.png)
KP Unpacked
KP Unpacked explores the biggest ideas in AEC, AI, and innovation—unpacking the trends, technology, discussions, and strategies shaping the built environment and beyond.
KP Unpacked
Is Your Startup a Vitamin, a Painkiller... or the Cure?
Welcome back to KP Unpacked, the #1 podcast in AEC.
In this episode, KP Reddy (Founder & CEO of Shadow Ventures) and Jeff Echols (Executive Director at Catalyst) unpack a powerful metaphor that’s reshaping how we think about startups, business models, and the built environment.
We’re not just talking features or fixes. We’re talking about delivering outcomes that actually cure real industry problems. From aligning incentives in AEC to rethinking how firms deliver value, this episode is packed with strategy, story, and sharp insights.
🔍 Featured in this episode:
- KP Reddy, Founder & CEO of Shadow Ventures
- Jeff Echols, Executive Director at Catalyst by KP Reddy Co.
📌 Main Topics Covered:
- Why “being useful” isn’t enough in an AI-driven world
- The real difference between vitamins, painkillers, and cures (and where your product fits)
- What AEC firms get wrong about value and deliverables
- How misaligned compensation models destroy innovation
- What NFL stadium designers can teach us about asymmetric business models
- Why the future of the industry belongs to those who think beyond specs and software
Ignite what's next
We're launching something new... It’s called Catalyst.
It’s a space for AEC forward-thinkers are reimagining what’s next. This is where the top minds in the industry are sharing ideas, leading change, and pushing the future of AEC forward.
Sounds like you? Join the waitlist at https://kpreddy.co/
Check out one of our Catalyst conversation starters, AEC Needs More High-Agency Thinkers
Hope to see you there!
Hey, welcome back to KP Unpacked. This is where the biggest ideas in AEC, ai and innovation they all collide into one podcast. It's powered by KP ReadyCo and this is where we break down the trends, the technology, the discussions and the strategies that all shape the built environment and beyond. My name is Jeff Eccles, I'm the Executive Director at Catalyst here at KP ReadyCo and I am joined as usual by our CEO and founder, kp Ready. Hi, kp.
Speaker 2:Hey, jeff, how's it going?
Speaker 1:It's going well. You are still in Atlanta, yes.
Speaker 2:I am. I am until the end of the month. We had our quarterly meeting here, which was fun, exhausting, exciting and exhausting. We come in a day early to prep and get our ducks in a row. Although sometimes it may not look like we have our ducks in a row, we actually try very hard. I actually was talking about all day, breakfast to dinner, all day like we have our ducks in the row, we actually try very hard. Uh, I actually was talking about like and then we all day, you know, breakfast to dinner all day, and then the next day we do a debrief. So here we are, thursday, and I'm still kind of seepy yeah, absolutely yeah.
Speaker 2:Yeah, but it's interesting, you know I try to tell people let's refrain from calling what we do as events. It's really more like meetings.
Speaker 1:Yeah.
Speaker 2:Because we're not an events company. We just like to get together.
Speaker 1:Yeah, Maybe events puts a different perspective and a different expectation, and I think the important part of it is, you know, it's the conversations, it's the discussions that happen at those things, at those meetings, if we want to call them that. And yeah, I pulled into my driveway at one o'clock in the morning after flying back and you know it was on our stand up at nine o'clock. I guess it is, and yeah, it's still a little bit at nine o'clock, I guess it is. And yeah, it's still a little bit bleary eyed brain, still a little bit mushy, but it was good conversations that we had about 50, some odd people in the room building owners and developers, building product manufacturers, architects, engineers, contractors, startup founders, VCs. It was a great room.
Speaker 2:Yeah, it's also funny. The other thing I think about is like we deliberately did not do name tags this year.
Speaker 1:Right.
Speaker 2:Which is this time this quarter, which was a little bit me kind of experimenting with the people to say that, like, if you don't have name tags, is it a forcing function to actually meet who's next to you? Versus like and introduce yourself. Versus looking at the tag and saying I don't want to meet no architect, like it's. It's almost like name tags you skip over the people you don't want to spend time with. To quote unquote get get.
Speaker 2:get to the people you want to spend time with. The reason I know this to be true is because I do the same damn thing. Sure, it's like, especially when they have the title on their tag I'm like director of.
Speaker 1:Yeah.
Speaker 2:I'm going to keep walking. I'm looking for CEOs. I'm going to keep walking. I'm looking for CEOs.
Speaker 1:I'm going to keep walking Right right Now because I'm in front of the room a lot right, so I kick it off and you and I co-lead the morning sessions and then in the afternoon this time this quarter you took the owners off with some of the research team, et cetera. You took the owners off with with some of the research team, etc. You took the owners off and and then Ian and I co-led the afternoon sessions with mastermind members and and other guests that are that are focused on on those conversations, and so you know this, obviously, but but being in front of the room and recognizable people will come up right, they'll come up to you in the breaks and in the interstitial spaces and times and they'll give you feedback, which is fantastic. Not a single person said anything to me about a name tag. Did anybody say anything to you about a name tag?
Speaker 2:No.
Speaker 1:Interesting experiment.
Speaker 2:It's also one more thing that we don't have to deal with, because we're not an event. Go to a registration table.
Speaker 1:Yep.
Speaker 2:Blah, blah, blah. It's like who wants to do any of that? Right, we didn't give out any swag. Sorry, you don't get swag. You can bring me swag, but don't expect to get any swag. We're not here for the swag or the um or any of that. But, um, I I thought what was interesting, um, I was telling you, I was kind of telling my wife this right like that, this event, the engagement was super high, the energy was. I mean, I think it's like our best ever. Quite honestly, I think it's our best ever.
Speaker 1:Yeah, yeah, we've been iterating for a long time, for a year and a half, on this and, yes, it continues to improve, definitely.
