Innovation and Tech in the Construction Industry: Insights from Ben Carter VAE Group

What’s the future of Brisbane’s infrastructure as we gear up for the 2032 Olympics? In this episode of Redd’s Technology Podcast, Ben Carter from VAE Group explores Queensland’s opportunities and challenges with host Nigel Heyn.

Ben discusses the early adoption of industry solutions and the pressing need for innovative procurement models. He also shares his vision for how the state can build a lasting legacy with infrastructure that serves the community for decades to come. He highlights the strain on the construction industry and the importance of making smart, strategic decisions to meet the growing demands.

You’ll also hear Ben’s candid advice for aspiring entrepreneurs on the importance of taking risks and pursuing your ideas with determination. If you’re curious about what lies ahead for Queensland or simply seeking inspiration, tuning into this conversation with Ben is a must!

#Brisbane2032 #Infrastructure #ConstructionIndustry #Olympics #Entrepreneurship

00:00 – Start
00:26 – Guest Introduction
05:40 – Technology Integration & Acquisitions
10:59 – Key Lessons and Growth
13:51 – Embracing Technology in Construction
17:49 – Cybersecurity in the Construction Industry
20:42 – The Road to Brisbane 2032 Olympics
23:16 – Brisbane’s Infrastructure Vision
24:24 – Advice for Aspiring Entrepreneurs
26:50 – Closing Thoughts

If you would like to discuss any of the topics discussed in this episode further with a REDD expert or if you would like to be a guest on the show, please get in touch either via our website, [email protected], or through any of the links below. https://redd.com.au

https://www.linkedin.com/company/redd-digital/
https://www.linkedin.com/in/nheyn/
https://www.linkedin.com/in/bencarter5/

(00:20):

Welcome to Redd’s Business and Technology podcast. I’m your host, Nigel Heyn, and today I’ve got a special guest, Ben Carter, founder of VAE Group, and I’ll get Ben to introduce himself and share the background about where it’s come from. Thanks for coming on, Ben.

(00:32):

Thanks for having me and nice to be here. Nigel, are you all I’ll? I guess I’ll start back. I’m traditionally from the construction based industry, but started off as a mechanical engineer. Worked for big some global corporates over that time. Got trained up 11 years, grew a Queensland business into running it. It got acquired by another company and at that point I thought, I’ll see what else is out there. And an opportunity came around for me to take on a role to run an air conditioning contracting business for a NZ private equity. And so I did that in 2008 with this view that I always had this philosophy that it’s nice to be rewarded proportionately for the value you add into a business. And so this private equity came along opportunity and I took that with both hands. And three months later the GFC hit and it went from take some equity and grow the equity and sell out after a few years into a rescue mission.

(01:41):

And so within three months, GFC hit 66% of our customers were in liquidation and being property developers and builders. And it just became a quest to survive. So I spent three years doing that. We turned the company around, we got it back to a profitable position. The opportunity was still to take equity on the table within that particular organisation, but I saw an opportunity to go out and do it for myself as opposed to being sort of a small minority player, was to put a group of people together and go to the market and maybe offer something a little bit different in the mechanical side of construction. So mechanical side of construction basically is doing all the air conditioning, ventilation hospitals, shopping centres, high-rise buildings, that sort of large commercial market. And so I actually took the dive into being a business owner in 2011 and I bought my father-in-law’s business.

(02:44):

So he was selling air conditioning and electrical products up into p and g, and he was ready to retire and he was just hitting 65. And I thought there was an opportunity to take that business and turn it into what I do, which was to contract and maintain large commercial buildings, air conditioning and ventilation systems. So I did that in mid 2011. And because of his contacts up in p and g, there was a big oil and gas development going on up there. And through those contacts we were able to take on some, probably in hindsight looking back really risky work. Our first job was a massive job for ExxonMobil up in p and g up in the jungle in a place called Hides. There was two of us at the time and there was about a $20 million contract and everybody I spoke to thought we were crazy, but we sort of had this plan and we negotiated a good contract and away we went in conjunction with that.

