I’m still amazed by a group of highly intelligent people’s ability to collectively make an incredibly stupid decision.

Individually, these people may be successful entrepreneurs, engineers, architects, developers, attorneys, technology executives, or investors. They have impressive résumés, successful careers, and enough business experience to know that starting any manufacturing company requires customers, capital, management, research, and a solid plan.

Then somebody mentions affordable housing and modular construction, and much of that accumulated business wisdom seems to leave the room.

It Usually Starts With a Very Good Idea

Someone says the country desperately needs more housing for people who can’t afford what is currently being built. Everyone agrees because it’s obviously true. Someone else mentions homelessness, workforce housing, teachers, nurses, first-time buyers, or families living near the poverty line, and soon the group is discussing how traditional construction simply isn’t producing enough affordable homes.

Then someone remembers that he knows someone who works at a modular factory. Maybe it’s a former employee, a cousin, a business associate, or the brother-in-law of someone he met at a conference. It really doesn’t matter because the word “factory” has entered the conversation.

Someone says, “Why don’t we build the homes in a factory?” Another person points out that factories can build things faster. Someone else says automation should make them cheaper. Another starts talking about robotics, and before anyone has bothered to ask what an affordable home actually needs to cost, the conversation has moved from discussing America’s housing shortage to planning a modular factory.

Ten minutes ago, they wanted to help people find affordable housing. Now they want to become manufacturers.

Ten Minutes Later, They Own a Factory

The excitement builds quickly because modular construction looks wonderfully logical from the outside. Put workers under a roof, bring materials to them instead of sending workers to job sites, use repetitive processes, install modern equipment, reduce weather delays, and send completed modules to waiting foundations. What could possibly go wrong?

Someone opens a laptop and finds a video showing modules gliding smoothly through a factory. Another person Googles industrial buildings. Someone begins estimating how many homes could be produced every week. Before long, six highly intelligent people who have never designed, engineered, permitted, financed, manufactured, transported, set, finished, warranted, or sold a modular home have mentally built a factory that can produce 1,000 affordable homes a year.

They haven’t identified enough customers to keep the factory busy. They haven’t secured land for those homes, investigated zoning, studied transportation distances, talked with local officials, priced foundations and utilities, found set crews, or determined who will provide construction financing. They also haven’t figured out what happens when completed modules are sitting in the factory yard because the jobsites aren’t ready.

Most importantly, nobody has asked the question that could ruin the entire meeting: Affordable to whom, and at what finished price?

Why spoil a perfectly good startup with details?

Now We Need Some Intelligent Investors

Once the imaginary factory is running beautifully inside everyone’s head, the group needs money. That means preparing a pitch deck explaining that America has a housing shortage, which somehow becomes the market research supporting the new factory.

The presentation will probably include photographs of housing problems, charts showing rising home prices, statistics about millions of missing homes, and attractive renderings of a futuristic modular factory that doesn’t exist. Somewhere in the presentation will be artificial intelligence, robotics, automation, sustainability, digital twins, advanced manufacturing, or preferably all of them.

By slide 17, homes are flying out the factory door. By slide 22, the company is profitable. By slide 28, the founders are discussing factories number two and three. There may even be a map showing future factories strategically located across the United States.

The only thing still missing is customers.

Fortunately, our group eventually finds another group of highly intelligent people called investors. The entrepreneurs believe the investors understand modular construction, while the investors assume the entrepreneurs do. Neither group wants to be the one asking the uncomfortable questions while everyone else talks about changing the world.

Now two groups of highly intelligent people who may know almost nothing about modular manufacturing are officially off to the races.

Somebody Finally Suggests Calling a Consultant

Eventually, somebody around the table says something genuinely intelligent: maybe we should talk with someone who actually knows the modular industry. That is an excellent idea, but it introduces another problem because consultants in our industry tend to come in three very different flavors.

The first type is the Enthusiastic Consultant. He loves the idea almost as much as the founders do. A new modular factory producing affordable housing with automation and innovative technology sounds exciting, and he immediately begins helping them figure out how to make it happen.

Instead of asking whether the factory should exist, he starts helping design it. He researches equipment, discusses production lines, recommends software, talks about factory layouts, and begins introducing suppliers. Pretty soon everyone is working extremely hard solving problems for a business nobody has proven should exist.

Then we have the second type, whom I’ll call the Cash Register Consultant. This consultant has enough industry experience to recognize exactly what’s happening. He knows the production estimates are optimistic, the startup schedule is fantasy, working capital is probably inadequate, and the sales forecast is mostly wishful thinking.

He also recognizes something else: these people have money.

So why interrupt them? He’ll write reports, attend meetings, recommend equipment, introduce vendors, develop schedules, and revise those schedules when they don’t work. When the original budget proves inadequate, he’ll help prepare another one. If the investors eventually start asking what happened to all their money, he may even recommend another study to determine why.

Some consultants help startups build successful factories. Others simply help startups spend their money more professionally.

Then There’s the Consultant Nobody Wants to Hear

The third consultant can become extremely annoying very quickly because instead of congratulating everyone on their brilliant idea, he starts asking questions. He wants to know exactly who the customer is, what that customer can afford, who owns the land, who will develop it, and what the completed home will cost after transportation, foundation, crane, installation, utilities, permits, site work, financing, sales costs, and builder margin are included.

He wants to know how many homes customers have actually committed to purchase and what happens if first-year production reaches only half the volume shown in the pitch deck. He asks about working capital, factory management, sales, warranty service, transportation, set crews, local zoning, engineering approvals, labor availability, material purchasing, and what happens when finished modules start accumulating in the yard.

Then he asks what may be the most irritating question of the entire meeting: Why do you need to build a factory at all?

