“I think a lot of builders are unclear as to what is that niche that they want to serve and do they really understand that niche?“
Host: Hello. This morning, we’re going to speak with Melissa Morman of Built4F. Welcome, Melissa.
Melissa Morman: Thank you. Always good to chat with you, of course.
Host: As always, this is one of the conversations that I always look forward to. I only get them a couple of times a year, often at the International Builder Show, but so excited to have you on our Epcon Experts Podcast.
I wanted to start with, you’re a leader in the industry when it comes to discussing important topics and preparing for what’s next. How did this role evolve for you? Why is it so important to you? How have things come about in your life?
Melissa: I would say, over the course of my career, I’ve been kind of a serial monogamist in terms of I’ve worked with companies, and I tend to think I’m going to mate for life. I do mate for a very long time, and when I’m in that company, I am heads down. That’s what I do.
As you know, with BDX, I was there for over two decades, founding that, running that and that was consuming. It didn’t leave a lot of space for venturing out very much. I was fortunate in that role. Obviously, I got to meet so many fabulous people in the building industry and very connected, but still very focused on BDX.
What I love about my role today is that it’s kind of the giving back stage. It’s basically now working with companies and individuals. Whether that’s consulting with a home building company or an individual, mentoring and coaching them, or investing and working with startups in our industry and helping them navigate their way through. It’s all about helping others be successful. It’s gratifying.
It also allows me to go across multiple different opportunities. It’s not just this one entity that you are focused on. It’s really a great time in my career.
Host: I feel the same way when it comes to this industry. Like you, I was from a technology background. I was with high‑growth entrepreneurial companies, software development companies and the like.
When people think of the home building industry, they don’t often think of technology and things moving forward rapidly. I think this time that we are in the middle of, with the vendors and the people involved, it’s really a great time for that catalyst to be taking place.
Melissa: Yes.
Host: There’s been a lot of changes going on, and anywhere from the technology advances to financing challenges. From your perspective, working in the home building industry and working outside of it, what do you see are the biggest headwinds and tailwinds impacting us for the next few years?
Melissa: As we know, our business is so cyclical, and we’re always shocked as we come in and out of the cycles in a way. We know they’re coming, but we are always jarred.
I always like to say home builders are either so excited and drunk because they’re selling every home they possibly can, but they’re exhausted. They’re drinking in celebration, or they’re panicked because the market has softened and they’re not getting sales, so they’re drinking out of desperation.
These cycles are somewhat predictable. We know they’re going to happen. If we can rise above that a little bit, I think that’s where the magic can happen. We’re always going to have these basically headwinds that we’re facing, either in a great market, or a soft market, or something happening, but we’ve got to keep persevering in spite of that.
When we’re selling like hotcakes, we don’t have the time and energy to focus on moving forward. When we’re not doing so well, then we don’t feel like we have the money to spend. It’s a very short‑term focus, versus recognizing we’ll have these cycles, and we’re always going to have these headwinds.
The tailwinds that are presenting themselves at this point are that technology can really help us, and technology has become more available and affordable. It’s not just the top few builders or the top few companies that can benefit from technology, we all can do that. We can all tap into that.
To me, while the customers and the evolving technology are headwinds that we have to face, the tailwind is that it’s accessible and available, and it’s getting easier in a way once you figure out your strategy. That’s the hard part. Once you figure that out, the how is not quite so difficult.
Host: Market cycles are a great way of saying the roller coaster that is the home building industry. We have the opportunity to work with 75+ Franchise Builders in our network. That’s a conversation that we often have with them. There’s an ongoing saying that in good times and bad, you stop advertising.
When things are great, you don’t need to, and when times are bad, you can’t because you don’t have the dollars. The one way we talk to our builders as businesspeople, and saying, “How can you invest consistently so that when you don’t need leads, maybe those dollars, instead of generating leads, you’re investing in technology so when things are lean, that investment can pay off in that time?”
When you don’t have the extra dollars, well, guess what? When times were good, you took those dollars and invested in things that would help you. Do you agree with that?
Melissa: It’s totally spot on. I think it’s having just a little bit higher view and understanding this roller coaster is going to be happening, but how do you keep making that progress? I think that’s a great way to look at things.
Host: How do you even it out throughout the process? One area when we talk about technology in any industry is the term inflection point. I know I’ve heard you mention that many times as it relates to other industries, from Blockbuster, Netflix and others and such, that we’ve often talked about the inflection point in home building.
When is it going to be a point where the technology advancements impact companies? Those that had been making those investments will be doing well going forward, and those who haven’t may just fade away. I’m just curious as to your thought about an inflection point in the home building industry. Has it happened, or is it still coming?
