The ConTechCrew 230: Don’t Build Cardboard Houses! with Matt Risinger of Risinger Build
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JAMES: It is Fridayyyy! That is right, we are finally here! This has been a busy week, man. I tell you what, James Hillegas, he loves Ohio and for some strange reason, still roots for the Browns, but he is in Georgia now. He came to God’s Country for football and he is down in Georgia, sweating out to the oldies this summer, doing CrossFit leaning up. Welcome to not powerlifting man! Like high rep, high intensity. What could possibly go wrong with your joints, Mr. Hillegas, how are you doing?
HILLEGAS: I am doing phenomenal. It is sunny. It is harmlessly warm, got a kayak last weekend. So today after work, I will be headed to the lakes, do some kayaking this weekend.
JAMES: Lake Lanier? Which lake are you going to?
HILLEGAS: So, it is lake… I could be saying it wrong cause I have no idea. It is Lake Allatoona on the North West side of Atlanta.
JAMES: Nice. Nice. There is a lot of lakes, a lot of damn lakes there. You are not going to get natural lakes like up here, man, it is a little weird. I am still in Michigan at the summer studio and I have been laking it up! Lake Michigan. I am not kidding. We had a big storm come through, it flipped the lake, went down into the forties. They actually had to put an advisory out for people to stay out of the lake cause they could get hypothermia. I was like, oh my gosh, I literally went and soaked like knee below in and went numb. It is crazy man. Like total polar bear club territory. I tell you what, I am about to go back to Texas though. School’s starting. We are going to have Corona Fest, 2020/2021. Get all our kids infected. So, we will see what happens. What could possibly go wrong there? Georgia, early adopter over there, you were watching reports out of Georgia, huh James?
HILLEGAS: Yeah. Every day, the news changes. I do not really pay attention anymore. Cause, one day it is up, next day, gravity’s off.
JAMES: It is like the biggest roller coaster ride on the planet. Oh, we got a vaccine coming. Oh wait. No, we do not. Oh, we got a vaccine and a treatment. Oh, wait. No, it is insane. We are not going to talk about that today though. We are going to talk about building, making stuff, technology. And for that, we have got a fellow Texan. Matt Risinger, Matt, how is it going?
MATT: Good James. Thanks for having me on today brother.
JAMES: Man, it is so good to have another Texan. Even if you are from the people’s Republic of Austin, I still like having you on! The most blue part of a red state.
MATT: It is the blueberry and the tomato soup.
JAMES: It is the blueberry, the awkward blueberry and tomato soup. Old Austin Texas is where all the Californians go to escape California and try to recreate California in Texas. It is the most strange thing I have ever seen in my life, but they are spending a lot of money with you building houses. So, God bless them.
MATT: I am thankful for that JB and it is a good town to be a builder in.
JAMES: It is a good town to be a high-end home builder
MATT: I feel very blessed to be in Austin cause not every market’s like this. I have builder buddies across the country and we talk and there are some good markets and some weird things are happening with COVID in terms of building, having a bubble, and people really all of a sudden wanting to bring that big project online and a big remodel online, but Austin’s booming right now.
JAMES: Yeah, it is wild. I monitor real estate pretty closely. I like investing in real estate, direct investing in real estate. I think real estate is fun. I think buying houses and land and that kind of stuff, and then flipping them and selling them. I have always enjoyed it. It is just a really good way to… certainly it is a better investment than a lot of other things out there. And I have been following Hays County pretty closely. And Hays County, even in all of this mess, is going berserk right now. If you do not know where Hays County is, it is between Austin and San Antonio. It is where all the rivers go through the Guadalupe and the Comal and all the rivers people like to go float on. This market is going nuts! People are saying, if we are going to work from home, I am going to have a badass house. And so, they are going to Hays County, they are getting out of the city. They are going to Hays County. That is crazy!
MATT: And people are selling houses even in the city of Austin though, for nutty prices right JB
MATT: And no slow down. My buddy put his house in the market to move out of Austin school district. He put it on the market Friday. He had three offers. One of them was a $100 000 over his asking price, which is already steeped for his neighborhood. And he settled on like 15% more than what he was asking, which was already about 5% more than the market in his neighborhood should have been. So, he got 20% over what he probably would have normally gotten.
MATT: The people wanted a pool and in his neighborhood.
JAMES: Yeah. It is a weird deal. Look, a good house in a good neighborhood is still a good house in a good neighborhood. Of course, we really have not really seen the economic consequences yet. And that that is something else to keep in mind if you are having a rational, exuberance about a V-shaped recovery and all that stuff. What is really going on is the affected industries are getting nuclear bombed right now. And without more stimulus money from the government, we are going to see a level of bankruptcies and defaults that we have not seen in a hundred years. It is going to be ugly.
MATT: We are seeing crazy rising prices too. Right now, guys that are doing deck jobs for… you know if you are a deck contractor, you cannot even find pressure-treated lumber right now. I am hearing from people in markets, even in Texas, where they cannot get it at local lumberyards.
MATT: And all of my lumber prices have gone nuts. Like one random indices, I always think about over the years is what is a sheet of OSB costs. It is $22 right now for a sheet of 4 x 7/16 OSB.
JAMES: Yeah. What happened? This is just my amateur economist hat on right now. The economy is like a balloon, and when you squeeze parts of that balloon, other parts pop out. And so, what happens when you really mess with the supply and demand curve, is they get completely out of whack. And when supply and demand get out of whack, prices go nuts. It is like groceries. The better example is the market for disposable paper. i.e, toilet paper, paper products went berserker for about 60 days.
Toilet paper ironically will be one of the things we remember the most from this.
MATT: I bet we will all have a stock of it in our garages from now on, won‘t we?
JAMES: I do. I don’t know about you.
MATT: I do too.
JAMES: Yeah. I am a bit of a prepper in general. Like I have a generator at the house, and I have, I am ready for some crap. Like I have an emergency ammo store. I have extra guns.
MATT: Me too.
JAMES: Yeah. I even got the Zombie automobile. I got a Jeep that got completely jacked up and off-road tires just in case.
MATT: You win JB. You definitely win that one!
JAMES: Oh, wait, Matt, here is how I really win on that one. That Jeep, I had it coated in Kevlar!
MATT: Yeah, you definitely win that one! You are definitely a prepper!
JAMES: I am a prepper dude.
MATT: You are just the dad how has four kids who do not want to get burnt when things go bad. You are definitely in prepper category. Do you have an underground bunker?
JAMES: No, but if it were reasonable to build the one I would, but I have priced it out, and it was like, ooh, that is a lot of money. I really cannot justify that. Although I think there is a market for underground bunkers that will do as she sheds for your wife. If you can sell your spouse on, this is your escape from the children, and at the same time it is a bunker, there might be a market there.
MATT: I do not know that women would love the submarine feeling of an underground bunker. I could be wrong. My wife would not go into the bunker to hang out, would be my guess.
JAMES: Really? I am surprised to hear that because I know a lot of moms that would, they would do anything to escape their children right now.
MATT: Yeah, that is probably a good point.
JAMES: College Station ISD did a survey and they found 70% of parents wanted their kids to go to school. 70% of children wanted to go to school and 70% of teachers wanted to get back to school.
It was overwhelming. It was not like little numbers like everybody is ready to get the heck out of the house. So, let us get back to this conversation in just a second.
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Also, the cause of our show. 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 statistics, contractors, unions, associations, and industry service providers, and project owners must work together to stand up for suicide prevention. We got to do it, folks. 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. Visits preventconstructionsuicide.com for more information.
