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

Episode Date: April 29, 2024

Welcome to a new episode of the Founder Podcast. In this episode, we go into the innovative world of modular housing with Paolo Tiramani, CEO of Boxful. Paolo shares his journey from ideation to the current successes and challenges of creating foldable, modular homes that will surely transform the housing industry. With insights into the entrepreneurial spirit that drives Boxful and discussions on overcoming regulatory hurdles and enhancing manufacturing efficiency, this episode is a must-listen for anyone intrigued by the intersection of technology, design, and real estate. Highlights: "If you really want to be an entrepreneur, you can't give up. To a pathological degree, you can't give up. You have to get up and go every day." "I just want to be the best. Driven to be the best doesn't mean I always succeed, but it's a core driver for me." "Our philosophy in product development was always to say, 'What product category can we invent that doesn't exist?" Timestamps:00:00 - Introducing Paolo Tiramani and Boxful04:20 - Early Prototype and Interaction with Elon Musk09:06 - First Public Presentation at the International Builder's Show13:49 - Paolo's Background and Entrepreneurial Drive17:58 - The Philosophy Behind Never Giving Up22:19 - Crowdfunding Success and Production Challenges27:48 - Vision for a Massive Logistics Company in Housing31:02 - Addressing Regulatory Challenges in Housing37:45 - Tour of a Modular Home Setup45:00 - Potential for Multi-story Modular Buildings Live Links:Join my community - Founder Acceleration ⁠https://www.founderacceleration.com ⁠ Apply for our next Mastermind: ⁠https://www.thefoundermastermind.com Golf with Chris h⁠ttps://www.golfwithchris.com⁠  Watch my latest Podcast Apple- ⁠https://podcasts.apple.com/us/podcast/the-founder-podcast/id1687030281S⁠ Spotify- ⁠https://open.spotify.com/show/1e0cL2vI1JAtQrojSOA7D2⁠ YouTube - @thefounderspodcast

There's lots of fine companies out there in that space, but they're still regional business. 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 is the premier housing brand that's out there. And we haven't done anything yet. We haven't done anything yet we haven't done anything

so today we are here with paulo tiramani founder with his son yes a? Yes. 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. 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. Yeah,, we're gonna have a great time. It's gonna be a great time.

Come on in. Let's go. 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.

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 and putting together uh you know an initial product prototype to the market and and getting people really excited about it and uh and then do the pre-orders and then and then coming through and doing the fulfillment yeah um my understanding is you guys have like 160,000 pre-orders or something crazy like that. Yeah, exactly.

I think we have about 160,000, 170,000, but I like to call them expressions of interest really, because there's a bunch with deposits. I don't know the exact percentage, but mostly without a deposit, just like Cybertruck or something like that. And it's a unique expression of interest. 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 does that person have the money? Do they have the land? Do they have the project? Do they understand what the undertaking is? 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, right, without any marketing to just come on through. But we said, Okay, let's, let's, let's, let's pin it at this scale. Yeah, for the next step. And it was really based on those numbers, which I think are validated one way or the other. I mean, that's pretty amazing either way, right? Regardless of how many people are going to be able to fulfill, I mean, the Cybertruck, you know, it's the same type of feel, but amazing. And you guys have been catching a lot of press. I mean, from my understanding, Elon Musk is actually one of those that actually ordered one or has expressed interest in owning one of your units.

Yeah. He was actually, strangely enough, he was customer number one, which is pretty sweet for a startup to have one of the most important people on it, customer number one. And I'll tell you a quick story if I may. Yeah, I'd love to. So we're in our R&D lab with 10,000 square foot R&D lab. And my business partner, my son Gally, came to me and said, he said, I keep getting this lady wanting to buy this, one of our prototypes. We only had three prototypes.

He goes, what do you tell her? I said, I told her no prototypes. We only had three prototypes. He goes, what do you tell her? I said, I told her no. We've only got three. Comes back a couple of weeks later. She keeps calling. She says she's from SpaceX. Elon Musk wants her. So I said, what do you tell her? He goes, I told her no.

