An Actual Solution to the Housing Crisis w/OD Krieg of Intelligent City.

Want to know who’s actually building the mass timber industry?

We have a housing problem. The upstream cause isn't zoning or interest rates. It's that we still build essentially the same way we did sixty years ago.

This week's episode is with OD Krieg, co-founder of Intelligent City, the company behind the largest prefabricated mass timber residential project in North America. He's building what an actual solution looks like: industrialized, productized, scalable across cities.

Projects like this don't happen alone. Behind every mass timber building, architects, engineers, manufacturers, and developers are working together. So we turned that network into something practical: a curated directory of companies shaping the industry.

Use it to discover key players, explore collaborators & understand who’s driving innovation.

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Transcript

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SPEAKER_01 0:00

We need to approach construction and housing in a more industrialized approach. It doesn't mean standardization, it just means the process that is underlying needs to be repeatable, not the result. In our industry, when we talk about this, when I think about what the future of construction could look like or should look like, it's about finding ways to productize either building components or the entire building and finding ways to customize that while still keeping or introducing ultimately efficiencies in production and manufacturing that allow you to have variability but also a really scalable process.

SPEAKER_00 1:11

When I heard about it, I knew I had to talk to somebody about it. Today's guest is O.D. Krieg, president of Intelligent City. They design and manufacture scalable, high-performance, flat pack envelope and floor systems using cross-laminated timber. And they're the team that has to actually deliver on that thousand-unit project. But here's what's interesting. They didn't start with mass timber as the goal, it just ended up being the right product decision. They needed a material that was machinable, lightweight, and transportable enough to support a flat pack prefabricated housing system, and CLT just fit. This episode is about what's possible when prefabrication and mass timber meet at scale. Here's what we get into today. First, what Intelligent City actually does, what they build, and how their systems let you erect and enclose a building faster than anything being done conventionally. Second, the customization problem. How do you build the same system over and over and still give every building a unique look? OD explains how Intelligent City gives architects and developers real design options while still keeping an efficient, repeatable manufacturing process. And third, what this looks like in practice. Their first project was a nine-story round building in Toronto. OD walks through what worked, what didn't, and what they're up to next, including a 420-unit building, and of course, the biggest prefabricated and mass timber project in North America. All right, let's get into it. How are you solving construction and housing challenges?

SPEAKER_01 2:37

Well, I personally think that we need to approach construction and housing in a more industrialized approach. And industrialization is a really big word. Obviously, we've seen, we've heard of it in many different aspects, especially, of course, in you know what happened sort of 150, 200 years ago, car manufacturing, we think about that sort of super automated factories. But industrialization really means finding means and methods to have a more repeatable process. And especially in this day and age, it doesn't mean standardization. It just means the process that is underlying needs to be repeatable, not the result, right? We have a lot of industries that have extreme customization, the clothing industry and to be fair, the car industry as well nowadays. So industrialization means finding a common ground on which you can build customization from. And in our industry, when we talk about this, when when I think about what the future of construction could look like or should look like, um, is about finding ways to productize either building components or the entire building. Um and really sort of from a hierarchical point of view, what's the structure, what are the windows, what is the cladding, and finding ways to customize that while still keeping or introducing ultimately efficiencies in production and manufacturing that allow you to have variability, but also a really scalable process. And if you achieve that, I think what will happen is that we can design buildings much faster and ultimately with fewer people, because with the people that we have, we can only build so much right now. And if you have to increase output and we have to build more housing with the people that we have available, there's only one way to do that, and that is increase efficiency for everyone in the industry.

SPEAKER_00 4:41

What are we doing right now in the construction industry that's not working, in your opinion?

