Author name: Owen Drury

INDUSTRY INSIGHTSEnscape’s Journey: From VR to Industry-Changing Rendering Software Enscape is a staple in the world of architectural rendering. Rarely do you speak to an architect who hasn’t used it at least once. But how did it all start? How did we go from VR treadmill to rendering, to large acquisition? We were extremely lucky to sit down with Moritz Luck – co-founder of Enscape to hear his story. Read on to learn about: Mortiz’s masterclass in entrepreneurship, product development, market strategy and exits Mortiz’s advice for founders Perspective of exits and acquisitions The future of rendering  The future of the design stack (hint: consolidation) Advise for AEC-Tech startups Enjoy!  P.S. It’s a long one! The Unlikely Origins of a Rendering Revolution Moritz never set out to change the world of architectural visualization. In fact, when he and his co-founder Thomas started their company, they weren’t even thinking about architecture at all. Fresh out of university, with degrees in business engineering and mechanical engineering respectively, they had their sights set on the emerging world of virtual reality. Their first venture, InReel, aimed to create an omnidirectional treadmill for VR experiences. It was an ambitious project, conceived before Oculus had even entered the scene. But as they pitched their VR services to potential clients, including architects, they stumbled upon an unexpected insight. “We offered our services to architects,” Moritz recalls, “and they said, ‘No, this is too slow. If we give you our design, it takes two weeks until you get back to us. We have moved ahead quite a bit in this time.’” This feedback was a pivotal moment. It revealed a gap in the market that Moritz and Thomas hadn’t anticipated. Architects needed fast, real-time visualisation solutions, not slow, outsourced rendering services. With this new understanding, they pivoted. The treadmill idea was set aside, and a new vision began to take shape. They would create a tool that allowed architects to visualise their designs instantly, without the need for specialized rendering skills or powerful hardware. This pivot led to the birth of Enscape. The name, coincidentally similar to their previous use of Unreal Engine, was suggested by Thomas. It marked the beginning of a journey that would transform not just their company, but the entire field of architectural visualisation. The irony wasn’t lost on Moritz. He remembered his initial thoughts about the real estate and architecture industry: “I thought this is the most boring thing I’ve ever heard. Why would you do that?” Yet here he was, diving headfirst into this world he once dismissed.” As they developed Enscape, Moritz and Thomas faced a steep learning curve. Neither had a background in architecture or rendering. But this outsider perspective proved to be an advantage. They approached the problem with fresh eyes, unencumbered by industry conventions. Their lack of experience in the field also meant they had to listen closely to their potential users. Every conversation with an architect or designer became a learning opportunity, shaping their understanding of the industry’s needs and pain points. This journey from VR dreamers to rendering pioneers wasn’t smooth or straightforward. But it was this very process of pivoting, learning, and adapting that laid the foundation for Enscape’s eventual success. Without realizing it, Moritz and Thomas had stumbled upon a problem that would define their careers and reshape an entire industry. The Rise of Enscape Enscape’s journey from a pivoted startup to a industry-changing software wasn’t an overnight success story. It was built on a foundation of customer-focused strategies and relentless innovation. At the heart of Enscape’s approach was a commitment to real-time rendering. This wasn’t just a technical feature; it was a revolution in workflow. Architects could now see changes instantly, eliminating the hours-long wait times that had been the norm. Moritz explains, “We started with real-time rendering. So every change you see is directly there, or maybe with a delay of a couple of seconds. That was transformational for the architecture industry.” But having great technology wasn’t enough. Enscape needed to get it into the hands of users. Their pricing strategy was key to this. Rather than maximising revenue per user, they opted for a “no-brainer price” that would encourage wide adoption. “We wanted to price our solution not at the highest price we could possibly get, but at a no-brainer price where everyone could quickly adopt it,” Moritz recounts. This approach paid off. It allowed Enscape to rapidly build a large user base, which in turn provided valuable feedback for further improvements. Community building became another cornerstone of Enscape’s success. The team recognized the collaborative nature of the architecture and engineering world. They invested in fostering a strong community around their product, with a dedicated community manager leading these efforts. As the company grew, they faced the challenge of scaling while staying lean. Automation played a crucial role here. Moritz proudly notes, “By the time we merged with Chaos, I think we had similar numbers, but they had twice the people because we automated more than they did.” Perhaps most importantly, Enscape maintained a laser focus on customer happiness. They didn’t optimize for financial metrics or acquisition potential. Instead, they concentrated on solving real problems for their users. “We optimize how we can get the best value for the customer,” Moritz emphasizes. “And the rest will come. If you build a successful company, then people will be standing in line waiting to acquire you.” This customer-centric approach extended to their product development. Rather than trying to predict what features architects might want, they listened and responded to user feedback. This iterative process allowed them to continually refine and improve their software. The result was a tool that not only met the immediate needs of architects but also changed how they worked. As Moritz puts it, “Everyone came up to us and said, ‘Wow, this really transformed, changed the way we work.’” Enscape’s success story is a testament to the power of focusing on user needs, fostering community, and continuously innovating.

