122 - Revolutionizing Housing: From Blueprint to Global Impact with FullStack Modular's Roger Krulak

Welcome to Listening with Leaders. I'm Doug Noll, lawyer turned peacemaker. I teach executive leaders how to listen to emotions rather than words so that they can become the leaders everyone wants to follow. And I teach those same leaders how to be authentically present, available, and connected to their families despite being insanely busy. I have learned that we are 98% emotional, and only 2% rational. Learning how to listen to emotions is, in my experience, the foundational skill of life. Stick around to the end of the show, and I'll reveal how you can be on our next guest in 15 to 20 minutes. So let's get started.

Roger Krulak, welcome to Listening with Leaders. You are the founder and president, and I think CEO, of Full Stack Modular. Which is a really interesting, innovative construction firm, and your website is fullstackmodular.com. Welcome to Listening with Leaders.

Thanks, Doug. I really appreciate the invitation.

Absolutely. So, Roger, a little bit of your backstory to get us started.

So I grew up in the construction and development industry, construction and development family, degree in organizational psychology, spent a lot of my early career building, uh, and designing, uh, data centers and all kinds of other commercial construction, um, until the dot-com crash. And then I went back to my knitting at, uh, residential development, uh, and then moved to New York, uh, to, to, um, to work for a large, uh, New York, uh, developer, uh, building, um, multifamily in mixed, mixed-use environments, you know, in conjunction with retail, etc. So have spent a lot of my career on development side trying to fit pieces and parts together that don't necessarily fit, or are slightly, you know, atypical. Like, how do you have a residential building interface with a shopping mall in a way that doesn't feel like the resi— that the residential space is in a shopping mall, those kinds of, those kinds of interesting conversations. And, um, have always been wildly, um, unhappy with things that take too long, waiting in line, uh, at any point, traffic, movies, restaurants. I'm not really interested in that. And so my career has sort of fallen that path. And, uh, And so, uh, from construction development, um, sort of redevelop the idea of, of modular mid to high-rise, uh, solution to our, our housing crisis, uh, in the United States.

Uh, you know, I've always been aware of modular housing, but I've always seen it as being one-story prefab, like, uh, Clayton Homes, people like that. I had never really conceived of the idea that you could do modular multi-story structures that worked.

Yeah, it's, um, it's definitely, um, it is pushing the envelope, uh, or as we like to say with the, you know, sort of internal nomenclature, keeping everything inside the box is a, is a challenge. Um, uh, but, but that's the goal. And obviously the reason for that is We build it in a factory based on theoretical ideas and then bring it to site and then put it in its final place of existence.

What's been the market acceptance of this idea?

Slow, but it's happening. Right now it's on fire. There is more talk and activity than there has been in a long time. At the beginning of the process, I would go into a room and everybody would roll their eyes and say, "I have no idea what this guy's doing here. He's out of his mind." Even people in the business were like, "Tall building? Like, what are you talking about? It's not gonna work." So, and then we built the tallest modular building in the world, which gave rise to the industry, really, I think, in many ways. Not only, it was not the only driver, but it was one of the major sort of touchpoints on why the industry makes sense. And then, you know, they built taller modular buildings in the world. So the idea has and is continually evolving and the industry is continually evolving, but it was definitively, per your comment, a pioneering sort of out of the norm way of trying to address a problem that we all know exists. Like you just open up any newspaper anywhere in the world and there's an article about lack of housing. It doesn't matter where you are, whether you're in San Francisco or whether you're in New York or whether you're in the Caribbean or whether you're in Saudi Arabia or whether you're in Australia, it doesn't matter. It's the same problem. And most people aren't doing a whole lot to try to solve it.

Yeah. And what you've done is developed a system for constructing housing and commercial that is faster, more efficient, and much less costly, if I understand your website correctly.

Yes. I mean, the costly is part of the, you know, taking advantage of the industrialization of the process. So the less costly, at least from a hard cost perspective, is a lot about how you're doing what you're doing and how much repetition there is in the process, not necessarily the product, but the process. That drives costs down. But it is faster, it's definitely higher quality, it doesn't require as many skilled trades, um, and it's, you know, you could work 365 days a year unless, you know, you're unfortunate enough to be in a hurricane. You could pretty much come to work every day, right? Uh, and, uh, and, and it's safe and consistent and, uh, you know, ergonomic and all the things that we seek to do to make productivity, um, of people, uh, and, and other things, uh, more efficient.

Now, what I— the other thing that I appreciated was the safety concerns. I mean, you're building high-rise, that's a dangerous enterprise.

