Reimagining New Home Construction with Veev’s Amit Haller

Welcome to the Top of Mind podcast from Altos Research. This is the show where we talk to real estate industry insiders and experts about the trend shaping the market today. Enjoy the show. Mike Simonson here. Thanks for joining me today. Welcome to the Top of Mind podcast. For three years now, we've been sharing the latest market data every week in our weekly Altos research video series with the Top of Mind podcast, we are looking to add context to the discussion about what's happening in the real estate market from leaders in the industry. Each week, of course, Altos research tracks every home for sale in the country, all the pricing, all the supply and demand, all the changes in that data. And we make it available to you before you see it in the traditional channels. People desperately need to understand what's happening in the housing market right now.

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The market was frozen solid last year. It was surprisingly strong this year and now that landscape is changing again very rapidly. So if you need to communicate about the housing market to your clients, to buyers and sellers, go to altos research.com and just book a free consult with our team. Then we'll review your market together, your local market, and how you can talk about this crazy housing market with the people you need to communicate with. Alright, let's get to this show. I've got a terrific guest today, Amit Holler. Amit is the CEO count co-founder of Veev. It's a company that is out to build single family homes at scale. Amed has 20 years of experience in the tech industry including leading positions in public companies and over a decade of real estate development, asset management and construction. So I am really interested in understanding about how Veev is re-imagining home building and the home building process using technology. There's a lot of technical innovation happening in home construction right now, and so that's what we're going to talk about today. So Amit, welcome.

Thank you so much Mike, and thank you for the opportunity.

Great. Well let's start with you. And so tell us about your background and how you came to Veev.

Well, very interesting background. I would say non-traditional into get into construction actually started in semiconductor and I created one of the very first, or the first Bluetooth chip set mid the nineties, so before Bluetooth was a thing, and the company got acquired by Texas Instrument later on and became the Bluetooth solution for Texas instrument among many other technologies going into that from wireless communication and semiconductor, I switched to smartphone and created smartphones early 2000, before the smartphones were very popular at the time and over time and over progression, I got to the point in 2008, very coincidentally, October, 2008, which I decided I'm going to retire and to become a real estate investor. So real estate investment went very well just because it was October, 2008, right? Nothing to do with my smart or nothing around that retirement went very poorly. One is because it is hard work to do good real estate investment as I learned the hard way.

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It's not like the books tell you that you just pack your money and life is beautiful. And second, as a technologist, I start to get very engaged very quickly into problems and solutions and how to create efficiency. And over time learning more and more about real estate, about real estate development, about asset management from the ground up, literally from the ground up. And over time, the more problems we start to realize, I said, me and my co-founders and us being technologists in a very diversified technology, we start to figure out that there must be a different way and there should be solutions around that. And that's where Viv was evolved into a technology company.

So most of my audience doesn't know this, but I too have a semiconductor background. Now, I'm not a semiconductor guy, I'm a software guy, but I have shipped some silicon in my day before I landed in the real estate world. And what I ended up doing was taking the network security concepts, there's a billion packets on the network, which are the bad ones and the visualization techniques. And I actually brought that into what we do at Altos. I was never skilled at Chip and silicon, though that was never my calling. So that's a neat background. And so October, 2008 when you got into real estate, and by the way, I got in January 1st, 2006, that was this era. And so in the zeitgeist of, huh, what we might do there, and you had a couple of things you mentioned in there about how it took a lot more work than you were expecting and there's no such thing as passive income as much as people want to talk about it. Okay, so you were building, when you got into real estate, you were building homes. Is that what you were doing in that oh 8, 0 9 timeframe?

