1 00:00:15,356 --> 00:00:23,436 Speaker 1: Pushkin. Houses in America are too expensive. There are a 2 00:00:23,436 --> 00:00:26,236 Speaker 1: lot of reasons for this. One reason that we've heard 3 00:00:26,276 --> 00:00:29,876 Speaker 1: a lot about in the past few years regulations, regulations 4 00:00:29,916 --> 00:00:32,076 Speaker 1: that make it hard to build enough housing in the 5 00:00:32,156 --> 00:00:35,436 Speaker 1: places people want to live. But there are other reasons 6 00:00:35,476 --> 00:00:39,196 Speaker 1: that we've heard less about. One other less discussed reason, 7 00:00:39,596 --> 00:00:44,516 Speaker 1: building houses is an inefficient process, and it's not getting better. 8 00:00:44,876 --> 00:00:48,476 Speaker 1: Over the past several decades. As so many industries got 9 00:00:48,516 --> 00:00:52,076 Speaker 1: so much more productive and more efficient, home building stayed 10 00:00:52,156 --> 00:00:56,676 Speaker 1: largely unchanged. People have been dreaming of transforming home building 11 00:00:56,716 --> 00:01:00,316 Speaker 1: for like one hundred years now, dreaming of using modern 12 00:01:00,516 --> 00:01:04,996 Speaker 1: industrial techniques to mass produce houses and bring down the cost. 13 00:01:05,396 --> 00:01:08,676 Speaker 1: In the nineteen twenties, for example, Buckminster Fuller even started 14 00:01:08,676 --> 00:01:11,156 Speaker 1: a company to do that, but it never really got 15 00:01:11,196 --> 00:01:14,276 Speaker 1: off the ground, never really worked. In the decades that followed, 16 00:01:14,316 --> 00:01:16,636 Speaker 1: other people tried similar things, and you know, we got 17 00:01:16,836 --> 00:01:20,556 Speaker 1: mobile homes and we got manufactured houses, but nobody has 18 00:01:20,796 --> 00:01:25,556 Speaker 1: really succeeded in fulfilling that vision that Buckminster Fuller had. 19 00:01:25,956 --> 00:01:28,756 Speaker 1: No one has figured out how to make beautiful homes 20 00:01:29,156 --> 00:01:32,796 Speaker 1: at scale in a way that is optimized for factory 21 00:01:33,076 --> 00:01:36,636 Speaker 1: mass production. Someone could do it If someone could figure 22 00:01:36,636 --> 00:01:39,756 Speaker 1: that out, it could go a long way toward bringing 23 00:01:39,796 --> 00:01:48,316 Speaker 1: down the cost of houses in America. I'm Jacob Goldstein 24 00:01:48,396 --> 00:01:50,236 Speaker 1: and this is What's Your Problem, the show where I 25 00:01:50,276 --> 00:01:53,276 Speaker 1: talk to people who are trying to make technological progress. 26 00:01:53,836 --> 00:01:57,516 Speaker 1: My guest today is Alexis Revas, co founder and CEO 27 00:01:57,636 --> 00:02:01,636 Speaker 1: of Cover. Alexis problem is this, how do you build 28 00:02:01,636 --> 00:02:04,436 Speaker 1: houses in a factory the way you build cars, and 29 00:02:04,516 --> 00:02:06,676 Speaker 1: how do you do it so that a factory built 30 00:02:06,676 --> 00:02:10,476 Speaker 1: house becomes cheaper and better than a traditionally built house. 31 00:02:11,796 --> 00:02:15,716 Speaker 1: Cover is based in La in California, and like basically 32 00:02:15,756 --> 00:02:19,236 Speaker 1: every other startup making physical things, they're following the Tesla model, 33 00:02:19,516 --> 00:02:22,316 Speaker 1: starting with a low volume, high end product with the 34 00:02:22,436 --> 00:02:25,476 Speaker 1: dream of scaling to the mass market. In other words, 35 00:02:25,516 --> 00:02:29,916 Speaker 1: today Cover sells expensive backyard studios to rich people in LA, 36 00:02:30,316 --> 00:02:34,396 Speaker 1: but their dream is to sell affordable houses all across America. 37 00:02:34,476 --> 00:02:37,556 Speaker 1: Alexis was interested in architecture from a very young age. 38 00:02:37,596 --> 00:02:39,876 Speaker 1: He told me he drew his first floor plan when 39 00:02:39,916 --> 00:02:42,916 Speaker 1: he was in first grade. He went to college and 40 00:02:42,956 --> 00:02:46,236 Speaker 1: studied architecture, and like so many people before him, he 41 00:02:46,276 --> 00:02:49,836 Speaker 1: got captured by this dream of building houses in a 42 00:02:49,916 --> 00:02:53,836 Speaker 1: factory and there are companies in America that build houses 43 00:02:53,836 --> 00:02:56,676 Speaker 1: in factories now, and so Alexis went off to intern 44 00:02:56,876 --> 00:02:57,956 Speaker 1: at one of those companies. 45 00:02:59,316 --> 00:03:03,556 Speaker 2: I saw a problem with conventional construction and thought, well, 46 00:03:03,556 --> 00:03:05,156 Speaker 2: what about building ups in a factory. So I looked 47 00:03:05,156 --> 00:03:06,636 Speaker 2: that up and I actually went an intern for a 48 00:03:06,636 --> 00:03:09,116 Speaker 2: company that built homes in a factory, so a prefab company, 49 00:03:09,996 --> 00:03:12,236 Speaker 2: and they were basically doing it conventionally. It was like 50 00:03:12,356 --> 00:03:15,396 Speaker 2: two by fours in drywall, right. But what happens is 51 00:03:15,396 --> 00:03:17,956 Speaker 2: that when you add in the transportation, when you add 52 00:03:17,956 --> 00:03:20,676 Speaker 2: in the overhead of actually running a factory, you know, 53 00:03:20,756 --> 00:03:25,196 Speaker 2: to the customer, the price gains or the quality gains 54 00:03:25,596 --> 00:03:28,796 Speaker 2: aren't really noticeable. It's not a meaningfully better product or 55 00:03:28,796 --> 00:03:30,076 Speaker 2: a meaningfully cheaper product. 56 00:03:30,436 --> 00:03:32,516 Speaker 1: Well, and is part of is part of the reason 57 00:03:32,556 --> 00:03:36,796 Speaker 1: that the transportation is expensive. Because they're making it like 58 00:03:36,836 --> 00:03:41,236 Speaker 1: a conventional house. It ends up like a three D box, right, 59 00:03:41,236 --> 00:03:44,076 Speaker 1: They're not making like flat panels. It's not an ikea house, 60 00:03:44,196 --> 00:03:45,956 Speaker 1: it's a It's a house that you put on the 61 00:03:45,996 --> 00:03:49,556 Speaker 1: back of a giant truck that is very expensive to 62 00:03:49,636 --> 00:03:51,556 Speaker 1: hire and us a lot to move. Is that part 63 00:03:51,556 --> 00:03:52,996 Speaker 1: of the issue. 64 00:03:53,076 --> 00:03:54,716 Speaker 2: That's definitely part of it. That's definitely part of it. 65 00:03:54,756 --> 00:03:56,476 Speaker 2: And then and then once it gets to the site, 66 00:03:56,716 --> 00:03:58,876 Speaker 2: because it's this large, you know, like you said, you know, 67 00:03:58,916 --> 00:04:01,636 Speaker 2: almost container size, you know, or even bigger than a 68 00:04:01,636 --> 00:04:04,396 Speaker 2: container size room that needs to be lifted into place. 69 00:04:04,436 --> 00:04:06,876 Speaker 2: You need a massive crane and those cranes can be 70 00:04:06,876 --> 00:04:10,196 Speaker 2: twenty thousand dollars a day, right, So that alone is 71 00:04:10,236 --> 00:04:12,156 Speaker 2: a huge cost. If you need a creat for even 72 00:04:12,236 --> 00:04:13,836 Speaker 2: one day, that's twenty thousand dollars. 73 00:04:13,916 --> 00:04:15,676 Speaker 1: I just want to clarify one thing that I realized 74 00:04:15,716 --> 00:04:17,676 Speaker 1: might be ambiguous, and that is we're not talking about 75 00:04:17,716 --> 00:04:20,476 Speaker 1: mobile homes here, right, We're talking about houses that are 76 00:04:20,476 --> 00:04:22,356 Speaker 1: manufactured in kind of a similar way. But it's a 77 00:04:22,356 --> 00:04:24,276 Speaker 1: full house. It's not a mobile home. It's not like 78 00:04:24,316 --> 00:04:25,676 Speaker 1: a trailer park house. It's a house. 