Live from Buildertrend University: Austin McKnight of Southern Creek Homes

Zach Wojtowicz:

It’s “The Building Code.” And today we’re in front of a live audience at Buildertrend University. Charley, how hype are you, bro?

Charley Burtwistle:

Very hyped. This is a dream come true. For those of you listening, I work as a data scientist, so rarely do I get to interact with our builders and our clients. So, I’m always pitching like, “Hey, let me go on these cool trips that Zach gets to go on. Let me go to BTU, let me do these different things.” And they let me out of my back closet where I do data science. And here I am, we have Austin here live at BTU, going to talk about his experience and his business a little bit. And we’ll just dive right into it. Austin, welcome.

Austin McKnight:

Yeah. Thanks for having me guys.

Zach Wojtowicz:

We’re really excited to learn about your business. Tell us a little bit about it. We want to know just the basics, what do you do? How’d you get here? How’d you get on stage with two tech pros?

Austin McKnight:

That is on your end. I don’t know why you invited me. So, yeah, me and my brother, we’ve been around building our whole entire life and my dad built, his dad built and so, kind of third generation builders. My dad ended up starting a construction administration firm, which is …

Zach Wojtowicz:

Wow, that sounds sexy.

Austin McKnight:

Yeah.

Charley Burtwistle:

Sounds great.

Austin McKnight:

But basically, it’s a backroom office for lenders across the country, managing construction draws and inspections, things like that. So, I took the route of mortgage, actually the front end mortgage, like lending and stuff. And so, I work with them on a daily basis on a particular construction product and government construction product that we utilize a lot. And so, one day I woke up and saw a lot for sale for a great deal. And me and my brother had talked about opening a building company before, and I was like, “Man, this is a good deal of a lot. I think we could make this happen. Let’s just do it.”

Charley Burtwistle:

Yeah. What’s the worst that could happen?

Austin McKnight:

Yeah. What’s the worst that could happen? You can lose money, but …

Zach Wojtowicz:

It’s just money.

Austin McKnight:

Yeah.

Zach Wojtowicz:

There’s ways to bounce back.

Austin McKnight:

Exactly.

Zach Wojtowicz:

What year was this?

Austin McKnight:

This was in 2015.

Zach Wojtowicz:

Okay.

Austin McKnight:

Early 2015. So, we both kept our day job

Zach Wojtowicz:

Smart, Charley.

Charley Burtwistle:

Yeah.

Austin McKnight:

So, if we did lose money, then there’s something to support. So, we keep our day job, but we needed somebody to come in and run the project. So, we pulled a guy out of Dallas that had been building for about 35 years, brought him in and said, “Hey, this is what we want to do. You’re going to run the day to day.” And that’s how we started. And so, this is kind of a side hustle for us in a way that we are very actively involved, but it’s not our primary. And so, that helps us keep it funded.

Zach Wojtowicz:

Yeah. I love that.

Charley Burtwistle:

I don’t want to set you up for failure here, but you have teased this story a couple times already. So, tell us now, how did the first project end up going?

Austin McKnight:

Yeah, so our first project not so … Beautiful home, beautiful home.

Zach Wojtowicz:

First thing’s first … It’s still standing.

Charley Burtwistle:

Yeah.

Austin McKnight:

Buyer’s got a great deal. And so, we lost on that house about 30,000. And soc, we immediately started searching the web for a software and a platform that we could track things. Literally, how we came across Buildertrend. And at that time we were looking at different things, and we were just like, “Buildertrend just seems to be a full package.” But we literally did not start using any features in Buildertrend for the longest time, except for it synced with QuickBooks. And we could cost code and budget and track invoices and where we should be. And that’s how we started in Buildertrend. So, we’ve been Buildertrend 100%, well, not 100% in all the features, but from the second house on.

Zach Wojtowicz:

Yeah.

Austin McKnight:

And that was probably early 2016.

Zach Wojtowicz:

So, you’ve learned along the way, right?

Austin McKnight:

Absolutely.

Zach Wojtowicz:

Is your brother here today?

Austin McKnight:

Yeah.

Zach Wojtowicz:

He’s out in the crowd?

Austin McKnight:

Travis is out in the crowd.

Zach Wojtowicz:

He’s like … He’s now eating lunch. There he is. What’s up?

