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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
This Industry Worships Timesheets...
This episode of KP Unpacked pulls no punches. KP and Jeff dive into why real innovation in AEC doesn’t come from AI, tech stacks, or strategy decks, it comes from frustration. From timesheet tyranny to capital allocation myths, this is a wake-up call for founders, executives, and anyone stuck in the loop of “this is how we’ve always done it.”
They unpack why most firms are afraid to change their business model, how brand is often confused with logos and websites, and why go-to-market matters more than invention. Plus, KP shares what really happened in the latest Catalyst AMA and what inspired the launch of the Vibe-a-Thon — a no-code innovation sprint built for operators, not just engineers.
🔗 Resources & Mentions:
- KP’s Post that inspired the episode: “Creating an intangible enterprise is not easy, but well-documented…”
- 📘 Creating an Intangible Enterprise by KP Reddy
- Catalyst Community — apply to join: https://kpreddy.co
- Vibe-a-Thon at the Innovation Center (July 28) — no code needed, real AEC problems, $5K prize
- Hot Topic Live — every Thursday inside Catalyst
- 🎧 Build Your Brand podcast (by Jeff)
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. My name is Jeff Eccles. I'm the executive director of Catalyst here at KP Ready Co. And this is my opportunity to ask KP Ready, our founder and CEO hey, what were you thinking when you posted that on LinkedIn recently? I am joined as usual by KP Ready. Hi, kp hey.
Speaker 2:Jeff, how's it going?
Speaker 1:It's going well. We've got another interesting topic the idea of innovation, of course, is it's just part of our every minute of every day and in launching Catalyst over the past month or so, there's been a lot of conversation about, or framing maybe about, innovation, whether that means technology or business model innovation and the whole spectrum thereof, and of course, all these things are tied together and I think you know the last episode that we recorded on brackish waters is an interesting melding of those topics. Um, in a pretty obvious way. For those who haven't listened to that episode yet, you should, but, um, I think you know, jeff, also like we did our uh weekly AMA within Catalyst yesterday yes, we did.
Speaker 2:I think that was lively.
Speaker 1:It was, it was great, it was lively.
Speaker 2:But I think, like you know, necessity is the mother of invention right. Frustration might be the mother of innovation, but it felt like you know the crew that was asking me all the questions. They weren't soft questions.
Speaker 1:Right right.
Speaker 2:They were a little bit like hey, this is really screwed up, what do you think? And it was a lot more, I mean, I don't know. I felt like maybe I was channeling my aggressive energy with the group. And then they were reflecting that. But, it seemed like people were kind of pissed off, which I kind of love. When you're pissed off, whenever you're pissed off, it's like your authentic self. And I just felt like through that AMA, people were, just, like you know, down with Autodesk kind of stuff.
Speaker 1:Our sponsor this week is Autodesk.
Speaker 2:Within the first three minutes, it just felt like there was a lot of that, a lot of that which. I love.
Speaker 1:Yeah, well, I mean, that's part of what's necessary on some level right for innovation. I was having a conversation with somebody a while back and I go to a lot of yoga classes. A while back and, um, I go to a lot of yoga classes and many of the yoga instructors will talk about leaning into or embracing the discomfort or something like that, because that's where growth comes from. Right, like there's no. Well, there is a way to grow sitting on the couch, eating doritos and and watching, um, you know, watching something on Netflix, but that's probably girth rather than growth. But you have to be able to lean into the frustrations, et cetera that you're talking about, into that discomfort, in order to innovate.
Speaker 1:Yeah Right, and it was a couple of episodes ago. You opened it up. I didn't know you were going to do this, but you opened up our conversation two, three episodes, something like that and you asked me I think that's the way you did it you asked me what's my least favorite term or something? And it's that, to me, my least favorite term or something, and it's that, to me, my least favorite term. As you know, as you well know, that's why you did that is because this is the way we've always done it. I believe that's the most dangerous term in our lexicon today and unfortunately that is a predominant point of view in the AEC industry and it's not going to lead to any innovation. So I thought it was. It was a great group of participants yesterday and are asking me anything on Catalyst Great questions. We didn't even get to all of them, which is also a fantastic sign Sorry, we didn't get to your question and also fantastic We've got so much participation, so many people interested, that we run out of time.
Speaker 1:We shut it off right at an hour.
Speaker 2:So good thing. Do you think it's a fair assumption that everyone in that group that, if they were gonna walk out of their office, leave their structural engineering firm, their architecture firm, their construction company? Let's say they inherited a couple bucks right, Some seed capital. Do you think any one of them would walk out and start a business similar to the job that they're in? In other words, am I going to leave my architecture firm and start another architecture firm?
Speaker 1:And if they did?
Speaker 2:would it look a lot like what they left.
