#128 Construction Corner - State of Construction
Dillon Mitchell: Hello, and welcome to another episode of instruction corner podcast. I'm Dillon, I'm your host and joined by my blue collar. Badass Matt, how's it going, man?
[00:00:11] Matt Vetter: Fantastic. Dillon. I hate talking about the weather in the intro, but I have to bring it up because it is finally like 75 degrees and sunny in Michigan and it feels like spring today.
[00:00:23] It's next week looks pretty nice. So I'm hoping, I'm hoping that we're over that hump.
[00:00:29] Dillon Mitchell: All right. So I told you we were going to talk about this afterwards, but it has been so nice here lately. And I don't know why, but, uh, after my trip to Florida where it was just like the perfect day, right. I got up at four in the morning for no good reason, like five hours of sleep.
[00:00:48] Uh, you know, red did all my like morning routine started work at six work til like one got probably 15 hours a day in that six hours. You know how it is lines make you like, just super productive on the boat. It was on the water for the rest of the day. And this week I have granted, I don't, I have water around me, but not like, you know, all my front door type type of water.
[00:01:15] Not yet anyway, not my own dock, but. I've you know, got up to my, all my own stuff. Basically stay true to 75 hard. Get on my water, read two workouts, outdoor done all my powerless stuff except for this. So this is the break in, in 75. Heart is, uh, we just put up some lights on our deck this weekend, you know, those nice, like I saw those.
[00:01:40] Uh, Edison bulb ones and made it a conduit conduit, and a C clamps to on the deck, most expensive, uh, you know, stand these days, still cheaper than wood, but put those up and we've been sitting out there and I've just, I've had glass of wine at like five, six o'clock. But the difference is like, when I. Drink if, unless it's like out in social, I sit there and I'm reading books, man.
[00:02:10] I'm reading books, I'm taking notes. I've got, you know, like my, uh, my big old pad of paper here and just, that's what I do. So it's been like perfect days, perfect weather, especially with the lights. So you can stay out there and, you know, again, I have a glass or three wine and take notes and read and it's, uh, I've strung those perfect days together, man.
[00:02:32] So it's. It's been fun.
[00:02:35] Matt Vetter: That sounds awesome. We are, uh, we are right smack in the midst of a hell month around here. It's uh, it's, it's mostly fun, but part of it sucks and that we have three boys they're playing four different sports right now. So we have something every single day of the week, except for Fridays.
[00:02:52] So Fridays are, are chill afternoons and, uh, but it's, it's good, man. It's good to see the sunshine again, and it's good to get some vitamin D and. I think it makes everybody happier,
[00:03:05] Dillon Mitchell: man. I love just drive down the street and I see people playing baseball, right. Everybody out on the baseball fields and crowds and all that stuff.
[00:03:14] I just, I love seeing it. It's so awesome. So I'm sure like going out to practices and all that stuff are just as fun to games
[00:03:22] Matt Vetter: and whatnot. Yeah. It's it. It's what America is. Right. I never played baseball. I'm the worst baseball dad ever. Cause I don't know half the rules, but I can go to your, my kids on.
[00:03:33] And you know, I know the, the gist of it. You hit the ball and you run fast and we're good there
[00:03:41] Dillon Mitchell: for sure, man. And so, um, I'll take a hard right here. Um, we'll maybe not. So we're talking really about recovery, right? People going out doing do normal shit again and in construction. Like last year, really? And March, April, even into may was a weird limbo time.
[00:04:02] Right? We all, we all know this. It was weird limbo. And are we gonna, can we, can we be on a construction sites? We can't let stuff sit too long. Is design going to happen? All this stuff on hold. So March April was kind of like a weird time for everybody. May start, you know, New York and all the big cities kind of started letting people go and do construction, which was awesome, especially in those places.
[00:04:25] And it probably worked out really great because they had no traffic to contend with, like in New York city to shut down anything in Manhattan is always as always a nightmare. Um, but with that, you had a, there was a comment on one of your posts and cause we were. Talking about pricing, right? And we're all in this together in the terms of pricing, we're all in the pricing battle and delivery dates, everything that we talked about last week, uh, you know, getting material, material, pricing, talking to everybody about those pieces.
[00:04:57] But as far as recovery goes, I don't know what world this person was living in. But if you look at all like economic indicators, Four. And I'm going to talk primarily in construction because I think that's one of the strongest indicators of how the economy is actually doing, not the stock market, not doji coin, not like any of those things that don't reflect what's happening on the ground.
[00:05:24] Right. And if you look at the U S economy as a whole it's $23 trillion, commercial construction is like 800 billion, you know, a year. Uh, so in that like, and then we take housing on top of that, that adds another, like 1.2 trillion, and then everything else with housing, it's like another, you know, 500 billion in financing and all that stuff.
[00:05:46] So you take construction as a whole. It's like a $3 trillion industry in the U S alone annually out of let's just say 21. So that's a seventh, you know, you start to, uh, have a really big, you know, it's 14% of the economy. Right. Or 10% on any given year. So it's probably like 12 to 15% on any given year is what construction, financing related activities for instruction too.
[00:06:14] So in you look at all the things, right? So I pulled up the census data and there's a lot of things. Our government doesn't do really well, but data and like housing starts cause they're the ones that have all the data. They do this really, really well. Right. When you look at housing, housing starts so new residential construction and seasonally adjusted.
[00:06:35] This is from the, uh, census and like the Fred Fred two database, which is by the fed. Um, so you can pull all this up very it's public information and through this. So, uh, permits as of March 21. So it's like the most recent data you're going to be able to find. There were 1800. Uh, housing units in the thousands.
[00:07:00] So that's 1.8 million housing unit permits. Uh, and about the same amount of starts in, um, March with completions at like 1.6, I don't have like exact figures in this graph, but 1.6 million, uh, new houses completed. And then we compare that to March of 20, where starts where 900,000. Uh, completions were about 1.2 million.
