AI In Construction: Vessels Matter More Than Water

April 10, 2025

Explore AI’s role in construction tech, shifting European capital, and what sets enduring founders apart. Learn why AI must integrate with tools like BIM to unlock real value

Patric Hellermann

AI In Construction: Vessels Matter More Than Water

A dog, a bathtub metaphor, and a WhatsApp founder group walk into this week's update. Behind these seemingly random elements lie some thought-provoking reflections about European capital flows, AI implementation in construction tech, and what might make founders stand out from the crowd.

This Week On AEC_VC - tl;dr

Signs pointing to significant capital potentially moving toward Europe
Why AI might need vessels like BIM or CAD to deliver real value in construction
Some interesting patterns observed in founders who build enduring companies

🎧 Listen To This AEC_VC Episode

How Europe Might Be Attracting Unprecedented Levels of Capital Investment

Could Europe be entering a new chapter in startup funding?

There's something interesting happening in the global capital landscape that might be worth paying attention to. In a recent op-ed with Pitchbook, we explored what appears to be a significant movement of capital into Europe. We're talking potentially trillions of dollars quietly shifting geographic focus.

It's important to note that we're only three months into the year, so much of this remains anecdotal and the full picture isn't entirely clear yet. But if this trend continues, it could signal something meaningful for European founders and the ecosystem as a whole.

The scale of what might be happening is truly astonishing - nothing like it has been witnessed before. The narrative around European capital has traditionally been one of scarcity compared to the US, particularly for later-stage funding. But this dynamic may be changing.

Several factors seem to be contributing to this potential shift. There's a growing optimism around infrastructure spending in Europe. Defense budgets have increased substantially, likely influenced by ongoing geopolitical realities. And domestic policies in many European regions appear to be becoming more investment-friendly.

The big question is whether this is just a temporary blip or the beginning of something more substantial. If it's merely a short-term reaction, it probably won't significantly alter the landscape. But if this capital movement persists over the coming years, we could see meaningful changes in how European startups grow and scale.

For founders in capital-intensive sectors like construction tech, this potential shift represents an interesting development to watch. Companies that might have previously faced challenges securing adequate growth funding could possibly find new opportunities opening up. European startups that traditionally felt pressure to relocate to the US might have more options to consider.

The broader implications could extend beyond individual companies. A better-funded European tech ecosystem might develop its own distinct character and strengths in areas where Europe already shows promise – including aspects of construction technology, sustainability solutions, and industrial tech.

Of course, capital alone doesn't solve everything. The European ecosystem still faces other challenges around regulatory fragmentation, talent development, and scaling support systems. But having more investment flowing in certainly wouldn't hurt.

here more: https://pitchbook.com/news/articles/is-us-volatility-europes-tech-ipo-opportunity

Why Construction AI Needs Purpose-Built Tools to Deliver Real-World Value

The bathtub metaphor that explains AI's relationship with construction technology

Amid all the AI excitement of the past couple years, Stanislas Chaillou, co-founder of Rayon, shared a metaphor that perfectly captures AI's role in construction technology.

Stan compared AI to water coming from a pipe in your bathroom. Water is essential and valuable – much like AI capabilities are becoming. But water without something to contain it just creates a mess. At minimum, you need a glass to capture it. Better yet, you have a sink. Ideally, you have a bathtub that allows you to make full use of the water.

This narrative aligns perfectly with what we've been thinking at Foundamental for the past three years. While AI (the water) is powerful and increasingly ubiquitous, it's not inherently useful in construction without the right tools and platforms (the vessels) to harness its capabilities for specific applications.

This perspective helps explain why combining AI with robust data infrastructure or domain-specific authoring tools might be particularly important in construction. When AI generates content for construction applications – whether it's a design, schedule, or cost estimate – the first version rarely meets all requirements perfectly, especially when outputs need to be detailed and precise.

You could keep generating new AI iterations, but there's a challenge: The more deterministic and granular your outcome needs to be, the more inefficient it becomes to use purely statistically generated outputs. At some point, it likely makes more sense to generate initial versions with AI, then refine those results using specialized tools designed for the specific domain.