Speaker 1:So you're talking about people that are in Catalyst? No, I don't think they would. But that's been the history of AEC, right? I work at a firm and, for whatever reason I decide I need a change. I get frustrated with my project manager or the hours, or there's been a change, you know, in my family dynamic or whatever. There's lots and lots of reasons, but the history of AEC is full of examples of people leaving where they are, the firm where they are, to go out and do it on their own and many times saying I can do this better, I can make more money, whatever. But what they do is recreate what they already know, and so it just perpetuates. I don't think the members of the Catalyst community. I don't think so.
Speaker 2:Members of the catalyst community?
Speaker 1:No, I don't think so.
Speaker 2:Because I know a couple of them. I'm actually helping them. They're building a side hustle, they're trying to build a business with the intention of leaving their day job and I think what's interesting is it's still in their industry, still leveraging their expertise, their subject matter expertise, still leveraging their network. But because they're starting with a blank sheet of paper, they're just taking it totally different and I'll take some credit in, like you know. Actually remember someone asked this Inspiration. Yeah, they said hey, kp. How do we think differently?
Speaker 1:Yeah, that was.
Speaker 2:Remember it was like a great question, I said I think it was nick's question yeah, and I said, look, the way you start thinking differently is you go back to first principles. You go back to first principles of why and how and what, like those are all the first principle thinking right which is, which is so incredibly ironic.
Speaker 1:This is the way we've always done. It has very often forgotten about first principles, right yeah?
Speaker 2:Right, the client's buying a building. They're not buying your drawing Like just the basics of get back to first. And I think it seems like so, like weird right To say how do you think differently? And then I say say like go back to first principles people like how's that different? I'm like because we veer off of first principles through time, through environments. You know, I think someone was telling me the other day how we lost so much talent during the great recession it's so many people left the industry.
Speaker 2:You know, not everything is like self self-inflicted sometimes a lot of it is self-inflicted. But, um, the firm from 50 years ago that maybe had like a first 10 principal approach of here's how we're going to do things, here's what the market wants and needs, quickly goes through some journey of things and they're so far away from first principles. Yeah, um, that I think it was funny. I think people were taking a background, like how do I think differently? I'm like get back to the beginning, you know, start at the beginning.
Speaker 1:I don't think that was the answer they were looking for right, but but I think that is the answer yeah, well, I mean that one of the things that conjures up in my mind is the popularity of Simon Sinek. So, Simon Sinek, many people have heard of. Start With why. Most people have watched his TED Talk but not actually read the book. You should read the book. And then his next book was the Infinite Game, which I think is really actually more important than start with why. But both of those are first principle books. Start with why certainly is right. That's absolutely first principles. And the infinite game is really don't forget why you play the game right. Of course, he's the master of storytelling, of the corporate disasters, Kodak and others, but it's not lost in me that, while we spend all of our time talking about AI, machine learning, emerging technology, disruption which we prefer to talk about now rather than innovation, disruption of business models, et cetera, and you've got this guy over here, Simon Sinek.
Speaker 2:That's going okay, do you actually know?
Speaker 1:why, you do what you do, which is just as important a conversation as grok for. Yeah, what are you going to do with grok for, and why?
Speaker 2:Mm-hmm. No and I think look, I think that's you know. Back to the first principles. Did you know I'm an engineer? My client wants me to design a bridge.
Speaker 1:Okay.
Speaker 2:Right, Great. It needs to be economical, fit within the budget, meet the safety requirements. I'm going to go start a company that design bridges. When did timesheets come into this conversation?
Speaker 1:Well.
Speaker 2:Like you know what I mean. Like that's like what the work is. Right. The work ahead of us is that. And how do I think about optimizing for materials or whatnot? Right, but remember that class in architecture school you had about timesheets.
Speaker 1:Yeah Well, the architecture student's handbook of professional practice they're in there.
Speaker 2:Timesheets are in there.
Speaker 1:Probably.
Speaker 2:Oh my.
Speaker 1:God, I actually haven't. Timesheets are in there Probably.
Speaker 2:Oh my God, I actually haven't read the book, and you just teach it, I just teach it. I tell students here's, here's the here's the text.
Speaker 1:I wouldn't buy it.
Speaker 2:Yeah. That'll that'll get me hired. It's in this running the practice, chapter four. Oh, I was saying keep track of time. Yeah, because customers buy time sheets, they don't buy bridges. Well, it.
Speaker 1:Well, that's, that's interesting, right? They it is. It is driven so here. So again, I okay, I'm the, I'm the anti-commoditization guy. It's driven by customers that want to know how you spent your time. But then that goes back to the agreement. That was completely commoditizing agreement. You sold it based on time, right? So it becomes this vicious circle of timesheets when none of it is actually speaking to any value proposition, right.
Speaker 2:Yeah, the number one email that goes out within firms is be sure to get your timesheets in timesheet deadline. Expense deadline timesheet deadline.
Speaker 1:There's more conversation and it's also the number one point of dispute, right Because?
Speaker 2:the client's like this has no alignment to what I'm buying.
