A House in a Box?

what's going on everybody welcome back to the show today we are here in Las Vegas touring the boxable factory box was a company that literally ships out houses in a box if you think you've heard of them before you probably have because their first customer was Elon Musk now let's go ahead and take a tour we're meeting up with the co-founder of the company Galliano ceramani and he's going to take us around the factory let's go [Music] this whole company has been powered and built by social media marketing 160 000 names on the customer wait list 150 million dollars raised all through crowdfunding from 40 000 plus investors originally we had our first prototype which was a box book aceta and we had the video of it unfolding and that video kind of went viral a lot on its own and so we kept you know running with it and pushing it out so of course this house folds up to eight and a half feet wide so it's 20 feet and then it folds up to about here so that it can ship in the most cost effective way and that's what really catches people's attention for you know a second while they're scrolling through social media this is our first product uh what we're doing here is creating like a building system where it will Mass produce different Rim sizes with different interiors that can stack and connect to build basically everything like apartments or single-family homes but we're starting with this little small house products so it's a 20 by 20 studio apartment pretty much everything is done in the factory before it arrives on site so you know uh kitchen bathroom Plumbing electric flooring Windows like everything is done we fold up all the all the empty space here and then we ship it out did you self-fund the first the Prototype yeah so we put a few million dollars in to get everything up and running to get uh through a lot of R D um through the initial prototypes we ended up at a certain point saying all right we're ready to do a big Factory you know we couldn't fund something that big on our own so then we looked into different ways to raise money came across crowdfunding tried it and it just worked and it keeps working 150 million is no uh small amount why did you create this to begin with the original idea came from my father so my father Paulo and I both own the company and he built a house many many years ago it was actually that childhood house I grew up in he tore it down and he rebuilt like a a nice big house on the property and sold it and he used traditional modular Factory built housing and he's experienced all the problems that come along with that all these problems with shipping and and other issues and just said there's got to be a better way he originally Drew up the idea to fold the house up and filed the first patent on it and then in around 2017 uh both both me and him separately were kind of like looking for new projects and we started talking again about the folding house idea and then we made a website uh started getting some interest and then things started accelerating I think it looks awesome uh congrats on everything you've done so far you mentioned the factory yeah let's go check that out have a look through the factory let's do it [Music] this is our our first factory it's a 170 000 feet uh here in Las Vegas Nevada right now we produce uh two houses per shift everything we're doing here is like different than traditional building construction different materials different equipments we've done a huge amount of work and research to identify different building materials to simplify the manufacturing process with the ultimate goal like you mentioned before to get out one house per minute in a future Factory so obviously that's a much larger scale than what we're doing here but this is like Proving Grounds r d and we're going to dial it in here we're going to prove everything and then we're going to say all right now we need a billion dollar Factory to put out one house per minute got it got it so this is kind of the uh like assembly line stages right here so we do various like parts manufacturing like you see a CNC cutting apart over there and then all those parts kind of come together right here and this is like a kit of parts for one of the wall panels okay so what you end up with is you know this kit of Parts versus a traditional wall where you might have you know a thousand Nails a hundred little pieces of wood all these other different layers uh where we've simplified things quite a lot and the way it goes is we have these These Sheets here that are like for example the exterior wall you know they're roughly you know four by ten sheets so you lay out five four by ten sheets and then the core of eps foam you lay out four of those and then another four sheets and then that all gets laminated together in this equipment here right now we build one wall panel in about 20 minutes and then over the next six months we're going to be upgrading the equipment and we think we're gonna get to about one wall panel every three minutes wow okay in this Factory yeah in this Factory okay got it how long did it take to get this whole thing set up we've been in production for about uh 15 months and then before that there was uh get the lease on the on the shell of this building as a brand new building got the permits install all the equipment build out the office and then we were alive you know by uh you know August you know producing houses October or something like that and that's pretty quick by itself right yeah it was and it was a huge learning curve where no one had ever done anything like this before and we just figured it all out from scratch and not only had we never done anything like this before with this product we had never manufactured anything we had no experience in manufacturing so uh it all went you know really really well and uh yeah we're in a good spot now and when you're because like it it started off you your dad and this other partner right where do you start even making hires like you start raising all this money through crowdfunding you get a couple big checks in you have this money to play with you know that you need this done but if you've never done manufacturing before you've never done assembly like this before like how are you thinking about spending the money you said you hired a couple hundred people like that's not a small feed by itself yeah you know where do you where do you begin like which I guess in in the hiring hierarchy where are you starting you know uh frankly early on we didn't really have enough money but we still just went for it like when we got into this building if we hadn't kept bringing money in we would have been out of business in like a month but we were just like we were just like it we're we're going for it like we don't care and now we're in a really strong position with money but uh you know we started out just as a small crew of people yeah um before this Factory in the office just uh you know a few Engineers yeah and then we get in here uh we hire a few like you know kind of managers of the actual assembly floor uh and then once we were ready we started grabbing like actual laborers and scaling up and scaling up and now we've got you