Speaker 2:And one of the things that was very different was how many people have been listening to this podcast, really listen not just listening, but applying what they're learning from the pod and like playing it back to me right in fact I think there was like a short or something where I said something like it's really embarrassing when people come up to me and say they love the pod.
Speaker 2:I just kind of shrink up up, I just get very shy Right. I'm like okay, great. But I said I had like three people come up to me like hey, man, love the pod, wink, wink, like trying to troll me.
Speaker 2:Right, trying to troll me, and I was like, okay, that's good, like people are listening, that's good. But but and same thing with the blog post. I mean, like we generate so much content, right, it's not. Which is the number one complaint I get you guys generate too much content. I don't know where to start, I don't know where to end. It's just too much. Which I'm really excited about the Catalyst platform, how we've kind of redeveloped it platform, how we've kind of redeveloped it, and then we're going to have an AI chatbot in there that you can let multiple chatbots and you can ask it hey, I need help raising money, I need, I want to understand how to improve my career, whatever.
Speaker 2:And of course, the AI will give you some answers. It'll give you some answers, but a lot of the answers are driven by the content. We have the blogs, the Sunday Scaries, all of it, and it kind of. I think the bigger benefit is it cites it. So if you're, you know, early career and I don't know how to deal with my boss, whatever, and you had this great conversation with Kevin on one of the pods or whatever, on a blog post, it'll actually go cite that. So I think the real benefit is not going to be like the AI tells you what to do, but it's going to kind of tell you like where to go find it, which I think is going to be super helpful because we do have so much content.
Speaker 1:Yeah Well, and you realize on that front that some of the answers are also going to be send kp a jethro tull shirt, because that's going to show I think that window has.
Speaker 2:I think that window has closed. Now, right, you keep walking that back. By the way, for those of you that are listening to this, we're recording right now and kp is wearing his metallica t-shirt yeah, I actually had to explain it like not every like um one of the guys, um eric, like he knows, jethro tully, and he didn't know like what what I was talking about.
Speaker 2:Right on the award stuff the grammys yeah the grammys, right, and so I posted it in in catalyst and he was like he actually commented on it like oh, that's what you were talking. I didn't know what you were. I didn't understand the connection between Jethro Tull and Metallica. I didn't realize this had happened back in 1989.
Speaker 1:Yeah, the heavy metal.
Speaker 1:So he got all the value out of Catalyst. Just on that one nugget for the month. Everything else is gravy. Well, I guess we're done here, yeah, yeah. Well, I guess we're done here. Yeah, yeah, but it's, it's the. So, yes, the. I'm glad, you know, I'm glad that what we're building there on Catalyst is already having an impact.
Speaker 1:The tools that we're able to implement now that we weren't able to a year ago, or whatever right they're they.
Speaker 1:They provide incredible benefits and functionality, and and so, as we're, as we're talking about this right now, um, if, if you want to join Catalyst, and so let me just describe part of the vision of Catalyst is it becomes the hub for everything that we do.
Speaker 1:There's a platform for mastermind groups, there's the platform for our incubators, the platform for our integrated owners forum, it's a platform for our advisory clients, and also all the conversations and live virtual events, all of those things.
Speaker 1:It becomes the hub for all of that and these conversations and the content that's being produced and everything else. So, in order to gain access to Catalyst, you have to be approved, which means that you have to have a conversation with me, and the way that you set that up is the application process is super simple Go to go to kpreadyco, kpreadyco and right there, right in your face, is the application. There's just a couple of fields there that you need to fill out and we will start that process with you. And we will start that process with you and if you're lucky enough and let me just say that, if you send a Jethro Tull t-shirt, there is a box. We talked about this last week when we talked about awards programs like they're scoring systems. There's a scoring system for applications for Catalyst, and sending a Jethro Tull t-shirt is one of those checkboxes.
Speaker 2:Let me comment on one thing. Jeff right, it sounds like you're selling people, which would imply there's something to buy.
Speaker 1:Right.
Speaker 2:There isn't.
Speaker 1:There isn't.
Speaker 2:There isn't anything to buy. I mean, we'll take your money. I mean, I think we can take credit cards I'm not sure what, but Catalyst is not a paid program.
Speaker 1:Right.
Speaker 2:And I think you know when you and Ro and the team have been all over this like I think a lot of it comes from the fact that LinkedIn has so many limitations. One of the things lately has just been like spam. Like you know, I go into my LinkedIn messaging and I'd love to help I mean, I love helping folks, right but I have to get through 300 messages of spam before I get to anything like of interest. So I think there's that One. I think I'm at my LinkedIn max so I can't even connect with you.
Speaker 1:And I think In terms of connections, you're maxed out.
Speaker 2:Yeah, yeah, and I think so. I think that where it's in publishing documents and things like that, like we publish like best practices and white papers and all kinds of stuff that you just can't really do on LinkedIn, it's really hard to do on a website and, quite honestly, we don't charge for this stuff. But I'm just disinterested in sharing content with people that are just like content hoarders. I have friends in the VC world. They just collect pitch decks. I don't know why. They're just hoarders, like digital hoarders, right, and I think some of that happens and I think there's no benefit of and we see people download stuff and you do it on LinkedIn and then someone starts commenting and trolling and who is this schmuck?
Speaker 2:It's just like a pain in the butt, and so I kind of feel like as much as we're doing, we just want to do it support the people that are really ambitious and motivated versus, you know, versus like the general public, you know that just want to troll Scott Pestridge 05,00. And I mean I get some great comments every once in a while and I'm like you know, I don't care, right, I'm too old to care. But I think what's awesome is in Catalyst just the conversations are real deeper. And then our quarterly meetings. Then people get you know they have the opportunity to show up to quarterly meetings, which there is money for that, by the way. We charge for that but nobody's going to sell you on. Nobody's going to sell you on that Cause if either you either you feel compelled to come or or you don't come, like that's just how it is Right.
