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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
Architects Are Better at Feelings Than Engineers
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What if the biggest barrier to data center approvals isn't policy, permits, or power, but storytelling?
In this episode of KP Unpacked, KP Reddy and Nick cover a lot of ground: why AEC firms are terrible at the billable hour compared to lawyers, why 18-year average tenure is a sign of mediocrity not culture, why AI is going to expose the standby workforce faster than anyone expects, and why architects have been handed a billion-dollar opportunity in the data center wars that nobody's talking about.
The Walmart analogy says it all. When Walmart was expanding everywhere, communities hated it. Not because groceries were expensive. Because they were worried about their friends on Main Street. Data centers are in the same moment right now. Half the opposition has genuine concerns. The other half is just mad and has been told to be mad. Either way, the technocrats showing up in Mercedes S-classes are not the right messengers. Architects are. They understand community engagement, storytelling, negotiation of experience versus money, and why a watercolor rendering sells better than a photorealistic one that's technically accurate but makes everyone uncomfortable.
Key questions answered:
- Why do AEC professionals work unpaid overtime while lawyers never question their billable hour?
- What firm pays engineers overtime for billable hours, and how does it make better project managers?
- Why is an 18-year average employee tenure a sign of mediocrity, not culture strength?
- What does "debugging the human endpoint" mean for remote workers?
- Why will AI expose the standby workforce faster than anyone expects?
- Why are data center projects getting put on pause and what does that mean for AEC firms that ramped up?
- What does the Walmart community opposition playbook teach us about data center pushback?
- Why are architects better positioned than engineers or technocrats to sell data centers to communities?
- Why does a watercolor rendering sell better than a photorealistic one in community meetings?
- What would happen if Kevin Durant's $250K Hugging Face investment returned $60M?
- Why do pro athletes listen to investor calls while working out instead of music?
- How does KP think about meritocracy versus tenure in a world where Claude can audit your calendar?
If you're an architect watching engineers dominate the data center boom, an AEC firm trying to figure out where community engagement fits in your service offering, or a project manager whose best people work nights and weekends for free, this episode will make you rethink where the real opportunity is and who actually belongs in the room.
Listen now.
Tech Glitches And Why We Podcast
SPEAKER_01Hey Nick, how's it going? Hey KP. I promise this today this might be the worst podcast we've ever recorded. Friday afternoon recording session. My brain's a little wonky. Just had some audio audio difficulties. Couldn't get my couldn't get my analog microphone hooked up to my USB cord, to the USB port. Things aren't going well.
SPEAKER_00Can the podcast get any worse though? Your implications at our podcast is amazing in the first place.
SPEAKER_01Yeah, the bar's pretty low. I have no way it does.
SPEAKER_00It is kind of funny, right? Like everybody has a podcast. I know. And I get hit up every day beyond my podcast. And when I ask them like any level of stats, it's like super tiny. And I then I ask, like, like, happy to be on your podcast. I'm not gonna promote it because like I can't, I'm not in the business of promoting your podcast, right? But happy to be on it. But I'm like, why do you do it? You have like 10 listeners, or I mean, it's like very small, it's not even like I mean, I don't think anyone has millions, right? Yeah. Uh there's no Joe Rogan's in the AEC space of sorts. Thank God. But it's like, yeah, I mean, I've got 50 listeners, and I'm like, why do you do it then?
SPEAKER_01It's it's because that's that's the dream everyone sells when you have a podcast, is that everyone's first four years are zero listeners, and then after after year four, you magically have have a million listeners if you incrementally get better every you know every week. I mean, to be fair, that like that that does happen, but it's also the same logic as like a JK, you know, JK Rowling, who's kind of their poor writing Harry Potter, and then one day she gets discovered. She was like a an amazing writer, and I think generally speaking, most yeah, most people probably probably to some extent aren't like the world's best podcasters.
SPEAKER_00Well, I don't think yeah, I mean, I don't I don't even like, I mean, who am I? I'm not the arbitrator of talent, right? But I think like why? I mean, and you know, I ask myself, like, why did we do this? And I'm like, I the reason I do this, the reason I do Substack is means I have to I can have less one-on-one conversations, right? I get less of these, like, hey, do you have 30 minutes? Hey, can I ask you about? So for me, it's just distribution of knowledge. Not that there's any economic benefit here, but I do get I mean, I do like when I meet people, they're like, Man, love your emails, love your podcast. I learned so much. I'm like, great, fantastic. Yeah, what less, yeah. I think for me, it's like less one-on-one conversations, scaled communications for sure.
SPEAKER_01Yeah, that's all makes sense. Maybe they're doing for the same reason. Why are you knocking them?
SPEAKER_00But you know what's interesting is my team or portfolio, like they listen. So it's also great community, even like it's almost like an internal communication tool as much as it is external. Like, I'll get texts from some of our founders saying, like, hey, what did you mean by that? Like, I listened to your pod, blah, blah, blah. What were y'all talking about? Yeah, which is good. That helps us too, like in terms of just what's going on in the world without having to have a bunch of one on one off Slack messages or group chat texts. Yeah.
