Tuesday, February 5, 2013

Modcoach - Stop Picking on Blu Homes

I just can't help it and apparently neither can other people. I just received the following email and just have to share it with everyone. Enjoy the email and the videos:

Blu's latest promo videos are fantastic!  

This one has a great scene where the customer proudly declares that he doesn't know anything about building, but he's an advertising executive!!  

In this second video, a woman named Milli built a house in Tahoe and struggles to make every day consumer choice seem somehow like altruism:

It is so funny to listen to the mundane talk about appliances and bedrooms which are common issues that necessarily present themselves to anyone who wants a home spun into special features and acts of beneficence that have been gifted to the future.  

When she talks about the cabinets, she says, "The cabinets are veneers, because that is the environmentally friendly solution".  Now if she'd said, we bought the IKEA cabinets because they only cost $8,000 and they are just about as good as the ones that cost $95,000, well then we'd be getting somewhere. 

These commercials have to be a case study in where we've arrived in our belief that consumption of luxury goods like second homes are in fact altruistic acts that address environmental problems.   

What is presented in these videos is an example of complete disconnection not only with material and industrial reality, but with every day home economics.  The problem is that these attitudes are not so much opinions as they are deeply held moral beliefs which actually function to protect the people who hold them from being honest with themselves about their choices.  When I hear this, I can't help but think:  Let them eat cake.        

But none of this would amount to anything more than being upset at Louis Vuitton EXCEPT for the fact that Bill Haney, co-founder of Blu Homes may as well be the poster boy for the train wreck collusion between architecture and environmentalism in the 21st. century, and the arrogance on display here is what this has metastasized into.

Note from Modcoach: These houses looked staged and the videos appear to professionally done. I would bet that these videos took another big chunk of that $60M. I would be willing to give Blu Homes an ad on Modular Home Builder blog which reaches over 60,000 people a month for only $10,000 but I don't think I'll ever get the purchase order. 


Anonymous said...

Please don't stop!
I just wonder how long Blu Homes will be around after they burn through their investors money which is the only thing keeping their doors open.

Anonymous said...

Keep it going! Just opened another magazine that I get called RealSimple and surprise, another full page full color ad from Blu.
Price tag? $196,900.

Dan Hobbs said...

May I offer a contra-explanation of Blu Homes’ actions?

Some of us are old enough to remember the rollout of Honda’s first car in the US – a diminutive, two door model introduced in 1969. It was sold in Honda motorcycle shops and we all made a visit to laugh. We joked that the entire car would almost fit into the trunk of US cars, and the performance was abysmal (0-60 in 19 seconds). Little did we know Honda was bringing the seed of the world’s new characterization of a car, and eschewing blindly following the Detroit herd down the path to declining market share.

Could we be seeing a similar shift in homes? Over the past decade the following changes have taken place:
• Increasing emphasis on energy and resource conservation
• Increase electronic content which reduces space (flat screen v. CRT) and improves performance (programmable thermostats, variable speed compressors)
• A sea change in the assumptions undergirding housing finance – from ‘cannot-fail’ to ‘just another asset’
• A parallel shift in housing demand – from McMansions to optimized designs

Notice the above items have nothing to do with the appearance of the home; they speak directly to function and utility. Given this, could we be witnessing the beginnings of a market shift to the housing equivalent of the Honda Civic/Accord?

We may be on the verge of just such a major market shift. If so, we would all be well advised to avoid the blindness of Detroit execs in the 70s and instead labor to see the as-yet-undefined future. This is dangerous ground, and I claim no clairvoyance in this realm. What I do suggest, however, is that we give kudos – at a minimum – to Blu Homes for their boldness. Regardless of the outcome of their business venture, they are pushing the envelope.

To the issue of the sixty million investment, much of Blu Homes’ powder may still be dry. Even with a heavy marketing effort in this industry, it is hard to burn through tens of millions quickly. Given that much of their marketing to date is targeted at generating awareness, they may be holding resources in reserve for the time when awareness converts to orders during the growth stage.

Bottom line: it is far too early to discount the possibility that Blu Homes is a game changer.

Dan Hobbs
Cardinal Homes

Anonymous said...

Your game changer has been around since the 1940's. It was called the Acorn House and folded up and shipped. It became Deck Homes and they dropped the folding part. We may have laughed at those original small cars but it was Honda who adapted to us rather than us to them. If it wasn't for the rapidly rising gas prices, many of Detroit's cars would still take up two parking spaces and come with fins.

Modman said...

Coach, here are the challenges Blu Homes faces:

1. Their folding house solves a problem that does not exist (shipping wide boxes long distances) and actually creates some major disadvantages such as:

2. Folding a house like they do requires all the wet areas and cabinetry to be in the core module. The rooms with not much in them, i.e. great rooms and bedrooms, are "folded" and kept on the outside.This system is inherently inflexible as such, and customization becomes a huge challenge.

3. Engineering the Blu Homes is a major project, and customization is reduced to very minimal changes from the standard. Remember the days in early modular home manufacturing when you could not customize a plan?

4. Blu touts the fact that they are not only the factory, but they handle the complete project, including site work, button-up, etc. How did that work for Nanticoke Homes, and a dozen other factories that tried it and then decided to stay with what they did best- build modules. Invariably it made more sense to sell homes through local builders.

5. The folding system is nothing more than panels on hinges around the core wet module. The on site finish work is substantial.

6. All of the factors above drive the costs up. Greatest challenge facing consumers today? Getting financing and making the appraisals work. It must be pretty near impossible to get 90% financing on this product, as they are just too costly.

7. Lets be honest, the architectural style appeals to a much smaller segment of the market. Blu's decision to move to CA, despite the fact they boasted the fact that they delivered houses from MA to CA, makes sense because that is one area where this architectural style thrives.

8. Blu's philosophy of hiring young MIT and Harvard people and avoiding seasoned modular industry people is bold. Perhaps Dan Hobbs is clairvoyant and we are on the cusp of a major change in the housing industry. I wonder if the realities of the financial hurdles and the market proclivity towards traditional architecture are more than a gimmick of folding a house can over come.

Anonymous said...

Modman- You are correct about the aestetic of Blu is more pleasing to the CA crowd. However,having sold mods in CA for 8 years I can tell you that it is hard to believe that an entire company can be sustained on that style of home.
Perhaps they will capture the vacation home market, but in terms of primary residences, the demographic for that type of home is very limited.

Anonymous said...

Another Blu full page ad in House Beautiful: $140,235