This Week’s Quickfire BytesFuel your curiosity with this week’s contentW/C 30th September 2024 COMING SOONMonumental Super Series Explore the cutting-edge world of construction robotics in this exclusive five-part Super Series featuring Monumental, a pioneering startup revolutionising the building industry. COMING WEDNESDAY OCTOBER 16th WATCH EPISODE TEASERS NEW EPISODES Bringing Amazon Robotics to Homebuilding – Reframe Systems Ever wondered how Amazon’s robotic fulfillment centers revolutionized e-commerce? Now those same principles are transforming home construction. In today’s episode of BitBuilders, we had Vikas Enti from Reframe Systems, who shared insights on bringing speed and scale to low-carbon homebuilding. open.spotify.com/episode/16oXHE6EYLTAAZdLpgvI8V Volvo’s Secret Weapon in Construction – Startups and AI – David Hanngren Ever wonder how a 100,000-employee company like Volvo stays innovative in construction tech? 🤔 In this episode, we had David Hanngren, Investment Director at Volvo Group Venture Capital, and learnt about Volvo’s approach to innovation, their investment strategy, and the future of construction equipment. open.spotify.com/episode/6ECPK5CfJyAdOk40PtdWhD Space, Robots, and ‘Add the Egg’ Philosophy- September’s Bricks & Bytes Highlights September in review: From Paris to Boston, construction tech is booming! In this month’s roundup, Owen and Martin dive into the exciting developments in the world of construction tech. We’ve hit major milestones, with over 1,000 email subscribers and 900 YouTube followers! open.spotify.com/episode/71dYqVrfJVEFGF4bk53M4B Can Small Modular Nuclear Reactors Solve Big Energy Problem? – Last Energy’s $40M Bet on Energy Independence Euclear power’s comeback? Last Energy raises $40M for micro modular reactors. In this episode, we learnt about Last Energy’s $40 million Series B funding for developing 20 MWe micro modular nuclear power plants. We also explored how nuclear energy fits into the broader energy landscape, including its role in providing baseload power for data centers. open.spotify.com/episode/4b0UZyYq31JbbZhRO8OvQZ View All Podcasts BRICKS & BYTES BULLETINHow BuildingConnected Was Sold for $275m Dustin DeVan is one of the construction tech OG’s (or Mafia as we like to call them). Alongside the founders of companies like Levelset (Scott Wolfe), PlanGrid (Tracy Young & Ralph Gottee) and others, Dustin exited his first tech company for a substantial sum. BuildingConnected was founded in 2012 and six years later, sold for $275m. How did Dustin do it? And what is he doing now? It all started with gambling… Read Full Article 2 FAVORITE QUOTES: “Our homes actually emit more carbon than our cars. And what was I think pretty interesting too is the fact to decarbonize a home was actually all the existing technology.” – Vikas on the significant carbon emissions from homes and points out that the technology to decarbonise homes already exists, framing the problem as one of deployment rather than invention “Our aim is not to make them part of the Volvo family. We just want to make them strong so they can collaborate with us.” – On Volvo’s approach to investing in startups, focusing on strengthening them for collaboration rather than acquisition LATEST STORIES: The Strategic Acquisition: Why Autodesk Bought BuildingConnected Explore Autodesk’s strategic acquisition of Building Connected. Uncover the offensive and defensive reasons behind this game-changing move in construction tech. Data Analytics is Revolutionising Construction Management Discover how 95% of unused data can drive transformative improvements. Explore data-driven decision-making, from material quantities to project timelines, and revolutionise your construction management. The Venture Capital Reckoning: When Carry Dollars Evaporate In a recent statement that sent ripples through the venture capital world, Geoff Lewis delivered a sobering message: a generation of VCs is about to learn that “carry dollars” are worthless when a fund fails to reach carry. View All Articles BONUS CONTENTWhat Are Investors Betting On? OUR SPONSORS Shft — helping contractors like you leverage BIM to secure a leading position in the race towards construction’s digital future.  BuildVision — streamlining the construction supply chain with a unified platform for contractors, manufacturers, and stakeholders. Powered by beehiiv