I went through, I didn't start by building homes. I went through, I would say the very traditional, if there is a traditional process for real estate investors is that you start to buy a few single family home, fix them up, doing the typical mistakes, which is converting into the garage to a living space and being fined by the city and then realize that there's no, there's no tricks in the books that the industry didn't realize yet. And then around 2009, we started to buy at scale in Sacramento area, a few hundred homes in one year and remodel them and fix them and rent them immediately. And then we start to learn about the challenges, which has to do with property management and how to efficient there and how to remodel homes and fix them in a way that they're going to sustain the asset value and reduce the cost of maintenance.

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So it's really step-by-step, learning all the hard lessons in this industry and then into small multifamilies and larger, I picked at a 450 units multifamily building or it's almost like a neighborhood at that point. So really baby steps, I would say very quick baby steps, but in baby steps, clubbing the entire kind of value chain until we got to the point that I believe it was around 2011 or 12 that you cannot make money anymore from buying foreclosure stuff because pretty much it's dried up. I mean the prices start to fix themselves and that's when you are looking for the next stage or the next phase of real estate. Oh, let's buy land, let's buy homes. Initially it'll start with homes and doing significantly flips and then actually let's buy the land or taking the home downs and rebuilding from scratch and let's buy land for multifamily. So it was really evolution step-by-step until getting to the point that we built hundreds of homes and we had 1200 units of rental units under management. So we really kind of build it from the ground up to many different, I would say variants, but always residential as asset class, never commercial, nothing else.

Great. Okay. So now you've moved from buying and flipping to building, you've got a bunch under management. And so tell me about the germ of the idea, the genesis for Veev. When did you say what I need to do is revamp the technology for construction? What were their catalyst points in there?

As I many times say, we humanity, we innovate only when we hit the cliff, right? I mean, so we're typically not very good in predicting the cliff, but only once we are on the edge of the cliff we realize we need to innovate. So exactly the same thing happened to us. It's actually started with, it's actually started with the smart technology or the smart home technology. We really want to make our homes that we're building much smarter than most of other homes out there. And we start to realize that even though there's a lot of technology out there, again, I don't recall the exact year, I think it was around 2015, that's where you start to see a lot of devices, but it didn't work very well together and the electricians didn't really know how to install it. And in order to configure everything we needed to start to hold our own it personage just to make it work.

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So just to provide a pretty simple experience that you can turn on and off the light from two different locations and connect it to your app and have multiple lights in the room, it start to become very complicated. So our first thing was reinventing the low voltage system for the home in order to provide significant amount of lighting because we think that the well thought and thoughtful lights changing a lot of the experience of the home for the consumer, that's very probably one of the most interior, the core elements that you can bring into homes beyond obviously the kitchens and bathrooms and all the other stuff. And we really went through those baby steps realizing that the electricians that we work with couldn't do that. Actually one of the next big cliff we hit was in a multifamily building that took us ages few years to get off the ground.

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And once we went off the ground and built a big basement for the parking, and we just got to the point that we need to start to do the framing, it was four story building, wood framing over slab, over podium. Basically the Santa Santa rosa fires hit and all the framers were flooding into the Santa Rosa because they've been paid fortune by the insurance companies over there. So the bid for the framing that we had on this home overnight went up by 150%. It's like, take it or leave it. I'm either going to Santa Rosa or that's what you are paying me here. And then immediately we start to think about, well there must be a better solution than framing just bringing the wood on site and connecting everything. And that's where we start to look into, into framing a new framing opportunities. And I came across the light gauge steel framing, which is basically rows of steel that are being rolled into the studs and trucks in real time and punch all the different holes into that for the service holes and creating a beautiful new construction method.

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And I was so happy with this idea. I came on and Eureka guys, we have this idea. And the electrician said, no, if you use steel, I'm going to double my price. Why? I just cut all the holes for you. I don't know how to deal with steel structure. I am used to a wood structure and doubling my press. And same thing with the plumber and the framer just resigned. So every time you try to push this new solution, you realize there's new waves of resistance. So making long story short, it was not overnight, it was over five, six years. But we ended up doing everything because we realized that every time we introduce a new technology and new ideas to solve for some the issues in this industry, it's creating ripple effects that are actually slowing us down and making it more difficult. And it took us some time, but we got to the point that we created a fully vertically integrated solution at Veev solving for. So it was all by our own pain points, learning the journey.

