Will AI Make Construction Cheaper for Owners?

If contractors get 50% more efficient with AI, who captures the margin improvement?

In this episode of KP Unpacked, KP Reddy and Nick tackle a question that went viral in construction circles: with all these AI companies raising capital to serve contractors, will owners and developers actually see lower costs? Or will GCs pocket the efficiency gains and maintain pricing power? The conversation spirals into economic theory, prisoner's dilemma dynamics, and why the WebMD playbook might predict construction's AI future.

But the deeper thread is about what happens when an entire conservative industry, one built on stability, 401Ks, and predictable careers, gets blindsided by deflationary technology moving too fast to adapt. KP shares observations from an M&A conference where 200 AEC executives think AI is "ChatGPT helping me pack for trips," while tracking former firm owners coming off PE non-competes who could launch AI-native competitors overnight. Nick introduces a viral economic report painting a bleak 2028 scenario where AI delivers on all its promises but unemployment hits 10.2% and the S&P drops 40%.

Key topics covered:

• Why construction AI companies target contractors, not owners, and who captures the ROI when margins improve
• The prisoner's dilemma: will a mid-market GC defect and pass savings to clients to win volume?
• How one multifamily GC is guaranteeing outcomes by controlling supply chains and offering territory exclusivity
• The WebMD precedent: doctors used it first, then consumers took control, will owners do the same with AI?
• Why 200 M&A conference executives had no idea what's happening in AI beyond trip-planning with ChatGPT
• The 2028 economic doomsday scenario: AI succeeds, unemployment hits 10.2%, S&P drops 40%, software companies collapse
• Why the rate of AI advancement is too fast for human adaptation, six Claude updates since January 12th
• How KP is tracking former AEC firm owners coming off PE non-competes using Claude Cowork 24/7
• Why IT departments are the biggest barrier to AI adoption in conservative firms
• The "Friday AI Day" thesis: carve out four hours every Friday to tinker instead of leaving early
• Why KP's 70-year-old brother-in-law (retired physician) wants to learn coding to pre-screen insurance denials
• The opposite of Y Combinator: an incubator in Costa Rica for retired people who want to build AI startups
• Thought experiment: 60-year-old contractor with hand tools vs. 35-year-old with power tools at identical pricing
• Why experience + AI tools is the winning combination and what it means for next-generation knowledge workers
• The impossible prediction: what jobs will exist for kids born in 2020?

If you're a contractor wondering whether to pass AI savings to clients, an owner trying to figure out when pricing pressure arrives, or a knowledge worker in a conservative industry watching the future unfold too fast, this episode will challenge every assumption about who wins when technology moves faster than adaptation cycles allow.

Listen now.

BuildingWorks & Brookwood Sponsors

Chapters

• 0:00 Cold Weather, Malls, And California Life
• 3:09 Beaches, Quality Of Life, And A Quick Pivot
• 4:18 Will AI Deflate Construction Costs
• 9:13 Who Captures ROI: Owners Or Contractors
• 14:08 Market Scenarios And A Middle‑Market GC Playbook
• 20:48 AI Shock To Software And The Macro Economy
• 26:03 Pace Of Change And Industry Unpreparedness
• 30:38 Career Risk, Weekend Tinkering, And Learning AI
• 34:43 Retirees, Coding, And A New Incubator Idea
• 38:43 The Shed Thought Experiment: Tools Vs Experience
• 43:38 Institutional Knowledge, IP, And AI “Big Brains”
• 48:43 The Next Generation’s Path And Uncertain Jobs

Transcript

SPEAKER_00: 0:35

Hey Nick, how's it going?

SPEAKER_03: 0:37

Hey KP, happy Monday.

SPEAKER_00: 0:40

Just saw you the other day in person in live live forum.

SPEAKER_03: 0:44

Yep. Uh seasonal depression is fully fully on this year. Heading back, heading back to fridge attempts here in Kentucky from the beautiful Bay Area. I'm not not in a great headspace today.

SPEAKER_00: 0:57

Well, you got to experience my life a little bit being out here.

SPEAKER_03: 1:01

Yeah, you have a nice life. So living living your life for three hours on a Saturday was quite nice.

SPEAKER_00: 1:10

Yeah.

SPEAKER_03: 1:11

It's not horrible out here.

SPEAKER_00: 1:12

You know, it's like a lot of my friends, you know, East Coast folks, they're always like, it's so expensive out there. I'm like, yes, and I feel like I get something for it. Like, I do feel like I get value. Like, yeah, taxes, car, like all those things are much more expensive here. I'm not gonna ignore that. But I do believe if you like being outside, you know, if you want to go hang out at the mall, there's no point in coming out here. You can hang out at the mall anywhere you live.

SPEAKER_03: 1:40

Us us Midwesterners, Midwesterners love hanging out at the mall. How'd you know? There's entire movies about it. I mean, you live that life for 30 years.

SPEAKER_00: 1:51

100%. Like in Atlanta, when I lived in Atlanta all those years, I don't think there was a weekend that did not go by that I did not visit Target or Dick Sporting Goods or Costco or the mall.

SPEAKER_02: 2:04

Yeah.

SPEAKER_00: 2:05

Every weekend. Every weekend there were some. And I don't even know that we bought anything, it was just more of an activity.

SPEAKER_03: 2:10

I get out of the house, 100%.

SPEAKER_00: 2:12

Yeah.

SPEAKER_03: 2:12

Yeah, we did that. We did the target trip yesterday, literally, to get out of the house. 20 degrees out. The kids don't want to be outside.

