, which is what we work alongside.

19:19 [SPEAKER_02]: Like we don't replace your traditional change order management software. [SPEAKER_02]: So like if you're using [SPEAKER_02]: You know, pro core financials, revista, or CMIC, or whatever, the job of clear stories, the capture all your changes at the granular level, and then ensure, like we have a bunch of reports in the software to ensure you have everything in that system.

19:39 [SPEAKER_02]: And that's really the main driver of clear story. [SPEAKER_02]: But what we're uniquely positioned is a lot of times you've received a change, you reject it, and it sometimes doesn't even hit your financial system, right? [SPEAKER_02]: So there's data that's like lost effectively. [SPEAKER_02]: And so with first story, we're more similar to your personal finance tool where you see every expense you've made.

20:00 [SPEAKER_02]: And so when it comes to change orders, you see literally every CR that's been sent to you. [SPEAKER_02]: And as a subcontractor, you see everything you've been sent across all of your projects in your whole, really your whole company. [SPEAKER_02]: And so with this reason category feature.

20:13 [SPEAKER_02]: AI automatically categorizes every CR you've received and then just like in your personal finance tool, you could look at categories of all the CRs you've received. [SPEAKER_02]: And so there's something relatively new we've launched for the whole goal is you know there's some pretty cool in app reporting we have like in on a project level and on a company level so you can get trends on like such kind of project level of your.

20:36 [SPEAKER_02]: 18 months into the project and most of your change orders are still design changes. [SPEAKER_02]: It's like a moment to pause and have a conversation with the architect, but you might find that a lot of them are overtime, change orders, or trade damage, or whatever, and then you can decide like, are beginning value from that overtime, et cetera.

20:53 [SPEAKER_02]: But then on a company level, the goal of this feature is so that, you know, they can take our data into their data warehouse or wherever they're doing business intelligence hook it up to an agent and start round tripping that data to different parts of the business. [SPEAKER_02]: You can say, hey, on a hospital project of the size, how many changes were we actually wind up with at the end of the job?

21:20 [SPEAKER_02]: And therefore, what allowances should I carry and why? [SPEAKER_02]: And it's shockingly a data set that like, even the most sophisticated GCs we work with don't actually have today. [SPEAKER_02]: So it's a really interesting. [SPEAKER_02]: And then it took your question, Nathan. [SPEAKER_02]: It kind of opens up the door as well for some predictive analytics and things like that in the future.

21:40 [SPEAKER_00]: to have to look at how that resequencing or, you know, we're talking about equipment now in equipment lead times, and you know, hey, we need to buy out the electrical scope early and order transformers, order everything we need ahead of time, or we're gonna be in real trouble. [SPEAKER_00]: I mean, it's switch boxes, et cetera.

21:58 [SPEAKER_00]: Like, oh great, we got everything, but we can't electrify the place. [SPEAKER_00]: And by the way, the speed at which our hyperscalers are changing and what they want, [SPEAKER_00]: from a sizing perspective, that's going to be something that, hey, listen, we see this from early designed to hear, hear some of the trends and, you know, I like the idea too that you're not trying to replace the change order platform that people are using.

22:22 [SPEAKER_00]: What you're trying to replace is the paper in the truck. [SPEAKER_00]: It's the handshake and and which are great, right? [SPEAKER_00]: We need the handshake, but we need to capture it so that data can tell us over time. [SPEAKER_00]: what really what really happens, I think that goes back to why you're called what you're called, right?

22:38 [SPEAKER_00]: Every project has a story, but it's a very incomplete, a very telephone game story that becomes very different depending on where you are in that telephone game, but this gives us an ability to, you know, mark those chapters in the story and tell it as it goes and then hopefully [SPEAKER_00]: If it goes well for clear story and the long run, what does that look like for construction companies?

23:09 [SPEAKER_00]: What does that look like for trades, for owners? [SPEAKER_00]: What would great look like for clear story in the end? [SPEAKER_02]: Yeah. [SPEAKER_02]: Well, our focus is we want to become this sort of orchestration layer between companies when it comes to out-of-contract work. [SPEAKER_02]: And I think we have a pretty clear path to sort of become in the industry standard.