SPEAKER_01What what do you think when you hear feedback from people, what do you think they come to listen to this podcast for mostly? Is it industry conversation and insights? Is it is it founder stories? What are they looking for in particular in most cases?
SPEAKER_00It's the intersection of all those. Yeah. Right. I mean, I don't think we're great content sources for generic startups. Sure. Um, I think we're probably fine for AEC stuff because there's just there isn't much out there, quite honestly. Most of it's like vendor driven, right? It's like go listen to Autodesk's podcast, right? And then I think on the investment side, there's plenty of other places, right? Go listen to God, I mean, everyone, right? Everyone but us, if you want to hear about investor point of views. I think it's our I mean, I think it's our own little niche, right? Like, how do those three variables work together? And how do I need to think about it? I think is you know, so I don't think, I mean, I don't think we have a million listeners. I don't, I think we have more than 10, but I think that's what they I've had I've had a lot of VCs. I just was on with one this morning that was like, man, I love y'all's podcasts. And they're a generalist VC.
SPEAKER_01Yeah, that's cool. And they're like, are they interested in just learning about your view on the world, or are they interested in learning about AEC tech? Like, is there is there an audience of onlookers to our industry that are actually curious about learning about what's happening on the tech side?
SPEAKER_00I would I would say they're mostly interested in the industry, right? I think they like that you and I frame things from various lenses, right? From founder lens to venture lens. I don't think that I mean, I don't think they view us as like, you know, the foremost experts of venture capital, but I do think they view us as guys that understand the intersection of VC and construction industry. And I mean there's there's not a lot of voices out there that talk about that.
SPEAKER_01100%. Yeah, cool. I uh I do hope to hope hope to wake up one day and have a million listeners and people understood in AC tech. So I'm never gonna give up the dream, but yeah.
SPEAKER_00You know how we would know if we actually I we don't actually look at anything. I don't know if you know, like have I ever sent you stats or anything? No, you never sent stats. I because I don't look, I don't even know how to get them. I'm sure there's something, right? I'm sure someone on the team, there's something to that, by the way.
SPEAKER_01There's like a there's a there's a creative exercise here where if you I I know you do you do listen back sometimes, right?
SPEAKER_00Like you do listen to I listen back just to like you know, I listen back. It's not even like an ego thing. I just find I find that I when I listen to my own voice, it's horrifying. It's it's the worst thing in the world for sure. That's why I do it. It's like a growth thing for me. Like I feel like there's something to getting comfortable with those uncomfortable things.
SPEAKER_01I agree. So it's even harder when you back to last week's topic, when you have to watch yourself solo and listen to your voice on a on a video screen. That's a tough one. Yeah, yeah. All right, cool. What's
Tech News Identity And Bitcoin Hype
SPEAKER_01on your mind this week? What's what's new? I think we missed last week. Let's let's catch up a little bit.
SPEAKER_00What's uh what's cracking? A lot going on, right? I mean, I think there's the bigger things going on in the world, whether it's meta getting a judgment against them, which is 17 billion over 10 years, that's a big so what.
SPEAKER_01Well, that they they trade they traded, I think, uh like six to ten percent after that announcement.
SPEAKER_00You know, I I posted something on X that I was like, why is everybody acting like it's a big deal to identify users? Like, just go partner with Clear, they're already doing it. Like, I don't know if you know. I mean, if you've noticed, like on LinkedIn, you can use your clear account on LinkedIn to verify that it's you. Interesting. Okay, it's not hardly publicized, but exists, right? Why don't all these social media right? If all these people actually wanted and cared about verifying that all their users were real users over a certain age and not bots, you go do a deal with clear. That's what they do for a living. But they don't really want to, right? They don't really want to, so anyway, stuff like that. But their their user counts. I think you know, if we want to get economic nerdy, seems like you know, interest rates, long-term yields are kind of edging up, and yeah, Bitcoin, you know, you're our resident Bitcoin expert because I don't know anything about it. So that makes you default expert.
SPEAKER_01That's not true. False. We've had many conversations over the years. I know you you are educated on the topic.
SPEAKER_00By the way, I did watch that documentary on the plane.
SPEAKER_01The Satoshi one?
SPEAKER_00No, no, the one from the guy from the OC. He was on that show, the OC. Okay. And he's married to that woman who's another actress that I forgot what show she's been in a bunch of shows. I think during the pandemic, one of his buddies told him, like, you should invest in Bitcoin. And he's like, Okay, I don't have anything to do. I have an economics degree. I don't believe my friend. He's never given me good sound financial advice. And he did this whole thing. And by the way, he was on Gavin Newsom's podcast, and he hasn't got he's had it hosted on his own website because nobody will give him distribution for it. Really? Is he canceled or something? He's kind of canceled because his whole thing about it is like, what does Matt Damon know about Bitcoin and why is he giving financial advice? Like, he just he kind of I mean, I I don't think he's wrong about a lot of his ideas about the fraudulent ass. There's so many fraudsters in Bitcoin, right? Just like we're seeing all these fraudsters in AI. But there's always fraudsters when people that lack information, there's always gonna be people that scam. But it was really interesting. I was on the plane coming back from vacation, and you know, I travel enough that I run out of things to watch. So I watched it, it was pretty decent. He had an interview with SPF and oh cool right before he got arrested. Wow, fascinating.