Melissa: I think it’s both. The nature of technology, it’s such a constant evolving beast, if you will. It is like the frog in the pot. It’s changing every day. We tend to wake up at some point and go, “Wow. When did I suddenly start using five devices? Wow. Suddenly, when did I have to have a digital design center or virtual reality?”
It happens really fast, but we don’t see it. I almost think we’re past the inflection point, if you will, if there was one. It’s just more this constant evolution. I think builders who have been investing over the years ‑‑ and it’s not been all fun and games.
As you know, you try something and it goes OK, or it goes great, or, “Oops. We’ve got to rethink that.” That’s just the nature of technology in today’s world, that you’ve got to constantly be out there and you’ve got to try things. You’ve got to be willing to fail.
You don’t want a catastrophic bet the farm failure, but we’ve got to be willing to do that because the next evolution is right around the corner. If you haven’t invested in the basics and the table stakes, if you will, then you’re not going to be able to get to the next layer of things.
Many builders have embraced it, and they’re on the right path, and they’re going to keep going, and others are still on the sidelines waiting to see if this technology stuff is really important. I think they’re going to be really challenged.
Host: One of the conversations I often have with the technology vendors is they’re trying to sell product in to home builders that are resistant to change.
When I’ve looked at other industries and they’ve had that inflection point where things are never the same going forward, it’s often when the technology company, the vendor, becomes the car builder, becomes the supplier of video product.
I’ve often said when a technology company decides to become the home builder is when the real progress will happen going forward. Instead of trying to change an industry, they just change it themselves, instead of trying to change people who are reticent to change.
Melissa: I think new entrants coming in could be very fascinating. I don’t know if you follow ICON, Jason Ballard, the 3D‑printing guy. We had him at one of our summits way back when because he’s in Austin. We had him at our summit, and he was not known at that point.
He showed up in a hoodie sweatshirt. He’s on a panel. We’ve got a bunch of really accomplished home builder executives in suits, and then we’ve got Jason in his hoodie. Not sure anyone took him seriously, but he’s really going to town.
He is venturing beyond just printing homes and just constructing homes. Whether you like the look of that, or you like that, or whatever, he is changing how we can build, but he’s now actually venturing into AI and using AI to design homes.
He has some really bold claims about what he’s going to be able to do to enable people to design their perfect home. Now, will he be successful? Do not know, but I think there are companies like that.
The other entrants that would be good to watch are the Japanese companies coming into our industry. They tend to view manufactured housing very differently. In the US, manufactured housing has a stigma. But in Japan, it’s not. It’s revered as a superior product, and they do build amazing products.
As the Japanese have come into our industry, they don’t tend to come in guns blazing and rip everything up. They go very slowly, and they’re acquiring quite a few builders. Richmond American was just acquired by Sekisui. Eventually, we’re going to see them bringing those home building methods into the US. I think that will really change some things.
You’ve got Clayton, who traditionally, has manufactured housing. They’re now builder number eight on the top 100 production builder list. While they have not infused those, from what I can tell, they’re not bringing those manufacturer housing practices into production building, but certainly wouldn’t surprise me.
To your point, I think we’ll see other entrants and other entities coming in that may really accelerate some change, and it will apply some pressure to us in the US.
Host: I was at that conference you mentioned, and I did see him in the hoodie, and I did take it very seriously. It’s been one of the things that energized me the last several years as I’ve continued to study things like modular construction, 3D printing. I’m looking at AI, robotics. There’s a lot of things happening.
You go to conferences all around the world. You’ve been at the forefront of what’s happening, not only in the home building industry, but other industries as well. What should we be taking notice of? You’ve mentioned a couple entrants from other countries moving into the US.
They see the problems we have with affordability and the ability to build enough homes, and zoning continues to be an issue. What are you seeing? What are you hearing, not only in our industry, but in others that we should be taking notice of?
Melissa: You’re right. I go to a lot of conferences. We go to the Consumer Electronics Show every year, and we go as press. We get in behind the scenes and a little bit more in‑depth. It’s a little more curated because it makes the International Builders’ Show look tiny. It’s so massive.
I think it’s important that you get out there and experience conferences. We have some great conferences within the industry. IBS is really good to go to. It’s really important. John Galante’s Housing Transformation Summit, which is great, which you and I have spoken at. Really great conferences.
But I do think you have to get outside of our industry to stimulate your thinking. Consumer Electronics Show is really good. The Adobe Summit is good, if you’ve not been to that one. Sometimes just going to AMA conferences, social media focus.
