Transcript: Disrupting Ourselves in the Built Environment: BuildSort

Just seeing so much waste in the industry, discovery costs people thousands and thousands of dollars. So I know that there's a lot of people that would like to buy my data, that's in the BIM model, would like to have that, so they can do the shop drawings. However, they're having to rebuild their own models, so that's costing them time and money. And there's also this contractual separation between us and MEP, that's with architecture, and those fabricators and steel schedulers. When they are appointed, I don't even know who they are.

So I have no means to be able to approach them and say, hey, I've got this model, why don't I sell that to you? Fabricators, materials suppliers, they all want this data. They have no way of performing just-in-time manufacturing. For those that don't know what just-in-time manufacturing is, it was invented by Toyota, and they would just make the parts just as they needed them. However, with construction, we can't do this.

We can't do this unless there is someone out there aggregating all of this data together of how many bricks of a certain type of brick, or how many universal beams are needed. So there's all of these problems. We can't get that information to them. Now, these manufacturers can save so much money by implementing just-in-time. So there was a study in America, and they reduced 50% of their employment costs, and 70% of their storage costs by just implementing just-in-time.

So a lot of industries that are missing out of these advances in BIM, because there's no way to get the information from us to them. I think lean principles in BIM and blockchain are the technologies that we need to bring together to make that happen. To put everything onto a blockchain is the future. Hello, and welcome to The Constructor Podcast, the best way to build it, episode number 84. I'm your host, Brittany Campbell-Turner, and this podcast is dedicated to helping property owners have certainty in their decisions about their construction projects.

We talk about fostering trusting relationships help you to understand how to lower risk, be under budget and on schedule, and most importantly, exceed your end user's desires. Last week, we spoke a little bit about how we should be able to support our industry by working on it from within, doing this by disrupting it, and by taking on the challenge ourselves to align ourselves with technological solutions. So last week, we kicked it off by speaking with Michael Carr, who was the president of MoCA, M-O-C-A, the software division called TouchPlan.

We actually started that conversation by honing in on the benefits of using the last planner system, which allows for project teams to establish the project schedule together, collaboratively determining the project path and keeping each other accountable throughout the entirety of the project. We talk about how TouchPlan can support that process, taking a step to digitizing lean. If you haven't listened to that episode yet, check it out at constructor.com slash EP83. So we'll continue this conversation about how to disrupt from within by talking with our guest for today, Chris Dorian.

Chris is the CEO and founder at BuildSort, where BuildSort is a blockchain technology that assists with building and construction to support supply chain, documentation, project management metrics, in addition to integration with BIM. In episode 57, Kimono Numa talks about creating agility and efficiency by using architecture as a platform. That episode, found at constructor.com slash EP57, is very useful to understand what BuildSort provides. Building architects and engineers are using building information modeling. However, there's a lot of rework in the system in order for the data in that model to be useful.

The general contractor, trays, and suppliers often work together to rebuild, review, and approve usable BIM models for their scope of work. If companies were able to sell the data back and forth with one another on a platform, it would reduce the amount of rework in the industry, and that's what BuildSort provides. With this out-of-box thinking, BuildSort has won some awards. BuildSort recently was part of an incubator from the Blockchain Center, actually run out of Melbourne in Australia, where they won the top prize for the best blockchain solution.

Also, they won the Westpac business of tomorrow, where BuildSort was one of the 200 that was awarded most innovative companies in Australia. Last but not least, they were runner-up, start-up of the year, in the Australian Industry Technology Awards. With that, let's get into the interview. Today, we are talking with Chris Dorian. He is the CEO and founder at BuildSort, where BuildSort is a blockchain technology.

And BuildSort assists with building and construction in order to support supply chain, documentation, project management metrics, and what I find most interesting, integration with BIM. So, we're going to dig into the details of BuildSort, but first, let me welcome our guest, Chris. Chris, welcome to the podcast. Hi Brittany, how are you? I'm good.

Happy to have you here. Just to share with the audience a little bit, tell us about how you've even entered into the construction industry, what got you excited about it, and what keeps you going. Well, I probably started with playing with Lego as a kid. However, that moved on to becoming an engineer later on in life. Before university, I actually worked on building sites as well.

I became an engineer. I've worked around the world. I've worked in the Caribbean, UK. I'm in Australia now. I've even done some projects in India.