SPEAKER_01Yeah, I think I know who you're talking about, but yeah, we shall let's let's un let's unpack that in in terms of the content
Why AEC Undercounts Billable Hours
SPEAKER_01of the show. There's a couple other topics that I maybe would push to the push to the front of this pod. One was a post that you had go pretty viral on LinkedIn this week about billable hour and the AC industry, and how it's quite how our our treatment of the billable hour is very different than how other white-collar professions like lawyers, like you know, maybe maybe maybe accountants, but lawyers in particular, I think you called out how they treat the billable hour, which is like sacred, they're documenting every second of the of their time and they're and they're billing you for every second of their time. And then the AC industry is it's really not like that. And there's other there's factors of of why that's true. So yeah, what give us your thoughts on that on that post.
SPEAKER_00What's the what's the opposite of imposter syndrome? Overconfidence. Yeah, that's lawyers. So I think in our industry, like so the post was really focused, not on why do we keep timesheets? It wasn't that. It was like it was very individualist, right? And and I've seen this with my friends. I think I was probably guilty of it as an engineer. The balancing of your time is a balance between what you need to do minimally to satisfy your boss and not piss off your client because you question. I think I don't think lawyers ever say, was I being efficient? I don't think accountants think, was I being efficient? I think they're just very matter-of-fact. It's like three hours, it took three hours, three and a quarter hours, it took three and a quarter hours. That's what it is, is what it is, right? I think engineers have this way of questioning themselves like, was I really efficient? And I think when you're an engineer, and I think architects have the engineering mindset too, is you're constantly battling, like, what should that have taken me two hours? Or did I like not do it right? And so what happens is this puts people in this in this spot where, well, if I don't turn in 30 billable hours this week, my boss is gonna yell at like, I'm gonna get in trouble, I won't get my bonus, whatever, right? Because you're being told like you need to bill all these hours. And then the client, if you put in that quarter hour, you think the client's just gonna audit your your invoice and say, like, well, why am I paying for your lack of ability? So I think what that does is that puts people in the middle that they're balancing, like it's and so so what happens? So you end up working late hours to get something out to a client, and you don't get to bill the client for it because you're afraid that they're gonna think you're not good at your job or whatever, and then you're not letting your boss know because you're not putting those hours down. So you're basically working for free, and I don't get it. Like, I mean, I I get I get why people do that, but like, why would you why would you give your time to your company for free and not get recognized for it? Like it might be okay, like, hey, I had to put in a bunch of extra hours, and the client, you know, isn't gonna pay for it, right? But that's what needed to happen to get it done. Maybe next time, boss, don't give me, you know, maybe scope more hours for me to get this done. So, one, because they people kind of internalize this stuff, there is no feedback loop to say, hey, maybe we should raise our prices, right? And and the worst part is they look across markets and say, well, our competitor does it for ex well, they're they're killing themselves too. Like everybody's killing themselves individually because they think they need to be competitive. And so I so I think it's just an interesting human, and the feedback I got was just that like, yeah, man, like I work all kinds of hours and I don't get paid, and I don't build a client, and I you know, it's like suck it up. This is the job. Now, there is one firm that I I'm very close to that pays their professionals overtime, which I think is pretty unusual. Okay, they pay them overtime for billable hours, not for I'm screwing around hours, right? Or proposal time or whatever it is, right? For billable hours, if you bill over 40 hours, you get paid hourly for those extra hours. So when I asked the CEO of that company, like, hey, how do you do that? No one else does that, he said, well, what that does is that puts the accountability to whoever the project manager is to go talk to the customer, or they have to write it off. And so it's it's kind of interesting, right? And and so what that does is their project managers or senior leadership, they don't get to just say, like, oh, like I met my budget because Nick worked 80 hours a week and didn't put it on his timesheet. And it's not made up time like, oh, it's like non-billable project direct time. It's like the company's paying these people, it's coming out of your budget, yeah, right. And so if you're judging people on their ability to make a profit on their budget and they're getting hard costs built to them, they have a very short relationship with their company if they don't figure it out. So I think it makes better project management capability versus like, I mean, I think there's a lot of bad project managers in our industry, which is wild if you think about it, right? And I think it's because they don't get charged for everything. And people like work nights and weekends, and it doesn't show up in their project budget.
