Ever wondered why we keep hearing about standardizing construction, yet the industry still relies on bricks and 2x4s? I'm diving into the paradox of construction standardization, the myth of “construction is not standardized” (it is !) and why the conventional wisdom might be missing the point.

We have already standardized on the smallest demand unit. It's called bricks. It's called cement. It is called two by fours. If you want to standardize construction supply on a higher level, you need to …

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The Myth of Large-Scale Standardization

We've all heard it before: "Construction should be more standardized." "What if we had more standardized components?" "Prefab could revolutionize the building industry!" These ideas sound great in theory. They promise efficiency, cost reduction, and faster speed to market. But here's the reality check - modular construction still makes up less than 0.8% of the global construction market.

So why isn't large-scale standardization taking off? It's not about culture or resistance to change. The answer lies in a fundamental misunderstanding of how standardization actually works in industries like construction.

Lessons from the Energy Sector

To understand this better, let's look at the energy sector. In energy economics, there's a concept called the merit order. It's a way of ranking energy sources from cheapest to most expensive. The cheapest sources form the baseload - the minimum level of demand that's always present.

This baseload concept is crucial. It allows energy companies to invest in stable, long-term solutions like nuclear power plants. They can do this because they know there's a consistent, uniform demand for a certain amount of energy.

The key here is that every sector standardizes supply based on the smallest unit of repeatable demand - in this case the kilowatt-hour. Not on entire power plants or distribution networks, but on the basic unit of electricity that every consumer uses.

The Automotive Industry's Approach

The automotive industry follows a similar principle. They don't standardize entire cars. Instead, they focus on standardizing granular repeatable components - things like axles, charging pads, or prop shafts. These are the smallest repeatable demand units that can be used across various car platforms.

This approach allows for mass production of these components while still enabling customization at the car level. It's a balance between standardization and flexibility.

Construction's Hidden Standardization

Now, let's bring this back to construction. Contrary to popular belief, construction is already highly standardized. They've just been looking at it wrong.

The standardization in construction isn't about entire buildings or rooms. It's about the basic components - bricks, cement, two-by-fours, glass, paint, rebar. These are our "kilowatt-hours" of construction. They're standardized units that can be used in virtually any project, regardless of the final design.

This standardization at the component level offers crucial benefits:

1. Flexibility: These standardized components can be used in any project, from a small house to a skyscraper.
2. Simplified logistics: It's much easier to transport and store bricks than pre-assembled walls.
3. Error correction: If a brick is placed wrong, it's easy to fix. If a pre-assembled wall is placed wrong, that's a much bigger problem.

The Exception: State-Driven Standardization - the Demand Shaping

There are exceptions to this rule, but they prove the point. In former Soviet countries, China, and some public housing projects, you see large-scale standardization of entire buildings. How? Because the state shaped the demand.

When a government decides that millions of people will live in identical apartment blocks, suddenly large-scale standardization becomes viable. But this is the exception, not the rule, in most construction markets.

The Real Reason Why Prefab/Off-Site Is Not Taking Off: Demand Shaping

So what's the takeaway for those dreaming of a more standardized construction industry? The key isn't in the supply - it's in the demand.

If we want to standardize construction beyond basic components, we need to find ways to standardize demand. This could mean:

1. Working with policymakers to create incentives for certain types of standardized buildings
2. Developing flexible modular systems that can adapt to various demands while still benefiting from some level of standardization
3. Focusing on standardizing processes rather than products

Rethinking Scale in Construction

This perspective challenges us to rethink how we innovate in construction. Instead of trying to force large-scale standardization onto a diverse market, we should:

1. Improve the efficiency of our existing standardized components
2. Develop new standardized components that retain high flexibility and low supply chain and logistics cost
3. Find ways to standardize construction processes rather than just physical components
4. Look for opportunities to shape demand in specific market segments

The next time you hear someone say, "We need to standardize construction," remember: we already have. The real question is, how can we build on this existing standardization to make construction more efficient, sustainable, and adaptable?

For founders in the construction tech space, this presents an exciting challenge. How can you innovate within the constraints of our current standardization? Can you develop technologies that make our standardized components smarter, more sustainable, or easier to use? Or can you find ways to standardize aspects of construction that haven't been tackled yet?

The future of construction isn't about reinventing the wheel - it's about making our wheels roll smoother, faster, and in new directions. Let's build on what we have and push the boundaries of what's possible.

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