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Silicon Valley companies have taken notice of the construction industry as one ripe for disruption. Tech-driven offsite construction company Katerra is one investing heavily in architecture firms.
Katerra seeks to streamline the design-build process via total vertical integration of design and construction. This year, Katerra acquired Vancouver, B.C.-based firm Michael Green Architecture and most recently purchased Atlanta-based Lord Aeck Sargent, after raising $865 million in venture capital. And in September 2017, the company announced its plan to open a new timber panel factory, with the intent to open more in the future. CityLab reports that this process is “'backward integration,' when a company at the end of the supply chain seeks to shape its products 'upstream.'"
The way that most large buildings get built hasn’t changed much from 50 years ago. It goes by a deceptively straightforward name, “design-bid-build.” First, a developer or owner hires an architect, who comes up with a rough design. To flesh this out, the architect brings in consultants such as engineers and landscape architects, and sometimes niche consultants like food-service specialists. Not surprisingly, having so many cooks in the kitchen leads to misunderstandings and finger-pointing. Add volatile material prices and a skilled labor shortage, and you have, in the now-familiar parlance of Silicon Valley, an industry waiting to be disrupted.
