KP Unpacked

Faster By Design

• KP Reddy

Share episode

Welcome back to KP Unpacked, the #1 podcast in AEC!

In this episode, KP Reddy sat down with Ahmad Omar, founder of Slate, also our Mastermind member, to discuss the new wave of entrepreneurship sweeping through the AEC industry. Ahmad shares his journey of leaving a large firm to start his own, highlighting how today's technology, including AI, has shattered traditional barriers to entry for new companies.

This conversation delves into why the rigid, slow-moving systems of the past are no longer a fit for today's innovators. Ahmad explains how Slate differentiates itself through speed and personal relationships, challenging the conventional wisdom of large firms. They also explore the future of the industry, from the potential for AI to be a "great equalizer" to the end of archaic practices like timesheets and multi-phased project billing.

Follow KPR Co on LinkedIn to stay updated on our latest insights and groundbreaking projects.

Ready to get hands-on with the future of AEC? Join us for our upcoming events!

See you there!

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!

SPEAKER_02:

Hey, I'm here today on KP Unpacked with Ahmed Omar. Hey Ahmed, how's it going?

SPEAKER_00:

Good, good. How are you, KP?

SPEAKER_02:

Awesome. Well, it's funny we were talking before we started. Um, you're part of our mastermind groups, and I think some of the challenges are mastermind groups. You you know, we have people from WSP and Walter P. More, and you're like, I think I'm your smallest firm in your mastermind group.

SPEAKER_00:

Yep.

SPEAKER_02:

So um, so tell me a little bit, um, kind of background, you know, where you've been and what you're doing, and we can start from there.

SPEAKER_00:

Sure. Um, uh, started off my career at a really big firm at Burns McDonnell. Um, uh, did a year there, uh, and then moved into a smaller firm um uh in Mobile, Alabama, and then we opened up an office in Nashville, Tennessee in 2018. So I kind of had a chance to dip my feet into different environments uh in the AEC world. Burns and Mac, obviously a massive company with um their hands in construction, design, all that. Um, and then uh the firm I was with uh before going off on my own was a smaller, around a hundred-man firm. And we went from about 30 to 100 while I was there and uh opened up the Nashville office so I got a chance to see that side of the business and help grow an office. And then uh about two years ago, just decided if I can do this for them, then I can probably do it for myself. And uh kind of most of my frustrations were just getting tired of clunky systems. I was a project manager on my way into ownership, and they told me that uh they told me that maybe in a few years or so I could expect it, but I felt so crunched uh from like having to do design, manage, and um build a team without tools. Uh so that was one of my biggest frustrations. So I decided to do it on my own, give it a shot. Uh, and then luckily, two years in, we've we're doing amazing. Uh, we're growing, we're hiring, uh, we have uh pretty decent sized backlog and we're developing our own tools in-house.

SPEAKER_02:

Yeah. And so your firm's name is Slate, right? So um I think it's interesting, you know, a lot of people we'll jump into a couple little topics, but one of the things when people ask me about like how is AI, how has technology changed our industry? Um, one of the key things I always look at is, you know, entrepreneurship. It's it's pretty amazing. You know, I think about when I was an engineer back in 1994, right? It was to start your own firm, it was go rent office space, hire a receptionist. It was almost like your first hire was a receptionist. Think about that. Um, and then you had to have IT systems, you had to have a local area network, you had to buy CAD machines that were like$3,000 apiece back in 1994 terms. You had to buy all this software, you probably had to hire someone for accounting. So, you know, you had three or four hires in office space before you even hired another engineer.

SPEAKER_00:

Yeah, massive printer, plotter.

SPEAKER_02:

Yeah, I mean, yeah, plotter. I mean, yeah, it was it was this so the the barrier, I would say the barrier to entry was was pretty significant, you know, given that as an engineer you're not making millions of dollars or anything, right?

SPEAKER_01:

Right.

SPEAKER_02:

Uh, and it was pretty significant. And I think that's why you saw also a lot of partnerships, right? It was, you know, Smith, Smith and Smith, you know, it was like three names or four names because they could split the startup costs. So, you know, I've I always loved the fact that people are, you know, I got frustrated with my engineering firm and went off and did my own thing. But um, I'm I'm happy to see more entrepreneurship in our industry. And I think a lot of people, because I'm a tech guy in a VC, they think I only care about tech companies. And it's like, well, no, I just kind of care about entrepreneurship. So, how long, how long ago did you start?