23:33 [SPEAKER_02]: So it's like if you're sharing a change order, you're doing it through a clear story. [SPEAKER_02]: And I think we're already like, you know, somewhat there, you know, there's the industry's very, very, very large, but we work with things like 75% of the ENR top 25 today. [SPEAKER_02]: And so like we're getting to that inflection point, we're like, [SPEAKER_02]: You know, there's, I think, 14 or 15,000 construction companies that have a clearer story accounts today.

23:58 [SPEAKER_02]: I think we're doing like three and a half billion a month and like change order volume, like submitted through the platform. [SPEAKER_02]: So originally, like a pretty big scale, there's still, it's still a huge industry. [SPEAKER_02]: So we feel like we're still just like scratching the surface.

24:10 [SPEAKER_02]: And a large part of our usage is like a, you know, you mean when you get invited, you get free access to clear story. [SPEAKER_02]: And so, so that's been like the stated objectives kind of since day one is like create this transparency and workflow layer across the industry. [SPEAKER_02]: And it's agnostic to what you're using for financials internally.

24:32 [SPEAKER_02]: So again, like the GCs have their own set of tools, the subcontractor, so their own set of tools. [SPEAKER_02]: And, you know, really the inbox is where change order communication workflow is primarily happening today. [SPEAKER_02]: And, you know, other industries have solved this problem.

24:46 [SPEAKER_02]: Like, like, there's, you know, you may be familiar with builds.com, which is like a workflow layer for accounts receivable and accounts available. [SPEAKER_02]: And it works alongside your ERP or financial system, right? [SPEAKER_02]: We're like a really similar concept, but for change orders and add a contract work, [SPEAKER_02]: What I'm excited about, too, is like, you know, we started at the company 2018, like, AI wasn't a thing.

25:09 [SPEAKER_02]: We weren't thinking about AI and how that could also help. [SPEAKER_02]: And even over the last, like, honestly, like four months are thinking on how AI can also accelerate this workflow. [SPEAKER_02]: This has greatly changed as well. [SPEAKER_02]: And so, you know, we launched our first series of AI features over the last, like, kind of four or five months.

25:31 [SPEAKER_02]: You know, one challenge if there's any other construction tech companies is listening to this, like one of the challenges of construction tech and the reason why our industry is perceived, which I have a disagree with, but the structural reasons why we don't adopt technology fast and that's because most technology gets adopted when a new job starts up, right, and so just by that nature piloting software takes a fair amount of time.

25:57 [SPEAKER_02]: And so for us, oftentimes when we talk to a project team, during the middle of a job, they're stressed out about change orders. [SPEAKER_02]: They don't have a good understanding what their exposure is. [SPEAKER_02]: That's when they want clear story the most. [SPEAKER_02]: And so years ago, we felt like a bulk import tool where you can like, [SPEAKER_02]: Put your change order log in our Excel import and import it and we've done that with hundreds of projects where they can get an active job into clear story, get that visibility.

26:24 [SPEAKER_02]: But one of the first AI features we built was like an AI import. [SPEAKER_02]: So you can send if you're GCE, you can send it any subcontractors change order log, it'll analyze the data, map it to our columns and import it. [SPEAKER_02]: So you know, it's an activity that took 20, 30 minutes per change order log in our software.

26:40 [SPEAKER_02]: And now it's like, [SPEAKER_02]: You can do it in a minute. [SPEAKER_02]: You just upload the change or a log and analyze it. [SPEAKER_02]: So that was one of the first AI features we built, but we'll be right now in beta that we're starting to enable for our customers for beta testing is kind of these like four agents that make up the change order a lot of the change order workflow.

27:00 [SPEAKER_02]: So the first one is we have a tool called change notifications in clear story where you can send out of design change to your subcontractors. [SPEAKER_02]: set it that line of when the pricing's due, track whose open debt, whose received it, whose responded. [SPEAKER_02]: And so we're building an agent that analyzes that design change for the user, flags things for them, helps them estimate the cost before they send it out.

27:27 [SPEAKER_02]: But then it fills in the change location form for them automatically in clear story. [SPEAKER_02]: Then it goes out to the subcontractors for the subcontractors rule we're building, [SPEAKER_02]: and for the GC as well is a change order pricing agent. [SPEAKER_02]: So if they get that design change, they can put it into our agent and it'll help them draft a change order across.

27:46 [SPEAKER_02]: This is also useful for like really simple change orders. [SPEAKER_02]: Like we have a voice detectability in this agent where it's like, if it's a simple over time change order, where you have 10 crew members working over time, you know, today either got to fill in an Excel spreadsheet or you got to type, use your change order software and type something up.

