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September 9, 2025 47 mins

Gabe Joseph shares how getting past ego made him a better builder—leaning into curiosity, standardizing specs, and scaling without bloat. We dig into procurement, margins, architect fit, permitting, and the upstream moves that erase change orders.

https://www.jdbatx.com

Show Notes:
0:00 Cold open — curiosity as the builder's edge
1:01 Gabe's background and Austin roots
6:08 Specs over one-offs: standardization that scales
10:36 Procurement: high-design without high cost
14:27 Margins, materials, and making the numbers work
31:27 Subcontractors: building a reliable roster
40:10 Change orders: how to avoid them upstream
44:43 Permitting & city dynamics (late-stage hurdles)

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Podcast Produced By:
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Transcript

Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
The only smart thing I've everdone in construction is to
continue to be curious about howto figure things out.
But the clouds of vape andsaying a lot was going to be a
problem.
But, well, mics are hot baby, sothe cloud is vape. Yeah, the

(00:22):
clouds of vape. And saying a lotis just par for the course. But
this is a family friendly show,builders, budgets and beers is
for a, you know, whoever whowants to chime in audience. So,
you know, we don't have to besailors, but, you know, if you
little F bomb fly here everyonce in a while, it's okay,
don't, don't let it get toodark. Yeah? Yeah, exactly,
exactly. But dude, thanks forjumping on. Appreciate it for

(00:45):
everybody that is listening.
Hopefully, if you're watchingthis, you're gonna see the
awesome buffalo mount behind mygood friend, Gabe Joseph. But
Gabe, go ahead and give thelisteners a little background on
yourself, a little intro,sure. Yeah. My name is Gabe
Joseph. I'm a partner in justdesign build in Austin, Texas,
been in construction virtuallymy whole life in one way or

(01:06):
another. But in Austin, thelast, last 10 years here, and
along with some other partners,we we've got projects in
Houston, Austin, Dallas, andlooking to kind of expand from
there, so a little bit ofeverything.
100% love it. And I think justfor the list, for the listeners,
you can tune back, I can'tremember how many episodes, but
a few episodes, and you can geta little bit of a preface with

(01:30):
Thomas Joseph, who is Gabe, hisbrother. And Gabe just with you,
mentioning that, like, you guysare in Houston and, like,
expanding all over Texas. Like,when did that start? Because you
guys were primarily in Austin,yeah, you know,
yeah. No, that we actually, sowe went through the process of a
merger with a company based inHouston, starting about nine

(01:52):
months ago. And so in the lastnine months, we sort of expand
our footprint across Texas, butthen also, at the same time,
kind of scaled up our design andengineering operations to fold
in some staff overseas in acouple of different countries,
and our pipeline volume went uppretty significantly. Went from

(02:13):
about 15 to 20 houses a year toaround 300 now. So it's been a
very, very rapid path to growthand kind of navigating that goes
withthat dude, nine months. Call it
what? 30x growth,somewhere there, yeah, somewhere
between 20. Like, how? Thatdoesn't even make sense. How?

(02:34):
Like, how do you do thatcomfortably? And I know that's
like, a huge question, but,like, That's just insane. You
have, you have 300 units, huh?
Go ahead,yeah, yeah, that's right. Now,
there's about three betweendesign, permitting and
construction. That's the besttoken. You don't do it
comfortably. You do it asuncomfortably as you're willing
to admit. Sure, totally. Youknow what, though, before we get

(02:55):
too far, I just want to pointout, if anybody can see this,
Reese, that beard should be astate park in Colorado. You get,
like, hippies chainingthemselves to the base that you
don't shave it, like, that'sjust, yeah, exactly, exactly.
It's like the mud flap, dude,like the mud flap, you know,
this beard gets so muchattention. I mean, hey, it's a
fine beard. It's a fine beard.

(03:18):
They would have to inject mewith like, elephant levels of
testosterone to produce a beardlike that. So I'm jealous,
brother,dude, yeah, just, you know, born
with incredibly high tea. Imean, it's just, it's more of a
lifestyle than anything, justingesting pounds of red meat a
day, just an absolute and just,just corn fed Nebraska beef
raised, baby. Yeah, dude, yeah,the beard. I get it. I get it.

(03:40):
We, you know, if you get alittle uncomfortable, Gabe just
going super deep into, you know,the hyper growth scale. And just
business magicians that you andyour brother are, we can, we can
take a slow roll here.
No, no, I would say grab is bysaying I'm happy talking about
anything you want. And ifanybody's listening to this,
they should take everything Isay as the opinion of an idiot

(04:02):
who knows very little and isjust figuring it out as he goes
for a very long time now.
So not true, not true, and I'lldebunk it with this question,
how did you get intoconstruction? I think I've heard
this story, just like in theyears that we've known each
other, but like just to provethat you're not an idiot and
you've been in this gameforever, and you look at
business through a prettyinteresting lens. How'd you get

(04:23):
into it?
Yeah, so my brother and I grewup in a family in upstate New
York where our grandfather hadbeen a small builder, Our father
was a builder and smalldeveloper. Kind of rode the boom
and bust wave through the 80sand 90s, and so we had the
benefit of being around a lot ofexperience, but didn't come from
an established business.
Bootstrap this ourselves. Istarted off as a framer, and

(04:45):
then from there asuperintendent, and from there a
pm, so kind of, we were able torise up, kind of through the
ranks and put it together moreor less organically, but very
blood and guts very much. Youknow, started with bags on and,
you know, kind of. Went fromthere and found out pretty early
on, we were much more interestedin the business of construction
than the, you know, than thenuts and bolts. Like, yeah, I

(05:07):
can plumb a wall, but I likedoing what I'm doing now a lot
better, and I charge the samerate for either activity.
So, yeah, totally, dude. I loveit. And I think I like, I want
to dig in on that, because Ithink was just the last episode
that I did, we were talkingabout, like, the difference of,
like, builders being bags on andlike, just drooling over the
craft, and then this like,dynamic that happens where you

(05:29):
realize, like, it's a business,and like, you really do have to,
like, pivot into this businessmindset, not discounting that it
is a craft, and you're you needto take pride in your work, and
you are delivering a veryreputation based huge asset
investment for the consumerproduct. But I think that's
where a lot of builders, theyjust kind of, like, they get to
these points, like, struggle ofthey try and scale a business

(05:51):
and it flops, and then they justgo back into like, well, we're
just going to do it all ofourselves. And they can't, like,
really get to that hump. So atwhat point did you and Thomas
start to, like, understand thatyou guys love the business side
of construction, arguably morethan the craft. It's a really
interesting question. And Ithink, yeah, at some point you
kind of accept that, okay, anexcellent execution, right?

(06:12):
Like, the fact that the Househas to be where the building,
whatever it is, has to be doneto really high level. That
shouldn't be the goal. I think,in this business, that should
just be the baseline. Like,yeah, you've got to produce an
excellent product or nobody'sgoing to buy it. You're not
going to go very far. But onceyou get comfortable with that,
then you start, sort of startlooking at, Okay, what's next?
And then you find that buildingthe machinery around an

(06:34):
operation is very similar tobuilding anything you're just
doing with people instead ofmaterials. And if that happens
to be interesting, then it canbe a really, really should pass.
So I think that probablyclicked. It probably clicked for
me about 10 years ago. And wedidn't really have the
opportunity to start doing it ata significant scale until about
a year ago, about fall of 2024so we kind of had had it in our

(06:58):
minds for a long time. Had spenta couple of years chasing, you
know, private equity funding toexpand. That really wasn't
happening at that time or morethe point wasn't happening with
infill spec developers in a, youknow, hot and bubble market in
Austin, Texas. So I think, yeah,the seed for that, the thought
was there for a long time. Weknew that was a path we would

(07:19):
like to get on. It just, youknow, took a little while to
really get, get a little furtherdown. And honestly, man, I'm a I
would say there's still, like,every day I wake up, there's no
guarantee that anything's gonnawork right. Totally we like
we're doing, but I could end upworking at Home Depot a year for
now and just be like the mostfucking knowledgeable guy in

(07:39):
orange apron in history.
Io, art, time believing thatthat would be the outcome if
everything went to shit. But,yeah, it's an option. I hardly
have free benefits, dude. It'slike, basically full time
working on PTO. It's like, Isanyone there? Really not checked
in? Yeah. But okay, so I think,like, you made the comment
earlier, like, blood and guts,like you guys got the itch 10

(08:01):
years ago, and you got youropportunity a year ago, less
than a year ago, right? Yeah, Ithink that's impressive in
itself. Go ahead,to be fair. I mean, we had built
up a really solid brand and areally solid pipeline over that
10 years. It wasn't like wewent, you know, from zero. We
spent most of that period doing,like, two to $5 million luxury
infill homes, a lot of customs,a lot of specs, but really, you

(08:22):
know, architecturallyinteresting, high level of
execution, high level of detail,really demanding clients,
whether it was a spec or acustom. So we benefited from
that experience. And what youfind along the way with that,
especially doing high endcustoms, which I personally
hate, and, you know, would do asfew as possible the rest of my
life. But some of those clientswere fantastic people to learn

(08:45):
from. You know, some of themwere executives, things like
that. That taught us a lot aboutjust, I think, business in
general, not necessarily theconstruction business
specifically. But, you know,kind of showed, at least for me,
it kind of showed that, yeah,there are levels and levels and
levels, and you sort of figureout, you sort of figure out
pretty quickly that if you'renot the dumbest and broke his

(09:06):
guy in every room, you'reprobably fucking up. Because,
yeah, you that's where youlearn, yeah, a lot from
that totally, totally focus ongetting into the into the room
where you're not the sharpesttack, which, again, is hard for
you guys. I mean, you guys are,you know, you're pretty sharp
guys. Yeah, it's all relative.
Okay, cool. So 10 years and,like, again, if for anyone

(09:32):
that's listening like, youshould definitely look up JDB.
Joseph design build and Austin,they build an exceptional
product has always beeninteresting. And I might have,
like, a bias towards you guys,because towards you guys,
because, like, obviously we'vebeen working with you forever.
But point being is, like, I'minterested even based on the
Thomas episode of like, what youguys are getting ready to do
now, right? And I think Thomas'sperspective and explanation was

(09:53):
great. I would be curious toknow, like, how yours differs in
terms of going from two. Uh,what'd you say? 15 to 20 units,
and it's a two to $5 millionproduct, right? So you're going,
you're going from that and thengoing into the product that
you're getting ready to scale.
Let's hear a little about thatand what we're scaling now. It's
different. Instead of being in alarge, uh, extremely

(10:13):
architectural, single family, itthere were some zoning changes
in Austin that allowed for sortof medium density sensitive one
unit on a lot. Now it's we'reable to do three, and we're able
to subdivide certain NFL lotsinto, you know, smaller lots
that can each do three. And soyou end up with certain pocket
subdivisions. So it's sort of,it's like building an entry

(10:34):
level version of what we weredoing. So still incredibly
design focused, high endmaterials, really interesting
looking product. But instead offour to 5 million, it might be
between like 750,000 and 2million at the very high end. So
we wanted to do with that. Whatthat zoning allowed us to do was
kind of unlock the ability tostart delivering this to, you
know, a wider audience. Becausemost people, I think you know,

(10:58):
for a long, long time that kindof home building has been pretty
inaccessible all but the top,like 1% and that's that's
unfortunate, because what youfind out pretty quickly is that
your cost structure doesn'tchange all that much with a high
design product, if you do itintentionally, and if you are
smart about procurement. Forinstance, we buy about 70% of

(11:18):
our materials overseas, directfrom wholesalers in other
countries and ship it over.
Here's, there's a logisticscomponent that took some
figuring out, but it the thesisis that'll allow a much broader
audience access to, you know,high quality, architecturally
interesting, really well builthomes, not just in Austin, but,

(11:40):
you know, Dallas and Houston,and eventually other markets as
well. Really, the goal is to getthis we're trying to grow this
up as big as we can. We thinkthe demands there, we think the
timing's right, and then it'sjust, you know, the test is, can
we do five years worth? Whatwould take an operation five
years to do successfully? Can wedo it in a year, year and a
half? So that's sort of ourManhattan Project.

