Latest / What's Your Problem? / Building Houses Like Tesla Builds Cars

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Building Houses Like Tesla Builds Cars · What's Your Problem?

• 0:15
  Speaker 1: Pushkin. Houses in America are too expensive. There are a
• 0:23
  Speaker 1: lot of reasons for this. One reason that we've heard
• 0:26
  Speaker 1: a lot about in the past few years regulations, regulations
• 0:29
  Speaker 1: that make it hard to build enough housing in the
• 0:32
  Speaker 1: places people want to live. But there are other reasons
• 0:35
  Speaker 1: that we've heard less about. One other less discussed reason,
• 0:39
  Speaker 1: building houses is an inefficient process, and it's not getting better.
• 0:44
  Speaker 1: Over the past several decades. As so many industries got
• 0:48
  Speaker 1: so much more productive and more efficient, home building stayed
• 0:52
  Speaker 1: largely unchanged. People have been dreaming of transforming home building
• 0:56
  Speaker 1: for like one hundred years now, dreaming of using modern
• 1:00
  Speaker 1: industrial techniques to mass produce houses and bring down the cost.
• 1:05
  Speaker 1: In the nineteen twenties, for example, Buckminster Fuller even started
• 1:08
  Speaker 1: a company to do that, but it never really got
• 1:11
  Speaker 1: off the ground, never really worked. In the decades that followed,
• 1:14
  Speaker 1: other people tried similar things, and you know, we got
• 1:16
  Speaker 1: mobile homes and we got manufactured houses, but nobody has
• 1:20
  Speaker 1: really succeeded in fulfilling that vision that Buckminster Fuller had.
• 1:25
  Speaker 1: No one has figured out how to make beautiful homes
• 1:29
  Speaker 1: at scale in a way that is optimized for factory
• 1:33
  Speaker 1: mass production. Someone could do it If someone could figure
• 1:36
  Speaker 1: that out, it could go a long way toward bringing
• 1:39
  Speaker 1: down the cost of houses in America. I'm Jacob Goldstein
• 1:48
  Speaker 1: and this is What's Your Problem, the show where I
• 1:50
  Speaker 1: talk to people who are trying to make technological progress.
• 1:53
  Speaker 1: My guest today is Alexis Revas, co founder and CEO
• 1:57
  Speaker 1: of Cover. Alexis problem is this, how do you build
• 2:01
  Speaker 1: houses in a factory the way you build cars, and
• 2:04
  Speaker 1: how do you do it so that a factory built
• 2:06
  Speaker 1: house becomes cheaper and better than a traditionally built house.
• 2:11
  Speaker 1: Cover is based in La in California, and like basically
• 2:15
  Speaker 1: every other startup making physical things, they're following the Tesla model,
• 2:19
  Speaker 1: starting with a low volume, high end product with the
• 2:22
  Speaker 1: dream of scaling to the mass market. In other words,
• 2:25
  Speaker 1: today Cover sells expensive backyard studios to rich people in LA,
• 2:30
  Speaker 1: but their dream is to sell affordable houses all across America.
• 2:34
  Speaker 1: Alexis was interested in architecture from a very young age.
• 2:37
  Speaker 1: He told me he drew his first floor plan when
• 2:39
  Speaker 1: he was in first grade. He went to college and
• 2:42
  Speaker 1: studied architecture, and like so many people before him, he
• 2:46
  Speaker 1: got captured by this dream of building houses in a
• 2:49
  Speaker 1: factory and there are companies in America that build houses
• 2:53
  Speaker 1: in factories now, and so Alexis went off to intern
• 2:56
  Speaker 1: at one of those companies.
• 2:59
  Speaker 2: I saw a problem with conventional construction and thought, well,
• 3:03
  Speaker 2: what about building ups in a factory. So I looked
• 3:05
  Speaker 2: that up and I actually went an intern for a
• 3:06
  Speaker 2: company that built homes in a factory, so a prefab company,
• 3:09
  Speaker 2: and they were basically doing it conventionally. It was like
• 3:12
  Speaker 2: two by fours in drywall, right. But what happens is
• 3:15
  Speaker 2: that when you add in the transportation, when you add
• 3:17
  Speaker 2: in the overhead of actually running a factory, you know,
• 3:20
  Speaker 2: to the customer, the price gains or the quality gains
• 3:25
  Speaker 2: aren't really noticeable. It's not a meaningfully better product or
• 3:28
  Speaker 2: a meaningfully cheaper product.
• 3:30
  Speaker 1: Well, and is part of is part of the reason
• 3:32
  Speaker 1: that the transportation is expensive. Because they're making it like
• 3:36
  Speaker 1: a conventional house. It ends up like a three D box, right,
• 3:41
  Speaker 1: They're not making like flat panels. It's not an ikea house,
• 3:44
  Speaker 1: it's a It's a house that you put on the
• 3:45
  Speaker 1: back of a giant truck that is very expensive to
• 3:49
  Speaker 1: hire and us a lot to move. Is that part
• 3:51
  Speaker 1: of the issue.
• 3:53
  Speaker 2: That's definitely part of it. That's definitely part of it.
• 3:54
  Speaker 2: And then and then once it gets to the site,
• 3:56
  Speaker 2: because it's this large, you know, like you said, you know,
• 3:58
  Speaker 2: almost container size, you know, or even bigger than a
• 4:01
  Speaker 2: container size room that needs to be lifted into place.
• 4:04
  Speaker 2: You need a massive crane and those cranes can be
• 4:06
  Speaker 2: twenty thousand dollars a day, right, So that alone is
• 4:10
  Speaker 2: a huge cost. If you need a creat for even
• 4:12
  Speaker 2: one day, that's twenty thousand dollars.