SPEAKER_00: 2:18

It's like, what do you do? Right. I can't. It's been a minute. Like, I don't go anywhere. I mean, there's none of that. Live, I don't have any of those stores. We have two grocery stores in our little town.

SPEAKER_03: 2:29

Yeah, I saw the driftwood spot. That's for your target replacement.

SPEAKER_00: 2:32

Yeah. Yeah. Go visit the driftwood spot or yeah, yeah. Like I have different beaches to go. Actually, yesterday we went to a beach called Grey Whale Cove. Okay. It's up a little bit north of me. And it's just like the most I didn't get to take you there, but it is one of the most beautiful beaches around here. And one of the reasons I think it's really beautiful, for whatever reason, it's very clean. Like there's no driftwood, there's no seaweed, there's no like sea stuff. You know, it's just like, you know, because some of these beaches you go on, and there's like all these like seaweed type things and sea kelp and stuff all over them. And they kind of get stinky because all the flo, you know, the critters, and yeah, but there's one, it's just like super clean. The the only thing, the downside is there's a lot of nude sun bathers on a sunny day. So you're you kind of do a little bit like, whoa, okay, didn't mean to see that.

SPEAKER_03: 3:29

Okay. Another another great reason for me to move to California. Yeah, nude beaches. We'll uh we'll keep the keep the conversation short there and move on. Uh okay, transitioning. So you came prepared today. You had a couple a couple posts that had a lot of commentary, had a lot of debate that people now hate you for. What else is new in the world? So let's get into it. I'm gonna read read the first post that you called out. So you said so many construction AI companies. Does this mean that contractors will charge less to owners and developers because they have more predictable outcomes? AI had a deflationary effect to other industries. Will construction see it? The rules of ROI imply that whoever invests gets the return. So, yeah, talk me through kind of the thought experiment here. Basically, you're just saying, hey, will I AI actually make construction cheaper?

SPEAKER_00: 4:33

Yeah, I mean, we're seeing, I mean, we're seeing like every day there's another announcement from a company that raised money in the construction space, whether it be pre-construction estimating, job site, whatever, whatever. And I mean, and honestly, like we have a lot of startups in the space. We would tell them too like, don't go chase owners and developers. That's all, you know, they maybe build one or two projects a year at best. If you go get a large general contractor, you'll be on 50 projects, right? It's just that it's for a tech company, it makes all the sense in the world to target contractors. So we we know this to be true. But, you know, with all these companies that are adopting the contractors that are adopting the technology, if it's that effective, if it's that better, there's two things, right? One is it gonna de-risk things for them, which costs money, right? Risk costs money. There's a there's a risk hurdle in everything, right? Like the game we play in venture capital, there's a a risk return hurdle that we play with. And you know, if you go get a money market fund, that's a different risk profile, right? So I think like technology is the same way, and businesses are the same way. So if construction companies are de-risking their capabilities, if they're reducing costs, right? Who's benefiting? Who's getting that return on that investment? And, you know, it it would be rational that it's not the owner or developer. That would be a very rational thing. That's not an irrational thing to think about. Now, the the other thing that's interesting is, you know, back in the day, a friend of mine started a company called WebMD back in the during the dot-com. And if you talk to any physician today, they hate WebMD.

SPEAKER_03: 6:16

They're like, because these patients show up like they already know what perpetuates fear, uncertainty, and doubt. Like everyone thinks they have cancer whenever they have like a mild cold. Right.

SPEAKER_00: 6:28

Or they come in in a very combative situation with the, you know, with the doctor saying, I think I have this, don't I? And then the doctor's like, well, let's let's run some tests about like, I mean, we already know, like WebMD told me. And I think in AI, it's probably gonna be very similar, right? We're gonna self-diagnose ourselves. No, I do use AI to convert my doctor gibberish into like what what does this mean? Right. And then also I use it to say, what are some homeopathic methods that I could maybe use and try out. So, so now if you if you think about that, like the the technology got passed on to the consumer, which by the way, early days of WebMD, the doctors were using it more than the consumer. Because for doctors, so much of what's codified in their books and everything is sitting in books. So they actually had a doctor portal so that doctors could go research. You know, it was just a much better way to research journals and latest things, and it was a good outlet for them. Uh, so that was actually their first market was physicians, and then they flipped to consumers. So I think, you know, and a lot of the feedback and commentary on this post was well, of course they're not gonna pass it on. They're not gonna pass it on to the to their clients, they're gonna keep it.

SPEAKER_03: 7:44

I I think the only we touched on a little a little bit of this idea when we talked about building the first general contractor that is fully like transparent in everything that they do, right? Like building the full the full stack transparency solution. Here's our you know, here's our pricing, here's the schedule, bit the Uber analogy on the on the on the PC wrote, right? The I think the idea where I would push back on none of the costs accruing to developers and owners, and I agree with you in the short term, but I think potentially long longer term, medium term, there's gonna be the incentive if you have the extra margin lift from using AI, which in this example, like everyone would, right? Someone's gonna defect from that prisoner's dilemma, right? And they're gonna say, okay, I have, you know, I have 50% higher margins than we all we all have 50% higher margins. We can either like decide to keep that collectively, like and you know, basically collude. Or that never happens in construction. Yeah, yeah. Never never it's never happened before. It's not like we've we have uh we have evidence that that that's occurred. But I think eventually someone will defect and say, hey, I'm gonna charge 25% less than I normally do and and win competitive bids because my margins are better and now I can, and I'll just take on, you know, two to three X the volume that I did previously. Don't you think that's a a scenario that someone could defect?