So, but you know, at the end of the day, you don't say no. Yeah, you don't say no to yeah you don't say no to elon musk no so anyway so we shipped one down there and uh 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 um we'll swap it out for you anytime you want with the production one they're really nice. So, yeah. So that's the backstory of that.

And then the press went nuts. We actually had momentum prior. We had amazing momentum prior to that news. But it certainly didn't hurt. It absolutely did not hurt. And everybody just keeps bringing it up over and over and over again. For sure. 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. Where did that idea originate from? Yeah. So prior to this company, I had another company that was basically IP licensing. So IP, intellectual property, mechanical patents. And my career, my whole career has been, it sounds a little Rube Goldberg, a little eccentric,

but it's invention. Nothing super fancy, like anti-gravity or anything, but still it's invention. I mean, I would say Boxable is pretty close to anti-gravity. Oh, you're a smooth talker, Chris. So I ran that for a number of years, pretty successful. And the business model was really easy. We'd invent stuff, we'd license it to industry in exchange for royalty,

just like on any kind of author, except we were a company. 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. So we got really broad knowledge, broad and deep knowledge on mechanical engineering. And just like I think most people in any industries, the graphic screener, and I'd harbored the desire perhaps to become an operator in a space. 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? And fast track to building construction,

which is pre-industrial. So we're like, okay, you know, why? What's the problem in this and that? And so filed a couple of patents uh over the last decade and so what would you say is the biggest problem that you guys are solving at boxable or that that idea stemmed from yeah so the overarchingly the biggest problem is that it's a pre-industrial business by that i mean it's not built in a factory so everything in the modern world is built in a factory we can make rockets in a factory right so um and then you know so okay so the next step is why? It's like, oh, because they're big.

All right, so what can we do about that? So, you know, we look around at factory solutions. 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. 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? So that led us down to sort of the next click to why is there a size problem? Okay, houses are two thirds empty space, which is inexpensive empty space. And then the remaining third is dollar dense with labor and materials, kitchens, cabinets, shelves, infrastructure.

We said, OK, can we fold that down? And what does that get us? What does that net us? And what it netted us was 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 will develop. So that was a main aha moment. And then what folks don't realize is that if one aha moment is really backed up by hundreds of mini aha moments, mini inventions. 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. We were just engineers solving a problem. My background is degrees in mechanical engineering, industrial design, mostly industrial designer at heart. We were just solving a problem. 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 at what point at what point in the did you have like something a prototype that was unfolding and going viral on the internet yeah so um we we first, we attended, since sequential years, IBS, International Builders Show.

It's not international at all. It's totally American. It's like the World Series. The World Series, yep. So it's an international builder show. And we went with a 40-footer, which is the ultimate goal of the company. That's going to be the best price value. And got a great reaction.

It was wonderful and said, what can you sell us? And my partner and I looked at each other like, I don't know. So we needed to come up with a product. So we came up, Galeano had the idea about this ADU, Accessory Dwelling Unit market in California. And we said, okay, let's just make the 20 foot a building shell and we went to ibs that year i forget what year it was a couple years ago and uh we we really just wanted to know do people like it and what what can we price it at you know is it viable economically and do folks

like it 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. It was pretty interesting. And then that just caught fire. That just caught fire with the funding. That's amazing. You know, it's creating a modular home

where it's built in a factory, non-single-wide, the idea isn't necessarily new. In fact, 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? How we can build real homes in a factory 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 what was like the big turning point to actually be able to get this to production yeah so if i can on on the idea um the novelty of the idea there's actually you know my background is a lot of mechanical patterns so there's actually, you know, my background is a lot of mechanical patterns.

So there's been folding structures out there forever, but they're folding structures stylized into an architectural model or style. So it's like this unpacks into an A-frame. 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 about it's in a 40-foot cottage. How about no?