Suddenly, the excitement level drops. The experienced consultant, invited for his or her superior industry knowledge, starts to sound negative. He doesn’t understand the vision. He’s thinking like the old modular industry. He isn’t entrepreneurial enough, and he clearly doesn’t understand how technology will change everything.

Or maybe he’s the first person in the room who is actually trying to save their money.

The Best Factory May Be the One You Never Build

Entrepreneurs sometimes struggle to accept this. A good consultant isn’t hired to tell you how brilliant your idea is or how much the industry needs another innovative factory. Plenty of people are willing to provide encouragement for free.

An experienced consultant should be willing to tell you that your proposed factory is too large, your market is too small, your capital is inadequate, your timeline is unrealistic, your management team lacks manufacturing experience, or your customers don’t exist in sufficient numbers. More importantly, that consultant should be willing to tell you those things before you buy a building, order equipment, hire employees, and burn through millions of dollars.

He may suggest starting with 25 homes instead of building a factory capable of producing 1,000. He might recommend contracting production with an existing manufacturer, proving the market before buying a single saw, becoming a developer first and a manufacturer later, or partnering with a factory that already knows how to build what you’re trying to sell.

He might even study everything you’ve assembled, listen to the grand vision, review the projections, push the business plan back across the table, and politely say, “No, thanks.”

That could be the most valuable consulting advice the group ever receives.

Intelligence Is Not Experience

None of this means these entrepreneurs or investors are actually stupid. Quite the opposite. The problem is that intelligence creates confidence, and success in one industry can convince people that it will automatically transfer to another. Sometimes it does, but modular construction has humbled plenty of smart, successful people who thought it would be easier than it turned out to be.

From the outside, modular construction appears deceptively simple. Put construction workers inside a building, establish an assembly line, buy better equipment, introduce automation, build homes faster than site builders, and attack the affordable housing shortage. It sounds so logical that the biggest mystery becomes why the existing modular industry hasn’t already done it.

The answer is that a modular factory isn’t simply a manufacturing operation. It sits in the middle of manufacturing, construction, transportation, real estate development, financing, zoning, building codes, engineering, labor, supply chains, sales, installation, warranty service, and local politics. Success doesn’t require making one of those systems work exceptionally well. It requires making them all work together at the same time.

That’s where highly intelligent people can become highly intelligent stupid people surprisingly quickly.

Gary’s Observation

I love entrepreneurs and people willing to challenge an industry and try something new. Offsite construction desperately needs fresh ideas, new technology, new capital, better processes, and people willing to question why we’ve been doing certain things the same way for decades.

What the industry doesn’t need is another $30 million factory built around a PowerPoint presentation, a national housing-shortage statistic, and six smart people convincing one another that because affordable housing is desperately needed, buyers will automatically appear when the first module rolls out the door.

Before deciding to build a modular factory, find someone who knows enough about this industry to try to talk you out of it. Ask that person to attack your assumptions, your market, your numbers, your production estimates, your management plan, your working capital, and especially your definition of “affordable.” Don’t hire that person to validate your dream. Hire them to find out whether the dream has any chance of surviving reality.

If the idea survives that conversation, you may actually have something worth pursuing. And if the consultant looks across the table after hearing the entire plan and says, “No, thanks,” don’t immediately start searching for another consultant who will say yes.

You may have just received the best—and cheapest—advice of your entire startup.

Every so often, a factory announcement comes along that makes me stop and read it twice. Cavco Industries’ decision to build a 616,000-square-foot manufactured and modular home factory in El Mirage, Arizona, was one of those announcements.

This isn’t an expansion added to the back of an existing plant, nor is it an abandoned industrial building being converted into home production. Cavco is building a new, fully temperature-controlled manufacturing campus from the ground up on approximately 39 acres in the western Phoenix metropolitan area. The company broke ground earlier this year; the walls are now going up, and production is scheduled to begin by mid-2027.

When a company with Cavco’s experience commits to a factory this large, the interesting question isn’t simply how many homes it expects to build. The more important question is what Cavco sees coming in the Southwest that convinced its leadership and board this project makes sense.

More Than a Bigger Version of an Old Factory

Cavco’s public announcement says the El Mirage facility will produce both HUD-code manufactured homes and modular single-family homes for Arizona and surrounding states. It will begin with one production line, but the building is being designed so the company can add a second line later for what it calls “modest additional capital.”

That is a carefully calculated way to approach expansion. Cavco can bring the first line online, train the workforce, refine material flow, test market demand, and correct problems before committing to full production. If demand develops as expected, much of the second-line infrastructure will already be in place.

The planning documents submitted to the City of El Mirage reveal that this is more than a giant empty building with a conventional production line running through it. The proposed campus includes a 504,000-square-foot main manufacturing building, four material-storage structures, covered storage areas, two chassis shops, administrative offices, employee facilities, and outdoor staging for finished homes awaiting transportation.

Those components total approximately 640,350 square feet, somewhat more than the 616,000 square feet in Cavco’s public announcement. That difference may reflect a design revision or simply how covered storage and accessory buildings are counted, but either number makes this one of the most significant new factory-built housing projects in the country.

The factory plans describe two mirrored production lines sharing a central cabinet shop, mill shop, and countertop fabrication area. Cavco also intends to use CNC equipment, welding fixtures, overhead cranes, paint booths, centralized compressed air, utility trenches, and dust and fume collection systems. Onsite chassis fabrication and component production should give the company greater control over quality, scheduling, inventory, and costs.

This sounds less like Cavco is building a larger version of yesterday’s manufactured home factory and more like it is trying to establish a new production model for tomorrow.

A Factory This Large Needs More Than Demand

Cavco expects to employ approximately 228 people when the plant opens. Employment could eventually grow to 455, although the planning documents indicate about 372 employees would be onsite when both lines are operating at the expected level.