SPEAKER_00: 9:17

Yeah, I think I think that will happen. I think the challenge there is it can't be a startup. It can't be like, oh, we just started, we started a new wave GC, right? Because there are like capital, you know, one of the biggest things of you know, if you to go start a construction company, there's a natural capital barrier around bonding and insurance. Like it's really hard to be a startup contractor. And that's why you see these contractors that are 180 years old, right? It's very hard to like, I'm gonna leave XYZ construction and go start my own construction company and go build an airport. It doesn't work that way. It's very, very difficult. So that's why a lot of them start off as, you know, oh, I'm gonna do some tenant improvement, I'm gonna do some retail. Like they all kind of go after that to start building some credibility up because it's tough, right? So I don't think you're gonna, and by the way, if you're a startup GC, which would be fascinating, like how do you capitalize that? How do you have the tech? How do you do all those things, right? So I think where it comes through, I think where it's gonna come out is a middle market contractor that focuses on a specific end market and owns that, right? Like, hey, I'm gonna do Costco's cheaper, better, faster than anyone else. And I'm gonna go to Costco and say, hey, I can be 20% cheaper and to go own that. And then they're gonna walk over to Bentonville and say, hey, I'm gonna come do Walmarts for you. So I think it it's gonna be highly driven towards an end market and driving that behavior because there is also from an AI teaching and learning and building these agents, right? I think you have to kind of narrow the scope. I don't think you can start a mid-market G, I don't think you can be a mid-market GC and say, I'm gonna do airports and I'm gonna do hospitals. So I think that's where it's gonna come into play. Now I've seen it in multifamily already. I can't remember the company name, but it's a fascinating company. It's like they have started a multifamily GC. They mostly operate in the southeast. I'm I'm not trying to hide the name, I just can't remember the name. But they're going to multifamily developers and saying we guarantee outcomes. Now, what's really cool about what they're doing is they're saying, however, the boundary condition is we review your drawings and we will make recommendations because your architect might have done something wild that's unoptimal for construction, and we're going to re-optimize it for construction. Here's some of the, you know, whether it's cabinets, tile, like they have a catalog of these are the things you can pick from that fit in our supply chain, and that's it. Like, like this is what it is. And they're actually they're pretty clever. They're creating exclusive relationships. Like you have to buy the territory as a developer, right? So you have to like buy the zip codes from them, and then they won't work for your competitors. And apparently it's working really well because they're they're they're delivering on it. So I think that that which is a super, super interesting model. The the exclusivity thing is kind of interesting, but I think their point is like, look, we have limited resources to do this, and if you want to be on board, we're gonna give you an edge in the market, and you know, we want an exclusive relationship and uh to have to deliver that edge. But I I think that's maybe how it comes in. It's a mid-market GC that says, let's just focus on an in-market.

SPEAKER_03: 12:42

So, but so in your post, you're the main thing you're calling out is that the short-term incentives are gonna be for the mar the margin improv the the marv the margin improvement that that occurs as a result of AI implementation, which by the way, I think that's still a few years out. I mean, yeah, I don't think any, you know, any any large general contractor is gonna see like major step up and and margins from AI in the next two to three years. I think we're talking like five to ten years is when that that diffuses out.

SPEAKER_00: 13:16

But think about that. Think about what you just said, like that's far out. A construction project is three years, right? So it could be your next project, right? I'm sure three years is not that far out, is all I'm saying. Yeah, yeah. Yeah, yeah.

unknown: 13:32

Yeah.

SPEAKER_00: 13:33

And but I think you know, you you you sent me that article, which you might want to give some background on. I think there is some correlation into this article you sent me.

SPEAKER_03: 13:41

Yeah, so the article that you're referencing is by a actually I did a little bit of digging. They they frame themselves as a research firm, but really it's like a it's like a fintech content content marketing group. I think they might sell a Substack subscription, something along those lines. But the entire the entire finance finance world on on X yesterday was reacting to this post. It had like, I think it has three million views as of this morning. Actually, the if you saw futures trade trade down and the market trading down early this morning, the literally people are suggesting this piece took took the market down. And the the so the piece, it was an economic scenario in the year 2028. I think it was October 2028 was the time frame. And it basically paints a science fiction like like picture where it says everything that we think plays out with AI just put plays out normally. Like it the adopt the adoption curves are are great. AI continues the the models continue to get better, they continue to you know progress at the same clip that they're progressing at today. Scaling laws apply, compute you know is going well. Nothing earth-shattering in terms of the trend line, just like kind of staying on it. And but the economic picture from like a macro standpoint is really bleak for society. So the SP at this point in time is down 40%, unemployment's at 10.2%. The this the the the white-collar knowledge workers that we've talked about a lot on this podcast, like they're the they're now the unemployed. It's not necessarily like the the trades or the blue-collar workers per se. It's basically every job that the that the models have taken. And anyway, the the the piece in pretty you know granular detail walks you through like the mechanics of how we ended up in that spot. And I think like we the the reason it had such a strong reaction in the finance community is because we've talked about deflation and we've talked about how much of a positive impact AI you know can and and should have. Um, but we haven't really played out, you know, across when you when you look at the macro landscape, what it does to, you know, the S the SP and the bulk of the companies that represent that index today. And, you know, and and the the first class of companies they they really talk about are are just traditional software companies. And they talk about this reflexive loop that happens with software companies where so so they all start, so they're trading down significantly now. I don't know what they are from their all-time highs, but call it 50% below their all-time highs. Maybe it's it's even more than that. They're now forced to lay off people. Yep. The companies that are buying the software are also forced to reduce headcount in the next six to 12 months due to similar circumstances. Their stock is trading down, whatever. So now you have this scenario where the models are are increasing their their their share, the share of work that they can complete daily that can replace human labor. And you have a limit, you know, you have a drastically shrinking pool of buyers because the so the software companies, they all sell per seats, right? So now the per se head count at all of their at all of their customers are reduced, you know, are are getting reduced 20 to 20 to 50 percent. And you have this competitive dynamic with the model companies where like they're just eating into the into the share, like everyone's, you know, just they have a subscription to Claude or they have a subscription open AI AP AI, and they they're now they're now stealing market share from the software incumbents. And so it's reflexive, right? So like the more headcount that is reduced from their their cut their customer base, you know, basically the the the smaller their their growth is going to be. And then, you know, with the infringement on from the model companies on on just the number of tasks that they can complete, it starts to look really bleak on like where they can get additional growth and revenue from, right? So basically, like the the the thesis of the report is that AI could continue to to to be AI and and track amazingly well and do all the things that we hope and want it to, and we could have like a really, really bleak economic picture and like what do we do in that scenario as a society is like the is the question.

