#94: Will This Tiny Home be the Future of Housing? Elon Musk Thinks So...

Speaker 1 lots of fine companies out there in that space, but they're still regional business.

Speaker 1 They're not national and they're not global, let alone global. They're not national.
There's no national brand. And I would argue, I think without any hubris, that in a few short years, Boxable

Speaker 1 is the premier housing brand that's out there. And we haven't done anything yet.
We haven't done anything.

Speaker 2 So today we are here with Paolo Tiramani, founder with his son

Speaker 2 of Boxable. These guys are changing the world, one of the largest crowdfunding ever.
These guys are literally producing foldable homes that come in a 19 by 19 square foot.

Speaker 2 We're going to be doing tours of their facilities here. We're going to be sitting down, talking a little bit about the story.
Yep. Super excited to join you here.

Speaker 1 Yeah,

Speaker 1 we're going to have a great time. It's going to be a great time.
Coming in. Let's go.

Speaker 2 Hey, Paolo, thanks for having me here at Boxville today. Super excited to be with you.
Chris, welcome. Man, you have a really cool product.
Thank you. You know, and I'm very intrigued.

Speaker 2 I'm a marketer and salesman at heart. And so I love, you know, I guess you would call it kind of like the Tesla-esque approach from a standpoint of building a lot of hype and putting together

Speaker 2 an initial product prototype to the market and getting people really excited about it and then doing the pre-orders and then coming through and doing the fulfillment.

Speaker 2 My understanding is you guys have like 160,000 pre-orders or something crazy like that.

Speaker 1 Yeah, exactly. I think we have about 100, 160, 170,000, but I like to call them expressions of interest really because

Speaker 1 there's a bunch with deposits. I don't know the exact percentage, but mostly without a deposit, just like a cyber truck or something like that.

Speaker 1 And it's a unique expression of interest.

Speaker 1 So it might be one or it might be 10 or it might be 20, with the understanding that these are small, affordable things, so somebody might be able to put up a community. But

Speaker 1 does that person have the money? Do they have the land? Do they have the project? Do they understand what the undertaking is?

Speaker 1 So I really look at it as an expression of interest, but it's so, the net of it all is that it's so insanely overwhelming, which has been really validated by the dozens of people that come through here, fans come through here, investors every day,

Speaker 1 without any marketing to just come on through.

Speaker 1 That

Speaker 1 we said, okay,

Speaker 1 let's pin it at this scale for the next step. And it was really based on those numbers, which I think are validated one way or the other.

Speaker 2 I mean, that's pretty amazing either way, right?

Speaker 2 Regardless of how many people are going to be able to fulfill. I mean, just, I mean, the

Speaker 2 Cybertruck, you know, it's

Speaker 2 same type of feel, but

Speaker 2 amazing.

Speaker 2 And you guys have been catching a lot of press. I mean, from my understanding, Elon Musk is actually one of those that

Speaker 2 actually ordered one or has expressed interest in owning one of your units.

Speaker 1 Yeah, he was actually, strangely enough, he's customer number one.

Speaker 1 Which is pretty sweet for a startup to have one of the most important people on earth, customer number one. And I'll tell you a quick story, if I may.
Yeah, I would love to.

Speaker 1 We're in our R D lab with 10,000 square foot R D lab. And my business partner, my son Galli, came to me and said,

Speaker 1 he said, I keep getting this lady

Speaker 1 wanting to buy this

Speaker 1 one of our prototypes. We only had three prototypes.
He goes, what do you tell her?

Speaker 1 I told her, no, we've only got three. Comes back a couple of weeks later.
She keeps calling. She says she's from

Speaker 1 SpaceX.

Speaker 1 And Elon Musk wants her.

Speaker 1 So I said, what did you tell her? He goes, I told her no.

Speaker 1 But you know, at the end of the day, you don't say no.

Speaker 2 Yeah, you don't say no to Elon Musk.

Speaker 1 No. So, anyway, so we shipped one down there and

Speaker 1 it really is rough as balls. I mean, it was rough as balls.
What year is this? This is a couple of years ago, three, four years ago now. And the prototypes, really, really, I'm sorry.

Speaker 1 We'll swap it out for you anytime you want with the production one. They're really nice.

Speaker 1 So, yeah, so that's the backstory of that. And then the press went nuts.
We actually, we had momentum prior. We had amazing momentum prior to that news.
But it certainly didn't hurt.

Speaker 1 Absolutely did not hurt.

Speaker 1 And everybody just keeps bringing it up over and over and over again. For sure.

Speaker 2 I mean, it's great press. It's great media.
So my understanding is you guys were founded in 2017. I'm imagining that's when you guys started developing the idea.

Speaker 2 Where did that idea originate from?

Speaker 1 Yeah. So I've been prior to prior to this company, I had another company that was basically IP licensing, so IP intellectual property, mechanical patents.

Speaker 1 And my career, my whole career has been, it sounds like a little

Speaker 1 Rude Goldberg, a little eccentric, but it's invention.

Speaker 1 Nothing super fancy, like anti-gravity or anything, but still

Speaker 1 it's invention.

Speaker 2 I mean, I would say boxable is pretty close to anti-gravity.

Speaker 1 Oh,

Speaker 1 you're a smooth talker, Chris.

Speaker 1 So I ran that for a number of years, pretty successful. And

Speaker 1 the business model was really easy. We'd invent stuff, we'd license it to industry in exchange for royalty, just like any kind of author, except we were a company.

