Our guest today is Zach Scheel. Zach is the co-founder and CEO of Rhumbix, a San Francisco-based startup helping construction contractors and field service personnel go paperless while improving how they measure and manage labor, equipment, and material utilization and productivity. Zach has more than a decade of construction project management experience across three continents.
As a Civil Engineer Corps Officer in the US Navy, he served as the Resident Officer in Charge of Construction and Assistant Public Works Officer at Naval Station Everett, WA, and Military Construction Manager at Camp Lemonnier, Djibouti. Outside of work Zach serves as a Cause Ambassador to the Movember Foundation, is actively involved in numerous Veteran-related charities.
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Zach, thank you for joining us here today.
My pleasure to be here. Thanks for having me.
Yeah, so just going back a little bit about that, I’d like to hear a little bit more about how it is that you got into construction in the first place and what dragged you into it?
Yeah, I actually grew up around the construction industry. My dad sold construction equipment for a company called Multi-Qip throughout the Midwest. So I grew up climbing on, riding on trowels and compaction equipment on a trailer in our driveway most weekdays.
I started my professional career, went into the Navy. So I did an ROTC program and got commissioned as a civil engineer core officer. And so I started out at Naval Station Everett. As you mentioned, kind of as a project manager for all of the categories.
capital improvement projects on base. They’ve since had the opportunity to build in North America, Northeast Africa and South America. So just been awesome getting to see construction all over the world and being part of a lot of huge, global mega projects.
Yeah, that’s that’s awesome. That’s a fantastic experience. Also, what did you see as far as were there any major differences in the way that people build things in the different areas where you’ve been?
Absolutely. Yeah, safety is something that I think, you know, we take for granted OSHA and the safety requirements and the US job sites. In Africa, we had to do a lot of education around the importance of safety and it’s just not part of the culture that you see here.
You know, South America also, they’re very cultural differences. The way construction is done, you know, physically, the way that things are built is all the same, but, you know, the types of contractors you have to build in South America, it was a 7000.
person workforce that was supplied by two companies. You want to get that in North America, for instance. So it was just different challenges in terms of how contracting structure, delivery vehicles, that are very unique to all three of the continents of Build -On.
No, that’s awesome. I’m sure that’s great experience in everything you’re doing with Rumbix now, which you started Rumbix in- 2014. 2014, so it’s coming up on a decade now. So that really makes you one of the OGs in construction technologies.
What led to you starting Rumbix in the first place?
Yeah, if I think back on my whole career in the industry, I joined in 2006, and that’s probably where, backing up eight years before Rumbix was founded, I was running the challenges with construction software and construction technology on job site.
So, I mean, in the Navy, we actually had a cloud -based project management required on the first major project I was building, but the internet speeds were too slow to upload a photo, so it was abandoned on the project.
And so, I was spending a lot of my time doing manual, collecting RFIs and submittals with signatures and scanning them to PDFs and putting them in file folders. And on paper, I was a construction manager, but I was a glorified administrative assistant, just pushing papers.
And so, that was kind of my first introduction to just the challenges that the industry had with not having the right digital tools and technologies that it needed. If you fast forward to summer of 2013, I’m working at the World’s Largest Copper Mine in Northern Chile.
It was a three and a half billion dollar project that went $900 million over budget. All of that was pushed onto the owner as a cost plus contract. So, there was a lot of friction around the inability to have better answers as to where the funds were going, why were we losing money?
The primary source of data that we needed to better understand what was driving costs and schedule deviation. was coming from a thousand paper time cards, handwritten in Chilean Spanish that took three to four days for a 70 person clinical staff to translate to English, put into an Excel spreadsheet that was connected to an access database that this contractor’s homegrown software would tap into.
And so by the time we got the data digitized to be able to analyze it, most of it was wrong. You lost a chain of custody of the accuracy of that data. And so that was really the big kind of light bulb of hip and e moment where there’s got to be a better way.
You know, at the time I was in the middle of grad school at Stanford, this was 2011 to 2014. And so Uber and other Airbnb were really, you know, kind of driving consumer technology forward from mobile devices.
