The ConTechCrew 227: Hooked on Sensors with Meirav Oren from Versatile.ai
Construction Tech News
Construction is the world’s oldest industry but spends the least amount of money on innovation. We realized people outside and inside the industry did not typically associated with technology like virtual reality, apps, and robotics. We started the ConTechCrew. Each week we bring our listeners the latest in ConTech news and interview the mind behind the technological innovations, changing the way we build.
So, strap in, enjoy the ride and geek out its ConTechCrew time!
JAMES: All right. It is a Friday. Another Friday in July. Tell you what, all is well up here at the summer studio and Lake Michigan. A balmy 74 degrees. A little bit better than the 109 back in Aggieland. Tell you what, 109 with the heat index back in College Station Yowzah! It is getting hot in heeeere! So, Jeff, I know you do not have those worries up in the mountains of Colorado.
JEFF: No man, we do not have that problem at all.
JAMES: How is the bike riding going?
JEFF: But it does get hot right now, though. I can tell you that. The new apartment gets a little bit hot, but the fact that you can cool it down to 55 at night by just opening your windows. Somebody told me they were getting an air conditioning unit. I am like, I have lived here for 23 years and never had air conditioning.
JAMES: And you do now.
JEFF: And I refuse. Nope. I am not buying that. Not for my house.
JAMES: What is that duct behind you?
JEFF: Oh, that is the heating duct.
JAMES: Oh, okay.
JEFF: Which is completely funny, every time I am on these right now with my construction friends, they are starting to notice that. I do not know if I changed the camera angle or something But it is really funny because it is a prefab deal. If you actually look at my apartment, it is this U shape. They did it prefab dropped it in and walked out.
JEFF: But y’all did not think that the heat goes up.
JAMES: Yeah, he goes up. I was going to say if that is the heater, should not that be on the floor, Jeff?
JEFF: Yeah, heat goes up. There is a fan above it that I have to use slowly pushing up…
JEFF: When good prefabrication goes wrong.
JAMES: Goes wrong. You want one of those Big Ass Fans. Those are great. Those are awesome. That will push some air down. Meirav Oren, where are you at today?
MEIRAV: California. Perfect weather.
JAMES: All the time. 74 and sunny. Well, I mean, San Diego has perfect weather all the time. San Diego does. Are you up in the Bay area?
MEIRAV: I am. Yeah.
MEIRAV: Our Los Altos office.
MEIRAV: Just part of everything, right?
JAMES: You are in the office today and are you the only one in the office?
MEIRAV: I am the only one in the office.
JAMES: Yes! It is like what every business owner has always wanted. An office just to themselves. No one around.
MEIRAV: It is kind of boring. I am extrovert, so that does not really work for me, but it is what it is.
JAMES: Quarantine is tough for us type A extroverts. I will tell you that. You are used to socializing. I think like the first time I go to a conference and get to go to a reception, whenever that is going to happen, I do not know when, I am going to be really excited.
JAMES: I am going to like hug everybody. I am going to be on some type of like extrovert high.
MEIRAV: James, I will join you!
JEFF: We just did a vacation and got a couple of families together and kind of decided like we had all been good at quarantine and we were all going to go to this lake where we could quarantine together.
But that we were going to cross our bubbles, and it was like a mini version of it. James, I am telling you, you are going to be hooked on it more than you ever were before, because it was just like, Oh my Gosh!
JAMES: Other people?
JEFF: Other people hugs, like really? We are not even like air bumping or fist bumping right now.
JAMES: No, we had that. Our, our family got together. We have tried to be good during quarantine, but we all got together. My sisters and my mom and dad and all that stuff, we all got together. It was fun. It was good scene, everybody and having other people to look at other than your own family.
JEFF: It is like a touch of it.
JAMES: I love you guys, but I am really tired of looking at you. I mean my gosh! We take a lot of independent walks. All right.
JEFF: Well, maybe that is why the bike rides are the way they are.
JAMES: Exactly. I take a lot of bike rides. I do take a lot of bike rides. All right. So, I will get back to you in just a second. Remember, never miss an episode by having every one of them sent to your inbox. Text CONTECH to 66866 Not just the audio. You are getting a weekly email or links to the show notes, links to the articles we talk about on the show, just text CONTECH to 66866 Also, a reminder that you can text me on our Google voice line. 979-473-9040. A bunch of listeners last week texted me happy birthday wishes on the line. So, I do appreciate that. It was a really fun birthday week. I am certainly clear of that now, but I got some great suggestions for new guests. Got a really interesting comment for discussion that I am going to hold off. I am not going to mention this one because we are doing an all crew monthly webinar and it is coming up and I am really, really excited about it.
So once a month, Josh and Jeff and Rob and me, are going to hop on a zoom webinar. So, you guys can hop on and do live Q & A, and we are going to have a lot of fun. So, we are going on once a month and I am going to save this question for then. So, I am not going to list it right now, but feel free to text potential questions for the crew to talk about. You will see us all on board hanging out in no time. I know Jeff, I am really looking forward to that and I know you are too. So, we are going to have a lot of fun hanging out with each other. That is going to be on the 31st of this month we are going to be hanging out. So, all kinds of good stuff there. But needless to say, we got a couple of other things we have got to talk about. Remember our cause of the show is Prevent Construction Suicide. That is https://www.preventconstructionsuicide.com.
According to the CDC, construction occupations have the highest rate of suicide as well as the highest number of suicides across all occupational groups. To combat these stats, contractors, unions, associations, industry service providers and owners, must work together to stand up for suicide prevention. The construction industry alliance for suicide prevention is raising awareness about the risk of suicide within the construction industry and providing suicide prevention resources and tools to create a zero-suicide industry. https:www.preventconstructionsuicide.com for more information..
Before we get started with our interview with Meirav Oren from Versatile, we are actually going to talk with our sponsor today. And this is a really great conversation I had with Daniel Pifko from Wakecap about how they are collecting job site data with hardhats. So, we are going to talk about collecting job site data with crane hooks in a second, but before that, I want to have a brief recap of the conversation I had with Daniel Pifko from Wakecap.
CONVERSATION: Being your ConTechCrew chief here with Daniel Pifko, VP of North America for Wakecap. So, let us just talk about Wakecap. What exactly is Wakecap and how does it work?
DANIEL: Wakecap is a labor management solution for construction sites in oil and gas. It helps companies to improve the productivity and the efficiency and the safety on job sites, by locating where workers are on the job site. There are a few different parts of it. First off, what we do is replace the ratchet knob on the back of a hard hat with a little piece of electronics. It has the battery, the electronics, and the antenna built right in there. We have a bunch of anchors, little things that are battery powered and placed around the job site. And those create a mesh network on the job site so that you can figure out where people are just on the site. And all of this is overlaid on top of the blueprints that are given to us by the general contractor or site manager or somebody along those lines.
JAMES: And we are back. Our special guests from a Bay area in California. Well, that is not where she is from, but it is where she is at now. Meirav Oren from Versatile. Meirav, thank you so much for joining us today. It is good to see you and have you on the show.
MEIRAV: Thanks for having me. This is fun.
JAMES: Yeah. Awesome. So, Meirav, let us talk about you. We are going to talk about your company in a minute. We are going to talk about the job site sensors and crane hooks and data collection and aggregation, artificial intelligence machine learning. We are going to run through the gambit of topics. You have to pretty geeky co-hosts here. Both of whom have written their fair share of code in their day and manage their fair share of servers and infrastructure. So, we can certainly get very technical if you would like, but before we do, we want to talk about you. Where were you born and raised? What did you dream of doing when you grew up and what did you end up studying and going into?
MEIRAV: Oh, wow. Okay, well, first of all, I am a nontechnical founder. I do not go too deep into code, and proud of it, by the way.
MEIRAV: I am born and raised in Israel, almost had a normal childhood, but I am really good at disappointing parents. So, I think I did that throughout high school and then making up my mind as to what to do. I think the army was a part where my parents were happy. It was a Lieutenant in the Israeli Air Force. So that was like a proud moment. My parents went traveling, then I have way too many degrees. We will not get into that. It seems like anything I am interested in I will just go ahead and have a degree in, but also a dropout. So, like, three degrees and the dropout at the same time, which is a fun way to do that.
