Steve Muck is the CEO of Brayman Construction, a heavy civil and geotechnical contractor that builds bridges, dams, and other large infrastructure. Steve is also the cofounder of construction-related robotics startups TyBot and Advanced Construction Robotics.
Steve has started or acquired twenty businesses and currently operates a portfolio of entities that in construction-related endeavors alone runs approximately $200 million in revenue annually.
Steve acquired the company over 28 years ago in a leveraged buyout and has since acquired a number of companies as he has expanded his business empire.
In this episode, Steve and Aaron discuss how Steve got started in construction, the company’s ‘Dragon Slayer’ ethos, and how he has upskilled his team in order to escape competition.
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If you liked this interview, check out episode 412 with Jake Loosararian where we discuss industrial robotics and raising one of Pittsburgh’s biggest Series A financings.
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Muck: The trade unions that we interact with the laborers and the ironworkers. When we introduce the products to them, and we started talking about what we were doing, they actually embraced Thai baht because they've had customers like me coming to them, looking for people in the peak season and they don't have them. And it's very frustrating for them to have to tell me as an employer or a customer that we can't send you a five guys cause we just don't have them.
Watson: Hey, this is a very special episode of going deeper with Aaron Watson, my guest, Stephen Muck has taken a company that he acquired over 28 years ago. That was doing $7 million in annual revenue and built it into a multi-faceted diverse powerhouse. Doing more than $200 million in annual revenue. Stephen talks about how he's built the business, the role that robotics and automation will play in the future of construction, and why he trains all of his executives to be dragon slayers. There's a ton here. We didn't have a ton of time with Stephen. So I tried to move it at a really quick pace and think you're going to take a lot away from it. Here is Steven Muck.
Watson: Steve, thanks for coming on the podcast. I'm excited to be talking with you.
Muck: Yeah, it's my pleasure. Happy to be here.
Watson: So I'm going to go back to 1992, you had started your career in investment banking and made the decision to acquire a construction company. How did you make that choice? And can you talk a little bit about the state of that company when you were acquiring it.
Muck: Sure. Let me take you back one step further.
Muck: Okay. Because I think it's relevant and it's maybe a little bit interesting. So when I got out of school undergrad, the first job I took was in economic development. So I actually worked for private, nonprofit corporations doing job creation, economic development, creating small business incubators, assisting companies with developing business plans and funding them using public funding programs to supplement bank funding. So, that was really unique environment because I had sort of the who's who of various communities on my boards. And so those board members became mentors to me in various ways and had a lot of diverse business background.
So when I left investment banking to acquire my first business, Braman construction was a little $7 million rusty construction business that was focused on doing subcontracted, concrete structure work for, the bigger earth movers and things of that nature. So that's kind of where they were when I came on the scene, they had some older superintendents, they had a lot of older equipment. And I was full of piss and vinegar, and ready to rock and roll in and figure out a business that I really didn't know much about.
Watson: And so for folks that are less familiar with contracting generally, subcontractor general contractor, that's relatively self evident, but in terms of the stair-step up, this is how I was thinking about it coming into the interview.
And you just correct me if I'm wrong, a subcontractor. It is somewhat constrained and is relatively, I mean, maybe you're just absolutely world-class in that little sub domain, but there's a lot of competition, a lot of different electricians, carpenters, plumbers that could potentially bid on the general contractors job.
And so, first by climbing up into being a general contractor instead of a sub, and then moving into the different specialties that Raymond has developed underwater, efforts, bridges, dams, these really kind of complex, heavy civil infrastructure projects. It was really a study in differentiation and kind of escaping a lot of the competition in the construction realm.
Muck: Yeah. That's fairly accurate. I mean, as a subcontractor, you need your horse to win the race, and then you need to be the jockey that got the ride. So, that it, your odds, aren't the greatest. And as a general contractor, you have much more control of your own destiny. So we work in both hard bid and negotiated environments.
Most of what we work in are hard bid environments, which means, if you're qualified and you're low, you get the job, which means you have to be efficient, you've gotta be good at what you do. And as a subcontractor, you don't have that luxury. You've got to have a relationship with that general contractor and that general contractor has to be successful. And then ultimately has to select you to do the work for them.
