Reducing Building's Carbon Footprint: Nick Farmer, Opal Build

Happy Planet Wednesday! And to American followers, Happy Thanksgiving!

During the US presidential debates, we heard a lot about the nearly five million unit housing shortage in the US. While this needs to be addressed urgently, it won't be good for the climate. Traditional building activity accounts for up to 40% of the world's carbon emissions. 

Our guest Nick Farmer is president of Opal Build, a Maine company whose mission is reduce the carbon footprint in homebuilding. And do it at a discount. Nick's entrepreneurial story is also unique. Unlike many entrepreneurs who start from scratch, Nick took his ideas to an existing company and joined forces. And it looks like they are positioned for success.
 
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Transcript

Happy Planet - Reducing Building's Carbon Footprint with Nick

[00:00:00] Abigail: Welcome to happy planet, where we meet entrepreneurs, investors, and thought leaders driving a modern nature forward economy. I am your host, Abigail Carroll, and I believe that sharing these ideas has the power to change how we all engage in the world. We're heading to my home state of Maine this week to speak with Nick Farmer, president of Opal Build.

[00:00:26] Abigail: Nick is determined to address the U. S. housing shortage while reducing the carbon footprint of the built environment, which accounts for 40 percent of the world's carbon emissions. He may also help prevent some forest fires along the way. He says he can do all of this at a considerable discount from traditional building costs.

[00:00:46] Abigail: I love these plans where environmental business is economic business. Let's hear what he has to say.

[00:00:57] Abigail: Welcome to the podcast, Nick. 

[00:00:59] Nick: Awesome. Thanks for having me excited to be here. 

[00:01:02] Abigail: You are a main entrepreneur, and I'd love to know more about what you're trying to do and what problems you're trying to solve. 

[00:01:09] Nick: Yeah, absolutely. We're a Belfast, Maine company. So about two hours north of New York. Portland, and our whole mission is really to decarbonize the built environment and address the national housing shortage.

[00:01:20] Nick: So what we're seeing across the United States right now, there's a 4. 9 million unit housing shortage. 40 percent of greenhouse gas emissions are attributable to the built environment, the spaces that we live, work, play in every day. And really what's happening is that we're not solving the building material availability issue.

[00:01:36] Nick: And we're not solving the on site construction issue to build more houses to meet that shortage. What our company is doing is identifying the most sustainable building materials out there, which is wood fiber insulation made up in Madison in an old paper mill by Timber HP, and cross laminated timber, which is an engineered lumber.

[00:01:55] Nick: And what we're doing is taking those materials and making the walls and the roofs of structures in an off site setting so it's more safe, the environment is more consistent, you're not out swinging a hammer. When it's snowing outside or when it's raining upside down, cats and dogs and getting them out to site and installing in about 30 days.

[00:02:14] Nick: So those are super high level, what we're doing more than happy to get into a more details. Yeah, we're excited. We're getting going. We've been around for about three years now and. Um, have plans to continue growing. 

[00:02:24] Abigail: Great. So let's, let's get into some of these terms here, the wood fiber insulation and the cross laminated timber.

[00:02:31] Abigail: Can you, can you elaborate a little bit more on those and how they work and, and why is it that these are solving a carbon problem? 

[00:02:41] Nick: Yeah, absolutely. So I'll start with wood fiber insulation. How it's made is effectively using byproducts of the sawmill industry and the forest products industry. Taking the wood chips, crushing them up, putting in paraffin wax, um, boric acid to create these really rigid insulation structures that can be used for exterior and interior insulation.

[00:03:04] Nick: So we're using TimberHP and we also share a co founder of TimberHP, Matt O'Malia, who Happy to talk about a little bit later on down the road. He founded Timber HP because he was a passive house architect by trade, and he was putting a lot of this really high carbon emitting material into the super insulated, big sandwich walls that he was building and designing.

[00:03:26] Abigail: Would that be like spray insulation or, or the sort of traditional pink insulation? Or, you know, yeah, it's that, 

[00:03:34] Nick: that and EPS foam, like those big blocks of foam that you see on the job sites. So it's really a replacement material for those significantly reduces the greenhouse gas profile of that high carbon emitting material.