That is a substantial workforce to recruit, train, and retain in one of the country’s fastest-growing metropolitan regions. The factory may be automated in important areas, but homes will still require skilled people who understand framing, electrical work, plumbing, roofing, cabinetry, finishing, quality control, material handling, engineering, and production management.

The labor question may prove almost as important as the housing demand question. A state-of-the-art building does not automatically create a state-of-the-art operation, especially during the first year when equipment, processes, suppliers, supervisors, and new employees are all learning to work together.

Then there is downstream capacity, which rarely gets as much attention as the factory. More homes leaving El Mirage will require more retailers, developers, land, financing, permits, transporters, set crews, foundations, utility connections, and local jurisdictions willing to accept manufactured and modular housing.

Factories can increase production much faster than communities can approve subdivisions or install infrastructure. Cavco may be able to build hundreds or even thousands of additional homes, but those homes still need somewhere to go when they reach the end of the production line.

What Market Is Cavco Preparing to Serve?

The Southwest continues to struggle with housing affordability, population growth, land costs, and a shortage of attainable entry-level homes. Arizona, Nevada, New Mexico, California, Colorado, and parts of Texas all present possible opportunities, but they are not one uniform market.

Each state brings its own transportation distances, zoning restrictions, energy requirements, labor conditions, financing challenges, and attitudes toward factory-built housing. A home that works competitively in rural Arizona may face an entirely different set of costs and approvals in suburban California.

Cavco has said the plant will produce both manufactured and modular single-family homes, which gives it more flexibility than a factory committed to one product category. The HUD-code side can serve retailers, land-lease communities, individual homebuyers, and developers. The modular side could potentially serve subdivisions, build-to-rent projects, workforce housing, infill lots, and other developments requiring state or locally approved construction.

What Cavco has not publicly disclosed may be more interesting than what it has announced. We do not yet know the expected number of floors per day, the intended product mix, the amount of automation, the investment required, or whether production will supplement or eventually replace capacity at older Cavco facilities in the region.

We also do not know whether large developers, communities, retailers, or institutional buyers are already helping support the business case. Companies rarely build a factory of this size based solely on the hope that individual buyers will appear after the doors open.

Cavco reported record annual production of 34,745 factory-built modules in its latest fiscal year, a 7.1% increase over the previous year. That suggests the company is expanding from a position of operating strength rather than trying to rescue a declining business. Still, adding capacity is one thing; feeding it with profitable, repeatable orders is another.

A Test of the Entire Housing Delivery System

The El Mirage factory could become an important test for more than Cavco. It could show whether the manufactured and modular housing industries can finally connect modern production capacity with the land, financing, zoning, transportation, installation, and development systems needed to deliver homes at scale.

For years, we have heard that offsite construction is the answer to America’s housing shortage. I believe it can be part of the answer, but the industry sometimes talks as if building more factories automatically produces more affordable housing.

It doesn’t. A factory produces the home, but affordability depends on the entire chain from the first engineering drawing to the day the homeowner gets the keys.

If land prices, impact fees, site work, transportation, financing, zoning delays, utility costs, and installation expenses keep climbing, even an extremely efficient factory will struggle to deliver the affordability promised in the press release. Cavco’s challenge will be to make the new plant more than a production achievement. It must become part of a coordinated housing delivery system.

Gary’s Observation

The size of Cavco’s El Mirage project tells me that this is not a casual expansion. A 616,000-square-foot facility with room for two production lines, onsite chassis fabrication, central component shops, advanced equipment, and nearly 500 potential employees represents a long-term wager on factory-built housing in the Southwest.

Cavco may be anticipating stronger demand from developers, changing zoning attitudes, wider acceptance of HUD-code homes, growth in modular subdivisions, or financing programs that have not yet reached the broader market. It may also believe many older factories simply will not meet future expectations for production efficiency, employee working conditions, quality control, and product flexibility.

The factory itself is impressive, but its real importance will not be measured in square feet. It will be measured by how many homes it can produce profitably, how quickly those homes reach prepared sites, and whether families can actually afford the final delivered price.

Maybe Cavco simply believes the Southwest needs a lot more homes. Or perhaps it knows something about the next stage of factory-built housing that the rest of us are only beginning to see.

The first article in the “In the Beginning” series from Offsite Innovators

There are moments in every industry’s history when someone proposes an idea so unconventional that most people dismiss it before it has a chance to prove itself. Looking back years later, those same ideas often seem obvious, even inevitable. But at the time, they were anything but.

The offsite construction industry has been built on those moments. Long before robotics, artificial intelligence, digital twins, or automated production lines, there were innovators who looked at the way homes were being built and quietly asked a simple question: “Why does it have to be done this way?”

This new Offsite Innovators series, In the Beginning, looks back at those people, companies, and turning points that changed how America builds. Some became legendary. Others faded into history despite remarkable accomplishments. Each has something to teach today’s entrepreneurs, factory owners, engineers, and innovators.

There’s no better place to begin than with the company that convinced tens of thousands of Americans they could buy an entire house from a catalog.

A Retailer, Not a Homebuilder

When people hear the name Sears today, they usually think about department stores, Craftssman tools, Kenmore appliances, or perhaps memories of flipping through the Christmas Wish Book. Few realize that between 1908 and 1940, Sears sold more than 70,000 complete homes that were shipped by railroad to customers across the United States.

It sounds almost unbelievable today, but in the early twentieth century it wasn’t nearly as far-fetched as it appears with the benefit of hindsight. Sears had already built one of the most efficient mail-order businesses in the country. Farmers and families living in rural America depended on its enormous catalogs to purchase everything from clothing and furniture to farm machinery and household goods. If the company could successfully deliver thousands of different products across the nation, someone eventually asked an obvious question.

Why not houses?