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Now back to Matt. Matt, we are going to talk about building, we are going to talk about tech, we are going to talk about building media cause we are going to talk about The Build Show and all that. But before we do, let us talk about you, baby. Let us talk about you. I want to talk about you. So, give me a little background because you have a neat background. You got a Bachelor’s in Industrial Management from Grove City College, go ahead, and tell everybody where that is.
JAMES: Yeah, Pennsylvania. So where were you born and raised?
MATT: I am a Pittsburgher.
JAMES: There you go.
MATT: Pittsburgher PA. Steelers fan, right?
JAMES: Oh, Oh!
MATT: Sorry Browns fan out there. I do not know who I am talking to.
HILLEGAS: Start smashing heads again.
JAMES: The Steelers have winning seasons.
MATT: They do. And super bowl rings.
JAMES: And Superbowl rings. And legendary X coaches and players and some current ones. Anyway. Alright, so Pittsburgh, tell me about it.
MATT: So, I grew up in Pittsburgh and my dad was in the steel industry. I did not have a construction background. I did not know what being a builder was. And social media for me as a kid was watching TV when it was actually on TV. So, I grew up watching PBS as This old house and idolized the builders and the work going on there. Just thought it was so cool. But never knew that that could be a career for me. And meantime, starting in junior high, the church that I went to, did a bunch of mission work in inner–city, Pittsburgh. And Pittsburgh’s a town that, unlike Austin had tons of money in the late 1800s, early 1900s. We have all these beautiful, inner–city townhouses, rowhouses, that when kind of the flight to the suburbs happened, those houses became the slums of Pittsburgh. And so, we would go work on those houses for a week or two in the summer with my church group. And I loved it. I love these old houses and meeting people that were unlike the suburbs where I grew up.
So, then I go to college and started down the path to get into the auto industry. I had enjoyed the statistics and engineering and thought, oh, I am going to work for Toyota when I graduated college. This was in the early ’90s. I graduated now 95. I sent my first email as a senior in college, I am a little older than you guys, and I could not figure out how to get a job with any of the manufacturers that were happening in, from Japanese companies or even the Germans that were starting to build in the States in the ’90s. So, a national humbler came to school and was recruiting for assistant superintendent positions. And when I attended their info session, I could not believe that this was happening. This is what I loved and enjoyed, and all of a sudden, I realized gosh, I could make a living doing this. This is amazing. And I was never a good framer. I was never a good carpenter. I was never a good plumber, but I know how to do all those things, but this was a way that I could actually manage all those trades.
And so, I got hired on as a 22-year-old working for one of the top 10 national builders. And they do not build a particularly good house, but they really know the business of building. And that is what I learned from those guys. Scheduling, working with people, understanding how to do things when you’re really busy, how to organize yourself, how to organize your jobs, what people need to have when they get to the jobs so that they can be profitable and get stuff done for you. So those are the things I learned there.
And then, I moved from Washington DC, where I had worked in my early career to Portland, Oregon, and this was a pivotal time in life. My wife was moving out to Oregon to start some training. She just graduated from medical school and Portland was a totally different climate from Washington DC where I have been building, and if you guys remember 2001, that was when the big national mold crisis hit. And when I moved there, I had started as kind of head superintendent. I do not know what my title was, but I was in charge of the superintendents at that company and I also had a warranty underneath me. Well, in the first week I started, we had three lawsuits handed to us for mold issues and had to buy back some houses. And so, it was a big wake up call. Like, gosh, we have been building the houses this same way for a long time. What is going on that there is all of a sudden, all these mold issues?
So that is when I kind of dug into what now we term as building science. And for me it was just, gosh, I am just trying to get these lawsuits out from underneath us as this builder. We also did a bunch of EIFS facades. If you know what EIFS is – External insulation and finish systems. Fake Stucco basically.
JAMES: Yeah. Yeah, definitely something to avoid. Yeah.
MATT: Well, it is actually a fine technology, but the problem was, we did it over top of OSB with no weather barrier behind it. And then we would face caulk everything and pray that the caulking would never crack and say, well, you got to re–caulk every year Mr. Homeowner. So, I would go out to houses that were six months a year old that had leaks and they would just be mulch underneath the EIFS. And so I’d rip off the facades on a dozen houses or so that had EIFS and figure out where the leaks were and what was the problem and replace all the sheeting and replace some of the studs that had rotted on a one-year-old house. So, I learned a ton during that time.
Then fast forward two or three years, I moved to Texas in 2005. So, I had been in construction for 10 years. And that was my chance to finally, spread my entrepreneurial wings. And I started my own home building company. But because I was new to Texas, I did not know subcontractors, I did not know the market. I was not sure how as a builder, I was going to get business. I did some spec houses and luckily the market was kind to me during that period of time in the early part of my business career, but I still had the speculative business going when the big crash happened in 2007/2008. And that was a huge wake–up call for me. I lost a little over $300,000 on one of my specs, that I had started for, expecting to sell it for 1.2 million, put a million into it, and sold it for $700,000.
JAMES: Ah, that is brutal.
MATT: So that was brutal. We called that Chuck. That was the debt that we had to pay every month, that was the $7,000 debt every month that my little company had, that was the employee we could not fire.
JAMES: Yeah. So, the reminder that things do not always go up.
MATT: Specs are a tricky market. And the other thing I learned about speculative builds is I could not make money necessarily building the way I wanted to, because speculative market rewards the best-looking house at the cheapest build price. And so here I was building really good houses that I was proud of and telling people who were looking at the house, here is the blower door score. Look it blew a 2.3, ACH 50, and here is the R–value of my walls and their eyes glaze over and they could not care less. They wanted to know what the granite looked like and what kind of tile we had and were the hardwoods, this flavor versus that. They did not care whether I had an 1 ⅛ subfloor versus Luan. It just did not matter. Nothing behind the walls mattered. Nothing about the longevity of the durability, the equipment, not the building science mattered to somebody moving into town, and buying a house.
And so, during that time, one of my project managers, at the time was a trained architect and he said, we need to stop doing specs and we need to go after architects who will refer us business. And this was an epiphany. I had frankly only worked with a few architects over my career. And I luckily hired architects to do those spec houses because I realized quickly that Austin was a very design–centric market and we have a bunch of, kind of starchitects in our market. Really famous architects that everybody knows. And the dirty secret is they barely make a six-figure income because architecture is really hard to make it. There is about a handful of architects who make over a $100 000 and the rest of them make pennies.
JAMES: I know, the struggle I was telling my students, cause I teach, I have been guest lecturing at A & M Architecture College for years, largely in the building area. But everytime I go teach a group of architecture students, I am like, you are going to work way harder for way less money than those students over there in construction science. I hate to break it to you but like the average starting salary… You know one of my extended family members graduated with an architecture degree and they are making 38% less than my starting construction science students, and they are working more hours. I am like, look, you got to understand this reality about this profession. It is tough.
MATT: It is really hard. People just do not want to pay what they should for design hourly rate or for a really, the problem too is people do not know what a good set of plans is in residential. And so, they look at what your fees are, what your hourlies are, what the estimate is. And a lot of times they go with an architect who maybe has good looking photos and terrible plans. Whereas a really good set of plans for me is 60 pages of plans and probably 45 pages of specs. That is what I need to really build you an excellent house. And so, we do work with architects who give us 15-page plan sets with no specs. But we have a lot more work on those houses and there is a lot more risk, frankly, in those houses for me as a builder. But the side note is, and I do want to mention that not everybody listening to this podcast is in a market like awesome, that is booming JB.