[00:03:46] Nick: And the way it does that is basically it's called sequestering carbon. So there's operational carbon and embodied carbon. And operational carbon is the cost of heating and cooling the building. So kind of passive house really attacks that of you can, I think their mantra is that you can heat a building with a candle, right?

[00:04:03] Nick: super, super insulated, and then there's embodied carbon. So the amount of carbon emitted as a result of the material that you're using, the building material that you're using, the mate, the making process of that and getting it installed on site. So what this wood based biogenic material does with fiber insulation, it still has that insulation, high insulation properties to attack that operational carbon challenge, but it also attacks the embodied carbon challenge by, um, sequestering carbon within the fibers itself.

[00:04:32] Nick: So when you chop down a tree at maturity. Instead of the tree burning, as we're seeing in a lot of cases out west, or just decaying over time and emitting the carbon back through the natural life cycle, carbon life cycle, it just traps that carbon within the fibers of that product, which theoretically is used again at the end of the building's life cycle.

[00:04:51] Abigail: Interesting. So it's a recyclable product too? 

[00:04:54] Nick: That's correct. 

[00:04:55] Abigail: Amazing. So you guys are collaborating, you're helping him, you're creating these products so that Timber HP can go out and make these passive houses. And can we just make sure that we've defined what a passive house is? That's a house that is so well insulated that it doesn't need basically to be heated.

[00:05:16] Abigail: I had a friend who grew up in Kennebunkport in the In the eighties and seventies. And he said that they lived in a passive house and they had a furnace, but they never used it and they had to keep the windows open all winter long. And that kind of blew my mind. I know the original passive houses had very, very thick exterior walls.

[00:05:37] Abigail: Is that still a feature of a passive house today? 

[00:05:40] Nick: Yeah, that's still the case. And really passive house is the movement. It's the certification process that, that we all know. Our value prop is to the market is we don't necessarily go out and pass house, certify everything that we build at Opal builds. But we do get up towards those standards.

[00:05:56] Nick: There's specific requirements from air sealing, insulation properties that we definitely pay mind to, but don't go through the entire process to actually get certified. So that's kind of case, case point A, but to, to your point in that you do need to put a lot of material into these things, and it's two sided.

[00:06:15] Nick: If you're using traditional ways of building towards passive house, like using that big EPS carbon emitting foam, You're not really solving that embodied carbon problem, right? So that's why we use that biogenic material, cross laminated timber, CLT, and the wood fiber insulation. The second component is because you're putting so much more material into it, most of the time it's at a cost premium.

[00:06:37] Nick: And that's kind of where we're coming to this of you can't be pushing more sustainable building products into the market and expect it to scale because just because it's more sustainable, it has to be cost parity. It has to be cost competitive. And that's where, where this, this team, this company come out of.

[00:06:54] Nick: Where do we find the opportunities to pay a slight premium for this material, but still be at and below market? We beat market rate construction by about 15 percent in an environment where we're seeing construction rates rise to about 150 percent of pre pandemic rates up until 2025. So I can unpack that a lot more, but that's kind of our whole crux.

[00:07:16] Nick: It's like, how do we make the business case around getting. This more sustainable building methodology system approach and materials into the ground in a way that people don't have to pay more money for it. 

[00:07:27] Abigail: So I want to get back to that because I want to know where there's those economies are coming from.

[00:07:32] Abigail: I also imagine there's economies and just living in a building like that. Right. You know, even if you're not completely passive, you have fewer expenses, you know, maintaining it or heating it. But before we do, I want to unpack the cross laminated timber. 

[00:07:50] Nick: Sure. 

[00:07:50] Abigail: What is the role of cross laminated timber and what are the potentials from that?

[00:07:56] Nick: Absolutely. So I've become over the years, mass timber and a cross laminated timber kind of nerd. So I love talking about cross laminated timber. It's part of kind of a bigger catch all. Item called mass timber, and it's a family of engineered wood products. So in typical buildings, you'll see a lot of like LVL laminated veneer lumber.