79 00:04:26,836 --> 00:04:29,436 Speaker 2: Correct, It's a house, and it's built to the same 80 00:04:30,076 --> 00:04:34,596 Speaker 2: building code and building standards as a conventionally on site 81 00:04:34,596 --> 00:04:37,116 Speaker 2: built home. Okay, And that's what I saw, and so 82 00:04:37,476 --> 00:04:41,836 Speaker 2: you know, I saw a ton of opportunity to improve, 83 00:04:41,956 --> 00:04:43,836 Speaker 2: right like I thought. I actually when I worked there 84 00:04:43,836 --> 00:04:46,396 Speaker 2: thinking these guys have the solution to the problem. And 85 00:04:46,596 --> 00:04:48,796 Speaker 2: I left that innership thinking this isn't the solution. And 86 00:04:48,836 --> 00:04:50,676 Speaker 2: I actually started that's when I started researching all the 87 00:04:50,716 --> 00:04:53,676 Speaker 2: other companies that were doing precou and learning about their approach, 88 00:04:55,036 --> 00:04:57,436 Speaker 2: and no, everyone was basically doing the same thing, which 89 00:04:57,516 --> 00:05:01,756 Speaker 2: was build homes in a factory but convention. And that's 90 00:05:01,756 --> 00:05:03,916 Speaker 2: where I realized there was a huge opportunity to solve 91 00:05:03,916 --> 00:05:06,676 Speaker 2: this problem. And that's when I started chatting with my 92 00:05:06,676 --> 00:05:08,156 Speaker 2: co founder Jim Well, So, you know, went back to 93 00:05:08,196 --> 00:05:10,756 Speaker 2: architecture school and said, hey, I think I think there's 94 00:05:10,796 --> 00:05:14,716 Speaker 2: this huge problem. And there's kind of two parts to it. There's, 95 00:05:14,996 --> 00:05:16,996 Speaker 2: you know, how do we build homes in a factory 96 00:05:17,396 --> 00:05:19,156 Speaker 2: more like how cars are made, so like you know, 97 00:05:19,236 --> 00:05:24,796 Speaker 2: true design for manufacturability, designed for scale, and designed for automation. Right. 98 00:05:25,116 --> 00:05:28,956 Speaker 2: And then there's a second part, which is how do 99 00:05:29,036 --> 00:05:31,796 Speaker 2: you do that? You know, while you're not building the 100 00:05:31,836 --> 00:05:34,796 Speaker 2: same car or same home one hundred thousand times, there's 101 00:05:34,796 --> 00:05:37,316 Speaker 2: some amount of variation that is necessary to serve the market. 102 00:05:37,356 --> 00:05:38,836 Speaker 2: And this is where the customization comes from. 103 00:05:38,956 --> 00:05:39,276 Speaker 1: Huh. 104 00:05:39,716 --> 00:05:41,156 Speaker 2: Right, And I think so there's kind of two parts 105 00:05:41,156 --> 00:05:44,276 Speaker 2: of the problem. Build homes like cars and uh and 106 00:05:44,276 --> 00:05:47,636 Speaker 2: and enable some enough enough customization that you can actually 107 00:05:47,636 --> 00:05:48,756 Speaker 2: serve a large enough market. 108 00:05:49,156 --> 00:05:51,596 Speaker 1: It has to be more customized than a car, yes, 109 00:05:51,876 --> 00:05:55,556 Speaker 1: but but kind of with the manufacturing principles of a car, 110 00:05:55,596 --> 00:05:58,796 Speaker 1: where you think, not what is what is my dream car, 111 00:05:58,836 --> 00:06:01,636 Speaker 1: but what is a car that is great that we 112 00:06:01,676 --> 00:06:04,116 Speaker 1: could make a million of exactly the same. 113 00:06:04,156 --> 00:06:06,476 Speaker 2: Exactly And so that's that's when we started chatting, and 114 00:06:06,516 --> 00:06:08,196 Speaker 2: that's that's when we started Cover. So we started to 115 00:06:08,196 --> 00:06:09,036 Speaker 2: cover while we were still in. 116 00:06:09,356 --> 00:06:12,876 Speaker 1: And when was that? That was twenty fourteen, Is that right, correct? Yeah, 117 00:06:12,996 --> 00:06:15,676 Speaker 1: so a long time ago. A key moment for me 118 00:06:15,716 --> 00:06:18,116 Speaker 1: that's interesting both in the life of your company and 119 00:06:18,236 --> 00:06:22,436 Speaker 1: in sort of the housing story more generally, is when 120 00:06:22,476 --> 00:06:26,436 Speaker 1: California passes this law that makes it easier for people 121 00:06:26,516 --> 00:06:30,076 Speaker 1: to put what's technically called an ADU, which is basically 122 00:06:30,116 --> 00:06:32,956 Speaker 1: like a little backyard cottage or apartment on their house. 123 00:06:34,476 --> 00:06:36,236 Speaker 1: Is that the right moment to talk about next? 124 00:06:36,916 --> 00:06:39,956 Speaker 2: Yeah? So yeah, we you know, we we started the 125 00:06:39,956 --> 00:06:42,876 Speaker 2: company while we're still in school, graduated, moved out to 126 00:06:44,716 --> 00:06:48,876 Speaker 2: California the day after graduating, basically three months after graduating 127 00:06:48,956 --> 00:06:52,556 Speaker 2: that law was passed, Okay, And interestingly, at the time, 128 00:06:53,716 --> 00:06:57,596 Speaker 2: we had realized that instead of focusing to start on 129 00:06:58,036 --> 00:07:00,356 Speaker 2: entire you know, single family homes, right, call it a 130 00:07:00,396 --> 00:07:04,356 Speaker 2: two thousand or three thousand scriffed home. We should actually 131 00:07:04,396 --> 00:07:08,636 Speaker 2: focus on backyard you know, little backyard offices or guest homes. 132 00:07:09,356 --> 00:07:11,196 Speaker 2: We actually realized we should focus on this before that 133 00:07:11,236 --> 00:07:13,836 Speaker 2: lock came out. Interesting because yeah, and the reason for 134 00:07:13,876 --> 00:07:17,436 Speaker 2: that is is really, you know, taking the lean iteration 135 00:07:17,876 --> 00:07:20,036 Speaker 2: process of a startup, and how do you apply this 136 00:07:20,076 --> 00:07:22,556 Speaker 2: to this large, complex product. Well, start with the smallest 137 00:07:22,556 --> 00:07:24,836 Speaker 2: possible version of that product you can, right, the. 138 00:07:24,716 --> 00:07:28,316 Speaker 1: Minimum viable product. The minimum viable product is not a 139 00:07:28,356 --> 00:07:31,796 Speaker 1: two thousand square foot house. It's a five hundred square 140 00:07:31,796 --> 00:07:34,036 Speaker 1: foot studio with a bathroom. 141 00:07:33,716 --> 00:07:35,836 Speaker 2: In a kitchen exactly. And so we realized that, and 142 00:07:35,836 --> 00:07:38,956 Speaker 2: then turns out the timing was just perfect because this 143 00:07:39,076 --> 00:07:41,236 Speaker 2: lock came out and we were already positioned, you know, 144 00:07:41,236 --> 00:07:42,916 Speaker 2: we were like, we already have the website. We just 145 00:07:42,956 --> 00:07:45,396 Speaker 2: have to you know, speak to this new regulation. And 146 00:07:45,436 --> 00:07:48,076 Speaker 2: so the market for what we were focusing on, you know, 147 00:07:48,476 --> 00:07:50,716 Speaker 2: I don't know what the number probably over one hundred 148 00:07:50,876 --> 00:07:53,276 Speaker 2: x you know, within three months of us starting there. 149 00:07:53,316 --> 00:07:54,276 Speaker 1: So it was just good luck. 150 00:07:55,436 --> 00:07:56,916 Speaker 2: It was good luck. Yeah. 151 00:07:57,116 --> 00:07:59,076 Speaker 1: Yeah, and like maybe a little bit like you're just 152 00:07:59,156 --> 00:08:01,276 Speaker 1: kind of in the zeitgeist. Right, that's the non pure 153 00:08:01,316 --> 00:08:02,676 Speaker 1: good luck part of it is kind of it was 154 00:08:02,716 --> 00:08:03,716 Speaker 1: in the wind. 155 00:08:04,556 --> 00:08:07,196 Speaker 2: Yeah. We had our investors, you know, basically reach out 156 00:08:07,196 --> 00:08:09,596 Speaker 2: and say, did you guys like pass this law within 157 00:08:09,636 --> 00:08:12,156 Speaker 2: three months and we're like, no, we wish we could 158 00:08:12,156 --> 00:08:14,636 Speaker 2: take credit for it, but we didn't do anything there. Yeah. 159 00:08:15,076 --> 00:08:17,236 Speaker 1: So okay, so now you've got a company, you got 160 00:08:17,276 --> 00:08:20,796 Speaker 1: the laws suddenly on your side. What do you have 161 00:08:20,836 --> 00:08:24,316 Speaker 1: to do to go from that moment to actually sell 162 00:08:24,316 --> 00:08:27,956 Speaker 1: in somebody a backyard studio and putting it in their backyard. 163 00:08:28,396 --> 00:08:31,196 Speaker 2: So really, what we wanted to do is prove to 164 00:08:31,276 --> 00:08:35,796 Speaker 2: the world that not only could you build homes in 165 00:08:35,836 --> 00:08:40,356 Speaker 2: a factory, you know, efficiently and at low cost and fast, 166 00:08:40,996 --> 00:08:44,876 Speaker 2: but that you could build homes that are way better 167 00:08:45,756 --> 00:08:50,676 Speaker 2: than conventionally built homes. So you know, high end, you know, 168 00:08:50,796 --> 00:08:54,316 Speaker 2: kind of change people's perception of a home, of a 169 00:08:54,316 --> 00:08:57,196 Speaker 2: prefabricated home, home built in a factory, to something that's 170 00:08:57,356 --> 00:09:01,156 Speaker 2: that's actually desirable, that's better, right and noticeably, right, not like, 171 00:09:01,156 --> 00:09:02,756 Speaker 2: oh yeah it's better in these three ways that you 172 00:09:02,756 --> 00:09:05,996 Speaker 2: have to read on the on the brochure, right, No, 173 00:09:06,116 --> 00:09:09,316 Speaker 2: it's actually used. Look at it. You're like, Wow, that's beautiful. Well, 174 00:09:09,316 --> 00:09:12,076 Speaker 2: that's that's you know in the that it looks like 175 00:09:12,116 --> 00:09:14,356 Speaker 2: you was built by a starchitect, right or or you 176 00:09:14,396 --> 00:09:16,876 Speaker 2: know that kind of things. That's what we wanted to do. 177 00:09:20,196 --> 00:09:22,636 Speaker 1: In a minute, why Alexis had to hire people from 178 00:09:22,636 --> 00:09:25,676 Speaker 1: the car business to make Cover work and the problems 179 00:09:25,716 --> 00:09:28,796 Speaker 1: Cover still needs to solve to sell factory build houses 180 00:09:28,876 --> 00:09:37,836 Speaker 1: at scale. That's the end of the ads. 181 00:09:38,236 --> 00:09:39,396 Speaker 2: Now we're going back to the show. 182 00:09:40,116 --> 00:09:43,796 Speaker 1: So that's the that's the dream. Tell me about some 183 00:09:43,836 --> 00:09:45,756 Speaker 1: of the things you had to figure out to do 184 00:09:45,796 --> 00:09:48,396 Speaker 1: that to get from the idea to the thing. 185 00:09:49,036 --> 00:09:51,676 Speaker 2: Yeah. I think one of the biggest realizations, you know, 186 00:09:51,676 --> 00:09:53,596 Speaker 2: we're starting to build this. My co founder and I 187 00:09:53,596 --> 00:09:57,276 Speaker 2: both have architecture backgrounds, and the more we built, the 188 00:09:57,276 --> 00:10:00,156 Speaker 2: more we realized the reason that this problem hasn't been 189 00:10:00,196 --> 00:10:04,196 Speaker 2: solved from within the architecture construction world is because some 190 00:10:04,276 --> 00:10:07,676 Speaker 2: of the core skills that are needed to solve this 191 00:10:07,756 --> 00:10:11,996 Speaker 2: problem aren't known and taught by most people in that world. 192 00:10:12,076 --> 00:10:12,796 Speaker 1: Huh. 193 00:10:12,996 --> 00:10:15,556 Speaker 2: And we realized that actually, if you want to build 194 00:10:15,596 --> 00:10:19,636 Speaker 2: homes like cars, you need people that understand homes, but 195 00:10:19,676 --> 00:10:22,116 Speaker 2: you also need a lot of people that understand cars. 196 00:10:22,716 --> 00:10:25,236 Speaker 2: Huh to be part of the innovation process. 197 00:10:25,316 --> 00:10:28,916 Speaker 1: What specifically are the sort of skills or knowledge that's 198 00:10:28,956 --> 00:10:31,356 Speaker 1: that you need from the car industry. 199 00:10:31,876 --> 00:10:35,676 Speaker 2: Yeah, I mean one big one is designed for manufacturability 200 00:10:35,676 --> 00:10:38,596 Speaker 2: and designed for assembly. So you know, you don't just 201 00:10:38,636 --> 00:10:40,396 Speaker 2: design the part for what it's going to do, what 202 00:10:40,516 --> 00:10:42,956 Speaker 2: it's in the car. You design the part with how 203 00:10:42,996 --> 00:10:45,236 Speaker 2: you're going to make it in mind, so that you 204 00:10:45,276 --> 00:10:48,156 Speaker 2: can make it incredibly efficiently and a low cost and 205 00:10:48,276 --> 00:10:53,396 Speaker 2: reliably and at a very high quality, consistent uh huh. 206 00:10:52,556 --> 00:10:55,996 Speaker 1: And like it has to be exactly the same every time. Right, 207 00:10:56,196 --> 00:10:58,756 Speaker 1: It's like a precision element I think of in cars 208 00:10:59,596 --> 00:11:03,756 Speaker 1: that is probably not there in conventional home building. 209 00:11:03,836 --> 00:11:06,476 Speaker 2: Right, that's right, even the units that you talk in right, 210 00:11:07,116 --> 00:11:09,636 Speaker 2: Like you know, when I was an architecture school, people talk, 211 00:11:10,276 --> 00:11:11,876 Speaker 2: you know, people talk, you know, oh, it's going to 212 00:11:11,916 --> 00:11:13,636 Speaker 2: be within an eighth of an inch or even an 213 00:11:13,676 --> 00:11:15,796 Speaker 2: eighth site tight, Right, Most people are like, you know, yeah, 214 00:11:15,836 --> 00:11:18,276 Speaker 2: within half an inch, within a quarter of an inch, right. 215 00:11:18,396 --> 00:11:21,236 Speaker 2: In in automotive you're talking you know how many thousands 216 00:11:21,236 --> 00:11:24,676 Speaker 2: of an inch? Right? And so and actually at cover 217 00:11:24,836 --> 00:11:27,356 Speaker 2: that's that's we talk in terms of Yeah, this tool 218 00:11:27,396 --> 00:11:30,356 Speaker 2: has to have this many thousands of an inch precision. 219 00:11:30,116 --> 00:11:33,356 Speaker 1: So it's orders of magnitude more precise. And that's because 220 00:11:33,356 --> 00:11:35,796 Speaker 1: it just has to fit together automatically. You're not going 221 00:11:35,876 --> 00:11:37,756 Speaker 1: to have a carpenter there to kind of just make 222 00:11:37,836 --> 00:11:39,236 Speaker 1: it work exactly. 223 00:11:39,236 --> 00:11:41,116 Speaker 2: And we actually we learned that the hard way, you know, 224 00:11:41,876 --> 00:11:43,996 Speaker 2: that's exactly how we learned that this is a problem. 