From Where I Sit S3E4 Transcript: James Gallagher, CEO & Co-Founder, GreenLite

James Gallagher:

Considering the workforce shortage and the qualified, kind of skilled workforce shortage for this regulatory process, I think it's inevitable that we're going to have to invite the private sector in. You know, whether that's outsourcing the planning, you know, and building department function to private sector, whether that's private plan review, whether it's, you know, entirely kind of co-managed software workflows or AI workflows, I'm not sure. But you know, I don't think it's realistic to expect that 20,000 different jurisdictions across the country, you know, need to collaborate to weigh in on whether we have the permission to construct or not.

Tom McGee:

Welcome to From Where I Sit, the award-winning podcast where we explore the forces shaping America's built economy. I'm Tom McGee, President and CEO of ICSC. This season, I sit down on camera with the leaders shaping the future of the built world, commerce and technology. From emerging trends to groundbreaking innovations, we'll explore what's driving change across our communities and the broader economy. Let's get started.  

Today we're talking about an issue that touches nearly every corner of the real estate industry but doesn't always get the attention it deserves. Permitting. For anyone developing a shopping center, opening a restaurant, rolling out stores across multiple markets, or repositioning an existing property, getting from an idea to an open door requires navigating an extraordinarily complex process. My guest today, James Gallagher, knows that challenge firsthand.

James is the co-founder and CEO of GreenLite, a construction technology company working to make permitting faster, more predictable, and more transparent by combining technology, AI, and licensed experts. Before GreenLite, James spent more than a decade building and scaling businesses, including GoPuff, Bandit, and Good Uncle. Earlier in his career, he worked in investment banking and served as a Marine Infantry and Intelligence Officer deploying to Afghanistan. What makes James’ perspective particularly interesting is that he has experienced the development process from both sides. First as an operator trying to open locations quickly, and now as an entrepreneur trying to rethink one of the most persistent bottlenecks in that process. James, welcome to the show.

James:

Thanks Tom, I'm really glad to be here.

Tom:

Yeah, we're glad to have you, James. And it's a fascinating topic. And you have had a fascinating career as well on a journey to entrepreneurship. But let's start out at the real core, which is the permitting process. You know, we have a conversation in this country about a housing shortage, and obviously in our industry and retail, there hasn't been a lot of new development really in the last 20 years since the great financial crisis, and there's a lot of reasons for that. But one of them is permitting and what makes the permitting process so difficult?

James:

Yeah, I mean I think that the answer today is really twofold, right? The first is that the regulatory process is probably one of the largest by volume, construction volume, you know, processes that affect our economy that's still really run on the fax machine era. I mean, oftentimes, you know, wet stamped, you know, plan sets and rolls in triplicate of construction drawings that need to be hand delivered to a permitting office, to a planning office. I think, you know, ICSC members can definitely empathize with that image. I know that I have personally hand delivered drawings to a planning office before and that's one of the big, you know, shortcomings of the permitting process. And you can't really automate what you can't observe. And if the process still largely exists on pen and paper or kind of fax machine era technology, that's a big problem right there.

And the second is there's a massive shortage, you know, workforce shortage of qualified people to do plan review in this country. Folks like the ICC talked about this even back in 2016, ten years ago, that the majority of folks who were qualified to do plan review were retiring in the next couple of years. That was ten years ago. And so, you know, we've looked at this a couple of different ways, but you know, basically the number of folks who are qualified to do this job, you know, relative to the demand for construction permitting, which really is, you know, every project that gets built in this country goes through these regulatory rails from, like you alluded to, a single family residential home all the way to some of the bigger projects that, you know, your membership, you know, are working on every day. This this goes through the same process and there just aren't enough people to do it, aren't enough qualified people to do it, you know.

One stat that we we've sort of looked at is that, you know, based on demand, each plan reviewer could spend about seven hours on plan review for every project. And we know that this is a deeply technical, complex civic function. And if we don't do it right, you know, we don't get the structural engineering right, then a building falls down in a maybe major urban area, it's a bad day. So that's another big constraint.