[00:08:16] Nick: LSL, all of these typical products that are used out on a construction site. But about 10, 20 years ago, a new product started entering the market, principally in Europe, called cross laminated timber. And now it's starting to be adopted in the U. S. And what cross laminated timber is and what it does, it's basically a bunch of two by sixes laid on top of each other at right angles with a glue layer.

[00:08:40] Nick: In between them, they can be built in layers, odd layers from three all the way up to 11 layers, so they can be as thin as a couple inches thick all the way up to over a foot thick. And what the use case is for them typically, and particularly in the United States, is replacing concrete and steel, which are 11 percent of global greenhouse gas emissions, so it can, depending on the applications, a bunch of different criteria within a life cycle assessment, it can save anywhere from 40 to 60 percent greenhouse gas emissions from an embodied carbon perspective against concrete and steel.

[00:09:14] Nick: In the United States building code, you can currently go up to 18 stories. So people have built literally skyscrapers out of this stuff. Yeah. 

[00:09:22] Abigail: Amazing. That is amazing. Are they flexible? You know, in California you need to have some give and a skyscraper because of all the seismic activity. Does it respond well to that?

[00:09:32] Nick: Yeah. So great question. Yes, it does. And they just did a huge shake table test out in California. I think last year it was, there's a big advocacy group called Woodworks and they do a lot of application studies for the material to get more material in the ground. And they sponsored it with a couple of other manufacturers and they found it, because of the nature of wood, it's naturally flexible, it moves around.

[00:09:56] Nick: Um, it's in many ways a living material. Um, it flexes and goes back to its original structures pretty well. Um, the other question that comes up often is fire. It's like you're putting a wood, big blocks of wood into these huge buildings. So that's why it's been slower to adopt in the U. S. Um, the IBC, the International Building Code, IBC, the Um, it started integrating mass timber into the, uh, the code in, I believe, 2015, and it's gotten less and less stringent since then.

[00:10:24] Nick: And the reason is because there's been so many studies showing that instead of the entire structure basically lighting on fire if there is an event, what happens is, and it's similar with wood fiber insulation, there's a charring effect that happens. So, basically the outside, just like you see in a forest fire situation, you'll see a lot of, um, trees still standing up, and it's because The outside is basically just charred, but the structural integrity of the tree, in this case, is still sound in the, in the tree itself.

[00:10:52] Nick: So similar effect happens with cross laminated timber and other types. 

[00:10:57] Abigail: I want to know more about the glue. And I feel like the glue is maybe an opportunity to find some glue that's like, like not flammable that would help like kind of extinguish any fire that took place. 

[00:11:09] Nick: Right. The glue layers. Yeah, within the CLT, or the Cross Laminated Timber.

[00:11:15] Nick: Yeah, 

[00:11:15] Abigail: I mean, is that, like, do you have a non toxic glue? Like, is that a, is that a probability point? Yeah, it's 

[00:11:21] Nick: non formaldehyde PUR adhesives are used, and you can always, you can always ensure with whatever manufacturer you select that they're using non formaldehyde. So you don't have any off gassing issues using the product.

[00:11:36] Abigail: So what about, I mean, I get that the, you know, this, this sort of carbon save, cause I know concrete is so terrible for the environment, but we are taking down trees to make this. So do you, do you put that into the equation? 

[00:11:52] Nick: Yep. So there's kind of two answers to that question. The first one is that a healthy forest forest needs to be, there needs to be harvesting that happens.

[00:12:02] Nick: There was, there was a big movement in. 70s, 80s, 90s of chopping down any tree is not a good thing, but what we've seen as somewhat as a result of that, mostly as a result of pulp and paper products decreasing, forest utilization rates are at all time lows. We're seeing more fires in part because of that, and it's exacerbated by the impacts of climate change, drought.

[00:12:26] Nick: is huge out in the west coast. So there's multiple studies showing that if it is, if the, if the lumber is, uh, sustainably and responsibly harvested, so you're not necessarily doing clear cutting, there's a bunch of other criteria that the Forest Stewardship Council or the Sustainable Forest Initiative, you can get them certified wood from these manufacturers to make sure that it's adhering to good practices.

