Word on the Street: Issue 188

Shark Tank for the AE Industry Is Live in Miami This Week

We’re bringing Shark Tank for the AE Industry to the Southeast M&A and Business Symposium in Miami this week. The “Innovation Incubator for the AE Industry” will showcase five of the industry’s most exciting new start-ups and business ideas. The concept is based on the popular TV show Shark Tank (except these new businesses are focused on making a big splash in the design and construction industries and we don’t have anyone who goes by the moniker “Mr. Wonderful”).

The over 200 industry executives and investors in attendance will not only have the opportunity to see these start-ups make their pitches from the stage, they’ll also get to vote for which is the most likely to be a break-out success. (And, who knows, one or two attendees may choose to invest in or acquire one of these start-ups.)

We’re producing this new session in collaboration with our pals at Shadow Partners (Atlanta, GA), whose mission is to drive innovation for the built environment through education, community, and thought leadership. Shadow Partners is the sister firm of Shadow Ventures, a thematic venture capital firm that invests in seed-stage ConstructionTech and PropTech companies disrupting the built world.

Shadow Partners annually runs a pre-seed incubator for start-ups and corporate start-ups. In Miami this week, the “Innovation Incubator for the AE Industry”will provide a “Demo Day” opportunity for the incubator’s five most promising start-ups to present their business ideas to industry executives and investors. 

The five exciting start-ups that will be presenting in Miami are as follows:

1. Aren (https://aren.ai) Aging infrastructure poses safety risks and creates massive maintenance costs due to inefficient assessment methods.

Aren offers an AI-powered SaaS platform that transforms infrastructure inspections, optimizing maintenance spending while prioritizing safety. Its technology combines civil engineering expertise with advanced computer vision and deep learning algorithms. Aren’s target market is asset owners (e.g., municipalities, government agencies) and engineering firms responsible for maintaining critical infrastructure. The SaaS subscription model provides recurring revenue for Aren. Aren’s patented technology, deep learning expertise, and a focus on both safety and cost optimization set it apart from traditional inspection providers. Co-founders Ali Khaloo, Ph.D. and Edgar Martinez Ceja have deep expertise in structural engineering, robotics, computer vision, autonomous sensing, data interpretation, and artificial intelligence as well as significant business, engineering, and start-up experience.

2. HVAKR (https://hvakr.com) The HVAC design process for commercial buildings is slow, complex, and often relies on outdated tools, creating inefficiencies and knowledge gaps within engineering firms.

HVAKR provides a web-based platform powered by AI-assisted automation that streamlines HVAC design. Its intuitive interface and focus on education addresses both speed and knowledge transfer within engineering teams. HVAKR’s focus on modern workflows and collaborative design enables teams to rapidly prototype solutions and optimize results. The target market for HVAKR is commercial mechanical engineering firms involved in building design. The SaaS subscription model provides recurring revenue, and HVAKR’s focus on ease-of-use, modern interface, AI-driven features, and the ability to empower less experienced engineers sets it apart from legacy HVAC design solutions. Co-founders Davis Muxlow, Andrew Krippner, and Frank Thalakotur have extensive HVAC industry experience, and software development expertise informs HVAKR’s unique value proposition.

3. Brillist (https://brillist.com) Construction and manufacturing projects routinely run over budget and behind schedule, costing the industry billions annually.

Brillist offers a powerful, AI-powered project management software that uses advanced optimization algorithms to reduce project durations by weeks or months while saving significant costs. Brillist’s target market is proactive construction and manufacturing firms (contractors, developers, fabricators, engineering firms) seeking to increase profitability and gain a reputation for on-time, on-budget project delivery. The SaaS subscription with fees based on a percentage of customer cost savings (demonstrating ROI) is the basis of Brillist’s revenue model. Brillist’s unique AI-driven approach provides actionable insights and predictive analytics that set it apart from traditional solutions, addressing this massive cost overrun issue. Its proven track record in saving time and money provides a significant edge. Brillist co-founders Sheila Maithel and Sid Sharma are already transforming their existing software into a scalable SaaS platform to capture a larger share of its vast $197.5 billion TAM.