And so that was really where, you know, kind of, you know, the epiphany came, hey, like most of these workers have smartphones or devices in their pockets already. Can we leverage that powerful compute device that’s in their pocket to be able to better collect and aggregate data in real time?
to help manage projects.
Yeah, that’ll make sense. And you paint this picture about the time card issue, about all the transference from paper to digital back and forth. And that’s not an isolated incident.
The more you dig into any given project, even still to this day, that is a very common theme with a lot of what we do in construction. So what is it with Rumbix that you all are doing? What is the core functionality and the mission of Rumbix?
Yeah, so it’s a labor and resource management platform. So labor is one of, if not the largest cost on any construction contractor’s balance sheet. And labor productivity, as we all well know, has been a challenge in the construction industry.
So we started with time. That’s half of the equation of labor productivity and when you combine it with production tracking, which no other company had put time and production in the same system when Rumbix did it 10 years ago, that was the initial innovation, was real -time insights into labor productivity, the ability to see budget versus actual unit rates on a daily basis so that if you begin to deviate, you can step in and say, type out what’s going on.
Do we know why this deviation is happening versus that being batched in a two to three week old, kind of latent set of data? And so the first innovation was really around real -time insights into labor productivity coming from the field daily.
And then we really just heard a huge demand from the customer base that, hey, you’ve digitized timekeeping, you’ve helped provide assistance for production tracking. There’s a ton of other worker level field data related pieces of data that we’d like to capture.
And so we’ve gone a lot broader to bite off. The first, next module we built was T &M tracking. And so timekeeping and production tracking cover your base scope, T &M, your non -base scope, as well as unit rate work.
And now we’re venturing into a lot of like health and safety reporting. OSHA required reports really leaning into labor compliance, providing kind of a better understanding of the data. of a one -stop shop with a very modern, easy to use, intuitive user interface, which was a big change for the industry.
I was talking to a CEO once, and he was like, I know the construction workers know how to use software on their smartphones because I see them ordering pizzas at lunch every day. And I said, hey, it’s an interesting point you bring up.
Like, whether you like it or not, the bar for mobile software is consumer applications. Like, in the end of the day, unless it’s as easy to use as the Pizza Hut app, they’re not going to want to use it.
And we’ve definitely found that to be true. Software that was developed for the acronyms UI and UX existed, and people weren’t talking about user experience, can be very clunky. And if you’re especially a formant in the field, you’re not a knowledge worker.
You need the software to work for you, not work against you. It can’t be death by drop -down menus to find what you need. It’s like, I just want a search bar, and I want to put up what I’m looking for and have that pop up to me.
and make it very easy to collect the data I need. So that was really another area where we differentiated and focused on building mobile first, make sure it’s something that any form of worker can pick up and learn in 30 minutes or less.
Doesn’t require a lot of training. Only show them the bare amount of information that they need to provide accurate data from the field to complete their administrative reporting. And then on the back of getting better data, you can build a whole suite of powerful analytics and insights for project managers, construction operations managers, project executives, CEOs, et cetera.
Yeah, that makes sense as far as the, we’ll say the development strategy with focusing on the craft level first, right? That way you can ensure a higher level of adoption. Is that kind of what you’ve seen is by designing it in this way that’s, we’ll say as simplistic as it needs to be, not casting any characterization or shade on craft workers, right?
I was aware. I think that they’re fully capable of doing a lot of these things, but is that the idea of trying to make it as easy to use as possible just to ensure adoption? Is that kind of what you’ve seen?
Well, you can have as many bells and whistles on the backend system, but if the workers won’t use it, you’ve got shelfware. Exactly, right. They’re not gonna use it. So let’s start there and make sure it’s something that delivers value and they’re like, oh, actually, because paper is actually a very, very highly configurable.
There’s no battery life. It can be in English or Spanish. Right, right, right. It’s like you want it. It is a good system that has a lot of limitations, though, around the data latency, around the ability for error and stuff like that, but there’s a big hurdle to get off paper.
Maybe it takes two, three minutes for somebody to write out a time card on paper. They need to be able to do it in Rhumbix in 20 to 30 seconds. And they’re like, okay, this is easier. And then the next day, 10 seconds, let me just copy duplicate the time before for the next day’s time card.
