Ray Levitt has been deeply involved in construction from his earliest summers as a rebar worker to decades as an academic at Stanford, to his three startups and now, as operating partner at Blackhorn Ventures. Ray shared some refreshingly clear and actionable advice for startups of all kinds, as well as some specific thoughts on what construction technology startups face. We end with some great thoughts on where the industry is headed.
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[00:00:00]Hugh Seaton: Welcome to Constructed Futures. I'm Hugh Seaton. Today I'm here with Ray Levitt, operating partner at Blackhorn ventures. Ray, welcome to the podcast.
[00:00:10]Ray Levitt: Thank you Hugh, it's a pleasure to be with you.
[00:00:13]Hugh Seaton: Ray, I'd like to start with your background because you've just done some amazing things and I think it adds good context for the rest of the conversation.
[00:00:20]Ray Levitt: I'd be happy to provide some background. I was born and raised in a construction family in South Africa. My dad was a structural engineer and also ran a rebar design supply, install consulting specialty contractor. And I was on projects with him almost from the time I could work and I got to love construction growing up.
In high school, I worked at several trades, I was a carpenter one summer. I was doing the rebar tying another summer, which is not a job I particularly would encourage others to do. I got sunburn and burned out my hands from handling steel in the South African sun.
[00:00:57]Hugh Seaton: Builds character though.
[00:00:59]Ray Levitt: ...and nicked by the wire... definitely builds character. In any case, I went to college to do civil engineering as a solid background for a career in the industry.
And during my summers, I worked as an assistant project engineer, then a project engineer, and then an assistant project manager on a small airport project. For a variety of reasons, mostly political, I decided to leave South Africa in 1972. And, as my immigration path, I decided it would be great to be in a master's program and meet a network of people.
So I was lucky to be accepted in Stanford's construction management program for a master's degree. I moved to California, completed that master's degree and then took a job in the industry. It was in Canada, actually, where I could find the job I was most interested in. I worked for a Kiewit subsidiary called VK Mason on a waste treatment plant.
In the middle of that summer, Richard Nixon's wage and price control program caused shortages all the way up into Canada of things like steel and cement. The US steel companies were shipping all their steel to Japan where the prices were not controlled. My project shut down. I did not have a work permit for Canada, it was only for this job. I ended up, after some discussion, going back to graduate school. My professor told me they had a grant from OSHA and he could support me to study construction safety, which was an interest of mine. So I went back. But I didn't realize that by getting into a post MS program, leading to a PhD, I was basically disqualifying myself from employment in the industry, because people I talked to looked at my resume and said, you know, a PhD, you want to be a professor, don't you?
So the long and short of it is I became an accidental professor. First at MIT for five years, where they were launching a construction management program, and then a position opened up back at Stanford. I moved back in 1980. And spent almost 40 years on the faculty at Stanford.
Because I was an accidental professor, I also was really interested in construction startups. And so I actually launched three startups during my time at Stanford. First one was a failure, which in Silicon valley doesn't mean you're a loser. It means you're experienced...
[00:03:16]Hugh Seaton: notch on your belt.
[00:03:17]Ray Levitt: One of the unique cultural things about Silicon valley, that others in Scotland in Silicon Glen, or in Norway in Silicon Fjord find difficult to emulate - if you fail,you sorta get a red spot on your forehead and you're uninvestible. In any case, following the second and third startups, which were more successful, one actually led to a public company. I became an angel investor was one of the very first investors in PlanGrid, which turned out very well. Some others that were moderately successful.
And then, at the time I began teaching a course on entrepreneurship and civil engineering with some colleagues. And in the course of that met the founders of Blackhorn ventures who were planning to target three sectors, one of which was construction. And they offered me a position as a partner in the fund to help lead their construction tech investments.
And I was about ready to retire from academia, so I did. Joined Blackhorn when they launched their seed fund in 2017. And that's basically how I got to where I am and up to now, I have helped them with selecting and diligencing and investing in 20 startups in construction.
[00:04:32]Hugh Seaton: Wow. Well, thank you for that.
That's pretty amazing. I want to spend one second on a comment you made a second ago about, startups overseas. It isn't really the whole point of our conversation today, but one of the points that you brought up is how America treats failure on a couple of levels. One of them is the fact that you've done it before means you've made some original mistakes, but the other one I think is, bankruptcy law, right?
Like I think one of the things that really sticks out in the US as why we are so good at starting up companies is you're also able to start again without having to pay it all back. And I've heard some stories about European countries where you owe the money that was raised, is that, is that something you've come across?
