BuiltForward: The Future of Construction

In This EpisodeWhy surety bonds are essential for public construction work and how bonding capacity can limit contractor growthHow performance and payment bonds work, and what happens when claims ariseWhat underwriters look for in contractors, including the three Cs: character, capacity, and capitalWhy CPA-prepared financial statements, job schedules, and profitability are critical to securing bonding capacityHow contractors can increase bonding capacity and why choosing the right surety agent mattersWhat separates financially healthy contractors from those at risk, and the importance of strong operating systemsHow private equity acquisitions, ESOP conversions, and holding company structures can affect existing bonding arrangementsThe relationship between bonding capacity, working capital, and bank financingHow AI is beginning to change surety underwritingMark's outlook on commercial construction, private equity, and the skilled labor shortageAbout Mark LeskanicMark Leskanic is the founder of Surety Bond Professionals, a surety-only agency based in Massachusetts that helps construction contractors secure the bonding they need to compete for projects and grow their businesses. He has more than 38 years of experience in the surety industry, beginning his career as an underwriter in 1988 and later serving as president of a surety company in Canada before moving to the agency side. Surety Bond Professionals became employee-owned through an ESOP on April 1, 2026.Chapters00:00 — Introduction and Why Bonding Matters03:27 — Mark's Background in Surety04:29 — Surety Bonds Explained07:58 — When Contractors Should Start Thinking About Bonding10:11 — Growing Bonding Capacity and Financial Requirements13:11 — The Three Cs of Underwriting15:05 — Choosing the Right Surety Agent17:47 — Bidding Rules and Surety Relationships20:55 — Market Conditions and Risk Appetite23:10 — Matching Contractors With Surety Providers26:09 — Claims, Defaults, and Loss Ratios32:04 — Underwriting Judgment and Experience35:15 — Reading Beyond the Financial Statements36:29 — Job Schedules and Financial Red Flags38:23 — Systems, Controls, and Contractor Performance40:17 — ESOPs and Private Equity43:09 — How Ownership Changes Affect Bonding47:43 — Holding Companies, Indemnity, and Bank Financing54:05 — AI in Surety Underwriting59:35 — Construction Outlook and Labor Shortages01:06:49 — Final Advice and ClosingLinksSurety Bond Professionals: https://www.suretybondprofessionals.comNational Association of Surety Bond Producers: https://www.nasbp.org BuiltForwardExploring the future of construction and what it takes to build great construction businesses.Hosted by Jason Jacobs.More at https://builtforward.ai — or follow the weekly newsletter on LinkedIn: https://www.linkedin.com/newsletters/builtforward-7299979495069929472/

