Transcript 0:00 [upbeat music] Welcome back to The Peggy Smedley Show, the voice of MDM and connected devices. [upbeat music] Hello, listeners, and welcome back to The Peggy Smedley Show. I'm your host, Peggy Smedley. 0:15 My final guest today has a career spanning academia, s- startups, and large corporations. 0:21 Today we will be discussing his third book, Precision Construction: Principles, Practices, and Solutions for the Internet of Things in Construction. 0:30 Please join me in welcoming Timothy Chow, Stanford lecturer, investor, and author. Timothy, welcome to the show. Thank you, Peggy. Glad to be here. I'm delighted to have you. So let's talk about it. 0:41 You've got not one book, but multiple book. It started with Precision, how you got Precision Construction. You know, l- what's all these books all about? Yeah, it's really maybe a, an exercise in personal exploration. 0:55 I, I've had a long career in enterprise software, and I, uh, had been wondering for quite some time what was next. I mean, we had built ERP and CRM applications. 1:05 We delivered them as cloud services, but kind of at the end of the day, they're functionally nearly the same. And 1:13 so quite by accident now, five years ago, uh, because of a class I teach at Stanford, uh, on cloud computing, uh, I ended up meeting, uh, Bill Rue and the team at General Electric and kind of got exposed to at least how they were seeing the world. 1:28 And I realized that, you know, at the end of the day, most of the market that we sold to in enterprise software was financial service companies and retailers and telcos or media companies, but two-thirds of the global economy is energy and transportation and power and water and construction and agriculture, et cetera. 1:50 So, uh, I wrote the book mostly because I think as maybe many people have thought of IoT as why should my toaster talk to my coffee maker, which I never really understood why that was necessary. 2:04 We all have never understood that. I wanted to explore, you know, what did that mean in, in these industries. 2:09 And so the book is really my exploration of, of trying to understand it both from a technology perspective as well as from a business perspective. But think about that today, though. Look at how we've come. 2:23 You know, people are saying, "Why does my toaster talk to things?" 2:26 But really when you think about it, when you think about sensors and things, how is that now when you look at your book and what's in your book, because I, I have your book now and it's, it's on my Kindle, and, and I was going through some of the pages of it. 2:40 You really help people kind of understand kind of the basics, but really when you wanna understand where technology's taking them, why it's gonna matter into an industry that in some ways has been laggards to understand technology, in other ways are gonna leapfrog construction, right? 2:57 I mean, and, and when you talk about it, these are industries that have to really start embracing a lot of technology and pretty quickly because it's in all kinds of areas of the job site and in a lot of other places. 3:10 Yeah. I think, you know, to your point, I think d- the, the phrase digital transformation affects many different industries. 3:18 But construction, and it's one of the reasons that it was the first sequel to the, what we call the mother book, which is Precision, which touched every industry. 3:27 Precision Construction was really a whole bunch of case stories, uh, around the construction industry and the digital transformation of the construction industry. 3:35 And I think, uh, what we tried to do with the book is n- not to talk in too much hyperbole, but talk in terms of actual cases, uh, both how this is starting to change the world for the guys that make machines, so whether that's forklifts or boom lifts, uh, or, you know, construction robots, as well as how is it transforming the business for companies that use these machines. 4:00 Kokusan Construction was a great story in the book as well. 4:03 So we really wanted to help people see the world not as a, you know, the far distant future, but as kind of what's going on right now, and to give them an idea of what might happen in the future. 4:16 Are those the major takeaways you want them to get from your book, is what's happening in the distant future? Because people think digital transformation and they get overwhelmed and they think, "Where do I begin? 4:28 How do I, you know, take this digital transformation plunge, the IoT, what, what's next?" And they get overwhelmed. No, I, I appreciate that. In fact, 4:40 uh, one of the things that the book tries to do is to give the, uh, the guy in construction really an understanding of this technology in a relatively simple way. We talk about a five-layer framework. 4:52 You know, what's the thing? You know, forklift, whatever. Uh, how is it connected? Uh, what do you do to collect data from it? What can you learn from that? 5:00 And finally, how would this change what would you do differently? 