Exploring The Future Of Construction, with Carson Holmquist

Dan Sullivan: Hi, everybody, this is Dan Sullivan, and I’m here with Steve Krein of Startup Health, and me of Strategic Coach, and we have a real honored guest today, and I can guarantee you, he’s going to tell you things about a world that, when you think about the world he works in you say, “Boy, that sounds really boring. That’s really boring,” and I’m going to tell you, your eyes are going to open really wide, your mouth is going to be really wide when you hear what Carson Holmquist has to tell you about the future of manufacturing and construction. What’s possible in constructing new sites, and this one happens to be a Starbucks, and he’s going to show you how, start to finish, you can create a brand new Starbucks in three days and have them operating within a week. I think you’re going to find he’s created an entire Free Zone in what seems to be a really old and, for a lot of people, boring industry, and this is not boring…
 
RJ Russo (Audio): At RJ Russo, our 20 years of experience have informed us how to do things today. All of our modules and components are precision-built in a factory to meet our clients’ most stringent requirements. Then we transport the modules to the job site and, like magic, the building is assembled within days. If you’re looking for faster expansion without sacrificing quality, connect with us today. RJ Russo, for a seamless modular experience.
 
Carson Holmquist: We’re capturing film throughout the project and then we call them “Project Sizzle Reels”, where after, to commemorate that project, we give them a marketing video that they can go to use to market what they’ve done to go win their next project. So that’s a video we created there. But Dan, you right...
 
Steve Krein: So the client is not Starbucks. The client is the firm that Starbucks is using to build their store.
 
Carson Holmquist: Correct. Yeah, the manufacturer, which is... Yeah, these modules, and it’s really “offsite construction” is the category because there’s a few different types of construction in here. But yeah, they’re building as much as they can in a warehouse rather than on site, shipping it to the site, and then installing it—much more like building blocks.
 
Steve Krein: Well, as somebody who’s lived in the digital world for my entire entrepreneurial career, I love seeing a physical manifestation of what can only happen with technology. I mean, really incredible and exciting. Makes me want to go open storage, but I’m glad you’re getting value out of, how to really de-commoditized yourself from, in Free Zone, because it’s obviously a very commoditized space, but you’ve taken a really unique approach to it. Love it.
 
Dan Sullivan: Yeah.
 
Carson Holmquist: Yes, thank you.
 
Dan Sullivan: Yeah, Carson, let’s start at the beginning, just how you crossed into the entrepreneurial world, and how long ago in the first place, and what you were doing then, and what were jump-stages, you jumped from one stage to the next stage to the next stage, and the Starbucks modular store—start to finish. I mean, actually, from the moment you got involved, how long did that project take till they had a working operational Starbucks?
 
Carson Holmquist: Yeah, so that project, when we were on site delivering, it was only three days’ worth of deliveries and install to get the store looking like an actual store. So fully assembled, and then there’s fit and finishes to really finish out the product. So some on the exterior, some on the interior, but the entire project is less than two months. So it’s probably somewhere between three and four times faster than traditional site-built construction.
 
Dan Sullivan: Yeah, with a lot less opportunity for error and delays.
 
Carson Holmquist: Yeah, I mean, the primary benefit to off-site construction is speed to occupancy. Getting access to that building sooner is the primary goal, but there’s also a lot of other efficiencies and advantages gained, and precision is definitely one of them. Building them inside a factory is a lot more accurate instead of building them outdoors and subject to all the current weather conditions. And it’s a better environment for skilled workers to work in, in a factory rather than two stories high. There’s danger there, there’s weather elements. It’s a much more enjoyable and safe place to work from as well.
 
Dan Sullivan: In this case, where was the factory located?
 
Carson Holmquist: The factory was in Phoenix, and then this project was in Utah.
 
Steve Krein: Is that always the setup is, are you doing everything at your own factor and shipping it wherever it’s needed in the country? Or do you have multiple factories around the country?
 
Carson Holmquist: Yeah, so our clients have their factories all over the country. So we work all over the US and our job is to get those products that are built in the factory from the factory to the job site. And sometimes it’s a short haul, so within the same metro area, and sometimes it’s halfway across the country.
 
Dan Sullivan: Okay. Start at the beginning.
 
Carson Holmquist: So I went to college at Arizona State University. I knew I wanted to be an entrepreneur, I grew up in an entrepreneurial household, my parents owned a business. I loved the freedom, that’s really what attracted me to being an entrepreneur. But at Arizona State University, at that time, there weren’t entrepreneurial classes. So I was studying traditional business, but I needed some context to put that into so I was looking for an internship while I was there in a young startup company. And I happened to find one that was growing very quickly and it was in the logistics space—a space I didn’t know anything abou,t but what I was really looking for is the startup experience, and this company at the time was doing about $10 million in revenue. By the time I left, it was doing about $200 million, so I got to see a fast hyper-growth company, and I got to cross-train in all different departments, and really saw how a business worked, which was the goal.
 
