232. Too Many Tools, No Results With Mitchell Kasselman & Rick Moore

Welcome to another episode of Professional Builders Secrets. This episode was taken from a webinar series we did to launch the State of Residential Construction Industry Report, but the insights that were shared were so valuable we decided to share them with our podcast audience as well. In this session, I interviewed Rick Moore, who's an executive business coach here at APB, and Mitch Castleman, who is the founder of Resio software. We dive into what the latest data reveals about tool overload and how the most efficient builders are simplifying their tech stack. There's a bit of Q&A with the audience, so just be aware of that when you're listening, but the insights are highly practical. So enjoy the session. This episode of Professional Builders Secrets is brought to you by Apparatus Contractor Services. Apparatus provides full-scope, end-to-end QuickBooks Precision construction accounting and CFO services for residential builders. If you feel like you can't completely trust your weekly and monthly financial reports, or you feel like you're flying blind, Apparatus will rebuild and operate your QuickBooks accounting system and give you precision construction accounting capability you can trust. Learn more at apparatusteam.com or on the APB Rewards Partner Directory.

Most recently, with AI and everything that brings, that is also increasing the need, I think, for them to automate all sorts of all different areas of their business because they're starting to realize just what's out there and maybe a little bit afraid of falling behind others.

The legacy tools, the technology, pen, paper, Excel are still out there. You know, we see the gap regardless of even AI getting bigger and bigger between those using software and those that aren't.

And what the, the Sourcie data told us was that there's more investment in technology.

We often see one person can get value from software, but two or more you see exponential growth. I think estimation AI is getting there. It's not quite there. And then turning it into an estimate will become more powerful first with AI. Yeah, I mean, I think skills training is more valuable than ever. I'd love to multiply myself. That requires someone who is a skilled veteran in the industry to be duplicated in their skill set.

Welcome, everyone. To this episode of the Beyond the Data SourcE webinar series. So the topic is why builders are drowning in software and still doing things manually. My name's Will. I'm the head of marketing here at APB, and I'll be your host today. But hopefully after I've done a little bit of an introduction, we'll do most of the talking with our expert panelists today, and I'll introduce both of them in a moment. But while we're waiting for everyone to get in the room, we've got quite a few people already piling in. Could everyone just share in the chat where they're joining from today? I'm joining from Sydney in Australia, so it's 8 AM for me, but we've got a couple of North American panelists with us. So Mitch Castleman from Recio. Mitch, where are you joining from today?

Washington, DC, so in Eastern time zone.

Very good, very good. Well, welcome. And Rick Moore, one of the coaches here at APB. Rick, you're up in Calgary.

Calgary, Alberta, Canada, right at the foothills of the beautiful Rocky Mountains.

Perfect.

Happy to be here.

Well, great to have, have both of you on and great to have everyone piling into the room. We've got Eric from Colorado. Jennifer's joining from Michigan. Adam from Bundaberg in Queensland. Good to see Drew from Chicago. Chuck from Chicago as well. Mike's joining from Vancouver Island.

Oh, cool.

Welcome, Mike. I actually got married on Vancouver Island, so that's a nice little, nice little one to look at there. Evan from Minneapolis. Jeremy from West Palm Beach. Leah is joining from Chicago.

Love it.

Good to see Leah on. That's one of our, another one of our coaches from APB. So she's here to support Ric, which is cool. But great to have everyone here today and doing the analysis of the data around SourC, we did find that there's a lot of software investment happening in the construction industry. It's kind of popping off, to be totally honest. And there's a bit of confusion across the industry in terms of how easy it is to implement software. You know, what's the right software for me? What's going on with AI? All this kind of stuff. So we're going to hit a number of those topics today head on, but Before we dive into that, I wanted to give everyone a bit more context to how we're going to run today, and also then we'll introduce our guests. So I'm actually going to stop sharing my screen because today's going to be about diving into the conversation and having a really deep dive on the challenges that builders are facing around technology and software. But Rick Moore, so Rick's one of the executive coaches here at APB, and he's got a 4-decade career leading transformative growth across financial services, private equity, fintech, and also construction. He was the former CEO of the Canadian division of one of the world's largest business coaching companies prior to joining APB. He's written a book about exiting your business, and he's got a ton of other awards and expertise and certifications to make him a phenomenal addition to our team. So Rick, welcome to the webinar today.

Thank you so much. Appreciate it. Great to be here.

And we've also got Mitch Castleman. So Mitch is the CEO and founder of Recio Software. So Recio is an intuitive and cutting-edge construction management software, which has got a lot of AI built in. So I'm sure Mitch can touch on that at different times today. But Mitch has also played a pivotal role in helping small contractors grow in a company called Service Channel before he moved to Recio. And he worked with Fortune 500 companies as a consultant working for McKinsey as well. So I know you, you play around with AI and all sorts of stuff in your free time and do a bit of football as well, Mitch, but welcome to the webinar today.

Thanks for having me.

