#507 - David Lee, Founder of Buildnotes

Introduction to BuildNotes LA

0:00This is The Second Studio, hosted by the Architecture and Design Office fame. My name is David Lee. I'm a partner at the office and host of the show. Today our guest is also David Lee. He's the co-founder of BuildNotes LA. BuildNotes LA is an online marketplace, a broker of sorts, that allows fire rebuild owners and contractors to purchase materials, products, equipment, and other building items at a massive discount with the power of collection.

0:30Essentially, the more people who buy things through their platform, the greater the discount is. And so David talks about his background, how he started BuildNotes, why his particular set of skill set, expertise, and interest happened to align perfectly with this. We also discussed the specifics of how BuildNotes works, how do we buy stuff on there, how the discounts work, how do they solve connecting vendors with owners, with contractors, what's next for BuildNotes, and of course, how we, how we, the community, how we, the community can help them grow and get the word out and be more productive and also allow David to sleep a bit more because I think he's working extremely hard these days on creating this wonderful platform. So I hope you guys enjoy it. And again, I highly recommend you check out their website, which is BuildNotes.LA and sponsors.

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1:53Join the ranks of leading studios using Programma today. Click the Programma link in our show notes to start for free. This is The Second Studio with myself and David Lee. Here we go.

Background and woodworking origins

2:02My background is not in architecture or building, but I am a software developer. And when the fires broke out, I was actually just helping a couple of friends of mine whose homes burned down in Altadena. So two different couples and really just helping them out with basic stuff, you know, buying them clothes and, you know, making sure they have hotels to stay in and everything. But in doing that, I met some of their neighbors who were architects and builders. And very early on, they were really intent on building back and working together and, you know, bringing their resources, their networks, their expertise to bear to try to help folks build back faster and more affordably.

2:49And they asked me to build a couple tools, really. They were just, you know, logistical things that they thought they were going to need in orchestrating this. So a master calendar, a master map of all the projects going on at any given time in the burn zones, right, so that whoever was working could collaborate. And so I built some of those things for them and then sort of started to meet more of the community and have more conversations.

3:21And I realized that really what everyone was talking about was collective purchasing. That was kind of the top topic on everybody's mind, which was pooling people's pooling, pooling the community's money and resources to group purchase or bulk purchase, because everyone could see that there was a lot of overlap in the types of things and materials that everyone was going to need in building back. And so the community was very intent on that, and that was interesting because that topic, collective purchasing and group purchasing, is actually something that I've been obsessed with for over a decade, for a very, very long time.

4:08So it was kind of, it's a random thing to be obsessed with, but I have been. And so I realized this was kind of, this was kind of a chance to try some of the things that I, I had wanted to try for a long time. Wait, so your interest in bulk purchasing, is that from your, your current or previous job? Is that from just a random interest? Like, I'm guessing it wasn't specific to houses. It's not right. It wasn't specific to houses. It was actually, uh, I've actually tried it in a couple different, uh, uh,

4:44areas and industries. I mean, most immediately, uh, you could say, um, I'm an amateur woodworker at best. And so there are some pretty, there are some times where I have tried to build things and have tried to, you know, furniture and make things on a small scale. Only to go to, uh, a lumber yard, say, to find out that the slab that I wanted cost $2,000. Right. Um, and realizing and thinking, hoping that there's a cheaper way to find lumber.

5:21If only, you know, uh, I could place a larger, larger order. And sure enough, if you go to a mill and you place a much larger order, um, you can get that, that slab for, for a lot cheaper. And so that was kind of an immediate pain point for me. But I, even beyond that, you know, it goes further back to sort of, I don't know. I, I, I, I, I've, I've always had a sort of obsession with, um, collective purchasing, collective group action growing up in the Bay area.

5:55Um, that was kind of a big theme of, of, of organizing, right. Um, social community organizing and leveraging, um, collective power to, to do any number of things. Right. Um, for me, I guess I, uh, I've always had an interest in alternative materials or sustainable materials. Um, and the idea that, you know, the sustainable alternative option is almost always more expensive.

6:25Right. Than the, than the incumbent, um, common unsustainable material. And so I, I kind of became obsessed with the idea of figuring out ways to make the more sustainable option, more affordable for people. And that goes for like, you know, everything from clothing, textiles to, you know, plastic cups and, you know, cups made of algae or, uh, you know, organic biogeist.

6:55Um, degradable, um, materials, which, you know, you have a lot of great companies, a lot of great startups who are always trying to bring in these into the market, but they're always, uh, you know, 20, 30, 40% more expensive than the solo cup or whatever. Um, and, you know, realizing that though 20, 30, 40% can seem like a lot, there are ways where if you purchase that amount in, in wholesale amounts, you can actually, um, get that, uh, discount and get that percentage off.

7:28And so I kind of, you know, uh, tried that in a lot of different capacities in different industries. Um, but it wasn't until, you know, uh, this, this tragic event happened where I think the, the collective urge and need was strong enough for people to maybe try something as radical, um, as this. I had no idea you had any kind of background or background in woodworking and an interest in these things beforehand, but now it completely tracks.

8:03Like you're, you're like, you're the guy, like, it makes sense that you would be leading this effort. Um, the, uh, okay.

What BuildNotes is

8:11So jumping right into it, right. I want to hear more of the story, but people are probably wondering like, what exactly is build notes? So how would you describe build notes to the lay person? And let's imagine we have an audience who are obviously architects, builders, and also people looking to rebuild or build in general. Like what, what is it? Yeah. So the simplest way to think about it is a wholesale marketplace that was developed specifically for the LA wildfire rebuild. Uh, we are trying to save folks anywhere from 40 to 60% off on their construction materials.

8:42And we're trying to do that by organizing and enabling larger volume purchases of those materials by helping to coordinate amongst the customers, but also amongst the vendors who have been really receptive and have been really great, um, and amenable. Um, because it really, it really serves their, um, their objectives too. It sounds like a great idea. It also sounds like one of those things that's much more difficult to do in practice because you have it.