Speaker 1:Yeah, Like I don't care about your time. You just charged me for 5,000 hours. How in the world did you burn 5,000 hours? Will our timesheets show?
Speaker 2:You know what the worst part is. I don't even think our industry cheats that much on timesheets, unlike lawyers. I think lawyers cheat a lot on timesheets.
Speaker 2:This episode, brought to you by Dewey, cheatham and Howell, but I think, you know, I think the point is like really digging into first principles, yeah Right, it's just so like that's the beginning of all of this and I think if we continue to iterate off of what we know, I think we'll iterate, it'll all just be incremental. You have no choice, right? You just got to blow this shit up. You got to blow it up and start from the beginning, right?
Speaker 2:And I think that is like near impossible to do in an existing firm right? That's why they say things like you know. They say things like change management. You know what change management is. Change management is a people problem. If you have to spend so much time and energy around change management, you have the wrong people. The good news is, when you start from scratch, there is no change management. So I think what's interesting is that I think we're entering a zone now where there's capital, there's ideas, there's capital that's interested in ideas, and I think generally the industry is equally as fed up as the customers they serve, unless you're really excited about filling out your timesheet. But I just don't think you know how to get out of it. You just don't know how to get out of it, right.
Speaker 1:Yeah.
Speaker 2:Running a 500-person firm. How do you wake up tomorrow and say I'm going to do something different.
Speaker 1:Yeah, that's very difficult, and I was actually having this conversation earlier today with a firm leader. Starting from scratch is often the answer. Right, we, we have those conversations with clients and things, um, advisory clients and those pop up in our mastermind groups and, um, it also reminds me, um, there's a book called where do, where do good ideas come from, steven Johnson, I think, and he talks a lot about near adjacencies and basically, hey, you know, we're trying to figure something out, somebody else is doing it over here. It jumps across the near adjacency and blows this thing up, right Creates. And when he talks about that, he says, you know, often we see innovation, you know, we see the ipod or whatever is.
Speaker 1:Is is like this big, you know, groundbreaking change. And it's not, it's an incremental change that leapt over from something else, that just blew it up when it came over, and all of a sudden it looks like this big, this big change, and and so I I think that that tracks with that really well, it's often, you know, like this conversation I was having earlier. Yeah, you're you, you're probably going to have to spin out something new.
Speaker 2:Yeah, and I think to your point right, like if you take, you know if we're drawing out a little triangle, and you said success, innovation and adoption right, like what's the interesting math formula right, what's? What's the correlation? Right because I would say success and adoption doesn't necessarily mean innovation. No, and success and adoption doesn't necessarily mean innovation. No, and success and innovation doesn't necessarily mean adoption, definitely not Right, and I think we see plenty of examples of that right.
Speaker 2:So I think that's where I think a lot of people, you know. Would Steve Jobs be a genius if nobody bought the iPod? Right? Yeah no, it wouldn't have made it less. We could all be walking around with Zunes and Microsoft phones right now. We could still be walking around with Blackberries, right, and be like oh that guy, Steve Jobs, what a nut. Which also starts to lead into innovation and go-to-market Right definitely nut right, which also starts to lead into innovation and go-to-market right, right, definitely it was brilliant.
Speaker 2:The go-to-market for the iPhone was brilliant. For those of you that don't remember, you could only get the iPhone one. You could only get it at AT&T mm-hmm. And at&t was a big backer financially to go to market because they had that exclusivity yeah it was a differentiator to get people. People would switch off around. I mean, I think the most number of switching to at&t happened with the iphone one, because that was the only way it had to have.
Speaker 1:It had to have yeah at&t.
Speaker 2:I mean that was their entire kind of business model, right yeah, definitely it's.
Speaker 1:It's funny because you bring that up and in my commodity, as this commodity does talk, I've got a whole section on the ipod, right, and it it was not the first mp3 player right, and you know there's, there's the go-to-market. You know, it's exactly what you're just saying. The go-to-market for the ipod was brilliant, the go-to-market for the others not. Was the ipod an innovation? No, I don't think so. Yeah, so what? Let's see. Now we have to make an announcement, this episode brought to you by AT&T and Apple. We've already offended four sponsors, three real and one fake, and we haven't even read the post that we're unpacking today. It's all product placement, folks, it's all product placement folks.
Speaker 2:So, by the way, I was talking to a podcaster friend of mine. Owen Drury does Bricks and Bites. Bites and Bricks. We check in. He's based in the UK and we check in every once in a while and I always give him a hard time about my stats are better than his stats, that kind of stuff. We just kind of give each other a hard time about. My stats are better than his stats and you know that kind of stuff. We just kind of give each other a hard time. And I was telling him about like hey, we're, we're good, we're crossing sponsors off the list every time we record. And he was like yeah, you know, like I don't.