5:03 So we try to give them a basic understanding of these components because all these components come together, uh, to deliver new classes of applications, which then flips to the other side of the conversation, which is, well, why am I interested in doing this? 5:20 And I think, uh, I particularly focus on the companies that make construction machines and talk about business models and how the business models are, are going to change in the future, uh, from just, you know, selling you a box to selling you a service. 5:36 And I think we're already starting to see this in the transportation industry, and I believe this is, you know, something that is gonna happen across every industry, including construction. 5:46 And we've already seen services of r- with things that we never thought were going to have a service actually do, and how companies have to look at whether it's an HVAC unit to whether you're servicing a, a vending machine, there's money to be made in how things you just put in place and ignored, now you really have to monitor on a regular to be more predictive instead of reactive. 6:10 Is that what, what you're trying to encourage people to understand?Well, that sits as the base of it. But if you, if you start to think about... I mean, fundamentally, uh, all machines are turning into hunks of software. 6:24 I mean, the last generate, twenty sixteen Porsche Panamera had two million lines of code in it, but twenty seventeen had one hundred million lines of software in it. 6:33 Uh, modern-day combine harvesters have five million lines of code in it. So once you start seeing this evolution of machines to being software-defined, 6:43 I tell them, I go, "Guys, look, if you want to think about it, maybe you should learn from my industry, right? What are the business models that were successful in my industry?" 6:51 And I go, "It's fundamentally three models. The first model was, I deliver you a product, and I charge you annually for maintenance/service of that product. 7:02 If you're students of Oracle, SAP, Microsoft, et cetera, you know this business model, and it's been enormously successful. 7:10 Uh, and if you become a student of GE, you'll also see that fifty percent of their revenue is selling you a new jet engine. The other fifty percent is service on that jet engine." 7:19 And by the way, these are subscription services, right? They're annual services. So that's model one. It's a disconnected service. Model two is, hey, you know, if I could connect to your machine, 7:33 I can deliver you more personalized service. I can help you maintain or optimize the performance, availability, or security of your product, whether in the world of software, you know, a database or an ERP application. 7:49 Of course, in the world of machines, right, I can help you maintain or optimize the performance, availability, and security of your, you know, your boom lift. 7:59 And then that leads us to model three, which is if I can assist you, if I can tell you what to do to manage this, then in the world of software, we went, well, what the heck? Why don't I do it for you? 8:12 And so this thing we all call software as a service, right, which has basically been the last fifteen, twenty years of enterprise software, which some of your listeners know as Salesforce or Workday or all these companies emerged, and they changed fundamentally the business model. 8:28 They said, "Hey, I'm not going to charge you up front for the product. I'm going to charge you per seat, per transaction, et cetera." Okay, let's go to the world of machines. 8:36 And I go, "Look, if I was going to provide you a car as a service, how would I, how would I price that?" I go, "Well, it's fairly obvious. You price per ride, right?" And I go, "Well, we're seeing that right now. 8:51 It's called DiDi and Uber and Lyft, right? They price per ride." And then I ask people, you know, who build machines, I go, "Guys," right, "what's the number one expense in that ride?" And I go, "It's the driver." 9:06 So autonomous driving, while very interesting technologically, has huge economic impact because as soon as you eliminate the cost of the driver, right, then, you know, now there's no reason to ever own a car. 9:18 And by the way, the car I design will be completely different. 9:21 And so what we are seeing right now kind of transforming the car business and, you know, GM's conversations most recently, but across the board here, I look at it and I say to those guys, "You know, there's no reason that these things are not going to start to happen in the construction, agriculture, healthcare." 9:41 I mean, across all these industries, there's no reason it's not going to happen there. And, uh, you know, the advantage will go to the first mover in this conversation. 9:51 I think you have to then take it a step further and say how artificial intelligence and predictions are going to actually take hold in this. 9:58 Because the human side of all of the equation, as you know, you can't take the human out of all of these things when we start talking about what's going to happen, how we put things at the edge versus the cloud, and how important all of this will be as we start going to ma-machine learning, AI, and, and all of how that plays into the Internet of things and how that'll change the way we do things from the job site to the office and how that work environment's going to, to actually shape out. 10:29 Oh, a hundred percent agree with you. I think we're on a, a road. I, I have a young startup, bunch of my former Stanford students called LeCita working in the whole AI area. 10:38 And I-- And the, the operating belief we have right now is that the next step is really about assistance, not about, you know, doing it, letting the machine do everything. 