Designing a Service-Based Practice

A This episode of Practice Disrupted is supported by Monograph, the cloud based practice operation solution built for architects by architects. I'm Evelyn Lee. And I'm Janine Chastain. We're collaborating on curated conversations to explore how the industry is changing.

B Together, we'll find ways to create new solutions to current challenges while elevating the value of architects.

A Welcome to Practice Disrupted.

B Hi, listeners. Hi, Janine. Hi, Evelyn. Hi, listeners. This is the 2nd time we're bringing on today's guest to the show, to practice Disrupted. And that's because he has a really compelling story to tell about his journey as an entrepreneur. He started at SHOP Architects in New York and became one of the founders of CASE, which was later acquired by WeWork, and he is now the founder of Teal. Many know Dave's name and work, but we thought it would be interesting to go back to the point in his story where he started CASE and talk about what it means to run a service based practice.

A So some of our listeners will know what Caisse is and are familiar with them being acquired by WeWork in 2015. However, we're interested in really looking at the story of CASE prior to WeWork, and so that's a lot about what this interview will include. CASE was a building information and technology consultancy founded by 3 team members, Dave Fano, Federico Negro, and Steve Sanderson in 2008. They became a successful enterprise because they found a gap in the industry and were able to position themselves to help design firms develop and think about the technology supporting their projects. And this included everything from project consulting around BIM to strategic management consulting around technology as a whole, implementation, and software development. And Dave's gonna get into that in the interview, but, basically, this is a case study on CAES and the entrepreneurial side of how they identified a gap in the market and provided a solution that had a big influence on the industry.

B So here is David's more formal bio. David Fano, CEO of Teal, is a serial entrepreneur and architect by training. He has built his career by creating high growth teams. So we've already talked a little bit about how you founded the building information and technology consultancy case, which sold to WeWork. But his position that WeWork, he actually served as chief growth officer and increase the unicorn startup revenue 100% year over year for 4 years by growing the team by 2000%. In 2020, Dave launched his latest passion teal, which offers a collection of resources that puts career development back in the hands of individuals so they can pursue a fulfilling career. Let's cut to the interview. Just because there's been so much growth on the podcast since we last talked to you, Dave, can you give us a brief introduction of who you are, and then we'll jump into what is ultimately a case study on case?

C Well, thanks for having me. I'm Dave Fano. I'm trained as an architect. I like to throw in the trained, because I'm not sure I'm allowed to say I'm an architect. But I went to school for a very long time to be an architect, 7 years. I did 4 years of undergrad and then 3 years of a graduate degree in architecture. And, have yeah. Did the majority of my career in the building industry, then sort of slowly but surely transitioned it into 1 foot in technology and 1 foot in industry.

C And now I'm the CEO and founder of, what I would say, is a pure tech company that's focused on careers, which is nothing that I'm formally educated in, but something that I'm entirely passionate about. And, you know, I've tried to help people think through the transitions that I made because careers are unwinding and, you know, going from something like architecture because your parents tell you you're supposed to do that because it's a real job, and then figuring out that it's you know, my my passion was building and not buildings, and that's that's what I'm doing now. And a little bit about what I did sort of, along the way is right after graduate school, I had a a deep passion for technology in the built environment, and so I got to go work at a really incredible firm, Shop Architects, where I came in thinking I was gonna get to do a lot of digital fabrication, found myself being the 3 d visualization person, which I loved three d visualization when it was my projects, not when it was someone else's project. So found myself moving rugs and Photoshop, and I didn't enjoy that. And then started to take on other cool things like BIM and and Revit and helped the firm lead, their implementation. Met 2 really incredible people, Federico Negro and Steve Sanderson, who had been there doing a lot of the technology work.

A Mhmm.

C And, this was at the time when BIM was really growing and catching hold in in the industry. This is, like, 2007. Autodesk was making some big moves. They had just acquired Revit, and we saw kind of a demand in the market, for companies wanting to implement this. And so we started the process of creating a company called Case. The sort of less known thing is that the real impetus was that we wanted to create a product company called Who by You that was gonna be, like, the blue book for con for a digital blue book, not the Kelley blue book, but, like, the construction estimator's blue book. Uh-huh. And, but, you know, that we can talk about that another time that didn't end up doing as well.

C But this company, Case, did fairly well, and it was a consulting practice that helped companies in the building industry leverage technology. And then one of our big clients became WeWork, when it wasn't so big. I think we all know who WeWork is now. We were acquired by WeWork 3 years after the beginning of that relationship. It was about 7 years into case, and then I came in as an executive. Fed and Steve came in as very senior leaders in the company, and and we oversaw a lot of the growth there on the physical side and on the sales and marketing side. And I was chief growth officer at WeWork for 4 years and, and grew, you know, a pretty awesome team that got to do some really incredible things, like open, I don't know, like, 2,000,000 square feet of real estate a month. You know? And that we built a totally vertically integrated team that did that with architects, engineers, construction managers, procurement people, and then also salespeople all within 1 roof and launched the enterprise business, which tied to a lot of corporate real estate, and things like that.

C And then I I left in late April of of 2019. And, yeah, we had our 2nd child. I did paternity leave for a while then decided to leave and start a new company.

B Yeah. So one of the reasons that I actually wanted to bring you on to Practice Disrupted to talk about running a service firm is because if we think about the business model of architecture practices, we are, at heart, a service firm. And the interesting thing about CASE is that you're, you know, you're working with a lot of architects, but you're also working with a lot of, like, architecturally adjacent companies. Outside of identifying the problem, what did you inherently know about, like, how you wanted to create a company?

