CCCT with Aaron Kline with Boom & Bucket Video
CCCT with Aaron Kline, COO & Co-Founder from Boom & Bucket who is changing the way contractors buy and sell used heavy equipment. For sellers, they make it quick and easy to get your equipment online with best in class photos, videos, inspection reports and pricing analysis. For buyers, they provide top notch support and transparency so that you can make an informed buying decision. Check out Boom & Bucket’s website at boomandbucket.com and reach out to their team to learn more about how they can help.
#construction #rentalequipment #heavyequipment #contractors
Transcript
Hey there, Commercial Construction Coffee Talk fans. Thanks for chiming in. My name’s David Course, and I’m your host. I’m also the publisher and editor of Commercial Construction and Renovation magazine. I’ve got a little glare from my light, but that’s what it used to look like. Hey, oh, this is when we had Target. I’m breaking out the archives. Oh wow, November December 2003. What were we doing? I had a lot more hair back then. But anyway, another great looking issue. Wow, I mean, I just grabbed them out of the box. This was actually when I went on my own in 2001, so my company was only a couple of years old. You know, we were still standing today. Let’s see where I… Oh, I’ve got the hockey geek going. Look, you got to look at this picture. Here I am, I’ve got a lot more hair, I’m putting my rollers on, and I’m ready to go shoot with my son out. Got my Thrasher shirt on when they were in the ATL. They’ve only been there for a couple of years. I was a season ticket holder. Actually, a good story about The Thrasher: I played in the AAA League, in the adult league here in Atlanta, and the president of The Thrasher, his son, was on my team, and now he’s the Braves president. He and my son, we all went through the roller league together. Derek was an awesome guy. But looking back at these pictures, it’s so much fun to hold. I’ve gone digital in 2021, and in August was my last issue, but holding these magazines up in my hand, it’s always nice to see them. We’re digital now, and don’t miss the printer, don’t miss the post office. People are just hitting the site every day, consuming content. Thank you so much if you’re out there. Hit that like button. We want to get this episode out. Listen, TGIF today. I’m saving the best for last. I hope everybody had a great week. I was in Detroit, the retail contractors Round Table, and then went to New York, did my meet and greet yesterday. It was awesome seeing some family. It was like having family and seeing people I haven’t seen in a while. I flew back last night, just trying to get ready for the weekend, and I’ll do it all over next week. So thank you for staying with us on a Friday afternoon. It’s beautiful here in Atlanta, about 80 degrees, no humidity. It’s just so nice. It’s Indian summer, the heat’s gone. It’s just been beautiful here, and hopefully, it’s nice where you are today as well. I have a gentleman out in Southern California, his name is Aaron Klein, and he’s with a company called Boomer Bucket. He’s the CEO and co-founder of the firm, and they’re headquartered in Austin. Aaron, say hello to our listeners out there on Commercial Construction Coffee Talk.
Hello everybody at Commercial Construction Coffee Talk. Pleasure to meet you, and thanks for having me today.
You’re welcome. So Aaron, the way this is gonna work is you’re going to do our episodes in three parts. You’re gonna tell your story, where you grew up, played sports, how many kids, etc., and then how you ended up at Boom Bucket. Then you’re going to talk about the last three years of the roller coaster that we’ve all been on, lessons learned, any new and exciting things that you see there in the construction equipment market, and then you’ll leave one positive thought or phrase with our listeners, and then we’ll end the episode. So with that said, the floor is yours. Tell us your story.
Cool, all right. Well, thanks again for having me. I really appreciate it.