In This EpisodeDavid’s journey from third-generation construction entrepreneur to founder of NorCal Pipeline Services and LegacyHow a single phone call from Kiewit took NorCal from one truck to twenty in a matter of monthsWhy David repeatedly turned down private equity offersHow an ESOP helped solve his father’s succession needs while allowing David to keep buildingWhy Legacy uses a decentralized holding company model that preserves local brands and leadershipWhat gets centralized across the portfolio, including finance, HR, payroll, and other shared servicesThe benefits and challenges of employee ownership, including financing, bonding capacity, and future liquidity obligationsHow David evaluates acquisition targets, aligns incentives with owners, and finances growthThe challenges of finding technology that works across multiple construction businessesDavid’s advice on starting versus acquiring a contracting businessAbout David JaegerDavid Jaeger is the founder of NorCal Pipeline Services and Legacy. A third-generation construction entrepreneur, David co-founded NorCal with his father in 2007 and grew the business before establishing Legacy as a holding company for service-oriented construction businesses. In March 2025, they completed a transaction that transferred 49% ownership to an Employee Stock Ownership Plan (ESOP), creating liquidity for his father while allowing David to retain majority ownership. Legacy now brings together four operating companies: NorCal, JVAC, Guardian Traffic Solutions, and ECS. Through a combination of employee ownership, acquisitions, and shared services, Legacy aims to help regional businesses grow while preserving their identities and leadership teams.Chapters00:00 – Introduction to David Jaeger and Legacy02:30 – Three generations of construction entrepreneurship05:00 – Starting NorCal and the opportunity that changed everything08:00 – Lessons from scaling a contracting business10:00 – Building a holding company that preserves local autonomy14:00 – Why private equity wasn’t the right fit16:00 – Solving succession through employee ownership18:00 – Weighing an ESOP against private equity and self-financing22:00 – Why a 49% ESOP instead of 100%23:00 – ESOP trade-offs: bonding, financing, and banking27:00 – How Legacy’s acquisition strategy developed30:00 – Centralized shared services versus local operations32:00 – Technology, ERP systems, and AI adoption35:00 – Acquisition strategy, synergies, and geographic expansion43:00 – ESOP advantages, limitations, and liquidity obligations46:00 – Starting versus acquiring a construction business48:00 – Building an alternative to traditional private equity50:00 – Long-term vision, leadership, and successionLinksLegacy: https://legacyholdingco.comNorCal Pipeline Services: https://norcalpipe.com BuiltForwardExploring the future of construction and what it takes to build great construction businesses.Hosted by Jason Jacobs.More at https://builtforward.ai — or follow the weekly newsletter on LinkedIn: https://www.linkedin.com/newsletters/builtforward-7299979495069929472/

In This EpisodeWhy Balto Energy and Northern Pacific Power are building an AI-native platform of residential solar contractorsHow the acquisition model combines outside investment with employee ownership through an ESOPWhy established local brands, customer relationships, and experienced operators are central to the strategyHow AI can identify operational bottlenecks, reduce project cycle times, and free up working capitalThe difference between giving employees AI tools and fundamentally redesigning how a contractor operatesWhy employee ownership could make workers more willing to embrace AI-driven changeThe challenges of scaling an operating playbook across multiple acquisitionsWhat it takes to build a durable construction business rather than a traditional private equity roll-upChapters00:00 — Introduction to BuiltForward and today's guests03:00 — How Balto Energy and Northern Pacific Power work together06:00 — Why residential solar contractors need to evolve10:00 — Northern Pacific Power's origins and the creation of Balto Energy14:00 — Combining a contractor roll-up with employee ownership19:00 — The challenges of home electrification and energy modeling24:00 — How ESOPs can help finance acquisitions30:00 — The vision for acquiring and transforming established contractors35:00 — Mapping 473 tasks and using AI to eliminate bottlenecks39:00 — Acquisition strategy, financing, and market uncertainty44:00 — What happens to contractors after an acquisition50:00 — Balancing shared capabilities with local autonomy52:00 — Connecting AI adoption, employee ownership, and financial performance55:00 — Does AI threaten jobs even when employees own the business?59:00 — Lessons from previous contractor roll-ups62:00 — Financing the platform and future acquisitions65:00 — The long-term vision for an AI-native construction business67:00 — Why giving everyone access to AI tools isn't enough71:00 — Final thoughts on transforming the solar industryAbout the GuestsAndrew Krause is CEO of Northern Pacific Power, a California-based residential solar and battery contractor founded in 2009. He has helped lead the company's innovation efforts, employee ownership transition, and partnership with Balto Energy.Carl Lenox is Head of Product at Balto Energy, where he works on applying AI, energy modeling, and operational technology to help residential contractors improve performance and expand their capabilities.LinksBalto Energy: https://www.baltoenergy.com/Northern Pacific Power: https://www.northernpacificpower.com/ BuiltForwardExploring the future of construction and what it takes to build great construction businesses.Hosted by Jason Jacobs.More at https://builtforward.ai — or follow the weekly newsletter on LinkedIn: https://www.linkedin.com/newsletters/builtforward-7299979495069929472/

