Inside Clear’s ambitions to manage your identity beyond the airport

If you’ve ever been through a large US airport, you’re probably at least vaguely aware of Clear. Maybe your interest (or irritation) has been piqued by the pods before the security checkpoints, the attendants in navy blue vests who usher clients to the front of the security line (perhaps just ahead of you), and the sometimes pushy sales pitches to sign up and skip ahead yourself. After all, is there anything people dislike more than waiting in line?

Its position in airports has made Clear Secure, with its roughly $3.75 billion market capitalization, the most visible biometric identity company in the United States. Over the past two decades, Clear has put more than 100 lanes in 58 airports across the US, and in the past decade it has entered 17 sports arenas and stadiums, from San Jose to Denver to Atlanta. Now you can also use its identity verification platform to rent tools at Home Depot, put your profile in front of recruiters on LinkedIn, and, as of this month, verify your identity as a rider on Uber.

And soon enough, if Clear has its way, it may also be in your favorite retailer, bank, and even doctor’s office—or anywhere else that you currently have to pull out a wallet (or, of course, wait in line). The company that has helped millions of vetted members skip airport security lines is now working to expand its “frictionless,” “face-first” line-cutting service from the airport to just about everywhere, online and off, by promising to verify that you are who you say you are and you are where you are supposed to be. In doing so, CEO Caryn Seidman Becker told investors in an earnings call earlier this year, it has designs on being no less than the “identity layer of the internet,” as well as the “universal identity platform” of the physical world.

All you have to do is show up—and show your face. 

This is enabled by biometric technology, but Clear is far more than just a biometrics company. As Seidman Becker has told investors, “biometrics aren’t the product … they are a feature.” Or, as she put it in a 2022 podcast interview, Clear is ultimately a platform company “no different than Amazon or Apple”—with dreams, she added, “of making experiences safer and easier, of giving people back their time, of giving people control, of using technology for … frictionless experiences.” (Clear did not make Seidman Becker available for an interview.)

While the company has been building toward this sweeping vision for years, it now seems the time has finally come. A confluence of factors is currently accelerating the adoption of—even necessity for—identity verification technologies: increasingly sophisticated fraud, supercharged by artificial intelligence that is making it harder to distinguish who or what is real; data breaches that seem to occur on a near daily basis; consumers who are more concerned about data privacy and security; and the lingering effects of the pandemic’s push toward “contactless” experiences. 

All of this is creating a new urgency around ways to verify information, especially our identities—and, in turn, generating a massive opportunity for Clear. For years, Seidman Becker has been predicting that biometrics will go mainstream. 

But now that biometrics have, arguably, gone mainstream, what—and who—bears the cost? Because convenience, even if chosen by only some of us, leaves all of us wrestling with the effects. Some critics warn that not everyone will benefit from a world where identity is routed through Clear—maybe because it’s too expensive, and maybe because biometric technologies are often less effective at identifying people of color, people with disabilities, or those whose gender identity may not match what official documents say.

What’s more, says Kaliya Young, an identity expert who has advised the US government, having a single private company “disintermediating” our biometric data—especially facial data—is the wrong “architecture” to manage identity. “It seems they are trying to create a system like login with Google, but for everything in real life,” Young warns. While the single sign-on option that Google (or Facebook or Apple) provides for websites and apps may make life easy, it also poses greater security and privacy risks by putting both our personal data and the keys to it in the hands of a single profit-driven entity: “We’re basically selling our identity soul to a private company, who’s then going to be the gatekeeper … everywhere one goes.” 

Though Clear remains far less well known than Google, more than 27 million people have already helped it become that very gatekeeper—and “one of the largest private repositories of identities on the planet,” as Nicholas Peddy, Clear’s chief technology officer, put it in an interview with MIT Technology Review this summer. 

With Clear well on the way to realizing its plan for a frictionless future, it’s time to try to understand both how we got here and what we have (been) signed up for.

A new frontier in identity management

Imagine this: On a Friday morning in the near future, you are rushing to get through your to-do list before a weekend trip to New York. 

In the morning, you apply for a new job on LinkedIn. During lunch, assured that recruiters are seeing your professional profile because it’s been verified by Clear, you pop out to Home Depot, confirm your identity with a selfie, and rent a power drill for a quick bathroom repair. Then, in the midafternoon, you drive to your doctor’s office; having already verified your identity—prompted by a text message sent a few days earlier—you confirm your arrival with a selfie at a Clear kiosk. Before you go to bed, you plan your morning trip to the airport and set an alarm—but not too early, because you know that with Clear, you can quickly drop your bags and breeze through security.

Once you’re in New York, you head to Barclays Center, where you’ll be seeing your favorite singer; you skip the long queue out front to hop in the fast-track Clear line. It’s late when the show is over, so you grab an Uber home and barely need to wait for a driver, who feels more comfortable thanks to your verified rider profile. 

At no point did you pull out your driver’s license or fill out repetitive paperwork. All that was already on file. Everything was easy; everything was frictionless

More than 27 million people have already helped Clear become “one of the largest private repositories of identities on the planet.”

This, at least, is the world that Clear is actively building toward. 

Part of Clear’s power, Seidman Becker often says, is that it can wholly replace our wallets: our credit cards, driver’s licenses, health insurance cards, perhaps even building key fobs. But you can’t just suddenly be all the cards you carry. For Clear to link your digital identity to your real-world self, you must first give up a bit of personal data—specifically, your biometric data. 

Biometrics refers to the unique physical and behavioral characteristics—faces, fingerprints, irises, voices, and gaits, among others—that identify each of us as individuals. For better or worse, they typically remain stable during our lifetimes. 

Relying on biometrics for identification can be convenient, since people are apt to misplace a wallet or forget the answer to a security question. But on the other hand, if someone manages to compromise a database of biometric information, that convenience can become dangerous: We cannot easily change our face or fingerprint to secure our data again, the way we could change a compromised password. 

On a practical level, there are generally two ways that biometrics are used to identify individuals. The first, generally referred to “one-to-many” or “one-to-n” matching, compares one person’s biometric identifier with a database full of them. This is sometimes associated with a stereotypical idea of dystopian surveillance in which real-time facial recognition from live video could allow authorities to identify anyone walking down the street. The other, “one-to-one” matching, is the basis for Clear; it compares a biometric identifier (like the face of a live person standing before an airport agent) with a previously recorded biometric template (such as a passport photo) to verify that they match. This is usually done with the individual’s knowledge and consent, and it arguably poses a lower privacy risk. Often, one-to-one matching includes a layer of document verification, like checking that your passport is legitimate and matches a photograph you used to register with the system.

The US Congress urgently saw the need for better identity management following the September 11 terrorist attacks; 18 of the 19 hijackers used fake identity documents to board their flights. In the aftermath, the newly created Transportation Security Administration (TSA) implemented security processes that slowed down air travel significantly. Part of the problem was that “everybody was just treated the same at airports,” recalls the serial media entrepreneur Steven Brill—including, famously, former vice president Al Gore. “It sounded awfully democratic … but in terms of basic risk management and allocation of resources, it just didn’t make any sense.” 

Congress agreed, authorizing the TSA to create a program that would allow people who passed background checks to be recognized as trusted travelers and skip some of the scrutiny at the airport. 

A computer screen showing a biometric iris scan, part of Clear's security program in airports.
In 2007, San Francisco’s then mayor, Gavin Newsom, had his irises scanned by Clear at San Francisco International Airport.
DAVID PAUL MORRIS/GETTY

In 2003, Brill teamed up with Ajay Amlani, a technology entrepreneur and former adviser to the Department of Homeland Security, and founded a company called Verified Identity Pass (VIP) to provide biometric identity verification in the TSA’s new program. “The vision,” says Amlani, “was a unified fast lane—similar to a toll lane.”