Speaker 2:I think even if you want to stay true to your content, right, and just be above it all, above the fray, he's like you just can't help it. He's like you know, the minute you get because they don't do sponsorship either and we're just talking about that Like, is it even worth it? The minute you get a sponsor, is there a really good chance? The content gets worse because you can't say the things now clearly if it's product you believe in, um, you know, if it's element or ag1 and stuff like that. Yeah, maybe that's different. Right, maybe that's different, but in our world of technology talk, you know, can you beat up xyz company?
Speaker 2:they're the only ones that have budget, by the way, to sponsor anything we would want to do they still won't, yeah, and then right, and then we'd have to, you know, have real conversations about them, and then you know they're not gonna be happy about that so it's um you know, his point was like I think I don't think you have a choice but end end up being like a shell for the advertiser in our industry.
Speaker 1:I don't know about that. I mean, it's what Built World says Strike up another one Struck that one off a long time ago.
Speaker 1:Yeah they're not going to sponsor anything. But you know, I've got the pro practice manual here Again for those of you that are listening. I pulled it out as we were talking about timesheets, but it all comes down to the agreement, right? It was the last episode, or two episodes ago I mentioned the YouTube video I was watching and the host said here's why XYZ sucks. I was like what? And then I I realized that that was their hook right to to talk about the sponsor.
Speaker 1:So it's you know, anything can be agreed upon, I suppose. Yeah, potentially. Um, if you knew around here and you've been listening now for 20 minutes 20 minutes of KP and Jeff offending sponsors, rambling on and on about timesheets and business models they're actually related. So what we typically do in these episodes is I read one of KP's posts from LinkedIn. If you're not following him on LinkedIn, you should go over there and follow him. Don't try to connect with him. What happens when somebody, when someone goes to your profile and they try to connect to you and you have your full, like a self-destruct button, or what happens?
Speaker 2:I leave one slot open, because that's what will happen. It'll be like a person has too many followers or whatever, right? So what happens is when they try to connect, um, someone typically responds back to them Like I'll have. I mean, I wake up every morning. There's like 50 people trying to connect, right. And then they reply to them with in mail. Sometimes it's in mail, sometimes it's not, but they basically just send them a note saying hey, I'm at my limit. Here's my email address that you can reach out to me, or you can come over to catalyst or whatnot. You know what's really interesting about that is um, I think a lot of people passively just try to connect to you. I would say probably one in 20 people. I literally give them my email address.
Speaker 2:Now it comes to me, it comes to me, but it's monitored, right, because I can't get you know, I can't some email. I have multiple email addresses for different things, right, but I do look at it right, um, because there's a lot of scammers out there, and sometimes Angela, my assistant, just you know she takes everybody at face value.
Speaker 1:It's hard to tell.
Speaker 2:Right, it's hard. This person needs help. I'm like, oh, they're trying to sell me some stable coin. No, like you know, delete. So I do look at it from a high level perspective. But generally speaking, they get an email back saying here's my email address, here's our website, if you want to blah, blah, blah or here's different ways. It's probably one out of 25, maybe higher, that actually email me.
Speaker 1:And so it's.
Speaker 2:it's interesting that people just kind of click on stuff that they're not intentional. I mean, my view is, if you're connecting to me, you're generally a startup that wants money Like if I don't really know you right, If I don't know you and you're a startup and you're connecting to me.
Speaker 2:You're either a vendor, because I need more B2B marketing leads there's that right or you're a go-to-market chief or whatever, which. The first thing I do is look at how many linkedin followers you have and I'm generally unimpressed, right, um, but generally I would accept, I would expect that, um, the people reaching out are trying to pitch me. Right, they have a reason. Right, they're transactional, but it's maybe one in 25 that actually emails and says hey, I want to see if I can get some time on your calendar to pitch my startup or whatever, which is interesting. I mean maybe not surprising, but interesting.
Speaker 1:Yeah, yeah Well, so it's good to know nobody self-destructs, um, that you should be following KP. You could give it a shot. You can see if you can compete for the one spot. Um, but at the very least, follow KP, because he's posting two or three times a day, um, great insights, um, some absolutely meant to stir the pot, some reflections from his travels and work with clients, et cetera.
Speaker 1:But what we do is once a week, we unpack one of those posts here on KP Unpacked, that's the name. Last week we actually did one of your sunday scaries. So every sunday it's a different sort of post. It's called a newsletter on linkedin, right, um, it's your newsletter. It's also available on our sub stack. It's available on on, uh, in catalyst, uh, some other places. But we unpacked last week, we unpacked your, uh, your sunday scaries this week. It's a post and so I'll read it and then we'll continue. We've already sort of been unpacking this, but I'll read it and then we'll continue to unpack this idea. It says creating an intangible enterprise is not easy, but well-documented. To the core, it's the business model that drives everything. While AI is a powerful tool, ai isn't the business model. How often do you think about changing your business model. So we've kicked around the business model idea related it to a lot of things already, but what was the let's start with? What was the inspiration for this post?
