EP102: Leveraging Technology With Aaron Henderson From Stack

Yeah, I've got, I guess, kind of an interesting background. So I come at things from more of a business perspective, I guess, than actual boots on the ground. But my whole background was I came out of school with a construction management degree and a business management degree. Honestly, never really realized how the two would kind of play together. But ultimately, I kind of actually thought I'd just spend a little extra time in school than I needed to. But anyway, but I actually ended up working for a small consulting firm where we worked with architects, engineers, and contractors all over the country, really around operational efficiency and overall kind of business strategy. And so that's kind of how I got into the industry about. Five years ago, I had an opportunity to move over to the technology side of the business and has been really cool. It's something I noticed working with contractors was one of the fastest ways that they could get efficiency out of what they were doing was to implement the right technologies. And so it was just a really natural transition over to the technology side and kind of continue the same thing, man. Get to work with contractors every day, hear about their business, what they're doing, and just see if we can help, you know, help make them better.

I do. I definitely do, man. And I think, you know, it's so many of us get into business because we're really good at something. Right. And I always I refer to it as working in the business versus working on the business. Right. And just because we're really good at swinging a hammer or doing something doesn't necessarily mean we're we're a business person. And so I think, you know, it takes somebody to, you know, really entrepreneurial to go out there and. turn their craft into a business, but then two, it means that we've got to add to what we're doing, our knowledge base, and kind of how we look at everything. I think one of the toughest things I see is that contractors, they're so good, it's really hard for them to sort of let go what they're good at personally and trust that kind of next. tier, that next layer. You know, I think that first hire, when you first start to turn things over to somebody else, being able to trust that person is something that that's a big kind of breaking point, I think, for a lot of people. And so, yeah, I think that's the whole mindset, man, is going from the trade guy to being the business guy.

I definitely do, man. And I think, you know, it's, it's, there's pluses and minuses to both sides of it. Right. But I think of it every day from a technology standpoint, if I could really get into code and develop and do all those kinds of things, I'd probably cross over a lot of boundaries that I shouldn't. And so I'm kind of more dependent on my team and the people around me. And so it kind of keeps me in my lane a little bit that I can't go over and do what they do. And so, yeah, no, I think you see that a lot. I think some of the more successful people sometimes are the people that just stay focused on. you know, what they do really well and let the people around them kind of do what they do. You know, that said, there's definitely room for both sides and advantages to both sides of that.

I think the first thing I see is just not creating processes and procedures, right? I've done it this way for 10 years,20 years or whatever it's been. And that's just the way that we do it. And we like to think that people are going to learn from us through osmosis. And I think that maybe works at a certain scale, right, for the first couple of hires, those kinds of things, you know, apprenticeships, you can kind of learn from each other. But I think at some point you've got to get to a place where you're really documenting those things. And I think another thing that people tend to do is when they do start to document, they get into too much detail. And I don't think documenting process has to be a really... laborious kind of an activity. It's just, it's sort of just setting like, what are the big guidelines or the parameters? And let the people be creative, let them do what they want to do within those processes. But just know that we want to keep, you know, what are the guide rails that we want to have as a business? And I think those are the things that sort of allow, allow companies to now bring in more people and they can kind of follow our guide rails. but sort of do their thing within those. But I think the biggest thing is, man, just getting them down in some format, not spending too much time on them to start. And you can always add to them as you go.

Yeah. I mean, I think, you know. Looking at estimating as a whole, like you said, pre-construction, man, it's a big deal. So much time gets wasted in the pre-construction phase and we take on projects we shouldn't and all those kinds of things. You know, I think the first step of getting started is just, I mean, it's going back to like grade school almost. It's like, what's the outline for what I want, right? It's here's the... Big five steps. And you can always come back and add to them. But I think it's just taking that very first step of just starting to get something down. Specifically around estimating, I think it's starting to define what projects we know we can be successful at and setting those parameters so that we can kind of get some, I call them go, no-go variables, right? Like I know that if I have a project in a certain area or for a certain type of client, we just tend to not be successful on those. I think get those out of your way as early as possible. So that you can kind of start to focus your time and attention to the projects that you know you really have a chance of being successful with. So I think it's starting as big as you can to weed stuff out early. And then that allows you to focus more time and attention to the projects that really matter.

