Jason Perez, cofounder and CEO, YARDZ, recently sat down with Constructech Editorial Director Peggy Smedley to talk about the company and why having the right data can ensure that available construction equipment is where you need it, when you need it, at a jobsite, with simply a click.
Connected World (CW): Why don’t you start out by telling us a little bit about the company and why you started it?
Jason Perez (JP): I would love to do that. So, I actually come from a construction family, my father was an electrical contractor, he did small commercial, residential-type work, so I grew up crawling the attics of houses in 110-degree weather with insulation in my pores as a child. After graduating college, it was kind of one of those deals, my dad said, “alright, well, now you need to go get a job,” and so I jumped into the construction industry and started a consulting firm after a little while. We did fairly well, focusing on mission-critical construction like data centers, healthcare, biotech, and some DOD work. But as I wound the last few years of that consulting company down, one of my neighbors in the rental industry””he worked for United, RSC, H&E, he’s kind of one of these legacy guys in the industry””he started talking about how he was trying to manage all the assets that his customers were renting””not just from him””but from these other companies, right, because there’s only a finite amount of equipment that you might have within your own yard. And we just started talking about how he’s trying to track this on a whiteboard, in spreadsheets, and then we started talking to some of the contractors and saying, “hey, how are you tracking all these rentals out there and how are you tracking all of your own equipment?” And it just blew my mind because I came from a consulting background, building data centers where before we even walked onto the job and broke ground “¦ in today’s age, you can put on VR (virtual reality) goggles and walk that entire site, right? And there’s been where you’re seeing all these conflicts of conduit and pipe and all this stuff going on, and then you go to this equipment guy and you say, “hey, how are you tracking your equipment?” and he goes, “look at these sticky notes on the wall in red, blue, green. That’s my technology, sticky notes, and spreadsheets and sometimes white boards with different colored markers.”
So, there was a clear need, a problem that was widespread, as we talked to company after company. And it really wasn’t addressing these guys that on a day-to-day are trying to solve the problem of where’s my equipment? And how do I communicate to my team that they have it, and validate and verify, and really hold the whole company into one place and still be able to go home and spend time with my family. And it just wasn’t there. That’s really the birth of Yardz; we developed the easiest way for contractors to manage the assets they own and the assets they rent all in one place.
CW: So, looking at that, how can construction firms today prepare for this influx of work as a result of maybe what we hope is if this infrastructure bill ever gets passed?
JP: Yeah I think there’s going to be a tremendous amount of work, and a lot of people, as they’ve started to dig through the bill, they’ve started to realize that it says infrastructure, but that doesn’t mean just roads and bridges like we saw in the 1940s post-World War II type stuff. This infrastructure bill includes a lot of telecom, a lot of data centers, it even includes healthcare-type projects. What you’re going to see though as you start looking at the heavy civil””you know the bridges and the roads””that’s a lot of big, heavy, yellow iron that’s pushing dirt around””cranes, things of that nature. They’re high-dollar assets that you don’t want sitting on the side of the road because if you have to rent one, it costs a lot of money every month, and if you own it and you’re not tracking it, you can start spending money on assets that are rented that really should be sitting on your yard and available for you to use somewhere else. So, I think the first thing when you start looking at just the low-hanging fruit is, there is going to be a lot of this civil, heavy work going on, and people are going to have to figure out how to get equipment.
Right now, it’s at an all-time shortage, and supply chain is an issue everywhere in every industry, regardless of whether it’s material or equipment, but here’s the thing: you might be able to find diverse ways of using different material and substituting different material, things like that, but if you don’t have a piece of equipment to move dirt, you’re not doing it with a shovel, right? There’s not a lot of alternatives. So, people really need to start looking and going, how can we get the most out of the least? How do I get the most amount of work out of the equipment that we own? And the only way you do that is by really having visibility to the assets that you own and the assets that you rent and increasing the production of each one of those assets and increase the utilization. You can no longer just throw skid steering at every single project and let it sit there. You just can’t, you don’t have that luxury anymore.
CW: So, let’s think about the consequences then, there are some real consequences of the lack of being able to track equipment””financially, staffing wise””talk about some of those key things.
JP: First things first, not knowing where your equipment is at is obviously going to hit your pocketbook in two different ways: one, if you don’t know where it’s at and you’re now renting things that you shouldn’t be renting, that’s additional costs that you could have been using your own assets for, so that’s first. Second, when you are renting these things, if you’re not tracking the things that you’re renting and getting alerts and notifications and your team is being notified of those things, then you’re also adding cost in utilizing equipment longer than it should be utilized, especially on the rental side. You know, the other piece though is””as again, there is an equipment shortage””what an excavator or a bulldozer does, you’re not going to do with a shovel so at the end of the day, you’re also going to be looking at delays if you can’t produce the equipment that you need to get the job done. So, it just kind of compiles the issue and compounds the issue, I should say, when you start looking and going””yeah, okay, I’ve always kind of just done equipment this way, and it doesn’t matter. Well, but it’s different, because when you have an influx of jobs and you have the same amount of equipment, how are you going to deal with that? You know? You can’t.
