Construction projects include complex processes that depend on strict organization and seamless collaboration. And yet, there are very few ways for managers to track all the data necessary for a successful project in one comprehensive system.
Costs, material inventory, schedules, specs, crew manifest—there are a lot of moving parts involved, and without a centralized hub to navigate it all, mistakes can be made.
But Raffi Holzer provides a solution with his company, Avvir, which offers a sophisticated process for assembling and analyzing construction data for better efficiency, safety, and accuracy.
More information: https://avvir.io/
Raffi Holzer is the CEO and co-founder of Avvir, an industry-leading Reality Analysis platform that automates the comparison of data gathered from your project’s existing conditions with that of your digital design (BIM) models.
From that intelligent comparison and analysis comes numerous practical benefits to the building/project Owner, GC, and trade contractors, including but not limited to a contextualized understanding of construction progress, QA/QC of existing conditions, and overall risk tied to your schedule and budget/SOVs.show more
Prior to starting Avvir, Raffi worked for three years as a product manager, helping clients realize and bring to market products that served the needs of both the users and the business. He graduated from the University of Pennsylvania with two master’s degrees in mechanical and bioengineering and enjoys finding ways to apply his interdisciplinary training to complex problems.
He is passionate about bringing cutting-edge technology to market and often reads journal articles in fields ranging from neuroscience to materials engineering to stay ahead of what’s next.show less
DISCLAIMER: Below is an AI generated transcript. There could be a few typos but it should be at least 90% accurate. Watch video or listen to the podcast for the full experience!
Raffi Holzer 0:00
We ultimately move to is we first moved to a becoming a predictive engine. Right? So what does this likely mean for the future of your project? Right? So if you’re behind schedule by this much, when are you likely to finish? If something has deviated from where it was supposed to be, what is the likely impact on construction? And then to move from predictive to prescriptive?
Alexander Ferguson 0:31
Welcome to UpTech Report. This is our applied tech series UpTech Report is sponsored by TeraLeap. Learn how to leverage the power of video at teraleap.io. Today, I’m joined by my guest, Raffi Holzer, who’s based in New York City, just north of it. He’s the CEO at Avvir. Good to have you on man. Yeah, good to be here. Now, Avvir is a platform, as you describe it focused on a system of records for construction. So we’re really talking about enterprise focus company here in the construction technology area or pulling from your website. Also, it said, using automated verification analytics, lots of fancy words, but understand that, what’s the problem that that you see in the marketplace? Your your customers are facing right now? Sure.
Raffi Holzer 1:15
Yeah. I mean, so every industry, every business should want to have a system of record for the data that matters, right? So if you are a salesperson, your Bible is the CRM, right? That your customer relationship management system, what has gone on? Where did I leave that customer? How many emails I sent them? When’s their birthday? All that information matters to you, for obvious reasons. It’s the same in construction, there’s a lot of data that you care about. Right? So where are we with respect to the schedule? Are we actually building to spec or not? How much does stuff cost? How much have we paid for how much do we owe to whom and when all of that stuff matters. But there is no cyst as my contention at least is that there is no true system of record today in the industry. And the reason I say that is there are two things missing from any kind of datasets that are out there. The first is that there’s no unifying data structure to bring together just for example, there’s three data sets that I mentioned, your costs are schedule your plans, into one cohesive whole, nevermind all the other potential datasets that you might care about. And the other is that construction projects, especially at the enterprise level, move at such a fast pace and are so complex, there’s no way to actually keep those records up to date, given the pace of change. And so you might have plans, but you don’t have a system of record.
Alexander Ferguson 2:54
So you think you have information already, this information exists somewhere, but probably isolated, and it’s not necessarily up to date. That’s, that’s really the issue that you’re seeing. Yeah.
Raffi Holzer 3:05
And so actually another way of framing this problem, this is an amazing stat, that I think the FMI group put out, I think it was about 95 or 96% of all data generated on construction sites goes unused. Right. So it’s not that the data doesn’t exist. But the problem is that it’s unstructured. Right? So if you think of a photograph being taken on a construction site, that’s a piece of data, or that’s actually there’s lots of data contained in there. But it’s not necessarily usable, because you’d have to take 1000s of photographs to capture the construction site, and who has the time to sift through 1000s of photographs to determine what they mean and act on it.
Alexander Ferguson 3:52
This challenge that you’re solving right now, wasn’t the original challenge you you set out to solve when you when you start looking at a construction arena, right?