JAMES: It is okay. I changed majors four times in college. I could not decide.
MEIRAV: Well I just did them all.
JAMES: You finished them out. At least you are like, no, I am going to, I hate this major, but I am going to finish it!
MEIRAV: No, the only reason I dropped it in the last semester of that 4th degree is because I was doing two of them in parallel while working full time for Intel, living in Southern Israel. Those were degrees in two different universities in Tel Aviv, and I had no car. So, and Intel was already sending me all over the world. It was just like I will get back to that semester. I swear I will. I will just finish the legal degree first. I will be right back. I never went back, but maybe one day. But it gives my cofounders the perfect kind of like, hey, no matter what, you are still a drop out.
JAMES: There you go.
MEIRAV: They say that all the time.
JAMES: Yeah. So, you got a bachelor’s in Econ & Management in Israel. You also got a Master of Laws. You also got an MBA. All of that was in Israel.
MEIRAV: All that was in Israel
JAMES: Awesome. So, what happened after all this a robust education? I mean, you went straight through on school. Did you serve in the Air Force before or after that?
MEIRAV: Oh, before sorry. Israel is right after high school.
JAMES: Yeah, so you did two years?
MEIRAV: Oh, I did way more than two years. I was in a F16 Squadron. We will not get into too many details. Did a few cool stuff and ended up staying for longer than a couple of years?
JAMES: Yeah. The compulsory service in Israel is two years and that is pretty much everybody does that, right?
MEIRAV: Yeah. Some of them four. But yeah, it was fun with some of my best friends, so I can make friends for life.
JAMES: Are you a pilot?
MEIRAV: No, not a pilot. I thought that would be too much, but let us just say I understand F16
JAMES: So mysterious, so mysterious! And I am a pilot. I like to fly airplanes, so I enjoy a good airplane story, but we will leave that where it is. So, let us talk about Intel for a second because Intel is a pretty large corporation. I had a brief brush with glamor when I got to hang out with the chairman of Intel. He was at an art auction and way back in the day. I mean, we are talking like 16, 17 years ago. I built software that managed… It was a fascinating little deviate before I got into construction. So, this was right near the founding of JBKnowledge. And I was at a major Western art auction up in Great Falls, Montana. And the largest bidder was at the time, the chairman of Intel who loved western art.
And so, the ladies that ran the auction knew that I was a fanatic for computers technology, and all things. So, I actually processed his art auction payment when I said, hey, by the way your brand-new Xeon processors are running this entire auction. And he got a big smile on his face. And I remember that they had just rolled out. I had just bought them and put them into service and I intentionally put their auction on those new servers so I could tell him that the whole auction ran on his new processor line. So, tell me about Intel. What do you do there and what did you learn there?
MEIRAV: The best business school, I guess you could ever hope for. By the way, my long career of disappointing parents started there. So, my dad really wanted me to be a superintendent. He thought I will be great at it. He was a former, truly the black sheep, but Intel made an offer I could not refuse right out of… Actually, when I was still doing my bachelor’s degree.
MEIRAV: So, kind of went in there thinking, it is the best business school you could ever hope for. Stayed for a very long time simply cause I was truly enjoying the people I was working with and the things I was doing. So, I was doing really cool stuff with IT. You know, later on a bit of finance, but mainly jet setting around the world, setting up a really cool international kind of cross cultural business operations team within IT, getting to work with some of the smartest capable people I could not work with. Sometimes leads. It does not really get better than that. Intel is such an amazing place to learn, but there is a time when you wake up and I was like, wait a minute. I never meant to be a corporate girl. What am I doing still in corporate this many years later? I better get out!
So, a bit of a golden cage, hard to get out of, a bit of a scary move. And again, this is where I disappointed my mum. My mum was quite happy to talk about my career at Intel. She was very pleased with the topics she would have with her girlfriends, over whatever get together they would have. And then I quit, and I go off doing crazy things, technically being unemployed, which she would remind me over dinner again and again.
JAMES: So, to your mother being an entrepreneur meant being just unemployed.
MEIRAV: Oh, absolutely. Yes. She would argue the case quite passionately that if no one’s paying you, then you are technically unemployed, so with all my degrees and that career in Intel that I just flushed down the toilet, what am I doing with my life really? I was like, hey mom, I am building something that is going to be great. And I will, fundraise when I decided that I proved enough. I have my own believes where it comes to like, do not go after money. I am a huge believer in bootstrap. This is a full stack company that we bootstrapped which is very unusual and very deliberate. I better prove it. To me it is like, you cannot come to people and ask them to follow you without steps. Basic proof. Hey, it works, and we know exactly what we are doing, and this is why. And then you could pitch your idea quite better than just a presentation.
JAMES: So, I would call myself a militant bootstrapper. I have been doing it for 19 years and we have 220 people that we bootstrapped off of 5,000 bucks. And so, yeah, we never raised any funding, never raised any rounds, and built SmartBid, SmartInsights, SmartCompliance, TerraClaim & SmartEnterprise.
And it is hard. I mean, it is hard. It is very challenging, but the best thing you can do evidently for your mom is put yourself on your own payroll. So, you can say, no, look, I get a W2 and a payroll stub from my own company. So, let us talk about construction. How would you land on construction? And what was the deciding moment, what was the problem hypothesis for Versatile?
MEIRAV: So, my house pretty much sounds like a construction debate on those Friday night dinners. Always has been, but my brother, not the black sheep, actually lost a worker on his job. Must have been about four years ago now. Time flies. It totally changed the dynamics of conversation, for good reason. It is not just that moment in time, but a sequence of events and what is happening in the industry and the discussion went very quickly into why it is such an uncontrolled manufacturing process. If every job site is a factory, and it is. Non-structured, fragmented as it might be, it is still a manufacturing process. With that strong belief where like processes can be controlled. And my partner literally drafted a Post-it that night, saying if we got data flowing out of job sites, which was not really flowing four years ago, this is how we would control the process.
Just assert advanced process control and Lean Six Sigma and all of those cool things that actually work for any other manufacturing industry. We can do this. That Post-it, oddly enough, landed at the tables of one of Israel’s top general contractors. Their name is Ydar. A customer to this day. Actually, joined our round when I was ready to do a round. And they believed on the beauty of having an early believer, as they gave us their job sites. That is all I needed. I did not need their money. I did not need anything else. I just needed to work really closely with the people that we came to serve. And this was about, we are not going to create a gadget. This is either really going to be transformational or it is not worth doing.
So quick proof of concept on one of their job sites showed that not only kind of like put in a bunch of sensors on a hook, and I know we’ll talk more about that, but not only do those sensors give you credible data, that is extremely noninvasive. And I could talk all day about that noninvasive non-intrusive DNA of ours. This is where I say, if you are getting in their way, you are never going to get anywhere. So, the hook just allows you to be gone when you need to be gone and still collect that data. And it proved that it did data flows and that the algorithm actually works. So, it was very, very basic. I should be very ashamed of that POC, but this is how it is done when you are bootstrapping. And as soon as we were done with the POC, I think the first report out to that GC, they were like, okay, we know you are only like 1% done or less, but we will give you all our jobs sites. Can you deploy?
JAMES: On a hardware solution too. And, for listeners out there who haven’t tried to do this, I mean, deploying a software application or a mobile app or a web based application, which is by the way the easiest one, they had developed is just a purely web based application, is completely different from actually having your own hardware in any way, shape, or form that you have to deploy. I mean, it completely changes the nature of scaling a deployment. I mean a company says we want all of our job sites. I am guessing this is not a small company. I am guessing this is a really big one. And so, all of their job sites, dozens of active job sites and that is challenging. So, what was on the Post-it note? I mean, you cannot mention it without saying what was on it.
