with Stanley X SVP MICHAEL KEOGH

Michael Keogh recently joined Stanley Black & Decker as SVP of their new Digital Innovation office. He is leading the effort to transform a 175-year-old industrial company into a data and digital company. In this role he is responsible for incubating internal startups, ecosystem development, and building new revenue streams for the company. Most recently, he was at Apple where he was the Senior Director of Finance for all of Apple R&D supporting the long-term hardware and silicon roadmap development. At Apple, he negotiated with the Shanghai government on a tax and economic incentive plan with a >$1B benefit to grow Apple’s business in China.  

For over a decade spanning his time with Apple and Intel, he held several roles in China, Malaysia, and the Philippines. Before starting in the tech world, Mike spent several years at a large Commercial Contracting and Property Development company as an estimator and Project Manager. He is an angel investor and hold several Board and advisor positions. He also invests in real estate and has built a portfolio of university student housing, as well as some international properties. Mike holds an MBA from Cornell University and a BA from the University of North Carolina. He speaks conversational Chinese and Italian.

In this episode, you’ll learn:

• Is the construction industry prime for disruption?
• What will the future look like for the construction Tech sector?
• How is construction Tech and Real estate tech different or the same?
• What are some areas of the construction that can be semi-automated and automated?
• What about the advances in the materials used for construction?

We would like to give a special thanks to Sonja Markova who is the Executive Director at Band of Angels which since 1994, has invested in over 400 companies with 62 profitable M&A exits and 12 IPOs. Without her introduction to Michael this interview would not have been able to happen

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Connect with Michael Keogh:

• Website of Stanley Black and Decker
• Link to Band of Angels

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• Shawn Flynn’s LinkedIn Account
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• Email: Shawn@thesiliconvalleypodcast.com

 Disclaimer to the Transcripts:

The transcript was generated using an Artificial Intelligence program and then scanned over; we would like to thank you in advance for understanding that there might be some inaccuracies.  While reading, one might also notice that there are times were the sentences are not grammatically correct and due to changes in advertisements, the time stamps do not always align with the show.  We are keeping the text as true to the interview as possible and hope that the transcript can be used for a reference in conjunction with the Podcast audio. Thank you and enjoy.

Intro 00:00

You’re listening to The Silicon Valley Podcast.

Shawn Flynn 00:02

On today’s episode we have Michael Keogh, who recently joined Stanley Black & Decker as the Senior Vice President of their new digital innovation office. He is leading the effort to transform a 175-year-old industrial company into a data and digital company. On this week’s episode: we talked about the construction industry, is it primed for disruption? What will the future look like for the construction tech sector? How is construction tech and real estate tech different or the same? What are some of the areas of the construction that can be semi-automated or automated? And what about the advances in the materials used for construction? This is an amazing episode. So, enjoy.

 Intro 00:43

Welcome to the Silicon Valley Podcast with your host Shawn Flynn who interviews famous Entrepreneurs, Venture Capitalists and Leaders in Tech. Learn their secrets and see tomorrow’s world today.

Shawn Flynn 01:06

Michael, thank you for taking the time today to be with us on Silicon Valley.

Michael Keogh 01:10

Hey, Shawn, thanks a lot for having me. I’m looking forward to the discussion.

Shawn Flynn 01:14

Now, Michael, you’ve had this amazing career. But please tell our audience what has led you up to your current role?

Michael Keogh 01:20

Sure. After I got my undergraduate degree, I started out in the commercial construction industry. I decided that was not an industry I wanted to spend my career and so I went back and got my MBA, and focused on tech. I spent the last 20 years in the technology industry. It’s been pretty phenomenal that it’s moved me all over the world. I’ve spent most of that time in tech-focused on finance and business development. Some of the highlights I think are worth pointing out are in China trying to help Intel get a foothold in the mobile silicon market.

