12. Systemising Your Drafting Process with Kevin Weitzel

This is Professional Builder Secrets, the number one podcast to help you grow your building company safely and securely. Brought to you by the association of Professional Builders. Join us every week as we talk to industry experts and your fellow professional builders on everything you need to know to generate more leads, more sales and higher margins while improving the building experience for your clients. Hello and welcome to the Professional Builder Secrets podcast, a podcast by the association of Professional Builders for building company owners, general managers, VPs and emerging leaders. Here we discuss all things running a professional building company from sales, processes, financials, operations and marketing. Today I'm joined by Kevin Weitzel, VP of Business development and Sales for Outhouse. Kevin, welcome.

Hello. Thanks for having me.

Well, thanks for being here today. Let's get into it. Shall we? Start off with telling me a little bit about what you specialize in and what does Outhouse do?

Sure. Well, obviously we have a lot of fun with our name Outhouse. We have nothing to do with Porta Potties or toilets or J. Johns or anything. We're actually an outsourced services company for production and semi custom home builders. We can work in the commercial world, we can work in full custom, we can even work in the remodeling sector. But really what it comes down to is that where builders most benefit from utilizing our services is when they want to streamline their process to make their options and their products more standardized. So even when it is custom, it's pre curated design. Not necessarily just willy nilly, whatever I feel like doing on my plans. But in addition to that, we also invented the interactive floor plan a little over 20 years ago now. And that's really where shine head and shoulders above the rest of the competition that's out there.

Tell me a little bit about this invention of the interactive floor plan. You talked about it being there for 20 years. How did you actually get into it?

So it's kind of a funny story because it wasn't actually even developed to be an interactive floor plan tool for structural options. Our company was founded by three independent companies that all just kept running into each other with various home building clients. We had a drafting services company, a graphics and print company, and a rendering and even model. Like back when they used to make the models like the little Monopoly homes in the sales centers, you know, so way, way back Time machine. And because they keep running into each other, they just decided to form Outhouse proper. And they've been working together ever since. One of our partners had been working with one of our developers to develop a furniture planner and the original Intent was that people that were moving into multifamily fixed spec home type builds could utilize that furniture planner as a way to space plan their home before they move into it, make sure everything moves in, use it as a planogram so their moving company could just drop everything right where it belongs. And we were approached by an Arizona builder that asked us if we could do the same kind of functionality but move walls, you know, have structural options. So a few months later, we developed that technology. They had that on their website way, way before anybody else. Matter of fact, I didn't think they had it in their sales office before anybody else. And then it's just been going, you know, gangbusters ever since. But, but the whole concept is that instead of just having a static plan that your buyer, your potential buyer can look at, you have a plan that it could be static, but you can show them what a den would look like in lieu of a bedroom or an extended porch or a siloed garage. Literally any kind of anything that comes to mind, but allows you to standardize and develop and engineer those, those options first and then roll them into what the options would be for your client.

So let's talk about Kevin a little bit here. Was this something that you landed on? Was this a calling that you jumped through? Were you doing something before this? How did you get into this world?

It's kind of a funny story. I had zero background in the home building industry other than somebody who has purchased and sold homes himself. Long story short, I'm a former professional cyclist, race pro from 84, 83 to about 89. I was Olympic alternate in 88. Then I did a little stint in the Marine Corps. I was a sniper with 7th Marines for eight years. After that I got back into the bicycle world and not racing anymore, just selling, buying and selling bicycles. And I opened a triathlon store here in Arizona. And when I sold my store, I went to the world of two and four wheel, like powered train, if you will, motorcycles, cars, et cetera. And I made really good money, made great money selling vehicles. But I just was not very happy. I was completely disenfranchised with, you know, even having any joy in my life at all. My friend that is a principal here at Outhouse asked me if I could set up a, set up a sales program for them because they never have had to had sales. They've always worked with word of mouth. You know, marketing manager A from this company moves over to B and they say, hey, you need to use these products. And then, you know, Just so on and so forth. There's more competition out there in the world. You know, it's. It's more of a global market sooner. We have competitors in India and China and the Philippines in Australia. And really what it comes down to is that because of all that added competition, in addition to that, we also have the need to always step up our game. So we had to add a sales protocol in place. So, you know, a way to reach out to people, way, you know, put a CRM in place more so than just, you know, the good old boy network and handshakes. That's actually been to our benefit because we have had record sales ever since, matter of fact, record growth ever since. We were pretty decent sized company up until the housing crash. We stayed in business only by virtue of an angel loan, an angel investor that came in and kept our company afloat. We actually bought our company back from that angel investor about four and a half years ago. We've just been shining ever since.