It appeared to be a win-win solution. The TSA had a private-sector partner for its registered-traveler program; VIP had a revenue stream from user fees; airports got a cut of the fees in exchange for leasing VIP space; and initial members—typically frequent business travelers—were happy to cut down on airport wait times. 

By 2005, VIP had launched in its first airport, Orlando International in Florida. Members—initially paying $80—received “Clear cards” that contained a cryptographic representation of their fingerprint, iris scans, and a photo of their face taken at enrollment. They could use those cards at the airport to be escorted to the front of the security lines.

The defense contracting giant Lockheed Martin, which already provided biometric capabilities to the US Department of Defense and the FBI, was responsible for deploying and providing technology for VIP’s system, with additional technical expertise from Oracle and others. This left VIP to “focus on marketing, pricing, branding, customer service, and consumer privacy policies,” as the president of Lockheed Transportation and Security Solutions, Don Antonucci, said at the time. 

By 2009, nearly 200,000 people had joined. The company had received $116 million in investments and signed contracts with about 20 airports. It all seemed so promising—if VIP had not already inadvertently revealed the risks inherent in a system built on sensitive personal data.

A lost laptop and a big opportunity

From the beginning, there were concerns about the implications of VIP’s Clear card for privacy, civil liberty, and equity, as well as questions about its effectiveness at actually stopping future terrorist attacks. Advocacy groups like the Electronic Privacy Information Center (EPIC) warned that the biometrics-based system would result in a surveillance infrastructure built on sensitive personal information, but data from the Pew Research Center shows that a majority of the public at the time felt that it was generally necessary to sacrifice some civil liberties in the name of safety.

Then a security lapse sent the whole operation crumbling. 

In the summer of 2008, VIP reported that an unencrypted company laptop containing addresses, birthdays, and driver’s license and passport numbers of 33,000 applicants had gone missing from an office at San Francisco International Airport (SFO)—even though TSA’s security protocol required it to encrypt all laptops holding personal data. 

a hand reaches into drawers containing sensitive personal data from behind the user's profile image

NEIL WEBB

The laptop was found about two weeks later and the company said no data was compromised. But it was still a mess for VIP. Months later, investors pushed Brill out, and associated costs led the company to declare bankruptcy and close the following year. 

Disgruntled users filed a class action lawsuit against VIP to recoup membership fees and “punitive damages.” Some users were upset they had recently renewed their subscriptions, and others worried about what would happen to their personal information. A judge temporarily prevented the company from selling user data, but the decision didn’t hold. 

Seidman Becker and her longtime business partner Ken Cornick, both hedge fund managers, saw an opportunity. In 2010, they bought VIP—and its user data—in a bankruptcy sale for just under $6 million and registered a new company called Alclear. “I was a big believer in biometrics,” Seidman Becker told the tech journalists Kara Swisher and Lauren Goode in 2017. “I wanted to build something that made the world a better place, and Clear was that platform.” 

Initially, the new Clear followed closely in the footsteps of its predecessor: Lockheed Martin transferred the members’ information to the new company, which had acquired VIP’s hardware and continued to use Clear cards to hold members’ biometrics.

After the relaunch, Clear also started building partnerships with other companies in the travel industry—including American Express, United Airlines, Alaska Airlines, Delta Airlines, and Hertz Rental Cars—to bundle its service for free or at a discount. (Clear declined to specify how many of its users have such discounts, but in earnings calls the company has stressed its efforts to reduce the number of members paying reduced rates.)

By 2014, improvements in internet latency and biometric processing speeds allowed Clear to eliminate the cards and migrate to a server-based system—without compromising data security, the company says. Clear emphasizes that it meets industry standards for keeping data secure, with methods including encryption, firewalls, and regular penetration testing by both internal and external teams. The company says it also maintains “locked boxes” around data relating to air travelers. 

Still, the reality is that every database of this kind is ultimately a target, and “almost every day there’s a massive breach or hack,” says Chris Gilliard, a privacy and surveillance researcher who was recently named co-director of the Critical Internet Studies Institute. Over the years, even apparently well-protected biometric information has been compromised. Last year, for instance, a data breach at the genetic testing company 23andMe exposed sensitive information—including geographic locations, birth years, family trees, and user-uploaded photos—from nearly 7 million customers. 

This is what Young, who helped facilitate the creation of the open-source identity management standards Open ID Connect and OAuth, means when she says that Clear has the wrong “architecture” for managing digital identity; it’s too much of a risk to keep our digital identities in a central database, cryptographically protected or not. She and many other identity and privacy experts believe that the most privacy-protecting way to manage digital identity is to “use credentials, like a mobile driver’s license, stored on people’s devices in digital wallets,“ she says. “These digital credentials can have biometrics, but the biometrics in a central database are not being pinged for day to day use.”

But it’s not just data that’s potentially vulnerable. In 2022 and 2023, Clear faced three high-profile security incidents in airports, including one in which a passenger successfully got through the company’s checks using a boarding pass found in the trash. In another, a traveler in Alabama used someone else’s ID to register for Clear and, later, to successfully pass initial security checks; he was discovered only when he tried to bring ammunition through a subsequent checkpoint. 

This spurred an investigation by the TSA, which turned up more alarming information: Nearly 50,000 photos used by Clear to enroll customers were flagged as “non-matches” by the company’s facial recognition software. Some photos didn’t even contain full faces, according to Bloomberg. (In a press release after the incident, the company refuted the reporting, describing it as “a single human error—having nothing to do with our technology” and stating that “the images in question were not relied upon during the secure, multi-layered enrollment process.”) 

“How do you get to be the one?”

When I spoke to Brill this spring, he told me he’d always envisioned that Clear would expand far beyond the airport. “The idea I had was that once you had a trusted identity, you would potentially be able to use it for a lot of different things,” he said, but “the trick is to get something that is universally accepted. And that’s the battle that Clear and anybody else has to fight, which is: How do you get to be the one?”

Goode Intelligence, a market research firm that focuses on the booming identity space, estimates that by 2029, there will be 1.5 billion digital identity wallets around the world—with use for travel leading the way and generating an estimated $4.6 billion in revenue. Clear is just one player, and certainly not the biggest. ID.me, for instance, provides similar face-based identity verification and has over 130 million users, dwarfing Clear’s roughly 27 million. It’s also already in use by numerous US federal and state agencies, including the IRS. 

The reality is that every database of this kind is ultimately a target, and “almost every day there’s a massive breach or hack.”

But as Goode Intelligence CEO Alan Goode tells me, Clear’s early-mover advantage, particularly in the US, “puts it in a good space within North America … [to] be more pervasive”—or to become what Brill called “the one” that is most closely stitched into people’s daily lives. 

Clear began growing beyond travel in 2015, when it started offering biometric fast-pass access to what was then AT&T Park in San Francisco. Stadiums across California, Colorado, and Washington, and in major cities in other states, soon followed. Fans can simply download the free Clear app and scan the QR code to bypass normal lines in favor of designated Clear lanes. For a time, Clear also promoted its biometric payment systems at some venues, including two in Seattle, which could include built-in age verification. It even partnered with Budweiser for a “Bud Now” machine that used your fingerprint to verify your identity, age, and payment. (These payment programs, which a Clear representative called “pilots” in an email, have since ended; representatives for the Seattle Mariners and Seahawks did not respond to multiple requests for comment on why.) Clear’s programs for expedited event access have been popular enough to drive greater user growth than its paid airport service, according to numbers provided by the company. 

Then came the pandemic, hitting Clear (and the entire travel industry) hard. But the crisis for Clear’s primary business actually accelerated its move into new spaces with “Health Pass,” which allowed organizations to confirm the health status of employees, residents, students, and visitors who sought access to a physical space. Users could upload vaccination cards to the Health Pass section in the Clear mobile app; the program was adopted by nearly 70 partners in 110 unique locations, including NFL stadiums, the Mariners’ T-Mobile Park, and the 9/11 Memorial Museum. 