SPEAKER_01 4:47

I think the and I have to be very humble because you know there are so many people in the construction industry that have been in there for decades and they have seen a lot more than I have seen. But sometimes maybe also a fresh mind is is helpful, and maybe some naivety is helpful. I found that myself. Um, I think it takes a lot of naivety to build a company and try to change things. I think what's what's been challenging in the industry is that the industry has been very used to everything being custom. Um there is no precedent for what a industrialized production process could look like for major buildings, for housing, for multifamily. Um, you know, we we we have seen this in other industries, but but it has happened and has transitioned decades ago, if not a hundred years ago. And so we we have really a hard time to compare it. And if you build a building, and anyone who has done it knows that um a lot of decisions are being made without necessarily understanding the consequences in the building process, because no matter what you do, no matter where this corner is, or you know, no matter how this hallway goes in the multifamily building, it it'll cost you the same. So understanding that maybe if we reduced the choice a little bit and looked at can we actually pre-fabricate, manufacture this part and that part. But if we do that, then there's only so much choice that you have in this part, and then you have to design around those limitations. You actually allow yourself a lot more efficiency. You will allow yourself to have a faster process and potentially a cheaper process. But you have to have the belief that that constraint, constraining yourself as an architect, as a builder, as a developer actually has these consequences. So I think that's what's been going uh challenging is that we we don't have a good precedent and we are all trying to achieve that, but the industry is just so used to customization, mass uh you know, customization, uniqueness in every building that it's really hard to pull back from that and show that actually if you follow these rules, yes, maybe you have a little less choice, but actually you get a building as a product.

SPEAKER_00 7:12

I like that. So when we're talking about productizing different building components, moving into this more industrialized construction method, what are you doing in an intelligent city that fits in that vein?

SPEAKER_01 7:22

Yeah, we productized just a few parts so far. Um, I have to say. Multifamily is a very big animal. Multifamily is another level. Um if if I'm if I may take a quick detour here, because I think about um single family housing. Single family housing is actually pretty close to being productized. And I think a lot of companies out there are doing that. They have, especially in Europe, I've seen uh pre-file companies that have 12 different houses, and then within those houses you can make a few selections, you know, a few different rooms, a bit of a different configuration. It's all pre-planned, it's pre-engineered. You have an online configuration tool, you press a button, and the the building is ready, right? That's incredible. And it's easy because it's a green field, you know, standalone house. Multifamily is stacking those together, and you have almost an infinite variety. And so it's difficult to productize the entire building because then you get stuck um in too few options, basically. And so instead of doing that, Intelligent City was founded to um develop a building system in a way, um, so uh or you could call it a building platform or a product platform that is made of components, um, and in our case, flat-packed components. And so we focused first on the envelope of the building, envelope panels, flat-packed envelope or wall panels that form the outer skin of the building, and the structure of the building, the floor panels, um, and the columns that form basically the raw floor. So you have the floors and you have the outer shell, um, which are two very major and important parts of the building, and they allow you to erect the building and enclose the building really fast. So we thought that was the highest sort of return on investment. Um, and then within those components, you have a lot of flexibility because ultimately if you design the process and the manufacturing process in the right way, you can you can vary the dimensions of these components, some of the materials, some of the finishes. So you create an incredible amount of variability. And then, of course, you start stacking them on a multifamily building, how you stack them. And so that was for us a good approach to enter that industry and also showcase how you can create variability from a common platform.

SPEAKER_00 9:53

Tell me about what specifically you guys are doing in the envelope in the floor components that you're talking about. Because like that people would say that, oh, there is pre-fab uh envelope assemblies, there are prefab floor cassettes. Like, what are you guys doing specifically that is kind of like making this work for you?

SPEAKER_01 10:12

Yeah. Um, well, first of all, we we do this for high-rise multifamily. Um, in Canada, it usually means above six stories. I know it's a little different in the US. Um, but we approached it from that perspective because we saw, first of all, a lot of missing middle housing coming and sort of the higher missing middle areas, especially if you look at Vancouver and Toronto, a lot of the regulations and bylaws that that have been passed um in recent years are to enable 12-story, 15-story, 18-story buildings, which is um we're definitely in the high-rise um zoning. Um and then we thought about materiality and we decided to go with mass timber for those components because we felt that out of the materials that it can use in high-rise construction, mass timber is you know the most machinable, the most lightweight material, um, the most transportable material to make these components. So for us, mass timber, in a way, was a consequence of what we thought the requirements were for a successful product platform. Um and then we ultimately really focused on design flexibility. Um, I think a really important part is that um of our story is Intel City is founded by architects. Um, I have an architecture education. Um, and a lot of people that work here have a have a good design understanding and they understand it is ultimately about how the building looks like in the end. And of course, it is how it functions. Um, but those both have to go hand in hand and you have to create that flexibility, otherwise, you constrain yourself too much, and architects don't want to use your systems, right? So there is this dialogue that you have to create. Um, and that's I think what makes us unique. And when you're are you guys also building these components yourself? Yes. So I think a big part of that is um we develop these components, we develop the system, um, how everything goes together, how the process looks like, how you design with these, how you execute, how you assemble them on site, but we also manufacture them ourselves. Um, and the reason for that is ultimately there there you know wasn't enough of an ecosystem of manufacturers that we could have just given that to, especially in the mass timber space. I think in some ways you could you could say we put too many um too many things on our shoulders, then it changed a lot of processes on site, but then on top of that, we're also doing prefab. And and so now you know there's another level to that. Um, but you know, that's also why there wasn't really a supplier who would have taken that on. Um and in some ways it is really important that you have the capabilities of manufacturing and of design and engineering in-house, so you understand how to actually develop this manufacturing process. I mean, this our industry hasn't experienced that level of industrialization and manufacturing innovation yet. A lot of um the processes that we that we have still in our factory are essentially on-site construction processes, right? And we slowly sort of chip away at that and and change the process, change the parts so that they can be automated and we can employ automation, industrial robots, any other machines that can take over that process. And so it's a it's a slow process of productization, some level of standardization, but also a level of customizability and then automation ultimately at the very end to make the process more efficient. And I don't think we could have that back and forth if we didn't manufacture this ourselves.

