From Paper to Platform: How Stratus is Digitalizing MEP Fabrication 

Podcast Transcript 

Steven Rossi-Zalmons: 

All right. Hi, Jake. Welcome to the Construction Revolution podcast. How’s it going today? 

Jake Olsen: 

Good, Steven Happy to be here. 

Steven Rossi-Zalmons: 

That’s great. Yeah. I’m excited to learn more about you and learn about Stratus. So why don’t you start off by telling me about what brought you from being an engineer and working at companies like DeWalt to leading Stratus? 

Jake Olsen: 

I’ll try to keep this tight because it’s a meandering story, but to your point, I started life as an engineer, structural engineering, here in the San Francisco area. Right around two thousand is when I started my professional career, which was of course the dot com bubble had popped. So fortunately there was still a lot of construction going on. There wasn’t a lot of design going on. 

I quickly got into kind of the construction side of engineering, forensics, doing failure analysis on big things that were getting built. So I spent a lot of time working actually on job sites in the construction capacity. The other benefit of being in the Bay Area is you’re always exposed to technology even back then. So quickly I kind of became attached to some of the opportunities to bring technology into what I was doing and started working on what we would call today construction software. I early on started working on building data acquisition systems, ways to do structural testing with software versus just gauges, kind of manual stuff. 

And through that I got hired at a building products company to do kind of R&D on new products design. That was called Powers Fasteners, and building software for designers that were using these products as well. So really early on, I built kind of my first exposure to construction tech, which was like an anchor design software back in 2005 or 2006. I did some entrepreneurial work, actually moved to Asia and started kind of a franchise of Powers in Asia. And then how we got to DeWalt is we ended up selling that company Powers to DeWalt back in 2012. 

So then I stayed for a while at DeWalt, continued doing kind of construction and software, worked on a couple big software programs for DeWalt. I built a tool called DeWalt Hangerworks, which was kind of an automated BIM. This was kind of the beginnings of my BIM journey as well in the twenty-ten, twelve timeframe — a tool that anchored design inside of Revit for MEP systems. 

So I was there at DeWalt for a few years, then I left and started my own company, which was called DATO. It was basically ChatGPT for construction before LLMs existed. So this was like 2017, 2018. And after I sold that company, I knew I wanted to build more construction software. So I went back and worked for a contractor for a year just to make sure my ideas were correct and what I was going to spend my next time on. 

And so I worked for a big mechanical contractor called Binsky Mechanical in the Northeast, doing very large MEP plumbing piping systems, mainly for healthcare and pharmaceutical. One of the tools that we used at Binsky to kind of turn this into more of a production type of workflow was Stratus. I knew the Stratus team well, so kind of through that I had the opportunity to get really familiar with how to deploy Stratus and the advantages it can have to a contractor. So when the opportunity came to take over Stratus as CEO, I kinda jumped at it because I really believed in the product and the vision for where the company needed to go to keep up with the changes in MEP. So that’s the meandering story, Steven. 

Steven Rossi-Zalmons: 

No, that’s great. That’s quite the journey — you’ve been in the industry a long time and at the cutting edge of tech for all of it. I’m wondering, as a kind of serial entrepreneur almost, how has it been jumping into a company that you didn’t found? 

Jake Olsen: 

Yeah. That is the right question. Definitely different challenges for sure. You know, I’ve built a few companies from the ground up, which you kind of get to put the pieces of the puzzle together as you go. So who’s on the team? What’s the vision? What’s the mission? What are we building and why? 

So taking something over, all of that kind of exists and there’s some momentum from how the company was started. You have to quickly assess which parts of that existing culture and vision are correct and you need to carry forward. And then where do you need to layer on your own vision and own people and own team? There’s talent assessment and strategy assessment across the board. That was a new challenge for me, an exciting one. I enjoyed that. 

This Stratus journey’s been extremely rewarding. But it was definitely a growth experience for me making that transition. We’ve got a world class team, built on the existing vision and strategy for Stratus and kind of made it our own now. And I think the results are speaking for themselves. We’re enjoying great rapid growth and some fantastic customers getting lots of value from Stratus every day. 

