NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

AI Is Coming for This Age-Old Industry

Many business leaders don’t yet appreciate the speed at which AI is progressing—and how rapidly it’s moving both downstream and upstream in the labor task stack.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

Jan 5, 2026

 

I spoke recently at an annual meeting for owners and managers of large commercial construction firms and, of course, a great deal of the conversation was about the impacts of automation, robotics and AI on their industry. I came away from the meeting and the many side conversations with one overwhelming impression—these folks think that their industry will be one of the very last to be adversely impacted by AI because, as one guy put it, “software can’t swing a sledgehammer.” The necessity for large quantities of manual labor in all of their projects would be their salvation for the foreseeable future.

They had all seen charts projecting the relative degrees of exposure that various industries had to new technologies, and typically construction was at or near the bottom of the lists. They admitted that every few months they were seeing new tools, equipment, and computer-driven machines being introduced which augmented the abilities of their workers and took over certain manual functions, but they didn’t envision a time any time soon when those folks would actually be entirely replaced. Watching a mobile robot with an extendable arm equipped with a nail gun handle an entire ceiling of precise installations instead of some poor guy with a ladder, bursitis and a sore shoulder trying to do the same overhead job, but taking five times as long, tells you everything you need to know about where we’re ultimately headed.

My audience members were actually far more concerned about the fact that—in order to keep up with the growing national demand—and given the fact that their workforce was rapidly aging out, the construction industry will need more than 500,000 additional workers each year. I’ve repeatedly stressed the need for massive increases in vocational training starting in high school and, in many cases, entirely in lieu of an expensive, debt-infused and time-consuming traditional four-year college education.

It’s possible that the industry leaders are finally waking up to the fact that they can’t simply leave this issue up to the educators or frankly the government if they want something substantial and timely to be done about the labor shortages. Education is a business that’s too important and too valuable to be left in the hands of educators. Of course, because almost everything Trump does largely screws his own supporters, thousands of skilled “foreign” workers are being seized, arrested, deported or simply scared off these very job sites across the country by the masked ICE clowns, so the current labor shortages are getting worse every day.

I think the unfortunate aspect of this situation is that the target industries and operators don’t yet appreciate the speed at which the level of AI understanding and intelligence is progressing and how rapidly it’s moving both downstream and upstream in the labor task stack. I have some particular expertise and experience in this process because I watched a very similar progression in the auto insurance industry starting decades ago where computer-created estimates quickly replaced the manual work product of thousands of experienced adjusters.

The computers knew in minutes the work typically required for a given repair, the parts needed, the time required to perform the operations, and, of course, exactly what the total costs of the entire claim should be. If the damage was severe and the car was a total loss, the computers could calculate and make a settlement offer instantly. Veteran adjusters with years and years of field work were reduced to glorified picture takers of the wrecked vehicles involved. With the advent of the cell phone and the ability of computers to now read and interpret images, the claimants and insured themselves can submit photos and save everyone the time and costs of having adjusters travel to physically inspect the cars. When you add to this situation, the cumulative experience which all the computers and AI systems now have of thousands of prior wrecks and repairs based on similar, if not identical, vehicles, it’s possible for the systems to generate claim settlement offers on the fly and thereby save all of the parties weeks of costs and delays in resolving accident and theft claims.   

As I watch the costing processes on construction sites these days, the job cost “estimators” whose expertise is doing take-offs and other calculations to arrive at multi-million dollar cost estimates for entire construction projects, it’s clear that their days are also numbered, and the precision guesswork that they do will quite rapidly be supplemented and eventually entirely replaced by AI systems. This is another situation where their considerable and hard-earned knowledge and abilities will quickly be devalued in two respects: first, the nature of the work that they are charged with estimating will be quickly and radically changed; and second, the AI systems will have better and more immediate access to all of the costs of the components, materials, labor, etc. in real time as compared to the old-time estimators’ seat-of-the-pants guesses.

Here again, a simple example is the programmable robotic painting machine which can now tape and paint an entire room in a fraction of the prior time required with sufficient directions from the construction plans to move around doors, windows and other openings and precisely apply the exact amount of paint required. While an old-time estimator might know what time it took Joe, the painter, and his assistant to get the room done, the AI system already knows what it will cost for the robots to paint the entire building and how long it will take. This isn’t science fiction or some distant future vision; this is what’s happening on the ground every day right now. And finally, it takes one or two guys to watch the robots rather than a dozen guys to paint the place.

As the farmer said to his horse: “You won’t lose your job to a tractor, but to a horse who learns to drive a tractor.”

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

If Your Customers Aren’t Brand Ambassadors, You’re Doing It Wrong

As a new business builder, you learn sometimes that it’s not just your competition that stands in your way, but your own customers and their agendas.

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

Dec 9, 2025

 

Many years ago, when I was starting my first business helping insurance companies do a better and more accurate job of settling their vehicle loss claims, we began to acquire national brand-name clients. Initially, we would deal only with their local offices or branches, either as a pilot project or because other parts, locations and divisions of the same companies were handled by different managers or administrators. The plan was “land and expand” and we were anxious to grow. But the insurance industry is composed of a million different fiefdoms.  