Demand for vaccine verification eventually slowed, and Health Pass shut down in March 2024. But as Jason Sherwin, Clear’s senior director of health-care business development, said in a podcast interview earlier this year, it was the company’s “first foray into health care”—the business line that currently represents its “primary focus across everything we’re doing outside of the airport.” Today, Clear kiosks for patient sign-ins are being piloted at Georgia’s Wellstar Health Systems, in conjunction with one of the largest providers of electronic health records in the United States: Epic (which is unrelated to the privacy nonprofit). 

What’s more, Health Pass enabled Clear to expand at a time when the survival of travel-focused businesses wasn’t guaranteed. In November 2020, Clear had roughly 5 million members; today, that number has grown fivefold. The company went public in 2021 and has experienced double-digit revenue growth annually. 

These doctor’s office sign-ins, in which the system verifies patient identity via a selfie, rely on what’s called Clear Verified, a platform the company has rolled out over the past several years that allows partners (health-care systems, as well as brick-and-mortar retailers, hotels, and online platforms) to integrate Clear’s identity checks into their own user-verification processes. It again seems like a win-win situation: Clear gets more users and a fee from companies using the platform, while companies confirm customers’ identity and information, and customers, in theory, get that valuable frictionless experience. One high-profile partnership, with LinkedIn, was announced last year: “We know authenticity matters and we want the people, companies and jobs you engage with everyday to be real and trusted,” Oscar Rodriguez, LinkedIn’s head of trust and privacy, said in a press release. 

All this comes together to create the foundation for what is Clear’s biggest advantage today: its network. The company’s executives often speak about its “embedded” users across various services and platforms, as well as its “ecosystem,” meaning the venues where it is used. As Peddy explains, the value proposition for Clear today is not necessarily any particular technology or biometric algorithm, but how it all comes together—and can work universally. Clear would be “wherever our consumers need us to be,” he says—it would “sort of just be this ubiquitous thing that everybody has.”

Seidman-Becker with the gavel raised above her head next to the opening bell on the floor of the stock exchange with NYSE Group president Stacey Cunningham clapping on the right side of the frame
Clear CEO Caryn Seidman Becker (left) rings the bell at the New York Stock Exchange in 2021.
NYSE VIA TWITTER

A prospectus to investors from the company’s IPO makes the pitch simple: “We believe Clear enables our partners to capture not just a greater share of their customers’ wallet, but a greater share of their overall lives.” 

The more Clear is able to reach into customers’ lives, the more valuable customer data it can collect. All user interactions and experiences can be tracked, the company’s privacy policy explains. While the policy states that Clear will not sell data and will never share biometric or health information without “express consent,” it also lays out the non-health and non-biometric data that it collects and can use for consumer research and marketing. This includes members’ demographic details, a record of every use of Clear’s various products, and even digital images and videos of the user. Documents obtained by OneZero offer some further detail into what Clear has at least considered doing with customer data: David Gershgorn wrote about a 2015 presentation to representatives from Los Angeles International Airport, titled “Identity Dashboard—Valuable Marketing Data,” which “showed off” what the company had collected, including the number of sports games users had attended and with whom, which credit cards they had, their favorite airlines and top destinations, and how often they flew first class or economy. 

Clear representatives emphasized to MIT Technology Review that the company “does not share or sell information without consent,” though they “had nothing to add” in response to a question about whether Clear can or does aggregate data to derive its own marketing insights, a business model popularized by Facebook. “At Clear, privacy and security are job one,” spokesperson Ricardo Quinto wrote in an email. “We are opt-in. We never sell or share our members’ information and utilize a multilayered, best-in-class infosec system that meets the highest standards and compliance requirements.” 

Nevertheless, this influx of customer data is not just good for business; it’s risky for customers. It creates “another attack surface,” Gilliard warns. “This makes us less safe, not more, as a consistent identifier across your entire public and private life is the dream of every hacker, bad actor, and authoritarian.”

A face-based future for some

Today, Clear is in the middle of another major change: replacing its use of iris scans and fingerprints with facial verification in airports—part of “a TSA-required upgrade in identity verification,” a TSA spokesperson wrote in an email to MIT Technology Review

For a long time, facial recognition technology “for the highest security purposes” was “not ready for prime time,” Seidman Becker told Swisher and Goode back in 2017. It wasn’t operating with “five nines,” she added—that is, “99.999% from a matching and an accuracy perspective.” But today, facial recognition has “significantly improved” and the company has invested “in enhancing image quality through improved capture, focus, and illumination,” according to Quinto.

 Clear says switching to facial images in airports will also further decrease friction, enabling travelers to verify their identity so effortlessly it’s “almost like you don’t really break stride,” Peddy says. “You walk up, you scan your face. You walk straight to the TSA.” 

The move is part of a broader shift toward facial recognition technology in US travel, bringing the country in line with practices at many international airports. The TSA began expanding facial identification from a few pilot programs this year, while airlines including Delta and United are also introducing face-based boarding, baggage drops, and even lounge access. And the International Air Transport Association, a trade group for the airline industry, is rolling out a “contactless travel” process that will allow passengers to check in, drop off their bags, and board their flights—all without showing either passports or tickets, just their faces. 

a crowd of people with their faces obscured by a bright glow

NEIL WEBB

Privacy experts worry that relying on faces for identity verification is even riskier than other biometric methods. After all, “it’s a lot easier to scan people’s faces passively than it is to scan irises or take fingerprints,” Senator Jeff Merkley of Oregon, an outspoken critic of government surveillance and of the TSA’s plans to employ facial verification at airports, said in an email. The point is that once a database of faces is built, it is potentially far more useful for surveillance purposes than, say, fingerprints. “Everyone who values privacy, freedom, and civil rights should be concerned about the increasing, unchecked use of facial recognition technology by corporations and the federal government,” Merkley wrote.

Even if Clear is not in the business of surveillance today, it could, theoretically, pivot or go bankrupt and (again) sell off its parts, including user data. Jeramie Scott, senior counsel and director of the Project on Surveillance Oversight at EPIC, says that ultimately, the “lack of federal [privacy] regulation” means that we’re just taking the promises of companies like Clear at face value: “Whatever they say about how they implement facial recognition today does not mean that that’s how they’ll be implementing facial recognition tomorrow.” 

Making this particular scenario potentially more concerning is that the images stored by this private company are “generally going to be much higher quality” than those collected by scraping the internet—which Albert Fox Cahn, the executive director of the Surveillance Technology Oversight Project (STOP), says would make its data far more useful for surveillance than that held by more controversial facial recognition companies like Clearview AI. 

Even a far less pessimistic read of Clear’s data collection reveals the challenges of using facial identification systems, which—as a 2019 report from the National Institute for Standards and Technology revealed—have been shown to work less effectively in certain populations, particularly people of African and East Asian descent, women, and elderly and very young people. NIST has also not tested identification accuracy for individuals who are transgender, but Gilliard says he expects the algorithms would fall short. 

More recent testing shows that some algorithms have improved, NIST spokesperson Chad Boutin tells MIT Technology Review—though accuracy is still short of the “five nines” that Seidman Becker once said Clear was aiming for. (Quinto, the Clear representative, maintains that Clear’s recent upgrades, combined with the fact that the company’s testing involves “comparing member photos to smaller galleries, rather than the millions used in NIST scenarios,” means its technology “remains accurate and suitable for secure environments like airports.”)

Even a very small error rate “in a system that is deployed hundreds of thousands of times a day” could still leave “a lot of people” at risk of misidentification, explains Hannah Quay-de La Vallee, a technologist at the Center for Democracy & Technology, a nonprofit based in Washington, DC. All this could make Clear’s services inaccessible to some—even if they can afford it, which is less likely given the recent increase in the subscription fee for travelers to $199 a year.