Great. Well, before I hand over and let Mitch and Ric do a lot of the talking, which will happen very, very soon, I wanted to give everyone a bit of context about what we're talking about today. So every year, the Association of Professional Builders, we publish a report called the State of Residential Construction Industry Report. We've done it for 6 years. We've had over 8,000 participants across the US, Australia, Canada, and New Zealand participate in annual surveys. So there's a ton of data we've been collecting since 2020. This year we were able to connect the dots across multiple data points, across multiple years using artificial intelligence, which has given us more insights than we've ever had before. So I just want to also acknowledge Recio's participation in the collection of that data. It really contributed to us being able to get a broader industry perspective as well. And that's why Mitch is here today. Don't worry about if you're questioning whether you can get your hands on the report. Everyone that's joining us today will get sent a PDF copy along with the recording of this webinar straight after. Well, not straight after, as soon as we process it, but soon after this webinar, you'll get a copy of that report and the recording of today's webinar. But today we're going to focus on technology, like I mentioned. Not your typical webinar. We won't be having a whole bunch of slides and, and going through a practical education. We're going to focus on deep expertise from Mitch and Rick and get hands-on-the-ground information from what they're seeing from builders as that ties into the data that we've got from the Sourcer Report as well. So it really is about going beyond the data like the name suggests. All right, well, let's dive into it so we can start getting you some value and really get this conversation opened up. I want to kickstart by looking at some software investment trends that we're seeing in the industry. So what the data told us in the research was that compared to 2024, 54.3% of builders increased their spend in software and 38.6% plan to spend even more again in 2026. We also saw the adoption of AI absolutely explode across the industry. So surged from 37.8% of builders in 2024 were using AI to 66.7% in 2025. And to be honest, 66.7% still seems quite low to me, and I'm sure it does to Mitch and Ric as well. But Ric, why don't we start with you? What are you seeing happen with your clients and the builders that you're working with from a software investment perspective?

You know, most of the builders that we work with have some element of a construction software package in place. It has, I would say, most recently with AI and everything that that brings, that is also increasing the need, I think, for them to automate all sorts of all different areas of their business because they're starting to realize just what's out there and maybe a little bit afraid of falling behind others. So we're seeing a lot of it in, you know, marketing their CRM platforms, things like that, estimating softwares, all of this. I think what I'm seeing is that because of AI and that whole, just the knowledge that's coming from that, it is opening people's, our builders' minds to, hey, what am I missing out on? And that's probably where that increased investment in software is coming from, is people not wanting to fall behind.

Interestingly, and I just want to pull this data up so I don't make it up again, Rick, but I'm pretty sure estimating software in the US, the top estimating software in the US was actually spreadsheets still in the Saucy data, 21% using spreadsheets as their estimating software. So as much as adoption has improved, there is still people using manual processes. Is that something you've been exposed to, Mitch?

I think a ton of it. And I think when I was first getting into the industry and learning about what people have done, you know, I saw a lot of spreadsheets. I have actually a yellow legal pad somewhere around here because I always use that as representative of what I saw on the first job site I went to. That was how they were doing the proposal and writing out the estimate. So the legacy tools, the technology, pen, paper, Excel are still out there. But coming back to kind of, hey, the conversation with Rick and what he's seeing and what you're seeing, Will, in the data, you know, we see the gap regardless of even AI getting bigger and bigger between those using software and those that aren't. Spreadsheets is actually a great example of this. If I think about an estimate and an estimate's baked into something like Excel, that data is very isolated. So it sits there. You have to manually edit it. You have to manipulate it in order to print it cleanly. You have to send it via email, information can get lost. And I think about where software has done a really good job, you know, not necessarily specific to Resio, but just in general, this industry, in taking that information and connecting it into the builder's process, into their workflows. And so now, you know, that information is abundant. It's throughout the end-to-end journey that a builder is running and also shared with external parties like clients and vendors. And so that creates a big value add that is a pretty big gap from, you know, not using that type of software, not using software out there that ultimately can take you a level up from spreadsheets.

It's interesting. It's almost like there's two fighting forces. Rick, you're saying that builders don't want to fall behind, so they need to adopt software. But on the same respect, we're seeing data come back where maybe they're adopting software too quickly and not exactly sure how to get the benefits from it. So It's almost like we're in a transition here, would you say?

I would say that a trend that I see is a builder may take on software but not utilize it to the extent that it should be utilized to. You know, they might be using one little narrow piece of a software that could do so much more. And so because of that, that is just keeping them back in the old, you know, pen and pencil and a piece of paper world. On other things that they probably have access to being automated with software.

Can you expand a bit more, Mitch, just on how you're seeing that gap grow and how it's accelerating?

I mean, I think about software versus Excel, not to say that your Windows computer or your Apple computer doesn't update all the time. Usually it's really annoying when it does, but software today out there continues to get better and better and better. The pace of development, not only because we have smart people building tools, but we actually have AI tools embedded into the software development lifecycle. So new features are coming out faster and faster, you know, than ever before. So for us, like, we're super excited because we think about the progress we've made in the past 12 months, which is fast, but the next 12 months will be even faster because of the tooling that is at our fingertips. And so when you think about something that's static like spreadsheets and you think about something like software that is continuously evolving, think of it maybe like a Tesla versus a used car, right? Used cars not changing, but a Tesla is always updating, right? That's going to put you at an advantage if you are part of that software, using that software, and the gap is going to get bigger and bigger and bigger. And there's also, you know, it shows up in the sourcing data, but there's such a proliferation of tools out there. There's more and more folks seeing how can we make construction processes better for builders, for the end client, for trades. And so you're seeing a proliferation of tools out there that ultimately further that gap even more.