• 4:13
  Speaker 1: I just want to clarify one thing that I realized
• 4:15
  Speaker 1: might be ambiguous, and that is we're not talking about
• 4:17
  Speaker 1: mobile homes here, right, We're talking about houses that are
• 4:20
  Speaker 1: manufactured in kind of a similar way. But it's a
• 4:22
  Speaker 1: full house. It's not a mobile home. It's not like
• 4:24
  Speaker 1: a trailer park house. It's a house.
• 4:26
  Speaker 2: Correct, It's a house, and it's built to the same
• 4:30
  Speaker 2: building code and building standards as a conventionally on site
• 4:34
  Speaker 2: built home. Okay, And that's what I saw, and so
• 4:37
  Speaker 2: you know, I saw a ton of opportunity to improve,
• 4:41
  Speaker 2: right like I thought. I actually when I worked there
• 4:43
  Speaker 2: thinking these guys have the solution to the problem. And
• 4:46
  Speaker 2: I left that innership thinking this isn't the solution. And
• 4:48
  Speaker 2: I actually started that's when I started researching all the
• 4:50
  Speaker 2: other companies that were doing precou and learning about their approach,
• 4:55
  Speaker 2: and no, everyone was basically doing the same thing, which
• 4:57
  Speaker 2: was build homes in a factory but convention. And that's
• 5:01
  Speaker 2: where I realized there was a huge opportunity to solve
• 5:03
  Speaker 2: this problem. And that's when I started chatting with my
• 5:06
  Speaker 2: co founder Jim Well, So, you know, went back to
• 5:08
  Speaker 2: architecture school and said, hey, I think I think there's
• 5:10
  Speaker 2: this huge problem. And there's kind of two parts to it. There's,
• 5:14
  Speaker 2: you know, how do we build homes in a factory
• 5:17
  Speaker 2: more like how cars are made, so like you know,
• 5:19
  Speaker 2: true design for manufacturability, designed for scale, and designed for automation. Right.
• 5:25
  Speaker 2: And then there's a second part, which is how do
• 5:29
  Speaker 2: you do that? You know, while you're not building the
• 5:31
  Speaker 2: same car or same home one hundred thousand times, there's
• 5:34
  Speaker 2: some amount of variation that is necessary to serve the market.
• 5:37
  Speaker 2: And this is where the customization comes from.
• 5:38
  Speaker 1: Huh.
• 5:39
  Speaker 2: Right, And I think so there's kind of two parts
• 5:41
  Speaker 2: of the problem. Build homes like cars and uh and
• 5:44
  Speaker 2: and enable some enough enough customization that you can actually
• 5:47
  Speaker 2: serve a large enough market.
• 5:49
  Speaker 1: It has to be more customized than a car, yes,
• 5:51
  Speaker 1: but but kind of with the manufacturing principles of a car,
• 5:55
  Speaker 1: where you think, not what is what is my dream car,
• 5:58
  Speaker 1: but what is a car that is great that we
• 6:01
  Speaker 1: could make a million of exactly the same.
• 6:04
  Speaker 2: Exactly And so that's that's when we started chatting, and
• 6:06
  Speaker 2: that's that's when we started Cover. So we started to
• 6:08
  Speaker 2: cover while we were still in.
• 6:09
  Speaker 1: And when was that? That was twenty fourteen, Is that right, correct? Yeah,
• 6:12
  Speaker 1: so a long time ago. A key moment for me
• 6:15
  Speaker 1: that's interesting both in the life of your company and
• 6:18
  Speaker 1: in sort of the housing story more generally, is when
• 6:22
  Speaker 1: California passes this law that makes it easier for people
• 6:26
  Speaker 1: to put what's technically called an ADU, which is basically
• 6:30
  Speaker 1: like a little backyard cottage or apartment on their house.
• 6:34
  Speaker 1: Is that the right moment to talk about next?
• 6:36
  Speaker 2: Yeah? So yeah, we you know, we we started the
• 6:39
  Speaker 2: company while we're still in school, graduated, moved out to
• 6:44
  Speaker 2: California the day after graduating, basically three months after graduating
• 6:48
  Speaker 2: that law was passed, Okay, And interestingly, at the time,
• 6:53
  Speaker 2: we had realized that instead of focusing to start on
• 6:58
  Speaker 2: entire you know, single family homes, right, call it a
• 7:00
  Speaker 2: two thousand or three thousand scriffed home. We should actually
• 7:04
  Speaker 2: focus on backyard you know, little backyard offices or guest homes.
• 7:09
  Speaker 2: We actually realized we should focus on this before that
• 7:11
  Speaker 2: lock came out. Interesting because yeah, and the reason for
• 7:13
  Speaker 2: that is is really, you know, taking the lean iteration
• 7:17
  Speaker 2: process of a startup, and how do you apply this
• 7:20
  Speaker 2: to this large, complex product. Well, start with the smallest
• 7:22
  Speaker 2: possible version of that product you can, right, the.
• 7:24
  Speaker 1: Minimum viable product. The minimum viable product is not a
• 7:28
  Speaker 1: two thousand square foot house. It's a five hundred square
• 7:31
  Speaker 1: foot studio with a bathroom.
• 7:33
  Speaker 2: In a kitchen exactly. And so we realized that, and
• 7:35
  Speaker 2: then turns out the timing was just perfect because this
• 7:39
  Speaker 2: lock came out and we were already positioned, you know,
• 7:41
  Speaker 2: we were like, we already have the website. We just
• 7:42
  Speaker 2: have to you know, speak to this new regulation. And
• 7:45
  Speaker 2: so the market for what we were focusing on, you know,
• 7:48
  Speaker 2: I don't know what the number probably over one hundred
• 7:50
  Speaker 2: x you know, within three months of us starting there.
• 7:53
  Speaker 1: So it was just good luck.
• 7:55
  Speaker 2: It was good luck. Yeah.
• 7:57
  Speaker 1: Yeah, and like maybe a little bit like you're just
• 7:59
  Speaker 1: kind of in the zeitgeist. Right, that's the non pure
• 8:01
  Speaker 1: good luck part of it is kind of it was
• 8:02
  Speaker 1: in the wind.