Raffi Holzer 4:01
No, no, it’s it’s kind of taken a set of twist and turn, not too dissimilar from my own path to getting here. Take me back to like, help me understand,
Alexander Ferguson 4:12
like, Where did you start that they got you into this whole journey of construction tech. So
Raffi Holzer 4:16
I was a physics undergrad with the idea that I was going to eventually get into neural engineering. Which Yeah, which at the time was was very nice, and most people didn’t know what you meant when you said it. Today, a lot of people are aware of Ilan, one of the Elon Musk’s many ventures kernel which is exciting endeavor to I’m sorry, neural link kernels that a competitor.
Alexander Ferguson 4:48
Neural link is to be able to control a computer with your mind.
Raffi Holzer 4:51
Exactly. So brain computer interfaces is the scientific domain that they all fall under. And that’s what I was really passionate about and I was going to pursue a PhD in that in that space. And I actually got into a Ph. D. program. Before I started the Ph. D program. I did an internship, though, at a lab at Carnegie Mellon University, in a robotics lab there and the robotics lab happened to be focused on automation in construction. So that was actually my first exposure to construction and the problems they were in. And the problem that I discovered there was actually just that building plans did not accurately reflect the buildings they were supposed to. I had been interested for a while in that notion of digital twins, as they applied to real estate, and facility management. And I’ve always been pretty entrepreneurial. So that summer, this is back in the summer of 2011. When I was doing the internship, I asked property managers and building managers and building owners that I got to meet over the course of this experience about this concept, you know, what they thought of it? Was it a good idea, something they’d be interested in? You know, what I later came to call customer discovery. And the feedback that I got was completely uniform, which was, we tried this already. It hasn’t worked. And it hasn’t worked. Because the software that has tried to do this, assume that we had accurate plans about our buildings, and we don’t, which I thought was insane. It imply two things implied that first of all, construction doesn’t go according to plan and be nobody takes the time to update plans to reflect the actual conditions, which was astonishing. And so my idea about construction, yet that the business idea that I had is maybe what we could solve that problem, right, we could just automatically update the plan. So because apparently the reason it wasn’t getting done was it was expensive and difficult and tedious. So what if we could automate that that would be really valuable. So fast forward, I’m in my PhD program. Turns out I’m I keep on getting involved in the entrepreneurial competitions they have. I was at Penn for grad schools who got the Wharton business plan competition. I entered that I enter another term, I’m much more involved in the business plan competitions than I am in school.
Alexander Ferguson 7:23
It’s like PhD, like, yeah, you know, I just all the business side of the business idea.
Raffi Holzer 7:27
Yes, exactly. So I had an advisor, he’s like, he sat me down, he’s like, you don’t want to do this. You don’t want to spend the next, you know, I was 12 months in at that point, he’s like, take the masters and go. Like, you can, it was hard to hear at the time, because I was dead set on becoming a doctor. But it was right. So I did two masters in the end cuz I couldn’t get enough of school.
Unknown Speaker 7:59
Alexander Ferguson 8:00
still wanted to know if you enjoyed it. Yes, the call to entrepreneurship was stronger in the law. Yes,
Raffi Holzer 8:06
yeah. And so I decided before I started my own company that I wanted to learn what it meant to launch products. So I ended up becoming a product manager for about four years. And then I saw a press release, in the summer of 2017, for a company that actually Unfortunately, no longer exists. But they had start, they’d created a laser scanning laser scanner, that claimed to have brought the cost of scanning down on a per square foot basis by two orders of magnitude. Alright, so the big thing that was holding up my idea in 2011, was laser scanning was incredibly expensive, we needed to laser scan in order to get an accurate sense of what was actually there. And we need to do that repeatedly over the course of construction to constantly reconcile the as built with plans. And doing it repeatedly was enormously expensive. But if we can bring down the cost of scanning by 100x, then this was doable. So I saw that press release, the light bulb was like oh, okay, this is what I’ve been waiting for. But it’s funny, I was actually torn at the time I knew I wanted to start my own company, I was still torn between, do I want to do this thing of construction? Or do I want to do something in neuroscience. And I had actually for about two months, I was creating investor decks for two different ideas, one construction, one neuroscience, and the one in construction just took on a life of its own. I started talking to people about it, people who mattered started getting interested in
Alexander Ferguson 9:39
there was just already the interest the fact that you created the pitch deck and you were having conversations about both there was just so much more conversation around the technology. It just went from there. I want to dive in a bit more about then how this technology of the scanning kind of then set you off on this path. But taking a step back for a moment. Was it a clear cut In your mind of, Okay, I enjoy entrepreneurship. I want to be in this space. So I’m going to become a product manager. So I can see a launch. And then I’m going to develop a product deck, and then I’m going to pitch it, was it? Was it a clear cut for you?