So, it was a really interesting time where China was experiencing really large growth. It has just become the largest market in the world for Intel in the PC space. But Intel wanted to break into the mobile space because at that time smartphones are really starting to explode. Really interesting learnings that I got there. I parlayed that into a career with Apple. I also started out there in China and came back to the US with them. That really gave me a lot of experience at the forefront of not only really large-scale technology companies who are trying to grow markets, but also the direct consumer side with Apple about what people really get from how to really delight consumers and bring products to market that will impact people’s lives.

Michael Keogh 02:45

In my current role in the last year, I joined Stanley Black & Decker. I’m leading up their innovation efforts for the company. We’ve opened a new office in Silicon Valley. Our job here is to really help a company that’s 176 years old, with a long industrial background to transform itself to be a digital first company. We’ve got a few focus areas here that we’re spending our time on. The primary starting point for us is the construction technology market. It fit my background with starting out in construction and then working in technology lend themselves pretty well to have a unique perspective as to where Stanley Black & Decker needs to go.

Shawn Flynn 03:24

Can you tell us what is construction tech?

Michael Keogh 03:28

Construction tech definitionally it is a broad category. But the best way to think about it is everything from the initial concept of a construction project. All the way through to the completed construction in managing the building itself can be considered the area that construction tech is focused on. The construction industry has not experienced many productivity gains at all over the last 50 or 100 years. Recently, it’s really heated up as far as area of interest for the venture capital community, and many technology companies have started springing up to address the lack of productivity in construction technology. When you think about where the areas of focus could come from, there are companies that have specifically focused on the front end, from that initial concept and design on the architectural and engineering phase. There’s been a lot of activity there that started 15 or 20 years ago with BIM models. When you take all that through to the actual construction phase to the back end of the facilities management, that’s where you’re seeing a lot more investment going today. There is still not a lot of adoption of technology in that space. But that is specifically where we’re focused today.

Shawn Flynn 04:40

Has the industry really changed over the last 20, 30 or 50 years? Or is it still the same processes? The same that has been there since the 70s?

Michael Keogh 04:50

I think there are a couple of challenges that we face today. It is an industry that has been resistant to change and there has been a lot of different reasons for that. Part of it could be the demographic of the workforce there. Another one is, it’s an industry that’s been around since the beginning of time, as far as building things. Traditionally, everything was done where a concept was in someone’s head, they got it down on paper. And then they would take that paper design and they would construct it by hand. Even now, with a lot of the innovation that is happening, things are still primarily constructed manually on a job site.  So, what we see is that there has been some innovation on the upfront design phase, people are moving from paper to completely digital documents. However, where we see change, it is still not quite happening yet is taking that digital design and implementing that in the field from anything but a manual method.

Michael Keogh 05:49

Talking about challenges. there are a bunch of them. So, we’ll start with the fact that on a job site. You don’t necessarily have an infrastructure in place, you don’t necessarily have a solid Wi-Fi network. You don’t necessarily have an office environment where people can take all of these digital documents and bring them to life in the field. Only recently, we started to see companies start to adopt iPads or carrying tablets as a method of communication and document retrieval. The other thing that we see is just the construction industry, in general, is typically a lower margin business. And there has not been IT budget set aside, or even just the capability within companies to be focused on technology solutions. That’s some of the several reasons we see that adoption has not yet achieved the scale that it could. But there are a lot of factors today that we think are driving an inflection point in that adoption starting to happen.

Shawn Flynn 06:44

So then is the construction industry ready for disruption then here in the US or global?

Michael Keogh 06:50

Our focus today is the North American market. If you do a heat map of where all of the activity is in the startup space around the construction tech industry, it is really here. This is the nexus of activity. That’s not surprising. We’ve seen European companies and North American companies that have long ago invested the BIM models and the digitization of the documents. And we’re starting to see cities and governments also require adoption of more digital tools. However, the real activity and volume in the construction industry is happening all over the world. We know it’s in the emerging markets, massive infrastructure projects going on. China continues to be the largest construction market in the world. Our point of view is that those markets are not as far along in the adoption curve. But what we see is a nascent market that has huge potential because we’re so early on.

