Introducing Formwork Labs
A construction tech focused accelerator program powered by Brick & Mortar Ventures and Built Worlds. <3
I was admiring the old and refurbished parts of the Colosseum in Rome, Italy.
I like to think of the beginning of construction as the beginning of the use of concrete. Every concrete structure requires the use of formwork, which is used to support and mold poured concrete. One of the first known uses of formwork was in ancient Rome to build world-inspiring and still-standing structures such as the pantheon and the colosseum.
It is with that history in mind that we have named our new accelerator Formwork Labs, a program focused solely on the construction industry. Investment in construction technology companies have tripled to US$4.5B in 2021 from 20201 and more generalist investors are excited about this space. As the first and most active investor in the construction space, Brick & Mortar Ventures wanted to create an opportunity for industry professionals and seasoned construction technology entrepreneurs to support the expanding, yet still fledgling construction technology startup ecosystem.
We didn’t want to host another construction tech startup competition or publish a bunch of research papers. Although we realize startup competitions can be fun to participate in and the papers interesting to read and cite, we wanted to serve the industry in a bigger way by filling a glaring gap in the funding lifecycle: namely the inception and kickoff of companies. We want to show the construction industry and the investor community that we are serious by committing capital and resources to entrepreneurs at the earliest stage.
While we could teach you what a SAFE is or what product-market fit looks like, there are many other great programs and online resources that already cover these important, yet basic topics. Our accelerator program is built specifically for startups building technology for the construction industry and is curated based on Brick & Mortar Ventures’ experience investing in, working in, and analyzing the construction industry. We will guide the cohort through the earliest challenges of company setup and provide access to mentors and experienced entrepreneurs from our space.
As a construction industry veteran, I am proud of the increased interest in technology and innovation from those outside the industry. However, it has not been enough. There is a ton of opportunity in construction: it is a large market, with $10T in global spending, and there is significant room for technology development and application. Productivity and capital investment in construction remains low. Take President Biden’s Infrastructure Investment and Jobs Act for example; it touts US$500B allocated to infrastructure projects, yet only a mere US$100M (0.02%) will be allocated to construction technology over the next 5 years2. If you are interested in becoming an entrepreneur and don’t know where to begin, I will gladly point you in the direction of whitespace and explain many of the industry pain points in detail to you. I would also happily go over the nuances of the industry, such as geographical markets and contract types that affect GTM, sales, pricing, etc…
I see construction as a game of risk management with the goal of building something using temporary supply chains. This is what makes it so interesting and complex at the same time. There is a misconception that people in the construction industry are lazy and that there is a lack of energy to change—thanks to McKinsey Global Institute’s now infamous industry digitization index. The reality is that those in the industry do not have the opportunity. Most construction professionals want to be more productive, but are trapped by contracting methods, cultures, or organizations that make it hard to adopt new technology. Here are some characteristics of the construction industry to help you appreciate the challenges and opportunities:
Construction is a low margin (mostly less than 10%), services business
Construction is a competitive business and fees (mostly less than 5%) have continued to trend downwards for architects, engineers, and contractors
On any given project, there may be up to 200+ different companies working as consultants or contractors all needing access to differing amounts of information — collaboration is a challenge due to different tools that each company may use
Stay tuned for a future article providing more in-depth reviews of opportunities in the construction industry to help anyone who wants to pick up the mantle.
We want to support individuals who can become passionate to work on the problems of an industry that has been underserved for too long. This is a big opportunity that is only going to get bigger. There is already a shortage of homes and buildings and we need an even more sustainable built environment for our growing population. The inaugural cohort of Formwork Labs will be the foundational tech stack of tomorrow’s construction companies. I welcome you to join us on our journey to build better!
If you are interested in applying to join the first cohort of Formwork Labs, please click here.
https://www.constructiontechnology.media/news/investment-in-construction-tech-hits-record-levels/8016696.article
https://techcrunch.com/2022/03/15/infrastructure-bill-could-promote-lean-construction-via-data-capture/