Since 1990, the real value added per construction labor hour has dropped by 23%. One fundamental reason is the opacity and fragmentation of construction workflows and activities — making sharing of information (aka communication) difficult.
‘Remember that Time is Money.’— Benjamin Franklin, Advice to a Young Tradesman, 1748
The best way to achieve integration and transparency is letting information flow. However, in construction, the people working on the same project — from architect to crew — are in different places most of the time. As MIT professor Thomas J. Allen has proven in the 1970s: communication is highly correlated with physical proximity. It drops as a power law curve — after more than 10m distance, it ceases to happen. That’s why we remain bullish in solving the communications riddle in construction.
1/ On mid-to-large construction sites in the US, Foremen spend 3–5 hours of their day on communication.
2/ On similar sites Project Managers and Supervisors spend 7–9 hours of their day on communication. These numbers were fairly robust day by day in our field research, i.e. they didn’t vary a lot by site or by day.
3/ And: Supervisor communication is still extremely non-digitally integrated. Want evidence?
4/ We identified 4 types of Supervisor communication. Informing, Scheduling, Resolving and Reviewing.
5/ Informing and Scheduling together make up 50+% of a Supervisor’s daily communication. Informing and Scheduling communication are transactional + contain repeated information.
6/ Ergo: Informing and Scheduling communication is well automateable.
7/ And: We see a variety of tech companies from Asia-Pacific, North America and Europe attack the communication opportunity:
8/ But: We have yet to see a solution that has an intense product-problem fit and well-working network effects and virality. Many construction communication solutions we get to see as part of our work in Foundamental have the issue that the Supervisor doesn’t get instant value. We believe that any construction communication solution needs to provide an instant benefit to the Supervisor. In some ways the issue is similar to why enterprise knowledge management has historically been hard to solve: the ones who have knowledge (senior experts, leaders) are usually not the ones instantly benefiting from filling the system nor do they have the time to fill the system. In construction projects, execution revolves around the Supervisor. Any solution that does not provide the supervisor instant value in his/her busy day with extremely low barriers for usage is — in our experience — unlikely to achieve 1000x growth on construction sites.
9/ The good news: One thing I learnt by spending my own research time in the construction trenches is that construction teams are a community and proud for mastering their tools. Any solution that does provide instant value at low usage barriers has a good chance to pull in the Supervisor’s network. Again, this is something that a few tech companies have stumbled upon, but they haven’t cracked the code for virality.
10/ Founder opportunities:
As always, credits go to the data wizards in our Foundamental Insights group.
… a few more collected impressions from our field research. All the talk about construction workflows being “traditional” is not an exaggeration: