Katerra Post-Mortems Raise Risk Of Missing The Point Of The Fail
- Beware an inverse relationship between PPT pitch deck and messy life
- Financial brute clout and a transformed building lifecycle are two different things all together
- Productization is a promise; expanded access to decent, safe, healthy housing doesn't happen by virtue of promises, but as a result of a complex system of trusted relationships, sweat-equity, brilliance, coordination, and cooperation.
Wall Street Journal writers Konrad Putzier and Eliot Brown offer a high-level post-mortem of residential construction's biggest recent casualty, the crash and burn of Katerra last month. Putzier and Brown speak with insiders, outsiders, experts, analysts, strategists, and financial investment stakeholders for insight and answers as to what went so wrong for a fledgling enterprise whose valuation peak was upwards of $6 billion.
The decoy take-away – and one that could be costly were it to be widely embraced as the essential lesson in the massive failure of Katerra – comes through in this passage of the WSJ narrative.
Katerra’s failure is the latest sign that the hypergrowth strategy employed by social media and software companies faces challenges in complicated, slower-moving industries like real estate.
Rather than to throw up a distracting and unhelpful lesson learned here, we'd say the problem was not so much schematic process over-reach so much as it was the absence of two simple capabilities, hidden in plain sight amid the Menlo Park, Calif-based enterprise's heft.
- Doing what you say you'll do means more than saying what you'll do
- "It's a people business," one of the most commonly heard-statements in homebuilding, actually means something when it comes to success and failure.
Trust and execution don't come with huge sums of capital investment from private equity, nor venture capital funds. If anything, those two ingredients had better be defining properties of any enterprise – start-up or not – before investment money takes a role in the capital structure.