Web3 (also known as Web 3.0) is a new growth area in construction technology solutions. It is a new iteration of the World Wide Web built on blockchain tech. Rob Salvador and April Moss are working at DigiBuild, a new type of construction management soft...
Web3 (also known as Web 3.0) is a new growth area in construction technology solutions. It is a new iteration of the World Wide Web built on blockchain tech. Rob Salvador and April Moss are working at DigiBuild, a new type of construction management software utilizing blockchain for construction companies. Imagine being able to capture transactions from all of the different systems being utilized on your project and put them into a filterable, searchable, and comparable project timeline to remove the waste and fraud. Easier and better data insights and decision-making to support putting quality work in place.
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Rob Salvador 0:00
I'm a big believer in if you can fix the money you can start to fix society think there's a huge future for decentralized applications. You know, staking Defy. So yeah, definitely I would say a lot of the, you know, a handful of the majors and then you know, a couple up and comers that could end up being big, you know, so definitely a big proponent of the digital asset asset space, right?
Felipe Engineer 0:22
Yeah, a couple friends of mine. They've been big into blockchain. There's a, like a blockchain nexus in Chicago.
Rob Salvador 0:28
Yes. Yeah. I know a lot of the Chicago scene. Yeah. So I talk enough to where I think I keep everyone if not engaged, entertained.
Felipe Engineer 0:36
Do you know what a good jokes about any good construction jokes that are clean for audiences? 13
Rob Salvador 0:41
I mean, I think I probably have some memes in there somewhere. But I'd have to think of like, if it's a good like a knock knock joke or like, what are the carpenters say to the plumber, I don't know. Back charge. So I don't know.
Welcome to The EBFC Show, the easier, better, for construction podcast. I'm your host Felipe Engineer Manriquez. This show is all about the business of construction. Today's episode is sponsored by Bosh RefineMySite is a cloud based construction collaboration platform that applies Lean principles to enable your entire team to plan, communicate and execute in real time. It's the digital tool that works in tandem with your last planner system process and puts it all together in one simple, collaborative ecosystem. This easy to use platform is available in English, German, Spanish, Portuguese, and French and can be used on desktops, tablet and mobile devices. According to Spencer Easton, scheduling manager at Oakland construction, refined my site in my opinion, is the best cleanest tool on the market for the last time. Here's what our users have to say. We've looked at three other digital scheduling platforms and none compared to the straightforward approach refund my site takes from milestone planning all the way down to daily tasks. This program gives every general contractor and their trade partners meaningful collaboration, accountability and KPIs. Registered today to try refine my site for free for 60 days. Today's show is also sponsored by the Lean construction Institute. LCI is working to lead the building industry and transforming its practices and culture. Its vision is to create a healthy and thriving industry that delivers outstanding project outcomes every time for everyone. Check the show notes for more information. Now, to the show.
Felipe Engineer 2:42
Welcome to the show. Rob Salvadore. Rob, you are the first technologist that had the plug in before the show started. So I just want to appreciate the fact shout out to battery technology that still isn't such that you can do a a one hour show and not run the risk of running out of battery power. But I want to go ahead and welcome you and let the good people know where you hail from. How did you get into digital solutions, especially digital construction solutions?
Rob Salvador 3:11
Yeah. So hi, everybody, I am Rob Salvador, the co founder and CEO of Digibuild, we build construction software that improves projects, profits and people. So really construction management software. My background comes from the construction industry grew up in it. You know, my dad had a small contracting company, they did drywall painting, things like that. So I was always running around job sites with him working with him, you know, I always make a super lame joke that, you know, before safety coordinators cared 10 year olds, like myself were, you know, able to run around job sites and help out. So jurisdiction has always been near and dear to my heart. And you know, throughout the years, you know, I started my own construction company, I started to see a lot of the pain points in the industry directly, all the complexity, all the different things that we deal with trying to manage projects, especially big commercial projects, and really just, you know, growing up in technology, and using technology, kind of just realized there had to be a better way. And then I started to see, you know, other markets, digitize and move towards technology and software and kind of just realized, Hey, why isn't construction doing this as well? So, you know, I would say my personal experience is what really led me to where I am today and building Digi build and software to improve the construction industry
Felipe Engineer 4:31
That's a question that a lot of people I've been in the business for a little bit to a little bit longer a little bit over a couple decades. Ladies and gentlemen, we'll put in the show notes, a link to Rob's contact information so you can get a hold of him. And it's digibuild.com and we'll put it in there. It's d i g i b u i l d . c o m. Check the show notes for more details there. But I gotta ask what kind of construction company were you running Rob?
Rob Salvador 4:55
So originally, we started as a subcontractor doing framing draw eyewall paint a lot of the interior work on commercial projects so started specializing in hotels because we had kind of deep roots, you know, building those. And then you know, obviously the last couple years with COVID and hospitality you know, slowing down a little bit, we ended up transitioning to you know, apartments multifamily things like that. Eventually, after about seven years in business, we spun out a construction management and consulting arm as well. So started as a sub, and then made our way to cm consultant. But really, I've held you know, multiple different positions in the industry throughout the years and kind of seen a lot of the pain points from different stakeholders positions as well.