That question didn’t come from a homebuilder. It came from executives who understood distribution, logistics, customer service, and manufacturing. Sears wasn’t trying to reinvent residential construction. They were simply looking at their existing strengths and asking how those strengths could solve an even bigger problem.

The People Behind the Vision

Although Richard Warren Sears laid the foundation for the company’s mail-order empire, the Sears Modern Homes program is generally credited to Frank W. Kushel, who recognized that America’s growing railroad network created an opportunity unlike anything the housing industry had seen before.

Kushel understood something that many entrepreneurs still struggle to recognize today. A revolutionary product rarely succeeds because of the product alone. It succeeds because the systems surrounding it finally make the product practical.

Rail transportation had matured. Manufacturing techniques had improved. Customers already trusted Sears with major purchases. The timing was finally right to combine those pieces into something entirely new.

That timing proved to be just as important as the houses themselves.

Designing Homes for a Railroad Boxcar

One of the biggest misconceptions about Sears Kit Homes is that the company simply bundled together lumber and hardware, then hoped buyers could figure out the rest.

Nothing could be further from the truth.

Creating a Sears home required architects, engineers, draftsmen, and manufacturing specialists to work together in ways that were remarkably advanced for their time. Every floor plan had to be attractive enough for families to proudly call home while also being engineered so every component could be manufactured efficiently, packed into railroad boxcars, shipped hundreds or even thousands of miles, and assembled with predictable results.

Each board was cut to size before shipment. Components were labeled. Windows, doors, trim, roofing materials, flooring, hardware, nails, and fixtures were all carefully inventoried before leaving the warehouse. Detailed instruction manuals guided local carpenters and homeowners through the construction process.

In many respects, Sears wasn’t simply designing houses. They were designing an entire building system.

That distinction still matters today.

Convincing America to Trust the Process

Selling a house through the mail wasn’t Sears’ greatest achievement. Convincing people to trust the idea was.

Imagine opening a catalog in 1915 and seeing a complete home offered alongside kitchen tables, work boots, and farm equipment. Even if the price seemed attractive, most buyers naturally wondered whether such an ambitious purchase could really work. Sears recognized those concerns long before customers voiced them.

Instead of simply advertising affordability, the company focused on removing uncertainty. Homes arrived with pre-cut lumber that eliminated much of the measuring and cutting normally performed on site. Every shipment included carefully organized materials lists and construction instructions. Sears even introduced financing programs that allowed many middle-class families to own homes that would otherwise have remained out of reach.

Looking back, it’s easy to admire the engineering. But the real innovation may have been something less visible.

Sears systematically removed every reason customers had to say no.

Lessons That Still Echo Through Offsite Construction

More than a century has passed since the first Sears Modern Home was delivered, yet many of the same challenges continue to define today’s offsite construction industry.

Factories still spend enormous amounts of time educating buyers about unfamiliar building methods. Transportation remains one of the industry’s greatest logistical challenges. Financing, insurance, public perception, local acceptance, and regulatory differences continue to influence whether innovative housing systems succeed or struggle.

The technology has changed dramatically, but human nature has not.

Customers still want confidence before they embrace something new. They want to know that the product has been tested, that the company will stand behind it, and that the process is dependable from beginning to end.

Sears understood that long before anyone used terms like “customer experience” or “innovation adoption.”

Their greatest accomplishment wasn’t inventing factory-built housing. Others had experimented with prefabrication before them, and competitors such as Aladdin Company would become formidable rivals. Sears’ lasting contribution was proving that industrialized homebuilding could become mainstream when backed by organization, quality, and trust.

That may be the most valuable lesson they left behind.

Gary’s Observation

One of the reasons I wanted to begin this series with Sears is because I see so many similarities between 1908 and where our industry finds itself today.

Every week I hear about another startup with an exciting product, a new manufacturing process, an innovative transportation system, or software that’s supposed to revolutionize housing. The enthusiasm is real, and in many cases the technology truly is impressive. Yet too often the conversation begins and ends with the invention itself.

Sears reminds us that inventions rarely change industries by themselves.

What changes industries is building an entire system that people can understand, trust, finance, transport, insure, and confidently recommend to someone else. That’s exactly what Sears accomplished over one hundred years ago. They didn’t just sell lumber packages. They created confidence in a completely different way of building homes.

As we continue this In the Beginning series, I hope we don’t simply admire the pioneers who came before us. I hope we study them. The challenges facing today’s offsite innovators may wear different names, but many of them are remarkably familiar. History has a way of reminding us that the biggest obstacle to innovation is rarely the technology itself.

More often, it’s earning the confidence of the people who are being asked to embrace it. And that’s a lesson that’s just as relevant today as it was when the first Sears house rolled out on a railroad boxcar.

Innovation has never had an easy time finding acceptance in construction. In fact, many of the ideas we now take for granted were once dismissed as impractical, unnecessary, or simply impossible. Sometimes the resistance comes because a product is unfamiliar. Sometimes it comes because changing long-established methods makes people uncomfortable. And sometimes, unfortunately, it comes because of the person presenting the idea.

Nearly a century ago, one remarkable architect experienced all three.

Looking at a Wall Differently

During the 1920s, America was building at an incredible pace. Schools, theaters, factories, commercial buildings, and homes were all rising from solid clay brick. Each brick weighed roughly four and a half pounds, requiring enormous amounts of labor to manufacture, transport, and lay. Once the walls were completed, they provided structural strength but little insulation against heat, cold, or noise.

To most builders, that was simply the cost of construction.

Anna Keichline saw something entirely different. She believed the industry was wasting raw materials, transportation costs, and countless hours of labor. More importantly, she understood something many builders overlooked—air is a far better insulator than solid clay. Instead of accepting centuries-old construction methods, she began asking a simple question: Why does a brick need to be solid?