[00:07:30] So we're up, you know? Yeah, here. And then if you look back two years ago, we're still up 30% from 1.5 million to 1.8 million. So you're still up, you know, 30% in housing starts 25, 30% and a two year gap. I mean, we're at the highest you look at the, from 2016 is as far back as this chart goes to 21.
[00:07:57] Seasonally adjusted March year over year. Like it's not even close, like blows them all out of the water. And we thought 17 was a great year, right
[00:08:09] Matt Vetter: direction. We haven't been recovering we've we've been growing is what's happening. Um, you know, recovery is going to come at some point or we're going to need to, uh, if we keep heading the way we're going with everything we talked about last week with commodities and, and material structures, but.
[00:08:26] You know, construction as a whole has been growing quite favorably for quite a while now. And you know, you, you go around to any major city, even the little cities, there's stuff coming out of the ground, all over the place. And it's not just flowers. You know, buildings, buildings are being built. Designs are still pushing through we're, you know, we're just as busy as we ever have been.
[00:08:48] We're seeing a lot come across our desks and. You know, part of construction is you got to ride the wave. You know, you, you, you, I'm looking at your background, but you got, you know, surf the wave and until it crashes and that's, that's what we're doing.
[00:09:03] Dillon Mitchell: And even there, right. Another one's coming. I mean, we, you know, I didn't personally live through it.
[00:09:09] Uh, but well, I mean, I did, but I wasn't affected by it, but you know, nine to 12, right. With the big collapse, like. You know, it, it rose up all the way there. And then, you know, nine to 12, it went down in some sectors, right. In some sectors. And then from there primarily housing and from 13 on, it's just been a boom, you know, with a slight dip last year, which was really just now it's pent up demand.
[00:09:38] And on top of that, for housing in particular stock housing, everyone wants to leave their condo in the city. And move out to the country or at least some the suburbs where they have some land and a good internet connection and they can work. And most people are totally fine with that. Most jobs, you know, you don't need to totally be in the office.
[00:10:01] Is it beneficial? Absolutely. You know, you get a lot more collaboration done, all that stuff, but frankly, if you just have work to crank out, being at home is probably better for most people.
[00:10:14] Matt Vetter: Yeah. Um, I'm a huge proponent of that. And I've always said, and we've talked about before, since I started doing this, there's, there's very little of my job that I can't do anywhere in the world and it gets less and less by the day as technology, you know, we can do a podcast together and we're on essentially different coasts of this country.
[00:10:33] Um, I can have face-to-face meetings with any client, any, any subcontract or any vendor, any employee that anyone I want to, and you lose a little bit, right? I mean, you, you lose that human side of, of communication sometimes, but to get by and to, to thrive in this sort of environment, it's really not that difficult.
[00:10:54] I mean, I. Like I said, I think, I think I told you guys, but I built an office next to my house in November, December. Um, cause I couldn't take work in at the kitchen table anymore. I can't leave now. You know, my, we have a nice office in downtown Brighton and my office is sitting there essentially vacant.
[00:11:14] Uh, but it's, it's just so convenient. My commute now is like, Between 35 and 45 seconds. I take my boys to school every day and drop them off. And I'm still back here before, you know, anything really is happening. And why would I want to leave this? And, you know, we're still productive. I think we've proven that
[00:11:40] Dillon Mitchell: I was talking to a friend the other day whose, uh, architect, uh, Sean was actually on one of the early episodes and.
[00:11:49] We were discussing another firm, um, that we worked at and kind of knew about. And one of the things that came up in a recent meeting was, Hey, all right, this is all over. We're all coming back to the office and then kind of like ended the meeting. And everyone's like, uh, uh, Nope, like why we, we proved. And this is the thing that I think a lot of people are going to get.
[00:12:17] Push back against is, you know, Hey, we're fine to come back maybe sometimes or a split schedule, but we proved that we can still do the work remotely. Right. We proved that we can do this. And now it's, I think on a lot of companies on a lot of structures on a lot of commercial real estate on figuring out, Hey, what are you going to turn all this stuff into?
[00:12:44] What are you going to do now? How are you going to utilize these spaces that people don't need to be here, right. Is your, you know, Cummins did this years ago and it failed miserably where they did all the flex office stuff. Right. It was just find a spot lands and it, it, it failed. Um, because it, again, it wasn't like a forced thing.
[00:13:06] It was, people are just so used to coming in the office, but now that we've been forced out, people are so used to being at home or. And I'm not saying that there's not a place in time for all those. And I think we're still going to need to have these conversations, but it's going to be on a lot of companies, a lot of commercial real estate people to do some education around, Hey, this is what a modern, you know, 20, 21 and an ongoing office looks like.
[00:13:33] Right. Um, versus some of the like old static offices that we've had. So I think in construction, a lot of the things that we're doing are going to, um, Change. They're just, it's going to be an evolution, but I think it's going to be a split work day. I think commercial office space is going to cut in half, or it's going to be a lot of conference rooms and, you know, pods, there's not going to be as much, much is she's not going to be the need for it.
[00:14:02] Right. It's going to be built out super unique spaces. Um, you know, all built around like teleconferencing and zoom rooms and all
[00:14:11] Matt Vetter: that kind of stuff. And here's the thing, though. It couldn't come at a better time and I'm no economist. Right. But when steel and lumber start going through the roof and we don't need to belabor that, like I did last week, but when, when material prices get so high, that it's almost prohibitive to build renovations become really hot commodities.
[00:14:30] Right. They become huge in the, in the construction market because you don't need as much raw material necessarily as you, as you would with the ground up. So yeah. We've got the zoom world and the 20, 20 real reality that we all can work separately. Plus this issue with materials, it leads itself to, to opening up a whole new, a whole new realm of, of the industry, you know, and, and that's in the renovation market,
[00:14:58] Dillon Mitchell: and this is such a good point.