Speaker 2:But, um, you know, we put all this stuff out there on the internet like, oh, come join us at this and come do that, and know it's like what's the point? Like, just come into the inner circle, we'll tell you what's going on. Some things cost money. A lot of things don't cost money and you know, do or don't do. I mean, you're not gonna, you're not hurting my feelings, right? Um, we don't have this great revenue like, oh, 500 bucks a month, we're buying new cars or anything. And it's funny like we I did a pricing strategy session the other day with the startup and I, you know, I kind of said like the only reason sometimes you charge money, like you think about pricing models, it's partly about the value but partly about who you want your customer to be.
Speaker 1:Right, right.
Speaker 2:You know, I have friends that do personal training. Some of them charge like 50 bucks a session, Some charge 500 bucks a session. I'm not sure that there's a huge difference other than the ones charging 500 or working with celebrities and high net worth people, and those are the people they want to train and that's their filter. That's their filter, that's their choice, right? I don't know that there's a huge difference, right? So I think when we do charge for stuff, it's not like we're. You know, nobody's getting rich over here folks. But I mean I am, but not through $500 fees or anything. But I do think it is a great qualifier for how interested are you.
Speaker 1:Right, yeah, well, it's to your point. And yes, there are things that cost, right, you know tickets for this membership to that, you know masterminds, obviously, advisory services, right, there's's, there are those things, but, but. But catalyst, as the platform does not cost. But the reason that we've at, the reason that you have to have a conversation with me in order to get in, is because we do want to keep it curated at the same time that that we are pushing to grow this community and and you know, let's be clear, we're we're pushing to greatly expand this community, but at the same time, it's curated. Right, we want the people who are interested in that, are invested in and I mean that literally and figuratively but are invested in, uh, innovation for the built environment is how we say it a lot right? So, architects, engineers, contractors, building owners, startup founders, vcs you know everybody that's in that ecosystem. We want the most engaged, we want the most forward thinking, we want the people that really are paying attention, that want to learn more, that want to share more um, that are that are either doing the work or are moving in that direction.
Speaker 1:You know, we can't forget about the fact that we have our early and mid-career mastermind groups, and you know we talk about this sometimes. Well, you know what's the what's the bar. You know we talk about this sometimes. Well, you know what's the what's the bar. You know how many years should somebody have in order to be? No, it's not about that, right, because even our early and mid-career folks, who may be five years into their career, they're the ones that are pushing and accelerating towards becoming a director of innovation or chief innovation officer. So it's, it's the you know who's the ICP has. You know, we actually had that discussion this morning. Who's the ICP for this? It's, it's not by title, right? It's, it's as much by psychographic as it is anything else. And so that that's that's the reason, that reason that I'm the gatekeeper, it's the reason that we curate this in an attempt to make this as big and valuable and useful as possible for exactly the right people.
Speaker 2:Yeah, 100%. Well, enough of that. Enough hard sell on everybody, Jeff.
Speaker 1:Yeah, we click here.
Speaker 2:You're trying to tell Jeff, like, stop being such a sales guy. Yeah.
Speaker 1:And if you're not, if you can't see this, if you're just listening, I have on the proverbial plaid blazer of the used car salesman right now.
Speaker 2:Have you been up to New York yet to see Glengarry Glen Ross on Broadway?
Speaker 1:No, no, I've seen the movie, but I've not seen it on Broadway.
Speaker 2:Yeah, it's supposed to be fantastic. I actually was up in New York when I did that thing for NASDAQ and my hotel was across the street from it.
Speaker 1:Oh yeah.
Speaker 2:And I got there like 30 minutes too late to the hotel because they were like, oh, we can get you seats, and it's like my cab ride was just a little bit, my Uber ride was a little bit longer, but I like missed it by the 30 minutes. But it was fantastic Speaking of sales. If you haven't seen Glenn Gary, glenn Ross absolutely.
Speaker 1:Always be closing, yeah, abc. One last thought on content and on the amount of content. Before we jump into creating today's content, um, one of the things that I've started doing inside of catalyst is doing a weekly content recap. So friday, if, um, if you're going, you guys produce a lot of content. What was it? What is it this week? I, in under 10 minutes, I go through the highlights of all the content that we have created for the week the podcast, the YouTube shorts, the YouTube longs, if that's the right term for it the sub stack articles, the latest newsletter, all of it. So you can find that on Catalyst. It's just me doing a live streaming video. You know, no expectation that anybody actually shows up live for that, because it's a quick hitter, right? I just bang, bang, bang, bang, bang bang. This is what we did, this is what we produced this week. But I talk about the articles and you can, you can use that as a guide, and there is a sort of a print version accompaniment to that as well, so you can go in every week and see. You know, just in a nutshell, what all the content for the week was, but that's that's in Catalyst. So so check that out Now, the reason that we come here, that KP and I come here every week, is to unpack one of his LinkedIn articles.
Speaker 1:Thus the name KP Unpacked. If you ever wondered, you know where did that name come from? We started out, I don't know, a year, year and a half ago or something, unpacking one of your LinkedIn posts every week and you post a lot. So we you know we have to narrow it down. If you're not following KP again he mentioned earlier you can't connect with him. He's maxed out his connections there, but you can follow him. So just look for KP the letters K and P, and then ready R-E-D-D-Y and follow him.
Speaker 1:And one of the things that you'll find that are only intended is this Sunday Scaries series and that's what we're going to draw from today for this conversation. It Scaries series and that's what we're going to draw from today for this conversation. It actually came up Tuesday at our quarterly event in Atlanta. You know conversation around this post as well, so I'm going to, I'm going to just read a little bit of it and then we'll start to unpack it. So this is from KP's Sunday Scaries from May 18th 2025. As you're listening to this, in 2030 or whenever it is that you're listening to this? It's titled the Cure for the Common Cold. That ought to get everybody. This is how you cure the common cold Quick wait, you cure the common cold Quick wait.