Raffi Holzer 10:14
Yes or no? Right. So I come from a family professionals, not from a family of entrepreneurs. So I was actually listening to a podcast recently. with somebody, I forget who it was now, but it resonated with me, because this person Oh, actually, there’s a YouTube series out there called veritasium. I don’t know if people are familiar. But this guy, also from a family of professionals wanted to become a filmmaker and kept pushing off pursuing his dream because there were certain expectations, you go to school for a certain amount of time, you do the right thing, you get the right career. I was dating my wife in grad school. So first of all, I should say, before I even went to grad school, I had a professor, my physics advisor, tell me like don’t go to grad school. I know you want to start a company. So just do that. You don’t need to go get a PhD to do that. And I had the advisor in grad school. Tell me that.
Alexander Ferguson 11:14
Yeah, to grad school. everyone around you is telling you get out. But you’re like, No,
Raffi Holzer 11:18
well, the family matters a lot more in the family, you know, the family expectations were get it, you know, get a degree get a good job. That’s the way that life works. And I was dating my wife at the time. And I told her, I remember exactly where we were, we were a block away from Macy’s in Herald Square. And Midtown Manhattan, and Rod date. And I just turned around, we started getting serious. And I was like, you know, I don’t think I ever want to have a job, per se. I just want to start companies work for myself. And she gave me this look like I was an insane person. But that’s the craziest thing. You know, she’d ever heard to turns out in some ways you do marry your mother? Because that was my mom’s reaction to
Alexander Ferguson 12:14
both of them. They’re all like, what are you doing when you’re exploring this?
Raffi Holzer 12:17
Yeah. So you know, I kept on pushing it off. And so in my mind, I was doing two things by becoming a product manager. First, I was charting a course that would let me pursue the path that I wanted to, but also making the people in my life happy at the same time.
Alexander Ferguson 12:37
It’s like bringing them along with you. So you, okay, you’re happy, but I’m still getting to where I want to go. Yeah. How did they react? How did they react when you finally got to the pitch deck? And you saw this technology? Like, alright, I want to start a company now.
Raffi Holzer 12:49
Well, so what happened was I kept on starting little, or almost starting companies along the way. I ended up Well, I’ll tell you. So I have a reverse. I have a patent on a pair of reversible sunglasses,
Alexander Ferguson 13:03
reversible sunglasses, okay,
Raffi Holzer 13:05
reversal, sunglasses, you can wear them two ways. In fact, they still exist, somebody is running with that idea right now, the called peak p w. q. So they may launch the summer for all I know. There was an idea to bundle a set of services and benefits for lawyers and investment bankers. It’s similar to the way that Google provides amazing benefits to their teams in order to to stem, you know, departures of their workforce and to increase retention. I knew investment banks and law firms were having similar issues. And like, why don’t we just offer a package of services and benefits smoke to what Google does, but offered to them, and they actually got pretty far down the road. Each time, it was just like, Get serious, get back to your job. But I didn’t like getting serious. And that way, I didn’t like getting back to my job. And at some point, after getting fired enough times, it just came to a head where, you know, my wife and I sat down and, you know, she was like, I think you just need to I just need to do this. You know, as uncomfortable as me just,
Unknown Speaker 14:14
I see that,
Raffi Holzer 14:15
that this is what you need to do. And so just go and so I did, I grabbed the opportunity, and I ran
Alexander Ferguson 14:23
Do you have the pitch that you set? Well, you have the you saw the technology, you create two pitch decks, one around neuro link type of mentality, and then when around construction tech, and they’re just started creating conversations. Now when you were Did you just start pitching this to VCs and say have a great idea and they started buying in on it?
Raffi Holzer 14:41
No. So what were the first two sales that I needed to make first two hard the hardest to sales were my spouse is the first one and the second one was my technical co founder to read and write. So I I can write a little Python. You know, I was doing a lot of MATLAB in grad school. So I, you know, could use code for for analysis and stuff like that. But actually building web apps was not my thing. Had didn’t have that skill set. So I needed somebody who did. And so I had to sell my co founder tiara on this idea as well. So that was the first step
Alexander Ferguson 15:27
that took you find your co founder.
Raffi Holzer 15:29
So tear, I both worked at Pivotal Labs. Before we started, she had left the company a few months before I did to start her own thing. And I reached out, I was like, would you help me with mine help me build a prototype, I’ll pay you a little bit on the side to get off the ground. I’m slowly wooed her to be a full time co founder. And you know, I think it helped that when we started actually seeing interest wasn’t necessarily from VC right away, but was from owners and developers.
Alexander Ferguson 16:08
Did you show it to them? It’s the end. They’re like, Yeah, I would, I would take this, build it, and I’ll buy it.