Felipe Engineer 5:42
Yeah. And people listening to the show you, you can hear it in Rob's accent, because he's, he's very urban. And he's now got a beautiful office in Miami, let's all be super jealous that he's in beautiful Miami, Florida suffering through so much sunlight and ocean views. I'm sure you're just suffering but tough, tough. We're talking at the start of the show. And it's just funny coincidence, how small the world it isn't construction that even though I'm all out here in California, I went to the same elementary school as Rob's parents. So I think that that is that is freaking insane. It's the first time ever on the show run first time. Yeah.
Rob Salvador 6:19
I mean, you know, people in construction always say, you know, it's a very small industry, everyone knows each other. But I would say, you know, this is kind of one of those synergies, I was definitely not expecting, you know, we come from a small place in Illinois, and I wasn't expecting that. So
Felipe Engineer 6:34
if you're ever telling me how you got stuck by a train, and as I was reading your email, I instantly remembered because I remember where my bedroom was in my parents house. Growing up, I can hear a railroad tracks on all sides of me. And you get really smart at catching where the bridges are the overpasses and getting under viaduct in and around town to get anywhere on time. Because if you get caught by a train, you can lose 20 minutes easy.
Rob Salvador 7:00
Yes, I learned that firsthand. And obviously as I've gotten older, I have not gotten wiser because I'm still getting caught by those trains.
Felipe Engineer 7:08
But I love that, you know, through frustration, you want to make a solution and help out your your father originally just thinking about, you know, what your dad went through what you went through because the same headaches that he had coming up at construction, you had to have exactly the same. I call it imagine like what kind of family dinner talks would you guys have talking about the type of shenanigans that happen that is every day? Regular off the shelf construction. But where did you get into like blockchain and bringing blockchain? Was that always something that you're gonna bring to your technology company right away? Or is that something that just came up as you got more experience with cryptocurrency and that type of stuff? Yeah, so
Rob Salvador 7:55
you know, they kind of happened in parallel. So you know, about four years ago, I was already looking at, you know, digital solutions and how we might build one for the industry. And that also happened to coincide with when I really dove deep into the blockchain, crypto, call it you know, web 3.0 has a lot of different names, digital asset space, in general. And, you know, just in studying that technology, I was just looking to see kind of where the technology was gonna go. I like to be, you know, not only just for construction, but I just wanted to understand what I thought would be, you know, part of the future. And as I dove deeper into Bitcoin and blockchain, and then I started to understand things like smart contracts, kind of just had this light bulb moment where I realized that it was a perfect technology for construction. You know, if you look at what a construction project looks like, you have 50 to 100 different parties who have to do business together, but they don't really trust one another. So they have to build trust between each other using audit trails, you know, contracts, different forms of manual trust building that happens between them. And because of that, and because they're all these different companies, what ends up happening is the industry spends a ton of costs and added risk, and putting all these processes together that it takes to manage a construction project. And so I kind of realized that that's a situation where blockchain is really good. So what blockchain is, is basically just a technology that allows multiple parties, usually with economic interests in the situation, to transact together in a better way. You know, the current in internet that we use, it's kind of a closed off database. And what that means is when I send you something right now, I'm sending you a copy, whether that's a picture, whether it's an email, whatever I'm sending online, I'm sending a copy from my database into your database. And once I send that, I lose control of it. Of your copy, right? I can't see into your database. I can't control your day. database. So there's a lack of trust between us. Basically, what blockchain is, is a shared database between us. Now it has all the characteristics of privacy and things like that that you need. But what it means is that there's certain information that we can't change, there's more transparency. And there's a shared common data environment. And when that happens, it unlocks benefits that weren't possible in the previous versions of the internet. And so in construction, I kind of realized that meant that we could automate a lot more things that meant that we could improve how we collect data, how we audit our construction projects, things like that. So to your original question, it kind of happened at the same time, I was looking at digitization, I had a light bulb and said, Wow, you know, Blockchain makes a lot of sense in this industry. And that's kind of how the original idea for Digi build came to be.
Felipe Engineer 10:55
That's perfect, says perfect timing to the April, just in time as we're getting into the nerdy tech stuff. But I wanted to read a quote to you while April gets connected, gets all our stuff figured out. One of the things that you said on your website is did you build as one of the first in blockchain, and it is blockchain itself that allows for a verifiable, and auditable single version of truth. One of the things that jumped out at me on your site, as you had this function, or some kind of module that shows this timeline feature, can you talk more about that timeline feature? And why would that be important to people? That might not necessarily be, you know, from a general contractor's perspective, or, honestly, a lawyer that does construction law cases? Which timelines are super critical in the legal profession, defending claims, and preventing claims as well?