You bet. I think, you know, one of the things I say a ton is, is we say a lot more about who we are as business people by what we say no to than what we say yes to. You know, I think, I think you can weed out a lot of stuff that you're not going to be successful at pretty early if you get some of that stuff down.

Yeah, no, it's without a doubt. And we run into it on the technology side, too. We always want to think that everybody who calls us or talks to us is the right customer. And I think it's hard to say no. It's really hard to say no sometimes, but when we do, I just feel like that comes back to us tenfold usually. If I tell somebody, hey, I'm not the right software for you, I can't tell you how many times I've seen that same person be really appreciative that we told them that and that we were straight up up front. And then they go on to refer us or tell somebody else who is a better fit for us about us. And it just becomes a way better sales cycle. for the right opportunity. And I think, you know, same thing in construction for sure. Yeah.

I actually don't think I have, man. I think I've done about 90% of the business books that are out there, but I don't think I've done Checklist Manifesto.

I've heard about it. Yeah, I know exactly what you're talking about.

Yeah, man, definitely. And I think it's all phases of construction, right? I mean, it starts with pre-construction, goes all the way through the project. But it's kind of that thing of a little bit to what I was saying before is those parameters are just to, they're not to sort of like put handcuffs on us or to limit us from what we can do. It's to get this stuff out of the way that we don't want to waste our time thinking about, right? Like just get that stuff out of the way. And now my best. technicians, my best people, my project managers, my superintendents, my foreman can be out there and they can focus on the stuff they do really, really well. But it's just sort of standardizing, systematizing those basic things that we all have to do. Get that out of the way. Let me focus on the more high payoff activities is usually the way I kind of refer to it.

to say, man, that saved the project, right? You end up upside down in that thing really fast if you didn't check one box, right?

Yeah. So, and, and go ahead. I'm sorry. Oh, I was just going to say, I mean, that's, that's exactly it. It's, it's, I don't want my guys out in the field worried about. those little things make those the checkbox items make sure you know i say little things that turn into big things but check the box on those things and let them you know build the relationships and do everything else that they do out there to make sure that the customer's happy so yeah

think it kind of goes back to that little bit of conversation around trying to say yes to everything right like you said as soon as somebody calls you we just want to say yes that's our project we're going to get it and i think i think it it's that and We're such a boom and bust industry. You know, we kind of want to take everything that we can take when we can take it, you know, make hay when the sun's shining. And I think it's that. I think it's starting to try to weed out projects. And kind of back to your checklist, you know, back to the checklist manifesto, it's having a checklist of what, you know, of what things do we look at on a project that makes sense for us. And it's, again, it's that reminder, right, of like, hey, this project. If I check these three boxes, that's a good project. If I don't check the boxes, it's not. And being able to say no to that. And I think that's what frees us up to get the right projects, to spend the right time so that we're working for the right clients, all those kinds of things. I think that's the biggest thing is just get the projects that we're not going to be good at out of the way quick.