An Architect Who Refused to Accept “The Way We’ve Always Done It”

Anna Keichline was hardly an ordinary architect. Born in 1889, she had already established herself as a skilled woodworker while still a teenager, studied mechanical engineering, graduated from Cornell University’s architecture program, and served as a Special Agent for the Military Intelligence Division during World War I.

This is one of her earliest designs to improve cooking for women of the 1920’s

When she returned to Bellefonte, Pennsylvania, to open her architectural practice, she entered an industry where women were rarely welcomed on construction sites. Contractors often questioned her authority, and foremen weren’t shy about showing their skepticism as she climbed scaffolding to inspect projects she had designed herself.

Rather than arguing with them, Keichline paid attention to what she saw every day. Watching masons struggle with heavy, solid bricks convinced her there had to be a better solution.

Reinventing One of Construction’s Oldest Products

Her answer became the K-Brick.

Instead of changing the material itself, she redesigned its shape. The exterior looked much like a traditional brick, but the interior contained large hollow chambers separated by structural webs. That simple change cut the brick’s weight nearly in half while requiring significantly less clay to manufacture.

The benefits didn’t stop there. Those hollow cavities trapped air, creating natural insulation while reducing outside noise. They also allowed masons to cover more wall area with less lifting, making construction faster and far less physically demanding. It was one of those rare innovations that reduced costs while improving performance.

On paper, the numbers were compelling.

Unfortunately, construction doesn’t always embrace good math.

“It Will Never Work”

Keichline confidently presented her invention to local brick manufacturers, expecting they would immediately recognize its advantages. Instead, they rejected it almost without discussion. Some insisted the hollow brick would collapse under its own weight. Others argued that masons would never accept it. Many simply couldn’t imagine replacing a product that had changed very little in hundreds of years.

There was another obstacle she couldn’t overcome with engineering calculations alone.

Construction in the 1920s was overwhelmingly controlled by men who had little interest in taking advice from a female architect. Pennsylvania had only recently licensed its first female architect, and that architect was Anna Keichline herself. The building supply industry, contractors, and trade organizations were deeply rooted in tradition, making it nearly impossible for an outsider—especially a woman—to introduce a revolutionary product.

If They Wouldn’t Build It, She Would

Rather than abandoning her idea, Keichline decided to prove it herself. She invested her own money to have prototype K-Bricks manufactured and personally loaded them into her automobile.

Then she drove from construction site to construction site across Pennsylvania.

She met with foremen, explained the engineering, demonstrated the product, and asked builders to give it a chance. Time after time, she was turned away. Some refused even to examine the prototypes. Others dismissed the concept before hearing her explanation. Even when she offered to build demonstration walls, many contractors simply weren’t interested.

For anyone trying to introduce a new building system today, that story probably sounds all too familiar.

The Patent Wasn’t Enough

When manufacturers refused to listen, Keichline took her case to the federal government. Her patent application included engineering calculations, structural testing, thermal performance data, and manufacturing specifications.

On September 6, 1927, she received U.S. Patent No. 1,641,185 for the K-Brick.

The patent confirmed what she had been saying all along. The design was structurally sound, fire-resistant, dramatically lighter than conventional brick, and capable of helping bricklayers complete projects more efficiently while producing walls that were warmer and quieter.

She had official proof.

The industry still wasn’t interested.

Economics Finally Changed Minds

Eventually, a handful of independent builders decided to test the blocks themselves. The walls performed exactly as Keichline predicted. They proved strong, durable, quieter, and more energy efficient. Masons appreciated lifting less weight, contractors appreciated completing projects more quickly, and owners appreciated the improved buildings.

The economics eventually became impossible to ignore.

Ironically, by the time hollow masonry units became widely accepted, the industry had begun transitioning from clay to concrete. Manufacturers adopted the very geometry Keichline had pioneered, replacing clay with concrete and creating what would become the concrete masonry unit of today.

The principle was hers.

The fortunes built upon it largely belonged to someone else.

A Legacy Hidden in Plain Sight

Anna Keichline died in 1943 at just fifty-three years old, never witnessing the tremendous post-war construction boom that transformed America. Yet her idea quietly became one of the foundations of modern construction.

Today, hospitals, schools, warehouses, office buildings, and countless commercial structures rely on hollow masonry units based on the same engineering principles she carried from construction site to construction site in the trunk of her car. Millions of people see those blocks every day without realizing whose vision made them possible.

CLICK HERE to read more about Anna Keichline

Gary’s Observation

Whenever I hear someone dismiss a new product because “nobody’s using it yet,” I think about Anna Keichline. The offsite industry has no shortage of innovators introducing better ways to build, transport, manufacture, and assemble housing. The real challenge has never been developing new ideas—it’s convincing an industry built on tradition to give those ideas an honest chance.

Whether it’s Uni-Frame, robotics, artificial intelligence, advanced transportation systems, or the next breakthrough none of us has seen yet, every innovation faces the same uphill battle. History has shown that truly valuable ideas are often questioned, criticized, and even ridiculed before they become standard practice.

Anna Keichline didn’t change the construction by winning arguments. She changed it by creating an idea that eventually became too practical—and too profitable—to ignore. That’s a lesson worth remembering every time someone says, “We’ve always done it this way “

Several weeks ago I had an opportunity to learn about a panelized start-up in Durango, CO. I was immediately struck by their innovative approach to maximizing sustainability through the use of readily available underharvested Ponderosa Pine. Timber Age and their use of cross-laminated timber (CLT) which is composed of sustainable Ponderosa Pine, epitomize true sustainability.

I talked with Kyle Hanson, co-founder of Timber Age Systems about his team’s approach and work at this innovative panel manufacturer in the heart of sustainable timber country. Thank you Kyle for leading the charge on providing innovation through sustainability in Offsite manufacturing.