know about about 30 people in the office and everyone else out here on the on the factory floor gotcha but so you started top managers yeah did you guys create the whole process before you brought anybody in basically like you and the engineers yeah it was basically you know me and Kyle and Paolo researching the equipment uh designing the product ordering the parts and then figuring out what the processes would be to assemble it and then just getting in here with like trial and error yeah uh and it's funny like one of our early hires was actually a guy when I moved to Vegas I went on Craigslist and I found a handyman to hang TVs at my house and so I hired this guy his name's Josiah and he's great and he still now still works here in the factory he's kind of in charge of like a large section of the factory awesome and you know we just come across you know quality people and hang on to them I was just saying because like you basically have to train them from the ground up essentially it's like you can't go hire someone that has experience in manufacturing homes in a facility like this right I mean you just that also that's part of the pitch here is that we're not using skilled labor that's expensive like a free a carpenter or something we're getting anyone off the street and we're training them as a technician and then that reduces is the labor cost and the product cost yeah and gives a great career to somebody who may have otherwise oh yeah yeah been hanging TVs for a long time yeah yeah definitely you know a lot of you know opportunities that we're creating yeah these jobs and as we scale up the factory you know I think it's possible we could become one of the bigger Employers in the state if we're successful with scaling up these factories yeah absolutely you planning on staying in Nevada for a long time so right now we just got a second building uh right right next to us here so that's gonna go online over the next few months we'll be moving in okay uh and then we're planning in the background a really big Factory a billion dollar Factory to be out a little further in the desert here so you know that'll be further north uh yeah so uh right out here in in Apex about 20 minutes away is where we're looking at land okay you know hopefully several hundred acres several million square feet of Warehouse building full automation full robotics get closer to one house per minute yeah there you go dude there you go that's awesome even that next Factory that big factor we're planning like the amount of stuff that's going to be trucked in and out is crazy like we're looking at the numbers like the amount of like trucks and material like it's like it's huge yeah but you know they're houses and they're big yeah right a lot a lot of stuff so yeah you'll see right over here they're actually starting to assemble the pieces together uh into the walls uh applies adhesive to them uh sends them into this machine that puts a tremendous amount of pressure so the glue can cure and then you end up with these you know panels to a pretty significant degree of finish that are um you know really exceed the requirements you would see on a traditional house whether it's wind rating uh energy fire resistance like across the board what we've engineered here is a better building and for lower cost when you are at capacity or let's say let's say you've reached the goal of a house a minute at that point is are you wanting to start building bigger houses or is that already in the plan before you get to that type of output yeah so right now we're fortunate because we have so much interest in the casino floor plan so we can keep it simple and we can just focus on you know Mass producing that yeah and then we're basically planning to stick to that in these current buildings and then that really big Factory that I described that we're planning that would do the full building system so the Casita is a 20 by 20 room we'll do 20 by 30 20 by 40 20 by 60 rooms those will stack and connect they'll have different Interiors one will be a bathroom box one will be a kitchen box one will be a living room box and then we'll see a building system where you kind of have endless combinations and configuration you're shipping it's like um it's like the LoveSac couches yes where you just remove this one put that one in I only want this many Let's do an L here yeah but you can do that with your house now yeah we think we'll have like an online 3D configurator where um you'll go and you'll you'll arrange stuff and you'll hit order and then the brooms show up you know next day like Amazon Prime yeah yeah yeah you're right exactly and how long like if they get shipped to a lot and it's already pre-wired there's a foundation how long until you have a house that you can live in we could unfold a house like in an hour wow right now for the Casitas yeah for the Casitas so you know so even with all the extra complications maybe a day two days yeah it's it's not long it's not six months and uh you know as the crews that are doing it get experience doing it because even we're doing it for the first time yeah uh they're gonna get better and better at it and as the product develops we're gonna streamline things so anything that's taking a little extra time we'll figure out how to eliminate it it'll get better and better as we go sure so this is there where they're putting in all the electrical and things like that yeah so out of this um machine comes these panels so these are like all you know panels that are um this is basically you know how it comes out out of there and then they'll do uh some paints and mud to get rid of the seams yeah and then they'll do electric got it and then once that uh panels all ready to go then they'll just start assembling it together and then they'll fit out the interior of the rooms [Music] so you start to see yeah here's where you see the assembly line uh things are starting to come together you'll notice that they're only working kind of one side of the unit so that's the core so in in the house we were just in you know I explained how kind of half the house is empty and the other has all the stuff in it so the cool thing about our product is it's all open uh they finish out the core kitchen bathroom and then they throw the rest of the panels on and and then you're done with it so you know quite a bit different than traditional building construction where you might have the whole house and you have to walk through a small door to get to get your stuff in sure so this is more compatible like later on we'll have robot arms that are just placing you know toilets and cabinets into these uh into these cores as they go down the line yeah that's awesome dude that's awesome so assembly once it's done then you kind of compress it or is it kind of built compressed yeah you'll see down here um the rest of the panels are going on and uh then they'll they'll just fold it up unfold it fold it up and then ship it out yeah yeah we can see some some folded up units that we've got outside um and then like you know each of these stations the guy working at that station he's just doing the same job over and over he's going to get really good at it really efficient