Done, like, oh, wow. That’s way easier than taking notes in my notebook throughout the week and spending three hours. hours of Starbucks on a Friday morning, hand jamming this stuff onto an Excel spreadsheet to send to the payroll manager.
And so once you get them over that, and I think this is true of all technology, the time to value, especially in the field needs to be on the order of weeks. And we advocate for this a lot when a company is wanting to run a trial, whether it’s a trial versus a paper process or trial versus another competitor, it’s like this child can’t get fed up with the dual data entry, like trust us, we did this a lot.
And so that sets a good bar for the software to really show that value where after two weeks, you know, the former goes, when are we getting this? I want this, I like this. And so, you know, once you achieve that, you know, that makes the sale a lot easier to the business because time and time again, we see one of the biggest barriers to purchase is, is this going to be easy to adopt in the field?
Yeah, because change management is especially You know, SaaS software by its nature, it’s like the benefit of it is it’s continually improving and changing its features and functionality are being added to it, which was a very, very different model than on premise where I buy the software, it’s the same software for decades.
But when software development shifted to a SaaS model, a lot of companies don’t have the muscle built internally to train and retrain on product enhancements. And so that does create friction. And so you have an easy intuitive, but you also need to work with the companies.
It’s like, is this going to be easy to retrain as you update and add functionality to the software? And that is an area where a lot of companies don’t have good systems in place, but certainly over the last decade, it’s been great seeing we have a product, we’re having rollout technology, we have a process for how we do an initial project, learn from that, kind of tweak and smooth out the rough edges, and then we’ll be ready to do a quicker deployment to the rest.
Yeah, definitely makes sense. So, you kind of touched on it a little bit about the changes that you’ve seen over the last 10 years. I’d be curious to hear, again, since you were so early into the game, I didn’t really start seeing a whole lot of construction tech until probably, I don’t know, 2014, 15 or around the time of Rumbix coming out originally, but even to say tech was being kind of loose the definition of tech, right?
So, how have you seen the industry change over these last nine, 10 years?
Yeah, I mean, certainly there used to be a perception of technology as a cost center and companies more see it as either status quo and table stakes for being able to compete as a modern contractor, or potentially a competitive advantage, both to win work, you’ll find favor with clients that want to do repeat work because of the technology is generating a lot fewer change orders that they don’t recognize, a lot fewer friction and project delivery, but also for rich attention of talent.
So the attitude towards technology has differed, has completely changed almost 180 degrees, you know, over the last 10 plus years. Certainly companies knowing and having a process for how they evaluate and buy technology is good because you can go in and in an early conversation, you identify a need and then just say, Hey, how do you guys typically procure software?
What does that process look like for you? When we started, there wasn’t process in a lot of places. And so, you know, it was just kind of really kind of figuring it out. I was just talking with Tywin from Hensel Phelps and he was like, I’m amazed how much traction you guys got inside Hensel Phelps before we had a process, well, that had a process for technology evaluation.
And I kind of said, yeah, it’s like playing Jenga, just kind of looking for the loose block, finding somebody that has the authority to purchase on a small project and deploy it. And then again, that that goes to like, if the software delivers value, you’ll create evangelistic users and then that creates a virality within the company.
And so that, you know, I challenge my team, it’s like, we have to deliver value and enjoyment and excitement, as much excitement as you can as a time card. But in doing so, you know, that helps create the ability to gain momentum within a company.
Certainly 10 years ago, the investor ecosystem didn’t exist as it does today. So it’s great to see not only construction specific funds like brick and mortar, Blackmore Ventures, but also a lot of the construction companies themselves, either investing off the balance sheet or raising dedicated venture funds.
As an early stage startup, you know, one of the hardest things is to get, if you’re doing customer discovery, is to get access to the people you need to do on construction project sites. Like we were hanging out outside of trailers with boxes of doughnuts and burritos to do interviews and get feedback in the early days, because these folks all have jobs to do.