Yeah, not to be self-serving in any regard, but I think that's for us, there's a lot of software out there that can help with it. They can kind of streamline things and make stuff faster. I mean, I still talk to contractors every day that are doing takeoffs by hand. They're going in and doing counts of every little thing that's out there or building their estimate. on a word document or an Excel spreadsheet. And there's just, there's software out there that can help you with that. They can help create templates that can allow you to do takeoffs really quick. So you can get material quantities and, you know, understand where you're at with, with that. I think it's, it's being accurate. You know, the more accurate that we are on estimates, I always say projects are made in the estimate, right? If we. bid stuff correctly, there's a lot better chance that we're going to come out good on the back end of that thing. And I think it plays into every aspect of construction. I mean, we bid something wrong. We come in too cheap. Now, all of a sudden, when we're out in the field working on it, we're working faster and harder trying to get to the dollar that we said we would get to. We had an interesting conversation around here not too long ago, but I think it was during safety week last year. Somebody said, well, estimating software doesn't really play into safety. And I said, absolutely, it does. It plays into every facet of construction. If we bid projects incorrectly, we're now out there trying to make up that money in the field. And that's when stuff starts to get dangerous. So, you know, I think it's leveraging everything that we can, whether it's technology or, you know, even having our own standard templates ourselves or whatever we do to try to bid stuff as accurately as we can so that we know that we're going to come out and get on it.

Yeah, I mean, I think, so there's, it's probably twofold, right? Is this, but I think there's a couple of things. One, there are good softwares out there that can help you. There are, you know, price databases and things like that, that you can start to get some pricing things. Tell you the truth, man, I think the biggest thing, take technology and everything else out of the picture is. talking to and working with your suppliers and knowing where they're at with stuff. I think every contractor we have, no matter the size of the scale, is they've got good relationships with their suppliers. They know that they're getting the right pricing on stuff. They know what materials people are using and what areas, you know, all those kinds of things. So I would say start with your suppliers and then, you know, leverage anything else that you can out there, whether it be technology or, you know, some of the standard price books and those kinds of things. They're generally pretty high level, but it can at least give you a good idea of where to start, I think.

It goes both ways, right? I mean, hopefully we get to a place that they're courting us. But man, in the beginning, especially, you got to be out there courting them. You know, it's construction is a team sport, man. I mean, we tend to get some divides sometimes between, you know, the trade contractors and GCs and suppliers and, you know, all those kinds of things. But at the end of the day, the most successful are the ones that form good teams and good partnerships for sure.

Yeah, I love talking about the handoffs. It's projects for me are made and lost in the handoff, right? It's that handoff, especially depending on the size of the team and those kinds of things. But it's that handoff from estimating to the project team, from the project team to anybody that's handling financials and doing the books on the back end. There's so much information that gets lost because we go through, you know, if we're looking at a project and, you know, before it starts and we're. making all these lists and doing all these things and we're digging into this project. And then all of a sudden, you know, maybe it might be a couple of weeks before we get started. It might be a month or more before we actually get started on it. And we find ourselves in this place where we didn't write anything down. We didn't document anything in that. And now we go back there and we do the whole thing again. And it's like, you know, I think the more that we can document those things and probably spend just if you are working on a team where you've got multiple players involved. Take 30 minutes during the handoff to talk about the handoff and walk through everything that you did. Because I think that 30 minutes can be invaluable as you get down a project. If you can share just a little bit of inside information, what you found out during the pre-construction phase with somebody who's actually doing the project, that's going to save them a ton of time if they get halfway into the project and they realize something that you could have just told them in a quick conversation at the front end. So a lot of that just comes down to communication and documentation, I think.

Yeah, it's. I don't know if you'll agree with me on this or not. And this may be a little bit of an old school kind of a view of stuff, man. But for me, it's I love text messaging. I love the speed of it. You know, all those things that we can do. But sometimes it's just pick up the phone. Right. Like if you just pick up the phone, there's so much more that we gain from a quick conversation than we might from a quick text. And I know when we're busy and we've got so much going on and we're putting out fires, sometimes picking up the phone seems too cumbersome. But man, if a couple minute phone call can save us a few hours down the road because somebody learned something that they wouldn't have through text, it's worth a phone call. And I think even a step further than that is us as owners and managers and all these things. trying to be out in the field with the guys, checking in on projects as much as you can. I mean, you just, you learn stuff and you can't be on every project every day, but if you can be out there, at least some, you start to identify little things that we can, that we can, you know, make better or help train people up on and those kinds of things that hopefully prevent maybe the text message or the need for communication in the, in the first place. So.