Speaker 1:Yeah, quick. Yes, you said it, not me. It starts out. In today's AI-driven world, being useful isn't enough. Your startup needs to be the cure and prove it.
Speaker 1:If you are a regular reader of the Sunday Scaries, you may think that I have changed my mind as of late. It's possible, since the world and business environments constantly are changing. There's possible, since the world and business environments constantly are changing. There's an old saying is your startup a vitamin or a painkiller? The idea was that you should be a painkiller. The long-term benefit of a vitamin isn't seen early enough for a customer to get excited, while a painkiller has an immediate effect. It turns out that this doesn't. There are so many medications to treat the symptoms, but no cure.
Speaker 1:So now the adage is is your startup a vitamin, a painkiller or the cure? And I could go on. This is it's not much longer than that. Actually it's a relatively short Sunday Scaries, but I think that's a great way to, or a great place to stop reading it, because that's it in a nutshell Is your startup and we could apply this to any business model for anybody that's listening right now but is your startup a vitamin, a painkiller, or is it the cure? Yeah, you brought this up on Tuesday at the quarterly meeting and it spurred some good conversation. But let's go all the way back to the reason that this became the idea and you said, hey, I'm going to use this for Sunday Scaries. What was the inspiration for this to be the Sunday Scaries topic?
Speaker 2:Yeah. So I think a lot of where this is coming from is the technology I'm seeing that I'm impressed with and the technology I'm seeing that I'm unimpressed with, but more so the business models, and the shift in business models is what matters, right. So you know, it's always like, hey, let's go find the customer pain. We hear this a lot right, we hear this a lot right, we hear this a lot. We need to understand the pain points, right. And it's funny, part of this was inspired because my son wasn't feeling well and so I had to go get him some stuff from the CVS.
Speaker 2:I'm walking down the aisle. And, by the way, there's so many, so many medicines cold and flu, nighttime, daytime, liquid gel caps pretty insane, yeah Right. So there's this entire industry. So I'm walking down, I'm like there's this entire industry. Each box is like $15 to $25 a box. None of them are a cure.
Speaker 1:Right.
Speaker 2:None of them are a cure. It's like and, by the way the way, like, oh, you got mucinex. I mean, you got all the brands right and there's extra strength, and I don't know why you would take anything less than extra strength. That seems like a weird game, um, but you know. But the other day.
Speaker 1:The other day, I saw something. I forget what it was now, but it was like extra, extra strength there was a different one. It's like what? What are we doing here?
Speaker 2:Right, I mean, if I ever like oh, that's too much strength.
Speaker 1:I have a moderate cold, I don't it just comes in a box shaped like a coffin.
Speaker 2:Right. So that was kind of the thing. I'm looking around saying, hey, this cold medicine business is a great business. God forbid anyone find a cure for the common cold. These guys are done. Right, they're done. Or even a vaccine for my friends that like to talk about vaccines these days.
Speaker 2:But at the end of the day, you know, you look at that and you hear it in business all the time, like, oh, is it a feature? Oh, how does it solve a customer pain? I mean, even in like with our startups, we talk about how are you solving the customer pain point? And I think, with AI and the innovation of business models that are highly, highly disruptive, I think that's the goal. It's not about being a painkiller, it's about the goal. It's not about being a painkiller, it's about the cure. And so if you're, I'll make it up more generically, right?
Speaker 2:If you're in sales and you're like, oh, I need to generate more leads, great, I'm going to buy HubSpot. Nothing wrong with HubSpot, I'm going to go buy HubSpot. Nothing wrong with HubSpot, I'm going to go buy HubSpot. I'm going to go buy some leads, maybe, or generate some leads through some downloadable, some lead magnet things, and then I do that and then I send an email out and I follow up and I follow up and those leads convert to qualified leads, whatnot? And then I still have to sell them and I'm going to pay HubSpot a couple hundred bucks a month, whatever the number is Apparently more than that.
Speaker 2:Sometimes. That's solving some pains, right. What's the pain? It's hard to really maintain and manage the workflow and process and that's how you pay. Now, instead of that, maybe the new ai sales system is we send you sales, we send you orders, our ai engine will send you orders and we want 10 of that and that's how we get paid and that's the business model, and so I think that's where the shift is going. And when you look at things that are pervasive in our industry, like rfIs and something I went to the ENR construct future tech thing and, like I said, I told the ENR folks do a great job, so this isn't anything against them. It's really just that I saw so many companies oh, we're going to track your submittals. I mean, what is project management? What is project management and what is project management software?
Speaker 1:it's just tracking things yep things, things in time project management software, right.
Speaker 2:So what if software came out that said, hey, you don't pay us for software. You put in your project, we analyze whether it'll be on time and on budget and you pay a percentage of the savings, that's all. So what's interesting about the idea of like vitamin versus painkiller versus cure? The incentive alignment around the cure is very strong. Right, I'm not here to sell you licenses. I'm here to put more money in your pocket. I'm here to de-risk your process. Right, that's what I'm doing, and the financial incentives are 100% aligned. I'm not trying to sell you more licenses. The way I think about releasing features in my product is 100% aligned. If it doesn't help you get your project done cheaper, better, faster, I'm not releasing it and I think with that. So the interesting dynamic of that is not only are startups smart to go down this path, the TAM, the total addressable market, is massive.