And you're referencing the 2008 recession in the U.S. right? And that changed the U.S. landscape quite a bit in the building space as well.

It blew apart. Over half the builders in the country were gone in literally a year's time. So, yeah, we, we felt that pinch. We definitely did. You know, builders that owed us tens of thousands of dollars of invoicing just dried up and disappeared. Good luck paying those bills, you know, or collected on them. But yeah, so I was asked to come over and set up a sales system. We've had a very good success with it and we actually increased our foothold not only in the United States, but up in Canada, Guatemala and Australia. We've had some fantastic partnerships across the globe. Matter of fact, Russ Stevens with the association of Professional Builders has been a fantastic partner. I shouldn't say, should I say partner? I guess it's a strategic partner. We align with each other because we, you know, both of our products, if you will, scratch each other's backs. So.

So you've gone from the Marine Corps and being a former Olympian to moving to the building and construction space as well. What compelled you, other than the growth and the success on a personal level, what really compelled you to take all those experience and go, this is the industry I'm going to land on?

I'm actually glad you asked that because I have honestly never been happier than I am professionally as I am in the home building industry. You know, when you sell tchotchkes, you sell bicycles, you sell a little bit transportation, you know, you're selling an Item. But when you sell homes, I mean, you're literally selling where people raise their families, where people have memories, where they have quinceaneras in the backyard. They have their birthday parties of people and anniversaries that they celebrate. And this is all done in your home. So I'm helping builders who sell and build that product, I'm helping them market their product digitally so they can get that product out and into the face. And the people that are success.

What really sparked that for your business? Was it the timing? Was it the digital outlets that you were providing?

The original onset before my time was, or the original success uphill, was that we hit the market with a product that nobody else had. Interactive floor plans. When we were in. There's a lot of other products we do. You know, obviously we produce render 3D renderings and virtual tours. A lot of that has actually been commoditized globally. You know, you can get renderings anywhere by anybody. They used to. There used to be a big difference between some of the developing countries that were providing renderings versus our top tier countries, I would say are most developed countries. But honestly, those have been leveled out a bunch. There used to be a huge difference, but it's. It truly is a worldwide market and there's a lot of talented people out there. So where we gain most of our success now is that our systems build and integrate with each other and with other systems. So for builders that utilize us for drafting, when we draft their construction documents for their homes, their blueprints, if you will, one of our byproducts is that all the content that we draft, we can actually turn into interactive floor plans. So we can provide the interactive floor plans practically for free. And I don't want to make this a sales pitch about outhouse, you know, but it is. Our services build. When we do renderings for a builder, we have a visualizer. So now instead of just showing a static 3D image, you can actually show it with different shingles, different stone, different siding, different paint schemes instantaneously. Because the Internet speeds everything up. Computer processing has sped everything up. The video game infusement of their technology into our industry has allowed that to escalate and just jump leaps and bounds over what it has been in the past. You know, historically, the home building industry really is really slow to innovate. A lot of times, the only instigation factor in a home builder wanting to move forward with a new technology or a new service or a new way of thinking about something is that competitor B down the road just did it. So now we need to do what they're doing. And that's kind of sad because, you know, for an industry that literally builds homes for everybody around the world, it is kind of silly that there is so little innovation in our industry.

So take us through the world of interactive floor planning and these architectural plans. You know, obviously the, that has really digitalized systems around. How has that changed in the last few years? You're responsible for relationships, business development with other builders. What do you get to do on a day to day basis?

So a good example of that would be BIM or technology where builders can not just draft in 2D, but they can draft in 3D. And not just draft the architectural standards of the home, but they can draft the electrical, the mechanical, the MP and E, the mechanical, electrical and plumbing, all the civil aspects, all into the same plan. So you, Anthony, could be in one country drafting the plumbing. I could have my team over here doing all the architectural and then structural, over in England doing all the structural engineering and all at the same time. That's the beauty of BIM is that it can all be done at the same time. Now why does BIM not work globally and worldwide? It doesn't work for everybody. It's a fantastic concept and idea and it works fantastic for commercial and it works well for spec building. However, the magic bubble that has not been attained yet is how to have built in structural options into a BIM structure. That's the only real downfall so far. So for the, for the single family home builder out there, 2D drafting is technically still the best way to go because it also ties in with all the other systems that are out there now. When all these other systems, you know, like for E Studio Max and all those start, you know, catch up to that tech and can integrate with the files that are produced out of these BIM software programs, then we're talking about a different story. And that's coming really soon. Technology is just flying by.