INDUSTRY INSIGHTSHow BuildingConnected Was Sold for $275m Dustin DeVan is one of the construction tech OG’s (or Mafia as we like to call them). Alongside the founders of companies like Levelset (Scott Wolfe), PlanGrid (Tracy Young & Ralph Gottee) and others, Dustin exited his first tech company for a substantial sum. BuildingConnected was founded in 2012 and six years later, sold for $275m. How did Dustin do it? And what is he doing now? It all started with gambling… Dustin DeVan’s journey to construction tech stardom began in an unlikely place: the world of online gambling. As a college student, he paid for his education by mastering the art of casino games. This unconventional start would later fuel his entrepreneurial spirit and risk-taking abilities. After college, Dustin found himself in the construction industry, working as a scheduling engineer for Bechtel. It was here that he first identified the problems that would later inspire BuildingConnected. The preconstruction process was a mess of disjointed systems and inefficient communication. The Spark of an Idea While working on a $150 million prison project, DeVan experienced firsthand the challenges of managing bids and subcontractor relationships. He realized there was a massive opportunity to streamline this process. But having an idea wasn’t enough. he spent years refining his concept before taking the leap. In 2012, DeVan made a bold move. With only $5,000 in his bank account, he quit his job to pursue BuildingConnected full-time. He convinced two friends to invest $75,000, giving him a short runway to prove his concept. The San Francisco Advantage Dustin credits much of his early success to being in San Francisco during the 2010-2019 tech boom. “San Francisco was the only place in the world that I could have made BuildingConnected successful,” he says. The city provided access to capital, talent, and a network of like-minded entrepreneurs. Fact: Dustin raised $250,000 by pitching random dudes in coffee shops in downtown SF. A Unique Go-to-Market Strategy BuildingConnected’s path to $50 million in annual recurring revenue (ARR) was unconventional. They started with a completely free model, focusing on getting 1,000 active general contractors to use the platform. This took two years of intense focus. Once they achieved this milestone, BuildingConnected had a powerful network effect. Hundreds of thousands of subcontractors were now using the platform to view bid invites. Only then did they start introducing premium features. The result? An astounding 93% cohort retention rate. Once a general contractor used BuildingConnected for three projects, they almost never stopped. The BuildingConnected Network Lessons for Construction Tech Founders Dustin’s journey offers valuable lessons for aspiring construction tech entrepreneurs. First and foremost, solving a real problem is crucial. Dustin’s industry experience allowed him to identify a genuine pain point, rather than creating a solution in search of a problem. Patience is also key. It took years for BuildingConnected to move from idea to execution, with him spending considerable time refining his concept before fully committing. Location can play a significant role in a startup’s success. Being in the right place at the right time provided Dustin with significant advantages, especially when it came to accessing capital and talent. The power of network effects cannot be overstated. BuildingConnected’s free model created a massive user base before monetization, making the platform incredibly sticky and difficult for competitors to replicate. Finally, focusing on retention proved to be a game-changer. The high retention rate was a key factor in BuildingConnected’s success and ultimate sale to Autodesk. By creating a product that users found indispensable, Dustin built a company that was not just valuable to its customers, but highly attractive to potential acquirers. The $275 Million Exit In 2018, Autodesk acquired BuildingConnected for $275 million. Dustin cites both offensive and defensive reasons for the acquisition. BuildingConnected had built a network-based platform that would have taken Autodesk years to replicate internally. Additionally, the acquisition prevented competitors from getting their hands on this valuable technology. Life After BuildingConnected Dustin didn’t rest on his laurels. After a brief stint as CEO of an indoor air quality monitoring company, he’s back in the construction tech world with his new venture, Ediphi. Ediphi aims to revolutionise the preconstruction process, building on his extensive experience in