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I spent 5 years working on one of these startups. I'm not sure that the highway lane constraint is fundamental to the reality that contech startups tend to fail

I spent 5 years working on one of these startups. I'm not sure that the highway lane constraint is fundamental to the reality that contech startups tend to fail, but I think the assessment about the hubris of contech startups is fair. The first lesson to learn is that construction doesn't happen behind a laptop or on a phone. From your user's perspective, time spent fiddling with your app is time not spent on real work. So naturally you focus on selling to the "office workers" who spend more time on planning and administration. The problem with that segment is that the tools they already have are good enough. Construction projects always take far longer and cost far more than expected because of what's happening in the field, not because of what's happening in the office, so software simply isn't a bottleneck in this industry. The fact that your tool was specifically designed for their use case, or has an AR feature that allows them to walk the site virtually, or whatever -- it's cool, and you can get a few sales that way, but it's not going to result in better project economics, so it's not going to revolutionize anything.

throwaway14356 3y ago
just unlocking the phone and starting an app takes waaaaay to much time. You have 10 people standing there looking at you for 3 minutes. Then bill the customer 25 for opening an app??? Better write things on paper.
giantg2 3y ago
I see the AR usecase as being a huge potential win in the inspection process. Instead of inspectors having to drive site to site, just give them a tour. You could probably pull up permit/schematic/etc info as you're viewing the property and stuff. But I assume something like this already exists.
2pointsomone 3y ago
Excellent point. When I think of a foray into construction, I plan to use all software off-the-shelf and focus my process improvements entirely on-field.
mym1990 3y ago
A general question to anyone in the industry: how come after so much experience with over budget/over timeline projects, the industry still vastly underestimates those variables?
- scrubs 3y ago
  Yah you'd think with all the management know how in the US we'd be better not worse. US medicine and US education are the other two sectors where things suck too. Not coincidentally these three areas are what make it hard for a lot of people to get ahead. Costs in these areas (to purchase a house, deal with med costs with no or sucky insurance, or pay for education) is stupid high.
- creer 3y ago
  The scary take from all the answers is that there seems to be essentially NO incentive to get the estimate right in this industry. All the incentives are toward underestimating under cover of the slimest excuse possible - just for appearances sake. For example, you don't know what's in the old wall (but you have a pretty good idea of the amount and odds but you don't mention that) and so you don't include it (because the other guy won't and you have to stay competitive). Instead of including in proportion to the odds. You then later go to the client with "uh oh, we need to fix that. It happens. What are you gonna do?" And the client accepts it. This is mind boggling. If that's not the signs of a thoroughly broken industry, I don't know what is. Before someone mentions that it's the same for software, not it's not always like that. With experience we got very good at estimating each in a series of comparable projects. It's very possible to fail to estimate large one-off projects. It's very possible to get it right with series. And house building is a very repetitive business. They are all different, but only so different and they are all built of human-sized rooms.
- aas1957 3y ago
  The construction business is one of the few where contractors are asked to provide a price to build something they really have no idea what its going to cost. They have an "estimate" but so many things are unknown. Compare that to auto manufacturing. Ford knows exactly what an F150 costs. They can then price for known profit within a range.
ftlio 3y ago
I worked in construction for ten years and then worked at a construction management software startup for a year, where maybe I could see the writing on the wall better than others. The problem is that nobody can align the incentives of the tradespeople and the office folks when it comes to integrating into an information system together. You have to cross multiple organizational boundaries between owner, builder, contractor, and subcontractor of which very few people have a bottom up understanding. Mostly the people with the incentive to put everyone on a single platform (owner / builder) think very low of the tradespeople, which is why tradespeople are beginning to make more money than the accountants and PMs.
- ksec 3y ago
  >The problem is that nobody can align the incentives of the tradespeople and the office folks when it comes to integrating into an information system together. Exactly this. What you describe is basically the same as every ERP and CRM problem. In the end most of them all somewhat converged to SAP or SAP equivalent. It takes a very specific and special sets of skills to align and understand both, if not all parties interest.
- KRAKRISMOTT 3y ago
  Which is exactly why I always advocate for importing temporary labor from mexico. Letting the local tradespeople gain too much power is half the reason why building is so difficult in america.
  - ftlio 3y ago
    The unions aren’t that bad, but if there was any kind of accountability on budgets, they would be crushed or, more likely, just be better and faster. Between ZIRP and infinite debt, I can’t blame them for getting their cut. Also yes, I assume most of American buildings in the next 20-30 years will be built by foreign contractors using foreign labor.
  - thatguy0900 3y ago
    God forbid anyone other than computer engineers get to feel like they're not just wage slaves.
doctorpangloss 3y ago
> Construction projects always take far longer and cost far more than expected because of what's happening in the field, not because of what's happening in the office, so software simply isn't a bottleneck in this industry. Hmm. The government takes place in an office, doesn’t it? Do you think a law could make construction faster and cheaper? A regulation? Change in policy? Non enforcement of existing policies? So no votes required? I don’t know, some of that could be extremely impactful and it could happen extremely quickly. Non enforcement of all sorts of regulations can happen in a stroke of a pen. Then, think of the impact of immigration policy on construction labor. Think of all the levels of government that could impact this, local state federal. With no votes whatsoever, no campaigning, none of that slowness. I don’t know. You worked in this for 5 years. How could your takeaway be that construction doesn’t happen behind a laptop? Like I get the spirit of what you’re saying, poopooing AR whatevers, but I am just a layperson, and it’s just common sense that if the policy were “there’s no minimum wage” or “there’s no limit on immigration,” both of which can and do occur without legislation due to nonenforcement, dude, construction would get a lot cheaper and faster. And maybe that’s not software in your limited sense, but gig economy companies essentially achieved part of those specific policies I’m describing for all sorts of things. So c’mon, of course what happens in the office in every sense has the biggest impact on construction.
- ako 3y ago
  As they say, most regulation are written in blood, they are there for a reason, have you not learned anything from the titanic submarine disaster? Or the earthquake in Turkey? Same for worker protection, also there for a reason, workers fought hard to get those protections, do you really want to go back to the 19th century as a worker? Today it’s the protection of the Mexican workers that’s taken away, tomorrow it’s yours…
  - doctorpangloss 3y ago
    I don't support those things. I am reacting to the poster saying it isn't about the office. It is. You should take a charitable interpretation.
deleted 3y ago
[deleted]
AnthonyMouse 3y ago
> Construction projects always take far longer and cost far more than expected because of what's happening in the field, not because of what's happening in the office, so software simply isn't a bottleneck in this industry. It seems like there are at least two problems software could solve here. The first is that right now it takes effort for tradespeople to find work. They have to advertise or form relationships with general contractors etc. But then they have the incentive to draw out the work, because it's easier to extract more hours from this job than to do this job quickly and then have to find another one. Make it easier to match buyers and sellers so as soon as you finish a job you've got another one lined up and that incentive disappears, and maybe even goes the other way, because if you were the lowest bidder on a job you thought would take three days and you can get it done in two days, you still get paid what you bid. Which gives the general contractor more slack in the event of some other construction delays. The second is efficiency. A lot of jobs are small and the major cost is travel time to the site. If you could get many contractors into the same system, you could do some optimizations there, by assigning jobs to whoever is nearest and minimizing the transportation costs, or letting contractors automatically adjust their bids based on their proximity. Which the contractors should like, because it reduces the travel time they don't get paid for.