SPEAKER_00: 18:13

Yeah, and I think that you know, and I've I've given this cop-out answer before, right? We've been through these in my book. I actually talk about we've been through these things, it's not a new thing, but I I think what we're starting to realize when I wrote my book, even things were not moving this quick, right? They would just that this the pace, and I think the problem is it feels like an eternity ago when you wrote your book. I know it does, Dennis. Yeah, seriously. But it's insane. Like, by the way, everything in my book has come true. I agree, I agree.

unknown: 18:40

Right.

SPEAKER_00: 18:42

I don't want to, I don't want to admit it, but you were right. Right. But it's like if people are it's like you should have read my book, why are you so shocked? But but I think what's interesting about that is that we, you know, even in my book, I talk about like, oh, it'll be fine. Like we adapt. I think the narrative these days is it's moving too fast to give us space to adapt. And that might be the risk, right? It took time for the PC to go to market, it took time for the diesel engine and the steam engine to be deployed, like all these things, these uh industry X point O's, right? It took time. The absorption rate was just it took time. This is happening too fast. I mean, I wrote it in one of my posts today was there have been six updates to Claude since January 12th. I mean, that's insane. Like, I mean, I feel like my full-time job is keeping up with what Claude is doing, and people are like, Oh, why aren't you using open AI? I'm like, you think I can afford to spend my mind share like tracking through, you know, I'm gonna track Gemini and OpenAI? Like that that's like three full-time jobs. So I've just picked anthropic and you know why. But um, I've picked anthropic, like, I'm not gonna focus on them, but that's like 20 hours a week for me. It's like 20 hours a week, just keeping up with that. So I think the rated pace of what of how these things are moving is as humans, can we adapt fast enough? And I think the answer is probably no. And I even think you know, some of my friends that are in these LLM businesses, I feel like they're slow playing us. I think they're concerned. I think some of them are generally concerned. I think if they released everything they had right now, it would be very catastrophic. I think they're kind of like just, you know, a little bit at a time. How do you cook a frog? The pot and the frog thing, you know, right? You're just a little bit at a time, right? So I agree with all.

SPEAKER_03: 20:35

I mean, I I think for what it's working, like you you hear someone like Dar like Dario talk on Torcash's podcast or any listen to any interview he's ever done, they forecast it. I mean, they're not they're not, I mean, like they're they're very transparent with where they think things are going, and a lot of people take them master fundraisers and you know, speaking talk talking their own book, but I think they're really just telling the truth. Yeah, I also think like he doesn't need to talk his own book.

unknown: 21:07

Like, you know what I mean?

SPEAKER_03: 21:09

Yeah, he doesn't need help.

SPEAKER_00: 21:10

He doesn't need help. So YouTube listeners are like, oh, I'm gonna put 30 billion dollars like no one cares, like they they're not worried about that.

SPEAKER_03: 21:16

It went from a billion in revenue to 14 billion in revenue, like he's not struggling to attract capital.

SPEAKER_00: 21:22

Yeah, right. And so I do think you know the thing that worries me, which I think if you you know, we're all like amateur economists, like we we just don't have we don't watch sports, I think is uh we're not consuming our time with sports, but I'm not sure why like the Olympic like I didn't watch any of it. I watched curling because it comes on at CNBC, it comes on C N B C after all the real news is over.

SPEAKER_03: 21:45

My kids got really into the skeleton like the Luge skeleton thing. They really like that.

SPEAKER_00: 21:52

But I think you know, if you talk, if you know, we're kind of so we're amateur economists, we don't we don't know anything really. We just like I would say like our biggest benefit is there's too many people that have politically opted out of X. But I gotta tell you, like, I get such the information off of X.

SPEAKER_03: 22:09

100%.