C So there was a big, like, inflection point in the history of Caisse, which was when we decided to shut down WhoBuy You. Mhmm. Because, really, the thing that we thought we'd all be doing in 12 to 18 months was WhoBuyYou full time. And Case was just kind of a temporary way for us to have complete control of our time, and focus on this other thing. And so I would say there was got a a pre and post who by UK's where we actually got super focused, and we're very deliberate about how to build that company and what it focused on. So I'd say, like, the 1st 2 years of case, I don't remember the how long they coexisted.

B Right.

C But it was it was much more reactionary. You know, we were, we were doing some things. Like, we had a blog called Design Reform. We're putting out a lot of content. So we were lucky to get some inbound, and, you know, we had been doing speaking at a lot of conferences, and we were able to draft off of the brand that we had built for ourselves, by working at shop and their incredible brand as a company and and how innovative they were. So we had a a fair amount of, enough, know, given how little we were, like, inbound work. And then also all of us taught, at different schools. And so at the very beginning, it really was around, like, educating firms and selling training, in a slightly different way.

A Mhmm.

C And then once we got deliberate about it, I'd say we started to have more thoughtful opinions on on what we were building. Yeah.

A It was interesting to hear you say that you guys started thinking about building a product service firm and then unintentionally shifted into this service driven firm. So when you started, what were the indicators that triggered the idea that you needed to shift towards service?

C So it was 2 totally different companies. We actually had 2 entities. One had investors, and the other one was just us, sort of bootstrapping and had clients that and and they were they had nothing to do with each other.

B I see.

C Literally, we each had 2 jobs. I had a primary focus on who buy you, Fed and Steve. You know, if we were, like, 70:30, I was 70:30. WhoBuy You? They were 70:30 case. And, you know, we kept trying and trying, and, eventually, WhoBuy You just didn't work. None of us had any experience building a consumer product company and a tech company at the time. You know, very it was very different to build a web based tech company in 2007 than it is today. Yep.

C You know? And I could build a version of that company today with, like, 10 no code tools. Know? Then we had to build everything from scratch and learn how to do that. And, so it was a very different time. So and now, you know, that's just hard, and we didn't have the experience. And we were doing 2 things, you know, so there's a lot of reasons for why that was tough. And then the thing that we naturally knew how to do and we're sort of, like, more naturally more prone to success was the thing that we had deep expertise in, which was technology implementation for the building industry. We had done it before. We were recognized for expertise.

C And so it was more so that we decided to shut WhoBuy You down when we said, hey. This thing isn't there. We have enough money to pay back our investors, which is super important to us. Had tried a couple different things, and we said, this is a distraction. Let's just try to do one thing really well.

B I think there's a lesson to be learned just from the necessity to focus.

C There was a lot there. I mean, you can only and I think architects I saw this a lot. You know, think, like, we can do this. We can start a furniture line, or we can, you know, license this other thing, or we can, you know because there's a lot of ideas in architecture firms. And but to actually make a business is hard and have a lot of different even within a single business, you could have different product lines. And so, you trying to give myself advice here because I generally struggle with focus is, you know, the more you can do one thing better, the higher likelihood that, you know, the market will take to it because you can, you know, speak to 1 value prop. It's not general in the way that you speak about what you do. You have to be comfortable for constraining yourself and constraining your narrative about who you are, which I think none of us like doing, like speaking about ourselves in this very limited way, but having a belief that there is this more expansive future version.

C But if you don't do the short term limited version, you're not gonna enable yourself to do the long term expansive version. So it's it's counterintuitive, but it's time and time again proven to be true that this is the best way to kinda build a business.

A I think it's a challenge that a lot of entrepreneurs struggle with. I mean, I know I've seen Evelyn and I and even some of our friends. Like, it it is hard. When you first start out, you you have a lot of ideas and you have to, like, figure out which one's gonna work. But what I hear in the story is more about experimentation and trying and testing different ideas. So I wanna ask, when you guys first founded Caisse, what what was the definition for success and how did you did your incoming work define your services, or did you guys define what your services were in pursuit of work?

C It's a bit of both. So we started with our 1st contract ever was a consulting agreement with Autodesk, and we didn't go out, you know, trying to do it. We had sort of built rapport with Autodesk and had professional relationships, and they needed a temporary I think what they called, like, program manager or customer support manager for this new product called Newport that they were rendering sorry, that they were releasing that focused on rendering real time rendering. It ended up having a different name. I can't remember what the final name was. Oh, Showcase. It is called Showcase or it was like the merging. But, anyways, I knew visualization really, really well.

C It was of one of my expertise. Sean Young was the person. I had worked really closely with him on some other things, and so he asked me. He said, hey. You wanna help me out? And it was it was really awesome, and it was a great sort of, like, initial lifeline for the company and Jolt to get us going. Then I was also teaching at Columbia at the time. So between those 2 things, I was able to enough I was the 1st person to leave. We also had this kinda, like, phased rollout.

C Part of what we were going through, which, you know, is kinda leads to some of the stuff I'm doing with Teal today. It's just, like, the amount of concern and fear we had about resigning, and that and we knew that it was the 3 of us and, like, how we would leave the company. And if, like, we told the partners about 1 of us that they would just, like, fire us all on the spot, which they were all really good human beings, and they wouldn't have done that. But we sort of just, like, psyched ourselves out. And I think at the end of the day, probably didn't handle the situation as well as we could have. Because, clearly, like, we were thinking about how to do it, and then they were getting kinda, like, piece feel piecemeal information that, like, one of us quit, and then 2 months later, the next one quit, and then 2 months later, the next one quit, which, you know, now putting on a business owner hat, I wouldn't have appreciated that. You know, you just and then that's one of, like, the tricky things about employment and thinking about your career and and just, like, the amount of uncertainty and fear that there is. So once we were all out, which kinda took a minute and and that that actually happened faster than we anticipated.