• 8:04
  Speaker 2: Yeah. We had our investors, you know, basically reach out
• 8:07
  Speaker 2: and say, did you guys like pass this law within
• 8:09
  Speaker 2: three months and we're like, no, we wish we could
• 8:12
  Speaker 2: take credit for it, but we didn't do anything there. Yeah.
• 8:15
  Speaker 1: So okay, so now you've got a company, you got
• 8:17
  Speaker 1: the laws suddenly on your side. What do you have
• 8:20
  Speaker 1: to do to go from that moment to actually sell
• 8:24
  Speaker 1: in somebody a backyard studio and putting it in their backyard.
• 8:28
  Speaker 2: So really, what we wanted to do is prove to
• 8:31
  Speaker 2: the world that not only could you build homes in
• 8:35
  Speaker 2: a factory, you know, efficiently and at low cost and fast,
• 8:40
  Speaker 2: but that you could build homes that are way better
• 8:45
  Speaker 2: than conventionally built homes. So you know, high end, you know,
• 8:50
  Speaker 2: kind of change people's perception of a home, of a
• 8:54
  Speaker 2: prefabricated home, home built in a factory, to something that's
• 8:57
  Speaker 2: that's actually desirable, that's better, right and noticeably, right, not like,
• 9:01
  Speaker 2: oh yeah it's better in these three ways that you
• 9:02
  Speaker 2: have to read on the on the brochure, right, No,
• 9:06
  Speaker 2: it's actually used. Look at it. You're like, Wow, that's beautiful. Well,
• 9:09
  Speaker 2: that's that's you know in the that it looks like
• 9:12
  Speaker 2: you was built by a starchitect, right or or you
• 9:14
  Speaker 2: know that kind of things. That's what we wanted to do.
• 9:20
  Speaker 1: In a minute, why Alexis had to hire people from
• 9:22
  Speaker 1: the car business to make Cover work and the problems
• 9:25
  Speaker 1: Cover still needs to solve to sell factory build houses
• 9:28
  Speaker 1: at scale. That's the end of the ads.
• 9:38
  Speaker 2: Now we're going back to the show.
• 9:40
  Speaker 1: So that's the that's the dream. Tell me about some
• 9:43
  Speaker 1: of the things you had to figure out to do
• 9:45
  Speaker 1: that to get from the idea to the thing.
• 9:49
  Speaker 2: Yeah. I think one of the biggest realizations, you know,
• 9:51
  Speaker 2: we're starting to build this. My co founder and I
• 9:53
  Speaker 2: both have architecture backgrounds, and the more we built, the
• 9:57
  Speaker 2: more we realized the reason that this problem hasn't been
• 10:00
  Speaker 2: solved from within the architecture construction world is because some
• 10:04
  Speaker 2: of the core skills that are needed to solve this
• 10:07
  Speaker 2: problem aren't known and taught by most people in that world.
• 10:12
  Speaker 1: Huh.
• 10:12
  Speaker 2: And we realized that actually, if you want to build
• 10:15
  Speaker 2: homes like cars, you need people that understand homes, but
• 10:19
  Speaker 2: you also need a lot of people that understand cars.
• 10:22
  Speaker 2: Huh to be part of the innovation process.
• 10:25
  Speaker 1: What specifically are the sort of skills or knowledge that's
• 10:28
  Speaker 1: that you need from the car industry.
• 10:31
  Speaker 2: Yeah, I mean one big one is designed for manufacturability
• 10:35
  Speaker 2: and designed for assembly. So you know, you don't just
• 10:38
  Speaker 2: design the part for what it's going to do, what
• 10:40
  Speaker 2: it's in the car. You design the part with how
• 10:42
  Speaker 2: you're going to make it in mind, so that you
• 10:45
  Speaker 2: can make it incredibly efficiently and a low cost and
• 10:48
  Speaker 2: reliably and at a very high quality, consistent uh huh.
• 10:52
  Speaker 1: And like it has to be exactly the same every time. Right,
• 10:56
  Speaker 1: It's like a precision element I think of in cars
• 10:59
  Speaker 1: that is probably not there in conventional home building.
• 11:03
  Speaker 2: Right, that's right, even the units that you talk in right,
• 11:07
  Speaker 2: Like you know, when I was an architecture school, people talk,
• 11:10
  Speaker 2: you know, people talk, you know, oh, it's going to
• 11:11
  Speaker 2: be within an eighth of an inch or even an
• 11:13
  Speaker 2: eighth site tight, Right, Most people are like, you know, yeah,
• 11:15
  Speaker 2: within half an inch, within a quarter of an inch, right.
• 11:18
  Speaker 2: In in automotive you're talking you know how many thousands
• 11:21
  Speaker 2: of an inch? Right? And so and actually at cover
• 11:24
  Speaker 2: that's that's we talk in terms of Yeah, this tool
• 11:27
  Speaker 2: has to have this many thousands of an inch precision.
• 11:30
  Speaker 1: So it's orders of magnitude more precise. And that's because
• 11:33
  Speaker 1: it just has to fit together automatically. You're not going
• 11:35
  Speaker 1: to have a carpenter there to kind of just make
• 11:37
  Speaker 1: it work exactly.
• 11:39
  Speaker 2: And we actually we learned that the hard way, you know,
• 11:41
  Speaker 2: that's exactly how we learned that this is a problem.