Like they, you know, are worked very hard in the field, especially, but now with a lot of these, it felt like a program’s they’ve got a structured way for startups that go through them or get investment from one of the corporate venture funds to be able to talk to the right people that they need to, to understand the nature of the problem as it exists within that company, you know, extrapolate those data points across a lot of customer research and then building a product that ideally solves a big problem for the industry across multiple companies or an entire swath of the industry versus just building it one way for one company.
That makes sense. What are you doing? So you had said something about going to these sites and kind of through the initial users making evangelists out of them in order to get them to promote this within and allow it that to kind of organically grow from one side.
you know, grow a lot more within that one site and then go from one site to another. How is it that you are approaching that situation? Who are you targeting whenever you do something like that? Because I think, you know, in my mind, obviously the biggest user of the system for your system is craft form and maybe general form and uncertainties.
But the people that are really seeing a lot of the benefit are people like the superintendents, the project managers. If you were to tell a PM in my experience, hey, this whole time card problem is gone, they’ll be ecstatic, right?
Because that is a big problem for a lot of different, especially if you’re working with a lot of different subs. But you know, it’s not always the easiest to get the adoption from the craft. So who are you targeting?
How are you making the evangelists out of these people?
Yeah, so a lot of times actually, and so in the early days when there wasn’t process, you know, it’s literally just like… trying to find anyone that’s got innovation in their title, anyone’s got technology in their title.
So here’s what we do. Nowadays, we do, you know, we’ve got a sales team, a marketing team. And so it’s like finding the pain point. Does a company have a pain point around field data, worker level field data around production tracking.
And so once you’ve got the identified pain point, it’s, you know, going to them and saying, Hey, here’s how we, you know, if you know exactly what you want, you can buy it on the gate, we’ve got a sandbox, you know, you can kind of play around on it, or we can do, you know, a paid pilot where we’re going to deploy to the project site.
But a lot of cases, we get a lot of kind of inbound referrals from somebody who’s used Rumbix on another company, moves to a new company that doesn’t have a system or has a system that’s not working as well and says, Hey, like you guys check out Rumbix.
And so that’s a great way to get new customers is just the industry is very transient, especially on the craft labor force. And, you know, a superintendent or a foreman going to a new company gets there and just goes, you know, okay, we need Rumbix.
Let me let me find out who’s in charge of technology and connect them up with the Rumbix guys. So to grow the business, your advice is get more people to quit from one company. A lot of people to expand that way.
Yeah, well, you know, that happens a lot just in the nature of the projects and folks, you know, looking for a worker, you know, moving, moving geographically and stuff like that. But, you know, word of mouth is a very strong source of referrals in the industry.
You know, even a lot of the CEOs are all part of CEO peer groups within FMI, you know, built worlds, even here as CEO forums. And so they all in non competitive markets, they all kind of share what best practices are.
And I do think the industry still relies significantly on industry associations and word of mouth, which is a good thing to get unbiased kind of views of what works and what doesn’t because, you know, companies market a lot of things.
I think the industry as a whole is still on the learning curve of learning about a lot of technology and at times, we hear it a ton, people buy something and we’re sold a bill of goods that six to 12 months later is not delivered.
It was on the roadmap, but now it’s not. They come back and market looking for something new. So yeah, I think the word of mouth and certainly folks switching companies and bringing technology is a great way for technology, good technology to proliferate throughout the industry.
Yeah, you made a good point about getting that kind of unbiased feedback about a product. I there was a quality manager I had years ago, he would say self praise is no recommendation. I see the over life here with technology as well, right?
Working with a tech provider, just probably take it a little more to heart. We let’s get more people to be evangelists for our system, for other systems in order to drive us forward. If in fact we are as good as we think we are, right?
We should get other people saying that, not just us. If they’re not, you get other questions you need to answer. So is that, which is a real thing you should do anyway, right? Hey, if they’re not enjoying using this system, if they’re not seeing the value out of it that we should be seeing, I think that looking yourself honestly in the mirror saying, hey, what can we do better?
