Learnings and Missteps

Subcontracting Success: Transforming the Trade with Shayne Paterson

• Kaelalosey • Season 3

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In this episode of the Learnings and Missteps podcast, host Jesse welcomes Shane Patterson, founder and CEO of Jenga. With a background in finance and software engineering, Shane has focused on solving complex problems in the construction sector. The conversation highlights Shane's journey into the construction industry, his focus on building solutions for subcontractors, and the complexities involved in estimating and bidding processes. Shane discusses the importance of delivering undeniable value, understanding customer needs, and how technology is catching up to meet the deep requirements of subcontracting. The episode explores Shane's vision for a more efficient and risk-averse future for subcontractors, the concept of 'super subs,' and the potential impact of robotics on the industry.

00:00 Introduction and Guest Overview

01:06 Meet Shane Patterson: Founder and CEO of Jenga

02:50 The Complexity of Construction

03:39 Shane's Journey into Construction

05:57 Challenges and Lessons Learned

12:38 The Importance of Listening and Problem-Solving

26:29 Managing Feature Requests and Business Strategy

32:16 The Early Days of Construction Software

32:41 Challenges in Software Functionality

34:28 Deep Needs of Construction Technology

36:41 The Cost of Building Software

39:44 Subcontractors vs General Contractors

42:02 The Complexity of Subcontracting

48:53 Vision for the Future of Subcontracting

55:39 Overcoming Adoption Barriers

58:03 Delivering Maximum Value

01:02:29 Grand Slam Closing Question



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SPEAKER_02:

When I think about my career, the things that I've enjoyed the most have always been solving hard problems with technology.

SPEAKER_00:

What is going on, LM family? Back again. And this time, if you want to meet super awesome people, like even accidentally, that are way out of your league, start a podcast. Because my guest today is exactly that caliber of individual who we've had a little bit of conversation, and it's clear that he's a caring individual, totally different, comes from a different background, different country, even. I think, I don't know, I may be assuming there, but he's got a sweet spot for the trade contractors, which of course, you know me, I'm super biased about subcontractors out there. And he's come up with maybe I should say it this way he's helping subcontractors, specialty contractors double the number of bids that they can submit, reduce errors, and increase profitability. His name is Mr. Shane Patterson. He is the founder and CEO of Jenga. I keep saying Jeng AI, Jenga AI, Jengang, Jenga. It's just Jenga. All right, folks. Y'all heard it straight from the boss. He said it's just Jenga, which is estimating and pricing suite built for the commercial specialty contractors and helps them again double the bids, get more work out there. Does a lot of fancy stuff, which we're going to ask about because y'all already know I don't know, I'm like not that smart in the tech space, but I do understand valuing people and making lives better for subcontractors. So I'm super excited to talk with Mr. Shane. But before that, if you're new here, this is the Learnings and Missteps podcast, where you get to meet amazing human beings just like you that are sharing their gifts and talents to leave this world better than they found it. I'm Jesse, yourself your servant, and we're about to get to know Mr. Shane Patterson. Mr. Shane, how are you, sir?

SPEAKER_02:

I am fantastic, Jesse.

SPEAKER_00:

How are you? If you can't tell, I got a little bit of energy. I made some coffee this morning, went for a swim, and then I got to working, and then realized I didn't finish my coffee. So I started drinking my coffee again about 30 minutes ago. So I'm like bouncing all over the place.

SPEAKER_02:

It's very dangerous to drink a coffee this late in the day, Jesse.

SPEAKER_00:

I agree. I agree. And you're in Florida right now, so it's like 6:45 your time over there. Yep. Um, all right. So I got a super simple softball question for you, Shane. Sure. How simple is construction?

SPEAKER_02:

Do you know what? I wish you had asked me that question six years ago when I first got into construction, because as far as I knew, there were general contractors, they were architects, and that was about it. Six years later, after immersing myself in construction, I feel like I know even less now than I did then. It's very interesting because for the uninitiated, it feels like a business that is that shouldn't be that hard. But the more you get to know it, the more you realize, wow, there's if I'm honest, Jesse, I don't think I'm not aware of. Well, let me tell you a little bit about my background. Sorry, I'm giving you a answer, but I I am a software engineer. I've been writing software for longer than I care to admit, even though I'm so young, I'm a very old man. I started out in finance, I worked for the British Treasury, I wrote the software that they use to auction out British Treasury bonds. Then I worked for an investment bank. I did a tech startup with my brother in 2013. It was a cloud-based financial analysis when cloud was still sexy. Or at the cloud's not that sexy now. And then when we sold that company, I was looking for something challenging to get into, something interesting. Friend of mine had a stone and tile subcontracting business based out of Manhattan. And he told me there was a big opportunity around preparing takeoffs and proposals. And my first question was, What's a takeoff? I literally had no idea. I walked into his office, he showed me how his company, which at the time was probably around 10 million in revenue, so not tiny, but not huge. And when he showed me what they did, I thought, oh my god, this guy has no idea what he's doing. It can't be like this. So did a bit of research and discovered that yes, when you're bidding construction projects, you genuinely do trace the outlines of the walls so that you can figure out the material quantities. Like there genuinely is a human who is clicking on all of the boundaries to start, yeah, to start preparing a takeoff. And at the time, I'm not sure if you remember those AI videos with the robotic arms picking up the squishy balls. Did you ever see that? Oh, yeah. So this was 2018. Man, not too long ago, yeah. I know. And I thought, you know what? If a robotic arm can pick up a squishy ball, I can write a piece of software that's gonna automate this takeoff problem, and I can build a company that has a material impact on this particular problem space. And here I am, six years later, still very angry with my friend for getting me involved in this very difficult business. But the short answer is I have developed a love for construction companies because the people are incredible, Jesse. Like just such genuine, hardworking, honest people. And the work itself is tough. Not just the actual building work, that's obviously difficult because it's manual, like you're pushing your body, but the information technology side of construction is very difficult because it's the interception point between standards where you think that there's a specific way to communicate something very complex and then just the human aspect, creativity. So it's super, super interesting. So, how much do I know about construction? What do I think of it? I think it's hard, I think it's a tough business, very exciting, and I'm excited to learn more about it. It's probably gonna take a long time because it's tough.