[00:05:14]Ray Levitt: It is.
And there's one other thing that's unique to California as a state, even within the US, and that is during the gold mining era, the state passed a law that basically invalidated any non-compete agreements that an employee would sign with an employer. And so this was to allow people on gold mining claims to work for another claim if their owner of their claim was not treating them well. And that law continues today, which means that if you've been in a startup that involves electric vehicles, it doesn't stop you going to another one. Of course, you have to be careful not to take with you proprietary information or client information, but there's no way somebody can stop you working for a competitor provided you're ethical about the way you make the transition.
And that creates a lot of churn among companies, which sort of distributes knowledge and creates a broad ecosystem. That is very difficult again for other people to copy.
[00:06:08]Hugh Seaton: I love that. There's actually a guy named Alfred Chandler, Who's sort of the father of the business case, wrote a book, a couple of them, and he used to use the word integrated learning base as a means of kind of local clusters and so on and so forth. And I think that's really exciting, I love talking about why areas are successful and you know, why a startup might choose to go to one place versus another other than the obvious economics of costs and wages.
[00:06:34]Ray Levitt: So, you know, at this point Hugh, it's still easy to start a company in Silicon valley. There's a wonderful ecosystem of angels and early seed investors, late seed investors, A and B round investors and then mezzanine investors who can put up serious money to grow a company up to an IPO or an acquisition.
The problem is it's so expensive to operate here that as soon as you employ 10 or 15 people, it becomes very costly to be located. So what we see are firms starting up in California and then moving to Denver or to Austin, or to a number of other places that have lower living costs, lower taxes, et cetera.
[00:07:11]Hugh Seaton: Yeah, when you grow up to a certain point where you're thinking about P & L's instead of investment rounds, it starts to be a different proposition, right?
[00:07:20]Ray Levitt: Absolutely. And a number of our companies, even if they remain based in Silicon Valley, locate their development teams elsewhere, and I would say that COVID has been a booster for this idea of having an outsourced company or a virtual company with people in Ukraine, in Canada and in Finland and Estonia, wherever there's talent and it's less expensive than the Silicon Valley. India of course has played that role for a long time with larger firms.
[00:07:48]Hugh Seaton: Right, so let's transition to where you think... COVID is a nice segue. The context of construction software and construction software startups is always changing. Procore, you know, their IPO obviously had an impact on the attractiveness of the sector, but where do you see things now?
And this is a big question, so take it wherever you'd like to go, but where do you see the, the landscape? Right now?
[00:08:12]Ray Levitt: Well COVID is still creating a lot of uncertainty for a number of firms. And we have seen sales get slowed down for some of our portfolio companies. We've actually had to bridge some of them during the earlier stages of COVID to get them to the point where they could justify a higher valuation in a new round.
And that uncertainty remains with this Delta variant, because it's so bad in some parts of the country, especially in the south and the Midwest, that it's having an impact. But some of our companies have actually even pivoted to offer solutions, for example, to help do COVID check-ins or to measure social distancing, using helmet mounted, locating devices, and so on and so on.
But in general, it's definitely slowed down things and created some uncertainty.
[00:09:01]Hugh Seaton: Do you think that there's going to be a bit of a boom in, I mean, infrastructure aside, which who knows it's something will happen at some point presumably, but there's a lot of commercial real estate that is going to need to be revalued and re-looked at right? Like New York has, God knows how many square feet of commercial real estate, where the fundamental economics don't make the sense that they did three years ago. I mean, I worked at a software company in Midtown and the number of people we had on top of each other is just, I don't think people are going to be comfortable with that for quite some time.
[00:09:36]Ray Levitt: I'm quite sure you're right. And a number of companies have figured out that people can be quite productive at least part-time working from home. And so the amount of office space they need, if they set it up as so-called hotel space, where people can just check in with their badge and then if they have a telephone, that's not a cell phone, it'll ring at their desk and their data will be accessible to them in the cloud, wherever they are in the building.
So people just pick an empty desk at work when they're in there, the company needs... totally they need less space, but the space they have has to be reorganized. We've also seen startups that are looking to do things like convert to certain kinds of offices that have the right base size and footprint into a multi-family apartments.
And we've seen earlier during the boom of Uber Lyft and so on where people were not driving to work anymore. We saw people converting parking garages into same-day logistics hubs, things like that. So I think there will be a lot of opportunity for retrofitting office buildings.