Shawn Flynn 07:45

You’d mentioned BIM model.

Michael Keogh 07:47

A BIM model, the acronym stands for “building information management.” A BIM model is it takes… you think about a traditional blueprint. You take a 2d rendering of a project and what you do is you turn it into a three-dimensional model. So, it’s essentially the digital representation of those blueprints. It’s created a shift, where you’d ask the question about 20-50 years ago, what are the changes been, there used to be a lot more generalists in the field of construction. So you would have the person that would first conceive the design who would also be the one that would draw the blueprints, and would also be the one that would often directly play a role in the construction phase. That same person would understand how to take the concept and understood the challenges of taking a design and building it in the field. What you have seen with the advent of more digital tools, you’ve had much more specialization. There are architects that focus purely on the aesthetics and the design, and then separately, other people in the field that actually have to put it all together where there are completely different set of challenges.

Michael Keogh 08:52

That specialization, what it’s actually caused is communication issues. You see that there is not always a clean handoff between that architectural rendering of the design and then the building. That does create opportunity. The BIM model back to your original question, really has been focused on those first two phases. It’s taking this design and putting in a nice 3d model so that you can simulate different types of materials, different types of designs that may really appeal to an owner and architect from a branding or a curb appeal. What we really believe has not yet been addressed is what’s next. I take that beautiful 3d design. Mow I need to go and build it in the field.

Shawn Flynn 09:37

What parts of it can be automated or semi-automated?

Michael Keogh 09:41

I think there’s a wide range of opinions on what can be automated, but what we’re starting to see is that the BIM model could allow for much better cost outcomes. And so, what I mean there is right now, the models have allowed architects or owners to become infinitely creative. It allows for you to understand how can I get the kind of aesthetic appeal that is really going to make this particular property stand out.

What that also does is it really enabled complexity, when you have the ability to not just draw 2d, but to put a 3d model together, is you could add many unique characteristics that will make a beautiful design, but it does increase your time to build in your cost of build.

Michael Keogh 10:27

What we are starting to see a need for is we understand there are challenges in the industry today. We have massive labor shortages. You know, there are very many widely published studies. There’s probably the most famous that is published by McKinsey around the fact that the majority of large-scale construction projects are behind schedule. And over the cost estimates. That challenge has continued to grow with more complexity in design. So, what we’re starting to see is a shift towards the other side where companies are starting to say, “Why does construction need to be so unique and so handmade to the extent that there’s no benefit of scale?” People are starting to look at it as scale. Much like an automated or factory environment, I can take the concept of mass production, should we not be looking at construction the same way? Can we not create designs that are very easily replicable and very easy to construct? Essentially, if you think about it from an assembly perspective, is the more I can make all of my parts look unique and eliminate endless variation, I can save money. And so there is the focus that we’re starting to see emerge now is companies trying to take the construction process down to its simplest form, and find ways to construct in many different environments with the ability to put some exterior type of customization to it. But essentially, the skeleton, the bones of the project, look exactly the same. So that is really where we think the opportunity lies.

Shawn Flynn 12:04

The last time I was in China, the buildings look very similar. Is that kind of what you’re talking about? The one idea building?

Michael Keogh 12:13

The one different type I call that is… The basis of your question is I would agree with is that there is a concept of the building everything very similar. However, I think the reason we’ve not seen a wide scale adoption of just pure replication is when buildings are first conceived, think about who they’re designed by. They’re designed by designers and architects who want their next project to have some amount of customization. They want it to look unique. And so, the barrier has been no one wants their project to look common. What everyone wants it to make look and feel like this apartment complex has some appeal and it doesn’t look like a long row of apartments. The real differentiator there is that the inside, your standard structural elements, your standard layouts of your rooms Your electrical, your plumbing, all of that can be standardized. However, there is the ability to infinitely customize the exterior, the aesthetics. And that is really the difference that we’re starting to focus on now, is we use a common type of material, common layouts and extra-customization. We’re starting to see a lot of activity in that area that allows people to still feel like there’s a uniqueness to this property, but it doesn’t have to cost as much.

