Reinventing Construction with Agorus CEO Garrett Moore

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Welcome to the Tacos and Tech Podcast. I'm your host, Neil Bloom, and I am thrilled to have you here on the Tacos and Tech podcast. We interview builders of technologies, of companies, of communities, and we do it weekly, so thanks for tuning in. Every Tuesday, a new interview, and on Fridays, we talk about what's new in the San Diego tech ecosystem from a news perspective. So make sure you join us there as well, too. We also have a tech newsletter that comes out every other week@freshbrewedtech.com you can subscribe to listen to it without further ado.

Enjoy this episode. I'm thrilled to have Gerrit Mohr, co founder and CEO of Agoras, on the podcast today. Hey, Garrett, thanks for joining.

Hey, Neil, thanks for having me. I appreciate it.

Yeah, absolutely. Well, I'm excited to get to know a little bit of your story, especially, like, how you got here today. But you want to give us a quick little overview of what Agoras is?

Absolutely. Agoras is to construction, to technology. What Tesla was to electric vehicles a little while ago. You look at something as an industry that says, hey, hasn't likely changed, and you say Detroit, and you say, yeah, we're still building vehicles the same way we were 50 years ago. That's where we are in construction. So our goal is to bring technology and vertical integration combined with a new business model to a space that hasn't seen a ton of innovation in a while.

Oh, yeah, and it's a hot space, that's for sure. Especially in San Diego. We love our construction tech here, which we're going to dive into a little bit. But how'd you get here? Because I don't think you start. I don't think. You've been a lifelong construction worker, have you?

I have taken a circuitous route to get here. I'm actually. It was a good. It was a good journey, and it taught me a bunch of different things, but I think it was the necessary one for me. So my background is. Grew up in Arizona. I love to play sports. Got to keep playing sports in college, so I was a mechanical engineer at Stanford, played football there. Didn't have the talent to keep playing. And so I thought I'd do what at the. You know, when you're 19, your brain doesn't work, so you think silly things. For some reason in my head, I thought, oh, the military is like sports for adults. If I can't keep playing. So ended up deciding to join the military, became very interested in the special operations community, got picked up to become a SEAL officer, and then spent 12 years deploying and really kind of growing as a young man and a father and a husband. And it was during that time, even though I. The. The entrepreneurial bent from the Bay Area never left, it was during that time that I really got to understand the value of teamwork and operational excellence and dynamic problem solving and stressful, ambiguous environments. And concurrent to that, I'm three deployments deep, three kids deep, starting to build my own house. And I'm. I. I remember vividly exactly where I was sitting. I was deployed trying to track down an electrician to help my wife out because the job site was just stagnating. And I remember at that point going, okay, this is a solvable problem. It's 2015, or whatever it was at the time. We should be able to fix this. And so it was kind of. When I came back from that deployment, said this might be a problem worth leaving the military over and really kind of figuring out if there's a unique edge here. And so my. My journey was kind of a roundabout one, but it intersected two things that I'm very passionate about. One is the built world, and the second one is inefficiencies. And so those two collided at the jump site for me.

I love that. Well, from one mechanical engineer to another, I know the foaming at the mouth to solve a problem that comes for us. Right. Any tool that's in front of us is a Hammer that we can use to solve something for sure. I gotta imagine a lot of your classmates at Stanford didn't end up in the same path that you did. I would imagine they kind of stayed in Silicon Valley building things. Or were there a whole crew that went off to military?

No, that is. That was definitely the path I was taken. And I think to a certain extent, in my more honest moments, and I've told a few of them this, I still feel pretty insecure because I feel like my peer group got a 12 to 15 year head start on me. But I think what was unique about that decade was understanding how to solve ambiguous problems when it changes on a regular basis in a matter of minutes. And I think that skill specifically helped really translate over to the startup world. When you're building an airplane in flight, like, you just have to be able to respond to unforeseen stuff. And I would say that's been especially acute because never in a million years would I have thought in 2018, when I started this, that we'd go through Covid that we'd go through once in a generation labor shortage, the supply chain disruptions. I literally can't even buy a company pickup truck right now to potentially war on the eastern front. Like just a lot of uncertainty in the world. And so it is what it is. It's life. You know, you don't necessarily get to control those circumstances, but it allows for the flexibility to roll with the punches.