SPEAKER_01Yeah. I what when I think about these dynamics, I always my first thought goes into is there a free market? And like what's the market mechanism at play? And I'm just playing back what I heard, which is hey, we submitted a bid, we won the bid, and the bid estimates that we should have this amount of hours that are billed per per week, you know, in terms of across the amount of employees that are on the project, right? So you have your so you have your floor, and sometimes there's a scenario where you come under the floor, right? And the you know, the the project goes as planned, things are efficient, maybe the personnel is you know, they're super top performers, and they they actually don't end up working the the the floor of billable hours. And and then, but that's in some ways that's a problem for the firm. Because because they still like they need to figure out how to bill the you know the amount of hours that they they had expected and and budgeted for, right? The revenue planning. And so what ends up happening is like maybe they just still bill those hours and they you know they they somehow wind their way into getting to that floor. That's not a perfect market, that's like intervention, and you're not actually not just billing the amount of hours that were worked, you're billing the floor of hours that you had planned to work. And then on the other side, you have you know the flip side where project does not go as planned. Maybe the personnel is junior and they're you know, they've just started and they're having to learn you know how how things are managed internally and whatever. It takes longer than expected, and they're working extra hours to get down to the expected floor. And but it but but they don't, and at the end of the day, they don't they don't get paid for that extra work. The firm can't bill it because they've already promised the floor of hours and they're worried about that affecting future relationships and the current, you know, the current relationship, whatever it might be. And so I just hear that this is like an imperfect market mechanism because we're like cementing the fact that they're like here is the here's the amount that you're expected to pay to the customer, whether it's you know the owner or the GC in this case, but you're cementing the amount of hours and that's the expectation. And as soon as we're up, we're up or down on that expectation, weird things start to happen and it's not uh it's not optimal.
Budgets Create Weird Billing Behavior
SPEAKER_00Yeah, it's interesting. Like, you know, I didn't I haven't worked in construction construction, right? I've just been more of a construction engineer. And I had no idea. I was talking to a GC a couple of years ago, and they were talking to me about how they do general conditions. So general conditions is basically their time, their people's time, and that gets billed every month to the project for the duration of the project. That's to have a superintendent on site, a project engineer, blah, blah, blah. Right. And there's some margin in there, but it's not a high margin part of the business. And so recently when we were talking about like closeout services, I was like, Well, how do you guys do closeout service? They're like, Oh, well, we do it in our general conditions. And I'm like, Well, what happened? Like, how does gener so I started asking, like, how does this work? And they were telling me, like, well, it's pretty normal that we charge a client full time for someone, but then they're actually doing in that job trailer for that client, they're doing closeout services on an old project. So this client's actually paying for the time and not getting the time, they're actually working on a different project, and apparently that's the norm, like that's the common thing that people don't talk about. I think where I found this conversation, like it's hard to have these conversations in AEC because when people do a lot of shady stuff, what I consider shady, and the customers act like everybody's a commodity, right? But when I had a software development firm, it was super interesting. And this was early day, you know, this is the 90s, right? So people would ask you to build stuff, and I would tell a client, okay, well, here's what we're gonna charge, here's the budget, it's not fixed fee, and here's the hourly rate for my software developers. And I kid you not, one of them was like, Hey, I got an invoice, and you guys you build me for bug fixes, and I was like, Yeah, they're like, Why am I paying for your incompetency? Right, and I was I was like, excuse me? They're like, I mean, why do you guys have bugs? You must not be very good at writing code. It's like, wow, right? That's like, and then so what I broke it down to some clients back then is like, I think I I look at it as like stewardship of resources. So when you sell someone a lump sum project, you are the steward of your resources. When a client buys hourly rate, they are the steward of your resources, right? So we used to have this quote, like, well, just give me a rate sheet. I'm like, great, you know, there's gonna be a project manager on there, they're a hundred bucks now. Like, why do I need a project manager? I can manage the project. I'm like, okay, then it's just hourly rate. And if you think you can manage my people better than my people can manage my people that do this every day, more power to you. That's great. And I think that's the difference between like contract labor and consulting, right? Contract labor, you're just hiring bodies that have a set of skills and they bill you by the hour. If it takes them longer, that's your problem because you're managing them. And so, but it but it's interesting. I I don't think people dig into this much.
Stewardship Of Resources Plus AI Time Back
SPEAKER_00And I and so part of the conversation and what people gave me feedback on is like, you know, maybe the first use case of AI is for people just not to work extra hours for free. Forget about ROI, right?
