Insights and best practices for construction management technology and project delivery

Darren Bechtel on the Future of Construction Technology

Burcin Kaplanoglu
Executive Director, Innovation

We’re excited to have Darren Bechtel, founder of Brick & Mortar ventures, join us at Oracle Industry Connect 2018 to discuss his work and his perspectives on the “dawn of the digital era” in the AEC industry. I recently sat down with Darren to discuss his journey to become a venture capitalist for the built world and his views on the future of technology in AEC.

Why did you start a VC company for the built environment?

I was born and raised in the engineering and construction industry. My great-great grandfather, Warren A. Bechtel, started the family business 120 years ago with two mules and a scraper in Oklahoma. He built up a grading business in the railroad industry and started making his way west. After saving up enough money, he purchased one of the early steam shovels, put his name on it, and then started winning construction work for railroads, then highways, then power, then dams…and the momentum continued to build. Fast forward to today: the company is in its fifth generation of family leadership with my brother, Brendan Bechtel, as the chairman and CEO. There are about 52,000 non-manual employees who, collectively, help the business generate annual revenues of around $35 billion. That was the world, the culture, and the family that I grew up in. As was customary and encouraged in our family, I started working summers once I turned 14.  By the time I graduated college, I had served as the gofer to the gofer on a homebuilding crew, a finish carpenter, a mason, a forklift operator, a TIG welding instructor, a field engineer on a light-rail project, and an area superintendent on a coal terminal expansion in Australia. It was a bit of a sprint-paced exposure across the broad spectrum of the AEC world. In college, I studied mechanical engineering at Stanford with a product design focus – so creative problem solving was the focus on my education.  

Following graduation, I took on a role at a commercial architecture firm on the East Coast, initially as an in-house engineer and eventually an architect and construction admin. I loved working in a creative design community, but I came to miss the hands-on tinkering of product design. I pivoted away from the built world industries and returned to the San Francisco Bay Area to join a medical device startup as an R&D engineer – a role that ultimately led to me becoming a turnaround CEO for that company several years later, after completing my MBA back at Stanford. My work as a medical device CEO was a real crash course in startup operations and management; I learned so much about trying to get a startup cleaned up and off the ground, managing a growing business, and the day-to-day challenges of a turnaround effort. It was during that time I began angel investing – though then in an industry-agnostic way – and trying to help startup founders apply some of the hard lessons learned from my own experiences. I fell in love with the world of startups and venture capital. After my career in life sciences, I launched an incubator and co-working space in San Francisco for Stanford entrepreneurs and began focusing full time on venture investing. I knew that was my calling, but I also knew the world didn’t need another generalist super angel. After some soul-searching, reflection on my own experiences and competitive advantages over other investors, and looking for common traits among the breakout performers of my portfolio of investments, I realized the opportunity presented by the still underserved and yet-to-be disrupted built world industries of architecture, engineering, construction, and operations and maintenance.

So what conditions make the built world a favorable target?

We recognized that the dawn of the digital era for the construction industry was just starting to break over the horizon. The industry’s need for productivity and safety improvement was clear, and the foundational technologies necessary to connect the field to the office, trailer, and digital world were just starting to become accessible to end users. Digitization and industrialization of the built world industries has long been an inevitability, but we were starting to see early indications that suggested that the timing was favorable. We formalized our efforts to launch Brick & Mortar Ventures in early 2015 with conviction in our vision that the global construction industry – a $10 trillion dollar sector expected to grow to $15 trillion by 2025 – will need to realize an exponential growth in productivity and significant decrease in project delivery costs in order to meet the $50T in infrastructure demand over the next 12 years. Innovation through digitization is being embraced by some early adopters in the industry, and it is being forced upon others by the clients they are serving. From a human capital standpoint, AEC companies are also beginning to experience difficulties recruiting and retaining the next generation of the workforce that has come to expect the use of new technology in the workplace. For an AEC organization to remain relevant, survive, and thrive over the next 10 years, we believe they need to be investing in innovation right now. And much more than just talking about it; they need to be actively seeking out new technologies and learning how to work with the new generation of ever-improving solutions – or they will have a hard time remaining competitive.

How is Brick & Mortar Ventures helping drive innovation in the industry?

Over the last two-and-a-half years, since the inception of Brick & Mortar Ventures, we have invested a lot of time, energy, and resources into developing partnerships with some of the progressive, industry-leading organizations and corporations across the AEC world, realizing that those organizations are the ultimate end users of the technologies that entrepreneurs are trying to develop. It is not uncommon that the entrepreneurial tech talent that has the knowledge and tools to develop cutting-edge solutions lacks the understanding of what their target market actually needs and values. We believe that the way to develop sustainable, successful solutions is to get end users involved in the iterative design process and get them involved early. It is a fundamentally different way of thinking for an industry that has historically only had the options of buying technology off the shelf, as-is; developing solutions in-house; or paying a large software company to develop a custom-built solution.

We’re helping to create a more efficient path to market for entrepreneurs that struggle to navigate our opaque industry, and at the same time, we are helping ensure end users are getting the tools and solutions they actually need. Part of this process requires us to help the industry think through their own strategies of how to engage, work with, evaluate, and ultimately implement new technology and business solutions. We are excited to see the position of Chief Innovation Officer becoming more common within the AEC industry, and we are encouraged by seeing established organizations allocate capital for funding pilots and investing in their own corporate infrastructure to enable and encourage innovation. We regularly talk about being at the dawn of this digital era, and that is because the industry is just starting to wake up to this new day.

What emerging technologies do you see presenting opportunities to drive transformation?

It is a wide variety; we feel like there’s almost too much opportunity. Construction is one of the largest industries in the world, and yet it is tied with hunting for the title of least digitized. There is massive opportunity in the internet of things (IOT) space – just being able to create the connected construction site, to start. To really try to improve processes out in the field, we first have to be able to get reliable connectivity, functional sensor networks, and ubiquity of mobile computing. The worksite needs to be connected to the office and the trailer to be able to unlock the power of real-time information and data-driven actionable insights. You can start doing predictive analytics and intervene before there’s an issue.

Advancements in robotics introduce the possibility of disruption to the way we physically perform work, from automation of repetitive tasks to utilization of remotely operated equipment in high-risk and harsh environments. “Worker augmentation” is another exciting area of opportunity in which technology is utilized to enhance a worker’s physical capabilities through solutions such as exoskeletons or modification of traditional hand and powered tools. And then there’s new materials and fabrication techniques, such as additive manufacturing and subtractive manufacturing, that have the potential to not only change the way we build, but also unlock a new world of engineering and design capabilities.

We also believe the refinement of emerging “reality capture” technologies – solutions that generate 3D models from scans or a series of photographs of a physical environment – will help users marry real-world conditions of “what exists” with their increasingly more detailed 4D and 5D BIM models of “what should be” to identify clashes, automate progress analysis and reporting, and verify site conditions and compliance against design parameters and intent. These technologies also start laying the foundation for utilization of autonomous drones and equipment by enabling a kind of situational awareness onboard in field equipment.

The future of construction looks very different from the processes of today, and industry transformation is well underway. We see great opportunities across a wide range of solutions for the AEC industry, ranging from addressing the low-hanging fruit of getting people off of paper and into the digital world through to the stuff of science fiction, like 3D printing habitats on Mars. It is an exciting new era for the built world industries, and we’re betting science fiction is closer than most think.

Darren will explore his work and vision for technology in AEC at Oracle Industry Connect this April in New York City. Visit the Oracle Industry Connect site to learn more and register to attend.   

Read insights from the Oracle Industry Connect 2018 report here.

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