Tom:

There's a lot to that, and there's a lot to unpack. There's the, you know, obviously the public safety part, which you just, you know, referenced at the end, you know, economic development and revitalization of communities across the country and just need, you know, housing short shortage and so forth. You know, the interesting comment, and I hear this a lot when you we talk about different business challenges and just labor and resources and obviously in development, there's a there's a lack of plumbers and electricians and construction workers, etc. And you mentioned another one, which I hadn't really focused on, which is just the expertise needed to do an appropriate review of something that's being built. So I get the issue.

Let's talk about GreenLite now, and you know, the offering that you have to help address that issue.

James:

You know, I've lived this problem myself, right? I mean, I'm pretty empathetic to getting called into, you know, the CEO's office and sort of explaining why we missed, you know, opening dates for retail locations and so is my co-founder Ben. You know, we did that in different contexts, but I've certainly been yelled at for missing opening dates and, you know, when we were asked, hey, why did you open 20 sites in August and only two in September, frequently the truthful answer was construction permitting.

So starting there, you know, really having been in the position of many folks within the ICSC community was a good place to start. And when we started to bring, you know, break down the problem to its first principles, really those two things leaped out at us. It's like, man, this regulatory process, which is important, which is essential for safety and safe community development, is run basically on pen and paper and red pen. and two, you know, the talent shortage isn't just affecting the trades. There's not just fewer plumbers and electricians that become master plumbers and master electricians that then go into the city maybe after they finish running their firm and then actually kind of jump into public service and do this, but there aren't enough architects. There aren't enough professional engineers. There certainly aren't enough master code professionals.

Tom:

James, can just ask a quick question there? You said something that, just for the education of myself and maybe the listeners, are there folks that were master plumbers, master electricians that will transition into public service at some point? Is that a career path that happens in some larger municipalities?

James:

Yeah, I've seen that a lot, you know, in probably, you know, myself alone, I've been part of a couple hundred development projects, mostly retail development projects. And yeah, you see the folks who are doing, you know, especially plumbing review and electrical review is, you know, maybe they sort of aged out of the field and they were like, hey, this is a great way to have a job and also leverage my expertise. And so they'd go in and work for the city, you know, that they had been on the other side of the counter for a while. And so they had a pretty good understanding of, you know, what needed to get done and just there aren't enough folks like that anymore. So GreenLite really started with those two, you know, kind of principles. This was the problem.

And then the other thing is, you know, this is a really frustrating problem to underwrite, right? You know, I mean how do you predict labor costs in the construction project? How do you underwrite, you know, construction schedules? Well, I mean, you know, that's a much easier problem to solve, but when, you know, permitting and zoning and plan review is a black box, you know, it makes it really difficult to underwrite and determine things like rent commencement and going hard on a land, you know, acquisition and all of those things that need to happen in the full development cycle. And so, you know, what we are offering today is we call it permit intelligence. And so if you think back to the days when we used to do site selection the old-fashioned way, right? You'd fly into a market, you'd have a local broker waiting in a McDonald's parking lot and you'd go do your tour, right? And hey, this building's in Maine, this is a good site for us, etc. and I think our community is pretty familiar with the new site locations and site intelligence tools, locate.ai, you know, folks like that that use data, cell traffic data, whatever to get that that foot traffic count. Permanent intelligence is just the logical conclusion to the next step in the development process, right? I mean we recognize that permitting really has this hyper local reputation for being a hyper local problem and it trades on relationships and our contention is that, you know, we can make it a predictive data problem. You know, permitting is a predictive data problem.