[00:14:59] I think so often we. Overlook right as come from the MEP side of the world, uh, you know, for general contractor, like how much, uh, FFNE and finishes matter, right. Just to go in, rip up carpet, repaint a space, it looks brand new and it's so cheap to do. It's so easy. And if we, if you did just that for your spaces, How much of a refresh would it give to, you know, something that you've maybe been in for 10 years or whatever, it makes a huge difference.
[00:15:37] And I think we a lot of time forget that because we focus on like full new building, full new, you know, systems or changing out some lights or, but I mean, furniture fixtures there's finishes.
[00:15:52] Matt Vetter: You can re yeah, you can restore that new car smell. Quite literally overnight in, in a mid-size office. And that does a lot for everybody's mentality, you know, and for their mindset, it it's fresh.
[00:16:04] It's new. It's exciting. Uh, you know, there's a lot to be said for that.
[00:16:11] Dillon Mitchell: Yeah. I mean, so again, we've recovery, I think we've we've recovered. Right? I don't think there was ever, there were, there was down, but we weren't out. Right. It wasn't like you couldn't. Can do anything in construction design still went on and we still move forward through last year.
[00:16:28] I think as much as people might not have talked about it, it still happened. We still move or we're. I mean, shit, a lot of stuff was still built last year. Uh, maybe not opened, but it was built. It was completed. And now a lot of that's moving forward from the design from all that side of things too. We're open.
[00:16:49] We're operating. Let's go. Um, I mean, Florida is fully open, you know, they've got no problems, Arizona, you know, a lot of states are just South Dakota, never shut down. Right. There's a lot of, a lot of states still operating now where we are, where I am in the mountains was fine. A lot of the valley was fine.
[00:17:07] You know, San Francisco is its own thing in LA and those areas are their own deal. But for the most part, like I think most of the countries still still move forward. Designs still happened. We're still planning things. And again, for like a hospital, it's a four year timeframe. Right. You gotta start design now if you want it operational by 24.
[00:17:30] Um, so I, I think a lot of these things move forward. Recovery, I think is just. And it just irked me so much because we're not, you know, you might be emotionally recovering, but that has no effect to the economy.
[00:17:45] Matt Vetter: Well, I can say this as somebody who absolutely did work through oh eight oh nine, 2010, 2011.
[00:17:52] That was some miserable shit. And recovering from that was something to be happy about was something to post about something to shout from the rooftops. We haven't seen that yet. And I, I hope we don't, you know, but it, I mean, we're, we're, we're kind of routing riding that roller coaster up to the peak where we were back then.
[00:18:13] Um, I'm hopeful that the powers that be get things figured out and we, we kind of squashed this inflation bug that that's flying around, infecting everything before it gets too bad, but we haven't had anything to recover for in a long time. So.
[00:18:29] Dillon Mitchell: And this is one of the other things that we touched on last week was supply of materials.
[00:18:33] And I think so around some of this. So for like lumber, putting in more lumber mills is going to be tough. People just don't like logging. So that's, that's a hard piece. It's going to be hard to go and cut more trees out of the forest. Again, logging permits is a, I mean, it literally has to take an act of Congress to make that happen.
[00:18:54] Which so it's, it's not going to, they, they tried it after big fires out here to, to make that happen after 2013 in the rim fire in Yellowstone or not in yellows and Yosemite. Um, but it just, it, they can't push it through, but it literally has to go through Congress because it's in federal forest, national forest land to up those permits.
[00:19:16] Cause that's again where most of the trees are in us. They're not privately owned, like. There are big lumber companies that own a lot of tree land forest land, but they're, you know, they only do so much. Um, so that, so lumber, I think, is going to be a hard one to increase any production without congressional action, not going to happen, uh, steel, we can do more on steel, but again, it's going to be two years to build a new steel now.
[00:19:49] So as much, you know, they can ramp up production, maybe, I don't know, 20% behind figuring out a way to do stuff. Maybe 50, if they just had something that wasn't, it was just sitting there and not running, but, uh, you know, to look at doubling steel production, I think you just, we've got to build more plants and for that to happen, it's, you know, it's a two year process and in two years, what's the demand for steel going to look like.
[00:20:18] Matt Vetter: Which pretty much means they're not going to build them because that's, there's just too much risk, you know, it's too much economic risk, so we're just going to have to deal with it. And if you know, 10 month lead times are, are the new normal, um, it's gonna sting. It's gonna suck for a little bit, but we'll figure it out.
[00:20:36] We'll get used to it. We'll get used to phasing and stacking, and then that's just what we do. Um, I gotta tell you, I'm gonna take a little bit of a tangent because I'm thoroughly pissed off. Um, so it's not just construction material. It's, it's starting to become everything right. And, and, you know, it was toilet paper last year when all the idiots ran out and bought every store in town, out of toilet paper, gasoline this week went insane because the hacking thing over wherever that was.
[00:21:07] And it had literally no effect on our gas supply here, but on Tuesday or Wednesday, when I went to fill up my, my stupid big truck with gas, it was $3 and 10 cents a gallon. And they cut me off at $75 and wouldn't sell me any more gasoline driving back to my office. Then I'm passing other gas stations and these people are lined up for miles to get gas.
[00:21:35] Well today. I had a couple of great meetings. I was in a fantastic mood. I've told you before we have a pool here at the house. It's almost time to open it up. Well, when you have a pool, you need pool chemicals or else it turns to shit. It gets really gross and no one wants to go in it. So we've got this store locally.
[00:21:53] I'm going to call them out. I don't know if you have them. It's called rural king. It's it's basically like a, like a redneck Walmart tractor supply. It's like tractor supply on steroids. Right? It's it's huge. It's a great store. You can buy everything from camouflage couches to pool chemicals, to handguns and food.
[00:22:13] It's just one of those weird enigmas. We have one around here and historically they've had pool chlorine for really cheap. Well, apparently because of all of the COVID shit going on. Pool chlorine is now also in very short supply and very high demand. So they're limiting your, your purchase to two cases of chlorine per person.