9:12I suppose the, the platform and the website and the market is reliant on you corralling together a bunch of different people and trying to make it work. So I'm kind of jumping forward to a specific question, but like, I think one of the questions is, okay, so does that mean as a homeowner, I have to partner with, you know, six other people on my block to secure a discount, which has been discussed many times. And I know, you know, this, like there are all of these, always these smaller communities within your community who are trying to build together using the same GC, the same architect, the same, whatever else to lower the cost.

9:51I have found that historically the chances of that working out in such a tight knit way is, is unfortunately not very high, right? Like one person falls out because they decide not to rebuild another person gets sick, whatever. And pretty soon the whole thing deteriorates. So is the, is that, is that kind of a closeness requirement to get a discount on the build notes.la website?

Horizontal group purchasing system

10:15Yeah.

Horizontal group purchasing system

10:16The way you described it is not how, um, it has to work and how, how our platform works. I think some of the solutions you just described start to tend towards a very vertically integrated approach, um, where you have one GC, one builder, everyone kind of either getting the same plan or some similar plans, um, and limited options for different, um, materials. Our approach, you could think of as horizontal, right? Um, so, you know, it doesn't matter which specific materials you buy from a vendor.

10:49So long as you're buying from the same vendor, um, we've come up with a really simple system because we, we listened to a lot of the approaches that, um, the community first threw out there. And frankly, these are things that I've tried previously, right? So I think a lot of people's conception of a group purchase or a bulk purchase here means literally putting all your money, you know, sending your money to one person so that they can all place an order with the same credit card, have it delivered, um, on the same date to the same address. Right. And then everyone comes and picks it up at that, at that, um, lay down or, uh, uh, you know, someone's yard.

11:24Right. Um, that, that wasn't going to work for a number of reasons. And so we, we kind of stepped back and tried to think of a solution that would work for all parties involved, homeowners, builders slash architects and the vendors. And what we came up with was a pretty simple system, which doesn't necessarily achieve the maximum objective for any one party, but, um, it achieves partial aims for everyone. So what I mean by that is, um, we've gotten the vendors to treat the entire community as, as one group.

12:01So all three burn zones, Altadena, Palisades, and Malibu. If anyone purchases from a vendor in, uh, any of those three areas, they can count towards a volume tier or a minimum order quantity for that vendor. Um, it doesn't matter where you're located, where your address is, it doesn't matter when you purchase within reasonable timeframe. So, you know, we have vendors who are giving a couple of years timeframe for a certain offer or a deal.

12:32Um, and then the vendors can, can then set minimum order quantities for the entire community to hit. So for example, we've got some vendors on the platform for whom, um, if, if five projects purchase from them, uh, in the next two years or next three years, then, um, that will unlock 30% off for the entire community. If 10 projects purchase from them, um, that will unlock 40% off for the entire community, meaning everyone who purchases from that point on after that 10th project hits gets 40% off.

13:11Um, and so it's, uh, it's a really simple format and a really, you know, uh, uh, uh, intuitive goal for the community to hit while also giving the vendors some measure of, uh, commitment or, uh, numbers before. Before they commit to these deeper discounts. Cause initially a lot of people, um, got, got sort of not aggressive about it, but they were, they were like, all right, we have, we have thousands of projects. We're going to, we're going to approach these vendors and we're going to demand that they give us 50 or 60% off off the bat.

13:46Um, and of course you can, you can imagine that was met with a lot of, um, well, with a lot of no responses, right? But if you give vendors sort of an on-ramp, um, where they can gradually increase their, their offers based on traction, they're a lot more receptive to that. And, you know, it turns out some of these, some of these minimum order quantities are, are, are pretty reasonable, right? Given the number of homes that burned down, which is anywhere from 10 to 14,000 across three areas.

14:21Um, they're achievable with, with some amount of coordination. And so that's kind of the format that we, that we, uh, landed on. And so far it's, it's really worked out well for, um, for all parties involved. That's really interesting. So I, I know it's vendor dependent, but just broadly or generally, like what are the minimum quantities that you're seeing? Is it by, is it by a volume of the product? Is it by projects?

14:51Is, how is that quantified? And, and again, what are the numbers that we're seeing? Is it like 10 houses, 20 houses? That's a minimum five, like you said, or. Yeah, exactly. Again, that was sort of another, um, breakthrough that we had, right. Which is the units, uh, the, the units of, of measurement for all these different orders. And we landed on projects, um, which sure enough is really simple for most vendors. Now within that, you know, a vendor might want to set certain reasonable, um, minimums, right?

15:24So if you're talking about, um, you know, windows, uh, a minimum of, uh, uh, uh, 10 windows, for example, as opposed to just one. Right. But still, um, projects generally works for every type of vendor. Cause you have to remember, we have a lot of different types of vendors on the platform. And so it would be a nightmare if every different type of vendor say, you know, lumber, but then cabinets and then appliances or tiling all chose their own vault. You know, uh, volume unit, that would be really hard for the customers to wrap their heads around.

16:00And so we landed on a project, which isn't again, perfect for any one vendor, but is workable for most of them. Gotcha. And the minimum project numbers are pretty good. Like you said. Oh yeah, exactly. It, they, they've, they've been really, they've been very pleasantly, uh, uh, uh, you know, achievable. Um, you know, we're talking about, again, five projects and 10 projects are real numbers that real vendors have given us for 30 or 40% off or 45% off so far.

16:34And so you, you know, you can imagine if we can start to hit, um, uh, those 50 or a hundred or a thousand numbers. Um, we, we, we may be able to unlock even more, but so far, um, so far so good. And so of course, the other question is what happens if I'm the first, you know, zero to five and then it gets to 10, then did I lose out? Cause I was the first and early adopter.

Early bird customer rebates

17:03It's a great question. Um, no, you don't. So we refer to those customers as early bird customers. So if it's a five, say the MOQ is five, then if your customer's one through four, you will pay full price initially. Um, but once that fifth project is achieved, then we've, uh, we've contracted with the vendors to pay back the original customers one through four. So it's a rebate in the form of, uh, the amount that they're owed.

