Why are there no startups in the real estate construction sector?
It is a highly profitable business and yet there are no startups involved in constructing building, although the secondary works related to construction like B2B market place for construction materials or layout designing softwares startups are there but no startup is primary associated with real estate construction.
If there are any , please let me know!
There's a long list of construction startups who thought the industry was low-tech simply because everyone in it was dumb, and that they would be the smartest guys in the room who'd revolutionize everything. Those startups are pretty much all roadkill.
The construction industry's fundamental constraint is that it manufactures products that are too big to fit in highway lanes. That means they can't be shipped from a centrally-located factory to their final destinations. So they need to be built at the site, which means they need to be built with more labor-intensive methods (since it's too expensive to build a capital-intensive factory for just one unit of output).
Building components that are small enough to fit in highway lanes, on the other hand, are manufactured in centrally-located, capital-intensive factories and shipped to their final destinations, just like cars or electronics. Think: boilers, doors, windows, air handlers, etc.
And, like cars and electronics, these building component products are manufactured by a small number of big companies, rather than a large number of small companies. The equilibrium capital investment and company size is much different when the product is small enough to be manufactured in a central location and shipped.
I spent 5 years working on one of these startups. I'm not sure that the highway lane constraint is fundamental to the reality that contech startups tend to fail, but I think the assessment about the hubris of contech startups is fair.
The first lesson to learn is that construction doesn't happen behind a laptop or on a phone. From your user's perspective, time spent fiddling with your app is time not spent on real work. So naturally you focus on selling to the "office workers" who spend more time on planning and administration. The problem with that segment is that the tools they already have are good enough. Construction projects always take far longer and cost far more than expected because of what's happening in the field, not because of what's happening in the office, so software simply isn't a bottleneck in this industry. The fact that your tool was specifically designed for their use case, or has an AR feature that allows them to walk the site virtually, or whatever -- it's cool, and you can get a few sales that way, but it's not going to result in better project economics, so it's not going to revolutionize anything.
I worked in construction for ten years and then worked at a construction management software startup for a year, where maybe I could see the writing on the wall better than others.
The problem is that nobody can align the incentives of the tradespeople and the office folks when it comes to integrating into an information system together. You have to cross multiple organizational boundaries between owner, builder, contractor, and subcontractor of which very few people have a bottom up understanding. Mostly the people with the incentive to put everyone on a single platform (owner / builder) think very low of the tradespeople, which is why tradespeople are beginning to make more money than the accountants and PMs.
>The problem is that nobody can align the incentives of the tradespeople and the office folks when it comes to integrating into an information system together.
Exactly this. What you describe is basically the same as every ERP and CRM problem. In the end most of them all somewhat converged to SAP or SAP equivalent.
It takes a very specific and special sets of skills to align and understand both, if not all parties interest.
Which is exactly why I always advocate for importing temporary labor from mexico. Letting the local tradespeople gain too much power is half the reason why building is so difficult in america.
Which is exactly why I always advocate for outsourcing engineering talent overseas. Letting the Silicon Valley software engineers gain too much power is half the reason why keeping a product from being cancelled is so difficult at Google.
See, throwing a lot of nonsequiters together does not make a convincing argument that you know anything about what you’re talking about!
Can't tell if sarcasm or not... Yeah, it's those local tradespeople living in their mansions and driving Lambos that is the real problem with building costs, so of course we should import desperate people in unstable situations to compete against them.
It works perfectly, government subsidies and cheap foreign labor creates happy american farmers. Housing and infrastructure are critical to the country, just like food. The only issue is the legal limbo of selective immigration, it would be less cruel to issue visas quicker for temporary workers with most resident benefits waived than the current under-the-table dealings with illegal and undocumented migrants.
Given that enforcing the law drives the labor away, and the conditions for the workers suck, the only way it's working is to find that making things suck for people is somehow good.
Most of the houses built from the late 80s through the 2000s housing bubble were built by foreign labor.
Ditto for most of the kitchen labor in big cities. Anthony Bourdain wrote about it extensively in the book that made him famous.
Both are the reason the middle class was able to eke it out for so long. Now the hacks aren't working and the money printer kept going brrrrrrrrrrrr and the average person can't afford jack.
Mexicans in construction can feel like wage slaves every day in Mexico. Those temporarily in the US get to feel like they’re making bank, absolutely just cleaning up. Typical roofer in the US makes $50k (BLS figure). Not sure what he makes in Mexico but the median income in Mexico is about $20k.
Why is the US based tradesperson superior to the Mexican? Why must we address his prosperity more than theirs? To “protect” the Mexican from making cash?
And remember that when construction is expensive, people have to pay for it. Maybe if you already have saved enough for your house, that’s fine for you, but if not? It absolutely makes it harder for young people (not in tech) to afford homes. And on the national scale we have a massive backlog in housing and can expect it will take decades before housing gets better.
US labor is neither morally superior nor economically sounder for the US or world economy. It is the specific laborer himself who benefits.
> Why is the US based tradesperson superior to the Mexican?
A better question to ask is why is the value of the Mexican’s labor so much higher once they step foot into the United States for the same exact work and exact same skill level.
Another question you can ask is why can’t I as an American move to Norway and partake in their healthcare system and sovereign wealth fund? Or why can’t I move to Switzerland and work as a barista?
Once you can answer the second question, you have your answer to the first.
It's not even close to the same amount of work, the construction worker in Mexico has to be far, far more resourceful than his American counterpart because things that we take for granted in the states like having on-site power, a constant supply of water, porta johns, working power tools, safety equipment and padding, nearby air conditioned restaurants and other public spaces to cool off in after the job or on lunch breaks, transportation to and from the site are largely absent in most Mexican construction circumstances. Things like sawbucks and and jigs for bending and shaping rebar are almost always just improvised on site.
The concept of the US style planned development (fraccionamiento, very loosely the MX counterpart) where basic service infrastructure is laid down first, and construction happens afterward, is very much the exception there, and most work is done ad hoc using whatever tooling happens to be available in the nearest small town.
Also Mexican construction is almost entirely cement and cinder block standards due to relatively little native timber, and those things are all hauled around the site manually with occasional wheelbarrow assistance. None of this tilt up, balloon frame stick built business we have here.
Bottom line being that the typical Mexican construction laborer is going to be much more well-rounded, flexible, and industrious then the typical American construction worker, and as such is worth far more to an American crew, where these traits stand out, than to a Mexican crew where they are the norm.
The reason for the first is that the US has a much, much better environment for conducting business, compared to Mexico. This is on many levels, starting with education, continuing along to infrastructure, but also things like “low levels of official corruption” and “effective and consistent application of the rule of law,” especially least where business is concerned. For all our troubles (you needn’t raise them, I know) chances are that no one you know will ever be stopped by a cop claiming you were speeding and asking for a bribe; this would be business as usual and fairly unremarkable in Mexico.
It would be good if Mexico could improve and avoid these problems. Until it does so, trapping the Mexican laborer in Mexico to earn his wage, when he could go elsewhere, is like making a farmer farm in the desert.
It is not a natural-resource ownership allocation problem like you allude to with Norway.
> It is not a natural-resource ownership allocation problem like you allude to with Norway.
This is false in the general sense but also you can just ignore the natural resource ownership allocation problem and still use Norway as an example, or a different country (the Netherlands? New Zealand? Japan?).
The answer someone has to provide is why an everyday American barista can't wake up and move to Switzerland, Norway, etc.
> Trapping the American laborer in America to earn their wage, when they could go elsewhere, is like making a farmer farm in the desert.
Japan is notoriously xenophobic with regards to matters of immigration. Many analysts speculate that this attitude will cost them dearly as their demographic trends continue and the population ages, or expect attitudes to change. The same is true for much of East Asia. Some recent coverage from within the past week: https://www.economist.com/leaders/2023/07/06/the-new-asian-f...
We don’t need to be stuck in a rut of malaise like Japan. We could prosper instead.
Mexicans in computer engineering/science feel like wage slaves every day in mexico. those temporarily in the US get to feel like they're making bank, absolutely cleaning up. Typical computer scientist/programming in the US makes $93,000. Not sure what he makes in mexico but the median income in mexico is about $20k.
Why is the US based computer scientist superior to the mexican? Why must we address his prosperity more than theirs? To "protect" the programmer from making cash?
And remember, development is expensive, people have to pay for it. Maybe if you already have enough saved for your application, that's fine for you, but if not? It absolutely makes it harder for young people to create businesses. And on the national scale we can use more mexican app developers.
US developers are neither morally superior nor economically sounder for the US or world economy. It is the specific laborer themselves who benefits.
PS Your argument is that the country you live in shouldn't value the citizens of that country over some other country's citizens - its basically the end of the social contract and of society in general. Its a bad idea but I guess if it saves you $15/h on a construction worker its now moral in your eyes?
> Typical roofer in the US makes $50k (BLS figure). Not sure what he makes in Mexico but the median income in Mexico is about $20k.
If you were a roofer would you rather make 20K in Mexico us 50K in the US?
I don't know, but I doubt it is clear cut answer.
The insane US health care costs alone would eat up much of that if you're unlucky. I'd guess a young healthy single guy should take the 50K in the US but as soon as there is a family to support, 20K in Mexico may go farther.
If you're under 50k in the US healthcare is literally free. What country do you live in? Have you ever visited healthcare.gov?
Your get an extra $400/child/month at that income. If you're Mexican and you're weighing working in Mexico, you should absolutely go file and then go to the doctor and get your head checked.
I guess you just solved the US healthcare crisis with a single comment? Since US healthcare is literally free, there can't be huge numbers of medical bankrupcies (but there are) and there can't be insanely high levels of uninsured and underinsured people (but there are) and low-income families have nothing to worry about regarding access to care (but they do). Closer to the HN demographic, individuals who wish to start startups can freely do so without worrying how to get healtcare if they leave their FAANG job (but they can't).
The other possibility might be that it's not that simple.
When I was playing around with startup ideas, not employed by any large corporation, your so-called free healthcare was costing me well over $3K/month in the US (not including out of pocket expenses, of course).
Average costs of healthcare in the US per person is roughly $560/mo. That's a little more than most European countries based on tax breakdown. Yes, in the US rich FAANG workers that decide to go startup are required to pay for poor bus drivers making less than $50k. That's called socialized healthcare. I don't see a crisis. I see the news pedaling whatever garbage they need to slander the other party, including painting crazy pictures about the US "crisis" where lifespans are strikingly similar to everywhere else. Next time fill out your forms on time. You get Cobra when you leave and if you really are under $50k the following year, then yes it's really free. Unless you're too lazy to fill out your forms, or your startup took off, you are just fine.
The unions aren’t that bad, but if there was any kind of accountability on budgets, they would be crushed or, more likely, just be better and faster. Between ZIRP and infinite debt, I can’t blame them for getting their cut.
Also yes, I assume most of American buildings in the next 20-30 years will be built by foreign contractors using foreign labor.
A general question to anyone in the industry: how come after so much experience with over budget/over timeline projects, the industry still vastly underestimates those variables?
A couple of reasons:
1. Just like with software, you make assumptions that may be wrong because you don't have enough info up front. Whenever you remodel a house, there is always a chance that you're going to open the wall and find that the wiring isn't up to code and needs to be fixed. You always know it's a possibility and can make some guesses about how likely it is based on things like the house's age, but ultimately you're probably not going to include it in the estimate. After all, there's a ton of stuff like this that can come up, and if you included all of them in the estimate, it'd always end up being way too high.
2. Competitive pressure. You're bidding against other contractors. If you bid $1 million and the other guy bids $800k, you're going to lose. When that other guy comes with the bad news that it's going to run $200k over budget, the client grudgingly accepts because the cost would ultimately be higher if they switched contractors at that point.
I find comment 2. interesting for a couple reasons.
a) What it says about lowest unique bid auctions [1] and reverse auctions [2] with multiple bidders and multiple auctioneers. That the auctioneers will often (?) take the lowest bid, even if it represents "unrealistic" based on the criteria of the auction (this seems especially relevant in contract procurement).
Especially though, that even in a market, with relatively "transparent" information (concrete costs this much, lumber costs this much, ect...) there's still not much consumer transparency on what "reasonable" prices for construction represent. And consumers or "auctioneers" are likely to just take the lowest number, like a lowest unique bid auction. Whether its lack of information, strong preference for lowest price, can't be bothered to check reasonableness, purposeful cost obfuscation, or some other issue.
b) That people often fall for sunk cost issues. Especially on big purchases. Gov't might drop $100k contract without much notice. Except a $10B contract? Just keep throwing good money after bad. Consumer might switch soap brands on a tiny price fluctuation. Except a $1M house? Just keep throwing good money after bad.
Australia's had a rash of collapses lately, and it's felt this way.[3] 2000 companies in two years, and reading along, lots of companies that basically said "Give us another $200k as a payment right now." ("Even though we know we won't be able to finish your house, because our financials are horrible.") Except buyers felt like they had to, because they already committed to an expensive project.
In this case, it's not necessarily sunk cost. There are switching costs associated with bringing in a new contractor, so it is likely cheapest to continue with the current one, even if they didn't bid it right initially.
Switching costs are massive in construction. The permits and loans involved are often tied directly to the contractor and sometimes their subs for licensed trades. Many contractors wouldn’t want to come in and take over at a late stage because they can’t really vouch for what’s been done so it will be seen as risk.
It’s not just that there’s little incentive, it’s that just as in software getting the estimation right is an almost impossible job.
Hence if you go the other way and include severe penalties you’ll only get significantly padded estimates because the contractor now has to bear significantly more risk.
There's also a huge moral hazard in these negotiations due to the different traditional ways ( arising from the problem that all parties have perfect knowledge of the agreed upon price, but very imperfect knowledge of the putatively agreed upon product) that we view responsibilities of the person spending the money versus the person delivering the product. and it is doubly hazardous in that it disproportionately harms the honest, thorough vendor by artificially equating their product to the dishonest, corner-cutting vendor.
The buyer has an advantage in that they can negotiate the vendor down through competitive bidding techniques, and by doing so transfer the fault for insufficient delivery entirely on to the bidder instead sharing the fault themselves. If I work two contractors against one another to drive one into the position where they are now no longer safely comfortable they can deliver the product they promise for the agreed upon price, (however I am now safely in my own comfort zone knowing that I've got the lowest possible price extracted from them), well if they fail to deliver what is requested it's now their fault for promising they can do it, not mine for pressuring them into a risky position.
Surely that's only half the story. A competent customer has got to know low balling now just defers "unforeseen" costs later. If I've done 100 projects surely it's occurred to somebody to look at bid v. actual to gauge discrepancy?
Like all estimates it depends if you must do it for a fixed price or if its just an estimate.
If its just an estimate, you underbid everyone else, win the contract, start building, run out of money past the point of no return, then get more funding.
Like anything, look at the incentives. There are simply very strong financial incentives to generate ridiculously unrealistic low bids.
As for people talking about "why is the software industry like that?" I have great personal anecdote that to me explains why. Years ago I was tasked with a small team (~5 people) on a software project. We all got together and spent a good solid 3 days on planning and estimation, and our estimate was something like 5 months. Sales team freaked out, they said they needed it next quarter, so we had 3 months. So we looked at our original estimates and tried to find ways where we could cut scope, and came back with a "well, if we cut out literally anything remotely non-critical, and pray a little, I guess we can say 3 months." When all was said and done, the project took nearly exactly 5 months, just with a ton more stress and worse quality.
So these days, I'm more wise to the ways of the world. If someone says "we need you to find a way to cut the schedule by 25%", I basically say "OK, we can cut scope, but in my experience it always takes the time of the original estimate anyway." So then when things eventually go over budget, I don't stress at all - I leave work at a normal time, and just say to myself "everyone knew how long this was going to take, we just wanted to pretend it wouldn't take that long."
A big reason software is chronically over budget is that people simply want to pretend it will take a shorter time than it actually does, but they also know there is some real value to everyone engaging in that "mass pretending" in the first place.
"When all was said and done, the project took nearly exactly 5 months, just with a ton more stress and worse quality"
When in the heck did corporate America stop having men/women in the adult sense? I work in software/finance and it's disgusting the number of people who know better but don't have the backbone to stand their ground. People are too afraid of the mysterious ways of "blowback" by corporate whiners and politicians.
Because most of the gravy is in getting those things wrong. The bank or the government will find more money to keep the work going.
I worked with a GC who bragged about tripling the budget of a highschool build. If you are doing large projects the only way you're going to win is to be way off on bid day and to be good friends with the people who figure out the financing.
Yeah this. One of my friends is a PM for mostly government contracts. He also gets serious commissions for any mid project add ons so they're incentivized to low ball and win contracts then get customers to pay more later.
All the takes are correct, but they don't really explain the root of the problem imo.
We can recognize all these problems with budgets - that sales is incentivized to sell under budget, and submit change orders or project renewals later to get more money. Yet why does this happen? Can a private company really compel a government to change a contract? If the government really wanted to, they could take steps to limit the budgets, sue, nationalize a business, etc... This brings concerns that a government could wield it's power to exploit private companies, but I don't think people would be that opposed to the idea of a government trying to save taxpayer money.