Raffi Holzer 16:14
Yeah, yeah. So the first big opportunity we had like that way this thing really got rolling was I went to a real estate networking event. And the speaker was the president of a major development group in New York that actually just finished a massive skyscraper in New York City. I’m not gonna name names. And because this story isn’t necessarily the happiest of ending. But it started, we had a really good beginning. So I talked to this person, actually do the elevator pitch cornerman, the elevator on the way down, right after he’s leaving, give him my schpeel. Like, this is what I have. And he like, great, Here’s my card, schedule an appointment with or you know, email my assistant, she’ll set something up with our heads of construction, and today’s word she did. And so I think was two and a half, two and a half weeks, to put something together to show them and I actually use two weeks of paternity leave, because I just had my first child. My wife wasn’t super thrilled about that. I used to have my six weeks of paternity leave to prep for this meeting. I go in and make the pitch. I showed them the concept. And they’re like, okay, when can you actually have this? I was like, six months? You know?
Alexander Ferguson 17:49
So this is crazy out of that.
Raffi Holzer 17:51
Because I don’t think we’ve actually reached that concept. And it’s now four years later. But six months, just give us six months, we’ll get it done. So you january, february time. And they’re like, Great. Let’s schedule a pilot for January. And I was like, great. So then I tell Tierra, I’ve got this massive customer. It’s this huge project, Midtown Manhattan. And that’s what got things going. In the end, they really did not want to deal with a startup. So when it came back to them in January, they’re like, nope, you know, you guys, you’re not ready, things are messy.
Alexander Ferguson 18:33
They wanted something complete, ready, stable, that will break. And that’s why
Raffi Holzer 18:38
I’m so thankful that whether they lied or just unintentionally, you know, they were optimistic at the outset and couldn’t hold up, didn’t want to work with startups. I’m just, I’m happy to work out the way that it did. Or at least that they gave me that initial greenlight, because that gave me the confidence
Alexander Ferguson 18:56
to to deliver those. Technically, it was empty promise it was the confidence you needed to build it and move forward. Exactly. So what did you do next?
Raffi Holzer 19:07
So that helped me convince tiara that, you know, this, this was gonna be a thing and help me convince my wife as well. This is 2017 right. 20 2017 I started meeting with investors at that point, was having a really tough time. Didn’t know exactly, I was still figuring out what the business was like. And again, it’s at this point to the businesses involved, we were gonna have drones. And we were just going to ensure that the building was to spec like, that was the whole idea.
Unknown Speaker 19:40
Raffi Holzer 19:43
pretty soon drones came out of the picture because I couldn’t fly them in New York. That was Donald Trump was president and so there was a no fly zone within like a mile or half a mile of his residence on Fifth Avenue. So that was just wasn’t possible. And I realized drones, first of all had been done at that point, right there were a bunch of big drone companies. And that wasn’t where the we were really adding value, where I saw us adding value was in taking data from a drone, or potentially any other source, and structuring it and analyzing it. And so we started refocusing. And then I borrowed some money from my dad, and from my grandmother. And we bought a laser scanner, the cheapest one we could find, from that company that I found online and I was able at enough money to pay Tierra, essentially, you know, subsistence wages, or barely that. And think, you know, my wife is an attorney. So I wasn’t starving, that huge help. And we just started, she started building up like a prototype of what this thing would look like I was designing it. She was building it. And we were showing it to people, both customers and investors. That was my thing all the time. That’s what I was doing. And we got a our first, you know, pilot customer to bite. Can we started our first pilot of that, probably in February, March, actually. So when we were supposed to have started that much bigger project, we started in a smaller condo,
Alexander Ferguson 21:29
three months later,
Raffi Holzer 21:31
yeah, and Brooklyn. And we also, around that time, I get a tour I was raising was trying to raise money for September, until February, you know, in the journey that I’ve gone so far, that’s like a miniscule amount of time. It felt like forever, because I saw the small pile of money that I had gotten from my family was dwindling quickly. So we got into an accelerator called urban x. And we managed to get an angel investor to to invest in us. And so we raised I think, was about $350,000, in February of 2018. And that felt like oh, my God, we’re I got all the money in the world. Now, this is incredible. Because we got to hire somebody now. So we did, we were there first enabled our first hire, and we hired two more people within the next couple of months. And the idea was, okay, we’re gonna go through this six month accelerator program. And then in the summer, we’re going to raise our seed round, you know, a couple million dollars. That didn’t happen exactly as I would have liked. I
Alexander Ferguson 22:56
love the realities that come in when you’re like, you have a plan. But it doesn’t always work out. So so you have this is first a little bit of seed by the angel investor. Right, right. Yeah. And and you hire some people, we’re gonna make it happen. What did you do next?