225 00:11:44,156 --> 00:11:48,076 Speaker 2: We tried to build something ourselves. It didn't fit as expected, 226 00:11:48,116 --> 00:11:50,636 Speaker 2: and as we kind of went and root caused it, 227 00:11:50,836 --> 00:11:54,516 Speaker 2: we learned that, yeah, you know, being off by one percent, 228 00:11:54,836 --> 00:11:57,476 Speaker 2: you know, in a degree over eight feet like that 229 00:11:57,636 --> 00:12:00,716 Speaker 2: doesn't fit together at the end of the day. And yeah, 230 00:12:00,876 --> 00:12:04,476 Speaker 2: if you need someone on site to then you know, 231 00:12:05,796 --> 00:12:08,316 Speaker 2: send something or trim it down. That kind of defeats 232 00:12:08,356 --> 00:12:09,916 Speaker 2: the purpose because now you're building it once in the 233 00:12:09,916 --> 00:12:12,236 Speaker 2: factory and you're rebuilding it again once it gets to 234 00:12:12,276 --> 00:12:14,076 Speaker 2: the site. So defeats the purpose. It has to just 235 00:12:14,156 --> 00:12:16,956 Speaker 2: fit together right once it shows up on site. 236 00:12:16,996 --> 00:12:20,236 Speaker 1: So you figure it out eventually, right you do. You 237 00:12:20,276 --> 00:12:26,396 Speaker 1: are now making and selling little backyard homes or studios. So, 238 00:12:26,396 --> 00:12:28,956 Speaker 1: I mean, one thing we haven't talked about in the 239 00:12:28,956 --> 00:12:33,996 Speaker 1: sort of bigger why is home building inefficient? Why hasn't 240 00:12:34,036 --> 00:12:39,076 Speaker 1: it progressed? Part of it seems like the regulatory piece, right, 241 00:12:39,116 --> 00:12:43,436 Speaker 1: there's so many rules for construction permits you have to 242 00:12:43,436 --> 00:12:47,436 Speaker 1: get in some places, it seems to be captured by 243 00:12:47,476 --> 00:12:48,916 Speaker 1: the people who are being regulated. 244 00:12:48,996 --> 00:12:49,196 Speaker 2: Right. 245 00:12:49,356 --> 00:12:51,876 Speaker 1: So, as you are trying to figure out how to 246 00:12:51,916 --> 00:12:55,756 Speaker 1: mass produce these studios, is there a regulatory piece you 247 00:12:55,796 --> 00:12:56,316 Speaker 1: have to deal with? 248 00:12:56,916 --> 00:13:00,076 Speaker 2: Because we're building homes in a factory, there's a state 249 00:13:00,116 --> 00:13:03,276 Speaker 2: approval process for everything that's built in the factory, okay, 250 00:13:03,476 --> 00:13:06,516 Speaker 2: And so that's something that we have a relationship with 251 00:13:07,236 --> 00:13:10,316 Speaker 2: this agency. They go and look at our design and 252 00:13:10,316 --> 00:13:11,876 Speaker 2: our way of doing things, and they actually look at 253 00:13:11,876 --> 00:13:16,876 Speaker 2: our quality control process and our pulled control documentation. They 254 00:13:16,876 --> 00:13:19,956 Speaker 2: approve that as an overall process, and then yes, we're 255 00:13:19,956 --> 00:13:24,956 Speaker 2: an approved factory built home manufacturer. Okay, but we still 256 00:13:24,996 --> 00:13:27,836 Speaker 2: have to submit and get approval for each home from 257 00:13:27,916 --> 00:13:30,956 Speaker 2: the city. But the scope of what the city looks 258 00:13:31,036 --> 00:13:34,036 Speaker 2: like looks at is smaller, okay. 259 00:13:34,196 --> 00:13:36,876 Speaker 1: And the city you're basically selling in La now right, 260 00:13:36,916 --> 00:13:38,716 Speaker 1: So when you say the city, is that basically of 261 00:13:38,716 --> 00:13:39,196 Speaker 1: Los Angeles? 262 00:13:39,276 --> 00:13:42,116 Speaker 2: Yeah, City of Los Angeles. Yeah, And and what they 263 00:13:42,156 --> 00:13:45,596 Speaker 2: look at is much narrower. It's basically, are you even 264 00:13:45,636 --> 00:13:48,716 Speaker 2: allowed to build this, you know, on this property? Where 265 00:13:48,756 --> 00:13:50,476 Speaker 2: on the property is it going to be located? And 266 00:13:50,556 --> 00:13:53,756 Speaker 2: is that acceptable? Right? And and things like how far 267 00:13:53,836 --> 00:13:56,716 Speaker 2: is it from the closest fire hydrant, right, and what's 268 00:13:56,756 --> 00:13:58,436 Speaker 2: the access like if there was a fire, you know, 269 00:13:58,636 --> 00:14:00,996 Speaker 2: basic kind of safety things, right. And so that's the 270 00:14:01,036 --> 00:14:06,156 Speaker 2: permitting process with the city, and they'll also look at 271 00:14:06,156 --> 00:14:10,716 Speaker 2: the foundation, right. So so the majority of the actual 272 00:14:10,996 --> 00:14:13,756 Speaker 2: building side of things is handled on the state level, 273 00:14:13,796 --> 00:14:16,756 Speaker 2: and then the local specifics are handled at the city level. 274 00:14:17,116 --> 00:14:20,676 Speaker 1: When did you sell your first thing, your first studio, the. 275 00:14:20,596 --> 00:14:24,836 Speaker 2: First actual backyard home with a kitchen and bathroom, right, 276 00:14:24,836 --> 00:14:29,316 Speaker 2: like a real home? That one we sold in twenty 277 00:14:29,316 --> 00:14:33,516 Speaker 2: seventeen and then we delivered it in twenty eighteen. It 278 00:14:33,516 --> 00:14:36,476 Speaker 2: took us a while to figure out the system and 279 00:14:36,556 --> 00:14:37,516 Speaker 2: engineer the whole thing. 280 00:14:37,676 --> 00:14:40,036 Speaker 1: And where are you too now, Like how many have 281 00:14:40,076 --> 00:14:42,956 Speaker 1: you sold? How many do you sell per whatever, per 282 00:14:42,996 --> 00:14:45,756 Speaker 1: month or per year however you look at it. 283 00:14:46,076 --> 00:14:49,156 Speaker 2: Yeah, yeah, So we've built dozens of these, like, you know, 284 00:14:49,516 --> 00:14:53,916 Speaker 2: well over thirty of them, you know, across LA. We've 285 00:14:53,916 --> 00:14:57,236 Speaker 2: also built one in Joshua Tree. We've built dozens of them. 286 00:14:57,636 --> 00:15:00,276 Speaker 2: And we're delivering homes every month. 287 00:15:01,556 --> 00:15:04,676 Speaker 1: So let's talk about where the product and the process are. Now, 288 00:15:05,036 --> 00:15:05,796 Speaker 1: how does it work. 289 00:15:06,796 --> 00:15:08,636 Speaker 2: The way I think about is we have multiple production 290 00:15:08,716 --> 00:15:10,916 Speaker 2: lines for different parts of the home. So you have, 291 00:15:11,236 --> 00:15:13,676 Speaker 2: you know, a roof and floor panel production line, a 292 00:15:13,716 --> 00:15:16,836 Speaker 2: wall panel production line, a cabinetry production line, and so 293 00:15:16,876 --> 00:15:19,916 Speaker 2: these are running. We're making the individual parts, uh, where 294 00:15:19,996 --> 00:15:23,236 Speaker 2: we're we're doing quality control uh and then and then 295 00:15:23,236 --> 00:15:25,236 Speaker 2: we're getting the ready to ship and so these are 296 00:15:25,276 --> 00:15:28,276 Speaker 2: these all gets shipped on regular flatbed trucks. 297 00:15:28,276 --> 00:15:31,836 Speaker 1: The sort of output of the factory is like a 298 00:15:31,836 --> 00:15:35,476 Speaker 1: bunch of like walls and roof panels and cabinets and 299 00:15:35,516 --> 00:15:38,476 Speaker 1: they like and the and the and the walls have 300 00:15:38,636 --> 00:15:41,716 Speaker 1: like pipes and wires in them. I mean, just just 301 00:15:41,756 --> 00:15:44,076 Speaker 1: give me like a little bit more detail of like 302 00:15:44,116 --> 00:15:45,316 Speaker 1: how this is actually working. 303 00:15:46,036 --> 00:15:49,396 Speaker 2: Yeah, yeah, so so so yeah, it's it's on the 304 00:15:49,436 --> 00:15:52,396 Speaker 2: production line. We're building you know, the structure. We're putting 305 00:15:52,396 --> 00:15:56,436 Speaker 2: the insulation in, we're putting the waterproofing in. We're putting 306 00:15:56,756 --> 00:15:59,196 Speaker 2: all of the connection mechanisms so that everything can can 307 00:15:59,236 --> 00:16:02,836 Speaker 2: connect quickly on site, and and we're also putting in 308 00:16:02,836 --> 00:16:03,916 Speaker 2: plumbing and electrical so. 309 00:16:04,236 --> 00:16:07,436 Speaker 1: There are like pipes and wires just running through walls 310 00:16:07,516 --> 00:16:08,756 Speaker 1: that you're building in the factory. 