Green Canopy NODE on StartEngine 2022
Last year, the human population reached 8 billion — and it’s still growing. With so many people competing for places to live, we need to rethink the housing industry as we know it — for the planet’s sake and for ours.
Green Canopy NODE is working to do just that. The company covers multiple corners of the industry, offering construction products, dealing in real estate development, and operating as a real estate fund management firm. We reached out to co-CEOs Aaron Fairchild and Bec Chapin to hear more about Green Canopy NODE’s defensibility and the team’s origins.
Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.
Can you describe Green Canopy NODE in your own words?
Bec Chapin: Green Canopy NODE is a vertically integrated construction technology firm, real estate developer, and fund manager. The firm is bypassing the hurdles in construction tech through its innovation ecosystem model — creating a virtuous cycle of capital and projects that allow scaling construction tech. Over its history, the company has embraced the innovation required to change the current paradigm of housing development and deliver on its commitment to help regenerate communities and environments. The Green Canopy NODE team works diligently to help lower building costs, decarbonize the built environment, and assist clients and partners in achieving their development goals for less time and cost.
Why did you merge Green Canopy and NODE?
Aaron Fairchild: We saw a significant gap created by the construction industry, siloed stakeholders, and slow technology adoption compounded by long development timelines. It became clear to us that one part of the construction value chain is not enough to make significant industry advancement.
As a result, we merged an experienced sustainable developer that understands the complexities of real estate development and how to bring capital to activate projects with an innovative product design company. This merger took place at the perfect time for both organizations to unlock rapid development and delivery of real estate products.
The approach has not only worked as envisioned — it has worked better. The speed at which we have been able to develop product solutions matched to our pre-existing sustainable development pipeline could only have been possible by bringing these two particular groups together at just the right time and harmonizing quickly. It’s been a lot of hard work and a blast at the same time.
Who is on your team and how did you come together?
Aaron Fairchild: The executive team consists of me and Bec as co-CEOs, Andy as chief financial officer, Susan as chief marketing officer, and Sam as chief development officer. The five of us have all worked together since 2014, and some of us have worked together since 2009.
We began to explore collaboration in earnest when COVID-19 descended into the Pacific Northwest region. After several months of exploration, we agreed that the most aligned and biggest opportunity for both firms and their shareholders was to merge and create a force multiplier. At this point, we have accomplished this in spades.
How easy would it be for a competitor to imitate your technology?
Aaron Fairchild: It would be very difficult. We have strategic partnerships and protected intellectual property (IP) that create large competitive advantages. In terms of a moat, not only is the gap wide, but the passageway is well fortified with IP agreements, contract partnerships, and a patent-producing process structure, internally designed to maintain our competitive advantage while also creating enabling structures and shared benefits for the industry where needed. Two examples of this:
1) We partnered with the Timber Finance Initiative out of Zurich, Switzerland to co-create the first approved global carbon offset methodology. The concept methodology was recently submitted to Verra for approval. The work on the final methodology has already begun. This economic tool will benefit our mass timber real estate investment fund and our business, but it will also be utilized by the entire mass timber industry.
2) We were awarded a $2.2 million grant from the federal Department of Energy in partnership with Washington State University and Pacific Northwest National Laboratory to create a circular cross-laminated timber (CLT) home. “Circular” means that once it’s created out of CLT, it will be able to be taken apart and reused. That form of circularity in a renewable resource structure has the potential to change the industry while promoting our enterprise even further ahead of our competitors.
Lastly, on competition, the ocean of opportunity that is housing in America is as deep as it is wide. The top homebuilder in the country produces only 1% to 2%of annual housing needs. Competition in a field as large as ours isn’t as straightforward as one would expect. The real competition is for buildable land. Ways to build faster and more sustainably enable preexisting builders the ability to focus on land acquisition strategies with greater clarity and certainty of the cost and time to build. Having greater reliability in construction enables better acquisition decisions and faster go-to-market strategies. It also empowers affordable housing groups to build sustainable housing for people of all income levels.