SPEAKER_00: 22:10

Like, we don't you you don't have to like you know, like dislike the dude or whatever, but you know, I'm not gonna let that stand the way of getting information. But every economist is really worried about stagflation. Yep. And so the thing, and and there's a good reason for that. It's not good, right? But I do worry that we could have like transitory stagflation. It's like when it's it's like those things where you know you know the intersection of things that can happen, it feels like they could happen. I'm not saying will, I don't know, but I'm saying that the variables that exist do feel like they're marching towards, and they won't stay in that zone forever. I mean, but it'll be so you know, I think there's a a real question there about how we think about the economics of all this. That said, I was at an MA conference last week, an AEC MA conference, and there were probably about 200 executives there. They had no idea what's going on in the world, man. I mean, that was scary to me. Like when you ask about AI, they're like, Yeah, like Chat GPT, it helped me pack my bags. I'm like, what are you what are you talking about? It looked up the weather in Fort Lauderdale and told me what I in West Palm Beach and what I should pack. And I'm like, oh my god, you're the CEO of a multi-billion dollar company, and this is what you think AI. I mean, I was and and we know our industry is a laggard, like we know we know this to be true. But I think I think it's gonna be a problem. I think this that laggard nature of our industry, like, oh, I'll wait for Microsoft to release the next thing and all that, you know, the barrier to entry for construction, it's an economic barrier, right? Now, I'm sure you can probably find a billionaire that'll back your new construction company and whatnot. But for this, for the white-collar pure services business of architecture engineering, I'm just like, I'm really, I'm really scared for my friends. I don't think they're gonna see it. I think it's gonna be one of those things. What do they say? It happens slowly till it happens suddenly. Gradually, then suddenly.

SPEAKER_03: 24:17

Yeah.

SPEAKER_02: 24:17

Yeah.

SPEAKER_03: 24:18

So okay, so play that out for me. What so let's say this the CEO, the the CEOs of most AEC firms are moving slower and maybe not on the on the on the frontier as much as you know, we are on this podcast. Like what's the sequence of events for you know the people that you're worried about? How do how does how does this all how does this all play out for the industry to someone who's not like super aware of what's going on?

SPEAKER_00: 24:47

Right. So I think one, the the industry has become highly capitalized by private equity. And in many cases, people, you know, I would have stayed a civil engineer if I saw the exit packages that being a civil engineer could warrant.

unknown: 25:00

Right.

SPEAKER_00: 25:01

You know, when I was making 26,000 a year and they're trying to like scam me into investing in the eSOP, I was like, God, this is not for me, right? So, but it's changed. So now you have people, and by the way, I use Claude Cowork to analyze this. So generally speaking, if you sell your firm to private equity, there's a three to five year window of non-compete, non-solicit earnouts and all that. There's a whole entire class of executives in their 50s that have sold their firms to private equity, and I'm tracking them. I'm tracking them on, you know, like I got co-work running this 24-7, tracking their behavior, right? Because we know there's some behavior that happens. All of a sudden they become a little bit more active on LinkedIn. All of us, like you start to see when people are kind of coming off the bench, right? So I'm tracking all those behavioral aspects, and some of it is tied age. I'm sorry, if you sell your company at 70, you may or may not have one more in you, right? So now you have executives who've been well capitalized upon exit by private equity. They probably still have that. So for those people to turn around and start a competitive firm leveraging AI is super just, it's just ripe for the taking, right? Because they also have the customer relationships, right? One of the issues that we have in our industry, if you're 26 years old and a really good civil engineer, good luck starting a firm because you probably don't have the customer relationships. And there's no drip campaign or like none of that stuff applies, right? It's like, who do you know? How long you've been doing it, kind of thing. And so, yeah, so you have a 50-something year old, sold their firm, has a little bit of liquidity, meets a guy like me and says, like, I mean, we can do civil design using AI. You don't even need a team hardly. They have the registration, they have the customers. It's it's an interesting dynamic. It's a super and you know, I talked to these firms and they're just they're not even trying. And and their biggest obstacle, I think, is the IT department. It's absolutely the IT. Oh, you know, we have to worry about security. Oh, we got to worry about this, you know. Oh, well, I mean, you want me to go buy a Mac? We're in a we're a Windows shop. You can't have a Mac, like just those type of narratives. And because executive leadership doesn't understand how tech works necessarily, it's not a knock, it just is, generally speaking, they're not gonna go do something rogue. And so I think there, I I think there is, I think, I think it's gonna be interesting. So to your this white paper article, right? What happens when an industry like a lot of people go into civil engineering, right? Because it's like, oh, there's always jobs, right? There's always something to be done. There's always jobs, there's always something to be done, whether it's roads and bridges or whether it's a hospital or whether it's a data center, there's always something to be done. But to that article, right, to that article's point, these are very conservative people that have been maxing out their 401k, you know, doing doing what they've been told, right? Like go come to work, do a great job, get your bonus, contribute to your 401k. Now, if you believe your that article that apparently a lot of people believe in, your 401k is cut in half. You just get laid off. Like those are the dynamics that really, for a conservative person in a conservative industry, those are the ones that just get whacked the hardest. You and I wake up every morning and it's like nothing but risk, right? We're risk on every hour of the day, right? That's how we think. Which means we also know how to plan for that, right? It's kind of, I mean, it's like I have a lot of friends in the government, all this government shutdown stuff, they're just so upset because like I went and got a government job because I wanted stability, because I have other interests. Work is not my 100% interest. I wanted to serve the community I live in. I wanted to know that I had a few, you know, that I didn't have to worry about finding a job. Yeah, that's changed. This is not what I signed up for, right? I did not sign up for this volatility. If I was gonna sign up for volatility, six years into my government career, I would have shifted to the private sector. And a lot of them are regretting that they didn't do that. But they're like, this is what I signed up for. You know, I get my PTO, I get my pension, like whatever, which is there's nothing wrong with that at all, right? But what happens for risk-on people like me and you, this is all like, so what, right? We we're fine, we'll be fine.

