Using tech to sustain growth with Chris Krebs of NOVUS

Zach Wojtowicz:

You are listening to ”The Building Code,” a podcast by Buildertrend, where we talk all things, technology and construction. Be sure to stick around to the end of the episode, where you can find out how to be part of The Building Code Crew. That’s exciting, isn’t it?

Charley Burtwistle:

That’s super exciting. It’s a crew you want to be part of.

Zach Wojtowicz:

We just wrapped up our takeover series where some of our best Buildertrend users hosted the podcast. And I thought it went really well.

Charley Burtwistle:

It went great. If you guys haven’t had a chance to listen, definitely go back through and check those out.

Zach Wojtowicz:

But now they’ve handed it over to a couple of Buildertrend buds.

Charley Burtwistle:

Interim co-hosts here.

Zach Wojtowicz:

And just for the people out there listening, a long-time listener as always, but if you’re new to the podcast, I want to introduce myself. My name is Zach Wojtowicz, and I’m on the Education Team here at Buildertrend. Charley, what do you do here?

Charley Burtwistle:

Thanks Zach. I’m a data scientist here at Buildertrend. So, anything and all things, housing and construction, looking at economic trends, and kind of where the industry is heading. That’s my role.

Zach Wojtowicz:

Charley’s the smart one.

Charley Burtwistle:

I don’t know about that. I like to nerd out on data for sure though.

Zach Wojtowicz:

Today, we’re going to be chatting with Chris Krebs from NOVUS Building Services. Chris, thank you for joining us today. Tell us a little bit about yourself and your background and NOVUS in general.

Chris Krebs:

Alright. I appreciate the opportunity guys. And I’m humbled to be here and excited to be a part of this exchange. I’ve been in this business, multifamily renovations and new construction, going on 16 years now. This is NOVUS’s 10th year in the fabrication game. We service the super East Coast, Boston to Miami out of two fabrication sites.

Little bit about me, I was a student athlete at Virginia Tech. I have two degrees, summa cum laude and honors with one of them. And I’ve worked very hard to get to this point. I’m not a trust fund baby and started NOVUS out of a garage. And I’ve had several different tiers of experience, some of Wall Street, some in the financial side, some in the true fabrication side where I actually did installs. I actually had a painting company out of college and kind of pulled from all of those and tried to build NOVUS in the way that I thought it should be built from a grassroots perspective.

Zach Wojtowicz:

Yeah, that’s really interesting. You’ve had a variety of your experiences that you’ve gone through and it sounds like you tried a few different things along the way. How did you end up in fabrication?

Chris Krebs:

Well, I had an IT degree in information technology. And then started working with a very large institution, John Hancock. And then, actually started a company in digital imaging of all things, that led me down some interesting roads for a lot of reasons. Then, a couple years later, I was broke, didn’t know what I really needed or wanted to do.

Just knew that I’d have a hard time working for somebody, but one of my best friends and one of my old teammates from high school and college said, “Why don’t you give Plan-It Granite & Marble a try? And we need a sales rep. It can be in a room. I need someone … the owner needs someone. Can you come work for us? Here’s your base. Here’s your commission structure.” So, I came and pretty quickly became the number one sales rep and started conceptualizing the process for ops and production, not just the sales side. Right? So, then in that company …

Zach Wojtowicz:

Getting the full picture, seeing how it all works end-to-end and getting kind of a feel for what it looks like for that very specific need that is a big part of construction, obviously, but it probably isn’t the most appreciated it in a lot of ways.

Chris Krebs:

No, and it’s heavy, hard work on the ops and production side. That company was bought out. Then the 2008 housing market crashed, they went bankrupt. And I said, “Well, I need to take my own clients.” And that’s kind of … off to the running.

Zach Wojtowicz:

Took the opportunity.

Chris Krebs:

Yes.

Charley Burtwistle:

So, at this point you’d gone through the dot-com bubble and the housing crisis.

Chris Krebs:

Right.

Zach Wojtowicz:

I’m noticing a trend here Chris, what’s the next one?

Chris Krebs:

Am I the cause or the effect, right? So, but it’s taught me a lot, and I’ve worked from grassroots perspective. Again, I have financed or I have debt financed, the growth of this company. So, that kind of got me through here. And I can take you through the stages of that, where we’re at now, but that’s what got me into the business.

Zach Wojtowicz:

Yeah, and I know you’ve really kind of diversified your offerings that NOVUS provides, a huge market that you’re covering. You’re up in Boston, all the way down into Florida. Talk about a geographical variants of different needs for different customers for different places and you’re now doing full renovations, so what was that evolution like for you? Why did you look into broadening your horizons away from the specific fabrication piece all the way into just going in and renovating these large multifamily structures?