The free Clear Verified Platform is already giving rise to access problems in at least one partnership, with LinkedIn. The professional networking site encourages users to verify their identities either with an employer email address or with Clear, which marketing materials say will yield more engagement. But some LinkedIn users have expressed concerns, claiming that even after uploading a selfie, they were unable to verify their identities with Clear if they were subscribed to a smaller phone company or if they had simply not had their phone number for enough time. As one Reddit user emphasized, “Getting verified is a huge deal when getting a job.” LinkedIn said it does not enable recruiters to filter, rank, or sort by whether a candidate has a verification badge, but also said that verified information does “help people make more informed decisions as they build their network or apply for a job.” Clear only said it “works with our partners to provide them with the level of identity assurance that they require for their customers” and referred us back to LinkedIn. 

An opt-in future that may not really be optional 

Maybe what’s worse than waiting in line, or even being cut in front of, is finding yourself stuck in what turns out to be the wrong line—perhaps one that you never want to be in. 

That may be how it feels if you don’t use Clear and similar biometric technologies. “When I look at companies stuffing these technologies into vending machines, fast-food restaurants, schools, hospitals, and stadiums, what I see is resignation rather than acceptance—people often don’t have a choice,” says Gilliard, the privacy and surveillance scholar. “The life cycle of these things is that … even when it is ‘optional,’ oftentimes it is difficult to opt out.”

And while the stakes may seem relatively low—Clear is, after all, a voluntary membership program—they will likely grow as the system is deployed more widely. As Seidman Becker said on Clear’s latest earnings call in early November, “The lines between physical and digital interactions continue to blur. A verified identity isn’t just a check mark. It’s the foundation for everything we do in a high-stakes digital world.” Consider a job ad posted by Clear earlier this year, seeking to hire a vice president for business development; it noted that the company has its eye on a number of additional sectors, including financial services, e-commerce, P2P networking, “online trust,” gaming, government, and more. 

“Increasingly, companies and the government are making the submission of your biometrics a barrier to participation in society,” Gilliard says. 

This will be particularly true at the airport, with the increasing ubiquity of facial recognition across all security checks and boarding processes, and where time-crunched travelers could be particularly vulnerable to Clear’s sales pitch. Airports have even privately expressed concerns about these scenarios to Clear. Correspondence from early 2022 between the company and staff at SFO, released in response to a public records request, reveals that the airport “received a number of complaints” about Clear staff “improperly and deceitfully soliciting approaching passengers in the security checkpoint lanes outside of its premises,” with an airport employee calling it “completely unacceptable” and “aggressive and deceptive behavior.” 

Of course, this isn’t to say everyone with a Clear membership was coerced into signing up. Many people love it; the company told MIT Technology Review that it had a nearly 84% retention rate earlier this year. Still, for some experts, it’s worrisome to think that what Clear users are comfortable with ends up setting the ground rules for the rest of us. 

“We’re going to normalize potentially a bunch of biometric stuff but not have a sophisticated conversation about where and how we’re normalizing what,” says Young. She worries this will empower “actors who want to move toward a creepy surveillance state, or corporate surveillance capitalism on steroids.” 

“Without understanding what we’re building or how or where the guardrails are,” she adds, “I also worry that there could be major public backlash, and then legitimate uses [of biometric technology] are not understood and supported.”

But in the meantime, even superfans are grumbling about an uptick in wait times in the airport’s Clear lines. After all, if everyone decides to cut to the front of the line, that just creates a new long line of line-cutters.

Health Crisis Drives $50 Million Supplement CEO

Dean Brennan says a diet of beer, pizza, and fast food led to his ulcerative colitis. His doctors diagnosed it years ago in his twenties and told him he’d need medications for life. But Brennan decided otherwise.

“I didn’t want to take lifelong medication,” he told me. “It sparked my passion for health and led me to want to help others.”

Fast forward to 2024, and Brennan is the CEO of Heart & Soil, a nutritional supplement company doing $50 million in annual revenue.

In our recent conversation, he addressed his journey to Heart & Soil, key supplement ingredients, supply chain challenges, and more. The entire audio is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Give us a rundown of what you do.

Dean Brennan: I’m the CEO of Heart & Soil, a nutritional supplements company. I entered ecommerce in 2020 with no experience, coming from a background in filmmaking.

I got involved with the company from my personal health journey. In my twenties, I was diagnosed with ulcerative colitis, and doctors told me I’d need medication for life. I grew up eating home-cooked, natural foods, although in college I consumed a lot of beer, pizza, and fast food.

I didn’t want to take lifelong medication. It sparked my passion for health and led me to want to help others who suffer from conditions like psoriasis, Crohn’s disease, and eczema.

Heart & Soil offers supplements containing nature-based multivitamins made from bovine organs sourced from regenerative farms, initially in New Zealand and now also from the U.S.

Bandholz: How did you get connected with Heart & Soil?

Brennan: I was aware of Paul Saladino, our founder, but not the company. He’s a board-certified physician and a nutrition specialist. I followed him on social media while experimenting with a carnivore diet. I admired his ability to simplify complex health concepts and share them in an engaging way.

In 2020, I met Paul by chance, along with two employees who are now our chief research officer and head of operations. At the time, the company hadn’t launched yet, and I offered feedback on its prototype product. Initially, I wasn’t looking for a position in the company, but I was passionate about their mission.

Later that year, after my persistence, Paul brought me on board the day the company launched. I printed shipping labels and prepared the orders. Within three months, I had worked my way into a bigger role.

The team was small then — Paul, me, and three others. We worked out of a rental house in West Austin, packing and shipping supplements ourselves. We grew quickly. Paul realized his expertise was podcasting and researching, not operations. He assigned those responsibilities to me by January 2021.

Bandholz: How did you earn Paul’s trust so quickly?

Brennan: It was a gradual transition. Paul left for a trip to Africa. Then there was a massive ice storm in Austin, and he couldn’t return. Eventually, he went to Costa Rica and decided to stay there, leaving me to run the business. I think he trusted me because I showed up every day, worked hard, and didn’t ask for anything.

The transition was easy. I was nervous about how the team would react, but they were all on board. We’ve worked well together ever since.

Bandholz: How do you spread awareness beyond Paul’s podcast audience?

Brennan: Only about 30% of our customers come from Paul’s audience, with the same percentage coming through word of mouth. Our product works, and we’ve received hundreds of customer success stories. One of our strengths is personalized customer service. Our team of health guides offers one-on-one support, which has led to word-of-mouth referrals. People often tell others about us, even if they haven’t purchased our products themselves.

We also started another podcast called Radical Health Radio, and we’re producing films for YouTube. Our documentary on seed oils will be released next month.

Bandholz: What’s your supply chain like?

Brennan: Our long-term goal is to build a U.S.-based supply chain to produce all the organs needed for our supplements. In 2020, nothing like this existed in the U.S., so we sourced from New Zealand, where regenerative farming is common. But we’ve worked hard over the last four years to develop U.S. suppliers, supporting American farmers.

There’s a huge education gap in the U.S. regarding organ consumption. Around the world, most cultures consume organs regularly. We hope that educating consumers can drive demand for better products and ingredients.

When consumers ask for healthier alternatives, large companies will have to respond. This movement isn’t just about our products but about supporting sustainable farming practices and improving public health.

Bandholz: Where can people buy your supplements and follow you?

Brennan: Our ecommerce site is Heartandsoil.co. You can follow me on X and LinkedIn.

Charts: Ecommerce in Europe 2024

Total B2C ecommerce sales in Europe will grow 8% in 2024, reaching €958 billion ($1.02 trillion), up from €887 billion in 2023. That’s according to the “European E-commerce Report 2024” (PDF) from Ecommerce Europe, an association representing 150,000 companies selling consumer goods or services online in that continent.

The report encompasses 38 countries and includes data and trends surrounding internet penetration, e-shoppers, and B2C ecommerce sales. The report’s data comes from direct collaboration, interviews, and questionnaires with national ecommerce associations across the continent.

According to the data, 71% of European internet users shopped online in 2023, increasing slightly to a projected 72% in 2024.