Yeah, we could barely fit the project management tools on one table on a page. So yeah, there is a bit going on. Funnily enough, I had to update my laptop this morning before this webinar, so that was a bit of a moment. Look, I just wanted to let everyone know if you've got any questions at all, please drop them in the chat and I'll bring them to, to Mitch or Rick throughout the conversation. So if anything's just on the tip of your tongue, you just really want to find a bit more about, please drop it in the chat and we can get the conversation flowing from that perspective. But let's talk more about the underutilization of tools. So what the, the, the Saucy data told us was that there's more investment in technology, but there's actually not enough training around how to use that technology And that's actually dragging down profitability across most building companies. When we look at the smaller builders, sub $3 million, there's not too much of an impact because they probably haven't accumulated enough tools and they're running relatively lean operations. But those mid-market builders, say like $5 to $10 million, they haven't got the systems in place and the training to actually scale effectively with the technology they're adopting. So their profitability is dipping down. The larger builders above $10 million tend to have more dedicated roles and systems in place to cope with the additional technology. And most of the time they're, they're probably at a point where they've consolidated their tech stack. So it really is those mid-tier builders where we're seeing the most strain and struggle, which is obviously a large portion of the industry. Rick, do you want to touch a bit more on, on what you're seeing from an underutilization perspective and how that impacts builders day to day?

Sure. I think what ends up happening is there's probably some initial training, some initial excitement around the adoption of software, and then it's not top of mind. So it really has to be leadership-led that, hey, the reason we are doing this is to make everybody's job more efficient. But if leadership isn't driving that and explaining why this is better, why this is what we want in the business, you're just leaving it to people to adopt it. And so the average worker could be intimidated by it. And if they're not trained well enough in it, they're just going to stick with that human status quo bias, which is, I'm just going to do what I've been doing. This is too scary to go and learn this new skill set. So it has to be driven from the top. And it can't just be left as a one-time, you know, we'll bring in the representative of whatever software that we've just purchased for 2 or 3 days to train. It can't stop there. You have to have a champion that's leading the team. And just letting people know, hey, it's nothing to be afraid of here. This isn't going to replace you. It's going to make your, your job better, your job more efficient.

Do you see that at Resio, Mitch? Is it a struggle for you to get customers to use your software?

First of all, let me say, Rick, I'm going to send you into, to my account management team, and that's all the stuff that we talk about all the time that goes beyond the product. And Will, to, to your point, I think a lot of times we see customers coming to Resio that, you know, previously didn't use whatever tool they were using, and then You know, at Resio, what we often see, just to kind of correlate some actual hard data around it, the faster your onboarding is, and if you have 2 or more users involved in the onboarding process. So to Rick's point, think of that as an owner and a champion. The faster you reach weekly active usage, which is when we see the platform become more and more valuable to our customers. We have seen in the past the number one reason for failure in adopting the value of Resio is usually a failed or aborted onboarding. And more often than not, that comes back to the team not being bought in on the change or the transition, even though they made a financial purchase. So, you know, we see it all the time. And I think the ones that are most successful actually move the fastest because they have that organizational buy-in. And on our side, you know, what we try to do is we try to stack up an experienced customer success person with them because we know as much as maybe someone wants to self-serve their journey and train themselves, that accountability, to Rick's point around an owner and a champion, also needs probably an external party to hold them to hitting certain milestones.

It sounds like it really needs to come from the top down as like in terms of leading the charge.

Yeah, there's no question because You know, what ends up happening is these decisions get made for the right reasons, but, you know, they don't— it just doesn't get communicated properly all the way down the line. If somebody just feels that they haven't been told in the past that their work was subpar, so now what is this new piece of technology that they've got to go and learn? You know, I had a builder that I coached, uh, had 7 project managers, none of which were using the project management software fully, some not at all, some a little bit. And this constant frustration on behalf of the owner, but really she was the problem, right? Is that she just didn't enforce it. She'd rather just go and fix the mistakes that were getting made because they weren't using it. Again, this comes back to you're a builder, you're running a successful business, but people are looking to you for guidance. The people that work for you are looking to you for guidance. And if you don't give them that, they're not going to understand the decisions.

Yeah.

Let me add two things on what Rick's saying. I think one, there are a couple of companies I've seen in resio that have done a really awesome job of this, you know, from a positive perspective versus, you know, focus on the failures. Where they've tied team performance metrics to achieving some level of training adoption in the platform. And as a result, the team is calling us saying, hey, how do I do this? How do I do that? Versus us calling them. That's always a great outcome because they're bought in, they're motivated, and then they get to the value really quickly that they would see by adopting the solution. I will say the second thing is if you look at this industry as a whole, I would be remiss as a software person to say that the software out there is perfect. You know, I think that we look at a lot of the reason we're here, we find that some of the legacy tools that have been out there that folks have had to use in the past were cumbersome and they felt like rocket science to folks. And I think we've made a step forward with that at Resio. But I also think there's another big step forward that the industry has to take because these tools Resio included, we're— I'd love to say we're special in this case, but we're not— require inputs in order to maximize the value from the tool. And building an estimate, that means filling in a description, filling in a quantity, filling in a unit cost, building, you know, a selection requires adding choices. You can templatize all this and make your process efficient. But the way we are going to go forward in this industry is how can we automate these inputs? Because that's when we truly see software reach another level of value for everyone here. And Resio, you know, Builder Trend, any tool out there right now is going to be relying on those inputs in order to develop a successful output.