For example, using AI to reach a certain Level of Detail in building design might become standard practice. But when you need to adjust specific elements within that design, working directly in a CAD or BIM system would probably remain more efficient than trying to accomplish the same through natural language prompts.

This insight suggests that companies building what could be described as "bathtubs" – platforms that effectively harness AI for specific construction applications – could potentially deliver significant value. These might include:

BIM authoring tools enhanced with AI capabilities
Construction management systems with embedded AI for pattern recognition
Process analysis tools that use AI to identify workflow improvements
Data infrastructure that makes construction information AI-ready

The value of these specialized tools may increase over time as they accumulate industry-specific knowledge and data. A general-purpose AI model might struggle with construction's unique characteristics, while a purpose-built tool designed specifically for the industry's needs could potentially deliver more tangible results.

Here more: https://www.linkedin.com/posts/aecvc_construction-architecture-ai-activity-7313850290544234496-L1VU

Patterns Observed in Founders Building Enduring Companies

Three qualities that might differentiate exceptional founders in today's landscape

When asked in a WhatsApp founder group about how perspectives on founders evolve over time, three patterns stand out in those who seem to build particularly resilient companies.

First, there are what might be called "onion founders." These aren't founders who make you cry (though the fundraising process might), but rather those who reveal increasing depth with each conversation. Like peeling back layers of an onion, each meeting takes you deeper into their understanding of their business, market, and technology.

What sets these founders apart is their ability to provide answers at whatever granularity is requested. They don't retreat to high-level vision statements when pressed on details. Instead, they demonstrate increasingly specific knowledge about various aspects of their business – from vision to unit economics to technical architecture.

This quality contrasts with what could be described as "flattish" founders – those who may have compelling vision statements but seem less comfortable when discussions move toward concrete details. The depth of understanding demonstrated by "onion founders" often correlates with an ability to navigate the inevitable challenges of building a company.

The second pattern worth noting is the ability to "ride the elevator" – moving comfortably between different levels of the business. Strong founders can articulate an inspiring long-term vision while also being willing and able to engage with detailed operations, customer interactions, and technical implementation.

This quality seems particularly important beyond Series B funding. After achieving initial traction and securing significant investment, founders might be tempted to remain at a middle management level, delegating detailed operations to others. While delegation is necessary for scaling, founders who lose touch with ground-level realities might make decisions based on filtered information rather than direct observations.

Effective founders often maintain what could be called "founder sampling" – regularly engaging directly with customers, sitting with support teams, reviewing code, and observing operations firsthand. Founders who maintain this vertical mobility tend to make better decisions because they're working with primary information rather than just filtered reports coming through management layers.

The third pattern involves nonlinear, sometimes challenging backgrounds. Founders who've followed unconventional paths often bring unique perspectives that translate into distinctive approaches to problem-solving.

If someone's journey has been perfectly linear – prestigious university, blue-chip employer, then founding a company – they might not have developed the same adaptability as someone who's navigated more varied circumstances. In contrast, founders who've overcome obstacles or taken unexpected career turns often demonstrate stronger first-principles thinking rather than relying on conventional approaches.

These founders tend to question assumptions others might take for granted and find creative solutions to problems. Their resilience, tested through past experiences, can serve them well when facing the inevitable challenges of building a company.

What's interesting about these three patterns is how they seem to interconnect. The depth demonstrated by "onion founders" often comes from their willingness to engage directly with all levels of their business. And both qualities might be strengthened by the perspectives gained through diverse life experiences.

Here more: https://www.linkedin.com/posts/aecvc_contech-aec-founders-activity-7313191288491700225--vRZ

Conclusion:

The construction tech landscape continues to evolve with potential shifts in European capital flows, interesting perspectives on how AI might deliver value through specialized tools, and some thought-provoking patterns observed in founders building resilient companies. These developments arrive at a critical moment for an industry that has historically been slow to adopt new technologies. Companies that successfully integrate domain expertise with these emerging trends may find themselves well-positioned to address longstanding efficiency challenges. For investors and entrepreneurs alike, recognizing the value of both specialized AI tools and the distinctive founder qualities highlighted could provide a competitive edge in this rapidly transforming sector.