17:33So the discount that they are owed as being part of that group. So, uh, if, if the MOQ is five and you get 30, 30% off. Um, at project five, then those customers one through four can get a rebate for 30% off, um, after the fact.

17:50It's such a cool idea. I mean, you've really taken away all the pain points of collective purchasing, um, in a very intelligent way. And, and I, you know, prior to build notes and meeting you, I would have kind of maybe somewhat pessimistically assumed it would be not possible because you have to get all these vendors on board to agree to that. And that last piece that you mentioned about the, the rebate is such a critical one that allows, that helps encourage customers to buy from the platform, even if you haven't yet hit the five or 10 mark or whatever it is.

18:22I mean, that's a really, really significant thing. I cannot think of any reason why, why we wouldn't purchase through build notes.

18:37Can you, I mean, that's a dumb question to ask you, but like. I don't see it unless, and, and also, by the way, for folks listening, you should go to the website. It's, it's beautiful. It operates well. It's a high functioning website. You know, some people, they create websites and you look at them and you're like, yeah, this feels like you created the website and it doesn't feel professional. Like this is a very high functioning and high performance platform. I feel like too. Thank you. Thank you. Um, so what was your specific question? I don't know. Actually, I was just saying, I don't see any reason why we wouldn't use build notes.

19:09Um, you know what I mean?

Vendor categories and open requests

19:11Is, is, so I guess, I guess the question would be what types of vendors are listed on there right now? Are you trying to grow? Are we like, what products do we have? Is it all the way? Is it all different types of materials? Is it just materials? Is it like HVAC stuff? What are we talking about? Yeah. I mean, maybe I'll, I'll pose the question for you. Uh, there, I think, you know, on the surface, it sounds really great. Right. But in practice, there's all sorts of challenges, um, and all sorts of reasons why, um, in resistance, you, you might meet everything from, you know, builders who maybe have their, their preferred vendors and have long, longstanding relationships and ways of doing things.

19:48Right. That's the one we, when we get a lot, um, to not having every material that everyone's going to need. Right. Um, and to that end, you know, I'll, I'll, I'll say absolutely. We don't have every single material that people, um, might want or builders are used to working with, even though we have 80 vendors and more signing up all the time. Um, I'd say we're really strong in windows, HVAC, um, electrical, electrical panels, um, flooring, uh, these are things that are, uh, can be owner, oh, appliances as well, uh, can be owner bought, but don't necessarily have to be.

20:31But at the very least, they're often, the, the, the client is often given some measure of, um, choice, right? So, so that's worked out well. There are also things that, uh, vendors are often willing to, the manufacturers are often willing to sell direct. So they don't necessarily need to, um, bring on distributors, um, and, and get them involved. Although we also do have some distributors involved too, which has been great. So local distributors who, um, can help, uh, deliver, um, and, and mediate has been awesome, but those categories have worked out really well.

21:09They're all, they also happen to be relatively high margin. Um, and so, uh, yeah, but you know, the ways we've addressed that is, is to build a platform in a very open, collaborative and open source way. We, we, we do not, um, you know, limit the, the categories of materials or the products or the vendors that the community can purchase from. At any time, uh, you as a customer can recommend or request a new vendor or a new product by just posting it to the website.

21:43And we'll do our best to go out and reach out to that vendor and bring them on and say, Hey, you know, we've got, um, a large, uh, quantity of customers in the situation who are interested in your product. Do you want to join the platform? And that's actually how we've gotten a lot of, uh, our vendors, um, especially products in, in sort of neat, neat, um, categories and, and, and, and, and, um, specialties like passive home or all electric, right?

22:15So there's a number of vendors that I personally would have never heard of were not for some homeowners who are really, um, committed to building back passive. And so they brought, um, passive home window manufacturers, um, events and, and installation and all sorts of these cool, um, heat pumps and stuff that, uh, um, you know, we now have on the platform. And, and, and a lot more people are interested in as well.

22:46So, yeah, yeah, yeah. That actually ties back to your, um, your comments about the plastic cups as well. And it's, it's, it's, yeah, it's true though, that, that remark that you made that, you know, one of the silver linings of all of this is that people are now open to, and, and in some cases wanting these quote alter, I've been using the word alternative, alternative methods, uh, or means or materials. To build back better.

23:16You know, that's the phrase. Um, and like I was talking to a contractor friend and we're talking about using light gauge steel for houses and how it's historically been something that widely used in commercial, you know, uh, but for houses like, no, no, no, no. We don't use those for houses. And for those of us who are educated, we're like, why not? Aside from, you know, insulation, which is easily solved. But now it's like, we actually have a client base, uh, a lot of people who are like, yeah, I don't want wood in my house.

23:47And, you know, which would, would kind of make sense. Um, it's, it's phenomenal really.

Team size and previous wine industry roots

23:51So how, how large is the team for a build notes? Um, you know, maybe go even further back. So when did, when did the, when did the idea for build notes really start and gain traction? Was it just you in a room creating this platform at the beginning? Like how did it kick off? Oh, wow. Great question. Um, have you slept since the last, less than, less than normal? Well, no, absolutely. The, the team is small. Um, and for a long time it was, it was largely, largely me.