Speaker 2:I think I talk about it. I talk about this a lot in my last book, creating the Intangible Enterprise, and I talk about asymmetry. Right, asymmetry is. You know, most engineering firms, et cetera. They have no asymmetry in their business models. It's like work an hour, get paid an hour, right, first margins of the semi notes. It's very labor arbitrage focused. There's no asymmetry in it versus the spend an hour, get paid a million dollars. But sometimes I spend an hour and I get zero dollars. Right, right. Which is like think about, like law firms that do contingency work. You know there's plenty of projects that go nowhere, but the ones that hit are like these class action lawsuits and they get eight figures and they get 30% of that Right. So so I think one is like these models now become very asymmetric in terms of how they operate.
Speaker 2:Some projects you get paid on, some projects you don't. But so what, right? Versus charging a percentage of the construction volume for your software? We know a company that does that. So maybe that's not the model anymore, right? Maybe the model is purely on the cure. That's not the model anymore, right? Maybe the model is purely on the cure.
Speaker 2:And then we work towards fixing an industry, fixing the problem, not just tracking the problem. You know, no customer ever said oh, I love your construction management software. The owners never say that. They're like I don't care what you use, use sticky notes, I don't care, that's not my problem, I just want my project done on time. On budget, how you do it is your problem. So I think that's where the market is going to. I think that's how we're seeing things develop that are much more because you can de-risk the work and still get the upside. In other words, if I was an AI driven law firm today, I'd have like three attorneys and a bunch of AI agents evaluating and and uh, you know, that'd be a hundred percent contingency. I get 30% of you know, and then all I need is people to go to court. When I go to court but you know how many, how many things go to court they mostly get settled.
Speaker 1:Yeah, yeah, driven a lot of it, driven by insurance industry.
Speaker 2:Right, I mean, think about that whole business. Right, you know the accident business. You could AI-ify that, auto-generate the insurance letters. You could auto, you know hey, call this number to give you a recount of what happened. That gets auto-transcribed, thrown into a brief, shipped over here and you could probably do like $100 million a year in fees with like three people if you wanted to. You could get more billboards.
Speaker 1:You know, speaking of billboards, I landed in Atlanta. For those of you that don't know, I'm originally from Atlanta but I live in Indianapolis. And then I, you know, I went to Atlanta for our quarterly event on on Tuesday. I landed in Atlanta and one of the first billboards I saw was one of those attorneys that you're talking about and I. I I had to do a double take because I went wait a minute, did I actually leave? Cause this is this exact same billboard that I see on the interstate, you know, right over here. So there's that.
Speaker 1:But yeah, I think one of the things when we were talking about this at the quarterly event on Tuesday, one of the things that came up over and over, and not just in the general discussion about that, but in some of the side conversations as well, because obviously we're talking about innovation and business models. But it is the sentiment that you know, the owner, by and large, doesn't really care how you got there. And the same is true, right, if you come down, you know, god forbid you come down with with some horrible disease At some point you cross this line and you say I don't care, just cure it. Right, you know, you, you accept the fact that there are side effects, and there are. Uh, there's going to be stress involved in, you know, whatever, whatever the process of the cure is and you're willing to pay. You know this, the, the adage, the, the vitamin versus painkiller, etc.
Speaker 1:There are a lot of people that have applied this in in different realms over the years. And, um, you know, we we've talked a lot about uh donald miller around, uh, coach builder. That's a book that I don't I think that might be his most recent book, but you know Donald Miller, I've been following him for years now and that's one of the things that he has said a lot in his marketing messaging books is you've got to sell, right, you've got to sell the cure and I like what you're saying there, right, I'm going to, I'm going to charge you for the outcome. And when you say that, it makes me think about the management consulting model, right, it's, it's almost. It seems to me that it's, it's almost a flip, or I don't know if that's the right description, but it's, it's almost a flip, or I don't know if that's the right description, but it's. It's similar but different to the management consulting model, but it's it's results-based.
Speaker 2:Yeah, I mean, look, I've had. You know, all we have is time, right, that's that's. We have no choice, that's all we have, you know. So I've had people come to me and say, hey, you know I'll pay. You Can your career coach me? I've done that a little bit. I still do a little bit, but I've kind of said, like you know what, I'll tell you what Give me your W2 for last year. I will career coach you, I will take 10 percent of what incremental per year, incrementally how much more you make in income? Just give me 10% and then now my incentives are aligned. I'm not charging you, I'm spending the time right. I'm probably helping you, like get opportunities. I'm probably, like you know, reposting your LinkedIn posts for you, like you know, whatever it is right Because the incentives get quickly aligned and there's just so many businesses where the incentives are not aligned.
Speaker 2:I mean, I think recruiting is the worst business in terms of misalignment. I generally hate using recruiters. I recommend that most of my startups to not use recruiters. I think when you get to a certain scale, it might make sense. But if you're a founder and you don't have an idea of how to attract top talent to your startup.
Speaker 2:It's not just about attracting VCs, it's not just about attracting customers. It's about attracting employees as well, people that want to come and work on your mission with you, right, but the model of paying 20%, 30%, whatever the number is of an employee's salary that the hiring person pays, so help me understand your incentive is to get me to hire this person for the highest amount possible. That puts money in your pocket, right? So what are you doing for me? How are you working on my behalf? So, versus like sports agents that get paid a percentage of whatever the player makes, they are highly aligned, and when you see about what NFL players make these days, is that driven by anything other than sports agents? The sports agents have been able to frame like, hey, this is a franchise player, look at all the ticket sales. I mean, the players would have never built the value prop.
Speaker 1:Right.
Speaker 2:Sports agents did and they're 100% aligned, right. I think you look at that. Recruiting, I mean, there's just a lot of businesses. So if you think of, if you bring it back to our industry, right, if someone said, hey, I want you to design and build a hotel for me, would I do it for hey, here's the costs. Because the costs are the costs, right Bricks costs, whatever, sure, but I get a percentage of your hotel revenue for the first year.
Speaker 1:Right.