Rob Salvador 11:51
Absolutely. So you know, one of the things that happens in construction, when you have all these different stakeholders on the project, is you end up with multiple versions of truth, right. And if you look in the industry, right now, everyone in software and solutions tries to be the single source of truth, you know, contractors, suppliers, lenders, software companies, they are all databases as well, and you can't necessarily see into them. So blockchain is an ideal single source of truth. Because, you know, if I send you a piece of data, and I can't see that you change the data or send it to someone else, you know, again, talking about what I said earlier, you lose version control, or you lose control of that piece of data. But with Blockchain, it's almost like I would have send a group text message where multiple stakeholders in the network, know that a certain piece of information has not been changed, or that that information came from somewhere. So what that allows you to do is create that ideal single source of truth. And no single company owns it by themselves, right? There's not that problem of lack of visibility into the database, because it's a shared database. So now, what you can do is take a look at the way that we currently build trust, and what that means to the end users in construction. So currently, you have stakeholders that need to audit information, right? Insurance companies, labor unions, the lender, you know, it could be a developer, it can be any one of the stakeholders, they need to audit that information for certain purposes. And because I can't see into your database, I don't necessarily trust you. What I have to do is right now is spend a lot of time and effort building that trust. So an insurance audit, for example, you know, you report to the insurance company, what you spent for that quarter, and then they send someone into your office for multiple days to verify that right or to go through your paperwork. And that's a manual form of trust building, because technically, you could have changed that information, you could have under reported your data. And they don't want you to do that because they need to charge you the right premium because that's how they make their money, right. It's shared risk counterparty risk. Now, with Blockchain, though, that bad situation where they change data isn't possible. So when you have a project that's writing the project data onto a blockchain, now the insurance company like think of it again, like a shared group text message, there's no way they could change that information could have been changed without them knowing about it. So now, you can have basically a one click audit, because that information when it's entered has hit the blockchain. And there's no way to change it. So you can download that information with one click. The insurance company gets the information they want. They know what hasn't been changed. So it's de risked for them from a risk perspective, they can engage in that in that workflow now. And all of the parties involved the contractors, the insurance company themselves, they save money, and they save risk. Because that auditor who used They have to come into my office for, you know, three days. Now you don't have to do that, at scale in construction, you're talking massive savings. And that, again, goes for any company that wants to audit, it can be a labor union, trying to verify their, you know, the amount of payroll so that they can make sure benefits were paid. So all that is to basically say, you know, you were asking about one of our products, which is what we call Digi verify. And it creates this timeline that captures all the transactions on a construction project, when you can add that certainty to information. Like I said, it has major benefits to the industry in the way of cost savings, reduced risk, and more clean, better data insights, as well. So that's part of the power of using Blockchain to verify information between all these different companies and construction that do business together.
Felipe Engineer 15:50
I think, Rob, you're just describing them the crib text is a beautiful analogy for how this actually works. People listening if somebody is going to be thinking, like, Where can I send rob a check? Because I want to invest in digital right now. So what what is the situation? What? What limitations do you guys have on geography? Since you are a software and technology company, you're limited to just English speaking countries? Or have you gone outside the US yet?
Rob Salvador 16:18
So for now, we're starting in the US, we have gotten a bunch of interest of going overseas, you know, especially in areas where, you know, fraud is even more prevalent, right, you know, developing countries and things like that. The blockchain is even more valuable. But right now we're in the US. And we'll probably plan to expand overseas in the next couple of years, I would just say, you know, if anyone is interested, feel free to reach out, visit us on our website. And we can, you know, let you know what the timeline looks like. But yeah, you know, as you see with some of the other software companies that are out there, you know, some of the current industry leaders like Procore, Autodesk, they are definitely expanding into other major markets. So we'll plan to do the same.
Felipe Engineer 16:58
Hi April, do you want to say hello?
Rob Salvador 17:00
So April is our...for everyone out there, April's our co founder. And she was able to jump on with us.
How are you doing April?
April Moss 17:07
Great April Moss, COO and co founder of Digibuild.
Rob Salvador 17:12
So April actually has, you know, pretty powerful story as well. And I think it's, you know, worth taking a moment just to share. So, you know, you guys asked me about my, you know, experience in the industry and seeing my dad's struggle and kind of, you know, get dragged through the mud by the Big Bad construction industry. You know, April has a pretty powerful story as well. And if she's willing, I would, you know, see if she wants to share it, because I do think it's one of the reasons that we're so passionate about improving the industry. So April, if you'd like to share, you know, we'd love to hear it.
