November 25, 2025 • 47 mins
Alex Molkentin shares insights from his journey in the construction industry, emphasizing the importance of pre-construction as a means to set clear expectations and effectively manage project costs. The discussion highlights the value of transparency, collaboration with clients and trade partners, and continuous learning from past experiences to ensure successful project outcomes.
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Show Notes:
Alex Molkentin's Background and Early Career (0:00)
Lessons from Past Generations (6:10)
Pre-Construction and Marketing (10:59)
Setting Client Expectations (11:52)
Pre-Construction and Cost Management (14:36)
Trade Partner Involvement in Pre-Construction (36:13)
Educating Design Professionals (43:29)
Final Thoughts and Contact Information (45:06)
Find Our Hosts:
Reece Barnes
Matt Calvano
Podcast Produced By:
Motif Media
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Business is solving people'sproblems. And when you break
down solving people's problems,really what that is, is setting
an expectation and thendelivering on that expectation.
Pre construction is thearticulation of that expectation
in tangent with how we are goingto actually solve
it. Welcome to builders, budgetsand beers. I'm Rhys Barnes and I
started this podcast to havereal conversations about money
(00:20):
in the building industry, thewins, the mistakes and
everything in between. I believebuilders deserve to feel
confident about their finances,and that starts by hearing from
others who've been through ittoo. This industry can be slow
to change, but the right storiesand the right tools can make
profitability feel possible.
Let's get into it. You allright, mics are hot. We're live.
(00:47):
Alex, thanks forjumping on, dude. Sure. Man,
glad to be here. Yeah.
Super, super stoked to to chatwith you here. But for the
listeners, give them, give thema little background on who Alex
mulcantine is,yeah, so I'm originally from
Ohio. I was part of a thirdgeneration construction company,
(01:09):
and the son of immigrants, andthat residential company grew,
but when I was a young age, Iactually broke off from it,
started doing my own thing. Andthat kind of, I think,
inevitably, led to metransitioning into commercial
work. And I did commercial workfor three, four years, and I had
(01:32):
this unique opportunity to kindof sell off parts of that
company, liquidate the others.
And I took a one way ticket toNew Zealand, cool, which was a
very interesting experiencethere New
Zealand. What so are you fromNew Zealand? You said you're
(01:52):
immigrant. You're son of anigger. Where are you from?
Germany, originally? Okay, yeah.
And literally, people have askedme this all the time, like, why
New Zealand? Yeah, I wish I hada better answer than simply, it
was on the other side of theworld, and I just wanted to
experience something inherentlydifferent than Ohio. It's
beautiful. It's like one of theit's like, I don't even unique,
(02:14):
I guess is the word to explainit. But it's like, one of the
most insane landscapes in theworld, yeah.
And just also a real I mean,it's a very transient place, and
so inherently, you're going tomeet people from all over the
world. And especially, I'd beento Europe a lot just because of
my family. I hadn't reallyexperienced people from the
southern hemisphere before,okay? And that was not something
(02:37):
I quite expected in New Zealand.
I don'tthink that thoughts ever ran
through my head, like, what?
Like, what's the difference?
Um, think a little bit of Latinculture. And it's actually
Queenstown where I live. I livedin Wanaka, and then also
Queenstown. And Queenstown, atleast when I was there, I
believe, was the number onetourist destination in the
southern hemisphere. Oh, wow.
Okay, so there was also a lot ofexpats. There a lot of people
(02:59):
from Britain, just because ofthe way the visas all work. And
then, of course, Australia andAustralian culture was very fun,
very interesting learningexperience nonetheless. But
yeah, it was. It was amazing.
And also led to my obsessionwith the outdoors and endurance
sports, which, in turn, isactually what led me to end up
(03:23):
in Boulder, Colorado.
Yeah, Boulder is definitely thead. Have you? Did you do the
boulder? Boulder? Boulder?
No, I've never done that. Andalso, I'm getting slow and out
of shape now, I got two kids. Igot two under two right now, so
I'm hanging out for dear life inother ways,
there you go. Yeah, they're,they're taking your energy other
than doing extreme sports,endurance sports. I love it.
(03:45):
Okay, so, okay. So your, yourfolks, there were contractors as
well, yeah, and yourgrandparents. And then you, why
did you break off? I am I? Am I?
Am I askingquestions? No, no, no. I've had
this asked a lot of differentways. And I think, you know,
it's really interesting to lookback at these things in
hindsight. And I, my father andgrandfather were incredible
(04:08):
carpenters, cool built justincredible things. They actually
specialized in an area calledShaker Heights, which had a
bunch of older homes built bythe Rockefellers and carnegies
back in like the early 1900sthat era. And so it was my dad
actually aligned really wellwith this historical society,
which wanted to maintain theintegrity of these, like old
(04:29):
hand carved moldings and thingslike that. I'm sure in Boston,
you know exactly those kinds ofstandards. They were incredible
at that. But I wanted to run asustainable business on top of
it, sure, I didn't want to beconstantly behind the eight
ball. And I defined craft asmore than just my ability to
(04:50):
make things with only my hands.
I wanted to make a company. Iwanted to make a product beyond
that and I. I think also whenyou're working for a bunch of
old stubborn German men, whichthey myself, would be included
in that now it was it only madesense for me to break off and
(05:12):
kind of do my own thing. But inhindsight, it was my crash
course on business, even thoughI went to college for finance
and economics, the true businesslessons I learned were being in
business for myself at I was 18.
So yeah,dude, that's the story as well
as time, right? Yeah. It's like,you can use, you can you can
research whatever, like, like,case studies, or, you know,
business whatever. But it'slike, you don't learn until
(05:35):
you're in the trenches.
Yeah, yeah, yeah. I mean, thebiggest lesson I learned that I
was just telling my wife aboutthe other day after we were
talking about my father, alittle bit about, just like the
stressors of business and thingslike that, was, I do remember my
father always promising to mymother, like, the future of a
better day. Like, you know, oneday we're going to make it one
(05:57):
day, you know, the business isgoing to really, you know,
provide for this family you can,you know, quit your job and we
can rely on this. And the truthwas, is that that never actually
happened. And I give my fathercredit for that in some ways,
but it also made me very afraidof making those promises to my
(06:18):
current family and then neveractually following through on
them totally. So, you know, it'sreally a position of luxury to
learn from past generations, Ithink, and just knowing what you
want to be and what you don'twant to be, or, you know, being
able to pick and choose from allof that is a really, really
powerful thing,dude, I think we get at the
podcast there, that wasbeautiful. That was beautiful,
(06:39):
dude. I think, I think that is,I mean, that could sum up a lot,
yeah, of construction companies,and I think that's why we're
here today, is to talk a littlebit about what you can do to
make your business more of themas a business, right?
Specifically, I wanted you onbecause I liked your perspective
from a pre con standpoint, whichwe'll, we'll dig into. But dude,
(07:01):
I think that was, that's, that'sgreat, because I think, again,
there's so there's so manyindividuals in this industry
that have the best intentions,right? They have the intentions
of a total passion towards acraft, a trade, a skill, whether
it's carpentry, whether it'sframing, whether it's whatever
it might be. And then they seethis, they inevitably get into
(07:24):
like, this business motion oflike, they're passionate about
their skill, and then they startto monetize it. And then they
wake up one day and it's like,holy shit, I've got employees,
I've got I've got income, I'vegot expenses, I've got all these
things that really make up thefoundation of a business. And
now, what do I do with it,right? And I think the fact that
you are self aware enough torespect and appreciate the
(07:45):
failure, if that's what you wantto call it, that might be the
wrong word, but lack of the lackof building a sustainable
business from your dad and itmotivated the next generation.
Kudos to you, because that'swhat this industry needs.
There's such a greatopportunity. The barrier of
entry is so low in constructioncompanies, the opportunity is so
large, but it's like being ableto run a construction company
(08:06):
well, as it takes a lot of work,and we need more people like
you.
Well, thank you. I appreciatethat, and I will say this that I
don't think failure is a badword. There's actually a book. I
can't remember the name off thetop of my head, but it just
really voices it and articulatesit incredibly well. But I think
that the measurement of successisn't whether or not you
(08:27):
experience failure, it's yourability to learn from it and
push through and become a betterversion of yourself, a better
version of the business. And soI would actually argue that I
was just asked on my podcastwhat make because I rebranded, I
re I relaunched this version ofthe company as Fern Hill, very
intentionally so. And they werelike, Why is it as such? And the
(08:47):
reality is that it's thefailures of my past, it's the
shortcomings of those before methat I was fortunate enough to
learn from and then be able tobe very intentional about how I
set things up now. And I thinksuch a big part of that is pre
construction and all thesethings. And, you know, even
(09:08):
beyond that, somebody I'll givean immense amount of credit to
is Nick schifer. You know, youobviously know he said something
that's just always resonatedwith me, that it's like, I just
want to build cool shit withcool people, and because I think
that this business is aboutconnection, but I have a harsh
reality that I almost left theindustry as a whole. I wondered
(09:30):
what I wanted to do. I haddegrees, I have all these other
avenues. I I thought to myselfthat this probably a lot of
other industries I couldarguably make more money in and
not have to deal with a lot ofthis crap. So I then came back,
though inevitably, because Ilove building. It's what I'm
actually passionate about. Andso when I heard Nick articulate
(09:51):
it like that, it was actually abig moment for me, because I was
like, You know what? I love thepeople in this industry. I love
building stuff, and if I'm notbuilding the coolest. Stuff out
there, and I'm not doing it withthe coolest people. I'm just
gonna set down everything and godo something else. So like that
is the journeythat it's a sobering it's a
sobering comment of buildingcool stuff with cool people, or
(10:12):
cool shit with cool people,whatever the actual quote is,
because it's simple, right? Andit's it's grounding. And when
you really bring it back to thewhy are we doing things it? It
prevents you from side, sidetracking on the business, which
I think is super common, right?
Because at the end of the day,you're building a product for a
(10:33):
group of buyers, right? And, andif what you're building isn't
selling, then it can, you canget into some pretty desperate,
I guess, decision making. Sowhen you ground yourself in
simple logic and simple, simplelogic, it's helpful, for
sure. Yeah. I mean, we'resolving people's problems at the
end of the day, like that.