Speaker 2:Or more so, I'll deliver your hotel on time and on budget, and we both agree that this is the numbers. And if I beat it, don't pay me a dime. You know, as a project manager, if I beat it I get a slice of beating it, something like that. I mean, I think you have to put yourself into, you know. So, when you and think you know we deal with a lot of engineering brands right as part of our industry and like, well, you know, I show up and do good work, clients are willing to pay for it, and they're like the client doesn't value my work, and it's like there's two questions to ask yourself.
Speaker 2:One are you communicating the value well? And then the second, what they don't want to hear is are you actually creating value or are you a necessary evil? When we talked to our integrated owners forum, there was a lot of talk about like well, you know, these design firms are just a necessary evil of the business, right? This is not. We're not in the construction business. This is what we have to do. This is the system.
Speaker 1:Yeah, I just want to say that this is triggering for the guy that does the commodity, as this commodity does talk, because what you're saying is exactly right. Right, we hear this all the time from engineering and architecture. It's not unique to them, it's a professional services thing, professional services business model thing. It's one of the most misaligned industries I'll. I guess I'll say it that way out there, and I think one of the problems is that it's it's the focus on deliverable, not result. Right, you know it's.
Speaker 1:If you look at the architects or the engineers, their, their fee structure, they'll break it down, they'll break it down by phases. Here's schematic design, design development, here's CDs and CA and so on and so forth, and a huge percentage, like 60% of, let's just say, the architects because that's that's my background background. So I'm going to pick on architects um, 60 of their fee is based on what. It's based on the construction docs, right, it's based on the deliverable, it's based on the paper that that somebody is going to print. Is that the value of your services? It better not be right, and that, and that's part of what drives that misalignment is, oh, we're, you know it's, the bulk of our time goes into this phase, and so that's how we're going to invoice for it, and so somehow we have trained ourselves to think that that's the value proposition and it's exactly the opposite of your value proposition. I mean, there are people in the right, so there's a whole discussion about replacing BIM, replacing the actual deliverable methodology. So you better disconnect from that as being your value prop.
Speaker 2:So when a firm's charge a percentage of the construction cost, how does that align with the owner, the customer? It doesn't If we have inflation due to tariffs and you know like. So basically and I've seen this with owner's reps, owner's reps, I didn't realize this A lot of them charge a percentage of the construction costs.
Speaker 1:So if the project seems like a conflict of interest right if the project goes over budget, they get made paid more so with construction manager, yeah right.
Speaker 2:So I think you know what was interesting about when we all met was, at the end of the day, how many people were talking about kind of vitamin painkiller cure and kind of like self-reflecting on like how do I create the cure for, you know, for whatever it is they do right over whatever it is they do for a living. So I thought you know, um, it's kind of interesting because you even mentioned this post was not a long post, right, but I think it really got people thinking about. You know, it wasn't the. You know, back to asymmetry my, my shorter posts get better engagement than maybe my longer posts we might need to ask ai what we should learn from that if anything
Speaker 1:so you know, maybe, maybe here's a little bit of a curveball. Yes, paying for the cure, whether it's cancer or it's, you know, whatever the problem is for the uh, the building owner, the client, is probably what the, the engineers and architects and contractors are calling them. Paying for the cure is expensive. Right, there's a, there's that's. That's not the right way to say that, right, but it's it. It it's highly incentivized at the same time, right in in the world of vitamins and painkillers and cures, to play devil's advocate here for a second. There are an awful lot of people spending an awful lot of money on vitamins and supplements. It's a huge industry. So what is that analogous to in our context here? If anything, is there a different direction to go?
Speaker 2:with this. Yeah, I mean this will not be popular, but I think some of the sustainability initiatives are vitamins. I don't know, when you think about a green roof, does it solve a problem for today or does it have benefit over time? Do you have to have it to have a building? Do you have to have a green roof to have a building? No, you don't have to. Do you get some kind of ROI and benefit? No, and I'm assuming vitamins with efficacy right, I'm not saying scammy vitamins right, but vitamins don't have an. You know like I was very excited, I went to the doctor. My vitamin D levels are at a great spot, which is always a problem, especially for us brown folks. It's a little bit harder, but you know, so vitamins with efficacy, not scammy stuff that I don't see the benefit right away. Right, it's not like oh, now, all of a sudden, I feel better, right.
Speaker 1:Right.
Speaker 2:But sustainability is probably a vitamin. Being a LEED-certified building, does that create value? I don't think so. I think over time is it beneficial. Yes.
Speaker 1:So are you making a distinction then, because the cure is not necessarily about instant gratification, right?
Speaker 2:It doesn't have to be, but it's near-term gratification right.
Speaker 1:Yeah. So then are you saying that we, you know, again, I get to play devil's advocate here, yeah, I get to play devil's advocate here, Um, or? Or are you then saying that, um, that we should only be looking at near term and not looking at long-term? Right, Like sustainability is, is it? Is it near term? Probably not, because the cost of a green roof or PV panels or you know whatever all the sustainability things that go or the things that go in that make it more sustainable, the ROI is definitely a long term, long tail thing. Right, there's this expense. So are you saying that we shouldn't be focused on the long term?
Speaker 2:Yeah, I think it's part of it, right? So when you think about one of the things with vitamins, right, they tend to have a high degree of marketing component to them, right? As is sustainability, right? Oh, our building is LEED Platinum, okay, like fine right, fine, right, oh, that's nice, right, so nice, it's nice, but it's highly marketed. It has to be highly marketed, and all sustainability programs have a high marketing component, to the point that they call it green washing, right? So I think the continuum of that, from a vitamin to a painkiller, to a cure, I I don't think it has to have necessarily long-term, but I think sometimes we also get, you know, we talk about the owner and building something which is very tactical. Right, we're going to build a school for you on time on budget.
Speaker 1:Right.