April Moss 17:42
I definitely would love to share my story. I'm not sure if Rob mentioned but i My background is working in the consumer products, goods organizations. I worked 21 years at Procter and Gamble and product Supply Logistics, very sales roles, operations. Last position was running the second largest global customer team for retail. And then I spent two and a half years working with Starbucks building out and managing their first ever internal retail sales organization worked for a large marketing and brokerage firm, and then did a little bit of work with that construction specifications Institute early on in my career. But like, Rob, my passion is driven by my personal story. My dad was a contractor and subcontractor. He loved what he did, and he was good at it. But he struggled within the industry with the inconsistency of work. Sometimes you'd get paid, sometimes he wouldn't. So just even the lack of access to larger projects, and overtime at war on him. And when I was nine years old, he committed suicide. Unfortunately, in construction, my story isn't unusual. There's four or five times more suicides in construction than any other industry. Nobody really talks about it. So our product that we're bringing to market is a software that would have benefited my dad definitely benefited. Rob, that and we like to say that we're here to not only help construction projects, but we're really here to help construction people.
Felipe Engineer 19:15
April, I'm very sorry to hear about your father. So, you know now at the pandemic, it's been getting even worse. I've got some friends that we've partnered together, speaking on mental health, and it's been a topic of this podcast, several episodes going all the way back to season one. When I had franking Come on, is the mental health comedian has turned his whole life around. He came on my show almost 10 years to the day where he almost took his own life and he's now dedicated himself to using comedy to keep others alive and increase awareness on suicide prevention. So ladies and gentlemen, as always, when the topic comes up, we'll have links in the description below so you can get access to free support. If you're got any types of need. For that, do not be ashamed. It is okay. It affects more people than you know, like April said, in construction today, commercial construction in United States are five times more likely to die by your own hand than to die of injury sustained on the site. And so it's a it's a topic that we're very sensitive to. And again, want to thank my friends partnering with me, Adam, Terasa and Sean, Sean's been on the podcast before we've done some free webinars to increase awareness around this topic. So something very near and dear to my heart, April. And like Rob and I were talking before the show started about how cryptocurrency This is, even before we were really rolling. cryptocurrency and just having some don't have security is not the right word. Because money itself can be a security, but just having some more reliability around finances for people, especially in small businesses, or individuals that are sometimes living paycheck to paycheck, which in our industry is very common. And so anything that we can do to help and be helpful in that area, let me know how I can support what you guys are doing even more so because this is something that is critical for all human beings, regardless of industry. So thank you for, for getting up and working on this all the time.
April Moss 21:20
I appreciate that very much and absolutely will reach out. I'd love to connect on that.
Felipe Engineer 21:26
Yeah, and I want to ask a nerdy question just to pivot a little bit. What chain is digit build, housed on top of?
Rob Salvador 21:35
Sure. So we're built on top of hyper ledger fabric, which was is an enterprise blockchain made specifically for b2b and enterprise use cases. Originally, it was built out by IBM, and they then donated it to the Linux Foundation open source. So that was driven by our customers. So you know, I'm obviously a very big fan of and believe in the future of public blockchains. I think they're going to be society changing in a good way. But, you know, in doing business with enterprise customers, we had to make sure that we were using a blockchain that was scalable enough, that had all the privacy mechanisms that we needed, and had some other features that made you know, b2b business possible on it. So hyper ledger is the most proven blockchain, I think, roughly half of global shipping, runs through it right now on the trade lens platform, which is a project that's owned by Maersk, the largest shipping company in the world. So we built on top of hyper ledger fabric, and you know, it gives us everything we need in order to, you know, minimize trust between these stakeholders, which then kind of helps us create these, you know, end user benefits of automation and data and things that we've talked about. But I absolutely believe that in the future, open source public blockchains long term will be a major net benefit for people business. And just, you know, markets in general.
Felipe Engineer 23:03
I'm gonna ask because this is something I've been nerding out recently, and finally, under the good advice of my friend, Brittanie Campbell-Turner, it was Brittanie, Rhino Brittany, oh, you know, British.
Unknown Speaker 23:13
I've done some events with her in Chicago as well. Yeah, she's great.
Felipe Engineer 23:16
Let's gotta say like, I know that Brittanie was has been shaping me for a long time to pay more attention to smart contracts in particular. That's all good, glad I found a friend of Brittanie's here in youRob. And April I'm going to ask you. April, do you just by chance, do you know Cindy Menches? Because I think she worked in the specification stuff herself in some earlier another life.
April Moss 23:41
I think I do remember her that is so strange. To look her up. That is awesome. I mean, nobody people from that industry.
Felipe Engineer 23:51
How would you set the specification group? I was like, I gotta thank Cindy used to do. Yeah, very cool. And you? Probably we could we could talk more about all the people we know from. Right. We're back in the neighborhood. They're still, you know, out and about. It's, it's incredible. Now, I don't know, I don't know too much about you said it's called hyper fabric. Rob. Is that your fabric? Yep. hyper ledger fabric. Is that a proof of stake? Or is that involve like verifications through a series of nodes? Like, I've done some transactions with Etherium. And sometimes it's five minutes, and sometimes it's four hours. So uptime or our speed of, do you guys see on your son?