he knows exactly what his tools are that's that's the way you want to be everything's repeatable and standardized and then you can really push labor costs way down really traditional assembly line type model and so now you'll see you know this um large floor piece has gone on uh one of the the roof pieces are on and then some walls here uh pretty much all the panels are good on this one the roof is in uh you know three pieces there and then it's just gonna fold over yeah so now they're just going to be doing some like final kind of quality control check finishing touches and then uh this house is going to be folded up like this shrink wrapped and then shipped out so uh with like Highway restrictions eight and a half feet is is the magic number to be Highway legal and ship at the lowest cost once you go an inch over that you incur huge extra expenses like the requirement to have uh follow a flag car uh restricted oversized load permits restricted routes restricted travel times and that's why you know all building is all building construction isn't done on an assembly line yeah like every other modern product is down an assembly line because the results are amazing but houses were just too big so that was like the first thing we had to fix we had to make these things shippable at the lowest possible cost and once we dialed that in you know so much more is possible as far as increasing the quality and reducing the cost once you get get somewhere and it's kind of installed or fixed do you have our people do people have the desire to like pick it up and move it somewhere else or is it pretty much fixed there the idea is that these are permanent buildings that exceed the the code requirements for apartment buildings but just by their nature they kind of are relocatable yeah so it's definitely possible if people want to do that uh you can totally do it I'm sure there'll be tons of use cases where they're relocating these buildings um frankly you don't even need a foundation you can just open it up on a parking lot or on the grass and use it and then take it away when you're done okay that's awesome dude that's awesome so you guys now are looking for extended crowdfunding through other markets where you're not maxed out essentially yeah not just looking at crowdfunding also looking at like institutional investors and large banking relationships and just kind of take everything to the next level but you know the crowdfundings work so well for us I'm just going to keep running with that yeah I mean the great thing about crowdfunding is it builds in a customer base right oh yeah like I mean you said you have 160 000 people on the waitlist yeah yeah so as soon as you open that up you're gonna probably get some pretty pretty good volume of orders the crowdfunding is amazing I don't really see any downside to it we now have these like Army of of cheerleaders telling people about it supporting us and you know any company needs you know awareness it needs customers and you know this is all kind of building that up uh what do you think the biggest uh piece of publicity was for you guys so the biggest one the biggest piece of publicity was Elon Musk yeah uh so you probably figured that was the answer that's why I wanted to ask yeah so how did that how did that whole thing come about so uh one day I got a call from I guess his assistant and she did you think it was I thought it was and then she was like hey we like we like he likes your house he wants to buy uh some and I'm like all right well I have three uh they're prototypes and I need to keep at least two of them so I'll sell you one and then we sold him one and we weren't supposed to say anything about it because they just have standard ndas and confidentiality so we didn't but eventually I think the Press figured out that he had one and so everyone started speculating and then the Press thought it was funny to say the richest man in the world lives in a tiny fifty thousand dollar house right so they ran with that and we ended up with like over a hundred uh press articles about it and it was totally you know epic for us yeah and the whole time we couldn't say anything and then eventually he came out tweeted about it and then later you know disclosed that it was true in an interview and then finally I was like all right now I can talk about it because he did it's already public information yeah that's awesome yeah where where did what was it like on his Factory lot or something or at his house so I believe what happened was we initially installed it in a backyard next to the rocket launch site in uh Boca Chica Texas okay and then after we left later on at some point they moved it into his actual backyard okay um where it is now and he said it's a guest house for people that's fantastic yeah so I guess he liked it enough to move it into his backyard after he after he installed it so that's a good sign yeah no kidding it's an epic guest house probably be a lot of people to use that for a guest house yeah and the actually the original idea for starting with the small house version of our product was to Target what they call Accessory dwelling units so in California there's huge demand for putting backyard Cottages because they've changed the laws to basically legalize it so that almost every backyard in the state can now have a backyard Cottage so it's something that's becoming really popular it's going to be a huge market for us that's awesome man well once you get into making podcast Studios I'll buy one from you yes yes that's a good use yeah I would I would I'd buy one I have an empty one maybe bathroom then you can start potting out in it yep it's been awesome thanks for the tour um we will do our best to blast this out wherever we can where can people go to find out more about boxable to pre-order one to invest like what what what can people do to learn more about what you guys got going on yeah thank you so much for for coming and checking it out and I would suggest anyone that's interested head over to our website boxable.com follow us on you know Instagram YouTube we're basically posting everything we do kind of live on the internet so there's like constant updates of what's going on and also our Factory is is open to tours from the public so pretty much anyone who wants to come and check out the product or check out the factory they can book that on the website and we are doing tours every day here oh sweet awesome okay sweet so boxable.com boxable without the e at the end boxwell.com make sure you go over there book book a factory tour that's awesome that anybody's just coming here and and book and tour the factory follow them on social I this is one of those companies guys that's if you fast forward in 10 years this is is going to be one of the ones that's that's making a lot of changes in the world you know because there's it's very rare to come across companies that are Reinventing the way an entire process is done that every family in America is going to be affected by at some point so I appreciate what you guys are doing thanks for letting us hang out here for a little bit and boxwell.com go check it out and we'll catch you guys in the next episode [Music]