(12:03):
Yeah, dude, I love it. I'm superstoked to follow this along. Um,
I think even like, going back tolike, again this, this pivot, to
me, is just like, insane, like,a nine month window. Obviously,
this isn't just like, wake upone day, figure it out, and we
go, like, you guys have this 10year precursor of, you know,
building up a reputationunderstanding how to do things
right, get to a position towhere you are now. But like,

(12:24):
when you're you made it kind oflike the procurement side I'm
sitting here, like, you guys areworking direct with wholesalers.
Is that the right term? Yeah,manufacturers, not wholesalers,
direct with manufacturersoverseas. Like, I imagine the
only way to get into thatconversation is with a level of
scale and volume, or can like,is that something that other

(12:45):
builders should be looking atdoing? Could you have done that
as a 15 to 20 unit a year?
Guy? Yeah, we could have. Wejust didn't know. Just didn't
hadn't figured that out. Thatwas actually introduced to us by
a couple of our new partnersthat had been doing it on the
commercial construction side.
And the more we got looking atit, we said, yeah, you can do
this. And, I mean, it's a littleeasier to do at scale. There are
certain minimums that some ofthese factors will participate

(13:07):
in, but it unlocks a whole newlevel of pricing. It unlocks a
whole new level of of options. Imean, they'll, they'll,
literally, these factories. Cancustom build just about anything
you want. Some will do it on aone off. Some you might need to
buy 10 or 20, and some havereally high minimum orders. But,
you know, in construction, byway of trying to tie it back to,
you know, financing relateddiscussion, you can only beat

(13:30):
the subs up so much, and you canonly, you know, kind of chisel
so much, and everybody ends upwith this same five to 10% you
know, target zone of a reductionin cost. We were able to get a
40% reduction in our build costsover the last six months and
deliver an equal quality productjust by handling procurement
differently. Now it'scomplicated. You have to deal
with factories in othercountries. You have deal with

(13:51):
time zones, the languagebarriers, the shipping, all of
the, you know, the tariffs,everything that goes into that.
But you can do it. It's not, I'mnot the smartest guy in this
business. And, you know, we'vebeen able to gain a lot of
ground very quickly looking athow to do that, how to expand on
that. We had a lot of goodadvice, and a lot from partners
who had doneit before. Totally dude, but a

(14:12):
40% call it discount, yeah,that's worth figuring it out on
absolutely, yeah, absolutely.
Big Deal Go ahead.
Yeah, no. I mean it all. It alltranslates to, you know,
healthier margins and theability to, you know, to
underwrite projects that justprobably wouldn't work any other

(14:32):
way. So it's a tremendousadvantage. And yeah, I would
encourage anybody to look at my,you know, sense of it is that
most people probably won't, butI think it's definitely the
wave. I think it's the wave ofthe future in construction
nationals are starting to do it,and pretty much everybody else
should be looking at that, ifthey're not
already, dude, yeah, 40% that'sthat's insane, I think. But

(14:53):
that's where it goes into, like,the hard part of it. But like,
even when you're thinking aboutit from a time spend standpoint,
it's like, Dude. 40% savings onand maybe, is it a 40% on all
material or just like a bulk ofit, how?
Say we had a budget that, justfor conversation, say it was
$100 a foot in Austin with alllocal vendors and suppliers,

(15:14):
that becomes a $60 a footbudget. Now that's not really,
I'm just tying it to a metric,but of course, yeah, yeah, no,
it's significant. And that'sprobably more exaggerated in hot
markets like Austin, you know,like Southern California, parts
of Florida, places whereconstruction costs are just
incredibly inflated because of,you know, demand and everything
else that drives them up, mostof which is just profit that

(15:37):
goes straight to the subs andvendors. But, but you find out
pretty quickly that's mostly allit is. It's not really what
those really what those thingscost.
So anyway, okay, so, but no,this is I've never heard this
take before this. I think thisis huge for the listeners.
Obviously, it's gonna come witha pain in the ass, but I'm
looking at this student like a40% net savings across the

(15:57):
board. Hire someone, hire a teamof people to figure it out,
right? And we're not the onlyones doing it. I mean, for sure,
we're not the first ones doinggood for that. There are others.
I mean, I believe there's evenother groups just in my market
that are doing that happen for awhile. So, yeah, it's you start.
I think the biggest, I thinkthat the only smart thing I've

(16:18):
ever done in construction is tocontinue to be curious about how
to figure things out. And youknow, in doing that, you find
all kinds of interesting stuff.
If you are willing to just quitfucking around and really see if
it's something that, you know,you can do it. And I think,
unfortunately, that's a limitingfactor A lot of times, which is
in this business, and probablyevery other but definitely in
residential construction,there's a tendency to just sort

(16:41):
of do things the way we'vealways done them over and over
and over. And it's very slow tochange, and it's very slow to
adapt and embrace, you know, anew idea or a new technology,
whatever it is. There's stillguys walking around fucking job
sites in every city in Americawith yellow legal pads, writing
down notes about how to dothings. Nothing wrong with it.
But, you know, there's a coupleof better options that have come
along the last 40 years.

