Link To Guest Website: https://icornerstoneinc.com/
Title: “Solving Building & Remodeling Problems Through Transparency”
Guest: Richard Connolly of iCornerstone
Interviewer: Jonathan Freedman – MAGE LLC
Click here to read the transcript
Welcome back Radio Entrepreneurs. I’m Jonathan Freedman and our next guest up. Great to see you again, Richard Connolly of iCornerstone Inc. Welcome to Radio Entrepreneurs.
Well, thank you, Jonathan. It’s a pleasure to be back. It’s almost three years, but I’m thrilled to be here.
So great to have you on the show again. I imagine you’ve been a very busy man given the economy and given what’s going on, why don’t you tell our listeners what it is that your company does?
Well, my company has a solution to the problems homeowners have when obtaining goods and services from the residential building and remodeling industry. I provide a comprehensive solution that actually benefits everybody, not just the consumer, which is something that really makes me different from anybody else in the business.
So tell us a little bit about how the service works, because I know what you’re, what you’re doing is you’re essentially helping, as you said, both parties or all parties involved, but tell us a little bit about the mechanics of how, how your platform works and why it benefits both consumers and the trade. Sure.
For the first time, to the best of my knowledge, ever, everybody, all parties, including regulators unified in one place, which is my platform and by doing so, everybody can see the profiles of everybody else so that everybody knows what everybody else knows about everyone in the platform or in the network that provides a level of transparency and accountability that simply doesn’t exist anywhere else to the best of my knowledge. So the platform is a key thing. The second thing about the platform that is key besides the folios for regulators, homeowners, subcontractors, and professionals, there is a, an educational component and that is a research tool. It’s based on my book, which is called how to avoid building a Remodeling, how I published that book many, many, many years ago, I updated it.
Richard (1m 47s):
I think there’s
Jonathan (1m 48s):
Probably many, many occupants that are living there.
Richard (1m 52s):
And Jonathan, I updated it of course, for the platform. And there was very little to change. Nothing has changed, and this is a problem that goes right back all the way to the ancient Greeks when PuroClean is a building, the, the, you know, the, the city on the hill. So it’s, it’s something that has been going on. It’s an ancient problem, but I think I have a modern solution.
Jonathan (2m 13s):
So tell us a little bit about the, the, is there something unique within this industry or is it just that the average homeowner has very little knowledge? And so historically it was a, a industry wherein, you know, trades people had the upper hand, so to speak, you know, it seems like we’ve got a, a significant supply and demand issue in today’s marketplace. We’ve got lots and lots of people who seem to have unlimited amounts of renovations to do in their homes and limited supply in terms of contractors who are even responding to, to homeowners, a level of frustration.
Richard (2m 47s):
Yeah, well, that’s what you’re pointing out of course, is the economics of the industry, which is a up and down and tends to be cyclical. Although this cycle seems to be much longer than any other cycle, and this is an up cycle. It may have to do with the fact that people are home more often now because of COVID and want to do things in their houses that they might not have thought of doing before home offices, basements separation of rooms, instead of having the open concept, which everyone’s favoring so much. So that that’s part of it. One of the mitigating factors should have been the incredible rise in the price of lumber. And I don’t mean a small amount of money. I’m talking three to four times the amount of, for lumber products in, in all wood products in a period of less than a year that has come down somewhat, but it hasn’t returned to pre pandemic levels.
Richard (3m 38s):
And you would think that those increases, which add no value whatsoever to the cost of the project, it’s simply a price. They still
Jonathan (3m 45s):
Have a room at the end of it.
Richard (3m 47s):
They had no value whatsoever to, to the project. You would think that the, the, there would be fewer people doing work because of that, but that has not been the case. People just simply going ahead and doing the projects regardless. And I just shake my head in wonderment and I say, how can that be? But they do.
Jonathan (4m 4s):
And it really is amazing when you stop to think about it. And I think w drive down, walk down any residential street and you see trades people at, at many of the homes. And this has been, as you said, a phenomenon that’s gone on for so long. I think we have a secondary aspect, which is, we’ve seen obviously a big housing, boom, not only in this area, but I think across the country and this area in particular, and you pick almost any town there’s renovations going on on every block, tear downs.
Richard (4m 34s):
I live in Weymouth, which is a, a modest community, and I’m certainly not understating what I think of my community, but I’ve seen tear-downs in, in Weymouth. I grew up in south Boston and that has changed quite a bit. And I’ve seen downs there too, which is to me, the equivalent to the fall of the Soviet union. I mean, I never thought I’d see such a thing happen in my lifetime. And, and, and yet here it is.