You talked about this technology also being outsourced to other parts of the world. Are you ever concerned about data breaches? Are there any dark fruits to this industry and what surrounds you?

Man, I'm glad you asked that question. All right, so let's just go nitty gritty on this one. If you produce a purse, A purse, not even home building, we're just talking about a purse. And you're like, wow, I've designed this beautiful purse. People are going to buy in this thing. It's going to be fantastic. And you take it to China, your intellectual Property is now gone. It's gone. That purse is now being made by 30, 40 different brand name manufacturers and sub brand names and private labeled left and right, all from your design. And you're none the wiser. Now think about that. From a home building standpoint, you can spend tens of thousands of dollars designing, developing plans. As a home builder, what are your thoughts? What are my thoughts? When you send that work to, let's say India to have some plans drafted in India, they don't have the same rules and regulations they have in Australia, in New Zealand, or in the United States or England or Canada, that intellectual property is gone. So those tens of thousands of dollars that you've heavily invested in your development of that product, they're not being sold to everybody else out there. Your standards, your innovations, all of that is now just open source property that anybody can grab a hold of.

Do builders know this?

Some do. Some don't care. The ugly truth is that some really don't care. They're like, hey, as long as I benefit from it, as long as it costs me less, I'm okay with that. But I guarantee you, the person that. And when you're talking about, let me just take a step back. When you're talking about a typical 30 wide product, that's a big old rectangle that literally is just, you squeeze the rooms in and there's only so much innovation there. You know, there's only so many ways you can cut up that box. You know, put, move, shift rooms around, shift walls around within reason. You know, rooms have to be a certain size to accommodate a bed. Bathrooms have to be a certain size to accommodate getting in and out, taking a shower or whatever. But when you're talking about larger scale homes and multi level and multi, you know, and multi floor homes, there's a lot more design development that goes into those. So why would you just want to invest all that and then just give it away to your competition? And when you go overseas, that does happen. Right, Right.

Now, take me through the world of the builders from their lens. And I've heard of people that still use a sketchpad in some parts of the world as well. Why should builders be paying attention to this digitalization of systems and that whole automation of availability what you offer?

There is still a world out there for the hand, hand drawn architecture. And trust me, we, we all love it. Matter of fact, when we look at, you know, hand drawn watercolor renderings, they're beautiful. They're still beautiful. They're just not efficient. You know, if you make A complete facelift to a plan. Now you've got to find somebody, pay 6, 7, $800 to have them redo that watercolor rendering when it could just be a couple of switches. I oversimplified being a sales guy, but, you know, you flip a couple switches and then poof, you've got a new rendering now that matches that, a new elevation. There's a lot of cost savings when it comes to drafting electronically, digitally, using cad, but even more so the other systems that it ties to pushing forward your marketing collateral, you can take that same drafting file instead of a hand drawn, the same drafting file, and now push it through to your engineers in a matter of seconds. You can have that brought back and have revisions done in a matter of minutes. When it comes to your pushing forward your digital collateral again, renderings, interactives, tying into other systems, your CRM, your estimating software, all that can be done with a few keystrokes, whereas with hand drawns and the old school ways, you're literally tying your own hands.

So you mentioned something really interesting about the fact that the industry is slow to innovate and it's typically keeping up with the Joneses. As they say, if someone else is doing it, we should do it as well. What needs to change for the building industry to embrace innovation?