So permanent intelligence is really three things, right? It's the expertise that is finite that we just talked about, right? Folks with registered architecture and professional engineering licenses, master code professional credentials. That's credibility enhancing, and those are the folks who've worked in industry and built projects for decades. they're great people to be part of solving the compliance process. The second part is data. And you can start with just building code. Building code isn't hyper local at all. Actually, when we studied all the building code, you know, throughout the country, we realize that it's actually 96% the same across all 20,000 jurisdictions. So, you know, putting a putting a fork in the contention that permitting is, you know, hyper local, well, code says it's basically all the same, you know. And then what is different are really minor things like application forms and formats and submission requirements, right? You know, sort of understanding that Miami Dade likes their title block in the bottom left of the architectural drawings or the CD plan sets, and Skokie likes it in the top right, is the kind of thing that's going to get your application rejected and kicked back to you. That's going to cost you 45 days. It's going to trigger rent commencement and you're not even going to be underway under construction, much less plan review. So those are the things that permanent intelligence can solve. And then the final piece, the third piece, are agents, right? I mean we live in a brave new world of AI. And when you're able to take someone with the expertise of a registered architect or a professional engineer and complement them and augment them with agents to do the repetitive tasks and speed up the workflows, that's how we deliver permitting outcomes for our customers really quickly.

Tom:

Well, walk me through tactically what would happen. So you're working on the permit for, you know, a major development or not a major development in some jurisdiction. Are you serving in some respects almost like an outsource of the government? And who's the client? Is the government the client or is the developer the client?

James:

Yeah, great question. 98% of GreenLite’s customer base is industry, is the owner, the developer, the controller of real estate. We really start there because who feels the pain when you trigger rent commencement, who feels the pain when you're comparing, you know, you're paying carried land cost and taxes, it's the developer. So that's mostly our customer today, although we do serve municipal governments and local governments directly as well.

And GreenLite helps in in a couple different ways. Just baseline status quo, our process results in the delivery of a permit 60% faster than not using GreenLite. Like doesn't matter what credentials, what authority we have, what jurisdiction, you know, right there we're 60% faster. And we're 60% faster for two reasons. You know, one we get people through intake, you know, the first time without being rejected and you know carrying another 30, 45 days to get the application accepted. And we get the project through review in an average of one review round or less. And we know that, you know, those review rounds kind of circling back and forth and back and forth, that's what really adds time to the plan review process. So those are the two success metrics that we care about.

Then you layer on a couple other capabilities. One, there's a big privatization movement for this permitting process going on in the U.S. right now. And really it started in Florida, which, you know, when I explain why it makes sense, right? Every couple of years in Florida, a hurricane would come and, you know, wash away a chunk of coastline. And, you know, small towns or big cities, they'd have to tack on all of those destroyed structures to the back of the backlog for permitting. And Florida just said, you know, back in the early aughts, they just said, hey, we we're going to involve industry here, we're going to get qualified credentialed people to be able to help us with this plan review process. It's called private provider or private plan review. And what happened after COVID and really even more so after the wildfires in LA was other states took notice and started passing similar laws. And so in about 20% of the country, GreenLite is a private provider where we have the authority and the credentials to review plans to issue, you know, kind of, hey, this is a compliant plan set. This isn't, you have to change this and then hand that off to the jurisdiction to issue the permit within a specified period of time. So it's a lot faster. I mean it can be a one, two day turnaround time in some cases.

Tom:

And even in those cases where the developer, the real estate owner is your client, you have the capabilities of saying this is compliant, government A, government B, you should approve this?

James:

That's right. And depending on the state, you know, it's somewhere between ten and twenty days where they have the ability to issue the permit. And they can audit, you know, if they want to. But we've built a reputation for doing pretty thorough work with the jurisdictions we work with. And so they know that we're  looking, you know, there's no rule against helping a developer get to yes, right? And that's the whole point. We just want to get them the green light and get underway under construction. And we don't have to go around and around and make this an adversarial process. And so we take a very collaborative approach with our developer clients.

Tom:

Do you see that trend? You said 20% of the country. Do you see that continuing to accelerate throughout the rest of the country at some point?

James:

Every year new states pass this law statewide. There are a bunch of state legislative assemblies, you know, kind of developing private plan review legislation, model legislation right now and the new legislative sessions kick off in January and we'll see a bunch more states pass that law this year.

Tom:

And are those decisions made at the state level generally or at the local municipality?

James:

It's a really interesting question. To provide for this statewide is really a great practice. We saw, you know, I think Tennessee is one of the better, you know, kind of frameworks for this in the country. We saw Governor Bill Lee's office push this into legislation with sponsorship and work this bill through. And the results are, you know, pretty incredible. And that, you know, governs the entire state of Tennessee. I know Nashville and Memphis and major metros in Tennessee are a big area of development for the ICSC base and we do a lot of work there.