You know, man, I think for me, the simple solution to that is if it's not worth the time to do it right, it's not worth being out there in the first place. Right. Like, you know, if I'm out there and I'm working on a bid and I'm only doing half what I need to on it because I don't think I'm going to get it. There's maybe a good chance I feel that way. So my advice to anybody that feels like that is, is focus on the ones that matter. Right. And, and then spend the time to do it. Right.

Do you agree on that? Oh yeah.

Yeah, I think it's something that we need to focus on as contractors is exactly that. There's a huge level of professional services that we provide, right? And we don't think about them that way. We don't think of being consultants, but we are. And we're coming out and we're teaching these people how to do projects right. Good contractors do it. Bad ones don't. And bad ones just go out, they bid at volume. Yeah, they might be cheaper. Yeah, they might be this. Yeah, they might be that. But the homeowner doesn't or the or the, you know, whoever the owner is doesn't get the the right result on the back end. But if if you're out in front of it and getting paid for professional services and working with the owner and understanding the project, there's a ton of value in that. I think contractors need to know it for sure.

So, I mean, I think, you know, obviously as the technology guy, I'm, I'm, I'm an advocate. I wouldn't be here if I wasn't. That said, I think it can be overwhelming. You know, I think sometimes we, there's this line that I use a lot is like tech for tech's sake. Like, don't just go out and get technology because you feel like you should or because somebody told you you needed to. It's technology needs to solve real problems, right? And so I think the first step in it is, you know, I mean, your question is, where's it going and how important is it? And I think ultimately it's super important. probably start to differentiate contractors more and more, you know, as we go in the years to come. You know, something I talk to people about a lot is we're all in the technology business. You know, it's just what are you doing with the technology? You know, and we as contractors, we spend a ton of money on tools out in the field and all these kinds of things, but we don't necessarily think about investing in tools for the back office. And so I think the first step is just identifying what problems do we actually have? What's slowing us down? Is it in the handoffs? Where is it? Where are we losing money? And I think that can be the toughest thing. But I think once you start to do that, we can then start to identify what technologies actually make sense and sort of bite them off, prioritize them and bite them off in a way that. we can do it well. You know, another thing I see a lot of people do is they go out and they try to get all these different pieces of technology all at once. It's overwhelming. They don't end up implementing any of them. That's me.

You bet, man. My joke is always it's when I come in and there's a good office manager in place, I go, I know who runs this business. It's a good office manager is worth their weight in gold every time, man, for sure. And I'll tell you, we've seen we see a lot of that. We see the office manager a lot of time will do some of the accounting or different things just kind of depending. There are a lot of times that people to help vet technology. But the single best thing is being able to say no. We've taken on too much or where we're at. good office manager will help you with it every time.

It's interesting. We're like an industry of like, of haves and have nots to some regard, right? We've got these big, massive commercial guys who are out here doing this crazy stuff with augmented reality and robots and drones and all these things. And I think, I think too often technology just kind of gets lumped into a bucket. It's just technology. And I think there's opportunity for all that stuff. I think in time, a lot of that will come around. But I think today, a lot of it is just we've got to walk before you run. And I think what scares me is people being deterred from technology because they think just a simple estimating software or a simple project management software is the same thing as having a drone. It's just not, you know, they're different things or augmented reality or Google Glass or these things. So, you know, I think it's walking before we run. I think it's identifying what matters and not being afraid of technology because we view it as, you know, some like crazy sort of like out there thing. But there's just more boozling around frontline technology that I think we need to start looking at. You know, I think those things we're starting to see across the trades at every level, right? Just the basic project management software, estimating software. you know, hopefully financial software. But I think we need to kind of segment those things and look at those a little bit differently, maybe than we do some of those more, you know, forward thinking out in front things that we hear about. You know, that said, I hope that more of that, you know, technology starts to come down to, you know, the residential side of construction and those kinds of things. But I think a lot of that's a long way out. I really do.