Speaker 2:I think honestly, like a lot of it was kind of the fiery AMA yesterday and just general conversations I'm having with people that were in our advisory business. You know, one thing people don't realize is our advisory business. It's very boutique. You know it's very boutique, but we've had and I'm not going to name names because that would be a breach of confidentiality I would say about 20%. We come into these workshops, we do evaluations, we help them understand where the opportunities are right and how to move the ball forward. So maybe 20% actually move forward, either with us or on their own. Right, you can do it either way, right, we'll tell you like here's the kind of people you need to hire if you want to do it yourself. If not, you know we're happy to help. Right, we have teams that can get hands-on, write code, build things, whatever it is you need done. We got that too right.
Speaker 2:So we kind of do an assessment. We say here's the two paths and it's kind of a corporate, it's a strategy decision right, work with us or do it on your own. It's only like 20% to move the ball forward. They all get stuck. We give them a plan, we give them a roadmap and then we check in like every 30 days, right, it's kind of like if you had a, a cardiac issue and I'm your doctor and it's like, hey, you know, you need to go walk for five miles and you need to eat this, you need to eat that. And we check in to say, hey, how's it going? And then 80% of the time it's not.
Speaker 1:It's not really like Doritos on my couch watching Netflix, it's not really like Doritos.
Speaker 2:on my couch watching Netflix, everybody out there eating cheesecake, cheesecakes Great, I was going to say I don't like Doritos but I do like cheesecake. But I think that's and I look at it our advisory business. That's a signal. Everything to me is a signal, right, you know how I operate. Everything's a signal and a pattern, and my job is to make the pattern into money, right? And so I look at that pattern.
Speaker 2:I'm like, why aren't people moving forward? I'm like, did we give them the which is? You know, it's not me, it's the team. I have to go back and get personally involved. Well, we didn't have time, we didn't have the people. And if someone gives you, if you spend money, we're not cheap, we're very expensive. Consulting, you know, it's very specialized thing. We're saying it's very specialized. Yeah, um, and if you spend all this time and all this money with us and you sit on an innovation strategy for six months, it's a do-over, it's it's it's already through its shelf life. It's probably irrelevant, right, you know. And so it's fascinating. And I think the problem is is people don't know how to think about this stuff, right, they don't know how to think about. They keep applying it to their current business model and when we start challenging them around? No, no, no. Let's look at your current business model, and that's fine, right, but you said you want to do something big and different.
Speaker 1:You know.
Speaker 2:Here's what we think the new business model might look like, and they just get stuck.
Speaker 1:That seems to jive with human nature. However, right, what we typically call human nature is sort of the medium, what the the medium median, um. So again, talking about innovation or disruption, it can't, it can't be that way. You know, it's our mastermind groups. Yeah, we'll, we'll talk about something. Yeah, I'm always sort of entertained at the conversations that, um, that we hear in different places and go, yeah, we were. You know, some of our mastermind members were talking about that six months ago, nine months ago, and you know, at the same time, some of them haven't caught on yet, haven't done the work yet, haven't done the thing yet. But it that does seem to me. Well, it falls. It falls back to. This is the way we've always done it. To me, well, it falls back to. This is the way we've always done it, yeah.
Speaker 2:No, but I think what's interesting is right. I think companies, specifically companies and we can talk about other stuff right? I think you have to decide, and I think this is where there's a lot of internal conflict, right? So let's say you're a company doing a hundred million a year, right? A hundred million a year in revenue. You maybe have 20 million bucks in your balance sheet, right? You've got cash sitting there and you're sitting there as an executive team saying, okay, we have 20 million bucks, we're going to keep a little bit. We have lines of credit and all to deal with cashflow issues, but what do we want to do with this money?
Speaker 2:So then you're dealing with the capital allocation conversation. Do we want to put it into a money market? Do we want to put it in the stock market? Do we want to put it into Bitcoin? Where do we want to allocate this capital? To? Where there's great opportunity? Right? Maximize returns, maybe not minimize risk, right, but understand the level of risk, whatever that risk quotient is. And then we allocate the capital. What most of these firms do is they put it back into their own business. So let's say you're a structural engineering firm right, making it up, right? Do you really believe your return on capital, your internal rate of return by deploying that money into your own business, is better than these other asset classes Because, I would argue, the S&P has been outperforming you.
Speaker 1:Yeah, I imagine.
Speaker 2:On a cash and a risk adjusted basis, s&p is probably outperforming your engineering firm. Sorry to tell you that. Right, yeah, but so then you have to admit that the company I work for, that the money it makes, is actually not the best use of my capital. How do you have that conversation internally? How do you have that conversation internally that the use of our internal capital is best suited to be invested outside of our capital, outside of our company? Maybe it's best to like set up a separate innovation company that's going to create a new business model and maybe that's where you flow the capital.