C Right? We thought we were gonna be doing who by you, for a while. It was gonna take us a year, but what started to happen is that we start to get demand for case. So the next contract, I believe, was with Grimshaw. Shane Berger was there who's, you know, been a thought leader in digital technology for the longest time, helping run smart geometry. And Grimshaw wanted to use Revit, and, you know, they saw that we had deployed Revit at a firm like Shop that was really design focused because a lot of people thought Revit at the time, this was Revit in 2008, was really for, like, CDs, and that's it. Yep. And that you couldn't do sort of, like, high design projects in in Revit, and they had been awarded the Museum of Science in Miami, which is a pretty complicated project. And this you know, I was friends with Shane.

C He said, could you guys help us do this? So we came in and we trained the team on how to use Revit. And then they said, hey. Can you help us with some energy analysis and energy modeling, which was actually Steve's expertise? And so then Steve resigned, and he that was a project that could kinda sustain him. And then there was another big potential project with Turner Construction because I had a relationship with someone there. And, you know, so a few things came in, and within 4 or 5 months, we were all out and which we did not expect to do it as quickly. And there was enough work to keep us all busy, you know, for the next few months, not, you know, not indefinitely. And that kinda just, like, you know, put us in the state of survival of, like, okay. Now well, now we gotta go get more work because we're all out in the system to sustain us all.

C Now we're taking very low salaries. I mean, I think all of us were paying ourselves, like, $50 an hour or something.

B It's it's interesting. So you grew, but you also had, like, a really important network, I feel, to draw from to make those connections and growth. Was that is that inherently a part of who you are? How do you develop a network not knowing where you're going?

C So there there is something uncomfortable about networking for the sake of networking. And I think some of us have more of the need to have a purpose to take action than others. And for me, I just I mean, speaking for myself, I just like meeting people. And I like the experience of meeting people with really no intended outcome. And so that has sort of served me well over the course of my career that I've just gotten to meet a lot of people, and then, you know, I've not been that bashful about asking for help when I needed it or reaching out. You know? So Shane and I spoke at conferences together. Steve was involved in smart geometry. He was very familiar with the work that we had done.

C And as soon as we were out, I'm like, hey. Do you guys wanna use Revit? Like, this is what we do. We deployed it at shop. You know, we just started to kinda pitch all our friends. One of our good friends, Nick Raider, was at Snowhead at the time, and so we said, hey. Does Snowhead, I wanna use Revit? We can help you guys. They ended up hiring us, like, 5 years later. That was kinda one of our first pitches.

C James Brogan, who led technology and is now a partner at KPF, had been a huge supporter of ours and would bring us to conferences and to speak at the firm. And so one of the first emails I sent was, like, hey, James. Do you guys need help with Revit? And we just sorta started to pound the pavement, but they weren't, like they were warm leads. They weren't cold leads, and we were able to 2 things. Like, 1, leverage the relationships we had, but also, 2, build on the reputation, from some of the thought leadership we had been doing in the market. So it's not even it was just like a friend. It was, you know, it was a person who we were friendly with, but also had, like, professional respect for us.

A Right. Even in career development, I know Dave's that's his expertise. But between career development and your entrepreneurial journey, like, you create these networks and, like, you have to to, like, figure out what you wanna do in the world. And it is kinda like a little bit unknown where you're heading and how how those connections will benefit you later or if they will, and it's an essential skill you have to develop.

C Cal Newport, who writes a lot around, you know, different, like, sort of business topics, he he's got this term of career capital. He he coined it in this book called Be So Good They Can't Ignore You, which is around developing deep expertise. But I think that network is another form of career capital. It is an investment you're making in the long term, you know, like a retirement fund that's there, and, like, no bad can come of it. You know, the only bad is that people who are maybe a little more strict with their time have a hard time reconciling, like, the direct ROI on that time. But if you approach it with a this is just kind of like a seed I'm planting. And one day, it will sprout, and then one day, it may bear fruit or not. You know, I subscribe more.

C There's another person named. His name's Keith Ferrazzi who wrote a book called Never Eat Alone, and he's, like, the, like, you know, prototypical networker. His point is, like, why would you ever have a meal by yourself when that's, like, one of the best times to, you know, break bread with someone and get to know each other? So the book's called Never Eat Alone, and and that's just kind of the approach I've always taken to life is that, you know, if there's an opportunity to take a meeting, I say yes. If there's an opportunity to get to know somebody, I say yes. You know? Now I'm on the other end of that where I'm probably saying too much yes, and I'm needing to, like, find focus work time. But I try to say more yeses than noes.

B So it sounds like Case grew pretty organically out of that network and out of just hitting the pavement and hustling. When did you start making very specific determinations about how you wanted to grow your company and the company culture within Case?

C So I would say that the moment that that became more evident to us that that mattered was the time we hired our 1st employee, because the 3 of us could choose not to take a salary. The 3 of us, you know, were kind of locked arms saying, you know, we'll we'll figure this out. We had already chosen to take the risk, and, you know, we'd figure that out. And we're very open about each of our sort of different needs to you know, family needs. I think I was I was, like, semi single at the time. No kids. I think Fed might have had a kid on the way. Steve wasn't married yet, but with a longtime partner.