Speaker 1 So you could be a book writer, a songwriter, and you get a couple of bucks for every time that song is played or every time that product is sold in a bunch of different industries.

Speaker 1 So we got really broad knowledge, broad and deep knowledge

Speaker 1 on mechanical engineering. just like I think most people in any industry use the graphic screener.
And I'd harbored the desire perhaps to become an operator in a space.

Speaker 1 And because we're sort of professional inventors, you know, the idea, we didn't start with the idea. We started with finding a problem.
We said, what's the biggest problem we can find?

Speaker 1 And fast track to building construction, which is pre-industrial. So we're like, okay, you know, why? What's the problem? And this and that.

Speaker 1 And so filed a couple of patents over the last decade.

Speaker 2 So what would you say is the biggest problem that you guys are solving at Boxable? or that that idea stemmed from?

Speaker 1 Yeah, so overarchingly the biggest problem is that it's pre-industrial business. By that I mean it's not built in a factory.
So everything in a modern world is built in a factory.

Speaker 1 You can make rockets in a factory, right? So

Speaker 1 and then, you know, so okay, so the next step is why? It's like, oh, because they're big. All right.
So well, what can we do about that? So, you know, we look around at factory solutions.

Speaker 1 They're not solutions, unfortunately, because they put them in a factory using actually field tools as opposed to factory tools, which is another problem.

Speaker 1 And then they build something that's 14 foot wide, typically, which is illegally wide to ship without permits and things like that. So we said, can we solve the size problem?

Speaker 1 So that led us down to sort of the next click to

Speaker 1 why is there a size problem? Okay, houses are two-thirds empty space,

Speaker 1 which is inexpensive empty space, and then the remaining third is dollar dense with labor and materials, kitchens, cabinets, shelves, infrastructure. We said, okay, can we fold that down?

Speaker 1 And what does that get us? What does that net us? And what it netted us was

Speaker 1 something that goes down the road at eight and a half foot wide and it expands to a pretty staggering 19 foot wide by pretty much any length you want in terms of the tech that we'll develop.

Speaker 1 So that was a main aha moment. And then what folks don't realize is that if one

Speaker 1 aha moment is really backed up by hundreds of mini

Speaker 1 aha moments,

Speaker 1 mini inventions.

Speaker 1 So when we came up with the folding tech, which really much easier said than done, by the way, insanely hard to accomplish at a very low price, we're there now.

Speaker 1 That we were just engineers solving a problem.

Speaker 1 My background is degrees in mechanical engineering, industrial design, mostly industrial designer at heart. We were just solving a problem.

Speaker 1 But then when people saw that on the internet, they said, what the hell? Why is this thing unfolding? It just got the public's imagination. So just

Speaker 2 at what point did you have like something, a prototype that was unfolding and going viral on the internet?

Speaker 1 Yeah, so

Speaker 1 we

Speaker 1 first we attended since sequential years IBS international builder show. It's not international at all, it's totally American.

Speaker 1 It's like the World Series. It's like the World Series.

Speaker 1 So it's an international builder show and

Speaker 1 we went with a 40-footer, which is the ultimate gold, the company that's going to be the best price value.

Speaker 1 And

Speaker 1 I got a great reaction. It was wonderful and said, what can you sell us? And my partner and I looked at each other and like, well, no,

Speaker 1 so we needed to come up with a product. So we came up, Galena had the idea about this ADU accessory dwelling unit market in California.
And

Speaker 1 we said, okay, let's just... make the 20-foot building shell.
And we went to IBS that year, I forget what year it was, a couple of years ago. And

Speaker 1 we really just wanted to know do people like it and what can we price it at? You know, is it viable economically? And do folks like it?

Speaker 1 And then everything exploded from there because we actually put out a video and it was the guys were actually folding it down. And we just actually played the video in reverse.

Speaker 1 It's pretty interesting. And

Speaker 1 that just caught fire. That just caught fire with the funding, you know.

Speaker 2 That's amazing. You know,

Speaker 2 creating a modular home where it's built in a factory, non-single-wide, like the idea isn't necessarily new.

Speaker 2 In fact, so I've been in the entrepreneur space for 20 years, and I remember back in 2006 talking with a guy that told me, hey, yeah, we're trying to figure this out, right?

Speaker 2 Like how we can build real homes in a factory, be able to go and puzzle them together. So the idea isn't new.
Like to me, it's really intriguing that you guys are actually bringing it to life.

Speaker 2 What was like the big turning point to actually be able to get this to production?

Speaker 1 Yeah, so if I can, on the idea,

Speaker 1 the novelty of the idea, there's actually, you know, my background is a lot of mechanical patterns.

Speaker 1 So there's been folding structures out there forever, but they're folding structures that are stylized into an architectural model or style. So it's like this unpacks into an A-frame.

Speaker 1 Everybody in the world should buy A-frame homes. Like, how about no? How about no? Everybody wants to live in an A-frame or Or about it's in a 40-foot cottage? How about no?

Speaker 1 Because not everybody wants to live in a 40-foot cottage. So apart from practically solving the transport problem,

Speaker 1 what we have at Boxball is

Speaker 1 we are architecturally neutral. So our position is we have three sizes of building shells, which 20, 30, 40, more or less,

Speaker 1 unpacked to about 19, 20 foot wide, and Stat Connect cantilever. There's no architecture in this yet, in that statement.
So what can't you build with that?