MEIRAV: I think it still shows up on some of my pitch decks, but I have not looked at it for a while. It had the crane and a hook, and multi-sensor approach from the exact same location, and if you get the signals from the same place, they will tell you more. You will be able to learn more and understand once again, the process, not the tool, not the people, but actually understand that manufacturing process that we are after. My contribution that night was that non-intrusive part. I just said, like, I know the guys well enough to understand what will fly and what will not. If we could keep it non-intrusive this might actually work and little did, I know, I was absolutely right. And it had like those little sketches where you could see the data flowing from the hook. It is actually a very funny Post-it. That is pretty much it, it just said had that. The crane is central enough. It should give us a pretty good idea of what is happening, whether if it is directly involved or indirectly involved by just delivering the materials, it tells you a really good story. And I can read stories.
JAMES: Okay. So fast forward to today. You have raised a few rounds. We will talk about that in a minute. The co-founders of Aconex came in and Bosch came in. You raised some rounds. You have moved to California. What does Versatile do today?
MEIRAV: Funny enough, just what that Post-it said. Never pivoted. So, an array of sensors on a fully standardized, load bearing element, which is actually a hook. So, we do not produce load bearing elements. Thankfully, we announced, just at Con Expo, by the way, before the world shut down, we announced a partnership with the Crosby Group. So, they are actually behind all of our load bearing elements, all those nice hooks and shackles on links, it is all theirs. And the data that we collect from that hook allows us to understand the loader’s style. So, what is it that the is it actually picking? What does that do to the process? Like how that relates to the product that you are manufacturing on that specific project. So, every project has its own DNA. We are agnostic because we are looking at that process and then how long it does not really take you? The way we break down the data, the way that we actually understand what the sensors are telling me, telling us, it helps us produce sometimes a single text in every day, just a daily digest for our users that is highly customizable, that truly tells them what their manufacturing looks like and what they should be paying attention for.
A good example would be just your production rates, right? Like our industry is not used to actually knowing to the minute and the second, how long things really take, but when you do and you track it for let us say a week, you could actually see outliers. And if you do not let outliers become your new trend, you are actually kept on schedule and everything just flows similar to a highly professional manufacturing floor. You could actually control the floor. And if you understand the way you handle your materials in a way that truly shows you that you do things in the wrong time of the day, or you have like peaks and valleys in your production during the day, just smoothing them out, allows you to create a benchmark. And I think that everyone has a bit of a competitive edge to them.
So, either compete against your own benchmarks or compete against industry benchmarks. But it eliminates overtime, which is one of the things I love the most about it. It is it cultivates pretty much a culture of safety. Like I do not think to this day, and I know we did not get into details of my brother’s accident, but to this day, what I do, cannot help that worker. He fell off the scaffoldings. And I am not a huge believer in technology taking over what people are doing or trying to force them to do anything. I really believe in the data allowing incredibly good decision making, simply because you are shown exactly what you need to know, exactly when you need to know it. And I think that is one of the things Versatile just does really well. Do not overwhelm, do not show everything just because you think you are very smart. Give those incredible people in the field, the people that we are here to serve, exactly what they need. And listen, I think we are also really good listeners.
JAMES: Okay, so obviously a construction hook cannot see every part of a job site. In particular, all the work being done indoors. So, are you only covering the outdoor work?
MEIRAV: For now, yes. We are also externally focused. So, to me having a non-intrusive data provider on the hook, showing that it could do that much on a job site is a great place to start. And a small company, better focus. We are providing so much value. I would not try to do more right now. I see a lot of potential. We do a lot planned. Some R & D done on other things. So, we will not stay just on a hook, but to your point, even if I cannot see things directly, I think one of the great examples, I think it was actually on the ENR article about one of our Turner job sites.
If you understand, from the schedule, how fireproofing is being planned, and then the spandrels, which we follow completely for the crane, have a trend of let us say 30 minutes per unit, and suddenly that trend starts to slip to 38. You could quite easily control that, which we did, within like a day or two. It was not only back to 30, it was actually down to 28 instead of 30. I think two or three weeks of delay would have been the case, but better yet with that data and knowing their plan for the fire proofing and understanding the production rates, we were actually able to tell that for the next job, and we could talk about estimating and using averages instead of actuals. For the next job, there is a positive ROI to double the fire proofing. For us do this, 55 days faster and control those production rates. So yeah, I cannot see the fireproofing. I know it is happening, and I could control the externals for now, but. we will go inside.
JEFF: Yeah, cause you are picking and packing it up. And so, you know where it is moving on the site. So, from that you can assume, and I think you hit on something before. You said, you cannot effect what happened to the worker on your brother’s job site, but you actually are, because by making it more predictive, more, less overtime, less chaos. Chaos and overtime creates those problems that you are talking about. If people have less panic and more understanding of what is going to happen, then they work on a job site safer. Those are all things they might be secondary to you, but they are really having an effect. What I want to know is how did, you know your time at Intel, you are doing something a lot of us in the industry do not do, like James said, we write software usually. And so, we can scale pretty quickly. How did you handle that? Did Intel, did your background there help you out in getting this done?
MEIRAV: Not directly intel very much. I was doing IT.
JEFF: So, you were on the front end of it, not on the actual building of those chips?
MEIRAV: Not really though. I understand the clean room pretty well. Some of my cofounders also come from Intel and understand more of that manufacturing floor actually. Controlling that manufacturing floor. But no, this is a totally different animal where it comes to the hardware, right?
JEFF: Yeah, alright. You kind of led into this before with estimating, right?
JEFF: You are kind of talking about, I am really interested in how it goes. Cause I think you are headed towards like the measured mile type deal, but from a crane and supplies. Talk to me about how that is going to all come together. Cause I think I know where you are going, but I am really interested in how you are going to get there from your angle.
MEIRAV: I do not think a single company, especially not one that is still small can do everything. So, I am definitely looking at what others are doing. Those production rates that I was talking about, that understanding of how long things really take, we are already feeding it back into the models, who are already feeding it back into the estimator’s hands, that is already changing decision making. So, the levels, by the way, one crane or two? Which one is better? And when do they actually act as one, even though you thought it will act as two. I will show you some data that will blow your mind. But it is down to those seconds… If you think about just putting someone that will time everything you do on a job, which is totally unrealistic, right. I know a few who tried successfully on a single job, but that will not scale, right? The things that we understand, even if I cannot see all just yet, put things in order, right. And when you were speaking about safety, I totally agree. I cannot help the worker, but I can definitely help change the sequence of events. It is that production that I am talking about. It is a sequence of events. When do you do… So site organization I think is a great example and we see most of it. It does happen for the crane, right?
MEIRAV: When you understand that it is done in the worst time of the day, it is always a low utilization activity as if, and not as if, people know this is not core, right? It is not manufacturing. It is not what we are meant to do. It is always over utilization. And if you just time it, right. And I have seen, I am just a huge fan of our users. I see superintendents, I take this data say, hey, well, I, you can do better on this. Why do not I time this on those dead zones that you already showed me? Avoid that overtime and avoid stressing my people with peaks and valleys, and then also feedback all that information that we collected into tomorrow’s plans or next week’s plans or the next job plans.
JEFF: Yeah, I mean, we have talked about this with, scheduling when it comes to in sequencing, when it comes to the Microsoft HoloLens and other tools that are possible there. And it is amazing that when you feed a superintendent, that kind of data, they can make really informed decisions. I think, and you are doing it frictionless, which I think is, you guys are doing it in a way, picking up the sensors and just providing really consumable information back to them to make those decisions. It is probably a little bit more friction when they are putting headsets on etcetera, but I could see if you are feeding the model, then you are going to not only inform current jobs, but you can inform future jobs on the sequencing to really get super-efficient for everything in the planning.
And it might say, hey, look, it is going to take two weeks longer, but if your schedule, if you go to an owner and tell them that this is when we are going to finish and you finish at that time, it is far better than if you say, oh no, we can finish three weeks sooner, and we still finished at that point. Transparency and predictability around what they are doing is really important. So, you are feeding a baseline into that and they can consume, I imagine consume that along with a lot of other information together to make those decisions.
MEIRAV: Yes. And take just offloading from a truck. How many times do you not know when to time it or how to time it or what was actually picked from that truck? Also, by the way, does it go directly to the product? So, is it a one step or like a double handling where you…
JEFF: Nobody handles material multiple times at a job site ever! We do not just move things around.