definitely do. Yeah, no. And I think it's like it's the whole thing of it's got to solve. problems. We don't just want it to have it, but we have to solve problems. And I think we kind of have to prioritize it based on it. But without a doubt, I mean, the more that we look at it and we even on the technology side, we see this, but it's you can't just be OK with status quo, man. You got to you got to be looking. And I think project owners, they whether or not you're fully leveraging it or using it, the fact that you're even just thinking about it and paying attention to it and know what's coming. matters to a lot of people too. And you just, yeah, you definitely can't put head in the sand. You got to be looking at what's coming down the road.

You bet. I mean, I think, yeah, the more you look at it, I mean, it's kind of that whole thing of like, shoot, you know, shoot for the moon, you end up in the stars. I think, I think that's it is like, you don't have to be the furthest one out, but even looking at just chat with GPT, you might start to identify other things where you go, Oh, this would be cool. Or let's look at this or that. So I think making time for technology and innovation and just paying attention to it. It matters, man. It definitely does for sure.

Plans, outlines, and things like that. I think there's a lot from a business aspect of, you know, it may not be perfect, but it's going to give you a starting point. Yeah. And we're, we've, we've leveraged it around the office at times. It's kind of fun.

So we started more on the pre-construction side of the business. So our whole goal was really around take off and estimating software and trying to streamline that process as much as we could. We work across the trades. We have our primary focus is around trade subcontractors. We work both in residential and commercial. But more recently here in the last two years, we've made a couple acquisitions where we brought in more project management. And so now for us, it's really trying to connect up that end to end and really streamline. I mean, you kind of hit with the handoffs is if we can keep everything that we do from pre-construction through project closeout. in the same place we want to do that. And I think there's a lot, you know, there are other softwares out there that do similar stuff. But I think this focus to the trade contractors is the thing that really sort of sets Stack apart. And what we're really focused on is just bringing that end-to-end solution for the construction process.

Well, what we do, we actually offer the software to the contractor to do their own takeoff. So they would log in and do their own takeoff, which can be a huge time savings. And I think one of the biggest differentiators for Stack 2 is the fact we're 100% cloud-based. So a lot of contractors right now are trying to figure out, they may have these old legacy on-prem. software that they're trying to keep up to date and they're trying to do all these different things. But with a cloud-based software, we're keeping everything up to date for you. We're locking down your security for you. We're keeping all your data safe for you. And it just prevents the contractor from having to be their own IT shop on the back end, right? Like that they can now, they've got everything in the cloud. We're there for them, just kind of making sure that all that stuff works well.

No, it's huge. And I think more so today than ever, right? I mean, I've been in too many construction offices where we've got a server stored in a back closet, you know, over there, whatever. And people feel comfortable because it's there. But what they don't understand is all this. It's not that secure, right? Like we've got, you know, we've got technology people who are doing nothing, but we have a chief security officer, all these people who are doing nothing, but all day monitoring. what's happening out there and just making sure that we're doing everything we can to prevent any kind of information leak or anything like that. I think the other thing that we see from the cloud standpoint is, especially after COVID and these things, is a lot of people are going more remote. I know all of us are having trouble getting the right tradespeople, hiring and these kinds of things. And I think the more... flexible that we can be and allow people to work where they want to work, you know, when they want to work, those kinds of things. It's a really, it's a big thing in hiring right now. And that's the beauty of cloud-based technology is, you know, we don't have to be in the same office next to each other right now. We can be looking at stuff together real time, know what's happening and kind of let people be as flexible as they want to be. So a lot of big advantages to the cloud.

Yeah. So, and that's, that's a little bit newer to us, but is, is, is absolutely where we're headed is, is full on project management all the way through to close out. So some unbelievable tools as far as being able to carry plans with you on your iPad, you know, you can mark things up, do all your punch listing, communicate with, you know, any of your trade contractors or suppliers right through the app, track the project, schedule things out, everything. if you get into a level of commercial with some like RFIs and submittals and those kinds of things, we can absolutely do those kinds of things as well.