Absolutely. Quick background on myself, David. I was a Navy brat. I grew up all over the United States. My dad was a ship driver in the United States Navy, retired as a captain after 28 years of active service. I followed in his footsteps. I joined the Navy myself right out of college, went to Auburn University, studied mechanical engineering, was terrified of AutoCAD and sitting in front of a computer all day. So I, you know, ran screaming from Corporate America to join the navy, flew Fighters F-18s for 11 years with the Navy, all over the world, East Asia, Iraq, and other places in the Middle East. A ton of fun, greatest job in the world. Then I got married, had kids, and 10-month deployments away from my kids didn’t sound quite as much fun anymore. So I transitioned out of the Navy, went back to school, and started working in early-stage technology companies about 10 years ago. More recently, was with a company called Yard Club. We were doing rental equipment management software, basically. So we were building software for equipment rental companies to help engage with their customers, to help them rent, kind of like if you go to hertz.com right now, you can rent a car. But at the time, there wasn’t really any great software interfaces to do that for the rental equipment around the world for contractors. We sold that business to Caterpillar in 2017, but my partners and I had always kind of had our eye on the used construction equipment space. Used construction equipment’s about a 40 billion dollar global industry. You know, it’s a lot of…sorry, 300 billion dollars, about 400 billion here in the United States. So a lot of used equipment trading hands across everything from on-highway, if you think like cement trucks and crane trucks, to bulldozers, backhoes, excavators, which is kind of our specialty. So we work with some of the biggest equipment companies in the United States to help them inspect, value, and market their equipment. We find buyers, we engage with these buyers, we help them find financing, warranties, and transportation for the machine. We run a completely digital and secure closing process for the machines. We wrap those machines in guarantees that we’ll actually come and repair the machine if there’s anything wrong with it that’s not in the inspection, making the whole buying and selling process a lot more easy, fluid, and transparent for everybody that’s involved. And that’s how we started Boom and Bucket.
Amen. You know what, first of all, thank you for your service, thank you for your dad’s service. I come from a military family myself, and anybody that served in the military, I’ve got a special place with me. And being a…you know, my dad was a pilot, and my son’s actually taking flying lessons. We were watching him on the app this morning. He works at Boeing, he’s got his AP license, he works on the 787 platform in Charleston. So my wife, every time he flies, she’s glued to it. It’s, you know, it was awesome. I didn’t know you were in there until I did listen. I just learned something new. That’s why I do these episodes. I get their basic backgrounds, but I didn’t know I was going to have a Navy pilot on there. So, go Navy. I feel like I got a lot more than I gave, to be honest, David. It was just an incredible experience from day one. Listen, Navy pilots, you have to land on an aircraft carrier, you know, and that’s just a whole different ordeal than being…unless anybody’s a pilot, but being a Navy pilot, landing in the middle of the night with a couple of lights guiding you in, it’s got to be nerve-wracking. You got to be a special person to be able to do that kind of stuff. My hat’s off to you, and I’m sure you’ve missed it. It’s like having your old Mustang in the garage or whatever, and now the F-35 or something. But hey, congratulations, that’s just awesome.
Thanks, it was a ton of fun. Yes, I do miss it, especially when I hear the jets fly over, but it’s pretty fun coaching my kids’ basketball games too. Absolutely, absolutely. So, as far as everybody’s kind of gone through this roller coaster over the last three years, and we’re out of the tunnel, but we’re still having a little dips and bubbles, and depending on what state you’re in, really different, predetermined on how things were going to go. Talk about how you weathered the storm over the last couple of years and maybe give us an insight of, you know, listen, we’re in Q4, just about, and how we’re gonna finish the year off and going into 2024. Give us your projections, what you see. There’s tons of commercial guys out there that are using equipment every day, so I think they would find your insight valuable.
Yeah, so let’s talk about the roller coaster ride. We actually founded the company in 2020, right in the middle of the roller coaster ride. So we had to do everything for this business at the beginning remotely. We did all of our sales calls over the phone, all of our customer research over the phone. And you’re in construction, you know, this is not an industry that’s great with Zoom calls. They like to look you in the eye and shake your hand. There’s a lot of in-person work that has to be done. So I would say that starting our company in the middle of that environment forced us to learn some stuff really quickly on how to effectively run a team and a company in a hybrid remote environment. So when we say hybrid remote, about 60% of our teammates are scattered all over the US. We have outside field sales reps, equipment inspectors, software developers that are distributed all over the world, actually. And we have a headquarters in Austin, Texas, where about the other 40% of the folks work. We’ve built some things into our work culture from the get-go that help our teammates feel connected and feel like they’re part of the team, even though they don’t have a physical office that they’re going to every day. Little examples, like if one person is remote, everybody’s remote. So if there’s a meeting and there’s five people in Austin and two people have dialed in, everybody goes to a phone booth and dials in on Zoom so everybody has the same experience. Just little stuff like that that’s been successful within that context.
