If you asked me which industries would most likely benefit from Web 2.0 technologies I don’t think the construction industry would be anywhere near the top of my list.

If you asked Jason Langenauer, however, construction would be right up the top, which is why he founded Constrex.

What Constrex does is provide an online platform/marketplace for construction companies looking for subcontractors to complete their projects.

In some respects, they’re operating in a similar space to companies like Service Central and WhoCanDo, but instead of targeting small jobs (such as home renovators looking to find a builder), they’ve developed the platform to support the enterprise functions (such as document management, audit-trails, multi-user accounts) that construction companies need to find, and manage, subcontractors.

Aconex has made a massive businessout of focusing on providing online services to the construction industry as one of it’s core markets, so there’s definitely some potential there for Constrex and it’s online marketplace.

Langenauer’s background is in Engineering at large scale construction/mining companies, so he has a good idea of the need from the company side. It must have been this experience that led him to realise that a real problem for construction companies is finding good subcontractors.

Langenauer explains the rest of the Constrex offering:

The other half of the service we provide is market intelligence – finding subcontractors who provide the best value to the construction companies for the work they want subcontracted. Again, while WhoCanDo and ServiceCentral do this sort of thing at a small scale ( e.g. “We’ll find you a tradesman with a good reputation who can build your new driveway”), there’s nobody really doing this at the major projects level (“We’ll find you a subcontractor who has previous experience in building sewage pump stations to Sydney Water standards, has ISO9001-certified quality management systems, and can provide a safety management plan compliant with legislation and your client’s requirements”). That’s the niche Constrex is trying to fill.

A quick look at the pricing model shows that this market intelligence is obviously where Langenauer feels that the most value is being added by Constrex. Where companies award a tender to someone they’ve put on their bidders list the service is free - where they award it to someone Constrex finds for them, they pay  3.15% of the value of the subcontract as a comission to Constrex.

That 3.15% is big enough, and the size of the deals that the construction industry is working on large enough, to ensure that if Constrex can overcome the important critical mass issues that the business could be incredibly successful.