And a quick plug for my friends at Lowe’s, who had me on their podcast today, they have got a really cool deal. If you’re a Lowe’s For Pros member, which is their loyalty rewards program, you can actually get a free a membership to Home Advisor right now through your Lowe’s for Pros membership. And Home Advisor is basically a lead generation service where you can get 10 free leads with Home Advisor on whatever your trade is. So, if you are a deck contractor listening to this, if you are a remodeling kitchen and bathroom remodeling contractor, sign up for Lowe’s for Pros. Get on that Home Advisor deal they have got going on. You can sign up at Lowesforpros.com/proloyalty and you will get a year’s worth of Home Advisor for free. And they are going to give you 10 free leads. Pretty cool deal. For me, I do not typically use Home Advisor, because I am really looking for that referral from an architect. And that is really how I have grown my business JB is, being strictly an architects builder.
And so, we are kind of an old school general contractor. We do remodels. We do new builds. I do some smaller projects mainly for past clients. And we do some very large, both new homes and whole–house remodels. I will not typically do that smaller kitchen remodel because I do not want to leave things that do not meet my standards. So that is why we say, look, we are the whole house remodel contractor.
If you are going to buy a house, take out of the studs and rework it, or I am going to get to touch the insulation, the vapor barrier, the weather barrier, the windows, the HVAC system, then we are your guy. Cause that is what we get. But we are not the guy to hire just for pretty. We know how to do pretty.
MATT: We have some excellent craftsmen on our team, but what we are really good at is building science.
JAMES: So, let us talk about your other project because Risinger Build is the home building company. You are building really a high-end product, you are partnering with really good architects, who are finding clients, cause they are doing the client selection for you. They are finding the clients that will appreciate build quality that is okay with taking two years to go through the process of selecting a site, designing the house, modifying it, getting all the permits. That is a couple of year process to build the type of houses that you are building.
MATT: It can be, yeah.
JAMES: In the highly regulated area you are building them too. I mean, the permitting process in Austin is notoriously draconian.
MATT: It is really hard.
JAMES: Yeah. It is really hard. So that is one half your brain, but you have really gotten excited around media and around producing content for builders by builders. So, you started The Build Show. Tell me about that.
MATT: Yeah. So, I went on to The Custom Builders Symposium in 2007/2008 and I heard the speaker on marketing, this guy, David Meerman, Scott. And he was talking about how to market your business for free. And it really piqued my interest as a new builder, a new business owner. And at the time he was saying you should start a blog. So, I started this written blog, you know, this was before podcasting even and started writing blog posts about things that I thought were interesting about construction, and how to build a good house in the South. Cause, I had read all of the construction trade magazines, my whole life, Journal of Light Construction, Fine Home Building, and they generally are pretty kind of Northern climate based, they are both based in the Northeast. So, there is not a lot of great info about the South you know, where do you put a vapor barrier? Do you need a vapor barrier? What is different about building in the South versus building in Vermont? So that was my blog.
And then in 2008, a buddy of mine said, hey, you should check out this new thing called YouTube, and borrow my flip video camera and, and record a video from one of your job sites. So, I put my first video up on YouTube in 2008. And I promptly got 6 views, and my videos would regularly get 25 to 35 views maybe. But the thing that got me really early was I would go into meetings and I have been doing this, let us say for six months to a year between blogging and YouTube. And I was not doing it that often, maybe two or three times a month. But I go into a meeting with a prospect and they would say, oh, Matt, it is so great to meet you. I watched that video about the difference between this window type and that window type. And I thought it was really interesting that, you liked this versus that, and that you laid out a U factor for me in an understandable way. And now I understand what solar heat gain coefficient means. And I would be like really 30 people watched that, and you were one of them. Huh? Okay. I guess it is really not about the numbers. I should keep this up.
So, I did that for many years, until about 2015/2016, I started building more and more expensive houses in here I was still recording my YouTube channel with a camcorder, and now I am getting like CEOs that are watching it before in an interview, and I thought, I should probably hire a pro crew so that my videos are not jiggy, it is not just me handing me my camcorder to the plumber saying, hey, record this. I am going to talk about Uponor Plumbing for a minute. So, I hired this broker and I went from like camcorder to movie studio overnight, which was ridiculous, like it was too much. My project manager’s like what the frick is going on? There are a van and guys are screaming out and there is like, all these lights being set up and like, I have to shut down the job for an hour while you film. Like my guys hated it at first. Like, this is stupid. But all of a sudden, my numbers on YouTube really started climbing.
JAMES: You are like, but the people are responding to high–quality content.
MATT: Yeah. And then I started doing like every Friday I would publish a video. And it was like, oh my gosh, I have like 10,000 subscribers. Like this is nuts. And then I started publishing twice a week. And then at some point, I was like, this is stupid for me to have an outside crew. I should just hire a guy. And I will kind of go back to the camcorder deal, but I will do it in a pro way. Like we will buy a nice camera and we will not necessarily shut down the job, but we will do a hybrid between a movie crew and a mom with a camcorder at a soccer game. It was like somewhere in between there. But the key was we were going to do two videos a week, kind of no matter what. And that was four years ago.
And one of my first videographers that I hired Joey, I remember when he started, I said, iron man, we are at 20,000 subs and your goal, is to get me to 100,000 subs by the end of next year. And he is like, that is not me. I do not think we can. We are both like, I do not think we can do that, but we will stretch goal. We will try it. So that was like three years ago. And then we hit 30,000 and then 50,000. And then by the end of the next year, we hit a 100,000, and that was two and some years ago now we are at 600,000. So, the numbers just kind of snowballed and it is not that I am smarter or different or better. We have got some great GCs in Austin, some really smart builders, but I have committed to sharing my knowledge every Tuesday and every Friday. And that has been rather rewarding for me, such that YouTube pays me really well, and my kids think that it is cool that I am a YouTuber, which is kind of funny.
And now I have started this whole separate company and a separate website, BuildShowNetwork.com where I have got a couple of other builders sharing their knowledge from their job sites as well. And the numbers again are cool, but what is really cool for me is that I can kind of shape the conversation of what it means to build a well-built house in America. And that is the part that gets me really excited and, oh, by the way, it is a second business for me. So, now that I have paid off Chuck, my debt from a couple of years ago, I can actually make some money for a change, in the building world. And so, it is kind of a double bottom line and double benefits to me. Just a quick story, or the long story anyway.
JAMES: Mr. Hillegas?
HILLEGAS: That is super fascinating. I can relate to that a lot cause that’s kind of how I ended up meeting James Benham, was through making videos on the internet and when it came with filming on job sites. And one day I left a GoPro mount on my hard hat. I am doing a 360-camera walk. This was obvious. I took so much heat in the first 30 minutes, there was no camera on there, cause I was not going to walk around a job site with a camera on my head cause I was afraid to knock it off. But I took so much smoke from people like, what are you doing, what is this stupid thing? How did you approach the guys in the field and really get over it? Cause one of the big things that people talk about with, like construction tech is the culture of getting people to use an iPad or an iPhone or an app or a camera or whatever the thing might be. How did you approach the guys in the field? Like, we are going to start filming jobs and that kind of stuff. What was their response and how did you kind of handle that?
MATT: Yeah, that is a great question, James. That happens in a lot of different areas in construction, whether it’s filming a video or whether it’s, hey, I want to do this different type of a weather barrier, or I want to try a fluid applied on this job compared to what we’re used to doing, where we did all peel and stick membranes, whatever it is, you have to go all right, I am the boss. And I really believe in this. And so, you need to get on board. And that is pushing through is really what is done for me. And, to your point James, when you get that flak from people, you just have to shed that and go, it does not matter what you think. And there are no comments to post on podcasts, but I regularly on my YouTube videos or Instagram, but not as much on Instagram, cause it is pretty personal, but on YouTube, I regularly get comments about I am idiot. I cannot believe this guy is teaching people about construction. He is never built a house before. He is the dumbest man I have ever seen.