And there's also really good examples of this done at the local level, too. You know, I'll use an example of Fairfax County, Virginia. The state of Virginia does not have statewide private plan review legislation, but much of the national capital region and the tidewater, kind of the Virginia Beach area, does. And Fairfax County has a great program, right? I mean, they are very thorough in vetting who can qualify to be a private provider. But a number of our retail and developer customers who are developing in Fairfax use GreenLite as a registered private provider in Fairfax County and it moves the needle in a big way and helps the local cities and county planning departments with their backlog.

Tom:

And I could see it in some of the larger cities, in some of the larger states, Los Angeles and California, New York, etc, that there's probably statewide rules, but there's also city rules in those because, just to the complexities and the sizes of those cities I would imagine. Right? Is that fair to say?

James:

It's definitely fair. I mean the code is hierarchical, right? It can go all the way down to municipal ordinance that has very little to do with, you know, building code and more to do with the personality or the priorities of that city. And it goes all the way up to state model code or, you know, energy code or ADA accessibility code, which is federal, right? And so all those things compound, it is complex and different versions are in use at any one time, which is why it's such a great data problem for an AI and permit intelligence firm like GreenLite to make sense of because it's like, hey, what version of ICC is this or NFPA is in this jurisdiction? You know, even if you're a local expert, it's tough to keep it all straight. And so that institutional memory, that brain is really what powers it for us.

Tom:

I mean your business is fascinating in that you're really a combination of a technology company on one hand, but also a services business on another hand. How does your, you know, revenue model work? How Do you charge customers, you know, not I'm not asking for specifics and rates, just how does model work? Is it by a fee, by hour? How does it work?

James:

Yeah, that's exactly right. I mean, we're venture backed, right? And you know, SAAS was king back in 2022 when we started this business. And so we were sort of apologetically, hey, we're an AI native services business. Don't hate us, talk to us. And look, more frequently back then the answer was no but there are a number of folks who did. And that model is really like a hot model now, right? I mean it's all about how do you get beyond the IT budget and into workflow and the labor budget and the opex budget. And that's really where we sit, which I think is a huge advantage because one, it's much bigger than selling software licenses, and two, it's tied more into outcomes, which is what's important to our customer. So very simply, you know, we sell our customers the outcome of an end-to-end permit faster, more transparent, more predictable, you know, permit delivered. And you know, the majority of our customers, we sell, you know, something akin to like an AWS credit package. You know, here is a big wallet or block of credits to be redeemed across a number of different projects and project scopes and project types, right? So this is good for customers because, you know, as we know development plans and priorities change, especially with macro conditions and kind of headwinds or, you know, the opposite tailwinds. Hey, let's do more. And it's it's really tough to predict which projects are going to come through Capital Committee first. Is it going to be a green field ground up development? Is it going to be a value add or a remodel, you know, to a store or to an asset? And so the credit pack is flexible enough to allow our customers to redeem, you know, those credits that are specific to that, you know, project level P&L that came through Capital Committee so we can get started. And we don't have to contract for every single project, which is time consuming and cost legal fees, etc. So it's a pretty good system.

Tom:

It's almost like having a, and I might be oversimplifying this, but having a broad relationship or a broad subscription or retainer or something that then, you know, adjusts based upon the volume that that might-

James:

That's exactly right. Yeah. You know, alignment of incentives for both, right? If we're on the hook, you know, we call ourselves the single wringable neck, you know, for your construction permit. And that's important to our customers because they want to know they can rely on us. They want to know we're going to get the job done. You know, rather than selling them a software license and giving them some tools to use or not use in the process, we actually stay on the hook to deliver them the permits. And I think that's built us like deep trust with some of the biggest developers in the country.

Tom:

But let's talk a little bit more about GreenLite. You were founded in 2022.

James:

That's right. Yeah, summer 2022.