SPEAKER_00 13:46

Yeah, I can definitely see that point because like it's it's a big challenge to bite off everything from manufacturing through design and engineering and then you know actual constructing the building, but to do all of them at once together, like that that's a pretty big lift. Like most people are just focused on like one individual component of that. So kudos to you guys for checking it on.

SPEAKER_01 14:06

Yeah, and it's it's not even um oh yeah, I would say it's it's it's a balance for sure, right? Um, and you know, we are not the architect, we are not the engineer, we are not the builder, right? So in terms of the um the possibilities of vertical integration, I would say we are still pretty um you know, pretty low um on the lower end of things. Um you know, we wouldn't want to completely vertically integrate, you know. I think you know the industry has experience in trying that. We have Katara from many, many years ago and other companies who try to eat up the entire supply chain um only to fail. Um and you know, it's also a very localized industry, so you also have to really understand every city that you work in. Um so we don't want to do that, but yes, we we definitely uh we think we have to manufacture ourselves or at least create an environment where we have really good control and feedback of the manufacturing, so we can innovate in that in that direction as well. Because ultimately, if you take things from on-site to off-site, what what really changes, right? Um, can you reduce labor requirements? Um, you can you can get higher quality, of course, you have more control in the process, but it's not significantly cheaper just because you're you're operating in a factory. In fact, you know, many argue it might even be more expensive because you have factory expenses and all of that stuff. So you need to create an environment where you have extreme innovation, extreme efficiency gain, so you can really um learn, iterate through this, and and ultimately reduce costs way beyond what could be possible on site.

SPEAKER_00 15:44

Talk to me about the balance of using industrialized construction and productization with those kind of unique demands that come from different buildings. Maybe it's from the design side, or maybe it's what different cities and municipalities allow. Like how do you balance those two kind of competing interests, like standardization versus customization?

