 This is startup storefront. The state of California is in a housing crisis and to meet the demand, the state needs to build 310,000 homes every year for the next eight years. However, between the high cost of land, labor and materials, this is a serious problem with no easy solution. So our guest today, Gene Edelman, began to analyze this issue at a high level and started to ask himself, why not use 3D printers to create the homes instead? Azure creates prefab units that are built 70% faster and 30% less expensive than traditionally constructed units, all while using recycled materials. They can be used as backyard studios, offices, and up to five units can be stacked together. In this episode, we discuss with Gene about how these can be used to help with the homeless crisis, how their early adopters were glamping retreats, and why Gene finds strength in coming from an immigrant community. Welcome to the podcast. On today's show, we're talking to Gene, the founder of Azure. Thanks for joining. Sure. For people who don't know, what does your company do? So we 3D print homes using recycled plastic. And we're a startup about to start shipping our first units. What I love about the problem you're trying to solve is obviously it's front and center, specifically here in LA, right? There's a huge unhoused population. As a developer, I always say the problem is not in the spirit of trying to solve the problem. The problem is not in the city trying to expedite permits. The problem has always been, can you get construction costs down? That's always been the problem. And the answer to that is it's very difficult to do that. And so what you're doing is literally, you're literally doing that. And then when you started attacking the problem, what was at least your first step or how did you view it as, okay, is it the materials? What's the thing that sort of changes the equation? Yeah, actually, back to the problem. It's how to do it faster, how to do it less expensive. And the third thing that really bothered me, I've been developing construction pretty much my whole life, is the amount of waste that construction generates, all the environmental impact. But back to your question in terms of how we thought about doing this. We just knew that it's not going to be just a marginal improvement. It's not like doing one trade faster or getting more qualified employees. We had to just think of how to shift the whole conversation. And we started seeing a lot of 3D printing using cement. So that started just about the time we were starting the company. So we love the concept of 3D printing, right? But what we didn't like doing with cement was a terrible for the environment. Cement generates more CO2 than any other construction material. And two is when you do cement, you have a lot of stoppages due to weather, rain, too hot, too cold. So it really, yeah, it solved maybe the problem. And the weather is nice, you can build the walls faster. But it really didn't solve the whole thing. So we just said, why can't we 3D print using plastic and then recycle plastic? And why can't we do it in the factory? Doing it in the factory is much faster, much better quality control. It's contained, controlled, right, exactly. Yeah. And then doing it with recycled plastic, you achieve the cost savings. Because now, basically in that process of we print the entire structure, so there is no wood, there is no metal, there is no roof, there is no waterproofing necessary. So it structurally just changes the whole conversation of this is a way to reduce cost, do it much faster, and then environmentally we are actually positive environmental impact. It takes over 100,000 recycled empty water bottles to print one of our structures. Wow. So the thing that always gets me about what you're working on is I always go, OK, if it were me, what would I think of solving the problem? And so the first part I would personally get stuck at is, where do I even get a 3D printer? You know, does it even exist? Like, we see it on YouTube, we'll see it, we'll read about it in the news. But it's like, how do I, if I was trying to attack the space, how do you get into that? Like, are they readily available? Is it pretty straightforward or like, what's the process there? Yeah, you know, I think in this respect, it benefited us a lot of time during COVID. Just normal conditions, you probably wouldn't have it because we're just so busy as contractors. Yeah. But during COVID, we just, exactly to your point, it's like, all right, this simple concept, we're the 3D printers. Yeah. And so we started looking at and we realized that there are some 3D printers made in Europe. They're not easily available. There are some technologies being developed here that's proprietary that you don't know how they do it. So we literally spent a year looking for, how do we get a printer? And our conclusion was, there is no off the shelf solution. We have to basically build the stack. You know, we have to take a robot from one place, extruder, which is a piece that melts the plastic from another place and then build a platform and how to build it. So we literally, just like people build software and they're taking different pieces, that's how we ended up doing it. Okay. And then in terms of material. Yeah. Where do you source that? You know, not only kind of where do you source, but what do you source? We've printed last year two models. And so now we're starting production now. We're in the third set of material because initially the material that was offered to us was something off the shelf that is used in a lot of automotive in our space type industries. So it has recycled plastic. It has some of the components that we had. And so on one hand it sounded, yeah, it seems like that might work. But when we put it into practice and we started printing, the unique part of what we do is we print very large structures. So 3D printing used extensively in many, many fields, but it kind of