I had a bit of experience moving around and seeing what the differences are around the world and the way they do things. That's always kept me interested in the construction game and always wanting to drive things forward. That's probably been my driving passion. Just seeing so much waste in the industry. I really like the ideas of Lean Principles.

You and me both. Chris, thanks for sharing a little bit about your engineering experience and the fact that you've been able to travel around the world. You mentioned you were in the UK, so it sounds like you're likely familiar with the British Standards Institute, PAS 1192, BIM regulations. And like you mentioned, you're seeing where the industry is going, more adoption of Lean, and technology as well. It is an exciting time, and I'm hearing more and more that lots of people are really excited about this industry.

We have so much opportunity right now. If you look at the industry, we haven't really come forward in productivity since the 1950s. And that is because basically the industry is so disjointed. There's a lot of contractual separation between people. We really want to make sure that we can put an impact in there and make some changes to that, incentivize people to not do those things.

That's our driving factor. I think Lean Principles and BIM and blockchain are the technologies that we need to bring together to make that happen. I'm so glad you see it, as I've been seeing this for the past 10 months and just trying to have more and more conversations with people who are seeing the same things. But you're actually in the works of building a product. I'm going to ask you, did you think you would ever end up in the software space, having worked as a structural engineer?

I probably always wanted to do something with computers. I think it was my father that convinced me to get into the building game and convinced me to become an engineer. You'd just be sitting in front of a computer all day, looking at the computer, which I'm kind of doing as a design engineer anyway. How did you learn about blockchain? I've been following Bitcoin for a long time.

I always knew that that was going to be a big thing. It's probably not the final technology, but I like the idea of trustless system. And that is an amazing technology. It's really simple. However, it's got so much impact in everyone's lives just to be able to take all this doubt about what someone else is doing out of the system.

So when I saw that, I thought, this needs to go into construction because there's so many people that are ruining the system. There's litigation and all of those things and just discovery. If someone went into the litigation, just discovery costs people thousands and thousands of dollars. To put everything onto a blockchain is the leap forward. It's the future.

Yeah, I absolutely agree with you. And for me, it was one of those things where I see all these other industries picking up blockchain as a technology that is viable. And different companies are coming together and investing in research, lots and lots and lots of research, and coming up with very few case studies, but really understanding, okay, yeah, this thing should work where they're having their case studies built internally, right? And saying, okay, well, let's see how we can disrupt our own businesses. I had the same thought.

Why not this industry? We have so much information we're handing back and forth all the time. And there is a problem with trust. So this system that maintains an accurate record of data, it allows people to trust the record and therefore be able to have a better relationship with the people that they're working with. It's awesome that you saw that pretty readily as well.

Everyone started behaving better in Uber taxis as soon as they started rating us back. So similar kind of thing can happen in blockchain where if you can also rate people, we're not bringing that into BuildSort yet, but possibility that could come in sometime in the future. So you could see who the bad actors are in the industry. There's a lot of things that can happen. There's a lot of ways to incentivise people to do the right thing.

Generally, we'd hope to do that with payment rather than some kind of rating system because there could be some pushback in the community for that. Our blockchain is all about community. Well, you know what? Let me take it a step back. What is BuildSort?

Tell us a story of how BuildSort came about. Okay. I'm still practicing structural engineering. I run my own structural engineering practice here. And I've been doing BIM since we started our practice eight years ago.

Now that I thought, wow, this is going to be great. We're going to take over the market because we're the first doing this. And what I found out was that we were basically documenting a little bit slower than everyone else. And we weren't getting paid any extra fees for it. So I started trying to say to these clients, hey, we're using BIM.

It means there's going to be less problems when you get to solve it because we've worked out all the clashes before that happens. And if there was a clash, basically, you'd be paying my time while I'm on site to fix those clashes. So you're getting a better deal, but you're having to pay for it upfront. That didn't really wash too well with the clients. It really didn't help.

You know, there's got to be a better way. I thought, well, the industry probably catch up. And here we are eight years later and we're still the same problems. So I know that there's a lot of people that would like to buy my data. That's in the BIM model.

Now, that's not the client. The client won't pay for that. However, you know, there's reinforcement fixes. There's schedulers, there's steel fabricators that would like to have that. And so they can do the shop drawings.