Yeah, not when you're only 24 inches off the floor at all times. Even for a 35-story building, you're still never more than 24 inches off the floor.

I mean, I guess, I guess the The thing that's interesting is how do you get those structures? How do you get the modular structures up that high? And I guess you just have big cranes.

Yeah, it's, I mean, it's, it's the same crane game mostly as, you know, anything else. Our system and the way we've created it even thought about the efficient way to install them. So it has, there's lifting lugs on all of our mods that stay in place and you just hook them up, drop them down. They have a self-sealing facade, goes into compression. It is taking away a lot of the patching process of creating the built environment. It's holistically building it and then literally taking sort of an Erector Set LEGO game and put it all together, all fully distributed MEP and structural, et cetera.

Wow. So what is it that gets you really excited in the morning? You've been doing this for a while.

Yeah, I have.

What gets you excited in the morning?

Look, I believe that it's a problem that has to be solved. And I feel like we live in a country that this should not be a problem. Like, it doesn't make sense that this is a problem with the kind of wealth that we have. And I walk around and see all these people who would like to have housing. Of course, some of the homeless people you see don't want to have housing, and some of them have other issues. But the reality is that there is a chunk of people that is significant that would love to have a place to live, and they don't. And it's absurd. We are completely capable of— perfectly capable of doing that, but we're not. We have to improve. We have to improve. And this is a way to improve. And also, you know, the, the process of the skilled trades, uh, is a wonderful thing that, you know, we, we should as a country be proud of. We should as industries be proud of, but it, but it's not efficient, uh, and, and it's not meeting the needs. So we have to be willing to to shift the process to accommodate the needs, because otherwise we're never gonna get there.

So this sounds like a combination of policy and industry figuring out.

Yeah, I actually, I'm sort of to the point where I'm hoping that our process will affect policy, not vice versa. And we're pushing pretty hard on that. And I hope that it does happen. And I'm pretty hopeful. I, you know, I feel pretty good about some interesting shifts in the idea of how we, how we house, uh, people and, um, and the health of, uh, of, of living space and the value of density and transit, uh, and all the things that we have been talking about and city planners have been talking about for a long time, but now we're, we're living it, right? We're, we're living, we're living the need. And it's, um, and it's so evident. Go to any big city. In the United States and you're going to run into the problem head-on on some corner. And we're really doing a miserable job. I mean, it's miserable.

Don't get me started on it.

Yeah, no, no. I mean, look, and I have friends who are in the affordable housing development space and they're amazing at what they do. And what they do is amazing. It's just not enough.

They can't have enough. I live here in Central California and led an initiative 15 years ago to try to tackle the mental health, homelessness, and addictive disorder problem that we have here in Central California. I talked to the guy at that time that was the CEO of our local housing authority, and I said, how much is it going to cost to house? At that time, it was a relatively low number of people, I think 7,000 homeless in the region. And he said, it's gonna cost us X number of millions of dollars. And I said, and how much do you have in your budget to do that? And he said, I have 100th of 1% of that. I said, well, what are you gonna do? And he said, I don't know, but I don't like what you're doing. 'Cause we were looking at the San Antonio model.

Yeah, no, I mean, it's amazing. It is amazing. The, I mean, I could wax, you know, we could talk about this policy stuff all the time. I mean, the idea that, you know, cities or counties or states have to use their credit in order to create, to enhance the ability to build stuff that has value at the end of the day so that you could build buildings that have no value at the end of the day until they fall out of affordability. I mean, it's just that we've created a construct that is literally our own worst enemy for creating housing.

So what is it that you think that's unique about you that you bring to the table that's allowed for this? I see a sea change, if I may.

And yeah, what, what is unique about me, Roger Krulak, besides being horribly impatient and ridiculously innovative and, uh, and, um, and, uh, you know, and, uh, and being geeky enough to sort of figure out solutions to things that people say they can't figure out solutions to? You know, those are probably the big things I have, uh, I have, um significant energy and passion around what we're trying to do. I believe in it on all levels. I believe in what we're doing, the process by which we're doing it, and I believe in the product that we're building and the need for it. It's interesting, I went to business school and talk about market share and coverage and capacity, I mean, we could quintuple the capacity of building in this country and we would still be millions of units behind. So there's, I like the market, there's some other problems with it, but there is endless need. And so, I get up in the morning like, well, I'm doing good stuff. I'm building housing, I'm solving problems, I'm working in a sort of ESG model by its nature, mostly minority workers, training underemployed people, building housing for people who don't have it, and—

And making a profit.

