Meeting the Needs of Building Materials with Emerging Technology
Authors: Diana Fisler, Frank Yang, and Chris Richardson
Summary: Nothing changes in building construction…until it changes. Incumbents are looking for competitive advantage and startups are looking to disrupt the status quo. Despite a fear of disruption, most legacy sector companies are not adept at working with startups at the bleeding edge of innovation. ProblemSpace connects legacy sector companies with the innovation ecosystem to help solve vexing technical challenges.
Nothing changes in building construction…until it changes.
A combination of tough code requirements and the risk avoidance driven by a needed focus on cost and reliability of product delivery means that construction can change at a glacial pace. That is until market and regulatory conditions align to create rapid disruption. For decades bituminous products were dominant in commercial roofing until single-ply membranes transformed the industry by offering cost and labor savings with the right long-term durability and moisture protection. Plywood gave way to OSB (oriented strand board) in residential construction. Interior materials such as carpet and flooring have undergone similar changes, with engineered wood and various synthetic fibers replacing hardwood and wool, respectively, in many market segments.
Thoughtful building materials companies say, “if only…”
Forward-looking building materials companies are increasingly aware that disruption is coming. Many factors play into this coming disruption, among them a historically tight construction labor market, increasing extreme weather events, stringent energy codes, and most notably the onset of low-cost modular / prefab solutions from overseas (e.g. turnkey building envelopes for hotels fully delivered from markets like China and Poland).
Building materials stakeholders-ranging from building materials companies to architects to construction management firms to building owners-are increasingly looking at the potential disruption on the horizon and thinking, “if only we could…”
Building materials companies are looking at the trends and some are asking “what if” we could offer lightweight, resilient materials to the construction space that would lower risk in the event of wildfire, flooding, and hurricanes and require less labor and skill to install in compliance with code?
This scenario is playing out with increasing frequency for ADL clients and partners such as Sto Corporation, a $1B global supplier of exterior building systems. Sto’s board members asked what was holding the company back from achieving step-function growth improvements. Sto leadership knew if they could solve specific challenges such as those around fireproofing or long-lasting architectural coatings, then there was real money to be made.
Unfortunately for most legacy sector companies, including but not limited to building materials, organizations lack the expertise, leverage, and reach to answer these “if only” questions.
Innovators are eager to disrupt the status quo and most would happily partner with forward-thinking building materials companies.
It’s true some startups and other innovators have an independent attitude and are dead set on breaking the incumbents’ business models. Most effective startups, however, are eager to work alongside the industry players that will be key to market adoption and market access.
Disruptive companies are already hard at work innovating in building materials. For instance, companies like Aspen Aerogels, Cabot, Johns Manville and various emerging competitors in Asia and Europe have made steady progress in using high performance aerogel insulation materials in the oil and gas industry. There are still many opportunities for high thermal performance materials like aerogels and vacuum insulated panels as they continue to improve in cost and scale, as evidenced by Kingspan’s Optim-R product and Department of Energy research on integrated vacuum panel roof insulation. Multiple researchers are looking at self-healing materials for roofs, roads and walls.
Innovation is not limited to materials. The very way we do construction is undergoing a disruptive revolution with the rapid growth of modular/pre-fab technologies. Modular and panelized construction are providing exciting opportunities for new materials, manufacturing techniques, and software innovation. Traditional materials suppliers for stick-built applications as well as contractors for related trades like drywall, framing, stucco contractors etc. are seizing the opportunity to transform their business with prefab solutions.
Open Innovation Challenges can connect startups with building materials companies looking to solve technical challenges.
Legacy companies such as building materials companies often struggle to work with startups. Early stage startups are often required to sacrifice progress on market-driven proof points in exchange for rapid funding and technical viability. Most don’t have the capability or experience to go through a traditional procurement process at a mid-cap or large-cap company, and even those that do are highly resource and time limited.
Moreover, startups are often formed around novel academic research related to a general scientific interest area. These novel technologies can be solutions in search of customer problems to solve. Given this dynamic, it is unlikely that existing startups have been created with precisely your challenge in mind. While the solution to your specific challenge very well may not exist at established startups, the technical building blocks may.
ADL Ventures launched ProblemSpace with an Innovative Pathways grant from the Department of Energy to allow corporates to tap into robust entrepreneurial networks to solve vexing “if only” problems. ProblemSpace creates product-market fit by “spinning in” promising technologies of interest, then codeveloping and refining them for effective field deployment. ProblemSpace works alongside building materials stakeholders to select finalists and ultimately winners of competitions for which only the most qualified entrepreneurs and academics are personally invited. Those best-suited and most motivated to partner are interviewed, selected, and brought in to collaborate formally through commercial agreements such as contingent purchase orders and development agreements.
This was precisely the process we walked through with Sto Corporation when its board prompted it to develop a wishlist of capabilities that would trigger a step-function improvement in financial results. ADL Ventures worked with Sto to issue a Building Materials Challenge. As shown in the Building Materials Challenge case study, ProblemSpace recruited over 400 academics and entrepreneurs to propose solutions to the specific challenges Sto outlined. Three winners were awarded, and are codeveloping solutions with Sto as a partner and future customer.
About ADL Ventures
The ADL Ventures team is comprised of technology leaders that know what good looks like at scale in a corporate environment and how innovative startups look to disrupt incumbents currently operating at scale. Leadership across the ADL team has operated across these organizations large and small.
Contact us to discuss ways in which the American innovation ecosystem can help your building materials company solve vexing technical problems.
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