My daughter-in-law works at Google and I know that they are postponing back to the office...they've postponed it several times now.
And I don't think they're going to expect everybody to be in the office.
[00:10:50]Hugh Seaton: That's a tough one for them to get right isn't it?
[00:10:52]Ray Levitt: It's very difficult because they don't want to make their employees sick and they have these super talented employees they want to keep engaged. But I think for a lot of people who are outgoing, it's really nice to work in an office with other people and to have physical contact.
I went to my first conference in 18 months, a few weeks ago, at BuiltWorlds. And it was just exhilarating to be around real people, you know, not looking at them on your screen.
[00:11:16]Hugh Seaton: Yeah, I had the exact same experience. I went to this advancing AEC tech, same kind of thing, also in Chicago, and it was just, I almost didn't care how good it was.
I was like, oh, just hanging out with people and, and shaking real hands, and so on. [It] was just really lovely.
[00:11:31]Ray Levitt: Yeah. You know, we've had to invest in a number of companies where we've never actually met the founders face-to-face and so far it's worked reasonably well, but we sure don't like to do that.
[00:11:40]Hugh Seaton: Yeah. Yeah. “Here, take this check. I know I've never met you, but I'm sure we're okay.” I mean, you have so many ways of getting to know somebody, but it is nerve wracking a little bit.
[00:11:52]Ray Levitt: We like to see the team dynamics when the whole team is together, you know how they defer to each other or don't, how they respect each other with different opinions, you know...circulate. We'd like to see those things live, but we've had to do it all on Zoom.
[00:12:06]Hugh Seaton: Yeah. I mean, everybody is, right? So at least there's no competitive difference there. I'd ask you also, having assessed, spoken to and successfully invested in a number of startups and run your own, what do you think are some areas that startups, let's just focus on construction, that you see, they often miss.
I mean, are there patterns you see in how, let's assume it's early-ish stage, but, but around when you normally see a company, so they're not friends and family, they're not figuring their logo out, but what do you see in terms of patterns that you wish people understood a little better?
[00:12:42]Ray Levitt: So the first thing I would say is what I call Lyons' theorem. And Mike Lyons is a serial entrepreneur and serial investor who co-teaches the entrepreneurship course with me at Stanford. And Lyons' theorem goes as follows: a startup is a series of experiments to discover product market fit. A lot of founders think they have product market fit when they start.
And in some cases they haven't even spent a lot of time talking to customers to really validate that belief. And if they come in with an ideological bent to push their solution at the world, and if the salespeople can't sell it, they fire them and hire what they think are better salespeople. And then they find they still can't sell it.
If you're not open-minded about what your solution is, who your target customer is, what the right way to go to market should be, in most cases, you're going to have problems. You know, if you're Steve jobs and you're visionary enough that you don't need focus groups and you don't need to talk to customers, that's very unusual, but most people are not that insightful and are not creating such a revolutionary product as a smartphone or earlier the iPod.
And so you really need to understand that and you need to pivot often, early and often, not necessarily in a large way, but in a small way. And so we try to discover when we talk to founders, people who are not ideological about what their, what their solution is and who the target customer is and how they're going to sell it.
[00:14:08]Hugh Seaton: It's an interesting balance with the unreasonableness that allows someone to persist when the world doesn't work the way they want them to, right? It's, you need somebody to not be so pliable that they just bend every time the wind blows, but at the same time, they need to be responsive to what the market is telling them, right?
[00:14:25]Ray Levitt: I think you're exactly right. You've got, is sort of, it's like an impedance matching an electric circuit. You can't pivot every minute – you’d drive your company crazy, everybody in your company, your engineering team, your sales team. So I think you have to be open to pivoting, but again, not as you say, not bend with the wind. Talk to several customers, see what several of them say, don't do what the last one says, do what, you know, a significant number of them.
You're getting sort of a consistent message from several different customers that what you're offering is almost what they want, but not quite.
[00:14:57]Hugh Seaton: And I think this comes back to the, the word experiment, right? Which implies that you're not just responding, but you're forming a new hypothesis that you then go test...
[00:15:06]Ray Levitt: Exactly, and every experiment should have a clear hypothesis and a clear method.
So it's an AB experiment or it's some other kind of an experiment. You're going to try two different things and see which one gets people eyes wide open and leaning forward in their chair and sort of breathing fast. And so you have to decide what you're testing and do it in a systematic way.
You don't just randomly pivot from one thing to another as you said.