throwaway14356 3y ago

just unlocking the phone and starting an app takes waaaaay to much time. You have 10 people standing there looking at you for 3 minutes. Then bill the customer 25 for opening an app??? Better write things on paper.

giantg2 3y ago

I see the AR usecase as being a huge potential win in the inspection process. Instead of inspectors having to drive site to site, just give them a tour. You could probably pull up permit/schematic/etc info as you're viewing the property and stuff. But I assume something like this already exists.

2pointsomone 3y ago

Excellent point. When I think of a foray into construction, I plan to use all software off-the-shelf and focus my process improvements entirely on-field.

mym1990 3y ago

A general question to anyone in the industry: how come after so much experience with over budget/over timeline projects, the industry still vastly underestimates those variables?

scrubs 3y ago
Yah you'd think with all the management know how in the US we'd be better not worse. US medicine and US education are the other two sectors where things suck too. Not coincidentally these three areas are what make it hard for a lot of people to get ahead. Costs in these areas (to purchase a house, deal with med costs with no or sucky insurance, or pay for education) is stupid high.
creer 3y ago
The scary take from all the answers is that there seems to be essentially NO incentive to get the estimate right in this industry. All the incentives are toward underestimating under cover of the slimest excuse possible - just for appearances sake. For example, you don't know what's in the old wall (but you have a pretty good idea of the amount and odds but you don't mention that) and so you don't include it (because the other guy won't and you have to stay competitive). Instead of including in proportion to the odds. You then later go to the client with "uh oh, we need to fix that. It happens. What are you gonna do?" And the client accepts it. This is mind boggling. If that's not the signs of a thoroughly broken industry, I don't know what is. Before someone mentions that it's the same for software, not it's not always like that. With experience we got very good at estimating each in a series of comparable projects. It's very possible to fail to estimate large one-off projects. It's very possible to get it right with series. And house building is a very repetitive business. They are all different, but only so different and they are all built of human-sized rooms.
aas1957 3y ago
The construction business is one of the few where contractors are asked to provide a price to build something they really have no idea what its going to cost. They have an "estimate" but so many things are unknown. Compare that to auto manufacturing. Ford knows exactly what an F150 costs. They can then price for known profit within a range.