Kyle and Charlie. Kyle is the one on the left!

Timber Age Systems Interview Questions

Bill Murray, Offsite Innovators: Would you summarize your current business model?

Kyle Hanson, Cofounder of Timber Age : First and foremost, Timber Age™ makes durable, attainable, high-performance homes in an off-site modular factory. The homes are produced from locally and sustainably harvested Ponderosa Pine.

Our business model leverages a local value chain and community partnerships supplying design, engineering and installation support. This focus on circular economics allows Timber Age™ the chance to address forest health, housing constraints and job creation while significantly improving the built environment in terms of embodied and operational carbon content.

Secondly, Timber Age™ is continually refining a replicable production model in preparation for widespread expansion over the coming decade. This production model prioritizes shared ownership, a short amortization of investment capital and a flexible and adaptive learning environment supplied through the Timber Age Operating System (TAOS).

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Bill: What inspired you to found Timber Age Systems?

Kyle: After spending four years as the Business Unit Leader for a local wood products manufacturer working closely with the US Forest Service, I developed a curiosity to better understand how to create a use for the overabundance of Ponderosa Pine in our region.

In addition to unhealthy forests, many teachers of my two daughters struggled to establish stable local housing. An inability to establish an “anchored” existence in our community frequently ended in job openings. This damaging pattern of churn repeats across public servant roles resulting in instability for schools and local government.

Last, but not least, many in our community maintain seasonal and overlapping jobs in an attempt to achieve sustainable adjusted median income (AMI) levels. My background studying and implementing Lean Operating Systems to achieve world-class manufacturing operations illustrates how the creation of predictable, safe and rewarding skilled labor jobs could help create more anchored community members.

A 2018 USFS Wood Innovation Grant award catalyzed an amazing group of individuals collaborating around the key market definition and challenges. This group problem solving process eventually allowed our co-founder Andy Hawk to enter the fray as team member number two.

Most of the idea development has followed the ideas inherent in the world of Lean (Operational Excellence, TPS, etc). These themes surrounding rapid experimentation and improvement have been codified in the excellent book “The Lean Startup” by Eric Ries. Our team is continually working to clearly identify a problem and its causes and then establish an experiment where we can test a hypothesis to address the problem. When we do this in a disciplined and continuous manner, Timber Age™ gets better and we all get smarter and more connected as a team.

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Bill: How would you describe some of the most innovative solutions Timber Age Systems has developed for offsite construction?

Kyle: Our approach to vertical integration and small scale manufacturing of Cross-Laminated Timber (CLT) seems to be a differentiating factor in the worlds of mass timber and off-site manufacturing. We don’t have a huge factory with giant cranes, and yet we create beautiful enclosures which are easily installed.

In the long-term, we believe our integrated approach to helping create housing, fulfilling jobs and healthy forests will provide a powerful model for sustainable community development around the world.

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Bill: In what way does Timber Age prioritize sustainability in its innovative approaches to construction?

Kyle: Timber Age™ is intensely focused on both the embodied carbon and operational carbon of buildings. A key mission metric for our team is miles traveled/ pound. In this way, we can look at the many components in one of our assemblies and create a weighted average of the total waste associated with transportation. In addition, our assemblies are almost completely foam-free.

Our CLT is constructed from trees which would have otherwise released carbon dioxide into the air due to overcrowding, fire and disease.

This approach to using a carbon-sequestering structural material (CLT) combined with recycled cellulose insulation (also carbon-sequestering) means an enclosure with net-zero embodied carbon and a home with super low operational carbon emissions due to the passive house building science behind our system design.

The Timber Age™ Modular Building System (TAMBS) incorporates low-carbon materials and is designed to meet the Passive House building standard.

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Bill: What are some of the biggest challenges you have faced in gaining an acceptance of your innovative approach both locally and regionally?

Kyle: Since the Timber Age Modular Building System (TAMBS) contains many unique innovations, our biggest challenge was proving out the ability to manufacture the system at a hyper-local scale. After proving out the system, our biggest challenge has been builder uptake of our approach. Introducing an innovative building system into a marketplace where demand for the status quo is still outstripping the capacity of local builders doesn’t incentivize builders to seek out or make time for learning a new system even if many of the builders understand and appreciate the inherent value proposition.

Matt Betts, Value Stream Manager

The world of building, much like the world of healthcare, encompasses multiple customers with varying definitions of value. We are working hard to collaborate with as many stakeholders as possible to ensure the highest level of value is created for each step off the value chain. We believe our system is easy for designers to implement, very quick and effective to install for the builders and beautiful, durable and very energy efficient to help enforce the inherent value for the end users.

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Bill: How important are collaborations and partnerships as you seek to grow your business?

Kyle: Timber Age™ would not exist without the help of our local forest collaboratives, fellow building scientists, collaborating designers and contractors and especially the funding and support of the US Forest Service and our incredible mission-driven shareholders.

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Bill: What are you short- and long-term goals for Timber Age Systems and what philosophy did you use in developing these?

Kyle: Short-term: Get our new interim factory running to produce our current backlog of projects and hire another ten great team members.

Long-term: Construct our new prototype factory and housing models in Mancos and then replicate this model across all viable markets to help create 1000+ fulfilling jobs and hundreds of thousands of durable, beautiful high-performance housing units around the world.

Our philosophy around planning, Hoshin Kanri, follows the teaching and examples of Toyota and other world-class companies.

Tens of thousands of acres of sustainable pine being put to use by this innovative panelizer in Durango, CO. Sustainability is more than a buzzword at Timber Age Systems, its a way of doing business and a way of life.

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Bill: I want to thank you , Kyle, for a very insightful, behind the scenes look at what you and Timber Age Systems are currently doing and what you have planned for the future.