SPEAKER_00:

Two years ago.

SPEAKER_02:

So when you started two years ago, you know you've heard me talk about core values. Did you have like either written down or in your head, like when I go start my firm? There's sometimes there's like this backlash, like, oh, I just left this big firm, I'm gonna be nothing like them. Right. Uh, which is funny because five years later, a lot later, a lot of people look exactly like the firm. You know, uh, so did you have like formal or informal core values when you were like, hey, I'm when I start my firm, here's what I'm gonna do, here's what I'm not gonna do.

SPEAKER_00:

Uh sort of, uh, I would say informally, definitely wanted to rewrite the script on internal operations. Uh, so we wanted to just if there's something that we want to try, we're gonna try it. So that was that was the attitude from the very beginning. Uh I quickly learned that I can't do everything on my own. So uh we started, I started hiring some temporary positions or part-time positions to help support that. To your point about technology, it's gotten a lot easier to find support where you need it. So that was kind of a pleasant surprise. Um, and uh and and then after that kind of morphed into more better core values, more well-defined, where we're focusing on service opportunities. So we do help a lot of local um nonprofit organizations with their projects, pro bono. Um uh we do we do other work here and there. We try to work with our local groups to help with leadership opportunities and things like that. So I would say we're we're pretty involved a lot more than previous leadership that I was involved with. Uh so it was a couple of things here and there, but mostly on the internal side, we were trying to just trying to look for ways to do things better in every in every aspect.

SPEAKER_02:

When you think about um kind of the clients you you work with right now and you think about future clients, um how do you think you're differentiating? You know, they're they could go to a larger firm, they could go to other firms. Like, why do you think your clients, like, how do you think about your market differentiator in terms of what you're doing versus the the next firm over?

SPEAKER_00:

To be honest with you, most of our clients are they I think they mostly appreciate the personal relationship. Um, this business is more of a relationship business of it's kind of a cliche, but I think in for the most part it is true. So people people really like to be in contact with the person making the decisions, and not necessarily you can get that at a bigger firm, but one one of the other advantages that we also offer is basically being a lot faster, to be quite honest, than most other firms. So we've won a lot of work that way. We may not we're we're almost never the lowest fee that they may be able to find locally, but we're almost always the fastest. Um, so that I think is a huge benefit nowadays, kind of underrated, where a lot of people don't really consider that speed could win contracts, whether or not the fee is the lowest fee or not.

SPEAKER_02:

Yeah. No, I think I think that's fair. I mean, I think I think it's great that you actually know. I mean, I asked that question. We didn't prep for this call, like most things I do. We don't do a lot of preparation. Um, it could have been easy for you to say, like, oh, I I'm not sure, right? But it's good that you do know. Um, but as you think about, you know, we we have this thing in VC world we talk about a lot is the solo entrepreneur that builds a billion-dollar company. Yeah. Right? It's this kind of unicorn idea, right? And and a lot of it's driven by, well, we think this one-person company can actually leverage AI tools to go to market, to do their work, to do their accounting, to do all the things. And they in fact could build a billion-dollar, a company worth a billion dollars on their own. How have you thought, like, do you think your mindset has changed? You know, call it the last three years of AI uh visibility. It's been around for a while, but let's just say AI, visibility, and accessibility. Do you think your mindset has shifted at all around, you know, growth of your firm and leveraging more technology than maybe you did three years ago?

SPEAKER_00:

Oh, yeah. I mean, huge, to be honest. I think in the past, for me, it's really been in the past maybe year and a half, where there's been a lot of awareness, mostly on my side, on what's out there and what's coming. I do agree that we would our way of doing business and our way of operating as AUC firms would be fundamentally different in the next three years. I completely agree on that. And that's I think that's largely in part the AI and a lot of kind of movement in the AUC world where like other industries have already kind of adopted a lot of technologies that we're slow to adopt in our industry.

SPEAKER_01:

Yeah.