The core of the issue is actually cultural. In business circles, closing a sale is considered a "skill". Lying, cheating, bribery - these are all culturally laundered as a method of sales tactics, and businesses laud salesman that can close above all else. I would argue that this is a cornerstone of business culture, at least in the US.
I think this is the core of why bids are so far off, and even a core issue with the world economics. A large portion of business occurs in the "enterprise" space behind closed doors, and the sales process is very obfuscated. It is the opposite of a free transparent market. These deals occur behind closed doors, net salesman a bundle in commission, and fall apart when they have to be implemented.
Yeah don't underestimate the physical or material limitations.
Cold, rain, or even local kids playing with not-yet-dry concrete can cause all sorts of issues.
Shortages of steel or wood, or a small accident that breaks something, can often set work back weeks. When I did welding I remember waiting around for for hours for more rebar to show up -- and you bet your ass we billed for that.
On one job some goober fell through an unfinished staircase due to it being mostly (but not totally) completed; it halted work and were down a skilled worker. IIRC dude cracked a few ribs and had shoulder problems, not sure if he got workers comp or disability -- but should have.
One a different gig someone kicked over all of the porta-pottys and turned on all of the outdoor faucets, creating a huge mess of poo and mud. Later on that job site someone stole a lot of copper, and I think at least 2 pallets of cinderblocks, as well as a non-trivial amount of fence.
Meanwhile, I've got an IT job now, and when it's cold and rainy I can sit at home and jam out lines of code as long as my wifi and HVAC mostly works.
The scary take from all the answers is that there seems to be essentially NO incentive to get the estimate right in this industry. All the incentives are toward underestimating under cover of the slimest excuse possible - just for appearances sake.
For example, you don't know what's in the old wall (but you have a pretty good idea of the amount and odds but you don't mention that) and so you don't include it (because the other guy won't and you have to stay competitive). Instead of including in proportion to the odds. You then later go to the client with "uh oh, we need to fix that. It happens. What are you gonna do?" And the client accepts it. This is mind boggling. If that's not the signs of a thoroughly broken industry, I don't know what is.
Before someone mentions that it's the same for software, not it's not always like that. With experience we got very good at estimating each in a series of comparable projects. It's very possible to fail to estimate large one-off projects. It's very possible to get it right with series. And house building is a very repetitive business. They are all different, but only so different and they are all built of human-sized rooms.
But putting aside the various incentives and psychological reasons why people tend to underestimate, I think there is a mathematical reason too.
Most complex processes with a large number of varied tasks tend to follow a log-normal distribution or something similar. And a property of this law is that when you go faster than expected, you don't go faster by much, but if you are late, you are late by a lot.
So, imagine the guy who does the estimate is completely unbiased and competent and tells you how long it usually takes (the mode), then there is more than a 50% chance that it will take longer (the median is greater than the mode), and on average, it will be even worse (the average is greater than the median).
The people who make the timeline have to make it seem like the completion is sooner than others, deals are made on that assumption.
But when building you have so many different workers, and if the foundation can't be laid because of bad weather then you can't have the plumber come in the week after. This plumber then can't reschedule to the desired date so it gets pushed back.
You make a budget but then one of suppliers drops out, so you find a new one that can do the job on such short notice but you pay the price for that.
Also You always make the budget as tight as possible so that it is very attractive, but there are clauses so you know you can go over budget in certain ways.
> the industry still vastly underestimates those variables?
Do they usually? I don't know, but curious.
My only experience with the construction industry was the construction of my house and those of a few friends where I was able to follow along.
The cost was exactly as estimated a year+ earlier and the timeline was pretty much spot on except for weather-induced delays (can't blame them for mother nature).
The people I've seen complain about cost/delay are also those who changed their minds in the middle about details, so of course it caused delays and cost.
We have exactly the same issue in software development, don't we? It's been decades and we're still bad at it. We even have a cutesy name for it: Hofstadter's law. A project always takes longer than expected, even when Hofstadter's law is taken into account.
Of course, but why are we bad at it after so many iterations? I think a comment above mentioned that there is actually incentive to get estimate to skew lower and worry about the extra costs later. What does a world look like where estimation is correct within a reasonable degree and people don't race to the bottom to get the lowest bid so that they can inevitably put out a crap product?
The blessing and curse of digital delivery of software is that retooling is comparatively easy to physical products and distribution cost is pretty negligible.
Getting it right up front matters a lot less for most software than it does something like a product where you invested a bunch of money in tool and die, stood up an assembly line, have warehouses full of product to deal with of you release a new version that obsoletes them, and so on.
If software is incomplete or wrong or bad, the real costs are mostly just labor to fix it. If physical products are bad, the very act of doing the fix has costs beyond the labor of the design work.
(I’m certainly not endorsing sloppy planning in software, fwiw, this is just how the incentives play out much of the time)
There's also the issue of requirements changing many times over, based on new requirements are added or limitations that are discovered only after making some progress in the project.
Yah you'd think with all the management know how in the US we'd be better not worse. US medicine and US education are the other two sectors where things suck too. Not coincidentally these three areas are what make it hard for a lot of people to get ahead. Costs in these areas (to purchase a house, deal with med costs with no or sucky insurance, or pay for education) is stupid high.
The construction business is one of the few where contractors are asked to provide a price to build something they really have no idea what its going to cost. They have an "estimate" but so many things are unknown.
Compare that to auto manufacturing. Ford knows exactly what an F150 costs. They can then price for known profit within a range.
Manufacturing millions of roughly the same thing is a lot different than constructing millions of roughly one offs.
Site prep has unknown unknowns, as each site is different. Maybe there's an unexpected geologic condition, maybe the utilities won't connect without a fight, maybe the jurisdiction issues a building moratorium at the last minute. Most construction jobs won't get guaranteed pricing on materials, so any delay can change those prices, and then the client may prefer to change materials and then you may need different labor, etc.
Remodelling is full of even more unknown unknowns. Residential construction doesn't tend to have as-built drawings, and the design drawings, if available, may not have much connection to the structure as built. When you open up the walls and find surprises, that's going to increase costs.
Construction quotes are generally for no delay, no suprises, no changes. Good quotes will also include estimates in case of likely surprises, and how delay costs will be allocated and change costs and procedures.
Most jobs take bids and so many people hire the lowest bidder. Because of this, a lot of contractors price their bids as a best case scenario... Or they bid an exactly what was asked and nickel and dime for everything extra.
The scope is mutable. What was asked in the quote, is different from what it became when planing started and is different from what it endup 6 months down the road.
I've had a lot of experience on one of the rungs of the commercial construction ladder. There are multiple reasons (of course), but there's an interesting correlation (in my experience) with the advent of higher technology.
CAD software, and now the various BIM tools, make it more likely rather than less likely to go into cost/timeline overruns.
Way back in the olden times, drawing plans was extremely labor intensive. Draftsmen using pencil and pen are many, many times slower than drawing on the computer. Because of this strict and unforgiving hard limit, a lot more time was spent in the planning stage. Architect and owner would work for a long time to get all of the details and requirements together before anybody touched a sheet of mylar. Any changes needed to be minor, because erasing and redrawing was expensive and difficult.
Because of the manual drafting restriction, details depended very much on using knowledgeable and experienced tradesmen. This also applied to specifications. Specifications were a lot more general, and were heavily reused between projects, because retyping 200 pages on an IBM Selectric is also time consuming and expensive.
This selects for a high level of competency across the board.
Now, because it's so easy to make massive changes at the last minute, everybody is pushing things down the road. "We'll catch it in addendums," is the rule, not the exception. And one of the biggest problems is the interface between architect and owner. The owner has ALWAYS been slow to get their people together and make decisions. So you end up with a project out to bid, and they're just now making calls on AV equipment and the like.
And the professionals, the architects and engineers, tend to put more on the drawings, and more in the specs. And because of this, a lot will get missed, or overlooked, or ignored. The general contractor sprays their sub-contractors with the drawings and specs, and the attending billion addendums, and so things get lost.
Plus, nowadays, J. Random Guy with a truck and good patter is now a licensed plumbing sub-contractor, who gets the job because he underbid. So he is now deeply incentivized to interpret the drawings and specs in a way that what should have been caught in the bidding phase is now considered a change order, which the owner has to pay for.
TL;DR: the ability to work fast in the design phase does not necessarily translate to better results in the construction phase.
(This works for software as well. We're still using software that was hand-chiseled into clay hard drives by the Great Beards Of Yore, while software that was programmed with amazing syntax-highlighting IDEs with built-in AI is riddled with obscure bugs.)
This sounds much like the same malady that has befallen movie production, and to some extent illustration and music.
The kind of artistic result achieved with true "do everything in triplicate" drafting and capturing one good performance, has fallen by the wayside when everything changes at the last moment. Movie budgets have become dominated with post-production, even when they make the effort to record in-camera scenes and effects.
And what I've noticed about illustration is the rise of a cargo cult of "the blind leading the blind" online akin to programmers who have only learned Bob Martin, driven by young people want to learn drawing digital-first, for some legitimate reasons, but also because of the gadgetry and because they want to cling to the undo button and use layers. But it's the same thing: most of the knowledge of drawing, like with every other trade, is tacit, motor-skills heavy and needs to be trained into muscle memory. Being very bad at getting the line you want and mashing undo to force your way through just means every project is frustrating.
And once you do cross that threshold and train it, having the undo and layers are nice additions, but predispose you to not do as much planning. Thus, much of digital illustration tends to have a formulaic quality to it: the artist could configure things all sorts of ways, but the overwhelming tendency is to drive towards excessive detail and excessive rendering, because the medium is an enabler for that and doesn't require you to think it through.
> Construction projects always take far longer and cost far more than expected because of what's happening in the field, not because of what's happening in the office, so software simply isn't a bottleneck in this industry.
It seems like there are at least two problems software could solve here.
The first is that right now it takes effort for tradespeople to find work. They have to advertise or form relationships with general contractors etc. But then they have the incentive to draw out the work, because it's easier to extract more hours from this job than to do this job quickly and then have to find another one. Make it easier to match buyers and sellers so as soon as you finish a job you've got another one lined up and that incentive disappears, and maybe even goes the other way, because if you were the lowest bidder on a job you thought would take three days and you can get it done in two days, you still get paid what you bid. Which gives the general contractor more slack in the event of some other construction delays.
The second is efficiency. A lot of jobs are small and the major cost is travel time to the site. If you could get many contractors into the same system, you could do some optimizations there, by assigning jobs to whoever is nearest and minimizing the transportation costs, or letting contractors automatically adjust their bids based on their proximity. Which the contractors should like, because it reduces the travel time they don't get paid for.
Excellent point. When I think of a foray into construction, I plan to use all software off-the-shelf and focus my process improvements entirely on-field.
I see the AR usecase as being a huge potential win in the inspection process. Instead of inspectors having to drive site to site, just give them a tour. You could probably pull up permit/schematic/etc info as you're viewing the property and stuff. But I assume something like this already exists.
just unlocking the phone and starting an app takes waaaaay to much time. You have 10 people standing there looking at you for 3 minutes. Then bill the customer 25 for opening an app??? Better write things on paper.
> Construction projects always take far longer and cost far more than expected because of what's happening in the field, not because of what's happening in the office, so software simply isn't a bottleneck in this industry.
Hmm. The government takes place in an office, doesn’t it?
Do you think a law could make construction faster and cheaper? A regulation? Change in policy? Non enforcement of existing policies? So no votes required? I don’t know, some of that could be extremely impactful and it could happen extremely quickly. Non enforcement of all sorts of regulations can happen in a stroke of a pen. Then, think of the impact of immigration policy on construction labor. Think of all the levels of government that could impact this, local state federal. With no votes whatsoever, no campaigning, none of that slowness.
I don’t know. You worked in this for 5 years. How could your takeaway be that construction doesn’t happen behind a laptop? Like I get the spirit of what you’re saying, poopooing AR whatevers, but I am just a layperson, and it’s just common sense that if the policy were “there’s no minimum wage” or “there’s no limit on immigration,” both of which can and do occur without legislation due to nonenforcement, dude, construction would get a lot cheaper and faster. And maybe that’s not software in your limited sense, but gig economy companies essentially achieved part of those specific policies I’m describing for all sorts of things. So c’mon, of course what happens in the office in every sense has the biggest impact on construction.
As they say, most regulation are written in blood, they are there for a reason, have you not learned anything from the titanic submarine disaster? Or the earthquake in Turkey? Same for worker protection, also there for a reason, workers fought hard to get those protections, do you really want to go back to the 19th century as a worker? Today it’s the protection of the Mexican workers that’s taken away, tomorrow it’s yours…
People seem to have forgotten the boom of prefab/modular houses in the 1960s/1970s. It turns out after the cost of delivery and final assembly on location you lose out a good chunk of the efficiency of the factory line production.
The biggest innovations to construction are probably to be had in better/faster/easier plumbing and electrical connections, making it faster and more reliable to install all the fixtures. Being able to plumb and install a whole bathroom in a couple of hours instead of most of a day while reducing the odds of needing rework would be a decent boost. We've seen some improvement in this already though with things like PEX and Wago, I imagine even more modular designs can improve this even more. The challenge with this is actually getting adoption and approval for some of this stuff.
Having just finished a build, this is very true. New construction methods are amazing. My home had rough in plumbing in a day. Scheduling, inspections, and credentials eat up the most time. Why a plumber can't hook up power to a water heater is beyond me. That alone ate a week.
I just redid my 15 year old original builder-grade kitchen sink and cursed the quick-construction plumbing the whole way. It was all glued together ABS plastic pipes instead of threaded pieces and single-use plastic shutoff valves with non-threaded supply hoses. I had to saw off all of it down to the wall and replace it all, this time with quality components.
So yeah, you're right, the new methods and parts make for very fast construction but the maintenance and repairability/reusability is trending toward zero.
>>> single-use plastic shutoff valves with non-threaded supply hoses
Yes, this is the standard now for an number of reasons:
* because it is far easier to cut damaged sections of PVC on site and assemble replacements than it is to cut metal piping
* PVC is wildly less expensive than the equivalent length of metal piping, because it is used in a huge number of applications
* PVC is non-reactive and does not corrode like metal
and lastly, threaded pipe connections significantly decrease the throughput of a pipeline, reducing available water pressure at the endpoint. It is basic best practice to limit where threaded connections are used so that you can maintain uniform pressure across the whole unit.
Please don’t assume that copper and metal are the best in all situations. My home has in slab copper plumbing. The problem with this is that the copper pipes develop pinhole leaks over time. The slab itself is under tension and can’t be cut into easily. So repiping is a substantial effort. PEX is the only “cost effective” solution for this.
One interesting thing about pex is it can't be left in the sun, even when you have a roll of it ready to install. The UV in sunlight will degrade it and cause failures.
Also, have you seen the new (expensive) crimpers that let you crimp not only pex, but copper pipes?
FYI, you can rent the press tools reasonably cheaply if you’re not a plumber by trade. I rented one for $80 for a plumbing project a few years back and it was worth every penny. A million times easier & faster than sweating joints.
>Many Florida residents have their second set of pipes running through their attics
When/if I remodel my bathrooms I have to have this done due to my existing galvanized steel pipes being horrendously brittle and filled with 70 years of gunk. Ah, the joys of a house built in the 1950s in Florida.
For me it was the waste lines giving me trouble. The drain lines for a tub in a house built in 1962. The size of the inlet meant I wasn't finding a drain at Home Depot.
> Why a plumber can't hook up power to a water heater is beyond me.
Depending on jurisdiction, they can. In Germany, you can train to be an "Elektrofachkraft für festgelegte Tätigkeiten" - i.e. an electrician trains your staff to do a specific task, like hooking up the water heater.
The problem is, plumbers already have more than enough work. They could do that technically but they don't because they want to move to the next job site as fast as they can.
A while ago I read that here in Germany you can also do the house wiring yourself, it's just that it has to be inspected and certified by a master electrician or you'll be really hosed if something happens since insurance won't pay etc.
How does this make any sense? The customer has to pay the transportation costs of the plumber and electrician. If the customer only has to pay the transportation costs once, there is more money left for the plumber.
Presumably the water heater is not the only electrical thing in your house so if things are scheduled correctly (which is a really big if in the construction world) the electrician is coming out the same number of times regardless.
There is a specific order things need to be done. You need the fountain, then the walls, then the roof - only then can plumbers start. Because water runs downhill, the plumbers MUST be done next, as otherwise something else might be in the way of where a pipe needs to be. Once the plumbers are done, then the HVAC people come, and then after that the electricians come - it is no problem for them to put power to the water heater at this point - the water heater must already be installed. (or at least roughed in). This is how all houses are done, so there is never a problem unless all the electric is delayed.
In large buildings things are done different. Architects spend more time designing exactly where the pipes, HVAC, and wires go. Then the trades people work to spec, and they can thus work in any order so long as their parts go where they are told to. This is a lot more effort/cost though, so it isn't worth it for a small house but is critical for something large. A small house turns out to have plenty of space for everyone to design as they go, and thus this is cheaper. For a large building there are a few places where there is barely enough space for everything that must go through that spot so you better ensure upfront there is enough space.