[00:12:51] Nick: And on top of that, the U. S. Forest Service is also incentivizing adoption of these. It's rural economic rejuvenation as a result of oftentimes the forest products industry in decline, particularly prevalent in, in Maine economies, mills shutting down. How do you, how do you find, More use cases to get the utilization rates up from an employment perspective, but also from a forest fire mitigation perspective, like how do we, how do we increase forest utilization instead of just going out and chopping trees down because we don't want there to be forest fires?

[00:13:22] Nick: Can we have use cases for them? And mass timber is often seen as a potential growing market opportunity to meet that need. 

[00:13:31] Abigail: I lived in France for a long time and they are very meticulous about cleaning their forests. That's interesting to hear about California. 

[00:13:38] Nick: It's, when I first started learning about the material, that was my first question of like, but you're chopping down trees, how can that be a good thing?

[00:13:44] Nick: As you start kind of reading the research and talking to people who have been in the industry for a while, it's, it's absolutely, um, a necessity at this point, um, where the world's at. 

[00:13:54] Abigail: We're gonna take a quick break and hear from our sponsors. 

[00:13:57] Abigail: I'd like to thank Gulf of Maine Research Institute and Bold Ocean Ventures for their support of Happy Planet Podcast, GMRI and Bold Ocean Ventures have partnered to create a mission-driven venture capital fund, supporting the growth of innovative, sustainable, ocean related business.

[00:14:15] Abigail: Listers may remember Patrick Breeding, who was on our show last year to talk about Marin Skin Care and its clinically proven formula that uses glycoproteins from Maine lobsters to treat eczema and dry, damaged skin. This company has since become wildly successful with this lobster lotion and Patrick is inviting listeners to a 20 percent discount on their products by using the coupon code HAPPYPLANET on their website marinskincare.

[00:14:42] Abigail: com. I use this product myself and I highly recommend it. Welcome back to Happy Planet. I want to get back down to the 15%. So you're doing a building project and you think you can say 15 percent and is that because of these, these inputs or is that because you are doing this offsite and that's just more efficient or is it just sort of a combination of all of it?

[00:15:10] Nick: The, the answer is yes. And it's like literally everything. At a super high level, what we've done is Really looked at the value chain from a procurement perspective all the way to an on site install perspective, right? And we've looked, based on my experience and Matt's experience and everybody else at the company, We've looked at, okay, where are the bottlenecks in getting a housemaid and put onsite cheaply, cost effectively and fast.

[00:15:42] Nick: So what we've, we've identified and first putting a lot of the work into a shop setting. consolidates labor, not in a way where we're cutting jobs, but in a way where people can be more efficient, more safe, and more in a controlled environment. You can just get more done more quickly. Um, and part of that is that we are using these big, you know, monolithic CLT blocks.

[00:16:05] Nick: I forgot to mention cross laminated timber. You can go up from 12 feet wide all the way to 60 feet long. So there's huge, huge blocks. But what we're doing is typically about eight, eight and a half feet wide. By 20 to 30 feet long, so it can span from the ground to the, to the roof of the structures. But anyhow, we get all that material in stack on all of the material in the factory setting, flat pack it out to site and zip it in really quickly.

[00:16:32] Nick: And what that does is everybody knows what their job is in the factory. And then once you get one rep in on the build on site, your crews on site start really understanding the benefits of being able to put these panels together quickly. We're also doing bathroom and kitchen pods, which is typically a really high intensive, error prone, potentially, aspect of any build.

[00:16:53] Nick: And we just drop those into the pre designed structures. So that's what's happening on the on site, and that drives cost savings. And it's not that we're trying to cut jobs or like pay people less. It's literally we're, we have good high paying jobs and also in the main environment, the labor is just like, there's no labor to come by.

[00:17:13] Nick: Yeah, exactly. And the replacement rate and like the trades, like. Plumbers, electricians, it's like six for every six folks retiring. There's one or two people entering the trades from an apprentice standpoint, and they're not obviously up towards the level of expertise that's required to run a whole crew.

[00:17:31] Nick: So it's a big problem that we're seeing across the construction ecosystem. So that's kind of like the downstream focus in why we're cost competitive. Upstream, you start looking at your direct inputs, wood fiber insulation, cross laminated timber, windows and doors, really high expensive items, right? So what we started to do is start looking at the vendor relationships and seeing is there a way that we can help them get more product into market, get a discount, pass those on to the end clients.