It is the necessary task that you have at hand. Absolutely. A net promoter score. I’m sure you’re familiar with it, but for the lessons that are, if you’ve ever been asked by an app, how likely are you to recommend to a friend, 0 through 10, 9 and 10 are your net promoters, 7 and 8 are neutral, 0 through 6 are your detractors.
And so we do that quarterly and I read the results of everything and it definitely helps us know where to prioritize. Hey, people on the web are struggling more. We have a lower MPS there. Like, let’s shift a little bit of our dev resources from the next couple of sprints towards some of the things that we’re seeing as pain points there.
And it’s a great way to get that voice of the customer and it’s painful to read sometimes because you just want everyone to be happy, like real teasers. But you need to have the ability to look in the mirror and know that your product is not going to be perfect for everyone and really kind of prioritize where you want to address and spend your limited development resources to improve it.
Yeah, no, definitely. The, I’d like to ask, I guess one last question, you know, like you said, you grew up in the construction industry, around the construction industry. You moved, even in the military, you went into the construction industry and then beyond.
And now, you know, Rumbix is what you do, right? You’re the CEO of a company that makes technology for the construction industry. So it seems like you still have. passion for the industry. So my question is off of this, where are you hoping to see technology goes over the next 10 years?
You can see where has gone over the past 10. Where do you want to see advancements still be made for the sake of the industry? To make the industry better, to make people safer, where’s the opportunity?
I mean, there’s opportunity everywhere. It’s pretty exciting. The construction is the world’s second largest industry behind food production. It’s the oldest industry in the world. People have been out of shelter as long as there’s been humans on the planet.
And it’s really exciting. Rumbix was started. There’s a lot of technological waves that come every decade, so to speak. CAD was like the personal computer. Computer is being able to be a desktop computer or architects were able to move from manual drafting.
Rumbix was really on the cloud and mobile wave that was breaking 2010, 11, 12. iPads were out, you’ve got Wi -Fi and cellular connectivity. We’ve got a new wave that we’re at right now. I think, you know, machine learning and artificial intelligence is very real.
You’ve got robotics, which 10 years ago, you know, even putting an iPad in people’s hands was laughable, like they certainly weren’t thinking about robots, but like they’ve got very, very real. Proving ROI use cases on job sites.
So I think as I look at like the next 10 years, artificial intelligence is going to change every industry on the planet. So that’s certainly going to change the construction industry. I think robotics has a whole lot of promise, especially as we have unprecedented labor shortages, a lack of affordable housing globally.
There’s just like every sort of macroeconomic need driving the more efficient construction methods that the technology is there now to be able to do a lot of that stuff. Whereas, you know, 10 years ago, there was like Sam the bricklaying robot.
It was like the only example. And so there was only a few, but, you know, now every week you’re hearing about a new kind of robotic application. And I think we’re still in the conceptual phase of AI within the industry, but I think within the next six to 12 months, you’ll begin to start seeing some very, very real use cases for generative design and just how do you really make a lot of, you know, the Artify process is a classic example of like something that likely can be significantly automated through artificial intelligence and being able to, you know, reference building code and, you know, architectural designs to get answers quickly.
They’re likely always going to require a professional engineer, somebody to say that is the right answer because of the life safety concerns around building any sort of facility, but all of those processes will be remarkably more efficient than they are today.
Yeah, absolutely. You know what I think about being on site and looking through stacks of code, which is great. You know, it’s an awesome thing in order to be looking through all that. You always learn something new.
You can, you know, extract more information every time, which is great, but oftentimes… be a hell of a lot easier just to be able to query a large body of knowledge and say what is the answer? Yeah, so with AI now like you’re saying like there’s a 10 inch 3 ring binder Now I can control f and a PDF and I get okay, there’s 40 versions of this word.
Let me go sign the read one To now just say, you know, what’s the answer? Yeah, no, absolutely. So yeah, it’s definitely I think that it’s a huge opportunity And it’ll definitely make that the process of building a whole lot more efficient.
Absolutely. Yeah, I think there’s a lot of low level Tasks that can be automated Or time consuming tasks that can be made a lot more efficient That’s just going to drive that you throw the rest of the project delivery lifecycle Yeah, that way we can focus on really the things that matter my task.