Raffi Holzer 23:13
So, we just started working, right. So I was actually doing a lot of the actual scanning, I would go, so I was doing the selling, I was doing the fundraising, I was doing the product management. And I would actually do I was the one going on site doing the scanning. We had also, I mean, it’s so fun, I forget that he was even there for for a while. But for a few months, we had another co founder who we ended up not working out with, but we needed a third person who had the expertise to actually do what we knew is an important the computer vision machine learning part of this right. So I can do the product and the business side. Even the design side to a certain extent. Tierra can do the software engineering component. And we had brought on a guy who had finished a PhD in civil engineering, especially his PhD was on this board on this topic of differentiating Building Information models from laser scans. And like,
Alexander Ferguson 24:21
perfect if you’ve worked out great.
Raffi Holzer 24:22
Yeah. It didn’t. It turns out, you know, when you’re getting your PhD in civil engineering, as opposed to computer science, right, you learn just enough, just like I knew MATLAB, right, just enough to finish the work in my neuroscience course. Right? He knew enough Python to finish something, his thesis but not enough to actually build a product. So we hired somebody who we thought did that person ended up getting overwhelmed by probably April May and it was our first crisis because he quit. We hired him in like, February when we got the money in, and then he quit in May. And we’re like, we’re trying to raise money. This is like, we don’t even have a team who could conceivably do this, how could we credibly raise money from anybody. And thankfully, we plug that hole amazingly well, a month or two later. So Cody, who’s now on our team is is incredibly talented and has kind of headed up the of the computer vision and computational geometry work that’s gone into that is the backbone of our company.
Alexander Ferguson 25:37
How do you find Cody, he just kept searching and oh my god that I search. And
Raffi Holzer 25:42
I found him in my figurative backyard, so to speak. Because I reached out to a professor, I knew at Penn, I never took any one of his courses. But I knew he taught computer vision, like maybe he knows somebody. And he remembered me somehow, which is incredible, because he had no reason to maybe, you know, talk to him once in the hallway or something like that. And if he didn’t remember, maybe just he completely faked it very well. And he’s like, I actually have a student, best student I’ve ever had, who, you know, company was working for a startup doing something similar in a different space, but technically similar. It’s shutting down, and he’s actually moving with his husband to New York. And he’s looking for a job. And I was like, put me in touch, and convinced him to that was another sale that that I
Alexander Ferguson 26:48
made and fails, in many ways, both to customers, as well as employees and investors.
Raffi Holzer 26:53
Yeah, I mean, when I think of what my job actually consists of, primarily, it’s convincing people to do things, right, whether it’s convincing people to pay us money for a product, convincing people to invest money in our growth in our story, or convincing people to join that become part of that story.
Alexander Ferguson 27:19
They’re just a natural talent selling, it just comes to you.
Raffi Holzer 27:22
I never thought of it that way. I will say persistence, I think is somewhat natural to someone. Someone earned. You know, there were a lot of things I was actually the way I thought of myself for a long time was as the guy couldn’t finish things. Right, I would start things and not see them through. Because I’m, I get bored. Honestly, by a lot of things, I’m the typical add kid. You know, I’m fascinated by something. And I’ll dive incredibly deep into it. And then I’m not interested by it anymore. And I’m on to the next thing. So I think that was the way I was perceived by the people I knew and loved and trusted. And, at some point, I needed to prove to myself cuz I knew this was a dream that I wanted. I knew it took a certain amount of persistence. And I was like, Okay, then I guess that just means I’m gonna have to be a persistent person. So I was, I will say, I think my wife and I, around the time, I don’t know when this movie came out, but it was the McDonald’s movie was this the founder about Ray Kroc. And the lesson of that movie, for my wife, and I particularly was, you have to just stick around long enough to be successful, right? This guy had tried again, and again and again and again. And so much of success really is luck, honestly. But you have to be persistent enough to tell to win the lotto, right, you’ve got to keep on buying a ticket.
Alexander Ferguson 29:09
So it’s just keep persisting until the right place. right time. It just, it just happened. So for obvious you just settled on. Okay. This is what I’m going to be persistent about. Yeah, exactly. Exactly. for you on this on this journey, you kind of start state you stay in this picture, you finally start to have the right crew, you know, clicking in place, everything you need. And then the first few clients, you got the first client in the pilots. Yeah, it’s a very March, and then we’re able to start picking up more from there. Not really.