Steven Rossi-Zalmons: 

Yeah, for sure. So I guess as a CEO, like are you finding you’re bringing some of that background as an entrepreneur to do things a little differently than maybe someone more traditional would? 

Jake Olsen: 

Yeah, I really do. That year of working with the product as an end user, being really boots on the ground in the fab shop with the BIM team on projects, trying to turn this whole MEP delivery system into more of a productionized workflow — invaluable. Having been in that seat, I was a Stratus power user building out dashboards and workflows. So I wouldn’t trade that for anything. I think that was a critical part of the success in this role. 

And then building companies and building teams is something I’ve done a lot of. And I think the combination of those two together is what’s helping us really excel here at Stratus. 

Steven Rossi-Zalmons: 

Yeah, being a user absolutely could make a huge difference. So for people who may not actually be familiar with Stratus or may not have used it as much as you have, can you tell me what is Stratus and who are the main users and your customers? 

Jake Olsen: 

Yeah, Stratus is a tool for MEP contractors. So mechanical, electrical, plumbing. You think about sheet metal, piping, plumbing systems, conduit, electrical — everything that gets put into a building. Our tool is basically a workflow tool. I like to say an operating system for MEP contractors that are using fabrication as part of their delivery. 

So what does that mean? That means some level of what’s getting built is being fabricated outside of the actual structure or building that’s getting delivered. Some people call that prefab, off-site fabrication, off-site modular. But when you’re using some type of off-site or prefabrication as part of your delivery method as an MEP contractor, that’s where Stratus comes in. 

And like I said, it’s more than just a software solution. I like to tell people you’re buying a process from us. Yes, there’s a software that comes with it, but what we’re really doing is selling you a new process or workflow to deliver your work. So think about Stratus as everything that happens between BIM — your 3D design — and then that final installation, sign-off, testing, turnover. 

We have to break that BIM down into fabrication-sized chunks or components. Those have to get put into a fabrication queue, a workflow, different flows through the shop. Am I bending conduit? Am I welding pipe? Am I cutting sheet metal? Which tools am I going to use? Which resources? What people are going to be involved? Do I have enough of those resources? So that whole MRP — manufacturing resource planning — type of concept. 

When you start moving fabrication off site, you get into this big question of where is everything and what stage is it at? Do we cut the pipe already? Is it welded? Have we put the hangers on a cart? So being able to track status and schedule through that whole process. Now, eventually all this off-site fab has to get shipped. There’s a logistics piece to Stratus — how do we put these in batches and get them on the right trucks to the right job sites at the right time? 

And then finally, where do they go on site? You imagine a big truck showing up with a bunch of fab, a bunch of pieces of duct, for example. Where do those go within the building? Do they get delivered to the West Gate? Do they go to the third floor? All those questions. And then when do they get installed? 

The real value here though, Steven, is once you’ve got all that running in Stratus, you basically now have a digital system. No PDFs, no pieces of paper floating around. You have a digital system all the way through from BIM, Fab, Logistics, and Install. Now I get the KPIs and the data off of that process. That’s the big transformation that our customers go through. You move from paper and spreadsheets and markers and stickers and pencils to an actual digitized workflow. 

Once that’s digitized, now I have the data to go back and actually start running a continuous improvement process. What’s working, what’s not? Where do I optimize? Maybe I introduce some new material handling systems. Maybe I think about a new logistics optimization. All those questions that a manufacturer thinks about when they’re running production — it’s kind of that for an MEP workflow. It’s a lot. It’s a true platform, but when it’s implemented, the results are kind of magical if you talk to our customers. 

Steven Rossi-Zalmons: 

Yeah, no, I can see that. It sounds like it’s a very elaborate solution, but you’re bringing everything together and once you have all the data in one spot, it’s a lot easier to analyze and improve upon. You touched on this a little bit in terms of paper and construction. I know people in construction have some of the most elaborate spreadsheets that exist. Can you tell me, for someone who is not using Stratus yet, what would be a more traditional approach that an MEP contractor is using to do these same things right now? 