Speaker 1 Well, you can build most things most of the times. And then, you know, I like to say,

Speaker 1 unless you're an Eskimo living in an igloo, I'm sure there's going to be an Eskimo upset by that statement.

Speaker 1 No worries. Yeah, thanks.
And it's around structure. You're living in a rectangular box.
And you're going from a rectangular room to a rectangular room.

Speaker 1 And if you want to create something with great atrium spaces and stuff like that, you can do that. But you can accomplish the bulk of it with the rooms.
It doesn't matter where you are in the world.

Speaker 1 It's actually a very small world in many ways. So that, what we have is a building system.
We don't have a house. We have a building system and the building system has configurations.

Speaker 1 And then to configure, and so the public's only seen the 20-foot casita configuration, which is great, widely popular. So we have to maintain that

Speaker 1 level of

Speaker 1 goodness as it expands. And it's incredibly complicated when you put those Lego bricks together to continue to create good architecture and create most things most of the time.

Speaker 1 So what we have is the building shells. The building shells

Speaker 1 can connect in many different ways. And then we have what we call dress ups, which you've seen outside probably.

Speaker 1 So customers and what the interesting thing about the dress ups is they're not structural whatsoever.

Speaker 1 You still need a roof, of course, but

Speaker 1 so it's almost a handyman project. So you can make it traditionally contemporary,

Speaker 1 traditional or contemporary, whatever you want. So it's a fundamentally different approach.

Speaker 1 And it is a mountain of

Speaker 1 development

Speaker 1 so that the program can scale, let's say, just in the residential market, from studio to four bedrooms, studio one, two, three, four bedroom. Maybe I'll show you something later.
See, yeah.

Speaker 2 Yeah, we're excited to jump in.

Speaker 2 And, you know, we've had the opportunity to do a little bit of a walkthrough with one of your tour guys here, and we're going to jump in.

Speaker 2 I think the product itself is very intriguing. What I would love to understand more is about you.
Like what created you? Like

Speaker 2 what got you into the entrepreneurial space? Like why

Speaker 2 are you the one that's here today changing the world?

Speaker 1 Well, I would say probably most folks that are driven to do things have some kind of character flaw. You know,

Speaker 1 on the spectrum of normal, probably not terribly normal.

Speaker 1 So so for me

Speaker 1 a couple of things I have really an aversion to authority

Speaker 1 when did you realize that oh yeah always so it was a little uncontrollable and then I was really sick as a kid so I spent a lot of time in bed with Legos and paper and scissors and stuff like that tell me tell me more about that you said you were sick it like was this like you weren't you weren't able to go out and play yeah yeah I was just stuck in bed for a couple of years just asthma over protective Italian mothers she's absolutely ridiculous oh my goodness I could have played with the kids really but how old were you

Speaker 1 um i was probably in sort of the

Speaker 1 five to seven five to eight so i went to school i was eight so i think that was really super formative for me because um it was a long time ago and it was with paper scissors blunt scissors because of a protective mother and legos and jigsaw puzzles and things like that so so that was that uh plus the other character defects and um

Speaker 1 the inability to to to to focus

Speaker 1 so didn't do too well at school until we got to industrial design, mechanical engineering school. Then I was great.

Speaker 1 So yeah, so I had it in my head from day one.

Speaker 1 So I started a company that...

Speaker 2 Were you a big dreamer at a young age?

Speaker 1 I don't know what dreamer is, but it's just a kid, you know, like any other kid. So yeah,

Speaker 1 it's just pretty common, common guy, common story.

Speaker 1 Nothing really, I don't think, truly amazing or incredible.

Speaker 2 I would say the vast majority of successful entrepreneurs have had a series of failures along the way. Can you talk about some of your failures that have led to this massive success?

Speaker 1 Yeah, yeah. So

Speaker 1 yeah,

Speaker 1 absolutely. I mean, first project I did out of school,

Speaker 1 I started a little company, just a couple of people, and

Speaker 1 we made it, was

Speaker 1 a hanger for, as an organizer for coats and things like that.

Speaker 1 And it was great. People really liked it.
And I had no follow-through. I was right out of college.
You know, it it was a complete disaster.

Speaker 1 So that was the first one.

Speaker 2 So people wanted it. You just weren't able to follow it.

Speaker 1 I couldn't follow through. I was a designer.
I was

Speaker 1 21 years old. And I just

Speaker 1 fell straight on my face.

Speaker 1 Then started a barware company.

Speaker 2 So when you're going through this failure,

Speaker 2 what's going on in your mind? And how did you overcome it and bounce back?

Speaker 2 Because usually, you know, a lot of people, when they go through failure, they stop there and they go back to the real world and get a job or whatever else.

Speaker 1 Well, I mean, you're a kid, so you don't overanalyze, right? Or certainly in my case, I just sort of shrugged it off and moved on.

Speaker 1 And it's easier to do when you're young because you don't have commitments.

Speaker 2 But I also say that's like the characteristic of a successful person. I wouldn't necessarily say, oh, you're a kid, you move on, right? Like, it definitely is easier.

Speaker 2 So I think that is probably one of your superpowers, the fact that you're able to shrug it off.

Speaker 1 Yeah, I mean, the other thing is the other character flaw would be never giving up.

Speaker 1 You know, if you really want, if you want to be an entrepreneur, you can't give up.

Speaker 1 But I mean, to a pathological degree, you can't give up.

Speaker 1 You have to get up and go every day. You can't give up.