So I spent about four years there, and at that time I met my business partner and we decided to start our own logistics company that was much more niche and focused on more of a quality approach to logistics rather than fast scale. We’re looking to solve difficult problems.
 
And the whole theme there was he and I both just always wanted to find a better way of doing things. So anything we saw that could be more efficient or injected with more quality or better experience, we wanted to do that. That’s not optimal for scale, so we started Stream Logistics when I was 26, and we started to build a differentiated service, but we had a undifferentiated clientele, meaning we were trying to do amazing things for all sorts of companies, most of which didn’t need our level of quality or expertise. They just wanted cheap, fast shipping, which, there were other companies who could do that way better than us. We weren’t looking to be bottom dollar, high automation, we were looking to solve the most difficult challenges. So we had some good success, but we really started to plateau in our growth. And this was in about 2018, 2019. And during that time--
 
Dan Sullivan: How many years did that represent since the start?
 
Carson Holmquist: That was about six or seven years into the business.
 
Dan Sullivan: It was around 10 you’d started then, right?
 
Carson Holmquist: 12, yeah, 2012. So six or seven years into the business, we had probably reached our full potential with that business model. And we knew that our capabilities were incredible, but we weren’t finding the right clientele for it. So when we looked into our clientele list, it bifurcated into two groups, which we now call “routine freight”, which is the freight that just needs to be picked up from dock to dock, not a lot of time sensitivity, and the primary goal with that freight is cost control. Then the second group, which we love to work with and who really appreciated what we did, we now call “high-stakes freight”. So these are manufacturers that are making something super-differentiated in the market, and the whole goal for them was execution. They had to deliver on time or intact or else there was extreme financial consequences or even reputational consequences if it’s not done properly.
 
So it required us to put a lot of energy into creating custom solutions and to pour all of our unique capabilities into the process to make sure that their job sites or their projects were never stopped or slowed. So once we discovered this, it really unleashed a lot of creativity in our company and allowed us to operate in a zone that created energy and that allowed us to truly create value for our clients where they loved what we’re doing, we were getting constant compliments, and it really freed them up to focus on what they were doing best. When we’re working in that environment, we really think we’re allowing our clients to reach their full potential.
 
Steve Krein: What was the biggest shift in that working environment for them to be working almost... I’m assuming they did maybe in other companies prior to working at your company. What was the biggest shift that you saw, and how quick was it from both the leadership but also the other people on the team?
 
Carson Holmquist: Well, I think everyone was cautious as we made the change because at that time the high-stakes freight we were managing only represented about 15% to 20% of our business. But we knew it was the type of business that we loved doing and we were making the most impact. So everyone understood why we were making the change, but I think most people were a little fearful. Like, “We’re going to turn our backs on 80% of what we’re doing now and we’re going to focus on this 20%?” And it did take a while to start realizing the potential in this shift, but everybody on the team loves working on that type of business. So as we started getting traction, as we started closing more accounts and started getting focus on high-stakes freight accounts, everybody knew that this future was going to be much brighter than our past, so they got on board quickly.
 
And from a leadership perspective, we were all in. We knew that not only was this what we were best at, but when we were working on high-stakes freight projects, our team was getting better. It challenged them. It wasn’t just routine processes done over and over. We were getting better, it was more profitable, the clients enjoyed working with us because they needed what we did, they paid faster. I mean, it was a no-brainer from a whole list of benefits, but it took a while to really change the focus, especially on the sales side, to get them to say, “Okay, instead of calling on 300 leads a week, we’re going to call on 30 and we’re going to pour more into the process because we know that the value of being to these clients is much higher.”
 
Steve Krein: So there’s a saying that Dan has said for many years around “The smaller the niche, the bigger the business.” And it kind of reminds me of that, or I should say this is exactly that in play here. But being an entrepreneur now for almost 30 years, I know that not every team member gets on board. Were there any stragglers in that? Did you either bring them over the hill or did you have to get rid of them? Just wondering about how you really got your team there. It sounds too perfect to not at least address those stragglers that challenged you and maybe challenged this decision.
 
Carson Holmquist: Yeah, there were definitely stragglers in the process, and here’s the form it mostly took was everyone would head-nod, they would agree, they would cheer on the strategy, then they’d go back to their desk and go try to sell routine freight accounts, old accounts. It was really more about breaking habits. It was about getting enough wins where they could believe that there’s enough of these type of clients out there that we can become a much bigger business. So it really took some evidence, I think, for some of them to change their behavior. But I would say, I can’t think of a single team member who, at least at a cognitive level, didn’t believe that this was the best opportunity for a brighter future. It was just about breaking habits.
 