24:24So, um, you know, we, we, we have some, so it's, it's me and engineer, um, account manager. Um, but, uh, mostly, uh, mostly me and some part-time folks are at this point. Um, we also have some support from the community. So we've got some really great, um, block captains who are pretty much, I consider them team members at this point. They help us, um, with community organizing and, um, you know, uh, uh, uh, liaising with,

24:59uh, various parties and organizations in the community, which has been great. And also vendor relations. Um, but it, it's been relatively slim and, um, yeah. So, you know, this, this company existed before the wildfires broke out. Actually, we, we transitioned into this when I, I realized so many folks were interested in this collective purchasing concept. But prior to that, we actually were a small company focused on, um, logistics and wholesale

25:34purchasing and was actually dabbling in, in, uh, the food and beverage industry. So again, I mentioned, we, we, we tried this concept in a lot of different industries. One of them being, um, food and beverage hospitality, um, where, uh, the concept of what are called group purchasing organizations or GPOs is actually really common. So this is, you can look it up, uh, uh, it's, it's a very common concept where you basically have a lot, uh, a lot of customers in hospitality or medicine or government or education who, uh,

26:11purchase through the same representative who goes out to vendors and, and tries to negotiate better pricing. And so we were doing that, um, with, uh, with some wineries and natural wineries actually where, yeah, it was, it was interesting. Basically, um, long story short, there's, um, an, an interesting system in the alcohol industry called the three tier system where essentially it dates back to the pro, uh, the prohibition

26:42era where, um, the government mandates that, uh, producers of wine are not allowed to sell directly to customers. They have to sell through what's called a distributor. Um, and, uh, there's, you know, God bless the distributors. They're, they're great parts of the community, but there's, there's no real reason why you should have to purchase from them. Right. And they take, they take, you know, anywhere from 20 to 30%. Um, just for handing it off from the, the, the, the, the producer to the retailer.

27:17But it turns out there's, there was a, there's a workaround that was introduced during the pandemic, um, where, uh, you could, customers could actually buy directly from the producer if you, um, if you purchased via phone or internet, um, yeah, it's such a, it's such a good example of an ass backward set of rules. And so it's loophole, um, that emerged, but really the only reason why a distributor would

27:47actually ever want to do that is if you place a large enough order, because they're not going to just take one bottle off the, off the shelves and then package it up, package it up and mail it to you. Right. You have to purchase a large enough quantity. So enter us who are like, okay, that's interesting. You're telling me that, um, a customer could potentially save 40 to 60% off on their cases of wine. If they buy in large enough quantities. Well, we got to figure out ways to aggregate demand here, um, so that we can get enough customers

28:20to purchase large enough quantities to get that savings. So we were doing that in that industry, um, before this happened and, um, you know, kind of, kind of pivoted when, when, when, when the fires broke out. Um, cause it turns out, you know, uh, the, the wine industry while really fun, um, and, um, you know, interesting is not, is not a huge industry and it's also, um, maybe not growing at the rate people would have expected. Anyways, that was a long tangent, but, um, no, I, it, it actually, it makes, not only

28:52does it make sense, but it, it does, it does demonstrate why you've been successful with, with build notes LA specifically, because I think also in these types of types of crisis scenarios, you always have everybody coming up with kind of similar ideas, but no one's able to execute. And there's a lot of reasons for that. There's the, the endurance factor, the intelligence factor, the skillset factor, but also, you know, you, it's hard to get a bunch of strangers together who don't actually have expertise in

29:25X thing, and then try to achieve that thing. Like, it's just really difficult to do. So the fact that you had in, you know, in-depth knowledge about these systems and ways of working and software development, uh, you know, that's, that's why it exists. I'm sure. Um, yeah, I mean, or, you know, or trying it many, many different times and failing, um, that too, yeah, that helps, but you know, I, I, I can't take complete credit there, right? There's obviously a, an enormous will to get this done.

29:58Homeowners want it. If you, if you can save, you know, 20, 30, 40% off on the largest investment most of us we'll ever make, um, that's, that's a very obvious need. Similarly, there's tons of great organizations who are helping get the word out for, for, for a lot of causes. Um, and so there's a great infrastructure that we're tapping into as well. Um, so, you know, really fortunate, um, in an unfortunate situation to have, uh, really great, great, um, community in, in these burn zones.

30:29So when did the website go live? Yeah, that's a good question. Again, in a lot of ways it was live. I kind of just repurposed the code base for this when things broke out, uh, when the fires happened, but I'd say this concept really materialized towards the beginning of summer, 2025, I'd say May, um, in its very early infancy, we had a version of this in May, but then sort of in its

31:01more polished form, I would say, uh, towards the end of 2025. Yeah. It's gone through a couple of iterations. Yeah. And so what do you guys need from the community? Is it people? I mean, I'm sure you need more, more help. Is it connections? Is it knowing more vendors? Like what, what are the things that the community can do? Or listeners can do? So that's a great question. To keep it simple, I would say, um, just distribution, word of mouth, telling your, telling your neighbors,

31:34telling, um, your friends and family, but also, um, you know, some of the folks who have a bigger microphone like yourself, right? Um, some of these larger Facebook, Instagram groups, um, making sure that really everyone in the community has at least heard of us, at least, has at least heard of the concept. Maybe it's not for them. Maybe they don't, um, they're not interested and maybe they're, you know, they're going with a turnkey solution and everything's taking care of themselves. But we think it would just be unfortunate if of the, you know, 14,000 households, um, who

32:07were affected, um, uh, a majority of them had not, uh, at least heard of us. And, and, and this is really important because a lot of folks are literally displaced, right? They're not living in, um, the, the LA area at all right now. They're staying with relatives. They could be even out of state. And so, um, they're not, they're not seeing some of the efforts going on on the ground as they drive through the area. Uh, they may not be aware of all the different Facebook and Instagram and WhatsApp groups going on. So finding ways to reach them, I think is the most important thing.

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33:12weeks over one year between London and California. The program is award-winning, transformative, and crafted for design and architecture leaders with 15 or more years of experience. If you're ready to grow your impact, apply now by tapping the future London Academy link in our show notes. This episode is brought to you by Chaos. They make award-winning design and visualization tools, and they're really pushing the boundaries with AI. Now, AI is shaking up the architecture and design world, and Chaos is taking a responsible approach. Their tools are built to help architects, designers, and visualization specialists to work faster

33:46and explore more ideas without replacing creativity. Basically, Chaos wants AI to make your imagination stronger, not take over. So you get to design with more freedom, create stunning visuals, and stay in control of your work. If you want to see what that looks like, tap the Chaos link in our show notes. Has it been difficult navigating all the various groups and community boards and organizations? Because every time I think I have a handle on the general scope of all these groups, I realize

34:17there's a whole other universe of them. And it's at times, even for me just as a practice, as an architecture office, feels overwhelming. How do you guys tackle that without running around 24-7 meeting? That's all you have to do for eight hours a day is just meeting all these different groups, I feel like. Yeah. You know, in a lot of ways, we are running around 24-7 meeting with these groups. So while we have had success, and at this point, I think enough folks and orgs have heard of us,

34:55a lot of it was brute force. A lot of it was showing up to every meeting every week. I mean, to this day, so I'm part of the Eden Fire Collaborative Rebuild Committee.