[00:15:33]Hugh Seaton: Do you find sometimes that there's also a confusion about what speed people are operating at? And by that, I mean, sometimes taking a second is faster than rushing in to execute.
[00:15:45]Ray Levitt: Yes. And I see this in pitches as well, I see startups speaking as fast as they can to get as much content as they can into a meeting and having slides that have so much text they're eye charts, literally.
And so the trick is make a point. If somebody asks a question, repeat the question back to them, that does two things. It shows respect to them. And it gives you a chance to think about your answer before you blurt out the first thing that comes to mind. And so say, you know, this is your question, is that correct?
And meantime, you're thinking about what you're going to say. And then they say, yes, that's what I, what I'm asking or no, that's not quite what I was asking. I often see people answering the wrong questions in pitch meetings..
[00:16:24]Hugh Seaton: Isn't that interesting? Yeah, you're nervous already. And you've got your memorized answers or however, whatever the dynamic is. That's an interesting one.
So are there other things that you see, so we've kind of covered this idea of thinking in terms of hypotheses and then you really don't know until the numbers tell you, right. Until the revenues behave the way you want it to.
[00:16:44]Ray Levitt: The other things that I would suggest aspiring construction tech startup focus on that we look for... founders have to be involved in early sales until you, first of all, discover that what is a strong product market fit for a clearly defined target customer.
And then secondly, a viable go to market process and what startups often forget...And I forgot this in my first startup is if the cost of sales is too high, you can never recover it in terms of the revenue and the gross margin you can generate from the business you get. So you have to have an efficient sales process relative to the size of the order you're going to get from that customer.
You know, we call it CAC over lifetime value... customer acquisition cost to lifetime value ratio. The lifetime value should be three times or more the cost of your customer acquisition. And people often forget that. So you have to discover not only the product market fit, but a way to sell to target customers that has that kind of ratio or better to be efficient.
The other thing I would say is pick your beachhead market sub-sector don't try to target an entire sector of the market. It's too difficult for a startup to address a big sector. So pick, are you targeting GC? So you're targeting specialty contractors.
Are you targeting building owners? You know, are you targeting materials vendors or equipment vendors? Pick that very carefully. By again, by type of firm. Sometimes the location creates a more of a challenge for some people, and you're really looking for the sub sector of the market that has the highest pain point, which your solution addresses, which means they'll likely be a high return on investment for them.
And they have an early adopter culture and a digitization strategy. They're not just sort of flailing around with different point solutions. And they've got the ability to pay for your solution. You know, they've got to be big enough and have enough margin in their projects or in their corporate overhead to be able to pay for the solution you have.
And then you should nail that beachhead market before you try to expand to the broader market.
[00:18:53]Hugh Seaton: That's a great one. It is a big industry and it's easy to see bright, shiny objects all over the place. And focusing on people that it's painful for also implies that the cost of selling to them will be lower too... they see the need.
And I wanted to ask you about how you look at lifetime value. One of the issues that I've heard a lot about and seen, is a lot of companies have, in their pitch decks and wherever, they have a lot of logos because they've gotten a lot of pilots.
And you talk to a construction company, they're like venture capitalists (almost) in terms of the percentage of companies that they really deploy vs. pilots that they want to go check out, especially right now, when there's been all this plethora of startup options. How do you guys look at that?
[00:19:37]Ray Levitt: I think you've hit on a really important point.
You know, we want our startups to avoid what I call death by pilots, especially free pilots.
[00:19:45]Hugh Seaton: Right.
[00:19:45]Ray Levitt: And I tell our startups don't ever do a free pilot because often you're doing it for an innovation group that does not have a lot of credibility within the broader organization. Try to get the highest level operating person you can, to agree on what a set of targets is for the pilot.
And to have a rollout plan for the company if you meet those targets before you agree to do a pilot, even if it's a paid pilot, because you can do one pilot after another, that never leads to real significant revenue. So don't ever do a free pilot and only do a pilot if you've laid the groundwork for what will be the rollout plan if it's successful, and make sure you get an operating person in the conversation, you're not just dealing with the innovation person who's often a tech oriented person, [but] a construction operations person who's respected by the project managers, superintendents and so on.
[00:20:36]Hugh Seaton: That's an interesting one. I had spent some time in the e-learning world. And we found that line versus staff was a big deal, especially in e-learning where almost by definition everyone is staff, i.e., they're not directly connected to the P & L, and you were always more successful when you were talking to people that, that were connected to the P & L.
Like you said, an operating manager. Just a general rule, though, right? Is if someone has budgetary authority and is responsible for the performance of the operating unit, they're going to have more ability to really sign you up as opposed to try you out.