SPEAKER_01 16:03

Yeah, you know, the interesting thing is that we talk a lot about building code and different jurisdictions having different requirements. In multifamily and on a component level, it has very, very little impact. Um, our components are, you know, they they have certifications and they have certain um detailing and fire-stopping details that are applicable across the country and likely applicable also in the US, I think. Um so there isn't really much of a hurdle in that sense. Um the the challenges with the different jurisdictions ultimately end up in the apartment layouts, right? Because you have different requirements for maybe accessible bathrooms or how many units have to be accessible, and so you have to have sort of versions of your apartment layouts that that need to work with our system, right? So if we we haven't gotten to that point yet that we have an actual apartment library, but if we if we did approach that, we would have to make sure that yes, there are certain apartments that don't work in Toronto and they work in Vancouver and vice versa, um, and any other city that we may go to. Um and and so, as such, there there is a potential um impact on that. But otherwise, it is really more about the architectural and design freedom that buildings have. And we like to think about it in two different ways. Um, one is the geometrical or topological difference. You have setbacks, you have balconies, you have, well, actually, you have steps on the side of a building, on the front of a building, you might have cantilevers, uh, you have higher floors, maybe lower floors, right? You have corners, you have a double-loaded corridor building that goes around a corner, you have one that does that is straight, you have a point tower where the corridor looks very different, um, and where the apartments look very different. Um, you have inside corners, outside corners, right? These kind of things that that you can kind of categorize as if you just look at the massing of the building, it's just a white shape. It has different edges and corners, and how do you solve those? Um, and once you've solved them, you can replicate them. Those are standardized details, standardized components. Um, not a big deal. It's just that there are a lot, surprisingly, and a lot of combinations of those. Um, and and every every time we look at a building, we might end up, oh, there's another detail we haven't thought of. And so we're kind of adding more and more capability to our platform, which is great ultimately. Um, you know, we're topping out, I think it's a logarithmic curve. Um, there's not that much more to innovate anymore in that sense. Um, and the other part is design finishes materials, right? Um, and it's pretty easy on the interiors. Um, there isn't any consequence if you choose a different flooring to any other component. But a different cladding is is highly consequential. Um, the cladding support system, how is that fixed on the on the mass timber frame of our envelope panels, right? How does it interface with the windows and also different windows, how do they interface, how do they get attached to the mass timber frame? Um, those have consequences on the manufacturing process. And so we are trying to really systematize that and really think about okay, here's a clouding system, we know that works, we've tested it, we've tested variations of it. Now let's look at the next clouding system and slowly build up a library of or you know, a yeah, a library of systems that you can configure. Ultimately, we think that having three, four, five different cladding systems, you know, metal, um, hardy board or cement board, um, you know, Alucobond, um, and and maybe brick veneer, you know, sort of some like clearly different choices for different different developers and architects. Um, that is one way to go. Um, another way to go is to actually team up with the developer and and build a developer-specific um cladding language, because oftentimes these big developers have multiple projects, portfolios, they want to have a certain branding themselves. And so it's very helpful to build something with them if that is a long-term relationship, right? Um, so that's just what you have to be sort of mindful of. And that's oftentimes where we end up talking with the architect and negotiating in a way and telling them, look, you know, if you have to think about it as a system and and and this is what we can offer, and you can work within that. But if you suggest something else, that means we have to engineer the solution, right? It's a custom engineered solution. It's possible, but it'll it'll cost more.

SPEAKER_00 20:26

Let's talk a little bit about the projects that you guys are working on right now and how these kind of concepts fit in. And let's start with like 230 Royal York, the building in the picture behind you. Tell me about that project.

SPEAKER_01 20:37

Yeah, 230 Royal York is an amazing project. It's a nine-story um rent market rental building in uh Toronto. And we were approached by uh windmill developments and leader lane developments who um a few years ago who basically formed a um a brand uh called Hauser, which is um I think Swedish for health. And they really wanted to focus on um, well, health, right? Uh sustainable buildings, um energy efficient buildings, comfortable living, um, innovative layouts, emphasizing to some extent the mass timber, um, because you can expose it, you can live in a more natural environment and have sort of those biophilic um advantages. And they were looking for innovative methods to deliver these buildings, right? And that that's it was sort of the the absolute bullseye right fit um for for us and and us for them. And so we worked together for a few years to design these buildings, and in fact, the architect, um LWPAC, um also designed the the cladding and the and the design language of that building for that brand, right? And so that you have a recognizable aesthetic, but each building in that brand could look very different, you know. Bigger, smaller, longer, shorter. And that's ultimately what was so interesting to the developer. And we started with this building as the first building. I mean, lots has happened since then. There was some kind of crisis. It was actually a condo in the beginning. Now it now it's a rent hold. So there's other challenges the industry that the industry threw us in our way. But we uh you know designed this building, used that as a really good precedent to hone in on our systems and on our productization. And ultimately we manufactured that building last year, and um it is now almost uh completed.

SPEAKER_00 22:37

So a lot of times when I'm talking about pre-fab, modular, productized, et cetera, the promises and the things that people are looking to get out of it is generally like cost, speed, certainty, risk reduction, like whatever the benefits are. Can you tell me like where this project came ahead in different realms?