MEIRAV: No, I have never, ever seen that.
JEFF: Hey, put that there, now put it over there. When are we going to put it on the wall? In a little bit!
MEIRAV: Hey Jeff, 400 files and picks later in the US alone by the way. What we are doing in Israel is still working with that GC. Still on a small scale by the way. Even though I quote unquote doubled the workforce at the time, and one of my co-founders quit his day job. So, we were two, but it is believable what you can see and what you can then show the people that you are there to serve. We always say at least internally that we give them superpowers. And I am a huge believer in that, right? Like I am a huge believer in people and how professional they are. Like, I come from a family of builders. My family’s very professional and everything. Everyone I have ever worked with; is extremely professional. Giving them those superpowers is incredible. If you have as a superintendent that data in your back pocket, and then the truckers come in the six figure, this is a true story, by the way, six figure claim about, how long it took, and all of those delays and whatever. All you have to do is just show them what really happened. The claim was gone like in five minutes. We are staying superintendents come back. And I think that is one of the biggest… To me, that is the greatest honor. So, we launched an early adopters about 18 months ago. We only opened it up to other users less than six months ago. Talk about timing by the way, and everyone is coming back. So, anyone that has have worked with us is coming back for another project or plans to come back for another project. We have had zero churn, a 100% percent growth within all of our early adopters and now the new clients that we serve.
JAMES: Zero churn in four years?
MEIRAV: Zero churn in I will say two years, because that early kind of POC, I do not, well, technically yes, by the way, we have never churned, but I do not kind of, I do not count that POC, though we did complete it, but yeah, zero churn. We have never done a free pilot.
JAMES: Be careful about pronouncing all of those. It takes one to ruin that stat. But I remember the early days. We had zero churn for a while too, until we got 1100 companies and then you start churning clients and it gets more interesting.
MEIRAV: I do not expect zero churn. So honestly, zero churn is a goal, not because of the churn itself, but because I do not believe in and just selling people a service and then not providing it and just not caring whether they get it or not? So, we are actually very involved in terms of like, are they using it? Can we do something to provide the data in a different way that is actually going to be useful for our users. We actually look at the dashboard to say, are they opening it? Are they acting based on the data? This beautiful feedback feed forward loop where if you have something that you want to try on a job site, I could tell you what they did to your production rates the next morning, or, within a couple of days. So, the conversations are constantly going. It is what they do with it. It is not what we do. It is all about them.
JEFF: Well, it has got to be a really interesting feedback loop for you guys.
MEIRAV: That is beautiful.
JAMES: So, when you did customer discovery in the beginning, and you were talking to construction companies, what did they highlight as their major pain point that you have now solved? What was the number one pain point?
MEIRAV: The number one pain point. I think that, just shedding light on the production. Like not knowing Jeff, I think you are right.
JAMES: Well, that is not a pain point. That is a feature. Let us talk about what was the pain point. The pain point was, they did not have real time insight into what was being produced every day?
MEIRAV: Yes. I think the pain point was around not finding a technology that actually gives them that and stays out of the way when they needed to. And that can help more than a single person on a job site. I will say a lot of the technologies follow the fragmentation, right? So. You would solve a single point, but you will create a problem somewhere else and I think I was hearing a lot of like, even on the pushback. So, you cannot do all that from the crane. You are still a niche solution, whether you believe it or not.
JAMES: Alright, there we go. So, those are your objections. Your objections are you cannot do that from a crane. And you are like, oh, but we can. We can do it from a crane because the crane moves. So, one of the benefits of putting it on the hook, is this moves vertically. It moves all three axes, right? And so, you get different angles on the job site. So, you are using… Let us talk about the tech behind it. I know you said that you are not going to get into specific aspects of coding, but you are using a photogrammetry engine, I am assuming.
JAMES: Okay. Are you using your own or using a third party, licensed photogrammetry engine?
MEIRAV: No, we are using our own, like, we are very proprietary. Because it is about reading all those sensors together and it is not just about the images. Actually, a lot of times we do not even use the images. So, I think the best example would be straight rebar. We would know with straight rebar without ever looking at the image and we would be right every time. The rest of the signals will tell you that quite clearly.
JAMES: So, are you using depth sensing cameras? Let us walk through this sensor list.
MEIRAV: Nope. Just a regular camera, actually. Not even video, obviously a load cell, which is why we are on the hook. Extremely accurate GPS. Inches, actually one-inch level of accuracy, a barometer. There is a few other there that… I will not get into the full array on how we use them altogether, but at the end of the day, they are all on that same hook.
JAMES: So, there is no LIDAR. There is no laser scanner. There is no depth sensing cameras?
MEIRAV: Not yet.
JAMES: Not yet.
MEIRAV: I am not limited. I have got like tons of real estate on it.
JAMES: That device, yeah. It has a large hook and then you have a device that kind of slides onto the top of it. Did you run into any safety considerations or any kind of, cause you are attaching something to the hook? What did you have to walk through to get permission to do that and to make sure that it was safe and not going to hinder work?
MEIRAV: We will start with; I am not trying to be a Silicon Valley startup that is producing load bearing elements. I think as early as our customers understanding that all we do is the sensors, right? And all the other load bearing elements are manufactured by, certified, credible US-based suppliers that gives them that guarantee. We always share the full certification of absolutely everything that we put on our hook. Never, ever, ever limit the weight capacity of the hook itself. So, all it takes is using the right elements. I think the only other question was, is that box made out of plastic? Is this going to break as soon it gets on a hook, we could be quite rough. You know, it is a job sites. So no, it is meant for job sites and it is as ruggedized as anything can ever be. We show kind of like the materials of what that is made of too. We even share like what the battery standards are like. So, we’ve very, very manufacturing, kind of crazy people that also take the same standards for our own hardware. So, we share all of that.
JAMES: Did you find a contract manufacturer? Have you built your own facility? Like what, what are you, I mean making hardware’s really hard. I had a brief stint where we tried to make our own hardware and I was like, oh no, we are a software company. I backed out of that quickly once I understood. And certainly, my friends, that had to make things, largely just go to a Chinese contract manufacturer and have them produce whatever they need. Walk me through that life cycle of actually building a hardware part.
MEIRAV: We actually have our own manufacturing. As long as our engineering is still iterating at a relatively fast rate, so the first devices that we put out there, again, perfectly safe, but were they exactly what we needed in terms of the data flowing and, not having any issues and being able to fully remotely control it through the software? No, it took a lot more handholding at first and all those iterations happened in the last 18 months. So, if you change that much that quickly, you better keep it really, really close to home. And we were doing a very curated exclusive on what was supposed to be a relatively small early adopters program. We got oversold in terms of like the demand was exceeding my original expectations and I ended up kind of allowing more into the program, but it was still very much sustainable. So no, we are not manufacturing in China. Obviously, some of the electronics are.
MEIRAV: Like, you do not do PCBs yourself. There is no good reason
JAMES: Really no point.
MEIRAV: There is really no point. And the sensors are mainly off the shelf. It is about how we use them. How we make them, I think the guys call it how we make them sync. So, they sync quite well.
JEFF: The secret sauce that makes it taste the way it does.
JEFF: That is really cool. I mean, so you are pulling this information in, but you are staying very… it appears from the way you talk. Very niche, not niche into what you do, but, but very focused. Focus is a better word for it than niche. Very focused into what you do. Do you see yourself working with the other things that are out there right now, or consuming data from other places? Is there a partnership here down the road for people? Cause I think that is where the friction becomes the silos some days, right?
MEIRAV: Well I agree. We are definitely when it comes to the whatever people are using out there to do their scheduling and their planning, we are already corresponding with a lot of those systems. We are in great relationships with pretty much everyone, like Procore, Autodesk, Oracle, we are actually in innovation lab, building that new structure.
JEFF: With Birken right? Yeah. That has got to be a cool one.
MEIRAV: That is a cool one.
JEFF: And we want to see when this comes together inside of that innovation lab.
JAMES: Yeah, had Burcin Kaplanalou our show before he went over to Oracle. We had a good…
JEFF: Actually, in the middle of that.