the field. He sees an opportunity to create a comprehensive platform that addresses the fragmented nature of current preconstruction solutions. Ediphi Estimates Views Lessons from a Second-Time Founder Dustin’s experience as a second-time founder offers fresh insights. He notes that the landscape has shifted significantly since 2012, with increased competition balanced by greater investor interest. This new environment requires a different approach to building a successful company. With Ediphi, Dustin is thinking on a grander scale. His ambition to build a publicly-traded company reflects his belief that there’s room for another major player in construction tech, particularly in the preconstruction space. This bold vision demonstrates the potential he sees in the industry. The post-pandemic world has reshaped how companies operate, and Ediphi embraces this new reality. Unlike BuildingConnected’s San Francisco-centric approach, Ediphi operates with a fully distributed team. This shift showcases the viability of remote work in the tech sector, even for complex, industry-specific solutions. Reflecting on his experience with BuildingConnected, Dustin acknowledges the importance of balancing rapid growth with operational efficiency. While BuildingConnected’s growth was impressive, he believes there might have been opportunities to optimize spending. This insight informs his approach to scaling Ediphi. Perhaps most importantly, Dustin emphasizes the crucial role of co-founders. He stresses the importance of finding partners who not only complement your skills but also elevate you as a person. This human element, often overlooked in discussions of tech startups, can be a key factor in a company’s success and the founder’s personal growth. The Road Ahead The construction industry is ripe for innovation, and there’s still plenty of room for new solutions. The next generation of construction tech leaders can follow in Dustin’s (and the so-called Construction Tech Mafia…) by adopting the tactics shared by the top founders on Groundbreakers. Check out the

This Week’s Quickfire BytesFuel your curiosity with this week’s contentW/C 23rd September 2024 NEW EPISODES Sold For $275M – Dustin DeVan’s Construction Tech Journey “I raised $250,000 pitching random people in coffee shops.” – Dustin DeVan’s unconventional approach to startup funding. In this episode, Dustin DeVan, founder of Building Connected and Ediphi, shares his journey from selling a company for $275 million to starting anew in the construction tech space. open.spotify.com/episode/5TTRupWHtKBVTCzauKvUtk Building The Most Wanted Robot in Construction – Dusty Robotics CEO Tessa Lau Did you know that a simple mistake in construction layout can cost millions? In this episode of BitBuilders, we had Tessa Lau, CEO of Dusty Robotics, and we got to learn about transforming construction with robots, the journey from prototype to product, and why human-robot teams are the future of building. open.spotify.com/episode/5pkuagleBi8YRWF0yfWyGN Build a Real Business – Why 1% of a Huge Market Isn’t Enough Note: This is a repost from an episode released last month on Bricks, Bucks & Bytes. “Building a f***ing business isn’t about chasing 1% of a huge market.” In this episode, Patric Hellermann shares insights on construction tech startups and investment strategies. We explored the evolving landscape of ERP solutions, 3D visualization software, and the pitfalls of lazy market assessments. open.spotify.com/episode/6tzoFqaSPenP08rfXg11H9 How Starpath Robotics Plans to Mine Space Water From Moon- Is It Even Possible? Construction robots: From hot dogs to highways? In this episode of Bricks, Bucks and Bytes, we explored how robotics is changing construction. We learned about Starpath Robotics’ plan to mine water on the Moon for rocket fuel. This could change how we explore space. We also covered how construction companies are now more open to using robots. open.spotify.com/episode/0qVra7lAkzRMfKnDRxoo1w View All Podcasts BRICKS & BYTES BULLETIN5 Corporates Share Their Innovation Strategies Understanding how and why the people who purchase (and use) the technology in AEC should be basic knowledge for anyone working in innovation across AEC. The truth is, this information is difficult to find.  That’s why we created Corporate Innovation (in AEC).  This podcast explores how cutting-edge technology transforms the Architecture, Engineering, and Construction (AEC) industry. We dive deep into innovation strategies, implementation challenges, real-world technology use cases, and emerging trends.  