[00:22:37] Now, I went there today and I happened to run into my beautiful wife in the store who was doing the same thing. I was, we were going to get our two cases and stock them away, or we're talking with each other and being the gentleman that I am. I picked up two cases. I throw them in my cart for her. This lady comes out of nowhere and gets all up in my face and says, don't you see the sign?
[00:22:57] It says only two cases per customer. And I said, well, these are hers. I'm just going to carry them up to the front and she'll pay for them separately. She goes, no, no, no, no, no, no. It's two cases per household per day. I'm usually a pretty mellow guy. But this really pissed me off. So I said, well, where does it say that it says limit to cases?
[00:23:17] It doesn't ask me where my, where I live, where my spouse lives. And she goes, they're going to ID you at the front desk. I said, lady, you're the problem with America right now? This is absurd. We still bought our four cases. But regardless that my rants over it didn't have a whole point except for. We're artificially making problems for ourselves all across the board and we're still doing it.
[00:23:42] We've been doing it since last year. We have to fix this before we can even touch fixing the other markets.
[00:23:52] Dillon Mitchell: I mean, there's so much like psychology to unpack in there cause that's really what it is. Um, I've gotten like really deep down on the like marketing rabbit hole lately and really into psychology and how people act. And it helps in so many ways, as much as we want to say, like construction is very cut and dry man.
[00:24:15] There's so many emotions to deal with across the board of, you know, how to like, think about this. How do you talk to an owner? Right. How you talk to an owner and the money man in the day is very different than the guy, you know, hanging pipe or drywall. Right. They have very different concerns and you, you just, there, they're going to care about different things and not that one is better or worse than the other.
[00:24:42] It's just, they're very different guys. They could still both drink Miller light at the end of the day, but they just have very different like concerns and where their head's at. And when you look at psychology, like in fear is one of the biggest driving factors in a lot of this it's right. It's fear of missing out, right?
[00:25:03] Fear of not having gas, fear of not having pool chlorine, which on a side note, I've I know two people who build pools in the last year, like, and I've never, never heard of anybody building their own pool. And I got two people go or three, three people build pools in the last year. Um, And then on top of that, so you got all this fear of missing out, like, and that, that inflates all like the housing costs, because now you're going after houses.
[00:25:30] Talk to another guy this morning. Who he's like I've, I've made offers on three houses. Got none of them. And it's, you know, like do, cause he's like, we want to sell at the top and I'm like, well, you're, you're going to buy into the top two. It just doesn't help you. Um, so it's like, well, okay, sell rent, you know, go forward.
[00:25:50] But it's, it's a lot of fear pieces and just hearing that. So, uh, I listened to Russell Brunson cause his marketing, uh, genius is just off the charts. And in that he, uh, started listening, reading a book, uh, outwitting, the devil, I think is it it's, so's an unpolished book by Napoleon hill. And I know I'm going to get on a little tangent here, but I'll bring it back.
[00:26:16] Is outwitting the devil by Napoleon hill. So it was like an unpublished thing. He wrote it after thinking grow rich, but it's, and I'm like halfway through it is the difference between fear, right? The devil is like fear, all your fear, motives, right? Fear of death, of poverty of. Uh, you know, poor health, there's six and all those like fear motives.
[00:26:37] And then there's like the faith side of it, which is thinking and positive reinforcement. Like it's all gonna be okay. And just there's two oppositions and fear is just so innate in all of us. Like they talk about like the devil is the fear side of it and he controls 98% of all people because they're.
[00:26:58] Easily motivated or determined by fear versus a 2% in, in faith, in, uh, positivity. Let's just call it that. So you've got these two oppositions, but if you can, this is why like, for all this stuff, if you can step out right, take 1545 an hour. A day a day and actually think, and be like, take notes. That's why, like, again, I don't listen to music.
[00:27:27] I'm my pastime. Like I told you at the beginning of the show is drinking wine and taking notes and reading books like non-fiction books. This is what I do like, so in a lot of this, but have you been actually think you can actually find like the positive ways of doing things in that, Hey, this will actually work out there's.
[00:27:46] It resets a lot of things that, again, that we deal with all the time in construction, we deal with problems on a, on a daily basis. But if you can always look to, to see solutions or options, right. Cause it's about, we have these days, I can't necessarily solve the pricing problem, but I can give you, you know, here's your choices and we can move from there.
[00:28:12] Right. And. A lot of that is it ends up being psychology. And for a lot of us that might not be, uh, you know, the, the manly thing or whatever to say in doing this, but you've got to deal with people and, you know, for, with your background in psychology, like it, it probably comes in more handy and more useful than not in this industry, in dealing with the wide range of people.
[00:28:37] Because again, you're dealing with most, most people it's in their fear. Right, except for your owner who, I mean, he's probably got a little bit of fear, but for the most part, they're, they're pretty positive or they wouldn't make that big of an investment in whatever it is that they're building. Right.
[00:28:52] Whether it's a house for some people, that's a huge investment at three, 400 grand for other owners, right? For a million dollar facility, five, 10, a hundred million dollar facility, right there. They're pretty optimistic or at least fairly certain that it's all gonna work out.
[00:29:14] Matt Vetter: That's an all you can do. And you know, the fear mindset, it, it screws with so much of our existence. It messes with your, everything. You do, you know, the way you interact with people, the way you perform at your job, the way you perform at home, the way you sleep, uh, your metabolism, and until you get your head, right.
[00:29:35] Nothing else will ever be right. You know, and the psychology thing, you know, I'll, I'll, self-deprecate myself on getting a psychology degree and then going into construction, but you're right. I mean, it, it comes in handy, you know, being able to, to deal and to communicate with everyone. It's it comes in quite handy to say the least because, um, along with fears and mindsets, I mean, everyone communicates differently, right?
[00:30:04] They're the guys who are first on the job or first day of the job. And they're in the bottom of the trench for the shovel communicate very differently than the guy who is paying the invoice and writing a sizable check to pay for his building. And you gotta be able to kind of effectively talk with everybody and understand where they're coming from.