SPEAKER_00:

Yeah, no, uh a hundred percent. I remember being in the field as a as an installer, right? Plumbing apprentice, journeyman. And I had my we'll say opinions about how we did business, right? The type of clients we got that we worked for, the type of projects that we were on, where it was just like it was not, it's it was horrible. Like they treated us like garbage. It was just it was a horrible environment. Like, why are we picking people like this? Thinking, well, you just get better clients. Well, it's not that easy. So over the years, it's like you nailed it. There's so many levels of complexity. I mean, a simple one, which seems simple, right? Like you've got the front end of the business where you're out there doing business development, doing an estimate, doing a material takeoff, so you can produce an estimate, and then you have the execution installation of it, and the just the communication between that internally fails in a lot of in the majority of places. That's kind of how why I have a job. But you decided I could write some code for this, and so I'm curious about the software engineer thing for two reasons, Mr. Shake, because you and I've had some conversations, and you I feel like you and I could just fucking hang out and tell stories and get on forever. Which I've talked with, which is rare, meaning uh other folks that I know that are like programmers that have that kind of brain power, I can't have a conversation with them, and so there's that element, and then, like you said, the people in our industry, they're they're different, it's a notably different personality type of communication, style of communication. And so, for you specifically, um, getting into software engineering code, I'm assuming that's coding. What was it that got you there? What was interesting about it that pulled your attention for you to dedicate so much of your time to it?

SPEAKER_02:

When I think about my career, the things that I've enjoyed the most have always been solving hard problems with technology. Okay. Always been drawn to those sorts of problems. And when you're at the start of your career, you spend a lot of time, and it's probably the same in plumbing. When you're a journey, when you're at the beginning, you're doing all of the actual installation and you're doing all the stuff that the more senior guy doesn't want to do, but you also need to learn, and then as you become more senior, you discover that wow, the easy part was actually writing the code, the hard part is actually understanding what the problem is that you're trying to solve.

SPEAKER_01:

Yes.

SPEAKER_02:

So I spent a lot of my career writing code, managing teams, but understanding when someone says when people describe a technology solution to you, they don't generally people are interesting, Jesse, because they always they can't always tell you what they do want, but they immediately know what they don't want.

SPEAKER_01:

Yes.

SPEAKER_02:

Oh yeah. And they know that after you have spent, let's say, a month putting something together, and then immediately they know, no. When people describe what they want to you, they generally they try to simplify it and they'll describe it to you in the terms that they understand, like make the Excel spreadsheet do this one thing or put a button here that does that. And the interesting part is uh really unpacking what do they when they say I want you to put this piece of information into this site and this spreadsheet, what do they actually mean? Why are they asking it in those terms? And that's what I spend my time doing. And essentially, I don't know if you've ever heard the phrase asking. There's a book called The Wise, or there's a technique called The Wise, which is basically just ask why. And I say the same things to my teams. Like when someone says to you, I need you to do this, you ask the question why you can, and you can sound like a three-year-old. Yes, experience the what it's like when you speak to a three-year-old who continuously asks you why. At some point you realize, wow, I I know nothing. You know, because oh, totally, because asking those questions, asking the whys really gets down to the root of the problem, you know.

SPEAKER_00:

Yeah, yes, yes, yeah. The the five whys, that's the way I understand, yes, is a part of the lean construction problem-solving framework because it helps us get to the root cause. And I love the way you said it, right? Like, we're not, I'll say it. Here's a confession from me. I suck at articulating what I want. But man, I could tell you what I don't want, quick, right? Like, that's easy. Yeah, and so like the five wives helps us get layer after layer to really understand the root of the thing. Yep, because if we just take action on the presenting problem, we're not gonna solve the underlying issue, and we got to dig to get to the underlying issue. So you seem to have an appreciation, or maybe not appreciation, but patience to listen to people to really understand their problem. Where does that come from? Is that like an innate thing that came up through your family, or is it really a function of well, that's the best way to solve problems and deliver a solution that's gonna knock their socks off? We're gonna do the LM family member shout-out. And this one goes to Mr. Steve Wood. He sent me this message. He says, You have a way of making things concise and you hit the nail squarely on the head. I'm truly glad that the algorithm led me to you. And I connected him with him on the Instagram. I'm starting to get some traction on the Instagram. So, Mr. Wood, I appreciate you, man, taking the time to repost and engage with the content. I appreciate most of all that you're signaling back to me that the content is landing with you and bringing you some kind of value. And to the rest of you, LM family members out there, you already know I love attention. So if you leave a review, drop some stars, leave me a comment, even a stinky comment, I can handle it. That gives me an opportunity to shout you out in a future episode.