Tom:

And you've raised an impressive amount of capital in a very short period of time, venture capital, which does speak to a lot of interest in this, you know, in this issue of permitting and the underlying need around permitting and shortages in the U.S., etc. As you've had conversations with prospective investors, did your pitches and etc. Obviously there's been receptivity to it because the track record, but recognition, have you found that there's a recognition of this challenge and that there's a recognition that there are some underlying building shortages in the U.S. that need to be resolved?

James:

When people underwrite, you know, the market or the TAM for this, I mean, it just hits them over the face, right? I mean, we have 10.4M construction permits that are going to be issued this year in the U.S. alone, right? And that number's going up, not down. I mean, I would make the case that we are in the early innings of an absolute boom in American construction, right? And it's the things that are making the headlines for sure, but you know, the workforce housing shortage, industrial distribution centers, electron deficit, we're getting bigger in energy right now, which is important. Obviously data centers hit the headlines. and so yeah, there's no disputing that this market is big and this is an extremely painful problem, whether you're a, you know, a spec home builder, kind of a small business, you know, kind of home builder, or whether you're, you know, a big grocery anchored REIT, whether you're developing in other ways in multifamily or other kind of categories or asset classes of real estate, this is a consistent problem underwriting the permitting process. And so we've never had to sort of advocate for the size or the importance of the market. I think, you know, like I said earlier, you know, in 2022, people were like, well why can't this be a workflow software solution?

And you know, I came from the other side, you know, the venture backed developer side and my co-founder Ben, he came from the private equity, you know, kind of work capital retail developer side. And you know, it's not like we were any strangers to workflow software, you know, we were using all the workflow tools and Procore, etc. on the other side, the cities were using, you know, the permitting systems of record, you know, and none of those things were actually making the permitting process faster and more transparent or more predictable. And so we decided to do the hard thing, which was really to get involved in plan review, to build that team, to, you know, kind of aggregate and build that data set and to build agents who, you know, could solve a problem for a customer like, hey, where am I going find an electrical engineer, you know, for less than $500 an hour? One. All right, well, I'm going to develop in Florida. So does that electrical engineer have a Florida license? Two. And then does that electrical engineer understand Duval County in Jacksonville, Florida, and know what code is like there? And the answer is our agents do, and we always have a licensed, you know, kind of expert, you know, a registered architect or a PE that's supervising that. And it's about building capacity to do that and that's been received well.

Tom:

So do the AI agents do a lot of the underlying process work, etc, and then the licensed professional in that state will do the review?

James:

That's right. Assembling, you know, all these construction drawings, making sure that title block is in the right spot for that jurisdiction, you know, making sure the pages are, you know, numbered and formatted correctly and we're not missing anything, you know, that was required and what we call the roadmap, which an agent puts together based on prior roadmaps. And then you know, that's all QA'd, QC'd by, you know, an expert, you know, one of the many experts we have on our team. And then it goes to review and you know, that that expert, whether he's a mechanical-

Tom:

I have to admit I'm a little bit of an AI geek in that I, you know, I'm fascinated by it all. I'm not somebody that deeply understands technology, but I'm fascinated by AI and the possibilities of what it could do, not just in our industry, but just in general. And I recognize there's obviously some, you know, legitimate concerns around all that. But what you just described makes total sense. I mean, leveraging technology but still having the involvement of human expertise to make sure that a human in the loop is, you know, pretty necessary when it's a compliance kind of public safety thing too, as well, right? I mean you don't want to delegate structural engineering to a high rise building in a dense urban center to a structural agent as good as it may be. Somebody needs to be responsible for this.

James:

That's right. Yeah. That's right.

Tom:

You said one thing I just want to go back on. You said you felt like we were on the verge of a building boom or construction boom in the U.S. What did you mean by that? And what makes you say that?

James:

Yeah, I mean I think the capital and ambition is lined up in a major way across a bunch of asset classes right now. I mean, obviously, digital realty infrastructure is the one that makes a lot of headlines, but I mean we're building shipyards again in Alabama, you know, and we're building industrial depots and distribution centers, both micro fulfillment centers and larger ones. And I think that that is also coupled with the fact that we know we have a housing shortage in this country. Then we've got to build a lot of a lot of homes.

