Monday, June 11th, 2012

WWDC Partner Talks: PlanGrid on the Future of Construction

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Today marks the beginning of WWDC, and we’re taking time this week to speak with partners whose businesses have either been drastically changed by or built entirely because of iOS. We’ll be talking to several companies, from custom app development shops to those that handle the backend work of building mobile apps – be sure to check back every day this week to read all the interviews. 

We recently announced our participation in the seed round of funding for PlanGrid, which allows complex construction blueprints to be viewed and managed on an iPad. This marked our first investment from the Box Innovation Network (/bin), and our first foray into vertical-specific apps for the construction industry.

This week, I caught up with Ryan Sutton-Gee, the co-founder and CEO of PlanGrid. Ryan has written in the past about how tablets will transform construction, but I wanted to learn more about the PlanGrid team’s focus, ambition and future plans.

CY: Tell us about you and your team – what’s special about you guys, and what drives you to change the way that the construction industry handles blueprints?

RSG:I think the most interesting thing about our team is that we’re the only startup I know of that combines people with a really great software pedigree and a really great construction pedigree. It’s because our team can both execute really quickly and understands the problem so well that we’ve been able to build so much in such a short period of time.

As far as motivation goes, for myself and Tracy it’s pretty simple – we dealt with this problem firsthand on construction sites and we got tired of waiting for someone else to solve it. For Kenny and Ralph (our hackers) though, it’s really about solving a real problem that will really add value to literally everyone’s lives. Construction touches everything. Our big goal is to make it 5% more efficient. If we can do that, we will have single handedly built 5% more hospitals, 5% more schools, 5% more water treatment plants,5% more of civilization.

CY: What’s your take on what’s happening in the construction industry today from a productivity point of view? It appears that there are a number of conflicting analyses on this front.

RSG: Well, it’s a hard thing to measure, but every analysis I have seen basically agrees that it’s grown much slower than the rest of the economy. There are obviously a lot of reasons for this, but the ones I’ve most commonly heard are:

  • Failure of automation to make it to job sites in the way they have made it to factory floors
  • Construction market volatility historically discourages capital investment
  • Shift of skilled talent out of trade schools/unions into universities and white collar work
  • Lack of IT penetration in the field
  • Labor unions slowing innovation by striking over shifts in work assignment (i.e. trades striking over modular building assemblies because they were done by factory workers rather than craft unions)

Of these, the most solvable (and certainly the most solvable by a startup) is the IT problem, which is why we’re working on it. Construction is obviously a very mature industry, but I think the advent of mobile computing is going to provide a rare opportunity for a burst of innovation that can add real efficiency improvements to it. It’s also so huge that even small improvements can seriously impact many, many people’s lives.

CY: How much of the productivity challenge in the industry relates to the handling of construction blueprints?

RSG: It’s a huge factor. By way of illustration, imagine if at Box you took away everyone’s email accounts, handed them pads of paper, then installed physical inboxes on the ground floor, and then forced everyone to communicate that way. That’s the current status quo on construction sites with blueprints. Every time someone needs to communicate with plans, they need to stop what they are doing, head to the trailer, and waste 30 minutes.

Even worse, they don’t communicate half the things they should, and as a result, end up building the wrong thing and generate a lot of rework . Before starting PlanGrid, I did my own research on the cost of rework caused by bad communication with paper drawings and I found some research that suggested it was around 1% of total construction costs or $10 billion a year. More recently, I spoke with some Bechtel folks who told me that it’s actually much larger than that, and that they have recently launched a “war on rework” to address it.

CY: What’s the core problem that PlanGrid is trying to address? What’s the magnitude of the problem from a cost and time point of view?

RSG: PlanGrid wants to eliminate all paper documents on the construction site, end all rework caused by outdated drawings and improve communication throughout the building process. We estimate $4 billion a year is spent in the US on paper plans, $10 billion a year on rework caused by outdated drawings and another $5-10 billion a year is wasted on time spent communicating with paper. All told, it’s about a $20-25 billion/year problem.

CY: What’s special about PlanGrid’s approach? What’s interesting and intriguing about the technology behind it?

RSG: Compared to traditional construction software companies, we:

  • Are built from the ground up on mobile
  • Put an emphasis on ease of use, especially on our iPad app, rather than on feature count. This is especially important given that many of our end users aren’t that tech savvy.
  • Have a very hacker-centric culture modeled after Google and Facebook rather than an enterprise sales culture. As a result, we try to make the product do the selling, rather than build features based on sales strategies.
  • We’re also one of the only companies in the space to go with the transparent SaaS pricing model pioneered by companies like Salesforce.

CY: How have customers reacted to PlanGrid? Who are your users today, and what are they saying?

RSG: Customer reaction so far has been fantastic. We’re now being used by a huge number of construction companies including: DPR, Webcor, Rudolph & Sletten, Turner, Boldt, Whiting-Turner, XL and a couple hundred others. Although they mostly love our product, they are really excited by the potential of it and so are constantly giving us all sorts of great features and additions that can help them be more effective. We’ve got a huge list of things to add, and are really excited about where the product is heading.

CY: Where does this all go in the future from a tech and business point of view?

RSG: Going forward, our product focus is to keep innovating on the product and to start doing more than simply enabling people to replace paper documents with an iPad app. Basically, we are going to do to paper plans what HTML did to paper documents: make them digital, make them linkable make them centrally updatable. This should have been done years ago, but just like HTML had to wait for the personal computer, PlanGrid had to wait for the tablet.

  • Anthony Cirinelli

    “I think the most interesting thing about our team is that we’re the only startup I know of that combines people with a really great software pedigree and a really great construction pedigree.” Apparently, Ryan hasn’t been introduced to the team behind Buildbox. :) I wish Ryan and team the absolute best of luck! It’s great to see so many young and energetic people trying to modernize the construction industry.