311 00:16:09,316 --> 00:16:12,836 Speaker 2: Yes, okay, Yeah, the goal, right is to minimize the 312 00:16:12,876 --> 00:16:14,876 Speaker 2: amount of complexity that you have to do on site. 313 00:16:14,916 --> 00:16:16,636 Speaker 1: How long does it take to put the house together 314 00:16:16,676 --> 00:16:16,916 Speaker 1: at the. 315 00:16:16,956 --> 00:16:19,796 Speaker 2: Site we're right now, we're at about a month. 316 00:16:21,596 --> 00:16:23,916 Speaker 1: About a month. That might be longer than I would 317 00:16:23,956 --> 00:16:25,796 Speaker 1: have guessed. I mean, I'm ignorant. I don't know why 318 00:16:25,796 --> 00:16:27,716 Speaker 1: I would have guessed less, but I was just imagining, like, oh, 319 00:16:27,756 --> 00:16:29,316 Speaker 1: it's just a bunch of lego blocks and you get 320 00:16:29,316 --> 00:16:30,556 Speaker 1: there and you're just snapping together. 321 00:16:31,316 --> 00:16:34,276 Speaker 2: Yeah, and actually we're working on making it even faster, right, 322 00:16:34,316 --> 00:16:36,436 Speaker 2: I think we can go even faster than that, and 323 00:16:36,476 --> 00:16:38,756 Speaker 2: so we're working. That's when we say the reason we're 324 00:16:38,756 --> 00:16:41,036 Speaker 2: not building one hundred homes per year, right or a 325 00:16:41,076 --> 00:16:43,596 Speaker 2: thousand homes per year, is because we want to get 326 00:16:43,636 --> 00:16:45,996 Speaker 2: it even faster before we go and scale not just 327 00:16:46,076 --> 00:16:47,996 Speaker 2: on site but even in the factory. Yeah. 328 00:16:48,076 --> 00:16:52,036 Speaker 1: So presumably the person the buyer already has what poured 329 00:16:52,076 --> 00:16:54,756 Speaker 1: a foundation, and we do that as all of the 330 00:16:54,756 --> 00:16:58,036 Speaker 1: hookups ready. That is that that's like before the house 331 00:16:58,036 --> 00:16:59,396 Speaker 1: gets there from the factory obviously. 332 00:16:59,476 --> 00:17:02,516 Speaker 2: Yeah, that's the foundation, the hookups, the utility hookups, that's 333 00:17:02,556 --> 00:17:06,076 Speaker 2: all done before. We do manage that for our customers, right, huh, 334 00:17:06,236 --> 00:17:08,196 Speaker 2: so that they just come to us and we take 335 00:17:08,196 --> 00:17:10,916 Speaker 2: care of everything in the permit, the foundation, the manufacturing, 336 00:17:10,956 --> 00:17:15,676 Speaker 2: the installation. But yeah, the the assembly itself is yeah, 337 00:17:15,676 --> 00:17:16,276 Speaker 2: about a month. 338 00:17:17,196 --> 00:17:19,236 Speaker 1: So what is that? What is that month of work? 339 00:17:19,236 --> 00:17:20,476 Speaker 1: What are people doing for that month? 340 00:17:21,236 --> 00:17:24,436 Speaker 2: Yeah, So so the structure goes up relatively quickly, like 341 00:17:24,556 --> 00:17:28,236 Speaker 2: one or two days. And then and then you're waterproofing it, 342 00:17:28,796 --> 00:17:32,836 Speaker 2: you're installing the windows, you're installing the interior walls U 343 00:17:32,956 --> 00:17:35,076 Speaker 2: and then and then you're you have some plumbing, you 344 00:17:35,076 --> 00:17:36,996 Speaker 2: have some electrical in but you've got to connect it all. 345 00:17:37,236 --> 00:17:39,876 Speaker 2: You've got to connect it to the panel, right and 346 00:17:39,916 --> 00:17:43,036 Speaker 2: connect that to the to the utilities. Actually we installed 347 00:17:43,036 --> 00:17:48,076 Speaker 2: we we ship them with deducting and HVAC already installed, right, 348 00:17:48,076 --> 00:17:52,236 Speaker 2: but you still need to make connections. Test those connections, 349 00:17:52,236 --> 00:17:55,036 Speaker 2: make sure they're reliable. Right, go and install, and then 350 00:17:55,076 --> 00:17:57,436 Speaker 2: go and install all the finishes, all of the interior 351 00:17:57,636 --> 00:18:04,076 Speaker 2: interior wall panels, exterior finishes, you know, countertops, cabinetry, align them. 352 00:18:04,596 --> 00:18:06,476 Speaker 2: That's one thing that that that takes quite a bit 353 00:18:06,516 --> 00:18:08,916 Speaker 2: of time. And then and then while we do the 354 00:18:08,916 --> 00:18:12,756 Speaker 2: first code of paint from the factory today, we do 355 00:18:13,476 --> 00:18:15,996 Speaker 2: a finished code on site. And so that's another thing 356 00:18:15,996 --> 00:18:17,836 Speaker 2: you know, that'll take a few days, right, you know, 357 00:18:17,916 --> 00:18:21,356 Speaker 2: including letting it dry and all. It's still you know, 358 00:18:21,476 --> 00:18:24,756 Speaker 2: that's still faster than conventional construction. But we can go 359 00:18:24,836 --> 00:18:26,476 Speaker 2: even faster than that, and that's what we're working on. 360 00:18:27,636 --> 00:18:31,556 Speaker 1: So you mentioned that you're still sort of trying to 361 00:18:31,796 --> 00:18:35,316 Speaker 1: get the process right so that you can scale so 362 00:18:35,356 --> 00:18:37,716 Speaker 1: that you can sell ten times as many houses as 363 00:18:37,716 --> 00:18:40,116 Speaker 1: you're selling now or whatever. What's a thing in the 364 00:18:40,236 --> 00:18:43,276 Speaker 1: process that you haven't figured out yet? What's the like 365 00:18:43,356 --> 00:18:46,436 Speaker 1: a optimization problem that you're working on right now? 366 00:18:47,196 --> 00:18:51,036 Speaker 2: Yeah, I'll give you some one, like the paint right, 367 00:18:51,196 --> 00:18:54,876 Speaker 2: painting on site. To paint something well, it requires a 368 00:18:54,876 --> 00:18:58,076 Speaker 2: good eye, it requires craft, it requires attention to detail, 369 00:18:58,556 --> 00:19:03,436 Speaker 2: and so that requires sending a painter on site. You know, 370 00:19:03,436 --> 00:19:05,716 Speaker 2: when you're building a car, you don't want to be 371 00:19:05,756 --> 00:19:10,836 Speaker 2: reliant on someone's skill and craft aft. So one of 372 00:19:10,876 --> 00:19:12,036 Speaker 2: the things that we're trying to figure out how to 373 00:19:12,036 --> 00:19:15,396 Speaker 2: do is and we're going to is move the painting 374 00:19:15,436 --> 00:19:19,276 Speaker 2: process into the factory and then ship things in a 375 00:19:19,276 --> 00:19:22,236 Speaker 2: way where they're protected so that it all comes together. 376 00:19:22,316 --> 00:19:24,236 Speaker 2: When people are moving around with their you know, the 377 00:19:24,276 --> 00:19:27,436 Speaker 2: fridge or the cabinets and they accidentally knock on the 378 00:19:27,996 --> 00:19:31,516 Speaker 2: or scrub past the wall, it doesn't damage the painting 379 00:19:31,516 --> 00:19:33,636 Speaker 2: and require refinishing. 380 00:19:33,836 --> 00:19:36,556 Speaker 1: And so you're talking about interior painting. 