Each fortnight, we sit down with innovation leaders from companies who are integrating new software and hardware solutions.  And in this week’s newsletter, we’ve distilled some of the insights into a bite-sized read for those interested, starting with: Roger’s O’Brien, McKinsey, Barton Malow, Implenia and EllisDon. Read Full Article 2 FAVORITE QUOTES: “I’d rather have great people share the pie and build a big pie.” – Dustin DeVan stresses the importance of sharing equity with talented team members to build a successful company “The best supply chain is the one that you don’t need.” – Patric emphasises the importance of developing self-sustaining technologies for space exploration and colonization. LATEST STORIES: An Unexpected Call: Jim Cantrell’s Fateful Encounter with Elon Musk Space expert Jim Cantrell recounts his unexpected first encounter with Elon Musk, a pivotal moment that shaped the future of private space exploration. The Rise of Global Investments in Construction Technology Global investments in construction technology surged by 45% in 2023. Discover how international collaboration is shaping the future of the construction industry. Innovating with Purpose: A Three-Step Approach to Corporate Entrepreneurship Discover a proven corporate innovation playbook: the Kickbox method. Learn how this three-step approach transforms ideas into market-ready solutions for businesses. View All Articles BONUS CONTENTWhat Are Investors Betting On? OUR SPONSORS Shft — helping contractors like you leverage BIM to secure a leading position in the race towards construction’s digital future.  BuildVision — streamlining the construction supply chain with a unified platform for contractors, manufacturers, and stakeholders. Powered by beehiiv

INDUSTRY INSIGHTS5 Corporates Share Their Innovation Strategies Understanding how and why the people who purchase (and use) the technology in AEC should be basic knowledge for anyone working in innovation across AEC. The truth is, this information is difficult to find.  That’s why we created Corporate Innovation (in AEC).  This podcast explores how cutting-edge technology transforms the Architecture, Engineering, and Construction (AEC) industry. We dive deep into innovation strategies, implementation challenges, real-world technology use cases, and emerging trends.  Each fortnight, we sit down with innovation leaders from companies who are integrating new software and hardware solutions.  And in this week’s newsletter, we’ve distilled some of the insights into a bite-sized read for those interested, starting with:  Roger’s O’Brien McKinsey Barton Mallow Implenia EllisDon Roger’s O’brien Rogers O’Brien innovates by focusing on discovering better ways to build. Their approach starts with defining innovation as finding a better way to achieve desired outcomes. They prioritize understanding problems over falling in love with solutions. Todd Wynne, as Chief Innovation Officer, oversees six departments including IT, VDC, quality, and R&D. The company fosters a culture of curiosity, courage, and learning, encouraging employees to challenge existing processes. They use the OPTIMA framework to guide innovation efforts, ensuring clear objectives, the right people, and measurable outcomes. RO also partners with startups and invests in technologies that align with their data strategy and can be seamlessly integrated into their existing processes, always keeping an eye on the impact on their workforce and project delivery. McKinsey Based on David Rockhill’s insights, corporations typically approach innovation through pilot projects, often led by dedicated innovation departments. These initiatives usually involve scouting for cutting-edge technologies at conferences and implementing them with mandatory training. However, this approach often leads to challenges in widespread adoption and scaling. Companies tend to focus more on acquiring new tools than on changing organizational culture. Innovation efforts are frequently disconnected from core business strategies, with limited employee empowerment. Rockhill suggests a more effective approach: integrating technology adoption into the core business strategy, empowering all employees to innovate, and focusing on adoption and scaling rather than just piloting new technologies. This holistic approach aims to create a culture of innovation throughout the organization. Barton Malow Barton