Because most construction projects aren't "just" new plumbing... if you're operating beyond the "Yugoslavia way" aka renovating/constructing in pieces whenever you had scraped together some cash (as my grandparents did back decades ago), you want to do everything at once - first you tear out all the old stuff and then you sequentially have every trade come in to do their respective job.
This is odd given that in a lot of places, a home owner can run their whole electrical, and the inspection is just a dude plugging shit in to the receptacles.
Also, are most modern water heaters not just a standard plug in? Even my dishwasher, which was a curiously long hold out, doesn’t have direct power any more.
Around here, home owners are not allowed to plumb, not even with inspection. Plumbing permits are only given to plumbers.
My brand new (last year, anyway) high efficiency water heater is direct wired. The plumbers connected it. I can't say I've ever seen a plug-in water heater (bigger than a few gallons).
2020 house and the tankless water heater is just plugged into a 110 outlet. Kinda surprising when I saw that. Also shoutout to the builder predicting that we'd want to replace every overhead light with a fan and using the correct boxes with two hot wires from the switch to handle that. Really appreciate it.
Yes we installed ceiling fans with lights in the bedrooms and living room. The smaller bedrooms (currently offices) have the light controlled by a switch next to the fan switch on the wall. This is because the fans we bought for rooms only use pull chains and have separate conductors for light and fan. The larger rooms have remote control fans so for now the control unit is switched from the wall and then the fan speed and light is controlled by the fan's remote. I actually hate this arrangement and am going to do some splicing of the fan's wires and expanding the switch box in the largest bedroom so I can control the light from a normal switch.
All the overhead lights outside of the kitchen and showers were cheap "boob lights." The kitchen and shower lights are LED pucks that mount flush to a shallow box and kind of look like recessed lights. First we replaced all of the boob lights with wider LED panel lights with a warm color temperature. While doing this I noticed something about the light boxes in the centers of the living room and bedrooms: the boxes were mounted so they are centered over a joist, meaning you can screw a fan directly into the joist. They also had two hot conductors running from the switch box. One was colored red and the other was colored black. The red one was wired from the switch to the light, and the black one was capped at both ends. They were set up to have fans installed without any modification to the box.
I think you certainly could set up a water heater with something like a clothes dryer lead and plug, but I've never seen it done. I'm not sure why kitchen ranges and clothes dryers tend to be plug-in and water heaters tend to be hard-wired; in my experience they all get replaced about every 10 years or so.
Isn‘t that mostly a question of the wattage the appliance needs? Here in Germany we have a Max of 3000W on the regular plugs which is why, for example, stoves need special plugs. Not sure about water heaters though
The limiting factor for outlets is typically the wire, not the plug. A standard NEMA 14-30 plug that is often used here in the US for high power appliances like dryers and ranges can provide 24amps continous at 240V, for a total of 5760[0] watts. Electric water heaters typically run at around 4500 watts. If you need more power, NEMA 14-50 is available as well.
More capable options exist if needed, but I have never seen them in a residential setting.
[0] The 30 indicates that it supports a peak wattage of 30.
A typical German water heater, e.g. from stiebel eltron, will be between 15kW and 22kW at three phase 400V, which is obviously too much for a regular outlet. Which is why it's usually wired directly, the same as stoves/ovens tend to be.
Geez, three phase 400V using up to 22kW?! That would be quite a rare sight to see in the US. Afaik most houses only even get two of the three phases from the power line poles, for a max of 240V.
This is a common misconception. US homes are not two phase, they are single phase 240 volts, called split phase because the single transformer leg is tapped in the middle to form two 120 volt lines, each 180 degrees out of phase with the other.
But isn’t it just “two phase”? I.e. how “true” two phase would be different?
Ok, help from our new common friend:
Yes, your statement is essentially correct. In the United States, residential electrical supply is typically a single-phase, 240-volt system that is "split" into two 120-volt legs. Each of these legs are 180 degrees out of phase with each other, which allows for both 120-volt and 240-volt circuits within the home. This arrangement is often referred to as "split-phase" electricity. It's not technically two-phase because a true two-phase system would have two waves offset by 90 degrees, not 180.
A tankless electric water heater could use that much I suppose. I wonder if that is what Germany uses? Tanks take up more space, but they need a lot less power at once so they are kinder to the grid.
In the US houses get 1 of the 3 phases. That phase is split in half, and so each phase is 180 degrees. This is different from 3 phase power where each phase is 120 degrees. 3 phase is good for a few things, but for a water heater it doesn't matter, and most of the things 3 phase is good for you today will run off of an inverter for speed control which in turn can run off of single phase (3 phase is still better but only because you can use smaller capacitors)
> A tankless electric water heater could use that much I suppose. I wonder if that is what Germany uses? Tanks take up more space, but they need a lot less power at once so they are kinder to the grid.
Tankless water heaters are much more common in rental apartments, and Germany has one of the highest quote of people living in rented apartments. And if space is at a premium, of course tankless heaters are preferable. Apartments are also the reason why electric stoves (again, using 400V tri-phase) are so popular in Germany.
Just looked that up, apparently some tankless water heaters in the US will use up to 30kW, supplied as 240V/120A. Yeeeesh. That's one helluva circuit, and you better believe it's direct-wired too.
It's pretty common to see 240V/50A plugs/sockets in the US. That's how you'd power e.g. an electric stove, and that's 12 kW in total which is quite a bit of power.
The water heater I just replaced lasted something more than 25 years. I don't expect this one to. But that's a different brand of "get off my lawn" than this thread is about. :-)
> I'm not sure why kitchen ranges and clothes dryers tend to be plug-in and water heaters tend to be hard-wired
The kitchen and laundry appliances are sometimes moved with the homeowner or tenant, but not the water heater. Also a plug can make it easier to pull out for cleaning.
Kitchen ranges, clothes dryers, and literally every other appliance large or small are usually moved with the homeowner or tenant in Germany - until the last decade or so, rental apartments almost always came with completely empty kitchens, and it was on the tenant to fit in the cabinets, appliances and even the sink. Bathroom cabinets are also usually the responsibility of the tenant, but the toilets, sinks, and showers/tubs are built in.
On the upside, even a small studio apartment usually has enough space and an extra water hookup for at least a washing machine, so no dealing with other apartment residents or a public laundromat for laundry. Dryers are usually condensing; no need for an outside vent.
Until the last few years, short tenancies were unusual for Germans; in the little building we rented in before we bought our house, the other tenants had been renting there for 20-40 years! Given the terms of our contract, I gathered that they must have had very small, if any, rent increases written into their unrestricted contracts, and the only way to get them out was if the building owner decided to live in one of the units herself.
Sometimes yes. Often they stay, especially if they are reasonably new and the buyer wants them. It's seen as a selling point that the buyer won't have to go out and buy appliances right away. Of course the hidden downside is that they are financing used appliances for 30 years so it's generally better if the buyer negotiates a lower price in lieu of appliances. But a lot of new homebuyers don't think about that.
But I'll grant that appliances are probably moved more often than water heaters are.
The rules for what homeowners are allowed to do vary by jurisdiction, but the underlying principle is that if you are living in the home, you have an incentive not to mess up.
Even with modern plumbing, wiring, tiling substrates, etc., bathrooms are an utter pain in the arse. You’ve got utilities going all over the place, multiple drainage points, tiling, underfloor heating, studs to position so things like shelves, heated towel rails and all the rest end up where you want them, ventilation, and on it goes - and all of it has to happen sequentially, often a bit of this, then a bit of that, and then back to the first thing again. Having done several bathrooms, top to tail, I would gladly just buy one off the shelf if it were good.
I think there’s a massive opportunity in modular bathrooms. I’ve seen them done amazingly badly (think: the plastic cube badly perched in a corner of your Victorian seaside hotel, in which you have to crouch under the shower, while it hoses down the toilet paper), I’ve seen them done so well you wouldn’t have a clue you were in a room delivered in a box. The latter, I’ve only seen in Latvia, by a Latvian company - but I think the concept has legs.
You're right. The way that some of the new cruise ships are built is that the rooms (including the bathroom) are each one long "module" that they slide into place for final assembly. This means they can be built offsite on an assembly line, and also when it comes time to renovate, they can swap them out with much less downtime for the ship.
Japan has modular bathrooms, it’s pretty nice (though it does mean that almost every bathroom looks like one of 3 kinds of bathrooms). Even the basic ones are more functional than what I see in 90% of US bathrooms, but it is just huge chunks of plastic and cleaning is a whole thing.
Well it’s made of mass produced parts so you can swap out panels relatively easily (though in a lot of cases this involves recalking).
This video shows a full renovation, but if you’re only replacing a broken component then you’re looking at less work https://youtu.be/8E5lH_qppWg
I think generally the point of these is that you’re a lot less affected by skill level of those installing everything, so even really shitty apartments have good infrastructure. Million dollar homes in the US have worse plumbing than stuff I had in starter apartments in Tokyo (not universal but!).
And the boxing up means that your “wet area” is limited (Japan is generally very humid so mold is a constant worry). But I’m not an expert, and everything I’m saying might be totally off base.
Tear the entire thing out and replace it. You have to understand that housing (separate from land) isn't so speculative in Japan, however; a "worn out" bathroom is likely in a house that's going to be torn down completely and replaced.
The “houses getting torn down all the time” practice is getting less and less true. It’s becoming fairly common to just do a bunch of renovations since the old houses now are also from the modern mass production era (whereas in the past your old house was likely to be a much bigger pain in butt to improve). Though I do not believe that we have entered a full speculative era from this.
Under this definition of housing US housing isn't speculative either. It's only the land that goes up in value. It's just that earthquakes and tsunamis aren't as frequent and powerful here and the zoning laws are more arcane here. (as well as some other reasons related to the speed of development of these countries). Japan is one of the least afordable places to live in the world. That is in large part the reason why the population is declining. But nobody is speculating on US bathrooms.
Also in the US, the house might be valuable because it might be illegal to build a new house of similar size on the land. My last house was 2.1x larger in square-footage than allowed under current zoning laws. If it was damaged due to natural disaster, you could rebuild with the same floor-plan, but if you willingly tore it down, you had to build a smaller house.
That's not necessarily true. People have borrowed against higher land values and built more expensive housing with higher-end finishes. That was the whole "flipping" craze; the contents of the house were literally worth more after renovation.
>But nobody is speculating on US bathrooms.
I've got two words for you, man: rainhead shower. (Or "in-floor heating" for the Northeast. ...I guess that's 3 words.)
I think the main challenge with modular bathrooms integrated into an otherwise traditional build is that you're plonking a finished unit into a rough-and ready site that has no pipes or wiring to connect to yet and people running round laying bricks and lifting in beams... which feels a little premature. You're not going to fit one through the doors of your average existing building either, and the economics of hiring a large crane just for the upstairs bathroom rather than the entire build probably make less sense
It's a bit different when the modules are part of a hotel/apartment block that's entirely built using a modular system. That's common enough in city centre hotels and motels where they're a single full-sized room and nobody can tell the difference.
Hiring a crane to put the roof trusses on isn't unheard of. It costs more than a large forklift (which you have onsite to move piles of lumber around anyway), so it isn't normal, but where the terrine doesn't allow the forklift to get the trusses in place crews will hire a crane. I've also seen crews (generally of old people - almost of retirement age with the typical failing body that come from years of hard labor) hire a crane to life their walls up, such crews are still competitive with other crews so in the scheme a crane cannot the that expensive.
If it became common I'm sure crews will switch to using a crane for the roof, just because the crane will be there to lift the bathroom in place anyway. However someone needs to start making the factory bathroom first and convince builders to use it.
They (prefabricated bathrooms) are sometimes used, but they do bring a number of issues (I am talking of "real" prefabricated bathrooms, concrete, not the plastic/fiberglass ones that also exist), a few of them:
1) they are heavy, the actual structural design needs to take this weight into account
2) since they have an "own" floor you either have a step to enter them or you need to have a somewhat thicker underfloor on the rest of the house
3) since they have an "own" ceiling, the internal height will be smaller than the rest of the rooms (here in Italy this is not an issue from the techincal norms as rooms are minimum 2.70 m and bathrooms and corridors can be only 2.40)
4) since there is the need of connecting the internal utilities, electricity is the lesser problem, but typically you have two or three (cold and hot + in some cases circulating) running water pipes, two (at least) drain pipes, two or more venting pipes and the radiator (or under floor) heating, you need some additional space on the outside or some (not really pleasing to the eye) boxes on one wall or in the floor (or both)
In practice the only kind of building where they make sense are new multi-storey, multi-apartment buildings and hotels, hospitals, prisons, etc., and even then usually they are not usually much cheaper, they are only much faster and easier to put up, and definitely have an advantage for "luxury" bathrooms where local workmanship capable of a high quality work are not available or cost too much.
An example, this is an Italian builder of such "pods" with experience in international projects:
Yep, it is possible, but it is not something you would normally do.
Usually these pods are lifted by a crane and "inserted" in the building (talking of reinforced concrete buildings) after the structure has been built (before building the outer walls).
Once they are on the floor they are moved manually on carts/wheels attached to the pod structure, so it is much easier if everything is at the same level, the lowered level of the deck (only where the pod goes) would add another complication in the moving/placing.
With the advent of underfloor heating the thickness of the screed is increased anyway (compared to the old buildings) so the "step" is not anymore a problem as it was years ago.
I saw a prefab fiberglass shell bathroom in a museum recently, I believe in Chicago (whatever their big art museum by Grant Park is called). It was, iirc, French and from the 60s. Pretty cool.
It might be an oversized load, but most bathrooms can. Fancy master bathrooms would not fit though.
There is more than that though, as the floor needs to be designed for where the pipes and wires of the prefab bathroom come out. Not impossible, but not easy either. A lot of modern houses are adjusted on sight for where the pipes have to be as the architect doesn't check if a pipe and beam are designed to go in the same place.. (in large building the architect will check, but not in something small.)
I'd also add Viega to the list, it is well accepted in many places and makes copper soldering unnecessary to join copper pipes in many applications by instead using a crimped fitting that only takes a few seconds to crimp with a power tool, it's a game changer for plumbers working with copper and even carbon steel pipes up to 4 inches in diameter.
I want at a minimum the wires in my walls/floors to be easy to edit, inside trunking in the wall/trapdoors in the floorboards. Why would you have to cut holes in your wall, edit the cables inside, and then plaster over them again to cause the same problem next time? Madness
I'd be curious to see examples of very tastefully concealed / unobtrusive / or well integrated access panels.
(Asking for myself, because I agree with both of you - I hate having to open my lathe and plaster walls, but I also don't relish the idea of blatant access panels).
Maybe 8"x8" panels with electrical receptacles and data ports integrated so they're also functional...
You could leave lathe off of the tops and bottoms of your walls and cover those sections with baseboards and crown molding. Then you pop off the baseboards / crown molding to get access behind the wall.
I do some homebuilding and I encase all my wires within walls (especially telecom) in PCV conduit (not quite Chicago style of using EMT), which allows me to pull what I want through and after the walls are finished. It also lets me upgrade my 240V conductors to handle higher current situations as I always conduit dedicated runs for dedicated circuits. I do not build slab homes, only pier and beam or basement foundation, so there is always room to go under. For plumbing, I use PEX-A for water but transition to copper at a stub pipe resulting in that being the only connection in-wall, with all branching done under the floor or under the water heater connection point (which is exposed with a water filter and access panels).
I sometimes really wish my house was pier and beam construction instead of slab; having a crawl space seems really handy when wanting to rework things. Everything is just right there!
A single story home does make some things simple, but it is still a pain with the insulation. On top of that, all the old plumbing goes through the slab making access difficult.
For a long time I've wanted a variant of this idea in which the exterior walls of the house are separated by a man-sized air gap from the interior walls of the house.
This make plumbing and wiring easier to repair; vermin easier to ensnare; improve safety from wildfires; and force every window to be a nice bay window with seating.
> For a long time I've wanted a variant of this idea in which the exterior walls of the house are separated by a man-sized air gap from the interior walls of the house.
Cue an increase in the number of DIYers and toddlers needing to be rescued after they have somehow managed to fall into the gap e.g. while working / playing in the attic.
Not sure how it would work from an insulation perspective, either.
Houses used to be constructed similarly. It’s actually very good, insulation wise. You have two walls you can insulate & a large air gap: pretty amazing.
If you’re running cables through the space in your walls, you will find a hole saw and a little plaster/paint is pretty cheap. Some kind of an access panel for the entire length of the wall? That’s a lot more expensive, and uglier to boot.
I can buy conduit cheaply. But I'm thinking make the entire wall from plastic panels, plaster was the only solution 200 years ago, surely we can do better now
Drywall is paintable. It’s repairable. It’s durable and can take a real beating. You can put new holes in it and close them back up almost like they were never there. It’s seamless. It lasts many decades. And it’s $0.40 a square foot.
There was still a lot of work needed to be done with those. A foundation had to be built to spec and a chimney built. Plumbing and electrical work was needed after the rough-in and then of course all the finishing work. What you were buying was a design and the materials.
Saying that, in the early 20th century there wasn't too much to the electrical and the house probably had basic plumbing for a single bathroom and a kitchen sink plus radiators and a boiler that was probably onsite oil fed. A modern home has far more to consider including insulation, far more electrical and plumbing, HVAC, etc.