SPEAKER_01 22:55

Yeah, absolutely. It's cost is number one. You can't fool yourself. Uh every developer, even the ones with the um most stringent ESG requirements and sustainability focus, they obviously need to see the bottom line make sense, right? It needs to pencil. And that's been true. And I think a bit of a learning curve for our company, I have to say, I think we started in a way where we thought, you know, if we really emphasize sustainability and performance, you know, maybe the cost of the building isn't so important, but ultimately it is. And you have to start there. You have to start at the baseline and say, we this is what we can achieve. Um but if you do want a higher energy performing building, um, we can very easily make that happen because the way we designed our envelope is for passive house performance. We tested it for passive house performance, but then you can always take a step back, reduce the insulation, the window performance, and so on. Um, it's still a better product, right? So, from a cost perspective, um there's two aspects to this. One is the mass timber, it's it's the elephant in the room, in a way. Um if you compare mass timber to concrete, mass timber at this point is more expensive by volume. You know, the volume that you need in a building to build the structure of the building. Compare that to concrete, mass timber is more expensive. Um, there's no way around that right now, especially North American mass timber. European mass timber is still a little bit cheaper. Um, the European industry is obviously much more advanced, uh, much, much bigger. There's scale, there's automation that helps so you can see where it's going. You can see that we can achieve cost parity on a material perspective to concrete and steel. Um, so that's one part, and that's not helping us necessarily. Um, but then you take the prefab aspect of it. And what prefab ultimately does, it allows you to build the building faster. Um, we can, with our system, and I think with every other prefab system, we can build a floor in a day, um, a larger building, maybe two days or three days, but you're much faster. And that is the structure and the envelope. Uh so now you go up with the building every couple days or every three days, and you have it enclosed. So theoretically, you could set up this nine-story or ten-story building in in 30 days. Um, and that reduces your total construction time by about three months, maybe more if it's a larger building. And those are real savings. There's savings on general conditions, there are savings on finances. Obviously, you have a faster return of your of your capital. Um, and and so um, there's a higher net present value basically for your developer. But everything has to go well. Um, and that's that's sort of the highest bar to hit is to actually realize those potentials. And we did not realize those potentials in 230-year-old York for a very good reason, which is that we have a very small factory in Vancouver and this building is in Toronto. So we decided to do this because we wanted to enter the Toronto market, and we knew that shipping would be very expensive and risky. And um, you know, it turned out actually that shipping itself isn't such a big deal once the components are on a truck. Whether the truck drives two hours or 40 hours doesn't really matter. Um, but obviously our factory is small. Um, we ran, you know, we were still learning, we ran into some timing issues, and then shipping didn't help either. And so we weren't able to keep up with on-site. So it's kind of a good news, bad news thing. You know, on-site, once the trucks arrived, it was fantastic, it was extremely fast, everyone's excited about it. But then it took a while until the next truck arrived. So we just weren't able to keep up and we weren't able to realize those um those cost savings. Um, but nevertheless, at least we were able to see that yes, if we had a factory locally, if we had a bigger factory with a higher output capacity, we can make that work. And that was very, very important, of course, to understand.

SPEAKER_00 26:55

And what are you taking into the next project? Like, are you able to share some of the bigger ones that you guys are working on or looking at and like the lessons learned that you're gonna take from Royal York into those ones?