Well, let's look at the frog in the pan. When do we do change? When does the frog decide that it's time to jump out of this pan that just keeps getting hotter and hotter? The sad truth is the frog doesn't jump out of the pan because he just doesn't realize that it's getting warmer. It's a slow transition. And that is the crux of the home building industry is that we are a slow built, moving transition. I mean, we're still using stick and stucco, we're still using bricks to build homes. I mean, there's so many new materials and technologies that are out there. You know, we've got solar, we've got wind to waste to power homes where they don't even have to be on the grid anymore legitimately, do not have to be on the grid, and home builders don't do it. Why don't they do it? Because this is the way we've done things, you know, for the last 40 years. Or why would I take on this expense when my competition is not solar panels? Solar panels on the roof, that's passive electricity. Why would I take on the expense of adding $20,000 to my home when my competition can beat me by 20 grand for a Similar home now. Well, because you want to do something that's better for your planet. The harsh truth is that the worries that builders have now about competitor A, B and C or is there land? Those are small, little itty bitty battles that they're having to worry about. They're big now. But let's fast forward 20, 30, 40 years from now when water becomes an issue, population becomes an issue. We're just talking density now. There's countries, look at Brazil, Sao Paulo, Brazil. They've got houses stacked on top of houses stacked on top of houses. And these aren't houses, folks, these are shacks. So that population is there and the only way for them to get out of that lock in is to chop down forests or to relocate to other countries. So yeah, the worries of the home builder, of worrying about whether competition A, B or C is doing X, Y or Z, those are pretty small little things to worry about. They need to worry more about the big picture and how can I still produce a sustainable product? Not only that I can build and profit from now, but that society can utilize and benefit from 30, 40, 50 years from now.

Let's get into your perspective, shall we, about the construction industry. What keeps you up at night and what gets you excited in the morning to do what you do?

I'd love to say that I'm so secure that my competition doesn't keep me up at night, but sometimes my competition does keep me up at night. But no, when it really comes down to it is that I don't really lose a lot of sleep over the things that I do for our industry. The long and the short of it is that I'm just a sales guy in the big scheme of things. I worry more about, you know, arcology. I worry about, you know, coastal areas being, you know, being eroded by, you know, global warming. You know, I don't want to sound like a big giant. You know, I can hear the audience now. What is he interviewing? A tree hugger? You know, who knows? But am I a little bit of a tree there? I guess I am, you know, because Mother Nature proves to us time and time again you're not supposed to mess with her. And I'm kept up at night by population growth, by mass, mass areas of the world where mass population is having to move out of unsustainable areas anymore, you know, that are just grotesquely overpopulated, that no longer have any natural resources to service them. We have these nice first world problems of what color car am I going to buy? Not can I feed My family today. And, you know, and not to say there aren't people out there that worry about feeding their family, but it's all on a big scale of important and not so important. So, yeah, the things that keep me up is, is our industry paying enough attention to our world? Are they paying enough attention to affordability? You know, are they paying enough attention to being able to have renewable resources to be able to build homes? Those are the kind of things that bother me, and they shouldn't, because I don't even build the home. I just sell the products that allow builders to market their homes. But that's the stuff that gets me. Right.

So what are some of the trends that surround the residential industry that you're seeing today? Potentially even sustainable trends as well. What are some of the things that you're seeing that are shaping the future of where we're going?

Well, I like to look at what they're doing in Scandinavia. You know, modular building. Love it or hate it or be afraid of it if you want to, but modular building is so much more efficient when those systems are in place. You can literally build a home on, you know, not on site, but in a factory, build sections of it, have minimal assembly on location. So you reduce waste, you reduce time. You can build homes considerably faster. You can palletize them. And I think that because we've been doing it the same old way here in the United States, we have not embraced modular building as much as we should have. You know, we do with trusses. How many home builders build, you know, roofing trusses? Most of them just hire that in. They just buy into roofing trusses. They get delivered, crane drops them into place and done, you know, so what's the difference of doing that with the whole wall panels, flooring systems that could literally be dropped in. So when I look at innovation, I look at Scandinavian to see how they're building homes complete and just dropping them into location. I think it's fantastic.

So you're talking about pre manufacturing, some of these entities that come with the home building side of things. It's almost like the Tesla model of building homes, I guess.

It's exactly it. And I think that we need to look at some of these other industries that have moved in that direction. You know, there's a reason why IKEA has these gigantic stores, and they're always full. They're always full because they make an inexpensive, reproducible, ecologically sound product that everybody can afford. Affordability is there. Sustainability is there.

I mean, IKEA has come a long Way too. You can get your kitchens built from there. Now you can get pretty much everything inside the interior sort of from Ikea as well. It's interesting that you mentioned that. Do you see this concept of eco solutions making its way to the U.S. i mean, I know the U.S. does have a modular building sort of entity, but do you see this becoming even more enhanced in the future?