Speaker 1 Unless you are absolutely compulsively driven to do that,

Speaker 1 you shouldn't go get a job. And there's nothing wrong with getting a job.
You can have a wonderful career. It's absolutely fantastic.
But

Speaker 1 if you think entrepreneur not you but if someone thinks that entrepreneurship is just

Speaker 1 all all the glossy all the glossy stuff no it's it's underpinned by mountains and mountains of pain yeah I'd say that's about two to three percent of entrepreneurship is the glossy stuff yes and then pain yes pain is 95%

Speaker 1 yeah this is true yeah so but never giving up really is you know And you have to put it, you also have to put it in front of everything.

Speaker 1 Really in front of everything. You have to put it in front of friends, relationships, everything.

Speaker 1 You have to

Speaker 1 be a good parent if you've got kids, but you're still going to be thinking. When they're at the park,

Speaker 1 you're going to be thinking about business. When you're playing with them at the park, you're still going to be thinking about business.
And that's the reality.

Speaker 1 If you're not prepared to do it, don't do it. Don't do it.
I'm not advocating it. Don't do it.

Speaker 2 And so you bounced back, you started something new. How many failures did it take to go through before you found something that finally started to pop?

Speaker 1 Yeah, I mean,

Speaker 1 that was probably it. Then I started

Speaker 1 sort of a cup company, brought us to America.

Speaker 1 It was in one of the Star Trek movies, so that caught fire. Again, sort of early media.

Speaker 2 That's a pretty cool story.

Speaker 2 How did you get on the Star Trek?

Speaker 1 So it was just a glass with a straw around it and the shape of a ball and a tumbler. And it was a really cool product.

Speaker 2 So did you work on getting it featured in that movie, or did it just

Speaker 1 work? It's so long, I can't remember, but I don't... No, we didn't work on it.

Speaker 2 They used it.

Speaker 1 Yeah, we just weren't that sophisticated. And then we were selling these things by the containers for, I mean, in my early 20s, it was pretty amazing.
That's cool. So that was pretty cool.
And then

Speaker 1 I started the intellectual property licensing company, ran that for a bunch of decades. And I think that just personally gave me...

Speaker 1 sort of really broad experience in materials, processes, consumer goods. It's always been consumer goods my whole life.
So I look at Boxable as a consumer good.

Speaker 1 It's the biggest consumer good that isn't.

Speaker 1 It's the biggest consumer product category that isn't until boxable and it still isn't because we haven't gotten off the ground yet.

Speaker 1 We look impressively wonderful and great but we're very much a startup. We're not at revenue.
We have humongous challenges ahead of us and you know and we're grinding through that.

Speaker 1 But our philosophy in product development was always to, let's say, go into the store, one of the big box outlets, and we go with the guys and I'd say, okay, here's a shelf.

Speaker 1 Put your hands in here, push it apart. What product category can we invent that doesn't exist? And that was the philosophy.
That was the first principle.

Speaker 1 And we didn't even have to do that with building construction.

Speaker 1 There's a brand for everything.

Speaker 1 There's no brand for housing. And we have wonderful partners like the R.
Horton, the biggest homebuilding brand in America.

Speaker 1 And, you know, respectfully, Most people don't know it, most people don't know it unless they're in the industry or Champion Homes. And there's Lenard.

Speaker 1 There's lots of fine companies out there in that space, but they're still regional business.

Speaker 1 They're not national and they're not global, let alone global. They're not national.
There's no national brand. And I would argue,

Speaker 1 I think without any hubris, that in a few short years, Boxable

Speaker 1 is the premier housing brand that's out there. And we haven't done anything yet.
We haven't done anything.

Speaker 2 You guys have delivered, what, 160 homes or whatever?

Speaker 1 Yeah, we delivered 170 to the government. We delivered another 100, 200 here and there.
I think we produced 550 in two years, which I'm very proud of because

Speaker 1 it's a production line, but it's not like we're not a car company, we're not forward just putting up another production line and the engineers know how to make cars.

Speaker 1 We assembled a group of strangers, a really incredibly smart group of strangers,

Speaker 1 engineers and such to build something that's not been built this way before using automotive Toyota type principles that the general auto market has adopted.

Speaker 1 You know, we've hired, we've hired Porsche consulting, Porsche the Carbrand consulting, we've hired Sandy, Sandy Monroe is wonderful,

Speaker 1 you know, to help us get there. It's iterative improvement.
And so we feel like we've just got our fingers on the first ledge of the production plan.

Speaker 1 And to do that from a standing start and make 500, 550 homes in a couple of years, I think

Speaker 1 is a huge achievement on the one hand, but it also

Speaker 1 doesn't

Speaker 1 to do anything.

Speaker 2 Just scratching the surface of what you're capable of because clearly there's demand, right? You got a lot of hype and a lot of energy.

Speaker 2 You ran one of the largest crowdfunding campaigns in history.

Speaker 2 I believe you raised about 75 million through crowdfunding. Is that correct?

Speaker 1 I think it's about double that. Oh, double that.
Wow. Yeah.

Speaker 1 We'd have to check on that. I'm not saying that as a certainty, but I mean, that too.
It's around 150, I think.

Speaker 2 In and of itself is a testament of the need, the want, the desire for your product. And so, now working on the fulfillment, you know, talking with some of your team,

Speaker 2 you guys are producing about two homes a day right now.

Speaker 1 Yeah, so right now we're slow walking because there's so much engineering to do. And if you sat in on some of the engineering sessions, you'd think you're at NASA.

