This week:
Founder vs investor knowledge
Counter-cyclical growth
Leveraging experience
Adversity response
Governance challenges
Info Asymmetry
Founders know 100-1000x more than investors about construction tech details; investors shouldn't get overly anxious
As Patric notes, "I always say the founder knows 100 to 1,000 times more than the investor." He explains, "That's true for I think every company out there just because there's so much more information that the founder is able to [access]." Shubhankar agrees, giving the example that "Patric, most investors have literally no effing clue about this industry." Therefore, as Patric cautions investors, "You're backing this person to actually figure that out for you. Because you don't know."
Counter-Cylical Growth
Construction tech is accelerating and going counter-cyclical despite broader economic conditions
Both Shubhankar and Patric express optimism that 2023 showcases construction tech's resilience. Patric specifically predicts, "I have high hopes for 2024. I think founders in general will have a much better year." He notes, "numbers already indicate construction tech is growing steadily amidst cycles impacting other sectors." Shubhankar echoes, predicting "2024 will end up being a much better year than many are predicting right now."
Leverage Experience
Experienced people/partners can help construction tech founders "learn on old horses" and avoid pitfalls
Drawing on the German idiom of "learning to ride on old horses", Patric advocates "in hiring and recruiting, as you reach a certain scale in your company, it actually pays off to get people on board that have been there, done that." He gives the example of "perhaps in a sales position that needs to reach real estate developers, someone that worked with real estate developers a lot." Shubhankar agrees this principle applies to choosing investors too.
Address Adversity
Construction tech founders need to pragmatically "get the cow off the ice" when facing adversity
Adversity is inevitable Shubhankar and Patric agree, making mindsets and behaviors for overcoming setbacks crucial. Here Patric introduces the amusing German idiom of needing to "get the cow off the ice", humorously conveying that construction tech founders must address problems head on before they escalate, even if solutions require creative or unconventional approaches. Remaining level-headed amidst uncertainties is key.
Governance & Delegation
Governance and avoiding "driving two boats with two feet" is key for construction tech firms entering growth phases
Shubhankar shares the Bengali idiom "trying to steer two boats using your feet simultaneously", emphasizing constructing tech founders often take on too much at once. Patric builds on this, warning "if you have set yourself up with two boats in your company, for example it could be two divisions, and you have not implemented like the second level of leadership to run both divisions, probably you're gonna end up in failure." Hence, disciplined governance and delegation is vital before chaos sinks promising construction tech firms.
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