C So, you know, we were fairly flexible. I think we're all in our twenties, late twenties. Yes. But once we had that 1st employee, it's like, okay. Well, now we have an obligation to another human being, and we're making a commitment to, like, a salary. Because we didn't go an approach with, like, contractors and hourly employees. It was it was a salaried employee. And then we said, oh, wait a second.

C Now we have, like we can't just choose to not pay ourselves anymore. There's a there's a different, like, floor. Like, before the floor was 0, all 3 of us could just choose to not take salary 1 month. Like, now the floor was this person's salary. That that became the new zero. And then that just brought, like, a different level of pressure. Right? Because this person who was interviewing with us, it was his name's Mark Green. He's a really impressive leader in the sort of design technology space now and has done some really incredible things.

C We work together at at shop. But, you know, we kinda had to tell Mark, yeah. We we will be around long enough to support you. Like, he resigned from another job to come take this job. Now he had a tremendous amount of trust in us as individuals, a high enough tolerance for risk to do it because he had enough business savvy to know that we were a fledgling company. Mhmm. But, you know, we did have to show them, look. These are the this is the work in the pipeline.

C This is how we think we're gonna do it. This is how we think we're gonna grow. You know, even for ourselves to have the the confidence and be able to sleep at night that, you know, a person's livelihood depended on us.

A So you started with Mark. What what was the size of your employee base at your highest peak?

C We were 63 people including the 3 partners.

A Okay. And so I'm curious to talk about that process of growth from Mark to 60 plus employees. As you stepped into your role as CEO, what were some of the struggles that you faced in that growth process?

C Oh, boy. So many. I always reference this as one of the big unlocks in cases growth. It was when Fed Steve and I sat down and were very intentional about our roles. Because what I've seen what we were doing and what I've seen a lot of small businesses do, especially when there's multiple partners, and even more so in architecture firms, is everyone does everything. Yep. Right? Each partner is sending their invoices to their client. Each partner is, like, doing the reviews of each of their own teams.

C Each partner is going out and landing their own business. And that's just really 3 people, 4 people sharing infrastructure, not actually operating as a cohesive unit. And we sat down and said, okay. Where are each of us best suited to give the majority of our time? Sure. We all gotta go land work, but, Dave, you're gonna go land the bulk of the work, you're gonna be okay with that. Okay. We're all gonna be on top of, like, our billings, but, Fed, you're gonna run finance because you are more comfortable with it, you're more judicious with spending. That makes sense for you.

C Steve, you're super operational, and you're gonna focus on that, like, the trains come in on time and that, you know, all our resourcing is good and that our we're managing all our projects right. And from the day that we did that, everything was different. Then there wasn't these, like, expectations of, like, well, why isn't Steve closing business? Why isn't Fed closing business? Or why is Dave not emailing his clients and getting those invoices paid? And because I just didn't gravitate towards that stuff, I was more excited to go do more deals and go find more stuff. And then there was an understanding of expectation and we were aligned, and then we were actually each playing to our strengths. Then we were really a team. And from that day, it was a very different approach to the business, and we could become far more deliberate about what we're building and what we're trying to do.

A Yeah. That's a great point. I mean, you know, I think we've talked about that idea before on the show about aligning to strengths. And and it sounds like by identifying that and eliminating, like, the background noise that, like, actually allows you guys to speed up and really engage in the in the strengths and the contributions you're able to add to the company?

C Yeah. It was a big deal. I mean, it was and it it sounds like not a big deal, but it's a hard conversation, and people dread having that conversation for for two reasons. Either, one, no one wants to admit that they're not good at any one part because we sort of especially in architecture, we kinda glamorize the rainmaker, dealmaker. You know, that's the partner. That that's how people get promoted. They bring in business. That's part of how you grow.

C You gotta be able to grow your own book of business, and some people just aren't well suited for that. And you see it. You know, some firms will have that technical management design, you know, trifecta, and the design ones are generally the ones that can sort of go do the pitch. And, you know, they get paid in a different way. They don't like, the promotion track is different. They're valued in a different way. And, you know, one thing that was always super important for us is that we were all equal. We had equal ownership of the company.

C We were paid equally whether, you know, one of us was getting business or what, but we were clear on what our contribution is because I couldn't go sell if Fed and Steve weren't delivering the work because we'd have no work to talk about. Right? And if I didn't go sell, there'd be no work to deliver, and we understood that. And we understood that that was a relationship, and then the more that each of us could focus, the better we could be at that thing. And overall, as a collective, we'd be better. You know, that was a big one. Starting to segment our customer base was also really important. That was another time that, you know, as we had, like, the next layers of accountability in the organization, was really important. So then we we created, not knowing it was called this at the time, but a matrix organization where we had our our customer types because we started serving architects.

C Mhmm. That was our 1st customer. That was our network. That's where we came from. You know? Then we started to sort of hit some friction on architects as a customer base given that they don't tend to have a lot of money to invest in, like, operational efficiency and, like, cost center type expenses. Yep. They wanna build it, you know, put and the industry in general wants to expense everything to the project, and that's hard. But we found enough of a way to do that.

C But, you know, it's getting tricky. And then we'll be starting to get a little bit of inbound from contractors. And then, eventually, we had owners, owner operators. And that's where we saw, like, the highest potential for growth because they benefited the most from a lot of this technological innovation. Unfortunately, the building industry is one that actually, like, monetizes inefficiency. Like, it like, it is it is a fiscal benefit for the vast majority of the infrastructure to be inefficient.