Speaker 1 You know, I mean, it's just an insane level of detail.

Speaker 1 And one of the nice things about that is that, you know, if you're making a single-family home out in the field and the architect's designing it, you can't put any resources into that.

Speaker 1 and it's going to be basically inefficient. Because we have a system and we make the same things over and over again in the factory that yields custom structures in the field eventually,

Speaker 1 we can add, we can put in whatever resources are needed to drive that cost down.

Speaker 1 That's what this is about. The three legs of our stool are highest quality, lowest cost, maximum speed.
And speed, which you mentioned, we're four hours

Speaker 1 very comfortably, slow walking, single shift, because it's pointless making something that's higher price than we want it to be.

Speaker 1 Although our prices are great, our first direct material and labor, which I probably shouldn't share, are really amazing and they're plummeting.

Speaker 1 Pretty nice. So it's all going directionally

Speaker 1 in a good place.

Speaker 2 But in terms of time, well, I mean, as far as sharing, you don't need to share numbers, but being profitable, I'm always a big champion of you got to be profitable in order to run a good business.

Speaker 2 So good margin, that's good.

Speaker 1 And we could, you know, if we said, okay, we've got 400,000 square square feet here, this is this is where the buck stops, let's make a nice company, let's let's release a whole bunch of engineers and just keep banging these out, and we can sell hundreds of thousands, probably millions of casitas around the country and around the world.

Speaker 1 But right now you're in growth mode. Everybody's in the world.
Yeah,

Speaker 1 everybody would be happy. But if you pile on your general SGNA onto one product, of course, it's not going to be profitable.

Speaker 1 It wouldn't be possible.

Speaker 1 But we could be profitable if we wanted to be today, if we just wanted to stop here but the growth you know our our investor base and our staff everybody i think mostly sees the vision is much better much bigger than that to actually to actually make to actually do something really really big like really really big and

Speaker 1 Really really big means a very short period of time where you're not fixing any problem. If you make a couple of hundred thousand homes a year, ultimately, we haven't done anything.

Speaker 1 I know it sounds crazy. You know, the numbers are so, so nuts, but we're at four hours.

Speaker 1 Our engineers are telling me that uh by year's end uh by by uh i'm not sure when some not year's end uh two we have 1.0 product out there right now we're going to 2.0 generative improvement that we should be with our first step into automation we should be 45 minutes

Speaker 2 from four hours from four hours to 45 minutes to be able to produce a home that is phenomenal so the automation yeah we we did an incredible tour kind of seeing what you have right now and and where you're taking this thing is is really amazing what's really amazing if I can just expand on that a little bit, because it's really, really interesting from a design and math point of view, like simple math, we have, let's call it 10 stations out there.

Speaker 1 We have 10 stations just like automobile and just goes down the line and makes the product and we're at four hours. We've only doubled the number of stations.

Speaker 1 So double the number of stations has gone from four hours. to 45 minutes.

Speaker 1 So you would expect to double the number of stations that it would go to two hours, but it didn't. It went to 45 minutes.

Speaker 1 our um our projections show that if we have maybe 80 stations 90 stations our engineers telling me we'll be down into four or five minute range what yeah and that goal our goal is to make one every minute every sixty seconds i love that vision what what else drives you right now what is the vision and long term that you see for this business yeah so i think that

Speaker 1 so the so the the our our overarching business if we're able to be successful goes far beyond you know the four walls or twelve walls what do we have three factories here in northwest Vegas we're looking at everything from from the origin of the supply chain

Speaker 1 past

Speaker 1 past interim customers such as developers to the guys that really matter which is the consumer, the person that pays.

Speaker 1 So when you have a standardized system, the fewest number of components, the fewest number of unique components, maximum amount of symmetrical components, and you're obsessed about how far people walk, how much energy they've used.

Speaker 1 You know, sustainability is really a function of energy use.

Speaker 1 To bring the price down, all of this stuff,

Speaker 1 all of this stuff that's happening here in this core can be utilized to streamline everything from, because the principles are so streamlined, can be used to streamline everything from

Speaker 1 supply chain to the end user, including government regulatory. Everybody wants this.
We don't see any losers in a reshuffle. So a super ambitious goal.

Speaker 1 And then I would say overarchingly, we were fortunate that we could start with the configuration of a little casita, a little Model T if you like.

Speaker 1 And as the business grows into different configurations,

Speaker 1 if we're successful,

Speaker 1 we should make millions of product a year. And it should slowly turn into a massive logistics company.
At which point I will have less than zero interest.

Speaker 1 We're a few years away from that, even if we do a really amazing job. But

Speaker 1 no interest in running a logistics company.

Speaker 1 So it should be success is a massive, massive logistics company

Speaker 1 making

Speaker 1 product incredibly quickly, like the rest of the post-industrial world at an incredibly low cost, at an incredibly low cost.

Speaker 2 And adding facets to that customer experience such as portability even though it's a fixed home and modularity that they can expand and reduce the size of their home things that people can't imagine right now so besides efficiency and getting to that point of where it becomes a logistic company like what drives you personally what it like if you wake up in the morning and you're excited for the day I mean,

Speaker 2 what is it that gives you that energy?

Speaker 1 So for me, just from day one, it's just very simple. I just want to be the best.

Speaker 1 You're talking about me as an individual? I want to be the best. I'm driven to be the best.
Doesn't mean I always succeed.

Speaker 1 So that's a core driver for me. I just want to be the best.