Because not everybody wants to live in a 40-foot cottage. How about no? Because not everybody wants to live in a 40-foot cottage. So apart from practically solving the transport problem, what we have at Boxable is we are architecturally neutral. So our position is we have three sizes of building shelves, which 20, 30, 40, more or less, unpacked to about 19, 20 foot wide, and stack connect cantilever. There's no architecture in this yet in that statement.

So what can't you build with that? Well, you can build most things most of the times. And then, you know, I like to say, unless you're an Eskimo living in an igloo, I'm sure there's going to be an Eskimo upset by that statement. 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 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. Doesn't matter where you are in the world. 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. 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 level of 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. So what we have is the building shelves. The building shelves can connect in many different ways. And then we have what we call dress-ups, which you've seen outside probably. So customers, and the interesting thing about the dress-ups

is they're not structural whatsoever. You still need a roof, of course, but so it's almost a handyman project. So you can make it traditionally contemporary, traditional or contemporary, whatever you want. So it's a fundamentally different approach. And it is a mountain of development so that the program can scale, let's say, just in the residential market from studio to four-bedroom,

studio, one, two, three, four-bedroom. Maybe I'll show you something later secretly. Yeah, we're excited to jump in. We 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. I think the product itself is very intriguing. What I would love to understand more is about you. What created you? What got you into the entrepreneurial space?

Why are you the one that's here today changing the world? Well, I would say probably most folks that are driven to do things have some kind of character flaw, you know, on the spectrum of normal, probably not terribly normal. So for me, it's a couple of things. I have really an aversion to authority. When did you realize that? Oh yeah, always. So it's 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 more about that. You said you were sick. Was this like you weren't able to go out and play? Yeah, yeah. I was just stuck in bed for a couple of years. Just asthma, overprotective Italian mothers. She's absolutely ridiculous.

Oh, my goodness. I could have played with the kids, really. How old were you? I was probably five to seven, five to eight. So I went to school when I was eight. So I think that was really super formative for me because it was a long time ago. It was paper scissors, blunt scissors, because I'm a long time ago and it was with paper scissors,

blunt scissors because I'm a protective mother and Legos and jigsaw puzzles and things like that. So that was that, plus the other character defects and the inability to focus. So it didn't do too well at school until we got to industrial design mechanical engineering school. Then I was great. So, yes, I had it in my head from day one. So I started a company. Were you a big dreamer at a young age? I don't know what a dreamer is, but it's just a kid, you know, like any other kid.

So, yeah, just a pretty common guy, common story. Nothing really, I don't think, truly amazing or incredible. 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? Yeah. Yeah. So, yeah, absolutely. I mean, first project I did at a school, I started a little company, just a couple of people. And we made it was a hanger for as an organizer for coats and things like that. And and it was great. People, people really liked it. And I had no follow through. I was right at college and I was complete disaster.

So that was the first one. I just, you know, just. So people wanted it. You just weren't able to I couldn't follow through as a designer 19 years 21 years old and I just just fell straight on my face then started a bar where company how did so when you going through this failure like what's going on in your mind didn't like How did you overcome it and bounce back? Because usually 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. Well, I mean, you're a kid, so you don't overanalyze. Or that was certainly my case.

I just sort of shrugged it off and moved on. And it's easier to do when you're young because you don't have commitments. I would 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. So I think that is probably one of your superpowers, the fact that you're able to shrug it off. Yeah, I mean, the other thing is the other character flaw would be never giving up. Yeah. You know, if you really want, if you want to be an entrepreneur, you can't

give up. Yeah. But I mean, to a pathological degree, you can't give up. Right. You have to get, you have to get up and go every day. You can't give up unless you're, unless you are absolutely compulsively driven to do that. You shouldn't, 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 if you think, if you think, not you, but if someone thinks that entrepreneurship is just all the glossy stuff, no.

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. Yeah, and then pain. Yes, pain is 95%. And hours. And hours. 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. Yeah. Really in front of everything. You have to put it in front of friends, relationships, everything. You have to, you know, be a good parent if you've got kids, but you're still going to be thinking.