And making a profit. Hopefully. And I don't know, I think that's pretty good.

I think that's really good. So right now you're located in Connecticut. I think, don't you have a plant in Brooklyn and your office?

We don't have a plant in Brooklyn anymore, although that was our birthplace. We left New York for some of the reasons that I was just speaking about, which is sort of unwillingness to lean in and solve problems. So we left there and we are now based in Hamden, Connecticut. And Connecticut, by the way, is fully willing to lean in and solve problems. You literally can roll up your sleeves with anybody in Connecticut on any day and they want to like, how do we solve the problem? It's pretty encouraging. Now, I don't know that it's always been that way, 'cause I haven't been around that long, but right now it's a pretty engaged process. And we have a factory in Portland, Oregon.

Oh, you're on the West Coast.

Yep, right on the Columbia River. And, and we're building a hotel for Starwood Capital in Sunnyvale, California right now from that location. Yeah. And we're talking to people in Hawaii and up and down the coast of California and a bunch of other places.

So for the Hawaii project, I guess you containerize everything and just ship it over?

Yeah, well, it is itself a container. It's not in a container. So it's a container ship and you load onto a ship and onto a barge, but not a container ship. Just that— this is my geekiness— not a container ship, but actually a bulk cargo ship. And our mods can stack 3 high and be just shipped as are, fully waterproof, etc. They don't have to go into anything.

Wow. And then they end up in the end up at the port and they get lifted off onto a truck and truck to the job site and installed and You got it.

And then everything gets shipped as one thing rather than all the pieces, right?

So there's got to be a huge efficiency in that.

There is huge efficiency. Um, you know, there— the costs— so the, the efficiency is that you're using industrialized construction and that you're doing it in a place that's, you know, not controlled by weather and all those things, and you're doing it in an ergonomic fashion., you know, like all manufacturing, have the ability to have a QA/QC process that, that is very precise, right? That's the, that's all the positives. And, um, and less skilled labor needs shorter periods of time. And the, and the, the countervailing issue is it has to get transported, right? It's a wide load, you know, they're significantly large and significantly heavy. So by aggregating all those things, you have a bunch of stuff that has to get transported in a way that requires some logistical maneuvering. And that's one of the reasons on both coasts we're on the water, because we really believe that water's— if you're water to water, it's very efficient. So if it's, you know, Portland to Hawaii, or if it's Portland to San Diego port, or if it's Portland to, you know, it's very efficient. It can still go on a truck and it can still go if it's under 11 feet, can still go on a train. But, but you have to do that logistics, and you, you want to, you want to have as few mode— yeah, you have one of as few modes of transportation as you can, right?

Right, exactly. Well, this show is called Listening with Leaders. You've been in business for many, many years. Tell me, tell me about the value of listening as you've moved through your career.

The value of listening, uh, I, uh, it's— there's nothing. I actually don't— I don't even— that's such an interesting— it's such an interesting question. You have to listen, um, and you, you don't learn when you're talking. It's, uh, people like, you know, I speak all the time and I love the idea of interacting with people, but, you know, what I really love doing is sitting and listening to people think about what they're doing and to see what I can learn from that. And it doesn't It doesn't matter whether it's a TED Talk or a psychology book or some metaphysical exploration of what's going on in your toe. All of it has value. I mean, I think as I get older, more listening, less talking has become a paradigm.

One of your unique attributes that you mentioned was your impatience. Yeah, you want stuff to happen yesterday. What do you do when you're in a situation and somebody's talking and you start to get impatient with them?

Yeah, that's such a good question. Um, I, I try to listen to them, uh, and I, and I know I, I'd say I probably was more, uh, um, um, petulant and impatient many years ago. I'm a little bit more about— I don't— everybody wants things done now. We're sort of an immediate— I was, I was thinking, I was talking to somebody about like immediate gratification. And people call me all the time to ask me to open a factory in Kathmandu. And they're interested in doing it, and they want to do it tomorrow. And everything is going to happen tomorrow. And so I was talking more about that, sort of impatience. My wife would probably tell you I'm not the best listener, but I am constantly working on that. And I do try to listen. Maybe I don't listen as patiently as I should, but I do try to listen to what others are saying and, and take it in.

Interesting. So, uh, how many people do you have in your organization?

It's about 50-something now. So we moved from New York, which was sad. We had to leave a bunch of people behind and we're building back up. So it's about 50-something and full scale factories have roughly 100 workers and then support team of 25 to 30.

Boy, when you think about how many people it takes to build a skyscraper and you're only talking about 100 workers, I mean, that's pretty significant.