• 11:44
  Speaker 2: We tried to build something ourselves. It didn't fit as expected,
• 11:48
  Speaker 2: and as we kind of went and root caused it,
• 11:50
  Speaker 2: we learned that, yeah, you know, being off by one percent,
• 11:54
  Speaker 2: you know, in a degree over eight feet like that
• 11:57
  Speaker 2: doesn't fit together at the end of the day. And yeah,
• 12:00
  Speaker 2: if you need someone on site to then you know,
• 12:05
  Speaker 2: send something or trim it down. That kind of defeats
• 12:08
  Speaker 2: the purpose because now you're building it once in the
• 12:09
  Speaker 2: factory and you're rebuilding it again once it gets to
• 12:12
  Speaker 2: the site. So defeats the purpose. It has to just
• 12:14
  Speaker 2: fit together right once it shows up on site.
• 12:16
  Speaker 1: So you figure it out eventually, right you do. You
• 12:20
  Speaker 1: are now making and selling little backyard homes or studios. So,
• 12:26
  Speaker 1: I mean, one thing we haven't talked about in the
• 12:28
  Speaker 1: sort of bigger why is home building inefficient? Why hasn't
• 12:34
  Speaker 1: it progressed? Part of it seems like the regulatory piece, right,
• 12:39
  Speaker 1: there's so many rules for construction permits you have to
• 12:43
  Speaker 1: get in some places, it seems to be captured by
• 12:47
  Speaker 1: the people who are being regulated.
• 12:48
  Speaker 2: Right.
• 12:49
  Speaker 1: So, as you are trying to figure out how to
• 12:51
  Speaker 1: mass produce these studios, is there a regulatory piece you
• 12:55
  Speaker 1: have to deal with?
• 12:56
  Speaker 2: Because we're building homes in a factory, there's a state
• 13:00
  Speaker 2: approval process for everything that's built in the factory, okay,
• 13:03
  Speaker 2: And so that's something that we have a relationship with
• 13:07
  Speaker 2: this agency. They go and look at our design and
• 13:10
  Speaker 2: our way of doing things, and they actually look at
• 13:11
  Speaker 2: our quality control process and our pulled control documentation. They
• 13:16
  Speaker 2: approve that as an overall process, and then yes, we're
• 13:19
  Speaker 2: an approved factory built home manufacturer. Okay, but we still
• 13:24
  Speaker 2: have to submit and get approval for each home from
• 13:27
  Speaker 2: the city. But the scope of what the city looks
• 13:31
  Speaker 2: like looks at is smaller, okay.
• 13:34
  Speaker 1: And the city you're basically selling in La now right,
• 13:36
  Speaker 1: So when you say the city, is that basically of
• 13:38
  Speaker 1: Los Angeles?
• 13:39
  Speaker 2: Yeah, City of Los Angeles. Yeah, And and what they
• 13:42
  Speaker 2: look at is much narrower. It's basically, are you even
• 13:45
  Speaker 2: allowed to build this, you know, on this property? Where
• 13:48
  Speaker 2: on the property is it going to be located? And
• 13:50
  Speaker 2: is that acceptable? Right? And and things like how far
• 13:53
  Speaker 2: is it from the closest fire hydrant, right, and what's
• 13:56
  Speaker 2: the access like if there was a fire, you know,
• 13:58
  Speaker 2: basic kind of safety things, right. And so that's the
• 14:01
  Speaker 2: permitting process with the city, and they'll also look at
• 14:06
  Speaker 2: the foundation, right. So so the majority of the actual
• 14:10
  Speaker 2: building side of things is handled on the state level,
• 14:13
  Speaker 2: and then the local specifics are handled at the city level.
• 14:17
  Speaker 1: When did you sell your first thing, your first studio, the.
• 14:20
  Speaker 2: First actual backyard home with a kitchen and bathroom, right,
• 14:24
  Speaker 2: like a real home? That one we sold in twenty
• 14:29
  Speaker 2: seventeen and then we delivered it in twenty eighteen. It
• 14:33
  Speaker 2: took us a while to figure out the system and
• 14:36
  Speaker 2: engineer the whole thing.
• 14:37
  Speaker 1: And where are you too now, Like how many have
• 14:40
  Speaker 1: you sold? How many do you sell per whatever, per
• 14:42
  Speaker 1: month or per year however you look at it.
• 14:46
  Speaker 2: Yeah, yeah, So we've built dozens of these, like, you know,
• 14:49
  Speaker 2: well over thirty of them, you know, across LA. We've
• 14:53
  Speaker 2: also built one in Joshua Tree. We've built dozens of them.
• 14:57
  Speaker 2: And we're delivering homes every month.
• 15:01
  Speaker 1: So let's talk about where the product and the process are. Now,
• 15:05
  Speaker 1: how does it work.
• 15:06
  Speaker 2: The way I think about is we have multiple production
• 15:08
  Speaker 2: lines for different parts of the home. So you have,
• 15:11
  Speaker 2: you know, a roof and floor panel production line, a
• 15:13
  Speaker 2: wall panel production line, a cabinetry production line, and so
• 15:16
  Speaker 2: these are running. We're making the individual parts, uh, where
• 15:19
  Speaker 2: we're we're doing quality control uh and then and then
• 15:23
  Speaker 2: we're getting the ready to ship and so these are
• 15:25
  Speaker 2: these all gets shipped on regular flatbed trucks.
• 15:28
  Speaker 1: The sort of output of the factory is like a
• 15:31
  Speaker 1: bunch of like walls and roof panels and cabinets and
• 15:35
  Speaker 1: they like and the and the and the walls have
• 15:38
  Speaker 1: like pipes and wires in them. I mean, just just
• 15:41
  Speaker 1: give me like a little bit more detail of like
• 15:44
  Speaker 1: how this is actually working.
• 15:46
  Speaker 2: Yeah, yeah, so so so yeah, it's it's on the
• 15:49
  Speaker 2: production line. We're building you know, the structure. We're putting
• 15:52
  Speaker 2: the insulation in, we're putting the waterproofing in. We're putting
• 15:56
  Speaker 2: all of the connection mechanisms so that everything can can
• 15:59
  Speaker 2: connect quickly on site, and and we're also putting in
• 16:02
  Speaker 2: plumbing and electrical so.