SPEAKER_01Like I like this take. I think that I think that's actually what's happening. Yeah. You get your time, you get your time back if you're using it well. I actually think like I think this started pre-AI. And if you think about where society has has come, most of us are working from home. Many, many of us. I'd say most of uh most of us are working in some sort of hybrid setup where we're either working from home or we're a cut we're working a couple days from home and then maybe going into the office for a couple couple other days of the week. And in that scenario, really what you're doing is you are working standby. Like you're you're like you're monitoring your work, you know, your work tasks and your projects, right? You do not, you are not needed to bang on the computer for eight hours a day that you're standing in front of the computer. Sometimes you're doing correspondence, you're writing emails, you're you know, you're chatting, you're jumping on Zoom with people, you're solving problems. That's needed. But that's that's not that's not 100% of your time spent. You're working, you're you're working on standby. You are expected to be there from nine to five or nine to seven, whatever it might be, but you're you're on you're on standby for those hours. You're not, you know, you're not, it's not like you walk onto the job site and you're swinging a hammer for for for 10 for eight to ten hours a day, like like many construction people do. So and white collar work in particular, like we've moved into this standby state of working. And COVID and remote work accelerated that. Like we've all admitted that that's like an okay state for for you know the the technology class, the the managerial class to work in. Things are still working, by the way. The economy's fine. Work from home Fridays is now a thing, right? Everyone works from home on Fridays. An extension of the stand of the standby working class, right? We're probably now like, you know, maybe we're standing by for six hours on Friday. I don't think everyone's standing there from from nine to five, right? So, like it, so we're almost piloting the no Friday work days in some to some extent. Yeah. Again, the economy's fine. Like things are working. So technology is getting a get the point is like the technology is getting to us getting to us to a state where we are not like every employee is not required to work 40 hours a week. And we can still maintain and perform really well, have great earnings, have you know, have great GDP and productivity. AI is just taking us another level.
SPEAKER_00Yeah.
Productivity Meritocracy And Tenure Myths
SPEAKER_00I mean, I think there's something to that. But but here's where I will kind of push back a little bit is I think I think when we think about output, right? I think productivity as a variable, like people talk about productivity, work productivity, economists talk about it, and it's like, I don't get it, right? I don't know like how this works. How do you measure it? Right. And so I think the only way you can measure it in terms of productivity is what I pay you and what you produce, full stop. Right. And then when you start looking about the administrative things you do that are not productive, i.e., they don't generate revenue, right? It's it gets really interesting and uncomfortable, right? Because what I'm saying is I pay you on the first and the 15th. On the 31st, there better be more money in the bank than I paid you on the first and the 15th.
SPEAKER_02Yeah.
SPEAKER_00And that's that's what winning is. So this idea, like, well, you know, I you know, and by the way, I've seen this in our industry a lot, what I call like professional entitlement. Well, you hired me because I'm an expert in X, Y, and Z. I'm like perfect, right? Perfect. So therefore, because you're an expert, your income productivity should be off the charts because you're an expert. Right? It's like, it's like when I do speaking, right? I mean, you know, like I charge a lot of money for speaking because I don't speak everywhere. I only speak when, hey, you're a civil engineering firm that's trying to understand AI and innovation and how to allocate resources. I'm your guy, I'm the guy, right? You're a healthcare company trying, like, no, like I'm one of many guys, right? So I've basically said I have limited time to do speaking. So I'm only gonna speak to fewer people, but I'm gonna charge a lot. So my productivity is very high, right? And that's my view of some of the entitlement in our industry where people say, I'm a sustainability expert. I'm like, great, you're one of five in the world and your phone rings off the hook. No, then you're not an expert, yeah, right? You're knowledgeable, and so there you see a lot of that in our industry, and it's kind of problematic. I posted something about startups and meritocracy, and one of the biggest things in our industry is this lack of meritocracy. It's like you've been here for 20 years, and so therefore you make more than the person that's been here for 10 years. Like, what does that have to do with anything? In fact, I was having a conversation with the Sea of our firm the other day, and he said something like, Well, you know, they're talking to me about coming and speaking, which I don't think they're gonna hire me because I was a little bit obtuse. But I was like, he's like, Yeah, you know, we're our culture at our firm is great. Average tenure of our team, 18 years. I'm like, wow, that seems like you've bred mediocrity, right? Because if they're there that long, like they're just like okay, right? Because if they're great, they would have left, you know. And when I talk to our friends at like Andrew, right, and places like that, their average tenure of people other than the executives. It's like four years, three years. Tour of duty, yeah. Because they're they're top people go off. I mean, that's why these, you know, the the PayPal mafia, now the Andrew mafia, right? That's why these ecosystems build out because they are hiring the best of the best, and the best are like amazing. And you're you just say, like, hey man, like I need you to stick around for four years, and that's why the stock vests over four years at the fifth year. You should go do your thing, right? Go do your thing, man. Like, why for these old line industries? How many Acom mafias are there? How many Jacobs mafias are there? There's none. There's none. So I think while I agree with you that the work has changed, I think there's still like a rooting out of stagnant talent, which I think AI is gonna help with a lot, honestly.
SPEAKER_01Yeah, that's fair. And every industry, probably.
SPEAKER_00Yeah, I mean, I mean, especially white collar, right? I I mean, I can ask Claude, like, how many meetings did Nick have today and with who? Right? If we were on the same domain, I can ask Claude all about your productivity. Sure. When is the best time to call Nick? Well, it seems like he never has meetings between two and three on Tuesdays. Sometimes I don't like Claude.
SPEAKER_01That's what you give up, right? Sometimes Claude knows too much.