CW: So now we need to turn to technology. We know that technology is going to be the answer to it because we have this Great Resignation, so if we don’t have the people, we have to turn to tech, so talk to us about your tech.
JP: So our technology””and some of these rental companies have deployed some of their own technology””the biggest difference for us is that we actually, again, compile everything that’s owned, everything that’s rented so you have one pane of glass to look through and go, alright, here’s everything that we have on the project. Ours not only gives you that visibility, not only sends out automated summaries to every single project team saying, “hey, this is everything on your project every single week” and they have to notify that. It also tracks the maintenance to make sure you don’t have downtime on your equipment. It also allocates responsibility to people, not just projects, when it starts coming to tools and some of these other components, hey you’re responsible for this. It drives the logistics and dispatch, so it actually sends notifications to your team to make sure that things are getting moved in a timely fashion, they have links to google maps on how to get there that’s notifying the teams as things move. And there’s also inspection forms that are involved in there to ensure again, that you’re consistently checking the health of those pieces of equipment and you’re not waiting for it to break down and then now you have downtime on a piece of equipment that just really needed a $100 part, and that’s going to affect your production as well. For us, that’s on the own side but on the rental side, we actually aggregate all the data from the big rental companies like United, Sunbelt, Herc, and so forth. We pull this data in for our customers so that if you have 100 projects going on and everybody’s ordering a piece of equipment, they don’t just show up and then nobody knows that they’re there, and they also don’t just sit there longer. So, one, we pull the data we landed on the project so the project team knows it’s there, and the people in the office know that it got rented. Two, there’s an end date for that rental that’s expected, right? We need it for two months. Right now, at the end of those two months that piece of equipment just sits there, no one is going to go pick it up, and again there’s no board or spreadsheet calling you or sending you an email, but on the Yardz system it actually will send you an alert on the last day of rental, and it gives you a list. Hey here’s all the things that need to be off your project immediately, right? And if you need it for longer, change the end date, and it alerts you that next end date. But if not, hit the little “˜call off’ button and get rid of that equipment so you’re not paying tens or hundreds of thousands of dollars a month with rental costs that shouldn’t be there with unutilized equipment. So, we’ve had several customers just in the first month when they sign up and have that visibility, they call off tens or $100,000 worth of equipment going””“gosh, we didn’t even know that was all out there.”
CW: So, let’s talk about that, dollar-wise and savings, because multiple people are being notified on where you are with this? Or is it just the PM? Super? Who’s getting those notifications, because now you’re talking about significance, so I’ve got two questions here””multiple people are aware of what’s happening, right? So, who typically gets the notifications? Let’s start with that question.
JP: Yeah, so we have a pretty robust permission setting and roles that can be created, and the great thing is we have something called notification users, and you can have an unlimited amount of notification users just with one single account. And so, when you ask who gets notified, well, you can build out the entire project with 20 different people and every single one of those people are going to be notified. Or you can set a permission setting saying I only want PMs and supers to get it, I don’t care about the operators or technicians or whatever it might be getting notifications on the last day of the rental. So, there’s a lot of flexibility in that, but what’s most important is we want your team to be notified, so just with the payment of one user account, they can add hundreds of people within their company that get those notifications.
CW: So, with that being said, talk to me about the savings then that you’re achieving because of the team being notified so that you’re not wasting equipment that should have been returned or that idea that we’re done with it, we don’t need it anymore, or that we might need it longer so that we’re maximizing usage I guess would be the vice versa or you tell me.
JP: That’s exactly right. So, we surveyed our customers early on in the life of Yardz and we said hey, just give us an estimation, because measuring savings is difficult when you start going, well how much did we actually save by calling it off early? But what we found very quickly by people just kind of trending and looking at the utilization they’re going: we’re saving 10-30% in overall rental costs, right? So if you have $1 million a year that you’re renting, then we’re estimating on the low end $100,000 a year you’re going to save in ensuring that you don’t have unutilized assets sitting on the back of a project and look, all of us drive down the street, we all see equipment sitting on a project for a month, two months, three months, and we’re going, why is that sitting there? How can those people even afford a $300,000 piece of equipment or even a $150,000 piece of equipment to just sit there for three months and not make money for them? But that’s what it’s doing. So, these notifications really drive so that you’re only paying for what you’re using.
CW: Jason, when you look at what you guys do compared to the competition, how do you see yourselves as being really different?