381 00:19:36,156 --> 00:19:38,756 Speaker 2: Now, interior painting yet naively not. 382 00:19:38,676 --> 00:19:40,356 Speaker 1: Knowing anything about it, I would think, well, you could 383 00:19:40,436 --> 00:19:42,916 Speaker 1: just paint it at the factory. That shouldn't be that hard. 384 00:19:42,956 --> 00:19:44,356 Speaker 1: But tell me why it is hard. I'm sure it is. 385 00:19:44,356 --> 00:19:46,596 Speaker 2: I just yeah, we've done that. We've tried to do 386 00:19:46,636 --> 00:19:48,956 Speaker 2: both cotes in the factory, and then what happens is 387 00:19:48,996 --> 00:19:51,836 Speaker 2: that they get scuffed along the way right, or or 388 00:19:52,156 --> 00:19:53,996 Speaker 2: you know, there might be something that you know, one 389 00:19:54,036 --> 00:19:56,156 Speaker 2: part doesn't fit together and so you need to trim 390 00:19:56,196 --> 00:19:57,996 Speaker 2: it and that creates dust and I have dust all 391 00:19:58,036 --> 00:19:59,396 Speaker 2: over it, right, that kind of problem. 392 00:19:59,476 --> 00:20:02,596 Speaker 1: Is there some kind of like industrial scale sort of 393 00:20:02,876 --> 00:20:04,876 Speaker 1: saran wrap? Could you paint it and then put like 394 00:20:04,916 --> 00:20:07,276 Speaker 1: a plastic film over it and then not remove the 395 00:20:07,316 --> 00:20:08,716 Speaker 1: plastic film until the end. 396 00:20:08,876 --> 00:20:11,436 Speaker 2: Yeah, exactly right, that's that's the solution, right. 397 00:20:11,756 --> 00:20:13,756 Speaker 1: Probably not, but I don't know anything That's what came 398 00:20:13,756 --> 00:20:15,116 Speaker 1: to my mind. I mean, what have you tried. 399 00:20:15,956 --> 00:20:17,676 Speaker 2: I mean, we've tried just painting for the factory. That 400 00:20:17,676 --> 00:20:21,276 Speaker 2: doesn't work right. We've tried kind of protecting it in shipping. 401 00:20:21,356 --> 00:20:24,916 Speaker 2: And while that helps right from the shipping process, you know, 402 00:20:24,956 --> 00:20:28,116 Speaker 2: once you even saw it on site, there's some challenges there. Right, 403 00:20:28,556 --> 00:20:31,076 Speaker 2: a film right might not cut it right some of 404 00:20:31,116 --> 00:20:33,836 Speaker 2: the Sometimes what happens is, you know, that might help 405 00:20:33,876 --> 00:20:37,836 Speaker 2: for eighty percent of the scuffs, right, but if you actually, 406 00:20:37,876 --> 00:20:41,836 Speaker 2: let you know, moving a fridge and you hit the 407 00:20:41,836 --> 00:20:43,596 Speaker 2: corner of the fridge, that's going to create a bit 408 00:20:43,636 --> 00:20:45,956 Speaker 2: of a dent. So there's many things like that. It's 409 00:20:45,996 --> 00:20:48,396 Speaker 2: not like there's one big thing that takes a ton 410 00:20:48,436 --> 00:20:52,316 Speaker 2: of time. It's it's really like hundreds of small things 411 00:20:52,716 --> 00:20:55,316 Speaker 2: that need to be figured out and and from a 412 00:20:55,356 --> 00:20:58,236 Speaker 2: process standpoint and from a product standpoint to make this 413 00:20:58,676 --> 00:21:01,716 Speaker 2: you know, much more like like a car. 414 00:21:01,916 --> 00:21:04,996 Speaker 1: So let's talk about let's talk about cost and price. 415 00:21:05,516 --> 00:21:08,716 Speaker 1: What does one of your backyard studios costs today? 416 00:21:08,916 --> 00:21:12,516 Speaker 2: You know, for a unit that has like a bedroom, 417 00:21:12,596 --> 00:21:16,156 Speaker 2: a bathroom, a kitchen, right, like a fully functional living space. 418 00:21:16,516 --> 00:21:19,036 Speaker 2: While you can go smaller and get under three hundred 419 00:21:19,036 --> 00:21:21,476 Speaker 2: thousand dollars. Most of them are going to be over 420 00:21:21,516 --> 00:21:22,556 Speaker 2: three hundred thousand. 421 00:21:22,316 --> 00:21:24,836 Speaker 1: Over three hundred thousand, so but that's. 422 00:21:24,676 --> 00:21:27,156 Speaker 2: All in that includes the sixiensive. 423 00:21:27,276 --> 00:21:29,036 Speaker 1: I mean, the median price of a home in the 424 00:21:29,116 --> 00:21:32,636 Speaker 1: United States is somewhere around there. So like, yes, you're 425 00:21:33,036 --> 00:21:35,036 Speaker 1: you're building an expensive backyard home. 426 00:21:35,396 --> 00:21:39,116 Speaker 2: Now we're starting off with a product that's very high end, right, 427 00:21:39,196 --> 00:21:43,356 Speaker 2: Like we've we include like sub zero wolf appliances, right, 428 00:21:43,756 --> 00:21:46,596 Speaker 2: which you know that a fridge and an oven there 429 00:21:46,636 --> 00:21:49,756 Speaker 2: can be fifteen thousand dollars, right, just just that, right, 430 00:21:50,356 --> 00:21:53,236 Speaker 2: So it's very high end, and we're proving to the 431 00:21:53,276 --> 00:21:55,756 Speaker 2: world that this is better than conventional construction. And then 432 00:21:55,836 --> 00:21:58,276 Speaker 2: as we ramp up production, as we build more and more, 433 00:21:58,756 --> 00:22:02,196 Speaker 2: we will lower the cost and be competitive with you know, 434 00:22:02,276 --> 00:22:05,876 Speaker 2: mass you could build the same home, like the typical 435 00:22:05,916 --> 00:22:08,476 Speaker 2: American home for the same price, right, Like, that's where 436 00:22:08,476 --> 00:22:09,076 Speaker 2: we want to get to. 437 00:22:09,636 --> 00:22:11,396 Speaker 1: For you to get from where you are now to 438 00:22:11,876 --> 00:22:14,036 Speaker 1: where you want to be to building full size houses 439 00:22:14,036 --> 00:22:16,796 Speaker 1: for people who are not rich, you need to get 440 00:22:16,796 --> 00:22:19,596 Speaker 1: better at building the houses, and then the world needs 441 00:22:19,636 --> 00:22:21,516 Speaker 1: to discover you and want to buy your houses. Right, 442 00:22:21,556 --> 00:22:24,236 Speaker 1: those are the two sides. So one side of that 443 00:22:24,316 --> 00:22:27,636 Speaker 1: is you getting better at building those houses. You mentioned 444 00:22:27,636 --> 00:22:29,636 Speaker 1: painting as an example of a thing you have to 445 00:22:29,636 --> 00:22:32,316 Speaker 1: get better at. What's another example, Yeah, I. 446 00:22:32,316 --> 00:22:34,796 Speaker 2: Mean another example is actually on the supply chain side. 447 00:22:34,796 --> 00:22:37,316 Speaker 2: So a lot of our supply chain historically has been 448 00:22:37,316 --> 00:22:39,716 Speaker 2: what I would call a prototyping supply chain. Who's close, 449 00:22:40,156 --> 00:22:42,036 Speaker 2: who can get it done fast, and who can we 450 00:22:42,076 --> 00:22:44,236 Speaker 2: basically go, you know, just drive to and if we 451 00:22:44,236 --> 00:22:47,156 Speaker 2: have feedback or we need to make changes because what 452 00:22:47,156 --> 00:22:51,956 Speaker 2: we've optimized for is speed of iteration. Huh right, But 453 00:22:52,076 --> 00:22:54,716 Speaker 2: as we scale, one of the biggest changes we need 454 00:22:54,716 --> 00:22:56,236 Speaker 2: to make is to say, you know what, we're gonna 455 00:22:56,436 --> 00:22:58,916 Speaker 2: lock down this design, not forever, but we're gonna say 456 00:22:58,916 --> 00:23:00,636 Speaker 2: we're gonna build one hundred that are gonna be the same. 457 00:23:00,716 --> 00:23:03,236 Speaker 1: Yeah, we're gonna stop, We're gonna stop monkey in with it. 458 00:23:03,276 --> 00:23:06,316 Speaker 1: We're gonna stop iterating on this one thing for a while. 459 00:23:06,596 --> 00:23:08,516 Speaker 2: For a while. So we order one hundred the same parts. 460 00:23:08,516 --> 00:23:10,156 Speaker 2: And when you order a hundred parts from a supplier 461 00:23:10,236 --> 00:23:14,636 Speaker 2: versus you know ten, right, it's a huge difference in costs. 