In addition, The Netherlands has the highest share of internet users who buy online (92%), followed by Norway (91%) and Denmark (89%).

Moreover, the report also looks at data for the 27 E.U. member countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.

According to the data, the most popular categories for E.U. internet shoppers in 2023 were “Clothes, shoes, accessories” (70%), followed by “Multimedia: music, films, books, games” (48%).

Supply.co Founder on Life after the Sale

Patrick Coddou’s entrepreneurial journey is impressive. In 2015 he launched Supply, a direct-to-consumer seller of razors and shaving goods, and then sold the business in 2022. He conceived the idea, hired staff, scaled revenue, and exited profitably.

His journey is incomplete, however. His talents apply to seemingly any industry, but his identity for years was tied to Supply. He’s now adjusting and charting his next moves.

Patrick is among the most popular guests on the podcast, starting in 2020 and followed by appearances in 2021, April 2022, and October 2022. In this recent conversation, he shares his post-Supply life, the emotions of stepping away, and looking forward.

Our entire audio is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: Update us on what you’ve been up to.

Patrick Coddou: It’s been quite a journey. I was the founder and CEO of a shaving company called Supply, which I sold a little over two years ago. After the sale, I stayed with the company for about a year, running the business and seeing it grow. I’m currently the head of marketing at a snow ski startup called M1 Skis. It’s been a bit of a roller coaster, but in a good way.

Bandholz: You took a step back from social media, particularly X. Why?

Coddou: After the sale, I hit burnout. I didn’t consciously decide to leave X — I just stopped engaging. Burnout comes with apathy and disinterest in things that once excited you, and X was one of those things. I stayed involved with Supply for a year after the sale, though, and it was productive. We doubled our top- and bottom-line numbers.

I had built a strong team, especially a capable head of marketing, Trace Crawford, who took a lot off my plate. As the year progressed, I became more of a leader and less of a doer, which helped me navigate the burnout. That was a big part of the transition.

Bandholz: How does leadership change when you stop doing everything yourself?

Coddou: It helped that I no longer had ownership, so I didn’t carry the same emotional weight. However, I was still financially motivated, as an earn-out was tied to the business’s performance. That allowed me to guide the team without micromanaging. They knew what needed doing, and I let them figure out how. Our team was solid; no one left that year, and the company continued to perform well.

Bandholz: You’re now outside of Supply. How has your perspective changed?

Coddou: My earn-out ended in August, but I had already stepped away from day-to-day operations a year prior. Trace took over as CEO, and I stayed on as a consultant. My role now includes filming ads and offering strategic advice. I have zero regrets about selling the business — it was the right move for me, my family, and the company.

But stepping away did force me to confront my identity. I hadn’t realized how much of my self-worth I tied to being the “razor guy” until that was gone. After the sale, I experienced a sense of joy, followed by a profound period of questioning and even depression. After the burnout, I felt lost, unsure of what I wanted to do next, and hesitant to return to ecommerce.

Bandholz: Why do entrepreneurs feel unfulfilled after selling their business?

Coddou: Many entrepreneurs believe that selling their business will bring happiness, but that’s rarely true. I attended the Main Street Summit, where we discussed how money, success, and fame don’t bring joy.

I’ve realized that selling Supply has brought me financial comfort and freedom but didn’t provide lasting happiness. Work is essential for finding joy and purpose, and I’ve come to appreciate that I need to be building something, whether a business or a personal project, to feel fulfilled.

Bandholz: Tell me about your role at M1 Skis. Was this a deliberate direction or an opportunity that fell into your lap?

Coddou: It was a bit of both. I’m running marketing for M1 Skis, a startup in its early stages. When I joined, there was almost no public awareness of the company. I’m responsible for building the brand from scratch, which I love doing. I work part-time, remotely, and for a friend. It’s a perfect fit. Initially, I hesitated to return to work, but this opportunity was too good to pass up.

Bandholz: How do you approach marketing for M1 Skis compared to Supply?

Coddou: The marketing strategies are surprisingly similar. At Supply, we sold high-end razors, which required educating customers about why they should invest in a more expensive product than competitors. It’s the same challenge with M1 Skis.

Unlike anything on the market, we make our skis from solid aluminum. They’re more expensive than traditional skis, and people are skeptical about the technology. My job is to explain why our product is worth the investment and build customer trust through education and engagement.

The experience has been great. I get to focus on the things I enjoy — like building the brand — without dealing with the headaches of payroll or invoices. The best part is that I don’t lose sleep like I did with Supply. I’m still invested in M1’s success, but it doesn’t consume my thoughts 24/7. I can fully check out when I’m not working, which is a huge relief.

Bandholz: Could you envision starting another business?

Coddou: I could, but I would approach it very differently. I would create a small, manageable business with minimal stress. Something that aligns with my lifestyle, even if it means making less money. It would be niche, high-margin, and not reliant on constant social media or inventory management. I want a business that works for me, not one that adds unnecessary complications to my life.

Bandholz: You’re advocating for simplicity.

Coddou: Exactly. The complexity of Supply became overwhelming. We used 30 apps on our Shopify store and multiple social media channels. It was a lot to manage. At M1 Skis, I’ve kept things simple. We’re using Shopify Email instead of a more complex service like Klaviyo, and I haven’t installed any extra apps. This approach allows me to focus on building a great product and telling its story.

Bandholz: Where can people buy these skis and reach out to you?

Coddou: M1skis.com. I’m on LinkedIn and X.

Charts: Global Ecommerce Trends Q3 2024

The internet is connecting the world. As of July 2024, 5.45 billion people —  67.1% of the global population — were internet users. Among them, 5.17 billion (63.7%) were active on social media.

Worldwide retail ecommerce growth through 2029 will fluctuate, with the overall trend being positive, according to Statista. The food segment will experience the highest revenue, reaching an estimated $1.23 trillion by the end of the period.

In addition, Turkey will experience the most retail ecommerce growth from 2024 to 2029, with a compound annual growth through 2029 of 11.6%. India and Brazil are also among the world’s fastest-growing ecommerce markets, each projected to have a CAGR exceeding 11%.

Moreover, during Q2 2024, online shoppers worldwide spent an average of approximately $2.78 per visit across all categories. Health and beauty led in spending per visit at $3.27, followed by home furniture at $3.09 per visit.

The ‘Why’ of Man Flow Yoga

To Dean Pohlman, long-term business success stems from a purpose. His is to help men improve their health and fulfillment through fitness and personal connections. That’s the mission of Man Flow Yoga, the company he founded in 2012, which offers memberships to workout programs and a paid community.

Pohlman, a former college lacrosse player, is an authority on yoga instruction for men and a published author on the topic.

He first appeared on the podcast in 2021. In this our second conversation, he shares client success stories, YouTube tactics, and the “why” behind his business.

The entire audio of our discussion is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: Give us a quick rundown on who you are.

Dean Pohlman: I own a company called Man Flow Yoga. We sell memberships to Yoga workout programs for men.

I’m a former collegiate lacrosse player. I discovered yoga by accident but noticed its benefits after consistent practice. However, I saw that men weren’t engaging with it much, especially because it wasn’t presented in a way that resonated with them. So, I created a brand focusing on fitness-oriented yoga tailored for men. I initially launched a YouTube channel and a Facebook page.

Over time, I developed paid membership workouts for men — primarily those in their 40s, 50s, and 60s. They found they couldn’t do their regular workouts due to aging and needed to focus on flexibility and foundational strength. Our programs help with flexibility and alleviate pain in, typically, the lower back, shoulders, and knees. The ultimate goal is to enable men to stay active and independent as long as possible, whether playing with their kids or staying mobile as they age.