Bill Murray, co-founder of Offsite Innovators, is a 40-year veteran in the Offsite industry. His goal is to assist in the growth of the industry by presenting and sharing innovation.

CLICK HERE if you would like to be interviewed about something innovative you have designed or are currently using.

Walk into almost any offsite factory and ask who’s really in charge of operations, finance, or long-term strategy, and you’ll usually get a confident answer followed by a quiet reality check. The titles are there, the responsibilities are assigned, but the experience behind them is often still developing. That’s not a knock on anyone—it’s simply how this industry has grown up.

We promote from within, we wear multiple hats, and we figure things out as we go. It’s part of the culture, and in many ways, it’s admirable. But it also creates blind spots that don’t show up until margins start slipping or production slows down for reasons nobody can quite explain.

Enter Fractional Management—Without the Fancy Label

Fractional management is a simple concept wrapped in a slightly pretentious name. It means bringing in an experienced executive—COO, CFO, or sales leader—on a part-time or project basis instead of hiring them full-time. You get the expertise without committing to a full-time salary and benefits package.

In plain terms, it’s like renting experience instead of buying it. You don’t need that executive sitting in an office five days a week; you need their brain applied to your biggest problems at the right time.

Why This Model Is Quietly Taking Off

In other industries, especially tech and advanced manufacturing, fractional executives are no longer unusual. Companies have realized they don’t need a $200,000-a-year executive to solve problems that require only a few days a month of focused expertise. They need precision, not presence.

Offsite construction, however, has been slower to adopt this mindset. Many owners still think in terms of full-time hires or going it alone, with very little middle ground in between.

The Places Where It Fits Like a Glove

The most obvious place fractional leadership shines is in operations. A factory struggling with bottlenecks, inconsistent quality, or scheduling chaos doesn’t necessarily need a permanent COO. It needs someone who has seen these problems before and knows how to fix them without turning the place upside down.

Financial management is another area where the gaps are often invisible until they become painful. Many factories are profitable on paper but constantly tight on cash, unsure where margins are being lost or why projects feel harder to complete than they should. A fractional CFO can step in, connect the dots, and bring clarity without becoming a permanent line item.

Sales and marketing is where things often get even murkier. Some factories rely on a single salesperson, others rely on relationships, and a few rely on hope. A fractional sales leader can build structure, define a real pipeline, and help companies stop chasing every opportunity that comes through the door.

Why Offsite Has Been Slow to Catch On

Part of the hesitation comes from pride, and part of it comes from habit. Factory owners are used to solving problems internally, often with limited resources, and there’s a belief that bringing in outside help signals weakness or loss of control. In reality, it usually signals the opposite.

There’s also a misunderstanding of what fractional leadership actually is. It’s not a consultant dropping off a report and disappearing. When done right, it’s hands-on, practical, and focused on results, not theory.

The Catch Nobody Talks About

Not every fractional executive is created equal, and this is where companies can get burned. Some have real-world experience running operations, managing teams, and dealing with the daily realities of production. Others have spent more time advising than doing.

The difference shows up quickly. One delivers measurable improvements, while the other delivers well-written recommendations that never quite make it onto the production floor.

Bill Murray – Fractional Executive Leadership for Offsite Construction

Bill Murray brings over 40 years of hands-on operational management experience in the modular and offsite construction industry, offering companies access to seasoned executive leadership on a fractional basis. His career began in the field as a contractor and builder, giving him a ground-level understanding of construction that continues to shape his practical, results-driven approach today.

Transitioning into the manufacturing side of the business, Bill quickly advanced through the sales ranks before stepping into senior leadership roles, ultimately serving as General Manager and COO, overseeing multi-plant operations. His experience spans the full lifecycle of offsite construction, from production and sales to strategic planning and operational execution.

As a fractional executive, Bill works with owners, prospective factory startups, and builder-developers who are evaluating or expanding into offsite construction. He provides high-level guidance without the overhead of a full-time executive, helping companies navigate critical decisions, avoid costly missteps, and improve operational performance.

Contact Bill: [email protected]

Bill’s advisory and consulting work has taken him across the United States, into Mexico, and on international assignments, giving him a broad perspective on different markets, production models, and business challenges. Whether stepping in as a fractional COO, strategic advisor, or operational guide, Bill brings real-world experience and practical insight to every engagement.

Where It Makes the Most Sense

Fractional management works best in moments of transition. Startups trying to get their footing, factories looking to scale, and companies feeling that slow, steady erosion of profit are all prime candidates. These are the times when experience matters most and mistakes cost the most.

It also works for owners who recognize that they don’t need to have all the answers, but they do need access to them. That mindset alone often separates companies that grow from those that stall.

Where It Doesn’t Work

No outside executive, fractional or otherwise, can fix a company that isn’t willing to change. If leadership is resistant, defensive, or simply going through the motions, even the best advice will sit unused.

Fractional management is not a shortcut or a magic fix. It’s a tool, and like any tool, it only works when someone is willing to use it properly.

Modcoach Observation

Most offsite factories don’t fail because they lack effort or ambition. They struggle because they wait too long to bring in the experience they need, hoping to grow into it instead of borrowing it when it matters most.

Fractional management isn’t about admitting you need help. It’s about recognizing that in an industry this complex, the smartest move you can make is knowing exactly when to bring the right expertise through the door—and when to let it go.

Photo – Autovol

Fourth in a series on improving the Bottom Line by 1% and more (For a list of all the articles, go to the end)

I’ve talked to more than a few factory owners over the years who all say the same thing in slightly different ways. Sales are steady. Backlogs look decent. The plant is busy. And yet, at the end of the quarter, the profits aren’t where they should be.

No one can point to a single disaster. No massive estimating mistake. No catastrophic project failure. Just… less money than expected.