Most commercial HVAC and refrigeration systems provide building operators with little visibility or control. Facilities teams often learn something is wrong only after receiving a complaint, while technicians arrive without the equipment data needed to diagnose the problem efficiently.Rahul Subramany is the co-founder and CEO of Monaire, which adds a low-cost layer of wireless sensors, controls, software, and AI to existing commercial equipment. Monaire helps multi-site operators monitor their assets, optimize energy use, predict failures, coordinate repairs, and verify that the work was completed successfully.In this episode:00:00 — Introduction01:00 — What Monaire does for multi-site operators03:00 — The USPS experience that inspired Monaire06:00 — Why commercial HVAC equipment still lacks connectivity08:00 — Why Monaire sells directly to building operators11:00 — The reality of reactive facilities management16:00 — What an ideal connected HVAC system would look like18:00 — Why BACnet hasn’t solved interoperability21:00 — Connecting equipment from different manufacturers24:00 — Monitoring, optimization and predictive maintenance26:00 — How Monaire keeps installation costs low27:00 — Using AI to predict equipment faults29:00 — How commercial HVAC equipment gets purchased32:00 — Working with existing HVAC service contractors34:00 — Predictive maintenance and flattening seasonal demand36:00 — HVAC contractors as a potential sales channel38:00 — Why no one manages the building as one system42:00 — Expanding into plumbing and electrical equipment44:00 — Technician shortages, cooling demand and grid pressure48:00 — How AI can improve HVAC service and energy efficiency50:00 — Working within the system versus reinventing it52:00 — Partnerships with major HVAC manufacturers54:00 — What commercial HVAC could look like in 10 years55:00 — Building the Samsara of commercial buildings57:00 — Closing thoughtsLearn more:Monaire: https://www.monaire.ai/Rahul Subramany: https://www.linkedin.com/in/rahul-subramany BuiltForwardExploring the future of construction and what it takes to build great construction businesses.Hosted by Jason Jacobs.More at https://builtforward.ai — or follow the weekly newsletter on LinkedIn: https://www.linkedin.com/newsletters/builtforward-7299979495069929472/

Show NotesMike Kanaby has spent decades in construction, from working in the field to leading a $1.5 billion operation at Johnson Controls. Today, as Managing Partner at Profitability Works, he helps trade contractors improve their processes, strengthen operations, and scale more effectively.We get into:Why contractors often hit operational growing pains around $20–30 million in revenueHow small breakdowns in execution quietly erode profitabilityWhy change order management is such a significant opportunityHow to build processes that employees actually adoptWhy technology implementations fail, even when the software is goodWhat contractors need to fix before AI can deliver meaningful valueHow private equity-backed contractors can standardize operations without losing local strengthsCHAPTERS00:00 – Introduction to Mike Kanaby and Profitability Works03:00 – Why contractors hit a breaking point at $20–30M05:00 – The three reasons owners pursue process improvement08:00 – Why change management determines whether improvements stick12:00 – The Building Excellence Blueprint: diagnostics, workshops, and implementation17:00 – Why piloting new processes is essential19:00 – Change orders: one of the biggest opportunities to improve profitability22:00 – Finding root causes instead of treating symptoms25:00 – Fixing handoffs between estimating, operations, and the field28:00 – Why contractor data is often fragmented and unreliable31:00 – Why construction software implementations fail34:00 – Getting field-level buy-in for process improvement38:00 – Measuring the financial impact of operational improvements42:00 – Why contractors aren't ready for AI47:00 – The relationship between technology adoption and operational excellence52:00 – What private equity should standardize across acquired contractors55:00 – Private equity's growing role in construction58:00 – The future of ownership and the skilled tradesLINKS & RESOURCESProfitability Works: https://profitabilityworks.comBuilding Excellence — Mike Kanaby's book on process improvement for trade contractors: https://profitabilityworks.com/building-excellence/ BuiltForwardExploring the future of construction and what it takes to build great construction businesses.Hosted by Jason Jacobs.More at https://builtforward.ai — or follow the weekly newsletter on LinkedIn: https://www.linkedin.com/newsletters/builtforward-7299979495069929472/