I’ve been interviewing members for our podcast, “The Better Man.” One memorable story is from a guy who weighed 300 pounds at the onset of Covid. He started a yoga program alongside daily dog walks and lost 75 pounds within a year. What stands out from these stories is the consistency people find in exercise. They enjoy it and feel good afterward, which encourages them to continue. This creates a ripple effect, where they start improving other areas of their lives like diet or adding in more physical activities.

Bandholz: What do your workout programs look like?

Pohlman: They can be as few as two to three times per week or as many as five or six. Our sessions aren’t long — typically 30 to 40 minutes. We have beginner programs that start at 15 to 20 minutes. People start noticing changes after just a few weeks, especially in how they feel.

For example, back pain disappears. These physical improvements motivate people to stay consistent. When you feel better and have more energy, it’s easier to continue instead of focusing solely on aesthetics, which takes much longer to notice.

Bandholz: You’ve done a great job of building a community.

Pohlman: I’m proud of the Facebook Group we’ve built, though it took a lot of time. It’s a supportive community of about 7,000 men who aren’t afraid to be vulnerable and share personal struggles. When someone posts about not being consistent with workouts, they’re met with understanding, not judgment. People relate to the same struggles, which fosters a sense of camaraderie.

I launched the group in 2013, and new members are always welcome. However, to maintain its quality, we keep the group exclusive to paying members — whether they join a challenge, sign up for a full membership, or purchase a book.

We consistently remind members about the community through emails, video mentions, and our 90-day onboarding series. The ongoing engagement keeps people connected and accountable.

Bandholz: How’s your YouTube channel performing?

Pohlman: Despite having over 500,000 subscribers, engagement is relatively low, although new videos typically get 3,000 to 10,000 views in the first week. Some go viral. Our morning yoga videos have recently gained traction. Short-form content is also helping with the algorithm. We went from gaining about 3,000 subscribers monthly to 10,000 last month. Certain topics, like sexual wellness, perform exceptionally well.

Bandholz: Do you collaborate with other brands?

Pohlman: Collaborations need to feel organic. I prefer working with people I genuinely connect with and would hang out with outside of business. One example is Anthony Balduzzi from Fit Father Project. We’ve been collaborating for about two years; our products complement each other. Beyond business, he’s a friend. These types of authentic relationships work well for long-term success, and that’s the approach I take.

Bandholz: What’s your long-term vision for Man Flow Yoga?

Pohlman: I want the business to expand beyond yoga into a broader men’s wellness brand. I’ve started introducing mental and emotional wellness topics on the podcast, but I want to incorporate more of that. We currently offer structured programs via an app and website, but everything is self-paced. I want to introduce more guided support — something more hands-on. While we have customer support and a Facebook Group, a more direct assistance model could benefit our members.

Bandholz: What’s the “why” behind your business?

Pohlman: Many men haven’t done the introspective work to understand their desires and what drives them. It’s about recognizing that the things I truly want — family, freedom, joy — are already within reach. I don’t need to wait for a business milestone to achieve them.

Most men believe they must accomplish something before feeling fulfilled, but that’s a trap. Once you realize you can have what you want, life becomes easier. Authenticity is key. People can sense inauthenticity, and I believe businesses built on genuine connections and purpose are more successful in the long run.

Bandholz: Where can people follow you?

Pohlman: Visit ManFlowYoga.com to get started. You can find me on all the major platforms — YouTube, Instagram, Facebook, and TikTok.

The surprising barrier that keeps us from building the housing we need

Ahead of abortion access, ahead of immigration, and way ahead of climate change, US voters under 30 are most concerned about one issue: housing affordability. And it’s not just young voters who are identifying soaring rents and eye-watering home sale prices as among their top worries. For the first time in recent memory, the cost of housing could be a major factor in the presidential election.  

It’s not hard to see why. From the beginning of the pandemic to early 2024, US home prices rose by 47%. In large swaths of the country, buying a home is no longer a possibility even for those with middle-class incomes. For many, that marks the end of an American dream built around owning a house. Over the same time, rents have gone up 26%.

Vice President Kamala Harris has offered an ambitious plan to build more: “Right now, a serious housing shortage is part of what is driving up cost,” she said last month in Las Vegas. “So we will cut the red tape and work with the private sector to build 3 million new homes.” Included in her proposals is a $40 billion innovation fund to support housing construction.

Former president Donald Trump, meanwhile, has also called for cutting regulations but mostly emphasizes a far different way to tackle the housing crunch: mass deportation of the immigrants he says are flooding the country, and whose need for housing he claims is responsible for the huge jump in prices. (While a few studies show some local impact on the cost of housing from immigration in general, the effect is relatively small, and there is no plausible economic scenario in which the number of immigrants over the last few years accounts for the magnitude of the increase in home prices and rents across much of the country.)

The opposing views offered by Trump and Harris have implications not only for how we try to lower home prices but for how we view the importance of building. Moreover, this attention on the housing crisis also reveals a broader issue with the construction industry at large: This sector has been tech-averse for decades, and it has become less productive over the past 50 years.

The reason for the current rise in the cost of housing is clear to most economists: a lack of supply. Simply put, we don’t build enough houses and apartments, and we haven’t for years. Depending on how you count it, the US has a shortage of around 1.2 million to more than 5.5 million single-family houses.

Permitting delays and strict zoning rules create huge obstacles to building more and faster—as do other widely recognized issues, like the political power of NIMBY activists across the country and an ongoing shortage of skilled workers. But there is also another, less talked-about problem that’s plaguing the industry: We’re not very efficient at building, and we seem somehow to be getting worse.

Together these forces have made it more expensive to build houses, leading to increases in prices. Albert Saiz, a professor of urban economics and real estate at MIT, calculates that construction costs account for more than two-thirds of the price of a new house in much of the country, including the Southwest and West, where much of the building is happening. Even in places like California and New England, where land is extremely expensive, construction accounts for 40% to 60% of value of a new home, according to Saiz.

Part of the problem, Saiz says, is that “if you go to any construction site, you’ll see the same methods used 30 years ago.”

The productivity woes are evident across the construction industry, not just in the housing sector. From clean-energy advocates dreaming of renewables and an expanded power grid to tech companies racing to add data centers, everyone seems to agree: We need to build more and do it quickly. The practical reality, though, is that it costs more, and takes more time, to construct anything.

For decades, companies across the industry have largely ignored ways they could improve the efficiency of their operations. They have shunned data science and the kinds of automation that have transformed the other sectors of the economy. According to an estimation by the McKinsey Global Institute, construction, one of the largest parts of the global economy, is the least digitized major sector worldwide—and it isn’t even close.

The reality is that even if we ease the endless permitting delays and begin cutting red tape, we will still be faced with a distressing fact: The construction industry is not very efficient when it comes to building stuff.

The awful truth

Productivity is our best measure of long-term progress in an industry, at least according to economists. Technically, it’s a measure of how much a worker can produce; as companies adopt more efficient practices and new technologies, productivity grows and businesses can make stuff (in this case, homes and buildings) faster and more cheaply. Yet something shocking has happened in the construction industry: Productivity seems to have stalled and even gone into reverse over the last few decades.

In a recent paper called “The Strange and Awful Path of Productivity in the US Construction Sector,” two leading economists at the University of Chicago showed that productivity growth in US construction came to a halt beginning around 1970. Productivity is notoriously difficult to quantify, but the Chicago researchers calculated it in one of the key parts of the construction business: housing. They found that the number of houses or total square footage (houses are getting bigger) built per employee each year was flat or even falling over the last 50 years. And the researchers believe the lack of productivity growth holds true for all different types of construction.

Chad Syverson, one of the authors, admits he is still trying to pinpoint the reason—“It’s probably a few things.” While he says it’s difficult to quantify the specific impact of various factors on productivity, including the effects of regulatory red tape and political fights that often delay construction, “part of the industry’s problem is its own operational inefficiency,” he says. “There’s no doubt about it.” In other words, the industry just isn’t very innovative.

The lack of productivity in construction over the last half-century, at a time when all other sectors grew dramatically, is “really amazing,” he says—and not in a good way.