That’s when I usually bring up something most people don’t want to hear about because it sounds too simple to be dangerous.

Overhead creep.

The Slow Leak Nobody Sees

Overhead creep isn’t a line item. It doesn’t show up as a glaring red flag on a financial report. It’s not a bad investment or a failed expansion. It’s the accumulation of small decisions, made by good people, for reasonable reasons, that slowly chip away at your margin.

It happens quietly. A design tweak here. A favor for a builder there. An extra step on the production line that was supposed to be temporary. A service call that “just needed to get done.”

Individually, none of them seem worth talking about. Collectively, they can take one percent—or more—right off your bottom line. And most factories never see it coming.

The 1% Illusion

Let’s talk about that one percent.

If your factory does $20 million a year, 1% is $200,000. That’s not a rounding error. That’s real money. That’s additional staff, upgraded equipment, or pure profit that should have been there.

But here’s the problem. One percent doesn’t feel urgent. It sounds small. Manageable. Almost not worth the argument it might take to stop it. So the decisions that create it get justified.

“It’s just this one job.”

“We need to keep this builder happy.”

“We’ll make it up on the next project.”

You almost never do.

Where It Starts—and How It Grows

Overhead creep doesn’t live in one department. It spans your entire operation, and every department contributes in its own way.

Design Favors That Become Expectations

It often starts in design. A builder asks for a small change. Nothing major. The design team accommodates it, maybe without fully pricing the additional time. Then it happens again. And again.

Before long, those “one-off” details aren’t one-off anymore. They become expected. Your design department is doing more work for the same revenue, and nobody has formally acknowledged the shift.

Sales Promises That Production Pays For

Sales wants to close deals. That’s their job. So they add a feature here, smooth over a concern there, and sometimes stretch what the factory can realistically deliver without added cost.

Production inherits those decisions.

Now the floor is figuring out how to build something that wasn’t fully accounted for. It takes longer. It disrupts flow. It introduces rework. And the margin that looked fine on paper starts disappearing before the first module is finished.

Production Workarounds That Become the New Normal

Walk through almost any factory and you’ll find them—those extra steps that weren’t part of the original process. Someone added them to solve a problem. A good intention. A quick fix. But no one ever removed them.

So now every module carries a little extra labor. A few extra minutes here and there. Multiply that across hundreds or thousands of modules, and you’ve created a permanent drag on efficiency.

Service and Warranty That Never Feed Back

This one has been a problem for decades. Something goes wrong at the jobsite. A crew is sent out. The issue gets fixed. Everyone moves on. Except the root cause was never addressed.

Design doesn’t hear about it. Production doesn’t change anything. So the same issue happens again on the next project. And the next. You’re not just fixing problems. You’re paying for the same mistake over and over again.

Administrative Growth Without Accountability

Then there’s the overhead you can see—but don’t question.

An extra position gets added to “help.” Another software subscription gets approved. Meetings get longer and more frequent, but not necessarily more productive. None of these decisions feel excessive on their own. But together, they quietly increase your fixed costs without improving output.

Why It Continues

The reason overhead creep is so dangerous is because no one owns it. Each department has a valid explanation for what they’re doing. Design is helping sales. Sales is supporting revenue. Production is solving problems. Service is keeping customers happy. Individually, they’re all right. Collectively, they’re bleeding margin.

Leadership often focuses on the big picture—growth, backlog, new opportunities—while these small leaks go unchecked. And culturally, most factories avoid pushing back because they don’t want to create friction internally or with their customers.

So the creep continues.

The Compounding Effect

One small inefficiency doesn’t matter much. Ten starts to get noticeable. Fifty begins to hurt. A hundred, and you’re working just as hard as ever, maybe harder, but the financial results don’t reflect it.

Factories rarely lose money on a single big event. They lose it slowly, through a series of small, accepted compromises.

Recognizing the Early Signs

You can usually spot overhead creep before it becomes a crisis—if you’re willing to look.

Margins begin to decline even though pricing hasn’t changed. Rework becomes more common but is treated as routine. Design teams are busier than ever, but not generating additional revenue. Service calls feel like part of the normal workflow instead of exceptions. And the most telling sign of all?

“We’re busier than we’ve ever been, but we’re not making the money we should be.”

Plugging the Leaks

The solution isn’t complicated, but it does require discipline. It starts with paying attention to the small things you’ve been ignoring. Questioning processes that have quietly changed over time. Making sure every change, every favor, every added step is either justified or eliminated.

It means closing the loop between the jobsite and the factory so problems get fixed once, not repeatedly. It means holding the line on pricing and expectations, even when it’s uncomfortable.

Most of all, it means someone has to take ownership of protecting margin—not just chasing revenue.

Modcoach Observation

Overhead creep doesn’t show up with a warning label. It builds quietly through decisions you barely remember making and processes nobody ever revisited. By the time you feel it, you’re not asking what went wrong—you’re asking where the profit went. If any part of this article sounds familiar, it’s probably already costing you more than you think.

This is exactly the kind of problem Bill and I work through with factory owners—finding the leaks, challenging the assumptions, and helping you get that lost 1% back before it becomes 3% or 5%. If you’re seeing the signs, don’t wait for the next quarterly surprise. Reach out. This is fixable—but only if you decide to fix it.

Other articles in this series:

When Developers and Builders Go Modular, the Learning Curve Is Steeper Than Expected

The Offsite Factory Warranty Loop That Never Closes

The Quiet Profit Killer: “When Factory Quality Slips Before It Ships”

If you are serious about continuous improvement, reach out to us via email.  We’ll schedule a brief phone call to explore the possibilities.  Contact Gary at: [email protected], contact Bill at:[email protected]. We’ll respond promptly and schedule a brief call.