Austin McKnight:

And then our project manager, Justin …

Zach Wojtowicz:

Oh, we got the whole crew here.

Austin McKnight:

Yeah.

Zach Wojtowicz:

Oh, okay. All right.

Austin McKnight:

So, we’ve grown since that one guy coming in, we have a small team of four now, and then us two owners. So, six people total.

Zach Wojtowicz:

Yeah. So, obviously you’re here at Buildertrend University, and we’ve talked about it a little bit on the pod before, and we’ve even had Taylor Henne who helps run a lot of our external education. And it’s at a great event, we love it, we love seeing our customers. Why’d you guys decide to come up here?

Austin McKnight:

So, about, I guess a year and a half, two years ago, we really decided that we want to grow and use more of Buildertrend. So, literally for about the first three years, we did not use much else of Buildertrend. I tell people all the time, we’re using 10%, and this program is super powerful. And so, about two years ago, year and a half, we decided to grow with a team and growing, you’ve got to have a center point communication source where everything’s at and be organized, because we want to get a lot bigger ultimately. And so, I think it’s easier to start now than later. And so, as we’ve been growing the team, there’s always growing pains and getting everybody on the same page.

And sometimes it’s asking questions, we haven’t asked ourselves like, how do we want this template to be built out? How do we want this schedule to look? And we didn’t have something before. And so, we decided to come up here because although there’s great content online and everything, we just thought in person, there’s sometimes these questions that come up when you’re dealing with selections or you’re dealing with different things. Like this morning, I learned about placeholders that may be not common knowledge or is common knowledge for some people, I didn’t know it. And I was like, “Man, that solves a lot of issues and some things.”

Charley Burtwistle:

What I love about your journey just from listening to you talk, I’d say is a little of a typical Buildertrend customer is that you started in more of the financial in the weeds features. You’re coming off a job, didn’t make as much money as you wanted, let’s figure out how to track it job cost it, get everything in there. And now, knowing why you signed up for it and what you’re hoping to accomplish and knowing where to start, I think is really important. And now that you feel good about that, you can move on to some of these other more advanced features, too. It’s a cool progression, but one that I’d say is a little bit different than one we normally see.

Austin McKnight:

Yeah. And we’re very, just me and my brother, just very backend oriented first versus sales where great salesmen just want to go keep selling, but then you have a cluster in the back side, and we are very much the opposite. And we don’t like to take on more than we can chew, but we want to be organized because I think if you’re organized, and you’re set up, and you’re confident in your team and what you can do, like sales is easy. Now, I’m just going telling you what I can do. And it’ll just grow from there.

Zach Wojtowicz:

Yeah. What’s your early review? What else have you learned? You’re having a good time, you’re enjoying it? I’m glad you came up.

Austin McKnight:

Yeah. So, we’ve only had a few classes thus far, it’s great. Especially seeing how, it seems like some of the trainers are just specialty in those areas. Looking forward to the one-on-one session this evening to drill down and get a little deeper in some things. But no, it’s great. We used 10% for three years, I’d still say we’re only like a 60% now. There’s warranties, there’s surveys, there’s sales side of it that we don’t use, there’s a lot of things that we’re excited to keep growing in and keep utilizing. But you got to take it one bite at a time. It can be very overwhelming at times if you try to, “I want to do it all.” So, we try …

Charley Burtwistle:

I’m sure Zach can appreciate that as some of the trained customers for a very long time, just biting off just as much as you can chew.

Zach Wojtowicz:

I love how measured you are in your attention. A lot of what I did as a consultant was that let’s lay out a plan, let’s figure out what steps we need to take. What are your goals? What are you trying to do in the next six months, a year or two, three, five years that you want to grow your business, you want to maintain what you’re doing? So, I love that you’re thinking of those things, but you’re right, there’s always more to learn. We always are releasing new features. There’s updates, like staying on top of it. I’m always speaking to our Buildertrend University attendees, it’s like, “Where do I go from here?” Is always kind of the most common question, you get so much information. And it just spend that time and you’re one on one, like making the plan. And then you have a path to follow and steps to go through.

So, kudos you for thinking ahead of that a little bit. It’s probably the back end mindset that you’re used to taking it a little bit slow, but I define in the construction issue, things move fast. And so, it’s hard to find the time to carve out and do it.