Raffi Holzer 29:47
I learned a bunch of stuff from that pilot, and the pilot didn’t go particularly well. I mean, when everything was being done manually, we didn’t have any kind of automation. So it was all Wizard of Oz. turnaround times are therefore very slow. But they give us a lot of insight. First of all, they’re like, the product needs to go in a different direction, right? I’m not as interested in the, what I call the deviation analysis that we do, right, which is, hey, the laser scan says the pillar is here. And the BIM says the pillar is supposed to be here. And you can tell me that that’s the case. I’m not so interested in that. I’m interested in knowing my progress, right? Tell me how far along I am like, I guess we could do that. Right? If we’re building an algorithm that tells you whether things are in place or not, the first thing that algorithm would have to do is tell you whether they’re there or not. And that would enable us to Yeah, we just have to display that information. Okay, so we took that feedback. The other really interesting insight that we gained is we’ve been hired by the general contractor, we actually found a significant deviation in this building. And at first, I was like, amazing. Like, I didn’t expect that necessarily. I was kind of hoping for it, because that one amazing case study. But that wasn’t the contractors reaction. They asked us to stop scanning.
Alexander Ferguson 31:12
That was their own issue, right?
Raffi Holzer 31:14
He Well, it was their subcontractors issue. And I thought, great, don’t you want to hold your subcontractor to account? And the answer and this was a really interesting dynamic was no, we have really good relationships with their subcontractors. This is a one off deal with an owner who I never don’t know that I’m going to get business with again, it’s more important for me to preserve my relationship with a subcontractor who I know respect and trust than it is to be completely transparent with the owner. Because this is an adjustable mistake. No, the building’s not gonna fall down because of this. Right? It’s just an issue will correct in the field, kind of, but I don’t, I’m happy I know about it. But I don’t want to record of it was the main thing.
Alexander Ferguson 32:04
Wow. Why? So this is almost a new insight for you to the no politics, but just the interconnectedness communications of
Raffi Holzer 32:12
Yes, that the dynamics of of construction, I’ve started doing a lot of thinking about the economics, the micro economics of construction, and really how game theory applies to construction. Because, you know, Game Theory is all about how do you get different parties to come together and align or not? And that honestly, if you boil it down, is probably I’d say, one of the fundamental issues in construction more than, you know, Victor, any technology, per se, is going to solve it, right. So there’s some robots out there that are gonna sell probably one of the other major problems, which is a lack of skilled labor.
Unknown Speaker 32:58
Raffi Holzer 33:00
this game theory problem, this lack of alignment, which, by the way, is super similar to medicine and a lot of ways, right, where you’ve got a conflict of interest between the provider, the payer, and the user, you’ve got that in construction all the time. You’ve got a developer, you’ve got a builder, and very often you’ve got the tenant who knows none of this before he moves in, but often is, you know, needs to actually manage the building or the part of the building that he occupies. So there’s very little alignment of incentives. There’s very little transparency because of that. And one of our I guess, part of our mission is to bring is to shed light on the industry, bring transparency to the job, because I think ultimately, it will benefit everybody, right? If you can manage to align incentives, and bring transparency to a job, everybody wins. I think the best example of that is in construction payments. So construction payments are notoriously problem plagued. It takes I think it’s the second longest payment cycle in any industry, right? So on average, it takes about 59 days, from time of invoice to time of payment, but it’s really not uncommon to for a subcontractor to get paid 90 days, 120 days a year after work has been completed. And that drives a lot of subcontractors out of business, right. If you don’t have sufficient scale, you don’t have cash flow, right? You go bankrupt. And then by the way that has ripple effects throughout the whole project. If your concrete subcontractor goes out of business while the building is going up, your project is going to suffer right finding a new subcontractor to come in and do that work projects delayed at least three, four months. The problem is, why is why are the subcontractors paid so late. This cycle of mistrust, or to the owner, the payer, whomever it is, is concerned that the subcontractor is fibbing, guess what they are? They are fibbing about how much work they’ve done, because they were you’re going to pay late. And so that cycle just perpetuates itself. If there was a single source of truth, that could be trusted by all parties about how much has been built, and how much is owed, to whom, by whom, and when that, in theory, at least should eliminate the friction from all of that. So that’s what we’re after
Alexander Ferguson 35:38
you paint a picture of, of course, you have human just behavior and and tendencies. Are you feeling like you’re fighting against it? Or do you see that the whole industry is wanting this? In some ways, they’ve been doing it this way for a long time. So it’s just it’s just the way it is? Are you trying to change the entire industry?
Raffi Holzer 35:57
Yeah, in some sense, but construction is not a monolith. So the way that we talk about ourselves, one of the companies I was involved with as a consultant, actually, the first job I really had was helping a consultancy start in education technology company. And I realized through that experience, that technology is not always the right tool to solve problems. And we were trying to solve a problem that parent teacher child communication, right, there’s this triangle of communication that needed to occur and often didn’t, if you have kids in grade school, you probably know when you ask your kids how a school you get.