• 16:04
  Speaker 1: There are like pipes and wires just running through walls
• 16:07
  Speaker 1: that you're building in the factory.
• 16:09
  Speaker 2: Yes, okay, Yeah, the goal, right is to minimize the
• 16:12
  Speaker 2: amount of complexity that you have to do on site.
• 16:14
  Speaker 1: How long does it take to put the house together
• 16:16
  Speaker 1: at the.
• 16:16
  Speaker 2: Site we're right now, we're at about a month.
• 16:21
  Speaker 1: About a month. That might be longer than I would
• 16:23
  Speaker 1: have guessed. I mean, I'm ignorant. I don't know why
• 16:25
  Speaker 1: I would have guessed less, but I was just imagining, like, oh,
• 16:27
  Speaker 1: it's just a bunch of lego blocks and you get
• 16:29
  Speaker 1: there and you're just snapping together.
• 16:31
  Speaker 2: Yeah, and actually we're working on making it even faster, right,
• 16:34
  Speaker 2: I think we can go even faster than that, and
• 16:36
  Speaker 2: so we're working. That's when we say the reason we're
• 16:38
  Speaker 2: not building one hundred homes per year, right or a
• 16:41
  Speaker 2: thousand homes per year, is because we want to get
• 16:43
  Speaker 2: it even faster before we go and scale not just
• 16:46
  Speaker 2: on site but even in the factory. Yeah.
• 16:48
  Speaker 1: So presumably the person the buyer already has what poured
• 16:52
  Speaker 1: a foundation, and we do that as all of the
• 16:54
  Speaker 1: hookups ready. That is that that's like before the house
• 16:58
  Speaker 1: gets there from the factory obviously.
• 16:59
  Speaker 2: Yeah, that's the foundation, the hookups, the utility hookups, that's
• 17:02
  Speaker 2: all done before. We do manage that for our customers, right, huh,
• 17:06
  Speaker 2: so that they just come to us and we take
• 17:08
  Speaker 2: care of everything in the permit, the foundation, the manufacturing,
• 17:10
  Speaker 2: the installation. But yeah, the the assembly itself is yeah,
• 17:15
  Speaker 2: about a month.
• 17:17
  Speaker 1: So what is that? What is that month of work?
• 17:19
  Speaker 1: What are people doing for that month?
• 17:21
  Speaker 2: Yeah, So so the structure goes up relatively quickly, like
• 17:24
  Speaker 2: one or two days. And then and then you're waterproofing it,
• 17:28
  Speaker 2: you're installing the windows, you're installing the interior walls U
• 17:32
  Speaker 2: and then and then you're you have some plumbing, you
• 17:35
  Speaker 2: have some electrical in but you've got to connect it all.
• 17:37
  Speaker 2: You've got to connect it to the panel, right and
• 17:39
  Speaker 2: connect that to the to the utilities. Actually we installed
• 17:43
  Speaker 2: we we ship them with deducting and HVAC already installed, right,
• 17:48
  Speaker 2: but you still need to make connections. Test those connections,
• 17:52
  Speaker 2: make sure they're reliable. Right, go and install, and then
• 17:55
  Speaker 2: go and install all the finishes, all of the interior
• 17:57
  Speaker 2: interior wall panels, exterior finishes, you know, countertops, cabinetry, align them.
• 18:04
  Speaker 2: That's one thing that that that takes quite a bit
• 18:06
  Speaker 2: of time. And then and then while we do the
• 18:08
  Speaker 2: first code of paint from the factory today, we do
• 18:13
  Speaker 2: a finished code on site. And so that's another thing
• 18:15
  Speaker 2: you know, that'll take a few days, right, you know,
• 18:17
  Speaker 2: including letting it dry and all. It's still you know,
• 18:21
  Speaker 2: that's still faster than conventional construction. But we can go
• 18:24
  Speaker 2: even faster than that, and that's what we're working on.
• 18:27
  Speaker 1: So you mentioned that you're still sort of trying to
• 18:31
  Speaker 1: get the process right so that you can scale so
• 18:35
  Speaker 1: that you can sell ten times as many houses as
• 18:37
  Speaker 1: you're selling now or whatever. What's a thing in the
• 18:40
  Speaker 1: process that you haven't figured out yet? What's the like
• 18:43
  Speaker 1: a optimization problem that you're working on right now?
• 18:47
  Speaker 2: Yeah, I'll give you some one, like the paint right,
• 18:51
  Speaker 2: painting on site. To paint something well, it requires a
• 18:54
  Speaker 2: good eye, it requires craft, it requires attention to detail,
• 18:58
  Speaker 2: and so that requires sending a painter on site. You know,
• 19:03
  Speaker 2: when you're building a car, you don't want to be
• 19:05
  Speaker 2: reliant on someone's skill and craft aft. So one of
• 19:10
  Speaker 2: the things that we're trying to figure out how to
• 19:12
  Speaker 2: do is and we're going to is move the painting
• 19:15
  Speaker 2: process into the factory and then ship things in a
• 19:19
  Speaker 2: way where they're protected so that it all comes together.
• 19:22
  Speaker 2: When people are moving around with their you know, the
• 19:24
  Speaker 2: fridge or the cabinets and they accidentally knock on the
• 19:27
  Speaker 2: or scrub past the wall, it doesn't damage the painting
• 19:31
  Speaker 2: and require refinishing.
• 19:33
  Speaker 1: And so you're talking about interior painting.
• 19:36
  Speaker 2: Now, interior painting yet naively not.
• 19:38
  Speaker 1: Knowing anything about it, I would think, well, you could
• 19:40
  Speaker 1: just paint it at the factory. That shouldn't be that hard.
• 19:42
  Speaker 1: But tell me why it is hard. I'm sure it is.