Austin McKnight:

Yeah, it is. It is hard to find the time. I think you just have to, if that’s blocking off time on a schedule or a calendar, you just have to sit down and do it or hire great people or somebody that can, ultimately. I think it comes from my mortgage branch side and background, we built out Salesforce and that was a process. Salesforce is very robust.

Zach Wojtowicz:

I can relate.

Austin McKnight:

And so, I learned very quickly, just take it bite by bite. Don’t try to go and do everything because you’ll scrap all that and have to do it all over again.

Charley Burtwistle:

We just transitioned Buildertrend over to Salesforce two or three years ago. So, I’ll be careful what I say on the hot mic here, but I can relate in that transition, especially just for a new company, too. It’s different if you already had all your processes established and you’re just, “Okay, how do we fit this into them?” But we’re kind of trying to figure out both. I can imagine that’d be a little bit more difficult. And you mentioned you’re fully custom, no reno work or anything like that.

Austin McKnight:

Yeah. Currently, right now we’re full custom and no renovation, anything like that, which adds in another difficulty layer. Like when you give unlimited selections and allow unlimited pretty much changes. Believe me, there’s a lot of times like, “We’re going to switch this.” And we do have a plan, our long-term plan is we want three tiers: a full custom tier, a semi-custom slight production and then a full on production. And we want the theme through the houses, energy efficiency and just quality built and inspected and all of that stuff to be similar. But a Control4 package in a full custom home makes it a smart home on that side. But on the simple side or the more affordable side, it’s an Ecobee thermostat, that’s what makes it.

But yeah, for the reason of custom, we do want to have different lines because we’re very limited on what you could do on custom, just at a broad scale. Because there’s just so many choices.

Zach Wojtowicz:

How many projects are you running right now?

Austin McKnight:

So, right now, we have 12 ongoing.

Zach Wojtowicz:

Wow.

Austin McKnight:

Yeah. So, with a little small four person team and high expectations with our customers.

Zach Wojtowicz:

High-end custom homes.

Austin McKnight:

Hot mic, I won’t say too much. But …

Zach Wojtowicz:

Most builders want to promote the pod, but throw their customers under the bus on the mic.

Austin McKnight:

But no, you have to be very receptive to their needs and make them feel like they’re the only project that you’re working on. And so, that can be difficult at times, but that’s the goal, is to make them feel like their house is the only one that matters. And it does, it does matter. It matters to them a lot, it matters to us.

Charley Burtwistle:

Yeah. I feel like you must have some fantastic sales guys because that’s the second time you maybe mentioned they’re a little too good at their jobs.

Austin McKnight:

Well, we’ve been really lucky.

Zach Wojtowicz:

At Houston market it’s got to be pretty hot.

Austin McKnight:

Yeah. So, primarily a lot of our building is in subdivision, in traditions, in College Station, aligned with Texas A&M. And so …

Zach Wojtowicz:

I feel like I got to say, not Texas A&M, but I feel like I was conditioned.

Austin McKnight:

Yeah. And you brought it up before.

Charley Burtwistle:

I know.

Austin McKnight:

But yeah, so we’ve been very lucky that our products really spoke for itself, and we haven’t had to push a lot of marketing in sales and a lot of stuff’s just come to us referral based or whatever the case may be. But yeah, the market is totally changed, and it’s hot right now. But to me, that’s another reason to get organized now. I think some of the smaller builders that may not have a system like a Buildertrend or whatever system, this market’s really changed the last two years. I see projects all the time sitting waiting on windows. What’s easy if you have it set up and you know up front like, “My windows are 16 weeks out, I need to order them at this point.” And that’s what we tell our customers, our team is set, so we can project. Could we do it all one guy? Maybe.

But if you have a team that is focused on getting it through that project, our timelines really hasn’t drastically increased because we’ve moved our process up. So, we’re in appliances right away because it’s eight months out right now. So, little things like that, we’ve just changed our process versus letting it change our process for us.

Zach Wojtowicz:

Yeah. That makes sense. Are you seeing, as far as the supply chain delays, are those starting to …

Austin McKnight:

Subside?