Shawn Flynn 13:28

What type of advances have there been in materials used for construction?

Michael Keogh 13:33

I think that’s a great question, Shawn. There have been many advances here. So, one of the problems that is facing the industry is the massive amount of waste that goes on. There are companies focused on the environmental benefits of new types of materials and construction. Let me just go through a couple of new technologies here that are really making a difference. One of them is just the ability to focus on sustainability and construction.

There has been focus for a while on a completed building and how do I have a building that is efficient from a daily maintenance and operational perspective? And those are the obvious things around how do we minimize electricity usage? How do I make sure that the building is run as efficiently as it can be, because as many people are aware, the building cost is one, but then the lifetime operation and maintenance is many times more expensive than the original construction? There’s more focus now on the construction phase itself. It’s not just how it’s constructed, but it’s what it’s made out of.

Michael Keogh 14:37

So, in the material space, what we see is the concrete timber, many of these materials can be environmentally unfriendly. So, some of the technologies that are helping there, there is something called cross-laminated timber. The ability to take sustainable types of timber, fast growth, high strength timber that’s sustainably harvested where a process of cross-examination where the timber is essentially under high pressure with resins and adhesives, you can throw massive amounts of timber in. What it does is it cuts it up and laminates it together into very high strength materials that there are many companies focused on shifting from specifically steel-concrete block to CLT, is the abbreviation for this cross-laminated timber construction. So that is one.

Michael Keogh 15:28

Another one is if you think about what’s happening within 3d printing. There are very early adopters that are pushing for doing printing on a job site. To the extent that I’m able to print concrete structures, I can eliminate some waste, I can print on exactly what I need. And you’re going to see that continue to evolve in many other materials.

Michael Keogh 15:50

Lastly, I guess I’ll bring up prefabrication. So, going back to the concept of the mass production concept, is building a project in the field requires essentially each and every project, even if it’s drawn up exactly the same, it’s still handmade in the field. What we’re seeing is there’s so much variability on a job site, whether it’s the temperature, the rain, the conditions on the job site itself, even the ability to get materials or heavy equipment in and out of a site that could be in a busy urban area. There is a much more focus now on prefabrication, where a lot of the construction is done off site in a factory-like environment. And then those segments are those.

The industry term is schools, I build schools and I bring them to the job site, and I do a final assembly. And you’re in an environment where you are not subjected to all of the variables as you are in a job site. You can create much more predictability and replication. So, you are seeing companies focused on scale. I am working on mechanical systems for multiple, large scale construction projects in a factory. You can be much more efficient that way, instead of bringing all of your raw materials to each and every job site and building them there. That is a huge opportunity. Prefab has been a promise for 20 years to 30 or more years. Only recently have we started to see people really focused effectively on all of the other supply chain material procurement type elements that can really enable it.

Shawn Flynn 17:32

You mentioned 3d printing on the job site. Are there certain materials only that they can print things out of such as just cement or how much variety of things that can be produced, size-wise, material-wise, are 3d printers capable of doing?

Michael Keogh 17:49

There are a couple of examples that have gotten a lot of press where there have been 3d printed houses. Certainly, that can be done. The scale and the ability to build the real amount of housing that’s necessary is not quite there. But there’s been a lot of really interesting solutions in a one-off basis regarding the types of materials that can be printed right now. The ability to print concrete exists, the ability to print, plastics, polymers, those exist today. And on a plastic side, at a cost in scale and time that rivals traditional methods of printing. I’m hoping to see more breakthroughs in the coming years is in metals, and some of these other traditional construction materials.

So there is been a huge amount of venture capital investment in these areas, the ability to print exactly what you want with no waste with the exact characteristics you want, your strength to weight ratios, the geometries, those things are emerging today. They’re still not at a cost parity. And on a scale of construction, we think that’s going to take a while to get there. But it does enable people to start thinking differently about the construction process. And so, we would expect that over the course of the next one or two decades, you will see large scale 3d printers on a job site that have the ability to print multi materials. And a lot of it instead of having to worry about ordering and delivery of materials that some will be printed on demand on site to the exact size and specifications.