That's what businessis, totally, totally okay,
(10:55):
beautiful. So let's talk about,I guess. Let's just start with
kind of like a foundationalquestion, like, what is your
point of view on preconstruction? How do you view
pre construction?
So I view pre construction asbeing the exact same thing as
marketing. It is, you know, Ijust said that business is
(11:18):
solving people's problems, andwhen you break down solving
people's problems, really whatthat problems, really what that
is, is setting an expectationand then delivering on that
expectation. Pre construction isthe articulation of that
expectation in tangent with howwe are going to actually solve
it. And so the reason I say it'sin tangent with marketing is
kind of twofold, because it's aneducational process at one and I
(11:41):
think that we've gotten a lotbetter user experience outcomes
once we've really tried toeducate people as to what to
expect, as to how to succeedwithin the journey of
construction as part of preconstruction, but even beyond
that, setting realisticexpectations. Because the
problem could be that, you know,let's just say we aren't doing
(12:04):
pre construction, and I get aset of prints, and somebody
inevitably comes in with, youknow, hey, we want this to cost
$2 million well, that's amazing.
I would love it if this cost $2million but unfortunately, it
costs five and that is just abad business model. That's bad
sales, that's bad consumerjourney, like nobody is going to
succeed in that process. But ifyou then look at that from a
(12:24):
different perspective and go,Hey, well, I'm going to manage
this experience here. I'm goingto help us develop something
that is in alignment with that$2 million budget, and we are
going to develop a scope of workthat is in tangent with it. And
then we're also going to talkabout risk management. Hey, what
is your risk tolerance? Becauseit's probably different than
other my other clients. My otherclients. Let's incorporate that
in. Let's make sure that youfeel that I am your guide from
(12:46):
the day one as to how we aregoing to create a successful
outcome. And I think it's beenabsolutely game changing for us,
because without one, I don'tknow how well the other actually
succeedsone 1,000% you made a comment,
which I thought was great. Itwas more so like your your
correlation between pre con andmarketing and how intertwined
(13:09):
they are, and specificallyaround the educating comment. I
was literally just had a dinnerin South Shore, Boston with some
of the best builders in SouthShore, and they were talking
about expectation setting andeducating the customer base, and
how ill educated, if that's theright word, Ill educated
(13:29):
consumers are today when itcomes to construction, right? It
makes a ton of sense, right?
We've got, we've been this hugepush for, like, four year
degrees, and pushing people intowhite collar jobs and like
totally like staring away andcreating these preconceived
notions of what the trades andskills are, and you just lose
those those skills and that lineof thinking of generations of
(13:50):
that action. What's yourperspective on setting those
expectations with a market that,I guess, to to bucket them into
a large group that don't knowwhat they're talking about.
Effectively, how do you setexpectations of people that are
so uneducated? So I've outlinedthe consumer journey within
(14:12):
those confines a little bit thatyou know you have to kind of
define the product beyond justsimply, like, build a house,
Build a pretty house, build adesigner award winning house
like those, things areincredibly complicated and
accordingly, can differentiate.
So one thing that we really tryto do, especially here in
Boulder, the energy coderequirements are on average, 30
(14:34):
to 40% higher than the rest ofthe country here, and so we get
a lot of commentary at, like,the very early meetings about,
Wow, this used to cost, youknow, we built a house before,
and it was, you know, $600 asquare foot. Now you're telling
me 900 $1,000 a square foot as astarting point. And it's like,
well, while they both might behouses, they're not the same
(14:57):
product. This one's being donewith our. Like, air tightness,
factors, all these other youknow, ERVs, like, all these
things, they are not the same.
Like, yes, they have walls, aroof, things like that. And so
number one, getting people tounderstand that is a really,
really important thing, becauseit's going to start to create a
they're going to disassociatewith the things of the past. But
(15:19):
then beyond that, what we try toarticulate is that there's
expectations that come alongwith what you want the
experience to be like. You know,we can have this experience be
that you have to micromanageevery single part of this, and
you're going to life is going tobe overtaken and things like
that. That's one thing like onepossible pursuit for you. If
that's the case, we are probablynot a good fit for you, and that
(15:39):
is okay. But if you want a highlevel of management, a very
stress free is what we're alwaysstriving for experience because
you with the the all theinformation that we have, all
the SOPs, all of the riskmanagement approaches that we
utilize, you are going to kindof have this binary process,
(16:03):
where zero is where you startand one is where you end. There
is a cost associated with that.
And if you want that experiencethe same way, when you go out to
a restaurant and you want finedining, you expect that to have
a cost associated with it. Weare now going to do our best to
articulate to you what thatexperience is going to cost and
I think that combining those twothings, it helps to set an
expectation that is at leastcloser to what the reality of
(16:26):
pricing is.
Totally I love it. And I think,like, even just your example of,
like, the fine dining exampleis, like, I, I wouldn't I'm not,
like, a Michelin star guybecause, like, frankly, I don't,
like, appreciate that stuff.
Yeah, right. And it's like, andthat, like, just relating that
back to building is like, youmight have someone that wants to
(16:46):
build an air quote custom home,but then when they get into a
conversation with Fern Hill andthey start going through this
process, they might be like, Idon't care if the ERV is
filtering in X cubic whatever offresh air into my home, and it's
airtight. It's like, I might,like, at that point I'm
understanding that I might havebitten off more than I can chew,
(17:07):
and that paying $500 for adinner isn't worth it for me.
Yeah, right, yeah. So I thinklike that, like, even, like, in
a pre con, relation tomarketing, it makes a ton of
sense, right? Because like,you're effectively, like,
you're, they're entering yourfunnel, right? And at that point
is like, how, how qualified canI get these individuals to be?
And I do that through education.
(17:27):
Is that fair? Oh,100% and I actually on my
pockets. I've interviewed a lotof architects, probably
disproportionately so than otherbuilders or trades people. And I
would say that almost all ofthem have talked about the
fatigue element that clientsinevitably go through from the
start to the finish. Like, youknow, it could be selection
fatigue, design fatigue, evenjust getting too many bills,
(17:47):
fatigue and managing that issuch an important thing. So
something I've I don't know ifwe've necessarily settled on an
approach, but we definitely havegone back and forth, which I
think is just a commentary onhow complicated it is, how much
information is the correctamount of information for a
client to be receiving in likethese cohesive documents. And so
(18:10):
for us, even in initial pricingsets, I'm like, you know, our
budgets for a custom home can be300 500 line items very easily.
I don't think it is a reasonableexpectation for somebody to go
through a 500 line item budgetand then walk away with a
accurate reflection of wheretheir project sits, or what's
driving costs or what'sdisproportionately affecting
(18:32):
then budgets, as opposed toother things. So what we try to
do is actually tier that systemfor them and give them a
digestible amount. And it's thesame thing even in the pre con
process. You know, we used tohave it be that it was like
1015, stages to thisconstruction thing. And what we
really want to ask people is,what do they want this
experience to be? Because, youknow, if we maintain that
(18:54):
position as the guide and letthem articulate to us what they
want it to be, we can thenfacilitate the correct amount of
information to be given to themand also articulate to them.
Hey, this is what we're going tobe doing behind the scenes. If
you want to be involved in this,by all means, we can schedule
these meetings and involve you,but just so you know, as long as
we know where you stand as awhole, like for the ethos, you
know, of this project, let usadvocate for you. Let us, let us
(19:17):
get you to this next phase, andthen come join us. And, you
know, participate 1,000%I think it's great. And just
like, in terms of the guide,it's like, they want to know the
lefts and rights, right. Theywant to know how to like,
navigate to the trail. Theydon't need to know, like, watch
out for this rock here and,like, step up over that. Like,
they just want to, like, belike, they want that person in
the front navigating thatthey're following behind and
(19:39):
getting to where they want togo.
Yeah, I literally had a phonecall with some clients on a
project that we're currently inconstruction for where they just
were like, Alex, you have to dome a favor. I cannot select
another light fixture. I justcannot do it. I We are just
going bonkers. We we didn't knowthat there were so many light
(19:59):
fixtures. We. To put in acloset. I'm like, yeah, that,
you know, there's a lot andlike, just, please, just put
the, put the submittal packagetogether, and just get us close
to where it is. And if we haveto change one or two things,
fine, we'll do it. But I justcan't look at another light
fixture. Yeah, I completelyunderstand. These are people
that have a family, people thathave jobs. That's how they're
paying for the darn thing. Likethey don't want to be doing this
(20:22):
like they are trusting thedesign team and myself to
advocate for them and be like,Hey, we know basically where
they want to sit. Let's do ourbest to get them as close to
that as possible. And if theywant to become part of the
process to change that slightlyin this direction or the other,
they have that agencytotally, 100% okay, so I
certainly want to keep goingdown this path, but I do want to
make a comment on you'dmentioned that as of recently. I
(20:45):
can't remember the exactmessaging, but you basically
alluded to like, this has been anewer concept, and it has, like,
changed your business.
Yeah, well, I would say thatit's been a newer process that
I've articulated it as preconstruction. The reality is
(21:06):
that even my grandfather alwaysdid it. She didn't do it as a
form of marketing, per se, but,you know, he was doing his own
shop drawings back in the day,by hand. My my dad did the same.
They were preparing for the jobbefore it ever started, and
thinking through every aspect ofhow to succeed within the
confines of it. And I learnedthat from them. I just took it
(21:30):
to the level unintentionally.
And I think it was because of myexperience in commercial,
frankly, which pre constructionwas a term there, obviously
totally to where it wasadvocating for the business side
of things, equally as in as theconstructability methods. And I
forget the gentleman's name,Schroeder, I believe is his last
(21:50):
name. He's actually a schedulingconsultant in the commercial
world. He said something thatreally, really made me make a
change. He said that you cannever allow for the design of a
project to progress beyond yourability to understand it from a
constructability, budgeting orscheduling standpoint. And so I
actually articulate that to theclients as being my role in pre
(22:10):
construction. And so once Ifound that out, it just defined
the scope of work so clearlythat it actually informed our
contracts, informed all thelike, how we bill for it all and
things like that. And so once wefigured that out, it changed a
lot for us, and I would even saythat it changed the clients that
(22:34):
we ended up aligning with,dramatically. So overnight,
totally, totally. What are someof the like, some of the biggest
wins outcomes of this like,specifically, because like, I
think it's very appealing,right? It makes a ton of sense
based on like, how this like,effectively is, in a like,
(22:57):
there's a qualifying component,right? From a marketing
standpoint, there's anexpectation setting standpoint
which is going to inevitablyimpact the rest of the build.