That's amazing. And I can totally identify with the smart home it needs. I have my house in the mountains and you get a nest, but the nest doesn't work for some reason. It can't work on my Google account, so it's got to be in my fiance's Google account. And then you do a thing and then they respond in business hours, but it's my mountain house. So I'm there on the weekends and it is nuts. And I have a closet full of smart locks that didn't fit that I bought and an hour they're sitting there somewhere collecting dust. And I have all these things. I'm like, well, I guess I'm going to have a dumb house forever. So I really understand that pain point and especially the ambition of it as an operator of a bunch of units, the vision could be amazing, the keyless entries and all of the things could be really a great opportunity.

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However, there is a long way between where we are and the ideal place. So then though, but man, what an ambitious leap to go from and I get the fire challenge, the cost of the framers. Again, my house in the mountains right now, I'm getting a new roof this year because of the snows last year, and it is a hundred percent more expensive than it was a year ago. And I booked them in April and it's now the end of October and they're just getting to my project hopefully before the snowfalls. It is. Exactly. And actually labor is one of the things I'd like to spend a little time with you during the conversation. Home building labor is a real function here in the housing crisis in the us but before we get to that, give me a quick summary of what the Veev product is or technology is or the innovation. We heard about the light gauge steel frame, but what are we talking about really building homes? What does it really mean?

Fast forwarding to where we are today as a company, we pretty much reinvented or re-imagined everything within the home and to start with, so all different materials, all different methods than what we are used to in the more traditional construction. But it starts with a very important concept that we realize that the home is a product. Now what I'm saying just Ryan, it's like da, I mean it's a product, right? But by this realization it helped us a lot in the way we manufacture it, in the way we install it and the way we think about it. And in fact, this is the most expensive, the largest and the most usable consumer product out there. But very, very few companies think about it as a product, how many product managers, people like Apple has, how many product manager a builder has none. And that was the big thinking about it.

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So you just mentioned your roof, right? I mean, so thinking about home as a product is what happened. If we need to replace your roof within 24 hours, how do we productize it in a way that it can be long-term maintainable, long-term upgradable, that's a very different product fault versus construction site fault. So with this introduction, let me explain first and for all in order to, well, part of the solution is prefab, right? I mean, so we are prefabricating big portions of the home in our factory. The big issues that most of the industry has with prefab that it either you fix their box literally because those are volumetric kind of boxes or it doesn't fit your home, but it doesn't work like this in home. It could work very well maybe in hotels, it could work very well in student housing, but it doesn't work in single family homes. And actually most of multifamily homes because they need to meet the environment, they need to meet the different jurisdictions, the needs of the consumer look and fields, et cetera. So it's much more difficult.

Things are mostly bespoke.

Exactly.

Things are mostly bespoke in home construction. Yeah,

Exactly. So we needed to figure out a method that we can build anything, any look and feel and still prefabricated. And it was really to go down to a very different fundamental building block, which is the wall instead of the room, instead of the box, it's the wall walls and we call them panels, the floor panels and the wall panels. And we are creating panels where they leave our factory that are fully finished and complete. So our wall is including the plumbing and the electrical and the HVAC and the windows and the doors and the interior finishes and the waterproofing on the exterior side. It's all finished and completed and it's a structural component, it's a load bearing component and in the field they plug and play one to another very, very quickly. So because of our atomic component is a wall, which on the XY can take any shape, any size, any look and feel, we can actually build anything that.