Jake Olsen: 

Yeah, it’s a great question. Most of the new customers that join us and start implementing Stratus have built what I call analog Stratus. They’ve cobbled something together because the problems exist, right? If you’re gonna start fabricating, you need to know where things are at, what status they’re in, where they’re at in my process. So you have to try to do something to figure that out. And that’s what I was saying: spreadsheets, stickers, whiteboards, and all kinds of systems. 

To turn that into anything repeatable, you kind of end up against the limits of your shared spreadsheets and your paper travelers. What most people will do — which is kind of crazy — is they go through all this work to create a nice BIM, a nice model of what needs to get built, all the coordination work, all the detailed modeling. And then you’ve got this rich data sitting in a model. What happens before Stratus is they go and turn that into a PDF to be fabricated. 

So you end up with these stacks of PDFs and of course, as soon as you take a live model and create a PDF, you’ve basically snapshotted that data at a point in time. Now you’re disconnected from the reality of the model. And anybody who’s been working on a fast-paced, highly complex project knows that model is not a static piece of design. Things change, owners change their minds, materials are available or not. So that model is a living, breathing artifact. 

The challenge is once you start creating PDFs off of that model, you’ve lost the direct data connectivity back to the live model. Now you end up in this headache of change management — trying to keep track of where things are at if there’s a change. What’s fabricated? If the model changes, how much risk do we have? How many PDFs are floating out there that are no longer accurate? And what parts of that have been fabricated or installed? 

And then there’s the real challenge on the shop floor — did I get enough data onto that piece of paper for somebody to actually do their job? That’s one of the early things that Stratus solves. Rather than trying to take all that rich model data and get it on a PDF, why not just give the fabricator access to the model data? So if there’s a dimension they need, a material spec, weld information — they have direct access to that model data rather than hoping that somebody upstream wrote the right stuff on a PDF. Our users work directly off the model data when they’re fabricating, shipping, installing, which is a huge advantage to the existing workflows. 

Steven Rossi-Zalmons: 

Right. That makes a lot of sense. In construction and in trades, obviously the labor shortage and skilled labor specifically is no secret. How do these digital workflows like Stratus help to combat that? 

Jake Olsen: 

Yeah, I think the big advantage is just fabrication in general. A lot of the big projects that we’re building in the United States right now are mega projects in remote corners of the country. Think about a chip fab or a data center or pharmaceutical production. These are getting built in areas that are already not dense with construction labor. And secondly, because we’re building so many of these, we have a shortage across the labor pool that you mentioned. 

The one way we can combat that is fabrication, off-site fabrication. So if I can take that chip fabrication facility and break that down into chunks, move it off site, now I can tap into other labor pools. I’ve got a lot of big customers on the West Coast. There’s not a ton of big projects going on in Seattle or San Francisco right now. But the contractors with fabrication capacity are as busy as they’ve ever been because they’re able to tap into that labor pool and build fabrication according to the detailed specs in the model and ship it to wherever these things are getting built — whether that be Reno or Texas or the Midwest. 

The other advantage, at the fab shop level, is that if you imagine a big project an hour and a half away from a metropolitan area, the folks that can go work on that project are limited by nature. Long commute, have to relocate, something like that. If I can move that labor into a facility with a known address that somebody can drive to every single day, maybe closer to where they live, I expand my labor pool right there. Workers who have to drop off kids, deal with sports, support family members — that’s tough with an hour-and-a-half commute to a job site that might be somewhere else entirely a year later. 

By moving that labor into a facility they can drive to every day, I can tap into just a broader group of people. Not to mention it’s a controlled environment — no rain, heat, cold. It’s just an easier way to attract labor into that facility. 