SPEAKER_02:

It's something that I had to learn. Sometimes I tell my wife, I miss my 20s because I knew everything then. Yes. When I was younger, I had a bad habit of interrupting people and thinking, I know what you're gonna say, you don't have to finish, let me tell you. And I'm a big fan of learning. Stand on the shoulders of giants, and I think a common theme from people that are accomplished is they will listen to what other people say. So having seen that from other people, I want to emulate that. I I want to stand on the shoulders of giants, so it's a learned behavior, and I'm very happy that I've spent the time to learn it because it's changed a lot of things about my life.

SPEAKER_00:

Oh, well, I don't know about your life, but I know it sure changed a lot in my life. I remember a friend of mine called a co-worker friend. This is way back when I was like in my 20s, where I was performance, and he's like, Jesse, you ask a lot of questions. I'm like, Yeah, because I really want to know. He's like, No, he's like, but you answer your own questions, you ask questions like you care about what we're gonna say, and really you're just setting yourself up to go on one of your rants, like you always do. I'm like, No, I don't. He said that to you. Wow, I went home to my ex-wife now, and I said, Can you believe what so-and-so said? And she just kind of looked at me, she's like, Yep. Oh like, oh, I got a problem. I asked my team, what was the number one thing I needed to work on? And like, we all came up with this list. We're on a project here in San Antonio, and and the deal was we were all gonna share our list for each other and help each other, like call each other out on it actively so we can make it better faster. The three guys all had the same complaint, they all said that I didn't listen, and I believed for real that I was the best damn listener in the company. Wow, and so I again right here that now I'm in my mid-30s when this happens, anyhow. What they pointed out, what we figured out was when they brought me a problem that I had been experienced before, I wouldn't, I would cut them off and tell them what to do. The rest of the time, I would I was listening, I was a little more patient. But if it was a thing like, hey, we got this issue with the supplier, um, okay, and I'm on the phone calling them, and they're like, Do you let me finish? Like, that's all right, I know what needs to happen. Don't worry about it. Oh, you should do this. And so it was, it took a lot of practice for me to break that habit. And I actually timed myself because I told the guys, for real, I said, guys, I said, I'm not, I don't want to defend myself. You are right, but I need you to signal to me when I'm doing it wrong, and that's how we discovered it was in that specific circumstance when it was a problem that I was very familiar with, I would just give them the answer. And so they keep, they would give me a signal. One guy will pull his ear, the other guy will kind of do this, and so I would like, oh okay, shut your mouth, Jess. And so, in order for me to keep my mouth shut, I had to focus on something. So I would focus on my why, I would tap I would time it. Wow, the longest it ever took for me to let them finish talking was two minutes. It was almost always less than 60 seconds for me to keep my mouth quiet and let them finish telling me the thing. And I thought I was being efficient, except that sure I was being efficient in terms of time, but in terms of social capital and relationship, entirely wasteful because I was offending them or disrespecting them every time I did that. So I say that to people if you're in that situation, time yourself, man. It's really not that much more time to just let people finish talking.

SPEAKER_02:

So I don't know if you know a guy like Jordan Peterson. I know that he some of his politics is a little uh is a little controversial, but I've read his book. But also, I have tremendous respect for the way that he handles discussions because what he always does is no matter what people are saying to him, he always listens. And I think nine times out of ten, you do know what people are gonna say, and you probably could cut them off, but one out of ten, ten percent of the time, people are gonna surprise you, and I also think that uh you surprise yourself when you actually listen to people because sometimes your response is in some cases the opposite of what you thought you were gonna say at the start of the conversation, and to bring it back to construction. Honestly, we were talking about big mistakes, and when I started the company, my big mistake was trying to deliver more than anyone had ever done before, not understanding how risky doing what I was doing was gonna be. So let me unpack that for you. So yeah, please, I'm curious. So so my friend brought me into his office, and it was 1 p.m. in the afternoon, and he had a bottle of whiskey on his desk, which he opened up and we had a sip of whiskey, which which was shocking for me, honestly. I was like, wow, okay. And then he showed me what it looks like for him to go through the bid process, and of course, it's your oxygen in a construction, everything comes through, almost every i mean, it depends on your business, but in most cases it comes through a bid process. And at the end of the session with him, I thought, you know what? Wouldn't it be cool if Yunus could be his name? My friends called Yunus. If Yunus is sitting in the bar and Jenga delivers his proposal for him. I said to you, what do you think of that? He was like, I would love that. Absolutely grow my business. So if you think about what's involved in doing that, so basically, you've got to you've got to do the takeoff accurately. And some trades are more risky than others, some scopes are more risky than others. He was in stone and tile. I knew nothing. Honestly, before I started, I didn't even know what a subcontractor was. He had to explain to me. I didn't even understand the function of a general contract, if I'm honest. I I'd done re-throughs on my house. I know it's crazy. I was so ignorant. But I I knew that I needed to start somewhere. I needed to under, I needed to work with someone who was an expert, and that was what his expertise was in. He actually said to me, You shouldn't start in stone and tile because it's too easy. In the finish trades, I'm not sure, Jesse, how familiar you are with the finished trades, but one of the riskiest is stone because stone slabs are so expensive.

SPEAKER_00:

Ah, yeah.