Jonathan (4m 58s):
So, so I guess one of the dynamics that play in the marketplace, and it seems to me as a consumer, as a, as a homeowner, who’s been out searching for services again, back to the supply and demand question. It seems to me that many of the trades have looked to go what I would call upmarket, why come in and fix a toilet or a washing machine when I can build a new home. And so do we have a bifurcation in the marketplace where we’ve got a lot of guys who are guys gals companies who are looking to, you know, strictly deal with large projects versus what many homeowners demand, which is somebody for a day, somebody for a half day, you know, solve my problem.
Richard (5m 39s):
It’s difficult for me to say, because as you pointed out, new housing is really driving the market in new housing, tends to be in clusters where you have neighborhoods and so forth. There are builders who will buy a single lot, and they’ll, they’ll build on it through a builders who will tear down properties and build on it. How much of the market that particular service represents? I have no clue. What I do know is that there’s a lot of Remodeling going on, and I am fortunate that every project I ever did in the, in the history of my company, beginning in 1988, I have in almost subatomic detail, all of the costs of every projects I I have been involved with. So I know to the penny, what they cost. So a project in 1995, I know exactly how much it costs and when I adjusted for inflation, and this is really an amazing thing, the cost of a project, let’s say $50,000 in 1995, that same project, if you adjusted only for inflation and nothing else, it would be roughly 75, 70 5% more.
Richard (6m 38s):
And yet when you look at the rise in home values during that period, during that 25 year period, that’s about 125%. So it seems to me that you’re much better off instead of building a new house or buying a new house, you’re much better off making the house that you have work for you because over time it’s a, it’s a good investment. So
Jonathan (6m 58s):
Yeah, that’s what I was going to say. Return on investment seems to be there. So what, give us a little bit, without digging too deeply into your platform, the value to the consumer value to contractors and how, and, and then I want to shift gears a little bit and talk about your experience as an entrepreneur, because that’s what we’re all about. Original entrepreneurs it’s, as you said, 1988 year, you’re in it for a long time. It’s been fabulous. You know, you brought a lot of value to the marketplace. What have you learned from those lessons? What lessons do you take away from, from the process? So
Richard (7m 36s):
I learned in the coast guard that smooth seas make for poor sales. So what I, what I have discovered is that I’ve worked for a lot of very difficult people over the years. And I’ve discovered that it’s not about building a Remodeling at all. It’s about relationships and oftentimes contractors and homeowners enter interrelationships about which they know very little of the other party in there in lies the problem. They don’t know how in no business operates the same way as in so far, as payments are concerned in what they provide and don’t do. And that is a major problem because that’s a communication problem. So what the platform is attempting to do is to eliminate any misunderstanding you, the consumer will have about hiring a contractor, because you will know everything about that.
Richard (8m 25s):
Person’s policies and procedures, as it relates to their running of the business, you’ll also have all their references there and you’ll have their insurance certificates day. And these are things that you can on your own investigate, so that you feel comfortable with the decision you make before you actually contact the contractor and say, I’d like you to be part of my project network. So I’m able to network everybody involved in the project into one place in the consume is the one that is driving communications in the consumer is the one that is saying who will see what the consumer says, who I want my network and who I don’t. I can view anything that I want, but I don’t necessarily have to have a person be in my network, even though I’ve viewed their profile.
Richard (9m 9s):
So that alone is singular. The research part of the platform is singular. And then the other thing that I do that I think is so unusual is I have actually found a way to standardize the language of all of the various trades, including carpentry painting and everything. And by standardizing it and attaching to each piece of work, a metric such as lineal feet, squiffy, cubic yards, and so forth, I can then attach a rate. If I attach a rate, I can have one rate for everybody. And so what I am now able to do, because I have a past history with all of these contractors that I’ve worked with, I know their rates going back several years, and if they want to adjust them, they can.
Richard (9m 55s):
But if the homeowner wants to bid the workout, which I actually require them to do to people that I don’t know to prove to them, that I don’t see a business to anybody, the system is wide open. They can then have an equal comparison because everything is predicated on a metric. What’s beautiful about that is that when you make these specifications, these labor and materials, specifications specific to a room or an area I can then include or exclude anything that I want and automatically adjust the cost of the project without any additional work. So the consumer controls the budget, which is not what happens typically when a general contractor is involved.