Steve Krein: Yeah. That’s what I was hearing on. Cause what we continue to push on that framework of “The smaller the niche, the bigger the business” and that the team has sometimes... Some people on the team behavior-wise have a hard time accepting that because they think it’s too narrow of a focus when you’re thinking about “Wait 300 leads to 30?” that sounds easier to an entrepreneur, but it sounds, like, silly to sometimes the team members doing it.
 
Carson Holmquist: Yes. Yeah.
 
Dan Sullivan: And there’s a difference between quantity money and quality money. Quantity money after a while, pushes out all quality; quality money after a while pushes out quantity. Okay, so there’s definitely… If you’re focusing on the one, you can’t be focusing on the other.
 
Carson Holmquist: Yes. And to illustrate that point, Dan, we’ve been focused on high-stakes freight for about three years now, and we’ve doubled our profit in that time without adding new team members. Same team count, so we’re much more efficient, to your point, it’s much more quality money, quality clientele, like the attrition is virtually zero. So it’s a much better business model, and it was because we did decide to commit to a niche.
 
Dan Sullivan: Yeah. Can you give a sense of growth of the team? Let’s say back to 12 when you first started, when you launched, and three years ago when you made the shift in permanent strategy, really. I mean, you’ve now got a niche that you’re in fact creating. So that first, let’s say, what would that be? Three years ago, it would be 19. So you had seven years, then you made the change and now you’ve had three years. So from 12 to 19, what was the growth of team?
 
Carson Holmquist: Well, we grew quickly, but the way to growth was adding new team members. We had a business model that only scaled with more effort. And the team members, they could reach a level of proficiency very quickly—three to six months. But after that, their personal development in the progress was pretty stagnant, because we were working on much more simple shipments for the most part. Now since then, the way we’ve scaled is to continue to add more value and to connect with larger clients and get even deeper into this niche. We’ve been able to do that without growing our personnel account and at an individual level for our team members, they’re getting way more skilled, way more sophisticated and what we do today is you’ll often see our team members huddle in groups of three or four trying to solve a challenge for a project or design an elegant solution for a project that needs just-in-time and delivery and the cost for failure is $3,000 per hour in any delay. So we’re seeing much more collaboration.
 
Dan Sullivan: Steve, do you notice how he’s avoided giving me the number I’m after here? I’m looking for numbers, number of people 2012, then 2019.
 
Carson Holmquist: 2012 was three of us.
 
Dan Sullivan: Three.
 
Carson Holmquist: Three of us and then we scaled to about 40 and we’re right about that number now.
 
Dan Sullivan: But higher-skilled 40 over the last three years.
 
Carson Holmquist: A much happier group of individuals.
 
Dan Sullivan: And that’s an exponential, that’s an exponential. You doubled your profit with same number of people. That’s a huge exponential.
 
Carson Holmquist: Absolutely. And we have more capacity within us to grow without expanding the team.
 
Steve Krein: So how many collaborations, external collaborations, do you have to make all this work? With a team like that I’m assuming there’s a great deal of reliance on good Unique Ability collaborators.
 
Carson Holmquist: Yes, absolutely. So we are always collaborating with the drivers. We don’t have any drivers on staff. We’re finding the most talented trucking companies, the carriers who have drivers who are very skilled at what we do, because a lot of our shipments are oversized, we need a level of precision, so we’re always trying to partner with the best partners there. But we also have collaborators to give us visibility to shipments. We have a collaborator that gives us real-time access to GPS tracking for every truck that basically has tapped into electronic devices on the truck that are constantly tracking them and gives us visibility to that. So our clients know where they’re freight is at all moments. It’s one collaboration.
 
Dan Sullivan: Just as a side note here, and it came up in the conversation of the Starbucks project, was that you’re now finding that you’re influencing the truck companies to actually create bigger beds.
 
Carson Holmquist: Yes. So one thing that we’ve discovered—so we’re fully invested in this niche of modular construction, and these units are massive. They could be 65, 70 feet long and up to maybe 16 feet wide. Now that requires a very specialized trailer, and we have all the skilled drivers that we need for these projects, but we have, and our clients have been limited by, access to the proper trailers. So we are now starting a product which we call “factory trailer pool”, where we’re going to be buying these customized trailers and having them custom-built and build a fleet of them, and then our clients will always have exclusive access to as many trailers as they need so that never becomes the bottleneck again. Then we can put our skilled drivers on the shipments, haul them with the precision that they’re used to, but they’ll never be encumbered by not having enough trailers they need for their projects.
 