SPEAKER_03: 29:31

Yeah, I mean, basically what you're saying is the riskiest thing you can do right now in your career is be at the whim, uh be it be at the whim of your employer making a decision on the future of your of your job, right?

SPEAKER_02: 29:45

Yeah.

SPEAKER_03: 29:46

And so the solution to that is take as much risk on as you as you possibly can. I actually see this being talked about as as a AI-oriented advice for people who are anxious about AI, is to go is you know, literally to to play with it, being, you know, use the tools at all times, like run into it, run at it, versus, you know, let everything, you know, just let let everything happen as as the chips fall. That's like that's the really the only way to kind of control your own destiny. Basically, if like you know how to use the tools, like you'll be f you'll be fine, you'll have a job.

SPEAKER_00: 30:23

Yeah. Well, I think I posted a couple of weeks ago about called it Friday, but it was AI day. So instead of, you know, we all know how Friday afternoons work out, right? We know this. This is like it's not new news. Around like 12 o'clock, we start like not doing work, right? Either we're like doing other shit or we're leaving home or whatever it is, right? Four hours every Friday, lock yourself in a room and get on AI stuff, right? Get on co-work, like start doing things, okay. Carve out the time, right? Instead of leaving early to go play golf, instead of leaving early to go grab beers with your buddies, because your employer doesn't have a high expectation of your productivity afternoon on a Friday, right? We all know this, right? I I used to do management meetings at 4 p.m. on Fridays just to mess with people and exactly. Exactly, right? Like, I know you're not doing anything because management meetings are probably as or probably worse than like in terms of productivity, it's the least productive thing. So let's do it on a Friday.

SPEAKER_03: 31:29

Four o'clock on a Friday.

SPEAKER_00: 31:31

Four o'clock on a Friday, because yeah, what else are you? What else are you doing? Oh, you're not working? That's weird because I pay you to be there at four o'clock on a Friday.

SPEAKER_03: 31:38

I saw Toby Lut Lutka, the CEO of Shopify, said he tweeted this weekend software right now is advancing on the weekend. Yeah. Because everyone who's tinkering with the tools is doing so, you know, after hours and essentially playing their video games. If you if you like that analogy of like AI tools being modern video games, like that that's that's what people are doing on the weekends now.

unknown: 32:04

Yeah.

SPEAKER_00: 32:05

So funny enough, you know, Claude did a uh hackathon thing for people to build stuff and they gave money away. The guy that won was a doctor, a physician, built something, right? So my brother-in-law, who's like one of the nicest, smartest people I know on the planet, he's a physician. He retired recently, but he's just like he's one of these guys in retirement is intellectually curious, right? He's not just kind of hanging out, he just stopped seeing he was seeing patients for a little bit doing telemedicine. And so I sent him that article. And his reaction was, how do I code? And I was like, Oh my god, like you got me. Like, I'm gonna help. Like, sure, here's what your setup needs to be, right? And here's a video. And so you know, he's like 70 years old, right? Retired. And he's like, he was like, you know, I'm thinking I might build something so that like before we submit our bills to the insurance companies and get denied, I'll run a pre-engine based on all the ones that were denied. So we run them through my AI system before we submit them. So we have less denied less denials, right? And I was just like, oh my God, this is kind of super cool, right? In retirement, you should be coding. Like the smartest people, the most experienced people are hanging out in retirement. They do things to try to like mentor young people, and yeah, they do all these things, right? So I was just like, we should start an incubator and we'll do it somewhere fun. We'll do it in Costa Rica, where retired people want to come hang out. Come spend a week with us in Costa Rica. We'll teach you how to code, we'll go build stuff, and we'll take it to market for you. So it's kind of like the opposite of Y combinator. Like use this like your friend in this game.

SPEAKER_03: 33:49

That's funny. Attract, attract, attract them through the you know, the retired, the retired vibes, weekend retreat vibes, but actually be building building stuff on on the weekends.

SPEAKER_00: 34:03

Yeah, yeah. Come to Costa Rica. You'll learn how to surf and code in the same week. You're really gonna take senior citizens out to surf? Oh, if you've ever been out of Witches Rock, man, it's an amaz like I'm not a big surfer, but at Witches Rock, I can actually get up. It's like a it's a different, they're just set up for us folks that aren't real surfers. But no, I mean, but I but I thought it was like super, I mean, I got excited, man. Like when he reacted that way, I was like, yeah.

SPEAKER_03: 34:31

Well, I think I mean my my response to that to that question is also, I mean, it's a great, it's a great, it's a great question. He's like kind of leaning into the how, and it's so incredibly easy to get started.

SPEAKER_00: 34:43

Yeah.

SPEAKER_03: 34:44

Like your advice doesn't have to be like, hey, you know, take this online course and you know, dip, you know, dip your toes into, you know, the this the syntax of coding languages. It's not just like, oh no, just just down download, download Claud Claude Code or Codecs and literally like use the English language to help get started.