SPEAKER_00:

So so I see it, I see it coming, and I think it's right around the corner.

SPEAKER_02:

Yeah, and I think I I think that's fair. I if we look at like AI proliferation, obviously um AI's biggest opportunity for proliferation is is professional services, right? And especially professional services industries that have been around for a while. You know, I always I was just at a meeting earlier today with uh a large owner, and I was like, you know, at the end of the day, like everything we do as engineers, there's kind of a reference book, right? We have tables and we had the blue book and we have the green book and we have all these books, and we have standards, and and really all those standards got put into software, right, for us to use. And if you take that and you say, well, take it out of software and put it into AI, now it's more about us being human in the loop and and that the technology will continue to evolve. The the second part of that I think is the ability to go into new markets where maybe it was like, oh, for me to go into this new market, I need to hire 10 people to go do that versus I could just, you know, I can go do it because I have an AI tool to give me some horsepower. Right. How do you like? Do you think that, you know, obviously I come from startup world. Do you think there's a market like if I wanted to say, hey, I'm gonna go seed, fund an architecture firm and a structural engineering firm, as long as they want to be AI driven to like start funding companies like that, people that want to go start their own firms?

SPEAKER_00:

I think so. Yeah, as long as I think if they're already in the industry um and they have an entrepreneurial mindset, 100%. I think you had said this before in one of our meetups, is there's there's a lot of movement in the industry where a lot of big companies are opening up architecture engineering firms um that are kind of flying under the radar right now and they're growing and they're gobbling up smaller firms. I think that's I think that's definitely bound to happen because of the opportunity in the industry. But I think to your point, someone funding um smaller entrepreneurs that are willing to take that funding and start developing a lot more AI tools and kind of becoming an AI first company is is definitely possible. And I think a lot of people would be open to it, especially if they're already in the industry.

SPEAKER_02:

Yeah. Cause you know, one thing we talk about is that um AI could in fact be the great equalizer, right? In other words, you can now start competing for projects that are above your kind of weight class, right? That maybe you start competing with a firm that has 250 engineers and you can compete with them. And and the reality might be that firms like yours actually demonstrate tremendous growth because the big guys can't move quickly. You know, you know, they're like, oh, well, we need to have an AI policy, and then we need to have an AI committee, and then we have to have an innovation team, and then we have to create a job number in our accounting system for innovation team so that everyone can try, you know. So by the time they do all these things, it's like you know, three years has gone by and nothing has happened. And uh, you were talking about we're talking about some of my posts, and um, you know, one of the ones I posted recently was about how timesheets might be you know the biggest problem we're faced. You know, I always say, like, I didn't go to, you know, I don't remember taking a class in engineering school around filling out timesheets, and uh, I don't want to fill them out, nobody wants to fill them out. And by the way, nobody wants to review them either, including your client. Including your client doesn't want to review them. And you had mentioned on LinkedIn that hey, we don't do time sheets. So was that was that just frustration from previous companies, or do you just think there's no place for it?

SPEAKER_00:

I mean, I I worked at a large multinational firm and we filled out timesheets there, and it was basically rigged. I mean, everyone knew what you were supposed to bill to. Um, and you would you would bill your whole day if you're working on one project or just spread it out between a couple of projects, it didn't necessarily reflect the exact time that you were working on that project. So the whole tracking benefit, the whole the benefit to it, the argument where you know it's for tracking time on certain projects, I think that's sort of an a non-issue because it typically isn't very accurate representation of the amount of time you spent on the project, especially if the time that's being billed to the project is being used as a metric in meetings to decide whether projects are good projects or projects that actually, you know, are profitable or not. That's been my experience in large firms and small firms. Uh, pretty much across the board, we would build time to projects that had budget, you know, if because you don't want to get reprimanded for going over budget, you know. So it was, it was, it wasn't really as effective as it seemed to be or as the original intention of it was. So, in my experience, when starting slate, we decided we're just not gonna do them. I don't see a point in doing them. Well, I'm salaried and all of our employees are salaried, and we track projects with our project management software to see timeline-wise, billing schedule, whether they're ideal for us or not. We also look at the client, and if the client's an ideal client, meaning they pay on time, they are they're they're bringing us projects that are better portfolio projects than than others, then those clients typically, you know, we'll we'll try to transact with them again. But uh, we're not really so concerned with like which hour you build on, you know, Monday didn't go to the right project, and then all of a sudden, you know, we're over budget, quote unquote over budget, because most of the time you you could go over budget technically on the books, but we're the company's still profiting.