But like, what are some of thespecific examples? It could be
good example, or positiveexamples or negative examples of
this of your world in pre con.
So I would say that the biggestwins are just being able to
(23:19):
deliver on what the expectationthat we've set is, because I
part of our sales process isbeing like, hey, here's tons of
data sets where I show you thatour average is about 4% on our
originally estimated cost ofcompletion. Like, I've taken
immense pride in that. But inorder for us to do that, I have
to articulate what scope iscurrently and then also be able
(23:39):
to articulate to you throughoutthe construction process what is
a change in scope, because thosenumbers could not convey
accurately what my role is andeverything. And so when I convey
that to people, and the endoutcome is like, wow. Alex said
he was going to be 4% on budget,and then we're at 4.2% that
right there is us delivering onthe promise that we made to
(24:01):
them. They budgeted for theirfamily life, all these other
things, and now they're happy toproduce, you know, pass our name
on to the next client, orwhatever it might be. I would
say that is the biggest win. Iwould say that the shortcomings
that were part of that processwere actually when we came short
on articulating expansions ofscope versus just the estimated
(24:23):
cost of completion, which Ithink is a trap of cost plus,
frankly, but because that couldlook in turn at the end of us
not delivering, it could belike, Wow, we're 18% over
budget. I'm like, Yeah, but youjust added $400,000 in, you
know, additional scope. That'snot, I can't be expected to be
(24:44):
more efficient at my process asa result of that,
it's moving the goalposteffectively, right? And again, I
keep going back to this dinnerthat hadn't stopped short, but
this, this conversation gotbrought up, is like, I'm
personally again. Having neverrun a construction company, I
think cost plus makes a ton ofsense. I understand fixed price
(25:06):
and the benefits of it, and theprecon is obviously very tightly
associated with fixed price.
That's not to say that cost plusbuilders are not doing pre con,
right? But how does I just don'tunderstand how this $400,000
scope change happens, andclients are even, or even
remotely close to having anopinion of you pulled the rug on
me. I just don't get it. Howdoes that happen? And from an
(25:30):
expectation standpoint, there'sa very simple expectation to
set. I'd feel like it's like,you want to add this great.
Here's the cost sign, the changeorder we're in, we're moving
totally I don't know if I havethe clear answer to that, but
somebody who I have immenserespect for, Harvey Hine of Hmh
architecture, who I've doneseveral projects with, he was
(25:54):
actually on my podcast, and wetalked about something similar,
and his response was that at theend of the day, we all hear what
we want to hear. And when youthink that in business, in order
for you know, you asked, Howdoes this happen? Saying no to
people is inherently harder thanjust being in the business of
saying yes. And I think that fartoo often, it's easier for
(26:18):
people to kick the can down theline in terms of like, well,
yes, you can have thisadditional wing with four
bathrooms in it. Why? Yes,somebody may or may not know
that that's going to just blowbudgets out of the water, or the
original, you know, set price ofeverything, but the far too
often it's left to thecontractor to be the one to
articulate. Well, this is not analignment with the expectations
(26:40):
that we set. If we want that, wehave to shift the goal post,
like you said, but somebodyshould have told you that the
second it came out of somebody'smouth. And when that doesn't
happen, I think it's really easyfor people to become emotionally
attached to things. And I meanthat right there is actually an
articulation of why we're costplus, not fixed price, like I we
utilize Procore as a projectmanagement software, and so we
(27:03):
actually approach ourdocumentation methods as if it's
fixed price, even though we'recost plus. The reason I'm cost
plus is because of theinherently emotional journey
that is residentialconstruction, like there is no
way around that. And you know, Ithink the better we can
recognize that people have theseemotional connections to their
(27:24):
home, to the biggest investmentof their life. You also then
realize that there's going to bethese moments where logic gets
separated from, you know, theactual process itself, or the
decision making,totally, totally I am. I think
that's probably the biggesttakeaway. I mean, do you have
that like, SOP out in your team?
(27:45):
Like, I imagine, just like aclient working with a project
manager, and they're like, doinga site walk, and they're like,
Well, Becky, you know, she hadher, you know, glass of red the
other night she was onPinterest. She was looking at
this and X, Y and Z, and she sawthis on Instagram. And we'd
really like to do this. Like, isthe SOP for the project manager
to be like, we can 1,000% havethat conversation. Let's go over
(28:07):
budget. Let's go over what wehad discussed initially. Let's
do it is that a part of yourmove? Is that ridiculous to bake
in? How do you do it?
So it's actually fascinatingthat you bring this up. I was
meeting with some prospectivearchitects on one of our job
sites yesterday, and we werejust talking about pain points.
And one of the biggest painpoints that they said is that
they have a client currentlycomplaining that the budgets
just gone up so much. And it wasliterally this exact same
(28:29):
situation. Well, it's like,well, yeah, was she drinking Red
or white? Who knows, it mighthave been what I heard. It might
have been both, but I so thesystem that I have set up and
within Procore is that we haveseparated budget changes from
change orders. A change order isa change in scope. A budget
(28:49):
change is a change in myestimated cost to complete an
asserted scope of work. So inother words, when I if I think
that, hey, we're building, let'sjust say the cost to install
these cabinets. If I think that,for some reason, the exact same
scope of work, the cost went up,for some reason, I would
(29:10):
articulate that as being abudget change. It's a change in
the estimated cost ofcompletion. But now if you add,
you know, 14 walnut cabinets onthe other wall, I will do that
in a signed change order to theclient. And what that actually
does for me within the budgetsis it's separate. It gives me
two separate columns, and itgoes owner asserted change scope
(29:33):
changes shows up as signedchange orders, and then budget
changes, which I'm able toarticulate as changes in
estimated cost of Completion isa completely separate column,
and that's the column that Iactually care about. And I am
constantly trying to have thePMs superintendents myself at
every single meeting, they needto be pointing out that column
(29:54):
as being separate from the othercolumn, and because what that's
going to do is create a sense ofresponsibility. Right, and that,
hey, I'm responsible for thiscolumn. It is my job and my
responsibility to inform you ofyour responsibility towards that
other column. Totally.
Okay, so by separating iteffectively into like a customer
change and a builder change,yeah, gives you the option, and
(30:17):
then, so you're focusing mainlyon the budget, on the builder
Change column.
Well, what I want to articulateto the client is that I can
control that. Yeah, you can'thave the expectation that, like,
you're not paying me to controlyou. I can, you know, inform
you, yeah, as well as possible.
But I don't think that you wantme telling you what to do. Truth
be told, I have had clients thatliterally do want that. But at
the end of the day, if they wantthat, and they sign the change
(30:41):
order and they want to pay forit, that is completely their
prerogative. I just want to makesure that they have the
information and an accurateexpectation in order to do that
from an informed positionTotally. I mean, this is like
getting into a path of, like,tracking financials effectively.
I mean that to me, sounds likethe backbone of being able to
(31:04):
run solid pre construction.
Oh, 100% it's all about datacapture. All about it, because
without the data capture, Idon't have the informed
perspective for myself toarticulate expectation to
clients. And so that's actuallythe workflow, though, is that I
(31:24):
have to have it, that everysingle piece of the company is
our is capturing their data in away that I can then track it to
what is the change event or thedeliverable driving that cost?
Because if I can't do that in avery like digestible way, like,
like, you know, I need a datascience degree, not an economics
one.
Totally, totally well. And Ithink I was, I was doing another
(31:48):
podcast with a builder out ofLincoln Nebraska, and the he
brought up very similarconversation. His was along the
lines of, like, they were doing,like an addition right on a
house or something. And thenthey needed, like, the client
was obviously living there. Itwas, like, a renovation
addition. And they're like, hey,like, you're already here. Like,
we actually need to do stairs upto our deck. Like, can you do
(32:09):
that? And he was just, like, onthe job site said, like, yep, of
course, sure. And then he, afterhe'd agreed to it, he had gone
back and he had looked, and hewas like, that's actually
chewing through, like, asignificant amount of margin
that, like, I just, like,totally, just charitably handed
over. Yeah, right. And it'slike, without this information,
without the data, withouttracking it, that's where you
(32:31):
can go sideways on pre con. Youcan have all the conversations
and expectations setting in theworld, but if you're not
reviewing what's actuallyhappening, it can be a cluster.
Well, to bring this back to preconstruction, being an
educational platform as well, wego over in some of the
documentation we provide. So inProcore, specifically, there's
(32:53):
cost R OMS range of magnitude.
We educate them as to what weset forth to you on a change
order is a range of magnitudeexpectation. In other words, we
this is what we are asserting.
We think it is going to cost.
But in these incrediblycomplicated projects, how am I
supposed to articulate to youthe critical path effect, 17
line, you know, schedule lineitems down the road, like we
(33:16):
just don't know. And so what I'mgoing to do is I'm going to take
certain factors from historicaldata try to set an expectation
for you, and that's going to bethe ROM that number can still go
up or down, because if you starthaving people treating that as a
fixed number, you might as wellbe fixed cost, and probably
going to give a different marginto begin with.
(33:37):
Totally, totally. I think that'sthat that range of magnitude is
important. And that's where,like, even when you start
talking about change orders,again, I keep reverting back to
all these like, episodes we'vedone, but there's a builder was
like, Well, how do you even,like, how do you even price out
a change order when you're like,thinking about, Okay, well, it's
not only just, like, here's thecost of the material, here's
where I think the cost of thelabor is. We're talking about
(33:59):
schedule shifts, we're talkingabout supply chain, we're
talking about, like, admineffort to go through all these
processes, like, there's so manythings that go into it, so it's
like that range of magnitudeseffectively insulating you there
is that fair? Oh, yeah, it'sincredibly so, because I think
it's impossible to give accuratepricing expectations on any
change order, because you know,you just don't know. You
(34:22):
probably have a limited accuracyto put these numbers to begin
with. It is an estimated numberfrom the beginning, and when
you're doing it on the fly, outof order, out of sequence, in
these, you know, inherently oneoff projects. You know, I tell
people I could just, you know,multiply this number by three
(34:43):
and tell you that, but, like, Idon't know if that's going to do
anyone any benefit. And so, youknow, I hate change orders. I
wish that they weren't a part ofany project. Inevitably, there's
always change orders, always.