(03:46):

I used some of my contacts and I got a big shout out to Hutchinson Builders. They were the first company to give me a couple of jobs in Queensland, in Brisbane. And so we started off a job at one 50 Charlotte Street in Brisbane and took on some mining work up in Ooba. So that was sort of got us to the end of 2011. And my, I guess understanding of how to run a business back then was pretty simple. I sort of had this opinion or if you make a million dollars then you get to pay yourself a million dollars, but this whole equity thing and all those other bits and pieces and capital was new to me. So learned very quickly and realised that you had to reinvest back in the business if you wanted to grow it. And so fortunately moving into the next few years, again off the back of Hutchinson’s, we moved up into Townsville and did two highrise buildings up there.

(04:41):

So we did all mechanical systems in those buildings and then at the same time we started a service business. So not only were we designed and installed the systems, but then we would move into maintaining them as well and say sort of complete the lifecycle of a building from that. In 2013, Len Lease took us up to Cairnes Base Hospital, so we moved to Cairns and then 2014 there was this, I guess really big downturn in the industry in Queensland. A number of companies went into liquidation, big players much bigger than us, and we sort of did a Steven Bradbury and everyone fell over and we were able to take on those employees, take on some of those jobs and grow quite quickly. So in the early days of turning over maybe a million to $2 million, by 2015 we’d sort of moved to 50 million. And then from that through contacts, we went over to New Zealand to do Christchurch Hospital.

(05:41):

And I guess through this whole time, just to bring it back to a bit of a technology focus, what we did is we saw, I guess a niche in the market and their whole philosophy was that we just want to provide good customer service and make sure the jobs worked completely in full when we finished them because you do an air conditioning job in a big high rise and there might be some temperature complaints or some airflow complaints or humidity or acoustics, all those sorts of things. And our philosophy was to just take the whole job, make sure it was built in certainty, which is our brand promise now, and give the client exactly what they paid for. And so through that, we kept getting repeat business went to Christchurch in 2016, and one of the key things that enabled us to provide that built in certainty to the clients was we took on and started an automation business.

(06:36):

So one of the areas where we were getting let down in the early days was it didn’t matter how well we installed all the mechanical systems, but if they weren’t controlled correctly, then the building wouldn’t function correctly at the end of the job. So we did that and then through that business unit within our larger business, we came across a company called Bit Pool, and we acquired them pretty early on 2014 ish. And what they did is they took data out of buildings, and if you look at any particular building around the city, any city of the world, they’re full of different systems. Some buildings might have 15, 20, even 30 different systems. And all of those systems talk in different languages, different tech. And so what Bit Pool did was basically cost-effectively connecting to those different systems and enable you to aggregate the data back into one pool or into one cloud-based technology.

(07:38):

So we invested in that and sort of grew that up through the business. As we were expanding, we funded that little business to a point where, got to about 2019 and we thought this business could actually be taken out of VAE, which is a raw construction business, and we had this tech business growing inside it. And so what we decided to do was that we would move that out and then as you would know, 2020 hit Covid came. And again, it was sort of a landscape that no one had navigated before. So we put that on the back burner navigated I guess the effects of Covid with Borders closing. And by this time we were working in p and g, we were working in Queensland, Northern Territory, New Zealand, north and South Islands. And so just to go back to that time, having Borders closing on a daily basis and a weekly basis, moving resources around and trying to fulfil contracts was a real mission.

(08:42):

So that took our focus moving through 2020. We then were approached by a company called Mann, a big global player in the air conditioning space in Germany, and they were looking for a platform to invest in Australia. And so we took a minority investment from them around 34%, and that enables to grow quicker again. And at that same time, we then put back on, we sort of navigated the initial effects of Covid and we decided to then fulfil the role of kicking Bit Pool out of our raw construction and service space company in the HVAC space and mechanical space. And we started Bit Pool in its own. And so that business now as a separate business to VAE and it’s now offering data aggregation of big commercial buildings to enable building owners to actually see what’s going on in their buildings. And then in recent times with the, I guess real developments in the AI space, we’ve then added AI to Bit Pool.