When they're at the park, 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 reality. 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. 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? i mean that that was that was probably that was probably it then i started a sort of cup company um brought us to america it was on the it was on one of the in one of the star trek movies so that caught fire again sort of early media that's a pretty cool story how did you get on the star trek so it's just a glass

with a straw around it and the shape of a ball and a tumbler and uh it's a really cool product so did you work on getting it featured in that movie or did it just uh it's so long i can't remember but i don't know we didn't work on it it just they used it yeah we just weren't that sophisticated and then we were selling these things by the containers. I mean, in my early 20s, it was pretty amazing. That's cool. So that was pretty cool. And then I started the Intellectual Property Licensing Company,

ran that for a bunch of decades. And I think that just personally gave me 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. It's the been consumer goods my whole life. So I look at Boxable as a consumer good. It's the biggest consumer good that isn't. 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. 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 we're very much a startup we're not at revenue yeah we have humongous challenges ahead of us and you know and we're grinding grinding through that 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 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. And we didn't even have to do that with building construction. There's a brand for everything. There's no brand for housing. And we have wonderful partners like D.R. Horton, the biggest home building brand in America. Yeah, that's a big one. And, you know, respectfully, most people don't know it unless they're in the industry or champion homes and there's a lana there's lots of fine companies out there in that space but

they're still regional business yeah they're not national and they're not global let alone global they're not national yeah there's no national brand and i would argue um i think without any hubris that in a few short years, Boxable is the premier housing brand that's out there. And we haven't done anything yet. We haven't done anything. You guys have delivered, what, 160 homes or approximately? 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. Yeah, it's amazing. It's'm very proud of because it's a production line, but it's not like we're not a car company. We're not Ford that's putting up another production line and the engineers know how to make cars. We assembled a group of strangers, a really incredibly smart group of strangers, 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. You know, we've hired Porsche consulting, Porsche the car brand consulting. We've hired Sandy. Sandy Monroe is wonderful.

You know, to help us get there. It's iterative improvement. And so we feel like we just got our fingers on the first ledge of the production plan. And to do that from a standing start and make 500, 550 homes in a couple of years, I think is a huge achievement on the one hand, but it's also doesn't do anything. Yeah, you're just scratching the surface of what you're capable of. Because clearly there's demand, right? You've got a lot of hype and a lot of energy. You ran one of the largest crowdfunding campaigns in history, right? I believe you raised about $75 million through crowdfunding.

Is that correct? I think it's about double that. Oh, double that. Wow. Yeah. We'd have to check on that. I'm not saying that as a certainty. I think it's around $150, double that. Wow. Yeah. We'd have to check on that. I'm not saying that as a certainty, but I think it's around 150, I think. 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, you guys are producing about two homes a day right now. Yeah. So right now we're slow walking because there's so much engineering to do. If you sat in on some of the engineering sessions, you'd think you're at NASA. You know what I mean? It's just an insane level of detail. 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 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, we can put in whatever resources are needed to drive that cost down. 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, very comfortably, slow walking, single shift, because it's pointless making something that's a higher price than we want it to be. Although our prices are great. Our first direct material labor, which I probably shouldn't share, are really amazing and they're plummeting. Pretty nice. So it's all going directionally in a good place. 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.

So good margin, that's great. Yeah. And we could, you know, if we said, okay, we've got 400,000 square feet here. This is where the buck stops. Let's make a nice company. 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. But right now you're in growth mode. You're changing the world. Yeah, everybody would be happy. But if you pile on your general SG&A onto one product, of course it's not going to be profitable. It wouldn't be possible.

But we could be profitable if we wanted to be today, if we just wanted to stop here. But, you know, our investor base and our staff, everybody, I think, mostly sees the vision as much better, much bigger than that, to actually do something really, really big. Like really, really big. And really, really big means a very short period of time where you're not fixing any problem.

We make a couple of hundred thousand homes a year. Ultimately, we haven't done anything. I know it sounds crazy. You know, the numbers are so, so nuts, but we're at four hours. Our engineers are telling me that by year's end, by by year, I'm not sure when, not year's end, 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 from four hours. From four hours to 45 minutes to be able to produce a home. That is phenomenal. So the automation, yeah, we did an incredible tour,

kind of seeing what you have right now and where you're taking this thing is really amazing. What's really amazing, if I 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. We have 10 stations, just like automobile, and it just goes down the line and makes the product.