Zach Wojtowicz:

Little bit? Or is it still kind of … I had talked to a few builders in Houston, and it seemed like they were particularly hit hard because of just the demand in that market. You’ve got Houston, you’ve got San Antonio, Austin is exploding, Dallas, obviously. And so, the material strain on those areas seemed especially so …

Austin McKnight:

It’s tough.

Zach Wojtowicz:

What’s your take on what’s happening in that region?

Austin McKnight:

So, we have really good vendors and partners, but they’ve given us a heads up like, “Hey man, Houston’s about to run out a two by four next week.” And we’re like, “What?”

Zach Wojtowicz:

Concrete home, custom home.

Austin McKnight:

Yeah, exactly. And it was like, man. But you’re right, there’s a lot of demand in our market. And for some reasons I think that’s great because we’re getting constant fresh supply. And it’s a big hub to bring stuff into. I can’t imagine being in a smaller area trying to pull the appliances or whatever it is into the process without all that demand there. But at the same token, we’re still seeing delays, it’s something new every week, but HVAC is having tough time getting ducting. We get price increases literally a couple of weeks depending on what it is. And so, it’s just staying ahead and staying on top of it. But at the end of the day, we’ve been very fortunate to be able to keep moving and not really affect greatly. There’s products maybe we switched to a different product or something, but for the most part we’ve kept intact what we’ve set out to do.

Charley Burtwistle:

And I guess in the spirit of BTU, how is Buildertrend helping that process? Or what are things that you’re starting to implement? Obviously, you’re here trying to learn more. What are some of your goals or things to roll out, to ease the pain of some of those ones that you mentioned?

Austin McKnight:

We started, like I said, kind of job costing and then just QuickBooks and tracking that. We went to selections next, which is a very powerful tool in Buildertrend. You can make that thing work however you want it and all kinds of different fashions. And so, we feel like we’re pretty confident there, great customer experience and a lot of our clienteles probably 60 plus on average.

Charley Burtwistle:

Oh really?

Austin McKnight:

And they find it very easy to use.

Zach Wojtowicz:

I love that.

Austin McKnight:

Yeah. I was impressed. And now sometimes maybe it’s too easy, they blow up comments constantly. But we’ve gotten very good feedback from our customers, and we use it as a sales point. Especially customers like may live in Dallas, and they’re moving to College Station, that happens a lot. Because they’re coming back to their alma mater whatever. And they’re like, “Well, we can keep tabs on the project.” And so, we implemented Daily Logs after that. It has an owner update every Wednesday, they get a little bit of an update, know what’s going on. And then our next thing, don’t reutilize my order of things, but scheduling is our next big-ticket item.

Zach Wojtowicz:

You’re ending on the scheduling?

Austin McKnight:

Yeah.

Zach Wojtowicz:

That’s my problem.

Austin McKnight:

Everything nontraditional to say like, “Did you talk to our Customer Success team?” We’re like, “No, you should …”

Charley Burtwistle:

… then we go to Selections.

Zach Wojtowicz:

He would remember my name for sure.

Austin McKnight:

If I started it over again, scheduling would be the first thing, 100%. Because everything evolves around scheduling and deadlines and due dates and all that stuff. So, yeah, we’re backwards, don’t mimic our …

Zach Wojtowicz:

I love it though. There’s a ton of value, too, on that back end administration and a lot of people at BTU, I’m sure that’s the thing, that’s like, “Oh man, that’s what I want to get to.” Because they started on the project management tools, which are real pain points. And really are the easy wins to communicate better, document things better. Fixing your cost codes or your accounting methods or your estimate is a little more difficult, but there’s no wrong way to get Buildertrend up and running.

Charley Burtwistle:

Yeah. That’s what I was kind of going at earlier is like having it, what is your desired outcome of Buildertrend? If you’re not trying to improve your scheduling right now, why focus on it? Right?

Zach Wojtowicz:

Yeah.

Charley Burtwistle:

And so, that’s something like Zach and his team works on all the time when we think about how we train customers. What materials do we put out there to make sure whatever they’re trying to accomplish because it is a robust tool. You don’t have to use it all, you don’t have to go in this order, figure out what you need, and let’s tackle that first.

Zach Wojtowicz:

Yep.

Austin McKnight:

Absolutely. And that’s exactly what we did. Like I said, when I rushed into it, I was like, “We’re going to do it all. This is great. I see the big picture.” And I’m like, “Oh this is a lot. And we’ve got to ask some questions internally, come up with some processes and then run with it from there.”