We went to a digital design expo one year just to see the different monitors and ways that you can digitally present information. I think it’s important to mix those in just so you can see what other industries are doing and what’s coming at us. Some of the big trends to watch, and obviously, AI. Everybody says AI, of course.
What’s interesting about AI, it’s actually not its own category anymore. When we went to CES this year, there wasn’t a category for AI because AI is in everything. It’s like, how do you partition it out? Everybody’s got some form of AI or claim they have some form of AI.
Obviously, that’s one that many builders are starting to use. I know that you’re starting to use those things. Use it with judiciousness in a way. We have to be mindful of how we use it, both ethically and legally, but it’s a game changer.
The efficiencies that you can pick up and how fast you can move on different things, yet you can’t just abandon your business to AI. You’ve got to have that human infusion.
Host: You touched on something I think is so important to this podcast series, if nothing else, is there are builders out there who are trying to get incrementally better and learn something here and there.
This podcast is for that niche of builders that are saying, “I really am wanting to make my mark. I want to create a differentiation between my company and another.” It’s giving them the thought and advice, if you really want to move forward in your business, get outside of our industry. Learn what else is going on in the world because then you’ll have a competitive advantage over other builders.
I think this is the time for those builders who are really curious and really wanting to become a big force in this industry, is they’ve got to look outside of our industry. That can be their competitive advantage. Would you agree with that?
Melissa: Absolutely. I think it’s good to learn from other builders and exchange ideas. There’s great goodness in that. But if you really want to break out, you do have to go study other industries, other technologies. It doesn’t mean you flip the switch on all of them.
I’d say 90 percent of it, it’s not ready or you’re not ready, or whatever, but it’s a conscious decision to say, “I evaluated it. I looked at it. I decided not for me, or not at this time,” versus you don’t even know that it exists or that it’s possible.
Host: If you were going to be speaking with a home builder, with that curious growth mindset, intellectually curious builder, and say, “Here’s what you could start doing today that will positively impact your business for the next 5 to 10 years,” what would that be? What would that advice be?
Melissa: I would say start with your customer. At the end of the day, that’s the heart of it. A lot of times, we’re looking at different technologies, and, of course, we’ve got all these constantly evolving tech providers coming at us, buy my app, use my thing, do my VR. It is overwhelming.
We don’t do technology for technology’s sake. You have to study your customer. We tend to avoid that because you’re getting down and dirty.
You’ve got to study them in their natural habitat. You have to listen to them. You have to map it out. You have to intentionally design an experience. Then once you’ve done that, technology often can help that experience. It also can hurt the experience.
We have all spoken with chatbots that if they were human, we’d kill them. They’re not even human. You yell at them and it doesn’t even matter. Just doing technology for technology’s sake is not useful. I think you’ve got to study your customer and that experience, and then you’ve got to script one that’s truly amazing.
You look at Apple and REI. They are amazing brands and they have this cult following. It’s not an accident. It’s not, “Oh, wow. We just got lucky.” No. They intentionally design every step even down to Apple’s product, the packaging. You don’t get a box that’s been crunched or whatever. You get a box that you want to save for no reason.
It’s about curating that great experience, and that’s a lot of nitty‑gritty work to do. It feels very frontline, but it’s absolutely critical. Then once you’ve done that, evaluating these different tech players is pretty easy because they either fit in with that experience that you have or they don’t, right?
Host: Yeah. You’ve got to have the ability to adapt and change according to your audience. We deal with that with our company. We’re primarily building a product that’s popular with 55 plus buyers. There’s generational change happening in that segment. For so long, it’s been Baby Boomers that have dominated the 55 plus space.
But Gen X is moving into that area. The US as a whole, as well as the world, but we’ll just focus on the US, there’s a lot of different generations at play with Baby Boomers, Gen X, Millennials, Gen Z, all with different knowledge, needs, different experiences with technology, how they look to experts, how do they look to each other.
I was just wondering if you could talk a little bit about that, just the generational nuances that are happening in our country.
Melissa: I think a lot of builders are unclear as to what is that niche that they want to serve and do they really understand that niche?
You may say, “Oh I’m an entry level builder.” Great. Awesome. That Gen Z coming in is really different than a Millennial and really different than an older Millennial. If we don’t actually pay attention to their shifting needs and their expectations, we’re going to miss the boat. Not just in how we market and sell to them, but the product that we’re building for them.
They really want something very different in the company that they spend money with, and the product that they’re going to obtain and how that process is actually going to work. I think it is shifting and we’re going to be caught flat footed if we don’t start to build for the market that is actually there.