Yeah Stuff that people love also like the other part is there’s a retention issue in the construction industry of talent you know, a lot of people leave the industry. And so, you know, early on, I felt like a glorified administrator.
Like I was the one like compressing PDFs and the zip files and send them to people, you know, not having that as your entry into construction. You know, I think we’ll make it a lot more likely to stay around for the entire career.
Yeah, no, absolutely. I couldn’t agree more. That’s one of the things I would always try to focus on whenever I was, especially on the owner side is trying to, you know, deboddle, make some of these, these really administrative or inefficient processes.
That way we can free up people that are valuable resources. The the the engineers, the QC, some of the superintendents, or whomever it is on on the sites, so they can actually be in the field where the work is happening, where we can really, you know, make a meaningful change.
Because oftentimes when incidents or issues arise, a second set of eyes could have entirely prevented it. And so let’s let’s free up the resources like you’re saying with with where they’re working on these really inefficient or mundane tasks and get them where we’re actually where it’s meaningful, right?
Absolutely. It can affect change. Now, we talk a lot about like leveraging your craft from the shoulders up. Like a lot of times people are just like leveraging from the shoulders now. That’s right. And neck down is like, you know, if you want to affect productivity, the people closest to the work that are experiencing the inefficiency are the ones that have the best insight.
I was on this job with Bechtel, Ivan Pah. OK. 396 megawatt concentrated solar thermal power plant. There’s 225 ,000 heliostats, like garage door size mirrors that is that power of this thing. And they all have a controller head.
So 225 ,000 controller heads. And I was doing, you know, some process improvement, link construction process improvement and was out and they had a manufacturing hub, you know, set up in the middle of the desert for these these heliostats.
And the guy that was doing the most efficient assembly I just watched. And what he was doing was he was separating. not all the butts and bolts and nuts that he needed for each assembly, putting them on back of a piece of duct tape and strapping it to the side of the table.
And he had like a 2x improvement rate over the rest of the folks. And it was just like, that’s where innovation comes from. And boom, productivity was through the roof. And so it’s like, okay, let’s just scale that to the rest of the crews.
And we’ve already got a 2x improvement in production rates, you know, just by that one idea. And you never would have known that. Never would have known it. How’d you not been in the field, right? Had you been working on some of these other just one day?
Smart people in the back office are going to figure that out.
100%. No, that’s awesome. I think it’s a great thing to kind of end on.
Rapid Fire Questions
So I’d like to ask you a few little last minute rapid fire questions.
So Zach, what is your idea of a perfect vacation?
Probably involve about 12 inches of champagne powder and a couple thousand feet of vertical on a ski mountain somewhere.
That sounds awesome.
What was your favorite movie?
Um, I don’t watch a ton of movies, uh, 180 degrees south about, uh, is a kind of documentary about Yvonne Shenard, Doug Tompkins, the founders of North Face and Patagonia about a trip that they took, uh, in a VW bus up and down the Panamanican highway back in like the early seventies and how it inspired them to build their businesses.
That’s a, it’s a, it’s a favorite of mine.
I’ll check that out. Yeah. What’s your favorite book?
Uh, Atlas Shrug. Yeah. Yeah. It’s a, it’s a big read. Yeah. Yeah. A couple military deployants. You can knock out this.
It’s a hundred page book.
Yeah, no kidding. What’s your favorite quote?
Uh, favorite quote. There’s a good one, uh, by John W. Gardner, uh, who most people don’t know. He was the, uh, secretary of health education and, uh, wellness for Lyndon Johnson, but it was, um, the world loves talent, but pays off on character.
Hmm. Yeah. That’s a good one. It’s a really good one. I’ll be thinking about that later, contemplating it. Yeah. If you, uh, if you could give any bit of advice, one piece of advice to somebody just starting off in their career, what would it be?
Uh, be curious. You have a growth mindset. Um, you know, don’t, don’t try to think that you know it all. You don’t, you never will. Uh, but just really liked instead of trying to be interesting to others, just be interested.
Hmm. Yeah. Good piece of advice. And then if you could have dinner with anyone, famous person living or dead, who would it be?