Watson: And so what is the muscle or kind of experience that gets built to be able to consistently land in those in low bid environments, because, you could, you can't necessarily forsake safety or kind of basic like cost of goods sold, or things like that. Where is the competitive edge that allows a company like Braman to win those qualified and low bid type of situations?
Muck: Yeah. It's really experienced people. We're margin hunters, so we built the business on hunting margin, making money, reinvesting that capital in our business, in our business plan and in our target markets.
So we've had to make the money to be able to grow the business and to do that. We kind of focused on higher profit activities and the higher profit activities tend to be riskier in a number of different ways. And you're absolutely right. We keep safety first in everything we do. So you can't soft sell safety in anything that we're doing. And frankly, over the years, we've learned, I've learned that having a safety first environment creates a more productive workforce. They feel secure, they feel safe, they know that we're looking out for them and we expect them to look out for each other.
They tend to be more productive. So, to find the margin, you have to rub up against the risk, and a lot of our businesses are risky businesses. Our foundation business is risky and that you don't know what the subsurface conditions are, and you may have soil borings that give you some indications, but it's not crystal clear.
So, that's a risky business. To the extent that we've learned to develop ways of solving problems in that environment, it lets us mitigate the risks. Maybe more effectively than other contractors, which let us embrace the challenging work, which is really twofold. It creates organizational development and it creates the human development in your people by providing them with unique, interesting challenges, and at the same time we still do mundane sort of straightforward projects, but we're always out looking for things that haven't been done before.
Watson: And so that was kinda the next question I was thinking about where, Hannah and I run a media business. If we want to go run an experiment, we can make media for ourselves. And there's, it takes some time, but there's not some sort of, kind of physical output or outlay that has to be a prerequisite for that type of experimentation. You can't necessarily go just, Hey, we're just going to go build a bridge somewhere else way, way beyond the bounds of some of these possible. So as you try to move an organization in the direction of some of these riskier ventures, these potentially higher margin or less competitive ventures. What is the on-ramp? Is it recruiting the right person? Is it, what gives you the confidence to even say, hey, we can go fill that need that we put the bid in for something like that.
Muck: Yeah. I think, institutionally it's having done it. Before when we started down this road, we were a little $7 million business. So we've, incrementally reached and reached and reached and grown and done more challenging, more interesting work. Another way we approach that is by combining the various expertise that we have.
So, we have our Marine construction capability, we have foundation capabilities. If we combine those, it lets us go after a combination of let's call it a Marine foundation job, which is complex. And there are fewer people who are willing to, or capable of going after that work and having the confidence to know that they can get it done and they can get it done right.
So it's having the right people. It's sometimes acquiring the right business that brings a certain new skill set to us. Sometimes it's hiring an individual, who's got a specialization in a special capability and bringing him into the team. And some of the things that are kind of fun and exciting for us is that we get people joining our team because of the diversity of things that we do.
And good people want to keep learning and developing their skillsets and working with people who can help them. And we've got a, an interesting mix of young folks and some older folks who've got great experience. And so, our young people turn tend to learn up pretty rapidly here in this world.
Watson: Yeah. So in that spirit of the acquisitions that you've had in order to kind of assemble Braman into this company, one of the things that was really interesting to me is in startup culture, there's this celebration of equity sales in the forms of your series A or series B in it. And people are like, oh my gosh, congratulations.
And what you actually did was just sell your equity off to these other kinds of outside investors. Was it, it was a leveraged buyout to, for acquire Braman. Can you talk about the financial construction side of the business? And as you do these acquisitions, is that mostly through debt financing? Is that something that because of your background in investment banking, you kind of had that legibility into how to best do that?
Muck: Yeah, I mean, initially it was, and it was kind of interesting when I finished grad school and I was trying to decide what was next. The banking industry was kind of a nice place to go because ultimately I knew I wanted to be debt developing my own businesses and working for myself. So developing those financing skills and the banking experience really gave you a lot of credibility for that first deal in particular, because I knew what they wanted to see. I knew how they wanted it structured. I knew what was reasonable from a projection standpoint.
So it did give me kind a basis for starting down that road. And then as we've gone, the deals are all a little bit different. But typically we've bought small businesses with a few good people in markets that we weren't currently in. So new products. So whether it was our large diameter drilling business, we acquired that was the first acquisition.
That was a bankrupt company that was owned by, at that point, our bank, had taken them, had taken their assets and we went in and, bought the assets from the bank and went back and picked up some of the people that were cast offs from the bankruptcy and brought them back and started down that road.