Totally. Well, thank you for your military service.

First of all, I have to give my token sub speech, which is I had the greatest job in the world soaking up your taxpayer dollars to do something I absolutely loved. The real hero is my wife, who had to raise three small kids while I got to work, which really looks like spending time with your buddies defending your country. So the privilege is truly mine. The cost was paid by my wife.

I totally understand that. So you said back in 2015, this itch was, was starting to be there of, hey, this is a problem I can solve. How'd you actually go from idea to validated business to starting like, what was.

That path like banging your head against a bunch of walls? Find. You know, it's the old adage about just finding a bunch of ways that it's not going to work. I think so. My co founder and I, Kyle's one of my longtime childhood friends. We grew up together. We've known each other for a really long time. What's interesting is that we built our houses right next to each other. He built his traditionally the stick Built way I built mine modularly. I thought for sure I had cracked the nut and figured it out. And so building off site did not provide for me the benefits that I had hoped. And I think that's an experience a lot of other folks have had. And so I think what we looked at was said, okay, the status quo is not working. Why not? And that led us on a little bit of a trip around the world where we got to look at, well, how do, how do other people build? America probably hasn't cracked the nut on this. And you start to see different materials and different building styles obviously vary all around the world. Well, the one that really caught our attention was in Europe. This method of panelization is really popular. And it's the idea that if you take any complex structure, you can break it down into a series of 2D panels or straight pieces, that the corny analogy I like to use is if, if you're looking at a picture of the Death Star in Legos, when you break it down, at the end of the day there's a bunch of standard little two dimensional pieces, but when you assemble them, it becomes this complex structure. Well, panelization is essentially that. And what was so intriguing to me as I was, we're visiting these factories and we're seeing these job sites in Europe where homes are getting built in days. And these panels aren't just like timber, it's not just like framing. They're, they're fully stuffed with electrical, plumbing, mechanicals, insulation, exterior cladding and siding. So there's a, an oh my gosh factor to it that when we came back we said, okay, well why is this technology not available in the States and why is it not penetrated the market? And our eventual conclusion was that there's something internal to Americans and the way that we like to live. If you could convince every American to live in a 20 by 20 cube, IKEA would have knocked housing out of the park a long time ago. But there's something to our psyche that says, I want to be my own man, I want to be my own family or my own woman. I want to design this house to match my style or the neighborhood in which I live. And when you start to do that, off site construction or manufacturing becomes much more difficult to achieve. And so when we kind of had that aha moment, we realized that this is the perfect application for a cutting edge American based software solution. And so what we started the company with was the idea that if we can inject a really advanced software into the mix, it will allow us to provide customers tremendous architectural latitude and customization. But at the same time, outside the back end of this black box comes standardized panels that can be assembled at the job site very quickly. So roundabout round, a long answer to a short question. But it was a little bit of just being discontented with what we saw and then figuring out how we could take other best practices from around the world and bend them to the American market.

Is this specific to homebuilding or is this all things being built?

So now we're going to go down as kind of a structural engineering rabbit hole, which is, in general, light timber works very, very well for the first three, four or five stories, depending on where you are in the country. You can build skyscrapers out of timber, and there are folks that are doing it. Generally speaking, I would say the best application for our technology is residential construction five stories and below. Got it.

Okay. But got to imagine, yeah, like you said, there's your. There's technology at play here and more legs, I'm sure, down the road for what you're building. But take us through kind of the path to. Now what did that take? Was it all product heads down, building, building the product, or, you know, take us through that early path?