Starting with homeowners over builders

35:09So the Eden Fire Collaborative being sort of an org of orgs, an umbrella org in Altadena, where a lot of nonprofits and builders and architects have kind of agreed to meet. It used to be weekly. Now it's monthly. But showing up, right, and talking to all the different organizations who are doing great work in a lot of different dimensions and getting them to spread the word

35:43and just kind of being consistent and available, I guess, has been the key. And, you know, explaining the concept succinctly and enabling people to sort of see how this affects a lot of the different parties and causes involved, right? The more people can save, the more people can, you know, build back. The stronger, you know, the stronger the community is, right?

36:23I mean, it's really like getting the advantages of being a large-scale developer. And one of them is the collective or bulk purchasing, whatever you call it. It's essentially that, but kind of, I don't know what even the word is, kind of like broken down to the individual level. So an individual homeowner can get that value, even if it's a different GC, a different design, different property, all of those things. And it's really phenomenal. Have you guys had any challenges with, like, appearing legitimate to other groups

36:58and companies or vendors and people? Because I guess where I'm coming from is in this, as a result of the fires, there are so many micro startups that would try to do what you're describing or something else to solve, you know, the larger problem. A lot of them kind of fade away. And I feel like also for the established vendors and companies, they kind of, like, they kind of wait and see, like, what shakes out. Like, who's for real? Like, who's actually going to be doing something? And who's not shady also, you know?

37:30Like, so has it been difficult to differentiate yourself and say, no, we are here, we're staying here. This is a legitimate operation. Take us seriously. That's a great question. Um, and now that I think of it, you know, I, yeah, though, that, that has always been a challenge is, is, is, um, a challenge that we've been able, able to surmount, right?

38:00Is, is, um, establishing legitimacy out of something that's relatively small, right? Um, so, so very early on, um, you know, we were, what we're building is effectively what you can refer to as a two-sided marketplace, right? You're trying to, um, uh, bring on the customers as well as the vendors at the same time, which is historically a really challenging problem. And so one strategy we took early on was a little unconventional.

38:34I think most people, if you were to try to start a, uh, a marketplace like this would start with the builders, right? And especially large builders, large developers. So another way to think about build notes is, is really bringing the type of purchasing power that a larger developer typically gets. They get it, they get, this is not new, right? They usually get 40 to 50% off because if you're Lenar or something, um, who builds a ton of homes each year or a commercial developer, um, you're in a different pricing tier. And so how can smaller builders or even smaller household owner households and owner builders

39:08tap into that same pricing tier? Um, and so a lot of people would have thought that we should start, um, approaching builders first because they're the ones who often purchase materials. They're the ones who have the relationships, which is true. Um, but for anyone who's ever tried to sell, um, software or services to, you know, enterprise services to builders, um, you'll, you'll probably, uh, you're probably familiar with how long that

39:38that sales cycle can be. It can be months, um, you know, or, or, you know, half a year before you break through and convince a builder who, um, you know, may not be too receptive to trying new things and has their established ways of doing things. Um, it may not be, you know, uh, too interested in using technology, frankly. Um, so we realized that, um, it was actually homeowners who are a lot more accessible, um,

40:08and who are on these WhatsApp groups and Facebook groups and Instagram groups, um, sharing information with each other, right. Out of, out of desperation oftentimes. Right. And there were a lot more of them. So a lot more, they're a lot, they were a lot more social. They were a lot more, um, you know, uh, uh, um, open-minded. And so we decided to, to, to start with them first and sure enough, once we had a critical massive homeowners, we started getting builders signing up for our platform, um, on their

40:41own without even really, uh, having to knock on doors and show up at all their work job sites with donuts and whatnot. Um, they were coming, they were coming for, um, for the clients, right. They, they're looking for leads. And so now we have the homeowners and the builders, both of which can place orders. Um, and then when you have the homeowners and the, and the builders, um, that's appealing to the, to the vendors. Right. And that's appealing to, um, you know, uh, a lot of vendors who you might've thought would,

41:17uh, uh, you know, wouldn't, wouldn't have given to us the time of day. Now that said, a lot of vendors are also in the community. They, they realize, um, how big of a market and opportunity this is as well. And so it's been useful to, um, to go out to these various builders fairs and to meet folks, um, showing up at events and, and to tell them about build notes as well. That's really smart. I mean, you start with the homeowners and then if they are aware and they understand what build notes is, which I would assume they do if they're logged in there and they have

41:50a profile, then they can be the ones to tell the contractor, I need you to go through this website and, and see if there's discounts. And if, if not, then fine. If there is, then let's, let's use them. Um, cause I mean, at the end of the day, the client is in charge of everything. And if they're, if they're spearheading an effort, then that trickles down to architect, builder, everyone else.

Broker model and soft quotes

42:08Um, so on the platform, then I know it's like a marketplace, but then there's also a kind of communication, social platform component to it as well. Yes. Yes. Um, again, uh, tapping into sort of people's social nature, um, to, to, to sort of build more virality and, and, and word of mouth. So allowing people to, um, to ask questions, ask each other questions. How's your build going?

42:39Um, have you, are you working with this builder? Have you heard of this product, this vendor? What do you think of them? Um, that, you know, lends itself to, to just, uh, the social network, but then you can imagine obviously people giving product recommendations and referring, uh, different products and services to one on one another, which is, you know, the foundation of, uh, a larger group or volume purchase, right. It is, um, sharing, sharing recommendations with each other. So it kind of goes hand in hand.