28:06 [SPEAKER_02]: And then for the subcontractors, we're also working on a mobile app agent for creating field for to teen and tickets in the field, it does like Spanish translation stuff like that. [SPEAKER_02]: But then I think we're at all connects together as we've, we have this in beta testing. [SPEAKER_02]: It's pretty cool is a change order review agent.

28:22 [SPEAKER_02]: So today in clear story, you can open up a change order, you can red line it, you can mark it up, you can request revisions back from the subcontractor, you can track all the versions. [SPEAKER_02]: But we're building an agent in that automatically does that review and the GC can set up a checklist of the items they want the agent to review.

28:40 [SPEAKER_02]: And what's so powerful about that is for the paying subcontractors. [SPEAKER_02]: They're going to have a pre submission check that tells them if they're going to pass the GC's checklist before they even submit it. [SPEAKER_02]: And so what reswimed laying all this out there is like. [SPEAKER_02]: Again, cycle time and change orders is where the subs get hurt and cash flow, the GC has risk because they don't know what's out there and then the owner can't make decisions.

29:06 [SPEAKER_02]: And so I, all of this is like human in the loot, but AI is going to do all that really manual work and I think the cycle time, as an ability to have the cycle time on change orders dramatically decrease across the industry, if you think will be an exciting opportunity for everyone. [SPEAKER_01]: Man, I mean, you hit on a couple of very hot button, obviously, A.I.

29:30 [SPEAKER_01]: and we can talk about that forever. [SPEAKER_01]: But before I don't want to skip over the importance of standards. [SPEAKER_01]: You mentioned standards once, because I had this written down, of I do think you guys are kind of in a place to set a standard. [SPEAKER_01]: Similar to how ProCore kind of set a lot of the standards for RFI, API, you know, endpoints and different things like that that you have now just become de facto.

29:50 [SPEAKER_01]: standards. [SPEAKER_01]: When it comes to some of these categories, I know that the integration somebody we were talking about at a high level, stipulated versus unsipulated versus your field directed, but you were also mentioning even kind of more granular categories. [SPEAKER_01]: Like, is that stuff that you guys are pushing back on the initiative saying, like, no, we should define a particular set of them.

30:10 [SPEAKER_01]: Is there any interest in trying to publish standards around that [SPEAKER_02]: Yeah, you know, we we still interesting like when we when we started building the reason category feature we met with like a lot of our big GC customers and and and some contractors really everyone. [SPEAKER_02]: And when we initially planned to build the feature we were planning on making it rigid so this like hey we were going to pre define this list of reason categories have it done across the industry.

30:42 [SPEAKER_02]: When it came down to it, it just felt like it was going to be too much like a lot of front for us to define for the industry. [SPEAKER_02]: So the way we did it is we did set a list of pre-defined categories that's live in every clear story account. [SPEAKER_02]: But as a customer, you have the ability to adjust the reason categories based on what you want it to be for your company.

31:04 [SPEAKER_02]: The trade-off for us, because I think what a lot of our customers really want, is like industry benchmarking so they can compare how their projects are doing to theirs. [SPEAKER_02]: Obviously, all of our data is like anonymized and stuff like that. [SPEAKER_02]: And our concern with making them customizable was that how do we do that benchmarking?

31:22 [SPEAKER_02]: But that's where AI is so powerful, is like it can directionally get it all. [SPEAKER_02]: I'll map together even if there's a lot of changes. [SPEAKER_02]: So with everything like we still use our baseline category, so we'll still be able to do that like benchmarking, but it gives the customers a flexibility to set up like how they want.

31:39 [SPEAKER_00]: Yeah, so not completely getting out of head, especially as a software developer and trying to define that for everybody is gonna be really hard. [SPEAKER_00]: It does become a de facto standard over time, but I think we're gonna have a little bit more flexibility in the AI world. [SPEAKER_00]: But it's interesting to hear the speed to delivery and speeding up the cycle time.

32:00 [SPEAKER_00]: Because you said earlier, like I disagree with the way people look at the industry as well, [SPEAKER_00]: It's not untrue that we haven't seen a performance increase, like a productivity increase as a whole of the industry, but I think that's because we don't look at it for its parts and this is one of them, right?