Dan Sullivan: Yeah. Steve, what are you seeing here? Because this is a conversation that goes back 25 years between the two of us. And what are you seeing here? And this is in the world of stuff. I mean, it doesn’t get any more real than 65-by-16-foot trailer beds. What’s the unit weigh? Like a half of a Starbucks? What’s that weigh?
 
Carson Holmquist: They range between probably 45,000 and 80,000 pounds these modules.
 
Dan Sullivan: Which makes it 45 to 80,000 pounds more than anything I ever deal with, ‘cause it’s always digital. As I mentioned before we started recording today’s podcast, having lived in the digital world for my entire entrepreneurial career, I think it’s always fascinating to see people take technology and capabilities that are enabled by the technology to the physical world. It’s fascinating, because I don’t spend any of my time during the day thinking about the physical creation of, or transportation of, these size and scope of the projects and products and programs that you’re developing. So it’s fascinating to see how you’ve brought faster, easier, cheaper, and better to the physical world using concepts that apply both in the digital and the physical world. So, really fascinating to see how you’re not only carving out a niche here, but you’re actually serving that faster, easier, cheaper, better model in a world where I think everybody’s thought about it as just total commodity place to stay away from.
 
Dan Sullivan: Yeah, race to the bottom in terms of price, the usual thing. Carson, just as a point, at what point, if you can go back, maybe it’s the first high-stakes project you had, you suddenly realized you were in a different world with high-stakes. It wasn’t in an adjacent property to the market that you were in. You were just in a totally different arena.
 
Carson Holmquist: I remember it perfectly, Dan. One of the first off-site construction companies we worked with, they make wall panels. So imagine a building 15 stories high, they build all the foundational levels, and then on the whole exterior they’re wrapping it with pre-fabricated walls, fully finished exterior walls. So the wrapping on the building basically gets sealed in days. They could do a whole floor in a matter of a couple days. They’re based in Phoenix, Arizona. The project was in Tampa, Florida. So all the way across the country. And these had to be delivered at the exact moment they needed to start being unloaded. They would go straight from the truck onto the building. So if we were late, we’re holding up the entire construction site. So we knew we had to come up with a good plan. We were fully confident in our capabilities to execute. But this was new to us.
 
I flew out to the job site in Tampa about a week before we started shipping, and I walked the site and I looked for anything that was going to keep us from making our commitments. I even walked about two miles on the route that we planned to drive in because these were wide loads and I found obstructions that made us reroute it. So I was making sure that any impediments to success were discovered early before we started shipping to make sure that everything would go smoothly.
 
Then we came up with a strategy where this was a four or five day transit in a truck. So we would have the drivers pick up seven days before they needed to be there so that they’re in Tampa two days early and we found them a staging yard, an area where they can sit and wait so that they could be called in a couple days earlier. That way during transit we had a buffer in case anything happened. If there was weather delays, if the truck broke down, there was time to fix it. But the additional benefit is we had a bunch of trucks stocked in a yard nearby so that if the construction crew started speeding up how quickly they were setting, they could pull from our inventory and actually gain progress on their timeline rather than being set back.
 
So it was so fun to design that solution. We crushed it on the project and I knew from that moment that this industry, this off-site construction industry, needed our capabilities, and it took the best within ourselves to execute them, which means we were going to get better every day. We’re going to learn something new on every project that we could use on the next one to provide even better execution. So that was the turning point where we said, “This is where we need to be.”
 
Dan Sullivan: In a funny kind of way, you’ve created the equivalent to the universal carrier box that goes on ocean liners, or they go in trains, or they’re the body of a truck. But it was just the observation that all of the friction in the entire global shipping area was the fact that each piece in a carton used to have to be transported and then that had to be placed inside the ship. So just by having everything pre-packed in a carrier box where the crane at the dock site just picks up, puts it in, they know exactly where it goes because they have to balance when the offloading time is going to be—which go at the bottom and come off last, which go higher and they come off first. But you’ve done the same thing with land transportation.
 
Carson Holmquist: Yes and specifically with high-stakes freight, we have created a suite of processes that we know work every time, and we almost have a menu of strategies that we pick from or we know that we’ve used this, this is proven, we need to layer it together with...
 
Dan Sullivan: These are your shortcuts. In the “Shortcut, Program, Platform” model, these are your shortcuts.
 
Carson Holmquist: Exactly. So we take our shortcuts, we bundle them into different programs for mods, pods, or panels, these are different off-site construction methods and it’s become extremely reliable in a world that was very unpredictable prior to.
 
Dan Sullivan: Yeah. So you actually have gotten keenly interested in weather patterns too.
 