10:49 So really providing assistance that is intelligent and across a much wider range of experiences to be able to, right, inform the human, right, on what-- how to maintain and optimize the performance, availability, and security of their machine, right? 11:07 In the longer term, right, these things could, that's why I said model two to model three, these things could begin to evolve into higher and higher degrees of automation. 11:16 But I think the next step, and I think this applies across all the industries, is really heading to an assistant view of the world, which by the way, in the home, we're experiencing. 11:27 It's called Alexa or Siri or Google Home, whatever, right? And I think that's what we're going to start seeing in the work, the workplace. I think it's exciting time. 11:36 Timothy Cho, Stanford lecturer and investor, author, thank you so much for your time today. Again, where can our listeners get your new book, uh, for Precision and Precision Construction in the IoT? 11:50 Where can they get it? Oh, well, it's available on Amazon, so just go search on Precision Construction or Precision and my last name and, and you'll see it pop up. 12:01 And, and Peggy, I, I want to, uh, tell you that sometime this month we're going to offer Precision Construction for free to your listeners. 12:09 So we should-Kind of coordinate when and how you can tell your listeners about that, but we're gonna do that for you. All right, let's make sure we do that, 'cause I'm excited that they can get that book, 'cause that... 12:20 We wanna work that out, and our listeners would love to do that. So thank you so much for spending time with us. Okay, listeners, we're out of time for this segment and for our show for today. 12:29 Remember, we broadcast live every Tuesday at twelve PM Central. Check out our website at connectedworld.com or any archives at thepeggySmedleyShow.com. And we hope you have a great week. 12:41 Remember, this is The Peggy Smedley Show, the podcasting voice of IoT and relevant technology. Remember, with great technology comes great responsibility. Have an awesome week. 13:01 [outro music] With great technology comes great responsibility. Follow Internet of Things tech expert and futurist Peggy Smedley, repeatedly ranked as a top IoT and M2M influencer. 13:14 Go to Peggy_Smedley on Twitter for her take on the latest tech news and lively interviews with other industry insiders on her weekly radio show. Visit twitter.com and search for Peggy_Smedley to follow her today. 13:30 [upbeat music] Video consumption is on the rise. So to reach this audience, Constructek Magazine created Constructek TV. 13:41 Constructek TV helps construction professionals leverage emerging solutions to better their business. Tune in to constructek.tv to catch the latest show on the first and third Tuesday of each month. 13:52 Like, view and subscribe to constructek.tv, bringing dynamic video to construction. [upbeat music] Signal to noise, an electronic term with new relevance on the internet. 14:07 Connected World Media cuts through the noise of data overload and finds you the signal of important information, information that will keep you current and aware of context in the Internet of Things. 14:18 Peggy Smedley shares her insights on The Peggy Smedley Show and in Connected World Magazine, all online at connectedworld.com. Stay current and competitive at connectedworld.com [upbeat music] 14:31 Besides the hard work of our incredible WS Radio staff that has decades of experience in the broadcast industry, one of the reasons WS Radio sounds so good is we use Orban technology. We are not alone. 14:43 Over fifty thousand professional broadcasters can't be wrong. From radio, TV, streaming to hardware and software, Orban has been supplying the broadcast industry for nearly thirty years. 14:54 Great customer service and continued R&D separates Orban from the rest. Learn more at orban.com. [upbeat music] Looking to be a successful entrepreneur? 15:04 The virtual assistant industry continues to be a top choice for those looking to start their own business. The problem can be how to become a virtual assistant. 15:12 Many turn to the bible of the VA industry, the book Virtual Assistant: The Series, and it's the perfect guide for office managers, executive assistants, and other administrative professionals looking to make the transition from employee to successful business owner. 15:27 Go to vatheseries.com to get your copy today. Education. Industry experts back to the basics. Is your company using the Internet of Things to its fullest potential? 15:38 Enlist the Peggy Smedley Institute and its team of experts to create a customized plan for how to apply the IoT to your specific needs. 15:46 Learn everything you need to know to achieve tangible business outcomes in today's digital economy. Contact us at six three zero nine three three zero eight four four. 15:55 At six three zero nine three three zero eight four four or visit learnatIoT.com.