And so what we're seeing is, you know, these numbers are ticking up at the time, you know, when capital and ambition are high to keep them ticking up, but we have this capacity shortage for regulatory capacity right now. And that's what's kind of working in opposition. And that's the middle we're trying to fill with GreenLite, is how do we, you know, increase the capacity to say yes to building again.

And you know, I think what happens when you start to, you know, bring all of these essentially, you know, almost new cities or parts of cities that are being developed to life is, you know, retail comes around them too. So we're really proud to be, you know, big in the retail space, and working with a lot of retailers.

And I saw this firsthand. I spent a couple of years in Austin, Texas, and I watched, you know, the gigafactory get built right near the airport in Austin. And it was farmland. There was nothing around there. And then, you know, a couple years later you fast forward and you've got grocery anchored centers owned by some of the biggest REITs in the country going up. You've got retail all over the place. You've got new housing communities, both production home builder housing and kind of local folks going in. And that's what's really happening around this boom. It's holistic. It's not, you know, just for any one asset class. I think it's really going up, which is exciting.

Tom:

You know, we are going through obviously a huge digital transformation, technological transformation, really have been for the last, you know, 25 plus years in the United States. But certainly with AI, you know, a huge amount of change and we often talk about digital transformation and all the investment that's going into AI, but what people don't realize is there's to your point around the building and the development, it's almost this reindustrialization of America that's happening because of because of AI.

James:

It's exciting too. I mean it's not just like reshoring some of that manufacturing in the traditional industries, like the stuff you hear in the auto industry, etc, but it's also, you know, building chips, right? Building robotics, building the defense industrial base. I mean, there's a lot of that going on right now. And it is exciting. I agree, housing, you know, will come and retail will follow that for sure. So it's an exciting time.

Tom:

Talk a little bit, James, about your background and what got you interested in this. I mean, I mentioned, you started in investment banking, served our country, deployed to Afghanistan, and worked in the retail industry, growing some retailers and now an entrepreneur. Did you find those steps all being things that led you to where you're at? Is that how you found where you're at today because of things that you learned on that journey?

James:

Yeah, I mean, you know, I definitely joke that GreenLite is the only possible conclusion to what I could be working on right now, the logical conclusion to my career thus far. But yeah, I mean, I wasn't very creative, so I started my career in banking, which a lot of us, you know, do and it it's great training, banking consulting, right? You know, the one problem was that it was the 2008 global financial crisis and there weren't a lot of deals to be done. And I wasn't, you know, the top analyst either. So when the music stopped, you know, my chair was missing so I had to figure something else out. And you know, I had kind of thought long and hard about going into the military during college and I was glad to have, you know, kind of the opportune time. I did, yeah. So a couple years after Penn-

Tom:

Yeah, undergrad, right?

James:

Yeah. I found myself in Marine Corps Officer Candidate school, which is a version of boot camp and you know getting yelled at and swabbing floors and it was it was character building as they say. And the entire experience in the Marine Corps, I was an infantry officer and an intelligence officer. So, you know, I did things like lead an infantry platoon, but also you know, lead a reconnaissance unit and participated in other intel work. and it was logistics operationally intensive. So it was a great training ground for that. And I didn't have any useful skills necessarily, you know, for the startup sector when I got out, but that's what I told them. I said, hey, I understand fulfillment, logistics, supply chain, you know, and I have this, you know, long atrophied expertise in finance that, you know, maybe I can be useful to you. So I jumped in an early stage company in San Francisco and, you know, kind of the rest of the rest is sort of history.

But the common thread was I really gravitated towards businesses that were heavily real estate constrained and found myself in this position where, you know, I had venture capitalists pushing faster, faster, develop faster, open locations faster. And then as we all know, you know, both you, me, and the ICSC audience, you know, real estate doesn't operate at venture capital speed. The development cycle was subject to the laws of gravity and the laws of development. And so that's kind of the problem I kept running up against in this, you know, 13-year stint in in venture-backed operating. It was like I tried to go around the regulatory process by doing things like prefab, modular, you know, kind of things that are really interesting for the development process. But, you know, at the end of the day I'd always get bogged down in this regulatory black box of planning and permitting. And then I was like, all right, well, if I can't figure out a way around this problem, let's try to be part of solving it. So that's sort of the story there.