And then Stratus specifically helps enable and optimize that fabrication. We also help reduce the labor needed to create those paper instructions for the fab shop. Somebody can go into Revit or a modeling tool and do all those detail sheets — some people call them spool sheets — and there’s usually a whole bunch of people involved in just creating those paper instructions. When I put Stratus in place, the amount of labor needed to do that kind of tedious pulling of dimensions goes way down. That’s a limited resource for a lot of these contractors to grow. So we’re able to help them grow their business without having to go hire a bunch of detailers, which is usually a difficult constraint on growth. 

Steven Rossi-Zalmons: 

Yeah, that’s a great answer. And it’s different from a lot of ones I’ve heard before. I ask that question quite a bit and yeah, it’s kinda tackling it from both sides. Moving on — as we were doing some research, we saw that you published a State of MEP report and it interviewed a bunch of MEP contractors and executives. I’m just curious to know what did you find by doing that and how did you go about it? 

Jake Olsen: 

It’s funny — we’ve got a lot of MEP contractors using our software, hundreds. And the questions of course, everybody wants to know how am I doing against other people? At some point we realized we’ve got a pretty good insight into the industry as probably one of the largest MEP software platforms operating in North America. We’ve got a lot of great insights just kind of anecdotally, but we realized there was going to be value in trying to make that into a more valid statement, not just what we’re hearing. 

So we kicked off this research project end of last year. We’re going to do it again — this will be an annual report. We targeted the executives at the top MEP contractors in North America and focused on several types of questions: broad business questions about outlook on the future, what’s growing, what’s working, what’s not; specific financial KPI type questions like how do you measure your business and what’s trending; and technology-based things like where are you investing and what are you looking for. 

The two big learnings that weren’t super obvious to me until we did this: the first is that the bigs are getting bigger. The MEP contractors that were big enough to have a good fabrication workflow in place have been enjoying an unprecedented boom — probably a generational boom — in their businesses in the last three, four, five years. They’ve been able to participate in the big MEP boom going on in North America even if they’re geographically not in the right place. But to be at that tier, you had to have had enough capital investment in fabrication to be ready — to be able to build a data center module in San Jose that gets shipped to Abilene, Texas, or something like that. 

Where in some markets, if you’re a smaller MEP contractor with no fabrication — more of an installer type of thing — and you were geographically in a market that didn’t have a lot of new construction going on, some people really had hard years in the last couple of years. It was really interesting to see how pronounced that was. 

And then the second one that is near and dear to my heart: we dug in a lot on KPIs. How do you run your business? What are the metrics? My undergrad was industrial engineering. I’ve had a lot of time to work in operational excellence settings through manufacturing. It was really interesting to see the gap. A lot of contractors are measuring financial performance on jobs, but it’s kind of after the fact — looking backwards at how did we do on the job, what were our margins. 

Very few contractors were actually using forward-thinking operational metrics where they can actually drive outcomes. Like a real-time analysis — imagine I’m a mechanical contractor with several different systems: plumbing, sheet metal, spiral duct, welded pipe, grooved pipe. Which ones are making money at a system level? Which ones are not? Which of my process changes have had a positive impact? If I don’t have real-time system level data, I’m not able to take that back and actually improve my business in real time. 

I’m excited — we’re going to kick off the next one in a few months. We’re going to go deeper into how things are measured, not just what you measure. It’s one thing to say I measure weld inches per hour in a weld shop. It’s another thing to agree on how you measure that. And the differences are vast. It was really an interesting set of data and we’re excited to keep working on those over the next few years. 

Steven Rossi-Zalmons: 

That’s great. And it’s like you’re in a unique position to be able to do that. And also great that you’re not just kind of refreshing the data every year, you’re diving deeper and changing what you’re finding each year. That’s awesome. So to sort of wrap things up here — as technology and as Stratus grows, and technology adoption in construction is up and there’s technology everywhere for just about everything now — I’m curious, as someone who has worked in the industry, how do you see MEP contracting evolving over the next five, even ten years? 