We, we do. And so, you know, it's, For us, for a lot of our projects, for a lot of our contractors, the plans are, they're like that single source of truth, man. It's like, it's where everything comes back to. And even if it's a small project that we sketch up on our own, I think there's still just this aspect of if we can have that be that source of truth, no matter who we're talking to, we're all referring to and looking at the same thing. And so when I tell you that it's on the north wall right here, that you need to fix that or change that or do something. We're all looking at it and we all know we can kind of communicate off of that. If I just text you something and you can't have a visual of what that looks like or where that it becomes a lot more difficult to kind of communicate about. So we do have a lot of focus to work from a plan set or, you know, at least some kind of a visual for sure. Right.

Well, it's exactly what we talked about earlier, right? It's the spend the time up front. You know, if we had done a new version of that drawing, you know, and there's studies out there that talk about this. But, you know, if we make a change in pre-construction before we ever start on anything, it's dollar for dollar. We'll save that dollar. If we get into starting the build, now all of a sudden that costs us $10, right? It's going to be 10x what it costs us to fix it during the design phase. And if we get all the way that we finish the project and we got to go back in and fix something, it's probably going to cost us a hundred times what it would cost us just to fix that on the drawing in the very beginning. So, you know, there's a huge, huge cost savings if we can catch those things early. And I think having those visuals and doing those things and spending the time up front make a really big difference.

I, I think it's kind of where we started. I think if, you know, it's, it's, it's deciding one, if, if, if you want to be, you know, the person or the guy or the gal, and you just want to have a small lifestyle kind of a business, or if you really want to be a business person and you want to grow something that has, you know, more value beyond yourself. I mean, I think, I think if that's the route you want to go, there's investment you have to make in yourself and in your teams. And there's things that you have to do and they may not be the most comfortable, but, you know, I think if you really want to try to have an impact, it's, it's making that decision and then starting to do things that you need to do to run a real business, whether it's, you know, process and procedure, hiring the right people, bringing stuff in. But I think it's. technology, whatever it might be that you need to help scale what you're doing. I love people making big impact. And for me, that's something beyond just myself. And so for me, it's making that decision and then starting to make the moves and do the things that they need to do to move in that direction.

There's two that come to mind, and I've been thinking about them through the entire conversation with you. One is The E-Myth. Have you read The E-Myth?

It's an incredible book, and there's also E-Myth for contractors. It's really great, and it goes through. It leverages The E-Myth. It's exactly that. It's stop working in the business, start working on the business. And along those lines, there's another one that I like a lot, which is Attraction by Gino Wickman. It's my attraction. Yeah. Yeah. Real, real similar concepts. I like the, I think one of the coolest things that Gino does is he borrows liberally from a lot of different authors that are out there, different books, different concepts. He even references the E-myth, you know, a number of times. But he just kind of lays out a really good process to start to build a business from. And so I like that one a lot too.

Yeah. Every time. It's just Michael Gerber did a great job with the E-Myth. And I think for any entrepreneur, it's worth it. And it's cool too, because some of it is stuff that we all kind of know, but we don't necessarily think about every day. Kind of back to the checklist thing. It's those things you kind of know, but you just don't always remind yourself of. And so I think for any entrepreneur, picking that thing up every so often and just rereading it, it'll just remind you of a lot of stuff that you need to be working on and doing. So big fan of the E-Myth. Absolutely.

Yes, technology can be a little, it can be complex and it can be a little confusing for a lot of folks. And so I'm always happy to talk to anybody. Hopefully start to at least head them in a good direction with what they're doing from a software perspective. They're welcome to reach out to me directly, ahenderson at stackct. com. Always happy to respond and help out. Not a sales pitch, but just want people to... to be able to run their business and do what they do well and happy to help if I can.