• 19:44
  Speaker 2: I just yeah, we've done that. We've tried to do
• 19:46
  Speaker 2: both cotes in the factory, and then what happens is
• 19:48
  Speaker 2: that they get scuffed along the way right, or or
• 19:52
  Speaker 2: you know, there might be something that you know, one
• 19:54
  Speaker 2: part doesn't fit together and so you need to trim
• 19:56
  Speaker 2: it and that creates dust and I have dust all
• 19:58
  Speaker 2: over it, right, that kind of problem.
• 19:59
  Speaker 1: Is there some kind of like industrial scale sort of
• 20:02
  Speaker 1: saran wrap? Could you paint it and then put like
• 20:04
  Speaker 1: a plastic film over it and then not remove the
• 20:07
  Speaker 1: plastic film until the end.
• 20:08
  Speaker 2: Yeah, exactly right, that's that's the solution, right.
• 20:11
  Speaker 1: Probably not, but I don't know anything That's what came
• 20:13
  Speaker 1: to my mind. I mean, what have you tried.
• 20:15
  Speaker 2: I mean, we've tried just painting for the factory. That
• 20:17
  Speaker 2: doesn't work right. We've tried kind of protecting it in shipping.
• 20:21
  Speaker 2: And while that helps right from the shipping process, you know,
• 20:24
  Speaker 2: once you even saw it on site, there's some challenges there. Right,
• 20:28
  Speaker 2: a film right might not cut it right some of
• 20:31
  Speaker 2: the Sometimes what happens is, you know, that might help
• 20:33
  Speaker 2: for eighty percent of the scuffs, right, but if you actually,
• 20:37
  Speaker 2: let you know, moving a fridge and you hit the
• 20:41
  Speaker 2: corner of the fridge, that's going to create a bit
• 20:43
  Speaker 2: of a dent. So there's many things like that. It's
• 20:45
  Speaker 2: not like there's one big thing that takes a ton
• 20:48
  Speaker 2: of time. It's it's really like hundreds of small things
• 20:52
  Speaker 2: that need to be figured out and and from a
• 20:55
  Speaker 2: process standpoint and from a product standpoint to make this
• 20:58
  Speaker 2: you know, much more like like a car.
• 21:01
  Speaker 1: So let's talk about let's talk about cost and price.
• 21:05
  Speaker 1: What does one of your backyard studios costs today?
• 21:08
  Speaker 2: You know, for a unit that has like a bedroom,
• 21:12
  Speaker 2: a bathroom, a kitchen, right, like a fully functional living space.
• 21:16
  Speaker 2: While you can go smaller and get under three hundred
• 21:19
  Speaker 2: thousand dollars. Most of them are going to be over
• 21:21
  Speaker 2: three hundred thousand.
• 21:22
  Speaker 1: Over three hundred thousand, so but that's.
• 21:24
  Speaker 2: All in that includes the sixiensive.
• 21:27
  Speaker 1: I mean, the median price of a home in the
• 21:29
  Speaker 1: United States is somewhere around there. So like, yes, you're
• 21:33
  Speaker 1: you're building an expensive backyard home.
• 21:35
  Speaker 2: Now we're starting off with a product that's very high end, right,
• 21:39
  Speaker 2: Like we've we include like sub zero wolf appliances, right,
• 21:43
  Speaker 2: which you know that a fridge and an oven there
• 21:46
  Speaker 2: can be fifteen thousand dollars, right, just just that, right,
• 21:50
  Speaker 2: So it's very high end, and we're proving to the
• 21:53
  Speaker 2: world that this is better than conventional construction. And then
• 21:55
  Speaker 2: as we ramp up production, as we build more and more,
• 21:58
  Speaker 2: we will lower the cost and be competitive with you know,
• 22:02
  Speaker 2: mass you could build the same home, like the typical
• 22:05
  Speaker 2: American home for the same price, right, Like, that's where
• 22:08
  Speaker 2: we want to get to.
• 22:09
  Speaker 1: For you to get from where you are now to
• 22:11
  Speaker 1: where you want to be to building full size houses
• 22:14
  Speaker 1: for people who are not rich, you need to get
• 22:16
  Speaker 1: better at building the houses, and then the world needs
• 22:19
  Speaker 1: to discover you and want to buy your houses. Right,
• 22:21
  Speaker 1: those are the two sides. So one side of that
• 22:24
  Speaker 1: is you getting better at building those houses. You mentioned
• 22:27
  Speaker 1: painting as an example of a thing you have to
• 22:29
  Speaker 1: get better at. What's another example, Yeah, I.
• 22:32
  Speaker 2: Mean another example is actually on the supply chain side.
• 22:34
  Speaker 2: So a lot of our supply chain historically has been
• 22:37
  Speaker 2: what I would call a prototyping supply chain. Who's close,
• 22:40
  Speaker 2: who can get it done fast, and who can we
• 22:42
  Speaker 2: basically go, you know, just drive to and if we
• 22:44
  Speaker 2: have feedback or we need to make changes because what
• 22:47
  Speaker 2: we've optimized for is speed of iteration. Huh right, But
• 22:52
  Speaker 2: as we scale, one of the biggest changes we need
• 22:54
  Speaker 2: to make is to say, you know what, we're gonna
• 22:56
  Speaker 2: lock down this design, not forever, but we're gonna say
• 22:58
  Speaker 2: we're gonna build one hundred that are gonna be the same.
• 23:00
  Speaker 1: Yeah, we're gonna stop, We're gonna stop monkey in with it.
• 23:03
  Speaker 1: We're gonna stop iterating on this one thing for a while.
• 23:06
  Speaker 2: For a while. So we order one hundred the same parts.
• 23:08
  Speaker 2: And when you order a hundred parts from a supplier
• 23:10
  Speaker 2: versus you know ten, right, it's a huge difference in costs.
• 23:14
  Speaker 2: I mean, you're talking about you can you can reduce
• 23:16
  Speaker 2: the cost sometimes you know, fifty percent sometimes even more?