Bec Chapin: Technical recreation of our products is under provisional patent protection. This is a reasonable step to IP defense. However, I believe a greater degree of technology defense comes from our innovation ecosystem model and our scale strategy.
The construction industry is the last industry to undergo a revolution, and it is primed to evolve. How we build is too slow and quite frankly too inefficient to keep up with demand. While creating systems and software to scale construction products is difficult, the real hurdle is market adoption. Getting lots of stakeholders in an anachronistic industry to buy and install your construction products is complex.
Our ability to solve this through our innovation ecosystem model is one of our best technology protections because we can prove and launch novel construction products within our own sustainable development pipeline. We have the relationships to partner with customers and contractors. And we are doing it — developing and launching construction products and partnering for scale.
How do you make sure that your utility products fit the quality requirements of the construction industry?
Bec Chapin: At every level, our team is composed of construction industry professionals. Our construction industry experience is the foundation we are innovating on. In our sustainable development channel, we design, permit, and build housing for our clients. It’s through this channel that we launch and prove our construction products for developers and builders who have their own sustainable development services.
For our initial utility and structural products, we analyzed hundreds of recently built plans on the city’s permit website and found wide overlaps in designs within the same type of building. By thoroughly understanding the majority of design requirements, we can launch products with minimal configurations, enabling us to ramp up manufacturing efficiently. Over time, we will add more configurability. To develop the installation conditions and user experience for our products, we consult with, test, and interview stakeholders within our ecosystem — subcontractors, designers, and installers.
What is your plan to scale the company?
Bec Chapin: The path to scaling is by enabling other developers to build faster and more reliably with our construction products. First, we develop construction products. We test and prove those products on real projects. Then we engage our strategic partners to pilot Green Canopy NODE’s construction products. Then we use our product catalog to sell products with configurability and designs.
We have products in beta release that have been installed onsite, and we are beginning to launch them to our strategic partners for pilot projects. At the same time, we are seeing a clear uptick in demand and are beginning to queue product sales for projects for 2024 and 2025. We are working on a strategic partnership with two firms in Northwest Arkansas to launch our utility product in its first location outside of the Pacific Northwest. We will expand to new markets in partnership with customers with a strong pipeline.
You want to sell your utility and structural products to other developers and builders. How will they need to adapt their design process to integrate your utility products?
Aaron Fairchild: Green Canopy NODE offers the MEP (mechanical, electrical, plumbing) cube to architects to design around and with. The design parameters enable controlled costs, better designs, and more reliable install times. Developers who want to use the MEP solution simply incorporate the MEP parameters into their design during the design phase.
Bec Chapin: The easiest way to bypass this challenge is through an integrated solution already designed with our utility and structural products. This integrated product will become the solution for entire development projects.
What tells you that this is the right time to bring your technology on the market?
Bec Chapin: The inbound demand for our solutions continues to increase as the industry gains a better understanding of what we are up to. The uptick in demand is due to two factors:
1) We have acute pain in housing. The need to house a population that increases faster than the rate of new housing solutions is at an all-time high.
2) The rate of productivity gains in housing pales compared to the rest of the economy. With labor shortages and material supply chain complications, manufacturing housing on-site is quickly transitioning to manufacturing our housing off-site in controlled environments and assembling it in the field for greater speed and lower costs.
We look forward to seeing where Aaron, Bec, and their team take the company. Green Canopy NODE is currently raising on StartEngine.
About: Léa Bouhelier-Gautreau
Léa is passionate about impact investing and sustainability. Prior to KingsCrowd, she worked for Stanford’s accelerator, StartX, helping to select the most promising entrepreneurs. She also led the first award-winning study on the Malawian startup ecosystem. In her free-time, she volunteers to help entrepreneurs in Cameroon, Brazil and Colombia. Léa holds a degree in Anthropology from France and is currently enrolled in the UC Davis MBA program.