Technology

Early-Phase Construction Tech Start-Up Heads For A Showcase

Here's Part 4 of our insider's look at a promising next-generation proptech solution's journey from prize-winning student prototype to real-world offsite provider of mid- and high-rise retrofits.

Technology

Early-Phase Construction Tech Start-Up Heads For A Showcase

Here's Part 4 of our insider's look at a promising next-generation proptech solution's journey from prize-winning student prototype to real-world offsite provider of mid- and high-rise retrofits.

January 31st, 2022
Early-Phase Construction Tech Start-Up Heads For A Showcase
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It’s all well enough to speak of Kit Switch as a concept, a hypothetical idea for a business whose time – amid extraordinary need for solutions to housing’s affordability crisis – has come. But make no mistake. Kit Switch, PBC is more than theory. It’s a company, a business, a construction technology start-up.

My teammates and I incorporated Kit Switch as a public-benefit corporation this past September. I will explain the reasons behind this entity choice in next month’s episode. In our prior three episodes, we’ve unpacked our rationale around the opportunity, the market, and the offering. It’s time now to put our business considerations in focus, so that’s what we’ll do here.

Here we are in early 2022. I will take you through what the company has been up to since Armelle Coutant and I committed full-time to it and will explain what we now look forward to.

Before I do so, let me explain how we envision our business model. As always, please remember that we don’t regard these decisions to be set in stone. They’re our starting place.

Business Model

As you all know, a typical construction project involves more than a developer. In fact, most real estate development company business models don’t conform to classic business-to-business nor business-to-consumer models. They’re hybrids.

Real estate developers typically have the lion’s share of the buying power. Consequently, they’re normally the ones with the most incentives to find efficient ways to create housing. For this reason, we decided to sell our kit and services to them.

However, two other stakeholders – the project architect and the general contractor – each play a critical role. Architects influence design and procurement choices. Contractors carry out the installation of our panels on site.

Understanding their role in influencing the sales process is key to our technology’s adoption. This is a priority we will address in 2022.

Our goal is to integrate within this ecosystem. To accomplish this we need to fill exactly the right gaps to simplify others’ jobs, and at the same time focus where we truly add value. Staying true to this principle, a strategy we have taken for now is to outsource manufacturing to already-established partners in the industry who can produce our kits. This approach differs from modular builders who have opened their own facilities.

Image Courtesy of Kit Switch

Updates and Progress

To structure my updates, I would like to follow the Venture Development Framework developed by VentureWell to describe the development of early-stage ventures. VentureWell is a non-profit organization supporting early-stage science- and technology-based inventors driven to solve the world’s biggest challenges. We participated in their E-Team program from which we have received invaluable mentorship.

Image Courtesy of VentureWell

Team & Venture Structures

In order to incorporate the company, we had to structure the team between full-time co-founders on the managing team and part-time co-founders with advising or consulting roles. With this new structure came new processes we put in place, which also helped with onboarding part-time interns.

Technology Innovation

We prototyped with Home Depot supplies, started testing our product design, and refined our bill of materials. We were welcomed into the Autodesk Technology Centers Outsight Network community as a resident team at San Francisco's Pier 9 location. We’ve been making the most of the fantastic on-site prototyping resources. We identified a manufacturing partner for initial projects in California as well as distributors to source materials. Applying the learnings from the Scale For ClimateTech Bootcamp we attended in November, we are currently building working prototypes. Manufactured by and sourced from these partners and distributors, they will undergo design validation tests.

Intellectual Property

More than 250 interviews and thorough industry research have helped us nail down the specific products and related services that are core to our value add. Not only did this inform initial steps to take for IP strategy, but it also clarified team roles and responsibilities by prioritizing milestones.

Market

Industry interviews shone a light on customer discovery and value chains, highlighting the importance of engaging with developers, architects, and builders to get feedback on our product. We are hosting lunch-and-learns for architecture firms, design review sessions, and other online workshops. We are also participating in the Small Business Construction Expo organized by the Associated General Contractors (AGC) during which we will engage with contractors and labor unions. Following what Eric Ries calls “validated learning” in his book The Lean Startup, these feedback sessions will serve as experiments for rapid product iterations in parallel of actual panel installations which take more time.

Operations Model

We have established pilot partnerships with housing experts such as Habitat for Humanity in Los Angeles county.

With these partnerships, we’ve (1) been finding and assessing potential buildings to convert and (2) will later be manufacturing Kit Switch panels for an install in the selected building.

We are also maintaining ongoing conversations with other innovative and mission-oriented housing developers (SF Housing Coalition, Urban Vision Alliance, Fresno Metro Ministry’s shopping mall reuse, Repvblik’s missing-middle conversions, housing authorities, cohousing and trusts, and affordable developers on Project HomeKey).

Resources

We gathered non-dilutive funding through grants and competition prizes in order to support our prototyping costs, customer discovery, and operational expenses. We have surrounded ourselves with industry mentors and are building funding milestones that will help with fundraising for 2022.

Lend a Hand

As I explained before, we are currently looking to test the installation of our panels in different building types and validate their modularity and ease of installation.

Please reach out to candice@kitswitch.com if you are aware of any opportunity in vacant or underutilized buildings around San Francisco (check out this document for more details).

As this article is the second to last of this entrepreneur series, feel free to sign up for our mailing list and newsletter at this link if you’d like to receive quarterly updates from our team.

Next month, I will bring the series to a close by talking about my vision of impact entrepreneurship and reflecting on the personal reasons that brought me to work on Kit Switch.

Join the conversation

ABOUT THE AUTHOR

Candice Delamarre

Candice Delamarre

Co-founder, COO, Kit Switch

Candice Delamarre, a recent Stanford University graduate, is co-founder and principal in Kit Switch, a Bay Area start-up committed to affordable housing by integrating trades in building components.

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ABOUT THE AUTHOR

Candice Delamarre

Candice Delamarre

Co-founder, COO, Kit Switch

Candice Delamarre, a recent Stanford University graduate, is co-founder and principal in Kit Switch, a Bay Area start-up committed to affordable housing by integrating trades in building components.

MORE IN Technology

Homebuilding's Endangered Species: Margins Of Error

A last bastion refuge of new residential construction business practice has reached the brink of elimination as inflation, interest rates, supply chokeholds, and local-municipal delays narrow the fairway.


Price-Vs.-Cost Neutrality Pursuit Drives Builders To Build Smarter

The power to build smarter, and the risks of of not doing so have never meant more to homebuilders' business outlook than they do in late-Spring 2022.


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Innovations in building technology and design, finance, and policy both lower the cost barriers to access, and raise individuals' capability to to make the Dream a reality for more.