Zach Wojtowicz:

So, I love that you brought up in your sales process, you bring up builders, and that’s a pro tip that we tell a lot of people on the phones. This is an anchor point for you to show your customer you’re different. You kind of have to then back it up. Right?

Austin McKnight:

Right.

Zach Wojtowicz:

And so, there’s always this hesitation about getting your homeowners involved, but I’m going to start saying, “Well, down in Texas, we’ve got people putting sixty-year-olds making selections. What’s your excuse?”

Austin McKnight:

Yeah. And Selections is really what forced that issue. Getting that sign off on that item, there’s no email somewhere or a text somewhere that said, “Oh yeah, I’m good with that.” You are actually physically signing off on that flooring, whatever it is. And that was the driver in the … It wasn’t hostile, but it was just, “Hey, you got to do this.” And we brought people in initially he was like, “Hey, we’ll sit down with you. We have a big TV in our conference room. We’ll do it with you.” But then, if they do that one time, they’re off to the races after that. Totally get it.

Zach Wojtowicz:

You didn’t threaten your customers to use Buildertrend …?

Austin McKnight:

You had no choice.

Zach Wojtowicz:

Yeah. It’s like the old … Teach someone how to fish, they eat for life. And that initial meeting with that customer to get them to see how it works. You may have to put in a little bit of extra effort on the front of it like what does it do on the back end? And I think there’s a ton of value in getting your homeowners involved because that is something that a lot of builders aren’t really approaching today. They use social media now, and they’re getting more about having an actual web portal is just unheard of and for a majority of the construction market of consumers.

Austin McKnight:

Yeah. And I go back to something I learned today, you can put a video up on as the primary photo that they see. But it’s a video and there was some great ideas on doing a … Me and my brother as owners welcome, introduction to the team. And I was like, “Man, that’s, that’s a great … That’s just like a pro tip right there.”

Zach Wojtowicz:

For sure.

Charley Burtwistle:

Or like, “Here’s a link to a podcast I did, make sure to comment, like, subscribe on there.”

Austin McKnight:

Absolutely.

Charley Burtwistle:

Yeah. For sure. Like any sort of video, either one of those two things.

Austin McKnight:

Right.

Zach Wojtowicz:

Charley Burtwistle, getting the brand going.

Charley Burtwistle:

Absolutely. If you’re not promoting yourself, who’s going to.

Austin McKnight:

Absolutely.

Zach Wojtowicz:

I love you. You make me laugh.

Charley Burtwistle:

Clip that. Zach saying that he loves me. Wow. That’s the nicest thing you’ve ever said.

Zach Wojtowicz:

The other thing I want to kind of touch on, is there anything else that’s unique about the way that you build or the way that you do things that … I just love to hear more about how you guys approach construction.

Austin McKnight:

Yeah. So, we looked at our market when we started and they were missing energy efficiency and it’s kind of the old mentality, that’s why we’ve done it for so many years. And I love technology, and I love new techniques, and you we’re big fans of Matt Risinger, down in Austin. And I know he …

Zach Wojtowicz:

Friend of the Buildertrend.

Austin McKnight:

Yeah. So, we really focused in that area. We do that in a lot of different ways, but we figured out that our insulators, our HVAC guys, they all had these ideas of what energy efficiency looked like and should look like and what you should do, but really early on noticed that they don’t talk. You got your HVAC guy saying, “Oh, you can do this, you can do this.” But then your insulator is doing something totally different. And so, we brought in Owens Corning, we brought in our energy inspectors and our engineers. And then we brought in our HVAC and our insulation, sat them at a big round tables like, “Guys, what’s the perfect house?” And just let them kind of argue it out a little bit. They have their different methods.

And then we said, “Okay, at what point can we build this house where spending another $10 doesn’t necessarily gain us another $10 or help the customer with another $10?” And we came up with this methodology and where we want to be with air changes per hour and all of this. And that’s what sets us apart is, we want to build to a very high standard, but we don’t want to do it some way because that’s the way it’s always been done. And so, we’ve done a lot of projects with the building science and Owens Corning and studies, and they have some test houses with us that they’re not constantly monitoring. And so, it’s been a lot of fun and makes it exciting that just building another home where we’re actually trying to progress.