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So we don't care so much about what the size of the room and the shape of the room, et cetera, moving away from the volumetric to the walls. But that took a significant technology lead flow. In fact, to the best of my knowledge, we're the only company ever that managed to create a closed wall system that is certified by the state of California right now, but probably will be certified by other states as well that it's fully inspected and finished in our factory, provide basically the inspection certification by the state and which arrived on site. There's nothing to inspect in this warm site. Everything else is plug and play very quickly. Our status right now is that we can build, assemble a home on site in 30 days. Not an ideal, a 2,500 square feet home, a real home in 30 days, including foundation. So that's the speed we managed to reach.

Okay. So that's terrific. That really gives me a view of what you're doing there at Veev. So I have a couple of questions though. One is about structural insulated panels. So I had a friend who built a home out of SIPS in the mountains a decade ago or maybe more now. How does this differ from those? And lemme start with that. How does it differ from things like structural insulated panels which are prefabbed, right?

That's right. I mean, so start the sipp, the structure and insulated panels is definitely a great method and being used a lot. Nevertheless, they don't provide, I mean just by themself, they don't provide the complete solution. So your friend most probably still need to finish the home on the interior. They still need to do the mudding and sending and painting and the trims for the windows and adding all the MEP, the mechanical electrical plumbing into these walls. So it did provide 20% of the solution, but it didn't provide a hundred percent of the solution. And even if you look into example that many people using is the three D printing homes right now with the concrete three D printing, I mean very cool technology, but it's really solving only for 15, 20% of the stuff it's solving for the walls for the exterior look and feel, which is obviously very, very particular taste and it's solving for the framing, but still all the meps still need to be coming in. Windows are still being installed on site, roof is done very, very differently. All the other doors and stuff like that. So the big difference here is that we went all in, our wall is fully completed when it's arrived on site. Nothing left to be done on it other than connected to the next wall.

Amazing. Okay, that sounds really cool. I have another question about prefab and I was talking with Robert Dietz who is the chief economist for the Home Builders Association, NAHB. And he pointed out, I think it was him that pointed out to me that we actually had more prefab construction in the nineties than we do now, and that was maybe even the eighties but eighties and nineties. And that was because the factories tended to be in the northeast and now we're building the homes in the southwest. And so the factories are a long way away from where we're building and so they're more expensive. Is that a factor that you're thinking about in yours as well? It totally surprised me that because of that capacity and the cost of shipping, we've actually regressed in productizing home building. Is that something you think about?

Absolutely. And I think it's just on the money. Yeah, definitely in our mind. And let me explain how we solve for it two ways. First, doing panels versus volumetric, it's already part of the solution because when you are shipping a volumetric device, you are mostly shipping air. And when you're shipping panels, they actually start stackers a cdre. Probably some of our audience don't even know what CDs are, but like a cdre that allow us to stack very high density of those on the single truck. Secondly, we took a very unique approach and actually as someone that coming from the semiconductor, you would appreciate it, we called our factories a fab. So we are following actually exactly the semiconductor industry in many ways and we have so many semiconductor guys in the company as well, including our COO. Our fab is a micro microfab. It's only 100,000 square feet facility that can fit pretty much in every warehouse order.

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And we follow the intel concept of copy exact, which means we created one of those and then we can replicate them next to the demand area. The idea is to create a distribution or very distributed kind of network of fabs of those micro fabs that would allow us to fabricate very close to the demand area. Now very close, could be still within 150 miles, Roger. So you are looking for a round trip of a truck on a daily base. It doesn't need to be within few miles. And even though it's possible as well because many of those subdivision, it's going to to be like 5,000 homes for the next 10 years. So they need 500 homes a year. So a single microfab is actually can produce 500 homes a year. So that could be also very smart just to locate it really next door within few miles to such kind of a facility. And it has so many other benefits. I mean obviously on sustainability because distance is not just cost, it's also embodi s and it's on social values. It's creating kind of a local workforce versus a remote workforce. So many extra values around that and we are very proud about the system.