JAMES: Yeah. Let us let us have a chat about Aconex, your connection with the founders there. Cause they were some of your investors. Walk me through that relationship and what the pitch was like and what the relationship is like. Cause it looks like both co-founders invested into your product, and so did Bosch. So, walk me through the process of convincing and talking with the Aconex co-founders and Bosch.
MEIRAV: Oh, Leigh & Rob were just incredible. We could not be more lucky to have them. During this current madness, I think I spoke with Leigh and Rob more that I spoke to my own team sometimes just drawing back on their experience on how they drove Aconex through two major recessions. So just an intro, serendipity, if you would like, a classic Silicon Valley serendipity that got that introduction. Together, I told Leigh at first what we were doing. Our results and kind of our customer responses. I will say the best argument for bootstrapping is when you are actually having those conversation you are not pitching a problem that you do not know very well or, a solution that you think might work. You actually have at least some evidence that it is working and that you are making a difference to your users and to your customers.
So, it was a relatively easy pitch from that perspective. I was like, this is what we are doing, the hook provides the data. And then we are staying very non-intrusive in a way we communicate back to the field. We can definitely integrate with all of those other systems. Honestly, I am not a huge believer in dashboards. I am actually against doing more dashboards. So, integrating into other systems and providing the data in the way that people already consume it as ideal. That is what we do right now. It is emails and texts simply because I have not found out one single collaboration system. We had a good chat. Later on, I met Rob and it was a pretty quick decision for them, I believe, that we were good for it.
And the round was pretty much coming together at the same time. I think when I started speaking to Leigh, there was not a round happening just yet. But then once the round was, once I decided I am doing the round them, they were just part of it.
JAMES: Yeah. Why did you, so why go raise money? Why not stay bootstrapped? Why not do it with your own funds? You had a clear thesis statement. You did not have to pivot. You had a clear problem statement. I mean, was it the cost of scaling? I mean, I can understand cost of scaling manufacturing is a really, really big challenge, but people have bootstrap manufacturing companies. My father bootstrapped a manufacturing company. So, it is possible. Was it about getting into market faster? Or where there just insurmountable obstacles on the manufacturing side?
MEIRAV: No, this had nothing to do with manufacturing. I do not actually believe that you should use venture capital to manufacture. Hardware has other, probably better ways to fund if you needed to. But at full stock company complex settles algorithms that at some point cannot stay just a basic code. And I have to actually evolve into a platform, requires resources that are beyond what I believe we could bootstrap. Most of all speed. If you have thing, you know that it is working, it is not a gadget and it is actually helping people and going back to he company in Israel, an early adopter,. I could not scale with them because I did not have the resources. Two people cannot build a company. I will argue that even though the almost 30 I have today. I can probably use more resources. I always can use more resources. Speaking of F16’s, I will use that, and I will let you all know I think it is pretty good. If you could really open up those burners, right. I have flown in smaller planes as well. So, it is not exactly the same feeling, but boy, you could go really fast with the right level of fuel, right?
MEIRAV: But I am a sensible person, so, we are building a company that’s venture worthy without a doubt. I proved that before I ever went to venture capitalists, so it was almost an easy decision. It turned out to be a really good round for us. And the timing was probably very good too, considering…
JAMES: Considering what it is like to raise money right now. Yeah.
MEIRAV: I have not tried, but yeah.
JAMES: Well we have certainly heard from a bunch of people that have been on the show before and that we have been talking to. It is a different environment. Jeff closing question.
JEFF: All right. So, you are sitting in here, have a really cool tech background, but also a really good construction background. And then, I know you have done some work with who is the Society for Construction Solutions, and they do a lot with this, what is coming out next. So outside of what you are doing, what peaks your interest the most? That is what I think is so cool. I have been to a couple of those. So, what is got you, like outside of your world, peaked your interest? Where do you peak?
MEIRAV: Oh, wow. There is so much. I think there was so much happening with imagery, right? So, A, I actually lead the Society for Construction Solutions. Tel-Aviv Chapter.
JEFF: I did not know there was a Tel-Aviv chapter. Congrats. That is really cool.
MEIRAV: Yeah. I will invite you to that. I am actually, the next session I am doing, it is actually going to be with Leigh Jasper from Aconex. So, I will send you guys an invite.
JEFF: Send us an invite!
MEIRAV: I will. I just did one last week where Gilbane, Turner, GLI, and Pepper Construction, all customers of ours actually, joined me on a panel discussion on about what really moves the needle for construction technology. There is a recording. You could check it out. My LinkedIn is already up to date, but I think SCS beyond that, like what is coming next and what’s super cool, is about bridging those gaps between investors and really good tech and the builders and even the academy. So, I think we had both Stanford and the Technion on the line last week, which is super cool. We had like 10 different time zones; I think were not cool. And I have seen very early technology coming out of Tel-Aviv that I think you had someone on the show as well, but I think some of the things that are happening on the imagery world will be interesting. Definitely interesting to us. Speaking of where we go next and what we want to get a good look at that does not come from the crane. So, I would not name a single technology. Definitely not a single company. I think we could definitely get a lot early… I will say one thing about that early those early technologies, because we were one of them not too long ago, we were still early in many ways, you got to give those technology is a chance, and this is a call for the GCs. There is so much to benefit from being an early adopter.
JAMES: Well, just allowing you and just look at though how pivotal the first major Israeli contractor was. Not in providing funding. Giving access to the job sites. It is a two-edged sword though. I mean, we have a lot of GCs who got, who kind of went crazy, letting people try their job sites out and trying apps out, and then they ended up with like 500 things they are trying. So, they have to walk a line between letting everyone who have access to their sites and letting some, but there is a lot of contractors. So, I mean, if each contractor just picks two or three construction solutions, it is a lot of access to their sites. I mean, it was a game changer for you, right? To have access to the data and the job site and the equipment.
MEIRAV: Absolutely and there is more to it though. It is also about scaling James. I think we sometimes miss the point on that. So, if you try something, if you are a contractor and you try something and it is actually working, how long are you going to keep it in experimental mode? And when do you start scaling? I think that is the next question on trying things out. And you are right. If you are trying to find companies that are servicing you, or, at a risk of dying in that process, then you lose your ROI. You lose, everything that you have gained by letting them actually try out. So, I am about, if something is working a couple of months later, it needs to start scaling. Well, that’s kind of our discussion with the customers and it is actually working.
JAMES: That is a big argument, man. That is a tough road to go with a lot of contractors though, because they are going to run it through a pretty lengthy committee process and, death by committee, snuff it out. There is a lot of challenges there. I know Jeff has had to run that gambit too many times as well. So, it is interesting. Well look, this has been a great conversation. We do have to move on to the news. We hope you will stay around for a second so we can wrap our discussion with you. Exciting stuff. Before we go to that, just give everybody your website so they can find out more information about Versatile.
MEIRAV: Yeah sure. So, it is versatile.ai and there is a lot of information there, including our recent world economic forum, tech pioneer that we never got to talk about, but this is the first construction technology company to ever receive that honor. More data there. More data about the stuff that we have done with Turner, some of the other early adopters or out there. Yeah. Let us talk, we are definitely happy to talk to anyone.
JAMES: Awesome. That’s versatile.ai. Go and check that out! Before we move on to the second part of our discussion with our sponsor, Wakecap, a quick station ID.
STATION ID: And onto our discussion with Wakecap. Wakecap, they put sensors on hard hats. It is a sensor show. Remember we are hooked on sensors today. So, we are going to talk all about sensors. Second bad joke of the day. We are going to talk with Daniel Pifko for just a minute about his solution Wakecap.
JAMES: And I am back with Daniel Pifko, VP of North America for Wakecap. Daniel, you tackled a huge problem in creating a small piece of hardware that attaches to a common piece of hardware people are already wearing on the job sites. After all that is done, you are collecting all this data, and then you tie it to the plans. What are you doing with it? Like, what problem are you solving?