[00:18:04] Nick: Um, so what we're doing, what we're doing is basically to work within the cross limited timber environment, everything needs to be like very standardized, very predictable, not very complicated. So we've got a 3D modeler designer who basically takes an architect's drawing, puts it into a 3D model, and we can just share that with our manufacturers so that they can go within their systems, quickly price it out, quickly say, okay, the material specs and spans for cross laminated timber don't apply to what you built.

[00:18:36] Nick: If you tweak it this way, you're good to go. And we can just have that be a repeatable building typology that we can build. Kind of sell time and time again. Phase two to this is that if we have, if we have this computer numeric controlled machine, a robot with chainsaw arms, we can start being a partner for, for the manufacturers and getting into the new England market where there isn't any manufacturer.

[00:18:59] Nick: And the way that we do that is basically just buying the raw material completely uncut. We just say, Hey, we want X amount of square feet of this material. We need it by this date. We just get it, push it out within our systems and distribute it through our go to market channels. So cost savings, kind of, as I said, whole value chain, looking for identity opportunities to consolidate.

[00:19:21] Nick: A lot of the work and redundancy that goes into a traditional build and just get more product out, more decarbonized product out at a more affordable price point. 

[00:19:30] Abigail: You had me at robot with, with chainsaw arms. 

[00:19:34] Nick: Right? Who doesn't want a robot with chainsaw arms? I think that's It's 

[00:19:37] Abigail: going to be in a movie sometime, a horror movie, but you can tame it.

[00:19:43] Abigail: It sounds like it could do wonders for your business. You can't 

[00:19:45] Nick: give it like legs or anything like that. You don't want 

[00:19:49] Abigail: that running after you. 

[00:19:50] Nick: Absolutely. All 

[00:19:51] Abigail: right. So how'd you get into this? What, what, what was your inspiration to focus on this carbon problem and try to solve it through housing? 

[00:20:01] Nick: I spent about six years, uh, working for the federal government, U.

[00:20:05] Nick: S. Agency for International Development. I was doing humanitarian assistance primarily focused around logistics and private sector engagement. So my job was approaching, like, UPS or a local company and saying, Hey, climate change is impacting your ability to make money, your bottom line. How about we work on a program together to make your infrastructure more resilient or to decrease the emissions profile of your factory or something like that.

[00:20:32] Nick: And what I ran into is like a lot of companies would push me towards their philanthropy or corporate social responsibility arm, which is fine. There's obviously a time and place for that. And those initiatives are important, but I really wanted to be able to make the business case for. For changing industry and high carpet emitting industry.

[00:20:49] Nick: So I started applying to grad programs and finished up a full time MBA a year ago down at the university of Virginia garden school of business. And basically just went through, through the ringer, stayed up all night doing case studies and making pro formas and figuring out what IRR means and all that fun stuff.

[00:21:09] Nick: You can imagine the whiplash between working for the government and diving into kind of a pressure cooker environment with a, yeah. It was a lot, but I learned a lot. It was a lot of fun. But what I did was really go into the, that program with the mindset of, I want to work in a high carbon emitting industry and figure out how to, Basically decarbonize it.

[00:21:28] Nick: So I grew up my, I've come from generations of painting contractors. So I've always kind of grown up around job sites and I was really interested in the built environment, started double tapping into it. As I've already said, 40 percent of greenhouse gas emissions attributable to the built environment, 11% Concrete and steel and I started looking at what was being done to start address that came across mass timber and kind of Went off to the races and the obsession started.

[00:21:54] Nick: I interviewed about a hundred architects engineers Construction officials manufacturers you name it anybody that was willing to talk to me. I would kind of pick their brain And what I came up with was basically the manufacturers are oftentimes bottlenecked or they have pain points in the way that architects and design teams present projects to their, to them because they're not necessarily drawn out, giving, giving attention paid to the specificity that's required by cross liminated timber.