Okay, that's super cool. I love the fab analogy, that semiconductor fab analogy and being able to locate that. So here's where my brain goes is there, in the semiconductor industry, there is a sub industry that is of the fabulous semiconductors that companies, that the people who design now I can conceive what I want my semiconductor to do something. Is there an analogy here too where you have designers who could in the future do some amazing new things with the home and then run 'em through your fabs?

You're absolutely right. And perfect analogy, right? I, so I talked about this wall and let me explain a little bit more about what this wall is and for our audience that don't understand or don't know so much the semiconductor industrial, I'll explain the following. When these fabulous companies or companies which are designing new chips, there are libraries component that they don't need to deal with. So think about a microprocessor chip that need to be connected to the U-S-B-U-S-B is very common and there's very commoditized and there's no reason to reinvent USBN again and again. So they have a library component which called USB and they just drag it in. And this library component still contain probably 5 million transistors and all those differences in memory and software. But it's coming as a sub component. That's exactly how we think about it.

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The plumbing wall or a bathroom doesn't need to be redesigned many times. I mean it could be stretch a stretch, it could have different ties, it could have different things. But the gut for it, it's like this USB, it has input which is hot water and cold water. It says output, which is the sewage. It need to have all kind of code related elements there, which is the distance between the toilet and center line and waterproofing and everything else around it. And we capture all of it as a library component. And from now platform is a library component. You can change the cars, you can change the shape, you can change the size, but you don't need to deal anymore with all the plumbing. And we created a new software tool which called Viv Studio that allowed to these designers basically to design on our system without the need to understand the guts of the fab and the technology and everything around that. I believe that's going exactly the same kind of concept. And again, some companies we really model after. I mean we model after several different companies. Sometime Tesla, sometime Apple, but in this very case it's actually a company called TSMC. It's a huge Taiwanese company, which is one of the biggest fabs in the world today. That's where Apple building the chips in, et cetera. And there's a lot of those models of libraries and components around these type of companies.

Okay, that's super exciting. I love it. I love it. I think that gives us a good idea about the technology and what you're building. Quick question before we move into thinking about market and implications of it. How many homes have you built? How far along are we?

Yeah, we've built to date four different versions of our technology in the past five, six years. We built about 170 homes in California. All actually very much in the Bay area in California. With this technology we built many more homes, but I'm kind of counting only the homes that have been built with a variety of versions of this technology and the sky's the limit.

Okay. Yeah, so 140 homes, I would love to see one and see what they look like. Really excited about it.

Everyone is invited. California Bay area. Please come over for a visit in the tour.

I am in San Francisco, so we will do that. Okay, let's switch from the technology and the product to thinking about housing general and the housing market. There are a couple of things that we talk about frequently on this podcast and in the work we do at Altos Research and it's really we have an inventory shortage of available homes for people to buy. We have an affordability, a corresponding then affordability crisis, especially right now with mortgage rates up. But even with mortgage rates lower, we still had an affordability crisis. And so the technical innovations that you're pursuing, do they allow us to build more or cheaper? Do we directly solve some of these crisis facing housing in the US right now?

So starting with the bottom line, the answer is yes, it helps to solve those issues and we'll solve those issues. But in order to better explain why we're going to solve for these issues, let me just think kind of map very quickly where the cost is coming from. So a cost of a home is made of three components. The cost of land, the cost of CT fees and the cost of construction when we go to affordability, there's also the cost of interest, the interest rate, which is also determine if it's affordable or not. So it's very arbitrage kind of. I mean land can go up down and it depends on school district and everything else around that. And it's really can go up and down very, very quickly. Fees by cities just going up, I mean I didn't see any cities that are reducing their impact fees and cost of construction right now is going up and will continue to go up for a very simple reason. The label we have in this industry is aging out. In fact, 40% of the existing label is going to age out in the next 10 years and you guys don't get in there. Efficiency is actually by McKinsey. Research efficiency in the construction industry was negative few percent in the past 70 years while every other industry, every other low tech industry was actually efficiency was increased by hundred percent if not thousands of percent. And at best it's flat, but actually in fact it's actually even become negative. So we are going to have less people. So

Efficiency in home builder, home building construction, meaning people build them slower, the people who are executing on them are less efficient than they were in the last 50 years.