> The biggest innovations to construction are probably to be had in better/faster/easier plumbing and electrical connections, making it faster and more reliable to install all the fixtures
I think maybe 90% of the benefit could be had by simply having good, efficient design in the first place with the same traditional connections. It is unbelievable how much quicker it is to build when all the plumbing is stacked within a small footprint, rather than running all over the place.
If you try to save on workforce cost by.... making materials more expensive, that only works if materials are not the big part of the cost. But they are for housing, usually by far the biggest cost.
If it is just "mold plastic differently so it can be put together quickly" and doesn't add much cost, it is worth it, but if you prefab walls cost more than raw materials + labour to build something similar... and on top of that are less elastic (just certain width and height etc.).
I do a lot of my own plumbing but I had a larger job I didn't want to do. I had assumed the plumber was going to use copper and sweat connections. He basically told me that copper was way up and the labor costs of the sweat connections would make it more expensive. I had him go with PEX and sharkbite connectors.
In retrospect, doing the job myself that way wouldn't have been too bad. The sharkbite connectors seem pretty reliable. I used some when I first bought this place and they've been installed for about 20 years now. I still prefer the traditional sweat joints, but maybe it's just not worth the investment of time?
I had a similar situation, but I had him go with PEX and sweat connections. I suppose I would have considered it for a connection in my garage, but this was deep in my crawl space in an area where you only visit if you absolutely have to. Not a place to mess around with products that have half the life expectancy of the tried-and-true methods.
I wonder if any builders are using this approach - solder in the crawl space and behind drywall, but shark bite in accessible areas.
Wago is better than sliced bread, the only people upset with them are just butthurt that their knowledge of how to use a wire nut is no longer a competitive moat.
What a silly response. No, Wago has in some cases higher contact resistance than other means of splicing hard copper wire. And in those cases it can lead to an increase in temperature, arcing and possibly fire.
It is much more convenient and I highly doubt anybody that can splice a couple of wires sees that ability as a means to keep the competition out. But there are drawbacks and you should be aware of them. When doing high current and tri-phase connections I will use a wire nut, otherwise I use a Wago.
> And in those cases it can lead to an increase in temperature, arcing and possibly fire.
Prove that. There is no evidence for that if they are used within spec - and if there was, UL and CSA would immediately pull their listings. There is however, plenty of FUD on the internet about Wagos being dangerous, even though plenty of tests have shown this is not true. For example, this test which showed a five-connector Wago running at maximum of rated limit releases about 1W of heat. A little warm, nothing dangerous.
Also, you should look into how common electrical fires are in Germany if you really want to prove your case. Wago popularity over there is insane. Wire nuts are viewed as archaic and most homeowners don't even know they exist.
Wago's fail all the time, as do wire nuts. Both need to be applied properly. Applying a Wago properly is easier than applying a wire nut properly.
But Wago's really do have higher contact resistance (especially when they age), can have higher temps and I've personally seen more than one case of a molten Wago, including one where the whole metal part had molten its way out of the container, as well as one where the tabs had gone missing and were all locked in the 'open' position (no idea how that came to be).
I do a lot of house renovations, have installed a whole pile of solar gear (including some pretty heavy duty inverters), and have installed a complete machine shop. You're more than welcome to question all of that but I'm not in your pay and I don't need to prove anything, my personal experience is good enough for a forum comment. I use both, for where I think they are most appropriate and that's how I treat all tech: apply it for its strengths and be aware of the weaknesses.
Could you elaborate? All connectors regardless of type have current rating and specify what wire gauges they are compatible with. It seems like it would be a big deal if a properly installed Wago could catch fire.
I know that wire nuts can sometimes have a better failure rate when tested at much higher currents than either connector is rated for but this is equivalent of ingredients causing disease when you consume 1000 times more than is typical.
Code and device approval are basically minimum standards. For example it's common wisdom to avoid "backstab" connections on receptacles, yet (at least one) NRTL keeps their approval, and they keep selling them. Go image search for "receptacle backstab" and see all the melted ones.
Or look at how romex/NM (doesn't) hold up to mild rodent activity.
I'm not saying that Wagos are in the same category as receptacle backstabs. The point is there are definitely quality/safety reasons to choose one approved method over another.
> Or look at how romex/NM (doesn't) hold up to mild rodent activity.
We had a mouse chew the romex going to the receptacle for our dishwasher (as well as the drain line). He must’ve gotten quite the shock, since the breaker tripped. The wire was charred and had exposed copper.
Wago use a spring loaded contact to touch the wire and there are at least two of these in series for every connection. This works quite well for currents up to about 20 A, and if the Wago is applied properly: straight wire, right thickness and proper length stripped. Obviously if you mess any of those up all bets are off. But assuming proper installation that 20A is still a potential issue: lots of gear has a multiple of that for a short time when starting up. That's when contact resistance starts to become important, and as connections age mechanical resilience comes into play and what was borderline before may become a problem. Contact resistance is ideally constant but as connections age they are pretty much a factor of how much copper is in contact with each other and this is where wire nuts do a better job. So a brand new Wago splice and a wire nut splice will probably have approximately the same contact resistance, but several years down the line it may well be quite different.
Motors and other large inductive loads are especially nasty in this respect, which is why there are several 'curves' in use for ground fault interruptors. The most common, the B curve will do a max or 3 to 5x for a short period of time before it kicks in, but a C or D curve can go much, much higher. And then that contact resistance (which wasn't such a huge problem so far) suddenly is a problem. Now you're generating serious Wattage in a small space that has no good way to get rid of the heat. Imagine an elevator motor or a shop lift or or something like that. This sort of application is where I would never use a Wago. But for regular low power stuff in my house I use them all the time, lights, bedroom outlets and so on. But my 17 KW Solar inverter is using crimped on joints and I checked the torque on the screws in the plug to make sure it's all up to spec. Those are not things to mess around with and hope it will hold.
If you want to have some fun take a FLIR across an older exposed installation, it will definitely help to visualize what contact resistance will do.
That's why wire nuts cause fires and wagos don't. If I had a dollar for every wire nut I've ever fished out of the bottom of an electrical box, I'd be able to buy a nice dinner for the whole family, whereas I'd leave the dollar store empty handed if someone had forced those numptys to use wagos.
This we readily agree on, but I've seen both being fucked up enough to go over the electrical system with a FLIR for any new property purchase. The stuff you find like that you won't believe, including dead rodents, completely burned out junction boxes, arcing so strong that you could smell the ozone meters away from the junction box (essentially a matter of time), wire stripped bare over ridiculously long distances and so on. Other code violations such as using only black 1.5 mm^2 for a whole installation and non in-ground approved cable buried a couple of inches under a driveway.
My advice is to use both, each for their strengths. If you're wiring up an electric motor of any sizeable power I'd definitely do that using the best connection possible, so a crimped on screw terminal if that's a possibility, a wire nut if it isn't and a Wago if there isn't anything else. But I'd check the drop across the Wago before calling it a day, just in case. Start-up currents are pretty nasty. Also: anything behind a type C or D breaker.
Can't agree on this at all. You twist the wires together in the direction the nut threads on, then screw it on. After it's done give each leg a light pull to make sure it's secure.
Where and how are people fucking this up? I could see using the wrong size, leaving stripped wire outside the nut or stuffing way too many wires into one nut, but other than that I'm baffled.
Here are some of the ways in which I've seen people mess this up:
- too small a diameter wire to properly engage the thread
- uneven insulation so only the tops get joined
- not enough twist so only the first couple of threads engage
- stranded wire cut through completely by the threads
- wrong kind of wire
(aluminum! which really needs its particular kind of connectors and is fortunately phased out but you may come across it in older installations).
- too many wires for the size nut (usually 5 is the max, depending on thickness)
- re-using oxidized wire ends because there isn't enough wire length
- wires not twisted at all before applying the nut
- leaving out the wire nut spring (!)
(presumably to make room for more wires...)
- spring upside down
- untwisting the nut and the spring, then untwisting the wires to add another splice
- bending the copper too often (metal fatigue)
- not inspected after twisting it on
- too much insulation stripped
- wire end damaged during insulation stripping
- wires twisted in the wrong direction
And so on... In comparison some of these will apply to Wagos but in general they have fewer ways of doing things wrong and adding another splice is much easier with a Wago. DIY electrical is great, it saves a ton of money. But the kind of stuff you come across can make your hair stand on end. The house I live in came with an electrical installation that was downright dangerous, I live here for 5 years now and I think I've fixed most of it but every now and then a new surprise pops up. Recently: a wall socket stucco'd over but before they stucco'd it over a piece of flex wire (twin strand) was connected through a groove cut into the wall to a brand new in-wall grounded socket of which the ground was left unconnected. Whoever made that (I suspect the previous occupant) is a complete idiot when it comes to electricity.
New ones for sure. Those stab-ins come loose much easier and are harder to get right. There are some stab-ins that are transparent, those at least allow you to inspect that the wire is seated properly. But be careful when you manipulate them to close a junction box because any twisting of the wire can cause them to slip loose.
Oh, I meant the gray 222s vs the clear 221s. The whole "I can see it right" thing is nice with the 221s, but I've had people tell me that the 221s don't hold as well as the 222s.
I could believe that wire nuts for regular size wires (say, 12 awg) have a pretty good reliability record -- only after they've been twisted together by an experienced electrician and then capped, there is great wire contact and physical strength. I've occasionally had a wire slip from a Wago when I do a test pull.
But I'm with you, I'm happy with Wago. When I'm doing the work myself, that's what I use. Though I do use wire nuts for my big wire connections (6 awg). They probably don't even have lever nuts for that size, but I didn't look.
Unless you're using stranded wire. It's definitely possible to use a wire-nut correctly with stranded wire, but it's much, much harder. Also (in the US at least) stranded is almost always lighting so the slightly increased contact-resistance is a non-issue.
That's true, for stranded wire wire nuts are less than ideal because the thread tends to severe the strands if you're not super careful. If you do use them always twine the threads and if you can use a crimp on sleeve of the right diameter.
This isn’t entirely correct. Modular construction is definitely an option and is particularly well suited to projects like hotels and apartments with lots of repeating layouts. Here’s a 4 storey hospital extension that I worked on in Melbourne that was put together over a weekend: https://www.modscape.com.au/commercial/the-avenue-hospital-e....
Having said that, it definitely has limitations. There’s a lot more structure in the modules which means more material overall and makes it harder to fit in services. You’re also limited architecturally.
See my other comment. Modular is somewhat better in some cases, but not dramatically better, which is why it has gained a certain share of the market but not the majority of it.
Modular is mature technology and would have taken over the whole industry decades ago if it was actually a lot better.
Most modular housing in the US is double- and triple-wide houses that look exactly like what they are. Boring, simple layouts, ugly roof lines, clearly going for efficiency over any kind of style. And the construction quality isn't magic, despite them being put together on an assembly line. They're subject to the same cost-cutting as every other mass produced item.
I think manufactured homes would be more palatable if they stick-built certain parts of them. The big one being the roof. Instead of the low overhang, low slope design that works well for transport, ship them as roofless boxes and then do the roof on-site.
Of course, the problem with that is that a manufactured home isn't -that- much cheaper when you're done, so any kind of manual labor to make it prettier will close that gap quickly.
All McMansions are ultimately delivered on a bunch of trailers. It's just a matter of how much of it is pre-assembled. But I understand what you are saying, it looks more impressive to have it built onsite instead of having a handful of large pieces trucked in and dropped in place.
There are also HOA regulations that empower the HOA board to reject builds. These boards tend to be conservative with building types. Many of these regulations are in place to keep the value of surrounding homes.
they are deeply conservative but saying that regulations are in place for the purpose of keeping home values is reaching. In my experience, there are a lot of HOA directors who are just control freaks who just want to lock everything down to prevent change.
> they are deeply conservative but saying that regulations are in place for the purpose of keeping home values is reaching.
That is a common stated goal by HOA officers used when I inquired about building alternative structures in a HOA when looking for land. Also preserving uniformity is a common reason.
I agree that there are underlying motivations, but I'm not sure what they are. It could be driven by some sort of underlying social contract that was established with the HOA or some fear of the neighborhood getting out of hand or diminishing in prestige if someone puts up a Yurt, Geodesic Dome, or a Tiny Home. A common constraint is forbidding habitation within a RV & minimum livable square footage & footprint. Contractors benefit from these rules as a minimum square footage is more expensive to build. It would be interesting to see some research into the underlying rationale of these administrators.
The modular housing industry isn't doing anything to solve that stigma. They are cheaper, they also cut a lot of corners that regular site built houses do not.
> would have taken over the whole industry decades ago if it was actually a lot better.
I think it would have taken over if it was cheaper. But for larger size buildings it isn't and that's what I think stops larger scale adoption. But they are faster to deploy.
Do you mean a skeleton laid on already poured foundations with water/sewage/electricity drawn, and ready for finishing after this weekend? finishing, carpentry, windows, internal plumbing and electricity takes a lot more to complete than the skeleton itself.
Correct this was just the structure. Still impressive for what it was. I did the mechanical services which were put in after in a traditional way but in theory a lot of the services could have been installed within the modules at the factory and connected onsite.
> There's a long list of construction startups who thought the industry was low-tech simply because everyone in it was dumb, and that they would be the smartest guys in the room who'd revolutionize everything. Those startups are pretty much all roadkill.
Slightly OT, but I feel like this is a general trend and definitely not limited to construction. There are many companies and founders aiming to 'disrupt' an industry, and a starting out with what only can be defined as arrogance. Seeing some of the startup companies in the sector i'm familiar with trying to explain how the world works to some of the most experienced and established players has been hilarious and infuriating at the same time. At this point, I finally understood where the derogatory meaning of 'techbro' comes from.
The main thing that concerns me is that people still believe technology (primarily software) is the solution to any problem we encounter. Yes, technology solved many problems in the past, but it also created a lot and failed in spectacular ways. If you need a solution to an acute problem, waiting for a technology to hopefully be developed isn't the right call. However, more and more people, governments and companies are buying into that idea. I can't fail to notice many people who where technology skeptic years ago now turned towards a "I don't want to change my behavior, technology will find a problem that solves the issues I cause with it". Autonomous cars are my prime topic that comes to mind, but many other things also come to mind.
But then I realized this is the natural push/pull of conservatism against progress. Incumbents get old and conservative. New companies crop up and try to do things differently. Sometimes the new ideas are stupid, and incumbents are right--the tried and true really is best.
Other times, the incumbents have become so bureaucratic, slow, and out of touch with what matters (customers), that a new company can come in, do things dramatically better, and burn an old competitor down.
Macro-wise, I think we should be glad for this. It's very hard to tell what will and won't work at the beginning. VCs get paid a lot of money for trying to guess this and even they can't get it right. I myself have been surprised many, many times when an idea I thought was incredibly stupid, turned out to have legs.
One way to change your mind on this, write down your predictions about what companies/approaches/techniques will/won't work 10 years from now. If you do this say, once/year, and you're honest, you'll see how hilariously bad you, and more or less everyone else actually is, at predicting the future and knowing what will and won't work. Sometimes you really do just have to try it, and see what happens.
I feel like this is so common. It happens for comments here too (but the comment I’m about to make is not about the top level comment which is a valid question).
I work in aerospace and whenever a post is related to aerospace here I expect to see several “why don’t they just <do x which they already do or do y which is easy to discredit>..” comments as if nobody else was smart enough to think of it. I favorite these comments for some reason. Not surprised to see the same thing happens in other fields.
Stuff like SIPs (structural insulated panels) and CLT (cross laminated timber) are kind of changing the game on prefabrication offsite for homes. The components are small enough for trucking but assembling each lego blocks onsite gets you far closer to a completed house per unit time compared to stick framing. I've even seen some smaller SIP houses that don't need a crane onsite. You also don't end up with the modular house stigma.
It's still a small % of houses built, but it's very cost effective and getting better (and more common)
I think there are a few niches for construction that haven't been solved, CLT and CMU can go up 16 stores and should be able to deliver "infinite" apartment buildings
Integrated Project Delivery - AI could solve the problem of aligning stakeholders possibly
Applying scrum/lean to construction -
BIM - there is a lot of data in a building and BIM standards are putting everything into one file,
digital twins: lidar and cameras and ai are all getting better where high accuracy scans can create as built digital twins while referencing BIM file to build it.
lifecycle analysis and building automation: precooling and preheating spaces, I believe we should have better rubric for valuing existing properties eg a window is an asset and a liability (many owners do not account for replacement costs leading to buildings in disrepair)
skilled labor - mixed reality education: if there is a digital twin then worker could use augmented reality to see preferred methods to make that happen while being credentialed and upskilling (crazy brick facades become possible)
There's a long list of construction startups who thought the industry was low-tech simply because everyone in it was dumb, and that they would be the smartest guys in the room who'd revolutionize everything. Those startups are pretty much all roadkill.
This is the same problem that plagues electric car startups. Most of these folks don't know what they don't know. Tesla has had great engineering from day one, but almost went under because it couldn't figure out large scale manufacturing and logistics. Problems that old school companies have been solving for a century.