But the thing that I tried to,you know, and. Again in the pre
construction process, I wantevery single decision on this
(35:03):
project made before we startconstruction. And the truth is
that that bar isn't hit on manyprojects, but I have been able
to shift the needle way closerthan we used to be. But the way
that I motivate the clients toactually advocate within the
design development process forthat to happen is that I tell
(35:23):
them that, hey, if we design forthis right now, the cost of it,
let's assume to be x if the dayafter construction starts, if we
add that in, while you might notthink it's a big deal, you
should assume that as every likemagnitude of time progresses
beyond it's going to go from1.2x 1.6x 2.1x 2.1x and I can
show you data set after data setafter data set of, hey, for us
(35:44):
to do this simple, you know,regular detail over here at the
beginning, it costs this. Andnow, for some reason, we added
it because we couldn't make thisdetail work on the trim. Now
it's going to cost 2x and so ifyou don't want it to cost 2x we
need to advocate for that designto be developed right now and as
soon as people understand thatthere's that price Delta
(36:04):
associated with it, it's theydon't look at as me being just
annoying, wanting to do it myway. It's me advocating for them
that needs bookmarked for allthe listeners out here,
explaining it to the client,that if we aren't making these
decisions today you are going tohave a more expensive project,
it is the biggest indicator of asuccessful project, bar none.
(36:29):
And because, how am I supposedto set expectations on an
incomplete set of informationnumber one? And you know, I said
my ability to deliver on a setof expectations is what
determines outcome of theproject as a whole. And so if
you're constantly moving thatgoal post from day one, that's
that's a model that's very hardto succeed in. And I think
(36:51):
advocating for that in a waythat informs the clients. It's
actually not you just advocatingfor how I do things, it's me
advocating for them to succeed.
That's totally, that's theprocess. Totally.
This is killer, real quick. I dowant to talk about the post
initially, because I think, likewhen, especially when it comes
(37:13):
to pre con, we've been talkingabout, all about, like, GC,
client, recon, what is yourpoint of view on GC,
subcontractor, vendor, pre con?
So we literally articulate topeople, you know, we've,
especially since I've beenhosting some marketing events
(37:37):
and developing a little bit ofa, I call it like a maker
community here in the frontrange. Love it. I've had more
and more trades like reachingout to us, and I simply set the
expectation that the trades wealign with best require
participation in the preconstruction process. It is a
non negotiable for us. It is wewant to pay you for your time.
(37:59):
We have it in the budgetsalready that you will be paid
for your time. And it's reallyinteresting too, because a lot
of people like, Oh no, we'll dolike, you know, no worries. No
worries. No. That's not theproduct I want. I want the
product that we pay for, becauseI want you to actually invest
your time and energy into it.
And so I think what, in turn,that actually means for the
subs, a lot of times, is theyhave to be organized. They have
(38:20):
to be able to articulate what'sdriving their costs and whatnot.
I have a framer right now who Iwill give him a shout out,
raising sons construction. He isa really, really good trade
partner, and the truth of thematter is that he's learning on
how to have a high level ofdelivery. He is learning how to
(38:40):
bring value to me as a GC. AndI've said to him time and time
again, you know, when he doesn'tknow how to do something or how
much time it's going to take,because maybe it's a little bit
unique, like, you know,currently we're doing a double
stock construction with aservice cavity, and then half
the house is engineered LSL. Theother half is dimensional
number. And I want the LSL andall these articulate these
(39:02):
articulated places so that wecan, you know, value engineer at
the drywall and things likethat. If he doesn't know that,
tell me that. And what we willdo is sit down together, work
through the drawings, createexpectations on time as a
measurement, and then haveallowances so that he makes sure
that he's covered. And then thenext one, if he wants to
articulate, is a fixed number orsomething like that, but like,
(39:24):
Let's capture the numberstogether. That's how we succeed.
And it's the trade partners thatgo, yes, let's do that, that we
want to be teaming up with.
What do you tell the builderthat tells you that's
impossible, that takes way toomuch time. There's no way we
could do that with our trades.
(39:45):
Hold my beer. Hold my beer.
I'm just saying I'm like, itmakes so much sense that that is
bettering the community, right?
I that it's not just sittinghere and be like, There's no one
I ever can do the goddamn work.
Anymore. No one wants to everwork. No one has the skills.
Blah blah. It's like, Well,dude, you know what you want,
(40:05):
right? You want the LSL and theexposed and the value
engineered. I'm not that guy,but you are right. You know it.
And if you're working withsomeone who's got the
fundamental skill that you'rebuilding a relationship with
that you believe can do it, youwant to build that relationship
for that conversation to be had,and now you are effectively
building up a subcontractorthat's going to be more valuable
(40:26):
for you in the future, becausethis time spent has been
educating them to deliver thework you want to
deliver. I want them to makemoney. I want them to make a
fair, honest amount of moneywhere they go. Wow. You know
what? When we're on a front Hillproject? We know we're going to
make our money. We know it'sgoing to be lower stress,
because we're going to beprepared. It's not going to be
(40:47):
these fire drills all the timeand things like that. We are
going to know that if it's we'vearticulated a scope of work that
we won't have to have thesearguments as to is, hey, is this
a change order? Is this notwe've already done that work,
that confidence factor meansthat, you know, when we advocate
for them, we also have thisexpectation that they then
(41:09):
advocate for us, because, youknow, we need their help, and we
are at the mercy of theirability to deliver. And it's
incredibly, incrediblyimportant. Because the other end
of that too is I actually get, Ithink, more annoyed when new
trade part or potential tradepartners will come in and say,
just toss out a giant number,because they just looked at it,
(41:32):
and they're like, Wow, this iscomplicated, and things like
that. And I know it could costthat, but that's actually not
the product that I'm selling.
I'm selling that we are going toset as realistic an expectation
as to what it's going to cost,and then articulate the risk
associated with it, so that Ican inform the design being
developed, and they can maximizetheir dollar being spent how the
(41:52):
client best sees. Because if wejust, you know, say the trim
budget, we look at him like,wow, this is crazy complicated.
We haven't really thought itthrough. We're going to say
three going to say $350,000budget. But now maybe they don't
go for the same lighting detailsthat they would have otherwise.
And now it's like, Well, hey, wejust developed a more efficient
(42:13):
way of doing this. The budget'snow are 250 they could have had
that. And now that's a changeorder which is going against the
product that I am selling to theclient. So it is really, really
important that I, you know, intruth be told, I don't hold that
against a lot of trade partners,because I don't think that they
have that experience on a repeatbasis always. You know, if they
don't say that big number, thenthey're constantly trying to
(42:35):
have somebody else drive theirnumber down, drive the number
down, and then they get down tothat 250, or whatever it is,
inevitably, and that inevitably,and that's not the model that we
take. So I have to takeresponsibility and inform them
of that so that they feelconfident in telling me a more
accurate number. But it's like,hey, if I'm selling the client
that we are going to do pricingexercises to maximize your
(42:57):
dollar being spent within thedesign that has to start with my
trade partners. It has tototally, totally. I thought this
is a great episode, Alex. Therewere several massive takeaways
for the audience. Two things.
(43:18):
First, is there anything elseregarding pre con that we may
not have talked about, or do youthink is, like massively
important in terms of howbuilders view and execute pre
construction.
I think the other side of itthat I actually, I would say,
spend the equal amount of timethinking about is how to make it
(43:38):
a value add to the design teamsand educating the the design
professionals in the area. And Ithink that's inevitably in the
high, high end markets, a knownthing, but I think it's slowly
trickling down, and probably tooslow at that, but that's the
only thing I did.
So educating the design sideeffectively, what I'm thinking
(44:01):
is, and how I maybe lesspolitically correct, say it is
like you could design one thing,but then the actual execution of
building it is completely adifferent thing.
Yeah, yeah. And also, I equateit to what if somebody could
design in a way that they knewit was always realistic and you
(44:21):
weren't constantly having to goone step forward, two steps
back, two steps forward, onestep back. What if it was a more
linear process? Would that makea design team more professional?
Would that increase your abilityto deliver on the expectations
that you're setting? Because ifso, I can help you do that. I
have these standard operatingprocedures. I have these data
sets that we capture that can dothose pricing exercises as a
(44:44):
relatively small investment likeyes, of course, we charge for
it, but it is not going to blowthe design development budgets
out of the water or anythinglike that. It's just simply
meant to be a value add where wecan help inform your process.
Totally. I love it. That'sgreat. The second. Piece of my
question, where do builders findyou so they can follow you along
(45:05):
and get more? Alex content,yeah, so on Instagram, built by
Fern Hill is the tag name isalmost called handle.
I think they're called handle,okay, yeah, should know, yeah.
YouTube, I learned it like a fewweeks ago.
Yeah, I am getting a crashcourse and all this media stuff.
Yeah, we are launching theYouTube channel here that's in
(45:28):
the works that will be built byFern Hill as well. I also have a
podcast called the buildproject, where I the big
component of that is just tryingto really create a community of
makers and articulating theperspective of not only local
architects, but also, I say thisa bunch that I a big goal of
mine is to also interview thepeople sweeping floors on our
(45:51):
projects, because they have someelement of value that would only
elevate the end project. And Ithink that the stories all of us
have the trajectory that makesthese beautiful homes, makes
these beautiful spaces, is justsuch an important human element.
And so the build project, that'smy podcast.
And, yeah, okay, beautiful. SoInstagram. And so my Fern Hill,
(46:17):
built by Fern Hill, builtby Fern Hill, B, U, I, L, T, by
Fernhill. F, E, R, N, H, I, l,o, love it.
Podcast, the build project, thebuild project. And there's a
third one.
YouTube is built by Fern Hill aswell. LinkedIn is Alex
mulcentine, and then also FernHill construction.
(46:37):
He's all over the place. If youguys need to follow. Alex, just
DM me. I'd happy to get you intouch. But no, Alex, this was,
this was great. Your wealth ofknowledge, dude, very, very well
spoken. A lot of really tacticaltakeaways
here. Well, I'm excited tointerview you now. So, dude, I
don'tknow how that's gonna work. I've
done several podcasts. You mightI feel like I might be a tough
(47:00):
guess. You might have to do somedo some some digging, some
discovery, but no, I'm superexcited to jump on your show.
