The Funding Frenzy Is Over -
Now What?

By Colin Gilboy, PE, CSI, CCPR

Almost unlimited venture capital funded the Internet and related dot-com companies from 1998-2000. After the recent collapse of venture capital investing, new companies expect venture capital to be more difficult to get, or impossible. Companies must struggle to develop a viable business plan, to survive and to become profitable without venture capital.

In the construction area, Construction Zone received $10 million in venture capital in 2000, folded within a year and was recently purchased by Dodge McGraw-Hill. Buzzsaw® received about $100 million in venture capital. After spending much of the money, Autodesk® purchased the outside Buzzsaw® stock from the other investors. The Buzzsaw® technology is now a service from Autodesk® .

Let's consider three examples and what happened later:

Railroads rapidly expanded after the Civil War, with too many competing railroads and a resulting crash. Yet as companies merged, and railroad technology improved, by the 1940's, a rail system resulted with vastly expanded capabilities and usage.

Automobile production greatly expanded in the early 1920's as hundreds of small companies were formed. Some companies folded and some were merged into larger companies. General Motors was the combination of several companies. Some of their names are still used today - Chevrolet and Cadillac for example. Today, automobile production and usage is much higher than in the 1920's.

In the early 1900's, competing telephone companies were formed in many communities. Many companies were not interconnected and some businesses had to have a phone from each local telephone company to talk with their customers. Companies folded or merged to form the current phone network.

During the first phase of a technology boom, users have a difficult time using the new technology and the infrastructure needed to support the new technology is not yet in place. The automobile business needed better roads and gas stations to sell more cars. The Interstate Highway system permitted increased usage and a large increase in automobile sales resulted. More women could drive cars when automatic starters replaced the crank.

Computer usage jumped when the Windows interface was adopted, making it unnecessary for the average user to learn computer instructions.

What is next for the Internet? Let's look to some of the fundamentals of the Internet and its future use in construction:

Bandwidth will not be a problem even as usage increases. The Internet equivalent of the Interstate Highway System already exists. The dot-com funding frenzy created an in-place fiber-optic network that is still little used today. Over 95% of the installed optical fiber has never been used. Newer technology is able to send 10-100 times the amount of data over a single fiber, compared to most other resources in use today. The last-mile connection from the main fiber-optic channel to your office will be improved to Cable, DSL and wireless for faster connections.

Product manufacturers' management will finally understand that architects, engineers, owners and contractors expect to find all of their product and design information online. The engineer/architect user expects an easy to use product website, with easy to use navigation. CSRF published WebFormat™ -- a standardized layout navigation for product websites. An increasing number of manufacturers are working to adopt the WebFormat™ design concepts in their websites.

E-mail will become more reliable as companies learn that the user expects a fast and complete response. I recently learned of one company that had 900 unread E-mail messages on their server. The responsible person had been sick for a month and no one else took over. Today, E-mail will probably not get a real response in a timely manner. A phone call to technical support gets a faster response. Once E-mail questions get a priority response, then people will shift to E-mails for their technical support and improved customer relations.

Long distance collaboration with consultants via tele-communications will increase, reducing travel. Small web cameras and software, available for under $100, permit each person to see the other on their computer screen while they are talking on the phone. This visual contact improves the conversation. As more people have web cameras, the usage will become more frequent.

Project websites will increase online construction project management. Lotus Notes forms the backbone of much corporate information. In many cases, the communication and collaboration system is managed by one company for a project with outside access as needed and appropriate. However, a major construction project can be a very different a environment, with perhaps 50 different companies working together on one project. Project websites are becoming more common when large owners and contractors can enforce the usage of the project website system.

As more people become familiar with a standardized interface, more construction projects will be managed using project websites. I expect that the larger A/E/C firms will more often manage their design phases using project website systems, as more project websites are used for the construction phase.

About the author: Colin Gilboy, P.E., is President of 4specs.com, Inc., and is a Director of CSRF. Mr. Gilboy can be reached at colin@4specs.com.

The CSRF newsletter is published for SPECTEXT® subscribers and others involved in design and construction. To obtain your copy of Creating a Common Language®, please contact the CSRF Support Center by telephone at 1-877- SPECTXT or 410-838-7561 or you may e-mail us at supportcenter@csrf.org

©  Copyright 2007, The Construction Sciences Research Foundation, Inc.  Updated January 12, 2007.