JP: There’s two main ways: one, a lot of the competition that we see first of all is mostly status quo, because nobody has done what we do where we aggregate all the rental companies, and we bring it into one platform side-by-side with your owned assets. What we’ve seen right now is when we call it’s not about hey, are you using a different product, right now, it’s well, you know I set up this spreadsheet and I’m just so used to using it. Well okay, but your spreadsheet doesn’t send out emails to your team. Not only that, if you want your team to know everything that’s there, you’re cutting and pasting from a spreadsheet, sending it out to each one, and it’s taking you hours a week just to kind of deal with those things, and by the way, as things are rented, they’re not inputted there. So, people now, when it comes to competition, they’re logging into five different places on the United system, the Sunbelt system, the Herc system, the Sun Sage system. They’re logging into all these places to see what they have rented. And so, everything is fragmented for them. There are other options where you can go through rental brokerages to kind of track all your rentals, but you’re paying a premium if you’re doing that, and the other thing is, you’re not loading everything into one place so, if I have 20 excavators and three of them end up coming back into my yard, I can’t easily just search to see what’s in my yard and what I have rented and swap those out. Because that’s your goal, I want, when something comes into the yard, I’m going to go, oh, an excavator just came in, let me see what I have rented. It doesn’t matter who I’ve rented with, and now I can swap it out and I’m going to be saving thousands of dollars a month. So, that’s really the advantage, seeing everything and being able to operate in one system as a team.
CW: So then looking at that, who is your competition then? Do you have one that is more aggressively a competitor than another or do you have many? Or no, you’re completely different.
JP: We are completely different. Again, because we aggregate all the rentals into one place. No one automates that process the way we do. And, again, with all the owned assets in one place, we’ve asked, and we’ve talked to hundreds of customers, and no one has a solution, no one has an alternative to Yardz right now. So, we’re very fortunate to be where we’re at, to be one of one, and we continue to just hit the market and try to provide value to these guys that again, are trying to do so much more than what’s possible as a single human being. They need this tech.
CW: How important are partners, collaboration, things like that? Do you have them?
JP: We do; we love partnerships. We have some partners on the IoT-telematics side where if a customer has deployed GPS and telematics, we’ll actually pull that data straight into Yardz. So, we can pull data from the Caterpillars and the Komatsu-type pieces of equipment, but we also have companies out there like Samsara, ZTR, where we can pull data from them or a track unit and pull it into our system. Our biggest partnership that’s going to be coming out here in a press release soon is with Equipment Watch, who is the premiere provider of calculating cost of ownership, and change orders, and things like that at a DOT level. They’re going to be huge as part of this infrastructure bill, but we’re integrating into them to have some taxonomy within our system and provide value back to our customers even on what’s the current market value of your owned asset, what should you be charging for it, when is the right time to sell. So, there are some things that we’re going to be coming out with in the next couple of months, specifically because of this partnership with Equipment Watch, and we’re really, really excited about it.
CW: Will you be doing anything with any partners ““ I know this is going to sound like a strange question ““ on the materials side ever? Looking at just the idea of as the market goes and we have to think about sustainability, do you think that you’ll ever get into that arena? We have to think about being more resilient, more sustainable, and we make a lot of products and we’re a make-take-waste society, so I don’t know if that’s something eventually you might want to think about. Is that something that will help them be better with their assets?
JP: We are, and we’re headed in that direction, so we have a warehousing module that’s coming out in a couple of months here and it’s really targeting material and some of these more consumable-type things, whether it’s masks and disposable gloves, or hard hats or whatever it is, these things seem to end up on projects and then disappear, right? Because they’re not tracked very well. There’s a lot of things we’re classifying between consumables and commodities and non-depreciated assets and depreciated assets. We’re going through all these components and we’re providing some of this bulk tracking for our customers because some of them really operate in remote places. They’re large utility contractors, and they might have these insulated mats that are used for linesmen and dealing with these high-voltage lines, and somehow, they lose hundreds of them a month.
CW: Like tools! It’s billions and billions of dollars market and they lose tools, it’s amazing right?
JP: Lose and lose, and so this is going to provide some additional visibility for each one of these projects and more importantly, accountability. When they know now, hey I’ve got 50 of them, and when I come back, I’m going to need to account for 50 of them, or on a weekly basis, someone is held accountable for that because Yardz is sending some type of reminder and confirmation of that inventory. It’s going to save these contractors a tremendous amount of money and as you said, it’s going to reduce some of the waste from people just leaving things out there and it just becoming trash.
CW: Great, so looking at final thoughts, I know you’re hoping the infrastructure bill does something there’s a lot we can do here””this is an industry that has to change, and we have to reimagine our cities, our urban and rural communities, so what are your thoughts there?
JP: I think there’s two sides of it, I think obviously our cities need to get smarter and better, but we’re also seeing a lot of people move to these more, I’ll say suburb, but even more rural areas, and I think we’re going to see quite a bit of development in some of these what you would call more rural communities and I think you’re going to see a lot of companies move out there as the infrastructure moves out there, whether it’s high-speed internet or things like that. I think corporations are looking at more rural states and rural communities to put their stakes and tent up in and build. So, you know, the future is always one of those things where you get a dream of where it could be and what it might become. I’m excited just to see people get out and hopefully enjoy life a little bit and for all of us to get past this COVID scenario to be honest with you.
CW: Well, this has been great, thank you.