SPEAKER_00Well, you know, it's funny, like I've a lot of people have asked me, like, because you know I post everything person, my personal stuff on my calendar. And people are like, What did you know? Actually, Barry asked me, Did you know like your personal stuff? I'm like, Oh, you mean like my two o'clock in the afternoon massage appointments on there? He's like, Yeah, he's like, Why do you share that? I'm like, Because honestly, I work so much, I don't want people to think that I don't do other things. Yeah, like I'm fully transparent. Just because I slack you at 2 a.m. on a Tuesday, don't think like I'm just strapped to my computer working all the time. No, I go do other things too. I just don't do I don't have work hours. Like why would I do that?
SPEAKER_02Yeah.
SPEAKER_00Yeah. So my two o'clock Thursday massage is on the calendar, right? Like whatever.
SPEAKER_01Yeah, I mean the culture point and like terms of the the average tenure, it's an interesting point. I think there's some there's there's something inherent, yeah, culturally in our industry that that really values that trait. I know I know it's pretty universal. Like you look across, you know, design, engineering, and and construction, like they do they you do get rewarded and incentivized to stay. And I don't know. Yeah, I think there's there's a lot of our I I mean, uh, yeah, I understand the argument for it. A lot of experienced people who are bought into the culture, you know, the compounding, the compounding benefit of them knowing your principles and your values and how you do business and all those things are are are great. But yeah, they're at some point in time you probably do not pay super close attention to the actual meritocracy and performance of those individuals. There's a there's probably a bar, there's a threshold.
SPEAKER_00Because I think to your point with hybrid work and all this AI stuff and all that, if you don't have the right relation, if you're if you're not culturally contributing to the company, right, which rarely happens via Slack, it happens via in person and like when you are engaged with other people in your company, um, and all you are, I I keep joking around with our engineering team. I was like, Yeah, we need to debug that human endpoint. It's like what? I'm like, yeah, the user, the human endpoint. You debug that human endpoint, right? There's there's a little bit like if you're just a human endpoint on a Zoom call and you have this freedom to work when you want to, then you're only judged by your input and output, which is how much I pay you and how much you bring me.
SPEAKER_03Yeah.
SPEAKER_00I think if you're but when you're in the office, I think and you're engaging with your teammates and building a culture and contributing, that that's different, right?
SPEAKER_01Yeah, yeah. Well the human endpoint, I had a I had a Zoom call today with one of our one of our LPs, and in the mornings I usually will sit outside
When AI Sees Your Whole Calendar
SPEAKER_01and take calls on my patio. And I've gotten increasingly, I mean, yeah, just increasingly I hear people asking if my background is real or fake.
unknownYeah.
SPEAKER_01Before I really never got that. It's like uh yeah, of course he's outside, but everyone sees so many artificial virtual, you know, virtual backgrounds that it's almost the expectation now. But anyway, like we played it out further. There, they were like, hey, is is your back, is that really where you are right now? I'm like, yeah, this is my backyard. I'm sitting outside. But they were like, wow, like how long until you're an apparition and you're you know, there's literally an AI, and it's it's it's like you they have you they have your voice and they can just correspond with me on these like really basic questions that I'm asking you about fun performance and just some admin things. And I'm like, yeah, that's I mean, like, that's it's not it's not a crazy future to to to think through. That's gonna happen.
SPEAKER_00Yeah, you know what's kind of funny. I was on a call yesterday, day before yesterday, with some friends of ours, you know who they are that are pro athletes. Okay. And you know, they're in training right now, right? They're they're working hard. Steve's season starts up soon, right? And there were a bunch of like fireflies, like note taker stuff that came to the call because they were they're working out, they're doing their thing, right? And one of the guys that was on the call, I was like, should I kick these out? He's like, No, no, no, don't kick them out. Like, this is how they keep up.
SPEAKER_02Yeah, sure.
SPEAKER_00Yeah, like this is what they do while they're and this is because they're all investing, right? They're playing and they're investing. He's like, This is what they listen to when they're working out. I was like, Oh my god, really? Like, not music? They're like, No, this is what this is more interesting to them than any podcast or any music. And this is what they do. So they record all of our calls with you know startups and other investors, and that's how they keep up to speed, is while they're working out, they're listening to all those these things. I was like, that's pretty interesting. It's very interesting.
SPEAKER_01Yeah, yeah. It's the reading material at that time. Side note, you mentioned professional athletes. Did you see the Kevin Kevin Durant news yesterday? No, what'd he do? He turned so Kevin Durant's a venture, it's a venture investor. He had a he has a fund. Okay. He out of out of his fund, he invested 250k into Hugging Face, which sold yesterday to NVIDIA. His realized value on that, his cash on cash was he got 60 million back from a 250k investment. Good for him.
SPEAKER_00I know. Isn't that great? It's just good for him. Maybe maybe we're the maybe these athletes can make money and venture and go buy these sports teams instead of all these other randos. Yeah. Like the idea, like if you just look at sports teams, have just become like a tax shelter for the rich. Like the Lakers news and all that, yeah. Well, I mean, I mean, look, I know the Cosla buying the Seahawks, he's not from Seattle. Yeah. Like he doesn't care, right?