And we're at four hours. We've only doubled the number of stations. So double the number of stations gone from four hours to 45 minutes. 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. Our projections show that if we have maybe 80 stations, 90 stations, engineers telling me we'll be down in the four, five-minute range. What?

Yeah. Unbelievable. Our goal is to make one every minute, every 60 seconds. I love that vision. What else drives you right now? What is the vision in long-term that you see for this business? Yeah. So I think that our overarching business, if we're able to be successful, goes far beyond the

four walls or 12 walls, whatever we have, three factories here in Northwest Vegas. We're looking at everything from the origin, the supply chain, past interim customers, such as developers, to the guys that really matter, which is consumer, the person that pays. So when you have a standardized system, the fewest number of components, fewest number of unique components, maximum symmetrical components, and you're obsessed about how far people walk, how much energy they've used. You know, sustainability is really a function of energy used to bring the price down. 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 supply chain to the end user, including government regulatory. Everybody wants this. We don't see any losers in a reshuffle. So, super ambitious goal. 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. And as the business grows into different configurations, if we're successful, we should make millions of products a year. And it should slowly turn into a massive logistics company, at which point I will have less than zero interest. We're a few years away from that, even if we do a really amazing job.

But no interest in running a logistics company. So it should be success is a massive, massive logistics company making product incredibly quickly, like the rest of the post-industrial world, at an incredibly low cost, at an incredibly low cost. And adding facets to that customer experience, such as portability, even though it's a fixed home, a 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, what drives

you personally what it like if you wake up in the morning and you're excited for the day i mean what what is it that gives you that energy so for me uh just from day one it's just very simple i just want to be the best you're talking about me as an individual i Yes. I want to be the best. I'm driven to be the best. It doesn't mean I always succeed. So that's a core driver for me. I just want to be the best. Because my mother told me I was. She's an Italian mother. What am I going to say?

I can't disagree with her. So I want to be the best. And then as it relates to the company, I want to fix this problem. I don't mean the boxball problem, I mean the housing crisis. 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? There's the product, there's the land, there's the regulatory. The product, the land, and the

regulatory. So we can fix two of those. We can't fix the land. Can't fix the land. That's another problem. I could go on about that, but I won't. 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. Now we can see where those cost savings go, where the speed goes, where the product quality goes, what the reaction by our customers to, if I can be modest for the group, really amazing design, seductive design that makes you want to just love and be in the space. And then also the regulatory is just pre-industrial space where with so many different stakeholders with their own islands of self-interest.

But the good thing is both at the state and federal level, they want to fix it too. They just don't know how. So we have the winds to our backs and we're also apolitical. It doesn't matter if they're left, the middle, or the right. Everybody wants to fix this problem right and the government is in the business unfortunately of revenue generation for the government right so more houses more revenue right more houses more taxes more revenue for the government so everybody wins um so those are the two or the three problems i can definitely definitely uh empathize with with this type of issue coming from the solar industry,

like dealing with different jurisdictions. 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 the fixing of regularity. It's awful. I mean, my favorite piñata is the 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 skedaddle. Right. It's just like, they're gonna drive their car, they're gonna drive their house to work. And it's just so absurd. It is. This sort of legacy, legacy law.

Right. And then followed blindly at 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 why I'm getting paid, these are the rules I have to follow. I'm going to implement these rules, then I'm going to be a good worker and I'm doing a good job.