462 00:23:14,676 --> 00:23:16,876 Speaker 2: I mean, you're talking about you can you can reduce 463 00:23:16,876 --> 00:23:19,556 Speaker 2: the cost sometimes you know, fifty percent sometimes even more? 464 00:23:19,716 --> 00:23:22,756 Speaker 1: Right, And so are you there? Are you there yet? 465 00:23:23,196 --> 00:23:24,916 Speaker 1: Are you ordering one hundred at a time? 466 00:23:25,196 --> 00:23:28,516 Speaker 2: Now, we're close, We're close. We're now setting up the 467 00:23:28,596 --> 00:23:31,396 Speaker 2: long term supply check. Okay, we're kind of taking the 468 00:23:31,476 --> 00:23:35,276 Speaker 2: product from this prototyping phase to hey, we're ready to 469 00:23:35,316 --> 00:23:39,076 Speaker 2: scale this. Let's let's go build thousands of homes. That's 470 00:23:39,076 --> 00:23:39,556 Speaker 2: where we are. 471 00:23:39,596 --> 00:23:41,116 Speaker 1: So so then there's the demand side, right, Is that 472 00:23:41,156 --> 00:23:42,516 Speaker 1: the other piece of people have to want to buy 473 00:23:42,516 --> 00:23:43,276 Speaker 1: these houses from you? 474 00:23:43,916 --> 00:23:46,996 Speaker 2: Yeah, people have to want to buy these homes from us. Fortunately, 475 00:23:47,036 --> 00:23:50,156 Speaker 2: there because we have a product that is much better 476 00:23:50,196 --> 00:23:53,676 Speaker 2: than conventional construction. Even at this price point. We've we've 477 00:23:53,716 --> 00:23:55,996 Speaker 2: always had a backlog of orders. 478 00:23:56,036 --> 00:23:58,236 Speaker 1: So is the only thing keeping you from selling full 479 00:23:58,276 --> 00:24:04,076 Speaker 1: size houses right now your own desire to make your 480 00:24:04,076 --> 00:24:05,556 Speaker 1: process better before you do that? 481 00:24:06,316 --> 00:24:08,876 Speaker 2: Yeah, it is. It's it's the it's kind of like, 482 00:24:11,036 --> 00:24:13,836 Speaker 2: you know, nail it and then scale it. 483 00:24:13,876 --> 00:24:15,156 Speaker 1: Did you make that up? Or is that a thing 484 00:24:15,196 --> 00:24:16,956 Speaker 1: people say? Is that like a y Combinator thing? 485 00:24:18,756 --> 00:24:22,276 Speaker 2: I didn't make that up. An investor friend said it. Actually, 486 00:24:22,356 --> 00:24:25,076 Speaker 2: it's like we love the nail it scalet approach. It 487 00:24:25,116 --> 00:24:27,476 Speaker 2: summarizes it. Well, when you. 488 00:24:27,396 --> 00:24:29,276 Speaker 1: Put it that way, it sounds binary. It sounds like 489 00:24:29,316 --> 00:24:31,276 Speaker 1: there will be a day when you're like, okay, let 490 00:24:31,316 --> 00:24:34,316 Speaker 1: a rip. But you know, the real world is often 491 00:24:34,356 --> 00:24:37,356 Speaker 1: not like that. Do you have a moment in your mind. 492 00:24:37,396 --> 00:24:39,116 Speaker 1: Is there a thing you're trying to get to when 493 00:24:39,116 --> 00:24:42,476 Speaker 1: you say like, okay, we know how to do this 494 00:24:42,756 --> 00:24:45,316 Speaker 1: well enough that we can we can let a rip. 495 00:24:45,916 --> 00:24:49,076 Speaker 2: Yeah. The focus is really on the on site assembly 496 00:24:49,116 --> 00:24:53,116 Speaker 2: side of things. There Once that process can basically be 497 00:24:53,196 --> 00:24:55,956 Speaker 2: done by anyone. Right, So this is not necessarily people 498 00:24:55,956 --> 00:24:59,516 Speaker 2: that have extensive construction training. Right, we can you and 499 00:24:59,596 --> 00:25:02,916 Speaker 2: I can go build it, or you know, are as 500 00:25:02,956 --> 00:25:05,796 Speaker 2: someone who's currently working at Starbucks or at a restaurant. 501 00:25:05,916 --> 00:25:08,036 Speaker 2: You know, as long as they want to work with 502 00:25:08,076 --> 00:25:11,276 Speaker 2: their hands and and can you know, follow the instructions. Well, 503 00:25:11,316 --> 00:25:14,636 Speaker 2: anyone can build a cover. Once it's at that point, 504 00:25:15,436 --> 00:25:18,716 Speaker 2: the installation side of things can scale very well. 505 00:25:18,796 --> 00:25:22,076 Speaker 1: Oh right, because that's is that the binding constraint now, 506 00:25:22,076 --> 00:25:23,716 Speaker 1: I mean you were talking about the bottleneck is the 507 00:25:23,756 --> 00:25:28,076 Speaker 1: real bottleneck Now the skilled labor you need to install 508 00:25:28,156 --> 00:25:30,156 Speaker 1: the house on site once it's out of the factory. 509 00:25:30,796 --> 00:25:33,636 Speaker 2: It is and and for most PREFIX companies even the 510 00:25:33,676 --> 00:25:36,796 Speaker 2: ones where they're shipping entire rooms, that on site process 511 00:25:36,836 --> 00:25:38,836 Speaker 2: still takes you know, they say, oh, it assembles in 512 00:25:38,876 --> 00:25:42,516 Speaker 2: a day, but really really what they do is they 513 00:25:42,636 --> 00:25:44,516 Speaker 2: put the parts together in a day, but then they 514 00:25:44,556 --> 00:25:48,036 Speaker 2: spend four weeks patching it up or six weeks thatching 515 00:25:48,076 --> 00:25:51,476 Speaker 2: it up. So even when they're shipping room size pieces, 516 00:25:51,236 --> 00:25:54,676 Speaker 2: that that's the bottleneck. And so yeah, that's the focus 517 00:25:54,756 --> 00:25:58,116 Speaker 2: is making it so that you know, that won't be 518 00:25:58,196 --> 00:26:01,996 Speaker 2: the bottleneck because then the complexity can mean the factory. 519 00:26:01,996 --> 00:26:05,116 Speaker 2: But there's a playbook for making factories more efficient, right, 520 00:26:05,156 --> 00:26:08,596 Speaker 2: Like any company that's had to scale up production has 521 00:26:08,636 --> 00:26:10,596 Speaker 2: had to learn how to make factories more efficient. So 522 00:26:10,596 --> 00:26:12,156 Speaker 2: there's much more of a playbook for how to do 523 00:26:12,196 --> 00:26:14,916 Speaker 2: that than there is for how to scale what's going 524 00:26:14,956 --> 00:26:15,876 Speaker 2: on on site. 525 00:26:16,156 --> 00:26:21,036 Speaker 1: Right, So the the real process improvement you need to 526 00:26:21,036 --> 00:26:24,596 Speaker 1: figure out is what can you change in your in 527 00:26:24,716 --> 00:26:30,996 Speaker 1: the factory manufacturing process so that assembling the house on 528 00:26:31,076 --> 00:26:33,796 Speaker 1: site requires less skill. 529 00:26:34,356 --> 00:26:36,916 Speaker 2: That's right, and and and the result of that is 530 00:26:36,956 --> 00:26:39,316 Speaker 2: that it's also faster. But yeah, exactly. 531 00:26:42,796 --> 00:26:45,876 Speaker 1: At a certain level, what alexis uncover are trying to do, 532 00:26:45,916 --> 00:26:48,556 Speaker 1: you know, designing this thing so that it can be 533 00:26:48,596 --> 00:26:51,796 Speaker 1: made in a factory, so you don't need high skilled 534 00:26:52,236 --> 00:26:56,276 Speaker 1: laborers to assemble it on site. It reminds me a 535 00:26:56,276 --> 00:27:00,196 Speaker 1: little bit of the original Industrial Revolution in England more 536 00:27:00,236 --> 00:27:02,716 Speaker 1: than two hundred years ago now, where they did something 537 00:27:02,796 --> 00:27:05,476 Speaker 1: quite similar, but instead of doing it with houses, they 538 00:27:05,476 --> 00:27:08,556 Speaker 1: did it with cloth. That moment, you know, figuring out 539 00:27:08,596 --> 00:27:12,156 Speaker 1: how to produced something for cheaper with machines. That's really 540 00:27:12,196 --> 00:27:15,316 Speaker 1: the beginning of this era of technological progress that we've 541 00:27:15,356 --> 00:27:18,596 Speaker 1: been living through ever since. We'll be back in a 542 00:27:18,596 --> 00:27:21,796 Speaker 1: minute with the Lightning round, including Alexis tips for designing 543 00:27:21,876 --> 00:27:32,916 Speaker 1: a small space that doesn't feel that small. Now back 544 00:27:32,956 --> 00:27:36,836 Speaker 1: to the show, let's finish with the Lightning Round. I'm 545 00:27:36,836 --> 00:27:40,836 Speaker 1: just gonna ask you a bunch of questions. Yeah, I 546 00:27:40,916 --> 00:27:44,396 Speaker 1: read that you canceled all meetings for everybody at your 547 00:27:44,436 --> 00:27:45,716 Speaker 1: company on Tuesdays. 