Carson Holmquist: Yes. And not just for the transportation, but when these modules or these products get to site, they’re required to be loaded by a crane. So wind can really delay a job site. You can’t have these big modules swinging because of the wind. So, yes, weather is always top of mind when it comes to these type of projects.
 
Dan Sullivan: If you would talk about the transformation of the 40 that you had in 2019, team members, probably different in terms of actual individuals three years later, right?
 
Carson Holmquist: Yes, at an individual level, the team members who are still with us today are transformed themselves, but we’ve also had to have some different types of capabilities brought in because of what we were doing. But, yes, everything is aimed at continuing to improve what we’re already doing and finding even better ways to serve our clients and free up their potential.
 
Dan Sullivan: Yeah. What is the learning process that you’ve built? Because each project is a money-making project, so it’s got cash flow, it’s got profits related to it, but there’s also a learning factor that every project makes the next projects better. So how do you build that in? What’s the debriefing process that you use for this?
 
Carson Holmquist: Yeah, we always have two really large meetings occur for every project. So it’s the planning meeting, so that’s how we’re going to execute this. And then afterwards it’s “How did this go? What are we going to do better next time?”
 
So that’s where we really are continuing to get better and we’re building a flywheel effect where the wins we had, we can roll into next one, but also the areas in which we didn’t execute as well as we thought we were going to. “Okay, why did that occur and how can we avoid that in the future?”
 
In addition to a part of that continual education is getting out in the field. I can’t tell you how valuable this is and how rare it is for a transportation company. We go to every job site and we do a site survey, is what we call it, where we are walking the site, we’re talking to the general contractor who’s actually going to be installing these and we’re looking for anything that would get in the way of this successful project.
 
But what we’re also doing is we’re building relationships, we’re talking to key stakeholders, understanding what they really value, what’s going to make a meaningful difference, and we’re actually seeing a job site in operation so we’re getting beautiful contexts. We also go to the manufacturer and we’re seeing how these are loaded. We’re consulting on maybe different ways or better ways to ensure product safety during transit or efficiency for loading more units. We’re looking at the factory and we’re saying, “Okay, how can you get better at loading? How can you be more efficient, loading faster? How can you store these in more efficient manner?” That’s part of the education as well. We’re getting insider access to this whole industry, and we’re not just looking for ways where we can transport the modules from A to B better. We’re looking how to really increase efficiency across the whole supply chain and look at it from a broader logistics level.
 
Steve Krein: What has this done to your competitors and to others in the industry who are trying to figure out what you’re doing and how you’re doing it and making them maybe get off their ass and get some innovation going? Because I’m assuming there’s been no, very little innovation in some of these things for decades.
 
Carson Holmquist: We don’t see a lot of change in our client’s alternatives. We haven’t seen a lot of change in what they’re doing. The typical trend is once we begin working with one of these factories, it becomes an exclusive relationship, with a few exceptions, but they love what we’re doing and they’re going to use us for every project going forward.
 
So our job at that point is making sure we have the ability to continue to scale and meet their demands, which is why we’re starting the factory trailer pool where we’re going to make sure that we have the access to the proper trailers. We want to remove that risk to make sure that as fast as they’re growing, we know we can keep up and stay ahead of where the demand is.
 
Dan Sullivan: Yeah, but Steve, you have a completely different model from whether it’s stuff or whether it’s digital. I mean he’s working in atoms, you’re working with bytes. I mean that’s the difference. But what’s the takeaway for you from the standpoint of what constitutes a project for you? What constitutes making sure things happen on time? Making sure that you’re more and more aware of the obstacles that could prevent you from doing what you’re doing, but simply the obstacles for the end user and what they’re trying to do. What are you learning from this?
 
Steve Krein: I mean what comes to mind is the mental obstacle that a lot of entrepreneurs have, and we see it in our community of entrepreneurs in all parts of the healthcare ecosystem—by the way, many of which are devices and products that do have physical supply chain and other related issues. The creativity that you’ve brought here and the innovation that you’ve brought here is very refreshing, because you’ve almost taken the ultimate industry that could have a million excuses of why it can’t change and where there’s no innovation that’s really going to really change the game except little moves of efficiency and totally upended it.
 
It reminds me a little bit of when you look at... For years, I remember driving to Florida as a kid and you’d be on the highway and there are these tractor trailers of these homes that, you know, you build. But it was always the low end of things.
 
You thought they were trailer homes or small little homes, you didn’t see luxury homes and other things being built this way. I’m imagining what you’re doing here, even in the residential space is opening up people’s minds to high-end innovation in a market where I feel like all that innovation’s been kept at the low end. And so I’m just wondering about, like every entrepreneur does, how can other entrepreneurs take away? What can they take away from this very, pretty, eight-year transformation you made or nine year transformation you made in an industry to what they might have created excuses of impossibility, right? It’s impossible to do. So are people taking your model into residential? Are people taking your model into other areas and can your model apply to other parts that you’re not going to touch but other entrepreneurs would?
 