Chris Krebs:

Yeah. I think that at the base of every company there’s capability and there’s capacity, and they don’t always line up. I believe we built a very capable company that didn’t have capacity. And as we worked up that curve, we were good at what we do and the core of what we do as fabricate countertops. So, as clients realized that, they wanted us to take on more and more scope over time. And then comes in the problem of managing that not only what we’re good at, but also the full scope over a larger, larger, larger geographic area.

Zach Wojtowicz:

So, how does that change the way that you do business then? Obviously, as far as your systems that you’re using for fabrication moving into these full scope projects, I imagine that is what led you to Buildertrend or looking at technology to facilitate some of that.

Chris Krebs:

Absolutely. We went through a digital transformation three years ago when we built the second shop in West Palm Beach. And we went from analog to digital 5-axis CNC robots in the fabrication side …

Zach Wojtowicz:

Charley’s eyes just let up like “Oh, tell me about that, I want to know more.”

Chris Krebs:

Right, right. Well, what happens there is then our capacity increases. Alright. So, then we start taking on more and more work. Well, now we have to manage it.

Charley Burtwistle:

Right, the snowball effect there. Just keep building, keep building.

Chris Krebs:

Yeah. Right. And guys, we failed four years ago.

Zach Wojtowicz:

You said that so confidently, I’ve never heard someone be like, “We failed, but we learned a lot.”

Chris Krebs:

It has been awful and amazing every day.

Charley Burtwistle:

Right in the sweet spot.

Chris Krebs:

Yeah. I mean that, and that large spectrum, it’s not sustainable. We’ve worked the last three years trying to lower … spin that spectrum of amazing and horrible, but that’s where Buildertrend came in. We evaluated several projects or several products to help us with real time management that could also do … we could tie in our cost codes for accounting or estimating. And then eventually, we want it to be our source of truth … we wanted something that’s the source of truth, that doesn’t have to be a CRM at the moment. Right. And so, we want a source of truth for operations, production, accounting and estimating. So, we kind of narrowed in to Buildertrend. And then, we have thankfully evolved, and Buildertrend has allowed us to evolve, within those prims.

Zach Wojtowicz:

Yeah. So, you’ve obviously decided Buildertrend is your path. This is the thing that you’re going to try and implement in your business. What was that experience like going through the experience of trying to get people to buy into technology and software? And the challenges that Charley and I know that comes with in our experience working at a technology company, it’s hard to change habits, it’s hard to change the way people have been doing things for decades in some circumstances. How did your team take to those changes? Especially at the same time as you’re, you’re completely revamping your business model at the same time, too, right?

Chris Krebs:

Yeah. It wasn’t great. Building a company, I never dreamed HR would be the issue, but I worked for myself and getting other people to buy in to that dream, it’s difficult.

You know, it truly is. I mean, I had to start reading about past greats and leaders of all kinds from all countries to understand how they’re motivating people. So, it was difficult and you could always tie it into a curve, a mathematic curve of revenue. So, we hit this revenue, this set of employees was hit. We were chilling. And then the second we got over that revenue line and then had to implement policy procedure, IT infrastructure and the digital transformation, 98% of those people were filtered out. And I’m the 2% that didn’t get filtered out. Everyone’s gone, everyone.

And so, I don’t know that that’s abnormal though, in the lifecycle of a company that wants to grow. People fear change. It’s the truth. I mean, that’s what movie … Wayne’s world …

Zach Wojtowicz:

“Party on.”

Chris Krebs:

Yeah, “we fear change,” and that’s the truth. And presenting that change was not easy. Most people didn’t like it, and money didn’t matter. It was capabilities, that people just shut down. So, we’d have to bring in, train and bring up, from the ground up, new talent.

Zach Wojtowicz:

Right. And I’m sure that transition was pretty hard there as one of the big players on the East Coast with the whole multifamily industry specifically going through a major change with COVID, where do you see that industry heading and what kind of implementations have you made over the past year now to keep up and adjust with that?

Chris Krebs:

Well, I believe the American … it’s not I believe, the analytics are starting to trend. The American dream is changing. And the millennials want the experience. I’m not even sure what that means, but they don’t want home ownership …

Zach Wojtowicz:

As a millennial, I feel like we can talk about it off of the microphone.

Chris Krebs:

Right. The home ownership isn’t the dream, it’s not the goal. It’s not the goal. It’s the life experience as a goal, which is great. So, that leads to more apartments, high rises, condensed living, basically what the rest of the world’s gone through already, minus large geographic areas, but condense populations are going up and smaller and that kind of fits into the, the niche that NOVUS is in.