DANIEL: Yeah. So, there are quite a few very simple things like attendance. So, there will be no more punch cards, no more shared pins, no more signing in on an iPad. No more supervisors trying to manually figure it when people came and went, but then you get into more interesting things like you divide the entire job site up. And so, you can track where people are to answer other more advanced questions like, what is my percentage of time spent where the work package says that they are supposed to be. Are they at 60%? And then you can divide it up into fully productive areas versus indirect.
All that, to say that you can develop a score for percentage of time, that tells the GC or the site manager of the project director or somebody who is managing the site, what percentage of time is spent in the productive area, and then they use that to make changes to the flow of the job site, to how the projects are deployed, and measure what that does to their score. For example, we had a project where they started out at about 60% time in productive work zones. And then over the course of three months, they used our system to track the number. They made other changes, and they are now up to over 80% productivity. So, when you are talking about 2200 workers on a job site and you increase your time spent in productive zones by 20%, that’s real money.
JAMES: Huge, real money. Saved a few minutes at a time, right? You are really taking those little slices of time and then reallocating so you can save incredible amounts of dollars at the end of the project. And where we can check out more information on Wakecap?
DANIEL: Wakecap.com. We have people across North America. We have people in Dubai, in the middle East. Drop us a line and we will get back in touch quickly!
JAMES: And we are back. Before we move into contact news. I just want to make sure everyone is aware that the 9th annual JBKnowledge ConTech Survey is officially open. We use the survey to create our infamous annual ConTech report. The report will be released this winter, but we cannot do without your participation in the survey right now. The part two joining us in the survey. You get the report early, your voice is heard, and this year we are giving away a new iPad Air to a lucky survey participant. So, you might win an iPad Air just for answering some questions about how you are using technology at your construction company. A lot of companies he is used this with tens of thousands of downloads of this report every year. It is a very, very popular report because it is really the only one out there that really tries to reach around the construction technology sector and give you a view on it. So, take the survey today at JBKnowledge.com/survey, you can even take it on your phone, pause it and finish it later.
Any time before the survey closes . It is less than 15 minutes. Gives us access to very, very interesting insights in the industry and what is going on and helps us understand what apps people are using, where they are having challenges. Go check it out today. And now for our weekly news stories, Jeff sample, take it away, my mountain man brother!
JEFF: Well, I could not have asked for this one to come out more timely than, having Meirav on. It is going to start with Project Dado, When Tech Hurts. By one of my good friends, Walker Lockhart. It is a really interesting article. I have always really liked Walker’s viewpoint. So, he was one of those early construction technologists that we always talk about. Something he is talking about here is tech friction. And I like his definition of the friction of, when you make something that is apparently easy really difficult. And I think we do that a lot in construction by really focusing too much on getting a solution and forcing it to be implemented because we have some idea of what it is we wanted to have happened, or hanging on to things that live along too long. James, you just mentioned this earlier that, Jeff you know, you have sat through a lot of these committees where, will my spreadsheets work man? My spreadsheet works! Yeah, your spreadsheet works, but it is now something that someone else has had to hold up.
There is a predecessor article to this from Walker, really about how some of his own artful use on Bluebeam and other things really became the bane of his job. I mean, it was all he was doing because he created something to Meirav, to your point, that was not scalable. He could not do it. And I really like at the end there, he is bringing in this idea and he is going to follow it up with a cool article. I did have a chance to work with them on this article a little bit ahead of time. And I cannot wait to see what escaping tech friction with intentional innovation. I think it is kind of Meirav what you have talked about is solving a problem, really staying focused. Looking to make an impact, but not looking to spray the impact across the world to really solve a problem. James, I know you know Walker really well. You have had the chance to talk to him. What do you think about, this tech friction? This idea of forcing a solution, that is just not fitting.
JAMES: Yeah. I have been watching this… I started building software for the construction industry 15 years ago and certainly saw a lot of older solutions still being shoehorned in, on clients that I went and visited with all that. And of course, back in 2004, 2005, 2006 when I got started, you know old MS Dos programs that were still being crammed down people’s throats and some really nasty old scheduling programs. I mean, there is a lot of power behind, a lot of inertia behind doing what you always done. And, and so it is an unfortunate reality of humanity that we just do not want to do. Generally, our default state is doing the same thing, right? And so, this has been a challenge for me and for many others in the tech business for a long time, is getting people to recognize how outdated this thing… I remember, it was maybe 2012 or 2013. I was in pitching SmartBid to somebody and they were bragging about an estimating tool they had implemented in 2003. And how that made them innovative. I am like, what made you innovative in 2003.
JEFF: Maybe into 2004.
JAMES: Maybe into 2004 & 2005, but I hate to break it to you, that that tool is no longer even supported. This is not innovative in any way, shape, or form. And, and so there is certainly a lot of that, you have to kind of walk people through and lovingly walk them through, because they are getting pretty emotionally tied to some of this stuff.
JEFF: Yeah. Well, I think that is true that some of them have created it, so, right. It is their creation. So, you are really messing with their baby. Meirav you are shaking your head like this frictionless hat; I think is at the core of what you guys do. I did not even know that was going to correlate really.
MEIRAV: Yeah and I could not agree more with the legacy tools that are there and no longer supported. I think if you were to lovingly introduce new things, you better do this frictionless and have it at least vaguely spoken to whatever your users are doing. Like we could just extract everything to CSV if that is easier. And they could upload it to anything that they feel comfortable doing and slowly but surely you move away from, just doing things that do not make sense to anymore and do things to do. Do not force it.
JEFF: Yeah, do not force it and I really have to give a shout. Cause I think, Walker going to Dado. Project Dado we have had on before here and their origin story about really doing so much research into the problem is critical. And I think it is why the two, you know why Walker is such a good addition for them. If you have not checked out his writing too, I really like his writing style. So, check him out at Project Dado. He is got a good bit of things and some things to come.
JAMES: I mean their entire premise is about reducing friction in the process of looking for information. Before Dado, there was no construction specific search engine for construction companies. Now, multiple companies are tackling this. Briq is going after Search, and SmartVid. And some level’s going to be going after Search. And the ERP providers have seen this and like, oh, we can do Search too on our own stuff plus other people’s. And so, you are going to see a lot of me too’s, is coming into this whole thing. Like, hey,I am doing this too.
JEFF: Copycatting, highest form of flattery. So, it means they are nailing it and they are hitting in their niche, man. Like that MEP niche is going to need it. And each one especially is going to have to change their language, train their language searches to fit what it is they want. So, I am all for that. Cause if they all fight with one another, then you are going to have these really rich cross capable search engines to get that frictionless data to people’s hands. So, check him out and check out his writing. I really dig that working with Walker. I know we have got to move ahead a little bit here.
So, I am going to go to a Construction Dive article in honor of Josh bone here, Modular Monitor, the Benefits of Value Engineering. My first experiences with value engineering were really, really painful at the masonry company. I worked with a guy named Dave Little who kind of handled the value engineering prospect and went through iteration after iteration, after iteration to get information back to try to either drive down costs or, increase schedule capacity, etcetera. And I think value engineering goes very unnoticed and undervalued. And what this is specifically talking about though, is modular pre-construction the DFMA idea and that to really take advantage of value engineering. It is about when it happens. There is a lot of value engineering that can happen throughout a design build process that can help you, influence the outcomes based on those things. But if you do not do really good value engineering for prefabrication and especially modular upfront early in the design phase, it cannot be leveraged.
And if you can leverage that, you can really drive down costs, increase efficiency, and Meirav, after looking at this and thinking about your crane and are thinking about your product on the crane and moving say a modular piece into a position, there is some really, really fundamentally groundbreaking ideas that are just starting to come to me here. And you are shaking your head. You can see this, right? I bet you, from the prefab modular, this would be huge for you guys.
MEIRAV: We are already doing it. Like we are definitely agnostic through the type of construction. So, I have got production rates on absolutely everything, including mass timber.
