| Why are there no startups in the real estate construction sector?
It is a highly profitable business and yet there are no startups involved in constructing building, although the secondary works related to construction like B2B market place for construction materials or layout designing softwares startups are there but no startup is primary associated with real estate construction.
If there are any , please let me know! |
The construction industry's fundamental constraint is that it manufactures products that are too big to fit in highway lanes. That means they can't be shipped from a centrally-located factory to their final destinations. So they need to be built at the site, which means they need to be built with more labor-intensive methods (since it's too expensive to build a capital-intensive factory for just one unit of output).
Building components that are small enough to fit in highway lanes, on the other hand, are manufactured in centrally-located, capital-intensive factories and shipped to their final destinations, just like cars or electronics. Think: boilers, doors, windows, air handlers, etc.
And, like cars and electronics, these building component products are manufactured by a small number of big companies, rather than a large number of small companies. The equilibrium capital investment and company size is much different when the product is small enough to be manufactured in a central location and shipped.