Speaker 2:Maybe like the risk return there, because what I would say is, like in traditional professional services, the risk is lowish, it's not zero, but the upside's not that great either. So if you want to say like, hey, let's take some risks and hopefully get a massive return, you might spin out a different company. Which is one of the things that we do with companies and on the advisory side is we spin out their technology. We help them build a real technology company, totally different business model, and then they fund that and sometimes I'll, I'll co-invest with them and help them. Yeah, I'll be a partner in it or whatever. But I think how does your executive team decide that the capital you have is not best allocated into your current business model? That's a tough thing to reconcile.
Speaker 1:Yeah I mean from an ego point of view, of nothing else.
Speaker 2:Right, right, it's, it's like the equivalent right, like if you have a kid and you're kidding, we're talking about baseball. We'll talk about your kids really good at baseball and you're going to spend time with them to develop the skills. But you look across the street and your neighbor's kid's actually even better. Right, are you gonna spend time with your neighbor's kid helping them hone their baseball skills?
Speaker 1:no, you're gonna send your kid over to your neighbor's kid.
Speaker 2:Yeah it's like you pay the dad next door like hey, get my kid up toit.
Speaker 1:Yeah.
Speaker 2:But I think that's one of those things, but part of it is, I think, a lot of the corporates right Back to the how do you get back? How do you create an innovative business model? How do you change a business model? You have to go back to first principles, right, and it's interesting. I've had this fascinating conversation. I started my career as a geotechnical engineer. I just found out like two months ago I was speaking at the Geo Professionals Association in Savannah and I just found out my total my entire life bubble was burst. Did you know that people don't read geotechnical reports?
Speaker 1:Oh, you're kidding me.
Speaker 2:They get them and they put them in a, and it's like the customers call and say, hey, we hit rock. It's like, yeah, if you would have read the report you would know that you were going to hit rock. It's in the report, right, but apparently like nobody. And I'm talking to these geotechnical firms, like you know, that's the biggest issue. We generate all this content, all this data. We write a report. Somebody the architect puts it in a file. The contractor doesn't look at it when they're bidding on the job, everybody acts like this data doesn't exist it's only there because the lender required it right until they hit rock and they need a change order to blast rock right.
Speaker 2:Yeah, now what just happened? Oh, we didn't know that. It's like actually you did that a year ago when we drilled, right like nothing has changed. Conditions of geology have not changed.
Speaker 1:By the way, you shouldn't have closed on this site.
Speaker 2:Right, I was just blown away. Like what do you mean? Like the CEO said, like no, nobody reads our stuff.
Speaker 1:Yeah.
Speaker 2:Like that's just, that's nonsense. That can't be true no-transcript.
Speaker 1:The geotechnical reports is just the first one.
Speaker 2:Specifications, the wall sections. Should I do geotechnical reports and like watercolor and then maybe put it on a print it out on a big board and do watercolor and maybe people like look at it like I don't know?
Speaker 2:maybe the reason I bring it up is I was talking to a firm there at this geo professional thing and I was like then, if you've been in the geotechnical business let's say you're a local shop you've been in Atlanta from there's a lot of these small shops, right, you've been in Atlanta for 20 years, you've probably drilled most of Atlanta, you've drilled all the sites. So what if you take all that boring data, we drop it into AI and we build it, we put it, build a data lake around it. Then we take all your environmental data that you've captured, you throw it in there. You anonymize it, right? So now we've, like, mapped out the entire subsurface of the area. We have environmental data. Then just sell it as a service a hundred bucks a month. You can have access to it before you do do it, before you go buy the property a hundred bucks a month, download the report for your property and if we have data in the area, it'll show up. If we don't, then don't buy the report, right.
Speaker 2:But you know, and this firm was like, hey, that's a really good idea, but that'll cannibalize our core business. I'm like that's absolutely not true. In fact it's actually lead generation for your core business.
Speaker 2:So people are going to look at sites on your property and when they buy it they're going to pay money to do that, to have access to your data. But eventually they have to go like you still have to roll out a drill rig and drill right, Like that's for a PE to stamp the report and all that. They have to go drill. That's just how it is right. It's just like you go to a doctor and ask for a second opinion. They ignore the x-ray the other doctor did. They're going to take another x-ray. Yeah, yeah, um, but it's interesting. Like they they couldn't get there, right, it's like but but no, that'll like, they just got stuck on. It's going to cannibalize our core business and I'm like why are you worried about that? Does your core business make 70 percent gross margin? So they're like absolutely not. I'm like this data business could be a 90% gross margin business, but they just couldn't. But it's because it's back to first principles. What does the client want? Apparently, the client doesn't want a report. The client doesn't want a report.
Speaker 1:No.
Speaker 2:They want red, yellow, green. That's all they want. There you go. If it's green, they'll just keep moving. If it's yellow, they'll probably ignore that. If it's red, like oh, I better read this, that's all they want.
Speaker 1:They want it mapped out, yeah.
Speaker 2:It's weird Cause I never got. I never got a call back from me. My client's like man, that was a great geotechnical report.
Speaker 1:I really enjoyed reading it. You have held on to that for so long and then someone finally put you at ease in the last couple of months.