Yeah, I love the idea of the KPIs tied into, to the training on the software. Makes a lot of sense. Rick, I'm assuming there was a good outcome to the situation you described. How did you help her through that?

A lot of discussion around just being direct, being a leader. You know, it was the nice, didn't want to create too much angst and have conflict. And so, getting that established, getting the KPIs set with that team that wasn't performing, and then holding them to it. And I think going back to the way she's a very nice person, she tied in some specific bonuses for using it, right? So there was a little bit of a carrot dangled to get them to use it, but ultimately it ended up being a success. And I think 7 project managers became 5.

Well, yeah, that's a different conversation, which I think Mitch was probably somewhat alluding to, even if it was a long bow with the automation side of things. We've got a couple of questions coming in here. This is more of a an opportunity for Mitch to talk about whether or not you work with developers. Margo's asking whether or not you do work with developers to help them implement technology, and if so, how can they contact you?

Yeah, great way to reach us is, is through our website. So resio-software.com, either through a demo or contact us. We do work with folks, so that would be the best way to reach us.

Cool. And this might be a question for you as well, Mitch, because I'm sure you can, can cover it off nicely. Robert, he said he runs a $7 million annual design-build firm using Salesforce free CRM, Excel for estimating, Buildertrend for construction management, and then an accounting program called Comet. Really looking for something which could ideally bring a lot of that together. And it sounds as if maybe, I mean, to be honest, Buildertrend could probably do estimating and a couple of other parts there. But yeah, so maybe there's a bit of user adoption there. But yeah, maybe you want to just address the best way to start bringing them together because I think that ties into where we want to go next in the conversation.

Usually when I advise folks on software and how they think about building like a tech stack, not just necessarily thinking about project management, we usually try to hone in on, you know, what are the 1, 2, 3 business goals they have and what's going to drive the most value in order for them to achieve those business goals. And that's just kind of a maybe a starting point to always evaluate, hey, is all of my software actually helping me achieve those goals? Now let's just sort of assume everything listed here that Robert has is all valuable. Then it's a question of, okay, relative priority, what's delivering the most value for my business and what do I really need to the fullest? Maybe to give an example, you know, Salesforce here, uh, you know, the Salesforce HubSpot, that is the suite of all suites for CRMs. It, depending on the business you're running, how often are you using the lead management tools? How much value are you getting from that piece? And I could be totally off base here. Right? But that is a CRM function that usually a lot of project management softwares or other softwares may have baked into it. So, you know, I'd be looking to consolidate because maybe you're getting more value from BuilderTrend for construction management and maybe less for Salesforce. And then I can make the assessment that, okay, if BuilderTrend can do 80% of the things that you need in a CRM, then that will solve that need for you. So it comes down to kind of looking at each one and how they fit into your business goals and value, and then ultimately what does your end-to-end process look like? I will say as an industry as a whole, because all the software has all come relatively quickly or has been entrenched for a while, you kind of have two different generations trying to talk to each other. A lot of software doesn't talk to each other that well. It's a problem that we still have in this industry and that we're still figuring out how to solve. And so thinking about where you're going to spend the most time and get the most return on your investment usually narrows down, hey, this is where I want to start and build a process around it versus having, you know, the kitchen sink of everything that is best in class.

And you're being very humble because Recio can do most of that as well, right?

Yes, we can. But, you know, I think this is ultimately about what's best for this person here.

Of course. And just to add to that Recio comment, Isaiah said Recio's customer service is excellent in the comments. That's a nice shout out to Mitch and the team there.

Thank you, Isaiah. I appreciate that.

Yeah, let's talk more about the risks of not adopting software effectively if you're investing in it. And potentially, like you mentioned, Mitch, having disparate systems that aren't talking properly to each other. What we did see from the data is net profit in particular was impacted from investing too much in software and not adopting the training and things like that. We did see a lot of those mid-market builders I mentioned before, the $6 to $10 million range, They were investing more in software, and yes, they decreased their net profit, but they were growing their revenue. So it was almost like they were paying some level of tax on software investment to increase efficiency, to grow the company, and therefore their bottom line was lower. But, you know, they were trying to get to that next stage in growth as well. So there's a bit of a positive spin to the investment in software as well, but there's obviously a gap between implementation as well. So what are some of the risks, Rick, of Yeah, having a bit of a disparate system of software and not working efficiently together.

Sure.

