Insider Insights: Philip Lorenzo of Rithm
A laser software scanning company CEO discusses enterprenurial success within AEC.
There’s a lot of talk about how it’s so hard to draw Millennial talent to the AEC industry. Why do you think that is?
The AEC industry is known to be an old school, traditional industry. Many Millennials are attracted to firms that focus on new technologies and innovative practices that constantly improve upon and redefine ways to do business. It pretty much matches how many Millennials perceive today’s world: an uncertain future and vastly increased competition that necessitates such a mindset to survive. The focus is less on stability and working at a company for decades to earn the “golden watch,” but rather great experience and upward mobility. There’s a generational conflict between Millennials that value technology and innovation and older generations who may place a higher value on experience and tenure.
As a Millennial, you not only were drawn to this industry, you were passionate about it and quickly started your own company. What is it that drew you in?
To be honest, I was destined to end up in it. My dad was a civil engineer and was part of a lot of interesting projects, like the Sears Tower. I started helping out with the family business when I was 12 doing CAD, so I was exposed to the industry at a very young age. I’m lucky—not that many people get that kind of opportunity.
What drove you to start your own company?
I worked in construction as a project engineer for a little while, but I really got drawn to the technological aspects of the building process in terms of making something that won’t just make one project better, but producing something that can scale and benefit the entire industry.
So I started making plugins! When I was tasked with tedious work, I picked up the right coding language and automated it. In one case, what took me 40 hours before took only two hours with a custom plugin. In the construction industry, man, margins are so tight. Anything you can do to get that extra edge is hugely valuable—it could be the difference between making a profit or not.
I got a lot of recognition within my previous company for helping to make things more efficient on our projects. But in the end, one of the reasons why I left the general contractor side to do technology was because there wasn’t actually a clearly defined career path for me that allowed me to do what I loved— create software—and it’s hard for a non-software company to place value on such non-traditional skills. There’s a huge need for it in the AEC industry, though—people who have both experience in the workflows and the technical chops to build the tools can make a big difference in the current construction climate.
There are a lot of laser scanning software companies out there—what make Rithm unique?
Other laser scanning software companies are focused on modeling. We create tools for people who might not have any idea what scanning is to be able to know, “How is my building being constructed?” People go to Rithm because they want to reduce the risk on their projects. They use our software, and they might catch a $20,000 problem from overestimating a concrete pour. They use us to monitor ground or horizontal movement across time. They use us to comply with ASTM, ACI, ADA, stair building code, and many more down the line. There are no other companies that focus completely on tools for creating such construction deliverables, direct from raw data into something that a project manager or superintendent can start consuming immediately.
Well, you must be doing something right. When Rithm was announced at AECX, you got a ton of applause.
I appreciate that! We’ve spent a lot of time building our brand. I actually got some advice from Richard Lee, Bluebeam CEO, about two years ago. I asked him what was one of the biggest reasons for Bluebeam’s growth in the industry, and he said that marketing and branding were always top priorities.
I’ve been honored to have some people describe Rithm as the Tesla of the AEC industry; we’re trying to rapidly change the way that people do things. We are setting trends and new standards, literally on the contract level. We pride ourselves on trying to pull the construction industry forward, as big and slow as it is.
To brand ourselves that way takes a lot of time and investment. We’ve trademarked something we call “The Minimum Variable Workflow,” which explores the fewest possible steps from field capture to a deliverable. We hope to continue to grow our reputation.
From a high level perspective, what do you see as your role in the industry?
I’m a workflow enabler. We take things that may have previously been unpractical and time-consuming, and automate it so that it is practical and rewarding.
But we don’t just want to create cool technology, we want to actually make things useful and accessible to the lowest common denominator. We want to change the way people build. We want to give people more control over the quality of their projects. Rithm’s role is to push the boundaries of what’s possible in terms of efficiency and visualization for quality control, making better decisions, and being able to be more proactive during the process.
What’s the most valuable piece of advice you got before starting your own business?
Don’t waste time creating a business plan, because the moment you talk to a customer, your plan is likely to be wrong, no matter how smart or experienced you think you are. There are just too many uncertainties and perspectives. So many people get stuck in the business planning phase and never get anywhere. You have to get out of the building and talk to potential end users; you can’t develop in a bubble. – Philip Lorenzo, Founder
Since I came from construction, I got a head start since I basically saw myself as an end user; but when launching a business, there’s still so much more to learn, and you can never stop learning. The successful companies never forget that.
Any advice for other AEC entrepreneurs?
1. Know the difference between what looks cool to develop, and what people will realistically use every day. People will pay for the value and the workflow, not the technology. Most people couldn’t care less about the technology.
2. From the get-go, think about how you’re going to make money. If you’re able to make money early on, then it proves what you’re doing provides real value. Otherwise you’re just volunteering. Simply getting people excited about your company isn’t enough; they need to put their money where their mouth is.
3. Understand the politics of the companies you’re selling to so you can demonstrate your value most effectively. A lot of people miss that and think that if they’re making something cool enough, it’ll sell, and they only end up getting some BIM managers excited. To really scale, you need to also get respect from non-tech folks like the superintendents and project managers.