Shawn Flynn 19:24

How much money can a job site save, if there’s no more waste of materials?

 Michael Keogh 19:30

There are a couple of things that really drive the profitability of a contractor. They must simply boil down to it’s your labor, it’s your materials, and it’s the assets that you own to process. So, the biggest challenges we think today are the labor and materials. Those two are going to really enable a lot more productivity for contractors. The material space, the estimates go anywhere from 10% on the low end to 30% or more on the high end by eliminating that waste, you know, that’ll happen in pieces, it won’t come all at once. Right now, its fairly capital intensive, people are investing in some of their own printers. But we foresee that what will start to happen is some of the same people that are supplying materials today will eventually start printing those materials soon. It may be the same suppliers. But what you do is you’re able to make a product that is the exact size and specification. And it’s really just an assembly in place.

Shawn Flynn 20:24

So, materials are one way to save on costs and the other is labor. What type of technologies are being developed to save on labor? And what does that look like?

Michael Keogh 20:34

Labor shortage is a problem that has been around so since the economic crash of 2008. The labor industry has suffered from massive shortages. What happened there when the construction industry took a huge dive was large numbers of construction, labor force, they left the labor force they went and found other jobs and as the economy is turned around, they never came back. And this is everything from the skilled tradesmen to your generic tradesmen, they never came back. That has, you know, for if you look at any of the statistics that has led to construction companies struggling to find not only enough but qualified labor. So, the solutions we’re starting to see pop up around this space are many. There are companies focused on whether or not my labor is focused on the right area. Is it productive? Are they standing up? Are they sitting down? Are they in the right area of the job site? There’s been a lot of breakthroughs recently about the ability to track productivity. There are some unique challenges that come with a construction site. We have indoor and outdoor environments. One of them is just understanding the productivity angle.

Shawn Flynn 21:48

Who is kind of hindering the process? We’d mentioned labor. Are there a lot of labor unions against adoption of new technology or is it more government and permits? Or what’s stopping some of this technology?

Michael Keogh 22:03

We talked about the labor unions, what we’ve seen is probably what most people would not expect is that the labor unions are very much supportive of the adoption of construction technology, there’s really two pieces as to why they are. One of them is they want to continue to be relevant in the industry.

And I think that they understand that in order to have the type of labor that they want to be supporting, the labor has to be savvy as these trends are changing. They don’t want to be subject to the discussion around robotics that we just had, is they’d like to be sure that their labor is either working alongside the robotic solutions or even maybe being a technician too on the maintenance end of that. But I think that the trends are clear, and that’s driving them to be supportive. As the unions look to stay relevant, they understand that a new and younger demographic wants to have training and has already, as a part of their life, adopted technology. And what that means is they’re often I mean, everyone has a phone, they’re on social media. They’re eager for these new types of technologies. And so, as a part of they are continuing to bring new members in. They’ve really gotten behind the adoption of technology solutions. Just a few years ago, some unions prohibited bringing your smartphone to a job site. In the last couple of years, we’ve actually seen now that it’s a complete shift to where it’s a requirement.

Shawn Flynn 23:34

Before giving some examples of startups that you’re working with. I have a quick question. Is there a difference between real estate tech and construction tech?

Michael Keogh 23:45

You know, I think those terms can often be used interchangeably. I’ll give you my take on how we view that. Real estate tech and broadly can cover a lot of focuses ahh. It could just be when you think about Redfin or Zillow, relative to its the transactional market, it’s where connecting supply with demand for real estate itself. There’s a lot of activity there in the evaluation, appraisal, and transactional processes. We’ve seen online exchanges come up in the commercial real estate space where people are just ultimately looking to try to really drive more efficiency into the transactional side of real estate. As you know, for you know, most of history, it has been very much a relationship-based industry, where there is an asymmetry of information between that supply and demand. It’s one of those industries that technology has not necessarily changed the transactional costs. So that’s one big part of real estate tech.