[00:21:11]Ray Levitt: And again, they're going to validate that this pilot solution you're going to test with them really could be potentially valuable to their operations. Because for example, some people have applications that deal a lot with employees and so on, but some general contractors have very few employees, they subcontract almost everything out.
And so you've got to figure out that you're talking to the right person. Or if you're doing something related to equipment, you've got to be able to understand that that company actually owns the equipment. You know, they don't just lease it. They don't just lease it by the job or rent it by the, by the day.
And don't care about, you know, the equipment really tracking it or maintaining it or operating it that much. Cause they often even rent the equipment with an operator. And so getting the operations person involved will validate that the pilot could actually be something useful to them. And then getting them to agree on target performance metrics for the pilot and that if they are successful, they will roll it out to a division of the company or to three other projects or some kind of commitment to generate real revenue after the pilot.
[00:22:20]Hugh Seaton: That makes a lot of sense. So, related to that, are you finding that general contractors are almost misleading in their sophistication? And by that, I mean, there are pockets of, "oh my gosh, that's amazing." But then there's like, no IT team behind it. You know what I mean? Or there's this part is doing very well. And it's amazing how well they're... like drones are a great example, right? Is the adoption in the industry misleadingly robust, because it doesn't really imply very much about virtual reality, for example, or even augmented reality. But are you finding that that can be a challenge as well?
That someone you think is super forward-looking from a GC standpoint, maybe isn't so much.
[00:23:01]Ray Levitt: Well, the very best GCs in the industry are ones that have thoughtfully created a plan for digitization. And, you know, we see digitization having moved through like a lot of different inventions, by the way they move through phases.
So the first phase of digitization is what my professor Oglesby at Stanford used to call “paving the cow path,” which is you look where the cows wandered and you pave that area. They don't wander in a straight line. They wander where the grass is green and it looks juicy and so on. And so you end up digitizing an old paper-based workflow in a way that's marginally more efficient, but doesn't really create a whole lot of value.
In any case, that's the first step. So you digitize a number of workflows in that way. You figure out how you can straighten the path, because the thing with the digitization is you can speed up things that used to take weeks, to almost real time. Then the second step is to look for how you can share data across these solutions.
So for example, you're only entering timecard data once, and it's driving your payroll, your productivity measurement, your production rate measurement, and so on. And then the next stage is to look at all this pool of data that you can create from all the point solutions you have and generate really valuable insights from that.
So that really creates the sort of value you can sell a C-level executive on an enterprise license, you know, in 30 days or 60 days, we have one of our portfolio companies, BRIQ, which is doing that, and they have successfully.
And they went through a series of pilots by the way, where they're trying to figure out is that a marketing solution to target, where companies should bid on new projects or is it something else?
And what they homed in on was a kind of a financial operating system for the chief financial officer to accurately predict project cost to completion early in the life cycle of the project. Which is a holy grail for CFOs to recognize profit and revenue, in a way that they don't have to derecognize it later on which they hate to do.
[00:25:01]Hugh Seaton: Yeah. I could see how that would actually be game-changing for a CFO.
[00:25:05]Ray Levitt: And again, you've identified a real pain point. You've someone who's got budget controls, all the budget, basically, for the company and someone who's got a real problem you can solve in a way that's differentiable. And, and sustainable.
So, you know, when we look at our startups, we say you have a great solution. Can you defend it? And typically it's not patents. A patent allows you to keep doing what you're doing. It's seldom stops a big company from copying what you're doing and the big company will eventually blow you away. You can see what Microsoft has done to people who invented spreadsheets and then PowerPoints and outlining tools and so on.
And so. You know, one of our companies, just to give an example of the kind of thing I mean, Buzz solutions looks at drone images along power lines and identifies 26 kinds of faults. I think it's up to 27 by now with 85% accuracy compared to anyone else. And the reason they can do it is they got a proprietary database from EPRI as part of an initial research grant EPRI is the electric power research Institute, it's an association of the best run utilities.
They got a unique data set of faults on transmission lines that they used to train their algorithm and they started sooner and are moving faster. So they will always have better algorithms than everybody else that is defensible. So tech patents can be defensible, trade secrets can be defensible.
A network of contacts, Autodesk bought board building connected, not because of its revenue. It had relatively little revenue when they paid $275 million for it, but they had a network of contractors and subcontractors around the country that was probably the best that existed anywhere.