[00:30:24] And I think that's. That's what a lot of people lack, not the psychology degree. Cause you could get that on through books and, and, you know, movies and YouTube a lot cheaper than I got mine. But, um, it's, it's that, that commonality of thinking that, that commonality of communication and being able to say what the hell is on your mind without pissing people off without sounding like an asshole.
[00:30:47] Um, but, but also being able to listen and in reverse right here. Different people's points of view and be able to process it and, and take whatever jarbled mess. It may be and turn it into something good. And that's understandable for everybody. If we all would start doing that a little bit more, um, I wouldn't be almost ready to scream at the poor girl at rural king because she's limiting my chlorine.
[00:31:14] Dillon Mitchell: Uh, one of the best things I've ever learned, and this was, it was from a marketing guy. Was. And heated discussions or something where you're trying to get your point across. One of the best things that you can say is what I heard you say is, and then basically repeat back to them. If you can do that, or what I'm understanding you to say is blank.
[00:31:41] And then you clear up so many discrepancies right upfront. It's like, Hey, this is how I understood this. Maybe in your own words, maybe in some of theirs, right. And repeat it back to them. It clears up so much for then you move forward that you now have a common base plate, but a lot of the times, you know, my, my dumb 21 year old self made a lot of the mistakes of.
[00:32:06] This is just what I understood it to be. And I'm going to run with that and never cleared it up and it caused more problems than it would have solved. Right? Like you, you just run in a completely opposite direction when your understandings were aligned.
[00:32:22] Matt Vetter: Yeah, it's, it's kind of also like, like having an effective meeting one-on-one right.
[00:32:27] At the end of the meeting, somebody needs to step up and say, okay, so I'm going to do this, this and this. You're going to do this, this and this. And we're going to meet on this day to review all the outputs that we talked about. It it's the same idea. Right? You can't do that. If you don't know what somebody said.
[00:32:48] You know, a lot of, a lot of it's listening. I think we have a listening problem as a culture because we get so busy, we get some, you know, so much instant gratification, so many, you know, notifications and things dinging all day long that we forget to, to listen and really hear anything that's being said, you know?
[00:33:08] And I I'm guilty of it at times when I'm not focused, I could sit and have a conversation with someone and have quite literally no idea what the hell they just told me. Um, it's not a trait I'm proud of, but you know, I try to, I try to work my hardest not to do that. And you know, that, I think that's the, what we need to focus on a little bit more.
[00:33:27] Dillon Mitchell: And I think so I'm going to backtrack a little bit to the, the whole gas thing is a lot of this is headline reading, right? Or some inference and not looking at the data. So again, like I did a quick Google search, pulled up census data for buildings, right. For building instruction and you can see it.
[00:33:49] Right. It's, it's very open. Um, and for like gasoline. So I had a conversation with the guy who was talking about it earlier this week and I'm like, dude, I don't know. Like I live in California. That's not like, so one thing that we don't have a problem with is gas. Cause again, like, this is the other thing is.
[00:34:09] You gotta, you gotta understand where all the refineries are. Right. So where that gas goes. So there's like 10 locations or refineries throughout the U S there's a couple in Bakersfield, some in San Francisco, some in LA, and a lot of it has to do with ports, right. Where the ports are. So they're going to come into San Francisco LA and then they're going to.
[00:34:32] Pipe the, you know, oil or crude or whatever, they're getting to a refinery and then they're gonna go from there. So like Bakersfield has a lot of them, um, and they pump a lot of crude out of the ground and big around that area. Um, San Francisco actually has a lot of them are in Oakland. Uh, Seattle's got a couple and then you look at the Eastern seaboard it's, um, And the golf.
[00:34:52] Right? You've got a few in Alabama. You've got like a couple in Louisiana. You've got a couple in Florida. Like there is a lot of refineries on the east coast. Uh, you know, they talk about one pipeline that did a hundred million gallons a day or whatever. And I'm like, they're not going to pump that much stuff.
[00:35:08] Like most of that's in the east, like upper east coast out of Baltimore is where those refineries are. Like, they're all in port cities while yes. That. Pipeline might actually flow, but it's probably crew not like refined gasoline. You're not going to pipe that you're going to truck a lot of it. Um, so there's a lot of things that like, when we actually look at infrastructure, right, and most of this is publicly available data.
[00:35:33] Like you can go. And again, they're like for the most publicly traded now Koch industries does a lot of, and they own a lot of pipelines and they're a private company, but that's like the only one in the oil business. Private. I mean, there's, there's others, but most of this data, like go look at shell, go look at BP.
[00:35:51] All those companies are public, publicly traded. They issue statements on a lot of this. Their pipelines are known because they have easements through everything. So it's all public D you can find most of this stuff. So as again, like there's the headline, which over the last year, we've found a lot of it to be completely false.
[00:36:11] And then there's, what's. Actually true, you know, did it have a cyber attack? Probably did it really affect anything who knows? You know, where's my real-time, you know, flow rate data on this pipeline to see, you know, nobody has that data, you know, 10 people have access to that data. Right.
[00:36:32] Matt Vetter: But you touched on, on a huge point, man.
[00:36:35] And I, I purposely try and toe the line on my, my political viewpoints in this show, because it's just not where we want to go. But yeah. As a society, we all stopped looking at data in about March of 2020. We just stopped completely. So I agree with you a hundred percent. It's all there. Err, almost all of the data on almost all of the questions and the things going on.
[00:37:00] It's all out there for us to consume for us to look at. And data is great, right? Because it's either yes or no, either it's black or white, it happened. It didn't. You know, there, there's not a whole lot of gray area when you're looking objectively for an answer, but when you either don't find your day or don't, don't look for the data or you take the data you find and put this massively subjective, spin on it, then you can make it say whatever you want to say.
[00:37:31] But again, I'll, I'll just stop with that. And I won't go too far down that rabbit hole cause we may never make it out.