Carson Holmquist: Yeah, so I think the key to us was starting with the concept of “Who do you want to be a hero to?” Dan I remember being in a session, and this is really what launched our pivot, is these high-stakes freight clients. I loved working with them because they were doing really interesting things and they needed the best of our capabilities to execute them. It was just a beautiful collaboration.
 
Once I got clear on who I wanted to serve, we got way more creative about doing it. So instead of focusing most of our energy on routine freight that didn’t challenge us, we’re focusing all of our energy on an industry or a type of client that needed new solutions that forced us to change and innovate. So that was the thing that unlocked it, Steve, to talk about the industry we serve in modular construction, it is extremely creative right now to your point.
 
The concept of building something off-site and bringing it on site is not new. Mobile homes have been this way for a long time. The difference with mobile homes, they’re built to a HUD standard, which is an inferior building code. These are not as high-quality products as what you would get let’s say if you built a home on-site, a normal, traditional single family home. But now there’s a lot of incredible companies that are doing innovative things with single family homes, to your point Steve, luxury homes that are built in a factory and assembled on site. We’re seeing it in hospitals, we’re seeing it in hospitality, we’re seeing it in student housing. It’s all over the industry and there’s modules which are essentially full 3D volumetric rooms and spaces. A great application for this is apartments where you can build an entire apartment unit in a factory.
 
Maybe it’s two modules pieced together and it has the bathrooms, the kitchens, the drywall, the flooring, everything is done in the factory so that when you stitch it together, it’s finished.
 
Then there’s also pods. Pods are smaller units that may just be bathrooms. Let’s say in a new hospital you might have 200 bathrooms. Instead of building 200 bathrooms on site, you can build all 200 of them in a factory, slide them into the space required for that bathroom and assembly goes much faster.
 
There’s also panels. So it’s incredible, the technology is great because there’s a lot of robotics that help in this process, but it really starts with the innovators because in the construction industry, they’re having success with site-built. There’s no lack of money to be made so the people who are really doing this are doing it because they know there’s a better way, they’re thinking about the future. It’s not because they have to do this to make money. They’re saying that in order to reach the demands of today and of the future, we’re going to have to change, we’re going to have to be faster and we’re going to have to be smarter. So we get to work with innovators like that every day, which is extremely energizing for us and our team.
 
Steve Krein: You’re manifesting shortcuts in a physical world. And Dan, we’ve talked about shortcuts for a long time now in Free Zone, and I think there’s something powerful visually about the physical manifestation. You said 200 bathrooms, right? Everybody can picture what a bathroom looks like. It’s really interesting to take the “Program, Platform, Shortcuts” model here.
 
Dan, I know you’re talking about a Triple Play kind of framework now in 10x a little bit, and I thought maybe this could be an interesting illustration of it in action because we have 430-plus companies. The companies that I find easiest to talk about are the ones with physical products or devices. We have a smart pill bottle put out by a company called a AdhereTech and I carry around the pill bottle because I can hold up a smart pill bottle the way you can hold up a Kindle or something physical to show people what a digital device looks like. I think it’s interesting that you are physically manifesting shortcuts. So Dan, I don’t know if you want to use this to kind of talk through the Triple Play. I thought it could be an interesting way to frame Carson’s business with that model for everybody listening— Including me: I’m interested in seeing you play it out as well.
 
Dan Sullivan: The big thing is that you can take any three issues. For example, in your case, we can take the manufacturer, biggest issue of the manufacturer. You can take the biggest issue of the contractor and then you can take the biggest issue of your own. I have a form where you have three arrows, and the issues go in each of the three arrows, goes there, and then you have a box connected to each of the two arrows, and you say, “What does this issue of this person have to do with our issue here?” And then you say, “What’s the connection?” And it’s really, really interesting to watch it happen because I’ve done it now about six or seven times in the 10x workshop and I’m doing it in the Connectors. And at first they say, “Well there’s no connection between these things.”
 
And I say, “Well I know there isn’t any connection… yet. You’re going to create the connection.” And they do the first one and they’re kind of looking at it and about half way through the second one they say, “Holy shit, huh huh.” Like that and you just see the whole room, just shifts. And then they fill it in, they fill in the third one. And I say, “How many of you could create a whole new program just based on the three connections that you made here?” Hand went up. I said, “How many of you, if you wanted to, you could start a whole new company with three connections that you do here?” And the hand goes up and I said, “How many of you, you have a new company hiding inside of your old company, just because of this?” And I said, “This is just three things. You could do it with any three other things.”
 