(09:58):

So we’ve got it now to a point where basically you’re going to have a conversation with your building. So you’re building data gets sucked up into the Bit Pool cloud, and then through the AI you can have basically a conversation. You can ask your building, what’s going on here, why did this do this? Where am I using the most energy? Have I got a problem with my water consumption? And basically the building will tell you now. So that’s where we’ve got to in the tech space. And that’s probably the five to 10 minute rundown of where I’ve

(10:26):

Got to. Oh, fantastic. Ben, look, you are the first leader that’s been on this podcast that actually is in the built form property game that gets tech, right? That’s why I really appreciate you being a guest. And it’s interesting, you’ve got a very varied background working with private equity building teams. We get a lot of the different listeners that are small business owners to listed entities. Like if you look back the last 10 years or so, what’s the one thing that I guess really you’ve learned or really grasp well that has helped you build a business that started off at two going to PNG, literally jumping in the deep end to what are you now over 300 ish,

(11:02):

About 400 employees, and this year we’ll probably exceed 200 million in turnover. So

(11:08):

Congratulations to

(11:08):

All that. It’s been a pretty wild ride. And I guess to be able to do that, it’s all about cashflow. Every business owner, it’s the lifeblood of a business. So structuring your affairs so that you have cash, those who have it can grow. Those who. But I guess going back to my private equity days, the private equity company that had bought the air conditioning business that I went to run was a NZ private equity. And through those three years I always maintained, I didn’t want to be owned by a bank. It was really just good cash flow management, reinvesting back in the business and making sure you had enough set aside for a rainy day like in 2014 when the industry had problems. And then again in two 20 when Covid hit, we were sort of sitting there and going, okay, what opportunity is going to come out of these particular events as opposed to how do we save the company?

(12:06):

Because we had, I guess the finances in the backing to take advantage of it. So cashflow management is one big thing. And I guess the second thing is I find that having like-minded people who believe in your vision and who think and want to go in the same direction is important because it can become quite lonely as a business owner, but if you’ve got a bunch of mates or business partners that you can share the experiences with, share the problems, share the wins, the successes, then I find that’s a lot more enjoyable. So probably those two things. And I guess the last thing I learned a lawyer in Brisbane, David Williams who works at Mullins, I went to a trade investment show in 2017 and met him there and it always sticks in my mind. He sort of said that when you start a business, start with the end in mind and look, that can change over time and it normally will.

(13:06):

But as he said to me, I sort of thought was puzzled by why would you start with the end in mind? And his comment on that was, well, at some point you’re going to leave your business. It’s either going to be you’re going to sell it, you might IPO it and they bring someone else in. You might bring your kids in, have a succession plan that way, or you might go out in a wooden box, but you’re guaranteed to live your business at some point. So set your affairs up early and structure it so that you can do that at a later point in time.

(13:37):

Yeah, great advice, Ben. And look, Queensland success story hats off to you. And you mentioned before Huie, my old school VBC, they’re heavily involved there. I know Scott’s great advocate for everything in Queensland. Talk to me a bit about tech as a leader, how have you embraced technology in your business? And obviously you’ve got Bit Pool, which is really, really early adopter, cutting edge for listeners here, part of the reason we do this is we want to educate people that technology is real differentiators a key thing that has uplifted humanity over the last a hundred years and will continue to drive that differentiation. But there’s a lot of people that are scared, they don’t understand it’s a foreign object. How as you as a leader embrace it in your business?

(14:15):

Yeah, that’s a good question. I’m probably in the dumbest tech industry that’s around in construction, but you can see there’s a lot of different plays going on in that space at the moment, particularly now with AI being pretty accessible and easy to implement into different products. Look, from my point of view, it was always about trying to get differentiator. What we do is we build things to differentiate yourself so that you’re not just competing always on the lowest price. It’s what can we do to make our product better. And so fortunately, some of my business partners over the years have been very tech savvy. I’ll definitely admit I’m not, but you can see that in an industry like ours that where the consensus or the norm is to just keep doing the same thing day in, day out. It doesn’t make sense. And so the whole reason when I got into the tech space was firstly to differentiate the product from in the automation space by actually delivering a quality job at the end of the day.