(17:03):
So totally, yeah, of course.
Well, dude, and it's hard tokick, you know, those white
monster energy drinks andcigarettes at 5am from the gas
station.
That's, yeah, I get, I get alittle sentimental the smell
like, you know, diesel fumes andMarlboro reds went at five in

(17:24):
the morning on a job site. Oh,man, take me back.
But yeah, that's right. That'sright. Take back to your roots.
Down.
Yeah, love it. Fifth grade was alot of
fifth grade stardom, young up inupstate New York, cool. Okay, so
I love it. So that's, like,that's a huge takeaway, um, the

(17:44):
40% margin on the procurementside. What are some of the other
big things that you've learnedjust working with these guys in
Houston? Like, what would yousay is probably the biggest,
like, most impactful side, asidefrom this? I imagine this has
got to be up there, theprocurement side.
You know, I think the thing thatwe're that we're seeing in terms
of how to grow that volume, youknow, more or less

(18:04):
exponentially, is that so muchof it has to do with the
strategy and not the tactics.
And I think most builders I knowfocus way too much on tactics.
It's the nuts and bolts, it'sthe type of insulation, it's the
type of HVAC system and all.
That's fine, but that doesn'tanswer the question of, how do I
assemble a team and build a lotof these in cities I don't live

(18:28):
in that I'm probably not goingto see all that often. How do I
make sure that still meets thestandard and the expectation of
the of the operation? And yeah,we start thinking about it that
way, then it becomes more of apuzzle of, who do I need, where
do I need to put them? Whatsystems, what processes? How do
I standardize this? How do I runthis efficiently? And I'm not
doing it alone. I, you know, Idirect the residential

(18:51):
construction, the architecture,the engineering and some of the
strategy side, you know, at thepartner level, but I'm not
taking credit for I have a lotof help from a lot of really
good people. And that's, that'sthe first thing is get really
good people in place, put themin the right position, and trust
them to do well. Doesn't meandon't watch them. Everybody
needs that, but do it alone. Andthat took a long time to let go

(19:14):
of that idea that I'm just I'mthe authority. I know better
than everybody. I'm going to doit all myself. That doesn't work
beyond a certain threshold.
Works really well. If you'regonna do four or five projects a
year, and, you know, deal withthe clients yourself. Nothing
wrong. It can be a goodlifestyle business. But if you
want to expand, you gotta, yougotta open up totally.

(19:34):
And I think that's like,everyone says that. That's like,
you know, that's like, I believejust very basic. When I say
basic, it's like, it's, it's theit's the advice that makes
sense, right? The processes, thesystems, hire great people, let
it go, trust your people. Stufflike that. You mentioned, though
that you hadreal quick. It's let go of total

(19:55):
control over everything. It'snot let. Go in the sense that
you still got to be I don'tbelieve there's a way to do this
if you're not on all the timeand grinding all the time and
putting in the hours payingattention to everything, like
people got to believe, rightdown to the guy swinging a
hammer, that you see everythingthat's happening right or wrong,
if you give that up, if theythink you're fucking off on a

(20:17):
boat or a golf course, i Goodluck to you, because I don't
think that's gonna I couldn't doit that way,
dude, but that's what I wantedto know, is like, what does that
actually look like?
Right? That looks like for me,on average, like 60 to 70 hours
a week in the control tower,watching everything all the
time. And some of that's companycam, some of that's build your

(20:38):
trends, some of that's we'reactually developing an internal
software they'll bring a few ofthese things together. It's a
lot of communication, and it hasto be efficient. You have to
I've got in a given day, I havea team of architects in Mexico,
team of architects in thePhilippines, team of engineers
in the Philippines, constructionteam in Dallas, Houston, Austin,
and then the staff here in theoffice with me. So that's not

(21:02):
bragging, that's not flex, justsaying, okay, that's the
reality. So you better beorganized where that's going to
get fucked up real quick. Andnot that everybody needs to do
it that way. It's just a reallycost effective, efficient way
that we've adopted to it, to getall these pieces to land at the
same time when you on the land,but, yeah, that's a lot of is,

(21:23):
it's similar to air trafficcontrol. It's just makes you
smash into each other,yeah, okay, okay, when what was
that? What was that growing painfor you? Because, like, Were you
the guy that was, like, I knoweverything, like, I've been
doing this forever. I'm theauthority. And, like, what was
kind oftotal, total idiot, and that's
probably the that's probably thebiggest failure I've had in my

(21:43):
career, is it took me a longtime to mature enough to where I
could listen to other peoplelong enough to hear what they
had to say instead justimmediately shutting them down,
being like, no, no, that's dumb.
I know what I'm doing. I built amillion square feet, blah, blah,
blah that I regret. That thatwas a bad attitude to have for a
very long time. I think Istarted opening up to it when
the market kind of turned downhere in Austin a couple of years

(22:06):
ago, we kind of had to lookaround go, Hey, that didn't
work. Things are slowing down.
And there is a sobering momentwhere you kind of realize that
it doesn't matter. I think thisis a real threat for everybody.
It doesn't matter if you buildthe best house, and you paid the
most attention, and theexecution was flawless. You had
good relationships with yourstaff and your subs and
everything else. It might notmatter at all. The market might

(22:27):
just turn against you, and youstill lose, even if you made all
the right decisions, even if youplayed all the cards right, you
might still get hammered. Andthat can happen, and it's out of
everybody's control. So whenthat happened, there's a
tendency to look inward and say,All right, what did I screw up?
What could I have donedifferently? You know, what?
What do I think I fucked up?