SPEAKER_02:

One of the most difficult is ironically, not I know nothing about the actual installation of it, but I'm sure that it's very challenging and tough and requires expertise. The toughness I'm talking about is getting the number right, like actually making money on posing. Getting that right is hard because you've got waste factors which impact you, you know, the margins are always tight. And you if you get the waste factors wrong, then you don't make money. So you do all this work, it feels like you're making money, but at the end, you're paying the you're paying your clients to install their stuff for them. Yeah, oh yeah. So my big idea was what how do I get to a place where I can do this for Unis? So I thought, let's start with I I don't have a machine that can do the takeoffs yet, but let's I'll build out an estimation team, they'll do the takeoffs, I'll build out a pricing engine so that I can I can material price for the scope of works that that I'm focused on. And my team will receive the bid invitation and they'll turn it into a fully priced bid. And I'll give that to my customer, and my customer will change the number, and then they'll they'll make it theirs and they'll submit that. I'll tell them, guys, please don't bid with this number because this is just your starting point. Right. Started to bring on customers, and then one of my customers called me up and said, Shane, we just lost$25,000. So they paid me$300 for the piece of work that we did. We just lost$25,000 on this project because of your price. And I said, Huh? What you submitted your proposal using our price? Are you guys insane? Did they really just do that? I promise you they did that, Jesse. And it was at that point that I realized, oh my god, the amount of risk that I am exposing myself to, because you can literally have a single, you can have like a reception desk, like a circular stone reception desk, that because it's circular, will be like 10 times the cost of just the square footage. So I realized, oh my god, because I didn't know enough, I was literally giving people a number. I was telling them, guys, please check everything. And they were saying, Yes, we're gonna check everything, Shane. But you know how it gets, you get busy, 90% of the time, my number's good. They're checking it and it's good. Actually, 90 98% of the time it's good, 2% of the time, it's gonna put you out of business. Do you know?

SPEAKER_00:

Right. Yes, yes.

SPEAKER_02:

And the second I realized that I literally changed the direction of the business because I just I didn't want to put myself at that level of risk, right? I didn't want to put my customers at that level of risk, so yeah, it was pretty scary. I feel like we we dodged a bullet on spotting that relatively early. When I say early, two years into the journey was but that was a very scary lesson for me.

SPEAKER_00:

Yeah, so so it's like okay, you're hanging out with Eunice, drinking whiskey, and you say, you know what? I need to make this so we could be drinking whiskey at the bar, not the office. Right. Came up with this idea, yep, and you put it into play. You hired a team and you started producing a product and selling the product, and then some bugs started popping out in terms of the way the end user was using it, even though you advised them not to do that because I you're 100% right. Like you get an invite, an RFP, and you get like due to day by 3 p.m. It's like, what do you mean? Like, come on, man. I need time to like do a solid bid or estimate takeoff and check all the things. Now, here's see if I can make the connection. You're good, you've developed the skill of listening and really seeking to understand the root of the problem for the client or the people that you're serving. You also have a business, you want to manage risk, not just for yourself, but also for the end user. How do you draw the line? Because I'm sure now, like what you were describing was probably way less automation or AI than there is today in Jenga. How where do you draw the line with regard to feature requests from end users? How do you manage that? If they want new features, was that something that's like you just expect that at the beginning when you're like in development? What does that look like in terms of feature requests and discerning whether it should be done or if I don't do it, I might lose the contract. That sort of stuff. Is that a challenge you have to wrestle with?

SPEAKER_02:

100%. It's very hard, Jesse, because people always want stuff, especially if they're not paying for it, if you know what I mean. It literally costs you nothing to ask a software vendor to add a feature. So it's a challenge, but I think that the well, I'll tell you how I how we manage it. So I told you that we delivered a piece of uh service, if you will. I still want to do that. I still want Younus to sit at the bar and get his fully priced bid and decide it's good and send it. I still want that, but I don't want him to lose money. Take him a couple more years to understand a little more about construction and about what the risks are and how to mitigate those risks. And part of how we're solving it is some things you can fully automate and some things you can't. So coming back to your question about how do I manage requirements? My North Star is achieving. I'll tell you what we want. Here's what I want for my customers. Let me describe a customer that has seen success with Jengai. This customer has doubled their revenue in three years and they've tripled their profits. So that to me is what success looks like.

SPEAKER_01:

Yes.

SPEAKER_02:

So that's my North Star. My North Star is the functionality that we're gonna put in the system. No arguments. I'm gonna prioritize it. Anything you tell me you want that aligns with that goal, I'm gonna put in. I'm not even gonna argue with you, I'm gonna figure out how to do it and I'm gonna do it. If I have to raise more money to do that, I'll do it. If if I have to knock off a piece of functionality that's less useful than that and deliver that later, I'll do it. So if it's if it aligns strongly with the North Star, it's a no-brainer. If I discover something new, then that's easy. Well, what's a little harder is functionality that sort of helps but doesn't really. And the way we deal with that is we try to figure out if it if is there some peripheral benefit to people apart from you. And if there is, then we'll figure out okay, we'll still do it, but you know, we'll do it when I'm sure you're familiar with the concept of ROCS. Have you heard of EOS, entrepreneurial operating system? Oh, yes, yep. So a concept that I think works really well when you have limited resources and you always have. Limited resource is you differentiate between a rock, which is a big thing that requires an investment by your team from a stone, which is a smaller thing that requires less from sand. And the idea is you can the sand represents all of the small little things that you do, but at the end, you haven't really moved the needle forward. So we're very particular about moving the needle forwards with the strategic things, which are the rocks. And then the stones are uh the smaller, easier to deliver things, and the sand is just fills in the gap. You know what I mean? You can put rocks in, you can put some stones in, and you can throw in some sand. But if it's all sand, there's no space for anything else. So that's how we think about it. And then a software company, in the same way as a construction company, is a services company delivering service. So sometimes you just have to bite the bullet. If you've got a big cup company that wants something and feels like it's urgent, and there are strategic accounts, yeah, we'll just do it. But the short answer, Jesse, it's hard. It's very hard. Yeah.