A Wow. I'd never thought about it like that, but you're right.

C Very few people benefit from it being efficient other than the owner. And even still, the owner can just mark it up in the costs. So, like, the customer at the end suffers or bears the full cost of that, which, you know, for another day, we can talk about as the main reason we wanted to be a part of WeWork, because we really felt we could serve the the true user. Maybe not the customer, but the user, which was the people that occupied the buildings. And so so we said, let's go to the owner. It gets us a little bit closer. Right? Architects don't really benefit from being more efficient because if they can do the project in half the time, the client's not gonna let them keep all that money because, essentially, it's a bottoms up hours calculation. Yep.

C And that's where there was so much aversion to red Revit, and it's like, we don't wanna be efficient. You know? Like, we don't wanna cut the drawing set in half. We've we've spent 20 years trying to make it 500 pages so we can charge on a per page basis. You know? So, yeah, so it was a tricky thing. So we went start to work on the owners, and then we started to get clear on our offerings. Like, what did we do and how could we get specific around those, and we knew that that broke into 4. Those evolved over time. We didn't have them all on day 1, but the first one that we started with was what we called implementation, which was our our training, abilities.

C Mhmm. Creating content on how to educate people on how to use technology. Then from that, people started asking us to just do stuff for them. So if you've proven, you know how to do it, can you just do it? So we created essentially, like, an outsourcing division. That was called we called the project consulting where we would actually you know, we would do the BIM modeling. We would do the clash detection. Then from there, people said, okay. Well, we get that you know how to do it, and you can teach us, and we know that you can do it.

C But, really, we want you to come in and help us design our organization so that we can have technology really be pervasive. So that formed a strategy group, which was more like management consulting. And then, finally, just, you know, came about the request to, like, weave it all together through integration. And so we created our software development firm, and that was that coincided with the shutting down of Who by You and us essentially acquiring that group and bringing them on to KACE. So now we had software development capabilities, and those were our 4 business units. So those were the 2 dimensions. Our our architecture, construction, owners were our client types, and then our services were strategy, implementation, project consulting, and software development. And at that matrix, we would sort of think about very granularly where customers fell in, who was the right person.

C Each of us had accountability for one of the dimensions of that matrix, and it actually worked really, really well. Not sure how well it would have scaled once we got bigger, but for our size, it was actually really great.

B Let's take a break from this conversation to talk about our sponsor of this episode, Monograph. We're proud to partner with Monograph because they are helping to the practice of architecture, one design studio at a time.

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B Be proactive with Monograph. So now you've you've introduced the owner scientist. So tell us a little bit about WeWork and how that relationship evolved over time.

C Going back to our previous discussion around networking.

B Yep.

C So WeWork came about through Who About You? Because I would go and code at night in a WeWork. You know, I was actively using Twitter in the early days, and I was trying to get people to use WhoBuyYou. I met, this awesome person named Jesse Middleton, who's now lead investor in teal, sort of bringing it all back full circle. He said, sure. I'll try it. We got to networking. He was very close with this new company called WeWork, and they were doing some cool things. He said, hey.

C You should come at night. We all hang out in the lounge of $154 from, like, 10 PM to 2 AM coding, and we get pizza. Nice. Because I would go there. I made friends with them, and then one of the people that was there was the 1st employee at WeWork, Kyle O'Keefe, who was Miguel's brother. And we would talk about who buy you and, you know, but he was building the WeWorks with his bare hands at the time. And every once in a while, I would need to do a little bit of, like, Revit modeling at night, And he would see it, and he would ask me questions. And then, you know, fast forward a year or 2, he said, hey.

C I know you're doing WhoBuyYou, and, you know, we tried to actually get them to use it as a platform. But he said, we're kinda doing some building things. We're gonna we think we're gonna make a lot of buildings. We don't wanna do it the same old way. You know? One of the cofounders was Miguel, which is his brother who's trained as an architect and said, Miguel would really like to innovate on the space. Can you guys come in and tell us about Caisse? And I said, sure. That sounds great. Yeah.

C And so we came in. We showed what was the potential with BIM and all the different kind of platforms we had built. And they said, okay. Look. That's all great. Can you train us to do it? Because they did a lot of things in house. And we said, sure. We think we can train you.

C Typically, like, from the staff, there was a little bit of resistance because they had a ton of pressure, and they didn't have time to learn something new. Met an executive there named Ronnie Bahar, and I said, Ronnie, I think we could do it for you. I think we could just let's not waste the time training you. We'll take it on. Like, we will do actually, what I pitched was for us to do all their CDs. Even though we weren't licensed architects, we could work with their licensed architects. We would take the design from their internal designers. We would model all the facilities.

C We would do it on a per square foot basis. So no time and materials, derisk it for them completely, put the pressure on us to be efficient and gain margin out of what we could deliver it for so we could invest in automation, and that we would work with an architect who would actually review it and sign it and seal it and all that kind of stuff. So we were basically drafting. We were a draft we took on a drafting contract, and we did a a dollar 50 a square foot.

B I was like, I can't get people to test fit at that rate.

C Yeah. So and and we lost money on the first few, but before we knew it, we were doing really well because we started to build a lot of automation. We started to build a bunch of, code for ourselves, to be able to do this. We built all the standards libraries. Right? We didn't try to charge them a contract to make a standards library. I mean, eventually, we did because they used 1 internally, but we did it just for ourselves because we structured a contract in a way that it motivated us to be efficient.