4. Phoenix iO (https://phoenixio.one) Engineering and construction firms waste time and resources pursuing proposals that are a poor fit, and they often miss critical risk factors that could jeopardize project success.

Phoenix iO’s software tool, PX iO, leverages advanced natural language processing (NLP) and machine learning algorithms to analyze RFPs. It rapidly identifies compatibility with a firm’s capabilities, flags potential risks, and suggests tailored proposal content, empowering better bid decisions. Phoenix iO’s target market is engineering and construction firms that regularly participate in proposal-driven projects. The SaaS subscription model provides recurring revenue, and PX iO’s intelligent RFP analysis offers a clear advantage over manual proposal review processes, saving time, minimizing project risk, and improving proposal win rates. Co-founders Omer Bozok, Atul Alatkar, and Clive Boulton bring a mix of deep expertise in the professional engineering marketplace, tech development, and go-to-market strategies to the development and execution of PX iO.

5. Ecobot (https://ecobot.com) The environmental permitting and monitoring process for land development is slow, complex, and suffers from a shortage of skilled labor, hindering projects and driving up costs.

Ecobot’s platform is a one-stop solution for environmental permitting and monitoring. It uses AI-powered analysis and intelligent automation to streamline consultant access, team formation, and compliance processes. Ecobot’s target market is AEC firms and their clients involved in land development projects. The Ecobot solution tackles labor shortages and process bottlenecks in environmental compliance. It increases efficiency, reduces timelines, and provides data for sustainable development decisions. This empowers firms to engage clients earlier in the process, increasing their competitive edge. Ecobot founder Lee Lance brings a mix of vast experience in environmental permitting with deep expertise in product-led growth and go-to-market strategy to the development and execution of Ecobot.

The “Innovation Incubator for the AE Industry” promises to be an engaging, entertaining, and enlightening addition to this year’s symposium. Registration for the symposium is currently closed. However, if you would like to attend, click here to be placed on the waitlist or e-mail Corinne McCanse, vice president of events and sponsorship at [email protected].

To connect with Mick Morrissey, email him at [email protected] or text him at 508.380.1868.

Bringing the Outside World In: Learning From Other Industries

Installment #1: MARKETING

AE firms contribute significantly to our world in too many ways to count. However, it’s essential to recognize that the industry doesn’t hold a monopoly on best business practices. Therefore, in the upcoming weeks, we’re excited to introduce a mini-series titled “Bringing the Outside World In,” where we’ll highlight various business strategies successfully used by other industries and demonstrate how they can be adapted for AE firms. In this inaugural installment, we delve into the dynamic realm of marketing beyond the AE industry. Take a look.

Influencer Marketing

Looking outside: Airbnb, a leading online marketplace for vacation rentals, effectively utilizes influencer marketing to promote its accommodations worldwide. The company collaborates with travel influencers on social media platforms to showcase unique listings and experiences. For example, Airbnb collaborated with travel influencer “WanderlustExplorer,” who has a large following on Instagram and YouTube. WanderlustExplorer created a series of posts and videos showcasing her stay at an Airbnb property in a scenic location. She shared her experience, including the unique amenities offered by the Airbnb host.

Bringing it inside: Similarly, AE firms can partner with influential figures in, say, the travel industry. For instance, a firm specializing in sustainable architecture could collaborate with a popular travel blogger known for advocating eco-friendly tourism practices.

Interactive Workshops and Demonstrations

Looking outside: The Exploratorium—a renowned museum of science, art, and human perception in San Francisco—hosts interactive workshops and demonstrations to engage visitors. They include hands-on tinkering workshops where participants can experiment with tools, materials, and simple machines to create their own inventions or explore scientific concepts as well as live science demonstrations conducted by museum educators or guest scientists.

Bringing it inside: AE firms can adapt this approach by organizing hands-on sessions and interactive demonstrations for clients. For example, a firm specializing in sustainable architecture could host a workshop where clients can participate in designing eco-friendly buildings using interactive software and models. By offering experiential learning opportunities, the firm can effectively showcase its expertise and innovative solutions, leading to better client engagement and understanding of complex design concepts.

