3 billion single-family homes are needed across planet in 10 years. Existing tools won’t do it, since the magnitude is so astronomically large, that there are no systems in place on the planet that can handle this volume. Its basically a new New York city to be built every month going forward.
We are busy with a system, which is fully open source, where anybody can build their own home. We could then scale this system in tens of thousands locations right away. Where 3D printing comes in play is with all the fixtures needed in a building. Anything from sewage to conduit and from AV to plumbing. One example of this is a custom 3D printed block, which will handle an electrical conduit.
Why is this cheaper?
This is not the entire question. You need to ask 3 questions, which will then triangulate to a solution. This is the classic trio of cost, attainability and speed. In other words, if one had a cheaper solution, but couldn’t send it to you cost effectively or if one had a faster system, but nobody knows how to use it, they will not result in attainable solutions.
And with cost, we don’t just compare to existing parts, made in another way, put it in an Excel sheet and try to replace something with 3D printing. Our model is based on selling homes and not parts. 3D printing itself is a very small part of the bigger picture, but it plays an essential role in it. If we look at an electrical conduit for example, traditionally you need several parts to just put one together. You will need an expert electrician to do the work, a project manager to make sure the electrician actually came to the building site and maybe an inventory and purchasing manager (or system) to make sure all the parts are there when they need to. In short, you need a handful of people on your payroll just to make sure one switch box gets created. Our system is so simple, that none of these people are needed anymore.
For those who still want to understand a basic parts to parts comparison, our electrical conduit system is made with 500 grams of material. Getting all the parts standard is about $5 and it will take about an hour for an electrician to do it. Depending on the region of your building project, but let’s assume its $20/h in US, so a switch box will cost you at least $25. If the 3D printing material was, say $20/kg, I am sure everybody can do the math from there. Now multiple the same principle to all the areas in your building where an expert used to be needed.
Why not just use injection molding?
If you think about it, every dwelling is unique. There are countless pre-fab systems on the market, which may look the same from the outside, but at the end of the day everybody’s interior is unique from each other. Every region will also have their own needs, tastes, regulations etc, thus when you start to calculate all the fixtures, that run inside your walls in your house from AC to electrical to sewage and plumbing, you come to some crazy numbers of material and expert labor costs. Yes some elements will also be injection molded, but these projects take very long to come to realization, so if you add it all up, by the time we have created expensive molds for thousands of different shapes and sizes, we will already very be far ahead with 3D printing.
How does this solve the problem?
Countless governments have political strain to provide affordable housing for their people. In the developing world, you are looking at a single family home needing to cost only 15-20K. Western companies don’t want to touch these projects, because the margins are not there for their systems. And local people are not educated to build their own homes with their systems, to begin with. Thus we see the opportunity in creating the systems so LEGO simple, that anyone can build with them. When the volume demand is already there, the material pricing plummets.
What’s the business model?
Selling home kits for 20K per 50m2.
How will this work?
These structures are merely guides and very thin “molds” for concrete, which is already reinforced with rebar. We are not changing anything in the structural elements of a building.
I would also challenge people to look at the bigger picture from a value network perspective. Asking how much a part costs is like asking how long is a measuring tape. For instance, if I gave 10% of the profit to a chemical company in return for them providing us the material, they’d give it to us for free. Thus we are not looking into calculating part costs but will look at the margin per house built and final P&L.
Isn’t that naïve? Will you negotiate with every material supplier that you need like that? Aren’t you asking people to take on more risk for an unsure outcome that is beyond their control?
Yes, of course, it’s naïve. That’s why I love it. Most experts view the world through a rearview mirror, because they base their assumptions on the knowledge from the past. My experience with the construction industry is just over 10 months, which is why I can ask the most naïve questions from everybody.
Value networks are nothing really new, but yes they are hard to put together and you need open-minded companies to participate in them. And new metrics need to be created in order for one to determine who gets what slice of the pie.
But I really see that the only way for the industry to flourish is to question everything…Unless one is happy with incremental improvements in a silo and is happy with their 15% business increase per year. This year our machine has 2 lasers and next year 3…and so on.
And no I would not negotiate with too many parties. Our system requires footing, CMU blocks, 3D printing, rebar, roofing, windows, stucco, and a few other things, so the value network is put together by only a handful of companies and no, I would not need to pull a rebar company to the negotiation table. When it comes to 3D printing, its just one material partner that is needed. That’s a simple game to play…, “currently your material is at $30/kg, but if I order 3bln kg, I expect the price to be at $2/kg, Yes or no?”
And yes you are absolutely right. The value is in the home kit, which we are going to sell and not in parts. Give you another example. Somebody else might tell you, their part costs …say $1, but they have 5 people working on it. I could say, my part is $100, but no people. If one was in the parts business, you do your P&L based on parts. We don’t.
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