I'm an open book. Appreciate it,man, cool dude. Well, I'll let
you get back to it. Appreciatetaking the time.
Sounds good? All right, see ya.
Business is solving people'sproblems. And when you break
down solving people's problems,really what that is, is setting
an expectation and thendelivering on that expectation.
Pre construction is thearticulation of that expectation
in tangent with how we are goingto actually solve
it. Welcome to builders, budgetsand beers. I'm Rhys Barnes and I
started this podcast to havereal conversations about money
(00:20):
in the building industry, thewins, the mistakes and
everything in between. I believebuilders deserve to feel
confident about their finances,and that starts by hearing from
others who've been through ittoo. This industry can be slow
to change, but the right storiesand the right tools can make
profitability feel possible.
Let's get into it. You allright, mics are hot. We're live.
(00:47):
Alex, thanks forjumping on, dude. Sure. Man,
glad to be here. Yeah.
Super, super stoked to to chatwith you here. But for the
listeners, give them, give thema little background on who Alex
mulcantine is,yeah, so I'm originally from
Ohio. I was part of a thirdgeneration construction company,
(01:09):
and the son of immigrants, andthat residential company grew,
but when I was a young age, Iactually broke off from it,
started doing my own thing. Andthat kind of, I think,
inevitably, led to metransitioning into commercial
work. And I did commercial workfor three, four years, and I had
(01:32):
this unique opportunity to kindof sell off parts of that
company, liquidate the others.
And I took a one way ticket toNew Zealand, cool, which was a
very interesting experiencethere New
Zealand. What so are you fromNew Zealand? You said you're
(01:52):
immigrant. You're son of anigger. Where are you from?
Germany, originally? Okay, yeah.
And literally, people have askedme this all the time, like, why
New Zealand? Yeah, I wish I hada better answer than simply, it
was on the other side of theworld, and I just wanted to
experience something inherentlydifferent than Ohio. It's
beautiful. It's like one of theit's like, I don't even unique,
(02:14):
I guess is the word to explainit. But it's like, one of the
most insane landscapes in theworld, yeah.
And just also a real I mean,it's a very transient place, and
so inherently, you're going tomeet people from all over the
world. And especially, I'd beento Europe a lot just because of
my family. I hadn't reallyexperienced people from the
southern hemisphere before,okay? And that was not something
(02:37):
I quite expected in New Zealand.
I don'tthink that thoughts ever ran
through my head, like, what?
Like, what's the difference?
Um, think a little bit of Latinculture. And it's actually
Queenstown where I live. I livedin Wanaka, and then also
Queenstown. And Queenstown, atleast when I was there, I
believe, was the number onetourist destination in the
southern hemisphere. Oh, wow.
Okay, so there was also a lot ofexpats. There a lot of people
(02:59):
from Britain, just because ofthe way the visas all work. And
then, of course, Australia andAustralian culture was very fun,
very interesting learningexperience nonetheless. But
yeah, it was. It was amazing.
And also led to my obsessionwith the outdoors and endurance
sports, which, in turn, isactually what led me to end up
(03:23):
in Boulder, Colorado.
Yeah, Boulder is definitely thead. Have you? Did you do the
boulder? Boulder? Boulder?
No, I've never done that. Andalso, I'm getting slow and out
of shape now, I got two kids. Igot two under two right now, so
I'm hanging out for dear life inother ways,
there you go. Yeah, they're,they're taking your energy other
than doing extreme sports,endurance sports. I love it.
(03:45):
Okay, so, okay. So your, yourfolks, there were contractors as
well, yeah, and yourgrandparents. And then you, why
did you break off? I am I? Am I?
Am I askingquestions? No, no, no. I've had
this asked a lot of differentways. And I think, you know,
it's really interesting to lookback at these things in
hindsight. And I, my father andgrandfather were incredible
(04:08):
carpenters, cool built justincredible things. They actually
specialized in an area calledShaker Heights, which had a
bunch of older homes built bythe Rockefellers and carnegies
back in like the early 1900sthat era. And so it was my dad
actually aligned really wellwith this historical society,
which wanted to maintain theintegrity of these, like old
(04:29):
hand carved moldings and thingslike that. I'm sure in Boston,
you know exactly those kinds ofstandards. They were incredible
at that. But I wanted to run asustainable business on top of
it, sure, I didn't want to beconstantly behind the eight
ball. And I defined craft asmore than just my ability to
(04:50):
make things with only my hands.
I wanted to make a company. Iwanted to make a product beyond
that and I. I think also whenyou're working for a bunch of
old stubborn German men, whichthey myself, would be included
in that now it was it only madesense for me to break off and
(05:12):
kind of do my own thing. But inhindsight, it was my crash
course on business, even thoughI went to college for finance
and economics, the true businesslessons I learned were being in
business for myself at I was 18.
So yeah,dude, that's the story as well
as time, right? Yeah. It's like,you can use, you can you can
research whatever, like, like,case studies, or, you know,
business whatever. But it'slike, you don't learn until
(05:35):
you're in the trenches.
Yeah, yeah, yeah. I mean, thebiggest lesson I learned that I
was just telling my wife aboutthe other day after we were
talking about my father, alittle bit about, just like the
stressors of business and thingslike that, was, I do remember my
father always promising to mymother, like, the future of a
better day. Like, you know, oneday we're going to make it one
(05:57):
day, you know, the business isgoing to really, you know,
provide for this family you can,you know, quit your job and we
can rely on this. And the truthwas, is that that never actually
happened. And I give my fathercredit for that in some ways,
but it also made me very afraidof making those promises to my
(06:18):
current family and then neveractually following through on
them totally. So, you know, it'sreally a position of luxury to
learn from past generations, Ithink, and just knowing what you
want to be and what you don'twant to be, or, you know, being
able to pick and choose from allof that is a really, really
powerful thing,dude, I think we get at the
podcast there, that wasbeautiful. That was beautiful,
(06:39):
dude. I think, I think that is,I mean, that could sum up a lot,
yeah, of construction companies,and I think that's why we're
here today, is to talk a littlebit about what you can do to
make your business more of themas a business, right?
Specifically, I wanted you onbecause I liked your perspective
from a pre con standpoint, whichwe'll, we'll dig into. But dude,
(07:01):
I think that was, that's, that'sgreat, because I think, again,
there's so there's so manyindividuals in this industry
that have the best intentions,right? They have the intentions
of a total passion towards acraft, a trade, a skill, whether
it's carpentry, whether it'sframing, whether it's whatever
it might be. And then they seethis, they inevitably get into
(07:24):
like, this business motion oflike, they're passionate about
their skill, and then they startto monetize it. And then they
wake up one day and it's like,holy shit, I've got employees,
I've got I've got income, I'vegot expenses, I've got all these
things that really make up thefoundation of a business. And
now, what do I do with it,right? And I think the fact that
you are self aware enough torespect and appreciate the
(07:45):
failure, if that's what you wantto call it, that might be the
wrong word, but lack of the lackof building a sustainable
business from your dad and itmotivated the next generation.
Kudos to you, because that'swhat this industry needs.
There's such a greatopportunity. The barrier of
entry is so low in constructioncompanies, the opportunity is so
large, but it's like being ableto run a construction company
(08:06):
well, as it takes a lot of work,and we need more people like
you.
Well, thank you. I appreciatethat, and I will say this that I
don't think failure is a badword. There's actually a book. I
can't remember the name off thetop of my head, but it just
really voices it and articulatesit incredibly well. But I think
that the measurement of successisn't whether or not you
(08:27):
experience failure, it's yourability to learn from it and
push through and become a betterversion of yourself, a better
version of the business. And soI would actually argue that I
was just asked on my podcastwhat make because I rebranded, I
re I relaunched this version ofthe company as Fern Hill, very
intentionally so. And they werelike, Why is it as such? And the
(08:47):
reality is that it's thefailures of my past, it's the
shortcomings of those before methat I was fortunate enough to
learn from and then be able tobe very intentional about how I
set things up now. And I thinksuch a big part of that is pre
construction and all thesethings. And, you know, even
(09:08):
beyond that, somebody I'll givean immense amount of credit to
is Nick schifer. You know, youobviously know he said something
that's just always resonatedwith me, that it's like, I just
want to build cool shit withcool people, and because I think
that this business is aboutconnection, but I have a harsh
reality that I almost left theindustry as a whole. I wondered
(09:30):
what I wanted to do. I haddegrees, I have all these other
avenues. I I thought to myselfthat this probably a lot of
other industries I couldarguably make more money in and
not have to deal with a lot ofthis crap. So I then came back,
though inevitably, because Ilove building. It's what I'm
actually passionate about. Andso when I heard Nick articulate
(09:51):
it like that, it was actually abig moment for me, because I was
like, You know what? I love thepeople in this industry. I love
building stuff, and if I'm notbuilding the coolest. Stuff out
there, and I'm not doing it withthe coolest people. I'm just
gonna set down everything and godo something else. So like that
is the journeythat it's a sobering it's a
sobering comment of buildingcool stuff with cool people, or
(10:12):
cool shit with cool people,whatever the actual quote is,
because it's simple, right? Andit's it's grounding. And when
you really bring it back to thewhy are we doing things it? It
prevents you from side, sidetracking on the business, which
I think is super common, right?
Because at the end of the day,you're building a product for a
(10:33):
group of buyers, right? And, andif what you're building isn't
selling, then it can, you canget into some pretty desperate,
I guess, decision making. Sowhen you ground yourself in
simple logic and simple, simplelogic, it's helpful, for
sure. Yeah. I mean, we'resolving people's problems at the
end of the day, like that.
That's what businessis, totally, totally okay,
(10:55):
beautiful. So let's talk about,I guess. Let's just start with
kind of like a foundationalquestion, like, what is your
point of view on preconstruction? How do you view
pre construction?
