Veev’s Amit Haller on Scaling Innovation and Shortening the Supply Chain
September 9, 2021
During the pandemic, while home builders were contending with extended lead times and a shortage of building materials and labor, off-site manufacturer Veev was completing a 78-unit emergency housing development in San Jose, Calif. Finished last October, the project took just 90 days to complete.
The off-site digital prefabricator and on-site installer of multi- and single-family homes and accessory dwelling units succeeded in shortening its supply chain and reducing selling prices while other companies were scrambling to find alternative vendors, making supply substitutions, and inserting escalation clauses in their sales contracts to cover rising lumber and other materials costs.
Veev, which originally launched in 2008 as Dragonfly Group, doesn’t use wood. The San Mateo, Calif., company frames walls using steel that is waterproofed and finished with high-performance materials. These fully closed and clad panels are trucked from Veev’s Union City factory complete with mechanicals, electrical, and plumbing systems and assembled on site by Veev’s five-member field team, which can install a wall every 30 minutes using simple snap-together connectors similar to train car couplings.
Last March, the company raised another $100 million to fund expansion into more production plants that design, manufacture, and assemble every component of its homes, including windows, doors, cabinets, and counters. Pro Builder talked with Veev’s co-founder and CEO Amit Haller about the company’s approach and vision for innovation in home building.
Pro Builder: Many innovative construction methods fail to be adopted because builders don’t see these alternatives as scalable. Is the Veev process scalable?
Amit Haller: Scalability is a huge hurdle because there are millions of people in the construction industry who continue doing things a certain way because that’s just how they do it, and it’s been unchanged for the past 100 years.
The big challenge with the current industry is that houses are custom made; it’s all craftsmanship. For example, every piece of tile requires someone to install it. Veev got radical and said forget the tile. There’s no tile. You might say, how do you do that? And I’ll ask, why do you need tile? The main reason is to create a waterproofing membrane in areas like the kitchen backsplash and in bathrooms because drywall should never be exposed to water.
So, what if I could have walls with no water issues whatsoever? Suddenly, you don’t need tile or drywall. I’m eliminating the problem. But you might say people really like tile for its style and architectural value. Great. So, what if through machines or by design I can just draw or texture walls that look like tile or create the right architectural values without tile?
By the way, we didn’t invent this process. Car manufacturers and smartphone makers have been making their products available to consumers in any color for years. It’s called standardization or productization. We’ve done it in every single industry other than construction.
Look at the fashion industry … You can get apparel in so many different colors and shapes, but in a massively scalable way versus just getting it from craftsmen or tailors. We need to do what the fashion industry has done. They started to look into standardization with sizes. You have extra small, small, medium, large, extra large, extra extra large, and so on, but at the end of the day, it’s just eight or so sizes. That’s productization.
In the construction industry, there are a million different bathroom sizes. Why? Are people really using the bathroom so differently? There’s a sink, toilet, shower, and maybe a bathtub. You can start to standardize, or productize, that room and its components.
One interesting thing that happens with scalability is that if I want to standardize something, I need to really understand the user. So I’m going to dive deep into the user’s life to understand how they use the sink. You might say, I wash my hands in the sink. But there’s more: How much space do you need around the sink to place items? How many drawers in the vanity do you need? What size drawers? Where will you store different items within those drawers so you can better affect drawer size in order to make the right product for you?
PB: Doesn’t standardization fly in the face of consumer choice regarding décor and finishes?AH: It definitely does, but there’s a level of standardization and a level of customization. Consumers want to be able to paint, color, and texture the bathroom any way they want, but they couldn’t care less about the standardization of the plumbing behind the wall. They just want the lifetime warranty that provides repairs in case something breaks or there’s a leak.
By standardizing what’s behind the wall, we’re creating the ability to focus on where we really bring value to the consumer, which is customizing the kitchen cabinets, the vanities, the flow of the layout, exterior cladding, and creating a smart home environment.
Standardization doesn’t mean everyone gets the same car, all in black. What Henry Ford did was standardize the production line of cars so you don’t need to rethink and reinvent the transmission, the location of the engine, the starter, the wiring, and so on every time a car is assembled. The consumer wants the car to perform and be safe, but how that happens under the hood doesn’t matter to them. Home builders are reinventing the transmission, the engine, and so on every time they build a home from scratch. At Veev, we’ve standardized the production process but kept the unlimited ability to customize your home.
PB: What is the High-Performance Surface (HPS)?
AH: HPS is a “super” material [similar to Corian with a high-performance acrylic coating] that is more alluring, durable, and healthy than any traditional finish on the market and provides superior strength and quality to surfaces while generating a low-carbon footprint. In Veev homes, HPS is the material of choice for all interior walls, doors, vanities, built-in closets, kitchen cabinets, and countertops because of its thermoforming-enabled flexibility, customization options for printed colors and textures to resemble any desired finish, and compatibility with a wide range of lighting effects.
HPS is a jack of all trades—pleasing to the eye, certified hygienic and mold resistant, ultrasmooth to the touch, and possessing incredible strength. It also offers weather and UV protection, does not fade or degrade over time, resists stains, and does not absorb odors, making it equally versatile for combatting common sources of depreciation in and around the home.
Veev’s in-house supply chain and optimized panelized wall system utilizes HPS to significantly reduce the cost of installation when building homes. These savings are in turn passed on to the consumer in the form of lower up-front costs and long-term savings derived from the strength and quality of HPS.