![\"mckinsey\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/mckinsey.jpg\")
<\/a><\/p>\nIn terms of economic potential, the construction industry is the world\u2019s second largest sector by annual revenue. [2] However, it suffers from a heavy reliance on paper for items ranging from blueprints, design drawings, and purchase orders to equipment logs, daily progress reports, and punch lists. [3] As projects grow more complex, the efficiencies that could be achieved with digital technologies will only grow. To keep pace with global GDP growth, the world will need to spend approximately $57 trillion on infrastructure by 2030, so there are ample use cases and opportunities for the development, testing, and employment of new digital technologies in the sector. [4]<\/p>\n
Enter Rhumbix <\/strong><\/p>\n Rhumbix was founded by two U.S. Navy veterans who met at Stanford\u2019s Graduate School of Business. The pair initially lamented the construction industry\u2019s heavy reliance on pen-and-paper records and clipboard analysis and decided to found a company that would help industry leaders more accurately account for labor costs and understand how labor resources are utilized in the field. [5] Rhumbix, which raised a $6 million Series A led by vaunted Silicon Valley venture capital firm Greylock Partners, is an example of a recent, but growing phenomenon in venture capital \u2013 investors are increasingly looking for opportunities in non-traditional sectors such as construction, oil & gas, mining, and agriculture. Because these industries generally involve asset heavy and capital intensive businesses, startups using digital technologies to disrupt and improve traditional business practices are attractive in their ability to generate venture class returns.<\/p>\n <\/p>\n <\/p>\n In its most simple mode of use (depcited in Exhibit 2, above), Rhumbix allows construction workers to clock in and clock out via a smartphone application and submit their electronic \u201ctimesheets\u201d to their foremen. In the days of yore, foremen compiled timesheets, which could actually be quite complex given that the market wage for an electrician varies widely from that of a welder or heavy equipment operator. The technology has more advanced use cases as well, as its geofencing technology allows for both real-time tracking of workers\u2019 locations on sites and post-job analysis of where workers spent the most time, allowing planners and managers to understand onsite resource allocation. [6] Because construction workers\u2019 salaries are \u201camalgamated from a variety of different monetary pots,\u201d the ability to understand which workers are performing which tasks and where in a more granular fashion can save hundreds of thousands of dollars through more accurate cost-code accounting. [7]<\/p>\n Rhumbix offers a tiered service model that aims to make and fulfill several different customer promises. At its most basic level, currently priced at $0.50 per worker per day, the software allows for basic daily progress reports, timekeeping, and notekeeping. The \u201cpro\u201d version adds custom export and dedicated phone and email support, while the \u201centerprise\u201d variant offers Rhumbix\u2019s custom analytics and geolocation capabilities. [8]<\/p>\n The impact of technologies like Rhumbix on the construction industry has the chance to be significant. Construction is a notoriously opaque industry, where cost overruns and \u201cchange orders\u201d are frequent. In addition to efficiencies, Rhumbix has the opportunity to provide transparency and allow managers and leaders to understand and communicate to their clients exactly where friction points lie. For example, a sub-contractor could demonstrate to a contractor just why a phase of a project ran over budget, allowing the contractor to clearly and concisely pass that information to all relevant stakeholders.<\/p>\n Can Rhumbix Evolve from Serving Clients to Serving an Industry? <\/strong><\/p>\n As Rhumbix and other innovators seek to improve the processes and business practices of the construction industry and similar sectors, they would do well to consider creative methods for monetizing the data that they and their customers collect. Rhumbix promises that its technology will allow customers to generate insights from their data, but Rhumbix should also consider who would benefit from industry-wide, anonymized data measuring items like workforce composition and task organization, labor rates, and crew dispersion. Surely there is ample opportunity to take this data, derive best practices, and monetize accordingly.<\/p>\n (763 words)<\/p>\n Sources:<\/p>\n [1] Agarwal, Rajat, Chandrasekaran, Shankar, and Sridhar, Mukund, \u201cImagining Construction\u2019s Digital Future,\u201d McKinsey & Company Quarterly<\/em>, June 2016, http:\/\/www.mckinsey.com\/industries\/capital-projects-and-infrastructure\/our-insights\/imagining-constructions-digital-future<\/a>.<\/p>\n [2] Chen, Jerry, \u201cOur Investment in Rhumbix,\u201d November 10, 2015, http:\/\/www.greylock.com\/our-investment-in-rhumbix\/<\/a>.<\/p>\n [3] Agarwal, Chandrasekaran, and Sridhar.<\/p>\n [4] Agarwal, Chandrasekaran, and Sridhar.<\/p>\n [5] www.rhumbix.com<\/a>, accessed 12 November 2016.<\/p>\n [6] Deamicis, Carmel, \u201cThis New Greylock-Backed App Tackles the Unsexy Industry of Construction,\u201d Recode<\/em>, November 10, 2015, http:\/\/www.recode.net\/2015\/11\/10\/11620520\/this-new-greylock-backed-app-tackles-the-unsexy-industry-of<\/a>.<\/p>\n [7]\u00a0Kulkarni, Nitish, “Rhumbix Wants to Be the Palantir for Construction,”\u00a0TechCrunch<\/em>, November 10, 2015,\u00a0https:\/\/techcrunch.com\/2015\/11\/10\/rhumbix-wants-to-be-the-palantir-for-construction\/.<\/p>\n<\/a><\/p>\n