So, all of our homes are HERS rated. We run about a low 50, HERS had lower than that. And so we’re using about 50%, less energy than another home built to code. And so our customers… That’s not the sexy part up front. Peoples’ like, “Oh, that’s nice.”

Charley Burtwistle:

I love insulation tile, really silver deal.

Austin McKnight:

But I really want this tile in flooring, but then a lot of our customers come back to us afterwards like, “I didn’t really care when you’re doing my front, but I really love it now. And this home seems really solid.” So, we engineer everything even for … A lot of people don’t engineer framing, unless they’re going to do that house 10 times or something like that. We frame engineer everything, foundation engineer everything. So, we just want to … That’s our custom, just over the top, everybody’s double checking us, third party, city, all that. But that’s our goal with the custom is just be that high quality, high integrity, and then be energy efficient and with technology, different things.

Charley Burtwistle:

Yeah. Well, I love the strategy you took. That’s super cool. Did you guys literally just all go to a room for a day and just …

Austin McKnight:

Actually at our HBA, our Home Builders Association, we took their big conference room and just pulled everybody in. And what was great is these guys, a lot of them been in industry for a long time, but they learned stuff from each other. Because they don’t sit down and talk. And this guy may say, “Hey, do it this way.” But then the HVAC guy’s like, “That’s really expensive. Can we do it this way and achieve the same result, maybe less expense,” or whatever the case may be. And so, in that particular area, so we steer away from spray foam, just little different reasonings and stuff. But we found a way to seal the house with an arrow barrier product that seals the house to whatever we want it to, with a computer sitting there, and they just blow door, test this like fog mist into the house and seal the house.

And then we do bibs insulation. And so, we get great R factor, but then we still get the seal of spray foam and don’t have some of the negative effects that sometimes spray foam can have or not be installed properly or whatever the case may be. So yeah, just cool things like that, a lot came out of it, and it was a lot of fun.

Zach Wojtowicz:

That’s amazing. I love talking to people in construction because you’re business owners trying to solve problems with like to take in your own hands and get your subs and really have that conversation take initiative. Amazing stuff. We are just about out of time. The pain is …

Charley Burtwistle:

Yeah, we got some food trucks here.

Zach Wojtowicz:

You got to get the lunch going. But I did want to ask just one last question. You’ve given a ton of insight, this is a great conversation about your business. What’s your parting advice for any builder who’s looking for to add a construction technology to their business?

Austin McKnight:

Yeah. I think if you don’t have some kind of system, I’ve always heard technology doubles every three years. I don’t know if that’s true or not.

Zach Wojtowicz:

Or is law.

Austin McKnight:

Yeah. If you don’t have something currently, you got to get something. And I think Buildertrend’s a great end-to-end package. Like we talked about, you can start in one sector of it and just use that piece and then just keep adding to it, and you’re not going to get hit with like, “Oh, well you want that? Then you’re going to have to be charged this.” Or, “You want this? Oh, okay. Well, you’re going to have to add this package,” with stuff I don’t even need. So, I think that’s one of the main reasons we went with Buildertrend to begin with. It was like, “Hey, we get it all up front. If we use it or not, we have it.” But I think for other builders, you got to have something because as the industry or as the supply chain is more messed up, you’re going to lose things, or you’re not going to stay on top of it. And a yellow notepad in the truck only works for so long.

Zach Wojtowicz:

I once had a builder who had sticky notes, and he would write them, and he’d stick them on his windshield. That’s how he managed his day. And then like he would go to his … I was like, literally I want to see it. “Show me.” So, he took me in the parking lot and literally opens the back of his truck and it was just sticky note, just graveyard. I was like, “This has got to change.”

Austin McKnight:

I know they got that one somewhere.

Zach Wojtowicz:

Yeah, exactly. What happens … Yeah. Amazing stuff. It worked, but there’s always a better way.

Charley Burtwistle:

Always a better way. There you go.

Zach Wojtowicz:

That’s what we say here at Buildertrend. Charley, this was an amazing episode, man to live up to your hype.

Charley Burtwistle:

Everything I could ever want more. Awesome. Thank you very much. You’re a fantastic guest. Let’s go get some food.

Austin McKnight:

Awesome. Thank you guys. Appreciate it.

Charley Burtwistle:

See you.