Rob Salvador 24:30
Yeah, so hyper ledger was specifically built. I forget how many transactions per second, but it's massive. You know, you lose a little bit of the decentralization that you get with public blockchains when you use more of an enterprise blockchain, but again, for businesses, there's only certain levels that you need, you know, taking the trust off of one and dispersing it to many or a couple businesses, you know, has big benefits anyways, so hyper ledger was built for scalability. They use State channels that basically you know, where as Etherium's current consensus is called Proof of Work and there'll be moving to proof of stake or they're halfway there, like a halfway proof of
Felipe Engineer 25:10
everything threatening to be there for like, a couple of years, right? Yeah, their roadmap
Rob Salvador 25:13
is changing, because it is a very tough thing they're trying to do. But hyper ledger fabric uses something called practical Byzantine fault tolerance, which basically is a way to say it's semi decentralized. And you know, decentralization is a spectrum, based on use case. So we're something like Bitcoin, we're trying to create sound money, where you have a massive attack vector, you know, you have to be completely decentralized. Otherwise, you know, corruption, greed, all the same problems we have right now will happen. But other use cases, like trying to just, you know, make more automation on a construction project, you don't need to be completely decentralized, you can kind of minimize trust, and then that allows you to do that from a risk perspective in business. So yeah, that's what hyper ledger fabric does. And, you know, obviously, long term, like I said, public blockchains can we'll be able to do a lot of that, but they're still, you know, early on in their roadmaps to
Felipe Engineer 26:04
know that answers a lot of my questions I was gonna have about the cost per transaction, it sounds like hyper ledger is the perfect use case for what you got going on. And, and one of the things just to dive back into something that I noticed when I was perusing your site, either one of you can answer this on Did you procure procurement is something that has been the bane of existence for so many people building, especially now with all the supply chain woes that we've had? Can you tell me a story about how did you procure has helped, and just in broad strokes, what it is, and, and what, what kind of insights, is it giving people that they didn't have before?
Rob Salvador 26:40
Yeah, absolutely. So you know, like, you hit right on the head supply chain, and material procurement in general is the biggest problem in construction right now. It was a major problem before COVID. But it has only accelerated, you know, tenfold. So, you know, in 2019, at the end of 2019, we held a big innovation summit, where a big group of the top companies and construction either flew in or called in. And we did a bunch of customer discovery. So we partnered with IBM, you know, they had helped us obviously, they were building hyper ledger fabric, we were building on hyper ledger fabric, they saw, you know, major use case, and what we were building. So together, we held an innovation summit, and the two biggest pain points that came out of that, you know, were the top companies out there telling us that supply chain, and payments are the biggest pain that they have currently. So what did you procure is, is an automated way to find order, track and manage your material from the supplier to the jobsite. So the number one reason jobs finished late or over budget is because of procurement issues. So we basically make it so that contractors never miss their procurement dates. And they always get the best pricing, we also allow them to interact with their suppliers. And then we capture all of that data that's created, you know, for procurement decision. So what a company can do, whether it's a GC or a sub, is upload their job schedule, upload their material takeoff, and we'll handle the rest, we'll make sure they ordered the material on time, we'll send them alerts, you know, it could be something like, Hey, you know, your project schedule says that you're supposed to start, you know, light gauge metal framing next week, but you have no light gauge metal framing material ordered, you better order that now. And then also, if they want us to, we can get that ordered for them at the best price, you know, they can track it. And then one of the other big pieces of what did you procure does, like I said, is capture that data. So as you know, construction is becoming obsessed with data now, especially with the high frequency of failure and disputes that we see. Companies want to know, hey, if I'm doing a project right now, and I'm going to be doing a similar project down the road, I need to capture all that procurement data. So if I went over budget on my, you know, I don't know my paint line items, I can capture that in pre con on the next job pre construction, and not have that happen again. So basically did you procure really improves the supply chain and material procurement process? And we're actually in the process right now, multiple of the current industry leaders are looking to invest in us and asking us to integrate with their current offerings because we have a really nice supply chain and procurement offering. And did you procure
Felipe Engineer 29:28
Rob. I mean, I know you know, but people listening what Rob just said, I mean, in my wildest dream job, I never thought that I would be alive to hear somebody say that you could offer the solution that you just described. I just gotta like, stop for a second because I heard like, like just a wave of superintendents that I've known. assistant superintendents and project engineers from around the world just start screaming at their speakers right now saying, Oh my God, he's finally solved like this thing. We waste so much time on. When I was a young project engineer Rob, I used to have to get on an airplane with like two other people and fly to the middle of nowhere Nebraska. Sorry, Nebraska. I love you
Rob Salvador 30:11
know, I assume you were checking on something like being prefabricated or making sure that it was actually coming to the job site. Is that what you had to go there for?
Felipe Engineer 30:19
Yeah, cool, you're off, and I lost. I lost so much time away from home, I got stuck in snowstorms, because Nebraska, there's nothing out there. So when it starts to snow just blows and just gets all over the runway, it makes it impossible for my tiny, teeny tiny plane to take off safely. And stuff? Well, yeah.