So in a certain sense I think that’s what you’ve done. And I think when you see the new tool, it’ll speed up your process. I took the number one habit that came out of my Unique Ability process with Julia Waller. So I put that in one arrow and then I took my number one Strengthfinder, which is “Ideation”, and I put that in second and then I took my 10 QuickStart from Kolbe, and I put in a third one. My first one is that I’m bulletproof: I can never get into trouble with a new idea. I’ve got can’t get in trouble with a new idea, your main passion in life is new ideas, and you’re a 10 QuickStart. When do you get to your new ideas? You just keep getting to the new ideas. And then I saw the connections and I said, “This is the permanent operating model at the center of Strategic Coach.”
 
Now it’s my skills, only, but I’m starting to teach the other team members how to do this with anything that they’re dealing with, and you create sort of a self-multiplying company. We already have a self-managing company based on Unique Ability, Teamwork and Unique Methods, Back Stage methods, we have that. But I said, “I’m not really free, and the company’s not really free of me, until other people can start innovating new tools, new programs, and everything else.” So it’s an interesting thing that you’re doing because what I’m seeing is that all innovations are combining things that are not connected to each other.
 
Carson Holmquist: Yes. That’s a great insight, Dan. I mean we see it all the time is, we’re starting to do things that have nothing to do with transportation, but it’s because we are trying to solve the challenges that our clients, which are the factories, are facing or we’re trying to solve the challenges that the general contractors are facing.
 
One of the main things that our clients are up against is they’re trying to change building methods. So they’ve got to convince developers and general contractors that using off-site methods is going to benefit them, and they’re changing centuries of tradition. So it’s very difficult. So one thing we’ve started doing to help them do that is we’re capturing video throughout the process and we’re using a lot of that for internal reasons. But--
 
Dan Sullivan: Well first of all, you’re doing it for legal reasons.
 
Carson Holmquist: Yeah, so one way we’re capturing video is we have a 4K security camera with a live feed that we can set up on a job site that’ll give us real-time visibility to the job site so we can see the trucks flowing in and out. We can also give that link to our clients so that they can see the progress at any given moment. But one thing we can do with that footage is create a beautiful time-lapse. And with off-site construction methods, the time lapse videos are even more dramatic because you see in a shorter duration this building going up, and you get to see these new technologies being deployed to construct this building.
 
Steve Krein: I love how you’re showing them the end product and giving them a tool for them to sell also. So you’re becoming... Going back to your triple play, Dan. You’re solving somebody else’s problem even though it’s a byproduct of what you’re doing, you’re not even doing it. You’re not a video company.
 
Dan Sullivan: You’re solving their problem so that you have an advantage.
 
Carson Holmquist: Yes. Yeah. Because if we solve that problem, their ability to go sell that next project, that’s more business for us and that’s another opportunity for us to get even better at what we’re doing. So we take that footage, we also have a full-time videographer who’s on the road a lot, taking amazing footage and drone footage. We put that all together and we create a project “sizzle reel” at the end of the project so we can basically commemorate that project and show all the amazing capabilities that came together to pull that project together. They can go take that, market it to the world so that they can go win their next project. And then we do it again. And that’s not anything that was on the roadmap of things to build when we were designing our high-stakes freight model. It just emerged because the need was there and we knew we had the capabilities to execute that for them.
 
Dan Sullivan: Yeah. And to go back to the distinction between a convincing argument and a compelling offer. I mean, you can have experts come in and they can talk why there’s advantages here, and people are looking at their watches and they’re just wondering, “I wonder if I can just get on the road earlier or get to the airport earlier?” and everything like that because they’re board stiff of the convincing step-by-step pro... But when you show a video that shows a major project with time-lapse, it might be a two month project, but it’s 12 minutes start to finish with the modular component of it. That’s a compelling offer, that’s not a convincing argument. They can see their building being built that way.
 
Carson Holmquist: That’s correct. Yeah, and it’s a compelling offer on behalf of our clients so they can go win that project. But it’s also, I mean, it’s a compelling offer from our perspective that we’re able to build those and we can make that project come to life. So that effort is communicating two different compelling offers that are good for both our client and ourselves.
 
Dan Sullivan: There’s three different industries involved here. One is the factory modular manufacturer’s industry, and they’re connected to other industries which are making more standardized parts and high-quality standardized parts. So that’s one industry. And then there’s the logistics industry, the high-stake, which you are the pioneer in. You’re actually Rogers and Clark here. You’re mapping out the Northwest Territories here. And the other one is the whole construction industry. These are three industries, and all of them have an incentive to create quality faster.
 