548 00:27:46,476 --> 00:27:47,116 Speaker 2: Is that true? 549 00:27:47,116 --> 00:27:50,356 Speaker 1: It's true? So why Tuesdays? 550 00:27:51,276 --> 00:27:54,076 Speaker 2: I Actually I wasn't like big on the Tuesday. The 551 00:27:54,116 --> 00:27:55,316 Speaker 2: Tuesday thing was just that we had to pick a 552 00:27:55,356 --> 00:27:57,156 Speaker 2: day and I just had to Hey, it's either gonna 553 00:27:57,156 --> 00:27:58,836 Speaker 2: be Tuesdays or Thursdays, and we put it up to 554 00:27:58,836 --> 00:28:01,276 Speaker 2: a vote, and Tuesday one, surprisingly by like seventy percent, 555 00:28:01,316 --> 00:28:03,756 Speaker 2: So I was like, Okay, let's do let's just do Tuesdays. 556 00:28:04,036 --> 00:28:07,356 Speaker 1: Who's the most overrated architect of the last one hundred years. 557 00:28:08,196 --> 00:28:10,956 Speaker 2: I think there's I think Frank Garry. Honestly, I think 558 00:28:10,996 --> 00:28:14,476 Speaker 2: Frank Aarry. There there's some I will say, there are 559 00:28:14,516 --> 00:28:16,596 Speaker 2: some very impressive things that he has done from a 560 00:28:16,636 --> 00:28:21,196 Speaker 2: technology standpoint, right as far as how his building, because 561 00:28:21,196 --> 00:28:22,156 Speaker 2: there's such crazy. 562 00:28:22,276 --> 00:28:24,476 Speaker 1: Metal that looks like it's like rippling in the breeze 563 00:28:24,556 --> 00:28:24,876 Speaker 1: or whatever. 564 00:28:25,076 --> 00:28:27,476 Speaker 2: Yeah, exactly, and and and and that metal actually like 565 00:28:27,556 --> 00:28:29,636 Speaker 2: they've done some pretty innovative stuff on it. So I'd 566 00:28:29,636 --> 00:28:32,196 Speaker 2: say from from a technology standpoint, he's actually very impressive 567 00:28:32,236 --> 00:28:36,356 Speaker 2: and inspiring. But but I just don't see why buildings 568 00:28:36,396 --> 00:28:38,676 Speaker 2: need to look like, you know, scraunched up napkins. Like 569 00:28:38,796 --> 00:28:42,756 Speaker 2: why this is controversial, but you know why. 570 00:28:42,756 --> 00:28:45,956 Speaker 1: I like it. So, who's the most underrated architect of 571 00:28:45,956 --> 00:28:47,356 Speaker 1: the last one hundred years? 572 00:28:48,516 --> 00:28:53,596 Speaker 2: Oh? Uh, underrated, I'd say, you know, Knees, Vandero and 573 00:28:53,676 --> 00:28:57,236 Speaker 2: Lac Corboussier. So by no means underrated. They're i think 574 00:28:57,356 --> 00:29:00,476 Speaker 2: highly respected within the architecture world. But outside of the 575 00:29:00,556 --> 00:29:03,196 Speaker 2: architecture world, a lot of people don't even know about them, right, 576 00:29:03,596 --> 00:29:05,636 Speaker 2: And they One of the things that I think was 577 00:29:06,116 --> 00:29:09,236 Speaker 2: really really interesting about the work that they did and 578 00:29:09,836 --> 00:29:11,756 Speaker 2: the vision that they set out for the world was 579 00:29:12,436 --> 00:29:16,476 Speaker 2: they looked at the car as kind of this thing 580 00:29:16,556 --> 00:29:20,156 Speaker 2: that we should aspire to in architecture in terms of 581 00:29:20,196 --> 00:29:24,836 Speaker 2: making it affordable to people, making it a mass market product. 582 00:29:24,836 --> 00:29:27,836 Speaker 2: And actually they talked a lot about the vision of 583 00:29:29,356 --> 00:29:32,716 Speaker 2: factory made homes so that you could have incredible homes 584 00:29:32,716 --> 00:29:34,636 Speaker 2: for everyone. And I think a lot of that has 585 00:29:34,636 --> 00:29:35,396 Speaker 2: been lost. 586 00:29:35,516 --> 00:29:39,476 Speaker 1: From your professional experience. What do you understand about houses 587 00:29:39,516 --> 00:29:40,596 Speaker 1: that most people don't? 588 00:29:41,356 --> 00:29:43,396 Speaker 2: Yeah, I think I think one thing there is is 589 00:29:43,796 --> 00:29:46,876 Speaker 2: not all square feet are created equal. And like the 590 00:29:47,036 --> 00:29:50,316 Speaker 2: degree to which this can be true shocks people sometimes, right, 591 00:29:50,436 --> 00:29:52,316 Speaker 2: people look at like, oh, how many square feet is 592 00:29:52,356 --> 00:29:55,396 Speaker 2: this home? Like you can have a thousand square foot 593 00:29:55,396 --> 00:29:58,916 Speaker 2: home that feels smaller than a six hundred square foot home. 594 00:29:59,036 --> 00:29:59,796 Speaker 1: Huh. 595 00:29:59,916 --> 00:30:02,516 Speaker 2: And and and I'm not I'm not exaggerating. So there's 596 00:30:02,516 --> 00:30:04,916 Speaker 2: a lot that you can do from a design standpoint 597 00:30:04,956 --> 00:30:09,356 Speaker 2: to make small spaces feel bigger. Right, So you know, again, 598 00:30:09,476 --> 00:30:10,316 Speaker 2: less is more, right? 599 00:30:10,556 --> 00:30:13,036 Speaker 1: What's one way to do it? What's like one tip 600 00:30:13,236 --> 00:30:15,476 Speaker 1: for optimizing your your space. 601 00:30:16,436 --> 00:30:21,956 Speaker 2: Yeah, large windows is huge, large Florida ceiling windows. And 602 00:30:21,996 --> 00:30:24,116 Speaker 2: then and then just good layout where you don't have 603 00:30:24,116 --> 00:30:25,996 Speaker 2: a bunch of wasted space and kind of like transition 604 00:30:26,076 --> 00:30:29,556 Speaker 2: like hallways right or foyer's right, like you kind of 605 00:30:29,596 --> 00:30:31,436 Speaker 2: don't think about that space because you don't use it 606 00:30:31,436 --> 00:30:31,956 Speaker 2: all the time. 607 00:30:34,636 --> 00:30:37,436 Speaker 1: Do you think you'll run cover for the rest of 608 00:30:37,476 --> 00:30:37,876 Speaker 1: your career? 609 00:30:39,316 --> 00:30:40,516 Speaker 2: That's all I want to do. I want to build 610 00:30:40,556 --> 00:30:43,596 Speaker 2: awesome homes and you know, whether it's backyard homes, single 611 00:30:43,596 --> 00:30:50,956 Speaker 2: family homes, multifamily that that's all I want to do. Yeah. 612 00:30:51,556 --> 00:30:54,476 Speaker 1: Alexis Revis is the co founder and CEO of Cover. 613 00:30:55,196 --> 00:30:58,836 Speaker 1: Today's show was produced by Edith Russello, edited by Sarah Nicks, 614 00:30:58,876 --> 00:31:02,156 Speaker 1: and engineered by Amanda Ko. You can email us at 615 00:31:02,236 --> 00:31:06,756 Speaker 1: Problem at Pushkin dot fm. I read every email. You 616 00:31:06,796 --> 00:31:09,116 Speaker 1: can also find me on Twitter at Jacob gold STEAE. 617 00:31:09,676 --> 00:31:12,116 Speaker 1: I'm Jacob Goldstein and we'll be back next week with 618 00:31:12,196 --> 00:31:21,276 Speaker 1: another episode of What's Your Problem.