(22:49):
Talking to my brother a lot,talking to other people. Hey,
what do you think about this?
And certainly made, I think weall made mistakes in that
period, and, you know, continueto make mistakes forever, but,
but, you know, I think a marketdownturn has a way of driving
introspection that's that'spretty beneficial if you're open
to, you know, being honest aboutit totally it may be an expert

(23:10):
in failure,yeah? Well, I think, like, just
beautiful that. Like it Itsucked. And I actually know it
sucked. I think I was talking toThomas, like, during that time,
like, duringthat time, not in a good spot,
but as you guys do, you made it,you persevered, and now you're
like, coming out like anincredible lag. Yeah, you got

(23:31):
goodyeah, you got to be resilient.
You got to be able to getthrough those times. I think you
learn a lot more in the downmarkets than you do in the up
markets. For sure,totally my question is, is like,
is this just like fluffy wishfulthinking never gonna happen? Or
can you take that type of selfawareness, introspection,

(23:56):
consideration without the burn.
Or do you think that the burn isa necessary component to
changing how you do things orlooking?
I mean, I like to think thereare people smarter than me that
were able to do that withouthaving to go through an absolute

(24:17):
ass whipping for me that, youknow, Yeah, I sure it's
possible. Sounds a lot morecomfortable. Yeah, okay, yeah.
So theshort answer is, yeah. I think
going forward, it's a thingthat, you know, you just want to
be watching all the time, thesame way you'd look at a P and L
or a balance sheet or a budget,you know, at a regular interval,
you probably at some point, ifyou're going to be if you're

(24:39):
going to try to grow and ifyou're going to try to lead a
bunch of people, you need to bereally aware of of what you're
doing and how you're impactingthem downstream. Because I can't
take credit for anything we'redoing. I have an amazing team of
really smart, really capablepeople, and without them, none
of that would work. And partnerstoo, and without them, none of
this would would work. So it'sit's. Is not so much me. It's,

(24:59):
it's a collection of otherpeople that are able to make
those things happen.
Totally, totally. You've beentalking about the team a lot,
and I've like, actually, likehere in the last few weeks,
months, I've been working withthem a decent amount, and I've
got to know them, and they'recertainly sharp. You've got a
good team over there. I talkedto a lot of builders. You've
got, you've got a good squad.
How do you find them? How doesthat whole thing work?

(25:24):
I I like picking a team. I likethe GM. You're the recruiter,
huh? Of doing the draft? Yeah,I, you know, it's a funny thing
is, I think there's a, there's atendency to pick friends and
relatives and things like that.
And we've certainly got a few ofthose mean shit. My brother's
one of the parties, and I didn'tdraft Thomas the record. Thomas

(25:44):
drafted me as the is the originstory. He started me on. So you
were in DC, weren't you? Youwere in DC? Yeah,
yep, was in Washington. Salt wasgoing on in Austin, and moved
out a month later. So it wasjust that strong of a market at
that time. But, you know, Ithink in evaluating people,

(26:06):
you're looking at a skill set,you're looking at personality
matches, you're looking atexperience, but you're really
looking for sort of coreattributes more than anything
else, like, yeah, they have tohave experience doing whatever
that is, but you really have tolook at all, right, is this
person a grinder? Is this personlazy? Is this person going to
put in, you know, is this awhatever it takes person, which
is what I'm always going togravitate toward, or is this a

(26:28):
do as little as possible andhide from the, you know, hide
from the job kind of thing, andthe sort of why, of what they're
of what they're doing, is a lotmore important in a lot of
cases, like, I've had peoplethat were, you know, curious,
hungry, you know, wanted tofigure it out, wanted to get
better, wanted to learn the job,but didn't have a lot of

(26:49):
experience, who've turned out tobe great. And I've had people
had a lot of experience thatturned out to be terrible,
because once they saw theexpectations and the workload,
it just spooks. So on paper,they were fantastic. But reality
is, you know, paper tigers.
Okay, so in that, like, Iimagine there's, like, just,
there was a lot of learning thathappened over the last 15 years,
of hiring great people, hiringawful people. Like, when you're

(27:13):
talking about the attributes, Imean, it sounds like the grinder
thing, like, that's not, youcan't just, like, ask someone in
an interview, like, how manyhours do you work in a week?
Because they're going to tellyou 80. You know? How do you do
it?
Well, one, one thing that'salways worked is ask people
about work life balance, andtell them to express as a
percentage. Most people willreflexively tell you the truth,

(27:36):
and it's usually going to be alower number than you want to
hear. But that I, if I were togo back and graph it, I'll bet
you that question has beenanswered honestly 90% of the
time over the last severalyears. And then right answer,
boys and girls, anybody thatsays less than 70 is probably
not going to do the job you wantthem to do. So, you know. And

(27:58):
it's and it goes up from there,but yeah, that's a really good
litmus test for how somebody,how hard somebody wants to,
wants to push on something.
Yeah, I think that work lifebalance is, like, it's a super
hot conversation now, whether itsounds like in construction and
tech, really, wherever, andlike, there's been, like, such a
priority on, like, what is worklife balance? And I think you

(28:21):
mentioned it earlier, it's like,it has to go back to the why.
But I think, you know, when youdo, if you hear someone that's
like, oh, it's all about work,life, balance, I've got to do
this, that and the other it'slike, what are you really doing?
Probably no business works thatway. But what you find
construction, more thananything, and I love this about
the business, is that you youget, you do get a lot of people
that are just, you know, doing ajob and this snap, but most

(28:43):
people that you meet that are init are really it like they
wouldn't do anything else orthey couldn't, you know, we're a
bunch of goons that arevirtually unemployable in any
other line of work, but they cantake it, and they can handle the
heat and the weather and theunpredictability and the
variables and All the thingsthat go with this, this
business, that it's kind of hardnot to get into that, right?

(29:04):
It's kind of hard not to, not tofind that interesting. And then
it, to me, it just becomes anefficiency thing, like I don't,
I don't think you need to bedemanding your you know, staff
work 80 hours a week if they canget it done in 40, great. It's
more about hitting the targetsconsistently and getting the
outcome. And there's a for us,we try to keep the emphasis on

(29:26):
the outcome while following aprocess, and not just, you know,
steps for the sake of steps,like it's got to be, it's got to
be toward goal.
Totally. Dude, I love it. I loveit. Um, what?
Almost nothing aboutconstruction I'm getting off in
the philosophical weeds on here.
Man, sorry about that, dude,there's no room for apologies on
builders budgets and beers.