Rob Salvador 30:37
You know, not only is it doesn't affect you personally, right, that's some of the stress that we talk about in the industry. That goes back to, you know, like you said, the high suicide rate. So there's the people aspect, right. But then the other side is the business aspect, every single action that you just described going, you know, flying somewhere, checking on something to make sure it's fabricated trying to spend an hour finding that material cost money to these construction organizations and adds risk. Anytime you add more complexity, you're adding more risk, right. And so sometimes when we talk to companies, like when we first come in the door, they're like, you know, we have such a good process. We know that we need, you know, better software, but we've mastered this process. You know, a lot of times innovation, and you know, technology, it's not just about fixing current processes. It's about unlocking value, add other processes and behaviors, right? So you know, just being able to have a tool like maybe you have four people in your office that are managing procurement all the time. Well, you're the by introducing software, maybe now only two of them, or one of them need to manage material, and the other three of them can go chase more work for your organization. Right. So that's one of the things you just described is, you know, I would encourage audience members and construction folks to think about putting one of your team members on a plane, you know, that has a cost, their time gets wasted, not even just on a plane, let's just say you're staying in the office, calling a material supplier or a subcontractor to say, hey, is this material on the way, every time they missed that material date, it compresses the rest of your schedule? Now your electrician is feeling pain, because their schedules compressed by the you know, some other trade? So at the end of the day, you know, there's no question that introducing software solutions will have does have immense benefit for construction companies, even if culturally, the industry has kind of been late to the party to introduce them. If you are a construction company, the future is in software and technology. And that's just a fact.
Felipe Engineer 32:44
Yeah, the the automation that Rob was talking about that he's describing, I've got other other stories, Rob, where we actually tallied this one time for steel procurement. And we spent just in my time on a multi year project, just on billable time. Now what I actually got paid people, not what I got, but what the owner paid. What the owner ultimately paid was, you know, north of a quarter of a million dollars to just verify material. I mean, literally just verifying material, a quarter of a million dollars just to go and see because trust was so low, like Rob described people trust has a cost. And Rob, is APR are finding out exactly what those costs are for companies. I mean, even on a on a medium sized project, Rob, I'm assuming like on a $50 million job, you're you're talking about potential ROI here on the millions for multiple parties involved, not just the general contractor. But all the trade partners as well, even just the automation of having something reading the schedule, and triggering a reminder, like we get reminders on our phones, like I had a reminder trigger me to get on this call at a certain time in the studio here. I need someone to nudge, I need nudging. And so that nudging is powerful because it got me here on time. And so that in construction, too, is big, and being able to bring that type of solution and leverage. That is a that could be adding back trillions of dollars to the industry, just the United States alone with all of the unnecessary movement of people and materials, waste verifications and things and you're totally right, that can absolutely be automated easily.
Rob Salvador 34:23
Yeah, I mean, your your software should be like your digital project assistant that does things for you, so that you don't have to do them, right, like project teams have enough complexity. Unfortunately, you know, the current solutions, just because, you know, we're still young in the adoption cycle of technology, the current solutions that are out there are kind of just like Dropbox for construction, right? Like you can upload a document than yourself can go grab that document, redline it, re upload it, but that's still a bunch of time, right? There's still a bunch of trust building. There should be automation, where platforms do things for you and to your point, the benefits at scale and concern ruction globally is a $10 trillion industry 13% of the global GDP, you're talking immense savings. You know, one of the things we're able to do for subcontractors is save them up to 5%. On their material costs, how? Okay, well, most subcontractors out there, whether you're a small middle, whether you're a large company, whether you're a mega company, most of them are only getting a couple quotes when they quote material. Right? Right. But let's say you're doing a job somewhere. And you know, maybe there's a local supplier, there's 50, local suppliers that normally you wouldn't even have talked to, well, because it's too much, right, you gotta call all of them, email all of them, gather all the quotes, compare all the quotes together with a platform with with Digi procure, what we're able to do is basically manage most of that for you. And now subcontractors are like, Oh my gosh, we're saving so much money on material, just because we're able to get 20 50% more quotes than we would have gotten before. And you get the best prices because of that. So there's many different ways that happens, like you said, but at scale, these type of solutions and construction are absolutely necessary. And they're absolutely game changing and helpful for these companies.
Felipe Engineer 36:12
For people listening, if you've never had to buy material for commercial construction, it's not like being at a grocery store and looking at like, oh, there's seven different types of ketchup. And you can see the price for each one. It's like, it's like going to a grocery store, and then seeing a piece of glass. And behind that glass, you can't see through the glass, they tell you there's a sign that says there's ketchup behind here. And there's a whole bunch of different catch ups, you don't even know that 10 Catch ups 20 Different catch ups, and the price is also behind the glass and the glasses, my eyes will be it's black, the glass is black, and you can't see through it. It's not transparent. And then you have to call somebody to get a key to unlock the glass to pull a slider back and only shows you a sliver of the ketchup since it slides. And that's the best procurement and construction.