So, our clients … what we’re seeing is we’re going to have to drive them deeper because they are doing, and then there’s more opportunities. So, our footprint is expanding, but it’s also going deeper. And in an analog world like pen and paper, even Excel, it doesn’t work. It’s got to be real time. I mean, and that’s where the mechanical advantage that we get from Buildertrend and the real time that … its scalability and then duplicate. Scale, duplicate. Without a product like Buildertrend, the equipment can do it, we can’t.

Zach Wojtowicz:

That’s interesting you hinted at the analytics and maybe I’m stepping on Charley’s toes here, but you said the analytics are telling you that the experience for the newer generations who are looking for a different American dream, what do you mean by that? What are the analytics that you’re looking at? And maybe Charley, you can speak to some of your background in data science.

Chris Krebs:

Absolutely. And I’m not pulling that from thin air, the TransUnion Rental Housing Financial Impact Study was the most recent one that I followed. We also do several multi-housing events, specifically focused on Florida. And I’d love to hear Charley’s opinion. Let me just say one thing, I saw this coming. Well, I had hope executives in the multifamily industry from hedge fund guys that own the properties, and women to third-party asset managers that are managing the properties that Florida was primed with jet fuel. Alright. So, although it was a massive financial burden and tactically not the best thing to do at the time, we knew setting up in Florida and getting it right was going to be important and I’ll leave it at that.

Charley Burtwistle:

Yeah. I think that’s a great call, too, especially to your previous point there, where you’re talking about, scalability, and then being able to duplicate those same type of trends and replicate and optimize your process. I think the multifamily industry is kind of perfect for the idea that you have and the way you want to run your business. And I’m familiar with a couple of studies as well, talking about the rise of the multifamily structure, especially down there in Florida, we can definitely link those in the shownotes, right? I’ve always wanted to say that on the Pod. We will link them in the shownotes of production team.

Zach Wojtowicz:

We got to call the shots on what goes on the website.

Chris Krebs:

Check that box Charley.

Charley Burtwistle:

Yeah, for sure. Any chance I get to talk about charts and graphs, and shownotes, it’s kind of the …

Zach Wojtowicz:

Charley is going to write all types of data analytics to post with our podcasts. We will be sure to include all of that for our listeners out there, isn’t that right Charley?

Charley Burtwistle:

Right. That’s why people came to “The Building Code” here.

Zach Wojtowicz:

Absolutely. That’s what I came here for. No, I came here to talk to Chris, honestly.

Chris Krebs:

Charley, if I could say this, I’m growing, too, right? I’ve never built a company before. And so, what I used to do, and this is what I talk about absolutely and strategic error, or strategic accuracy, I used to just do the numbers in my head. And I’ve been, thrown off by a couple of hundred, thousand whatever … we’ll figure it out … and that is the wrong way to do it. And it got NOVUS, although positioned correctly, in a lot of trouble which we dealt with. But I am now learning to not only trust my instincts based on my experience and those around me, my trusted group friends, but just to follow the analytics and then apply that to our financial model. Which now I cannot get away from, there’s just too many zeros.

Charley Burtwistle:

Yeah. And that’s the cool thing about data, right? Is a lot of times it does validate your assumptions, but then that gives you the argument and the use case to get everybody else on board, right? It’s like, “See, I told you, this is where we’re heading. Now we have the data to back it.” And that’s also what I love about Buildertrend is now you have all that data in one spot, we have the reports tab that you can go into. So, as you mentioned earlier, as the single source of truth, there’s no more. “Men lie, women lie, stats don’t,” is my favorite quote. So, this is where the rubber hits the road is Buildertrend, all the data’s right there. And you no longer have to rely on those assumptions. You can actually prove it out with the data.

Chris Krebs:

Yeah. And we’re in this process where we’re entering all of our existing projects … we’re actually changing the way we’re entering them with which we can discuss, and we met with Nathan earlier today to start that process. We are building a historically accurate contract waterfall. Then, we’re going to layer in a three- to four-year projection. But Buildertrend is that source of truth. And I mean, this will be deadly accurate when we get it right. And from what we do from our perspective, from a fabricator or manufacturing company that has a service component to it, this is going to be deadly, accurate. And banks are going to trust me for four years out, which will never end, ever, because the analytics that we’ll be able to get from Buildertrend has the source of truth to fold into those financials.

Zach Wojtowicz:

I love that man. You and I might have to take this offline, and we didn’t nerd out on that financial forecast for a long time. That sounds awesome, Chris.

Chris Krebs:

Yeah, I would love to, I would love to. And I’m learning to Charley. I’m on an exponential curve right now. And it’s been a long time since I’ve had to do that. And I love all of it.

Zach Wojtowicz:

And the other part of it too, I imagine with having different offices in different places like we’ve talked about the relationship piece, the management of the subs and vendors that you’re using are going to be so varied, your clients who maybe aren’t always in the same state that you’re working with, how’s Buildertrend filled that gap?