SPEAKER_01There's an interesting AGI theme there too, where it's like, what are the few areas that you can invest in that will not have any sort of AGI component, any any AGI threat, and sports is one of them.
SPEAKER_00Yeah. No, I think I think that's did you see the robot Olympics in China? I did. Yeah, the videos are just incredible. That's more comedy though than sports.
SPEAKER_01There's something about a robot burning out, crashing, blowing up in flames that is just super satisfying to the human brain.
SPEAKER_00Oh my god, Barry, I stuck, you know, because you know, I've got some friends in the entertainment business, and this is probably like 10 years ago, um, when there were some early narratives like man, I think it was like with the dog, you know, spot the dog and all this stuff. So a bunch of my friends in the music industry are like, hey KP, what's this whole robotics thing, right? Oh, hey, let's put a put a happy hour together. You guys can all show up. And I had Barry come talk about robots. And all he did was play like robot fail videos the whole time.
SPEAKER_01Crowd pleasers, yeah, yeah.
SPEAKER_00And he realized like it was like, you know, because he had a whole talk about like here's why it failed. Nobody cared. Show us more robot fail videos. I don't care about why it failed.
SPEAKER_01More robot, more robot burns, more robot crashes. Yeah, exactly. Me, me like, me like. Yeah.
Data Centers Backlash And Project Pauses
SPEAKER_01All right. I don't know how much time you have left, but there's one more topic we wanted to cover. Yeah, got a few minutes. Yeah, yeah, a few minutes. So surprising topic. Uh not actually so much. The topic is data centers. Yep. And seemingly over the past, I'd say, 30 days, the data center, you know, is our data centers a moral imperative? Are they good? Are they bad? That conversation has really, really picked up and it's extremely politicized at this point and has been for a while, but like at this point in time, it's it's front and center. There's news stories, you know, in every single major media publication, every single day about the topic. There's conversations about water, there's conversations about state approvals, there's conversations about job and energy costs and and impact on the on the local grid. So there's many different threads that you know that that are encompassed by this by this topic. The AC industry is uniquely positioned as the you know, as a is a core contributor to the development of the AI build-up and the development of data centers. Yeah. Companies that are likely listening to this podcast are constructing, designing, and engineering them. And so it's just, I think it's an important topic that we continue to cover. Yeah. I know that it's probably our position of like, are they good or bad is probably fairly obvious. I don't think we need to we need to cover that. But let's let's let's like, yeah, let's just let's so it's interesting.
SPEAKER_00One, these all these projects are getting put on pause. So engineering firms have ramped up, construction companies have rammed up serve. It's not like they get paid to keep people standing around. So it there is an economic impact, but it it's interesting, you know. So back in the day when I was a civil engineer, one of my clients was Walmart,
The Walmart Parallel For Public Pushback
SPEAKER_00right? And if you think about it, people hated Walmart back then. Walmart's gonna come to our town and crush all the small businesses, they're gonna create a bunch of traffic, so we just kind of hate them, right? And what's interesting is I and the parallel between Walmarts and data centers, there's one thing in common. Both of those types of construction and those types of buildings are low architecture, not a lot of architecture involvement, right? They're big boxes. Yeah. Now, the thing that came up with with Walmart, which I think people need to think about, and to our architecture friends out there that are kind of mad that their backlog is in a bunch of data centers, architecture's roles, besides like designing the things, right, is community engagement.
Architects Lead Community Engagement
SPEAKER_00It is to go out there and sell the story. That's part of their job. And so to my architecture friends, you guys have a big job if you go choose to do it. You should be reaching out to these data centers and saying, look, part of what we do is we do community engagement, we understand what the narratives are, blah, blah, blah. And then we go pitch, right? We go to these communities. Like, would you rather have an MEP engineer or the rich technocrat? Like, is is Elon Musk going to go to a community affairs meeting and pitch a data center well? Absolutely not, right? He's just not going to. And there's a so what we're seeing now is the need for the soft skills and the storytelling, which my civil engineering friends are not going to do well, right? Nor my electrical engineering friends, right? But that is the architect's job. People forget that, right? A little bit. Like it's not just about, oh, make a cool building, right? There is the understanding and the mediation between community needs, community concerns, and what you want to build. And, you know, back in the day of like Walmart explosions, where nobody wanted a Walmart, it was the architects that really got, you know, stirred up to go talk to communities and say, like, hey, what can we do? And I remember working on a project and someone we're at this community meeting, and someone said, I hate how bright the lights are, and I hate the parking lot lights. It bothers me. The light pollution is ridiculous.
SPEAKER_02Yeah.