It's just the same "I figured out something complicated so I'm smart and something I consider a problem in a completely unrelated area of knowledge must be because the people involved are too dumb to fix it so I will" mentality that seems to infect so many people that learn a programming language.
Tesla started from scratch and developed large-scale manufacturing and logistics from first principles. It was hard, but it's put them in a hugely advantageous position today. It turns out old-school manufacturing for ICE vehicles doesn't translate directly to EVs. Yes, Ford (for example) can build EVs, but they're not cost competitive with Tesla, because they're optimized for something else. Tesla produces 100x as many EVs as anybody else.
Now, was Tesla surprised by the difficulty of manufacturing, because they didn't know what they didn't know? Maybe, I have no idea. But in retrospect, it wasn't a mistake to ignore the accumulated wisdom of the car industry. It turns out the old-school companies don't know what they don't know either.
1. Elon thought they were smart enough to build cars with more robots and less humans than other manufactures. When this didn't work out, then swung to the other extreme and were employing far more workers than you would find at comparable plants.
2. Do you remember when Elon was tweeting about a national car hauler shortage, and that Tesla would start building it's own trailers? Tesla was the only manufacture having troubles with deliveries.
3. Have you watched the Sandy Monroe videos where they tear down vehicles? He has compared the build quality to 90's era Kias.
"Problems that old school companies have been solving for a century."
In the end (current time), didn't they (Tesla) find a better way?
I am truly ignorant here, but based on what I have read, Teslas manufacturing process now is much more efficient/better than the standard GM/Ford, etc...
Uh, I'm not in the industry at all, but obviously (?) the concept of prefabricated (modular) houses exists, and has done so for many years.
Perhaps this is a regional/national thing (I sometimes get the feeling that "prefab" is a condescending term in the US sometimes). For reference, here's a page showing the selection from one of Sweden's main house manufacturers [1]. It's in Swedish, but I just wanted to share the pictures. Also it's hard to say exactly what proportion of a house is pre-built, but I expect the majority of the structural things (walls, floors, roof) to be.
It might be worth taking a look at Bensonwood (https://bensonwood.com). They do some very impressive, high-end pre-fab homes, and they solve the "must fit in highway lanes" by shipping walls that have windows, electrical wiring, plumbing, etc., all already pre-installed in their factory in New Hampshire. When we investigated using them 3 years ago, they didn't support pre-installed CAT 5 wiring or Optical Fiber, but I wouldn't be surprised if they can do that now. :-)
This is all done using computer-controlled manufacturing equipment, much of which is imported from Europe, where they are much more advanced on this front than in the U.S. One of the advantages of having computer controlled nail guns and vaccuum operated "wall flippers" is that the construction tolerances are far tighter than if you have humans nailing in the shingles, sometimes while on a ladder 15 feet above the ground.
The downside, of course, is that they only today have their one factory in New Hampshire, and while the walls can be shipped trucks on highways, if you want to build a large, luxury pre-fab home in Arizona, the trucks have to travel a long way, and that adds to the cost. This hasn't stopped some of their customers, though. Take a look at their web site for some example houses that they have built --- it's a far cry from what most people think of when they hear about "pre-manufactured houses". These are not trailer park homes!
Various levels of offsite construction (below the highway lane size limit components of course) exists for decades, in many contries, since at least the 60s, some died, some flourished. Of course this is still requiring considerable amount of onsite assembly and finishing off but still, manufacture component and delivery on trailers is a traditional concept already, the resons for less (as there are some) startups in construction need to be looked for elsewhere than onsite/offsite reasons.
Should you look at the fragmented composition of participating professions, fragmented nature of players and organizations involved, the fragmented and fluid supply chain, all combined with the long realization phase and complicated responsibility (legal) relationships of the actors perhaps? Generic contracting is more like a conductor role for the numerous groups involved, be it joined or independent ventures, than a subject of startup 'disruption'. Management, including financial.
Sub tasks will see some unicorns, but not much though, mostly in software area. The opensystemslab.io comes to mind as one construction adjacent one concerning the structral components mostly, but with systematic vision and novel mentality.
Typically these are called "modular homes" in the US. They've been around for quite a while and do make up a certain portion of the new home construction, though not the majority.
This approach is not quite as efficient as it initially appears:
First, it does nothing for the site construction (grading, excavation, utilities, paving, septic, well, etc.) Those tasks, which make up a decent portion of the project, are done in exactly the same way as in conventional construction.
Second, the modular boxes are either A) the width of shipping containers, which severely constrains the house layout, or B) somewhat wider than shipping containers, which makes them oversized loads that require escort vehicles, highway permits...increasing cost.
Third, you have to hire a crane to set the boxes, and then make all of the connections between the boxes, and install various mechanical and electrical components, complete the finishes, install staircases, etc. This costs quite a bit and still involves the hiring of various local subcontractors, just like in conventional construction.
When you add everything up, modular sometimes saves a little money and often reduces the project timeline (unless there are delays at the factory). But it's not a massive improvement, which is why modular hasn't taken over everything.
It’s interesting - in Sweden, the vast majority of new homes are apparently prefab [1].
Aside from customer expectations for customizability in the US (and other countries) I believe regulations also contribute, with prefab homes actually requiring more robust construction than conventionally built homes.
All house structures depreciate in value over time. The land they sit on is what appreciates, usually dramatically more than the depreciation of the structure. The prefabs associated with poverty are prefab structures on rented land, so the only thing you own is the depreciating structure, not the appreciating land.
That is true of "manufactured homes", a.k.a. "trailers", but not of "prefab" or "modular" homes, which are built using the same components as conventional homes.
They're the same components but not. If you would frame a building and then build the wall assemblies traditionally your ability to integrate parts of the structure and seal it is different than when you put together assemblies and try to seal the thick boundaries between them. You also don't have any quality control - whatever shows up on site is installed.
The houses they are building around here are usually put together from pre-fabricated walls. The siding is even on them. They arrive on a truck and most of the house (as far as the outside goes) is put up in a day. Just like the trusses.
To add to that, construction is heavily regulated (which is by the way, probably a window of opportunity for some startups that will aim at finding innovative ways of working around regulations to build cheaper without breaking the law), and heavily unionised too. Most attempts to seriously innovate in it will be shot down quickly as it will threaten jobs and union power.
It honestly feels weird to hear people talk in generalities about “regulation” and “innovation” in the wake of the whole Titan submersible thing. Like, didn’t we just have an object lesson in why certain industries need to be more tightly regulated than others?
I would not want to live in a house whose builders took an “innovative” approach to dealing with “regulation”. Building codes are often written in blood.
>> I would not want to live in a house whose builders took an “innovative” approach to dealing with “regulation”. Building codes are often written in blood.
Not everyone is so rich. People should have the choice about whether or not they want an unnecessarily expensive house. Regulations assume one size fits all and that everyone wants the same thing This isn't true. and trying to outlaw poverty doesn't work, it just makes things worse.
I wouldn't want to live in a house that was unnecessarily complicated to point of doubling it's cost just because of endless regulations forced vast increases in costs. You should see one of the links shared above: it talks a great deal about what's driving the increased costs in housing and it's all to do with increased building complexity, much driven by regulation.
Some building codes are written in blood; others, they are not so much about safety. For example, the federal minimum SEER rating for air conditioners where I live is now 15 SEER, as of this year. It's a good bit more expensive than the lower SEER units and there is a perception that they're more complicated and therefore easier to break and harder to maintain over time.
Similarly, the 2021 IRC now requires a surge protective device at the service entrance. This doesn't protect anyone's life, and may protect your TV or cable modem if you live in a lightning-prone area. Its cost-effectiveness decreases in areas that don't get lightning strikes.
I think it's OK for the government to establish a floor on the quality of things, as long as they do it with the understanding that nothing happens for free, everything is a tradeoff, and better things cost more. So it's generally preferable when the legal floor is mostly focused on safety (where the tradeoff to something cheaper could be someone's life or limb), but more questionable when it's for things that don't relate to safety, where it would be better to let the individual make the tradeoff for themselves.
>>Not everyone is so rich. People should have the choice about whether or not they want an unnecessarily expensive house.
what you saying is that it's cheaper to put lead pipes instead of copper, right? or not do proper wall ventilation / insulation and let whole thing rot and mold within a year or two? etc, etc. I don't know bro. I'd rather have regulations.
some building codes are written in the blood of people who were injured or hurt, some are to stop people from building slum and becoming slumlords.
Regulations don't assume one size fit all, rather they tell you the minimum standard you must meet to participate in this, at least in our society.
If you think egress requirements and insulation requirements are too restrictive for you, then you don't belong in an industry that builds where you live and work.
The Titan submersible didn't violate "regulations", though, it violated industry standards. Standards that are updated more often than regulations. In so doing, it it was denied a certification. Since it operated in international waters only, there were no applicable regulations to evade.
Regulatory bodies which are poorly funded may write overly restrictive rules because they don't have the resources to do a more comprehensive assessment. In particular, many HUD rules are split into "single-family houses" and "everything else", with little consideration for small apartment buildings, townhouses and other "missing middle". The requirements for houses are much less strict than for apartments, and construction costs per square foot are correspondingly lower for detached single-family homes.
If you live in a detached SFH built after 1970, it's arguable that you already live in a structure where the builders took an "innovative" approach to dealing with regulations, because it was built to the lower house standards and not the stricter apartment standards. And if it was built before the 1970s, the regulations were probably very lax.
Nonetheless, I think the solution must be to reexamine the regulations, rather than evade them. But this "written in blood" is a thought-terminating cliche that prevents progress.
> The construction industry ... manufactures products that are too big to fit in highway lanes.
This is why I believe the future of construction is portable 3d printing. Imagine a 3D printer which fits on a truck, yet can be assembled in an hour and can print something the size of a large house from fiber-embedded cement. The printer would have nozzles for paint, foam, tar, electrical wire and PET plastic. It would also have a scoop to remove soil.
A team would drive the truck to the worksite, assemble the printer, start it going, and come back in 2-3 days when it was done. The printer would dig foundations, lay a fiber-cement foundation, damp proofing tar layer, build double skinned walls with foam between, paint the inside and out, install wiring and pipes, and build a foam, cement and tar roof. The house would have premade cupboards, bathtub, washbasin, etc.
Humans would come back to fit carpets, electrical outlets+fusebox, appliances, windows, vacuum formed liners in the bath/washbasins, etc.
You lost me there. I’m guessing you’ve never had to deal with rocky New England soil and non-flat grades. I’m sure many other regions have their own challenges, such as water tables and custom insulation requirements.
Even a tiny creature like an ant can dig holes in tough soil. A machine can too as long as it has feedback (ie. it can see the rocks and keep digging around and bashing till it comes lose.)
> non-flat grades
Well you dig it till it is the same shape as the plan...
> water tables
Either lay the concrete underwater (most concrete can be laid underwater) or dewater with a pump on the end of the actuator arm.
All of these problems just lead to increased build time. Obviously your machine is quite expensive - so if it takes 2 extra days of machine time to build a house on a steep grade in rocks, then thats gonna cost more, and at some point might make it not worth it.
By rocky, I’m not talking about pebbles and small stones. I’m referring to boulders and ledge that may need blasting. It happens quite often up here and most of the time excavators may not know about these issues until they start digging.
> Well you dig it till it is the same shape as the plan...
That’s not how it works. Either the surrounding property needs to be regraded, in which case you’d still be forced to use excavation equipment, or you’re making an even more complex machine to be able to support building things like walk out basements on a custom grade. In the case of basements there’s simply a lot of volume of material that would need to be either removed out of a lot or just moved within the lot. Again, still needs excavation equipment to do that. The same excavation equipment that can dig out a foundation within hours and is perfectly adept at dealing with boulders.
A machine to handle other parts of the job such as foundation pouring might be viable. I’m just saying that a magical machine that can do it all if left alone for a few days is wishful thinking.
Cement is not a great material for building a house. It is weak in compression (normally made up for by using a lot of it), it has terrible insulation, and it is hard to modify when you want to make a change. 3d printing of buildings is a niche and I predict it always will be.
3D printed things in general tend to have poor (weaker) material properties.
I predict that that won't matter eventually though, because over time, the cost of human labor goes up and the cost of materials goes down (relatively). That means anything that reduces the labor cost to build a house will always eventually happen, even if more materials are needed (unless another technique reduces the labor further first).
Yes, but I think their printer design could be improved.
I would go for the printer being far less weight by making the whole thing a cable truss and winch structure. That should cut the hardware cost in half or better, like the way a travelling circus tent can be assembled entirely without a crane, yet packs into a tiny box. The downside is you can no longer assume a rigid structure, so you need cameras and alignment marks for precise positioning - but you probably needed them anyway. You also can't make any accelerations above 1G, but that should be fine for housebuilding.
And obviously, their design only makes the walls, but I would want to do foundations, roof, insulation, plumbing and electricals all with the same machine.
Yeah, getting plumbing and electrical as part of the print seems key. The current ICON system looks cool, but at the end, you have a concrete structure with no openings for these elements. Pictures of ICON buildings show electrical installed entirely with visible conduit, and protruding J-boxes, and don't show rooms with plumbing at all. I don't think many home-buyers would want a home without utilities embedded in the wall as in traditional construction.
> Building components that are small enough to fit in highway lanes, on the other hand, are manufactured in centrally-located, capital-intensive factories and shipped to their final destinations, just like cars or electronics. Think: boilers, doors, windows, air handlers, etc.
The elaborate on your idea, there are a couple startups that do work in "real estate" if you can even call it that, they ship ready-made prefab aimed at people looking for separate mancave/home office from the actual home.[1] Those are things you can ship in highways and load in with a crane. But that's about it. These startups had their boom during COVID but you don't hear much about them now.
For what it's worth, my house was shipped on the back of two lorries and the individual walls were built in a factory offsite. Though what I learned in the process is that getting the frame assembled is only one part of having a house built and the other stuff (foundations, etc adds up quick)
> The construction industry's fundamental constraint is that it manufactures products that are too big to fit in highway lanes. That means they can't be shipped from a centrally-located factory to their final destinations.
As a whole, yes. But there are a number of companies that are building segments (walls) in a factory and then shipping those to be craned-in like Lego® blocks. Some factory tour videos:
I'm can't watch these videos, but there's thousands of 1–2.5mm$ homes being built west of Austin, Tx (who's buying them!? I DON'T KNOW!)
I like ti watch these houses go up: the walls & roof trusses are all laminate and come in to the job site in segments. It's takes a crew of 2–4 (depending on the size of the house) about 4 days to assemble the exterior.
The interior is about 50% 'modular', and the rest is traditionally framed. It's pretty insane.
Pre fabricated assemblies exist all over but are highly constraining if standardized or need to be custom ordered to fit which becomes expensive. You still have to assemble and seal everything on site so you don't necessarily save anything and it limits you in other ways. Building wall assemblies isn't the hard or expensive part of construction.
From your description, the solution seems obvious. The factory needs to come to the building site, rather than the other way around. So the opportunity essentially becomes one of providing better tools to builders. This has already happened in some ways since air nailers are a nice productivity gain over hammers and have taken over. If you could deliver automated tools that could fit on a tractor trailer, say a robotic arm/crane with a few attachments, you might have a winner.
You'd think there'd be a novel application along the lines of programming Boston Dynamics robots to construct cookie-cutter template houses, no?
Have humans in the loop to clear the land and drive construction materials to the site, but build the rest with robots that can work through the night and faster than any human, constructing the same template again and again in different lots?
Sure, bureaucracy is a major bottleneck, but it's not like human construction finished within a month...
Boston Dynamics robots are still nowhere close to as dexterous, flexible, or capable as human laborers. Getting them to build houses is a massive and expensive R&D project, not a startup, for now.
If you built the houses the same way as with human labor, sure. But perhaps they would be built differently with robots, in a way which didn't require that level of dexterity. After all, most industrial robots don't have opposable thumbs.
I'm not saying it's a simple problem to solve, nor one whose solution I have fully mapped out in my head. Just that it's a problem whose solution strikes me as being within the realm of feasibility.
Boston Dynamic robots aren't free. They're far from cheap. Do you think making and sending them out sites would be cheaper than just hiring someone local?
At their current cost? No. But if you could come up with a dependable and repeatable solution that reduced the labor cost of human construction down to about a week of robot construction, then yeah, I think the cost of manufacturing the robots would quickly pay for itself.
The economics on those robots is that they’ll be used for monitoring and controlling citizens and aliens by the state or employers, rather than be used to serve common folk for their problems including housing
Edit: I imagine though, that in locations where building is regulated under the international residential code. There has been less investment, it only in the last few years added an appendix for mud/cob construction... So you can add regulatory cost on top of the actual robotics involved.
The tiny house they have a gallery of is aggressively ugly, with lots of bizarre curved walls seemingly just to demo their method. And the shelves and fixtures look precarious and unsafe, straight out of Arrested Development. Given the build quality, I'd be afraid the roof would come down on me if I sneezed.
It does not really support your hypothesis, instead giving a bunch of examples of inertia, which collectively make it extremely difficult to demonstrate a return on investment
> There's a long list of construction startups who thought the industry was low-tech simply because everyone in it was dumb, and that they would be the smartest guys in the room who'd revolutionize everything.