Chris Krebs:

I’m glad you asked that. Right before we started here, Buildertrend featured our ops manager for both fab facilities, Steven Miranda, about a month ago on an online post, and I asked him, I said, “give me one thing sweet.”

And he said, “the app, the Buildertrend app.” And then he started going into it, and I asked him to lead.

Because I knew at that point in all seriousness, he’s an engineer and a diamond in the rough. But that’s the truth, things like the Buildertrend app. So, with minimal effort and continuing education, we can get read and read/write access to the right people. And then they can see in real time, what’s really going on at their properties. So, a lot of these guys, they manage four or five, six properties from our client’s perspective. Now they can take a look at the app, see what’s happening that day with real-time pictures, comments, maybe in Spanish or Russian, but they’re there. And then, from an internal perspective we have that estimating that ties into a budget that ties to cost codes and allows us to have a singularity, a single unit within that project that we can drill down to and find out if we’re making or losing money. We’re not there yet, but the capability is there.

Zach Wojtowicz:

I think that is a huge piece in my own background in consulting is getting people to even understand that vision though, that it doesn’t happen overnight. It doesn’t happen in a week. It takes the end goal. And it takes a little bit of thought and process outlining to get there. But it sounds like you’re on the right path. And you’ve probably made a lot of progress over the last year or two years that you’ve used Buildertrend too.

Chris Krebs:

We have, and what’s kind of blowing me away is from the Buildertrend side, you’ve got this massive really smart company that’s listening to NOVUS.

Zach Wojtowicz:

We do our best.

Chris Krebs:

Yeah. It’s amazing. And one of my truths in life is listen, relate, sell. And that’s what I have to do. And I think whether it’s my children, a client or our partner, which is Buildertrend, I find it fascinating that you listen, and then you try and make adjustments for NOVUS, it’s nonstandard, and it’s just nice. And I always expect that we’re going to fall, and it just never happens. It’s just, I mean, it just keeps getting better.

Charley Burtwistle:

Well, I mean, from our perspective with a company like NOVUS, who’s had immense success, obviously, we want to build the best tools for the best contractors and builders across the nation. So, anything that we can do to help replicate the success that you guys have had, of course we’re going to listen to something like that.

Chris Krebs:

Yeah. I liked the sharing … I’ll think of the phrase … But it’s selfless from my perspective to see Buildertrend. And it’s just nice to see guys. I’ve had a lot of people try and take stuff from me, from this company, and it’s nice to see a collaborative effort.

Charley Burtwistle:

Right. Well, we appreciate the kind words for sure.

Zach Wojtowicz:

Yeah. We did not pay Chris to say any of that. I just want to preface the entire conversation on that.

Chris Krebs:

Yeah. Yup.

Zach Wojtowicz:

And we are running a little short on time, and I think we could talk for hours about your background and NOVUS and where the industry is going. And I want to just end on this one last question, where do you think the future of renovation and construction looks like? You’ve shared a little bit about the booms and bust of the markets, and I think it would be just a good way to wrap up, where do you see things going here moving forward?

Chris Krebs:

I think the East Coast, including New York and Boston, the renovations, a lot of that product is hitting seven plus years. That was new product. And that’s the renovation … capital budget is every seven, supposed to be every seven years to do a renovation, but it gets stretched out depending on market, quality of the building and the unit. I think renovations are going to spike up. I think there’s at least one more, four to five year burn on new construction that the money’s already been allocated. I mean we have one client in Florida alone that has 21 new constructions, buildings, 400 units, 350-460 units in their pipeline, just in Florida.

Zach Wojtowicz:

That’s crazy.

Chris Krebs:

Yeah. It’s going to go well. And I think it’s going to go well in the East Coast, Alabama and Texas.

Zach Wojtowicz:

Place the bets now. Get that investment in. Well, Chris, thank you so much for your time. This was a pleasure speaking with you about your business and best of luck to you moving forward.

Chris Krebs:

Thank you, Zach. Thank you, Charley. This is my pleasure and my company, my time is always open to you guys, anytime any place. Okay.

Zach Wojtowicz:

I appreciate that. Thanks for the time Chris.

Chris Krebs:

Alright, guys.

Charley Burtwistle:

Okay. Thank you again for tuning into this episode of “The Building Code,” make sure you subscribe and like wherever you listen to podcasts, Zach, go ahead and tell them where they can go out for additional information.

Zach Wojtowicz:

If you’re on social media, join the Building Code Crew on Facebook, and finally drop us a line at the podcast@buildertrend.com. We want to hear from you, suggestions, guests, topics, anything goes, Charley, data.

Charley Burtwistle:

Yeah, a lot of data.

Zach Wojtowicz:

Whatever it has to be.

Charley Burtwistle:

Thank you so much for joining us, guys. We’ll catch you next time.