SPEAKER_00:

Well, yeah, I appreciate that. And I love the big rock stones and sand. My uh reason I'm familiar with it, I remember seeing a video, I think it was Stephen Covey, who showed, right? He's trying to fill a jar. He's like, if everybody spends all their time with the sand, if you take care of the sand first, you can't fit the big rocks and the stones. That's right. You take care of the big rocks first, then the stones, then the sand, you can take care of all of it. But so it's a matter of right, and I'm like, man, that was magic. Oh, but he's not showing me how to fill a jar, he's teaching me how to think. Got it.

SPEAKER_02:

Cov is cover's incredible. He's got a couple of really great like begin with the end in mind. So it sounds like a simple concept, but so powerful.

SPEAKER_00:

Yes, totally, totally. And so on the feature request, I've this was about five years, five, five to seven years ago, when I had like a real job, there was a lot all of a sudden, it was kind of when there started being a big focus of software in construction, right? Coming into I mean, now it's like anything, there's all kinds of options or ideas coming into the space. Back then there wasn't a whole lot, but they started. And what I picked, I wasn't aware, it took me a couple, a few conversations to figure out because I was always in these conversations. I don't know why. Anyways, and we I remember sitting and I'm like talking to these one people, this one group, and I'm like, okay, does it do this? And they were like, they would say it can, right? And I thought they were being just formal in their answer, like, yes, it can. What I discovered is they're saying they will make it do it, like it wasn't the current functionality. And so what happened was okay, well, and we got a test run because we were gonna be contributing to the whatever, and then we got it, and it didn't do anything that we wanted it to do. And they're like, No, we said it can, meaning we can program it to do that, and I'm like, that's not what I was asking. Like, can it do it now, man? And so I kind of learned like, okay, I gotta talk to these guys differently, and then I would see several people like they had a really great idea that was like one singular vertical, right? Right, super deep, like just great, and then they started Frankensteining putting all kinds of other features because people wanted them, but and you already nailed it. One person wanted it, nobody else cared about that feature, and then the other feature was one person, then one. So I credit it to a matter of discipline, or more clearly, like you said, they didn't have a true north, and so they were just saying yes, which ended up they ended up underperforming because they couldn't say no to anything, and so I've always been I've never been on that side, like in that type of business, but I would imagine it'd be difficult to say like no, like that's not we're not gonna do that.

SPEAKER_02:

It's very hard, but I do want to say something about about construction. I when I first started in construction, I I observed something similar to what you just said, which is why is it that the software goes so deep and solves this one little problem and does nothing around that problem? And I I really didn't have an answer to it, but I now understand why. The why is because the technology needs of construction are deep, very deep. And if you're not in it, you don't realize. And the funny part is construction companies to a certain extent have been building their own systems for many years, and they'll put it together with all of the tools that are at their disposal. So a couple of Excel spreadsheets, maybe databases. The information management problem is real, and you've solved it by putting together the capabilities that are at your disposal, and sometimes it's taken years, and you built a system that works. You're making money, your company's making money, and then a software guy will come along and they'll look at the solution that you've put together and they'll turn up their nose at it, and they'll go, I can solve this problem much easier, much easier, mostly because they don't understand the complexity of the problem. So they'll start working on a solution and they'll realize, oh my god, this is way harder than I thought. And what ends up happening, and it's hard because I've seen so many talks where people say that construction companies or people in construction are anti-tech, and that is not my belief at all. I think they're very pro-tech. I think that tech has never been good enough in the past to actually service the needs of construction, both in the information technology side, just moving bits around, and also the physical side, like the tooling that allows you to actually do the build quicker. So I think that's what's happened in the past. So, what will happen to a tech company is they'll start working on a problem and they'll realize wow, we've got to go really deep to solve this problem, and it costs a lot of money to build software, like a crazy amount of money to build. People don't realize because we have so many very cool free platforms that we get to use, and those companies that are giving it to us have spent billions on those platforms. We don't realize because we just use it and it's fantastic, right? We're the product, so they end up getting stuck because they've invested all of their the money that they had to build their product on the one problem, like takeoff softwares, for instance. They're great at being a takeoff product, but they don't, they're not great at building a proposal, they're not great at really anything apart from being a take-off software. Doing the takeoffs, not because the technologists that built it aren't great technologists, just because that problem itself is a hard problem to solve, and making it better really uses up all of your spend that you've allocated to technology. So that is very I've never seen it in another sector. Like really, I promise you, I haven't seen it in government finance, I haven't seen it in investment banking. I mean, I haven't worked in every like I haven't worked in rocket science, you know what I mean? Yeah, but you've been in some pretty darn serious businesses, so yeah. Thank you. But uh the construction sector has a very deep need for technology, and that's what I find so exciting about being in having moaned about Younis pulling me into construction technology almost years ago. He's my best friend, and sometimes I hate him and sometimes I love him because he's given me the opportunity to work in this vibrant, incredible industry. And what's super exciting about it is the fact that finally technology is catching up to be able to do provide that meaningful service, 100% to be able to actually do something that really makes a big difference. Like like I mentioned our success for a platform to position someone in a place where in three years they can triple their profit is pretty huge. And it's not because it's not because I'm an Einstein, it's just that I've met the right people and with their help, we've been able to build a platform that's really supported the needs that they have, but the technology is just getting very exciting, like its capabilities are catching up to the needs of construction, so yeah, it's an exciting time.