Jonathan (10m 35s):
Hmm. So it really fascinating. I can see what you w where you say we’re really bringing transparency and, and also standardizing language. And I think for, for many consumers, many homeowners, it’s probably one of the biggest challenges is, you know, th it’s it’s jibberish and in many cases.
Richard (10m 51s):
Yeah, exactly. And it’s frustrating because they use jog on and all that, and I’m going to accomplish rider. I don’t feel immodest saying so. And I used to teach English and I used to teach a journalism. And I used to teach writing in college. And communications is extremely important to me. And my goal is to make sure that what I say is understandable to the consumer and of course the contractor.
Jonathan (11m 17s):
Wonderful. So again, that’s a win-win. So what have you found in this marketplace where contractors are so busy and we talked a little bit before we came on air about response rates. Are, are you finding that contractors or because you’ve had them on your platform for, for so long are willing to engage or is there less interest because they’re so busy?
Richard (11m 37s):
Well, unfortunate that I have a relationship and that’s, what’s all about, I have a relationship with a lot of contractors who love the way that I work, because when the consumer hires me for the project, I say to the contractors, I’m working for you now, and I’m this latest on that’s right. The middle. So I do all the bookkeeping for them. The specifications that I developed that are so precise serve as invoices, I make sure that they’re paid. I don’t approve of payments, but I certainly review them with the contractor. So he never has more into the project than he has payment in the homeowner, and never has more into the project than payment than work also. So it’s an equal relationship and it’s fully balanced.
Richard (12m 17s):
My experience, how we’re with contract is, is this unwillingness, or this shall I say, indifference to consumers is to start. And in 2011, I published an article in the Boston globe about getting three bids. This is about as bad as it is that time of the in 2011, the great recession was well underway. And I turned it into a research project. I contacted 150 subcontractors. You know, that number, I got only a 10% response rate and achievable. It’s really, really shameful. I mean, you’re desperate for work. I have great projects. I’ve done all the work for you. All you have to do is say yes or no, and they won’t even respond.
Richard (12m 59s):
So I did the same thing subsequently on Angie’s list. And I had the same exact response rate of 10%. So it makes you wonder what it is about this industry, that they can be so indifferent to the very people upon whom they rely for their income. It’s something I will never understand. It’s something I’m trying to do something about.
Jonathan (13m 18s):
I wonder how much of it is just, it’s not, it’s not in their training, not in their development, not in their background to really focus on the customer, even though they want to focus on. And because I think a lot of tradespeople look at themselves to some degree as artists, right? I’m creating something, that’s something I’m, and, and perhaps, you know, they’re business people too, and you have to recognize that. And I think maybe that’s something that not consciously people don’t don’t think about, but you know, so busy running to job, to job, to job estimate, to estimate. I don’t have time to get back to additional people, but recognizing that you have to have all that cycle fulfilled to have successful subcontracting businesses.
Richard (13m 54s):
You’re not wrong in anything you said, this is an interesting point. That one way that they don’t have a lot of time, about 30% of the time contractors have, is dedicated to getting new work, picking up the phone. It’s pretty easy. As far as I’m concerned, that’s the easiest thing to do, but they chasing around it and maybe referrals, which are the gold standard. Great. I have no equivalent that the problem is they cannot do what I do as far as specifications, that concern they’re not detailed. So they have bidding our estimating programs. And the idea behind those programs is to cast the largest net for that, for the least number of fish. And that’s how it works. It saves them time.
Richard (14m 34s):
So they don’t want to be accurate. They say, well, if I get the job, they get the job. It doesn’t matter. I can cast a very large net and I’ll and I’ll have work. And I think that it does a disservice to the, to the contract, to, into the consumer working in this manner. I think one agency ought to be for the accuracy of the work, into describe it in such a manner that everybody can use it and benefit from it.
Jonathan (14m 58s):
Well, it sounds like you’re that guy, and it’s a wonderful word in terms of building it, then wish you continued success with it. If, if either homeowners, consumers and, or sub-contractors want to get in touch with you, what’s the best way for them to reach out to you?
Richard (15m 12s):
Well, they can call me at (781) 534-0277, and they can be guaranteed that I will answer that phone myself and I I’ve, I’ve answered the phone on vacation in Europe and in grueling places like that, I answer my phone and I respect the contractors and I respect the public.
Jonathan (15m 30s):
Wonderful. It’s been a pleasure having you back on Radio Entrepreneurs, Richard Connolly, our guests has been Richard Connolly, founder of iCornerstone and it’s, we’ll be right back with another segment on Radio Entrepreneurs.
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