(29:48):
We're just having aconversation. I think this is
totally applicable. I mean, whatdo you think the cost of a bad
hire is? We want to rope it backin.
Depends, right? I mean, if. It'sa superintendent, probably not
so bad, if it's a CFO,catastrophic, yeah, really
depends on the person. I've hadboth those experiences. So let's

(30:09):
hear about those.
Well, I mean, I think as much asyou want to share, how about
that withOkay, so with a bad financial
person, obviously the risk of,like, you know, fraud and theft
and those things go up, andwe've had to deal with that in
the past with a superintendent,you know, field construction
management. Most of thoseexpensive mistakes are going to
be, you know, errors in judgmentor things they just didn't

(30:32):
understand and know how to do.
So, you know, I would say thethe tricky part about
residential construction,separate from commercial is, you
know, the average mistakesomebody's going to make is
probably between 10 and $30,000you can only afford to take so
many of those hits on a job. Somy rule is, everybody gets one,

(30:52):
and if we can't make you better,if we can't improve people after
that, well maybe they aren't agreat fit, but I'll tell you
honestly, I've had very littleturnover, very few people who
have ever quit. I fired a lot ofpeople, but I've had very few
people quit, and I think that'sprobably more credit to them
than me. But yeah, it'sexpensive.

(31:13):
I was gonna ask like, what doyou think? What do you think is
because I like building forlike, the big JDB brand in
Austin, or do you think it'sthat they get to work on really
cool stuff? Do you think it'syou think it's you and Thomas
culture?
I don't think it's me. I thinkit's culture, though. I think,
you know, if you want to get inthis, This especially applies to
the growth factor before that.
You know, obviously the entirebusiness is run, is run by

(31:35):
people. And I think there's themistake is to put the emphasis
on the nuts and bolts and thematerials and the subs and all
that. What I always have toldpeople is that, you know, this
is the home team, and everybodyelse is that's excluding
clients. Obviously, everybodyelse is the enemy. Everybody
else is trying to take somethingaway from this business. And so

(31:56):
our position has to be defensefirst and then offense.
Literally, the other 90% of thetime because your friend,
they're trying to take somethingaway or trying to take more for
them than they are for you. Iturn over about half our subs
every year, mostly, really, ohyeah. I don't believe for a

(32:16):
second this idea that you haveto have long term friendly
relationships withsubcontractors.
That's just not true. Let's digthat's like the total opposite
of what I hear. I want to hearit. I might
be a little contrarian on this,but what I found is that half
our subs are long termrelationships, great people who
run, well run businesses. Theother half are people who maybe

(32:36):
are good or technically good,but they run a shitty business.
And that's the most expensivemistake. It's usually not
somebody you hire directly. It'speople leaving things out of the
bid or hitting you with, youknow, change, or, does it make
no sense? Or, you know, who justhave no financial system or
acumen whatsoever. I meanliterally, like, invoices
written on the like, ticketbook. They use it, you know,

(32:57):
Sonic, it's crazy, yeah. But soI don't, I don't have any, and
the reality is, there's a lot.
So there is no need to keep themand to, you know, to work with
them, and to, you know, befriends with them, and all of
this stuff. I think that'sactually counterproductive.
Every city has a huge volume ofcapable, qualified people that
can actually do the work. Youjust gotta find it.
So I think that, like, ascontrarian, it might sound like

(33:20):
at face value, that's actually,like, probably a really good
takeaway is, like, basicallywhat you're doing is you're just
holding the people you work withto a standard, yeah, right,
standard of operating abusiness, yeah. And like,
why would you trust enough?
Like, you look at, like, theaverage, I'm going to pick on
drywall guys. You look at adrywall company that has like,

(33:41):
their girlfriend runningQuickBooks because she took a
two hour class, and that's theentire operational structure of
that entity, and you're gonnatrust them with a few million
dollars worth of work. Like noother business does that, except
for residential construction.
Commercial construction doesn'tdo that. Everything is buttoned
up really tight, and so, yeah,to me, it's like, well, just

(34:03):
because other people in themarket do that, is that smart?
Like, does that really make alot of sense? I've never gotten
past that, that viewpoint.
So totally, dude. I think again,the reason why, like, I'm, like,
supportive of the idea isbecause I think that's where it
needs to go right. Like, inorder. Like, you look, you talk

(34:23):
about these labor shortages andlike, the cost of buildings
going up, and like, thesebuilders that are winning are
taking these, like, more seriousapproaches is, like, I think it
really does kind of fall in theGC to hold someone accountable.
Like, I'll use an example. Like,I know a builder that builds up
in, up in, like, a very like,it's not a metropolitan area,
it's a rural area, and their submarket and vendor market isn't

(34:47):
super dense, so, like, they arekind of held to, like, whoever's
gonna do it's gonna do it. Butdude, there are stories that I
hear of like, an $80,000excavation invoice that wasn't
even. And, like, put together,like, the general contractors to
build the invoices for this sub,and then they won't even come in
and pick up a check. It's like,the check is here for you. You

(35:09):
gotta pick, we gotta check forsix months on the desk. It turns
into an office running joke of,like, when is this guy gonna
come and pick up the check?
Right? Yeah. And it's like, youcan't have that, you can't
support that you can't, youcan't enable that. You got to be
like, dude, figure your shitout.
Yeah, that's right. You're abusiness. You should be looking
after your business's interestfirst, and part of that is,

(35:31):
don't associate with nonbusinesses that just happen to
have, you know, a truck and aphone and a magnet slapped on
the door. That doesn't make thema business. That just means
they, you know, how to paint orwhatever, but yeah, to us, we've
always treated as a businessfirst, which means take care of
your people first. And by theway, that doesn't mean I'm not
endorsing being, you know, likecruel to the subs. I'm not. I