Speaker 2:Your background paragraph. Man, it was just the best ever.
Speaker 1:You're the best Cherry.
Speaker 2:You know we're doing this Innovator Award with Swag, swag, which has been a lot of fun. It's been just a ton of fun. I think we do too many fun things that we haven't figured out how to make money yet. We just do them. I don't know why, we just do it because it's fun.
Speaker 1:But um, the whole process of like all these submittals coming in and thinking about, like maybe we should do an award for the best geotechnical, best geotechnical report of the year most innovative geotechnical most innovative phase one report, phase one assessment of the year that you're gonna need a good mc for that, because that's gonna be one riveting program well, you make everything sound exciting, so well, I try. I've been around aec for more than 30 years. You have to.
Speaker 2:You have to do the work but you know, getting back to, like, you know, new business models, right, I think it. And you get back to first principles. Then I think you think, and then we talked about, like, the innovation of go-to-market right, if Steve Jobs had screwed up go-to-market on the iPhone, we wouldn't be. He would not be a genius, right, because we would have never known. And so you think about that and you think about some of the blocking and tackling of business that our industry just does not, just ignores, kind of ignores, right, brand, right, like, like you know, I talked to CEOs about brand and like, oh yeah, we have a new website. I'm like, oh, my god, please do not. We have our social media account. I think I posted, like last year people still remember it about like nobody on LinkedIn cares about your latest project, nor your latest hire. Nobody cares, like nobody. Why do you think that people on LinkedIn care about that?
Speaker 1:You know, years ago I recorded a season of the build your brand podcast and it was. It was targeted at small firm architects, but, of course, applicable to others, and the biggest question was why does brand matter? Of course, applicable to others, and the biggest question was why does brand matter? Like you said, our website, our social media, nope, brand artifacts, not brand, but it's and I think that's super interesting too in a context where and you mentioned this, so a couple of weeks ago, we talked about vibe coding.
Speaker 1:We've got an announcement about vibe coding, but you mentioned vibe coding and the ability to basically clone something Procore, I think was the example that you used, strike them off the list, and so at some point, does brand become even more important because you knock this thing off through you use vibe coding to knock this thing off. Now how do you take it to market? Or do you take it to market? I don't, I don't even know, but does this brand arguably become more important the easier it is to clone things?
Speaker 2:the easier it is to clone things. Yeah, yeah, a hundred percent. I mean, if you think about it. Um, do you ever listen to the acquired podcast?
Speaker 1:I have. I don't on a regular basis.
Speaker 2:It's like three hours right, so it's a heavy commitment.
Speaker 1:It takes me three months to get through a three hour podcast.
Speaker 2:But they're fantastic, right. And so there's an episode about LVMH, right, and so you think about that. I mean, when you think about luxury brands and they made something pretty interesting they're like you have brands, you have premium brands, and the difference between just a regular brand and a premium brand is actually like feature benefit. Right, there is some feature benefit, sure, from a premium to a luxury brand. There is no feature benefit, it's just brand, right, right. So if you take, you know you, you you take an Audi, what is it? The RS six or whatever?
Speaker 2:No no, no, no. The Q six or the Q eight or whatever their SUV that that costs x. You take it, you throw a lamborghini logo on it, you come up with some brighter colors, you do a few cosmetic things. It's now called the lamborghini urus and now it's a half a million dollars there's no difference in those cars.
Speaker 2:It's like the best example of you know what? What's the difference between a Honda and an Acura? Badge, badge, right, and so you know. So I think you know if you ever listen to that podcast. It's really interesting about how brand is just all about feeling experience and you know some level of scarcity, but really it's the experience, right?
Speaker 1:Yeah.
Speaker 2:I've never bought a Louis Vuitton anything, but I'm sure if you do the bag it comes in the box, it comes in probably not a lot of plastic, shrink-wrapped things, Right right.
Speaker 2:You know, what I mean. So it's a whole thing for people that can afford that and appreciate that right. So I think in our industry, when you talk about these new business models and et cetera, I think you have to start building your skills around brand. I mean, this is the stuff we do in our advisory, around assessment stuff. But to my post right, how do you know, in my book I talk about the intangible or the intangible enterprise, right? How do you become the intangible enterprise? Very little of it has to do with the bits and bytes of it. So am I going to shift from salesforce just making it up to clone of salesforce?
Speaker 2:some star wars thing yeah, some people might oh, you remember, like the kids can google this. Remember there was like this whole cologne line. It was like smells like aramis oh yeah smells like dracar, nor people are like what the hell is all this stuff? Yeah, right, but there was a whole thing and if you went to like kmart or somewhere, they had this like smells like thing.
Speaker 1:Right, google, google it.
Speaker 2:Google it. It's kind of like that Like if it is the exact thing, right Smells exactly the same. Well, why am I going to? You know? Why would I pay more?
Speaker 1:Yeah.
Speaker 2:Brand.