When you’re an entrepreneur trying to expand your revenues, especially once you’ve demonstrated the real economic value and operational benefits of your products and service, you want to go after the biggest volume opportunities within the given organization. We started our company in Illinois working with State Farm and Allstate, but we knew from the beginning that the home run volume states were California, Texas, and Florida. New York and New Jersey also had great volumes, but they were hyper-regulated and rife with fraud problems. Even back in the 80s when we started, there were only a dozen or so giant insurers that mattered, and everyone knew who they were. State Farm and Allstate were among the top five by any measure, and their claims, volumes and customers were matters of public record. They were the biggest fish in the pond, and you always want to fish where the fish are. If fishing were easy, they’d call it catching.  

In our case, we were delivering—speeding up claims’ operations, eliminating adjuster errors and fraud, and, most importantly, saving the companies serious dollars on each and every claim. Once we started to process large claim volumes, the savings were so substantial that the insurers were actually worried about negative media attention and asked us to change the terminology on our monthly results reports from “savings” to “variances” so it wouldn’t appear to an outside reader that they were shorting their insureds and claimants by settling their claims for less than they were entitled to receive. But by every measurement, using our service was a win-win (more accurate settlements completed more quickly) and we found local supporters and sponsors in all of our customers. We were, however, in for a rude awakening. 
 
We assumed that our local champions would be interested in and excited about our plans to expand to their other offices across the country in the major markets. Expanding the financial benefits we were delivering locally to some of their largest offices would create even larger and more dramatic savings and other efficiencies for their firms. But they weren’t remotely interested in anything other than expanding within their own areas of responsibility and benefiting their own bottom lines. Their bonuses and promotions depend on the results in their own regions and on their own turf. Plus, they loved the service and attention they were getting and didn’t want that diluted by our focusing on our expansion elsewhere. And they made it very clear that going over their heads to pitch the decision makers at the corporate level would be really bad news for us.  
 
So, it was all about Decatur and forget about Dallas. Peoria was fine with them, but Pasadena was a hard pass. As a new business builder, you learn sometimes that it’s not just your competition that stands in your way, but often it’s your own customers and their own agendas as well. It’s easy to find people who will say “no” but difficult to figure out who within any given organization can say “yes.” Our champions often turned out to have cotton in their mouths when their peers from other regions called for references.
 
I encountered another somewhat less obnoxious, but no less costly, version of the problem where the left hand had no clue what the right hand was doing when we worked with a company starting in 2015 called Knowledge Hound that built systems to help large organizations manage and keep track of their own information. CPG companies in particular did countless customer surveys and focus groups over the years and literally didn’t know that some group, division, client or other partner had spent substantial sums of money on research like this and then buried the results in the bottom of someone’s drawer never to be seen again. It wasn’t deceptive; it was just that the various players didn’t understand the immense value that even older behavioral data and time-lapse results could have for ongoing and new projects and products. These businesses didn’t know how to find and employ expensive and important information within their own organizations or how to bridge the data gaps and silos that existed in their own companies.  

It’s going to be very interesting to see how well and how quickly A.I. tools are going to address and remedy this particular kind of problem. It should be one of the most appropriate and easily implemented applications, but the businesses are going to have to understand the critical need to share data and to build small language models of their own rather than getting sucked into costly attempts to boil the ocean with LLMs.
 
Smart companies don’t silo or sequester their information assets; they share them broadly for the greater good. Spreading the word – like lighting one candle from another – doesn’t diminish the first, it just doubles the illumination for all. 

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

If Carmakers Want to Sell EVs, They Need to Sell the Dealers First.

The lesson here is that, in many businesses, you need to get the sales team on board first; the buyers will follow. 

 

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@HOWARDTULLMAN1

 

In 1980 I started CCC Information Services, which is still the world leader in providing the automotive insurance industry with vehicle valuation data. Like many entrepreneurs, I struggled initially with a problem I couldn't anticipate. CCC's greatest early challenge was securing the cooperation and participation of tens of thousands of car dealers so that we could capture and incorporate their new and used vehicle information, and their actual inventories, into our valuation systems.

The premise was that real-time market data about the average asking price for a particular used car was the best and fairest way to establish the amount to be paid by an insurer in the event that a comparable vehicle was stolen or destroyed. Securing the dealers assistance turned out to be a very complicated task for reasons that are especially relevant today as automotive manufacturers, dealer ownership groups, and the last of the individual, old-time, family-owned dealerships confront the issues posed by the oncoming deluge of electric vehicles along with the emergence of new generations of owners, professional managers and operators.

Today most car dealers aren't really much interested in selling EVs;  in a recent survey, more than a third of them said they wouldn't offer an EV to their customers even if they could. Adding EVs, funding new staff training along with the incremental equipment costs necessary to maintain and service the new cars, building out new showrooms and display space, and facing uncertain near-term demand all mean that EVs aren't especially attractive undertakings. This is one of the major reasons that Tesla-- after lengthy battles with dealer groups, state regulators and local politicians who had been in the dealers' pockets for years-- built its own direct-to-consumer sales organization and its own outlets.

