The trouble with offsite

One of the drivers for next-generation BIM is the need to connect design to fabrication. But today’s BIM systems were never intended to do that. And while developing a tool that can handle ’loosey-goosey’ geometry is one thing, refining it to fabrication level is quite another. Plus, there seem to be big issues in getting offsite construction firms up and running and financially stable.

Rozmanith has seen this issue from all sides. “The AEC market is harder than the MCAD market, and if there’s one thing I’ve seen more than once, it’s that finance people will underestimate the scope of the problem,” he observes.

“They think it looks simple and then they will burn a lot of money and go out of business. We all watched Katerra burn through a billion dollars. It seems that firms entering this market think that having the manufacturing facility is the first step, when it is the last step.

You figure out everything before you go and build the manufacturing facility,” he says.

“I’ve talked with big firms that spent millions on building manufacturing facilities and six months later were saying ‘It’s not running very well, we need help.’ Then we came in, and they couldn’t even tell us what their processes were, because they hadn’t figured them out yet!

Unfortunately, he observes, construction companies get a one and a half times multiple of revenue as a valuation on the stock market, while a tech division can get a thirty times multiple on the stock market. “Offsite is seen as a way to say they have a tech division, because of that. It’s a really bad idea for construction companies to make software, because it’s not their core competence. A thirty times multiple of zero revenue is not really a very good outcome!”