Unknown Speaker 36:33
Raffi Holzer 36:36
they were trying to solve that problem with an app. And I realized pretty early on in that experience, this might not be the problem that’s easily solved with technology, you you need something you need psychology, potentially, or sociology, applied here. And so the same is true, I think, in construction, I don’t think any technology, you know, in and of itself is going to solve the problems that exists in construction, right, it’s not going to solve the nature of the industry, the way things have always been done, what technology can do is enable the agents of change who are already on the ground, right? Who want to make change within the industry, it can enable them to do so we can give them the tools. And so that’s how we try and position ourselves not as, hey, you know, adopt Vir and everything is going to be magically better, because it doesn’t work that way. But if you want to do things in a better way, this is the tool you need. It’s kind of like if you have a to do list, right, you don’t automatically get organized. But if you want to get organized, you need to get a list.
Alexander Ferguson 37:47
You describe this agent of change, it’s almost like what you’re trying to do is find those ages of change that want to make it happen. And then your technology can help them make it possible. That is exactly what we were trying to do. Exactly. So fast forward, you get kind of giving us the journey from the first year, really, from the beginning and up into that first year, helped me understand it. Just quickly, the last three years of the progress and the focus, have you been able to find those agents of change that want your help? Um,
Raffi Holzer 38:20
we have, and we haven’t, right, so we’ve definitely struck out with some it hasn’t we haven’t found the magic bullet to understand, you know, and discriminate among potential customers? Who are you know, can we create a profile and know exactly in advance? Who’s going to be a good adopter? And who won’t be who’s interested in change and who won’t? Until we have those conversations? So we’ve had a lot of conversations, and we found some really amazing people who really want to change some really amazing companies who want to make change at a corporate level. And so we’re starting to see the fruits of that, you know, for the investors who get construction, I would always say this to investors, when they would ask, you know, what kind of what are you looking for in a VC? And besides the money, which is usually most of it, but besides the money? What are you looking for in the last round that we raised? The answer that I gave consistently was somebody who gets that construction is not your typical enterprise industry, right, that this is going to be a little bit of a bumpier growth story than, you know, just your typical b2b SaaS company that takes off like a rocket ship. We are trying to change an industry and we do need to identify those people and things just take a long time because in comparison to producing a Word document, for example, producing a building moves at a glacial pace. And that’s the kind of stuff We’re working on we have to find a new project that project maybes only being contracted now and it’s not actually getting put into the ground for another year. So those are the timescales we have to deal with. But we’re, we’re making headway. So it’s been pretty amazing.
Alexander Ferguson 40:18
What are you most excited about looking ahead, though, of kind of where you’re headed, the journey and the progress.
Raffi Holzer 40:26
I’m excited about the initial vision, right, that I’m excited about, or at least the vision that we’ve come to that we’ve settled on about really changing the industry and providing that that true system of record, and what that can unlock. Right, you know, I started talking about, you know, a potential app store that might sit on top of, you know, the the eventual system of record of construction. In my mind, I refer to it as the as built App Store. But one of the the potential, you know, because we’re not going to do everything, right, what, what you can do with accurate information is pretty unlimited. And we’re not going to do all of it. So we’re going to want people to take advantage of the data that we’re providing and do something with it. And one of the, the use cases I’m really excited about is that, you know, there are a couple of companies out there, for example, who can take a building information model, right, that’s usually a design tool, and tell the architect that’s putting it together, whether it is to code or not really helpful thing, right that digitize the local municipal codes. And so I can tell you whether the doorway needs to be wider, because, you know, wheelchair needs to get through all of the little things that you might mess up on and get tripped up on at the the inspectors office. Now you can know in advance, but it’s only useful as a during the design phase of the project. But imagine if the BIM was always a reflection of what was actually being built, and you could run that check during the construction process. Well, now all of a sudden, I’m not going to get tripped up when the inspector shows up and says you need to stop work because this is this, you know, the, you don’t have enough ceiling height here, this got too low, somebody narrow the door by accident, you’ve got to undo this take off the sheetrock.
Unknown Speaker 42:17
Right, that’s the bane
Raffi Holzer 42:20
of a contractor developer’s existence. And we can eliminate better, we could potentially obviate the need for a lot of those inspections in the first place. If a municipality can trust that system being run, then I don’t mean to put all the inspectors at a job, but at least we can make their jobs a lot easier.
Alexander Ferguson 42:41
You give them already a checklist of what where where it is, and they can affirm it, and they don’t have to do as much. Now this BIM the building information modeling systems, basically you’re you’re trying to make sure everything that’s contained in there is accurate up to date. And you’re just excited about the the potential even the additional applications you can write on that. If it’s an accurate information that’s always up to date. Exactly. Wow. Curious IV or where did the name come from? Ah.