32:22 [SPEAKER_00]: This is a part that quote unquote slows productivity, but it's a cycle time on decision making. [SPEAKER_00]: And ultimately some of our biggest problems with productivity aren't our capabilities. [SPEAKER_00]: It's our decision-making abilities and ability to choose those things. [SPEAKER_00]: But I also like you tie it back.

32:40 [SPEAKER_00]: I don't think people really understand that a contingency in a GMP project. [SPEAKER_00]: And giving us some of money back at the end isn't always a good thing, you know, it's like having a budget for anything in your organization along the way and getting how many of you at the end of the year, it's like December and you're like, oh, wow, I have, you know, this left in my budget, I better spend it or I won't get it again next year right well on a construction project.

33:06 [SPEAKER_00]: That's exponential because it requires rework or rebuild or whatever it might be, you know, a tenant improvement on an area. [SPEAKER_00]: And that's going to be twice as expensive as if hey, I know it along the way. [SPEAKER_00]: So if you've seen instances and maybe where people can think about how does that like impact what what are some of those things that a that an owner might do that they're holding back on that they're going to do because now they know, hey, I have visibility over my total costs.

33:33 [SPEAKER_02]: Yeah, it's going to be different on every job, but yeah, I mean, and don't get me wrong. [SPEAKER_02]: Like it's great to give money back to the end of the job. [SPEAKER_02]: So like that should be a goal, you know, for every GC, but again, it's like the reason the reason we give money back is because we're holding back on, you know, our confidence level on, you know, how much we need that money all the way till the end of the job.

33:54 [SPEAKER_02]: Because what happens a lot and close out is when you finally go through all the [SPEAKER_02]: And then do your final contingency draw it out and you're like, oh, cool, we actually had 500 grand left, like, look, this is gonna be amazing. [SPEAKER_02]: We'll get back to the client. [SPEAKER_02]: And the client's like, well, yeah, but we were evaluating those two different carpet options.

34:12 [SPEAKER_02]: And like, I would have chosen to hire one if I knew I was getting 500 grand back and into the job. [SPEAKER_02]: And so there's just like a lot of little things like that where, you know, the owners making trade-offs constantly, especially going back to the beginning of the project. [SPEAKER_02]: when you're locking in that GMP and what the cost certainty level is of every evolution of that design, right?

34:33 [SPEAKER_02]: And so, so yeah, that the more cost certainty you could have is always like going to be a net benefit to really everyone. [SPEAKER_00]: And like you said, the more visibility, when it's time to make that decision on that type of flooring, on other finishes that you might be looking at, you know, things that and people are like, oh, flooring, so you have nicer [SPEAKER_00]: you have nicer carpet.

34:54 [SPEAKER_00]: No, actually in many cases the tile you pick, the carpeting you pick, the flooring you pick, based on the cost of it, it could be how long it lives and how long then you have to go back and rip that carpet up and change it out. [SPEAKER_00]: Or that tile is going to chip and break and how much you've got to go back and do that.

35:13 [SPEAKER_00]: These are like not immaterial decisions [SPEAKER_00]: the understanding. [SPEAKER_00]: Yes, we want to give you some money back, but there is also money that we want to spend because exactly like you said, there's trade off to the long term operation of a building and your. [SPEAKER_01]: your cutting costs at a time when you didn't need to because again, you just didn't have the visibility because you took a hard bid mindset into a GMP contract and like how often is that the root cause is that we don't think we think relationship is one thing we make an assumption of what the owner wants and I think that's a lot of what I was hearing cameras and it's both if you don't have the data you can't make a good decision but also

35:58 [SPEAKER_01]: we often make assumptions on what the other side thinks or wants and don't bother to ask them. [SPEAKER_01]: And to the more there is that openness that kind of safety that vulnerability to have those conversations, like it's a yes and it's both things. [SPEAKER_01]: I don't know. [SPEAKER_01]: What do you think, Cameron?

36:13 [SPEAKER_02]: Well, and just to be clear, I mean, [SPEAKER_02]: clear sure it's not like a silver bullet where you're going to just give away all your contingency and every allowance, right? [SPEAKER_02]: But it is going to absolutely give you a higher level of certainty of where you stand at that moment in time and what you're what you think is left out there in the job.