However, they're having to rebuild their own models. So that's costing them time and money. And there's also this contractual separation between us and those fabricators and steel schedulers. When they are appointed, I don't even know who they are. So I have no means to be able to approach them and say, hey, I've got this model.

Why don't I sell that to you? You know, then you can use that for your fabrication. So there's no means to do that. That's not just with us. That's with MEP.

That's with architecture. So there's a lot of industries that are missing out of these advances in BIM because there's no way to get the information from us to them. So BuildSort is basically a data market. We have a platform. Instead of using your email and Dropbox, for instance, you put it all into BuildSort.

You transfer that information across to each other. There's basically a record of information where people can see what's going on. It's automatically updated as well. So with every change, it's taking care of all that document management. Basically, everyone can see what's going on.

And there's also a means for the builder to come on. And then they can put in their scheduling, so their project's Gantt charts. Then their subcontractors can come in and they can update what their program is looking like if we're a bit delayed by another project. So the builder can be notified of what's going on and their full program changes. Now, when we take both the BIM model and the scheduling and put them together, we get 4D, so 4D BIM, where we can look at time as well as space, the 3D model.

Then you can bring in 5D, so you can add the costs in there as well. So there would also be our invoicing and quote requests and all of those kind of things. Because when you get that information back, you will have 5D, so you can look at what's happening. And there's also a market there. People are getting paid to put this data on.

So people are getting paid to put their scheduling information on. People are getting paid to put their BIM model on. Because the people down the end, which is fabricators, materials suppliers, they all want this data. At the moment, they have no way of performing just-in-time manufacturing. For those that don't know what just-in-time manufacturing is, it was invented by the Toyota car company.

And they would just make the parts just as they needed them. However, with construction, we can't do this. We can't do this unless there is someone out there aggregating all of this data together of how many bricks of a certain type of brick or how many universal beams are needed. So there's all of these kind of problems. We can't get that information to them.

Now, these manufacturers can save so much money by implementing just-in-time. So there was a study in America, I think it's a car company, and they reduced 50% of their employment costs. And 70% of their storage costs by just implementing just-in-time. So there's some big benefits in there for those guys. However, just because it's going to reduce some employment there, there's going to be a lot more employment needed on the design side.

Because now these architects and engineers, they're having to produce these models up to a level of detail, much higher. So it probably takes about twice as long. However, they're going to get paid probably two to three times more than what they were getting paid before. So we've done some modelling on just a small two-storey house. Now, BuildSort's not just going to be for the residential industry.

It could be used for any type of construction. And we worked out basically you could get two to three times more these as an engineer or an architect. The incentive is there to put everything onto the system and sell it down the line. So get paid more. Basically integrating the whole community.

We've had some pushback as well saying, well, that wouldn't integrate with my system. However, we're working hard to make sure that it will integrate with basically everything, APIs. We've got waves of nicks in the dots. You didn't like our interface. You don't have to use it.

However, just get involved with the DHT and you can integrate with your existing systems as well. We're going to have a way to build DAPs on top of our system as well. So Chris, really quick, what is a DAP? Could you explain that to the audience? Okay, a distributed app is a DAP.

So basically, you could create an application which draws on all of this data that we've talked about. So maybe the material take off from the BIM model or the scheduling. You can push and pull data through all of these different components that we've got. So there's a lot of ideas that have been floated. It could be one to do a lodgement for building approvals process.

There's a lot of ideas around security of payments. I don't know if that's a problem in America, but there's been some legislation coming in in Australia where there's these project bank accounts where builders have to put their money in for every project into an account and they need to pay their subcontractors that way. Well, we have the same problem. You know, someone could build a DAP around that based on the local legislations. So we've also got a GIS component in our system as well.

So that's based off projects that we've done previously. In that project, we were checking planning permissions if a project would pass planning checks. So we've got this we've done previously, which we're going to plug into BuildSort. So that can really help those architects and engineers, developers early on in the process, be able to see when the builders get onto the site, they'll be able to see what services are in the ground and things like that. We're just pulling information from a lot of open data that's available and we can aggregate all that together in just one platform.

So you have to see all the messages, BIM models, all your files and GIS, basically all in one platform. This is a really multi-layered opportunity here. And I can understand why someone may be telling you like, hey, we don't want to integrate with your platform. It's too hard. It's too many things.