US manufacturing, in contrast, continued growing at around 2% to 3% annually over the same period. Auto workers, as a result, now produce far more cars than they once did, leading to cheaper vehicles if you adjust for inflation (and, by most measures, safer and better ones).

Productivity in construction is not just a US problem, according to the McKinsey Global Institute, which has tracked the issue for nearly a decade. Not all countries are faring as badly as the US, but worldwide construction productivity has been flat over the last few decades, says Jan Mischke, who heads the McKinsey work.

Beyond adding to the costs and threatening the financial viability of many planned projects, Mischke says, the lack of productivity is “reflected in all the mess, time and cost overruns, concerns about quality, rework, and all the things that everyone who has ever built anything will have seen.” 

The nature of construction work can make it difficult to improve longstanding processes and introduce new technologies, he says: “Most other sectors become better over time by doing the same thing twice or three times or 3 million times. They learn and improve. All that is essentially missing in construction, where every single project starts from scratch and reinvents the wheel.”

Mischke also sees another reason for the industry’s lack of productivity: the “misaligned incentives” of the various players, who often make more money the longer a project takes.

Though the challenges are endemic to the business, Mischke adds that builders can take steps to overcome them by moving to digital technologies, implementing more standardized processes, and improving the efficiency of their business practices.

“Most other sectors become better over time by doing the same thing twice or three times or 3 million times. All that is essentially missing in construction.”

It’s an urgent problem to solve as many countries race to build housing, expand clean-energy capabilities, and update infrastructure like roads and airports. In their latest report, the McKinsey researchers warn of the dangers if productivity doesn’t improve: “The net-zero transition may be delayed, growth ambitions may be deferred, and countries may struggle to meet the infrastructure and housing needs for their populations.”

But the report also says there’s a flip side to the lack of progress in much of the industry: Individual companies that begin to improve their efficiency could gain a huge competitive advantage.

Building on the data

When Jit Kee Chin joined Suffolk Construction as its chief data officer in 2017, the title was unique in the industry. But Chin, armed with a PhD in experimental physics from MIT and a 10-year stint at McKinsey, brought to the large Boston-based firm the kind of technical and management expertise often missing from construction companies. And she recognized that large construction projects—including the high-rise apartment buildings and sprawling data centers that Suffolk often builds—generate vast amounts of useful data.

At the time, much of the data was siloed; information on the progress of a project was in one place, scheduling in another, and safety data and reports in yet another. “The systems didn’t talk to each other, and it was very difficult to cross-correlate,” says Chin. Getting all the data together so it could be understood and utilized across the business was an early task.

“Almost all construction companies are talking about how to better use their data now,” says Chin, who is currently Suffolk’s CTO, and since her hiring, “a couple others have even appointed chief data officers.” But despite such encouraging signs, she sees the effort to improve productivity in the industry as still very much a work in progress.  

One ongoing and obvious target: the numerous documents that are constantly being revised as they move along from architect to engineers to subcontractors. It’s the lifeblood of any construction project, and Chin says the process “is by no means seamless.” Architects and subcontractors sometimes use different software; meanwhile, the legally binding documents spelling out details of a project are still circulated as printouts. A more frictionless flow of information among the multitude of players is critical to better coordinate the complex building process.

Ultimately, though, building is a physical activity. And while automation has largely been absent from building trades, robots are finally cheap enough to be attractive to builders, especially companies facing a shortage of workers. “The cost of off-the-shelf robotic components has come down to a point where it is feasible to think of simple robots automating a very repetitive task,” says Chin. And advances in robotic image recognition, lidar, AI, and dexterity, she says, mean robots are starting to be able to safely navigate construction sites.

One step in construction where digital designs meet the physical world is the process of laying out blueprints for walls and other structures on the floor of a building. It’s an exacting, time-consuming manual practice, prone to errors.

The Dusty Robotics field printer marks the layout for walls and other structures.
DUSTY ROBOTICS

And startups like Dusty Robotics are betting it’s an almost perfect application for a Roomba-like robot. Tessa Lau, its CEO, recalls that when she researched the industry before founding the company in 2018, she was struck by seeing “people on their hands and knees snapping chalk lines.”

Based in Silicon Valley, the company builds a box-shaped machine that scoots about a site on sturdy wheels to mark the layout. Though the company often markets it as a field printer to allay any fears about automation, it’s an AI-powered robot with advanced sensors that plan and guide its travels.

Not only does the robot automate a critical job, but because that task is so central in the construction process, it also helps open a digital window into the overall workflow of a project.

A history lesson

Whatever the outcome of the upcoming election, don’t hold your breath waiting for home prices to fall; even if we do build more (or somehow decrease demand), it will probably take years for the supply to catch up. But the political spotlight on housing affordability could be a rare opportunity to focus on the broad problem of construction productivity.  

While some critics have argued that Harris’s plan is too vague and lacks the ambition required to solve the housing crisis, her message that we need to build more and faster is the right one. “It takes too long and it costs too much to build. Whether it’s a new housing development, a new factory, or a new bridge, projects take too long to go from concept to reality,” Harris said in a speech in late September. Then she asked: “You know long it took to build [the Empire State Building]?”

Harris stresses cutting red tape to unleash a building boom. That’s critical, but it’s only part of the long-term answer. The construction of the famous New York City skyscraper took just over a year in 1931—a feat that provides valuable clues to how the industry itself can finally increase its productivity.

The explanation for why it was built so quickly has less to do with new technologies—in fact, the engineers mostly opted for processes and materials that were familiar and well-tested at the time—and more to do with how the project leaders managed every aspect of the design and construction process for speed and efficiency. The activity of the thousands of workers was carefully scheduled and tracked, and the workflow was highly choreographed to minimize delays. Even the look of the 1,250-foot building was largely a result of choosing the fastest and simplest way to build.

To a construction executive like Suffolk’s Chin, who estimates it would take at least four years to construct such a building today, the lessons of the Empire State Building resonate, especially the operational discipline and the urgency to finish the structure as quickly as possible. “It’s a stark difference when you think about how much time it took and how much time it would take to build that building now,” she says.

If we want an affordable future, the construction business needs to recapture that sense of urgency and efficiency. To do so, the industry will need to change the way it operates and alter its incentive structures; it will need to incorporate the right mix of automation and find financial models that will transform outdated business practices. The good news is that advances in data science, automation, and AI are offering companies new opportunities to do just that.

The hope, then, is that capitalism will do capitalism. Innovative firms will (hopefully) build more cheaply and faster, boost their profits, and become more competitive. Such companies will prosper, and others will begin to mimic the early adopters, investing in the new technologies and business models. In other words, the reality of seeing some builders profit by using data and automation will finally help drag the construction industry into the modern digital age.

4x Founder Debuts Ecommerce Intel Tool

In late 2020 I interviewed a developer who had launched a Shopify app to send manual text messages to cart abandoners. Eighteen months later we spoke again, this time to discuss his sale of that company and purchase of another, an app for creating upsells in a Shopify checkout.

By early 2023 he had sold the second company and launched a third one, a coupon-leak recovery app.

And that brings me to my fourth conversation with Dennis Hegstad. He has shut down the coupon-leak business and started his fourth, a data provider for the ecommerce industry called Internet Research Unit. What, exactly, is Internet Research Unit? I asked him that question and more when we recently spoke.

The entire audio of our conversation is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Give us an update on what’s happening in your world.

Dennis Hegstad: In 2021, I sold LiveRecover, our SMS app for Shopify. That was our first exit in ecommerce. Then I sold another app, OrderBump, just 100 days after buying it in 2022. That sale was pretty much luck.

In 2023 I launched Vigilance, a coupon-code leak protection app, but that business failed. Shopify updated its checkout system, ultimately killing Vigilance, so we shut it down. We offered to return the investors’ money, but they said, “Try something else.” That’s when we started building Internet Research Unit earlier this year. Those same Vigilance investors are part of it.