SPEAKER_01 27:06

Yeah, I mean, a million lessons, you know. This is the this is the interesting part. I mean, especially when you're inside of this industry inside of a project, there's obviously a million small things that we know we could do better next time. Um, you know, from assembly processes to scheduling conflicts to how we onboard the trades and how we cycle through the trades as we go up the building and things like that. Um, transport and logistics, of course, procurement supply chain. Um, a lot of, I would say, um managerial or administrative issues that are actually quite boring, but ultimately, you know, they make the world go round. And so those are really, really important. Um, we learned about our product and about what aspects of customization are expensive and which ones are cheap, right? And we are really now after this project, we're really honing in on optimizing our products and really figuring out what parts can we actually standardize because it's still cheaper to standardize things, of course. So, what can we standardize and where do we need to allow for customization? How exactly does that look like from the design to the BIM model to the manufacturing instructions? Um, so really making sure that we have the right amount of customization available for the next projects and then what to sort of look out for when we encounter different projects. Um, and you know, we also see that scale matters um absolutely. Um, not only the scale of the factory, but also the scale of the project. Um, this building that we just did in Toronto, yeah, we know it's nine stories, 60 units. Um, it's really the low end of scale, I would say, because it has it has two setbags, it has balconies on the top, and it has a shift in the in the cladding. Um, and so almost no panel repeats, actually. It's ridiculous. You have a hundred and hundred and three envelope panels, I think. Um, and and I think 80 of those are different. So you have very little repetition. Um again, it doesn't have to be all the same, but you have to find a healthy balance, I would say. So we understand that much better now. What that means and how we can how we can achieve that in the future. Um and yeah, we have big projects um coming up. They are all a little bit further in the in the future in terms of construction start, but we uh we are um honing in on a on a 420-unit apartment building in Ottawa. Um, we announced a 1,000-unit project in in Barrie, Ontario, um, with a development uh group that is, you know, would be the biggest mass timber residential building and the biggest prefab building in North America. Um it's also you know gonna take a while, of course, to go through the planning. Um but these are some of the bigger projects that we're looking at, and those are really exciting because you have a huge impact. You you you your factory is busy for half a year or a year, you know, these are really, really big chunks of projects. And and we we are in there from the beginning, and we we have a comp we have we're part of the conversation, we have an impact on the project, and we can really make sure that it is designed with you know DFMA right for manufacturing or for prefab in mind um to make it successful. Are you guys gonna have to expand the factory? Oh, yeah, absolutely. Um that's a whole different story. You know, uh how do you build a prefab company? Like unless you have the money up front to just set up a factory um at full scale, and and you know what you're doing, uh, which I don't think there's many people out there that that have that much experience, um unless you have that, um you have to somehow build build it up right over multiple steps, hit some milestones, get more funding, and and build it from there. And so the way we approached it was basically in the very beginning, we uh I remember this very well, we guess lots of board uh conversations. Do we set up the factory first or do we get our project first? And ultimately we said there's no way will anyone will give us a project if they don't see the factory. So the approach is uh build it and they'll come, and it's it's risky. So we got a smaller factory, um, we call it a pilot plant, and we set that up, and you know, it still took us a few years to to after the decision to actually get a project. And it was the right decision. I don't think we would have ever gotten one, but um that factory was never meant to be a commercially viable factory, it is it's 15,000 square feet. We can maybe do a hundred, a hundred and fift units or as an apartments uh per year. Um, and we know we need to produce at least 500 units um to be profitable. And so for us, you have to sort of flee forward. You have to you have to scale. That's the you have to you scale or you die, really. And that's where that's the point where we are right now. We are we have planned a hundred thousand square foot factory that can produce a thousand to twelve hundred units a year, and and we're looking for factory spaces in Toronto or in the in the outside of Toronto, and um trying basically to get to that point that we can start delivery in early 27 um and deliver these projects that you have in our pipeline from a new first of its kind commercial factory.

SPEAKER_00 32:33

That's incredible. And you know, early 2027 is not that far away, you know, one in general, but two when you're talking about uh manufacturing, like that's a that that's coming right around the corner. Uh, question for you on because a lot of times I hear people talk about, you know, we we talked about European efficiency and scale, where the North American market is and where it's trending. A lot of people get hung up on, yeah, this IC prefab modular conversation sounds great, but it costs hundreds of millions of dollars to get anything started and up and running and profitable. But I like the approach you're talking about, like pilot plant, pilot facility, scaling into that. Can you talk about kind of your experience on the manufacturing side in this prefab world and like lessons that you've learned and what you're taking into this next other plant, whether that's capital efficiency, labor line layouts, automation, et cetera. Like what are you guys looking at in this next facility?