[00:22:25] Nick: So that's kind of the one pain point. And the second pain point is on the shop floor. Most of them are bottlenecked in that robot with chainsaw arms moment by about 50 to 50 percent. So their throughput, their ability to get product out is bottlenecked by about half. So my, my original idea was basically say, okay, New England, there's not many manufacturers around, so there's all this pent up demand.

[00:22:47] Nick: A lot of architects and engineers are still trying to learn how to work with the material. I'll stand up a company that buys these point billets at a discount machines them, gets 'em out to the job site, and also hire a, a team of, uh, structural engineers to be able to do that 3D design component. I got to graduating and I was looking at, at my student loans and realized I needed to make, make money in such a buzz cow.

[00:23:12] Nick: It was, yeah, I was like, ah, man, the real world exists. And I just kind of started poking around for, for a full time job and really wanted to see if I could stay in the built environment, real estate development, manufacturing space, and came across what Matt was doing up with Opal Builds in Belfast, who I now work for, and, He was using the cross laminated timber in more single family, low rise, multi family applications, structural walls, and the building shell, like the walls and the roofs.

[00:23:41] Nick: I was like, huh, that's kind of interesting. Like, I haven't seen that done before. So we just kind of started chatting, had a few conversations, and eventually he was like, why don't you just come work for me? I was like, Okay. That sounds great. And it's just been about a year and a half now and off to the races and have, have helped the company from everything, uh, set in strategic direction and goals, financial projections up until equity raise, which we're currently engaged in right now with the growth profile.

[00:24:07] Nick: But. Kind of bringing the work that I had done on that CNC structural engineering side and that market opportunity and marrying it up with this Really good innovative idea of getting more housing in the ground and developing that those use cases for the material Which is a nascent market in the Northeast.

[00:24:25] Nick: I'm kind of marrying those two together and getting at it So it's been it's been a lot of fun if you ask me Three years ago, if I would be in the construction industry, working with building materials, I would have been like, okay, but here we are. I'm super excited. And it's a, it's a fun space to be in right now.

[00:24:43] Abigail: I want to delve into this, the way that you went about bringing your idea to another company. I think that's really interesting. And I think that is a really overlooked strategy in the startup world. There's all this. Sort of focus on, you know, being a founder and starting at the very beginning and, and doing it all yourself.

[00:25:04] Abigail: And we have this sort of glorification. And I think it's really smart to go bring an idea to an existing company that has shares your vision sort of globally and, and working together through a collaboration and joining forces. Can you tell me a little bit more about how that worked? And what were the sort of pain points there and what went well and what entrepreneurs should, you know, think about if they're going to do that?

[00:25:35] Nick: Yeah, absolutely. I think it starts in the early stage startup space. You always sit, you always hear like the team's the most important thing. And I think that's true in that I don't think without Matt and the team up here, Kind of understanding what I was trying to get done and having the appetite to listen and digest and like, think about collaboration opportunities.

[00:25:57] Nick: Like that's it, it takes a special kind of person to like be able to kind of see that. So I think it, it really starts with, with the person that you're trying to work with. And I was kind of in the point where it was either I, I do this by myself or try and find somebody else to do it with, or just kind of go and work in industry and do the corporate thing.

[00:26:19] Nick: And, you know, I didn't really want to do that. So I think it really just boiled down to me and Matt just clicked and he had confidence in what I was selling him and I had confidence in what he was doing. And. Just kind of looped up and started moving forward and figuring it out. 

[00:26:37] Abigail: That's great. Uh, so, you know, Kamala Harris is talking a lot about 3 million homes that, and you, you said it's 4.

[00:26:45] Abigail: 5 or, you know, it's, it's, it's actually the real number is more than that, but they want to help 4. 9. I think you said, do you think that a Kamala win or. Provide real solutions. Like, are you, are you optimistic about what could happen and how would that change the life of a company like yours? 

[00:27:04] Nick: Yeah, absolutely.

[00:27:06] Nick: I, I hope that it will happen and it would be great if it did. I think that the way that we're building right now, it's going to be really hard to hit that much in four to eight years. Right. Things are, things are stove piped. I have a number of graphs that show start rates of construction, residential home construction.