43:10Um, and yeah. So a couple of random questions. Um, the first is, do you guys have a marketing person or publicist on your team or are you the one handling? Um, yeah, I, I think you're looking at, you're looking at them right now. Um, I have a list of other six people, but I think they're all, I'm looking at all six of them right now. I have a feeling. You're not, it's not all six, but you know, we've got a solid, uh, you know, group of folks

43:41here, but yeah, I mean, you know, it's, it's hard to have dedicated roles here, um, for specific things, um, we're, we're kind of relying on the, on, on, on the, the, um, you know, the elegance of the tool and, um, how it's designed to be sort of part of that sort of distributive mechanism for us. Hmm. Mm-hmm. Gotcha. Okay. Well, if there's any publicist, marketing individual, whatever you call yourselves out there who has

44:12spare time and you want to donate your time, then you should contact them because I think this is where, please, um, and also, are you guys just inundated with new products and vendors being, you know, sent to you from various people? Like how does that intake go? Yeah, that's a good question. Um, we, we've kind of reached an equilibrium now where, you know, we have enough, um, solid vendors on the platform and, and more coming in regularly. But yeah, uh, the intake process has been, you know, um, let's see, uh, kind of leaning

44:53on the community, honestly. And I, and what I mean by that is we've established a lot of relationships with, um, architects and builders in the community. You're, you, you among them, right? That's kind of actually another key to this is having really solid relationships with kind of the key parties. So alternate collective photo catalog, case study 2.0, case study, adapt, um, team Palisades, Eden fire collaborative, all these folks, um, who many of them have, um, lots of expertise in architecture and building.

45:24And so, you know, we'll lean on them to, to kind of check out a vendor and say, you know, Hey, is this a legitimate, legitimate vendor? Have you worked with them before? Um, is this builder, um, uh, legitimate, legitimate as well. And so that's been kind of a key to us, uh, establishing, um, uh, some sort of vetting process. Yeah. Yeah. That makes complete sense. Um, and have you guys had any assistance or help from the large scale developers?

45:55Like you had mentioned, you know, Lenar, that there's a bunch of them, right? That they buy bulk stuff already. It seems like there could be, I don't know how, but some kind of synergy between what you're doing and they're doing. That's a great question. Um, no doubt, um, we, we have spoken to them, spoken to them and, and, um, you know, uh, collaborated there's, that's actually another interesting point here. Um, so, uh, on the one hand, um, you know, there's kind of, I think a couple models that

46:33have emerged for rebuilding in the community, which I think are complimentary. So you have larger developers like Lenar Brookfield, um, who have tremendous capacity. They built thousands of homes across the country every year, and they obviously have the economies of scale with their vendors. Um, but they have, uh, come into the community with turnkey solutions, meaning pre-approved plans and a set of, um, homes that, uh, that you can buy.

47:05Um, and, and they'll take care of everything, right? They'll take care of, um, the design, um, the, the project management and really, um, just deliver you a home, right? Which is great. At the same time, there's a, there's a large segment of the community who really wants to build that custom or semi-custom or like for like. And if you're doing that, it's harder to participate in those, um, turnkey solutions. So that's where we feel like we offer a really complimentary option here where you can, you

47:41can build that custom, but you can also get some of the economies of scale on the material side, at least. So you can work with an architect, a designer, right. Um, or a boutique builder who maybe only builds three, five, 10 homes a year, um, while still getting some benefits of the economies of scale. Um, and so to that extent, we, we've talked with a lot of the larger builders and said, Hey, you know, um, there's a lot of ways where, you know, we're, we're dealing with two

48:12really different customer segments and they're not, they're not really going to overlap much. So what if there's ways we could tap into the economies of scale that, that you folks have, um, and, and really work together to bring your volume to the rest of the community. And even more so, you know, another way that we, we feel we're compatible with some of these large builders is, you know, even if you do go with a turnkey solution, um, they're not

48:44necessarily going to, uh, build and buy everything you're going to want to need before you can move in. So like landscaping or a lot of random, you know, specialty things that you would want to add to your house, um, after the fact, um, to make your house more unique and custom, especially if, you know, you're afraid of having say the exact same home as someone across the street of you. Um, you know, a way, uh, uh, maybe choosing different colors or, uh, again, landscaping,

49:14hardscaping, things like that. Well, we can partner with a larger builder where they do, you know, 80, 90% of, um, the purchasing, but that last 10 or 20%, which can really make your home unique. You can find some of those materials on build notes. And so in that way, um, we can collaborate with them as well. But, you know, uh, so far we haven't had a major collaboration with say the likes of Lennar or Brookfield, even though I have gotten on the phone with Adrian Foley, CEO of Brookfield

49:45and, and, uh, you know, pitch some, pitch some pretty aggressive, uh, concepts and ideas to them. Interesting. Interesting. Yeah. I, well, I hope something, uh, concrete materializes cause I've, there's certain overlap. I think you hire, you, you describe the different client bases, the two of them quite distinctly and well, and they're, they're, they're very different. Um, uh, it's interesting. And my, my actually, uh, perspective is probably skewed because obviously we do custom houses, but, um, a lot of folks are not interested in building something that is a true development

50:22spec, you know, that's been repeated a thousand times already. They don't want that. Um, but you know, it's expensive to do custom, uh, a more practical or I guess technical question is, so if I were to order, so homeowner can order from the website, a, um, a general contractor can, when I place that order, am I paying build notes and then you're buying from the vendor? Like how does that, uh, chain of, of, of, of, of entities work and are you guys taking a

50:54cut? Yeah. That's a great question. So, um, this is another thing that we kind of had to figure out by trial and error. Um, we are not a full marketplace in the sense that you think of say amazon.com, um, where, uh, we, we have full inventory, um, of every vendor and we, you know, we take custody and inventory of the products and ship it out. We're more of a broker. So, um, uh, we, we, we connect you with the, the various vendors.