So the square foot or the square feet that a single person build per day or depends how you want to measure it was decreased in the past 50 years, but the cost went up. So what can we impact yet 50% of the cost of the home is the construction cost. So if you look into the entire kind of home package, right, it's about 25% cost of land, about 10% cost of impact, fees and other fees et cetera. Soft cost, 50% cost of the home, 15 one 5% is actually the profit of the builder. That's pretty much how the bucket looks like. So that's where the biggest opportunity for an impact and that's what we are going after in order together. We need to create efficiency at scale and we cannot do it by improving the existing thing. And the reason is because we, in fact, the reason there's no improvement is that in fact we are the most efficient possible right now with the traditional method.

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It's a 200 years method. We already built in this country alone about 120 million homes. I think to date maybe a little bit more. That's it. We are at the plateau of the efficiency curve or the cost curve, et cetera. I mean there's rule of fame that every time you double the cumulative number of things you are doing, you going to gain another 15 one 5% efficiency, which means that in order to be able to reduce our cost by 15%, we need to build another 120 million home that's going to happen a hundred years from now unless you totally innovate pretty much everything around it. And that's what we're trying to do. New materials, new method, new design tools, new philosophy, semiconductor philosophy versus construction philosophy, everything new and we believe we can actually beat those numbers significantly.

Okay. So that's amazing. Are there big wins in that area? Like we talked about the framers that your catalyst, are there big wins that you're like, wow, it turns out that it's the plumbers that are the ones that need to go first or what have you learned in there?

Yeah, I think that the big win is the collective win. The construction industry is made of, I think the average is 24 trades in a single family home. It's very fragmented, it's very difficult to schedule and to coordinate. Many of them don't walk together on the site at the same time because of kind of conflict of space or whatever. So the big realization around it is productization. And let me explain in this home we have plumbers and fire safety and structure and the framers and everything we just said exists almost pretty much in any other industry. And the easiest way is to take actually the automotive industry. There's plumbing in automotive and there's HVAC in automotive and there's installation and soundproofing and structural and actually seismic environment because the car is and wind load and windows, everything exactly exists over there. And by the way, our car is genius compared to our dam home, right?

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I mean, so talking about smart home and technology et cetera. But when you go to Tesla or General Motors or whoever out there, there's no single plumber or electrician or fire sprinklers expert. It's a product and it's bunch of engineers, many engineers within different disciplines that working together on one product and not on a discipline. That's a huge mindset shift because right now in this industry, everyone owns their own discipline and there's no system integrator. There's no one person that thinking about the home as a product, as a one holistic product, every single person in this industry is like, my job is electrician, even in the electrical world is that my job is high voltage, my job is low voltage and they don't talk to each other and they don't coordinate and there's zero interaction between them and you cannot create efficiency by that. I mean, so that's what we created. And again, it's true. There's plumbing in SpaceX in rockets, there's plumbing and electrical and cooling and pretty much there's cooling mechanism in your laptop. We think that HVAC of the home is the expensive most complicated things out there. There's way more complicated HVAC solutions in different industries and that's what we try to bow and to bring into this industry to rethink about everything around that

Mentioned. Okay, so that's terrific. So you mentioned the efficiency and as we productize it, we still have plumbers who are designing plumbing and doing it in the product, but we're doing it as a unit. And you said the whole house in 30 days including the foundation and you also said about like 2,500 square foot house, not like an ADU, but like a real house. What's the price point on a house like that?