Shawn Flynn 24:41

Can you talk about some of the startups that you looked at? And kind of the technology that they’re working on?

Michael Keogh 24:41

Another one is just the building management side. So, if I am a landlord, and what we see is in many countries like Japan, for example, your architect, your engineer, your contractor and ultimately your landlord could all be the same company. So, they are much more vertically integrated. They have much more of a view as to what is my vision construction cost all the way through my annual upkeep and operational costs. So, a lot of real estate tech is going into those operational aspects. I’d like to know, how is my electricity system building? What is my heating, ventilation, air conditioning load looking like? Do I know when to have preventive maintenance? Ultimately, do I have a fully connected building for my tenants? Do I want to allow them to have keyless entry? Do I want them to have certain security aspects?

Michael Keogh 25:34

We have a ventures team in Stanley Black & Decker that we have a pretty active interest portfolio and we have looked at a lot of companies in this space. So, when we did our environmental scan, we came up with over 3000 companies today that are startups that proclaim themselves to be in the construction technology space. So, it’s pretty incredible, the amount of activity there. Just some other statistics that I think are worth pointing out is that in 2018, we saw about an 8 to 10 or 9 to 10 times increase of venture capital investment in construction tech startups over the prior year. There are a few unicorns in this space that have really driven a lot of dollar investment. But if you also just look at the long tail of breath, there’s just been a lot more activity in general. We look at it more from a vertical perspective, what are the things we’re interested in… We think, where the efficiency and productivity gains really need to come from are in these areas of asset management of labor productivity, and in the supply chain, whether it’s touching materials or the communication between the back office and the field.

Michael Keogh 26:49

So, we see a bunch of interesting startups that are focused on each one of these vertical areas. And a big name I’ll just start with is Katerra. It is trying to completely vertically integrate all these things. They’re not trying to take the current processes that exist today and make them more efficient. They’re trying to change all the processes. I think there’s a lot of people that believe to really drive change, that’s probably the best way to start to get over those barriers to adoption by coming up with a completely new way of building. Really, what they’re just trying to do is they’re trying to take the concept of mass production to building. As they have built that business, what they’ve realized is there’s so much more that needs to change. It’s not just trying to put everything in a factory setting and build efficiently and cost effectively. But it’s also the way we procure materials today needs to change. The types of materials that we’re building with need to change. The design phase needs to change. And so, they’re only a complete right now… They’re completely trying to own all of those processes. As far as what we’re focused on there is, we’re not going to try to take the Katerra approach. I’ll just touch on a few of the startups that we’ve been having discussions with that we think are really interesting.

Michael Keogh 27:59

In the asset management space, what we’re seeing is that companies have to own a lot of assets in order to do the construction. Their ability to understand whether they’re effectively utilizing them, whether they are getting the productivity out of them is very low right now. Most people keep track of everything at best on a spreadsheet. They may have multiple projects in many different locations. They don’t necessarily know what equipment is where, whether I have the right equipment at the right place based on the phase of construction. I don’t necessarily even… I’m not even able to tell you, is it been idle the last few days? Is it being on and off? So, there are companies focused just on the physical proximity, but there’s much more interesting data being created now around am I getting the output I expect? They can track the sound and the noise, and the vibration and they are understanding whether there’s maintenance needed. Is it actually working the way it was intended to? So that’s on the asset management space. We like a company they’re called BuildStream that we are planning to do some work with. There are many other interesting companies working in the tracking of what’s actually happening on a site.

 Michael Keogh 29:08

One of the problems we haven’t touched on today that we continue to see an area of opportunity is there’s a concept in a design. If I go back to the BIM models, the blueprints, there’s a design intent. However, when something is built in the field, we understand that there are often things that happen. And the way it’s built is never exactly as how it was drawn up. And so, there’s this need to compare your build to your drawings. And up until now, it’s always been a very manual process and saying, “Hey, this actually the way it was drawn out, the load bearing was not correct. So, we had to change either the material or the amount of material that we use.” That is something that there’s not a living diary of what’s actually been done. There are companies like StructionSite that has come up with a really good reality capture technology where every single day, they can go and take a video history of what’s happened and compare that to what was supposed to have happened. And they can point out differences. They’re trying to start tying that to schedule. This can also help with things like construction, progress tracking and billing. There are many companies focused in this space, it really comes down to who can do it most efficiently.