A Mhmm.

C And the more it was a fixed price, and it was better for them. They were it was a good price relative to what they were getting in the market and the aggregate. And, you know, I don't know. I think we must have done 20, 30 WeWorks in the span of, like, 6 months.

B Oh, wow.

C We were we were fast. We could we were really good at the tools. We didn't have to train anybody. We had then all the integrations with Navisworks, and we did this, like, very cool Jira integration to do clash detection testing. And what we were doing was kinda productizing our services all along the way and getting ourselves to a place where we could actually be quite profitable on a per project basis and not being worried about, like, t and m and billing per hour and just we derisked it for them and took the risk on ourselves with, you know, faith that we could do it well. And then knowing that if you know, they didn't wanna put us out of business. So if it didn't work, we'd go back and renegotiate.

A Mhmm.

B So as this was growing, how how did you and your team define success, or was it ever on the road map to be acquired?

C No. Actually, quite the contrary. I would tell people all the time. Service businesses don't get acquired. We have no intentions of being acquired. We don't wanna be acquired. We had already shot down some acquisition discussions. You know? I think, like, Autodesk never made a formal offer, but they had kinda talked about it.

C We said, no. Thanks. We just you know, we liked building what we were building. We liked the sort of impact that we were having, I think. You know, in in its kinda small niche case that established a pretty good brand at the time. People really thinking of us as innovation and and trying new things in the building industry and kinda leading the charge. And so we never thought that that was really a possibility. You know, the the what success looked like for us was having an awesome culture, loving going to work every day, making money, you know, and being okay with that and talking about it.

C That was not a bad thing. Being very confident and secure in what we were as a company, which focused on innovation and technology and didn't need to be a design firm or didn't you know, wasn't doing that as the bread and butter so that we could build a design firm, which a lot of people were doing at the time. They'd open up a CNC shop and take on fabrication work, but really with the intent of being a design firm. It's like, nope. This is what we do. We're comfortable doing this. We embrace it. We're happy about it.

C And just, you know, making money and building an awesome business and and not growing it too big. You know, we had internal between Fed Steve and I, we had sort of different beliefs. You know, we had toyed with the idea of, like, doing, like, a headcount cap. Some really cool companies had done that. So, like, we will never be more than a100. Like, that's it, you know, to force us to start to say no to work or something like that. But then the WeWork situation came about. It was a really compelling opportunity.

C You had the potential for future upside in the sense that, you know, equity in a company that was pretty high growth. People like us didn't get hired by tech firms and didn't have a chance to get, like, equity in tech firms. And so that seemed pretty cool that there was this one little spot in the world where, like, our skill set was highly relevant, and we could kinda join the tech company type excitement that we really wanted even with WhoBuyYou. So we did it. You know? And we we sort of put together a deal. We learned about selling a company, transitioning a team, and onboarding a team via acquisition and all the complexities, and there's a lot of things I would have done very different there. But we got a very, very fast education in corporate mergers and acquisitions.

B Mhmm. What are kind of your biggest takeaways knowing what you do know of the architecture industry? And I have got to say even though you've been out of it so long, you still characterize it very well. It hasn't changed at all. Yeah.

C I mean, that's that has less to do with me and more to do with the fact it hasn't changed.

B Yes. Exactly. What are 2 or 3 takeaways that you would like to leave with the architecture profession about how they could be doing business better, what they should be doing differently, how they should be treating people. I don't I mean, that's a big ask, and that can go any which direction.

C Let's say focus on value and not production. Right? And I think you see these high brand design firms able to do that, and so I don't wanna trivialize it. But, you know, you pay for Fund Geary. You paid for a Zaha building. You paid for BRK building. No one's asking them how many hours. I shouldn't say no one. They're big clients.

C You know? I negotiated contracts with them at WeWork. You know, they still have to justify their costs like every architect, but they have more to lean on because their their value is beyond just pure production. And I think as an industry and architects in particular really need to elevate their value proposition beyond production and labor and work towards that. And it's really hard to do that in a highly, highly fragmented market like architecture where firms will undercut each other, will do what they need to do to survive and get the work, and, you know, and in past times when it's been attempted, you know, it's class action lawsuits and things like that. So it's clearly hard to be able to do it, but we kinda have to flip the script. And then the other is to figure out a way to not anchor the value to bespokeness. Right? Like, bespokeness and uniqueness. I mean, so many of the times I talk to firms.

C Like, I remember I would sit down with friends and it's okay. What vertical do you guys wanna be experts at? And I said, well, I wanna make sure we do a museum next year. It's, like, but but you've never done a museum? Like, yeah, I know. It's, like, so why what why do you think you've earned the right to charge a lot to do a museum? It's, like, well, no, but we wanna do one. It's like, okay, well, then that's just gonna perpetuate this problem where you're gonna go do it at very little fees because you want to do a museum and because you're not comfortable going deep and being an expert. It's like, I don't wanna be like a firm that just does hospitals. Like, why? Like, why is that an issue? What what is it about just doing hospitals that makes your skin crawl so much? And I don't know if that's, like, baked into the education that we can do anything from designing a business card to a chair to a skyscraper, but you see the firms that are highly successful and profitable as they have deep specialization.

A Mhmm.