Carson Holmquist: Yes, that’s exactly right. But all three of them need to be tightly integrated. One can’t really do what they’re trying to accomplish without the others. So we’re the actual physical connection between the other two parties, right? The factory and the job site, but we’re more than that. It’s not just a physical connection, we’re creating the efficiencies that help each other succeed beyond the transportation. So it’s really fun to be involved in, especially because there’s so much innovation happening at the factory level right now.
 
Dan Sullivan: These factories, they must be like aircraft hangers or something. They have to be fairly big don’t they?
 
Carson Holmquist: They do, yes. We’re seeing them getting bigger and bigger too. We work with companies that have... Many of them have between 100 and 300,000 square feet under roof. There’s a factory in northern California, the largest modular factory’s I think 520,000 square feet under roof. These are massive and we’re seeing new factories pop up all over the country. And it really started, I would say in the northeast is where a lot of this technology emerged, really was born out of the modular home industry, taking those capabilities and that concept and then applying it to different types of construction. And then you’re really seeing a high demand on the west coast as well in California, because there’s such a housing shortage and the demand for housing is so high. So you’re seeing a lot of factors pop up there, but now you’re starting to see the center part of the US is starting to develop a lot of factories as well from Texas, Missouri, Minnesota, Colorado, and it doesn’t seem to be slowing down at all. New factories are popping up every month.
 
Dan Sullivan: When you say truckers, and you used it once, you said that we have great truckers. Is this individual independent truckers or are they companies, independent companies?
 
Carson Holmquist: They could be both. We find the more skilled and specialized labor are smaller fleets. So you’re thinking maybe 50 trucks or smaller typically have, they’re looking to do more interesting work and have more skilled labor. Once you start getting massive fleets, they’re trying to go after more of the routine freight, it’s more about volume for them. So we work with smaller fleets, we get to know our drivers at an individual level. We love to reuse the same drivers at the same factory so they know the operations at the factory, they know how the projects flow, and again, it’s the flywheel effect: Once our drivers are learning the processes, they’re getting better on every single project. So the carriers we select are as important as anything we’re doing here at Stream Logistics.
 
Steve Krein: It seems as though you’re simplifying the complex, and even as you’re describing this, it keeps coming back to how do you make sure that you can keep simplifying the story and the narrative. One of the things I was thinking about when I watched your time-lapse video, I was wondering what it would look like if I time lapsed a regular construction of a Starbucks, right? You’d see four days later, yours is done and they’re just putting up the frame. It would be the compare/contrast. Not that you have a problem selling, but I think as you think about scaling, what does this look like a decade from now when you look out or even maybe two decades from now?
 
Carson Holmquist: Well, it’s certainly going to represent a much larger fraction of construction. So right now it’s still only three or four percent of construction projects are used with off-site methods. So it’s still very small, really our clients don’t see themselves as competing with each other. They’re competing against legacy building methods these factories.
 
I think a major trend we’re going to all see is much larger-scale projects. Most of these are going to be mid-rise and lower. Most of these projects. There’s a few companies in the US and Canada starting to do more high-rise projects. Let’s call it 15 stories or higher. And we’re going to see a lot more of that technology emerge. I know that’s coming. And then really it’s going to be about addressing housing. So whether it’s apartments or single family, at scale, with quality, and making them more affordable, I know that’s top of mind for everyone because it’s a fun challenge to solve because obviously no one likes to be under-housed or having to pay as much as is demanded right now, but I think those are two big emerging trends that are really going to accelerate in the next 10 years.
 
Dan Sullivan: We’ll cut here for our end of our first podcast and then we’ll come right back with the next one, but one thing I’d like to focus on in the second one is what’s happened to you as an entrepreneur through this entire process? In other words, we keep trying to stockpile capabilities individually to meet new opportunities, and I’m just wondering, sort of your own assessment of what’s happened to Carson Holmquist during this. Then we have the whole strategic coach world that it’s freedom in four areas: It’s freedom of time, freedom of money, freedom of relationship, freedom of purpose. So I’d like to come back and talk about that. That’d be my list for the next podcast. Steve, your own, just in terms of things that you would be useful for you, and then thinking in terms of Free Zone members?
 
Steve Krein: Yeah, I’d like to dig deeper on that Triple Play. I think what Carson has done, because of all the different stakeholders, it seems unique in that there’s something for everybody. And he seems to have gotten there in a way that probably illustrates the Triple Play really well. So I’d love to just see you take the Free Zoners through that a little bit because of the ideal set of stakeholders that benefit from Carson’s programs or projects or whatever you call them.
 
Dan Sullivan: All right. So this is Dan and Steve with our special guest, Carson Holmquist, and come right back because we have a second episode of this particular Free Zone Frontier.