SPEAKER_02:

So how do you um I gave a talk a few weeks ago and I was walking through our like how we think about drawings, right? You know, conceptual, schematic, design development, CD, you know, and shop drawings. And I was making the case that the system is very archaic because it may have been developed at a time when we were like, you know, using vellum or sketching on paper, and the cost of rework was very expensive. If you moved something, it was like a lot of work, and then we no longer live in that day and age, right? The ability to perpetuate a change, which you know, sometimes it's the owner developer drives some change, and sometimes it might be the architect gets a different idea and you go down that road, right? But that predominantly these systems that are in place um don't really make sense anymore, and that it's really become the way to do billing. Like I don't know that there is there, I don't know that there's a definition out there that says a 25% schematic set versus a 50% schematic set has to have certain things in it or not in it. You know, it's very rule of thumb, right? And um, and you know, that was one of those things back in the day when BIM was first coming on, there was a lot of concern about that, like, oh, I have to put in all this work up front, um, but I only get to get only get to charge by the output of drawings, which is slower than the amount of upfront effort. Um, how do you how do you think about that? You know, this idea that like let's just get rid of it, right? Let's just at the end of the day, the customer's paying for a set of drawings to to bid out, right? To put out to bid to build a building. I don't think they care what the percentage completes are, other than we do for billing purposes.

SPEAKER_00:

I'll I'll be honest with you, KP. I think my experience is a little bit different than most people. We work on some smaller projects. So most of our pro, and as I said before, we're usually uh done a lot faster. So while bigger companies are just getting ramped up, we're already at like end of CDs. So we're when typically on most projects we work on, we have one billing point and we bill when we're done, and we'll we'll send the the package when we're done. And I think the whole the other projects we're working on right now where we have the three phases and we're billing on certain billing points, or ones where someone on the team, and it's usually the architect, that's stretching out the timeline because they need to they need to bill intermediate, like it have intermediate billing points and not they don't just want to take on all that risk where they're completing all the drawings and then billing at the end. So I I think if the drawing process is sped up, which it kind of is nowadays, um, I agree. I don't think there's a big reason for SDs, DDs, and CDs. We can just iterate, you know, uh in the DD phase, you know, and there's there in I've never been on a project where we've had more than the two iterations, anyways. It starts to become a burden on the team. So usually we'll we'll pick a design and we'll go with it through a conversation early on in the project. So I agree. I think larger projects, there may be like an intermediate billing point, but won't necessarily maybe doesn't need to be called SDs, DDs, and CDs, and then just push to because, like you said, the owners they don't care about any of that stuff, they just want their drawings submitted.

SPEAKER_02:

Yeah, I always joke around like when's the last time an owner called you and said, Oh my god, that detail on sheet three was a work of art.

SPEAKER_00:

I mean, they don't look so great, yeah. Admiring my line work.

SPEAKER_02:

Yeah, oh my god, your your line work's amazing.

SPEAKER_00:

That's awesome. Yeah, they never care. I've I've gotten many calls from owners about price. That's usually what we talk about, is this is too expensive, and we'll go through what we can do to VE it. Um, and I I do feel like there's a big misalignment, and especially when there's multiple layers, and I think this is just how things progress. But us as structural engineers, we kind of do maybe about 20 to 30 percent of the cost is the structure of a of a of a building, and we're protected from the owner by the architect, so there's a little bit of a disconnect between us and the owner. So we rarely get to converse with the owner about certain things only when they request it, and uh, so that I think some of those things are could be improved by getting a lot closer to the owner and having those conversations early on.