MATT: Do not listen to this salesman. He is just slick willy trying to tell you…
JAMES: Trolls are everywhere.
MATT: They are everywhere.
JAMES: Which is hilarious because you have spent the last few decades building like yourself. You are doing the building!
MATT: I have been doing it for 25 years and I still get people who are like, this guy’s never built a house before. He does not know what the heck he is talking about. You are like, really? Okay, I have been doing this for 25 years. I kind of know a few things. You can disagree on my methods, but you cannot say that I have never been to a job site before. So yeah, to your point James, you just got to go through it and push through. And for me that’s kind of just saying, alright, this is my moral compass. This is my integrity, whatever it is. Building a better house. For me, one of the things I have always said is, I want every house to be a little better than the last one I built. And I am also not afraid to share my mistakes. And that has helped me a lot on YouTube. People love mistake videos. And sometimes it is other people’s mistakes and sometimes it is my own mistakes. Funny enough, I published a video two, three weeks ago, that was seven mistakes I made on my personal remodel. And that video is skyrocketed on numbers because people wanted to know what I screwed up.
JAMES: Yeah. Two days you posted Worst Built House in America, which I loved. I loved the red arrows everywhere with seriously across…
MATT: Yeah, I am taking a stab at cardboard sheeting that we see everywhere still in Texas. And that one drives me crazy. JB in College Station, I guarantee you, from your house, you can drive 20 minutes or less and find 50 houses under construction that have 2 x 4 walls that have a cardboard sheeting. And I do not want to say the brand name, but there are two or three different brand names that have holes everywhere in that cardboard sheeting, that the trades use a hammer to punch their hole through, not a saw or even a knife. And when they go to patch them up, they may be using a piece of peel and stick that is going to stick the first day and peel the next day. They are not actually being required to get a blower door test, even though it has been in the code for many, many years, for many code cycles. So, we just have really low standards and that type of construction that I was talking about at that Worst Built House in America, we have been doing that for 50 years now, 2 x 4 walls with Thermopylae sheeting, and then all the insulation on top of our drywall.
JAMES: They know their building a crappy house, too. These guys are not dummies. They know they are building crap.
MATT: They know they can do better.
JAMES: It is a moral issue then Matt.
MATT: It kind of is.
JAMES: This is a moral issue. When you know you’re doing wrong and you continue to do it, like you know that people, human beings are going to live in this, and they’re going to deal with severe financial and potentially safety hazard health issues, the indoor air quality, when there’s just massive, massive problems with the way that you built it. And, when they go to sell this house one day and it gets inspected, they are going to get ripped a new one if they have a good inspector. They are going to get ripped a new one on the inspection. The last couple houses I have bought, I like buying houses builders built for themselves to live in.
MATT: For sure!
JAMES: Because the last two I have done in Texas have both been builder homes where the builder lived in the house before I bought it. And because you know they are not going to put their kids in the house if it is junk.
MATT: No, they will pay attention then.
JAMES: Yeah. They will pay attention if it is their house.
MATT: Yeah, for sure. But part of the issue to is, a lot of these builders hire guys like me out of college and I built those style houses for several years, cause I just did not know any better. And I was being told this is a good house, and this is how we build them. So, I just did not know any better.
JAMES: You have had almost half a million views on this Worst Build House in America. Did you just walk into a random job site that you saw and not discuss it?
MATT: Yeah, you can walk it, I mean you guys know, you can walk into any job site in America. No, one is going to… unless it is a 20-story commercial building, no one is going to stop you.
JAMES: Yeah, but you are walking in with a film crew. You got a guy with a camera.
MATT: No, I got an iPhone and a mic hidden in my shirt.
MATT: And I am really careful JB to make sure like we scrubbed the video to make sure there were no names, logos, anything on the builder, cause I am not trying to call out that builder. And there are several national builders build that way. There are also hundreds of local builders that build that way. But again, it is not about that particular builder. It is about the type of construction. And my video that you’ll see published this afternoon is how could we build that same exact house 2 x 4 wall, but do it slightly better such that it would be, a more insulated, a more airtight, a more healthy house, a house that would be better for the trades to work in. It is just a couple of small things and I even break it down to the per square foot of wall costs to do it differently. So, I have got five wall assemblies, that are still standard stick–built, still 2 x 4 construction, and how much that cost more than that house that we visited. That is my video today.
HILLEGAS: Yeah, that video I watched was fascinating. So, I watched that video this morning now. How can we, everyone focuses on making sure cheaper, cheaper, cheaper, cheaper, cheaper, cheaper, but we also need quality to be high. I know when I worked in high school at Carter Lumber, we had a couple of contractors fall through roofs on spec homes, because whatever sheeting they would use, the guys fell through. So how do we avoid this? Cause like you said, people do not know what they are buying. It is like buying… you can buy a Ferrari shell, but inside of it, it is like a Honda engine. It is not a Ferrari engine.
JAMES: Honda engine last longer than a Ferrari engine. Sorry!
HILLEGAS: I am looking at the power!
JAMES: I was going to say! I mean Honda engines; those are good engines!
HILLEGAS: How can we avoid that? Obviously, YouTube is a great thing. I think more people because of YouTube will become aware of certain things and more knowledgeable. And it is a lot easier to do research about really anything you look into purchase before you purchase it. Like I watched a guy’s video on his Tesla, one-year review and he broke down the cost of owning the Tesla, the cost of how much he spent on electric, all that kind of stuff, which in the past you really couldn’t do. So, can you kind of elaborate on that a little bit?
MATT: Yeah, that is a good question, Hillegas. My hope is that more and more people will watch my videos or other videos and get educated on what is a good house and what are some frankly litmus tests for a not very good house. And for me, cardboard sheeting is a litmus test for a no-go. If you are going to build with that builder, I would say do not buy that house.
JAMES: Should cardboard sheeting be banned by code?
MATT: It is currently coded legal, and it should not be. And I do not exactly how to petition Code Officials for that process. I am just the dorky builder in Austin who makes videos, but I do know that people watch my videos and I have a lot of influence over the marketplace because of that, and I am not saying that in an egotistical way, I just mean that people see me as a bit of the Tom Silva type that I watched 25 years ago, a knowledgeable builder. And so I want people to say look, for not much more money, we could build a better house. And my video today, my first assembly, which is not much more expensive as the Switch That Cardboard Sheeting, which currently in Austin prices today, and we called yesterday. That cardboard’s sheeting is $9 a sheet. And OSB at $22 a sheet, plus some white standard Tyvec house wrap at about 16 cents a square foot. I forget the exact number I shot this yesterday. I should know, but it ends up being like, 30 cents more per wall square foot to go to an OSB Sheet house with Tyvec compared to cardboard sheeting in today’s prices. I mean really? 30 cents? And I doubt the labor is much different. It should be really close.
JAMES: But with a massive difference on build quality.
MATT: I mean with a massive difference on build quality. That is right. So why could not we say, hey, I am not going to build with that builder because they are using cardboard sheeting. I am going to go with this builder over here that is at least using a solid wood sheeting like OSB and a standard mechanically attached house rep. That is at least a basic good house.