[00:37:40] Dillon Mitchell: Well, so one thing that I do want to hammer on in this is, so let's, let's look at construction. Let's look at actual construction and actual data, right. And far too often, I mean, this is, this is across the board.
[00:37:55] Design construction, everybody. So design, how do you know that your thinking actually worked, right? There's no feedback mechanism, right? That your, the conference room you build or the HVC system, this was the beautiful thing about we work and they screwed a lot of that up for other things. But, uh, like they had data feedback mechanisms to figure out like conference room, right?
[00:38:15] Layouts, what works, they got feedback. You know, how many do we need? Did we over-schedule, you know, for all their flex space, that was the beautiful thing about we worked. They did a lot of other dumb stuff that they should not have been in at all, but that, you know, core base that they started with was fantastic.
[00:38:35] Will you take that? So that's designed, like we have no feedback on any building and no architect ever wants to call on a client and see how it's going, because there might be a problem, which is, you know, we've addressed plenty on this show. You should do that. But, um, the other thing is same in construction, right?
[00:38:52] Like this is how we, I think we did it last time. Right? Six months ago when we put another one of these up right. There's no feedback. There's no tracking of like, did it actually cost this? Right? What were the change orders? You had changed orders through the job, but did you feed that data back into your estimating tool to see, you know, Hey, are we pricing this accurately?
[00:39:17] And granted it's probably a year lag, but that's you, that's the only data you have and you're not using it effectively on your projects. So it's a. And yeah, it's a pain in the ass, but would you rather still have a company or, you know, go through a little bit of work? I know we're not like it's construction.
[00:39:36] We work. Like we're not opposed to the work and yeah. It's different type of work, but if you can track all this stuff and then feed it back into the mechanism to then, you know, okay, Hey, we priced this thing in a dollar, right. It should have been three. Adjust right. Update the spreadsheet and then let that flow through until the next time.
[00:39:58] Right? What did we do wrong? And so often nobody feeds any data back and just like the stat of, you know, it's up 25, a foot to design for electrical. Right. Nobody knows that number.
[00:40:14] Matt Vetter: So a few weeks ago, a couple of weeks ago, I don't know when it was, we talked about software and estimating software in particular. Um, I haven't bought it yet. And frankly, to the, to the vendor who keeps calling me, I will end up buying it from you, your constant calling me. You won't make it any faster, but that's one of the beauties of that product is I can, once I get it up and running, I can take that data and dump it on the front side.
[00:40:40] And it makes everything we do so much more efficient. And then the next time you do it again and you do it again. And once you build those, those processes into your normal workflow, it becomes less burdensome because it just becomes, that's what we do, you know, instead of finishing a project and running into the next one, now you, you just quickly collect this data and data that you've been tracking now all the way through the project, because you know, it's important.
[00:41:06] You dump it into the software at the front end and you're next estimate is even better. And it's just this, this container. And he was loop until finally you're really, really working at a highly efficient level and you're not wasting time and energy on the little stuff that shouldn't have been missed.
[00:41:24] You know, your, your, your folk, you have time to focus on the bigger issues at hand.
[00:41:30] Dillon Mitchell: And I mean for estimates in general, right? And this is again across the board because design is just as bad at estimating their time as construction is. And the more that you can feed back into that beast, into that mechanism, the more accurately you're going to do it, you know, can you accept a 5% fee on this building?
[00:41:54] You know, can you actually do it for that? You don't know, you just sure. It will do it. Right. But you have, you had no idea. And so this is, and then it, it gives you real data, but again, far too often, even as engineers, we're not making objective decisions. It's just like, well, this is what we do. We just take it and move on.
[00:42:18] You don't have to, but you have to know your numbers in order to make an actual determination of, can you do it for this?
[00:42:25] Matt Vetter: Yeah. And I think today in our conversation, we've kind of brought out the highlights of our last four, maybe five shows, you know, it all kind of culminates into, you gotta be able to communicate.
[00:42:37] You gotta be able to listen. You gotta know your numbers. Can't be afraid of software because all of these things are going to combine together and help you grow, help us be more efficient. And that's what everybody needs right now. Especially riding this, this rollercoaster that, you know, if inflation keeps going.
[00:42:55] We're going to be where we were in oh eight oh nine, pretty soon here, you know, within the next, I'm not an economist again, but within the next year. Right. That's my prediction. If it keeps going, if we don't fix things. And one of the ways to buffer that, that systematic breakdown of our industry is to get more efficient.
[00:43:14] Now, when it matters, now that we have. You know, we have projects going everybody's busy. No one can find them employees because everyone's so busy. There's so much work out there. Use the time now to get better so that when, when shit falls apart and gets really hard again, you're going to be already at, you know, an rung or two up on that ladder from the guy who's just blindly running and doing the way he's always done.
[00:43:40] Dillon Mitchell: It's one of the hardest things to do is to take that hour a day and think. Right. And that's, that's really what it is. Take a half hour, hour a day, and think sit in a room uninterrupted and actually think through what, what works, what doesn't and the firms that do that, the companies that do that, that put in structural pieces and again, half hour a day, like little tasks, the smallest thing that you can do to move forward on a daily basis compound over time.
[00:44:14] And far too often, we all get. Busy. We all have a bunch of stuff going on and we don't do any of those things. We don't do any of the improvement pieces. We don't think strategically any. And this is at the highest levels. Like, I mean the highest levels in big companies, right? This is why Warren buffet is as rich as he is because he spends a lot of time thinking.
[00:44:38] And when they pull the trigger on something, it's. They have complete confidence in their decision. So for a lot of you, you know, you're running it, you're doing operations, you're doing finances, you're doing personnel decisions, you know, you're, you're running everything, but if you can take it half hour and think through are the, any of the assumptions that we're making.
[00:45:02] And it's the hardest thing to find the assumptions that you're making, but you know, what do we need to. Fix or what do we need help with? What can we get better at? What should we implement? What's out there. And again, the more people you can recruit within your organization to do that and to help you.