We are targeting mid-market price. So because we are subscale and we still at a relatively low volume to the existing industry and we build up volume, we started slightly on the upper end, which is the move up and the mid market versus the first time home buyers. Our price point are ranging for homes. That depends. If it's like Texas to California, those are the half a million dollar homes to as high as the 1 million homes in the California range. Yet we have a very, very clear line of sight and very detailed plan about how we are going to continue to take our price down again and again. So comparison to other companies, it's like if we're looking into Tesla, which is a great con for us, we started in the model S and we'll go down to the model three and down the road to the model two if it's existing and Apple and any other kind of companies in this space, building up the volume, building up the scale and then start to reduce the cost.

That makes a lot of sense, although it does open the door for critics who are like, oh, you're building a luxury home or a high end home. In a world where we need entry level, we need first time home buyer inventory. And I can also imagine critics coming in saying, I can imagine resistance from the entrenched labor interests in home building. Are you encountering anything like that or am I, are we going to do that when we get this podcast out? We're trigger this.

So first of all, one things I learned in my life in my past 35 years, technology lives much easier to critique versus to do so we'll find critiques and some of them obviously legit as well. But it's about doing right, it's about building the scale here and you need to start somewhere and a lot of consideration including raising funds from investors and to be able to build a profitable company in order to build stuff mean. So in order to get to the end goal, which is help humanity, you need to start somewhere. I mean you cannot start from day one from the end goal because no one is going to help you to help you man. You need to help yourself. And that's what we try to build here around that. Nevertheless, by the way, a million dollar home in the Bay area. So some of our audience, I guess not familiar with the barrier, but it's really kind of first time home buyers. I know it sounds crazy, but also the numbers here.

So yes, it is indeed. And so then the question is how quickly can we go, oh by the way we're buying a Veev home, it's a million bucks. It's got the quality of one that's going to cost you 1,000,005 down the street if it was a bespoke home or a home that was built by the traditional methods. And how quickly do you get to a place where you can illustrate that, that kind of benefit?

The quality of our homes are so much higher than anything exists out there. So the comparison is more like $1 million versus 5 million versus one and a half. Those are the luxury of the luxury homes in the mid price market. So the experience we get is that whoever works in our home, the wow effect is to the point that people will try to take it unless it's not the right school district, et cetera, and everything else, which has to do with bul. And many times actually USA today at the time use it as the Tesla of the homes. I mean the experience, it's not just electrical car, it's not just a new type of form. It's not just very sustainable. By the way, our homes are 55% less and body carbon than stick build. It's not only materials that are going to last forever. Mold can never develop on it because the materials, because we don't have the dry walls internally. It's stuff like that. Not only those but the look and feel and literally the feel. I mean some people we call it hanging the walls. I mean the feel and the quality of the walls and the texture level six qualities is so high that people just falling in love and it's creating for you all your experience altogether, hugging the walls, that's a term for us. It's so different in a good way that you must touch, you must feel much need to understand what's going on over there.

Amazing. Are you building these, is your customer right now home builders or home builders who have a bunch of land in the land bank or are you going direct to consumer?

So we mostly build for home builders. So most of our business model is B two B, but in our close proximity neighborhoods we also build a few handful of homes in our factory. Or fab is located or is Inco it? Fab One is located in Hayward in the Bay. So in our close proximity we build few homes as part of our service to the community as well here and we'll sell it directly to consumer.

Nice, okay. Alright, that's exciting. Are consumer tastes changing or do you have visibility or a view on what we build in the next decade? You talked about smart homes, so that's kind of interesting and I can see more of that happening. Are there other things that you're paying attention to that you're like, oh we can do that before traditional built is. What do you see there?

Yeah, I think that the next wave that we're going to see significantly in housing is going to be about sustainability. Homes are contributing, not construction homes alone are contributing to 38% of the embodied carbon. Part of it is the construction impact, I mean the materials, et cetera. And part of it is actually the usage of these homes. So I think that the net zero and even carbon positive home homes that generating more energy than what the home itself needs, we are going to start to see is the next wave. The EV cars basically trend is going to impact the homes as well because you'll need to have two chargers in the homes. You're going to have two EV cars at one point and you will need to charge them overnight and you need to generate a lot of this energy. Water conservation is going to be a very big impact in this homes.