You know what, that person is right. That person is right, it's not their fault. So anyway, that's been one of the biggest changes. I'm excited to see what's next here, Paulo. 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 so we're gonna see a secret secret squirrel awesome well let's jump over there i'm excited all right so uh looks like we have pretty awesome uh modular home going on here it looks like a combination of a few of your your your standard 19 by 19 units? That's exactly right. Okay. So eventually we'll have this 20 by 20,

we'll have 20 by 30, 20 by 40. But what we're doing here is we're showing customers how they can connect. So three dimensions, X, Y, Z. So there's no Y, Y is up and down, so it's X and Z. Yeah. This fourth time, but we'll forget about that. And so the principles here are how we can take

the casita program and then turn it into uh studio one two three and four bedrooms with all good flow good floor plans and all of that good stuff and how customers ideally can expand their casita um i don't know if they'll be able to do it with 1.0 with 2.0 certainly after they've moved in. And this might give some really great opportunities to developers who are having those discussions where they can just do an oversized lot, put the foundation down for a larger unit. And then, you know, a couple has a kid blah blah blah you know uh kid comes back from college uh 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

we have cores we have open space we have kitchens we have bathrooms how can we make that all work together and what we've concluded is with three SKUs with three with only three configurations only three of the cut so the factory's making three configurations configuration is the 20 foot box and what do we put in it so it's the same 20 foot box but we put different things in it. Only three different things. And with that, we can create 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, custom is in the word maybe I know it is and for the factory the fact you go for the factories to make repeatability very cool so we're gonna go in we've seen the casita we're gonna enter through the casita we'll check out some some cool stuff what we see here is the standard casita the casita has you know these nine and a half foot ceilings, incredibly wide, eight foot tall windows, great sight lines, everything's big, all the cabinets are huge. 2.0 cabinets go up to the ceiling with a step stool,

just on and on and on. Great appliances, good looking countertops. Yeah, big Z-wave counter. And even the Casita, everything's full size. So the refrigerator is full size because even if you're living alone in a sixty thousand dollar house you're still shopping for the week to save money um so but then as the as the product system scales into additional bedrooms uh the big fridge doesn't 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 a three bedroom, as a three bedroom, all scaled off the casita, which is pretty amazing. Yeah, you can tell this is the original casita and then you just have a new opening here and here. It expands it. Very cool. So, and what we did in the bathroom is we took out the shower, made it a half bath and we have a double stack here.

We have a double stack for the family. Very nice. Okay. So we'll lay down some breadcrumbs and we'll go on a tour. Okay. 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 the wall.

And what did you say about, so most of life, especially where you're living, most of life is visual when you think about it. If we close our eyes right now, as long as the temperature is good, you don't know where you are. You could be in a basement. Visual is super important, although we pay attention to sound and smell as well. Visual is so important. Things like this, it makes this look huge. The mirror is a great touch. But the secret to the mirror is that there's no frame around it,

and it goes all the way to the ceiling, to the edges. And so in a casual glance, the space feels big. It feels big. And one of the driving design details for 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, you're not skimping on anything, you're not skimping on size. The first thing folks do with something small like a Casita is they skimp on size. Everything's tiny, you've got low

ceilings, little windows, it's junky, everything here is big and high quality. So, very nice, come in here, this is the kids's wing. So you have a nice sort of, I don't know what you'd call this, vestibule? I have no idea. So we come in. This is the first of two bedrooms. And a nice size bedroom we can put in here. So we size this. So these are obviously, you know, fairly, fairly compact, but it's still got to work from a human factors and ergonomics and flow point of view. This will fit a queen size bed, which is pretty amazing. Queen size bed, plenty of room to walk around.

We're going to set this up as a sort of teen tween bunk where the kid sleeps on top, couch below. Yeah. Gaming, huge TV. Wow. Nice big, nice big window. Yeah. Walking closet.

Which is phenomenal. To get a walk-in closet, right? Like that is, Nice big window. Yeah. Walking closet. This doesn't have a door on it yet. Which is phenomenal. To get a walk-in closet, right? Like 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? So we're putting two barn doors, but they slide over each other so you can both have them open at the same time, blah, blah, blah. So anyway, really great space for kids. And if we look behind us, right here, this mirror, this is a standard window opening. 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 window that backs up against another box.