So our path was trying to find a steady, scalable metronome, because in the nature of physical goods, very large physical goods like a home, you don't get the hockey stick inflection points that you might get in a software startup where all of a sudden you explode and now you're at millions of users like it doesn't progress that linear. So tremendous amount of operational discipline and focus on getting the details right. So in that context, we started the company 2018, raised first Angel Capital 2019, did first prototype builds in 2020, and then raised first institutional money last year in 2021. So Blackhorn ventures out of Colorado letter around, followed by Steve Cohen's fund 0.72 on the east Coast, Toyota Ventures, as well as Signia Ventures. And that was a major inflection point saying, okay, the technology works. Product market fit is generally there. How do you start to scale this up? Because if you're going to become a vertically integrated manufacturer, obviously there's no shortage on the market size. It's huge. How do we, as investors or how do you guys as founders, connect the dots to tens of thousands of homes? And so 2021 was largely a focus on manufacturing excellence and scaling up the internal operations to. To be able to ramp and all.

With, like you mentioned, a lot of other things happening in the background for sure. Like Covid, which has completely changed the name, the game for most of the world that we're living in now. Take us through. What was that like building this startup? I mean, like you mentioned before, you're already ready to handle, you know, two ups and two downs every day or maybe even every hour. But we still don't plan for. For something like Covid to happen. What was that?

I'm going to say something that's slightly controversial and I mean it to. To. To healthy regard for the tremendous impact it's had on our nation and on families, et cetera, and lost multiple family members to Covid. So I'm not trying to trivialize it purely from a startup founder who needed to stay focused. It was actually being in a startup was a hidden blessing because all of my bandwidth was getting sucked into the company. And so I didn't have as much free time to get lost in how ridiculous and crazy a curveball this was for all of us. And so in that context, it was. I did not necessarily feel the effects anywhere near like everybody else did, because construction continued to carry on. In fact, if anything, it accelerated. And there were so many other personal and professional things going on at the time. I just kind of. We didn't really think about it. It was like, we gotta survive. Let's just keep pressing forward. I would say at a macro level, a couple things have come from COVID that have obviously changed the game for everybody. And I kind of walk you through how we've tackled them. So one of them is a realization that life can go on in the virtual world. And so specifically to construction. One of the things that's. That we're optimistic about is the idea of remote inspections and for people to start to think about how you can leverage technology to do something you were doing before, but do it in a different way. If you can get, you know, elementary school teachers to teach kids over zoom, we can get inspectors to look at inspecting a nail pattern on the house via an iPhone. Or you can start to. You can start to change the paradigm a little bit. The second aspect is the labor force has completely changed, as all of us are realizing. Remote and hybrid work is not going away, it's here to stay. And I think this has been a huge challenge for us because the labor force is tending to leave construction what was already a trend anyway. I think there's a stat out there that's like, it was something like 70% of the workforce was above 50 and 1% is below 30 years in age. When you look at the trades. And so there's this existential shortage of workers in construction. And so that's only getting worse. As people say I want to change the way I work or I don't want to work on site anymore. And so we're trying to tackle that long term. I think it will provide good tailwinds for a technology based business. But right now, just like everybody else, hiring and building a great team is challenging.

Absolutely. Especially in an industry where little old school, we're face to face really matters. Right. Especially on the customer side. Imagine getting out there, shaking hands with the foreman and that kind of stuff. Like it really does go a long way and, and tougher to do when your team may be scattered. Working from anywhere right now as well too.

Yeah. So the joys of working in the post Covid environment.

Yeah, absolutely. But at the same time, like you said, home ownership and home building has exploded. Right. So there's that tailwind that's saying more people are buying and building homes because maybe they're moving out to the suburbs or something like that. Like what other tailwinds do you have kind of behind you around that?