starts out with small printers, small parts, you know, medicine. But when you start printing big structures, you don't necessarily need the precision that's required for smaller parts, but you need the rigidity. Yeah, it's kind of, you got to be sustaining the weights. The weights, being able to comply with seismic requirements, hurricane winds, snow loads. So, and then just the whole process of printing when you print large structures. It's amazing how the composition of material affects this layer, what they call layer speed, because the printers can actually print very fast. But you need to have a right balance of the material. Because it's hot, maybe, yeah. Yeah, material needs to be in, on one hand, it cannot be totally, you know, first layer cannot be totally dry when the next layer goes on. On the other hand, it cannot be totally liquid because then the next layer will not stick. So it's that, it's really just a fine balance. It's pretty fascinating. Of, yeah, anyway, so a lot of it is just trial and error. I mean, we're in the third material and we're really, really happy with it because, A, it prints much nicer and we've now accelerated the speed of how quickly we can print by about a third from our first, from our first model. And were you, were you funding this yourself or did you go raise some capital while you're sort of in development? Yeah, so initially we funded ourselves. It was so new. Investors love innovation, but investors don't like, like, totally. Most common question, why hasn't it been done before? Right, right. It must be dumb if no one's done it before. It's either dumb or impossible. Yeah, yeah. So initially, for the first year and a half, we had to do ourselves, you know, it really is. I mean, in the morning, you're all enthusiastic, right? To do it towards the end of the day. My goodness. What are we getting into, right? And that's how it is every day. How do you deal with it? What's your secret of dealing with it? Or do you enjoy it? Do you view it maybe as like a game? No, it really is not a game. Okay. You still have money on the line, right? The way to deal with it, you know, I've started several businesses before, is to have a good support system a Monday. Yeah, it's the family and friends and your business partner that makes it manageable. So you kind of, entrepreneurs by nature are optimistic and enthusiastic, but when you have doubts, you want to have people around you who will say, you know, you always come up with a solution. You're going to think about it. And so, and quite honestly, again, I'm come from where immigrants refugees to this country and kind of immigrant community. I always, I often think that it's really kind of helpful because in the immigrant community, it's not just my media family, my brother, my parents, but but it's more of a friends who are like your long lifetime friends who just believe in you and and don't accept that. Don't ask the question why hasn't been done before. It's like, yeah, they just go, you'll figure it out. They know you'll figure it. Exactly. You'll figure it out is the most common. I hate it. I hate that though. I get that they're like, you'll figure it out. And I'm like, I know, but I hate that because it's because it's like, I have that means I am aware of the pain I have to go through. And I'll figure it out no matter what, but there's still pain or annoyance or whatever. Yeah. You know, I think what was time you kind of learned that if you're just going to stick with it, the most important thing is to show up the next morning. You know, it's amazing how every time at the end of the day, when you say, gosh, I don't know how it's going to work or how to solve it. When you show up, for me, it actually works. It's training up early in the next morning before all the activity. It's just amazing how you sleep on it. You think about it even subconsciously. I sleep very well. So I know I'm not kind of on the one hand, I don't think I'm thinking about the night, but on the other hand, it's amazing where all those ideas came from. That's in the morning. I think for me, it's weird where I'll go to bed. I'll try not to think about it, but then I'll solve it in my sleep or I'll derive some thing, whether it's a new way of looking at it or just like a personal, like, oh, I got this and this is how I'm going to do it. It's weird, but I do it in my sleep. And then I wake up either very motivated or terrified, right? Same here. No, it's kind of amazing how you can go to bed just thinking it's not going to work or don't know how to do it. And then the next morning, I have a terrific business partner and he's also immigrant and kind of also very positive type person. And we'll get together in the morning. It's like, this is easy, right? My goodness, all of this. Yeah. The thing for me, I always think about too, is my mom came to this country with two kids and didn't know the language. And so I always just tell myself, I'll never have that problem, right? And I would say that problem is probably the hardest problem to give any human. No plan, just one way ticket, two little kids, and they have to figure that out. And so that's another thing I tell myself when it gets rough. It's like, I'll never have that problem. So I'm in the bonus to some extent. Yeah. Not on what we never know, but theoretically, that problem will never emerge. All right. So then you figure out the printing component and the printing side of it. And then I imagine at this time, there's so many companies doing it, which is almost a good thing because then there's a lot of energy in the space. There's a lot of different takes. It creates some credibility as it relates to printing or modular in general. Or just, wow, there's a lot of people attacking the problem. From your perspective, did you ever want to focus on, I know you do ADUs is the thing that's on your website, but when you were sort of thinking about the direction to go in, did you consider