Well, I will say that, you know, you want to have a good— you want to have good systems in place in your business. You want to systemize your business. The software and technology that you use should just enhance the already sound systems that you have in place. So that's where I would see if you didn't have really sound systems in place, and then it adopted 2 or 3 different softwares in different areas, there's the communication between those, just because there's not proper systems in place, could break down. And for a builder, I see the biggest problem there is time wastage. And time is money in the building business. So, you know, it is important. And Mitch touched on it when he said that you may have two different softwares and one of them might do something that that other one is doing. Right? So having two different things that people need to learn in two different departments, and you could be doing that with one. So that's where you really want to have your systems buttoned down to the point where the technology that you're bringing in is enhancing your business, not causing delays and communication issues.

Yeah, that makes a lot of sense. I mean, time efficiency, just user adoption sounds like there's some issues, but there's probably some, some implications. Mitch, maybe you can touch on it from a construction point of view as well, I imagine.

Yeah, the one thing I actually wanted to build on what Rick said is I often see hiring as a consequence of multiple systems. So, you know, I would say that like the thing we often hear from folks is, and this is the case for some legacy solutions, it's like, hey, I need to hire person X to run my software processes. And that is usually a concern that we have for the business itself, because then obviously you want a champion that's ultimately going to drive adoption of the tool within your business. But when you are hiring people to fill gaps created by software, that means the software is working against your business. And so coming back to kind of the construction side, well, in your question, like we often see, not only is it a person filling the gap, but like there's information gaps. It's usually where something is in one system, but not in the other. So I go to install, you know, some part of the home and I have the wrong information. I make a mistake. Now my client's upset. I've cost the project money. I've hurt the net bottom or I've hurt the bottom line for that particular job. And so those information gaps end up compounding the financial impact of those mistakes.

So I think we've touched on it a few times, Rick. You mentioned like consolidating is probably the end goal. I mean, Robert's even mentioned in the comments here, he's trying to figure out how to consolidate his software stack as well. So it sounds like it's probably something everyone would love to have, you know, this one tool. But Mitch, you mentioned that maybe that's not possible given the current constraints of technology. Can you talk more about that? How do builders go about finding the right stack for themselves and making sure that it's as consolidated as it can be without having too much, you know, fat in there?

Yeah, I mean, it's really easy to have shiny object syndrome. I have it all the time. I'm like, I'm looking at the cool AI tool. I'm like, I need that. I want that for my business. I want that for my team. Next thing you know, we're spending more money on software than we are on people internally. But what I can say is, you know, we think about building a tech stack around a system of record. So, you know, that usually requires 2, maybe 3 things, right? Number 1, that's my accounting system. So where am I going to document my final P&L, pay my taxes, make sure I'm documenting everything that has happened on every transaction across the business. We usually see that pair with QuickBooks. It's QuickBooks Online is the most common one that we'll see. And then we say, okay, you're starting with a system of record for your projects that helps you run them from start to finish. So that's your project management suites, that's your Resios of the world, your Builder Trends of the world. Now I've got what I would call a complete system of record where I have 100% of the financial documentation, I have 100% of the job documentation, and now Along the way, I can make sure I'm doing everything consistently with tracking from start to finish. And then I think about supplementing where I have specific needs to automate a specific problem of my business. A couple of good examples of this is, you know, CompanyCam. CompanyCam is a great tool for field usage and customized checklists and photo storage and video storage. So if I think about CompanyCam, that's solving a very specific need to my business, and it's going to complement those systems of record. Another good example—

and I'm going to promote, promote all these other softwares but us—

is, uh, Adaptive. Adaptive is a great one where, you know, if you're looking for AP automation, right, that's going to be a very specific use case that's going to complement what you do in terms of your two systems of record, your project management suite, and your accounting suite. So I kind of think about it as build a base and then build around it. And it all comes back to what we talked about earlier with Rick in terms of, hey, we want to achieve some sort of business goal from this. We don't want to make sure that we are just buying everything for the sake of buying it because it looks cool and it might help our business.

Yeah, I would agree. The, the, the idea would be to start off with whatever you've got, do a bit of an audit on the things that you're using. And see if there's overlap. You know, sometimes I get a question from a builder that says, geez, you know, we're talking about marketing and I know we want to do some automated emails and those types of things. Who would you recommend? And I say, well, you use BuilderTrend, correct? You have that software package? Well, they will have a CRM, there's a CRM and there's email automation within that package. Not knowing that could easily go off and, and, you know, sign up, go out and buy another piece of software to do that. So I think doing a bit of the audit first, just see what you've got, see what, what might be being wasted, and then that'll give you a good indication where you should be going forward.

Yeah, at APB we actually have a list of all the software subscriptions and every quarter our leadership team goes through and gets called out and says like, you need to check all of the ones that are in your department and make sure that they're still getting utilized and if they could be consolidated into another tool, which I think is actually a really good way to raise awareness and make people question if they're using the right tools or not. Well, Mitch, you have been promoting everyone else's software, so I'll give you an opportunity to tell us more about Recio in a moment. I want to really lean into this idea of, we've spoken a lot about the problems, the challenges, and all that kind of stuff, but what does it look like when you are running an efficient building company and you're adopting technology and you're growing and it's all working as good as it can do? I mean, nothing's perfect, right? But, and we'll start with Rick and then we'll come across to you, Mitch, and you can talk about some of Recio's customers, how they're getting the most out of your software. But Rick, talk to me about what you see in the best performing building companies from a technology perspective.