Talking to a car dealer (who is laser-focused on today's sales results) about a five-to-ten-year time horizon for substantial EV sales volume to develop is like trying to sell an anvil to a drowning man. It's not easy to sell these guys anything because they're world-class skeptics. They have the attention span of a typical teenager, the patience of a fruit fly, and they don't trust anyone-- especially to the extent that it concerns new technology. The U.S. goal of having 2/3 of the new cars sold here be EVs by 2032 seems like a pipe dream when you talk to most dealers. They don't have a clue as to how we're going to get from here to there.

To be honest, most established dealers today are fairly fat and happy with the way things have gone for them and their families for decades. They may have family and generational challenges, as do many other industries, but they've also had exclusive territories, scarce inventories, political protection, and very little price competition.  They don't like change, they don't like spending new money, and they're not really sold on the vehicles themselves.

We faced this kind of resistance and inertia when we first tried to introduce CCC.  The best way to value a car that had been stolen or destroyed (a total loss) was to find several existing comparable vehicles that were as close in age, features, and mileage to the lost car as possible. The insurer's adjuster could then point the insured or claimant to the available cars, give them a check based on the comparable values, and tell them where the cars could be found.

Our two-part pitch was pretty straightforward: (a) we'd do all the work; and (b) because we'd be handling hundreds of claimants every day who had just lost their cars, we could provide a steady stream of prospective customers who were interested in cars that were in their inventories and actually sitting on their lots -- and had insurance checks to pay for them. More importantly, even if the prospective buyer didn't want another version of the car they had been driving, they definitely needed a car, and they could be sold an alternative or even a new model. We thought that dealers would be drooling over a steady flow of prospects looking at their used car inventories. But what seemed like a no brainer took years to accomplish and to scale.

There were three main barriers to acceptance by the dealers, apart from their simple laziness and complacency. First, they regarded their used car operation as a necessary evil, not a part of the business that they really cared about. Second, they were reluctant to invest time, money, or effort into these cars (even something as simple as capturing each car's specific features, add-ons, and mileage) because they regarded them as fungible assets that would be on their lots for a short time and then, if not sold, sent to auction or scrapped. And third, used car sales represented a small percentage of their annual profits.

Even apart from the fact that there won't be too many used EVs any time soon (even though Elon is trying his best to make owning a Tesla an embarrassment), as noted above the dealers see plenty of similar problems with jumping into the new EV line of business. The manufacturers are trying very hard to push the EVs out the door-- a loaded dealer is a loyal dealer--because at scale they're much cheaper and easier to make than traditional cars and command higher prices. But the dealers are going to need to be bribed, cajoled, and eventually dragged across the finish line. The bright spot for the carmakers is that they have seen this situation before and have a pretty good game plan already prepared.

The first solution is the Carfax model. Dealers absolutely hated Carfax when it first emerged because the absolute last thing they wanted to do was to tell their customers about the nasty past histories of the used cars they were trying to sell them. So, Carfax jumped right over the dealers and went directly to consumers with a pitch that said only an idiot wouldn't check out a used car before they bought it. Today, almost every dealer in America offers customers a Carfax report (or one like it) as a free benefit and assurance. Tesla has already shown the way for the other OEMs to reach out to and convince the buyers of the benefits of the EVs in order to drive sufficient traffic and demand to win the dealers over.

The second solution is to move the whole discussion upstream in the consumers' minds and turn the EVs into a premium item and a status symbol (as Tesla has done so well) rather than simply a transportation tool. This is a page from the Japanese manufacturers who created entirely new and distinct imagery and marketing for their luxury cars to separate them from the public's perceptions about their legacy brand's quality and value. Lexus (Toyota) and Infiniti (Nissan) led this strategy with entirely separate stores and branding, and demonstrated the potential for substantially greater profits, renewed customer loyalty and improved dealer reputations. Today we see Genesis vehicles, which no one would ever suspect are a Hyundai product, independently marketed for the same reasons. Interestingly enough, at the other end of the economic spectrum, Hyundai also has just announced that Amazon will begin selling its cars online with delivery made by local dealers.

Finally, the manufacturers need to understand that, for a substantial period of time, they're going to have to share in the costs of the EV transition with the dealers. To jumpstart the adoption and use of the CCC system, we had to build our own internal sales staff -- not to sell the CCC system -- but to actually help dealers sell the cars to the insured buyers. Once they saw the program working, they eventually took it over for themselves.

The OEMs are going to have to finance equipment, subsidize EV training in both sales and service, and lobby nationally for extensive state and federal investments in charging stations if they want to win over the roughly 12,000 dealerships out there today who are sitting on the fence.

The bottom line is an old and simple rule: nothing good happens to a business without salespeople who are willing to sell your product.

 

Plus ça change, plus c'est la même chose

plus ça change, plus c'est la même chose

                    FOUNDED CCC - 1980

               FULL-TIME AT 1871 - 2013

1871 CEO Howard Tullman Speaks on Innovation to CCC Tech and Developer Teams