ftlio 3y ago

I worked in construction for ten years and then worked at a construction management software startup for a year, where maybe I could see the writing on the wall better than others. The problem is that nobody can align the incentives of the tradespeople and the office folks when it comes to integrating into an information system together. You have to cross multiple organizational boundaries between owner, builder, contractor, and subcontractor of which very few people have a bottom up understanding. Mostly the people with the incentive to put everyone on a single platform (owner / builder) think very low of the tradespeople, which is why tradespeople are beginning to make more money than the accountants and PMs.

ksec 3y ago
>The problem is that nobody can align the incentives of the tradespeople and the office folks when it comes to integrating into an information system together. Exactly this. What you describe is basically the same as every ERP and CRM problem. In the end most of them all somewhat converged to SAP or SAP equivalent. It takes a very specific and special sets of skills to align and understand both, if not all parties interest.
KRAKRISMOTT 3y ago
Which is exactly why I always advocate for importing temporary labor from mexico. Letting the local tradespeople gain too much power is half the reason why building is so difficult in america.
- ftlio 3y ago
  The unions aren’t that bad, but if there was any kind of accountability on budgets, they would be crushed or, more likely, just be better and faster. Between ZIRP and infinite debt, I can’t blame them for getting their cut. Also yes, I assume most of American buildings in the next 20-30 years will be built by foreign contractors using foreign labor.
- thatguy0900 3y ago
  God forbid anyone other than computer engineers get to feel like they're not just wage slaves.

doctorpangloss 3y ago

> Construction projects always take far longer and cost far more than expected because of what's happening in the field, not because of what's happening in the office, so software simply isn't a bottleneck in this industry. Hmm. The government takes place in an office, doesn’t it? Do you think a law could make construction faster and cheaper? A regulation? Change in policy? Non enforcement of existing policies? So no votes required? I don’t know, some of that could be extremely impactful and it could happen extremely quickly. Non enforcement of all sorts of regulations can happen in a stroke of a pen. Then, think of the impact of immigration policy on construction labor. Think of all the levels of government that could impact this, local state federal. With no votes whatsoever, no campaigning, none of that slowness. I don’t know. You worked in this for 5 years. How could your takeaway be that construction doesn’t happen behind a laptop? Like I get the spirit of what you’re saying, poopooing AR whatevers, but I am just a layperson, and it’s just common sense that if the policy were “there’s no minimum wage” or “there’s no limit on immigration,” both of which can and do occur without legislation due to nonenforcement, dude, construction would get a lot cheaper and faster. And maybe that’s not software in your limited sense, but gig economy companies essentially achieved part of those specific policies I’m describing for all sorts of things. So c’mon, of course what happens in the office in every sense has the biggest impact on construction.

ako 3y ago
As they say, most regulation are written in blood, they are there for a reason, have you not learned anything from the titanic submarine disaster? Or the earthquake in Turkey? Same for worker protection, also there for a reason, workers fought hard to get those protections, do you really want to go back to the 19th century as a worker? Today it’s the protection of the Mexican workers that’s taken away, tomorrow it’s yours…
- doctorpangloss 3y ago
  I don't support those things. I am reacting to the poster saying it isn't about the office. It is. You should take a charitable interpretation.

deleted 3y ago

[deleted]

AnthonyMouse 3y ago

> Construction projects always take far longer and cost far more than expected because of what's happening in the field, not because of what's happening in the office, so software simply isn't a bottleneck in this industry. It seems like there are at least two problems software could solve here. The first is that right now it takes effort for tradespeople to find work. They have to advertise or form relationships with general contractors etc. But then they have the incentive to draw out the work, because it's easier to extract more hours from this job than to do this job quickly and then have to find another one. Make it easier to match buyers and sellers so as soon as you finish a job you've got another one lined up and that incentive disappears, and maybe even goes the other way, because if you were the lowest bidder on a job you thought would take three days and you can get it done in two days, you still get paid what you bid. Which gives the general contractor more slack in the event of some other construction delays. The second is efficiency. A lot of jobs are small and the major cost is travel time to the site. If you could get many contractors into the same system, you could do some optimizations there, by assigning jobs to whoever is nearest and minimizing the transportation costs, or letting contractors automatically adjust their bids based on their proximity. Which the contractors should like, because it reduces the travel time they don't get paid for.