Malow’s innovation strategy is multifaceted and provides valuable insights for other corporates. The company employs an Entrepreneur in Residence to explore commercializing internal innovations and IP, while a dedicated Business Transformation team evaluates new technologies and maps them to company problems. They encourage innovation from all levels through “the pitch” program, allowing any employee to propose ideas. Barton Malow is developing an e-commerce marketplace for contractors to sell hardware innovations, demonstrating a focus on monetising internal developments. The company actively pilots and implements various technologies, including AI, robotics, and AR/VR solutions, while continuously rethinking traditional construction processes. They allocate significant resources to innovation, recognizing its importance for long-term success. This comprehensive approach balances internal idea generation with external technology adoption, fostering a culture of innovation throughout the organisation. By implementing a structured evaluation process and aligning innovations with core business challenges, Barton Malow ensures that their innovation efforts drive tangible value and keep them competitive in the construction industry. Implenia Implenia’s innovation strategy is multifaceted and pragmatic, focusing on addressing both internal challenges and broader industry trends. Their approach includes an entrepreneurship program called Kickbox, which follows a three-step process from idea validation to implementation. The company actively engages in tech scouting and startup collaborations, maintaining a curated database of potential partners. Implenia emphasises aligning innovation efforts with specific business unit needs and pain points, rather than pursuing a broad, unfocused approach. They balance internal idea generation with external technology adoption, and prioritise innovations that can improve margins, increase profitability, and address sustainability challenges. The company is also developing integrated digital workflows, such as AI-based generative design for modular construction. Implenia takes a measured approach to investments, preferring strategic partnerships that demonstrate clear value before considering financial involvement. This strategy allows them to stay agile while driving meaningful innovation in their core business areas. EllisDon EllisDon’s approach to innovation focuses on experimentation rather than immediate ROI. Their process involves running new technologies concurrently with traditional methods to establish a baseline and mitigate risk. They emphasise “time to value” over ROI for truly novel innovations. For more established technologies, they do consider ROI when evaluating implementation. EllisDon has created the ConTech Accelerator program to foster innovation without a traditional corporate venture arm. The program offers startups access to EllisDon’s nationwide operations, brand credibility, and feedback from end-users across various projects. This 18-month pilot program helps startups refine their products and achieve product-market fit without requiring equity or cash investment from EllisDon. The company takes a portfolio approach to innovation, understanding that not all experiments will succeed but valuable learnings can still emerge. Enjoyed this? We’ll be adding more to this library as we release. Subscribe to Corporate Innovation (in AEC) to keep informed. WEEKLY MUSINGSLogo Changes, Data Entry, $875M Exit A costly game of GBs Jonathon Broughton on LinkedIn: UFF Such a lot of GBs to change the logo every year…. 😉 | 12 comments on LinkedIn Data captured in Excel is not good data Why construction companies need data governance | Federico Selmi posted on the topic | LinkedIn A WARNING TO THE CONSTRUCTION INDUSTRY Alas, you will have seen the saddening news by now, yet another top construction company has gone into… | 103 comments on LinkedIn From series A to $875M exit Plangrid was one of the most successful deals in contech. Let’s take a look: Plangrid founded in 2011. @sequoia led their series A ($18M) investment. 7 years later Plangrid sold to Autodesk for $875M. This gave Sequoia a ~9x multiple from series A. No homerun but not bad. — AEC Technology Guy (@AEC_Tech_Dash) 4:45 PM • Sep 23, 2024 OUR SPONSORS Shft — helping contractors like you leverage BIM to secure a leading position in the race towards construction’s digital future.  BuildVision — streamlining the construction supply