Bandholz: What’s Internet Research Unit?

Hegstad: It’s a data platform for the ecommerce industry. Our primary users are brand owners, agencies, app developers, and financiers. Brands can track competitors’ revenue, units sold, popular SKUs, app stacks, and more. They can set up alerts to track competitors’ sales or app usage changes to guide product launches or strategic decisions. Agencies and app developers can use the data for lead generation — tracking which brands use specific services or technologies, such as Klaviyo, and which don’t. Financiers can assess trends or identify struggling companies they might want to invest in or acquire.

Our product is high-end, priced around $500 a month, so it’s not for beginners. It’s aimed at established companies who want to fine-tune their strategies.

Our data is public; brands cannot hide it from our platform. We can track compliance-related issues, like price manipulation or accessibility compliance, so companies can address potential problems before they lead to lawsuits.

We have ways of accurately estimating sales and breaking it down by SKU. For example, if a brand sells leggings, we can report which colors and sizes are selling best. That way, competitors can focus on high-performing products.

Bandholz: The front-end design of your software apps, including Internet Research Unit, is terrific. What’s your design philosophy?

Hegstad: We don’t use professional designers on the site. My co-founder and I handle design and prioritize aesthetics. Stripe pioneered the trend of beautifully designed SaaS platforms, and we follow that approach. Software should feel exciting to use, not boring or outdated.

We aim for a cyberpunk vibe with Internet Research Unit — something that feels futuristic and appeals to tech-savvy users. We even started selling a bit of merchandise — shirts and hats — with designs inspired by this aesthetic. We did hire a designer to create cyberpunk-inspired shirt art. One says “anti-algorithm” because we feel like everyone’s life is ruled by algorithms these days. It’s a fun way to rebel against that.

We’ve considered other branded products, such as ZYN-style [nicotine-pouch] cans with USB drives inside. But we’re focused on growing the software business before diving deep into merchandise. If the software performs well, we might reinvest some of the profits into the brand side.

Bandholz: Is the platform fully built?

Hegstad: There’s more to come. We launched in March, and we’ve slowly onboarded users. In November, we’ll open it to the public. We want to add funding data so our users can find brands that have raised capital but are underperforming. That would help venture capitalists or merger and acquisition teams identify struggling companies that need help.

We’re not trying to shoot for the stars. We want to build something fun and keep it going. Reaching $5 million in annual revenue would be great. We love the business — it feels challenging, and there’s much to learn.

Bandholz: Where can people support you?

Hegstad: Our website is InternetResearchUnit.com. You can also find me on LinkedIn and X.

Software Founder Pivots to PPE Manufacturing

I’ve interviewed hundreds of entrepreneurs for this podcast. Most are problem solvers and optimists, confident in their ability to fulfill a need.

Take Lloyd Armbrust. He’s an editor turned software founder, having launched OwnLocal, a Y Combinator-backed portal for local newspapers.

When the pandemic hit, he observed doctors and nurses struggling to get protective gear. He thought, “This is ridiculous. How hard could it be to make these things?”

His solution was Armbrust American, an Austin, Texas-based manufacturer of personal protective equipment, which he launched in May 2020 and remains viable despite the dramatic drop in demand.

He and I recently spoke. He shared his lessons in manufacturing, ecommerce, and family-first priorities. Our entire audio is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Tell us who you are.

Lloyd Armbrust: My background is in media and software, but most prominently, I started a U.S.-based personal protective equipment manufacturing company in May 2020, at the onset of the pandemic. We produce U.S.-approved surgical masks, KN95 facemasks, and gloves. People said manufacturing couldn’t be done here and had to be in China, but we proved them wrong — though it’s been the hardest thing I’ve ever done.

When the pandemic hit in March 2020, my software business, OwnLocal, was slowing down. I saw how doctors and nurses struggled to get protective gear — some wore raincoats in emergency rooms. I thought, “This is ridiculous. How hard could it be to make these things?” So, I started researching and quickly learned it was much more difficult than I assumed.

I come from a software background, and I often say pushing pixels is easier than pushing atoms. If you want to scale software, click a few buttons on Amazon Web Services, and you’re ready. Manufacturing is a different beast. Yet we launched on Shopify and made a $1 million revenue in the first week, mainly because no one had masks in stock.

Bandholz: Did you have inventory ready, or was it a scramble?

Armbrust: We were producing masks but underestimated how hard fulfillment would be. We didn’t have a shipping system or proper label printers. I bought a label printer from Office Depot and tried to fulfill the first 100 orders. We had thousands of orders coming in, and it felt impossible. It took about three months to catch up.

This wasn’t about money. It was about solving a problem. Our mission from the start was to bring strategic manufacturing back to the U.S. All profits have gone back into the company. Today, consumer demand for masks has dropped significantly. We’re down to about $1.8 million in sales over the last 12 months compared to $7 million in January 2022 alone.

Bandholz: How do you manage a company with such a revenue drop?

Armbrust: It’s tough and demotivating. Scaling up and scaling down require the same skills — cutting costs and being ruthless. In the early days, our system was inefficient. We had 27 assembly machines, with 100 people running them to produce about a million units daily. Now, we’ve got five machines, each run by one person to output 200,000 units daily. So, we went from 27 machines and 100 employees to five machines and five employees, with the same production capacity.

We got lucky with our lease. The facility had been used by a defense contractor. When the pandemic hit, no one was leasing manufacturing space, so we got the space at a fraction of the cost. The owner wanted $50,000 a month for the space. It was really beautiful and big. We started at $5,000 monthly and worked up to $20,000, which they agreed on. Still, it was an 18-month lease. But by the time demand for PPE dropped, we were in prime real estate, right next to Amazon and Elon Musk’s Boring Company. We eventually moved to a facility on my ranch to save costs.

Bandholz: When you built that facility, what were your revenue projections, and where are you now?

Armbrust: We’re down to $1.8 million in annual consumer sales, but that’s only part of our business. We also manufacture for the government and other companies, but those contracts come with tighter margins — about 10-15%. The consumer side is more profitable and keeps us afloat.

When I built the facility, I had no idea where the bottom would be. China sells masks at prices lower than what it costs us to buy raw materials. They deliver masks to the U.S. for 1 cent each, while my raw materials cost more than that. The Chinese government subsidizes their manufacturers, covering costs like machines and even offering rebates. We can’t compete with that on price.

Ninety percent of medical gloves in the U.S. come from Malaysia and China. But before the pandemic, the U.S. didn’t produce any of these critical items.

Bandholz: You run the manufacturing business and OwnLocal, the publishing portal. You have six kids and a wife who also runs a business. How do you manage it all?

Armbrust: It’s all about priorities. My wife is at the top of my list, followed by my kids, and then making sure there’s money in the bank. I rank tasks every morning. I don’t focus on something that isn’t on that list. That can annoy some folks, but it keeps me sane. Work came before everything else in my first marriage, and I was unhappy.

Now, my family comes first. If my daughter wants to sit on my lap during an important business call, she’s in the meeting. I don’t apologize. I’m focused on enjoying life.

Bandholz: Where can people support you and reach out?

Armbrust: Armbrust.com. You can find me on X and LinkedIn.

Charts: Outlook of Global CEOs, Q3 2024

KPMG’s new “CEO Outlook” summarizes the survey results of 1,300 heads at large companies globally, including 400 in the United States, on their three-year outlook on enterprise and external economic growth. Per the report (PDF), U.S. CEOs remain optimistic about their companies’ long-term growth despite economic instability and geopolitical tensions.

Global CEO views on their organizations’ biggest risks reflect the rise of artificial intelligence technology and worldwide instability.

Also, when asked about the key trends that could hinder their organization’s success in the next three years, U.S. CEOs ranked aspects of AI as the most significant.

CEOs most commonly highlighted three key functional areas where their organizations plan to invest in generative AI over the next three years.