C Deep specialization. Like, people will pay top dollar to that firm that can build a highly efficient hospital. And that's it. That's all they do. And they embrace that they do that, and they love that they do that, and they're proud of the fact that they do that. But then you see these other firms, and you see this a lot with, like, small firms that have ambitions of being design firms. And so I wanna do at a museum, and I wanna do a cultural work, and I wanna do an edit, and I wanna do a house. And so they they can never develop expertise.

C So I would say embrace expertise. It is not a slight or an indictment of your inability or ability to design. And all you're really doing is pursuing, like, selfish motives, and and you are falling more in line with being an artist than a business. And not that that's bad, but if you're gonna be an artist, then be an artist. Don't pretend to be a business.

A It's interesting to hear you say that because I literally had this conversation with my client last week about recognizing their expertise. And I think it goes back to the very first thing that we talked about in this interview, from your journey as an entrepreneur, which is this idea of focusing. So, you know, maybe even as designers, it's hard to constrain ourselves, but I think there's true value in being able to constrain and focus. And to your point, what you said is practice getting better at that one thing that you do really well, and that's what allows you, to your point, to bill higher over time.

C Yeah. Look. There's a reason there hasn't been, and I don't know this. Maybe you guys can prove me wrong, but someone who's been to the all stars in multiple sports. You're an all star basketball player or you're an all star baseball player. If you're an all star basketball player and you try to be a baseball player, they put you in the minor leagues like Michael Jordan. Right? Like, it just requires practice. And time and time again, we've seen that deliberate practice is how you do it.

C You gotta do something. You gotta mess up at it, and that's how you get better. And you gotta try to stretch yourself. And I think people trivialize the nuance and specificity that's required for each building typology, and that it's not just about the physics of making a building stand. And I think it's a it's honestly an arrogance in the profession that I think is really unfortunate to think that these things that are highly unique products that have to serve a very particular use case can just all be done by anybody with little to no experience in that particular craft. And they're gonna say, well, I can just do buildings. Well, let's just say let's say, I can just make products. It's electronic, baby product.

C I can make all of it. It's like, that's just not true. They serve a very different function and a very different need. And so if there's more of this, like, product centric approach to it, then they could actually standardize. Right? To my point on bespokeness, they can create libraries. Standards projects in firms are always fought. Always. Nobody wants standards because they feel like they're being reduced to cookie cutter.

C And, like, you're taking away my ability to be creative because I should rethink the title block every project. It's like and that's an extreme example, obviously.

A Right.

C But those things actually allow you to do more. But it's this, like, fear of being process processified or, you know, sort of taken out. And so too many of the times, people, I think, are bias in job security and not actually what's better for the long term livelihood of the firm. And, like, as an industry, we gotta get past that, or, like, the market will take care of it.

B And right now, unfortunately, I think the market's beginning to take care of it because other even technology engineers and industries are seeing the holes.

C That's what we're seeing. Right? And you said that's why PropTech is really taking off, and people have finally woken up to this multitrillion dollar industry that is full of waste. Vertically integrating is getting easier than ever. And the biggest constraint to innovation in this space was capital, and there's more capital in the world than ever. And so people see real estate as an opportunity to disrupt the amount of people on the planet's not shrinking, and the amount of space continues to be constrained. So that's gonna bring economic innovation, and it's gonna bring technological innovation. And then that's what we've seen it time and time again. What goes is labor.

C And so the architecture industry, in particular, has got to be very, very careful about the next 10 years.

B So at the beginning of the conversation, I was a little bit thrown off because I don't know about you, Janine, but I didn't know anything about WHO by You prior to jumping on that call with Dave.

A Yeah. That was the 1st time I had heard about it, but it was very interesting to hear kind of the background that even, came before case.

B Yeah. I think there's actually a really interesting case study about WhoBuyYou and the decision to kind of focus at one point and really move beyond Who Buy You to Case. And the moral of the story, I think, if we are to pluck anything out of that moment in time, is that, you know, you have to be willing to pivot towards what is working even if what is working wasn't ultimately your goal in the 1st place.

A That's true. And I think it's a lesson that a lot of entrepreneurs kinda learn. And I can even say that from from myself, like, when I started, I, like, had, you know, so many ideas of things that I wanted to focus on. And as I've gotten further in this journey, I realized, like, you do have to narrow down. Because the only way that you can get better at what you're doing is if you like Dave said, you really practice and in on that one area that you're really looking to amplify.

B But I really think the other interesting story about Dave is kind of his notion of not necessarily networking, but developing relationships and the rising tides raise all ships mentality, that anyone who you meet at any time can have a greater influence on where you're headed next. And I think that's been true of kind of all of those WhoBuyYou clients that are all of those introductions that were made by WhoBuyYou, but then actually translated into business that case.

A I also thought it was interesting, this idea about, is the industry more profitable? They basically the is the industry monetizing off of the inefficiencies that have been created within the way we do things? That was kind of like an moment for me at least. Like, I had never thought about it. Yeah. I mean, I

B I I just think the the systems to motivate people aren't necessarily in develop our overall fee, like, is there other ways that we can value the services that we're delivering in a way that brings greater profit margins while we keep producing greater efficiencies for how we deliver.

A Yeah. Exactly. And, I mean, it does go back to the point Dave kinda left us on, which is this focus on value beyond production and labor. And and I don't think it's necessarily even just entirely on the staffing side in an in a design capacity. I think, obviously, in the construction phase, like, there are a lot of there's a lot of area where those inefficiencies show up and create problems. But if if we start to look at, like, where do we shift the value to create revenue in a different way than just purely on hours and time, I think then we yield, like, a new way to increase, like, the value of the industry.