The other thing that’s kind of interesting about the impacts of the last couple of years, probably the biggest issue that just gets talked about all the time in the construction equipment industry, was supply chain disruption. We went from a pretty stable environment at the end of 2019 to late 2020, early 2021, 18 to 24 month lead times for new equipment. That had pretty huge repercussions on the used equipment market because obviously, if contractors got a machine they’re thinking about replacing, they can’t get a new one, so they’re not going to replace them. The supply got incredibly constrained over the last three years, which sent prices through the roof everywhere for used equipment. We’re getting through that now. Lead times on larger equipment are back down to the three to six month time frame, and a lot of the big equipment rental companies have been taking fairly large deliveries of new equipment, so they’re rolling a lot of their used equipment out of the marketplace. We’ve seen a pretty rapid, what you see in the pricing graphs is basically a pretty huge spike in pricing that started right around the end of 2020. Now it’s come off, and it’s almost back down to equilibrium. This giant bubble created by these supply chain issues, we’re approaching normal. We’re not quite back there, but the sort of whiplash effect is that we went from this massively supply-constrained seller’s market to a now massive buyer’s market where there’s an incredible amount of inventory. So for us, as the partner of choice for getting these machines sold or bought, we have to explain these market dynamics effectively to both sides of the marketplace. Help buyers understand that they have options, find the right machine for their business. Help sellers understand that the pricing that’s now was not the same as it was six months ago, and tell that story with data and information, which is what technology companies are best at.
Being a pilot, you obviously know that planes have to be maintained, and they can’t just sit there. Talk about the maintenance factor of a piece of equipment. It’s huge. The construction equipment industry often gets compared to automotive. I think personally, we draw a little bit more inspiration from the real estate market because construction working assets, condition can vary broadly depending on how it was used. Let’s take a Cat 320 excavator, a kind of center mass construction piece of equipment. A 320 excavator that has been working at a sand plant, an aggregates facility scooping sand for 5,000 hours, is in significantly better condition than a machine that was used in demolition, where it’s just rocking and rolling, getting beat up, and just beat to hell after five thousand hours. Very different than an on-highway, like a Toyota sedan. You put one Camry, you put 100,000 miles on it, same Camry, 100,000 miles on it, but provided you do an oil change and the regular maintenance, they’re probably similar. So for us, the maintenance and how the machine was used are huge contributors to what the intrinsic value of that machine is. Our job to enforce transparency on this market, to make it function better for everybody involved, is to expose all of that. Professional contractors who have work order management systems, who have good maintenance records, who can show that they’ve done 500-hour service pretty regularly on every single one of their machines, they can demonstrate that to a potential buyer. The buyer sees that, knows the machine was well maintained, that machine is inherently de-risked, more valuable than a machine that has no maintenance records whatsoever, where the guy was writing an increase pencil on the side of the machine every time they did it because it’s easier or it’s cheaper. And that translates into dollar values. We see anywhere from a seven to fifteen percent lift in price realization for machines with comprehensive maintenance records than ones without. So it’s that maintenance that you’re investing into that asset. Yes, it’s important because it guarantees uptime, but it also is an investment in the residual value of the machine too.
You know, you can’t listen. We’re in construction, so you can’t get anything done without a bobcat or a backhoe or what have you, and it’s the backbone of where the country’s gonna go in the future. Talk about, you know, when you market the equipment to people that have no knowledge, do they say, “Hey, how do I learn how to operate this new backhoe that I got or a bobcat?” or so forth. Or a lot like construction contractors are at all different levels of experience and so forth. So talk about that aspect of it, you know, like it’s like, “Okay, I just got my driver’s license. I’m gonna go buy a Ferrari,” versus, you know, like my kid, we bought them all beater. I know you’re probably going to get in a little fender bender or whatever, and then you gradually get them up. They don’t talk about that aspect, you know, where I’m coming from.