So back then, it was very much a bootstrapped diversification because we were still building profits, and building our equity. And we didn't have a lot to work with. So there was a lot of leveraging going on back in that day.
Watson: Makes sense, and that's kind of opportunistic. It's a great deal. Maybe more so than like the perfect strategic compliment, but as you continue to grow, then you can kind of step back in. That really seems like what advanced construction robotics is, is much more of a stepping back, surveying the landscape and saying, this is something that needs to exist. And we're going to apply robotics to construction, which is, is relative to the other industry has been somewhat less automated than many of the other,
Muck: Right. Yeah. That's a great point. And that's a great contrast, that first acquisition being a bankruptcy that was repoed by our financial institution, we bought the assets for dimes on a dollar kind of scenario, and got the business back on its feet.
And then, with advanced construction robotics, it's, 25 plus years of watching the construction industry as a business person, more so than an engineer and looking at it and recognizing that our productivity is we're dropping, our workforce availability was becoming more and more of a problem.
Safety had become more and more of a concern. And we started looking at which activities were repetitive and what the convergence of technology was at that point, which was about four years ago. And really came to the conclusion that the technology had reached a point where, as it was converging, it looked like there was an opportunity to develop solutions for the construction industry and the heavy civil marketplace.
And that's really what started is we looked at it and said, somebody's got to do something and it's much better to develop solutions for problems than develop technology and then go looking for the things that it might do in a marketplace. So we very much focused on the problems in the industry. And then, ultimately I was very fortunate to find the right co-founder and build the right team of mechanical electrical motion control, vision, artificial intelligence, software guys, and pull them together with this vision to be the premier robotics solution provider for the construction industry.
That's kind of, that's the position that we feel that we sit in right now is one of the very few entities who's actually developed and commercialized construction robotics solutions.
Watson: And so when I, researching advanced construction robotics. My mind went to AWS and Amazon where AWS is cloud computing was first. Its first client was Amazon's retail business, that e-commerce website.
And they were able to kind of sit side by side as a very amenable, friendly client to them as they built out the model, and then eventually that spins out and that's wildly more profitable than Amazon's e-commerce business. And it sounds very similar here where, because you're in the business of building bridges and you have the weight to say, hey, you're going to try this robot out of this job where there's probably some skepticism at first.
And take qualitative feedback, see where the opportunity is and get that actual real life laboratory, as opposed to the theoretical laboratory in order to roll out that product.
Muck: Yeah, that integration capability is one of ACR strengths, because of our ability to iterate quickly, and get direct input from the people with boots on the ground that are actually doing the work, we're able to cycle through our prototypes extremely quickly. We understand the parameters that we have to work to from a productivity improvement standpoint, to build a commercially viable product. And our mission is to embed the least amount of technology, necessary to create a robotic solution that has a robust economic impact. And that's really what our focus is. And we're moving on to our second robot now, and we're in prototype development there with full-size, and that next robot is called iron bot and it will carry in place rebar.
So, another very labor intense, strenuous, activity that generates a fair number of injuries because of the need to walk on uneven surfaces, carrying weight, and do it in unison with four or five other people because the rebars long, and then you bend over and put it down and stand up, take a step and over and put it down.
So there's a lot of repetition. So we're solving productivity issues. We're solving manpower availability issues, and we're solving safety issues all at the same time.
Watson: Yeah. I was really curious if you could talk about like the messaging of something like this being implemented, because I know that the labor conversation is all over the place.
I think literally this morning, the new labor numbers dropped of simultaneously more people, unemployed and more companies struggling to like find people to fill their roles. And that's something that the construction industry is not, it's no stranger to. So can you talk just in broad strokes about how you've managed that through your different construction entities, and when something like this gets rolled out and you, maybe when your guys it's like taking a sideways glance editor or more maybe having a harsh word, like what is the messaging coming from leadership in this type of environment?
Muck: Yeah. It's interesting. There's, I mean, the construction industry. It is very slow to adopt new technology. There's a real desire to kind of do it the way we've always done it before, because we get an adequate result. And some of that comes from the fact that our products are engineered in significant detail because they're carrying traffic and there's human life type issues involved in safety issues. And so there's a reason for that, but there are also opportunities to adopt new technology and we're trying to push that forward.