SPEAKER_00:

Yeah, well, you know, the what so one thing that I really appreciate about you, Shane and Jenga, is that it is subcontractor or trade focused. 100%. And it's like my belief because here's what really irritates the hell out of me uh of all the different things that are out there. They say we're doing this thing, this new app, or whatever it is, doesn't matter. This digital solution is gonna make the workers' day better. It's not true, nobody has gotten to that point yet. That's not bad. But what's underlying that is who what the providers think that their system, whatever it is they're producing or offering, can serve a general contractor and a subcontractor and an architect and an engineer. And I don't believe that to be true because they are very different worlds. I my and maybe it's just my gray hairs and hard-headed thinking. I believe there needs to be a solution for subcontractors and a solution for general contractors, and they're separate, they can be complementary, but they are not the same. And so I'm gonna cry a little bit more. What I see is most of the stuff that is created is very GC centric. Why? Because they got bigger dollars, right? Right, like they got bigger dollars, they got more access, they got more influence, and all of I get all of that, right? Branding and marketing and reach and all of saturating the market, like I get it. But what ends up happening, and I think it's a good thing, depending on where you are in the business. What ends up happening is the subcontractors are underserved, and underserved, I think, is putting it lightly. They're straight up neglected, so it's like a blue ocean. I agree. It's like doing something for subcontractors, serving subcontractors in some form is wide open for people like you who give a damn and are willing to put in the time to come and make a something not just impactful, but also a viable business. Am I what do you think about that?

SPEAKER_02:

You hit the nail on the head. So every single software company that I'm aware of right now, if you think about the pro cores of the world, you think about the autodesks of the world, they started with a GC and then they try to retrofit the subcontractors' world into their software.

SPEAKER_01:

Yep.

SPEAKER_02:

And when I talk about the complexity of construction companies, I'm literally talking about the complexity of being a subcontractor. Because if you're a subcontractor, one, you've got to you've got to manage cash, two, you've got to manage your bidding, three, you've got to manage people, four, there are parts of you're actually doing the construction. And there are other teams that are in your way that sometimes ruin your work, that don't care about your timeline or your schedule, or they care about their own stuff. When I say um construction is complex, I should have qualified better. Being a subcontractor is probably one of the hardest businesses ever. And what's interesting about that, that I'm aware of that I've ever seen, what's interesting about it is to start up a subcontracting business is not hard. To get to, it has its challenges. You're gonna get gray hairs and have sleepless nights. Absolutely. But if you're like you're a master plumber, I think you're a master plumber, yeah. That would be relatively it would be hard work and it would be 24-7, but you could do it quite easily. But once you get there, it's like it starts out and it seems like I'm gonna start this up and you start making money straight away, and you buy the Bentley and you buy the big house, and everything's great. You've got lots of money, your business is growing. But level two opens up when you're going from a million to say two and a half, and then you realize, wow, okay, I am growing year on year, I'm doubling my revenues, but I'm running low on cash. Like I have to sell the Bentley, I've got to move into a smaller house. My my kids can't go to private school anymore. But my company's growing, and then as you so what's my point? My point is it's it seems like a it's a sector that is it has a low barrier to entry, which is great when you're starting, but it sucks when you're a mature business because you've got all of these people starting up who don't know how to bid who are undercutting you and losing money on so that part's hard. And then as you start to grow and get and as you start to become an enterprise, it opens up the next level of complexity. Like it doesn't get easier, it just gets harder. Yes, you get to two and a half, you get to five, you get to ten, and you feel like wow, even though the business is getting bigger, even though my revenue is huge, the bank manager comes out to see me when I go to the bank, I always feel like I've got no money. I always feel like I'm on the verge of bankruptcy. So that's something I've not seen in any other sector. And the other thing about who's got the money. I think that part of the reason why subcontracting, and this was I haven't done any beyond speaking to people, some very knowledgeable people. Um I didn't discover this myself. I've spoken to some great, very smart people who've been thinking about this for a long time. The undercutting hurts the bottom line of other like the bird process, the fact that it's there have been savings, there have been productivity boosts in construction, but it doesn't get passed on to the sub because there's always someone who wants to bid the job a little lower than you. Do you know what I mean? So I know that I'm taking a very circuitous route to arriving at why subs. So because it's such a hard business, it means that it's hard to sell software to subcontractors. It's very hard because it produces, if you're still around after 10 years, if you haven't gone bankrupt, it's because you've been very careful. Like you've been very careful about disrupting your process, you've been very careful about where you spend your money, and it's very difficult to sell you software because in your mind, you've got a solution. Yes, it's made out of bubblegum and seller tape, and it works, it works, and you've got a 65-year-old woman who's on the verge of retiring, who's holding it all together for you, but it's working, and it's my$15 million business is working. So from that perspective, the subcontractor is a tough customer to have, and most software vendors start with the GC and then cobble on functionality for the sub. But the way I think about it is what you said. It's and honestly, Jesse, I told you when I started this journey, I didn't even know what a subcontractor was. But the more I learned about the business and the complexity of the business, and the more people that I met who were subcontractors, the more excited and the more I want to, I really want to change, like I I want to make being a subcontractor great. Do you know what I mean? And I think technology is getting to a place where it can be great. Because I'll tell you my vision. I I mentioned that I I want units to sit in the bar and bird projects, but my other vision is in the subcontracting space, it's super interesting that you have hundreds of you, you'll hear people say it's very fragmented. Construction is fragmented. I don't know if you've heard those words before.

SPEAKER_00:

Oh, yeah, totally.

SPEAKER_02:

And when if you look at there are a lot, there are a number of very big general contractors, but there are very few big subcontractors.

SPEAKER_01:

Yep.