B And I think this goes and I just wanna be clear. This goes back to kind of, notion that we're disincentivized to be more efficient. So I remember being, I remember working on a firm that says, like, we need you to bill x number against this project. It didn't matter how efficient I was, but I was essentially desensitized to be more efficient on that project because they needed me to bill X numbers too. They were telling me, we need you to bill X number towards this project. We need 80% of your time to be billable to a project. And if it's not, then we're not making enough money to keep you. I mean, they didn't say it that way, but they kind of said it in so many words.

B So then me as an individual employee, like, even if I find ways to put in greater efficiency, I'm like, I'm disincentivized to kind of share that with my employer.

A I I agree. And I think, I mean, I do think speed is always, like, is always a thing that we try to manage around inside a design firm, but also but inefficiency is, like, not. Because it clashes up against, I think, creativity, which is what is always protected. It's the highest value. And I wanna take this idea back to prior to when Case was acquired by WeWork. Dave said that WeWork actually hired Case to do some work. And one of the things that he talks about is productizing their services. So from a, you know, a small firm standpoint or a medium sized firm standpoint, I think a couple things you could think about are, you know, when we try to protect being a creative entity, where can you create efficiency and where is it that you wanna keep space for creative interpretation and flexibility? And I think when Dave talks about this productizing their services, he's thinking about, like, what are things within what he does that he can repeat and package? Now I'm not saying that every firm can standardize everything because, obviously, there are there are things that you have to create custom, like a stair detail or, like, an exterior facade that you wanna customize and create for your client and and specific to the project needs.

A However, within that, there's probably frameworks that you can start to package that become repetitive. And certainly one of the easiest ones is when you pick a project type. I think firms that navigate towards being deep in a specific area of expertise really have an ability to market their services effectively. And when you work, that that maybe is a little bit easier to onboard than those unique one off projects because they have the deep bench of project types that allow them to, win the client over, which is what they're usually looking for on public projects.

B Yeah. I mean, I think that's especially true of public projects. I think there is an interesting balance though that we need to draw between having enough diversified revenue coming in that when your 1 client in that 1 sector isn't building, you're still able to make money. But gaining the knowledge you need to build the expertise and to be really deep in one subject. One thing that really rang true to me was not only their focus on kind of a greater subject matter, but like that moment where they each had to figure out what their strengths were and act collectively in partnership, you know, to decide who's gonna be in charge of the numbers, who's gonna be in charge of business development, and who's gonna be in charge of getting the work done. So many even medium sized firms that I know have these silos by market. And it is if you think about it, you're you're running for every single silo, you know, you're running it's like many firms within a larger firm, unless you're actually are truly sharing resources and playing to everyone's particular strengths.

A Yeah. And I've definitely seen this work really well in a in a small to medium sized firm where the partners each took kinda 1 piece of the pie. There was, like, principal in charge of HR, the principal in charge of finance, and the principal in charge of marketing. And, again, I think this this big idea that we hope everybody will start to think about. And maybe it's hard to adopt right out of the gate, but really thinking about what value can I create for my client beyond just production and labor, like hours on a time sheet that I bill my client? If you started to shift that in an in a different direction, where would you shift it? Second, he talks about really embracing this deep specialization. And I think I know I've heard a lot of architects. They they want this opportunity to be generalists so that they can pivot into new market sectors when they wanna take on a new project type. However, there is so much value that you leave on the table when you don't recognize, like, for instance, my client, he told me again after I had this conversation with Dave that he didn't see his expertise.

A And after I had kind of pointed it out to him, it was it was interesting because he did start to win all of this work around the specific market sector that he hadn't really thought about being a deep expert on. But once those doors open, it was for him, it was, like, a really insightful moment that he can position himself there and not have to compete for work because clients in the industry already know he is the expert in this area, which is a huge benefit for him. And then number 3, I think I I think there were we kinda wandered off at the end of that conversation, but I would say I'll bring it back to this idea about just really focusing on what you wanna get better at. Like, the more you focus, the more you constrain as an entrepreneur, as a designer, as anyone trying to get better at something, the better that you'll get with more practice. And that is such a universal truth. I really do think that constraint is a is a magical thing.

B I think those are 3 wonderful things to land on. If I can add 1 more thing to that is just being nimble about the expectations that you set for your business. Right? There was multiple times where, you know, they set out to do WhoBuyYou and they ended up focusing and and really going to case when they made the realization, like, that's where the actual business stands. Several times, Dave said throughout his career at Case, there's no way that they're going to get acquired. It ended up happening. And Dave finally pivoted into a new space in teal, which he probably had no idea he would land in when he was thinking about who buy you, you know, way way back at his years on shop. So being being nimble and open to the possibilities and and kind of letting those things happen organically as as they come to you too, and not so stringent that, like, oh, I'm never gonna sell. I'm never gonna sell, because obviously, he would have missed out on a huge opportunity if Huey and his founders weren't over able to change their mindset with where they're headed.

B And on that note, thank you for listening, and tune in next week. Thank you again to our podcast partner, Monograph.

A Learn how Monograph can help you take control of your firm's financial health.

B Follow the link in our show notes or visit practice of architecture .com backslash monograph so that Monograph knows that you heard about them from us. Thanks for joining us on Practice Disrupted, a podcast by Practice of Architecture. Visit us at practice of architecture.com to find out more about future episodes and the changing nature of practice.

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B And if you wanna take your career or practice to the next level, Janine and I also consult, provide workshops, and speak regularly on this research, and we would love an opportunity to collaborate with you.

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