(43:39)
That's our next wave of problems in the world water. In fact, there's so many cities, speaking of construction, there's so many cities that actually hold on construction because they don't have enough water. So wasting water, not going to be, or it's not already just a nice thing to the environment to be, if a city is wasting water, they would not build homes. So those things are happening left and and we are going to see many more of those. So I think that the home is really the core. It's going to be the core component of everything impactful in our life going forward.

Yeah. So I'm with you on that. The story of water, the story of the American is the story of water and the things, and you mentioned an energy positive house. So are you building solar into all of these, like your roof panels?

Yes. All of these homes are including solar and also we're fully ready for the new codes, new building codes out there in order to be able to accommodate upgrades of battery storage and net zero and off the grid and everything else which coming out.

And I could imagine a world where we have, you have 1978 home construction in 1978 cars versus modern EVs, dramatically different cycle and I could imagine a consumers valuing that dramatically really choosing that kind of efficiency and quality in the home. So can you demonstrate those kind of efficiencies like the carbon reduction? How do you show that to your consumers?

Yeah, we definitely demonstrate it and we are using external companies to validate our numbers mean. So as of today, as I mentioned, we are 55% less em. Body carbon on the construction of the home versus stick build have been verified. That's a lot. The other interesting shocking number is that 40% of the landfill in the world is coming from construction of homes and we cut it by 10 x. So we have 10 time less landfill than traditional. Everyone that build the home or sold the neighbors building their own home is so familiar with the numerous amount of beans, the wastebin that coming out of this home. And typically almost nothing is recyclable over there. And so all landfill, I mean, which is crazy, I mean

Crazy. A lot of the carbon in construction comes out of concrete, doesn't it

Cam loss from concrete?

Do you use less concrete when you're building this home?

We actually almost don't use concrete at all. So our foundation system is a heavy steel system which we actually calling the air flock and that's allow us actually to screws, huge screws into the ground, into the very dense soil area, creating a very precise, very, I would say F agnostic or soil agnostic including soil movements or soil movement don't impact our foundation system. And that's part of the reason that it's allowed us to build foundation very, very quickly and it's a fully recyclable steel. Right.

Wow. Okay. Well it sounds like we could spend a lot more time on the cool technology stuff. This has been really terrific and a really neat dive into potential in the future. We have so many things facing creating this housing crisis that we face, whether they were financial or labor or even some of the local, and you mentioned city fees, local fees as part of the cost of building, but it's also one of the things that make it difficult to build. Are you finding that local legislators are they're into it, they're behind you or are they resistant still?

Definitely behind us now as any kind of government legacies, it's take time to change, but understanding is there. Mayors are there head of planning, other head of buildings are there obviously the states. So this is a very slow wheel, but it's a very self will I would say as well. So they try to make the change.

Alright, it's been a fast hour for us, so I really appreciate your time today. Where can people go find out about you or Veev? Are you writing and stuff? Are you guys blogging? Tell me about where people or listeners can go find out more.

So I guess pretty much on all channels, we are on all social channels first and all. veev.com, VEEV.com. Everyone is welcome to join and to register on LinkedIn. I'm happy if anyone is connecting with me either to the Veev channel or me personally and on all other social medias.

Ahmed, thank you so much for your time today everybody. This is the top of mind podcast as always. You find us on all your podcast channels if you enjoy the show, I appreciate a review. Give us some stars, help other people find the podcast. I always appreciate a positive review. We will be back more in a week or so with another interview. Thanks everybody. Thanks for listening to Top of Mind. If you enjoyed the show, I'd really appreciate leaving a nice review on your favorite podcast app that helps other people find us as well. Be sure to subscribe so you don't miss future episodes