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People start companies, but they're more "sole proprietor plumbing services" and less "spending someone else's money on customer acquisition in hopes of 1000x e
by wlesieutre 3y ago
People start companies, but they're more "sole proprietor plumbing services" and less "spending someone else's money on customer acquisition in hopes of 1000x exit" so it's not what people categorize as "startups."
There's no magic construction sauce that will let you scale up to taking over the entire market, so it doesn't attract that sort of investment.
You get related startups for software to manage projects, building codes, etc, but not for doing the actual construction part.
- askmany 3y agoYeah agreed but the secret sauce can be operating at no margins for initial years since there are almost no startups in construction thus nobody else would be able to do the same thing and a bit of market can be captured. what do you say ?
- notfromhere 3y agoConstruction is actually pretty low margin, builders survive with credit and volume. The secret sauce for construction is just finding the cheapest labor you can. There’s not a lot of efficiencies to be had.
- ProllyInfamous 3y ago>secret sauce for construction is just finding the cheapest labor you can And then "sorting out" all the mistakes you can expect from such kwality.
- jimmychoozyx 3y agoSomeone just told me about a construction business practice: - Hire 5 guys, on the books. - Those guys each bring 5 guys, off the books. (illegal immigrants) - Those 5 guys on the books get paid for all 25 guys and distribute it within their team. It's a bit sad to hear about this sort of thing happening, but it seems all too common in business. That same person told me about another story-- regarding quality: - At another job site, the company had a new project manager. The new PM approved moving forward into a new phase of the project without plans (plans didn't arrive by the time contractor arrived). The contractor of that project build something incorrectly (as you'd expect) due to lack of coordination with other contracting teams (i.e. lack of plans). The result: $1-2 mil worth of work needing to get fixed.
- flatline 3y agoI know someone who landed six months in federal prison for doing just that, and a multi-million dollar civil suit for underpaying those workers. The penalties for failure here are pretty steep.
- LegitShady 3y agoThis is not a "construction industry practice" it's just an unethical business practice usually to underpay illegal immigrants. It's a crime and you will go to prison when you piss off the wrong guy you're underpaying.
- ProllyInfamous 3y ago>you will go to prison when you piss off the wrong guy you're underpaying. Ahhh.... freshly-poured concrete conceals all.
- ProllyInfamous 3y agoMost egregious in these practices is that the initial (legal) hires are typically the only ones speaking English, so they have no clue how much is being "skimmed" from their own labor... and their immigration status ensures compliance with status quo. No matter a $250,000 nor $2,500,000 will prevent this in my Southern experience. I know in the South Dakota of my childhood memories, the "illegals" were undocumented Russians (not brown).
- ozim 3y agoI’d say one construction site injury or fatality and you are out of business and on the hook for loads of money.
- cdchn 3y agoSo put at buildings with no profit with the hopes that will... let you put up buildings in the future?
- HelloNurse 3y agoA small construction contractor might be able to drive out of business through dumping some similarly small moribund competitor, at which point every other competitor will fill the small gap in the local market that they have paid for. A strategy of mergers and acquisitions seems more productive, but good management to actually build something without going bankrupt is still needed.
- Andoryuuta 3y agoI could be wrong, but I think intentionally operating at a loss in order to make it impossible for others to compete would run afoul antitrust / predatory pricing laws in most countries.
- mitthrowaway2 3y agoAt one time, there was. (And still is in Asia). The idea was to buy up undeveloped land, build a train line to it, develop a whole new city, and then sell it off in parcels. It seems we stopped doing this in North America when highways took over.
- LegitShady 3y agoThis is not construction. It's real estate.
- mitthrowaway2 3y agoIt's real estate development, at scale.
- LegitShady 3y agoIf you just build a railroad and sell off parcels you aren't doing any development, nor anything that tech bros can use to slide into the industry. Actual development involves a lot of heavy earthwork, drainage plans, development of water and sewer networks, maybe road planning, fire hydrants, etc etc. Just buying and selling land isn't development. Railroad companies control where we build railroads and they are conservative after decades of closing unprofitable lines. This is not the wild west.
- mitthrowaway2 3y agoAs I mentioned in the GGGP comment, they don't just build the railroad; they develop most of the parcels before they sell them off. Several buildings they do not sell; they for example tend to build shopping malls, hotels, and apartment complexes directly around the station, and hold onto those, leasing them out to businesses, or operate them themselves. Railroad companies in Asia are much less conservative than in the West, where they mostly have shed all their business except slow freight.
- 3y ago