The Built by Builders interview series by ConCntric features conversations with entrepreneurs who have construction backgrounds and have started technology companies to address the pains they have experienced in their construction careers. ConCntric’s Founder & CEO, Steve Dell’Orto, chats with guests about the importance of technology in the construction industry and discusses the various solutions being developed.
Watch the full Built by Builders video featuring our Founder and CEO, Steve Dell’Orto and Founder and CEO of Togal.AI, Patrick Murphy, here: https://www.youtube.com/watch?v=knnto4_oXcY
Steve Dell’Orto: Welcome to Built by Builders. This is our video series highlighting construction professionals who have started tech companies to provide solutions within our industry for the very things that they found as pain points, as well as issues that needed to be solved. We believe it’s that kind of leadership from within that is really what’s needed to truly drive our industry forward. So today I have Patrick Murphy, the Founder and CEO of Togal.AI, and also a leader within Coastal Construction business in Florida. Welcome today, Patrick.
Patrick Murphy: Thank you. Thanks for having me!
Steve Dell’Orto: I’d love to hear more about Togal and how it is different from the traditional tools that project teams are using today to do their estimate work.
Patrick Murphy: First of all, Togal, the name Togal AI, the full word means “builder” in the Irish language Gaelic, so a little factoid there. It’s a spin out of Coastal Construction, our family business. We’ve been blessed to become the largest contractor in Florida. The biggest piece of overhead in our company is estimating and the biggest piece of that is takeoffs. As we all know, the industry take off process takes a lot of time, it’s a manual process of clicking and dragging and basically coloring. We had the idea to use artificial intelligence to automate that coloring aspect and we believe that estimators are better suited spending their time on value engineering, scoping, and bid leveling. All of the tasks that really help make a bid better and allows teams to win more work. We originally built Togal to be used for Coastal to save us money. As we started seeing it working, we decided to spin it out and now we’re fully in the market. We have over 700 users now, some big companies, some small companies, everything in the middle. We’re automating the take off process. We’re very excited about that and excited about what the future holds. We had a couple of companies do some case studies and Coastal found last year that they saved almost a million dollars in their first year using Togal—straight to the bottom line. It’s driving some real efficiency. I know you’re keeping busy with a lot of fun stuff too and since ConCntric is also in the precon space like us, how much time do you think is wasted inputting manual data into spreadsheets on a regular basis?
Steve Dell’Orto: A lot. Preconstruction and its nature is not a one time thing. Throughout the lifecycle of a precon engagement on one project, you’ll have your team—maybe it’s one person, maybe it’s five, it could be a dozen or more—but they’re constantly iterating. They’re doing a lot of the same thing, periodically updating with more information. Not only are they repeating a lot of the same processes over and over, but they’re doing it with the same inefficient manual tools. I think people are running at a 50-60% efficiency rate. Whether it’s one and a half or two times the effort to get one thing done, that is incredibly wasteful. But for the smaller companies, it’s thousands of dollars of waste and hundreds of people hours. And for the bigger companies, it’s easily millions of dollars being wasted when you add it all up together. It’s not just the cost, it’s the opportunity loss that’s almost incalculable. All of those “people hours” doing those manual tasks could have been used for thought work and relationship work, or having more bandwidth to take on other projects and yield more upside for their respective companies. Almost incalculable. Patrick, building on that, why do you think it is that there hasn’t been that level of technology advancement in this preconstruction phase that we’re both passionate about?
Patrick Murphy: That’s a great question. Like I said, I think it’s critical that it’s addressed, but it has to be done. The beginning of all jobs is precon. It has to be done. As we know, it is often one of the biggest cost drivers. For reasons why it hasn’t, I think a lot of it has to do with the fact that a lot of the technology that we’ve seen in the industry hasn’t come from insiders, it’s come from outsiders. And unless you’re an insider like us, you don’t really understand some of the real issues with precon and what it takes to truly do it, as well as the amount of detail that goes into it. There’s a nuance, an art, that goes into it. Then there’s inefficiency that goes into it and on any given job, just from the Togal standpoint, there’s 100 people easily doing the exact same thing on every job, of any size. We’re with all of the different trades and contractors doing the exact same take offs. I mean, it’s crazy how much repeated work there is and wasted time. But with the tools available, that’s the only way to do it. I think a lot of it has to do with construction being thin margins and people not having the mindset or capabilities to invest in the technology needed. And having outsiders trying to solve problems that maybe weren’t even problems. Maybe they’re focusing on the wrong things and maybe there’s a sexy problem but it’s not really solving something. I think we’re finally coming around. So I’m excited about companies like yours and mine. Steve, what’s your vision for how to solve these problems in the precon phase for builders?
Steve Dell’Orto: I think first and foremost, having the right balance of tools that are super powerful and that save teams a lot of time is important. But also doing it in a very smart way, like Togal, at the same time. From a broader preconstruction perspective, using a holistic approach—which is really our main focus—how do you take all of the different functions and workflows that make up this very iterative, generally fractured process of preconstruction, and bring it all together? Our vision at ConCntric is to be the platform that unites the process, unites the data, and pulls all of the people together. That way we can derive the most affordable, sustainable and predictable outcomes for these projects. We want to be the one that helps bring it all together. With a single platform holding all information in one place, the power of the data, going from one project to the next, creates a flywheel effect. With this positive impact, you’re getting better and smarter. And the data is your data and it’s serving you in much more powerful ways, which will really start to become apparent to everybody. I think it’s going to be a real natural motivator for everybody to really rethink how they select tools to use in order to do preconstruction better and smarter. These are fun challenges to solve. My hat’s off to you guys. You guys are winning awards. You, yourself were invited to be part of the White House Committees on export and everything related to construction. So congratulations on that. How do you think the AI element of what Togal is doing is going to change the industry?
Patrick Murphy: First, we’re lucky to have a great team, just like you. It’s all about the team and coming together, mixing the AI algorithms, utilizing mathematicians and all of the folks we have in construction. The raw construction coming together, that marriage of people, is where I think it’s exciting. The tech sometimes has a tendency to sort of outpace what could really be adopted. I think similar to what you’re doing, Togal isn’t trying to change the whole process, we’re just incrementally improving one step of it. We’re not trying to predict everything, just one piece of it. We’re simplifying it. And while we’ve got some big ideas with artificial intelligence and what the future holds, some of the recent releases with ChatGPT and generative AI are going to be transformational for our industry. I think we all live in a world—and again, I don’t know how long this will take—but where generative construction documents will be made with some very minor input. Architects and engineers, and a lot of that engineering that goes into it will be automated. There’s enough data out there and there’s been enough jobs built to make this happen. Much of this can be boiled down to math, that’s the end goal. How do you get there? There’s a long way to go. One of the things we’re working on right now is predictive change orders. We’re basically looking at the data set of all the jobs that have been built and comparing that to future jobs. As we all know, once you get to the field, there’s a lot of change orders that are kind of obvious that should have been caught. The computer can catch them because the computer is smart enough and now it’s affordable. You can analyze literally millions of previous plans that have been built that are up to code and working. The big breakthrough now is that it’s affordable for the computers to do a lot of this manual work that prevents us from needing to reinvent the plane every time we want to fly in it. We don’t have to reinvent the wheel. It’s been done before. Let’s use that data to improve the process.
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