Yeah, there's a lot. So super, super high level, independent of COVID UN's projecting a billion more people on the planet in the next 13 years. If you look at the way we're currently building, there's absolutely no way to track with that. So I'm fundamentally of the belief that sleeping out of the rain is not going to go out of style. Housing is here to stay. It's not a fad. So how do we tackle this responsibly and thoughtfully, Especially because the building envelope, heating and cooling of buildings, accounts for 40% of global CO2 emissions. So if there's ever an easier way to try and get our heads around sustainability, it all comes back to the way in which you build. Because that is so significant a lever to pull as we look at the plant. So big picture, there's, this is a problem we're solving when you kind of trickle it back down to the US specifically, most of the projections show that we're 5/ish million homes underwater. Which is a large reason why not just in San Diego but all over the country, housing prices are going up significantly. It's basic econ, one on one supply and demand. If there's a continuing increase in population and the supply can't keep up with it, it's like go buy a car right now you're going to pay like $5,000 above MSRP because you can't find a new car. So it's the same thing in housing. Now, given that, just to put some scope to this, if you took the top 100 largest builders in the country, starting with Dr. Horton and Lennar all the way down, you would need the top 100 builders to double their capacity for a decade to get up from the hole we're under. So it's big. And this is not an American problem. And other countries have this. I happen to be living in the United States and this is where the company's getting founded. But I don't pretend to think that Americans have a monopoly on this issue. And so it's. I don't think I fully appreciated the magnitude or the enormity of how big the problem was until you start to study it. And then you realize, oh my gosh, you could have 10 unicorns and you're still like not going to move this. And so one of the other things I'm hugely bullish on is the other folks that are trying to innovate in the construction space. I need everybody to win. This is not a winner takes all. This is not a zero sum game. I'm really excited to see the other ways in which folks are trying to innovate problem solve here because we need all kinds of different solutions. There's different applications and different technologies for different niches.

Absolutely. And I gotta imagine the industry as well, you know, is less receptive in the beginning to change and to accepting tech in ways where they did it manually before. So if everyone's saying this is the change is coming, it helps you as well from just an adoption rate too, correct?

It is. And I think when people ask, what's your biggest competitor? I almost always say the status quo and the same old mindset as has been before. But I'm starting to see indicators of an inflection point. And I think it's raw necessity. Even if you are in your 60s and you've been doing it the same way for the last 30 or 40 years, you are acutely running into a labor shortage. And not just a quantity of labor shortage, a quality of labor shortage. And so I think that's making perhaps an older guard more receptive to new ideas and new innovations because they just literally cannot find the right labor to help them grow their businesses.

Interesting. Well, you mentioned, you know, seeing a trend in more construction tech companies. We've seen it for sure in San Diego, specifically from Vele's and E subs and rakens. And even in greater Southern California, the procores like what's that like being kind of in the same geo even as others? Is there collaboration? Is there? Do you see talent moving from staying within industry but want to go to another company? What's that like?

I think generally speaking the net effect is overall positive because the more people that are looking at construction technology, the better. And so as a prime example, Katera is obviously one of the most famous and I realized that Katera did not go well. A couple of our team is actually from Katera and if for no other reason than it put a giant spotlight on a huge problem and a massive market size, it's a huge win. And so I think what's good about this is being in an industry that is in, that is hot right now and a lot of money is flowing in and people realize the human and financial impact of investing in this area. It's fantastic. On the people side, it's a little bit trickier because I'd be lying if I said we're not at a slight disadvantage from the Bay Area just because the talent density and the number of people that understand tech startups is so much higher there. That said, Covid, I think is causing a lot of people to rethink where they live and so bringing people down south. We've talked about this before, but you and I are obviously tremendously biased. I think we enjoy the preeminent geography in the world and I think San Diego should be one of the hottest post Silicon Valley tech hotbeds because of the weather and the people and the environment. It's just a fantastic city. So when we go out to recruit, pumping up San Diego is usually one of the first things we talk about. It's not a bad place to live.