And therein lies the problem.
The guys that work in construction aren't "dumb". They're most likely way way *waaaay* smarter than you, particularly about construction, but maybe not so much about the computer industry.
Guess what? Construction is absolutely nothing like the computer industry, and nothing the techbros know about it remotely maps onto construction.
I jointly ran a window and door software company (I was responsible for product/dev). You wouldn’t believe the amount of staff that joined “how hard can windows be?” Consistently and without fail 3 months later “what the _____! I never knew!”
Nothing about computers maps to anything else. Computers are unique for many reasons, like the undo button, the fact that manual dexterity is not a factor, the lack of any concept of wear, strength, or durability, and the ability to copy something perfectly an unlimited number of times with no raw material input.
Building a bookshelf is SO much harder than software, and that's WITH clamp on guides, power tools, and pocket screws, giving myself every possible advantage. Things like painting, skateboarding, or guitar are an order of magnitude beyond even that, I can't even imagine what it would be like to be able to do those.
Software can easily become kind of a useless toy or hyper niche thing, unless the whole field can be changed to make it work like software does(Like how money and shopping is done, where every process has been changed to work with the software).
Once you change the whole field, stuff gets easy, otherwise, you're just spending all your time translating between paper notes and digital files, which are useless because there's no management system to do anything with the files, so they just sit there till someone has to run to the computer to check them.....
Yeah exactly, like the car industry. Christ, can you imagine if one of those cloud-cuckoolander morons decided they wanted to start a car company? You'd have kinda cool-looking cars that were surprisingly affordable but all the switches would be replaced by a big touchscreen that's too bright to look at when you're driving at night, and all the important safety systems would be written in node.js or some damn thing.
Portions of the "Autopilot" and FSD systems are written in Node.
You reckon self-driving cars are going to be safer? I have a 1998 Range Rover that barely has *any* software on board, never mind things that will shit a brick because of the next Leftpad Incident.
Pretty much. Current Tesla seems to be nightmarish, but still within general range of some of the less good human drivers.
I'm still super excited about the tech, because I am very clumsy and have no business even trying to drive, and a car is one of the highest modern luxuries out there. Not that I expect to be able to afford it when it comes out....
The problem is that its safety is being compared to human drivers on every possible kind of road, when it only works on straight well-lit motorways with everyone travelling at the same speed in the same direction, which tends to be when human drivers don't have accidents at all and when Telsas make an absolute fucking beeline for emergency vehicles.
People start companies, but they're more "sole proprietor plumbing services" and less "spending someone else's money on customer acquisition in hopes of 1000x exit" so it's not what people categorize as "startups."
There's no magic construction sauce that will let you scale up to taking over the entire market, so it doesn't attract that sort of investment.
You get related startups for software to manage projects, building codes, etc, but not for doing the actual construction part.
At one time, there was. (And still is in Asia). The idea was to buy up undeveloped land, build a train line to it, develop a whole new city, and then sell it off in parcels.
It seems we stopped doing this in North America when highways took over.
Just to name one example of this, in Bangkok the BTS Skytrain[0] is expanding pretty fast, and even though it's expensive to ride it's the only way around the awful traffic if you work downtown, ergo it's packed during commute hours. (There's an underground too, which is also expanding, but it doesn't go as far out.)
High-rise apartment complexes go up pretty fast too, when a new station gets built. Coming from the West, it's fascinating to watch: an area that would normally be somewhat insular, suddenly becomes a viable bedroom community for people who work downtown, and then there's a rush to get in on the relatively cheap real estate, and night markets open up for your after-work entertainment, and so on. All within a couple years.
OTOH there's massive oversupply in these high-rise complexes, so I'm not sure about the business dynamic for the developers, other than the fact that a lot of money is still desperately seeking a parking space outside the PRC
The US government actually tried this explicitly. For a lot of land out west they gave every other parcel to the railroads for free, on the premise the railroad company would then make things boom, and they’d both profit.
It mostly didn’t work out that way, and it is a key reason a lot of the parks and native land reservations have a bunch of dumb isolated parcels that no one can get to.
It does seem it would make more sense near a city with some existing transit today you could add to. I do know the MTA has used real estate to subsidize a few projects like the Fulton St transit center, but less so for entire new lines.
If you just build a railroad and sell off parcels you aren't doing any development, nor anything that tech bros can use to slide into the industry. Actual development involves a lot of heavy earthwork, drainage plans, development of water and sewer networks, maybe road planning, fire hydrants, etc etc.
Just buying and selling land isn't development.
Railroad companies control where we build railroads and they are conservative after decades of closing unprofitable lines. This is not the wild west.
As I mentioned in the GGGP comment, they don't just build the railroad; they develop most of the parcels before they sell them off. Several buildings they do not sell; they for example tend to build shopping malls, hotels, and apartment complexes directly around the station, and hold onto those, leasing them out to businesses, or operate them themselves. Railroad companies in Asia are much less conservative than in the West, where they mostly have shed all their business except slow freight.
then those companies are not scaling up in tech bro style with a minimum viable product and looking to sell services, they're laying out tens or hundreds of millions of dollars on real property and construction before making any back. They're not tech bros and they're not doing what they do through tech. You aren't going to beat them with this one cool AI trick you discovered in an LLM. They have people on the ground moving millions of tons of earth, designers working years in advance to plan all of this, applications to government for approval etc.
This isn't "magic construction sauce" that allowed them to do it. Its massive amounts of money, labour, time effort like every other construction company. You won't disrupt them if you aren't better at their business than they are.
Yeah agreed but the secret sauce can be operating at no margins for initial years since there are almost no startups in construction thus nobody else would be able to do the same thing and a bit of market can be captured.
what do you say ?
Someone just told me about a construction business practice:
- Hire 5 guys, on the books.
- Those guys each bring 5 guys, off the books. (illegal immigrants)
- Those 5 guys on the books get paid for all 25 guys and distribute it within their team.
It's a bit sad to hear about this sort of thing happening, but it seems all too common in business.
That same person told me about another story-- regarding quality:
- At another job site, the company had a new project manager. The new PM approved moving forward into a new phase of the project without plans (plans didn't arrive by the time contractor arrived). The contractor of that project build something incorrectly (as you'd expect) due to lack of coordination with other contracting teams (i.e. lack of plans). The result: $1-2 mil worth of work needing to get fixed.
I know someone who landed six months in federal prison for doing just that, and a multi-million dollar civil suit for underpaying those workers. The penalties for failure here are pretty steep.
This is not a "construction industry practice" it's just an unethical business practice usually to underpay illegal immigrants. It's a crime and you will go to prison when you piss off the wrong guy you're underpaying.
Most egregious in these practices is that the initial (legal) hires are typically the only ones speaking English, so they have no clue how much is being "skimmed" from their own labor... and their immigration status ensures compliance with status quo.
No matter a $250,000 nor $2,500,000 will prevent this in my Southern experience. I know in the South Dakota of my childhood memories, the "illegals" were undocumented Russians (not brown).
A small construction contractor might be able to drive out of business through dumping some similarly small moribund competitor, at which point every other competitor will fill the small gap in the local market that they have paid for.
A strategy of mergers and acquisitions seems more productive, but good management to actually build something without going bankrupt is still needed.
I could be wrong, but I think intentionally operating at a loss in order to make it impossible for others to compete would run afoul antitrust / predatory pricing laws in most countries.
> It is a highly profitable business and yet there are no startups involved in constructing building
It is very capital and labor intensive, and the margins aren't all that great [0]. It involves an asset class that has a slow-moving market. It also is very labor intensive with lots of local competition all over. Finally, financial instruments for investing in real estate construction already exist without venture funds.
Software is a completely different beast. You mention CAD and other secondary software, but finance is also a place where software is used extensively. The latter is so prevalent I was able to use a smaller language (Clojure) at two banking companies, one a startup and one established. The margins of software and the size of the markets for it attract VC money.
I do think there are places outside software for startups here, but it will be startups that are further up the value chain from the actual builders.
I talked to someone who created a startup in this space, specifically a two sided network for a type of construction material. She said it's all hyperlocal (no one is ordering from a supplier 3 hours away), most orders and planning are done on the fly and over the phone, and there are lots of local quirks that frustrate attempts to provide a one-size-fits-all solution.
Another example: I recently learned from someone who specializes in foundations in a rural area that he only has two options for ordering large volumes of concrete: a quarry 5 miles away, or a quarry 15 miles away. Any further, and there is a risk of the concrete drying out before it arrives at the site. He prefers the nearest quarry, even though it's smaller, because the owner hasn't yet moved to computer-controlled mixing and errs on the side of caution when creating a new batch, which leads to a better grade of concrete than its supposed rating.
Before COVID, but especially during/after, there is also loyalty to consider. You need 18 yards of concrete by 8am. You go to the depot, and there's not enough concrete to go around.
If you've stuck around and dealt with the ups and downs with the same guy, you're getting your concrete. If you're the kind of guy that shops around, you're not getting concrete.
FYI. If you're talking about the stuff in the big round trucks that final product is concrete. Cement is an ingredient in concrete, a chemical binder.
Normally for "sidewalk concrete" that binder is an ingredient called "Portland cement", and the final product is "Portland cement concrete" or P.C.C. Probably the stuff your friend is working with.
For road paving, often referred to as black-top, the binder is Asphalt, and that is called "Asphaltic Concrete," or A.C.
And of course these terms might be local as well, this is what we call them in Southern California.
But the fact that the smaller company doesn't computer control and errs on the side of caution is a great illustration of the difficulty of working in this space. And that 10 miles can make a difference. I believe it!
For large road projects in the boonies they typically have to build concrete mixing plants on site! The look like a collection of huge round tank-style trailers tilted upright and assembled all together.
There are concrete trucks that hold the various ingredients in different containers and can start the mix on demand.
Unfortunately they're (obviously) more expensive to purchase and operate, but they are super neat and could pave the way towards 3d printing options going forward.
I am squarely in the business and there are successful and failed startups everywhere. It is dynamic, challenging but there is defintely no shortage of people succeeding. Perhaps the startups just dont have the buzz or respect?
Many successful ones are already mentioned, like Procore for example. There are many more focusing in the data collection and modeling space including BIM. For example, there are still tremendous opportunities solving little problems with data collection and selling to Trimble. Or automating tasks in software and selling to Autodesk. Or add CAD like tools to a PDF reader and sell that for a hundred million (BlueBeam). The list is pretty endless, no shortage there. I believe the shortage is perhaps the humble humans that understand construction thoroughly AND understand technology to a level that would allows a bridge between the two to be constructed.
My favorite failed unicorn startup in this space that I believe demonstrates the difficulty of construction is Katerra. I personally dealt with them as a vendor and immediately knew they would fail even before Softbank gave them a billion dollars. The hubris was off the charts. A bunch of tech people that tried to hire people in the business but just couldn't understand the scale of difficulties or challenges. I must admit they generated a fair amount of schadenfreude in me.
Interesting note on Katerra, if you visit DPR’s headquarters in Sacramento, there is a vision statement on the wall from around 99 stating their intent to become to construction what HP had been to computers - winning by driving the cutting edge with smart innovation. Not so different from the Katerra pitch, except that DPR is run by seasoned construction professionals who want to leverage lessons from tech - not technocrats who think the building industry needs to be told what to do.
I am in horizontal construction (in Australia) and it is pretty much the same story. The key is having a person who can relate to both the corporate & project people, and has the understanding to translate that into a useful product. Quite rare it seems.
There are quite a few of them. They just aren't part of the HN eco-system, but tend to originate in contracting companies and their associates (suppliers, family members). I'm aware of several of these and there is some interesting innovation happening in this space. Do keep in mind that anything you do in this space still has to conform to building codes so your ability to innovate is limited and 'move fast and break stuff' isn't really an option (fortunately so).
They also exit and roll up by being swallowed by Autodesk, Oracle, Trimble, instead of Apple, Facebook, Google, Microsoft.
Construction is one of those industries that has trouble believing anything not designed for construction will work for them. It’s basically a completely parallel reality to what a lot of people here are familiar with. Procore and Plangrid are the darlings, with Procore being the big independent one left.
It’s also important to understand that construction is very much an accounting service. It’s endless bookkeeping, keeping track of material and labor. Nearly every company now is either 1) rooted in an industry specific accounting system 2) tied to estimating, and or models 3) some ultra specific tiny shoehorn to alleviate some specific manual process. There’s also a lot more hardware involved than people might realize like laser scanners for generating point clouds.
I think the OP is referring to startups that are construction companies.
> although the secondary works related to construction like B2B market place for construction materials or layout designing softwares startups are there but no startup is primary associated with real estate construction
And the same answer is like for a lot of industries: "startups" (per Paul Graham) are defined as companies designed for high growth. And certain industries difficult to achieve high growth; by definition you won't see many successful startups in them.
Historically it's not seen much investment, there are definite cultural issues but I see the sector as a sleeping giant that's often overlooked.
Here's a long lists of startups:
www.aecplustech.com
Regular Conferences:
NXT DEV,
AEC Tech run by Thornton Tomasetti,
MIPIM NY is a big PropTech event
I work for a construction tech startup (KOPE.ai) which is building a platform to bring the world of construction system manufacturing closer to that of architectural design.
As someone who actually worked in construction (excavation in my case):
- it is immensely capital intensive at scale. Your average excavator runs in the mid 5 digits, cranes and other specialized equipment way more. If you want to start a nationwide company, no one is stopping you, but be ready to shell out hundreds of millions of dollars before you made a single cent of income.
- Staffing is just as bad... you can't outsource the grunt work to the cheapest contractor overseas, you need actually certified people on site and most young people don't want to work in that area anymore as it is really hard, literally back breaking work.
- it is, and that for good reason, extremely regulated by government. No one dies if Facebook is down for an hour because someone fucked up a deployment. Mistakes in construction can cost lives or cause serious bodily harm or damages to nature (e.g. a sewer leaking into a groundwater table).
- almost none of it is automatable or in any way "disruptible" by a startup. Sure you can improve a bit by investing in automation or better digital tooling, but the ROI is in the single digits.
- most of the industry is decentralized small contractors. You can't go viral with construction, you can't build monopolies to extract rents later on.
- regulations are completely different everywhere on all levels, meaning you can't do a "build a standard whitelabel solution and sell it for cheap" job.
- most of the industry is extremely local and "knowing" people is how you get business. At the same time, purchasing is extremely local as well. If you want to construct a new home, you ask other home builders on recommendations for contractors.
- ETA: Yes of course there are giant companies in the construction world, but these companies don't do any small scale shit, these companies don't even return calls unless you're talking dozens of millions of euros of volume. But you can't really "disrupt" these either because of the sheer amount of everything you need just to get off the ground.
- ETA2: Another issue is a lot of the trades are run by older people with a ... seriously lacking understanding of modern IT. You'd be surprised how many essentially run off of Outlook, Excel and a CAD program. You'll have a very hard time pitching something to a crowd that has specialized in a specific thing and all but ossified there.
- Testing opportunities are scarce. Construction is an insanely risky business, delays causing significant followup costs and penalties, so you'll have it even harder to pitch something unevaluated to someone.
I'm something of a construction-ist myself. Just kidding. I've gone through 3 major home renovations in different parts of California - clearly not an expert, but I'm confident in saying that the biggest obstacle to real estate construction is government regulation, not that there's a lot of it (most, not all, of the regulation makes total sense), but the process around how it's applied is so ass-backwards it makes my head spin.
I've done all my own construction plan reviews with cities/counties. It's mind-blowing how it all works. You sit down with a reviewer, who looks at your plans drafted by an architect. You go back-and-forth with the reviewer about the length of a rafter and the type of wood, grandfathering existing structure, etc. Then, he pages through big-ass books to find the latest codes for insulation R-values or whatever. And the process goes on and on for hours. It's painful how inefficient it is. One reviewer I sat with actually fell asleep during the review. Seriously. I asked him if he was okay and he said he was hungover because he went to the Raiders game the night before. And the funny thing is, he was the toughest reviewer I've ever had. Another lady didn't even look at my plans; she just talked for an hour about her daughter's college graduation, then "stamped" my plans.
I often wonder how people who do lots of large projects deal with this. I assume they just dedicate staff to it, which seems totally unnecessary. As a software/systems guy who's always striving for efficiency, I wonder why all these various "codes" can't just be plugged into a system, then the "plans" be evaluated against those codes, kinda like a series of unit tests. All these "codes" are documented in the big-ass books; it's not magic. Has anyone heard of companies trying to do something like this (plan approvals as unit tests)? Just curious.
However, I'm reminded that city governments have zero incentive to streamline the process. That was painfully obvious during the plan reviews I was involved in.
> However, I'm reminded that city governments have zero incentive to streamline the process.
I closed last year on my new home northwest of Houston. The suburb is one that's growing like crazy, but still is run like the small town it was once was. (We didn't get a water bill for some 3+ months due to a ransomware attack).
The final certificate of occupancy was potentially held up due to the one person who signs off on them, who wears multiple hats and apparently only processed them one day a week. If you got on his bad side (and this included trying to bribe him to hurry up), he'll put yours at the bottom of the stack.