Because it is really just about every perspective of the project. But you have thought of it looks like most things that we're dealing with, which is great. I really like the aspect of fostering the incentivized culture. I'd love for you to tell us a little bit more about the tokenization and how that ties into this incentivized culture. Yeah, so the token would be around the data.

So we're buying and selling data between artists. And is with that a token or is that with the app? No, that would be a token. So this is performed on a blockchain. So basically, a architect would put in their data, BuildSort would buy that data.

We would turn that into a material takeoff. That material takeoff could be bought by builders and all of the subcontractors to start doing their estimation. That kind of goes for all of the design team and anyone that puts in data into the system. Now, that can all be bought by people down the line. Now, then those people down further down the line, so like the builder, they can start making a little bit more money to start paying that back as well.

So they can put their schedules, keeping up to date their Gantt charts of progress is on site. Now, then the material suppliers can access that data. So they now know what materials they need because they've got specifications from the BIM models and the time away from site when they're going to need them and what site. So they can start planning their material when they're going to need to start manufacturing all these materials. I can use that.

Now, there's also finance in here that could I would love to have the data as well, because there's invoice financing, you know, construction sometimes is up and down. Everyone needs to have a little bit of finance. Now, finance companies, fintech companies can come in here and buy this data as well, because they can start looking at the work in progress, how this company is tracking and finance based off that. Insurance companies will be able to buy this data and, you know, start looking probably on the current ones.

I'm not sure if they're probably advanced as some of the insure tech companies that are coming up. However, you could be able to look at a building model, look at the materials, what the risks has been sometime in the future. You know, those really work out what the premium should be based on a little bit more than when the last wiring of the house was done. So, yeah, I've been in to see insurance companies and they told me basically they work out the premiums based on when the house was built and last time the wiring was changed and no other data than that.

So there's probably a lot more that could be done in this space to, you know, Yeah. the risks on some people cheaper and those that probably need to be charged a little bit more because they've got dangerous cladding attached to the building or something like that, that could spontaneously combust. We can provide that data. Yeah, they can assess the risk properly. What I appreciate about the transference of data is that, say, for instance, we have a building that we've been able to share the BIM information on to an insurance company.

And this building we've had on built sort, for instance, what is this, 2018. And we're assessing insurance requirements in 2030. What's really great is that that data will be ready and in the platform and available for them to pull on and really identify what materials were in there, what the scheduling was like. If all the sub-trades are written into built sort, they will be able to know who those people are that worked on the building. And they would be able to, say, for instance, reach out to them.

And if there's a repair that needs to be made, they can have them speak to that. It sounds like there's this depository of data that if, say, one of these parties wants to buy that with a token, they can do that, which is really valuable. You can assess so much more and make better decisions and have so much more accuracy in how things are approached. Like you said, insurance, I mean, they use outdated information all the time. And this would be a great opportunity to true up how we're even coming about our data and our decisions these days.

That's right. Yeah. So the end of the project, we can hand over is a 6D model, because we have people like the trades using the built sort mobile smartphone app. And they can check RFID chips on the materials as they add them to the building. They're getting it paid to add that data into the system.

And, you know, at the end of project, you've got this BIM model, which has got all of the information of who installed it. So if there was ever a problem with the air conditioning, they pull up the actual trade, installed it. There's, you know, who the manufacturer was, what the warranty information is, you know, this model where people can just carry it themselves. Now, let's say they want to do some an extension to that sometime in the future. Add another floor to the building.

They can then sell that to the engineer that's going to come along later and do all of the calculations. There's a lot of things that can be done here. Very cool. Well, I want to dig in a little bit about the subject of BIM. I talked a little bit about the UK perspective of BIM in that there's a component that is governance and that there's a component that is technology.

And the two come together. And in an ideal world, BIM level three will work. And you talked about having information updated real time and available in built sort. Let's talk about how built sort could help with that process and getting there. Let's first talk about what level three is.

So level three is where everyone is working off the same BIM model. So architects and engineers and mechanical services and hydraulics, they're all working off one model. So that in itself becomes a problem because which platform do they do that on? How are they getting paid? Who owns the information?