Sure. Well, the best performing builders are systemized. And because they're systemized, moving through the levels of systemization requires employee buy-in at every level. Because they're good at that, they're also good at that whole idea of deleting, automating, and delegating their needs. So they're constantly taking a look at their business and saying, what no longer serves us? What tasks have become redundant? What tasks can we automate? And where can we delegate? You know, where can we make sure that everybody is efficient in what they're doing so that they look at their business that way? And then they say, what technology can help us do all of this? Very forward-thinking. Leaders that don't just sit and rest on, you know, last year's results. I think that's the main trend that I would see.

And I'll build on that too. Like, I think when I think about the Resu application, what you're describing, Rick, I know several, you know, for example, custom builders in our system today with teams of less than 5 and that are doing $10 million plus in revenue. And I think about, you know, those lean efficient operations, they are rigorous in their attention to detail on that system that you mentioned from start to finish. So as soon as that client, that prospect comes through, for example, they're tracking the lead in Resio, then they are building out the initial scope of work using a template or a cost catalog that's going to accelerate some of that process. They have guidance on bids and selections that they typically use, even if they're a true custom builder. There's still a foundation of these are the vendors I use, or these are the typical vendors that I may request a bid from, and I'm ready to send this information out once that client comes in the door. And as the process goes, not only are they using Resio to the fullest, maybe they're, you know, using the schedule function, they're tracking to-dos, they're making sure all their vendors show up in their job sites, but what I actually think distinguishes them even further is The way they communicate expectations to their people as well. So it's not just, hey, an owner is using all these functions along the way. We often see one person can get value from software, but two or more, you see exponential growth. And so their clients get, for example, a document at the very beginning of the job. This is how we use Resio. We send messages in Resio. We approve selections in Resio. They get twice as fast. Results in terms of selection decisions relative to others. This is to their vendors. Hey, we are going to send you a magic link. That link will give you access to your PRIDs, your purchase orders. You don't have to log in, but all you have to do is drop a file and that's it. And that communication before on what the expectation is for 2026 allows 2026 to run smooth because then that vendor understands in order to work with that builder that they are going to follow the process. And so the builders establish themselves as a credible resource for everyone involved while executing a very efficient process.

Well, Mitch, you're preaching to the converted because we talk about our builders becoming the authority to their avatar, to their customer, and having that, you know, the subs that they work with and the suppliers that they work with are all aware of what our builders stand for. And as an authority, you know, you can control who you build for, who you bring into your world instead of having to take everything. And that kind of relates to the chaos that we would see in a builder that might be struggling with too many pieces of software that don't communicate. You know, so it's all of that. They haven't just established that that authority. And when you do that, I think everything else will fall into place.

Yeah. When I was starting Resio, I basically signed myself up as like a customer, like an end client. One of the jobs that one of the builders I was working with was, was doing. And it was very clear that that builder, very great, you know, it was a great builder in the Massachusetts area, was the authority like you described. And so the client, when they felt like the builder wasn't providing that authority, would get anxious and ask a ton of questions. But when they felt like the builder was that credible authority, they were so happy that someone was just running the show for them, and they were ready to hit thumbs up when it came to whatever, you know, countertops they were recommending. Or, you know, it made the whole decision-making process throughout the home much, much, much easier because they just had confidence in what the builder was putting forward.

Yeah, it's a great point. We talk about professionalism a lot and being perceived as a professional builder at the APB. But there's just so many of these micro touchpoints which would be easy to overlook that can actually contribute to the perception of your professionalism with a client. And software can help enable being able to automate those, like you said, Mitch. So Connor's dropped a question in here. Anyone had any success with Estimation AI? I feel like, Mitch, you're going to have a take on this question.

Yeah, I think Estimation AI is getting there. It's not quite there. Is my take just on looking at the software tools out there. And so, you know, without clarifying 100% of the question, to me there's, okay, do I automate the process of takeoffs, which is one aspect, and then, or do I automate the process of actually generating the final estimate for the customer? Because the takeoffs are getting you those parameters, quantities, basic information, and then generating the scope of work and actually putting together the associated pricing is maybe a second piece. That would come with it. I tend to think the latter, where we're taking the information from a takeoff that has been provided or from a blueprint that's been provided and then turning it into an estimate, will become more powerful first with AI versus takeoffs. I do think there's AI-based takeoff solutions out there. I've seen mixed results. I can't say I've come up with a winner and said this is the best solution out there. Just given the complexity of plans and how things change and getting all the data and information right. Now, the fun part is 6 months from now, I could be totally wrong and all the technology and tools out there could have accelerated faster than I could have imagined. So that's the fun of the game we're in right now.

Can you tell us more, Mitch, about how you integrate AI with your software and if you've got like a roadmap to look at these kind of technologies?