Speaker 1:Right, exactly, yeah, I think that's a great point. Now, I hinted, not subtly that we have an announcement about about vibe coding. What is that?
Speaker 2:so I really, you know, and I think the world has changed and we, you know, we listen to our catalyst community and like what they're doing and, and you know we we've talked about vibe putting a bit and so actually a lot of people in catalyst have been vibe putting. We're actually going to create a new space where they can post their projects. It's been so much fun, right, so much fun. Um, so we decided for the day before summit we're going to do a vibe at them. So leading up to summit, we'll have, you know, if you're a member of catalyst, you can jump in. We're going to have some people doing training on like replet and cursor lovable, maybe I don't think you really need training for that. So we're going to do some preemptive training for people that are in Catalyst. And then, the day before Summit, we're going to have a vibe-a-thon and basically run an all-day session. We'll do some morning training and then, you know, you're going to be in teams. You can create your own teams. I hope that people show up with team jerseys.
Speaker 2:We're highly encouraging of the CEOs. If you're a CEO and you're running around talking about how innovative your firm is and how innovation and you're out there saying this nonsense. We're going to call you to task. If you're not vibe coding, you're not innovative. And this is a great opportunity for a CEO to come along with their team. Nonsense. We're going to call you to task. If you're not vibe coding, you're not innovative. And this is a great opportunity for a CEO to come along with their team and vibe code right next to their team and be part of something. Build the right culture, because if you're not ready to come, vibe code right next to your people. I don't want to hear you talk about innovation, right, and so I think it'll be fun. I think there's good. There's prize money involved, right, there's prize money involved From our sponsors.
Speaker 2:Yeah, from our sponsors. But I think what's what's super interesting is going to be how people start to realize how empowered they are. And you know, and who knows, like maybe somebody comes up with something super interesting and then we fund it, turn it into a company you never know, you never know right.
Speaker 2:But that's been one of the biggest things. You see a lot of hackathons. The problem with hackathons in our industry there's not enough people around the room. Rob Otani runs a great hackathon in New York. It's once a year. It's the AC hackathon. It's a great program that Rob does. However, it's a pretty short list of people that can show up and write code. It's not as and you know he does it in New York, so it's a little. You know it's got a density of people, but it's tough, right. The great thing about Vibathon is no coding requirement, no coding skills required. Just great ideas, right, just great ideas from people that have lots of experience, because, unfortunately, the person that just graduated out of college that knows how to code might code really well, but they've never experienced anything, right. So I'm really hoping we get some CEOs in the room vibe coding along with their teams great team builder and so yeah. And we've got some sponsors coming on.
Speaker 1:No, it's fine.
Speaker 2:I was just talking to Ty Wynn about it at Hensel Phelps because they're hosting us over at the Hensel Phelps Innovation Center. He's so excited about it he's just like this is such a cool idea. Hopefully it'll be one of many we're going to give the support in our Catalyst community. So definitely join Catalyst. Yeah, we're selling so hard all these products we have that we don't charge anything for.
Speaker 1:Well, I mean, at least we're successful at it.
Speaker 2:Yeah, thanks to our sponsors.
Speaker 1:No, Our product placement for this week. So you'll hear more about this. Certainly, kp will post about it in LinkedIn, but, more importantly, in Catalyst you will be able to find more information about the upcoming Vibathon Summit all of our in-person live events we have been and I think that ties really well to this idea, of course, of changing your business model, which is what we've been unpacking here. Kp posted these few sentences "'Creating an intangible enterprise is not easy, but well-documented. To the core, it's the business model that drives everything. While AI is a powerful tool, ai is not a business model. How often do you think about changing your business model?
Speaker 1:If you want more insights, more questions, more thought-provoking posts like that, follow KP Ready on LinkedIn. You can find his latest book Creating an Intangible Enterprise wherever you buy books Amazon, the airport, wherever it is that you pick up books and you can find more information and connect more easily um with KP. Do things like the. Ask me anything that that um that we hosted yesterday over in catalyst. That's our online community. It is the place for conversations, work, action on innovation for the built environment. Catalyst go to KP kpreadyco. Fill out three fields. You'll end up on the wait list. You will end up talking to me, and then I'm.
Speaker 1:I am the vetting process, uh and then perhaps you'll be able to join Catalyst with many others from the AEC industry and the CRE industry who are focused on innovating business models and innovating technology here for the built environment. As we're recording this, I'm already late. This is how-.
Speaker 2:I was going to say you're wanted on Hot Topic Live.
Speaker 1:I am. Things are blowing up. That's another example of what's going on over in Catalyst. I've got to jump off of this recording so I can go over and host Hot Topic Live. Every Tuesday, we ask you for your hot takes the important topics and then we unpack them on Thursday live over in Catalyst. So we'll be back again next week. Thank you for listening. Thank you for watching, depending on how you're consuming this KP. Thanks for this conversation today Fun as always, and we need to update our list of sponsors that we want to offend before next week. All right, thanks everybody. Bye now.