That can all be a problem. Now, there's no real answers for that yet. But built sort could be that answer. So where everyone's getting paid for the information that they add, how they get paid is yet to be determined. That is really up to the community to work out.

However, we'll be a platform for that to happen. BIM level three is basically the mega. That's what everyone's aiming for. You know, that's the industry needs. That's what everyone down the line of design consultants need to have.

And that is what's going to really bring about the changes to the industry. Now, so for people that may not know about the construction industry, there's this group of people that come to consensus about what needs to go into a building. They don't trust each other. Now, to do that all into a 3D model and be working together could be a bit of problems. I'm not saying that it's going to happen right away.

There's probably a lot of cultural changes that need to happen. With the directors of architectural firms that I know right now, I can see a lot of pushback. They're probably going to be the ones that lead that charge. I think it's going to be the next generation before we see BIM level three. BIM level two.

I see the pushback too, Chris. I see, even when I ask about just utilization of the technology, similar to like how you said, there's no incentive for designers to use 3D modeling outside of the fact that they know they'll be more efficient. There's no desire to invest in BIM 3D modeling software anyway, as it stands, because they're not getting paid more for it. And then the question is, where's the intellectual property lying? Who owns it?

When you have BIM level three and everyone's contributing to it now, we're having this really highly collaborative space. How do you hold on to that? And do you need to? And then how are you paid for that? And what does that look like?

So I think these are very important discussions that we have to have before we can get there. But yeah, what were you going to say about BIM level two now? Yeah, so BIM level two is basically where we are now. And that is where everyone has their own model. You keep bringing in the latest version of the architectural drawing into your model and you do the flash detection and then you update it as it needs to be updated.

But you still have your own different models. What you were saying previously about the incentives, I probably shouldn't talk about that. At the moment, there is clients aren't willing to pay for their design or their project to be done in them. The design consultants are only paid up to a level where they have to do a building permit or a planning assessment. They're paid in stages.

They're not paid for a BIM model such. And then they're getting paid for the project management through the build as well. However, most of the time where we're from, that's done on hourly rates. So there's no incentive for them to do this clash detection. And there's all these problems.

When the clients that we have look at our fee proposals, they're comparing against some other consultants, not looking at the end model of what they're going to get because they don't get to see this 3D model. At the end of the day, you hand over 2D PDFs or printed paper. And that's what everyone else sees as well. So where is the BIM model? There's no incentive for these people to get paid to do this BIM model or hand it over.

So why would they? Unless they had another incentive to build it in a 3D model, which could be because other people will buy it internal to a software like BuildSort. It sounds like a very interesting incentivization approach. Yeah, so that's kind of where we've come from. We're also just the platform working together as well.

Day to day use of the BuildSort platform. I think we'll probably cut down on 20% of our time in administration. I just think about my daily tasks and I'm filing information coming in from my email. You know, we need to stick that onto our own document management system so that our internal team can see what is going on as well. So if you think about it, someone receives an attachment and an email and the rest of the team needs to know about it and they got distracted or they got a phone call.

They forget to do that and that might sit in their email box. And the rest of the team, it might be vital information. The rest of the team might be waiting on, so it could be time wasted by having a system where everyone's working off the same project number in BuildSort. So an architect sends to an engineer or the builder or whatever. This information is automatically filed on the receiver's end.

You don't need to file anything. It's just there. It shows up where it needs to be. It's already tagged by maybe this was a notice of delay or a variation request or something like that. All of this information can be tagged by the sender.

And then when it's received on the other end, it's automatically filed away where it needs to go. So let's talk a little bit about timeline. BuildSort is its own distributed ledger technology. It's not based on any existing protocol that's used today, like Bitcoin or Ethereum or anything like that right now. What does the timeline look like for the BuildSort product to be available?

OK, so we're looking at the end of the year to have our prototype up and running. We do, as in a working prototype, we have already done all of the front end development. We're just starting on the back end development just now. And if someone wanted to have a look at what we've got a working prototype with the front end, so we can show to investors and everyone. And that's the house version, right?

Yeah, so if anyone wanted to have a look at that, they could go to my LinkedIn profile. And I've got some screenshots there. That's up and running. Gantt charts are working. It's feeding the information to nowhere at the moment.