(15:25):

And then that progressed to the data aggregation and being able to see what’s going on in your building by differentiating our services products, our maintenance products, and giving clients control back as to what’s going on. There’s a bit of black magic sometimes with what some companies might tell owners are going on in their building, particularly in the automation space. And so the whole idea of Bit Pool was to uncover what is going on and put that power back in the hands of the owner. And by doing that, we are also able to learn and get better at what we do. So it it’s predominantly been about differentiating and I guess in terms of being scared about it, I look back and think I probably should have been scared about it, but the key for me is just to take small steps. You don’t have to make a multimillion dollar investment on day one.

(16:23):

It’s about having an idea, a vision and testing whether that hypothesis is actually going to add any value and then taking small steps, but staying true to your vision because I can tell you over the years I’ve had millions and millions of people, not millions of people, lots and lots of people, tens and tens of people telling me that what we’re doing is crazy and it’s not going to work. But you’ve just got to have that vision. If you think it’s right, stick to it. Surround yourself with tech savvy people pretty well. Everybody who comes out of school these days is tech savvy and it’s amazing what they can do. Even look at my son who’s doing engineering at the moment, he’s doing mechatronics and some of the robots he’s building just blow me away. I wouldn’t have a clue how to do that from my days at uni. But yeah, I think just surround yourself with people who are like-minded who share the vision and chip away at it. And I guess finally maybe have a source of funds that you can keep devoting to it to get it to the point where it becomes viable.

(17:26):

Yeah, fantastic. Yeah, Steve Jobs saying those are the crazy ones that would’ve changed the world or the industry are the ones that get ahead and do it. Right. So it’s interesting, we’re talking a bit about people being scared, and I see this time and time again about technology. Something that we’re seeing more and more is that cyber. I know before the podcast we’ve been talking, we’ve seen this time and time again. How does cyber play a role in especially your industry? Can you share what you’re seeing in there with more and more connected buildings? I know we’ve, as I said, touched on this. Where’s the industry going from that point of view?

(18:02):

Yeah, that’s a good question. Well, in terms of cyber, on my risk rating, it’s right up there with health and safety within our business. And the reason being is these days when we do build large buildings, everything’s designed and drawn in computerised systems. Obviously we all work off computers, job management systems, there’s lots and lots of different software that we’re now using to build buildings. And so not having, I guess a tech system or a tech structure within your business that is reliable and online 24 7 can be the death of your business. But I’ve been quite worried about some of the advancements that we’re seeing with cyber attacks and what’s capable these days down to the deep fakes and all sorts of things. The early days people would be mimicking me on email trying to do pretty unsophisticated scams. But what we’re seeing come through these days are quite sophisticated just from I guess a phishing perspective.

(19:16):

But the real danger for us is that to have a company come onto our network and disable it through a cyber attack and having seen some of the presentations on what the cyber attacks are doing with AI based systems, we thought the only way to I guess have a chance is to go to an AI based protection system. So we’ve been doing that. We’ve spent an enormous amount of money in plugging the gaps, cleaning up infrastructure, procedures, processes to ensure that for our own business, but then we’ve got to think about our customers as well. And the reality is that commercial buildings are a massive risk to cyber. I said before you might have 15, 20, even 30 different systems within the building, and these days when they’re being built, they’re coming up with integrated networks in there. So it only takes one breach to get onto that network. And depending on how that network’s used within the building, it can then lead to all sorts of problems. And it’s a massive issue in our industry, which I think the industry is only really in the early adoption of solutions to.

(20:27):

Yeah, whenever there’s a challenge, there’s opportunity. So stay tuned for that space. Let’s change gears. Instead of talking about doom and gloom and all the negative stuff like Brisbane, 32 Olympics, everything that’s happening, your industry, construction costs, all of that, share with me where you see the next couple of years going in particular, Ben, your crystal ball, it’s been pretty good historically, where do you think we’re going?

(20:49):

Yeah, that’s a good question. Well, we’ve got just under eight years to the Olympics, and I think the first step bail that we’re all waiting to see is what’s going to be the final plan. But I think there’s an election to go before we’ll really know what happens there. From a hope point of view, I really hope that whoever is elected in October goes down the path of creating a legacy for Brisbane and Southeast Queensland and Queensland as a whole with infrastructure and facilities that we can use for the next 20, 30, 40, even 50 years. I think to do it on the cheap and maybe put a coat of paint here and a little fix there isn’t the right solution. And so to do that means there’s a lot of building coming up and I think we’ll start seeing a lot of those facilities coming out in the second half of this year.