JEFF: Well you heard it there. So this is a critical component and it’s something that I don’t know, there’s this James, whenever we come across this, it’s like, there’s these arguments in the world about, who can do what, what can be done, who’s blocking, and it is like, forget all of that. What we need to do is get the capabilities. I was talking to Amy Marks about this recently. We need to get the capabilities that are prefabricators. Our trades know how to do. And we need everyone to open up and say, these are the possibilities that this industry can do and let us do it and let us make it available and let us get better. Like we keep hanging on to these little things here and there, and it is holding us back. Like if we really, to your point Meirav, if we really open up that F16 engine and we drive this with the information and the knowledge that we have, man, we can rocket boost this industry to a point where fundamentally we can continue to be a cornerstone of the economy. We can build things faster. And I mean, what better place to impact the way that people experience the world around them? I mean, we fail to sell this thing completely, but we also fail to innovate and let the transparency scare us. So, for me this article was a Josh Bone thing and yeah, I was on my high horse there for a second, but for just a second, it is okay.
JAMES: Just a second.
JEFF: For just a second. It can happen with modular for me and value engineering is something I do not think people really understand the power of. I think it down the road, it’s really going to have an impact, not only on our scheduling and driving costs down, but also in looking at the carbon footprint and the sustainability of our industry going forward, like the ability to make a decision that can impact the 20% of a cost of a building is building it. 80% is operating it. And if we can lower the impact on our environment over time and really drive it, value engineering can become something that is we did not think it could become. So enough on that one, but really check it out! I love Construction Dive, as we always talk about, and I am going to jump back. I am going to go throw back James on here.
We are going to go back to an old article, and I have to thank Ed Coffin and David Tab for my company at eSub. For bringing this up in an article they wrote about, or that Ed wrote about something else. He referred back to it and its poor communication, rework, bad data management, costs construction industry $177 billion annually. Why would I bring this up now in a pretty depressed time already? Is because I want you guys to have optimism. I want you to think about if there is $177 billion being lost. There is $177 billion to put your share of back in your pocket if you start to adopt technology that really embeds itself into your process is frictionless, but also provides you with that critical data. So. James, I cannot tell you how many times I have seen this over the years. It says what is all the biggest buckets where we can save money. Is it in productivity and labor? Is it an equipment? Where is it?
JAMES: Preventable mistakes.
JEFF: Rework! Rework! We can bring the money back. So, do not sit and think through this time that we cannot do anything. We can get better, which can drive our margins up. We can put more money back in our pockets!
JAMES: Well, Jeff, this is an interesting one. And as a business owner, I have fallen prey to this sometimes where you tend to fixate on top end top line revenue instead of fixating on bottom line profit. And you can be more profitable while you are in a declining revenue environment. It is possible to actually make more profit and it helps you realize that it does not really matter how much gross revenue a company makes. The only thing that matters is how much profit they generate. That is really it. In fact, if you had two companies and one did 10 million a year in gross revenue and threw off $2 million of profit, and another one did a hundred million dollars a year and threw off $2 million of profit. Net profit after everything, right? $2 million of cash generated, I would take the $10 million company any day over a $100 000 000,00 company because the $100 000 000,00 carries a lot more risk for the same amount of profits. And so, it is a lot or risk. I would much rather have the smaller company that generated… And you look at it and I am not presenting an unfeasible option here, by the way, there are many $100 000 000,00 construction companies that generate $2 million profits. That is fairly common.
JEFF: It is a measuring subject
JAMES: 1%, 2%, 3% is fairly common, whereas, in a lot of other industries, 15%, 20%, 25%, 30% margins are fairly common. And give me the smaller company with higher margins any day, but that is not the way many construction owners that I talked to, construction company owners I talked to, view the world. They are fixated on volume of construction work at the expense of profit. And so, you are in a declining environment, 2008, in September 2008 Lehman Brothers collapses. I was seven years in the business. We had already survived the first major hit because right after I founded a JBKnowledge, 911 happened and the economy kind of hit a double bump because the.com collapsed and then the 911.
And so, we survived that, and it took years to pull out of it. And then we get to 2008, Lehman collapses, the whole economy craters. Our gross revenue in a minor way, declines, over the next two years. But in 2007, we had paid off all of our debt and we really took a big focus on profitability. And so, our profit increased in 2008, in 2009, while our revenues slightly declined and our net, because we had no interest payments, we had lower taxes and all kinds of good things that happened. We drove more cash to the bottom line in the worst market in the last 75 years. And we are facing, please do not lie to yourself, the economic consequences of Coronavirus have not hit yet.
JEFF: Oh no. We are in a fake bubble on the front.
JAMES: We are in a fake frothy bubble created by all the world governments. So do not lie to yourself. Do not lie to yourself. American Airlines just announced 25,000 people will be laid off in October if they do not get more government aid, by the way that is their way of holding a gun to the government’s head on the negotiating table. Do not fool yourselves.
JEFF: And what was it? Virgin Airlines or somebodies dropped their whole 747 fleet this morning?
JAMES: United Airlines, United American. They are all announcing mass layoffs coming October. So, be cognizant of the fact that you can use technology right now to drive higher margins, even on lower volume. You can actually be more profitable in a downturn.
JEFF: Yeah and something to think about James. And I am going to challenge you to do this is try and say that on stage in front of a bunch of big construction companies, the eyeballs, they shoot lasers through you when you say this. And early in my career, I sat in front of someone and said the same thing. We are $47 million companies that we are going to go to 88. I said, why? Well, because that is where we were. And that is what we are. And that is our measuring stick. And it is a really bad… Bad thing is not the word, but it is not met with good feelings when you say, listen, you can shrink and get better. And I think trades need to be thinking about that. Shrinking down into prefabricating and manufacturing and, let somebody else put it in if you want. Why take that risk? So, Meirav you are shaking your head out but before I let this one leave, I will get your feedback on it.
MEIRAV: Yeah. And capital efficiency I think will be an important thing, right? Not just photo startups, mainly for our customers. We have always run a very capital efficient to your point, James, about bootstrapping. And when you stop bootstrapping, you still stay at ease. That mindset is probably inherent and do more with your resources will actually produce a better bottom line. Even if your revenue starts falling. To that sort of recap article that you guys were showing. I was using this when it came out. Haters so much time and money, just, on the floor, pick it up and it is easy and sometimes frictionless to pick it up.
JEFF: Yeah, just start looking on the ground and pick up the spare change. And along the way you might get a couple of million. They are changing construction.
JAMES: The analogy I have used is there is there’s buckets of gold buried under every slab on America.
MEIRAV: I will also say that I think we are as an industry, we are funding our inefficiencies so well that maybe funding more of innovation that could save those inefficiencies is not a bad thing.
JAMES: Yeah. Awesome. Let us move on. This is an interesting one. I thought it was a good relation to today’s conversation, really around connected equipment. And we have seen a lot of manufacturers, the heavy equipment manufacturers connecting their hardware, CAT calls it Smart Iron. There is a lot of other initiatives by major hardware manufacturers to connect all these together. This is an article from Construction Executive, but there is a lot of equipment, bulldozers, fork lifts, cranes, that have the ability to connect data. Now we had Propeller Aero on here from Australia recently, and they have a piece of hardware called Dirt Mate that magnetically attaches to the top of heavy equipment so it can track where that heavy equipment goes during earth moving. So, they can really get precise measurements on what earthwork was done. Really amazing stuff. So we’re starting to see, and then we have Built Robotics who we have also talked about extensively on the show that’s taking traditional equipment and automating it, putting it in the ski locker on top of… They are actually taking minivan storage unit and putting it on top of heavy equipment, they are putting a sensor array inside of it. Really, really innovative stuff.
So, you are seeing manufacturers put physical sensors, parrot to artificial intelligence, software engines, and then tie it into this whole concept of digital twin, where you are just trying to keep a digital twin of the job site as it is built, and then when it is done. And so just a good article for you to go read and think about how sensors, how big data artificial intelligence, cloud-based computing, ultra-high-speed connectivity, 5G as well, because of the ability have low power sensors that communicate on the internet in real time without a Wi-Fi network. There is a lot of this… A lot of this technology is arriving together at the same time, right? So, you have a really, really fast, and then do not leave out Space X and Starlink because Space X is aggressively on a monthly basis launching dozens of satellites, every single month. They are trying to build a constellation of thousands of satellites that are low earth orbit dates, communication satellites, so that we can have of ultra-high-speed connectivity everywhere on the planet.