SPEAKER_00: 35:03

Right. And it's like I see so many retired people mindlessly in Facebook, scrolling along, right? And it's like, how much golf can you play? Like keep your brain fresh, right? I think you should like I think you need to like rip your mom or dad in. Get your mom coding. I bet you'd be good at it. It's a good idea, you know. And I think I think like even like mental, like mentally keeping people fresh in retirement, right? It's tough. Yeah, yeah. It's tough, and it's important to be intellectually fresh, right? And it's like, how much can you read? How many, you know, what how much time can you spend with your grandkids? I mean, just how much of that, right? But I think it's anyway. I got really excited when my brother-in-law reacted that way. That's cool. Yeah, you think he's serious about getting started? Yeah, like he he probably already built something. Like he's like that. Nice. I mean, he can only, you know, he can only occupy himself. He was never that physician that went golfing every Friday. He his golf game is worse than mine, you know.

SPEAKER_03: 36:03

The the analog I heard recently for the advances in in software development and and coding for newcomers is so Steve Jobs called the computer a bicycle for the mind. AI is now a motorcycle for the mind. Yeah. Just like mechanized things a little bit a little bit more.

SPEAKER_00: 36:25

Tell you, man, we need to launch the opposite of YC.

SPEAKER_03: 36:29

That's the new fun thesis. The lazy computer must be over 60. Must be over 60. I like it. Must qualify for Medicare.

SPEAKER_00: 36:42

Yeah. I'm telling you, man, I think there's something there.

SPEAKER_03: 36:48

A lot of good ideas buried in those brains. I think you're right. Next fun thesis. All right, let's go to the other post that got a lot of attention in the last week.

SPEAKER_00: 36:59

So let me pull it up.

SPEAKER_03: 37:01

Okay, this is a fun thought experiment. So you said you are a homeowner, you are using someone to build you a shed. Contractor one is 60 years old and uses hand tools, does old school measuring, tape plus, Bob Plum thinks power tools are bad for quality. Okay, so that's contractor one. Contractor two is 35 years old and only uses power tools and has laser laser measure measurement tools. This person thinks technology helps him do a better job. They present quotes that are identical in warranty, price, and schedule. Who do you pick? 53 comments so far. So a lot of people like this one.

SPEAKER_00: 37:39

Yeah, yeah. Expand on this idea. Yeah, so I think the thought experiment, because I think we're all dealing with this every day, right? And it's a good you know, thought experience, you have the luxury of idealistic situations, right? Like created it in in real life, this would never be uh then that's why it's called a thought experiment, everyone. So really trying to understand how we think about you know, how we think about AI and how do we think about experience versus technology, and that seems to be the battle, right? Like, hey, I've been doing this for six years, AI will never understand what I know, right? And then you have the younger set saying, like, man, like AI is giving me superpowers because it knows a lot of things that I don't know, right? But then there was another post I posted, and I think that got even more con some more comments. It's like, now let's flip it around, right? So the feedback in the comments was, oh, I'll always go with experience, right? Someone else posted something funny that I thought was like it wasn't a human reaction. I'm gonna I'm gonna back the 35-year-old because he probably has a wife and kids to feed and is early in his career, and I'm gonna encourage him. I thought that was an interesting very human response, right? Very human response. Because not everything, not every decision we make is purely based on a pragmatic thought process, right? Yeah, yeah. I love that people kind of reacted that way. But then the the second piece would be well, what if it's the 60-something year old with all the high-tech tools and the 35-year-old with the analog tools? And then, of course, everybody's like, of course, I'm gonna go with the 60-something year old. Which to me is the difference between like SaaS and AI in a way, right? That these tools are best used back to our retired. We have to come up with the name for our YC or new YC thing for old people. That's kind of what you're dealing with now, right? Is that you're dealing with not that I'm 60, I just turned 55, but these tools are like super valuable to me because it does the rest of the work, right? And I get to really ask, I get to do things that are a little bit more interesting because I do have the experience to apply. And so, of course, when I put that out there, but I was like, well, that's a no-brainer. Of course, I'm gonna use the 60-something role with the high-tech tools, and so I think that's kind of the the thinking, you know, we're we're trying to come up with these like binary ideas of like, here's how AI is best used. I think my my whole point of that thought experiment was just to get people thinking about like how do we decision these things. And and once again, at that MA conference, these are all the most senior people at these firms, and that they're not engaging in a meaningful way in these tools is really concerning. Because I think that is the answer. The answer is the 60-something year old with the latest tools.

SPEAKER_03: 40:43

Yeah, and my interpretation of why that was a popular response is because obviously the 60-something year old has loads more experience. The knowledge that they've accrued over their career is you know way, way deeper and stronger. So, like from a risk standpoint, it feels less risky if you're the homeowner, right? But but you know, buying buying buying the service contract from that contractor. But if they're not using the best tools, it might take a lot longer, right? Maybe they don't, you know, maybe there's some shortcuts that they take simply because they don't have you know amazing tools. But I think that you know, my just my expectation would the quality would be is the quality would be amazing from that person, but it just would take, you know, maybe maybe even twice as long, three times as long because you know, they're just moving slower. And so, like if you're looking for a fast fix for something and maybe even a longer, more durable relationship with someone, you're gonna choose the younger person because they're you know that you're you're solving for speed, right? And and durability over time. So you arm the most knowledgeable and the most experienced person with all of those speed attributes, right? And that's an amazing product, right? Right. I think that's really interesting to think about, you know, if if you are an older person, maybe towards the tail end of your career, you know, for the why and for why, you know, why revenue could could accrue to your company faster at a faster clip than maybe ever, is when you when you add those two variables together, which traditionally have never coexisted, right? Right. That gets really, really compelling and interesting from a value prop perspective to the customer.