So, one of the really interesting things as we were introducing the robot was that the the trade unions that we interact with the laborers and the ironworkers, when we introduce the products to them, and we started talking about what we were doing, they actually embraced Thai baht, because they've had customers like me coming to them, looking for people in the peak season and they don't have them.
And it's very frustrating for them to have to tell me as an employer or customer that we can't send you a five guys cause we just don't have them. So they looked at the robot as a solution for that labor scarcity. And when you drive it down to the individual level, the guys really don't like the work.
I mean, it's strenuous, it's repetitive, it's boring. There are higher and better uses of skilled construction labor than doing these tedious, repetitive activities. So most of the manpower are happy to see these tools come into play. Now the nuance is if the construction industry is slow and I have some of my people sitting on the bench per se, so not actively employed in the workforce, then, I may let that technology set bring my people back to work first.
And then once we run out of our skilled labor, then we go back and we say, okay, now we're going to use those robots. As the robots become more and more economically compelling. Hopefully the construction industry is picking up and, and busier. And so, we're happy to have those robotics solutions, but we have seen that ebb and flow and in a robust construction environment, we see a real poll for those solutions, in a very slow construction environment where maybe there's people, looking for work, then there's a little more hesitancy from the contractors and employers because they want to keep their steady people busy first. And we get that cause we live in that world. So we have seen those kinds of nuances.
Watson: So do you see from your vantage point, those type of labor shortages, and we've talked about something similar without one of the third-party logistics providers about the kind of shortage or the trouble with retention for truck drivers and some of these industries.
Do you see that as like, if there were the kind of different variables, the just kind of way a generation was raised, everyone was like center sent to college in certain ways. Blue collar work was like disrespected, and in certain educational circles, you see that as a demographics thing. Do you see that?
Like how do you try to piece apart the why behind those types of shortages or is it just cyclical? And it's like this macro cycle is in a high build versus a low built type of state. There’s gonna be $2 trillion infrastructure bill or something like that.
Muck: Yeah, no. I think traditionally, we've assigned certain stigmas to working with your hands.
As a society, at least in the US, and probably in most of the developed countries. And we've pushed kids towards higher education. I think there's a real opportunity right now from a trade skill standpoint. I mean, we have guys working with their hands, making six figures and doing very well.
I see other young people come out of college with degrees and they're having a hard time finding a job and a fair amount of time and a fair amount of debt. Right. So, I mean, I really think that as an industry, we need to do a better job of kind of sharing the opportunities.
I described the construction industry as the last bastion of the wild, wild west. And what do I mean by that? Well, we're an environment where, if you're a good gunslinger and you're willing, really willing to work hard, and you're a young person, you can get ahead.
Very rapidly in this construction marketplace, it's a matter of really putting your heart and soul into it and applying yourself, but there's so much opportunity. I’ve got three or four people running profit centers that are in their mid thirties, and some of them started in those roles in their early thirties, and I guess it's become sort of one of my philosophies because when I did do my first leverage buyout, I was 31.
So I don't discriminate against 31 year olds running businesses. As a matter of fact, one of our philosophies here is, we like to teach our young people, not just the work that we do, but the business we're in. So how the business works, the upside with that as we get some very energized and involved young people who not only understand how to build construction projects, but actually understand the way the levers push and pull to make the business grow and develop and how we generate profits and, and how we plan for the future.
Watson: And ultimately, you said you started as a $7 million business when, at least from what LinkedIn said over 200 million in annual revenue now, and the only way you scale to something like that is by developing people that can make good decisions on your behalf. You have only so many hours in the day. So many brain cells, you can't make every decision.
And so, it’s only through that legibility into the org and how it functions that those people are going to be trusted to make those types of goods.
Muck: Yeah, absolutely. I mean, that's one of the things I joke about. I've got a lot of people running around with my wallet, and my credit card and the message I give them is spend it like it's your money, treat it like it's your own, and we'll never get sideways. Just when you make decisions to why you're making it and have good thought process. Get good feedback and go get it done.
Watson: Right on. Well, I wanna be respectful of your time. We'll ask our kind of last wrap up questions here in a second. But before I do that, I've got one question that did not plan on asking until I entered this room that we're seated. Can you explain what a dragon Slayer is and how important that is to your org?