Raffi Holzer 43:14
So a Vir means air in Hebrew. And if you remember, I initially thought we were going to be a drone company. Sounds like a cool sounding name. And I hit on a beer and I had to find a spelling that would work. And the spelling is nonsensical in English, but most I would say like 90% of people do get the pronunciation right. Despite that, and word So, you know, we we changed the logo, because those are actually used to look like a little drone. We change the logo. But when we were doing that, we’re like, ah, should we change the name? I still like it. It sounds cool. So we kept it. And that’s it.
Alexander Ferguson 43:56
I love usually the history of names that usually came from something else, but it just it is what it is it becomes what the company becomes. Exactly. I really am fascinated with the journey that you’ve been on. And you’re still on it’s it’s a big mission. Like if anything, you’re taking on a shift, in many ways, the entire construction culture mindset of keeping accurate data and everyone knows what it is all at the same time and you’re held accountable to it. This is as you said, large scale productions don’t happen today. You’re you’re probably helping companies that are that are building up and building things already next year or five years from now. What do you see as though you’re in kind of the future of building construction tech? If you got a look ahead?
Raffi Holzer 44:43
Well, I hope we’re part of it. I’ll say I’ll say that first. It’s not guaranteed. But certainly I hope we’re a part of that. There are a lot of things happening within construction, a lot of forces at play right now. I mentioned the labor shortage That’s certainly going to continue to be a factor. So I do see more robotics and more automation coming into play. And one of the things that’s happening right now, actually, in part because of COVID, a lot of people took COVID as an opportunity to just retire, like, hey, the whole zoom thing is not working for me, if I’m, you know, north of 55, I’ve done my time in this job. And so a lot of the old guard left. And it’s what I’ve been hearing from construction companies, since I got into this industry is hard to attract young people into the industry.
Unknown Speaker 45:39
Raffi Holzer 45:41
either technology is going to help attract young people into the industry, or technology is going to make it so that you need fewer people. But one way or the other, that problem is going to be solved probably via technology. And so I just see a lot of that coming. I want to see more efficiency, I think the whole industry want to see more efficiency. But what I’m optimistic about is that the fundamental underlying problems really good. So whether through technology or not, around that that alignment problem, right, how do you solve for the mistrust that exists? I mean, the the quotes that I’ve gotten from people are, you know, litigation starts the moment the shovel hits the ground. And that’s not true everywhere in the United States. But we are a pretty litigious society. The less that is the case, the more productive construction will be, as an industry, and probably the more pleasant it will be for all parties. And I think transparency and feedback are going to be part of that. The one other thing I should say, in terms of where I think technology is going, we talked about VR, in particular, but I think this is true for our competitors, and a lot of other companies in the space broadly.
Unknown Speaker 47:11
Raffi Holzer 47:12
I would describe our algorithm, right, our core technology as a descriptive engine. Right? So we take in data that is unstructured, from the field photographs, laser scans, and we can inform somebody about what is there what is contained, what is the information that is contained. In those reality capture data. Where I think we ultimately move to is we first move to a becoming a predictive engine. Right? So
what does this likely mean for the future of your project? Right? So if you’re behind schedule by this much, when are you likely to finish? If something has deviated from where we’re supposed to be? What is the likely impact on construction? And then to move from predictive to prescriptive? Right? So not just what is the impact in your building going to be, but what should you do about it? And so that’s what gets me really excited when I have the free time, you know, I spend my time reading up on new innovative ideas in machine learning and AI. And I’m still fascinated by neuroscience. And so keep up with the trends and topics there. And so I’m bringing those back. So like our machine learning and computer vision team, do you think we could apply this to to the algorithm? I think this would be amazing. Usually, like, usually the answer is maybe I don’t know, we’ll look into it. But that’s what gets me pumped
Alexander Ferguson 48:49
your fascination and interest with continual innovation and the technology that is coming down the road, coupling that with your persistence, to just make something happen. It’s I’m excited to see where you go next. And for those that are listening and want to learn more, you can go to avvir.io, that’s avvir.io Excuse me. Yeah, you’re done. IO, yeah, that’s good. Tech tech company always uses IO.
Unknown Speaker 49:15
If the person who owns a.com is listening to this though, please reach out. We’d love to own it. We just can’t get into there we go.
Alexander Ferguson 49:23
Just be able to sell love it. Thanks so much for your time. This is an awesome conversation. Thank you. We’ll see you all on the next episode UpTech Report. Have you seen a company using AI machine learning or other technology to transform the way we live, work and do business? Go to UpTech report.com. And let us know