Speaker 2:But the right, and I'm not just like and, by the way, the product is not just about price and schedule, it's about what's good, that it's good and we can define what's good, right. But I would say if I took a step back and said, okay, here's a neighborhood where K through 12, the educational, the test scores and all are way below market, way below the industry averages.
Speaker 2:We need to put a new school here and the measurement of the school is the long-term benefit to the students improving their grades, improving their test scores. Right Now one would say like well, it's just all about the teachers. Well, that's not true. This is back to. What we do for a living is the most important thing in the world. We shape society. Right. Designing the right building with the right strategy for the right kids is huge. Right, having a way for kids to get to school safely, to get fed A lot of kids need to. They depend on two meals at school so they're not hungry and they're not getting garbage out of a vending machine Like. There's a lot of things here that in designing a school for a neighborhood to with the sole purpose, we have to increase our education, right, and we can argue about what that metric is. Is it test scores or whatever?
Speaker 2:I'm not an educator, but you can have like what is better right, what is a better use for society? That may not be. It may not happen overnight.
Speaker 1:Right.
Speaker 2:But you know, I remember one time talking to the former mayor of Atlanta and I said, if you do one thing, well, right. So mayors will tell you like, hey, we've got to take the trash out, we've got to make sure people aren't shooting each other, like those are the big water, right, those are the basics Right. And I was like, if you really want to get rid of all your economic development people and focus on one thing, build the number one high school in the country. Just one, just one. Because what will happen is the most affluent people will move into that district.
Speaker 1:Right.
Speaker 2:And when affluent people move in, money comes in. People will move to your city to get their kids a better education. Oh, this is the number one city, number one school, high school in the world. I'm going to move to that city Like you don't have to do anything else. If you do that, really, really well, it's amazing what most parents will do to get their kids a better education and it's like the number one draw, I think, for any society. But and of course it has to be safe and all that stuff. So I don't think it has to be long-term, but I do think there has to be a long-term strategy around it.
Speaker 2:And sometimes it's a short-term strategy, sometimes it can be a short-term, so I think it all depends. So the answer, like many answers it depends. It depends on your strategy, right? Right, I think that's what we miss so much. We're not building a school, we're not building a building. And I think in the world of better like we started talking about project charters in one of our sessions and mission and vision, right, if your mission and vision is to get the project done under budget, that's not a mission and vision. What is your purpose of building this building? How do you expect to impact society?
Speaker 1:Yeah, yeah, I believe it was Nate Clark that brought it up in the session on Tuesday. He kept coming back to quality. Right, there's this focus on quality that's necessary. And I think, to your point, one of the biggest misses, maybe one of the biggest misunderstandings in the industry and you know I've spent a lot of years talking about this from stage and teaching this um, especially the architects is you know, you think about it, especially the architects, is you know you think about?
Speaker 1:I'm going to tell you that your deliverables, your, you know your 24 by 36 or 30 by 42 plots that you print from a 3d BIM model, by the way, that that's not the value that you're creating. And so you say, okay, well, the value that I'm creating then is is this? You know this building that I've designed? It's like, well, okay, you took a baby step, but the thing is, it's not that either, to your point, it's the impact, it's what that building allows the owner, the occupants, the neighborhood, the students, whoever it's. It's what it, how it improves their life, and it may be a uh through a business, it may be through education, it may be through a lifestyle or whatever, but the value that you're creating is necessarily, is necessarily this. This seems kind of ironic in a way. There has to be some amount of sort of intangibility to it. Right, it's this, it's this. It makes life better yes we're gonna.
Speaker 1:We're gonna twist ourselves in 36 different directions to try to put some kpis to that and and figure out some sort of, some sort of roi. But it's about better, it's about quality, it's about making that change and making the life, the community, the business, the whatever it is, making it better. That's the painkiller.
Speaker 2:Yeah, I mean and, by the way, so much of, so much of that is about. So much of that's about experience, right?
Speaker 1:Right, of course.
Speaker 2:Right. So you know and I think about specific examples back when hospitals, the birthing centers, were these sterile, very hospital like rooms and they said, oh well, that's not a great experience. We're going to put in fireplaces and recliners and soften up the space and make it feel like a bedroom. That changed people's lives. I think about sports. You know, I grew up going to Atlanta Fulton County Stadium to see the back when the Braves and the Falcons shared the same field. Back when the Braves and the Falcons shared the same field. You know you'd see the big piece of dirt, the big piece of dirt in the middle of the Falcons field, from when they played baseball as well and you parked your butt on these nice.
Speaker 2:I was there and you parked your butt on these, like these concrete steps, to watch a game yeah there weren't comfy chairs, right, there was none of that stuff.
Speaker 2:You had to walk forever to get a hot dog, like all this stuff. And you look at these stadiums today and they're just like, beautiful and comfortable, and they'll sell you a $20 hot dog all day long. You know it's. And if you don't think for a minute, the redesigning of stadiums and these like has not changed how people play sports, how they watch sports, how they think about.
Speaker 2:You got to be out of your mind, I mean I would argue that if you are a stadium designer out there, you should have gotten. You should have gotten a percentage Instead of working for a fee on the new Atlanta Falcons stadium. You should have gotten a percentage of the team. You would have been better off.
Speaker 1:Sure, yeah, absolutely, and that's really important as well. That's a very important statement. Going back to what you said a second ago, it is about the experience, right. Why do the kids learn better? That's a it seems like a very caveman way to say why do they learn better in this school versus that school? It's about experience, right, it's about the environment that they're immersed in. But getting back to what you just said right, you should have gotten a percentage of the team right. What we're talking about here is basically a change in thinking. It's a change in mindset, change in business model, and with that has to be a change in compensation model. So when you say, hey, we're going to, we're going to do this, we're going to change this, also have to attach the, the compensation model, to that, otherwise it falls apart.