Shawn Flynn 30:24

Two types of technologies that weren’t mentioned, but I’ve heard a lot for construction. One is drones and the other is AR-VR. Are those areas that have seen some advances in or is that something that has come and gone already?

Michael Keogh 30:41

Yeah, I think we have not touched on that. But those are both very relevant. Drones I’d put in the category of the ability to monitor what is happening on a job site is of crucial importance. Whether you want to monitor it from tracking the efficiency of my labor, my assets, or whether it’s I just want to understand my construction progress over a period of time. And there’s even elements that we haven’t touched upon around safety. There are companies focus specifically on monitoring a site, trying to predict safety events and prevent them from happening. And then that’s all another thing we can talk about. But the advent of drones and the ability to have remote oversight and management, I think, will have a place in the industry. And there is a lot of interesting approaches regarding facial recognition and not so much about identifying who a specific individual is but understanding more about I understand what I’m tracking. I understand that this is a group of people working in a specific trade or this is an asset and it is where it needs to be.

Michael Keogh 31:46

The aspect of capturing the video or the reality of what’s happening, the real work to be done there is the AI, artificial intelligence, behind understanding what you’re seeing. And I think AI has gotten so much press lately. I don’t think it’s been as focused on the construction industry. You know, as many of you probably know, the real benefit of AI comes from all of the data set that you’re feeding into it. So we’re starting to see companies that are really started to focus specifically in this area in this industry and saying, we need to be creating those huge data sets, so that the AI is able to start with that baseline so that it is able to start tracking and deriving insights as to what’s happening. So that’s really what I think will allow drones to become, it’s already a low-cost method of tracking what’s happening. We need to turn that into insights.

Michael Keogh 32:46

Relative to your other question around AR, whether it’s augmented reality or virtual reality, we really think that augmented reality is where the benefits lie. Virtual Reality up until now is limited by the application today in the hardware by which you are experiencing VR, will be a barrier for most construction companies. They are not going to want to spend too much on the current set of hardware, whether it’s over the head type VR goggles. They’re only going to buy a limited number, which means the application in the field is going to be limited, easily displaced or broken, and people are not going to want to, we don’t see an appetite right now for people to spend too much of their budget in those areas. However, augmented reality, the ability to take a real time environment and overlay imaging, we see broad number of potential applications right now.

Now a very good example of where we see that playing out is. If I’m a tradesman, if I’m an electrician in the field, and I am looking at the work I need to do for the day, with a relatively low-cost way I can either through a visor type of a hardware, or even just through an iPad, where I can just sit pointed out the area of my work, and it will connect with the building information modeling tool, the BIM model. It will show me here is what the 3d blueprint says the scope of work needs to be done. It overlays it on top of the actual environment that you’re in. So, you can actually see, here’s what I need to do. That is something that we do see some really interesting applications of it will impact the industry.

Michael Keogh 34:29

There are a few things holding that back today. Again, it’s just people’s willingness to spend money on the solution. And the other one is there’s a there still tends to be a connectivity problem. So, some of the job sites today, depending on the environment, they’re not typically going to have a Wi-Fi infrastructure. There’s often cellular service. Now with the advent of 5g, what that’ll do is really enable some of these technologies where you don’t want any latency. What someone wants to be able to do is hold up their phone or their tablet in a construction site and see an overlay of the blueprint. And as they turn left or right and move around that that is their camera that is enabling the overlay of that blueprint onto on top of the real time environment. There’s no delay as they move around.