So I view pre construction asbeing the exact same thing as
marketing. It is, you know, Ijust said that business is
(11:18):
solving people's problems, andwhen you break down solving
people's problems, really whatthat problems, really what that
is, is setting an expectationand then delivering on that
expectation. Pre construction isthe articulation of that
expectation in tangent with howwe are going to actually solve
it. And so the reason I say it'sin tangent with marketing is
kind of twofold, because it's aneducational process at one and I
(11:41):
think that we've gotten a lotbetter user experience outcomes
once we've really tried toeducate people as to what to
expect, as to how to succeedwithin the journey of
construction as part of preconstruction, but even beyond
that, setting realisticexpectations. Because the
problem could be that, you know,let's just say we aren't doing
(12:04):
pre construction, and I get aset of prints, and somebody
inevitably comes in with, youknow, hey, we want this to cost
$2 million well, that's amazing.
I would love it if this cost $2million but unfortunately, it
costs five and that is just abad business model. That's bad
sales, that's bad consumerjourney, like nobody is going to
succeed in that process. But ifyou then look at that from a
(12:24):
different perspective and go,Hey, well, I'm going to manage
this experience here. I'm goingto help us develop something
that is in alignment with that$2 million budget, and we are
going to develop a scope of workthat is in tangent with it. And
then we're also going to talkabout risk management. Hey, what
is your risk tolerance? Becauseit's probably different than
other my other clients. My otherclients. Let's incorporate that
in. Let's make sure that youfeel that I am your guide from
(12:46):
the day one as to how we aregoing to create a successful
outcome. And I think it's beenabsolutely game changing for us,
because without one, I don'tknow how well the other actually
succeedsone 1,000% you made a comment,
which I thought was great. Itwas more so like your your
correlation between pre con andmarketing and how intertwined
(13:09):
they are, and specificallyaround the educating comment. I
was literally just had a dinnerin South Shore, Boston with some
of the best builders in SouthShore, and they were talking
about expectation setting andeducating the customer base, and
how ill educated, if that's theright word, Ill educated
(13:29):
consumers are today when itcomes to construction, right? It
makes a ton of sense, right?
We've got, we've been this hugepush for, like, four year
degrees, and pushing people intowhite collar jobs and like
totally like staring away andcreating these preconceived
notions of what the trades andskills are, and you just lose
those those skills and that lineof thinking of generations of
(13:50):
that action. What's yourperspective on setting those
expectations with a market that,I guess, to to bucket them into
a large group that don't knowwhat they're talking about.
Effectively, how do you setexpectations of people that are
so uneducated? So I've outlinedthe consumer journey within
(14:12):
those confines a little bit thatyou know you have to kind of
define the product beyond justsimply, like, build a house,
Build a pretty house, build adesigner award winning house
like those, things areincredibly complicated and
accordingly, can differentiate.
So one thing that we really tryto do, especially here in
Boulder, the energy coderequirements are on average, 30
(14:34):
to 40% higher than the rest ofthe country here, and so we get
a lot of commentary at, like,the very early meetings about,
Wow, this used to cost, youknow, we built a house before,
and it was, you know, $600 asquare foot. Now you're telling
me 900 $1,000 a square foot as astarting point. And it's like,
well, while they both might behouses, they're not the same
(14:57):
product. This one's being donewith our. Like, air tightness,
factors, all these other youknow, ERVs, like, all these
things, they are not the same.
Like, yes, they have walls, aroof, things like that. And so
number one, getting people tounderstand that is a really,
really important thing, becauseit's going to start to create a
they're going to disassociatewith the things of the past. But
(15:19):
then beyond that, what we try toarticulate is that there's
expectations that come alongwith what you want the
experience to be like. You know,we can have this experience be
that you have to micromanageevery single part of this, and
you're going to life is going tobe overtaken and things like
that. That's one thing like onepossible pursuit for you. If
that's the case, we are probablynot a good fit for you, and that
(15:39):
is okay. But if you want a highlevel of management, a very
stress free is what we're alwaysstriving for experience because
you with the the all theinformation that we have, all
the SOPs, all of the riskmanagement approaches that we
utilize, you are going to kindof have this binary process,
(16:03):
where zero is where you startand one is where you end. There
is a cost associated with that.
And if you want that experiencethe same way, when you go out to
a restaurant and you want finedining, you expect that to have
a cost associated with it. Weare now going to do our best to
articulate to you what thatexperience is going to cost and
I think that combining those twothings, it helps to set an
expectation that is at leastcloser to what the reality of
(16:26):
pricing is.
Totally I love it. And I think,like, even just your example of,
like, the fine dining exampleis, like, I, I wouldn't I'm not,
like, a Michelin star guybecause, like, frankly, I don't,
like, appreciate that stuff.
Yeah, right. And it's like, andthat, like, just relating that
back to building is like, youmight have someone that wants to
(16:46):
build an air quote custom home,but then when they get into a
conversation with Fern Hill andthey start going through this
process, they might be like, Idon't care if the ERV is
filtering in X cubic whatever offresh air into my home, and it's
airtight. It's like, I might,like, at that point I'm
understanding that I might havebitten off more than I can chew,
(17:07):
and that paying $500 for adinner isn't worth it for me.
Yeah, right, yeah. So I thinklike that, like, even, like, in
a pre con, relation tomarketing, it makes a ton of
sense, right? Because like,you're effectively, like,
you're, they're entering yourfunnel, right? And at that point
is like, how, how qualified canI get these individuals to be?
And I do that through education.
(17:27):
Is that fair? Oh,100% and I actually on my
pockets. I've interviewed a lotof architects, probably
disproportionately so than otherbuilders or trades people. And I
would say that almost all ofthem have talked about the
fatigue element that clientsinevitably go through from the
start to the finish. Like, youknow, it could be selection
fatigue, design fatigue, evenjust getting too many bills,
(17:47):
fatigue and managing that issuch an important thing. So
something I've I don't know ifwe've necessarily settled on an
approach, but we definitely havegone back and forth, which I
think is just a commentary onhow complicated it is, how much
information is the correctamount of information for a
client to be receiving in likethese cohesive documents. And so
(18:10):
for us, even in initial pricingsets, I'm like, you know, our
budgets for a custom home can be300 500 line items very easily.
I don't think it is a reasonableexpectation for somebody to go
through a 500 line item budgetand then walk away with a
accurate reflection of wheretheir project sits, or what's
driving costs or what'sdisproportionately affecting
(18:32):
then budgets, as opposed toother things. So what we try to
do is actually tier that systemfor them and give them a
digestible amount. And it's thesame thing even in the pre con
process. You know, we used tohave it be that it was like
1015, stages to thisconstruction thing. And what we
really want to ask people is,what do they want this
experience to be? Because, youknow, if we maintain that
(18:54):
position as the guide and letthem articulate to us what they
want it to be, we can thenfacilitate the correct amount of
information to be given to themand also articulate to them.
Hey, this is what we're going tobe doing behind the scenes. If
you want to be involved in this,by all means, we can schedule
these meetings and involve you,but just so you know, as long as
we know where you stand as awhole, like for the ethos, you
know, of this project, let usadvocate for you. Let us, let us
(19:17):
get you to this next phase, andthen come join us. And, you
know, participate 1,000%I think it's great. And just
like, in terms of the guide,it's like, they want to know the
lefts and rights, right. Theywant to know how to like,
navigate to the trail. Theydon't need to know, like, watch
out for this rock here and,like, step up over that. Like,
they just want to, like, belike, they want that person in
the front navigating thatthey're following behind and
(19:39):
getting to where they want togo.
Yeah, I literally had a phonecall with some clients on a
project that we're currently inconstruction for where they just
were like, Alex, you have to dome a favor. I cannot select
another light fixture. I justcannot do it. I We are just
going bonkers. We we didn't knowthat there were so many light
(19:59):
fixtures. We. To put in acloset. I'm like, yeah, that,
you know, there's a lot andlike, just, please, just put
the, put the submittal packagetogether, and just get us close
to where it is. And if we haveto change one or two things,
fine, we'll do it. But I justcan't look at another light
fixture. Yeah, I completelyunderstand. These are people
that have a family, people thathave jobs. That's how they're
paying for the darn thing. Likethey don't want to be doing this
(20:22):
like they are trusting thedesign team and myself to
advocate for them and be like,Hey, we know basically where
they want to sit. Let's do ourbest to get them as close to
that as possible. And if theywant to become part of the
process to change that slightlyin this direction or the other,
they have that agencytotally, 100% okay, so I
certainly want to keep goingdown this path, but I do want to
make a comment on you'dmentioned that as of recently. I
(20:45):
can't remember the exactmessaging, but you basically
alluded to like, this has been anewer concept, and it has, like,
changed your business.
Yeah, well, I would say thatit's been a newer process that
I've articulated it as preconstruction. The reality is
(21:06):
that even my grandfather alwaysdid it. She didn't do it as a
form of marketing, per se, but,you know, he was doing his own
shop drawings back in the day,by hand. My my dad did the same.
They were preparing for the jobbefore it ever started, and
thinking through every aspect ofhow to succeed within the
confines of it. And I learnedthat from them. I just took it
(21:30):
to the level unintentionally.
And I think it was because of myexperience in commercial,
frankly, which pre constructionwas a term there, obviously
totally to where it wasadvocating for the business side
of things, equally as in as theconstructability methods. And I
forget the gentleman's name,Schroeder, I believe is his last
(21:50):
name. He's actually a schedulingconsultant in the commercial
world. He said something thatreally, really made me make a
change. He said that you cannever allow for the design of a
project to progress beyond yourability to understand it from a
constructability, budgeting orscheduling standpoint. And so I
actually articulate that to theclients as being my role in pre
(22:10):
construction. And so once Ifound that out, it just defined
the scope of work so clearlythat it actually informed our
contracts, informed all thelike, how we bill for it all and
things like that. And so once wefigured that out, it changed a
lot for us, and I would even saythat it changed the clients that
(22:34):
we ended up aligning with,dramatically. So overnight,
totally, totally. What are someof the like, some of the biggest
wins outcomes of this like,specifically, because like, I
think it's very appealing,right? It makes a ton of sense
based on like, how this like,effectively is, in a like,
(22:57):
there's a qualifying component,right? From a marketing
standpoint, there's anexpectation setting standpoint
which is going to inevitablyimpact the rest of the build.
But like, what are some of thespecific examples? It could be
good example, or positiveexamples or negative examples of
this of your world in pre con.