JAMES: That is that is fascinating. I spent six years in City Council in College Station. And then before that, I was a Planning and Zoning Commissioner. So, I passed a lot of new code and spent a lot of time specifically because of my involvement with the building industry and software and technology, I spent time on that particular issue. And I can tell you, cities do not lead on code. The organizations that issue the code lead on code and cities adopt it.
JAMES: That is really how it worked. We would literally wait as a city, for these international organizations to pass that year of code and they would update it every two, three, or four years, depending on what it was. And then we would adopt it fairly quickly. So, the real fight there, in build quality has to be at the international code level. And that is the challenge is that you have got to sell them because most cities and Austin are not most cities. Austin’s very pro-regulation, but most cities, sit there and wait for the international code council to issue their new codes, and then they just adopt them.
MATT: Yeah. The problem though, JB is that, even though we adopt those codes, for instance, it is code everywhere, pretty much in America, as long as you are at least on the 2015 codes, which most places in America are to get a blower door test. And yet most cities, most counties do not adopt that part of the code and make their builders get a blower door tests. And these houses built with cardboard sheeting, like that one I visited in that video, there is no way that house is going to pass a 5 ACH 50, which is the standard for climate zone two. And when you go up to Dallas, which is climate zone three or higher, you have to go to 3 ACH 50, and there is absolutely no way those houses are going to pass at that standard, which is an even tighter house.
So, all we need to do is really enforce the codes that we have, and we would naturally get better–built buildings. And I am sorry to say that some of the trade groups that I am even a member of, often fight against those getting adopted. And that makes me sad. I wish that builders were the first ones saying, we should have a builder-built house, and this is a minimum standard. And instead, there is this reputation that builders grade means the cheapest legal thing you can do. Not builder’s grade is awesome. When you say something’s commercial–grade, usually that means it is a little more durable. It is a little more bomber, but when you say something’s builder–grade, that means the cheapest thing you could possibly buy at the home center that you can install that is legal in your house.
JAMES: I heard it last week. Oh, that’s builder grade. Why did you do this nice finish out downstairs and builder grade upstairs?
MATT: That is synonymous for cheap.
JAMES: Yeah. Synonymous for cheap and crappy.
MATT: And I wish that, you know that is my logo, is Build. I wish that it meant something different than the cheapest. I wish it meant, hey, this is really high quality. This is going to be durable and lasting. I am going to be proud of this. I am going to drive my grandchildren by this and go, I have built that. And that is what I am going for. And I think more and more people in America are going for that. My videos would not have the kind of views that they have if people were not interested in better build. So, we do that in everything else, just like, James, you were talking about that Tesla. You are researching the vehicle that you might want to the nth degree. Why are we not doing that with the houses that we build or that we buy?
HILLEGAS: No, I definitely agree. I guess to elaborate further on the cardboard sheeting, how can you, let us say when you are going through a house tour with a realtor or whatever, how can you short of punching a hole in the wall, are there ways that people can look for certain things when they’re walking through a house, versus obviously… there’s obviously destructive testing so to speak, but is there anything they can do from a walkthrough standpoint…
MATT: To know how it is built?
HILLEGAS: Yeah. Cause that is one of the toughest things that is behind the walls. So, just got to look good on the outside, like you have talked about earlier in the show.
MATT: Yeah. That is the problem, man. Once your exterior claddings are on and your sheetrock it on the inside, without ripping something apart, you really do not know. But if you are buying a new house in a new home community, you can pretty much see how all the other houses are being built. And if they are being built with solid sheeting, OSB, or plywood with a mechanically attached house wrap, or the, let us say they have zip sheeting on the outside, you get a bitter built house than a house being built with the cardboard sheeting. So, you can kind of get a flavor for the neighborhood and for what that builder’s doing currently, but you are right. It is hard to know. And it also depends on how much exposure the house has. So, in Texas, we have a lot of ranch–style houses. That is what I live in the 1970s, ranch–style house, one story, two-foot overhangs, everywhere, hip roof.
So, with that, even if you built a crappy house and for instance, my house has Thermopylae sheeting from the ’70s. There was no thought to sill pans, but yet, I have got a giant golf umbrella over my house. Well, if you have a golf umbrella, it kind of does not matter what your raincoat is. I use this example all the time. But take away your golf umbrella and built a modern house, modern spec house, well, now your raincoat means a lot because that is your main waterproofing. And so that is another issue I am seeing as more and more production builders are doing these more and more modern houses with six-inch overhangs or no overhangs or one-foot overhangs, two–story house, six-inch overhangs.
Well, that means the first-floor windows are getting drenched when there are any wind and rain. So now it makes a big difference what we do for our weather barrier for our sill pans, for all these other things, it means that those houses usually when you remodel them, 15, 20, 30 years later have a ton of rot in the bottom foot because of splash–back. That six–inch or foot overhang drops the water onto the grass, it splashes back onto the brick or under the siding, and that bottom two feet get wet. And now there is a bunch of rot on the bottom of the house. So, it is really about exposure, and we are not building low exposure houses anymore. There are hardly any houses that are one story with two-foot overhangs anymore. So, if we have higher exposure houses, we need to go to better methods. Ultimately water is your number one enemy for durability, for a house that is where 80% of construction defect litigation comes from, we should be experts in water management as builders. And part of that water management needs, starting with at least a minimum raincoat, which is not cardboard sheeting with a waxy coating on the outside.
JAMES: All right. Let us wrap our conversation, by talking about technology.
MATT: Sounds good JB. Sorry to get into the building side.
JAMES: No, do not apologize. This is technology. I say technology as if what we have talked about is not technology. Materials are technology. It is technology. My business partner and I listened to the same audiobook at the same time all the time, so we always have something to talk about out of the books we are listening too.
MATT: That is smart.
JAMES: And right now, we are going through the biography that was written on Elon Musk. And we are really enjoying it. We just finished, by the way, if you have not listened to it or read it, Robert Iger’s book Ride of a Lifetime about his time at Disney, which was just phenomenal, just really good. And then we moved on to Blink by Malcolm Gladwell, that will make you question everything about the way your brain works.
MATT: I love that book.
JAMES: Oh, it messes with you so much. So, I am listening to the bio on Elon Musk, and the disturbing thing out of that bio is not disturbing about Elon Musk. It is disturbing about all of us. That the greatest minds in technology and innovation are really, really focused on enabling people to upload short videos of stupid things they are doing i.e. Tik–Tok and, getting people to click on ads. Like if you really look at the greatest minds in technology are focused on how do we get people to click ads? And how do we get people to publish seven seconds of them being idiots. They are not even publishing quality content, like what you are doing. We are talking about probably just time–wasting that is what Musk was saying is that, and it is not just Musk, there are the people that are around him, want to get innovators back to solving problems that actually matter for humanity, because for the last 20 years, we have been a little distracted by our shiny new objects, and that is what struck me during our conversation just now is we are trying to solve things that really matter. Like how do we use better technology and process to fix your home. Not like how do we use better technology and process to get you to click on this ad on this little screen that I want you to click on.
MATT: The biggest investment of your whole life. They will actually go up and value over time.
JAMES: Yeah, one of the only things you will buy that will actually, you could sell for more than you paid for it. And as I am going through this book, I am like disappointed in humanity right now. In myself, a little bit cause I have played into this, that we are not spending enough time tackling the problems that really matter.
MATT: Yeah, and totally agree JB.
JAMES: And I just want us to matter. So, let us talk about technology, and it can be any kind of technology that you are excited about for home building. Whether it is new materials, new software, new hardware, new lasers, whatever it is. What is the technology that you are really geeking out on right now in-home building?