Speaker 1 Because my mother told me I was. She's an Italian mother.
What am I going to say?

Speaker 1 I can't disagree with her. So I want to be the best.
And then as it relates to the company,

Speaker 1 I want to fix this problem.

Speaker 1 I don't mean the boxable problem. I mean the housing crisis.

Speaker 1 And we have, I think, a singular sort of once-in-a-lifetime opportunity. That's how I feel about it, to actually fix the housing crisis.
And there are three parts to the housing crisis, right?

Speaker 1 There's the product, there's the land, and there's a regulatory. The product, the land, and the regulatory.
So we can fix two of those. We can't fix the land.

Speaker 1 Can't fix the land. That's another problem.
I can go on about that, but I won't.

Speaker 1 But we can fix the product. We know we can fix the product because we've done enough underlying research now to see what was an idea.

Speaker 1 Now we can see where where those cost savings go, where the speed goes, where the product quality goes, where what the reaction

Speaker 1 by our customers to, if I can be a modest for the group,

Speaker 1 really amazing design, seductive design that makes you want to just love and be

Speaker 1 in the space. And then also the regulatory,

Speaker 1 it's just pre-industrial space where there's so many different stakeholders, where

Speaker 1 their own islands of self-interest.

Speaker 1 So,

Speaker 1 but the good thing is, both at the state and federal level, they want to fix it too. They just don't know how.

Speaker 1 So, we have the winds to our backs, and we're also apolitical. It doesn't matter if they're the left, the middle, or the right.
Everybody wants to fix this problem.

Speaker 1 And the government is in the business, unfortunately, of revenue generation for the government. So, more houses, more revenue, more houses, more taxes, more revenue for the government.

Speaker 1 So, everybody wins.

Speaker 1 So, those are the two of the three problems.

Speaker 2 I can

Speaker 2 definitely

Speaker 2 empathize with this type of issue coming from the solar industry, like doing different jurisdictions.

Speaker 2 You're dealing with the lowest level of HOAs to county and city and state and federal. And everybody has a different interpretation on how they want to do things.
So I definitely understand

Speaker 1 the fixing of regulatory.

Speaker 1 I mean, my favorite piñata is

Speaker 1 that houses, some houses have wheels, you know, trailers and things like that. And they don't allow you to take the wheels off.
because that homeowner is just kind of skid adult. Right.

Speaker 1 It's just like they're going to drive their car, they're going to drive their house to work. And it's just so absurd.
It is. This sort of

Speaker 1 legacy law. Right.
And then followed blindly at

Speaker 1 the local level. And they're just trying to do the job.
It's like, here's the rules. Here's my job.
This is where I'm getting paid. These are the rules I have to follow.

Speaker 1 I'm going to implement these rules and then I'm going to be a good worker and I'm doing a good job. You know what? That person is right.
The person is right. It's not their fault.
So, anyway.

Speaker 2 I'm excited to see what's next here, Apollo. And I know we're going to go and see a little bit of behind the scenes of some of the things you're working on.

Speaker 1 We're going to see a

Speaker 1 secret squirrel.

Speaker 2 Awesome. Well, let's jump over there.
I'm excited.

Speaker 2 So, it looks like we have a pretty awesome modular home going on here. It looks like a combination of a few of your

Speaker 2 standard 19 by 19 units.

Speaker 1 That's exactly right. Okay.
So, eventually, we'll have this 20 by 20, we'll have 20 by 30, 20 by 40.

Speaker 1 But, what we're doing here is we're showing customers how they can connect. So

Speaker 1 three dimensions, X, Y, Z. So there's no Y, Y is up and down, so it's X and Z.
Well, this fourth time, but we'll forget about that. And

Speaker 1 so

Speaker 1 the principles here are how we can take the Casita program and then turn it into

Speaker 1 studio one, two, three, and four bedrooms. Awesome.

Speaker 1 With all good flow, good floor plans, and all of that good stuff. And how customers ideally can expand their casita.

Speaker 1 I don't know if they'll be able to do it with 1.0 with 2.0 certainly

Speaker 1 after they've moved in. And this might give some really great opportunities to developers.
We're having those discussions where they can just do an oversized lot,

Speaker 1 put the

Speaker 1 foundation down for a larger unit and then you know couple has a kid, blah, blah, blah, you know,

Speaker 1 kid comes back from college,

Speaker 1 grandparents, whatever it is. So really interesting.
So now we're working really just in two dimensions, X and Y. And we can rotate something, you know, four times.

Speaker 1 We have cores, we have open space, we have kitchens, we have bathrooms. How can we make that all work together?

Speaker 1 And what we've concluded is with three SKUs, with three, with only three configurations, only three,

Speaker 1 so the factory is making three configurations.

Speaker 1 Configuration is the 20-foot box and what do we put in it? So it's the same 20-foot box, box but we put different things in it but only three different things and with that we can create nine

Speaker 1 nine configurations for the customer that go through studio one two three four bedroom in townhouse style which is narrow front or college style which is wide front so a huge amount of customization for the consumer because customer

Speaker 1 Custom is in the word maybe I know it is and for the factory factory the goal for the factory is to make repeatability very Very cool.

Speaker 1 So we're going to go in, we've seen the casita, we're going to enter through the casita.

Speaker 1 And we'll check out some cool stuff. What we see here is the standard casita.

Speaker 1 The quesita has, you know, these nine and a half foot ceilings, incredibly wide, eight foot tall windows, great sight lines.