[00:45:17] And if you're just you to take that time, to think through a lot of stuff. And a lot of it might not pan out for years, but by taking that compound and effort by continually thinking and working through these problems, because that's what a lot of it is, right? Like you look at Amazon, you look at. Space actually look at Tesla.
[00:45:38] It's an idea that has, they've spent a lot of time on, they've worked out a lot of problems with it. And then they found the people in the money to execute. And far too often in construction, we just run from fire to fire from problem to problem. And don't ever come back to things strategically. And then you wonder why your business is broken or your business, or, you know, the really bad things that happen because you never took the time to think.
[00:46:07] Matt Vetter: A hundred percent. I I've got nothing better to add to that man that that's where we're at. It's about thinking, you know, and I think we're kind of coming up on time pretty soon here. Um, I did want to touch on some of the comments that have rolled in, um, I'll read his question and, and, and you can feel the first answer to it and maybe we'll go from there.
[00:46:29] But, uh, Siraj asked. So in your opinion is the future. What I think he means to say is the future remote working for companies that can do it.
[00:46:42] Dillon Mitchell: Um, again, like it's going to be a mixed bag and I've said this from the start. I think it's going to be a three to a work week, you know, or one in four, some something to that effect.
[00:46:52] And it depends on who you are. Right. Um, executives, frankly, don't need to be depending on what you're running. Um, probably don't need to be in the office as much. Um, you know, you need, uh, for anybody that's working on like group stuff and not to say that you can't do it, but there's going to be for sure.
[00:47:12] Like, I mean, board meetings are going to be in person. Um, maybe, maybe not like a lot of these things are going to be in person that you just need that energy, right. Or you're not going to, you don't feel secure doing it over a phone or whatever. Um, so there's going to be a lot of those things that are going to still be in person.
[00:47:31] And that's just the way it is, um, to get, can use time like off-sites, or are always in person, right? Like those types of things are always going to be in person. I think, um, now you can do a lot of design meetings, uh, like this and that. That's fine. It's probably for time's sake, it's works for everybody.
[00:47:48] And to do, I think there's going to be a split for like designer U meetings moving forward. I think it's going to be. And I've always been an advocate for this and no one ever took me up on it and I never had the power to do it, but is to do like either weekly, biweekly check-ins with the owners on projects to, Hey, this is where we're at.
[00:48:09] You know, we need review decisions on like a room we need, and then you just, you can iterate faster and have a 30 minute meeting with owners to get their buy-in on like a room and move through that. And you can do a lot of those virtually, um, and then have your big, you know, 100% D CD, uh, meetings or SD, right?
[00:48:32] You can still have your three big meetings in person with the whole design team and all the stakeholders or whatever. Um, but to do those kind of intermediate airy pieces, more often via zoom, especially now that everybody's used to it, like it's not, not hard to do a zoom meeting and I've been a big advocate of, um, basically a scrum mentality from, for a long time.
[00:48:52] Uh, just nobody ever wanted to do it, but it'll help you move faster. So I've always, you, you can't replace human interaction. This is pretty close. Uh, but you still, you need a three and two in your, and some of your workforce might want a five day work week, right? Like there's just going to be those people that want to be in the office that want to commute that do better in the office than they do at home.
[00:49:18] So you're going to have split and, but it's again on you as a leader. To understand your people, how they work, what they want. Some people are five day work week at home is going to be just fine for them. They're going to get more work more done. They're going to be more productive, more profitable for you as a firm owner.
[00:49:34] And then realistically, it's, you know, Hey, we do need you in the office for this and not like, you know, this afternoon, but you know, in a week or whatever, Hey, we need you to like, come here for this meeting.
[00:49:50] Matt Vetter: I would echo pretty much everything you said, man. Um, you know, at my company, uh, I'm not very good at it, but I do make an effort to get physically in our, our main Brighton office at least once a week for our weekly staff meeting.
[00:50:06] And I say that as I've missed the last three because of other things going on, but it makes a difference, you know, and, and part of it's just being able to sit there at the table and. You have more candid conversations because you know, big, brother's not recording you. And you know, you, there's a level of creativity that comes out.
[00:50:25] I think when a lot of people, when you're together in person versus doing this, um, but as far as what I do on a regular basis with the amount of meetings that I'm in, I'll be honest with you not having to drive half hour an hour each way to get somewhere for. A meeting or for, you know, a quick meeting it's you can't buy time.
[00:50:52] And I feel like over the last year, we've all gained a lot more time. And, you know, part of that's the stuff we've been through. Part of that, some of the personal things that I've, I've done on my side, but, you know, figuring out how to better utilize your time is worth its weight in gold or. Bitcoin or whatever the thing of the day is.
[00:51:12] Right. It's, it's fantastic. And you know, I can't tell you how many meetings I go to that it's, it's only an hour, but you tack an hour or 45 minutes on either side. And now that's, that's three hours a day gone. And I saw a post the other day from. Uh, a guy in the RTI group on Facebook that you're good friends with and I'm not going to name him, but he, he basically challenged people to shut all the notifications off on your phone, shut them off and see how much more productive you actually get.
[00:51:47] And I can tell you having done it myself this week. It's incredible. And that's, that's, that's just a small thing that the time I feel I gained this week by not having my phone buzzing and dinging for all the dumb shit that I can look at, I can look at it when I want to, or I could never look at it and everyone's still breathing.
[00:52:08] Um, it's incredible how much time I feel like I gained. And so to do that on a bigger scale, by not jumping in my truck and driving across town for a meeting that I'm tripling the time constraint or the time consumed now. To be able to sit here or wherever and do that and still be productive. I think it's worth its weight in gold.
[00:52:28] I don't think offices go away at all. I think it's going to be some sort of version of what, what you mentioned, you know, some days on some days off and there are certain people who just can't do it, you know, the people who decide that it's a good idea to when they're working at home, stay in their pajamas all day and sit on the couch, watching TV.