I think the industry is going to force it to happen. It's going to have to happen. The problem is that are they the frog. Are we. Do we have builders that could thrive and survive versus just struggle and buggle by implementing some of the modular technologies that are out there? I think that question is very easily answered when we look at Europe. I mean, they are even doing a lot of modular building down in Australia. So it is here. It's just a question of when it's going to take place. Insulation, materials, plastics. There's people creating and I forget the Gallus name, but it's pretty recent. It was in the news where she's literally taking and compressing plastic that literally just goes in the landfill and turning it into building blocks. Now, granted, you don't want to catch that on fire, but. Because that'd make a pretty nasty burn. But as far as structural, solid stuff.

Right. So what should builders be paying attention to as we embrace this new frontier? You know, I think it's someone once called the residential and construction space the final frontier. But what should builders really be paying attention to moving forward?

I think we should be concerned, and this isn't necessarily a global problem. It's more of a North American problem. I think we should be concerned about this mass acquisition that's happening where the biggest builders are literally the largest lion's share of the market. You have some smaller builders. There's 10,000 plus builders in the United States. And if you look at the top 100 builders, you go from 50,000 plans a builder down to, I think at the bottom of the hundred, it might be four or five hundred plans a builder. So that means you've got 9,500 other builders or 95, 700 other builders that are building less than 400 homes a year. That's a lot of people divvying up very small slices of pie and make that profitable is very difficult. So I think this acquisition and cornering of markets is something that we need to be concerned about. You know, there's some markets where these players aren't in, but these major players are moving into, like Boise market, where in the Boise market they haven't had that big player, you know, CBH has been the big gorilla in the room. And now, you know, you got Lenar moving up there, dear Horton moving up there. And once those big beasts move into your market, the whole game changes.

And that's because they're buying up the competitors and building it as part of their brand, I guess.

Well, it's twofold. They not only buy up competitors, they buy up low lying competitors whether they're successful or struggling. But then they also are much more funded so they can come in and buy the premium land. So now they're buying the dirt that everybody wants to live on. And if they're buying up and locking up that dirt, you being a smaller builder, you're just shoved right out of the market.

So they're literally buying the portfolios is what you're saying. The portfolios.

Exactly what they're doing.

Wow.

Exactly what they're doing.

So will the industry always have room for custom home building? You know, you talked about so many different trends, eco building or sustainable options. What are the insights that you're gathering on the front lines? And do you still see a room for custom home building as well?

There's always going to be room for custom home building. There's always going to be the affluent for number one. They want their homes built the way they want them built. They don't want to buy an off rack home. You're going to have that which is a shrinking population. You're going to have that population like myself that's in the, what we call the middle class where I like the idea of custom but I also like the simplicity of I can get this home built just right now, move into it and it's already been finished with a curated design of awesome finishes done. Who doesn't want the easy button? But I think I'm also a weirdo. I think I'm not that normal person that once you've made it to that level of affluence where you can afford to buy your custom home, where you wouldn't want to buy the custom home. Who wants to drive the same car everybody else is driving? Everybody wants the chrome wheels or their tinted windows and their sound system and their spoiler in the back. We want that with our homes too. Right? Right.

Well, Kevin, it's been a really insightful interview. I've learned some so much about the world that you come from. Any final words to our listeners out there? Who are the builders either getting into it or builders who have been there for a while or people that are still over the fence about embracing the technology that you provide. Any final words for them?

Embracing? Definitely. Do not be afraid of change. Don't be fearful of change. The whole world is based on change. Everything we do, every technology we have, I mean, even phones. You know, 30 years ago we didn't have, well, we had cell phones, but we didn't have cell phones in the pocket of every single person on the planet. So don't be afraid to change. Because if you are not changing, and actually, I'm going to quote John Burns on this, John Burns said, if you run your business the way you do today that you did 10 years ago, you won't be relevant or even in business 10 years from now. And then Russ Stevens even adds to that, saying, not only do you have to be relevant, but you have to be on point not only with your profitability, but with your product offering and knowing what your customers want, just not what you want to build. So I think it really comes down to you can have the passion to build homes, but if you're not willing to make the change to suit the market, the needs of your buyers, the needs of the environment, you're going to be in some trouble.

Well, thanks so much for being with us, Kevin. I really appreciate your time today and your insights and we really love having you on the episode.

Thank you. I appreciate you.

Cheers. Thank you for listening. Remember to subscribe to Professional Builder Secrets on your favorite podcast platform and leave a review. To learn more about how the systems at the association of Professional Builders can help you grow your building company, visit association of Professional.