Tom:

A number of those things speak to your character. Obviously making the decision-

James:

High pain threshold.

Tom:

High pain threshold for sure. Sacrifice and willingness to serve our country after graduating from college and working in investment banking and not a lot of people make that choice. And did you come from a military family at all or-

James:

Well I have my grandfather behind me. and he was a naval officer in in World War II. But that's about it. Not really a military family, but you know, I think I, and GreenLite is kind of part of this too, right? It's like we have so much potential in this country and so many things to be excited about. Like how can we, either in the private sector or, you know, in public service, you know, how can we figure out ways to keep building and keep, you know, making our country, which has given us all a lot, like globally competitive. I think that's part of the mission.

Tom:

You mentioned you ended up in real estate related roles. Did you have an interest in real estate or did that just kind of happen?

James:

The first business was in the parking business. And so I had to go out and do, you know, deals with big parking operators across the country. And, you know, we know parking can be a covered land play. It's a real estate business. It's a real estate asset. That was sort of my introduction. The next business, you know, I was, I don't know, I think late 20s and I had to go out and find a site, choose a market, find a site, you know, find a design build firm and work with a design build firm to build a ghost kitchen, you know, which is common vernacular now, but it wasn't back in 2016. So I just stumbled my way through that process, you know, working with a local, and then eventually a national, you know, kind of real estate, you know, site selection partner. And then working with that design build shop and making a million mistakes and not understanding why this was taking so long and being incredibly frustrated like many of us are by this regulatory process for construction. And I got I think fairly good at it over a number of years in a couple of companies, but, you know, good or not, right, I think it's a process that has lots of room for improvement. And think our audience can agree with that. And that's what GreenLite is about.

Tom:

Running a venture backed business is not for the faint of heart and not for those that like to get a lot of sleep, I'm sure. Talk about just your leadership journey a little bit, you know, leading a company that is raised a lot of capital, growing fast. You obviously have great experience doing a lot of different things. This is a new experience. Talk to talk a little bit about, you know, that leadership journey and motivating your team and helping them keep their eye on the ball.

James:

You know, it comes back a lot to the basics that I learned as a junior Marine officer, right? You know, things like leaders eat last, right? Like never ask your team or anyone who works for you to do something you're not willing to do yourself. So sort of just doing those small things that build trust and credibility with your team is where it starts. And then, you know, once that scales, yeah, that's where that's where my learning journey is really occurring, you know, and has occurred. You know, how do you manage an enterprise that has hundreds of people, you know, how do you manage, you know, tens and then hundreds of millions in revenue? How do you get spun up on, and on at least familiarity with all the different functions of a modern business from finance and accounting to product and engineering to marketing and go to market? And I think like you know being comfortable with the fact that I'm sort of a jack of all trades and a master of none in this in this role, you know, and I have no real useful skills, but I'm a willing thought partner and I'm still willing to roll my sleeves up and work hard and try to solve problems, I think is part of it.

And then, if there's one good thing, you know, you should be able to be good at, it's recruiting people and finding really great people to join the team who do know what they're doing, which is a great relief to me, because I certainly don't. And bringing them on board.

Tom:

Yeah. Well, I think you probably know a lot more than you think you do, for sure. And being a servant leader is I think the right type of leadership. People want to follow people that, you know, do the things that they're asking others to do, but also have an optimistic, you know, view of the future, which you clearly do.

You know, as we get to the end of our time, there's two things I wanted to ask you. I wanted to double just real quickly back on AI a little bit. And we're still in the early stages of AI, and none of us know exactly how where it'll all end in regards to complexity and development and so forth. But do you see AI continuing to kind of accelerate and improve the development process?