SPEAKER_01 33:30

Yeah, I think a really important lesson is that it's very easy to overinvest in equipment and automation. It's very easy to fall into the trap of, you know, we'll automate everything and it's gonna be an awesome factory. And and you kind of, you know, you're you're kind of drinking your own Kool-Aid and you know, I I have an industrial robot here, uh a small model in the in the background. Um, I I love robots, I love automation, but it is a trap if you are not a hundred percent clear on what your product is and what your manufacturing process is. And so the interesting thing where you know prefab is in a in a place in time where you can still do everything manually. You could rent an empty factory, put a few tables and conveyor belts and frames and shelves in, and you could you could make our components. Very little investment needed. Um and then you can start automating and you can start implementing you know more and more complex processes that are automated, and and over time, you know, you get more and more efficient and you get more and more output capacity. Basically, you just keep the same staff and you just augment them more and more until you have double and triple the output capacity. That's really sort of the way we are thinking about it. Um, you know, to your point, um, I think I think you can set up a prefab company with probably 20, 30 million dollars if you know exactly what you're doing. Like we didn't, um and it took us much longer than we thought. Um, so we need a bit more money than that. But ultimately, that's kind of what we think a factory costs. And that has a substantial amount of equipment in it already. And so we we learned, uh I'll give you an example. Um, we set up a robot cell with a big industrial robot on um to place windows into our uh uh mass timber frames. And to do that, we needed a uh a cart, a a uh a structure that would hold the windows so the robot can actually pick them up. Because obviously the robot's very big and bulky, it needs some space, you need to build this like a massive cart where there's three, four windows on it. So now we designed this cart. And now the thing is now you have to put the windows in the cart. How do you do that? Uh because the windows get shit from our suppliers in some crates or pallets, right? Uh so now somewhere outside the factory, someone has to unpack the windows, lift them anyway, into the cart, then move the cart into the robot cell, and then press play on the robot, and that's a two-minute job for the robot to pick the window and put it in there. You could also just put the windows as they arrive from the supplier on their pallet, into the cell, have someone with a lift assist device, which is this like mini gantry with a with a suction cup that you can just move around manually, just one person, lift the window up, put it, put it in the timber frame, done. You just saved a million dollars. So, you know, it's probably for those who work in prefab, they would probably have told us that before we realized that. But um anyway, we we learned it uh along the way. Uh, we can utilize the robot for other things, so you know it's not a loss. But this is the kind of lesson that you have to learn. Um, develop your process first and then evaluate where are the bottlenecks, what's the work that is you know tedious, dangerous, heavy, repetitive that you want to replace by automation. You can also use automation to introduce more uh customization, right? If you have laser projection, you can you can show where cladding pieces are supposed to go. Um so it doesn't always have to be the same cladding. It's very easy to understand. Oh, these are different pieces goes here. If you get the as a as a factory staff, if you get the instructions live and automatically without hurdles. Um, so that's kind of how we are approaching it now. We are being careful in how much automation we introduce. And we know that this next commercial factory will have more automation than we currently have, but it will be nowhere near what you think of, and you think of a factory like a car factory, right? There, the the percentage of automation or the equipment density per square foot is still much, much lower. And we just want to set that up and operate it and learn from it, and then we can make decisions how much more investment we're gonna do, and if that is the blueprint for the next factory, or if we need more um development to get to that point. Because ultimately the goal is to have a factory like that in every city in North America, because there's so much housing we need to build, and a thousand homes a year is nothing, right? So um, we need this to be replicable, and so we and we want to be very careful to get to that point where we can say, okay, now we can copy paste it.

SPEAKER_00 38:21

Yeah, yeah, I agree wholeheartedly. So, what's what's immediately on the horizon for you guys? Like what's what's getting bit off this quarter this year?

SPEAKER_01 38:31

Uh well, we're in the middle of fundraising. Um, so we uh um assembling a capital stack between grants and equity. Um, Canada is very good with grants and government support, less so with with venture capital, I would say, compared to the US. Um so we are assembling a group of strategic investors, um potentially developers that that sort of want to invest and reserve production capacity so that we can green light the factory. That's really the next three months essentially is the goal to get to that point that we can say, okay, we are moving ahead with the factory, everything is lined up, we are ready to roll, and you have that sort of 12-month window to um to get going. It's actually really exciting because if you had asked me at any point in the last 12 to 24 months, all I could have told you is focus, survive, and build a building. Um, but that was sort of we we only had a very short-sighted view because everyone was busy just making this building happen. Um it took the entire company really to achieve that. And now we are really looking at a more long-term strategy. Um, so for us, um, going into that expansion, going into that new factory, it's obviously the factory planning, is a very big aspect of that, starting that process, or I would say finalizing it because we already have a lot of knowledge about it. Um, but also product optimization and really honing in on what is needed, like I like I said, about product flexibility and so on. And we have a bunch of projects that are starting planning now as well. And so we have to focus on those and make sure they are successful. And then basically it's just from there, we just the next 12 months, we just execute.

SPEAKER_00 40:11

Fantastic. Well, look forward to watching that journey. And uh, I'm excited to see what you guys do over the next year. Um, for those of for anybody that's watching that wants to connect with you, how can they do that?

SPEAKER_01 40:22

Uh I'm on LinkedIn. Um I ideally, I guess, um, all over David Creek. Um, you'll find me there. You find you find me on our website uh at intelligent-city.com. Um, yeah, shoot me a message. All right. Well, thanks for joining me with this conversation, and uh well, I'm sure we'll be talking to you soon.

SPEAKER_00 40:38

Appreciate it. Thanks so much.