• 23:19
  Speaker 1: Right, And so are you there? Are you there yet?
• 23:23
  Speaker 1: Are you ordering one hundred at a time?
• 23:25
  Speaker 2: Now, we're close, We're close. We're now setting up the
• 23:28
  Speaker 2: long term supply check. Okay, we're kind of taking the
• 23:31
  Speaker 2: product from this prototyping phase to hey, we're ready to
• 23:35
  Speaker 2: scale this. Let's let's go build thousands of homes. That's
• 23:39
  Speaker 2: where we are.
• 23:39
  Speaker 1: So so then there's the demand side, right, Is that
• 23:41
  Speaker 1: the other piece of people have to want to buy
• 23:42
  Speaker 1: these houses from you?
• 23:43
  Speaker 2: Yeah, people have to want to buy these homes from us. Fortunately,
• 23:47
  Speaker 2: there because we have a product that is much better
• 23:50
  Speaker 2: than conventional construction. Even at this price point. We've we've
• 23:53
  Speaker 2: always had a backlog of orders.
• 23:56
  Speaker 1: So is the only thing keeping you from selling full
• 23:58
  Speaker 1: size houses right now your own desire to make your
• 24:04
  Speaker 1: process better before you do that?
• 24:06
  Speaker 2: Yeah, it is. It's it's the it's kind of like,
• 24:11
  Speaker 2: you know, nail it and then scale it.
• 24:13
  Speaker 1: Did you make that up? Or is that a thing
• 24:15
  Speaker 1: people say? Is that like a y Combinator thing?
• 24:18
  Speaker 2: I didn't make that up. An investor friend said it. Actually,
• 24:22
  Speaker 2: it's like we love the nail it scalet approach. It
• 24:25
  Speaker 2: summarizes it. Well, when you.
• 24:27
  Speaker 1: Put it that way, it sounds binary. It sounds like
• 24:29
  Speaker 1: there will be a day when you're like, okay, let
• 24:31
  Speaker 1: a rip. But you know, the real world is often
• 24:34
  Speaker 1: not like that. Do you have a moment in your mind.
• 24:37
  Speaker 1: Is there a thing you're trying to get to when
• 24:39
  Speaker 1: you say like, okay, we know how to do this
• 24:42
  Speaker 1: well enough that we can we can let a rip.
• 24:45
  Speaker 2: Yeah. The focus is really on the on site assembly
• 24:49
  Speaker 2: side of things. There Once that process can basically be
• 24:53
  Speaker 2: done by anyone. Right, So this is not necessarily people
• 24:55
  Speaker 2: that have extensive construction training. Right, we can you and
• 24:59
  Speaker 2: I can go build it, or you know, are as
• 25:02
  Speaker 2: someone who's currently working at Starbucks or at a restaurant.
• 25:05
  Speaker 2: You know, as long as they want to work with
• 25:08
  Speaker 2: their hands and and can you know, follow the instructions. Well,
• 25:11
  Speaker 2: anyone can build a cover. Once it's at that point,
• 25:15
  Speaker 2: the installation side of things can scale very well.
• 25:18
  Speaker 1: Oh right, because that's is that the binding constraint now,
• 25:22
  Speaker 1: I mean you were talking about the bottleneck is the
• 25:23
  Speaker 1: real bottleneck Now the skilled labor you need to install
• 25:28
  Speaker 1: the house on site once it's out of the factory.
• 25:30
  Speaker 2: It is and and for most PREFIX companies even the
• 25:33
  Speaker 2: ones where they're shipping entire rooms, that on site process
• 25:36
  Speaker 2: still takes you know, they say, oh, it assembles in
• 25:38
  Speaker 2: a day, but really really what they do is they
• 25:42
  Speaker 2: put the parts together in a day, but then they
• 25:44
  Speaker 2: spend four weeks patching it up or six weeks thatching
• 25:48
  Speaker 2: it up. So even when they're shipping room size pieces,
• 25:51
  Speaker 2: that that's the bottleneck. And so yeah, that's the focus
• 25:54
  Speaker 2: is making it so that you know, that won't be
• 25:58
  Speaker 2: the bottleneck because then the complexity can mean the factory.
• 26:01
  Speaker 2: But there's a playbook for making factories more efficient, right,
• 26:05
  Speaker 2: Like any company that's had to scale up production has
• 26:08
  Speaker 2: had to learn how to make factories more efficient. So
• 26:10
  Speaker 2: there's much more of a playbook for how to do
• 26:12
  Speaker 2: that than there is for how to scale what's going
• 26:14
  Speaker 2: on on site.
• 26:16
  Speaker 1: Right, So the the real process improvement you need to
• 26:21
  Speaker 1: figure out is what can you change in your in
• 26:24
  Speaker 1: the factory manufacturing process so that assembling the house on
• 26:31
  Speaker 1: site requires less skill.
• 26:34
  Speaker 2: That's right, and and and the result of that is
• 26:36
  Speaker 2: that it's also faster. But yeah, exactly.
• 26:42
  Speaker 1: At a certain level, what alexis uncover are trying to do,
• 26:45
  Speaker 1: you know, designing this thing so that it can be
• 26:48
  Speaker 1: made in a factory, so you don't need high skilled
• 26:52
  Speaker 1: laborers to assemble it on site. It reminds me a
• 26:56
  Speaker 1: little bit of the original Industrial Revolution in England more
• 27:00
  Speaker 1: than two hundred years ago now, where they did something
• 27:02
  Speaker 1: quite similar, but instead of doing it with houses, they
• 27:05
  Speaker 1: did it with cloth. That moment, you know, figuring out
• 27:08
  Speaker 1: how to produced something for cheaper with machines. That's really
• 27:12
  Speaker 1: the beginning of this era of technological progress that we've
• 27:15
  Speaker 1: been living through ever since. We'll be back in a
• 27:18
  Speaker 1: minute with the Lightning round, including Alexis tips for designing
• 27:21
  Speaker 1: a small space that doesn't feel that small. Now back
• 27:32
  Speaker 1: to the show, let's finish with the Lightning Round. I'm
• 27:36
  Speaker 1: just gonna ask you a bunch of questions. Yeah, I
• 27:40
  Speaker 1: read that you canceled all meetings for everybody at your
• 27:44
  Speaker 1: company on Tuesdays.