And so, you have this inner, this planetary network of satellite communication. You have got a terrestrial network of 5G communication. Then you have got really cheap sensors made out of China that all of us can buy. And then you have got, aggressive moves by the major cloud providers like Azure, Amazon, Google Compute Cloud, where they are making vast arrays of computing available anywhere on the planet. And then you have software providers and hardware providers, like Meirav, today that are pulling all this together. And then, so just pay attention to what is going on. Because the pace of implementation is going to accelerate because all of these things are arriving together at the same time on the job site. It is exciting. It is exciting. A little scary because it is going to be a lot of radical change all at once. Then you have iPads coming out that have LIDAR on them. I mean so you have LIDAR in your hand everywhere. This is going to be a radical 10 years.
JEFF: Well, if you think back, James, is this kind of a strange show, bringing a lot of things back together? Cause I am going to go back to Burcin Kaplanalou again. When we had him on, we were talking 5G, we were talking about the connected IOT job site. Exactly. Like you are talking about, where it was this environment that knew where everything was going, and it would adjust itself and it would avoid each other, and it would be safer, and now I hear what Meirav is doing. What this article is talking about, what Burcin is doing at the innovation lab? Like, I cannot wait to go there when everything opens back up to see them. And I think you are right. I think over the next two to three years, we are going to be close what he was talking about on the show. Gosh, I think that was it is two years ago now, that will be there. For this connected intelligent job site, which then, if we take a stop for a second and think what is a better way, where is a more changing ever-changing variable world to show what IOT and sensors, etcetera, talking together over 5G and other connected ways can make everything else autonomous.
JAMES: Meirav, you are putting a 5G sensor in your hook sensor, right?
MEIRAV: Yeah. We are generally using cellular connectivity.
JAMES: So 4G right now?
MEIRAV: Speaking of nuts, 4g right now, like what?! Definite conversations going on about the 5G. Yeah. You do not want to be on anyone’s Wi-Fi if it is even available. Speaking of non-intrusive.
JAMES: Yeah. Well, that would be a nightmare on a crane. I mean, you are literally, you could be moving in and out of hotspots. I do not want to see the connectivity along with that one. It is like, oh crap, we lost our sensors again! Let us put a Wi-Fi hotspot on the crank. No, no, just put a cell connection on there and do not worry about it. Are you solar powered or you pulling power off of a power feed? How are you doing that?
MEIRAV: We actually have two hot swappable batteries. So that is the only place where you do need to slightly work for us about once a week or 10 days, you will need to swap one of those out. The other one will stand kind of kicks in and anyway, so, yeah.
JAMES: Gotcha. Okay.
MEIRAV: We will get better on that too.
JAMES: Oh, yeah. The old battery technology is getting better and better and better and better. And we have seen that progressively over the years too. Let us jump to the next article. This is from Construction Executive. It is their tech rundown from July 10th, just a few days ago. Bio PPEs face mask, PPE dispensers and disinfection containers are voice enabled tech and Alexa integration. This is so cool. So, they took a voice control, Alexa, combined it with a PPE dispenser, and they put it on a job site. So, you can literally go talk to it. It will dispense like a face mask. It does some really cool stuff. Has double air antimicrobial, composite tech for the face mask. So, there is some really neat stuff coming out.
You can also sterilize phones, mask, wallets, purses, other small items with the Bio Shield, UV disinfection box. So, there is some really neat technology we are going to see coming to the job site to help deal with the perpetual threat of pandemic. Remember this is not over when Coronavirus is over. Cause it could happen again. They found bubonic plague in a market in China. In case you miss that one. That was this week. Yeah.
Healthepassport for that. This is the Healthepassport by Red e apps.1.16 It is a comprehensive health management solution. If you are looking for one of those. Health input from employees, contact tracing GPS powered location. So, we have had some requests for this. This is by, this is the Red E app, called the HealthE passport. Also, Carta by plot, digital mapping and measuring wheel uses AR in a smartphone to measure and map. And while the let us plot platform calculates dimensions. So, this is something that many of you have asked for many years as auto dimensioning. That is what they are trying to do with AR, where you can use the app in auto dimension, what it is seeing in real time. Also, in this one, WINT, we have talked about WINT went before the water intelligence platform did some really cool stuff with AXAXL. and go check out what they are doing with AXA in the construction ecosystem from AXA.
WINT does some really neat measurements where they are using a form of machine learning to identify leaks. Really, really neat technology. CSI, the Construction Specifications Institute has crosswalk it. It connects construction technology platforms through an API. So, we have talked a lot about connecting different solutions together. They have built a technology called Crosswalk to try and connect different solutions together through an API. And a headlight has a photo-based inspection technology. Inspectors can capture, interpret, and act on data. So, we have seen a lot of photo-based inspection tech, and we have had a lot of discussions around remote inspections for municipalities that they are doing right now. And what the potential future there could be. And I mean just more and more of the stuff. I will close out, there is some I will skip, but Doosan Bobcat North America and, An Stein,AI, a radar technologies company are partnering on developing a next gen radar sensor for the Bobcat equipment.
Now Bobcat’s are super fun. Whenever you see people driving, you are like, man, there has been a lot of fun driving that Bobcat. Well, now you can throw a next gen radar system on this to detect objects, people collect object position data and real time alerts. So does some crazy stuff with sensors. Imagine those sensors on a piece of equipment, that seems to be the theme of the show today. My last article is from Construction Dive. They are doing a bit of a tech rundown as well. They covered smart track, which we already talked about with structured sites. SmartTrack has a really neat automated production tracking platform. They covered one I had not dealt with This is Sentri360 by Everguard.ai, it alerts construction managers, and workers before. about real-time potential safety hazards, including Covid safety hazards. This is multisensory input through estriol grade wearable, personal device. These are sensors going on that the person themselves is a Sentri360.
Also, SmartWorldPro2, another one that I had not worked with before, it is a digital twin software from Cityzenith, designed for professionals who designed constructed, managed complex, large scale building complexes. And lastly, last tech of the day, GigapixelCam X2. I have talked about gigapixels many times on the show. I think they are amazing. They are awesome. They are a little creepy. It is kind of like zooming in on a fractal. It just keeps on going. This is the EarthCam X2. It is 4k live streaming video to multiple platforms and creates ideally detailed 360 degree, 5 gigapixel multilayer panoramas. So, you are talking about something that you could take a picture of a city and then zoom in on every window of every building, in the view and probably be able to see what is going on. I mean, it, this is absolutely insane. Go check it out. The EarthCam X2. Photogrammetry nerds are going to have a heyday with this. They are going to have to spin up about 20 more app processing instances on Azure to process the sheer volume of data that is going to come off with gigapixel cameras, but it will enable a whole bunch of new technology. So, check out that Gigapixel camera. With that. That is our show today. Jeff sample. Always good to see you. Thanks for joining us brother.
JEFF: Great to see you. Great to see you, Meirav and finally get to talk to you in person. Thank you so much for a great time, a great conversation. James, thank you my friend, you stay safe up there and everybody else, enjoy yourself!
JAMES: Meirav, thanks for joining us today from a beautiful, beautiful Bay area, California.
MEIRAV: Thank you, guys. This was a pleasure. Great conversation. Thanks for having me.
JAMES: Enjoyed it and then enjoy the discussion around technology. Keep putting sensors on the job site and keep changing lives. I love your mission and I love what you are the problem you are solving. So, go get it done. And thank you out there in listener land, for tuning in today for episode 227. Our interview with Meirav Oren from Versatile, that’s versatile.ai.
Join us next week, episode 228 with Pete duMont from Prairie Dog Venture Partners. To read all of our news stories, workflows, all of our stuff, subscribe at JBKnowledge.com or text ConTech to 66866. Big thanks to Jim Greenlee, our podcast producer, Kara Dalton-Arro, our creative producer, ad-coordinator Tish Thelen. To listen to the show, go to thecontechcrew.com. This is the crew signing out until next time, enjoy the ride and geek out! See you next time!
Enjoy the ride and geek out. See you next time!