[00:27:29] Nick: I mean, down south they're just pushing out structures. But once you start looking up in the Northeast, in the Pacific Northwest, and even to an extent the Midwest, you start seeing a lot of challenges. And a lot of it's expensive to build. Sometimes it's more expensive to build than buy something already on the market, but the houses on the market don't exist.

[00:27:50] Nick: Really at all. There's a lot of nimbyism, like not in my backyard. So if you're trying to do a really dense development project in New England, oftentimes, you know, not taking a stance either way on this, but it'll get kind of shut down when, when you're going through zoning or planning. It's happened a lot in Maine over the past couple of years as well.

[00:28:09] Nick: So you have all these unique challenges that I don't know if money's just going to solve them, right? You really need different ways of doing things. So I have optimism that yes, it will help our company. Absolutely. Because there's going to be a focus on it and all likelihood there's going to be subsidies.

[00:28:26] Nick: And because we're sustainable products, you'd think there's been GOA mandates, the government accountability office for federal buildings and federal funds that you get priority if you're sustainable. Building material, which mass timber and wood fiber installation are. But I do think that having this type of panelized offsite approach, like agnostic to the company is kind of the way that they were starting to move as a society, especially in these like really tricky environments to build in in Maine.

[00:28:52] Nick: You see a bunch of startups that are trying to do something similar, right? What differentiates us though, is that. A lot of companies are doing the big, let's do a big splashy, 250 300, 000 square foot warehouse where we're going to be able to punch out 200 300 homes a year and have a staff of 150. What we've seen over the years, and there's been failures like Katerra, for instance, in the Pacific Northwest and Spokane, Washington.

[00:29:19] Nick: It's like you kind of go too big, too fast, and there's not the volume necessarily to get in there. And then you have site logistics, challenges, 

[00:29:26] Abigail: HR, where are you going to get those a hundred people? 

[00:29:28] Nick: Yeah, exactly. Exactly. It's, it's kind of all over the place. So what we're doing is these really smaller, intentional panelization shops and trying to set up a number of them with local partners.

[00:29:40] Nick: We're identifying developers. We've already got three that are interested in working with us, where we give them the production system that we've developed up here in Belfast. And then it becomes kind of a hub and spoke where all the backend support. And what that allows us to do is spread out the capital expenditures and operating expenses that it takes to run one of these shops with site adjacent pipelines already in place.

[00:30:02] Nick: So that's kind of how we see our market entry point and hopefully the ability to roundabout way of answer your question of whether or not the 3 billion is possible of being able to help attack that. Obviously, we're not going to solve it on our own. It's going to have to be a whole of society approach, but I think there's enough folks out there that are, Seeing the issues and wanting to help change them that, that we can get there, but we're gonna, it's going to be a painful process, I think, over the next few years.

[00:30:29] Abigail: Yeah, I get it. So all right, well, tell me, now that we've talked about 3 million houses, let's talk about 3 million. So your fundraising, tell me about the fundraise, how much are you looking for and, and how's that going? 

[00:30:43] Nick: Yeah. So we've been a company since. 2021. Um, so we're, we're in a bit of a unique position because we bootstrapped it up until where we are right now.

[00:30:53] Nick: And by that, I mean, we've done a number of builds. We had a significant amount of revenue and income over the past 12, 24 months, and frankly, we could continue operating this business as it is right now and just be a successful mid coast main building company. But we do see this scalable opportunity, and we do see these societal systemic problems, and we do see the materials and the building systems that we're developing as a solution to that.

[00:31:21] Nick: So we decided to move into an equity raise. We're raising three million dollars right now. I've got about a third of it committed, and People are people are excited about the approach and they're excited. It's a main company that we want to stay here. We don't want to move out of state necessarily. We want to use the talented labor in more traditional industries that exist around here.

[00:31:44] Nick: What we also see this as is a potential use case. You hear often when you're talking about mass timber in New England. Everybody's trying to start a manufacturing plant and our, our theory is that you can go out and raise the 100, 200 million to go do that, but the question of volume and sales channels is still there, right?

[00:32:06] Nick: So what we see ourselves as is we're building up the use cases in the market from a grassroots level for mass timber, for CLT. And as we kind of increase our offerings from single family, low rise, multi, and starting getting to bigger structures, folks will see that there is a need for this, for manufacturing in, in New England, in the state of Maine.