Rob Salvador 37:05
But I don't even give it to you right there, then you have to wait for the material or your product to arrive and you have to hope it's coming on time. And then you have to call them and say, Hey, is it coming on time. So again, you know all that complexity, there's just no reason that software doesn't because project teams have to manage, you know, 50 trades you have to manage, you know, 1000s of different types of material. You've got workflows around contracts, RFI is, you know, payments, procurement, it's, you know, photos, daily reports, there's so many things, all that complexity is just too much. And so that's why companies are finding out that using you know, software can really help to manage that complexity.
Felipe Engineer 37:42
And I was I was even being interviewed on on the build builder podcast, Ross was asked, hey, they specialize in construction finance for subcontractors for material financing, and he was telling me some of the woes that subcontractors or some subcontractors and this should be illegal, are paying over 70% a py, for material contracts because of the payments are so long as the work that's already completed. I mean, we're asking the subcontractors people like April's dad, people like Rob's dad, like Rob to basically finance buying the commodities for the projects and not getting not seeing money for up to 100. He said on average, 120 to 150 days, until they can get payment for work that was installed. That's people that's half a year. That means I work today in February, and six months from now, I don't even know when that is six months from now. It's gonna be summer's almost over, you're finally getting paid for what you did in February.
Rob Salvador 38:45
Not cool, right? And then by the time you do get paid, you know, a lot of the conditions for the job have changed. So now you've got a bunch of change orders. You're working on negotiating now that money that you were owed from six months ago. Now, it's a tool that's being used against you to negotiate change orders down or to get you to get more manpower or so it is really a burden, not only on the subcontractors on the suppliers on the general contractors. You know, many people think that by slow paying, I wouldn't say many, but some people think there's been a history in the industry of companies that think by slow paying, you're helping your company or the project, you know, because you're the developer or something but adding inefficiency, building adversarial relationships, that doesn't help. That's actually the reason that 70% of projects finished late or over budget. Oh, you want more manpower? Well, you don't care about paying me so enjoy the three guys I'm gonna send you when you need 10 Right. I can't tell you how many times I've seen that or disputes happen right because you didn't get paid everyone's mad now we're all arguing ended the project. Now there's a lien on the project. Now we spend a ton on legal fees. So even with payments, you know what you can do with digitization right now? You know, one of our tools is called Digi pay. is basically a FinTech tool for construction. With just a software as a service platform, you can improve a lot of that you can save money collecting all that, you know those payment documents, you can reduce risk for all those parties, because there's a lot more transparency into who owes what there's more documentation. And then long term, the cool stuff with Blockchain, think about a future where construction payments in a fair and efficient way can be sent out daily, weekly, every two weeks, maybe in the future, not even maybe it will, it already is almost possible. You can stream payments by the minute, the same way you stream Netflix. Now, there's a lot of things that we could go into that you know, with how fast owners pay and lenders, that's a future down the road. My point is, though, you know, going back to what we're talking about with Blockchain, whatnot, having trust built natively into a platform will allow a lot of us to do so many cool things that improve the industry around payments, as well, as you know, many other things we've talked about.
April Moss 41:01
Yeah, I can't help myself coming from product supply and logistics background. But, you know, we always talked about just in time delivery, I'd love to see a day where it's just in time payment, right. And people aren't having to wait for that. I mean, you know, I've told Rob the story where my dad didn't get paid, and we'd have to close every room in the house down, we lived in our kitchen. And the reason we lived in our kitchen was because we had a gas stove. And that's just absolutely insane. Because my dad couldn't get paid,
Felipe Engineer 41:30
not cool in the least bit. And some of the owners APR, you mentioned an owner, I don't want to rehash and beat up on owners for a second. But some owners have payment strategies, and so adversarial contractors have to hire additional staff just to do the payments. With your with the system you guys already have in place. What type of savings are you? What kind of feedback? Are you just hearing from your customers, but digit Bay? Yeah. So
Rob Salvador 41:58
you know, we're able to save them up to 10% on the paperwork that they have to collect, you know, collecting the payment applications, G 702, G 703, we're able to automate the lien waiver process completely. And again, you know, that's because the lack of trust previously stopped us from doing that, right. Like, you weren't able to create a platform that fully automated lien waivers, you've got companies like level set, right, that was acquired by Procore. That kind of help with lien waiver management, it's better than a spreadsheet and you know, manual processing. But with lien waivers as an example, you couldn't fully automate it because, you know, as distrusting stakeholders, if I'm owed, say, $100,000, and you tell me, Hey, our software is going to automate you signing that, don't worry about it. I'm supposed to say Wait, how do I know I can trust you? Like, what if you signed my lien waiver for $50,000. But I'm actually owed 100, you know, the lack of trust in our databases, right? The lack of visibility in databases, like we talked about, prevented that. But with Blockchain, it's that transparent shared database. So now, you can