I am under the impression that I’ve read about something in Texas where they would outsource this class of approvals to people who were qualified and able to apply the same rules that the government would. Unfortunately, I can’t find it.
Some municipalities outsource it to Architecture & Engineering firms, for various reasons. It's not just Texas, I assume it happens all over, I'm in New York and have done some of this work.
This is why I never want to build a house. I'd seriously pay someone with superior interpersonal skills and construction knowledge to handle all this shit for me. Startup idea?
Fellow former tradesman and perennial DIY-er here, I think this is dead on.
There is a fundamental mismatch between the economics of startups and the economics of trades. Startups and technology work best when you can achieve scale quickly and without friction by using the same solution repeatably. Software is ideal for this, it scales (nearly) infinitely and can continuously deliver the same result. Work in the physical world frequently requires site-specific solutions. It's more akin to consulting than engineering.
It's not surprising that startups in the space came in overly optimistic and imploded quickly. I think most tech people have a bias against the trades and think it's easily understood grunt work. The reality is that it requires deep subject matter expertise, familiarity with local markets, sites, and housing stock, and a healthy amount of on-the-fly creativity.
> - most of the industry is decentralized small contractors. You can't go viral with construction, you can't build monopolies to extract rents later on.
At least around my area (in the PNW somewhere), and specifically for residential construction, the opposite happens. The builder has a bunch of small contractors he uses -- but they are only legally separate. And disposable, to be crude. They arrangement is a monopsony -- the plumber only has one customer: the builder. Same for the electricians, framers, etc. Even though they're not employed by the builder, they might as well be. Hell, even the realtor who sells their houses is an independent contractor with only a single customer. Guarantee she isn't making 2.5% per sale.
Interesting. The builders I've worked with used lots of contractors like that, but most were worked with more than one builder. Now the contractors did assign crews to builders, and so the same people only worked on houses for that one builder, but the other teams worked for other builders.
I was thinking about the automation when doing earthwork when I was in the field 20+ years ago.
They tried some things. Like set up a laser to spin shoot across the site and the dozer blade had a reader that would tell the operator to go up or down. That apparently only works if the laser level was setup up correctly they learned.
Construction Companies are pretty competitive and always looking for an advantage. They have some interesting ideas. (Using radiation to measure soil compaction was my favorite).
These days it is done via GPS not laser. With expensive GPS units (RTK is the term to google) you can get to within a couple cm and that is good enough.
Laser leveling is very much a thing, I can't speak to grading for construction, but I have several family friends who use it extensively for agricultural fields in California.
> almost none of it is automatable or in any way "disruptible" by a startup. Sure you can improve a bit by investing in automation or better digital tooling, but the ROI is in the single digits.
This is the angle I would attack if I wanted to get into a construction startup. Logistics & data. Single digit ROI might be worth going for if we can keep the rest of the costs under control. Maybe you aren't replacing Lennar 100%. Maybe you get into a B2B partnership with them and gradually go for a bigger play with them as your construction partner. How much would they pay you to reduce their opex by 1%?
If you are trying to revolutionize the art of construction and push the entire market towards some crazy idea involving off-site fabrication, I agree... Total waste of energy. All of the factors you describe point towards "work with an incumbent, don't fight them".
Make sure you target the right people. Logistics is something the lumber yards handle, not the contractors. The contractor drives there van to the job, unloads, works all day, loads up, and drives home - that is all their logistics. The lumber yards drive to many different sites, and often do have partial loads that could be combined.
I don't think there is much scale you can pull off there though. They have been doing this job for a while and can figure it out.
Indeed and there's lots of ways to make money there - but you won't get any easy funding. VCs aren't interested in businesses that won't offer a potential 100x (or better) ROI, and banks don't like funding R&D so your only chance is either being from "old money" yourself or knowing "old money" (aka someone who can afford to sink a dozen million euros as an angel investor).
>As someone who actually worked in construction (excavation in my case):
I dont think we could tackle construction as a whole. But if "Tech" ( Not just Software ) could help with all the smaller things. Like somehow make excavation 10-20x faster and cheaper.
PlanGrid is typical of the successful construction tech startups in that it addresses the way that information is transmitted during projects without impacting the actual way that buildings are physically assembled.
Shameless plug: at Speckle[0] we have the same attitude (we even have Ralph, Plangrid cofounder, on the cap table).
Only difference is we deal in 3D rather than pdfs, and we're open source for too many reasons to type on a mobile phone, but happy to elaborate if needed.
Would you consider the product you provide a BIM product?
I think what is fascinating about this space is that the tech is there for full 3d models, machine control, and BIM smart design.
It's all just so expensive, only the huge companies get deep into all of it. As a PLS, we've been delivering site topos for decades with full 3d surfaces, only to deliver those to the engineers and after design they print out a plan set.
I am so grateful for your comment because I did not know about your company and now I have been reading all your content and watching the videos and drooling on what you have put together. I am so mightily impressed and intrigued!
Biggest cost drivers for construction are land prices, permits and taxes,
materials, and interests.
You cannot make permits, taxes, and land prices to go down.
Interest can be "tamed" if you build quick and sell quick.
And most material prices are driven by transport.
Before you jump into the sector remember a great technology for construction was drywall (Pladur, Knauf, etc): it lowered time (and costs) to build inner walls.
Anything electronic, like automated window blinds... etc is not interesting for the sector: prices are high, cost to deploy are also high. It won't get mass adoption unless customers want to pay 2x-10x more for a house.
They're also extremely local, so it can be quite hard to scale.
The standard SV "ignore the laws until too big to fail" Uber/Airbnb is just not going to fly. You've never seen enforcement until you've seen the building inspectors crawl up someone's back unpermitted retaining wall (going so far as to take the sheriffs to order a backhoe to knock things down).
This isn't a business strategy because any reduction in taxes or ease in permitting also benefits your competition. Unless you mean that a company should lobby to increase difficulty/taxes so that they're the sole survivor.
There are a few start-ups about 3D printing houses, but - at least for those that I have seen that actually demonstrated something - they seem to be the "usual" startup led by some brilliant people that never worked in traditional building/construction[1] and propose a new, revolutionary approach that resolve a non-problem (building the walls) and forgets to address all the rest of the building (where the actual problems are), let alone compliance with the various technical norms (very often local, i.e. not even country or state wide).
They can usually print a rudimentary shed in little time, but the same or better shed can be built in less time with prefabricated elements or in a little more time (at a comparable cost) with traditional means.
[1] and know nothing on the complexity of building a house
Honestly those 3d printed houses scare me, it basically turns houses into non-repairable junk that will have to be torn down the first pipe that bursts. Normally framed houses out of metal or wood are king for reparability that can be repaired for over a hundred years if not more.
The biggest obstacle to building houses in my opinion are entirely legislative/political. Towns oppose density and cause suburban sprawl galore which drives up costs of everything.
Rich elites have also bought up land en-masse over the country so that even if you want to plop a house on a empty lot in a quaint town, they'll charge you half a million just to acquire the lot.
Seems like this still massively overprices the cost of repairs since you are now using a diamond saw to cut through concrete, plumbing new lines and doing new concrete work to fill it in.
Compared to a handyman just handling it in 2 hours at most with typical wallboard.
Well, it's the 3D printing culture. When you are printing something nobody printed before, you have to print, test, throw away, print again...
But that works better for some things than others.
IMO, there's nothing stopping house-printers from printing components, so that you can only partially replace them. There is also nothing stopping projects from having repairability and some flexibility builtin; in fact, for example printed walls can have holes for every kind of wiring, and let the routing free, in a way that brick walls can't. Also, they don't need to only extrude concrete.
But anyway, none of that will happen any soon. The 3D printing culture is about prototyping, throwing again, prototyping again.
That's OK, as 3D printed houses do not normally have pipes/conduits in the 3d printed concrete walls (just like you normally don't have them in traditionally built concrete walls).
Same arguments applies to balloon framing, drywall, steel studs or pvc piping. It doesn't matter if that 100 year old house is reparable when workers can't be found with the knowledge to repair it to the original appearance.
The typical lifespan of a residential contractor is MUCH LESS than alternatives (commercial, industrial). This is mostly due to the difficult nature of constant-lowest-bid-acceptance — and no amount of change orders will make up for such an unrealistic bid.
At the end of the day, what you are building is typically a single individual's most valuable possession, and they have every right to nitpick poor build quality (which is endemic). A couple "bad make-up jobs" can end a contractor entirely, and usually quite suddenly (even in the middle of a project).
In my 20 years working residential, it was extremely rare to find a crew that didn't have a scheduling, drug, and attitude problem. Towards the end of my career ("retired" 2020) I began working primarily on 5000sqft homes thinking that this wealthier clientele might have less difficulties — turns out there's more.
ADVICE: invest in commercial/industrial tradeshops, because residential is "fly by night" in their much shorter existences.
> it was extremely rare to find a crew that didn't have a scheduling, drug, and attitude problem
I guess the only area for potential improvement by a startup is the physical labor, which no one wants to perform. As others mentioned in the comments, there exists stereotype that people in construction are dumb which is linked to the profitability "secret" - finding the cheapest labor. To the point even of importing entire crews from dictatures on another continent.
Otherwise real estate is full of architects, designers, inspectors, controllers, agents, and whatnot. They oftentimes have education and qualifications, access to data not available to you, and a professional network.
The "smarter" you are, the faster you leave this industry (if you can help it). Unfortunately the massive usage of drugs (alcohol, minimum) to cope with a failing body from decades of not-being-given-a-hoot-about... tends to dull any potential brain development. Around the time most subs begin "realizing their value [wage]," is when the next-lowest bidder becomes king.
I'm stereotyping my own kind, and once thought of myself as "a fairly intelligent person" — but my occupational history would prove otherwise.
I absolutely loved the freedom of running my own shop (typically just myself, one-man one-van) — but after standing up for a few undeserving GC's, one of them sat me down and explained that "he has insurance for a reason, and necessarily must continue using sub-qualified labor to remain competitive [insurance covers his good name, he says]".
This is correct. The long-term companies in the building market either focus on industrial/commercial, are high-cost, or otherwise "barely get by". If you actually run the financials, they're not as high margin as you think.
And the opportunities for cost-savings have often already been done (simplified design, cookie-cutter, etc).
And every single time the housing market even slows down, tons of builders go bankrupt. Many you've never heard of.
In Seattle there's a company called "Sustainable Living Innovations (SLI)" that a few years ago started this modular apartment building that was supposedly going to fly right up because their modules are so efficient: https://www.king5.com/article/news/local/seattle/company-bre...
That was two years ago, and I can clearly see the building is still not done. It's gone up at a snail's pace compared to "traditional" construction nearby. Might be that the company is having financing and/or supply-chain issues.
Ya tech people that talk about this generally seem to have little knowledge of the field and think it's ripe for innovation, then later figure out it's not.
If you think a house starts at the foundation, you've already missed half the battle. Lot subdivision is a massive amount of work and expense. You have utilizes and roads which in new construction takes around 2 years from concept to finish where I live.
Then when you lay a foundation and plumbing, which again takes a licened plumber to inspect before you put concrete on it. Then some time for concrete to set and dry before you can build on it.
Walls go up fast. Doesn't matter if it's wood, or where I live 3d printed concrete. What takes longer is services in the walls. Again plumbing, power, and possibly gas all requiring inspection. A builder inspector, city inspector, and many times the bank inspector will show up at this point. You still have a rough house that requires another month or two of finish work or more now.
Building off site and moving it in place has not worked well in practice, US new builds are typically huge. And even then moving finish work tends not to go well which requires massive amounts of time and labor to complete.
They could always do like a lot,of different gigeconomy startups and completely ignore the law in the start, and afterwards lobby to have it legalized.
That doesn't work. You can't get hook ups to power, water, & sewer without the right permits. The police or sheriff absolutely will be dispatched to halt your construction if you try this.
Hah, depending on municipalities, utility companies themselves will outright refuse without having the permits from the municipality being presented. In my area for example, not only do you need municipal permits, you must also show a inspection certificate by licensed electrician for new installs.
The paperwork must be filed with the utility before they will even assign an utility engineer to do the review on their end for a new connection (they need to check the local area can sustain every new connection, even if its superfluous) and only then assign a linemen to make connections.
No police or sheriff required. Utilities want absolutely no financial liability because some moron DIYed his electrical and it burned down the neighborhood.
They don't fuck around because utilities do get sued for any actual fault on their part since they are a even bigger, fatter money target than a developer.
I wouldn't be willing to dump a significant chunk of my wealth into a structure built by a company who makes a point to ignore building codes and zoning laws.
"What do you mean their house imploded like a submarine"
Heh, also it seems tech side doesn't know what a certificate of occupancy is. Or what banks will give loans on. Or what insurance companies will cover.
It all depends on the area things were built in. I don't know if bank loans were involved, but a bunch of houses in Southern Spain burned down in a forest fire. The insurance refused to cover because the paper work for the buildings got accepted due to corruption. Those areas were not legal to build in.
This is true, but the only reason Uber could get to a large size was that local governments (mostly) ignored it for a while, often over the protests of taxi companies. With building, they are more likely to come down, hard, on the very first building that isn't up to code, if it's done by a newcomer (existing incumbents might get away with it longer).
People do this. A friend works with permitting and theough him I hear some stuff. There's this one developer that regularly sells houses before the permits have been granted. Really puts pressure on the municipality to approve, now that there are specific people that will be impacted if they don't.
That works until the developer finally fucks up and the municipality gets sued for approving it.
There's a town where I live in NY that is on the hook for basically spending millions on pumping the water table yearly because back in the 70s they idiotically approved development of a few neighborhoods when the water table was at a record low due to a drought and the entire area is up against a water table connected lake. No surprise post-drought, all those houses were getting permanently flooded since the area simply cannot sustain houses with basements.
Last news in recent years is the flooding is shifting so they are on the hook to build yet another pump station as long as those original houses still exist.
This is normal. It isn't about the permits as much as the banks. The banks like to know that many of the lots are sold before lending you money to start putting in the roads: it ensures that much of the loan will be paid off. In turn the builders buying those lots like to have some of the lots sold.
Municipalities generally will approve this as they will get the tax money from the development. (and frankly they shouldn't generally have the power to stop development in their limits - YIMBY and all that)
Where does he live? I'd like to move there. I've never met a planning department that gave two shits about the people their recalcitrant approval processes would impact.
Go hang out at bars in more rural areas, you'll find the ones that are lax and look the other way.
Also note that this stuff may work for "people who are known" and not newbies - the inspector knows this builder is "good for it" and it's "all just paperwork that gets resolved".
Or go to Wyoming, I hear they basically don't have building permits lol.
Sounds like it’s mostly insults. He’s banned from a municipality for punching a planner in the face. I mean, he’s not a nice guy, but he's a niche celebrity.
The one thing the government does usually enforce is construction laws, not always depending on the municipality but usually. You'll be shutdown by force within a day. It's why any business that renovates in NYC papers over their windows, because if an inspector is able to see anything wrong through the windows, you will be shut down even if you are a multi-billion dollar company.
It is probably because whatever few technical challenges may exist in the real estate sector that software could aid are utterly dominated by the intractable problems posed by politics and regulation.
We understand very well how to build housing, and we have understood how to build housing for a very, very long time, but for political reasons, because communities have been taken over by political interests that outright opposed to new housing we choose not to.
You could come up with some novel construction technique that makes building homes more efficient, but it wouldn't matter if the city doesn't approve new homes to be built.
Perhaps because there are so much regulations that also differ a lot from place to place. This makes economy of scales a lot harder, and stiffles innovating fast.
It seems like there's opportunity then in helping make regulations more legible/understandable, highlighting local differences, assisting with permitting and compliance, etc.? Seems like an area where LLMs could help out
Real-estate is capital intensive. The aggregate real-estate value in a small city is billions of dollars.
Real-estate timelines are long. Think thirty year mortgages.
Scarcity of desirable locations. Manhattan Kansas apartments are not fungible with big apple Manhattan apartments.
At scale real-estate is primarily used as a vehicle for wealth retention not wealth growth. If you have a few billion dollars, your problem isn’t scraping up a nickel for a hamburger. It’s finding someplace to store all that money (it won’t fit in your mattress).
So the real-estate market is bivalent. The low end ranges from people just trying to get by to people trying to make money.
The high end is real wealth with no incentive to sell in ordinary circumstances…what to do with a few billion in cash? is a real problem.
And again, a few billion can move a local market, but not a regional one.
Construction is perhaps the world's second oldest profession, so it's easily overlooked. It doesn't help that the TAM is so large it defies computation.
This conference crosses over into real estate but it's all pretty much the same network of entrepreneurs: https://blueprintvegas.com/
Point is, this is not a vacuum. It's just not getting a lot of attention due to the points above.
I believe (and am biased, see profile) that climate and housing crises combined will bring a lot more attention to contech/proptech/climatetech in the coming months and years.
I can't really add much substance to that subject but from what I read construction is a highly corrupt and bureaucratically intransparent industry based on coterie, bribes and deal-making. Markets and networks an outsider won't be accepted into easily and insiders are not interested in disrupting it because they are busy making deals and money.