(21:43):

My concern is the state of the construction industry, not only in Queensland but Australia, there’s a huge big build. It’s in the papers. There’s definitely a problem with resourcing. The Queensland government’s already committed to a massive health infrastructure spend. I think they’re looking at around 12 different hospitals throughout the state that’s going to take up a lot of capacity. And then we’ve got the stadiums and the facilities. I think there’s around 70 odd facilities that either have to be built or renovated prior to 2032. So it’s, it’s going to come down to the wire as my personal opinion as to how that gets built. Hopefully by doing things smarter and retrofitting a lot of the good facilities that we’ve already got is one way to do it. But then there’s the big opportunity of the potential new stadium Brisbane live. Those things need to be built, Brisbane needs them, and I think the Olympics is the catalyst to make that happen. And in conjunction with that, I think that if the state governments can’t look visionary from a visionary point of view and create the transport infrastructure that we really, really need in southeast Queensland to facilitate that by spending on that, then I think it’d be a real miss. So I think that it’s going to be close, but let’s hope we get there in time.

(23:08):

If you had the chance to say one thing to one of the politicians that’s listening in on here, what change do you think they need to make to help? You mentioned resources as a constraint. Is there a quick fix to this or is it systematic that’s going to just take time? I

(23:22):

Think they just need to look at alternative procurement models. If they go down the traditional path of state government tendering and look at all of delays and things that happen within that, then they might struggle to get some of these particular facilities built in time. I think they really need to work out who can do these in the market. Some of the facilities they need to build are multi-billion dollar facilities, and there’s not that many people that can build ’em. I think going down a partnering path, which I’m sure they’re already doing, and fast tracking that process, I think is the way to go, and maybe putting some checks and balances around that to make sure that taxpayers getting value for money. But I really think that the government should be looking at a partnering procurement model for these facilities, particularly the bigger ones, so that they can get ’em done in time.

(24:14):

Yeah, fantastic. Look, I’ve learned a lot just listening to you, Ben. So look, a couple of last questions. Conscious don’t want to make this too long. I know people tend to listen to this when they’re driving around. What would you tell a younger version of yourself with all the things you’ve learned today? One key piece of advice, I know you mentioned before cashflow, but with all of your wonderful experience building businesses, building or being involved in the buildings that actually shape Queensland and the world in particular, what’s one common thing that you reckon you want to share with others?

(24:44):

If I’m totally honest, be careful what you wish for, but if I do look back, I’ve got no regrets on what I’ve done. I guess the reason why I went into business and created VAE group with a whole bunch of other good mates over that journey was I didn’t want to get to retirement age and think I didn’t have a go. I figured that I’d rather have a go go bust and maybe not be very wealthy in retirement, but I could at least sit back and say, Hey, at least I had a crack. They’re a good Aussie tradition of having a crack. So I think, look, the big piece of advice is if you think you’ve got an idea and if you think that it’s worthy of pursuing, then have a go. And the sooner you do the better. And what I say that is, is that if you’re in your twenties or even your thirties, you can always make more money. You can always start again. You will always find a way if you try, the first one might not work, but then there might be a second or a third one. So don’t die wondering is probably my tip.

(25:55):

Wonderful. Last question, what’s next for Ben Carter given that you’re still quite young and you’ve got a long journey ahead, Ben?

(26:01):

Yeah, look, that’s a good question. Look, I’d love to see Bit Pool develop into a national and global brand in that building data space. That’s something I’ve always been passionate about and it’s pushing the boundaries and it’s not easy to do. So we’ve got a really good team there growing that and running that business now. So from a tech point of view, I’d love to see that just reach its full potential. And then personally, I’m still CEO of VAE group, so that consumes me for 40 to 50 hours minimum per week. And we’re halfway around Australia, we’re in New Zealand. I’d love to see that become a truly Australasian based company and see it grow to its full potential too.

(26:51):

Fantastic. Ben, look, you’ve achieved fantastic things in your young years, great business, great Queensland success story. Really appreciate you coming on board and you sharing it with the team at red. So thank you very much,

(27:04):

Man.