36:30 [SPEAKER_02]: So it's absolutely going to give you more. [SPEAKER_02]: confidence to make those decisions, because you, I mean, a big part of holding on to contingency is you're a safeguarding like the unknown, right? [SPEAKER_02]: And you're trying to protect your client. [SPEAKER_02]: So it's a big balance.

36:42 [SPEAKER_02]: So I'm not just saying like, hey, with Clear Stroke, you made every upgrade on the project, but you have a higher level of certainty for sure to like to, you know, go do that. [SPEAKER_02]: And I think like Jeff, you kind of touched on the minute ago, this is like a, [SPEAKER_02]: an observation I've had more clarity on, you know, selling to, you know, some of the different companies and we get so much feedback from our different sales reps and customer success teams.

37:05 [SPEAKER_02]: And when it comes to technology in construction, there is a big, big gap between what innovation teams or technology groups or the CIO understands of what their project managers are actually doing. [SPEAKER_02]: And there's also a little bit of like, [SPEAKER_02]: like when we go pitch our software to like a company and let's say they have the CIO in the room and a project manager.

37:35 [SPEAKER_02]: Let me separate this slightly. [SPEAKER_02]: So let's say we first just pitch to the innovation and technology group. [SPEAKER_02]: We're going to say, hey, we're this change order software. [SPEAKER_02]: We automatically capture everything. [SPEAKER_02]: We're going to give your PM as efficiency, time back.

37:48 [SPEAKER_02]: Our findings are that PM's are spending an average of 10 hours a week on the change order process, which, yes, that is a real like stat we get back from our customers. [SPEAKER_02]: And they're going to say, no, we've already bought change order software. [SPEAKER_02]: That's what we have to change order software.

38:02 [SPEAKER_02]: Why would we need something else? [SPEAKER_02]: And it's like, do you guys understand what actually goes on in a PM's inbox? [SPEAKER_02]: and what a project engineer does to manually review changes or is. [SPEAKER_02]: You know, and then we go talk to the PM team and it's like, you know, visceral response of like the software.

38:19 [SPEAKER_02]: But then sometimes when we talk to them to together, there's like this reluctance of the PM to be like, [SPEAKER_02]: Yeah, my process is actually this inefficient, right? [SPEAKER_02]: So there's this is interesting dynamic, but I don't think it's just our software, but I do think like, and design easy problem to solve, but the companies we see that do it best, a lot of their innovation groups come from project management teams and then move into that role.

38:44 [SPEAKER_02]: So they have that like deep empathy and understanding of what like truly what those workflows are. [SPEAKER_00]: But anyways, that's just another observation I see quite a bit you hit on some there and I think you're absolutely right and I also think it's why if you're out there in the innovation space and you're sitting at a construction company or a trade contractor doing that role you really need to rethink what you're doing.

39:08 [SPEAKER_00]: your business analyst that has to stop thinking, oh, I know a problem, I have a system that solves a problem. [SPEAKER_00]: And you have to analyze how work is actually getting done. [SPEAKER_00]: And, you know, and also if you're the owner of that company or you're leading that company, you have to decide is your head of innovation or your innovation arm, your marketing arm?

39:31 [SPEAKER_00]: or is it a functional productivity arm? [SPEAKER_00]: And I get to say that from where I sit, not a lot of people get to say that. [SPEAKER_00]: But I want, like, I ask people to do this all the time, hold them mirror up. [SPEAKER_00]: By the way, a great innovation department that's out there doing it for a marketing and getting more work for your company and getting your name out there.

39:49 [SPEAKER_00]: that's brand is important, those things are important, those things are powerful, but if you're looking at somebody who's going to do this to actually improve the process and improve the work that's going on, they need to wear a completely different hat. [SPEAKER_00]: They either have to have those experiences, like you said, Cameron, or I actually challenge they need a whole different set, [SPEAKER_00]: You know, I'm coming off of a conversation we had yesterday, Nathan with a guest coming up that it's really about like getting to the root cause of the problems and being okay looking for those inefficiencies, those areas where it's like, hey, we have a system for this.

40:31 [SPEAKER_00]: But actually, that's not how the work gets done. [SPEAKER_00]: Like, hey, there's all of this crap happening before we get to your system. [SPEAKER_00]: So we're not talking, like you said, I'm not talking about replacing my CMIC. [SPEAKER_00]: I'm not real pro core financials, those things.