SPEAKER_02:

Yeah. Do you think um I've I've asked owners this, right? This idea of we hire the architect to manage all the consultants, right? We hire a GC that manages all the subs, right? And you know, I've asked the question quite frequently actually, like, why don't you just hire the consultants separately and have them report to you? And they said, Well, the the architect does all the coordination. And then when I say, Well, how did that go on your last project? They're like, not well. Right. So they have this perception that the architect's gonna coordinate everything, which you know, some do, some don't. But most of the owners I talk to don't feel like that's actually happening. And um, so I was like, why don't you just hire them you know separately? Why not hire them separately? Right. And and I and I think it's interesting, you know. I think and some owners do, obviously, some owners um I see it on like NFL stadiums and arenas and things like that. They'll actually hire the uh the structure, structural separate because the cost of the structure is a big part of it, yeah, right. And then I actually have one one of my clients who's a big developer. He's actually decided they actually decide to be their own GC. So they're actually just hiring the subs direct, and they figured out that they felt like they could hire their own people, build a team, and manage it better than a GC could, which I thought was pretty fascinating.

SPEAKER_00:

I've seen that and I I do think they can, to be honest. Um, I think like whenever you're the one who's uh can more connected with the developer, or even a GC who's really well connected with the developer, you tend to have a better, like they tend to have a better grasp on the costs and they do value um uh the the cost of the structure. But what it ends up being in many cases is they start beating up on the consultants on the fees. So I've I've had that experience a lot where we'll work with a developer GC combo, and the first conversation just starts out with them just wanting to hammer everybody down a couple of grand, you know, on the fees because they're they're the ones spending the money.

SPEAKER_02:

So which I always find fascinating because on a relative basis, the engineering fees are not that much compared to the cost, right? And I feel like um if you treat engineers the way you want, you know, go solve a problem for me, you should actually want to pay them more. Yeah, because if they solve a problem for you, you're gonna save so much more on the back end uh on the construction of the building and such.

SPEAKER_00:

So yeah, and there are a lot of cases they want to like just do what you did on the last project, yeah. You know, and that's that's that defeats the whole purpose. Like, we're not rubber stamp, you know, we're not gonna stamp the last project.

SPEAKER_02:

Yeah. How do you so how do you think about um you're using some AI tools now, right? Where where are you seeing the biggest benefit right now?

SPEAKER_00:

So far, it's been kind of it's it's helped a lot, but it's still pretty elementary from at least my point of view, is we're using a lot of AI tools for uh obviously the meeting notes and uh and the recorders and the uh um and we we use chat GPT extensively, we upload all the codes to it and we uh it much faster finding sections, reviewing design reports, you know. It basically right now serving as like a double check in many cases. It speeds up your uh our timelines of finding things, you know, where I could spend hours and hours researching where you know within minutes I've got a pretty solid list of references that I just go check out and I know what I need to know. So yeah, we've been using those tools. I mean, my AI um uh uh note taker goes to meetings without me now, um, which is a really interesting experience with people who aren't familiar with it. They'll like see this note taker. Many of them think I'm actually in the meeting, but it's just a note taker taking notes for me. So that's been really helpful. If I can't attend a meeting, it'll actually go to the meeting.

SPEAKER_01:

Yeah.

SPEAKER_00:

And I'll check the notes out after. And nine times out of ten, you know, I probably didn't even need to be in that meeting, anyways.

SPEAKER_02:

Yeah. So we'll we'll still have to wrap up, but um if you had to give advice to someone that was leaving a big firm to start their own, what are some of the things you didn't realize then that you now know that you'd give someone advice on leaving their firm and starting their own?

SPEAKER_00:

I would say it's not as scary as it looks. Um uh it's definitely uh definitely a journey. There's a lot of learning on on the way. And I would say if you didn't have experience before with project management, with people management, with the billing side and you know, understanding how the firm makes money, uh, it there would be a lot rougher of a learning curve. But with today's technology rate of advancement with AI tools, I think they can shorten that learning curve a lot. So say if somebody's considering doing it, they can reach out to me. They could talk to anybody who's done it, and uh I'd be happy to talk someone through the ins and outs of just getting started and how things how you can get help for not you don't have to hire people full time to get help with certain daily tasks, and AI can do a lot of it, people can part time can do a lot of it, that sort of thing.

SPEAKER_02:

All right, very cool. Ahmed, it was great to see you again. Hopefully, uh we'll see each other in mastermind groups uh as those kind of continue on and um we'll talk soon.

SPEAKER_01:

Thank you.