51:29We have the pro the capability to process payments on our platform, but we actually don't for the most part, um, payment is paid directly to the vendor, um, returns, warranties, fulfillment, all of that is between you, um, and the vendor. And so we do take a commission, uh, after the fact from the vendor, uh, if there's, if there's a purchase, so a small percentage of the, uh, of the transaction. Um, and, and, and, and also it's important to point out that our, our entire platform works

52:04on a quote and invoice basis. So there's no one click checkout, uh, where, you know, amazon.com you, you, you, you, you purchase, uh, the product, it arrives 12 hours later. If you're interested in the product, you or the, the builder, you reach out to the vendor on our platform and you request a quote and they can give you a quote based on all the, uh, uh, the parameters. And if there's agreement, they can furnish an invoice on the platform and you can pay it, uh, with their preferred methods. So, you know, with a credit card, bank transfer, um, through a payment portal of theirs, et cetera.

52:39Gotcha. And it makes complete sense too, because, um, the, you know, a lot of times these products and materials that are being purchased, it's, it's a lot of money. It's not like an Amazon purchase, a normal Amazon purchase. And they're complex in the sense that we would want to be able to talk directly with the vendor and say, okay, what's your, what's the deal with lead times? How do you solve that? Like, there's a lot of more nuanced conversation that needs to be had to order from a vendor that I think most, um, to be honest, clients, they don't think about.

53:10So actually where my mind goes is more like we handle procurement for, for a lot of things. Um, not, not like base materials, but like more like finished things. And some clients are like, I can do that. I'm like, do you have a full-time job? Because if you do know, you can't, you know, it's, there's a lot more conversation with the vendor and sometimes more than their needs than there should be. But that's, you know, that's the nature of it. So it makes sense that you guys act as a broker. You're not, um, I guess another way to put it is that you're facilitating things, but you're not getting in the way. It sounds like.

53:41Yeah. Right. I appreciate that. Um, we're not getting in the way for a number of reasons. The biggest is that we have such a wide range of, of vendors that, you know, uh, one click checkout would not have worked for some of them at all. Like think custom cabinet, um, installer or maybe, um, maybe it can work for appliances, but that's, you know, that's why we had to sort of go with the lowest common denominator there. Um, and you're right. Procurement, um, can, can be, can, can be a hairy problem.

54:13We're working on a lot of ways to streamline that and standardize that as well. Right. Um, you know, kind of cutting down on the, the, the types of conversations you need to have, uh, with a vendor prior to actually getting a quote, because a lot of folks, you know, we found that that's, that alone has, has caused a little bit of friction where you get customers who just, you have customers who just have paralysis because we have so many vendors, they don't know which one to reach out to first.

54:43And they certainly don't want to have a conversation with every single one of them just to get a quote. So we actually came up with, uh, a, uh, a new concept very recently, which we were referring to as soft quotes. And with soft quotes, what you do is you as a customer just upload your plans or, uh, material schedules, uh, which you can redact by the way, remove personal information, um, uh, black stuff out. Um, but the, the vendors are actually not allowed to, to chat with you and message you

55:16until they've given you, um, uh, even a ballpark quote, just a ballpark quote based off the plans and materialists. And we found that that, you know, can be frustrating for people initially, but actually cuts down on a lot of the friction for both parties. So the, the, the vendor has all the information really, they, they would need to make an estimated guess as to what material that customer would want. You know, if they can see the style of home, they can see, let's see the square footage. They can generally see what they're dealing with. They can, they can recommend a product if they have, if they offer multiple of them quote

55:50based on that. And that gives the customer a really easy read on roughly how much does this vendor cost relative to others, right? So I'm talking about a $60,000 window vendor or 120, $140,000 window vendor, because one of those is just not even going to be relevant to me. Right. Yeah. And, and, and that can also save the vendor time when they're quoting, because instead of them having to think that every single quote is final and must be, you know, uh, immutable and perfect, instead they can give a range, um, to the customer knowing that it could change

56:26and knowing that the goal is just to get a rough estimate. Um, and so when they're receiving, uh, tons of, tons of requests for, uh, quotes, they don't have to belabor, belabor each one as well. That's a high five. I mean, that's, um, that's amazing. That is one of the things that really annoys the heck out of professionals as you reach out to vendors and they want to have this, like a long, elaborate, first of all, they want to make a big sales pitch to you. And sometimes it's like, I just need to know roughly the price, like to know what, what

56:56tier we're in here, you know, and that's it. And, and it's interesting. And sometimes the vendors, from what I've seen historically, they're reluctant to do that. And it's quite annoying. I mean, even this is a similar, but different example. Like when a client's looking to hire a GC to do a house, they, and they're asking for a ballpark, how much would cost to build a house like they had before. And GCs are like, well, no, I need full structural and architectural. It's like, guy, I, I understand that you're afraid to give a number because the clients

57:27can get pissed off later off if it ends up being higher. But you have to realize that for people who have never done this, they have no idea if we're talking about 400 a square foot, which I'm skeptical of, or 600 or 1200, like give them something to work with. Totally. Exactly. Yeah. You nailed it. Right. And I think the reason we've been able to convince vendors and parties to do this when normally they're not used to is again, this is not, this is a unique situation, right? It's not business as usual. And the type of volume and numbers you have here, if you learn how to leverage those, you

58:04can really get people to at least try something different. Similarly, you know, getting back to the, your question of legitimacy, right?

58:13You know, not every, not every, everyone's going to get the concept or be amenable to it initially, but some people are, and you can leverage them and lean on them. For example, some, some vendors have understood the concept from day one and they get it and they love it. Right. And they're like, yeah, you know, this is a volume game. We're, we're not gonna, we're not trying to beat around the edges, um, to maximize margins for every single individual project. We're trying to land as many of these projects as possible. Um, because it's a very sort of once in a hopefully generation, uh, circumstance here.