Experiential Marketing

Looking outside: Red Bull, an energy drink company, is known for its experiential marketing campaigns that create memorable brand experiences. It organizes extreme sports events and sponsors activities that resonate with its target audience, effectively engaging consumers and strengthening brand loyalty. For example, Red Bull Flugtag is an annual event where participants build and pilot homemade flying machines off a platform into a body of water. Red Bull sponsors Flugtag events in various cities around the world, leveraging the viral nature of the event to generate brand exposure and engagement on social media platforms. Participants often dress in elaborate costumes and design their flying machines with Red Bull branding, further reinforcing the brand’s association with adventure and innovation. I have to say, it’s pretty funny.

Bringing it inside: AE firms can adopt a similar approach by organizing interactive events and installations. For instance, a firm specializing in urban planning could host a pop-up exhibit showcasing innovative city designs and interactive simulations. By offering hands-on experiences, the firm can engage potential clients and demonstrate its expertise in a dynamic and memorable way.

Customer Relationship Automation

Looking outside: Amazon, the e-commerce giant, utilizes customer relationship automation tools to personalize interactions and streamline sales processes. The company analyzes customer data to recommend products, send targeted email campaigns, and provide personalized customer support. For example, Amazon leverages customer data to send targeted email campaigns that are tailored to individual preferences and behaviors. You’ve probably experienced it yourself. Have you ever abandoned items in your shopping cart? If so, you may remember getting a personalized email reminder with a curated selection of recommended products similar to those you left behind. Additionally, Amazon utilizes email marketing automation to send promotional offers, product updates, and personalized recommendations based on recent purchases or browsing history. By delivering relevant and timely email communications, Amazon effectively engages customers, encourages repeat purchases, and drives conversions.

Bringing it inside: AE firms can implement similar automation systems to enhance client relationships. For example, a firm working on multiple projects for a client could use automated follow-up emails and personalized newsletters to keep clients informed and engaged throughout the project lifecycle. This sort of automation improves communication efficiency and strengthens client loyalty.

Sustainable Event Practices

Looking outside: Salesforce, a cloud-based software company, is known for its commitment to sustainability and environmental responsibility in its events. For Salesforce’s annual conference, Dreamforce, eco-friendly venue options are prioritized. For example, in 2019, Dreamforce was held at the Moscone Center in San Francisco, which has implemented various sustainability initiatives, including energy-efficient lighting, water conservation measures, and waste diversion programs.

Bringing it inside: AE firms can adopt similar practices when hosting industry events and conferences. For example, a firm organizing a sustainability summit could prioritize eco-friendly venue options, minimize paper waste through digital registration and event materials, and provide sustainable catering options. By aligning event practices with their expertise in sustainability, the firm can demonstrate its commitment to environmental responsibility and attract like-minded clients.

Collaborative Marketing Campaigns

Looking outside: TOMS, a footwear and apparel company, is known for its One for One® giving model, where for every product purchased, the company donates a pair of shoes or other essential items to those in need. TOMS often collaborates with non-profits and organizations aligned with its mission to raise awareness and drive social impact. For example, TOMS has collaborated with the United Nations Children’s Fund (UNICEF) on various initiatives aimed at improving the lives of children worldwide. For example, TOMS launched a limited-edition collection of shoes and accessories featuring designs inspired by UNICEF’s global programs. For each item sold from this collection, TOMS made a donation to UNICEF to support its efforts in providing essential resources and services to children in need. This collaboration raised awareness about UNICEF’s mission and enabled TOMS customers to contribute to meaningful social impact through their purchases.

Bringing it inside: AE firms can similarly partner with non-profits on initiatives aligned with their expertise and values. For instance, a firm specializing in green infrastructure could collaborate with an environmental advocacy group on a campaign promoting sustainable urban development. By joining forces, both parties can amplify their message, reach a wider audience, and contribute to positive social change.

Data Analytics for Targeted Marketing

Looking outside: Netflix, the well-known streaming entertainment service, utilizes data analytics to target specific customer segments with personalized recommendations and targeted marketing campaigns. The company analyzes user behavior and preferences to curate personalized content recommendations and optimize its marketing efforts. For example, Netflix uses data analytics to target specific customer segments with personalized marketing campaigns. It analyzes demographic data, viewing habits, and engagement metrics to identify segments of users who are more likely to be interested in a particular genre or type of content. Based on this analysis, Netflix can create targeted marketing campaigns tailored to the preferences and interests of each segment. If Netflix is promoting a new sci-fi series, for instance, it creates customized email campaigns, social media ads, and promotional content specifically designed to appeal to users who have previously shown interest in sci-fi content.