Muck: Oh, that's colorful. So, it comes from me sitting around our construction meetings. At the end, I used to tell the guys still do to go slay dragons, which simply means go do the difficult things that you need to. So the dragon slayers have evolved into our senior management team and the thought process behind them is they're standing back to back in a circle with their swords out towards the dragons or the enemies or the challenges of any day, week, year.
And inside that circle is our corporate family. So all of our people, our employees’ kids, our employees’ spouses, all the college tuition payments, all the car payments, all the mortgages, and our mission is as senior managers are to protect and grow the business and take care of that society.
So, it's a little bit gothic, maybe. But it's really about the other saying that we have here, that you may have seen somewhere on the wall is we, what we killed. So the saying there is simply to call out to our people that we live and work in a very competitive world.
And it's either our lunch or it's somebody else's lunch. And we have friends in the industry, but at the end of the day, we’re in a competition. And so I like for them to have that in the back of their mind and recognize that edge, that there's winners and losers and we're in a competitive world, so let's get after it.
Watson: Beautiful. Well, hopefully the winds can continue to keep piling up and the team continues to grow. Before we ask our standard last two questions that I prepped you for, Steve. Anything else you were hoping to share that I didn't give you a chance to?
Muck: No, I think you've asked great leading questions and we've really covered a lot of it. You've clearly pulled out our tradition of heavy civil construction projects and, tied in my interest in technology and driving technology into the construction world and marketplace. That's a real passion of mine. So I'm happy to have got the opportunity to share that.
Watson: Beautiful. Well, hopefully we can do this again sometime, and I can learn more about building a business empire and building a dam and all these other cool things that you've been up to. But, for folks that want to learn more about Braman, about you, the different things that you do, what digital corners can we point people towards?
Muck: Yeah, I mean, I would just point them at our website, at braman.com and at ACR bots, to follow both the high-tech part of our business and the core construction elements. Through those websites, they'll find links to the various companies that we have and the businesses we're in.
Watson: Beautiful. We're going to link that in the show notes. For this episode, you can find it in the app. We are probably listening to this or going deep in with Aaron dot com/podcast for every single episode of the show. Before I let you go, Steve, I'd like to give you the mic a final time to issue an actionable personal challenge for the audience.
Muck: Hm. Okay. Actionable, personal challenge. Take a look, take a risk, and put it out there and go after your dreams.
Watson: I took it. Can you tell me about when you made that decision to do the leveraged buyout of Braman and whatever the perception of risk was at that point in time? Can you just talk through, like how you navigated that?
Was there a point at which you were unsure if it would occur or if it would be capable to come through? Like what, like when you were at the riskiest point, what was the kind of mental self-talk that got you through that situation?
Muck: Yeah, I think, any deal you do has points at which you think you may or may not get it done.
So I think that the concern was that I had a really great job. I was doing a strategy for nations bank. So I was buying banks and assets for the bank reporting to an EVP who reported to the CFO who reported the chairman. So I was basically four seats away from the chairman and I would get calls occasionally from the chairman asking about different deals we were working on.
So a super cool job that I walked away from and they were a little stunned when I did. So I guess I was concerned about making sure that I was doing a good job for them while I was working on this deal, and the deal was pretty personal and pretty consuming. And so it was my job. So balancing those two, was probably the biggest challenge, I think. Because I wanted to make sure I was doing the right thing for my current employer. And I was very passionate about what we were doing and the deals we were working on.
Watson: Right on. I love the side hustle. That's another, a consistent theme throughout the different interviews that we've done.
I really appreciate you taking the time to be on the show. Like I said, I hope we can do it again, and appreciate you giving us some of your time.
Muck: Yeah, absolutely. My pleasure.
Watson: We just went deep with Stephen Muck. Open out there has a fantastic day.
Hey, thank you so much for listening to the end of my interview with Steven. If you were interested in our conversation about how robotics can impact heavy industry, move people out of dangerous work and fill gaps in labor shortage. I think you'll also enjoy our conversation with Jake Luciferian from gecko robotics.
His company builds robots that inspect large energy infrastructure, keeping humans out of dangers, arenas and making the inspection process simultaneously more thorough and more efficient. He talks about that in the interview. Go check it out. It's linked in the show notes and hit subscribe because we've got a bunch of great interviews coming down the pipe.
Thanks for listening. Connect with Erin on Twitter and Instagram at Aaron Watson, 59.