And so things like that give you a real defensibility and you can grow your company large and, and continue to stay ahead of competitors.
[00:26:57]Hugh Seaton: That's a great explanation of the moat term that gets used a lot, right? Is that I love that you went to trade secrets as opposed to patents, because that's something you can act on and something, I mean, you can act on patents as well, but like you just said, people can engineer around them or make them...
[00:27:13]Ray Levitt: When you file a patent and it is first to file now, not first to reduce to use, when you file a patent, you have to give away all your secret sauce. That's right. And so trade secrets often are better, especially for software.
[00:27:25]Hugh Seaton: Especially when you very often...I mean, you used algorithms, but behind the algorithms is the data and then learning what to do with it, which is, which is fantastic. It's another argument for not outsourcing development as if we needed another one.
[00:27:38]Ray Levitt: Exactly. And so outsourced development means you don't really own your IP and you know, you can sign whatever agreements you like. You basically don't own your IP if you outsource your development
[00:27:49]Hugh Seaton: Not operationally you don't, you're right. You may legally own it, but people don't, you, you haven't retained the ability to do stuff with it, which is...
[00:27:55]Ray Levitt: Those people walk out the door and have somebody else go look at that code and try to, you know, fix it is really a challenge. Very few software developers actually document their code well.
[00:28:05]Hugh Seaton: That's right. Despite what they say. Ray this has been fantastic. I'd love to end with your thoughts on where you see...I mean, it is a highly uncertain environment, but where you see things going over the coming years.
[00:28:18]Ray Levitt: I think that targeted robotics and targeted offsite manufacturing are going to be very big.
But I would call it the anti-Katerra business model. Katerra's this highly vertically integrated, very, very well-funded company that acquired dozens of other companies and then had to figure out how to integrate all those cultures. And had so much capital invested and, you take on long-term debt often to do these kinds of things.
And then you have a downturn. This is a very cyclical industry and people who've tried to do prefabrication in the past, including Mitt Romney's father George Romney was put in charge of HUD by Nixon to "build houses like cars." He came out of American Motors and it failed as soon as you had Jimmy Carter stagflation, every one of these big vertically integrated modular manufacturers went bust. That was Operation Breakthrough in the late sixties and seventies. And then you have Katerra more recently, you know, another version of that... COVID hits and some projects get slowed down and canceled and they have trouble integrating all these moving parts. So what we look for is more like an apple computer model, which I call it totally outsourced manufacturing systems integrator model and supply chain orchestrator.
And so we have a company like that in the UK called Modulous. And then the other extreme is a very, very fragmented piece of one trade, which you can very efficiently automate without spending a lot of capital so that you can basically recover your capital cost the first year or two or even less. And so we have two companies like that in our portfolio, and I think there will be many more.
One is Agorus, which does framing for single family homes in a very automated factory and in a very flexible way, they can take any architect's drawing of a home and reduce it to manufacturing instructions using software, that's their secret sauce. And then they have a very efficient manufacturing process.
So they have high enough gross margins to pay off the cost of the factory in a very short time. And a second company like that is a rebar cage assembly robotics company called TOGGLE. And what they do is they actually get rebar from existing rebar suppliers who cut and bend the steel and own all the inventory.
So they don't have the inventory holding cost of all the steel. So TOGGLE takes the cut and bent bars and uses robots to assemble the cages for columns or for foundation mats or for other parts of the project, And then delivers them to site, which not only saves costs, most of which they get to benefit from, but it saves a lot of time for the builder because they can do a floor of a building in a day or two less if they don't have to assemble the column, rebar cages on site.
So, you know, that kind of very, very focused automation within a trade that takes maybe a million or a million and a half dollars to set up a factory. That's the kind of modular prefab that I think is going to dominate the future because the labor shortage, and the challenges of finding skilled workers when the average age in the industry is approaching 50 and young people don't want to do this dirty, dangerous, you know, rebar tying work that I did in high school, which was awful.
I think that's one of the areas that's going to boom. And then the second one is the kind of thing that BRIQ is doing this data pools with deep insights or what Buzz Solutions is doing, you know, deep data pools of, of transmission line failures, of all kinds, you know, cracked insulators, drooping cables, overheated connectors, things like that, where you have enough data to, to have a defensible solution.
Those are the kinds of things we're looking for.
[00:31:58]Hugh Seaton: Well, Ray, thank you so much for taking the time. I learned a lot from this and appreciate your time.
[00:32:03]Ray Levitt: It's a pleasure Hugh. Thank you.