SPEAKER_02:

And my interpretation of that is it's a function of the complexity of running a subcontracting business. So what happens is you started at a mill, then you got to five, then you got to 10, then you got to 15, then you got to 25, then you got to 45, and then three of your estimators made a mistake, and one of your one of your installation teams made a mistake, and suddenly you're bankrupt. Not because you don't have$30 million worth of future projects, but because you're out of cash. Yeah, you're a$40 million business that is that is that can run out of cash. That's what happens. So, what I would like to do, like my vision for Jen, where I would like to get to with Jengai, is one, I want to take the risk out of bidding. Because if you think about it, every proposal that you submit, especially as a so if you're a residential subcontractor, it's less risky because your relationship is single serving generally. Like you do work for one GC and then, but if you're a commercial GC, sorry, a commercial sub, that relationship is worth millions and millions over a five to ten year period or longer, if you're good. It means that if you make a mistake, you got to eat it. Okay.

SPEAKER_01:

Oh, yeah.

SPEAKER_02:

Which means that the that you're servicing their bid request, but you're putting yourself at risk every time you do. Because if you make a mistake, you eat that mistake. And if you make uh, let's say a$30,000 mistake, that's bottom line money. That's not top line money. If you make it, let's say a 20% margin, okay. Normally it's like five to ten percent. So if you make a five percent margin, think about the size of the bid to get to thirty thousand dollars to spend. That's the risk that you take every single time you sit. So take the risk out of proposals. How? With a platform that maximizes the value you get out of your people and AI-based tooling that gets everything out of the very inefficient method of sharing the ask, which is the architectural plans. So simplify that part. Okay, that's part one. Part two is imagine if I can because we've made the, and this might sound a little scary for some. What I see happening is the super sub starting to emerge. And what do I mean by a super sub? We have some of them already. It's essentially a subcontracting company that is bidding on more than one scope in a project. That's the path to a big construction company.

SPEAKER_01:

Yeah.

SPEAKER_02:

Because you can get access to, if you think about it, if you're a mature subcontractor, you're already one of the top five in your area, let's say. Like you're bidding all the big projects, and sometimes you win, sometimes you lose. But you're already good at your job, you're already an expert, basically. The only way to make more money is to start to get access to more of the money in the project, and the only way to do that is to bid more scopes. So I think that what we'll see is the super sub, and I think we'll see more and more installation companies that are sub-subs to these super subs doing the actual installation work. And I think we're going to start to see some robotics having an impact on the installers, which is very exciting to me, but just not an area that I'm focused on right now.

SPEAKER_00:

So yeah, I'm sorry, I'll give you a very long answer to because I agree. I mean, my background, I worked with TD Industries and they're mechanical contractors. So was we did mechanical with sheet metal, plumbing, and hydronic systems, right? Piping. Yep. So we did all of that for a little like a blink of an eye. We started doing electrical also here in San Antonio, anyway. So we did, we were all MEP. The problem was we had acquired the workforce of this was during when remember, I don't know if you're when Enron blew up. Yeah. So when that happened, there was some big giant electrical conglomerate that was part of that, and it dissolved. So all of those people were available in the market. And we said as an organization, let's start an electrical arm. Wow. And we did. But all of those that that workforce that we acquired came in totally different culture, right? We were a servant leadership kind of employee-owned company. They were uh screw everybody, we're gonna make as much as we can, type of uh culture, basically, yes, and so we're all on the sand. And I was fortunate enough to be one of those early projects where mechanical, electrical, it was all us, and I was like fighting with my co-worker, like wow, like really fine over dumb stuff that was gonna cost me a lot of money, which was gonna cost the company money. It was better for their little budget, their electrical, anyways. It was a disaster that lasted about two years, and then we stopped it. But to your point, I see, I mean, there are some like Southland industries, there's a lot of organizations that are, and I'm starting to see this trend too. General contractors are starting to go back to having self-perform operations, meaning they're having some of the subcontract work that they used to subcontract out. They're starting to take it in as part of their scope and operate it under their umbrella. All that to say, like, I agree 100%. And then the idea of like robotics coming into the industry, there's it's happening right now. I mean, well, I got introduced to the Tremble, which wasn't it's not necessarily a robot, but it was like a step, which is uh what do you call that? GPS locating, so we could do layouts, we could put all our piping and our all the all of our stuff, which used to, and I did the math and I timed it. I sat there with my timer. A scope that would take us six days with nine guys, we were able to do in four days with three guys, amazing, and the accuracy. There was there, we just didn't even, it's embarrassing how much more accurate it was with the tremble. So that was um not necessarily a robot, but I've been seeing these these layout, these robots that do layout, they just hold around. Cool, I wish I had one of those because you know what I had to do, Shane? I had to get me a six-inch welded flange, which weighs about 15 pounds, tie a string in my chalk length to it, put it at the end of the corridor, walk all the way down, pop my line, go back and get my welding flange. Like that's how I automated the and now they got these super crawl like, man, you're cheaters. But I think it's just around the corner, it's happening slowly. Now, I gotta ask you this question because I'm curious, and you already touched on it, right? You're talking about like a lot of the subcontractors are apprehensive. I'll say that is that word about bringing something in that is foreign to their current method, even though their method is bubblegum and duct tape, right? It works right. So, what's the most common objection you get around Jenga and adoption or maybe even consideration to use it and look at the thing?