Yeah, I mean, To be blunt, we are working on the second piece right now in terms of building an estimate. So one of the things that we're hoping to show folks in a demo at IBS in a week's time is the ability to take a set of information that is provided from a builder and then turn that into an estimate output that is desired by the builder for, let's just say, a remodel or a new home. We think that's something where, let's say you're meeting with a client, you want to get the 15-minute version that's 90% accurate. That is something that AI can do and with a little bit of training can do very well. So we're focused a lot on point solutions like that. We think a lot about, okay, what is the persona doing in a construction organization and supporting them with what we would call an agent, which essentially is going to think like them. So if Rick was working in a construction organization, we often think at Resio, how can I clone Rick? How can I get 2 of Rick to do a great job? To a will. And so a lot of the point solutions that I'm describing— estimating is one of them— where we're focused is how can we make the output of a single individual more powerful. The second area we're focused on is within Resio itself, how can we automate the inputs? So I think about, for example, a lot of times we see folks come to us and they do great job logs. Those job logs have to-dos, they have updates for vendors, who was on site, who was not on site, because it's a great area to start within project management software. Well, there's actually so much juicy information because the next thing they're going to go do is go into the office or they're going to go back to their computer and they're going to update the schedule. They're going to create to-dos. They're going to send a bunch of messages. And what we want to do is use AI to predict those actions. And so we can tell that particular user, hey, based on the information you put into that job log, we recommend adjusting the schedule by a day because the weather is bad, or we recommend creating this to-do list for your plumber to come back out on site, or we recommend sending a message to the client giving them an update on XYZ selection. And so those are the kind of automations in-app that we are focused on at Resio, to where we can take all those inputs and whittle them down to what's really most valuable.

Do you have any insights, Rick, on, I guess, the use of AI with builders and, and how they're— are they noticing it pop up in the tools they're using from your clients?

Definitely more and more are using AI. Every time I'm in a coaching session, somebody is talking about some new thing that they've come up with in AI to use. And, you know, we have a great discussion around being careful to make sure that it's a good assistant, but you're not relying on it to do your job. AI has come up, to Mitch's point, a lot recently about estimating. Is there something I should be using to do my estimating? And the first thing that I want to tell my builder is, look, you want to get, again, this word audit, audit your current process. Make sure that you've got that buttoned down. And then you'll be able to identify whatever gap it is that you think you want to solve with AI or with any sort of a program. And a good way to test it is to— and you don't have to tell, it's already a job that you've completed, so you know it down to a penny what the estimation cost was. Feed that in, feed that job in there and see if it comes out properly. So it's all really, you know, you want to make sure that everything we do around this space is creating value. Is saving you the time that you want to save, but not being a shortcut that could end up being a costly mistake.

Yeah, it's simple. I was at a speech or at a talk. What was this, about 7, 8 months ago? Woman, Angela Duckworth, she was terrific. And she gave this great analogy. She was speaking to a bunch of students and she said, we think about AI and we're scared about how it's going to affect our kids. I, you know, I have a son at home. I think about it a lot. And what she said was, you know, the critical thinking is the most valuable part that you need to retain. So think about writing a paper and then putting it into ChatGPT and having it edit that paper. That's great because it took out maybe a lot of the grunt work of grammatical changes and little cheat, little, little details that need to be fixed or went back and forth with you on some new ideas. That you could add to your paper, but having it write that initial paper without having the experience of writing papers in the past, well, we don't know if that paper's going to be any good or not because we don't have the critical thinking skills behind it. So I thought that was just a really good analogy and it applies to building as well. You know, wanting it to build an estimate for me, well, it's only going to be most valuable if you are an estimator that understands that output.

Yeah, that's a great point. An interesting take from Chuck here and I think Mitch, you might be best placed to, to at least comment on this one. He said trying estimating software in the last 5 years has been a losing battle because of changing labor costs and material cost increases and things like that. And maybe that's why a lot of builders have stuck to spreadsheets. What do you think about that?

Yeah, I mean, I can say that there's tools out there, you know, there's OneBuild, Craftsman Cost Book, there's RS Means. I think there's all these different estimating tools and we actually embed some of them in Resio directly. We think it's directionally right. We don't always think it's perfectly accurate because to your point, everything's always changing. I actually think that the, the harder truth here is less maybe about what's in the software as in our data, we see more and more builders going to cost plus, especially on larger jobs. That's because they're scared around the impact of changing costs and getting things wrong. Now, I think, you know, there always is going to be instability in labor and material costs. And protecting yourself as a builder is important as ever. But that's maybe just what our data shows. I can't necessarily speak to all of what the estimating software is doing. It's just, it's directionally right. It's not always perfect.

The source data actually said there's more people on fixed price than cost plus, and fixed price is actually growing. But I mean, that could just be—

Sorry, that could be a reflection of specific to high-end, to custom homes and high-end.

No, I think so. I think as you, the complexity of the build goes up, cost-plus becomes more common, I think. Well, that's what the data shows, at least, not what I think. But I know we recommend fixed-plus to, to our clients, right, Rick?

We do. And for a few different reasons, it's better for the customer, really. If you've got a builder that will commit to a fixed price versus a cost-plus, that's really a better— it's better for both, really. Because your cost-plus, it's just an ongoing negotiation every time you are presenting invoices. All they're seeing is an invoice, and if that is way higher than they initially thought it was going to be, that's bad enough. But then that plus, that number, is just right in their face the entire time. But I would say most builders that use cost-plus are doing it because they do not have much confidence in their ability to estimate properly, or they're just simply afraid of prices escalating out of control. So it, you know, just comes down to contract, the way you write up contracts. Perhaps just have some contingencies in there that will give you that protection. But I don't think that any AI or any software is going to solve this back and forth between cost-plus and, and fixed price. I don't think that's— it's going to be there forever.