• 27:46
  Speaker 2: Is that true?
• 27:47
  Speaker 1: It's true? So why Tuesdays?
• 27:51
  Speaker 2: I Actually I wasn't like big on the Tuesday. The
• 27:54
  Speaker 2: Tuesday thing was just that we had to pick a
• 27:55
  Speaker 2: day and I just had to Hey, it's either gonna
• 27:57
  Speaker 2: be Tuesdays or Thursdays, and we put it up to
• 27:58
  Speaker 2: a vote, and Tuesday one, surprisingly by like seventy percent,
• 28:01
  Speaker 2: So I was like, Okay, let's do let's just do Tuesdays.
• 28:04
  Speaker 1: Who's the most overrated architect of the last one hundred years.
• 28:08
  Speaker 2: I think there's I think Frank Garry. Honestly, I think
• 28:10
  Speaker 2: Frank Aarry. There there's some I will say, there are
• 28:14
  Speaker 2: some very impressive things that he has done from a
• 28:16
  Speaker 2: technology standpoint, right as far as how his building, because
• 28:21
  Speaker 2: there's such crazy.
• 28:22
  Speaker 1: Metal that looks like it's like rippling in the breeze
• 28:24
  Speaker 1: or whatever.
• 28:25
  Speaker 2: Yeah, exactly, and and and and that metal actually like
• 28:27
  Speaker 2: they've done some pretty innovative stuff on it. So I'd
• 28:29
  Speaker 2: say from from a technology standpoint, he's actually very impressive
• 28:32
  Speaker 2: and inspiring. But but I just don't see why buildings
• 28:36
  Speaker 2: need to look like, you know, scraunched up napkins. Like
• 28:38
  Speaker 2: why this is controversial, but you know why.
• 28:42
  Speaker 1: I like it. So, who's the most underrated architect of
• 28:45
  Speaker 1: the last one hundred years?
• 28:48
  Speaker 2: Oh? Uh, underrated, I'd say, you know, Knees, Vandero and
• 28:53
  Speaker 2: Lac Corboussier. So by no means underrated. They're i think
• 28:57
  Speaker 2: highly respected within the architecture world. But outside of the
• 29:00
  Speaker 2: architecture world, a lot of people don't even know about them, right,
• 29:03
  Speaker 2: And they One of the things that I think was
• 29:06
  Speaker 2: really really interesting about the work that they did and
• 29:09
  Speaker 2: the vision that they set out for the world was
• 29:12
  Speaker 2: they looked at the car as kind of this thing
• 29:16
  Speaker 2: that we should aspire to in architecture in terms of
• 29:20
  Speaker 2: making it affordable to people, making it a mass market product.
• 29:24
  Speaker 2: And actually they talked a lot about the vision of
• 29:29
  Speaker 2: factory made homes so that you could have incredible homes
• 29:32
  Speaker 2: for everyone. And I think a lot of that has
• 29:34
  Speaker 2: been lost.
• 29:35
  Speaker 1: From your professional experience. What do you understand about houses
• 29:39
  Speaker 1: that most people don't?
• 29:41
  Speaker 2: Yeah, I think I think one thing there is is
• 29:43
  Speaker 2: not all square feet are created equal. And like the
• 29:47
  Speaker 2: degree to which this can be true shocks people sometimes, right,
• 29:50
  Speaker 2: people look at like, oh, how many square feet is
• 29:52
  Speaker 2: this home? Like you can have a thousand square foot
• 29:55
  Speaker 2: home that feels smaller than a six hundred square foot home.
• 29:59
  Speaker 1: Huh.
• 29:59
  Speaker 2: And and and I'm not I'm not exaggerating. So there's
• 30:02
  Speaker 2: a lot that you can do from a design standpoint
• 30:04
  Speaker 2: to make small spaces feel bigger. Right, So you know, again,
• 30:09
  Speaker 2: less is more, right?
• 30:10
  Speaker 1: What's one way to do it? What's like one tip
• 30:13
  Speaker 1: for optimizing your your space.
• 30:16
  Speaker 2: Yeah, large windows is huge, large Florida ceiling windows. And
• 30:21
  Speaker 2: then and then just good layout where you don't have
• 30:24
  Speaker 2: a bunch of wasted space and kind of like transition
• 30:26
  Speaker 2: like hallways right or foyer's right, like you kind of
• 30:29
  Speaker 2: don't think about that space because you don't use it
• 30:31
  Speaker 2: all the time.
• 30:34
  Speaker 1: Do you think you'll run cover for the rest of
• 30:37
  Speaker 1: your career?
• 30:39
  Speaker 2: That's all I want to do. I want to build
• 30:40
  Speaker 2: awesome homes and you know, whether it's backyard homes, single
• 30:43
  Speaker 2: family homes, multifamily that that's all I want to do. Yeah.
• 30:51
  Speaker 1: Alexis Revis is the co founder and CEO of Cover.
• 30:55
  Speaker 1: Today's show was produced by Edith Russello, edited by Sarah Nicks,
• 30:58
  Speaker 1: and engineered by Amanda Ko. You can email us at
• 31:02
  Speaker 1: Problem at Pushkin dot fm. I read every email. You
• 31:06
  Speaker 1: can also find me on Twitter at Jacob gold STEAE.
• 31:09
  Speaker 1: I'm Jacob Goldstein and we'll be back next week with
• 31:12
  Speaker 1: another episode of What's Your Problem.