So I would say that the biggestwins are just being able to
(23:19):
deliver on what the expectationthat we've set is, because I
part of our sales process isbeing like, hey, here's tons of
data sets where I show you thatour average is about 4% on our
originally estimated cost ofcompletion. Like, I've taken
immense pride in that. But inorder for us to do that, I have
to articulate what scope iscurrently and then also be able
(23:39):
to articulate to you throughoutthe construction process what is
a change in scope, because thosenumbers could not convey
accurately what my role is andeverything. And so when I convey
that to people, and the endoutcome is like, wow. Alex said
he was going to be 4% on budget,and then we're at 4.2% that
right there is us delivering onthe promise that we made to
(24:01):
them. They budgeted for theirfamily life, all these other
things, and now they're happy toproduce, you know, pass our name
on to the next client, orwhatever it might be. I would
say that is the biggest win. Iwould say that the shortcomings
that were part of that processwere actually when we came short
on articulating expansions ofscope versus just the estimated
(24:23):
cost of completion, which Ithink is a trap of cost plus,
frankly, but because that couldlook in turn at the end of us
not delivering, it could belike, Wow, we're 18% over
budget. I'm like, Yeah, but youjust added $400,000 in, you
know, additional scope. That'snot, I can't be expected to be
(24:44):
more efficient at my process asa result of that,
it's moving the goalposteffectively, right? And again, I
keep going back to this dinnerthat hadn't stopped short, but
this, this conversation gotbrought up, is like, I'm
personally again. Having neverrun a construction company, I
think cost plus makes a ton ofsense. I understand fixed price
(25:06):
and the benefits of it, and theprecon is obviously very tightly
associated with fixed price.
That's not to say that cost plusbuilders are not doing pre con,
right? But how does I just don'tunderstand how this $400,000
scope change happens, andclients are even, or even
remotely close to having anopinion of you pulled the rug on
me. I just don't get it. Howdoes that happen? And from an
(25:30):
expectation standpoint, there'sa very simple expectation to
set. I'd feel like it's like,you want to add this great.
Here's the cost sign, the changeorder we're in, we're moving
totally I don't know if I havethe clear answer to that, but
somebody who I have immenserespect for, Harvey Hine of Hmh
architecture, who I've doneseveral projects with, he was
(25:54):
actually on my podcast, and wetalked about something similar,
and his response was that at theend of the day, we all hear what
we want to hear. And when youthink that in business, in order
for you know, you asked, Howdoes this happen? Saying no to
people is inherently harder thanjust being in the business of
saying yes. And I think that fartoo often, it's easier for
(26:18):
people to kick the can down theline in terms of like, well,
yes, you can have thisadditional wing with four
bathrooms in it. Why? Yes,somebody may or may not know
that that's going to just blowbudgets out of the water, or the
original, you know, set price ofeverything, but the far too
often it's left to thecontractor to be the one to
articulate. Well, this is not analignment with the expectations
(26:40):
that we set. If we want that, wehave to shift the goal post,
like you said, but somebodyshould have told you that the
second it came out of somebody'smouth. And when that doesn't
happen, I think it's really easyfor people to become emotionally
attached to things. And I meanthat right there is actually an
articulation of why we're costplus, not fixed price, like I we
utilize Procore as a projectmanagement software, and so we
(27:03):
actually approach ourdocumentation methods as if it's
fixed price, even though we'recost plus. The reason I'm cost
plus is because of theinherently emotional journey
that is residentialconstruction, like there is no
way around that. And you know, Ithink the better we can
recognize that people have theseemotional connections to their
(27:24):
home, to the biggest investmentof their life. You also then
realize that there's going to bethese moments where logic gets
separated from, you know, theactual process itself, or the
decision making,totally, totally I am. I think
that's probably the biggesttakeaway. I mean, do you have
that like, SOP out in your team?
(27:45):
Like, I imagine, just like aclient working with a project
manager, and they're like, doinga site walk, and they're like,
Well, Becky, you know, she hadher, you know, glass of red the
other night she was onPinterest. She was looking at
this and X, Y and Z, and she sawthis on Instagram. And we'd
really like to do this. Like, isthe SOP for the project manager
to be like, we can 1,000% havethat conversation. Let's go over
(28:07):
budget. Let's go over what wehad discussed initially. Let's
do it is that a part of yourmove? Is that ridiculous to bake
in? How do you do it?
So it's actually fascinatingthat you bring this up. I was
meeting with some prospectivearchitects on one of our job
sites yesterday, and we werejust talking about pain points.
And one of the biggest painpoints that they said is that
they have a client currentlycomplaining that the budgets
just gone up so much. And it wasliterally this exact same
(28:29):
situation. Well, it's like,well, yeah, was she drinking Red
or white? Who knows, it mighthave been what I heard. It might
have been both, but I so thesystem that I have set up and
within Procore is that we haveseparated budget changes from
change orders. A change order isa change in scope. A budget
(28:49):
change is a change in myestimated cost to complete an
asserted scope of work. So inother words, when I if I think
that, hey, we're building, let'sjust say the cost to install
these cabinets. If I think that,for some reason, the exact same
scope of work, the cost went up,for some reason, I would
(29:10):
articulate that as being abudget change. It's a change in
the estimated cost ofcompletion. But now if you add,
you know, 14 walnut cabinets onthe other wall, I will do that
in a signed change order to theclient. And what that actually
does for me within the budgetsis it's separate. It gives me
two separate columns, and itgoes owner asserted change scope
(29:33):
changes shows up as signedchange orders, and then budget
changes, which I'm able toarticulate as changes in
estimated cost of Completion isa completely separate column,
and that's the column that Iactually care about. And I am
constantly trying to have thePMs superintendents myself at
every single meeting, they needto be pointing out that column
(29:54):
as being separate from the othercolumn, and because what that's
going to do is create a sense ofresponsibility. Right, and that,
hey, I'm responsible for thiscolumn. It is my job and my
responsibility to inform you ofyour responsibility towards that
other column. Totally.
Okay, so by separating iteffectively into like a customer
change and a builder change,yeah, gives you the option, and
(30:17):
then, so you're focusing mainlyon the budget, on the builder
Change column.
Well, what I want to articulateto the client is that I can
control that. Yeah, you can'thave the expectation that, like,
you're not paying me to controlyou. I can, you know, inform
you, yeah, as well as possible.
But I don't think that you wantme telling you what to do. Truth
be told, I have had clients thatliterally do want that. But at
the end of the day, if they wantthat, and they sign the change
(30:41):
order and they want to pay forit, that is completely their
prerogative. I just want to makesure that they have the
information and an accurateexpectation in order to do that
from an informed positionTotally. I mean, this is like
getting into a path of, like,tracking financials effectively.
I mean that to me, sounds likethe backbone of being able to
(31:04):
run solid pre construction.
Oh, 100% it's all about datacapture. All about it, because
without the data capture, Idon't have the informed
perspective for myself toarticulate expectation to
clients. And so that's actuallythe workflow, though, is that I
(31:24):
have to have it, that everysingle piece of the company is
our is capturing their data in away that I can then track it to
what is the change event or thedeliverable driving that cost?
Because if I can't do that in avery like digestible way, like,
like, you know, I need a datascience degree, not an economics
one.
Totally, totally well. And Ithink I was, I was doing another
(31:48):
podcast with a builder out ofLincoln Nebraska, and the he
brought up very similarconversation. His was along the
lines of, like, they were doing,like an addition right on a
house or something. And thenthey needed, like, the client
was obviously living there. Itwas, like, a renovation
addition. And they're like, hey,like, you're already here. Like,
we actually need to do stairs upto our deck. Like, can you do
(32:09):
that? And he was just, like, onthe job site said, like, yep, of
course, sure. And then he, afterhe'd agreed to it, he had gone
back and he had looked, and hewas like, that's actually
chewing through, like, asignificant amount of margin
that, like, I just, like,totally, just charitably handed
over. Yeah, right. And it'slike, without this information,
without the data, withouttracking it, that's where you
(32:31):
can go sideways on pre con. Youcan have all the conversations
and expectations setting in theworld, but if you're not
reviewing what's actuallyhappening, it can be a cluster.
Well, to bring this back to preconstruction, being an
educational platform as well, wego over in some of the
documentation we provide. So inProcore, specifically, there's
(32:53):
cost R OMS range of magnitude.
We educate them as to what weset forth to you on a change
order is a range of magnitudeexpectation. In other words, we
this is what we are asserting.
We think it is going to cost.
But in these incrediblycomplicated projects, how am I
supposed to articulate to youthe critical path effect, 17
line, you know, schedule lineitems down the road, like we
(33:16):
just don't know. And so what I'mgoing to do is I'm going to take
certain factors from historicaldata try to set an expectation
for you, and that's going to bethe ROM that number can still go
up or down, because if you starthaving people treating that as a
fixed number, you might as wellbe fixed cost, and probably
going to give a different marginto begin with.
(33:37):
Totally, totally. I think that'sthat that range of magnitude is
important. And that's where,like, even when you start
talking about change orders,again, I keep reverting back to
all these like, episodes we'vedone, but there's a builder was
like, Well, how do you even,like, how do you even price out
a change order when you're like,thinking about, Okay, well, it's
not only just, like, here's thecost of the material, here's
where I think the cost of thelabor is. We're talking about
(33:59):
schedule shifts, we're talkingabout supply chain, we're
talking about, like, admineffort to go through all these
processes, like, there's so manythings that go into it, so it's
like that range of magnitudeseffectively insulating you there
is that fair? Oh, yeah, it'sincredibly so, because I think
it's impossible to give accuratepricing expectations on any
change order, because you know,you just don't know. You
(34:22):
probably have a limited accuracyto put these numbers to begin
with. It is an estimated numberfrom the beginning, and when
you're doing it on the fly, outof order, out of sequence, in
these, you know, inherently oneoff projects. You know, I tell
people I could just, you know,multiply this number by three
(34:43):
and tell you that, but, like, Idon't know if that's going to do
anyone any benefit. And so, youknow, I hate change orders. I
wish that they weren't a part ofany project. Inevitably, there's
always change orders, always.