SPEAKER_02:

I'll tell you what makes it tough. What makes it tough is at this point in time, the person that gets the most value out of Jenga is the salesperson. Ah if you think about you as a salesperson, my typical so the even the age demographic is just so interesting in construction too. Yeah, you've got this group of old god that are honestly, I was gonna say 60, but let's say 65 onwards, who are amazing at their job, like wonderful, super talented expert in their field. Then there's like this gap, there's no one, and then the next age is like 35. It's so interesting. So you have these people who have been very good at their job using the system systems that they have, and part of their thinking is I like the way I do things, and I'm making money. Why should I change? And part of it is I'm only gonna be doing this for another two and a half to five years. Why should I learn something new? So, what that means is in any industry, selling to salespeople is hard because a salesperson thinks if I'm not selling, I'm not making money. I'm not gonna, I'm not gonna. And one guy said, start chopping as quickly as possible. And Washington said, I'm gonna sharpen my axe. Yeah, yeah, it's quite rare for takes a lot for a salesperson to say, I'm gonna sharpen my axe. They'll generally go, let me start chopping, baby. So that makes it a little tough. But basically, it means that we have to deliver more value. So product, it has to be so obvious that it's better. So, and that's part of why we have to spend so much time making it better, because we have to get to this point where I can go into a big company and I can look at how they're doing things, and I can literally say, okay, right now it takes you four and a half hours to get this bit out the door. With my software, it's gonna take you half an hour. What are you gonna do with that other four hours? Like, what are you gonna do? Talk to customers, you're gonna sell more. So that's basically, and please don't think that I'm saying that it's easy because it's tough, it's tough to sell, and the product, despite the fact that it's so good and it does so much, we sell to the entire team. So we're literally saying, okay, you have a team of five estimators and 15 salespeople, they're all gonna have to change. And when they change, you're gonna have 15 salespeople, but they're gonna have the selling capacity of 25. Do you know what I mean? So that's basically how we've that's how we think about it. It's basically a deliver maximum value, deliver more value, and then the objection is learning. I don't want to learn, I don't want to take the time to learn. So we've trained, we've got a fantastic team of people that literally hold your hand. Oh, okay, go from zero to a hundred in a couple of hours. That's that's essentially how we've done it.

SPEAKER_00:

I love that answer because you know how many times that I you probably could tell when we got some new thing that again, this is a long time ago. They're like, Oh, just I'd like trying new, you know, if it improved production, I was open to it, or if it helped me analyze, make decisions that would impact production, I was open to it. And so I ended up being the in-house SME on whatever stupid new thing they got. And I normally I'm like, okay, like how do we use the thing? I'm like, well, we sent you the PowerPoint. Right. I'm like, oh, and that was the norm. Now this was 10-15 years ago, but that was an I was like, man, this sucks. Like, they got it, they got it, they they were selling software the way I dated. It wasn't great on the first one, and after that, forget about it.

SPEAKER_02:

So, Jesse, we started like that. Honestly, my idea was let's make the software as easy as possible to use so that it's easy. The problem is when the problem you're solving is complex, like the number of the different ways you can present doing a piece of construction. It's like limitless. There's a limitless number of, and the flow of information is very complex. So even with a focus on making it simple, it's still not simple. So it took me a while to internalize it. I've got to I've got to help my customers be successful on my platform, and that's where we are right now.

SPEAKER_00:

That's amazing. Good for you. Good for you. I folks, LM family, if you didn't hear it, Mr. Shane said we just need to deliver more value. We have to make it like undeniably valuable for the user, which I think is powerful. I mean, in terms of you being the leader of the organization, you've shared your vision with us. But being a I don't know what I would classify myself a wannabe entrepreneur, pretender, trying to learn how to start run a business. It's easy for me to blame the client or blame the customer. But if I just delivered more value, there would be no problem. And I think that's true for all of us in any situation, but I'm gonna keep it in the business vein. Like, if you strive, like deliver more value and you win. You got to be committed to that. And it's not easy, it's a long road. Oh my goodness. Okay, Mr. Shane, are you ready for the grand slam closing question? I think so. If now I'm really worried. Well, it's a good, but I don't, you shouldn't have anything to worry about. I think the path that you've traveled in terms of your career coming up in finance, software engineering, you have uh an appreciation and a skill set of listening to people and designing things to solve problems for human beings, uh, which I which comes across amazingly. Because of all of that, I suspect your answer to this question is going to be phenomenal. So here it is. What is the promise you are intended to be?

SPEAKER_02:

What is the promise I'm intended to? My promise to my customers or me personally? You to the universe. I promise that the business problems that I focus on will have a material impact on the people that are paying me for my services. I promise that I will be the best possible husband that I can be to my wife, and the best possible father that I can be to my children, so that my wife's life is better because of me, and my children are the types of people that have a very positive impact on the world.

SPEAKER_00:

Mic drop. Wow. No, not surprised, but I am thoroughly. I got chills. That was serious, serious all, you know. From the heart. Yeah, yeah, that's it. It was from the heart.

SPEAKER_02:

So I appreciate it. Did you have fun? I loved it, Jesse. I knew we were gonna have a great conversation, and I you exceeded my expectations. This was fantastic, and I feel like we need to chat more, my friend.

SPEAKER_00:

I do too. I do too. Thank you for sticking it out all the way to the end. I know you got a whole lot of stuff going on. And in appreciation for the gift of time that you have given this episode, I want to offer you a free PDF of my book, Becoming the Promise You're Intended to Be. The link for that bad boy is down in the show notes. Hit it. You don't even have to give me your email address. There's a link in there. You just click that button, you can download the PDF. And if you share it with somebody that you know who might feel stuck or be caught up in self-destructive behaviors, that would be the ultimate. You sharing that increases the likelihood that it's going to help one more person. And if it does help one more person, then you're contributing to me becoming the promise I am intended to be. Be kind to yourself, be cool, and we'll talk at you next time.