Speaker 1 Everything's big. All the cabinets are huge.
2.0 cabinets go up to the ceiling with a step stool. Just on and on.

Speaker 2 Great appliances, good-looking countertops.

Speaker 1 Yeah, big Z-Wave counter.

Speaker 1 And even the casita, you know, everything's full-size. So the refrigerator is full-size because even if you're living alone in a $60,000 house, you're still shopping for the wheat to save money.

Speaker 1 But then as the product system scales into additional bedrooms,

Speaker 1 the big fridge starts to make sense. And the kitchen is still right-sized and everything like that.
So, yeah, so we'll take a walk through. So this is configured as...

Speaker 1 a three-bedroom as a three-bedroom all scaled off the casita which is which is pretty yeah you can tell this is the original casita, and then you just have a new opening here and here.

Speaker 1 It expands it very cool. So what we did in the bathroom is we took out the shower, made it a half-bath, and we have

Speaker 1 a double stack for the family. Very nice.
Okay, so we'll lay down some breadcrumbs and we'll go on a tour. Okay.

Speaker 1 And we should wind up. back where we came from.
And the whole thing is about 1,050 square feet, which is not big, but I can guarantee it's going to feel huge by the time we've got to all.

Speaker 1 And what do you say about,

Speaker 1 so most of life,

Speaker 1 especially where you're living, most of life is visual when you think about it. Like if we close our eyes right now, as long as the temperature is good, you don't know where you are.

Speaker 1 You could be in the basement. So visual is super important, although we pay attention to sound and smell as well.

Speaker 1 But visual is so important. So things like this,

Speaker 1 it makes this look huge.

Speaker 2 The mirror is a great touch.

Speaker 1 But

Speaker 1 the secret to the mirror is that it goes, there's no frame around it and it goes all the way to the ceiling and to the edges. And so in a casual glance, the space feels big.
It feels big. And

Speaker 1 one of the driving design details for

Speaker 1 Boxable is that you're not giving up anything for the lower price. In fact, you're getting more quality, you're getting more features.

Speaker 1 You're not skimping on anything and you're not skimping on size. The first thing folks do with something small like a casitas is they skimp on size.

Speaker 1 Everything's tiny, you've got low ceilings, little windows, it's junky. Everything is is big and high quality.
So very nice. Come in here.
This is the kids' wing.

Speaker 1 So you have a nice sort of, I don't know what you'd call this, vestibule, I have no idea.

Speaker 1 So we come in, this is the first of two bedrooms,

Speaker 1 and a nice size bedroom.

Speaker 1 We can put in here. So we size this.
So these are obviously, you know, fairly compact,

Speaker 1 but it's still got to work from a human factors and ergonomics and flow point of view.

Speaker 1 This will fit a queen-size bed, which which is pretty amazing queen-size bed with plenty of room to walk around we're gonna set this up as a sort of teen tween bunk where the kid sleeps on top couch below yeah gaming huge TV nice big nice big window yeah walk-in closet

Speaker 1 which is phenomenal to get a walk-in closet right like that is that is incredible yeah and then Jack and Jill bathroom here you got it you got it nice so actually even little things like what happens when we put a door on here you know so we're putting two barn doors but they slide over each other so you you can both have them open at the same time, blah, blah, blah.

Speaker 1 So anyway, really great space for kids. And if we look behind us,

Speaker 1 right here, this mirror,

Speaker 1 this is a standard window opening.

Speaker 1 So as customers start to configure their product, when they put two boxes together, what used to be a window could now be a blind, a blind window that backs up against another box.

Speaker 1 So we'll be providing a kit that pushes on, that creates shelves and gives utility to space rather than having them patch the window. I like it.
And all the wiring is on the grid.

Speaker 1 One of the things we didn't talk about is all of Boxable is what we call on the grid, similar to Lego with the bumps.

Speaker 1 You know, you can put it together like this, but you can't put it together halfway.

Speaker 1 So on all windows, there are electrical wires that come down on the grid. Everything is chased.
The whole house has basically chaseways or holes through it. So

Speaker 1 on the factory production line or afterwards, the customer can run wires.

Speaker 1 So if they make that, if they turn what used to be a window into a bunch of shelving, they can pull a wire and light the shelving. Now you put glass shelves, you created a lot of drama in the space.

Speaker 1 Very cool. Anyway, check it out, Jack and Jill.

Speaker 2 Oh, this is a great use of space.

Speaker 1 Double sinks.

Speaker 2 Very large, I mean standard shower and tub.

Speaker 1 Yeah, it's amazing. So this will make our own.
This is just prototype. So when you expand the family, the casino just has a shower in it.

Speaker 1 But if you have little kids, kids need to split splash in the tub.

Speaker 1 And so you've got to have a tub. So this will be a tub.
Nice big mirror, double sinks.

Speaker 1 Gives some natural light with the window. Yeah, yeah.
And it's privacy as well. It's not a big deal.
That's both worlds.

Speaker 1 And then we come back to the mirror room, the mirror of...

Speaker 1 the other room. So this is just, you know, rinse and repeat, same features apply, walk in the closet and things like that.
And this one has a door to an outside deck.

Speaker 1 If you look at it from the top, it's three casitas in the shape of an L.

Speaker 1 So this is the fourth imaginary cube. And what we have here is

Speaker 1 the least expensive space of all. But it's incredible utility and you get an inside-outside flow.
It's a huge space and just with some inexpensive rafters, we can create some shade from sunlight.