Absolutely. Yeah. Not a hard sell, that's for sure. But you're right that, you know, working at a startup is a risk and it's not for everyone. And you do have to do an extra sell besides the, you know, hey, here's the solution we're solving. Also here's the, you know, we're still early, we're still just kind of getting started, but take us through kind of where, where you're at now and, and where you're headed. Give us where do you think you'll be like even just a year. Let's not project too far out.

Yeah. So what I can do is I can work backwards from our 2030 goal, which like most startups is pretty ambitious and kind of work through what we need to do to get there. So our vision is to become the largest builder in the country by 2030, which is obviously a huge goal in order to do that. And I, I'm using this a little bit loosely because while we are not building the full house, we're still building a strong component of the rough trades. But that aside, that would, that means we're, we're building 75 or 80,000 units a year. Puts you on par with Lennard. Working backwards from that. In order to maintain that tempo, we have to stand up one new factory every year and lay out one new production line every quarter. So specific to your point about what does the next year look like? We're in the process of standing up our first out of California facility. So we're looking at targeting a launch in Q3 out in Arizona, outside of Phoenix, and then looking at Texas and Florida the respective years thereafter and just continuing to kind of like I said earlier, set a metronome and just be consistent and brilliant at the basics and meticulous about executing the little non sexy details about how do you ship, how do you purchase, how do you load, how do you unload all those things that are kind of not very techy but are absolutely critical for us to scale the business. So that's kind of what the steady march looks like. What's kind of cool about distribution is that one of the innovations we've had is by building as panels and by shipping through our patent pending vertical intermodal technology, you can actually densely pack a truck much, much more. So for example, a typical single family home might only take two semi trucks for us, which is pretty unique. And that's pretty much stacked all the way to the gills, you know, 14ft tall, et cetera. And so this allows for a little bit more condensed distribution. But even with that, if you look at Southern California, Phoenix, Tucson, the major Texas markets and Florida combined with the Atlanta, Tennessee, Carolinas, about half of US construction can be consolidated in five geographic areas. So there's a tremendous amount of building going on in these areas, especially post Covid as people are looking to have a little bit more space, get out of the city, etc. Which is great because then we can focus on those really large markets initially get a solid foothold before we start expanding outside of those.

That's great. You're at the kind of already written the playbook now expand to new Geo phase, which is a big important step. You know, not rinse and repeat because you're always going to be tweaking and iterating and growing for sure. But at least you can hand a bit of the playbook and say, hey, we're 90% copy it. And, you know, mold to the new market, which is an exciting time too.

That's exactly it.

Really cool. Well, look, you're building in San Diego. You're building homes in San Diego. You know what homes need nearby? A favorite taco shop. So do you have a favorite taco place for yourself?

I do, absolutely. And it is quite a contentious issue because everybody has strong opinions on this topic. But my favorite taco shop in the world at the bottom of the 75 in Imperial beach, there's a little dirty taco shop called Don Panchos. To me, it is absolutely the best in all of San Diego. Carne asada burrito. Or maybe if I'm feeling chippy, a surf and turf, nothing can beat it. And I know there. It doesn't mean that there are not other good taco shops in San Diego. I know that's sacrilege. But in a pinch, that is 100% my favorite place.

Oh, you got to have a favorite. It's emotional over everything. So that connection there is super important. We haven't had dumb and punches mentioned. It's going into the taco database as we know.

What. Okay, all right, I gotta ask, what are the other ones that people said were the best?

You know, the ones that get hit the most are the taco stand and Oscars. Those probably get mentioned the most. And they're popular. They're good ones. Not saying that yours is wrong. There is no wrong answer here. Nope, that's for sure. But no, we love, we love a good, unique call out to Don Ponchos.

So I love it.

Thanks. Well, Garrett, appreciate so much what you're doing for building, for not just building a company, but building homes, housing, you know, a billion more people over the next 10 years. We're really excited for you for to continue to grow here and for the community to get to know you guys as well. So thanks so much for being on the pod and sharing your story.

Thank you, Neil. I appreciate it.

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