MATT: Yeah. I spend a lot of time on the… we kind of ended on the water issue and I’ll bring that one up because the technology that I have is available to me as a builder today compared to when I started my business 15 years ago, or when I got into the business 25 years ago is vastly different. The guys at Huber make a product called zip sheeting, which you’ve probably seen if you’re in Texas. Pretty popular Texas product. It is a higher grade OSB that has a green water and air barrier facer, already pre-applied. So, when the framer shows up and shes the house, he nails through that sheeting and makes a break in it basically. And they have got an incredible family or products, both tapes and fluid applies, which is, that’s kind of a nerdy term. It is basically like a really fancy caulking, that you can use to both air, seal, and waterproof. And so, now a builder who hardly has any building science knowledge can basically take a product off the shelf and build a house that is incredibly waterproof and airtight with just common things that are available at McCoy’s Lumber or BMC or any local lumberyard.
You do not have to order it in from the internet. It does not have to come from Europe or some crazy far off land, and it does not cost an arm and a leg. And it also does not change the process from standard kind of stick construction, which we have been doing for the last 300 years here in America. There is of course more expensive and more bomber products as well. And I use those, often as well, but this kind of whole category of integrated weather barriers, peel and sticks, fluid applies, we did not have those 25 years ago. They are really easy. There is no origami involved with fold this and then put this on first and then do that layer and then do this layer, with the flute applies or the peel and sticks, they really make it easy so that we can build a really waterproof really airtight house. I am building a house for my family right now that is being built to the passive house standard, which is this German standard that now we have adopted in America. And we have changed it a little bit, depending on what climate zone you are in. But my house will be 90% more efficient than my neighbor‘s houses.
MATT: 90% more efficient than my neighbor’s houses. 75% more efficient than a standard code-built house. I will be able to coast for long periods with hardly any heat or AC at my house. And I will just sip a little bit when I need it. I am going to do a small solar array that will power my house down a net–zero. I am talking to Generac, about a small battery array, which is basically a competitor to Tesla solar wall. So, at nighttime, when my solar goes down, if the power goes out, I just get the energy from my battery that is in the garage. And in fact, I probably could disconnect my house altogether from the grid, if I wanted to, because I have built it so efficiently and I am doing it with standard methods standard 2 x 4 stick framing.
All I have done is varied how I put those things in just a little bit. And that is the thing that gets me excited is this technology JB, which is not that entertainable, it is really just being smart about the products and smart about how we put them together and how we frame it. But my framer is not some prefabricated panelized sips construction. We did everything on site with kind of standard materials and I will use 90% less energy than my neighbors. And oh, by the way, it will be very, very healthy air, it will be dehumidified air. And I have got a fresh air system that puffs in air into all my kids’ bedrooms. So, at night I have got filtered fresh air coming into their bedrooms, right near their bed all night long.
JAMES: Man. That is amazing. That is what I’m talking about. That is tech as much as an app is tech, as much as anything else is tech. That is tech that actually has a long-lasting multi-decade impact on a building and the structure. What is frustrating is how long we all know this is going to take to actually adopt. Worldwide. Industry-wide. Countrywide.
MATT: I am working on that. One YouTube video at a time.
JAMES: Yeah, exactly. When you do video and 600,000 views at a time.
MATT: That is right. I hope so.
JAMES: That is awesome. Let us move on to the news. Before we move on to the news, just a quick reminder. JBKnowledge Podcast Network. Feel free to listen to our other shows. We have the InsureTech Geek if you are in risk management at a construction company, and you want to talk about insurance, risk management, all that kind of stuff, listen into InsureTech Geek that publishes every week as well. Onto our news. Mr. Hillegas, what do you have this week for us?
HILLEGAS: Our favorite topic SpaceX and Mr. Musk.
HILLEGAS: But not only did the astronauts come back. He follows it up today with launching more Starlink satellites, 57 at, I believe it was like 2:12 AM Eastern time is when they were released. So, it seems like the last time I was on the show with, Mr. Daly from StructionSite, we covered the launch, which was, I think two months ago, roughly with the astronauts. And now they are back. So just kudos to Mr. Musk and, keep it up!
JAMES: Yeah, it is really amazing. Again, talk about a guy who is solving problems that really matter. His life purpose is for humans to colonize Mars, which is pretty amazing. And unlike most people who say that this is life purpose, he is actually doing something about it. The Crew Dragon Capsule was really hinged on this landing. And again, why are we talking about this on the building technology show? Because space impacts construction all the time. Okay. Technology that is used in the outer space is brought back to earth all the time. So, this does matter for us, secondarily, we are going to have to use a lot of building technology to colonize Mars and the moon. We are going to start with the moon. Move on to Mars. The Crew Dragon mission was not complete until you safely return those two people. And if you did not look the picture when they arrived, remember there were two extra seats in this Crew Dragon Capsule, where people could have come back and I just love, and Matt, you appreciate good design as much as anybody else. I love that. There was a photo I posted on social media a few weeks ago of the original rockets that the United States launched and their control panels, and then the space shuttle and its control panel, and which had like 5,000 buttons and 20,000 gauges. And then the SpaceX Crew Dragon Capsule that had three screens. And that is it.
MATT: That was such a cool picture. I remember that. It was incredible.
JAMES: It was like, holy crap! He completely revolutionized the user interface for these rocket ships. So really exciting seeing the technology and software they are using, because these are really autonomous ships. Bob and Doug, the space dads who are everybody’s favorite dads with all their dad jokes, safely landed off the coast of Pensacola. I am a pilot, so I love flying. I will say I saw something on my air charts for the first time in my entire life. Cause I was born in 1979. I saw a splashdown TFR. That is a splashdown temporary flight restriction, which is a diamond with a circle in the middle, which means you cannot fly in this area for this time because there is a ship that is going to land in the water there.
MATT: Oh, that is wild!
JAMES: So, it was super cool seeing a splashdown TFR on my air charts. That was the first time a splashdown TFR has been laid out since 1975. Bob and Doug safely returned, they are back on earth. The mission was a wild, the raging success, and he delivered them to space for 30% less than the Russians. In the book I am listening to by Musk, he said he would not be surprised if the Russians eventually assassinated him. And I agree. The Russians have a routine habit of subtly assassinating or not. So subtly assassinating enemies of the state. They are very upset right now because he is decimating the multibillion-dollar revenue line they had of launching things on that cramped piece of junk Soyuz capsule that goes up into space, every week where they were crammed in like this, and it is appalling that what we have done, and we have had to send people to Kazakhstan to launch them into space. They are being launched and retrieved in the great state of Florida, and it was exciting news. So, James, I am glad you brought this up, cause I am pumped up about what he is doing, but for construction companies, and Matt, you got to be excited about Starlink because pervasive multi–gig internet being available anywhere, anytime on any device is huge for home builders.
MATT: Incredible. I just started a ranch job yesterday, about an hour outside of Austin. And we are having to use satellite internet at $180 a month for construction. And I forget the speed, but it is like low overall speed.
JAMES: Yeah. And he is talking about gig to 10 gig internet through a dish about this big, about the size of a plate, that is going to be delivered through hundreds… Now he already has hundreds of these satellites. Of course, the whiners are already complaining. Ah, the satellites are getting in the way on my view. So, what he has been doing is he has been paying them. It is like the ultra-black, super dark so that it does not reflect any light back, so that has actually been a problem because he is going to have the largest constellation of satellites by far. The previous or the network you are using is probably a Radium.
MATT: I cannot remember, but it is a crazy expensive.