Speaker 1:And for those of you that, are listening, right, if all the for those of you that are listening and can't see the video what kp was just chuckling about was I. I held up I actually have this my, my aunt turned 85 and we recorded videos for and I held up the little plaque thing that I have, because I was there when hank aaron. I was there at atlanta fulton county stadium when hank aaron broke babe ruth's home run record and my aunt, my aunt edith, shout out to any of she took me to that game.
Speaker 2:So I was holding up that plaque and that's what kp was chuckling about, in case you don't get the video of this, yeah, which you should watch this on youtube, then you can comment. That's the best. The best part of youtube uh, listening watching podcasts on youtube is you can actually comment, which is always fun. Um, but no, I look, I think about it like these, uh, stadium designers, can you imagine if they had given up their fee for a percentage to be a part owner in the team? I don't know if you know this, but the valuations on NFL teams are insane. I mean, just through the roof.
Speaker 1:Right.
Speaker 2:Through the roof. They would have made all their money just on ownership in these teams.
Speaker 1:And they would have had a very strong mission.
Speaker 2:There would have been very strong mission alignment around designing it to have the ultimate experience and to be able to charge more for tickets and charge more for hot dogs and all the things. They would have had it. You know they would have designed it very appropriately for all those things.
Speaker 1:Yeah, I mean it's and maybe that's the future. Right, maybe that is the future. It's the the biggest you know I have this conversation with, with professional services folks. All the time there's there's I bring this up from time to time there's a, there's somebody that I have debated this for years with. It's they, they have their own firm and they are so tied to that hourly rate they won't even do a fixed fee, they won't do a lump, you know, lump sum whatever. And you know I said you know the thing is you're penalizing yourself. You can get better, you can produce better, you can produce faster or whatever. And the faster you go and that's that's the key right in the in the hourly, of course is the faster you're able to deliver, the more you penalize yourself. It's you know you're you're getting paid less or for the value that you're creating. So, um, you know, if you're, if you're listening to this, you already know that. So we won't, we won't need to dig into it. But your, your point about youtube is a good one too.
Speaker 1:When frank and I record the ai and aec version of this podcast, we say that a lot because it's we're talking about ai, we're talking about tools, we're talking about things that are changing very, very, very quickly all the time. It's, like you know, go go to the youtube version of this and comment. Well, this. This has been a fun discussion and again this comes from we're unpacking KP's as we're recording this KP's latest Sunday Scaries. It's dated May 18th 2025. The title is the Cure for the Common Cold, and it's been coming up a lot in our ecosystem, so to speak, including at our quarterly event on Tuesday in Atlanta. So let me just read the first part of it here really quickly and then we'll wrap this up. But it goes like this In today's AI-driven world, being useful isn't enough. Your startup needs to be the cure and it needs to prove it. If you are a regular reader of Sunday Scaries, you may think that I've changed my mind as of late. Of course, this is KP speaking. It's possible, since the world and business environments are constantly changing.
Speaker 1:There's an old saying that goes is your startup a vitamin or a painkiller? The idea was that you should be a painkiller. The long-term benefit of a vitamin isn't seen early enough for a customer to get excited, and that gets to what I was asking earlier sort of playing devil's advocate there, while a painkiller has an immediate effect. It turns out that this doesn't even apply anymore. Things are moving so fast. Take the common cold. There are so many medications to treat the symptoms, but no cure. So now the adage is is your startup a vitamin, is it a painkiller or is it the cure? So, um, this, this has been good. This has been good to unpack. Um, again, we've. We've been talking it seems like we've been talking about this daily for a while now because of where and how often it's popped up, but I'm glad we were able to really dig into this in this episode.
Speaker 2:Yeah, no, and I think part of all this is like we're tuned in on these problems. I'm not just here to point out the problems, but you know, I think that's what we do, that's what we do within our community is really to start. You know, I can't say that I have all the answers right, far from it but I do think we have a pretty intelligent group in our community that when we, when I, when I point out some problems, they seem to jump on it. Right, they seem to jump on it.
Speaker 1:So yeah, yeah, we. We see that all the time, right, whether it's our quarterly meetings or our mastermind groups that meet. Most of them meet twice a month, I guess, virtually, and then once a quarter in person, like on Tuesday, and we see the problem solving, we see the action taken and me to me that's really exciting, right, it's not just kp and I come in here and talking on a podcast or talking on a video. It's not just kp writing articles, but we it's. It's what people in the community are doing, people in our ecosystem are doing with the information and how they're running with it and affecting the built environment. That's why we do what we do all right all right.
Speaker 1:So for all of you out there listening, and what is this podcast? Kp you? You mentioned to me that there's some ranking or rating of this podcast number one podcast in aec.
Speaker 2:Prove me wrong there you go.
Speaker 1:So for all of you out there that are listening and or watching uh, thank you for uh, for elevating us to that point again, if you'd like to comment or ask a question, go over to youtube. It's easy to do that there you can. Wherever it is that you're consuming this, obviously, you can consume it as a podcast, you can. You get a version of this in a YouTube short and a YouTube long and a sub stack article every week. So there are lots of places. I do a wrap up of all that content every week over in Catalyst on Fridays, so you can go there if you need a guide to help you find everything. But we appreciate you being here. We appreciate you listening and watching.
Speaker 1:This is KP Impact. It is where the biggest ideas in AEC and AI and innovation. They all collide right here. In this podcast. It's powered by KP ReadyCo. We break down the trends, the technologies, the discussions and the strategies that are shaping the places where you work, where you play, where you sleep, where you worship, all the things that you do, the built environment and beyond. So thank you for listening. Thank you for watching Kip, thanks for coming and spending a good amount of time with me to unpack this today, appreciate it and it's been a good episode. So thanks everybody. We'll see you again next week. Thanks, kip.