(35:52):
think you got to be ruthless,you got to be honest, but you
don't have to mistreat them. Ithink that's probably a mistake
as well, and I'm guilty of thata lot, a lot of stories, and
sometimes it's necessary, butmost of the time, it's more
easier to just say, Look, thisguy's a loser. Just get rid of
him and get somebodyelse. Yeah, totally. To like,
just like, play like devil'sadvocate here. Do you think that

(36:13):
like, it like that is a theory,a logic, a perspective that
should be exercised or appliedin sub and vendor dense markets.
Or do you think that that shouldjust be like status quo for
everybody, regardless of whatyour sub talent pool is? Go
ahead, it's a gooddistinction to make, right? I

(36:33):
mean, I think if you're, ifyou're in a town and it's, you
know, 50,000 people or less,yeah, there may only be five
plumbers that do what you'redoing, and so you do have to be
a little more diplomatic aboutit, but if you're in a larger
market, there are hundreds ofpeople available to do this that
are probably all about the same.
And the reason I said is, youknow, subcontractors are
primarily what we refer to aslabor pimping, right? Those

(36:55):
aren't their guys swinging ahammer. They're just subbing the
contract out to another crewwho's then just coming in, and
you're just paying the spread onthat, and so kind of, I think,
in all things, just lookingdeeper, am I paying a labor
pimp, or are these the actualguys that own it, and looking
into that, and kind of peelingthose layers off to get down to
the root of it, not only is thathealthy pricing, you end up

(37:18):
getting better response andeasier management out of it. So
well,they have more skin in the game.
They care more. Yeah, exactly.
And it, you know, separates lienrights and all these other
things. So yeah, that's, let'stake us an example of what I
mean by looking at it really,more as a business and less as a
lifestyle.
Totally. So what is, what issubcontractor relations look

(37:44):
like as you're going through thescale period, dude, because
you're not running the same guysthat you were, maybe you are,
but like, there's not enough ofthem. You need more of them,
right?
You need to have a deep bench.
And honestly, at this point,there's a few layers between me
and the subs, and so I'm notinteracting with them hardly
ever. I'm really just reviewingcontracts pricing at that, you
know, at that point, but I wouldsay that, you know, at even at

(38:08):
the level of doing, you know, 10to 20 a year, having as an
owner, having, you know, thatlayer of project management that
that kind of buffer between youand them is incredibly
important. It just frees up aton of bandwidth. It frees up
your ability to make decisionsclearly. Decisions clearly. You
don't get over reliant onpersonal relationships with
these guys. You know that'sYeah, I think that's a must

(38:28):
have. Keeping that separation,keeping it as as like siloed,
and having no imagination aboutthe dynamic between builder and
sub is pretty critical. Toooften your mind gets
blurred. Yeah, I think it'seasy, like you'd mentioned, like
the smaller, like dude doinglike 15 to 20 units at the

(38:49):
product that you guys aredelivering is, like a really big
business and residentialconstruction. You talk to the
guys that are doing like five toeight units, that are doing 10
to 15 million and top line,like, I feel like that's still
really easy for them to getinvolved with, like
subcontractors, day to day,controlling that stuff. Do you

(39:10):
think that go ahead? I thinkit's, ultimately, it's a choice,
right? It's, do you want tothat's, that's a business.
There's nothing wrong with it.
Is that where you want to be,right? If you want to stay at
that level, if you'recomfortable with that, do it. If
not, I take, I give the sameadvice I'd take, which is, Quit
fucking around and look at abigger picture. And you'd be
amazed at how, you know, you'dbe amazed at how many people

(39:33):
aren't working up to thecapabilities they currently
have, just because it's whatthey've done. And so they just
keep sustainingtotally and this kind of goes
back to the initial question of,like, do you think that it
requires a hardship, for lack ofa better term, to like, get out
of that just cycle of bullshit?
Or do you think it's just trueone thing, dude? Like, sometimes

(39:55):
guys are just like, dude, I'mdoing 10 million in top line.
Hopefully I'm clearing a 10. 10%net on this. Like I'm making
plenty of money. This is I canbuy trucks, I can take big
vacations, I can send kids toprivate school, whatever,
right? Yeah. I mean, I think, ifpeople are being honest, the
whole business is hard shit,right? Like you're combining all
the elements of production,logistics, entrepreneurism, in a

(40:18):
wildly variable market with alot of, you know, in
predictability, city inspectionsand financing and third party
clients, all these things. Sonone of it's easy. And so if
it's all going to be, you know,hard anyway, why not look at a
bigger target? I had a reallyinteresting conversation with a
guy who was a project executivefor like, the third or fourth
largest commercial GC in Texas.
These guys built stadiums andschools and things like that,

(40:41):
and his personal pipeline he wasmanaging was about one and a
half billion at that time. And Isaid, What's the hardest part?
Like, what's the most difficultthing at that scale? And he
goes, Oh, man, it's gettingpeople to pay change orders, and
it's getting the office to notscrew up the accounting. It was
all the exact same stuff that atthat time we were dealing with
as a small builder, and that'sgoing shit so it never gets any

(41:02):
better. And he goes, Nope, it'slike this all the way up. And
that's depressing, in a way.
It's also encouraging, becauseit means that, you know, there
are only so many, so many piecesinvolved in that, in that
business, then you just startfiguring out how they work, and
keep figuring it out. And youknow, hopefully we'll get there,
yeah, for sure. I mean, thereis, like, there's certainly some

(41:24):
peace in the fact that, like,the problems that you can
anticipate a massive companyhaving, you're already dealing
with, so you can get really goodat figuring out how to prevent
them.
Yeah, that's, that's really,it's how fast can you solve
problems, and, more importantly,how many of them can you
anticipate and eliminate beforethey present themselves as
something that's actually goingto be expensive, whether
expensive, whether that's time,money or both. Yeah. So I get