58:46And so you lean on those vendors to set examples and to set precedents and that to then approach some of the other vendors who may be a little more, uh, reticent to try it and be like, well, look, not only are they, um, trying this, but actually they might be a competitor of yours. Um, and, and, and they're all on board. Um, and, you know, another interesting thing I I'll, I'll, I'll mention, which is, which has been really pleasantly surprising is that, you know, some of the, some of the most amenable

59:17vendors have been really great premium and, and luxury and high end vendors, which you may not have expected. Um, but, uh, you know, it works for them, right? The, the, the wholesale is a large, uh, segment of, segment of their business. And, um, you know, when, when you have buy-in from those types of folks, it makes it a lot easier, um, for, for other, other types of vendors and parties to, to really, um, to, to

59:48get behind the concept. Yeah. Yeah. Uh, it's amazing. Um, I know we're at the hour here and we, I want to be mindful of your time. Uh, one kind of last specific question is, so what happens if I, if I have a vendor and

Future expansion and wildfire retrofitting

1:00:03I've, and I've, and I've purchased from them and I didn't know about your platform beforehand.

1:00:10That is, you know, that's not a you problem. That isn't, uh, is not a you problem, an us problem. Um, but hopefully that's a motivation for you and, um, and, and your neighbors to, to purchase up through the platform and, and get everybody else on board, because it would be a shame if, if people, um, built back, um, or didn't buy, or, or, or did build that great and sold because they did the math and it didn't add up and, um, they weren't aware of, of this

1:00:43offering and this platform. So again, we're just trying to, uh, get the word out and lean on as many of the different, um, orgs and, and community members to, to tell everyone else about, uh, uh, the concept. Okay, cool. Last two final questions. One is that I assume this is specific for fire rebuild zones only. And then two, I think kind of already talked about it, but what are the next immediate or bigger, bigger, uh, things on the horizon for build notes? Uh, that's a great question.

1:01:14Um, you know, on the one hand, we are very committed, committed to this community. Um, this, uh, uh, this is our focus right now. We have also gotten some interest from other, um, uh, uh, you know, parties and, and, and use cases. I think one obvious one is more broadly the, um, uh, the, the, the, the, the distribution

1:01:48of fire hardened materials and products and the retrofitting of standing homes in at-risk WUI areas, right? You can imagine there's a lot of those in California. There's a lot of those all across the West coast and frankly, the country, um, where you have a lot of homes who are at risk potentially of, um, of being burned down. And so you actually have a lot of government and civic, uh, um, initiatives that are trying to get people to retrofit their homes with a lot of the same materials that we are encouraging,

1:02:21um, these rebuilders to use. So brand guard vents, um, uh, fire resistant siding, fire resistant decking, um, and all these things, but it's really expensive to retrofit an existing home with those materials. And so, uh, to have a platform that can get you volume discounts on that could, could really put some of these communities over the edge to the point where they actually do commit and they do actually, um, fire harden their homes.

1:02:51And so, um, that's another potential, uh, uh, market, if you will, but really, we also see a lot of compatibilities and synergies with architects like yourself. Um, you know, not only because architects are sort of following along with, uh, uh, the project and the materials that we're recommending. And we actually did a, we, we did a, um, a project with IBHS, uh, the resiliency company and Habitat for Humanity and photo catalog, which was a materials list, um, approved by

1:03:26IBHS that if you build back with these materials, you can meet at least the materials portion of the IBHS wildfire prepared home or wildfire prepared home standard. And we found that a lot of architects found that resource really useful as sort of this dynamic reference that they can use for projects that aren't even necessarily rebuilds. They can use this for their other, um, uh, projects in the LA area or which may be, um, in, in WUI zones. Um, and so, uh, uh, you know, we think we can be really useful to architects.

1:04:01And the other thing is, you know, if you, if you kind of think about the economics that, that architects face is they're kind of under siege at all times by, from a lot of different angles, but by design builders, for example, right? I mean, a project that you are, um, are trying to bid, um, just from a design perspective might end up going to a design builder because they figured out ways to leverage economies of scale,

1:04:31to buy in bulk, to build in bulk, um, and to develop a lot more efficiently. If there was a way for you as an architect to get your client, maybe, you know, again, 20, 30, 40% off on just the materials that could be the difference between the client deciding to go with the design builder or sticking with you, um, and your workflow. So we really feel like there's a lot of synergies with folks who want custom, beautiful, technical

1:05:02design, but also, um, uh, could make, could, could make use of ways to, to get, uh, volume purchases and economies of scale as well. Yeah. I love it. I love it. I love it. I love it. And, um, I think everything you said makes complete sense. It's, uh, it also, I love that it's feathering into, again, the people who are wanting custom houses and there doesn't seem to be a lot of, you know, strings. It doesn't seem like what you're offering comes with a lot of strings. And I know you guys are making an effort to get the word out there and also make it an

1:05:34easy, an easy, uh, process and easy thing to use. And I think you've achieved that. Um, so David, thanks so much for making the time on a, what, what day are we? We typically do these on a Friday. So I think it's a Friday, but it's definitely, it's not a Friday on a, on a Wednesday. It's a Tuesday. Oh God. Okay. Well, on a Tuesday, I think what you guys are doing is great. And anyone listening, you know, definitely reach out to, to their team. Um, thanks again. Please reach out. Thank you everybody for listening to this week. So if you like what we're doing, then please support the show by leaving a review of us

1:06:05in the Apple podcast app. You can also find us on Spotify and YouTube. We have an Instagram, which is second studio pod. Um, so join us on there. We post reels, quotes, guest work images, announcements, all that kind of fun stuff. We also have a hotline, which is two, one, three, two, two, two, six, nine, five, zero. So if you have any questions, comments, or suggestions for guests and topics, feel free to text that or leave a voicemail. And lastly, we have a website, which is second studio pod.com where you can find all, we just surpassed 500, all 500 episodes on there.

1:06:39And, um, again, build notes and David, I think they're doing really phenomenal things. It just makes a lot of sense. And they, they've, they figured it out. They're, they're the ones who actually figured it out and they're in it for the long run. So, uh, visit the website, join their cause, help them out, send vendors, do whatever we can to, uh, help, help them because it's, it's all helping. It's all toward helping, um, you know, the greater community. So that's it for now. Thanks again. Stay tuned for more and talk to you next week. Bye.