[00:32:31] Nick: And we kind of become that justification point for additional forestry jobs and forest utilization in the state. So that's kind of like the, uh, The big theory is that we're, we're going to kind of help move the needle here and getting more product in the ground and helping people feel comfortable and actually pressing panels in New England in addition to helping solve the housing crisis.

[00:32:52] Abigail: Well, it seems like you have a pretty nimble strategy. It's a little bit decentralized. It's a little bit modular, maybe even, and, and it feels like you've got a lot of flexibility if you just go build a 200 million home. Warehouse somewhere, you might find out that that's not the right, you know, the right place.

[00:33:10] Abigail: You can go big later and start in a more flexible way. 

[00:33:14] Nick: Totally agree. I think my thought on that too is that, you know, there's kind of two, two schools of thought when it comes to entrepreneurship. There's kind of the causal entrepreneur and there's the effectual entrepreneur and the causal entrepreneur is like, this is what I'm going to do and this is where I'm going to be.

[00:33:30] Nick: And a year from now, and obviously we still have that and we have our projections and we have our milestones, but I like to think of our shop more as effectual where we're, we're listening to this stimuli around us in the pain points around us, and we're reacting to them as we grow. So we're not, we're not necessarily planting a flag in the ground and marching towards it with blinders on, right?

[00:33:53] Nick: We're continuing to look for the problems and the challenges that are going to make our company more effective, but also how you build buildings better, right? 

[00:34:02] Abigail: No, I love it. And you're doing a great advertisement job here for UVA's business school. 

[00:34:09] Nick: I've got reading my notes over here. 

[00:34:13] Abigail: Wow. Thank you for prepping.

[00:34:16] Abigail: You may be the only one. Well, I think it sounds super exciting. And I guess I want to come down to, to what advice you might have for other entrepreneurs out there who are trying to solve climate problems. 

[00:34:30] Nick: Yeah, I mean, there's ups and downs with any startup, but kind of, especially when it comes to sustainability, reminding yourself every once in a while that you're not just trying to go make money.

[00:34:42] Nick: It's really trying to solve this, this big institutional problem. And obviously. You know, we live in a society where money is kind of the metric of success, and it's important obviously when you're running a startup to be focused on that, but you know, when you're going through those, those kind of difficult, tricky times, just reminding yourself that what you're doing is, is worth doing for a reason that's kind of bigger than yourself, which sounds, I know that sounds kind of cliche and mushy, but it's easy to lose sight of it.

[00:35:09] Abigail: Come on. Yeah. 

[00:35:10] Nick: It's, I mean, it's easy to lose sight of it every once in a while, you know, you're staring at your Excel document all day long and you go home and you're like, all right, got to do it again tomorrow. And it's like, you know, reminding yourself every once in a while that it's, it's worth doing is kind of my advice.

[00:35:25] Abigail: What about our race against climate change? How, how do you think we're doing and what are, you know, what do you think is the future hold? 

[00:35:35] Nick: Yeah. Depends on the day. It's, I mean, obviously we're in a horrible position and all the projections show how much worse things are going to get. And I think a lot of it is an adaptation mindset that we have to be in and a mitigation mindset that we have to be in.

[00:35:50] Nick: But I do being, especially in the building material space. Seeing all these startups that are decarbonizing concrete and bringing these new building materials to market and actually finding use cases for them and being successful and starting to scale. And you start seeing like the big players starting to get involved too, like with timber HP, like.

[00:36:11] Nick: Their, their strategic investors are some of the biggest insulation companies and home builders in the country, and they see value in doing it. So it's, it gives me hope that we'll be able to get through kind of the hardest parts of what we as a world face. Directly ahead of us, you know, but also try and try and make things so that we can be better to the planet and actually pay attention to these things moving forward.

[00:36:41] Abigail: Thank you again for listening. Please follow Happy Planet wherever you tune in and leave us a rating and review. Happy planet was reported and hosted by me, Abigail Carroll. I am also the executive producer, composer, George Brandl Agloff created our theme music. Learn more about my work and get in touch by visiting happyplanetpodcast.

[00:37:01] Abigail: com.