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Word of
the Week
June
19, 2000
Fragments
Often investors
consider a "fragmented" market as a good market to provide
new services too. "A fragmented market" describes a
market where most of the companies or people in that market are
acting individually. This usually defines a good opportunity to
pull that market together under a unified service (preferably
yours). This makes sense at first thought because through a single
type of software or service you can pull together a large portion
of the market so that it is not fragmented any more.
Well, here
we have the construction industry. Is there an industry more fragmented?
Probably not. Over 80% of companies are small, localized companies
with fewer than 20 employees. Most of these companies are sole
proprietorships built by individuals who love the businesses and
enjoy the satisfaction of being their own boss.
I disagree
with the other 150 plus companies in the e-construction space
that we will be able to eliminate fragmentation. Our industry
is that way for good reason. The majority of companies get started
with one or two tradesman who cut out on their own. Usually there
is no long term plan or special program that someone goes though
to be a contractor. Thus each individual company is unique with
unique needs and ultimately different sets of solutions to the
same problems.
We as Internet
companies focused on the construction industry should direct our
services at inter-operability. Not, "My way or the highway".
We need to make the industry embrace our services, not give them
a reason not to use them. I accept fragmentation and believe it
is a healthy part of our industry. It offers unlimited choices
of personalities, methods and approaches to fit the needs of different
clients and projects.
Ultimately
the construction industry could benefit greatly form a unified
standard approach to project management. If, for instance, every
contractor, architect and supplier used the same system we would
be able to integrate and share information easily, saving loads
of time. Come to think of it, there are probably a lot of fragmented
industries that could benefit from a unified approach. I bet the
ice cream industry could save loads of money if all they had to
make was Vanilla.
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