Yeah, I think that's probably a total— another conversation for another day if you want to dive into contracts.

Next month's topic.

Yeah, exactly. Skyler's put through a question here, and I hazard a guess maybe she wrote it with AI because it's, it's quite lengthy. But let me, let me try to read it out and we'll see how we go. Are there any concerns of losing critical skills in the case of AI not being sustainable? The chances of it destroying our water supplies and with how expensive it is even to run. I guess they're talking about the infrastructure required to run, you know, large language models and the data required around that. Mitch, I think that's, that's where it's going. Do you have any perspective on that?

Yeah, I think there's— it kind of comes back to the analogy we were talking about with papers and estimating like we're very much a believer in AI is only going to enable more like labor growth and support in this industry. AI is not here to take jobs. It's really here to do the work that no one wants to do. And so I think when I look at a question like this, and there is a potential chance down the line that AI goes crazy or it does, it's not sustainable or whatnot. But what we see it is becoming more deeply embedded into all of our technology. You Google something nowadays, It's automatically running an AI search on whatever you just Googled as well with Gemini. So it's hard for me to see a world where AI is not here, but it's not that valuable in terms of a counterpart or an agent or a partner if you don't have the fundamental understanding of what you're using it for. So we often talk about building— we say a lot at Reziu, like, it's important to use the opposite side of your brain, developing, you know, thoughts about art, about prompting and writing. We think about the critical skills of being an engineer and understanding how good code is developed, or as a salesperson, how a good email is written, because those things translate to good use of AI, because then you can understand what AI is giving back to you as a partner. If you don't do those other things, then you're just taking what AI is giving you at face value. We don't always know if that's good or not, and we might not always know if that's good or not depending on the direction that AI takes us.

Thank you. Yeah, shout out to Skyla. She did write that herself. She said just a quick typer, so good to know. And Tom has to jump off because he's got a Resio demo at 4, so that's good to hear.

That's awesome, Tom.

But actually, just to, to tie back into Skyla's comment, and I think you touched on it there as well, Mitch, and you brought it up again earlier with the example you gave from that presentation you saw She's asked whether or not we should be looking to train people coming into the construction industry manually first so that they, to your point, understand how to do something before efficiently improving it with AI. Is that how you are taking it as well?

Yeah, I mean, I think skills training is more valuable than ever. Apprenticeships, understanding how things are made, how things are built. I think Even in that process, there's AI to make that learning easier for folks. So it's always going to be there. But I think making sure you have that skill or have that foundation is critical to being able to maximize the value of using AI in whatever you do.

It really is about being an assistant for you. So your prompts, what you are asking of it, comes from you, right? Comes from your knowledge base. And that's where the outputs are going to be best. When your knowledge base is there. With no knowledge, just your prompt isn't going to be good enough to give AI enough to give you a great answer. That's the way I would look at it.

Yeah. And I'll say I did, when I mentioned the cloning of Rick and Will, I'm not the one with the original thought there. That is, I've had multiple builders come to us and like, I'm like, hey, what's your number one problem right now? Well, I'd love to multiply myself. Right. And so that requires someone who is a skilled veteran in the industry to be duplicating their skill set, not necessarily getting someone who has no experience in that seat.

Well, I'm just going to share my screen one more time. Again, we're getting close to the hour, so going to have to wrap up. But there's been a lot of chatter today about— you've heard from Rick, who's a coach here at APB, heard a lot from Mitch and his expertise in, in Recio as well, and a bit about how Recio works. So If you want to find out more about either company, scan the QR codes there. Recio is a rewards partner with APB. So if you're a member of APB, you can get a rebate for working with Recio and easily enough to jump on and get a demo. But if you're not a member, you can just go to reciosoftware.com and find out more about them there. And of course, reach out to our team at APB if you're interested to learn more about coaching with us. But just to finalize with one last question from Randy here. And I think it's for you, Mitch. It's probably about the roadmap for Recio, but he wants to know when Recio might have all aspects of job cost accounting built into its platform.

It's a great question. It's something we are looking into here in 2026. Uh, Randy, I can, I can follow up with you on this directly, but, you know, as we think about QuickBooks, obviously we're paired with QuickBooks Online today. That's what we recommend to folks, but ultimately over time, you know, whether it's us or one of our partners Adaptive, we hope to have more of that workflow in-house.

Yeah, I'm hearing a lot of good things about Adaptiv in recent times, so it's good to know that you're in good alignment there. But thank you everyone for joining today. A special thank you to Mitch and Ric for giving up your time and sharing your expertise. It's been a really good conversation and something which is a critical topic to talk about in the industry at the moment with the adoption of technology across every area of our businesses. So thank you for joining us today, Mitch and Ric. Go check out Recio, check out APB, and also thank you to all the builders on the call today. We pretty much had everyone stick around right until the end, the whole group. So it's been a great conversation and thank you for sharing your comments and asking questions and being involved and taking the time out of your day to learn more about managing your technology stack. So we've got more of these webinars coming up soon in the Beyond the Data series. So go check them out. But thank you very much for joining us today and have a great afternoon.