have a platform that automates the creation, execution and review of lien waivers where you never have to look at a lien waiver, again, you still get the output of a completed lien waiver of the protection of it, but all of the labor, the time, the risk that went into it, that's now gone. So the things that we're able to do, you know, we say Digi pay are definitely saving companies a lot of money, like I said, up to 10% on collecting all those documents and whatnot. And then you know, you can speed up payments, as well as you know, at least by a couple days, because you're not really waiting for you know, wet signatures and snail mail, things like that. So, the same way Fintech is improved many other, you know, pen and paper industries, you're seeing the same thing. And construction, the FinTech in construction race is definitely on. And you know, we're in a pretty fortunate position with Digi pay. One of the things I will I do want to touch on is what you said, talking about the developers and the owner, the developer. So most developers are good actors, right? Like they're not trying to slow pay, you know, especially the professional ones. They know that a collaborative environment where your contractors are getting paid in time, especially in this tight labor market. That's ideal. There are some companies that operate under kind of like the fallacy, and maybe it's worked for them in the past, but it won't in the future, that you know, hiding things slow paying, you know, slamming their fist on the table, so to speak, is the best way to do business. If you look at markets at scale, efficient markets, you know, those actors, usually, it's not the majority, right, you know, efficiency creates efficiency and processes creates efficient markets. So, you know, there are contractors or excuse me, developers, owners, who might, you know, purposely like pay super slow and then try to get you to take less money. You know, bad actors are everywhere, but they're not the companies that are the future of this industry. You know, even now, we're working with multiple Large developers that see, hey, you know, collaboration. And you know, working with our stakeholders, not against them is the way to successful construction projects.
Felipe Engineer 45:10
That's my favorite sweet spot, Rob. But unfortunately, time is not our friend today, April. And Rob, you have been amazing. On this episode, I think we need to have you guys come back and make you like a regular. We could talk to you every season from now on. But you'll get the last words.
Rob Salvador 45:27
Yeah, no, I just want to thank you so much for having us. I think what you're doing is extremely important. You know, we need to talk more, collaborate more, learn more in our industry, especially around technology. Because at the end of the day, technology is a tool that is improving all industries construction included. So we at Digi Bill believe that, like April said earlier, we're building something that will improve the projects and the people in the industry. So you know, if you're a general contractor, or subcontractor, or even an owner developer who would like to look at Digi build and our tools and how we can help your projects, please do reach out, you can check out our website, as you mentioned, did you build.com you can ping us on LinkedIn or email us at info at Digi build.com. And together we'll build a happier and healthier construction industry. Thank you so much for having us.
Felipe Engineer 46:18
Yeah, April, you get some last words tonight, Rob doesn't get sole glory.
Rob Salvador 46:21
Well deserved the last word. I talked too much.
April Moss 46:24
I definitely would like to come back. I appreciate that. You recognize the struggles that people have been construction, you hit a real tender spot in my heart and love to collaborate and talk more about that with you and your audience.
Felipe Engineer 46:38
Ladies and gentlemen, you'll have all those links in the show notes.
Very special thanks to my guest. I'm Felipe Engineer Manriquez. The EBFC Show is created by Felipe and produced by passion to build easier and better. Thanks for listening. Stay safe everybody. Let's go build!
$500M in construction managed
Cofounder & CEO of DigiBuild
Y Combinator Alumni
Named Crain's Chicago Business "25 Rising Stars in Tech"
COO / Chief Customer Officer
After a successful 21-year career with Procter & Gamble, which included several promotions, awards and expanded responsibilities, I joined Acosta Sales & Marketing. At ASM, I was part of the executive leadership team and worked directly with many top 33 consumer product group companies. The majority of my time was focused on corporate retail strategy, company acquisitions and integration, new business development and creating partnerships that included two of the largest crowd sourcing companies.
The breadth and depth of my executive leadership in operations, sales, new business development, customer acquisitions, product supply & logistics and most importantly my ability to construct organizations from the ground up are foundational in standing up the DigiBuild Team and forming strong customer and partner relationships.
As a Founder in DigiBuild, I am driven to help fix construction projects and make construction workers' lives healthier. Why? I lost my father when I was 8 to suicide from the pressures of the industry. My father was a custom cabinet maker and finisher. As a child, my brother and I would tag along on jobsites with my dad. Some of my fondest childhood memories are sparked when I hear the sound of nails being hammered, the smell and noise of a saw cutting through lumber and watching construction workers on a job site. There should have been many more memories created before losing my father and I’m not alone. The high-pressure environment, the seasonality, loneliness and the drink culture within construction was a contributing factor. Most people don’t realize that the suicide rate in construction is nearly 4x greater than the national average and 5x greater than all other construction fatalities combined.
In the process of losing my father, I lost a part of my childhood. I would like to make sure that as we fix construction, we fix/help construction people and their families along the way with construction software tools that make a difference.