Host: A point you were just making there is what you build is as important as who you are. They want to buy a home, but they want to buy a home from a company they like, know, trust, respect and want to do business with. I think some businesses have maybe lost touch with that.
Melissa: It just matters. It matters more. I think even some of us who are in the older demographic groups, it matters to us as well. I think we’ve changed as a society but with Gen Z, it really matters that you are a good company and that, not only will you treat me well, but that you’re treating the world really well.
Host: Talking about human experience, I think something that’s probably important to you is just understanding people’s motivations, what makes them feel good often as it relates to mental health.
I think that’s another area that needs to be coming into business conscience of all business sizes and forms in every industry, and in home building as well. I just wanted to know if you want to share anything about that.
Melissa: Yeah. I think as you get older, I think you think more about these things. I certainly didn’t think of these things as much in my early days, my early career. I think in addition to just studying the business, studying the customers, studying the technologies, I think understanding the human element of what we’re all about.
There is this human element with our customers, but also with our compadres, and our associates and the people that we work with. Just being cognizant of healthy treatment of ourselves as individuals, but also for others. I can’t decide if it’s good or bad, but I used to get up at 4:00 in the morning, and I was raring to go, and there’s 50 emails in people’s inbox before they show up.
To me, that was productive and, “Oh, come on, we’re going to push a lot of stuff through.” I don’t know, was that human? I don’t know. Maybe pushing a little too hard. Taking those moments to think about your stress and how you do that.
In fact, I was listening to an amazing TED Talk, and it was Kelly McGonigal. She was trying to answer the question of, does stress kill you? Because a lot of us in this world are successful where we can be a little stressed, and we’re pushing it to max.
What was fascinating, what she found, was it wasn’t stress that would kill you. It was the relationship that you had with stress. If you had high stress and you believed it would kill you, it would kill you. They would study people over 10 to 20 years.
If you had high stress, but you believed it was a motivator and helped you succeed, it didn’t kill you. To me, it’s those kinds of kernels. Now maybe I was looking for justification for my craziness, but I think studying those kinds of things helps you as an individual. It helps as you’re relating to others as well.
Host: I think that’s great. It’s probably looking at things from a viewpoint a lot of builders are not thinking about. They’re just worried about putting that foundation in, building those two by fours, but then there’s the other aspects. There’s the human element, that we’re leaning back.
You mentioned a TED Talk. If you’re talking to a builder and saying, “Here’s where I go for the things I’m learning about.” Is it some podcast? Is it conferences? Is it all the above? Where would you recommend people go that are wanting to gain that competitive edge, want to improve their business, want to scale, grow their business? Where should they go?
Melissa: I think you’ve got to go to a lot of different places. I do personally love TED Talks because, one minute, you can be listening about AI, or listening about magnets and NASA. Then the next minute you’re listening to Brené Brown and empathy, and all of that. I think it’s important to have that variety.
I think sometimes we get so focused on whatever business task we have or the business we’re trying to run, and I get it, you get very passionate about it, and you’re steeped in it, but I think you’ve got to mix it up.
I mentioned CES. I think the Housing Transformation Summit is a great place to go. It’s more intimate and it’s curated. You don’t have to weed through every gazillion booth, but you’ve got these curated topics. I think it’s important to do that.
Then reading, I know it may be a little passé, but whether it’s on your Kindle or it’s actually books, I love book books. A couple of my favorite books these days, one is “The Power of Moments” by the Heath Brothers. You can see it, our audience can’t. Then the other recent one is “Unreasonable Hospitality.”
I don’t know if you watched the Hulu series, “The Bear.” Great, great, great, oh, just awesome. It’s unnerving, but really good. They even mentioned Unreasonable Hospitality, and I happened to have listened to a podcast by the author, and it’s fascinating and it’s amazing.
It goes back to understanding your customer, putting yourself in their shoes, understanding that journey and really meeting them where they’re at. Those kinds of books. They’re a little different than your normal business books or tech books.
Host: That’s wonderful. I thank you. A lot of people have recommended The Bear, so it’s something I’ve got to pay attention to. The same thing with “Ted Lasso,” people were talking about it, finally watch it, it’s one of those things that just impacts your life in ways you never quite expected it to.
As always, this has been a journey with you, Melissa. It always is when I talk with you. I always look forward to it, and I thank you for all the opportunities I’ve had to learn from you throughout the years, and look forward to many to come. I want to thank you for being a guest here on our Epcon Experts Podcast. Thank you again. Look forward to seeing you soon.
Melissa: Yes. Thanks for having me.