other avenues or was it ADU, the one that was the simplest? So we actually started thinking about them as homes. That's what we started thinking about them because that's where homes or even apartments. I have a nephew who actually was on your show a few weeks ago. And we sat down with him and showed him the business plan. He said, you guys start a lot simpler. Your go-to market strategy got to be a lot simpler. Okay. And we said, yeah, we do a lot of this backyard studios. They were like 120 square feet. They didn't require a permit. He said, go with that. So we simplified the business plan after that one got together for coffee in Stephen's house. There's so many questions on, I mean, we mentioned printer and material. How do you permit something? New product, how do you get approvals? And so making it a lot simpler and just much more narrow and deep. Right. Sheds don't require permits. Anything under 20 square feet, you can go Home Depot and from Home Depot, there are sheds. Right. Nobody requires permit. Yeah, right. So we really kind of said, all right, we'll start with this shed. We've also done lots of ADUs. So the next level is ADUs. But ultimately, we're going to go vertical and we're going to do apartments and homes. And we already are selling homes. So that's kind of how it started. And amazingly, it's kind of, everybody gets, especially during COVID again, people understood very easily, yeah, I need an office. So there are no interruptions from kids and family and dogs. I can have a conversation. Right, age on room. Yeah. And so that's kind of, so initially the people, I also just, it's amazing how many people think about how many early adopters in real estate because many people get real estate. Right. Yeah. And so people said, all right, how about an art studio? Yeah. How about a music studio? It has a good, yeah. How about just an exercise room or just a place to yoga or just to think? So many, many, I mean, kind of in our mind, all right, that's going to be a backyard office, but people just take the idea and run with it, right? And then, as you said, on our website, we put ADUs. With ADUs, again, kind of what you think about, again, during COVID it was like, I want to have a place in the back for maybe family member, elderly or adult kids who are coming back. But having is a rental income. And for people listening, how much or what's the price you have this thing down to now, square footage and then price? Yeah. For the small 10-by-12 studio, it starts at $26.9. That's crazy. And it looks beautiful, as you saw. It's very practical. You get the tour of the studio, the whole lab, the factory, really, really special, really amazing. And just to give people, in terms of like, if I were to build in a stick environment, wood, framing, all that good stuff, how much would that cost compared? Yeah. No, we've built a number of them, both from scratch and from companies at Prefabum. The same thing would be about $35,000. So it's about 30% less expensive. And it's like, you would never know that it's less expensive. So our initial use, our early adopters for people who thought all kinds of ideas of what to use this, what we thought just an office, what kind of use this is for. But then, when as we got more and more publicity, we did not expect, just to be honest, our initial customers are glamping resorts. Glamping, okay. Yeah, so it's industry is growing tremendously right now. And our first two customers, large customers are getting this. They have beautiful properties in the nature. And they're just putting these down. And they're putting them down. We have one, about 24 of these. One has one beautiful setting. So that's an industry. I'm not a glamper. Sure. Me neither. I prefer a nice hotel, right, when you go on vacation. But now I'm kind of excited to go stay in one of our places because you can just drive and be in the nature and have a very comfortable kind of luxurious unit to stay in. And it's also made from recycled plastic. I feel good about that. Any other cool examples? So the glamping one's interesting. That one's pretty cool. The way I think about real estate, and I've been thinking about this recently because pickleball is like this new craze that everyone's playing pickleball. And so what's interesting about pickleball is it's roughly 1800 square feet for just the court itself. And to basically stripe and maybe add a little civil work to it, it's like maybe 40 grand. That's the cost, maybe 40 grand. And what's interesting about that though is that that 40 grand can net you something like $6,000 to $8,000 a month in income just from people paying to play something like $15 to $20 an hour. And just because of the popularity of the sport. So as a developer, my brain just goes, oh, I could build a two bedroom apartment, let's say for a million dollars and make maybe four or 5,000 a month. Or I can spend $40,000 and make 8,000 a month. It's a no brainer. And so what your solution is doing is pretty unbelievable also. It's like this pickleball model similar in the sense of low cost, high yield. But the intangible is solving the homeless or not the homeless, the housing, the housing issue at large in a very efficient manner, which developers love. Yeah. Well, this is glamping or short-term rentals. Yeah, no brainer. You can literally put a small place and their rental rates for those are like $300 a night. You can spend like $40,000, $50,000. You can get your money back in like three years. And the other beauty of this, of our unit is after you, you don't even have to buy some property. You can install it and three years later, pick it up and move it somewhere else. So we've been talking to some cities and counties about using our units for the homeless, right? Yeah. How are those discussions going? Yeah, they're going, we have over 60,000 homeless in LA County. The new mayor wants to put 17,000 units in a year. I mean, you cannot do it traditional ways. You have to look