The Modular Advantage – Strategies for Business Success
I invited experts from the modular construction industry to discuss strategies for business success in modular construction, particularly for housing projects.
The panel included Andrew Staniforth , CEO of Assembly; Guido Maciocci , Founder of AecFoundry; Henry Salo , CEO of Flow Modules; and Renee Puusepp , Founder of Creatomus Solutions. I facilitated the workshop.
Key Discussion Points
Here are the condensed discussion points:
Introduction to Modular Construction
We began by defining modular construction, which involves prefabricating building sections or modules off-site and assembling them on-site. Various types of modular construction were discussed, including panelized construction, volumetric modular, relocatable buildings, and hybrid solutions.
Business Models in Modular Construction
The panel explored different business models, such as turnkey solution providers, manufacturing partners, design-build firms, etc. Key criteria for choosing a business model include understanding the market, the problem being solved, and customer needs. The importance of having a fixed aspect in your business model was emphasized.
Building the Business
Starting a modular construction business requires a clear understanding of the market and customer needs. Key elements include having committed first customers, a strong team, and a well-thought-out concept. The panel also discussed the importance of aligning your business model with your funding strategy and the need for a clear roadmap.
Technology and Processes
The discussion highlighted the importance of adopting product development methodologies from industries like automotive or aerospace. The need for in-house technology development and the pitfalls of relying solely on external software development agencies were also discussed.
Customer Acquisition
The panel agreed that customers are more interested in the value provided than the product itself. Understanding developers' decision-making process and the importance of references and real-world examples were highlighted as crucial for customer acquisition.
Risk Management
Risk management is critical in modular construction. The panel discussed strategies such as not taking on unmitigable risks, ensuring financial security with suppliers, and starting with a resolute customer. They also emphasized the need for patience and not rushing to high volumes too early.
Sustainable Growth
The panel suggested starting in high-value markets and gradually expanding for sustainable growth. It highlighted the importance of getting enough "reps" or repetitions in the initial market to build expertise. The geographical limitations due to freight costs and the need to align business models with market size were also discussed.
Listen and watch
You can listen to the discussion on the AEC Business Podcast or watch the workshop’s video recording on YouTube.
As seen in the video, I kept notes as a mind map during the workshop. You can download a tidied-up mind map version on the podcast page.
PS. Join Prefab Pioneers on Birdlflocks to continue the discussion!
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I thank our fantastic partners for supporting AEC Business!
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ProjectReady is a collaborative project information management solution that brings data and information together to empower professionals in the architecture, engineering, and construction (AEC) space as well as project owners, to make decisions, reduce risk, and save money.
Construction Innovation Agent | Managing Partner @ AE Partners
1moDownload our workshop results as a mind map at https://aec-business.com/workshop-the-modular-advantage/