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. One of the things we didn't talk about is all of the boxable is what we call on the grid, similar to Lego with the bumps. You can put it together like this, but you can't put it together halfway so so on all windows there are electrical wires that come down on the grid everything is chased the whole house has basically chase ways or holes through it so

at on the factory production line or afterwards the customer can run wires 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. Anyway, check it out, Jack and Jill. Oh, this is a great use of space. Double sinks, very large, I mean, standard shower and tub. Yeah, it's amazing. So this will make our own, this is just prototype. So when you expand the family, the Casita just has a shower in it.

But if you have little kids, kids need to splish splash in the tub. And so you gotta have a tub. So this will be a tub, nice big mirror, double sinks. So, you know, kids like this. Get some natural light with a window. Yeah, and it's privacy as well. Yeah, you've got the best of both worlds.

And then we come back to the mirror room, the mirror of the other room. So this is just, you know, rinse and repeat, same features apply, walk-in closet and things like that. And this one has a door to an outside deck if you look at it from the top it's three three casitas in the shape of an l right so this is the fourth imaginary cube and what what we have here is um 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. And then, of course, the rest of the roof would be on here. We're not doing it

for this one. We'll have sort of fairy lights on here. It's going to be a beautiful space. We're going to kit this out with, you know, a jungle gym and a giant TV to watch soccer and umbrellas and chairs. 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. 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. Yeah, exactly. And this this configuration, you can choose which is the front door, which is the back door. So we just came in one configuration where this was the front door and this would be

the back deck. But this could also be the front of the house, right? Because you know, boxable geometry says a lot of masters. So 918 is standard parking space. Boxable is 1919. That's not an accident. So if this were the front of the house, depending on the community,

you can actually drive two cars in here. This could be the parking spot. 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 nice. And then you have the master bedroom. Oh, yeah. So we save we save the biggest to last. Right. So again, a nice a nice pre entry here, which we can kit out with shoe racks and stuff like that. Oh yeah, a nice little mud room. Yeah. And this is really going to be a super nice space when it's done.

One of the nice things about this space is, so I'm a symmetrist, you know, if I can get it symmetrical, I'm going to get it symmetrical, unless there's a purpose to the asymmetry. So here's really nice. This will have a king size bed. The homeowners are going to be looking at a huge fireplace, a huge television, huge closets, pre-entry here. So you're not dumping straight back into the living room. So you get some nice privacy, nice kitchen. My first impression walking into this space is like, wow, like you would not expect this, right? From the outside,

you're like, oh, boxable, 19 by 19, whatever. You come in here, I'm like, hey, this is a good size master bedroom, right? To your point, I mean, these closets are phenomenal. I mean, this is like a combination of a huge walk-in closet, essentially, 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. 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. So imagine you have a king bed here, you have a, the girls 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 um bathroom door is going to be mirror the whole thing is going to be a mirror so now we've you you sort of trigger word uh uh walking closet you're absolutely right uh we've created a giant walking closet here in the sense that that person can get a giant walking closet here 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. So really, really nice. So this will be a solid door, obviously, and then this will be a mirror door. Big fan, big giant painting behind and really nice. And what you see with Boxabl being on the grid, on the system, any door can become a window and vice versa. So you'll see when we blow out those nine configurations, this window behind you in one of the configurations would be a door. Would be a door and that might be a small home office. 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. So if we wander back through here, oh look, we're back where we started. So very nice. Yeah, it's got a great flow throughout the whole home. I mean, it's pretty remarkable what you're building here, Paolo. Like, I mean, what it is currently, what the future is. 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, pretty phenomenal. Yeah. Our reach goal is to go, you know, multi-story. I won't pick a number and say it out loud, but I think it's, I think people are going to be shocked by how far we can stack them. And at last year's IBS, International Builders Show, these, we have repurposed. These three modules were used to create a two-story And that master suite was upstairs and we use that pretty much how it was and this was a different unit

Actually, it was configured with a spiral stair and stuff like that 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 cost a 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. 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. Let's think it through a bit. They're like, we don't have time. Well, I love the vision, love everything you're building here. Appreciate your time. Thank you so much.

Thank you. Thank you. Very nice.