Bringing it inside: AE firms can leverage data analytics to identify and engage potential clients in their target markets. For example, a firm specializing in energy-efficient building design could analyze local market trends and demographic data to target property developers and facility managers interested in sustainable construction practices. By delivering targeted messaging and solutions, the firm can increase its conversion rates and market penetration.

By learning from other industries and adopting innovative marketing strategies, progressive AE firms can differentiate themselves, attract more select clients, and thrive in competitive markets. What will you bring inside?

The week after next, we’ll search outside the AE industry for winning human resources management strategies. In the meantime, for more on bringing outside marketing concepts into your firm’s strategic plan, call Mark Goodale at 508.254.3914 or email [email protected].

Market Snapshot: Population Data and Insights (Part 2)

Three weeks ago, we shared data and insights for changes in state population between 2020 and 2023 (click here to read it). On March 14, the U.S. Census Bureau released the latest population estimates for metropolitan statistical areas (MSAs). Our research team gathered a few highlights:

U.S. population in metropolitan areas: About 86% of the U.S. population (or 289 million out of 335 million) reside in metropolitan areas. This section of the population grew 0.53% between 2022 and 2023 as many large metro areas experienced less out-migration.

Percent change between 2022 and 2023: Four of the top five MSAs experiencing the highest percentage population growth were in Florida. 

Numeric change between 2022 and 2023: Texas has four MSAs among the top ten in numeric population growth.

Number of metro areas with growth above the U.S. average (0.53%) between 2022 and 2023 (highs and lows):

Top states:

• Florida: 21 of 22
• North Carolina: 14 of 15
• Georgia: 12 of 14
• Tennessee, Alabama, and South Carolina had at least six MSAs with above-average growth.

Bottom states:

• New York: 0 of 13
• California: 2 of 25
• Michigan: 1 of 15

Compound annual growth rate between 2020 and 2023 by MSA size:

MSAs with population below 350,000:

Top Five	Bottom Five
Wildwood-The Villages, FL	Lake Charles, LA
St George, UT	Houma-Bayou Cane-Thibodaux, LA
Punta Gorda, FL	Charleston, WV
Daphne-Fairhope-Foley, AL	Napa, CA
Hinesville, GA	Santa Cruz-Watsonville, CA

MSAs with population between 350,000 and 1 million:

Top Five	Bottom Five
Myrtle Beach-Conway-North Myrtle Beach, SC	New Orleans-Metairie, LA
Lakeland-Winter Haven, FL	Urban Honolulu, HI
Wilmington, NC	Shreveport-Bossier City, LA
Port St Lucie, FL	Huntington-Ashland, WV-KY-OH
Cape Coral-Fort Myers, FL	Salinas, CA

MSAs with population above 1 million:

Top Five	Bottom Five
Austin-Round Rock-San Marcos, TX	San Francisco-Oakland-Fremont, CA
Raleigh-Cary, NC	Los Angeles-Long Beach-Anaheim, CA
Jacksonville, FL	New York-Newark-Jersey City, NY-NJ
Dallas-Fort Worth-Arlington, TX	San Jose-Sunnyvale-Santa Clara, CA
San Antonio-New Braunfels, TX	Chicago-Naperville-Elgin, IL-IN

For the latest insights on U.S. regions and AE markets, check out our 2024 AE Market Intelligence Webinar. Click here to access recording and materials.

To learn more about market intelligence data and research services offered by Morrissey Goodale, schedule an intro call with Rafael Barbosa.

Weekly M&A Round Up

Domestic deal activity down 4%: Last week we reported eight additional domestic transactions, including deals made by three other firms on our “Nine Movers and Shakers to Watch in 2024“ list: NV5 (Hollywood, FL) (ENR #22), Verdantas (Dublin, OH) (ENR #149), and SAM Companies (Austin, TX) (ENR #88). You can check all the week’s M&A news here.