SPEAKER_00: 42:20

No, I I think so. And I I think also like I think as you get older in in these firms, right? You you do try to give back, right? You do try to mentor, you truly try to cook the the problem is like, is that where you should be spending your time or should you be institutionalizing your knowledge and all in these in these AI platforms, right? Is that a better place for the future? Because, you know, we I think I had a post several months ago where I was annoyed because some startup pitched me and they said, our combined team has 50 plus years of industry experience. I'm like, well, it's 10 of you. So you have like on average, it's like this cumulative versus mean, you know, mean versus cumulative aspect of experience. And it's like, what does it mean to be a 180-year-old construction company? Like, what does that actually say? Right? Does it say anything? Well, I don't think it does. It says that, like, okay, well, over the years you've had a series of leaders that have managed the company well, and maybe that's rooted in the culture and the systems, but I doubt the processes that existed 180 years ago are being played today, right? So, what is longevity of a firm, especially in the white-collar world, where you know, your knowledge worker, your assets leave the building every day? Does that change with AI? Right? If you're a law firm with a hundred years of experience and you're able to institutional a hundred years of experience into your call it big brain of sorts, does that become more meaningful than maybe a firm that's a younger firm? And you know, I think people have to think about this stuff in terms of you know, are you creating IP by getting your most senior people feeding the AI engine? And does that become an asset? Is that valuable? I mean, you've seen these people, these startups hit you like 100 years of experience. It's like, come on, guys, like that's not how experience works. You don't get that.

SPEAKER_03: 44:22

Yeah, what the startup is trying to do is is communicate credibility and trust. And it's just like a poorly chosen metric to construct that. But yeah, I mean, I I think the the 180 years. thing I think it you know at that at that point you're kind of an institution right and I think for whatever reason and and you know and maybe there's a brand associated with it either either locally or you know nationally or globally potentially and there is brand value to things right like you there's trust there's trust that comes through but I do think that your point on on knowledge work where you know we're literally just talking about cognitive tasks and you know there is no hard earned trade secrets that you know you're you're you're operating with per se it's it's simply you know in blue collar work there actually there actually could be right like you are do you maybe you you're you are doing unique things and you do have this like proprietary knowledge about a local environment right that that you know could inform people why people choose you and and choose to move forward on projects with you. So I could see yeah but I but I I I get the point on on the knowledge work for sure. So okay so what was the consensus on the on this post?

SPEAKER_00: 45:37

I think I mean look I I wasn't there wasn't I didn't have a goal in mind. I'm trying to get people to think right I think that's I think the general consensus would be like yeah experienced person with lots of yeah capability like using using all the tools is is kind of like quote unquote the right answer. I think the question becomes you know that more holistically what do you do if you're the young person that lacks the experience right like I think that's when we look at unemployment with kids coming out of college right now like what are we going to do with people that you know kind of the next generation of of of knowledge workers like what are we doing with them? I don't I don't know that we have a great answer. I can only tell people like what I'm doing with my own kids right it's like hey like we probably need to start a business and it's more about relationships and you know the human effect than ever before like go spend time in market go meet with people face to face go build relationships um and and and that kind of thing. So I I think that's the only thing it's it's tough to say like you know if you just grab like I've got like four resumes of computer science graduates from Georgia Tech right now. And I'm like great like and they're telling me there's no jobs. And it's kind of like they were told four years ago like hey going to STEM right for sure. Yeah and so it's I mean it's I don't think anyone has a great answer on that right I don't think anyone has a great answer on that. I think I think that's to me that's the big question we have to answer is like it's it's not look we're all gonna be fine probably everyone listening most people listening to this and you and I we're fine like we're we're gonna be fine through all this stuff right we'll probably do better. What about the next generation? What about our kids? I mean it's I've already told my I've already told my family like I think my three year old is going to be a trust fund kid because I don't know what he's gonna do.

SPEAKER_03: 47:41

Yeah it's a really weird my my kids are four and two and it feels like an impossible thing to predict actually like what yeah what what they should study what they should you know what what what sort of work they'll even yeah be possible like what will what work will be possible for them to to do yeah what what's the the john adams quote I fought war so you could study math and science oh yeah like the art like science the art my kids can be artists yeah yeah I think that's what I think it's like come on like pull them out john adams quotes man like he already knew what they knew what was going on yeah I think there is a there is a future where I think there's a yeah I mean back to the citrini and like some of the some of the doomerism around where AI is going I think there's a scenario where we are a very culturally inclined society in the future and I think that there's probably a small percentage of people that are producing most of the productive work in society. And so what happens to everybody else? I mean there's eight eight billion people you know by the time that you know our kids grow up it's like yeah like what what you know what sort of jobs are left how do you how do you participate in the productive system or how do you support society I think there's going to be a big push on like actually support just supporting the middle layer of society and figuring out what's next is my that's my that's my read.

SPEAKER_00: 49:10

Yeah you know so I I carve out about 30 minutes every morning for me and my little to to hang out on a and so I was getting done with that time and I said hey it's time for Papa to go to work and he's like yeah papa I got to get to work too I'm going to school now keep in mind his school is like on a farm he hangs out with like it's not like school school it's more like hanging out with chickens and goats. He was telling you all about the chickens and goats and horses that he hangs out with right his friends at school. And so I was like he's like yeah that's my work Papa like me going to school is my work and I'm like yeah I think you might be right like he might be right like it's it may not be about alphabet and addition and subtraction and all that it might be that like you're better at taking care of goats chickens and and uh you know the like that might be the future yeah so goat goats and ch and and chickens and supporting supporting agriculture into the dystopian future music culture art who knows