But the thing that I tried to,you know, and. Again in the pre
construction process, I wantevery single decision on this
(35:03):
project made before we startconstruction. And the truth is
that that bar isn't hit on manyprojects, but I have been able
to shift the needle way closerthan we used to be. But the way
that I motivate the clients toactually advocate within the
design development process forthat to happen is that I tell
(35:23):
them that, hey, if we design forthis right now, the cost of it,
let's assume to be x if the dayafter construction starts, if we
add that in, while you might notthink it's a big deal, you
should assume that as every likemagnitude of time progresses
beyond it's going to go from1.2x 1.6x 2.1x 2.1x and I can
show you data set after data setafter data set of, hey, for us
(35:44):
to do this simple, you know,regular detail over here at the
beginning, it costs this. Andnow, for some reason, we added
it because we couldn't make thisdetail work on the trim. Now
it's going to cost 2x and so ifyou don't want it to cost 2x we
need to advocate for that designto be developed right now and as
soon as people understand thatthere's that price Delta
(36:04):
associated with it, it's theydon't look at as me being just
annoying, wanting to do it myway. It's me advocating for them
that needs bookmarked for allthe listeners out here,
explaining it to the client,that if we aren't making these
decisions today you are going tohave a more expensive project,
it is the biggest indicator of asuccessful project, bar none.
(36:29):
And because, how am I supposedto set expectations on an
incomplete set of informationnumber one? And you know, I said
my ability to deliver on a setof expectations is what
determines outcome of theproject as a whole. And so if
you're constantly moving thatgoal post from day one, that's
that's a model that's very hardto succeed in. And I think
(36:51):
advocating for that in a waythat informs the clients. It's
actually not you just advocatingfor how I do things, it's me
advocating for them to succeed.
That's totally, that's theprocess. Totally.
This is killer, real quick. I dowant to talk about the post
initially, because I think, likewhen, especially when it comes
(37:13):
to pre con, we've been talkingabout, all about, like, GC,
client, recon, what is yourpoint of view on GC,
subcontractor, vendor, pre con?
So we literally articulate topeople, you know, we've,
especially since I've beenhosting some marketing events
(37:37):
and developing a little bit ofa, I call it like a maker
community here in the frontrange. Love it. I've had more
and more trades like reachingout to us, and I simply set the
expectation that the trades wealign with best require
participation in the preconstruction process. It is a
non negotiable for us. It is wewant to pay you for your time.
(37:59):
We have it in the budgetsalready that you will be paid
for your time. And it's reallyinteresting too, because a lot
of people like, Oh no, we'll dolike, you know, no worries. No
worries. No. That's not theproduct I want. I want the
product that we pay for, becauseI want you to actually invest
your time and energy into it.
And so I think what, in turn,that actually means for the
subs, a lot of times, is theyhave to be organized. They have
(38:20):
to be able to articulate what'sdriving their costs and whatnot.
I have a framer right now who Iwill give him a shout out,
raising sons construction. He isa really, really good trade
partner, and the truth of thematter is that he's learning on
how to have a high level ofdelivery. He is learning how to
(38:40):
bring value to me as a GC. AndI've said to him time and time
again, you know, when he doesn'tknow how to do something or how
much time it's going to take,because maybe it's a little bit
unique, like, you know,currently we're doing a double
stock construction with aservice cavity, and then half
the house is engineered LSL. Theother half is dimensional
number. And I want the LSL andall these articulate these
(39:02):
articulated places so that wecan, you know, value engineer at
the drywall and things likethat. If he doesn't know that,
tell me that. And what we willdo is sit down together, work
through the drawings, createexpectations on time as a
measurement, and then haveallowances so that he makes sure
that he's covered. And then thenext one, if he wants to
articulate, is a fixed number orsomething like that, but like,
(39:24):
Let's capture the numberstogether. That's how we succeed.
And it's the trade partners thatgo, yes, let's do that, that we
want to be teaming up with.
What do you tell the builderthat tells you that's
impossible, that takes way toomuch time. There's no way we
could do that with our trades.
(39:45):
Hold my beer. Hold my beer.
I'm just saying I'm like, itmakes so much sense that that is
bettering the community, right?
I that it's not just sittinghere and be like, There's no one
I ever can do the goddamn work.
Anymore. No one wants to everwork. No one has the skills.
Blah blah. It's like, Well,dude, you know what you want,
(40:05):
right? You want the LSL and theexposed and the value
engineered. I'm not that guy,but you are right. You know it.
And if you're working withsomeone who's got the
fundamental skill that you'rebuilding a relationship with
that you believe can do it, youwant to build that relationship
for that conversation to be had,and now you are effectively
building up a subcontractorthat's going to be more valuable
(40:26):
for you in the future, becausethis time spent has been
educating them to deliver thework you want to
deliver. I want them to makemoney. I want them to make a
fair, honest amount of moneywhere they go. Wow. You know
what? When we're on a front Hillproject? We know we're going to
make our money. We know it'sgoing to be lower stress,
because we're going to beprepared. It's not going to be
(40:47):
these fire drills all the timeand things like that. We are
going to know that if it's we'vearticulated a scope of work that
we won't have to have thesearguments as to is, hey, is this
a change order? Is this notwe've already done that work,
that confidence factor meansthat, you know, when we advocate
for them, we also have thisexpectation that they then
(41:09):
advocate for us, because, youknow, we need their help, and we
are at the mercy of theirability to deliver. And it's
incredibly, incrediblyimportant. Because the other end
of that too is I actually get, Ithink, more annoyed when new
trade part or potential tradepartners will come in and say,
just toss out a giant number,because they just looked at it,
(41:32):
and they're like, Wow, this iscomplicated, and things like
that. And I know it could costthat, but that's actually not
the product that I'm selling.
I'm selling that we are going toset as realistic an expectation
as to what it's going to cost,and then articulate the risk
associated with it, so that Ican inform the design being
developed, and they can maximizetheir dollar being spent how the
(41:52):
client best sees. Because if wejust, you know, say the trim
budget, we look at him like,wow, this is crazy complicated.
We haven't really thought itthrough. We're going to say
three going to say $350,000budget. But now maybe they don't
go for the same lighting detailsthat they would have otherwise.
And now it's like, Well, hey, wejust developed a more efficient
(42:13):
way of doing this. The budget'snow are 250 they could have had
that. And now that's a changeorder which is going against the
product that I am selling to theclient. So it is really, really
important that I, you know, intruth be told, I don't hold that
against a lot of trade partners,because I don't think that they
have that experience on a repeatbasis always. You know, if they
don't say that big number, thenthey're constantly trying to
(42:35):
have somebody else drive theirnumber down, drive the number
down, and then they get down tothat 250, or whatever it is,
inevitably, and that inevitably,and that's not the model that we
take. So I have to takeresponsibility and inform them
of that so that they feelconfident in telling me a more
accurate number. But it's like,hey, if I'm selling the client
that we are going to do pricingexercises to maximize your
(42:57):
dollar being spent within thedesign that has to start with my
trade partners. It has tototally, totally. I thought this
is a great episode, Alex. Therewere several massive takeaways
for the audience. Two things.
(43:18):
First, is there anything elseregarding pre con that we may
not have talked about, or do youthink is, like massively
important in terms of howbuilders view and execute pre
construction.
I think the other side of itthat I actually, I would say,
spend the equal amount of timethinking about is how to make it
(43:38):
a value add to the design teamsand educating the the design
professionals in the area. And Ithink that's inevitably in the
high, high end markets, a knownthing, but I think it's slowly
trickling down, and probably tooslow at that, but that's the
only thing I did.
So educating the design sideeffectively, what I'm thinking
(44:01):
is, and how I maybe lesspolitically correct, say it is
like you could design one thing,but then the actual execution of
building it is completely adifferent thing.
Yeah, yeah. And also, I equateit to what if somebody could
design in a way that they knewit was always realistic and you
(44:21):
weren't constantly having to goone step forward, two steps
back, two steps forward, onestep back. What if it was a more
linear process? Would that makea design team more professional?
Would that increase your abilityto deliver on the expectations
that you're setting? Because ifso, I can help you do that. I
have these standard operatingprocedures. I have these data
sets that we capture that can dothose pricing exercises as a
(44:44):
relatively small investment likeyes, of course, we charge for
it, but it is not going to blowthe design development budgets
out of the water or anythinglike that. It's just simply
meant to be a value add where wecan help inform your process.
Totally. I love it. That'sgreat. The second. Piece of my
question, where do builders findyou so they can follow you along
(45:05):
and get more? Alex content,yeah, so on Instagram, built by
Fern Hill is the tag name isalmost called handle.
I think they're called handle,okay, yeah, should know, yeah.
YouTube, I learned it like a fewweeks ago.
Yeah, I am getting a crashcourse and all this media stuff.
Yeah, we are launching theYouTube channel here that's in
(45:28):
the works that will be built byFern Hill as well. I also have a
podcast called the buildproject, where I the big
component of that is just tryingto really create a community of
makers and articulating theperspective of not only local
architects, but also, I say thisa bunch that I a big goal of
mine is to also interview thepeople sweeping floors on our
(45:51):
projects, because they have someelement of value that would only
elevate the end project. And Ithink that the stories all of us
have the trajectory that makesthese beautiful homes, makes
these beautiful spaces, is justsuch an important human element.
And so the build project, that'smy podcast.
And, yeah, okay, beautiful. SoInstagram. And so my Fern Hill,
(46:17):
built by Fern Hill, builtby Fern Hill, B, U, I, L, T, by
Fernhill. F, E, R, N, H, I, l,o, love it.
Podcast, the build project, thebuild project. And there's a
third one.
YouTube is built by Fern Hill aswell. LinkedIn is Alex
mulcentine, and then also FernHill construction.
(46:37):
He's all over the place. If youguys need to follow. Alex, just
DM me. I'd happy to get you intouch. But no, Alex, this was,
this was great. Your wealth ofknowledge, dude, very, very well
spoken. A lot of really tacticaltakeaways
here. Well, I'm excited tointerview you now. So, dude, I
don'tknow how that's gonna work. I've
done several podcasts. You mightI feel like I might be a tough
(47:00):
guess. You might have to do somedo some some digging, some
discovery, but no, I'm superexcited to jump on your show.
I'm an open book. Appreciate it,man, cool dude. Well, I'll let
you get back to it. Appreciatetaking the time.
Sounds good? All right, see ya.
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