Yeah, absolutely. One of the biggest surprises for me, actually, John, was how many inquiries, sorry, David, how many inquiries we get from people about How to learn how to drive a backhoe, how to become an operator. This is not something we had anticipated. We’ve actually started developing some content around this now because we get so much inbound around it. The good news is most of our buyers get to us with a pretty good idea of what they want to buy. We’re not teaching them as much about the machinery as we are making sure that we match what they’re trying to accomplish with the machine to the right gear, make, model, hours, at the right price point. That’s what we do most of our exploration. We do occasionally get the person that’s like, “Hey, I need an excavator. What kind of excavator should I buy?” The good news is our inside sales team is fairly expert on these machines now. They can really help them locate what they’re looking for. From a technology lens, we view the problem you just described of matching the machine to the job application as a really interesting application for artificial intelligence. You see some pretty interesting things happening with like Google search or through ChatGPT. We think there’s a really interesting application here for the future for plugging some of those AI technology tools into our inventory set and helping guide contractors to the right machine for their application. There are so many variables here, like quality of dealer support in their region, what their budget is on the machine, how often they’re going to be using it afterward. It’s a pretty big data set problem, and this is just a really great application set that we see for potentially for artificial intelligence in the future. I’ve been taking digital classes for the last year, so I’m a digital specialist. I thought I knew a lot about digital, but it’s been mind-blowing what I’ve learned and how you can integrate AI into any business model. We’re in construction, so a lot of people are learning how to integrate it in the correct way, but the way that you’re doing it, using AI, you can find all the different equipment and plug in that question, and boom, it’s amazing. It can streamline your business and actually keep your attention. Probably if you do a good job with anything, that customer is going to come back and give you the referrals, and you pick up other business and so forth. So using that technology to your advantage is a major plus, as you’ve said, correct.
Absolutely. These are things that we stay pretty laser-focused on. Our customer satisfaction ratings after we’ve closed deals are on average like 95 to 100 percent. Technology, we view we have like a pyramid of our three talking points: technology, service, and trust. Technology is the layer; it’s the tools, it’s the things that make the entire process more streamlined, supported by a really fantastic service experience provided by real people, and that leads to trust. That engine creates that repeat business for us. Awesome, awesome.
What are some of the coolest products that you’ve seen that have come out over the last six to twelve months? Construction really doesn’t change. You’re doing drywall, you’re doing concrete, sticks and frames, and you know, but it basically is the same. You’re painting, the paint colors change. What have you seen on the equipment side that some of our listeners might say, “Hey, well, I never saw it. I didn’t know they had a bucket that or that attachment that might be available?” Oh man, all you got to do is walk around ConExpo for an hour and a half, and you’re gonna see. Oh no, I’ve walked that big boy toy show, God knows for how long. I would say there are probably two big trends within the equipment market right now: autonomous and electrification. This last ConExpo, electrification was really front and center. You saw some pretty large electric equipment, a lot of emphasis on it from every single one of the OEMs. A lot of that is driven a lot by the EU right now but also by the state of California with the Advanced Clean Fleets and by builders. So you’ve got companies like Amazon and Apple who are building new campuses. They build sustainability goals into almost every single one of their projects, and that’s driving the adoption of electric zero emissions vehicles. All of those sorts of projects kind of downstream into the GC and into the subcontractors too.
Electric equipment, I think, is super cool. It’s going to be, obviously, this is the future. We can’t keep belching smoke into the atmosphere forever and ever. There are still some pretty big barriers for adoption for electric equipment, primarily around charging infrastructure. I don’t believe that we’re going to get, like when we think about zero-emission vehicles, it’s not 100% electrification. We have to look at things like hydrogen, we have to look at, you know, really clean diesel in some cases too, depending on what the application set is. So, for example, if you’re running a recycling facility or an aggregates plant that has, like, you know, you’re tapped right into the grid already, yes, electric equipment is going to work really well for you. The mines have done some really great stuff with swappable battery trays where they’re actually able to run 24-hour shifts on some of their equipment because they’re swapping those things out, and it makes a lot of sense there too because now you’re not having emissions inside the mines, right. Now, if you’re working on an undeveloped job site, if you’re working in forestry, if you’re in some place that’s like, construction equipment goes places that aren’t developed yet, right, like that’s the whole point. We’re building infrastructure, so the infrastructure that may not already exist. There are some creative solutions, you know, you see these big Conex boxes full of batteries that people can swap out between shifts. There are some creative solutions that might work well, but I think for those types of applications, we have to look at things like hydrogen.