40:45 [SPEAKER_00]: I'm saying all the stuff before that is being done this way. [SPEAKER_00]: Let's analyze how it's getting done and let's see if we can do it better. [SPEAKER_01]: In the world of value stream mapping and theory of constraints, it's like that gateway, that point from a clear story to a sage or a plexus or a wherever it's going to, can be that point of quality check, that point of whatever, like that's where your rules get enacted, where it's like everything before that could be a million different ways, but at the point where it gets to here, it's got to meet A, B, and C, and this is why.

41:16 [SPEAKER_01]: I think so many of our changing issues are missing that clear story, no pun intended of why we're even doing this in the first place, right? [SPEAKER_01]: And I think that's that's so important to any changing issue with adopting technology, especially when it relates to change order. [SPEAKER_01]: So yeah, man, so many, just many untongers.

41:35 [SPEAKER_00]: And I know I get to see those things. [SPEAKER_00]: So, um, I just want to wrap it up with I want to thank our boy Taylor for reconnecting us, um, I don't know if you want to tell that story or not, but it was really cool to me to hear how all those things came together. [SPEAKER_00]: And then I want to make sure you give everybody a chance to figure out and connect with you guys and where you are camera.

41:54 [SPEAKER_02]: Yeah, definitely knows this is a full, full circle thing. [SPEAKER_00]: It was pretty funny. [SPEAKER_00]: We, uh, [SPEAKER_02]: We connect it with you or James years ago and one of our champions at Turner construction in Nadine crew we like introduced you guys to and she came on the pod and she you know, I've known her for for years now We studied abroad.

42:15 [SPEAKER_02]: I met her to study abroad saying in college for the construction management department [SPEAKER_02]: And then she went to Turner. [SPEAKER_02]: I went to DevCon. [SPEAKER_02]: She was on the Turner DevCon and joined venture for the Ford Niners Stadiums. [SPEAKER_02]: We kind of reconnected a little bit there.

42:28 [SPEAKER_02]: But that's just how the industry works, too. [SPEAKER_02]: It's like when you start a software company, it's something you've come from the industry, like all I did was leverage my network. [SPEAKER_02]: That's really what our industry is all about. [SPEAKER_02]: And what's been so cool about starting the companies, like the amount of people I've met and the conversations I've had, [SPEAKER_02]: You know, it's just, it's just exponentially grown, right?

42:49 [SPEAKER_02]: And so, with Nadine, she came on that you're guys pod, I don't know, probably five or six years ago. [SPEAKER_02]: And she, she gave a little plug for clear story. [SPEAKER_02]: We were extracker back then, and this kind of tailor Edwards, listen to your guys podcast because of that, started using [SPEAKER_02]: story on some Turner jobs out in Denver at the airport and became a power user and he kind of approached us at one point like, hey, like, you guys hiring at all?

43:18 [SPEAKER_02]: And so anyway, I think that I joined the company Turner. [SPEAKER_02]: We didn't approach anybody. [SPEAKER_02]: He came to us and now he runs our GC customer success team and he's been amazing. [SPEAKER_02]: Huge value adds to the company. [SPEAKER_02]: And so yeah, so if it weren't for the contact group pod, I don't think I don't know if Taylor would be at clear straight today.

43:35 [SPEAKER_02]: And it sounds like Taylor spent some time with both of you guys, come at least ago. [SPEAKER_01]: Huge impact on the, uh, to changes team with the Chad Pearson in Plexus and others. [SPEAKER_01]: And so yeah, we got that that video and, uh, report coming out here shortly. [SPEAKER_02]: We're launching an integration Plexus here soon, too, which is exciting.

43:50 [SPEAKER_00]: See, you never know what comes out of it. [SPEAKER_00]: And he did a wonderful job and did reconnectus and said, hey, [SPEAKER_00]: And I was like, we haven't had Cameron on and reminded me of all of it. [SPEAKER_00]: So look at that Taylor, thanks for getting us back together and Cameron, thanks for taking the time and sitting down with us and sending him to the AC integration summit.

44:08 [SPEAKER_00]: I think we really value having new players, new people, new mindsets. [SPEAKER_00]: And he did do a really good job of bringing a fundamental understanding of [SPEAKER_00]: what the change order process is from the perspective of someone who did it and now someone who's working on it, which is kind of what the integration of some it's all about is having all the perspectives we can possibly get at the table to work on moving problems ahead.