That's the part that we need to starting on the little bit of testing and things. We'll have it up and running by the end of the year. We've been talking to a fairly large international company that's got an office here in Perth. They're very keen to have a look at it and use it when it's ready. We've got a lot of interest from the material suppliers.

They're very interested in buying the data, had some interest from insurance companies, had some interest from finance companies. The interest is there, so we've tested the model. Who are you not hearing from that you'd like to get involved and get interested in the data? We probably need industry bodies. They wouldn't want the data.

However, we probably need to hear from industry bodies because we are looking at adding some governance into the system. And we think those industry bodies might be the people to help with that. Now, so governance, for those that don't know, I think EOS were the first to introduce this idea of governance and brought it around for a couple of reasons. That is basically everyone, they acknowledge that it will be hacked and they can reverse that. So we want to also be able to do that.

There's going to be disputes on smart contracts. Now, we don't think that we are going to worry about the disputes because generally these are localized disputes in a local community because that's where construction really happens. So there's already legal mechanisms there to take care of that. And then the last one is just keeping up to date with what the community wants. And that's probably where these industry bodies can really help out.

They're in touch with their members. The problem where people aren't listening to, we have forks in blockchains. So, you know, you've seen Bitcoin Cash come out of Bitcoin and Ethereum Classic come out of Ethereum because some part of the community didn't agree with what the other side said. And the result is there's a fork. Both sides of the community usually end up losing whenever there's a fork in a blockchain.

It drops in value and you get like these disputes. There's a lot of problems when that happens. So we just need to have everyone happy by introducing some governance. I mean, it's interesting that you said that gentleman by the name of Thomas Cox, who was able to speak to what the model looks like. And that's what EOS is based upon.

I think they just came out for use right now. If you guys want to learn a little bit more about what that governance looks like, basically that governing body to decide what happens and how things are verified and transacted. And then also how the blockchain will continue to work is exactly what Chris is talking about. I'll put that podcast in the show notes so that you guys can hear a little bit about DPOS. It's good to know what type of people you're looking for to get involved.

Industry bodies, any group of people who already have a focus on developing standards of that sort would be great contributors and that's good. Those who are listening to this podcast, if that's something you're interested in helping out with. Yeah, and we'd love to hear from architects, engineers, builders, material suppliers as well. So anyone who would like to buy data or even sell data, watch this space ready to be disrupted in the construction industry. The other thing I'm thinking about is people who are in the publication world, people who are always collecting data as well for reports and things of the like.

So that's just something I don't know if you've thought about that before, but that's definitely where a lot of data lies. People rely on huge publications. So just don't adopt there. Anyone who's listening. Since we know who you're looking to connect with, tell us how to connect with you, Chris.

What's the best way to contact you, reach you and learn more about BuildSort? Get onto our webpage at buildsort.com. We've got a form on there. We're whitelisting right now for our ICO, which is coming up. So please also jump onto that.

We're on Telegram. It's under BuildSort. You can reach out to me on my LinkedIn profile. That's Chris Dorian from BuildSort. Dorian, Chris on Twitter, or BuildSort on Twitter as well.

That's cool. We'll make sure to put it all in the show notes. I'm really looking forward to watching this space with you. Thank you, Chris. Thanks, Brittany.

Thanks for having me. If you want to learn more about Chris Dorian and BuildSort, check out the show notes at constructor.com slash EP 84. If you learned something valuable in this episode, share it with your friends and colleagues. You can also let me know if you enjoyed our discussion by connecting with me on Twitter at Brittany underscore CT or find me on LinkedIn. You can just email me too at Brittany at constructor.com.

That's B-R-I-T-T-A-N-I-E at constructrr.com. Next week, we will be speaking with Chao Sheng Shoreland, CEO of ShelterZoom. It's a blockchain based online offer solution to make offers for real estate online. It streamlines the process of making real estate offers, reducing paperwork and bringing greater openness and transparency about when offers have been made and the acceptance information. Making it available for MLSs to simply plug into.

Chao talks about how this solution will help buyers, sellers, landlords and tenants with the upfront offer process up to just prior to the legal documentation. She also talks about their plans to enable a global market. I look forward to sharing this interview with you guys next week. If you haven't already subscribed to this podcast, you can do so at your preferred podcast player. Please leave a review to show your support and let me know you're enjoying the podcast.

I look forward to talking with you next week.