(41:45):
this is a much more like, maybephilosophical discussion about
the construction business, andnot so much the technical
details. But I think I spend alot more time thinking about
this than I do the spreadsheetand the bid and the budget, and
you know why the why the framerdidn't show up today, because
all that's going to happenanyway.
Totally. Gabe, you do not needto apologize again, because a

(42:09):
like, I think that's what makesthe show good, is like, kind of
getting like this, likeperspective that other builders
carry. We talked enough aboutfinance. You don't have to worry
about this. We're not here tocheck boxes. We're just here to
hold warm conversation, Gabe,and also,
it's fantastic everybody shoulduse adaptive. I actually didn't
pay me to say that. He didn'tbribe me to podcast invites, and

(42:31):
he's not holding anybodyhostage.
So I think everyone feels like,obligated to lose some little
plug, like I'm like, doing mybest to get people that don't
use adaptive on the podcast,just so they don't feel, Oh,
plug it. Yeah, I do. I had, Ihad a guy on yesterday, and he
still felt the need Tyler grace.
It's gonna be a great episode.
And he's actually, like, thepolar opposite of, like, what

(42:52):
you're doing. And I respect thehell out of Tyler because, like,
he's like, you're gonna have tolisten episode. You said that.
You're a devout listener. You'llhear it. Um, but point being,
huh? I'll totally listen to it.
Yeah, you gotta listen to it.
But he even use adaptive and helike, like, they're like, What?
30 minutes into this thing, andhe just, like, tried to give,

(43:12):
like, a shameless point. I'mlike, Dude, you didn't even use
the product. You don't have todo this. Okay, so, okay, we'll
wrap this up. But okay, on thephilosophical threat you had
mentioned, like some of thethings that you're focusing on,
the business standpoint, butwhat role did you fill compared
to what role did Thomas fill?
Who like, like, what like, wholike, what, tell me, like the

(43:36):
personalities, like the gaps,the roles and the company all
that stuff, like, how do you andThomas, like Jive together in
this thing? Yes.
So we're brothers, which meanswe fight 50% of the time, but
nobody there's no bleeding,nothing is thrown. No i Our
initial setup, Thomas moved outto Austin, started the started

(43:57):
the business, by way of runninginto somebody that was building
specs and saw the margins, andthey were really good, and
managed to meet an investor whoput up the money and got one
going, and then got a couplemore. And then he called me up
and said, look at these numbers.
This is what's going on here.
And I said, You're full of shit.
Those aren't real. You can't domath. And that turned into a
conversation, but turned out hewas right, and so he convinced

(44:18):
me to move out here, and it wasthe best decision I ever made.
And our rules have beenhistorically, that he would
handle, really sales, marketing,fundraising, investor
relationships, which ismassively important. It's more
important the construction sidefor a development company. He
would handle that, and I wouldhandle the operations. So I
would handle constructionmanagement, I would handle the

(44:41):
staff. We would both kind ofmanage the strategic decisions
of the company, the vision wherewe wanted to go, being aligned,
and that's incredibly important,and we really never had any
disagreements about that. Wedon't get into fights about
important, big picture things.
We get into stupid fights abouthow many windows should be on
one wall when we're when we'reworking with the design. So it's
nothing, you know, reallydamaging but, but that was kind

(45:04):
of our roles then and now. It'sjust sort of a bigger version of
that, right? I'm overseeingconstruction, design,
engineering, permitting, allthat stuff, and he's working on
all the acquisitions. He's builta really, really forward
thinking sales and marketingoperation. We're using a lot of
automation in everything we do.
We're using a lot of the kind ofavailable AI tools really trying

(45:24):
to build the operation to becapable to scale to 500 or 1000
homes a year. So he's got hishands full with that side, and
his personality is perfect forthat charismatic, warm, engaging
people like him. And I'm theexact opposite, which makes me
really qualified to runconstruction, but not great at
sales. And I've always benefitedfrom a partnership. It's hard to

(45:47):
be one, for one person to beeverything, and so we've always
played upon our strengths ofhaving kind of complementary
skill sets.
Yeah, you're like, you're like,the great American bison just
grazing on the planes, just easyto chew on ass.
What's that? Is it easy to shootslow on my feet, you know?

(46:13):
Yeah, and Thomas is just likethe the trophy white tailed
deer. Just Right, right. Eatgallivanting. Yeah? Exactly,
exactly. No, I love it, dude.
This was great. You don't needto apologize, because I think
you brought a lot, like, a tonof great perspective. I think
you guys journey is incredible.
Again, for the listeners, youdefinitely need to listen to
Thomas's episode as well asGabes, because they're

(46:36):
obviously, like, running thesame business, but they all
like, two totally differentepisodes. Definitely a group
that you're going to followalong to. Gabe, do you have
anything that you want to sharewith the with the listeners
before we before we sign offhere, any you know, any words of
wisdom, more so than you'vealready shared, any tips,
tricks, anything like that?
Nope. Go figure it out. Gofigure it out, baby. Go figure

(46:58):
it out.
And thanks for having me on.
This was fun. It's good. 17 isgood catching up. So let us know
next time you're in Austin.
Yeah, 100%100% you guys gonna be staying
in Austin? Headquartered there?
Forever, forever. Nice.
Mothership. Yep, the mothership.
Okay, cool. Yeah. I'lldefinitely let you know. The
bride and I moved up to Boston,so we're not, we're not near as
close, but I actually do thinkI'm gonna be down there in like,

(47:20):
November. So yeah, in SanAntonio, Austin, area. So I
will, I'll let you guys know. Imight make it a longer, longer
week, and we'll get togethersome Terry Black's, get some
Terry Black's. I'm sure you loveTerry
Black's, sure, yeah, right downthe street. Why not? Hell yeah,
hellyeah, brother. Alrighty, well,
dude, you you enjoy the rest ofyour week. Appreciate you for
jumping onand we'll just chat soon.

(47:42):
Alright, man. Soon later. Seeya.
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