Speaker 1 And then of course the rest of the roof would be on here. We're not doing it it for this one.
We'll have sort of fairy lights on here. It's going to be a beautiful space.

Speaker 1 We're going to kick this out with, you know, a jungle gym and a giant TV to watch soccer and umbrellas and chairs.

Speaker 2 Yeah, especially in like a warmer weather climate, whether it's a California or Texas or whatnot, this would be a great indoor-outdoor space and very well utilized.

Speaker 1 Yeah, exactly. And this configuration, you can choose which is the front door and which is the back door.
So we just came in one configuration where this was the front door and this would be

Speaker 1 the back deck. but this could also be the front of the house

Speaker 1 because

Speaker 1 you know boxable geometry serves a lot of masters. So 918 is standard parking space.
Boxable is 91919. That's not an accident.

Speaker 1 So if this were the front of the house, depending on your community, you can actually drive two cars in here. This could be the parking lot.

Speaker 1 This could be the entrance and you can have a deck off the back, and this can be the front door. So huge amount of utility when we think about floor plans.
All right, so that's that's nice.

Speaker 2 And then you have the master bedroom. Oh, yeah.

Speaker 1 So

Speaker 1 we save the biggest to last.

Speaker 1 So again, a nice pre-entry here, which we can kid out with shoe racks and stuff like that. Oh, yeah, a nice little mud room.
Yeah.

Speaker 1 And this is really going to be

Speaker 1 a super nice space when it's done. One of the nice things about this space is...

Speaker 1 So I'm a symmetrist. You know, if I can get it symmetrical, I'm going to get it symmetrical, unless there's

Speaker 1 a purpose to the asymmetry. So here is really nice.
This will have a king-size bed.

Speaker 1 The homeowners are going to be looking at a huge fireplace, a huge television, huge closets,

Speaker 1 pre-entry here, so you're not dumping straight back into the living room. So you get some nice privacy.

Speaker 1 Nice kitchen.

Speaker 2 My first impression walking into this space is like, wow, like you would not expect this, right?

Speaker 2 From the outside, you're like, oh, boxable, 19 by 19, whatever. You come in here, I'm like, hey, this is a good-sized master bedroom.

Speaker 2 To your point, I mean, these closets are phenomenal. I mean, this is like a combination of a huge walk-in closet, essentially.

Speaker 2 You know, plenty of space on both sides of a king bed with the fireplace, the tall ceilings. I mean, just the whole thing is pretty phenomenal use of space.

Speaker 1 Yeah, thank you. Thank you.
And so, and we'll have a fan in here. And one of the nice things we're doing, for example, little touches that mean a lot in design.

Speaker 1 So imagine you have a king bed here, you have

Speaker 1 the girl's side wardrobe here, who's obviously going to take up half this wardrobe as well. But, you know, so the basic stuff for this season is over here.
On this bathroom door is going to be mirror.

Speaker 1 The whole thing is going to be a mirror. So now we've, you sort of trigger word

Speaker 1 walking closet. You're absolutely right.
We've created a giant walk-in closet here.

Speaker 1 in the sense that that person can get clothes, try them on, look in the huge full-length mirror, big deal, especially for girls, throw them on here, rinse and repeat until they're happy with the way they look.

Speaker 1 So, really, really nice. So, this will be a solid door, obviously, and then this will be a mirrored door.
Big fan, big giant painting behind, and really nice.

Speaker 1 And what you see in with Boxable being on the grid on the system, any door can become a window, and vice versa. So, you'll see when we when we blow out those nine configurations,

Speaker 1 you know,

Speaker 1 this window behind you, in one of the configurations, would be a a door, would be a door, and that might be a small home office, a small home office.

Speaker 1 But to think through all of those permutations and make the system work, obviously there's nobody doing that. And you have to apply enormous resources and tens of millions of dollars to get that done.

Speaker 1 So if we wander back through here,

Speaker 1 oh look,

Speaker 1 we're back where we started.

Speaker 1 So very nice.

Speaker 2 Yeah, it's got a great flow throughout the whole home.

Speaker 2 I mean, it's pretty remarkable what you're building here, Apollo. Like, I mean, what it is currently, what the future is.

Speaker 2 I mean, I've heard, you know, discussion that you can stack them on top and be able to do potential like apartments or those type of things. I mean, that's pretty phenomenal.

Speaker 1 Yeah, our reach goal is to go multi-story. I won't pick a number

Speaker 1 and say it out loud, but I think people are going to be shocked by how far we can stack them. And at last year's IBS, International Builders Show,

Speaker 1 these we have repurposed.

Speaker 1 These three modules were used to create a two-story

Speaker 1 and that master suite was upstairs and we used that pretty much how it was. And this was a different unit actually.
It was configured with a spiral stair and stuff like that.

Speaker 1 So it sort of gives us an inkling that if we stick to those first principles, if we stick to simplicity, if we think things through as hard as we can, even though it's really painful and costs a lot of money, as far out as we can see, and then bring it back and take the next step, We're less likely to booby trap the company or dead-end the company or a part of the company in the future.

Speaker 1 Right. If we really think as hard as we can, and it's difficult to do, it's difficult to do, especially when you've got immediate deadlines.
And then I'm saying, well, no, hang on, fellas.

Speaker 1 Let's think it through a bit.

Speaker 1 They're like, we don't have time.

Speaker 2 Well, so I love the vision, love everything you're building here. Appreciate your time.
Thank you so much.

Speaker 1 Thank you. Thank you.
Very nice.