Jake Olsen: 

I do think the trend to be more operationally focused — I like to call it production system thinking — is really thinking about your business not as a collection of 20 job sites that are kind of independently run, but as a true production system that starts in estimating, the design through fabrication, and then finally field install. Thinking about that as a system and putting the right metrics in place to optimize it. 

I see that happening certainly at the top tier contractors. And then more and more it seems to be spreading. You don’t have to be a billion-dollar mechanical to put those processes in place. In fact, some of the most innovative stuff I’m seeing is in the smaller folks that can pivot and move a little faster and really adopt this. I do think MEP is going to move into more of an optimized system where we’re running these businesses more like a true end-to-end operation, rather than 20 different job sites just hoping that on average we make money at the end of the year. 

It’s going to require some different skill sets — logistics management, manufacturing mindsets, quality control. The pieces that larger manufacturers have gone through. And I don’t want to say blanketly that MEP is going to look like manufacturing, because it’s not. There are different inputs and outputs that are nothing like a car plant. However, that doesn’t mean there aren’t some parts that rhyme with manufacturing that we can’t learn from. How do we take pieces that have been well studied and bring the relevant ones into our fabrication shops? Some people call that industrialized construction. 

I do think the big MEP boom especially around data centers will have a lasting impact on the entire industry. Once you get those processes in place, once you start thinking more operationally, the next job that shows up that’s not a data center — maybe it’s a hospital, maybe it’s a McDonald’s — you’re not going to forget how you optimized work for the data center. And I’m seeing this already: more people thinking around offsite fab, modularization, systems thinking. 

And of course that’s going to be underpinned by technology. The ability to have a construction-level BIM unlocks a lot of this. That’s getting easier than ever. We’ll continue to see automation on the design side where the cost to create this BIM is decreasing through better tools and more experience. As we get better at building 3D models of exactly what needs to get built — down to millimeter-level accuracy, bills of material that are exactly what we need to buy, costing information that’s exactly what this thing should take to build — that alone is going to unlock a lot of downstream technology that’ll continue to drive more of an operational approach to building things. 

Steven Rossi-Zalmons: 

That’s a great take. I think the connected data and learning from that data and modular construction for sure is a big thing. So lastly, if people are interested in learning more about Stratus, where should they go? And if they’re looking to get started, obviously it’s a pretty elaborate solution — what does that initial process look like to get on board? 

Jake Olsen: 

We’ve done this now with hundreds of contractors. So we’ve gotten pretty good at getting people onboarded. We’ve got an unbelievable team that supports Stratus. Stratus.build is our website. You can book a demo there and you’ll get in touch with one of our sales engineering team, who will get a good assessment of what you’re doing today, what’s working, what’s not, and then kind of overlay what that would look like in the Stratus future. 

And look, Stratus is not for everybody. So a lot of our job there is telling people, hey, this is not for you either yet or maybe even ever, depending on the type of work they’re doing. That’s part of that process. But once we determine it would be a good fit, then we put a true implementation plan in place. This business wouldn’t work unless we’re able to make that as painless as possible for our end users. 

We have a whole onboarding education program that we put you through depending on your role. But the real goal is to get ROI as fast as possible. If you make the investment — yes, there’s software cost, but the real investment you’re making is the time — that ROI needs to happen as fast as possible. So we put a lot of focus on getting to first value, making sure the customer feels like the time they’ve put into changing the process, changing their flows has got a good ROI back for the business. 

We’re pretty proud of how well we’re able to get people up to speed quickly. And I can’t take much credit for that — it’s the team that we have. Most of the folks you talk to have actually worked in contractors, have implemented Stratus, know what’s around the corner, know the pain points and pitfalls. So we’re able to weave you through that as quickly as possible. Stratus.build — there’s a little button you can book a demo and we’ll get you into that process if you’re interested. 

Steven Rossi-Zalmons: 

Awesome. Well, thank you again so much for your time and looking forward to seeing the future of Stratus. 

Jake Olsen: 

Thanks, Steven. Pleasure.