Portfolio Company Q&A: Falkbuilt
In the latest installment of this series profiling RET portfolio companies and their executives, we talk to Mogens Smed, CEO of Falkbuilt.
What is the inefficiency in the real estate industry that makes Falkbuilt necessary?
Conventional construction is inherently inefficient. Think about long schedules waiting for different trades to come and go, giant waste bins onsite and tipping fees at the landfill. Half of all waste in North American landfills is from construction sites! And now, with supply chain issues and severe materials shortages, conventional construction is even more challenged. Why would you want to throw 30 percent of your hard-come-by materials in the garbage?
How do you solve that problem for the construction industry?
Falkbuilt’s offsite prefabrication solution, empowered by technology, solves these issues.
We manufacture digital components in a compact factory—super studs, digital horizontals and cladding—and ship them to jobsites all over the world for fast, clean installations. We virtually eliminate waste onsite, which makes working in occupied spaces much easier.
Our process, “Digital Component Construction,” shortens the construction schedule, is far more sustainable than conventional construction and vastly increases the efficiency of labor onsite, which is an added benefit in the worsening labor crunch.
We use fewer materials, have a warehouse full of inventory, provide quicker lead times, deliver incredible design response, acoustic performance, durability as well as speed of construction. And we’re cost competitive with conventional construction. Our total material, fabrication, overhead, freight and installation costs are less than half other prefab manufacturers. Further, the digital components we manufacture are designed for disassembly, so they are easily and quickly reconfigured when a client’s needs change.
We’re also the only prefab manufacturer that has a solution completely aligned with conventional construction. Our digital components and process emulate how trades work onsite. Skids of flat-packed components come off the truck in the order they’re needed onsite. It’s all very intuitive and instantly familiar to trades on the job site.
We use that same principle—working like you already do—in our technology platform, Echo, which exponentially empowers industry standard software in the cloud. Echo also frees offsite fabricators from the constraints of standardized solutions to provide customized solutions with much quicker lead times.
How does your technology differ from your competitors’?
Echo is the first end-to-end cloud computing communication tool in the construction industry. With Echo, designers and engineers use the same tools they’ve already invested in, like Autodesk’s Revit or Inventor (the platform is technology agnostic).
Echo collects and manages the project data throughout from early design development, to pre-construction, material order, fabrication, shipping and installation. Each stage of the project moves faster, saving hundreds—sometimes thousands—of hours and providing total clarity as to cost and schedule.
With Echo, for the first time, architecture and construction professionals can leverage prefab construction, save thousands of decision-making hours, gain pinpoint accuracy as well as the ability to customize any project, large or small.
No one else does this! Echo is the only AI cloud computing platform that fuses design, manufacturing and delivery and we are confident it will transform the massive, notoriously technology-hesitant, building construction industry.
There’s an old trope about real estate being slow to adopt technology? Do you think that is still an accurate characterization?
That has been true for a very long time, but that’s mostly because previous technologies did not respond to the industry in a way that supported their process, leaving them with tried and true “best practices” as their only alternative. In the last few years, we’re beginning to see that evolve. If you look at the market, billions and billions of dollars are being invested in technology innovations for the construction industry. Echo is poised to change the game.
What advice would you give to a young entrepreneur just starting out in rent tech or proptech?
Don’t waste any time worrying! Don’t worry about running out of money because you will! Besides, too much capital compromises the sense of urgency and moving at speed which is integral to building any business. Don’t worry about making mistakes because you will make many. Stay focused on your vision and accept there will be a multitude of challenges you have to overcome. As every entrepreneur knows in their bones, a challenge is an opportunity.
Churchill is credited with saying: “A pessimist sees the difficulty in every opportunity. An optimist sees the opportunity in every difficulty.” Successful entrepreneurs are realistic optimists! There is a mantra I subscribe to: “Any individual can make mistakes, but success only comes from a team of people!”
Our Falkbuilt/Echo experience is testimony to the value of a strong culture supported by a capable and committed team of people both at HQ and throughout our global distribution network.
What is one challenge about building a proptech company that you weren’t aware of five or ten years ago?
Covid-19! I can tell you growing a new company in the middle of a pandemic has been the hardest experience in my 50-plus year career working in both construction and technology.
What’s next for Falkbuilt?
We’re just ending our second fiscal year and we have 90+ Factory Direct Branches across North America, the Middle East and India. Falkbuilt and our Falkbuilt Branches have outperformed all expectations, thanks in large part to employing the incredible efficiency of our Echo technology across our operations.
In just a few years—and during a pandemic—Falkbuilt has grown from nine employees in an empty building to more than 400 “Falkers” in a fully implemented, very busy, 90,000-square-foot factory. We’re producing projects for clients around the world and across a range of vertical markets including commercial, retail and healthcare. We’ve just celebrated our 1000th successful project. And we’re just getting started. Echo technology is the backbone for building a scalable business model for Falkbuilt, and our greatest vision is seeing the technology have a major impact on the entire construction and fabrication industry!