I'm working with a startup in Bethlehem, PA to create a crane-operator assistance device using extremely accurate GPS and computer vision to guide operators when lifting structural beams. If anyone is interested please feel free to reach out!
What could a YC-style startup do for construction?
A lot of stuff is already done.
There's total standardization of parts sizes, and has been for decades. If you order a 2x4" wall stud from your local lumber yard, it will be the same size as the ones you order tomorrow. (It won't be 2x4, but that's another story.) Doors, windows, stairways, plasterboard, switchboexes, plumbing parts, basically everything in stock at a Lowes, are all designed to standard sizes, made in factories, and delivered to the site. The CAD software has all those standards built in.
Payroll and scheduling for workers? Done.
Ordering? Done.
I imagine any startup app opportunities will be in something you'd only learn about by going out to jobs sites and swinging a hammer for a year or two. If someone came in with such an idea, it might be wise to say "let's go on a tour of the jobsites you've been on in the last year" just as a way of validating real experience.
There are some extremely interesting startups in the real estate construction sector. There are companies manufacturing tiny homes. There are companies automating individual expensive tasks like floor layout. However, any or most of the on-site tasks in real estate construction fall under the category of "things that are difficult to automate". And we are making some progress in standardized and modular homes, but many, many homes are still unique. Americans like their cult of individuality, and that seems to find one of its greatest expressions in home purchasing. On top of that, in many markets, construction isn't the most expensive part of a home purchase so it's not the part we focus on optimizing. I live in the Bay Area where permitting can cost more and take longer than construction.
I don't know anything about construction, but generally speaking founding a startup in a historically profitable industry means that there's a lot of room for competitors to counter if you try to disrupt the industry (eg they can afford to invest and improve, they're just not bothering because they don't need to), and it's hard to win on price because competitors aren't particularly cost conscious as they don't need to be.
If you want an easier time when you found a startup look for an industry with potential to grow. Then you can focus on growing the market rather than trying to compete for customers. Customer acquisition is far harder, and far more expensive, if you're trying to take market share from other businesses. The smart move is to go where no one has gone yet.
If by startups you mean new businesses then there are plenty of them created all the time in the construction industry. Think local independent contracting firms relying on financing options like SBA loans and regular bank loans. Some succeed and some fail, just like everywhere else.
Going by the tech definition of startup though, sectors like construction simply don't have the kind of economics that VCs want to put their money behind. Barriers like:
- lots of regulation
- lots or manpower requirements
- low margin
- established hierarchies, relationships, and general ways of doing business that are hard to disrupt
- need to have hyperlocal presence
- need to deal with people rather than technology
- scaling has a high variable cost
all make it unattractive for the "three dudes with a laptop looking to disrupt" types, since it is very unlikely that they are going to be able to have hyper growth and a large exit a few years down the line.
Great discussion, I agree with most of the points being made. That being said, I've spent the last 15 years building $1B+ businesses that digitally transform construction & manufacturing and my co-founder built a $1B+ GC-fabricator. We see a huge opportunity for software to transform prefab & construction especially around affordable housing. Besides putting our money where our mouth is through our company www.raap.builders we also have agreements with some major logos/partners.
Although we are still working on early pilots, we are looking to expand our founding team to bring in engineer & business development talent that has construction tech experience/interest. Feel free to DM me rj@raap.builders if you'd like to chat.
https://www.youtube.com/watch?v=zNTMxSUsFrM
The third home built using Hadrian X® robotic bricklaying technology in Wellard has reached lock-up stage and is now up for sale.
This four-bedroom, two-bathroom home was built in conjunction with Inspired Homes, a multi-award-winning turnkey home builder in Perth, and features a stylish open plan living area, modern kitchen centrepiece, comfortable home theatre, relaxing bathrooms, outdoor alfresco area and a double car garage.
This is cool, but immediately makes me wonder if blocks are the optimal material for this type of installation. Naturally that’s where you’d start because it’s what is commonly used
But pretty quickly you could pivot to better “blocks” that interlock or align automatically and need less (or no) mortar. Then you’d be really flying along
I believe they figured out a way to dry stack the blocks but they are still testing I believe. CLT seems like best building material for going past three stories
Not clear what do you mean by "primary association with real estate construction". Like Blokable? Or Juno? There are a lot of companies, they aren't really present online because their customers and investors prefer shaking hands. ;-)
2) They aren't so visible (here) because the VCs don't have a bikeshed moment where they think they know how to do things in that market and thus aren't tossing money at it. There are far more unicorn possibilities in other (bikesheddable) markets, so that's where the startup funding flows.
3) Inertia. You're dealing with entire industries and governments and etc that are entrenched, more or less conservative/bureaucratic/regulated, whole lot of nepotism and similar effects, where you really can't just make it up as you go and PR your way through it. Disruptors are killed or acquired/disappeared pretty quickly.
It's just a lot of work. That's the part that makes most people say, "you can't." Look at all these answers why "you can't." Try it and see where they got stuck. Odds are, it's not that you really can't. It's that when you see how much work it takes, you'll give up. But if you don't, you might be the next big thing. I've done it in a different industry. It's not easy to make software that does stuff that everyone else "can't" but it's a hell of a lot of work and it's not always profitable.
There is a company from S20 called Atmos (https://buildatmos.com) that does custom home building as a service.
I think in general though construction tech is hard because the margins aren't as crazy and it's extremely labor intensive. I briefly looked into working for a hardwood flooring software business and I realized that most flooring companies cap out at around $10m revenue and most are family owned/operated with no desire to change things around because "that's how it always was done".
While not precisely "real estate construction" the NSF has funded many construction-related companies through its SBIR program, many of which are pretty cool: https://seedfund.nsf.gov/topics/advanced-materials/
SBIR-style startups involve discovering new things. Success in real estate construction (strictly speaking) doesn't seemingly rely on having deep and novel insights about the world.
Pulte Homes took the concept of “Ford Assembly” back in 2004. The most common problem was the large components would not fit on the site on foundation which was slightly out of whack. In stick frame you normally work around the imperfections on-site.
You would need to solve problems that involve real people building or inspecting things. The work is variable enough that a person is the most flexible tool to handle most parts of construction. Labor is the most expensive part to deal with. The materials are pretty small margins otherwise.
There have been numerous improvements in construction methods and materials, even in recent years. One that sticks out to me is vinyl plank flooring. Vinyl used to be a good material but a pain to install. There was a change to make the material into planks that clip together instead of a large rollout sheet. Now this is one of the fastest, cheapest, and dare I say best materials for your floor, and it just took a different approach to the manufacturing and delivery to change it. Any new or old home I see features vinyl planking prominently because it takes only a weekend to install.
But no one like "owns" vinyl plank flooring. One company probably developed the idea mimicking how wood planking works, and every other vinyl company copied them. Even new companies entered the market because it sold well.
So the opportunities are out there, but if you change something in the materials or method of installation space you generally are only innovating something the rest of the industry with later ape. There's not as much opportunity to become the new Facebook of some new material or easy-to-install method you've developed.
Now if you could somehow replace one of the big time or cost sinks to construction at scale I think you'd have something: inspections, specialists, and the wait for these two to interact. Inspections are generally there for a good reason and are government-run, so it would be a tough nut to crack, and it would take a maverick to do it, but it does seem like there is opportunity there. Scheduling between specialist roles like plumbing, electrical, and HVAC also seems like a big one. I've noticed the bigger HVAC companies in my area get business because they can promise quick results, and they do that by having those specialists on the same staff and scheduling them all out appropriately. Contractors take forever because they need to sub-contract and coordinate people. If you have everyone under one umbrella you can manage the timetable better. But none of these things scream "start-up tech business" to me.
There are some startups, but they seem to be very limited in their growth potential given the very cyclical nature of construction. I believe this hampers their access to VC and debt funding, so they don't make as big of a splash.
My city has a local construction startup that is trying to drop the cost of housing units by fabricating panels and rooms offsite and assembling at the construction site: https://www.modulehousing.com/
It's nearly impossible to be a "startup" in the construction industry. Aside from employment, permitting, funding, and real estate, the whole notion of a startup just does not work in the construction industry. The timeline is long and slow, the upfront commitment is high, and the entire endeavor is risky. It's not just writing code and creating a website.
Edit: There might be startups brought on as subsidiaries to do specific tasks, but I think those are very rare.
This is such a good question, because I use "construction" as an example of an industry that's more or less the opposite of "software" today.
Because time has made people actually good at it. Construction is overwhelmingly safe and solid and reliable. It has well thought out processes and failsafes. Perhaps most importantly, it has real liability. If the building causes harm, someone's getting in trouble.
None of the above is meaningfully true for software.
> Why are there no startups in the real estate construction sector? It is a highly profitable business
Because your assumption about it being a highly profitable business is incorrect. It’s highly competitive, and net margins for large construction firms are in the single digit percent range.
What insights do you think a computer programmer has about construction that a field of professionals hasn’t already considered?
I mean there are huge home builders in the USA like DE Horton. Then there are local builders who are basically smaller "startups". If you mean a "tech startup", where exactly do you think software would bring an economy of scale? To build you largely need local expertise, land, planning permission/permits, infrastructure etc... these are time intensive things.
There are, just in China, CIS, Eastern Europe, etc.
For example, the world's largest and most advanced modular building company was just a tiny startup in Hunan making niche HVAC equipment 2 decades ago: http://en.broad.com/ProductShow-131.aspx
Startups in construction technology exist, we just aren't as flashy as those in other sectors like crypto. For context, more than 129 real estate and construction companies are part of the Y Combinator alumni, representing over 3% of all YC firms. I began to catalogue them all in this post, only to realize that I would eventually run out of space.
While the real estate construction sector may seem less attractive for startups due to its capital-intensive nature and complex regulations, there are actually innovative companies emerging in areas like modular construction, green building technologies, and construction management software. These startups are driving positive change and reshaping the industry.
There are actually a lot of start ups in the space. Most are related to support services such as electronic plans, job bidding sites, inspection apps, timesheets, material logs and so on. You don't build with technology, but there are lots of bits and pieces to the business process whether a large or small job.
- Dusty Robotics? They make a robot that prints wall, piping etc layouts on floors.
- Canvas, who make a robot for drywalling
I'm pretty sure there have to be more, but probably not many doing construction themselves since that doesn't scale well for a typical startup. But tools and software surrounding construction, there's companies for that.
Cleancrete is made by a Swiss based startup called Oxara[0] It's a cement-free building material that hardens in 24 to 48 hours. The product is mostly made of 70% recycled construction waste.
Why, because you actually have to build something, not code that millions of people can download an app.
Here in Austin TX, there is a company, ICON that is trying to mass 3D print homes. It is not going so good. They are slower than framing, drywall & mason crews. Also final finish is ugly in my opinion.
The startup boom was taking advantage of vulnerable companies that had simple operations, but were severely lacking behind in technology. For example, Uber when taxis were still largely cash only and had no apps. Construction is highly technical, complex work.
The construction industry is innovative, but on the other hand it is also one of the oldest industries on the planet, dating back literally thousands of years.
So innovation usually stems from new materials or tools hitting the market, but that does not happen every day.
I'd settle for a prefab DIY tiny house. They do exist but cost many tens of thousands still, or sometime low hundreds of thousands :( And takes months to build. Wish I could just build one in a few days, IKEA style.
Atmos was a YC startup that was building homes a few years ago. Not sure if they’re still around. I considered using them to build a house in Boulder, but they never expanded beyond NC.
AIM (Autonomous Intelligent Machines) is trying to automate construction vehicles, so is BILT robotics to name some. Definitely not as much as you would expect though
I live in one of the more rapidly growing American metros, in what I would consider a construction boom. I'm not sure what you're characterizing as a startup, but if you simply mean a new business without a lot of history attempting to enter the market and compete, as far as I can tell, there are a lot of these. My own home was built by a small builder, single-owner, who had been in business less than a decade. Three separate adjacent lots were purchased and at least started to be developed by first-time homebuilders. In two cases, they failed and sold the project before even completing it, but someone out there was at least trying to be a homebuilding startup.
You may be thinking of new businesses attempting to grow fast and capture market share using equity investors to subsidize low initial prices charged to consumers. I'm not sure that makes sense as a business model in the residential construction sector. Your revenue just comes from selling houses. Pricing is a fairly strict matter of supply and demand you have little to no control over. There is no alternative revenue model. People buy the house and tend to stay there a while. They're not going to buy a subscription service, or accept a discount in return for you collecting data from their home and selling ads or something. Companies that want to do that are selling smart home devices, not the homes themselves.
As others have mentioned, there isn't a ton you can do to push costs down. The unskilled labor is already cheap. The skilled labor is scarce and unionized. Material costs are set by global commodities markets. Timelines are heavily determined by external factors. It's easiest to build in the middle of nowhere, but then there is lower demand for the houses. Denser places where more people want to live tend to have most lots already developed, so now you're looking at convincing people to sell, possibly trying to get existing properties condemned, possibly rezoning, lot division, possibly needing new utilities hookups but instead of doing it in some brand-new exurb where nothing exists, you need to dig and shut down roads and sidewalks in places where people already live and work. You need permits, easements. You're disrupting things and people who don't want their lives disrupted slow you down. The skilled tradesmen who represent the major bottleneck in your workforce largely don't want to do this kind of work because it takes longer and payment is less reliable. So even in a place with relatively lax zoning where no one explicitly tries to stop you from building, you still may not be able to do it in any timely manner because you're competing for a tiny pool of laborers who can do the electrical and plumbing work and they can only be in one place at a time.
matt risinger features precut lumber packages. it still exists for custom builds but generally tract homes are built as simply as possible. It does feel like buying a plan online should come with a material package but no one offers this to my knowledge. Home Depot and lowes did catalogues where you would buy the components from them out of a book
there isn't much accountability for waste in construction and wood has been cheap compared to other costs
Capital intensive, labour intensive, long lead times, heterogenous high regulation. That keeps out serious players from office or residential real-estate. However, there are many self-storage startups that are doing quite well.
Any two of those factors above can be dealt with, but all four in concert is problematic. The reasons why are:
- Capital intensive: on its own, this is VC-funded business heaven. However, combine with labour intensive and you can't get good margins; long lead times and you can't iterate; heterogenous high regulation environment and you can't get economy of scale.
- Labour intensive: on its own, this is fine, but the labour here will cut into margins because it is not R&D-markable and it is controlled (unions). Combine with long lead times and your payback period is insufficient to maintain cash flow without massive funding; combine with heterogenous high regulation and you can't hire labour consistently across places
- Long lead times: This is okay for businesses where you have cheap acquisition and the demand variability is low; but real estate markets are fixed, it costs a lot for you to ship your product. Combine with heterogeneous high regulation and you cannot rely on being able to take your product to the new place if local demand has changed.
- Heterogeneous high regulation: Homes are heavily regulated. Some of these are for safety, and others are because of the idiosyncrasies of local markets (SF's "windows must be made of wood"), so you have no fungibility of product. You need cheap customer acquisition, low counterparty risk, and low demand variation for this to work.
Uber was capital-intensive, and labour intensive, but I think the lead times were short. They could spin up and spin down markets quite fast, and though some markets had regulation heterogeneity, most were unprepared for Uber and the regulation was not strongly enforced.
WeWork solved the problem with offices by acquiring existing buildings. This is a strategy that is commonly used in high-regulation environments: one of my friends acquired a FedRAMP-compliant company and another acquired a compounding pharmacy to advance their startups. You can bypass the regulation by acquiring someone who has achieved compliance. But compliance in RE is a per-product outcome!
Gusto/Rippling et al. solved the labour intensiveness of things through automation. This is great in non-tangible domains. You don't have a physical product. Automation is easier to build for that than something that requires robotics.
Long lead times are the real killers, though. You need a real technological or regulatory advantage to break that open. Tesla had a bunch of those: pioneer of mass-market EVs, regulatory EV credit timing. SpaceX also did: government contracts. Honestly, dealing with long lead times (and the resulting customer payback period) is probably the hardest thing in the world, and his rare skill at doing that is why Elon Musk is so wealthy.
Honestly, you can build a debt-funded self-storage company and it takes grit and good location choice. There's no formula to it, and you will likely do better making L7 at Amazon, but it's a thing you could do. But otherwise, I'd stay away from real-estate unless you have the sheer bullheadedness it takes to deal with a high-reg environment.
I reject the question - there are plenty of small family businesses in home-building, for example. They just don't happen to have a big fancy silicon valley name with a VC backing them. They do pretty well for themselves in their community, and don't have a huge desire to scale infinitely.
The construction industry's fundamental constraint is that it manufactures products that are too big to fit in highway lanes. That means they can't be shipped from a centrally-located factory to their final destinations. So they need to be built at the site, which means they need to be built with more labor-intensive methods (since it's too expensive to build a capital-intensive factory for just one unit of output).
Building components that are small enough to fit in highway lanes, on the other hand, are manufactured in centrally-located, capital-intensive factories and shipped to their final destinations, just like cars or electronics. Think: boilers, doors, windows, air handlers, etc.
And, like cars and electronics, these building component products are manufactured by a small number of big companies, rather than a large number of small companies. The equilibrium capital investment and company size is much different when the product is small enough to be manufactured in a central location and shipped.