JAMES: Yeah, it is either Radium, or there’s a couple of them out there. HughesNet and Radium. So, you are using something to get internet. I have a sat phone. I have not a Radium satellite phone. And it has 66 satellites and the bandwidth sucks, and it is problematic. He is killing it. He is absolutely killing it.
So, that launch, I tried to stay up for it, but I just fell asleep at like 23:30. I could not make it, but it was through a Falcon 9. He did not do the Falcon Heavy. I enjoyed the Falcon Heavy launch when he threw like 300 satellites into space simultaneously off his heavy rocket. And then he had the twin rockets land together at the same time. That was amazing. So, he is a space builder, Elon Musk. What else you got Hillegas?
HILLEGAS: Number 2, another impressive feed. Allegiant Stadium was finished up on July 30th.
JAMES: Just in time.
HILLEGAS: They finished the job on time and on budget, according to what has been released. So obviously there are no games going to be played in the stadium for its first year, but 200 engineers, an impressive project for just shy of $2 billion to be finished like that. And I think it is going to be a wildly successful case study in the future, as more things come out of how the job was running with the use of technology to manage that many moving parts. Most jobs like that traditionally just go over budget and over schedule. Either one or both, so I think an impressive feed will be… It will be good to see more come out about it probably I am guessing, Autodesk University or wherever else it will come out, so, that’s an impressive job.
JAMES: Yeah. Now you are saying it is not going to be used. What is the latest on the NFL game situation?
HILLEGAS: I don’t know the specifics of the NFL, to be honest, I’m not paying that close attention because it could change again by the time we finished the show, but they said when they got this, according to the article, obviously, so this is what the article says, they got the permits or the occupancy on July 30th, and I think three days later, the Raiders organization said they are not going to be having anybody in the stadium. It will be an empty stadium for the 2020 season.
JAMES: But they might be playing the actual game there.
HILLEGAS: They might be playing the games, correct. But the stadium would be empty.
JAMES: Ah, that is brutal.
HILLEGAS: But they should let two fans in. One from each team so they can just yell at each other entire time.
JAMES: I want to point out that in little old round rock, Texas, that is right, just North of where Matt Risinger is in round rock.
JAMES: They are playing minor league baseball games right now and they have fans in the stadium. So, they are closing every other row. And they have these big ropes around the center section. So, everybody is like 8 to 10 feet apart. You have to wear a mask when you are moving around, but once you are seated, you can take your mask off. So, I want to point out that people are holding games and having fans in the stadiums right now. We will see, obviously, we are going to see when infection counts, but the College Station, I know the Bryan College Station numbers have gone down. The daily infection rates have gone down, and the hospitalizations are down. Death rate is slowing way down and the infection rate is way down. So, it is interesting to see. National news is fine. I am looking at the local Health District publishes their numbers and it is significantly better since they started their mask mandate.
Also, interesting news this week came out on COVID that like evidently getting the cold,
provides some of the same immune response needed to battle CORONA virus. And so, they have found that people have the right tools to fight it if they had a cold this year. So, it depends on the type of cold you got, but all kinds of fascinating stuff going on. That is a beautiful stadium, Allegian’s. Gorgeous, beautiful, amazing stadium. It is like the Bugatti of football stadiums. It is amazing looking and extremely complicated.
MATT: With a Honda engine.
JAMES: With a Honda engine! I was looking at an old school, 95 Acura NSX this week. And one of my friends has one. Still runs like a champ. Got a Honda engine.
MATT: The Supra. That is my next car. I like it.
JAMES: Are you going to get the old school Supra? The new one or the old one?
MATT: Yeah, the old Supra’s. That is my… I grew up in the ’80s, so I was driving in the ’90s. And those old Supra’s were so cool. The fact that they come back around again is pretty awesome.
JAMES: I know, but the new Supra, all it is, is a BMW Z4 for wrapped in super skin.
MATT: Yeah, but it is still a Toyota.
JAMES: It is still Toyota. And they did some nice styling on it and it is a different drive train.
MATT: I like that it is different.
JAMES: Yeah. It is different. It is different. Okay. What is your last one, James?
HILLEGAS: Last article, but I want to say we should have a roadshow at the stadium in Las Vegas. Just a suggestion.
JAMES: When we get back on the road again, yeah.
HILLEGAS: And the last one is Hilti’s Exoskeleton. So, it looks like Hilti released their exoskeleton. It is going to be in Sweden first, according to the article, the US later. It is mainly focused on the interior or indoor portions of the construction work, so drywall maintenance, interior finishes, overhead systems. So, I might have to reach out to Trevor Owen to see if we can get one, to try out.
HILLEGAS: It will be sweet, to see him coming around. I have not really talked to anybody that has actually used one, and I tried renting one in the past from United Rentals, but I could not find anywhere to easily even rent one, so …
JAMES: Yeah. So, I have worn a few exoskeletons. These are really, really cool. Matt, I would love to see you try these out with some of your trades workers on your job site and publish a video on it.
MATT: You know who had one on display at the International Builder Show this year? I cannot remember. I was not able to get some video at that booth. But I think Fine Homebuilding did. Go to their site and check that out.
JAMES: I think it would be great for you to give it a shot and try it yourself and see what you think of it.
MATT: I think it is awesome.
JAMES: Because these are really neat. The ones I have worn do not have a battery; they are not powered. They enable you to hold your hands above your head and work overhead a lot easier. They enable you to squat down and lift. They increased my lifting capacity. And I only know that cause I actually measure my max deadlift as Mr. Hillegas does too.
MATT: We should take y’all to the gym, see if we can get some CrossFit going boys.
JAMES: I had to beg out on that note, I had to beg out at CrossFit. Just to be really clear. I go to a CrossFit gym virtually, but I do lower no weight training because CrossFit shredded both ankles, left elbow, right shoulder. I did CrossFit for like 7 years. I loved it. I got super lean, super ripped. And then things started tearing. And a couple of ankle surgeries later, and some other things, I actually had to beg off of CrossFit itself, like just pure CrossFit, which is high weight, high intensity, high rep count. Unfortunately, it tends to overstress joints and they get torn up.
MATT: I just do old man CrossFit, which is really low weight so that you do the women’s workout pretty much.
JAMES: That is what I am doing today. I did already do my workout today and I did a whole bunch of like clean and supersets, bare complexes. But I did it with like a 14-pound medicine ball.
MATT: There is nothing wrong with that James. When you are in your 40’s brother, you can do whatever you want. You do not need to do the men RX. I can tell you that.
JAMES: Oh no no, men’s RX is like, everything is going to break down.
MATT: I do not do that.
JAMES: My hands are no longer callus to heck. I have started playing guitar. So, I finger calluses. Onto my news. Traveler’s Insurance wants to pay you to use Procore. This is out of Construction Junkie. And look, you are starting to see this… the real prime mover in the space was AXA. AXA XL rolled out an insurance program that is so cool. But their construction ecosystem basically ties the usage of technology to your insurance. And Travelers are doing something pretty similar. They are offering their customers a 20% discount on their first year of Procore so, this is important, cause you are starting to see a linkage between insurance companies and construction software because insurance companies are recognizing that builders that use good technology properly, turns out they have a lower risk of project default, and they have a lower risk of errors and omissions claims because everything is being tracked like they are tracking their RFIs and their punch lists, their work orders, they track everything online, and it turns out they do a better job building and they have a lower risk of a claim. And so, you are starting to see insurance and construction linked at the hip. So, go check this out. If you are Travelers customer, and you want to be a Procore customer, if you are already a Procore customer, just go check out the connection. You are going to see more of this. You are going to see more connections between insurance companies and builders.
JAMES: Matt, as a building company owner, you got to be excited that you might get a break for being tech–forward.
