About This Episode

In this episode of Practical Nerds, hosts Patric Hellermann and Shub Bhattacharya dive deep into what makes a truly exceptional business model. Drawing from analysis of over 1,150 top companies, they explore the characteristics that separate great businesses from merely good ones, with particular focus on how these principles apply to architecture, engineering, and construction (AEC) startups and technology companies.

In This Episode

Hyper-Repeatable Units of Supply: How companies like cement manufacturers (Holcim, Heidelberg, CRH) and Coca-Cola create scalable business models through standardized products that can be industrialized globally

Monopolistic Characteristics and Toll Booth Businesses: The power of owning assets that others must utilize, from payment processors like Visa to technical certification bodies like TÜV, and how AEC companies can build similar moats

Cost Structure Advantages: Converting variable costs to fixed costs and selling them back as variable services, illustrated through examples from payments processing to construction formwork systems

Multi-Supply Capacity and Geographic Diversification: How companies like PERI (formwork systems) build resilience through diverse product offerings and global footprints in construction markets

Predictability vs. Disruption: Learning from companies like BlackBerry and Kodak that failed to adapt, and how modern businesses can build flexibility into their models

Big Bet Taking at Scale: Examining which large companies still successfully take major strategic risks, from Amazon's continued innovation to Reliance's Jio transformation

Timestamps

(00:00 ) - Introduction

(01:35 ) - Defining what makes a great business model

(05:01 ) - Hyper-repeatable units of supply in construction materials

(07:42 ) - Monopolistic characteristics and toll booth dynamics

(18:56 ) - Cost structure advantages and fixed vs. variable costs

(28:09 ) - Predictability and resilience in business models

(33:52 ) - Multi-supply capacity and diversification strategies

(41:34 ) - The role of automation and capacity creation

(47:17 ) - Big bet taking at scale in established companies

(53:59 ) - Conclusion and wrap-up

Resources or Companies Mentioned

PERI Formwork Systems: https://www.peri.com/

SAP: https://www.sap.com/

Holcim: https://www.holcim.com/

Heidelberg Materials: https://www.heidelbergmaterials.com/

Connect With Us

Practical Nerds Website: https://practicalnerds.com/

Subscribe to the Newsletter: https://www.linkedin.com/newsletters/practical-nerds-7180899738613882881/

Foundamental: https://www.foundamental.com/

Patric Hellermann: https://www.linkedin.com/in/aecvc/

Shub Bhattacharya: https://www.linkedin.com/in/shubhankar-bhattacharya-a1063a3/

Youtube: https://www.youtube.com/@foundamentalvc

The Daily Blueprint: https://tinyurl.com/the-daily-blueprint

#ConstructionTech #BusinessStrategy #AECInnovation