James:

Yeah. And I think it's going to happen in a number of different ways. You know, I think for this particular section of the predevelopment cycle, right? Kind of between site selection and feasibility and the actual starting a construction project, I think there's just, you know, there's always been a dearth of technology and there's always been and there continues to be a shortage of qualified workforce in this side of the development cycle. So I think the ways in which GreenLite, you know, sort of augments qualified workforce, the way we kind of look at patterns again and again and again and institutionalize that memory and use data that way is really interesting. So I think that's a good application for AI. I think some of the things going on in the field are incredible. You know, it started with Matterport, but just the site survey and conditions survey. Hey, is this in line with the design across a big project? You know, whether it's drone deploy or whether it's other areas in the field I think are really interesting as well. I think it ultimately though really comes down to a frame of mind shift for leaders in in development. You know, it's not about cutting heads necessarily, right? Implementation of AI is not going to necessarily have a straight line towards work workforce and payroll reduction if that's your kind of near-term goal. I think what it is really visibly good at doing is augmenting the capacity of your existing workforce and allowing them to really, you know, almost 10X their productivity, you know, while maintaining accuracy, which is exciting because you can do more. You can bid on more sites, you can do more takeoffs, you know, more cheaply, you can do all sorts of things in the development space that are really interesting.

And then I think the other side of things is that AI is really good at visibly absorbing the cost of gnarly workflows, right? Like there's so much stuff done in email and Outlook and Excel and pen and paper and phone call in the development site. And if you can start to bring those things online and start to observe them, it's surprisingly easy to automate them with AI and then get those folks who do that to do something more important, more difficult that requires a human's judgment. So that's kind of where I see it playing in the space.

Tom:

Real estate is such a data rich business. The systems are not necessarily all integrated to allow, you know, access to all that data, but AI and certainly that AI overlay is helping that tremendously.

Last question. If you could change one thing about the way our country regulates development, what would it be?

James:

The workforce shortage and the qualified, skilled workforce shortage for this regulatory process, I think it's inevitable that we're going to have to invite the private sector in. You know, whether that's outsourcing the planning, you know, and building department function to private sector, whether that's private plan review, whether it's, you know, entirely co-managed software workflows or AI workflows, I'm not sure. But I don't think it's realistic to expect that 20,000 different jurisdictions across the country, you know, need to collaborate to weigh in on whether we have the permission to construct or not. I think that that's going to hold us back as a country, in what we can say yes to building. You're right at the time where we have great ambition and capital to do it. So I think that's to me, I mean, the most obvious conclusion.

And you know, it doesn't mean you have to transition the authority, right? Jurisdictions can still maintain the transition of authority and enforcement, but the actual regulatory work has to transition to the private sector.

You know, the analogy I'd use is if the SEC or FINRA had to audit every single company filing their S1, you know, to go public, we'd have a lot fewer, you know, public companies, publicly traded companies in this country. Fortunately, we've outsourced that compliance function.

Tom:

You had mentioned the similarity of the codes across jurisdictions versus-I mean the uniquenesses are not that substantial.

James:

They're not. They're not.

Tom:

And maybe some of the uniquenesses don't need to be unique as it relates to where, you know, your name is placed on the application or whatever.

James:

That's exactly right. And look on the zoning and planning side, they are more unique. But, you know, again, we have this unbelievable time in technology right now where those complexities can be observed and institutionalized into a memory and then we can apply a combination of human expertise and agents against them. So that's solvable too.

Tom:

Well James, we could have talked for a lot longer. It's a fascinating topic and there's such a richness to this whole conversation of the use of technology and building the built world and just the amount of movement that's happening in the built world right now. So I thank you for taking the time today to have the conversation. Really appreciate it. Appreciate your involvement and membership in ICSC as well.

James:

Tom, thanks so much for having me. ICSC is really important to us and we spent a lot of time, you know, at GreenLite, you know, preparing for the shows and working with your team. So it was a real honor to be on this and to have this conversation with you. So thank you.

Tom:

Thank you, James, and thank you to all of our listeners.

Thanks for joining me on From Where I Sit. Follow the podcast on Apple, Spotify, YouTube, or wherever you get your podcasts, and share it with anyone interested in the future of the built world, commerce, and technology. I'm Tom McGee. Thanks for watching and listening, and I'll see you next time.