We have to look at other types of clean equipment, zero-emissions vehicles that can achieve the same outcomes without just relying on electric infrastructure. So a lot to unpack there. The other one’s autonomous, that I think is super cool. You know, the probably all seen the Case autonomous tractor that was a big one a couple of years back where there’s no cab on it. Autonomous excavators, remote-controlled mining equipment, all of this stuff is started to take on front and center too, especially with equipment that’s doing fairly, you know, rote stuff like, you know, digging, you know, grading, or, you know, digging holes that are kind of like all in the same spot, farming equipment that’s just kind of like doing tilling or spraying, that kind of stuff. So that stuff’s kind of interesting. It’s coming along. There are some great, you know, John Deere just made an acquisition of Bear Flag Robotics to help kind of advance that on the AG side. You see companies like Built Robotics that are doing this on the construction side too, that are building some pretty cool aftermarket, and then the OEMs are starting to adopt it natively too. Electrification is definitely ahead of autonomous right now, but I anticipate that gap is going to close over the next five to ten years. The biggest thing, it’s just like an electric, you know, like I have an F-150. They came out with the Lightning, and so forth, and I never like to go. I’m not one of those buyers like I want to have the newest and best thing first. I want it to be out there for a year and a half to two, get the bugs out of it, and then maybe I would buy that truck, but the biggest thing, I think, is the power value that electrification.
Electric airplanes can only go for so many hundreds of miles, and then you have to go down; you have to recharge the battery, just like if you’re in a Tesla, you can only go 200 miles, and you’ve got to find a recharging station, and if you have the adapter that can have the quick charge and so forth. The biggest thing with equipment is the infrastructure, number one, but number two is technology improving itself, so the longevity of the charge and being able to pull the weight, the power that’s necessary, whether you electrify a huge tanker or, as you said, pilots, you can understand it takes a lot of energy, even with lift and dynamics, where I’m coming from.
The good news there actually is that the OEMs have done a great job of replicating the power profiles on their electric equipment now. There are definitely legitimate concerns around battery life, and depending on the application, like I mentioned with the mines, they’re running 24/7 operations. They’re able to achieve their objectives by swapping out battery trays. You can get an eight-hour work shift done on a lot of electric equipment on the job site because the operator is taking a lunch break where you can recharge them between morning and afternoon sessions. The power output is not one of the concerns right now. Obviously, with really large equipment, that’s a little more challenging, but Komatsu just unveiled a hydraulic mining shovel that was all electric, a massive piece of equipment. The technology is definitely moving in the right direction. You’ve also got a significantly lower cost profile when it comes to maintenance on electric equipment than an internal combustion engine, making the machines really attractive, especially to the equipment rental companies, because they’re doing a lot of turns on these equipment. They’re keeping very high maintenance standards on their fleet because they sell uptime. That’s their value proposition to their customers.
It’s amazing, one of my favorite shows is the miners. You see these huge dump trucks with the big tires, and it would be awesome to see them electrified. But I always think, in the back of my mind, I have all sorts of people that talk about electrification, from Schneider Electric to those guys doing the charging stations. Weight’s an issue, and think about all the debris if you’re doing a demo job on a big shopping center, and you’ve got to get, you’re doing the new parking lot. But people like yourself, that are into technology and especially the OEMs working together, you guys are going to figure it out. It’s not “I can’t do it,” it’s “How are we going to do it?” Right, 100%. Thanks, listen, I make mistakes all the time, but what I like when I’m like, “Hey, I’m correct,” so I’m on the right tangent, so maybe I’ll write about that in my next publisher’s column, who knows.