SPEAKER_00Right. And so the architects like, hey, noted. So then they came up with a different design of where the signage would be, the lights would go off, just all these things, right? But it was like the community was being heard. Now, if it would have been my real estate developer friends showing up in their Mercedes S class and being all rich, right? Showing up trying to sell the community on why this needed to happen, it would have been the same pushback. So I think the technocrats in our industry in them in the market don't realize no one likes them. Nobody likes them, nobody's rooting for them.
SPEAKER_02Yeah, yeah, right.
SPEAKER_00And so I think there's an interesting opportunity for architects that have mostly been left out of this boom, right? Bunch of tilt-up panel buildings. Yeah, there might be a new role for them to start working on this in terms of community engagement and selling a story and negotiating, like, hey, we're gonna do this data center, but we're also gonna do a new park for the kids over here. Right? They're good at like they're great at negotiating money, but good at negotiating experiences.
SPEAKER_01Yeah.
SPEAKER_03Yeah.
SPEAKER_01That's very interesting. I like, I like, I like that idea. I think the I think they they will definitely have a an a differentiated ability to connect to the local community. It's something they've done with other types of projects and work and other verticals. And I agree, like there, there has been a disconnect of you know, uh just a lack of a lack of prominence in terms of architects being in the picture around data centers because no one's really prioritized this design when you think about a box and servers inside, right? So however, I think there's an interesting thought there that like maybe actually some additional design work will change the perception of these of of data centers in general. Like maybe the lack of design is actually really harming their ability to get to get adopted.
SPEAKER_00Yeah. You know, I used to run a 3D animation company in the 2000s and we did a lot of work for architects. And it was funny when when clients would say, like, hey, we don't want to do a 3D animation. I'm like, really? Why? They're like amazing, right? They're so cool, they're so realistic. They're like, No, I'm going in front of a community board and I'm gonna do a watercolor. I'm like, really, why? They're like, because a watercolor is softer and it doesn't have to be dimensionally accurate. Okay, like they already know it's a drawing, right? It's not real, like we want not realistic. Okay, because we can present something in a watercolor format that's softer, that's nicer. It's nothing like what it's gonna be, but it sells better than the realistic rendering that actually does, you know. So think about that. Uh
Why Watercolors Sell Better Than Reality
SPEAKER_00here's your new data center that we're building down the street, and it's in this photorealistic rendering, which probably is accurate, but not great. Does it feel good? Take it to the put it on a big board and do a watercolor. And the community's like, oh, that looks really nice. It's like it'll never be that, but okay.
SPEAKER_01Yeah. I think we need to try. I think we need to try it all. We need to we need to soften a lot of attributes around how data centers are being being pitched and meet and meet people more where they are, which is like, hey, they're they're super concerned about their local community and the impact on on it.
SPEAKER_00Right. And the the reality is probably half of them have genuine concerns, like real, there's real concerns. They should have real concerns. The other half are just mad.
unknownYeah.
SPEAKER_00That's all. Yeah. And they've been told that to be mad, right?
SPEAKER_01I don't like that guy. There's a lot of misinformation happening too. I don't know. There's yeah, I think like slowly we're starting to see some good stories come out. There's like a there's a story yesterday and somewhere in the West Coast where power just electricity bills are being reduced significantly because the data center is uh is is is is helping reduce the cost and basically sharing some of the profits with the local utility and that trickles down. And then I think that there's a job story there. Like, I mean, it's good, like data centers are critical infrastructure, and we have to figure out how to how to integrate more of the positive stories into into where they where they fit in. Yeah.
SPEAKER_00Like I said, I think the Walmart analogy is helpful. Yeah, because I think it was a good, I think it's a good example because there was a point where everybody was anti-Walmart.
SPEAKER_01There's a lot of NMBs. Like this is not I think that I think this is this is an important point. I like I like the analogy too for the reason that it's a historical example of being anti-the new technology wave, but Walmart is I would consider Walmart critical infrastructure in a lot of communities. Your basic needs are in the store. How else do you get them, you know, under emergency circumstances? I would consider you know, everyone considers now factories, manufacturing centers, be critical, critical infrastructure. Why wouldn't the data center also be that?
SPEAKER_00But by the way, the Walmart people never understood it. They're like, why doesn't this community want to spend less on groceries? They're like, these people are like they're insane. Like, what's wrong? And it's like you're missing the point. They're worried about their friends, the local Main Street bookseller, and the local grocery store. They're worried about those guys going out of business.
SPEAKER_02Yep.
SPEAKER_00And so, in many ways, like all these data centers are going to benefit people, but it doesn't matter, right? It doesn't matter, it's feelings.
SPEAKER_02Yep.
SPEAKER_00Architects are better at feelings than us engineers. Architects are good at feelings, they're much better at feelings and storytelling. It's true. So for all of our architect friends that are listening, I just gave you the billion-dollar idea. You're needed. You're needed. And if you're one of our engineering friends, forward this to one of your architecture friends that uh are not crushing their backlog like you are because they're needed out there. Good Nintendo. All right, man.
Final Thoughts And Sign Off
SPEAKER_00It's good seeing you. Good to see you. Talk to you soon.