In a setting where you’ve got strong connectivity, the capability exists today. It just doesn’t always work in the field. I was in China a few weeks ago, had several companies pitch their technology to us. There was at least one or two there today that have come up with some really interesting ways to overcome that barrier. Some pretty cool application, nothing yet that I’ve seen at scale. But I think that’s absolutely going to be impactful over the next five years.

Shawn Flynn 35:45

So what country is at the forefront of construction technology?

Michael Keogh 35:50

I’d have to say right now it’s definitely the US. If we talk about what has been the face of construction technology up until now… It has really been on the architectural and engineering side, it’s really been around the adoption of BIM models, European, North American companies, as well as some Asian countries, there’s pretty broad scale adoption. If you look at big scale contractors worldwide, there’s very good adoption of the models. So, from a design phase, construction tech has already pretty well been adopted in the industry. When you go to anything beyond that modeling side, when you get to application in the field, new ways of constructing, new ways of actually been collaborating and communicating, which is something I haven’t touched on yet, which is really just that communication between the people that spend their time in the office and the people that spend their time in the field.

All the solutions we see there right now, there’s that activity is really happening here in the US. You know, some of the largest scale contractors have IT departments, they have budgets. They are experimenting with a lot of these solutions; they’re willing to take some bets. We don’t see that as much happening elsewhere. There are plenty of startups, I think in other areas that have are trying to bring solutions to the market. We just haven’t seen that adoption. As a matter of fact, we’re working with some companies today that are outside of the US that have some really unique solutions but they’re really looking at the US market is where they really need to test their technology, because that’s where they see a lot more openness to go and try out their solutions.

Shawn Flynn 37:28

And is there anything else that you think our listeners should know about construction tech that we might have missed?

Michael Keogh 37:34

Other areas that we have not spent time talking about, like safety. Safety is something that has seen a huge improvement over the last 50 years, there have been regulatory issues that have driven it. Now we see that space that often ends up being driven by the need for compliance, rather than the need for driving more efficiency or lower costs because that typically comes at a cost, if you’re purely talking dollars and not a human capital perspective. But we see plenty of activity in that space where people are focused on really interesting safety solutions. We touched a little bit on robotics that I think all of these technologies are about our timescale. So, I think some of these things are more of your five to 10 year versus your 10 to 20-year horizon. The real game-changer aspect is when someone is able to start tying all of those solutions together.

The real long-term solution for the industry is all of this data that needs to be collected in construction is starting to be collected, turned into meaningful insights. So, when I talked about the AI capability, enabling drones, that’s really going to be the next application in the construction tech space, is I can start to track my labor, I can start to track my assets, I can understand the safety trends on my site. But now can I start to be predictive? Can I start to resequence my project? Can I start to change how to order materials because all those pieces now I have the data to tie them all together. That’s going to be the game changer. And I don’t know that there’s many companies that have developed that capability yet. But all of these unique point solutions we’ve talked about will eventually lead to the ability that when any one of those pieces changes how it affects every other one of those. And that’s really what’s going to drive productivity.

Shawn Flynn 39:27

Michael, thank you for taking the time today to be on Silicon Valley. And I also want to thank Sonja at Band of Angels who made the introduction that allowed today’s episode possible. Information on her and Band of Angels will be in the show notes. But Michael, if anyone wants to find out more information about you and what you’re working on, how is the best way to go about doing it?

Michael Keogh 39:48

Yeah, I think the best way to get in touch with me is through LinkedIn. I’m a daily user. And I think that’s been my best way to connect with people all over.

Shawn Flynn 39:56

Great, will have Michael’s LinkedIn link in our show notes so visit our website. And once again, Michael, thank you for taking the time today.

Michael Keogh 40:05

Thank you so much. I appreciate it.

Outro 40:07

Thank you for listening to The Silicon Valley Podcast. To access our resources, visit us at TheSiliconValleyPodcast.com and follow our host on Twitter, Facebook, and LinkedIn @ShawnFlynnSV. This show is for entertainment purposes only and is licensed by The Investors Podcast Network. Before making any decisions, consult a professional.