[00:52:47] Well, that's bullshit. You know, and if they need that structure of going to a brick and mortar facility, then I think it needs to be there for them. Um, but people like you and I, I operate pretty damn well by my lonesome here. And when I need to go places, I go places, you know, I still have I'm in construction, so I'm still, I have human interaction all the time.
[00:53:09] I'm on job sites. Um, I'm, I'm mingling with subs and clients. So I, you know, I don't miss that part of it, but. Uh, that's my long answer. I don't think offices go away, but I think they are changing for sure.
[00:53:23] Dillon Mitchell: It's just knowing your people, right. That's really what it comes down to. Do you know who works well in the office who doesn't or who can operate fine, but to not, it's no blanket statement.
[00:53:34] You just can't say everybody, you know, do this, or everybody do that. And not in today's world. You know, two years ago, everyone came to the office. It was just expected. There are different expectations now, and you've got to adapt really to that. You're not going back. People are too used to it. They're like, you know, why drive?
[00:53:53] You know, it saved me whatever, 20 bucks a week in gas, you know, like now you're going to cost me another a hundred bucks a month, you know, to come to the office. Like, no, not only time. And then, so here's the last, uh, hack that I'm going to give. I. I haven't done this in awhile, but, uh, if you flip your screen to gray scale on your phone, you will also, uh, it'll cut your attention.
[00:54:20] Like Instagram isn't as pretty anymore. Um, with Facebook, if you cut it, if you turn it to grayscale, then you're not as tempted to sit there and scroll either. Um, so that's the other big hack for, for color? Um, before we wrap up guys, uh, again, Man I come on every week. Now we've been doing this live for the last few months.
[00:54:44] So if you you'd like it, I appreciate all the comments, uh, you know, mark and Saraj coming in here on LinkedIn. We do this every week, uh, time changes. So you can be, uh, be aware of it on LinkedIn and Facebook and YouTube. Go ahead and share, you know, we'd love the interaction again, we're here to help, uh, the construction industry as a whole, you know, obviously from being on the design side and, and having designed software, Matt being on the.
[00:55:08] GC side, you know, and then for us having the subs and everybody else kind of in between, uh, come on onto the show, we love doing this. We love sharing. Um, but also, you know, guys, we want this word, just read about how great construction is, what we can all do to get better. Um, so share with your, your trade partners, your vendors, everybody across the industry.
[00:55:30] Uh, cause I think there is a lot to be learned here in for construction, um, and that will continue to move forward. So any. Any last words here, Matt.
[00:55:41] Matt Vetter: Um, I'm just going to echo that, you know, give us a rating, give us a review if you like it, let us know if you hate it, let us know. Uh, and we'll, we'll keep doing what we're doing.
[00:55:51] Dillon Mitchell: All right. I'm going to answer this question. So before, uh, we could out Serayah, uh, had a question on office designed to focus on data center. Uh, to support remote, I think so the two things in that one, there's going to be a lot of infrastructure projects to come through and fiber, um, and just communications in general.
[00:56:10] So if you're in it, um, there's going to be a lot of trenches opened up and put in to get fiber into buildings. So that's, you know, really the it infrastructure you need to get, uh, bulked up. That means probably for a lot of office buildings for cabling to be completely replaced from all like cat four, cat five.
[00:56:30] Uh co-ax. It's in a lot of buildings for all that, to get ripped out, which, you know, can we, uh, a lot of things have been where it is, um, to, to redo that, that infrastructure. Um, and then as far as data centers, there's a lot of data centers being built. Um, and they never stopped getting put up. So everybody's putting a lot of stuff in the cloud from everybody working, just, uh, so take construction, BIM 360 and Autodesk push.
[00:56:58] I mean, there. They're doing 200, 300 million right now and on their cloud side for Autodesk construction cloud. And, you know, they're looking for that to be a billion dollar piece of their pie in the next, you know, three to five years. So, and that's everybody going and getting them through 60 licenses, which we've seen a huge explosion of in the last year.
[00:57:20] Um, so, so a lot of this you're going to see a huge. Pushed for, you know, not only remote work and a lot, that's been the trend for a while, right. To have virtual desktops and a lot of that to where you don't have even a desktop in the office. So all that compute got pushed to a data center and then you just need a strong internet connection.
[00:57:39] So it's going to be different types of construction projects. Yeah. Mark. Exactly. There's going to be, you know, you're not going to know. So we have officer innovations or one of the other things that I said last year was. You're going to see those condo towers and office towers downtown being converted into, to housing, to, to bars and nightlife, um, to like, you know, where it's it's you got a bar on the third floor, you know, you got a pool hall, you got entertainment, right.
[00:58:06] A bowling alley put up there or something like there's going to be more entertainment pieces, put in more housing, put in downtown or converted from that office space. Cause you just don't need it. And. The guy that owns a building needs to click rent from somebody. So they don't care where it comes from, but you're going to see those types of projects I think come through.
[00:58:25] So it's, if you, if you work with, uh, building owners for like downtown office buildings for, uh, these types of commercial developments yeah. And mixed use in a very different capacity. Right. Which use an entertainment, not just restaurants and like housing, but entertainment and not on the, just on the ground floor.
[00:58:44] You know, think of it as, you know, it's four or five, right. Or three or whatever. Um, there's be creative in that if you're working with developers, um, I'd love, you know, think of how cool that would be, right? Like you're going to see all that stuff. I mean, people love going and doing things and like Axe throwing, right?
[00:59:03] Like that's a big thing now. So if you can add those types of things into a project, into a, what used to be an office is now an ax throwing center. Okay. People are still going to show up, right? You still have eight foot ceilings. It's totally fine. So I think there's just going to be a lot more creativity when it comes to a lot of these downtown, uh, locations.
[00:59:25] Matt Vetter: And I'm just gonna. And that with, uh, if I ever started another company, I'm going to mandate that all important meetings are held at an excellent facility.
[00:59:40] Dillon Mitchell: All right guys. Uh, cheers, Joe. And, uh, we'll see you next week. So,
[00:59:43] Matt Vetter: yep.