44:33 [SPEAKER_00]: So look forward to seeing that report come out and some other things that came out of it. [SPEAKER_00]: Tell people where they can go connect with your camera. [SPEAKER_02]: Yeah, actually it's real quick. [SPEAKER_02]: Well, I think I mentioned because it just popped in my mind as you said that obviously I'm sure tons of construction tech companies and founders listen to the pod and what we found extremely successful and a lot of it was because actually we hired Taylor and we saw how successful he was is our 100% of our customer success team is people from the industry.

45:00 [SPEAKER_02]: And just their ability to go connect with the customer and they can quickly understand their change order process, map to how clear story works. [SPEAKER_02]: has just been huge. [SPEAKER_02]: And like with Taylor and his team, some of the large GCs that we roll out with, like we got feedback from one of the EVPs at a top 10 GC and he was like, not only was it great rolling out, Claire's Shory, he was like, every team that got trained through the Claire's Shory team, felt like they were getting like changed order management, one-on-one, like, best practice training.

45:27 [SPEAKER_02]: And so I've been really just proud of that, and but I would encourage other contact companies to think about that for the teams they're hiring. [SPEAKER_02]: because there's so many smart people in construction and some of them want to do something other than just managing projects and stuff like that and it's a great way to keep them in the industry but on kind of a different side of it.

45:46 [SPEAKER_02]: So I figured I would just throw that in there. [SPEAKER_00]: I'm going to go further with that plug because I've said this a long time ago because way back before there was this idea of like [SPEAKER_00]: I'm tired of tech poaching my people, quote unquote, and you said it earlier, and I challenged them and said two things.

46:02 [SPEAKER_00]: One, those people, if they want to leave, they need careers. [SPEAKER_00]: They need to grow. [SPEAKER_00]: They need an opportunity. [SPEAKER_00]: And the biggest indicator of the health of a technology industry supporting an industry is the free flow of people back and forth. [SPEAKER_00]: because they bring that knowledge through that's actually like the whole boomerang idea of going from in I call from industry to technology to industry.

46:28 [SPEAKER_00]: The cross pollination is benefits all of us. [SPEAKER_00]: So I highly support it, especially because you just said it and we've seen a lot of them, they leave the industry to go do something else when we could have valued them and kept them. [SPEAKER_00]: So I'll double [SPEAKER_00]: I love the one-on-one idea because honestly in the future that is what great technology companies are going to be able to do is bring that standardization of process and knowledge of how it's done across the industry, not just in your little portion of it, so awesome.

46:59 [SPEAKER_00]: Now tell people where to go to find you and we'll wrap her up for the day. [SPEAKER_02]: The best way to find me is just connecting me on LinkedIn, and shoot me a note, or trying to do one of our team members, too. [SPEAKER_02]: If you want to get a demo, you can certainly message me. [SPEAKER_02]: I'm not the best that turns out in the company anymore.

47:12 [SPEAKER_02]: I'm doing demos. [SPEAKER_02]: So, you know, a contact one of our younger or website or a LinkedIn message. [SPEAKER_02]: And, you know, I'm also just passionate about this industry and technology and innovation, too. [SPEAKER_02]: So, I'm always happy to like talk to you, other. [SPEAKER_02]: entrepreneurs or people who are thinking about leaving construction and getting into technology or doing their own startup, I think that's where especially with AI tools we have today, that's where a ton of innovation is going to come as people building their own software and so much easier.

47:39 [SPEAKER_02]: than when I attempted to do it in 2018. [SPEAKER_02]: So yeah, the Lincoln's probably the easiest way. [SPEAKER_00]: That's great. [SPEAKER_00]: And I'll double down. [SPEAKER_00]: I mean 95 people, eight years in the business. [SPEAKER_00]: That's success from this side. [SPEAKER_00]: So keep it up out there and I'm sure people will connect with you.

47:54 [SPEAKER_00]: Nathan, it's always great to sit down with you, man. [SPEAKER_00]: I'm excited for one more episode. [SPEAKER_00]: man great discussion yeah i'm gonna go uh... swing some clubs nice good luck hit him straight i hope you bring up a couple extra sleeves of balls don't chase him for too long well send you some clear sherry golf balls how that thank you for tuning in today to geek out for our interview with Cameron page to read all our new stories learn more about our guests and listen to the show visit the content crew dot com this is the content crew signing out until next time enjoy the ride and geek out