at solutions like ours. And then you say, well, where are the properties, right? Well, there are many properties that my bill, LAX owns property. Maybe it's under their runway. I mean, under a flightway, but it's property. There are some schools around LA that might be closing there. They sell large properties. So you could again use our units. They look nice so that neighbors will not be opposed as to some of these cheaper versions. And then 10 years down the road, if demographic changes, school can get back in business, you could move our units somewhere else. So yeah, no, we're getting lots of interest. And do you have a waiting list at this stage? What's the... Yeah, I mean, we literally, as we talked before, we've done no advertising. I mean, it's all been through social media. And so we really are attracted to early adopters who follow YouTube channels about some tiny homes and ADUs and small homes. Yeah, for the first couple of months, we're totally booked. But now we have some openings because now people are knowing, they know that we're about to start printing. So they're now going for permits. So there is going to be openings. So on one hand, we kind of have a year worth of orders. You can pre-order, right? You can go to your website and pre-order. Pre-order them, yeah. But we have an opening, and if somebody just on Friday bought two of these studios to go to Nashville to use for office. I mean, they have an office building, but they just love them to have a couple of offices. And do you guys offer financing of any kind? Yeah, on our website, we have a link to a finance company. And then we work for ADUs, specifically a number of mortgage brokers who specialize in ADU financing. So there's ways of getting debt at reasonable prices. I know last time we spoke, you're working on making them vertical also, so stacking of these units. How close are we to doing that? How close are you to achieving that? Probably a year away. I mean, again, we just have about a year worth of production. And as I said, there are windows. If somebody wanted to one unit in a couple of months, we can probably find the window for them to do. We're also raising more equities so that we can have more printers so we can increase our capacity. But realistically, I just had to say no, there's so many people who want them to be stackable. We just need to focus. I mean, the idea for any startup is to figure out your niche, focus, really get it down, get deliveries, get production going smoothly. But the units were designed. And again, we started thinking about them. I used to build two and three-story apartments. So we in our head know how to make them stackable. OK. But all the approvals and extra things. It's a little different. Yeah, about in about a year from now. Yeah. Do you have a dream project at something that you'd really love to be doing? Dream project is to take this globally. We're getting, it's pretty incredible how we get people excited from other part of the globe. We have somebody coming from Canada in two weeks. They want to have distributorship for Canada. We have calls almost every week with somebody from Japan who's the housing shortage and cost is a global problem. And so I don't necessarily have a dream project, a project that I would love to do. But I just I think our technology can be used for solving crises like what's going on now in Turkey and Syria. There's thousands of homes are being destroyed or Ukraine where I'm from. One day that country is going to need to be rebuilt. Just to think again to doing it traditional way just doesn't make sense. So I really I'm more excited about how to take our technology and use it to solve housing shortage, housing problem. That's kind of more of a, you know, than the specific project. It's probably a big enough market for the time being also. So you can plant your flag on that all day. Yeah, yeah. Again, I see a lot of other innovation and I'm hoping that our innovation will spur other people to come up with new ideas. I know that we're not the only solution. The problem is so huge that there is going to be need for other solutions, but it cannot be incremental. I mean, you know, maybe in some other industries, you can make incremental change and reduce the cost a little bit or improve the timing a little bit. With housing, there needs to be a radical change. Yeah, do you have like a dream a dream person to come walk your studio? Maybe like Elon because he went to go see boxable and maybe come see you. I'm more, we have a lot of visitors, right? Yeah, of course. And I love when somebody comes in, they're not a real estate developer. They're not necessarily a buyer. Yeah. But they come in and just, you can see their eyes sparkle. Yeah. Sparkle. Yeah. And it's like, most of it is just for their own use. Yeah, that's so true. And for the people listening, if you can go on our YouTube channel, go there and you can see some of the B-roll that we took at the factory and you can kind of get a sense of what the sparkle that you're talking about and how it derives so quickly. Yeah, yeah. It's pretty incredible. Well, listen, where can people find you? Where can people buy it, follow you? Give them all the good stuff. Sureprinthomes.com. We're on every social media. And yeah, we'd love to, we'd love to hear from people. Coming to a neighborhood near you. Well, Gina, I appreciate you coming on the podcast, brother. I'm excited for you and your company. Yeah. And I love the problem you're attacking and how you're doing it. Well, thank you. Thanks for visiting us and sharing the reward. The first family duo, Steven and his uncle Gene, right here on our podcast. He's done very well. He's done well. For the people listening, the modern animal, that's Steven, that's Gene's nephew. And that episode did really, really well. Yeah, cool. Thank you, brother. Thanks. All right, that's over 100 episodes of Wisdom and Life Changing Advice. What are you waiting for? Join.