It's huge. I mean, it's, it's— no, there are sub-assemblies that we make, you know, so there's pieces and parts that we still have people that are not directly employed by Full Stack, but the assembly process is like that many people.

So, wow, amazing.

Yeah, so where's the inefficiency of how we've organized construction?

So what's the future?

Hm. Uh, what's the future of our universe, the world, the country?

No, no, let's keep it, keep it narrow. What's the, what's the, how, where is Fullstack, where is Fullstack Modular going?

What's the— so, uh, if I, if I wanted to project, you know, 7 years in the future, my, my hope, um, is to be able to create a system by which people can utilize, you know, industrialized construction. And especially volumetric modular construction, 'cause that's what we do, in a way that it would be a tool by which you could create more housing all over the world. Much like a franchise, although I don't love that word. The idea is that we could provide the design, manufacturing, material support so that Kathmandu can open up a factory if there's enough work to do that. But Fullstack doesn't have to open up that factory. It sounds to me like a licensing opportunity.

Opportunities.

Yeah, so licensing, franchising, I mean, we have all those conversations, but we have work to do, right? So, you know, we now have 2 factories, and my experience in the construction industry tells me that until you have 3 factories, you can't really reality test the effectiveness of what you're doing, because you can bootstrap 2, but you can't bootstrap 3. It's just, you know, it's sort of a Man-to-man coverage doesn't work anymore. You've got to zone the process anyway.

Are you thinking about your next factory being somewhere in the middle of the country?

Could be. Could be in another country. Could be. Yeah. I mean, I kid you not that I do get several calls a day from somewhere in the world that would love to have a factory tomorrow. And that includes most of the states in the United States, but also every country I've mentioned and probably all that I have not.

Wow.

So, as you said, you're on fire right now.

Yeah, the industry is on fire, you know, and as a result, we are getting, you know, as much sort of— and there aren't a lot of people in our space, like the mid to high-rise space. There's lots of people who build wood modular buildings very effectively and incredibly well. Lots of people who do panelized construction facades very well, very mature industry. But the, you know, The steel high-rise, seismically responsive, there aren't many players and it's a newer part of the industry for sure.

Not a lot of competition yet.

It's coming.

It's coming, of course. But you know, being the innovator and being in front is always good.

I don't know, there's all kinds of sayings from very famous people about pioneers and what happens to them, but, uh, but we don't have to go there today.

Well, I understand I'm a pioneer in what I do. Yeah, yeah, you take some slings and arrows, but also, yeah, your point, it's pretty exciting to be on the cutting edge of an idea that can change the world.

Yeah, and to see how it's evolved right now is incredibly rewarding, uh, you know, to see the amount of pickup and interest in it is, um, compared to the, uh, who's this 8-headed, 4-handed figure who walked in here and is telling me something that I do not want to hear about, to like, what can I learn about this and how could we you know, how can we include it in our process?

Oh, that's so exciting. Yeah, that's so exciting. Well, one last question, I'll let you go, Roger. What's one thing about yourself that we would never know unless you revealed it to us?

One thing unless I reveal it to me? Um, I mean, I, I, I love biking and paddleboarding, uh, and it's a— it's one of the many places I find, uh, I find my centers.

Yep, paddleboarding. I was just paddleboarding with my wife up at Shaver Lake, California, up above us, and took our little 2-year-old border collie. We got a, one of those big 15.

Oh yeah, I love taking the dogs, love taking the dogs up to California.

Yeah, it's really fun. Yeah, so yeah, we share that. Well, great. Well, thank you so much for your time today. Really interesting conversation. I wish you the best of luck.

Thanks, Doug, I appreciate it.

I think you can change the world, man.

That's the idea.

Good for you.

Doug Noll here. Thank you so much for listening to Listening with Leaders. If you are a successful executive leader who would like to be on this program, please visit podcast.dougnull.com/podcast. If you got something out of this interview, would you please share this episode on social media? Just do a quick screenshot with your phone and text it to a friend or post it on the socials. If you know someone that would be a great guest, tag them on the social media to let them know about the show and include the hashtag #ListeningWithLeaders. I love seeing your posts and guest suggestions. We are regularly putting out new episodes and content. To make sure you don't miss any episodes, go ahead and subscribe. Your thumbs up, ratings, and reviews go a long way to help promote the show and mean means a lot to me and my team. Want to know more? Go to my website, DougNoll.com, or follow me on LinkedIn, Facebook, and Instagram. That's @DouglasEnoll. Thanks for listening, and we'll see you on the next show.