MATT: I mean, it makes sense. I am a BuilderTrend user, which is a more like a residential version of pro… Procore’s awesome. Very commercial focused. But I definitely see among the builders that are using BuilderTrend, they are much more organized. Their projects run smoother and that would make sense that would get a discount.
MATT: Based on being a more elite group of less risky builders.
JAMES: Correct. And it is real. The risk reduction is real in the usage of technology, so it does not just drive return on investment and staff savings and labor savings and hard cost savings, it also drives down your risk. And now you are seeing that you are going to get some premium relief because the insurance companies are recognizing that you are at lower risk by adopting technology. So yet another reason to buy tech folks! Not just for the sake of tech, for actually getting better.
Next. 32% of IT budgets, I thought this was important. 32% of IT Budgets will be Cloud-Based by 2021 and will be dedicated to the cloud. That is a better way of putting it. 32% of budgets would be dedicated to cloud computing by 2021. And so, we have seen enterprise cloud spending uptake like 59% over the last two years. It has been a huge, huge swing. And COVID has stepped on the gas, big time on this, because builders who, and companies, let’s talk about companies in general, who had on–prem computing have been getting pummeled through COVID as they had to go work remote and builders who could instantly work from anywhere, it does not just work from home, it is really WFA work from anywhere, had a much easier time of being able to continue work immediately. Obviously we are a software company, but we also use a lot of cloud-based technology that allowed us to instantly go work for anywhere for our workforce. And it is proven to be invaluable. And so you are seeing, a full third of IT budget.
And look, we have a ton of listeners who are IT Directors and CIOs at construction companies. Cloud adoption has been skyrocketing for the last decade, but this year COVID has put a serious foot on the gas on cloud adoption. Matt, you know BuilderTrend is partners with the American Home Builders Association. And so, they have this connection there and they are really kind of the Procore of Home Builders. They have done a really good job of bringing Home Builders cloud–based. What has been the biggest pain point for your building company from a data sharing? Are you already on all electronic plans or you are in all electronic specs? If not like what has been the big pain point?
MATT: Yeah. We are a 100% cloud–based and we are a year before COVID so that has been an easy transition for us. So, we are Dropbox enterprise. We are BuilderTrend and we are QuickBooks in the cloud.
MATT: So digital plans though, that has been a little bit harder for us. We still like a paper set of plans on the job site. And we do have iPads deployed for everybody, but we do not always use that for every plan set. Just, it is really nice having a piece of paper sometimes on a job site and reviewing that and not worried about that dropping or getting broken, so that is one thing that we have not totally gone digital on yet, is plan sets. I suspect that will happen in the next five years. But we are not quite there yet JB.
JAMES: So, it is interesting. I am excited that a byproduct of a very bad situation is that companies are going to get much more efficient and much more effective. Remember, you can efficiently suck. I always tell this to all of my clients; you can efficiently suck. You can be efficient, and you can achieve the wrong outcome. So, you should not just go to the cloud to be in the cloud. In fact, I was dealing with a company yesterday. I kept asking what software they were using, and it said we are in the cloud. Okay. Well, which technology, which tools? Oh, were cloud–based. Okay, but which… I am like, the cloud is not… that is just a method of delivery! It is not the actual…, like help me understand what technology you are using, please. So, it is good to see budgets shifting up into cloud computing.
Last news story. And they are not the only ones doing it. And Matt, I am sure you have seen some really interesting innovations around architecture with computational design, where you actually have computers generating the design. So, you have computational design and generative design. Generative design, you have seen with like furniture for homes where people are doing these wacky designs, where they let the computer design the optimal chair and like generative design chairs are wackadoo. I mean they are wackadoo, but they use the least amount of material and they provide the most amount of strength and they look nothing like the chairs we sit on every day.
Computational design is a little different. It is where you program a piece of software to run through dozens of iterations, hundreds of sorry, dozens of millions of iterations, and to come up with optimal designs. And this is actually at Tech Crunch. And so, it is hitting some main mainstream. Social Construct. And they are targeting home building Matt. And that is why I thought this was a relevant article for you. They handle everything from design to execution. So, they are only leaving the actual in–person work to construction contractors. This is like a big move on prefab. And so, they are optimizing layouts, they are laying cables and pipes below floors instead of in wall. So, they are doing everything below the floor. And they are standardizing all the pieces in the assembly. And they are trying to reduce the cost of construction of a building by 20 to 30%. And this is a Y Combinator company, so they have some Valley money behind them. It is a non-builder who got into computational construction and he said, look, how do we build a home as precisely as we build an airplane or high-end car. And he has been watching the prefab efforts for the last 50 years that have been going on, and they have not been nearly as successful as we all hoped they would be.
And so, thankfully the founder here is trying to avoid using the word AI. He even said I am trying to avoid using the word AI, this is really computational construction. This is really exciting. There are really three aspects if you read this article. It is prefab assemblies, so there’s wall with kitchen cabinets, wall with holes for shower fixtures, lighting, and so on. So, they have got a hundred types of assemblies. The pieces can be carried by a single person or at most by two people and it can snap into place on the framing. It has in the floor, and this is wild. If you look at the pictures, all of the power data water is all under the flooring and does not run in the walls. The layout is calculated to minimize the possibility of variants and measurements of construction to deal with the potential for errors on installation, and all of the infrastructure has been moved under the floor, was their big point. And so, you can actually pull the flooring up and get that done. So pretty neat stuff. Matt, please tell me your thoughts.
MATT: Man, that is really interesting. We are doing that in a more human–generated version, but we are doing full MEP plans on about 80% of our projects where we have Uponor design their logic piping in conjunction with a 3D set of framing plans. We are having our full MEPs done with positive energy. And so, we know exactly where every duct is and exactly where it goes it goes in the framing. I do not know how it relates in terms of the software designing that. But I do have one interesting picture that sort of relates to this. This is a boat dock that we just finished this past year and boat docks on Lake Austin, have a requirement that a certain amount of screening is between you and your neighbors.
MATT: And in this particular place we needed that, I forget what it was, 80% open or 80% opaque, whatever the term is. And so, the architect on this project, MF Architecture, a UT professor, ran a software program that generated this random pattern on that steel, if you can see it.
MATT: And then we had that all laser cut and installed on the job site. And it is a little hard to tell on this, but the computer-generated pattern was really cool, and it met what we were looking for. And so that’s kind of a version of what you are talking about there.
JAMES: Yep. It is an exciting future for computational design and moving things out from under the floorboards. You heard it here. There are going to be some really interesting prefab assemblies coming out to check out. So, go and check that out. And that is all the time we have the day. Matt Risinger. You have been an awesome guest. Go check out his YouTube channel. You will love it, Matt. Thanks for joining us.
MATT: JB thanks for having me. Hillegas, thanks, brother.
HILLEGAS: Always a pleasure.
JAMES: Good to see you, Hillegas. Even with that Cleveland Brown shirt on.
HILLEGAS: This is not a front runner.
JAMES: Appreciate all of you for joining us today. Again, this has been episode 230, our interview with Matt Risinger from Risinger Build. Join us next week, episode 231, Boris Germanov from Civalgo. Remember to check out all of our new stories and, our newsletter at JBKnowledge.com or text ConTech to 66866. Big thanks to Jim Greenlee, our podcast producer, Kara Dalton-Arro, our creative producer, Adele Waldeck, our transcriptionist and our ad coordinator, Tish Thelen. Go to TheContechCrew.com to listen to this show. This is the ConTechCrew, signing out until next time! Enjoy the ride and geek out!