As we finish up here, if there are some people out there on our episode and they would want to bounce some questions off you on, “Hey, I’ve got, you know, I was thinking about purchasing this piece of equipment or a new attachment or so forth,” how would they reach out to you? Oh, super easy, I’m just Aaron at boomandbucket, Aaron at boominbucket.com. We’ve got a whole team of equipment experts that are a lot smarter than I am, though, now, and so like, head over to boominbucket.com, take a look at the machines we have available, talk to our sales team, sales at boominbucket.com. We’ve got our main line right there on the website too. You can text us, you can call us, you can chat with us on the website if you’re feeling particularly techy. We’ve got all kinds of different ways to talk about machines. We love it. Listen, if you’re out there, if you’re an operator or if you’re a contractor looking to get into a new fleet or you just want to talk construction equipment, give this gentleman a call, and he’ll put you in the right direction with his team, and hopefully, they’ll be able to help you.
As we finish up, if you wanted to leave one positive thought or phrase with our listeners as we go into the weekend, finishing up Q4 at the end of the year, and we roll into 2024, what would it be? So, I talked to my team a lot about the beauty of doing hard things on a regular basis. There is a misconception out there that all of us are working towards some sort of destination, like a life of ease. “Someday I’m going to arrive, I’m going to retire, I’m going to play golf, you know, I’m going to do something, and then it’s done, and then I can relax,” right? But the reality is, as soon as you start moving forward, you start moving backward. David, I know I’m preaching to your language here; you played hockey and lacrosse, right? Any sport, as soon as you stop practicing, what happens? Your skills start to evolve. Flying, if you’re out of the cockpit for a week, you suck when you go back. That’s all there is to it. As soon as you stop moving forward, you start moving backward. So, the beauty of doing hard things is, you know, it continually moves you forward. It keeps you trying new things, you keep pushing the envelope, and the hardest part of it is that the first move is always the worst part, that beginning. You have to get through that beginner curve where, hey, you go back in the gym, you do a really hard workout, the next day, man, I really hurt, I’m super sore. But if you push through that, it gets easier and easier and easier. That’s true with any skill set, anything you want to accomplish. Keep doing hard things. I remember, I’m a first-degree black belt, and I remember the day my instructor said, “The day that you don’t want to go to class is the day that you really need to do it.”
And that’s it. You will play as you practice, period. And then, when game day comes, we can always go into halftime and readjust if someone gets hurt or whatever, scrap the game plan, and then finish off. But I always say, when you don’t want to do something, do it. It’s just like taking action. If you take action today, a year from now, you’re You’re going to thank yourself for it, so beautiful. Hey, just taking action, taking that first step. Well, Aaron, it’s been a pleasure talking to you, and once again, thank you so much for your service and your father’s too. I’ve known being a Navy brat and rolling around, going here and there, but you got to see a lot of things, and flying, you saw some probably unbelievable memories in the cockpit. I’m honored to speak to a person like yourself, and look where you’re at today. So, with that said, say goodbye from Southern California to our listeners out there.
My pleasure today, David. Goodbye, everybody. Thanks so much for having me. I’m going to say goodbye from Sugar Hill, about 30 miles north of Atlanta, just below the Buford Dam on Lake Lanier. It’s like an ocean out there, about 600 miles of coastline. I think I’m going to go out on the boat later. I don’t think it’s been driven all week; I’ve been on the road. And go hit the Twisted Oar for some, I’ll get a BLT or a burger, a really good place if you’re up on Lake Lanier. If you’ve never seen it, you got to see it. It’s an amazing thing what the Army Corps of Engineers have done up there.
So, with that said, everybody, just a couple of things. Number one, I want you to stay safe on that construction site. We want you to get home to your family and be able to do it again today. And even though I said it’s not hot here, listen, we want you to drink lots of liquids. This is the coach talking to me. We want you to stay hydrated. When you get dehydrated, that’s when you get headaches, when accidents happen. So, make sure you’re doing—look, I’ve got my electrolytes right here. So, put that powder in your water bottle, stay hydrated, and you know, have a much better day. And like I said, safety is the number one option. We want you to get home at night and see your kids and be able to do it again the following day.
So, everybody, enjoy the weekend. TGIF to everybody. And Aaron, when I get out to California, I look forward to—I’d love to see some of this new equipment and get the tour of whatever’s going on, and even in Austin, if I make it down there, I’d love to have the opportunity if you offer it to me.
That’s fantastic. We’ll look forward to it.
Alright, everybody, we will see you next time on another episode of Commercial Construction Coffee Talk. Aaron, pleasure.
Alright, thank you so much. Bye.
