it can work anywhere—and help CMs become
the go-to suppliers in their markets.
For the past 15 years, says Shelter Systems’ Joe Hikel, he’s been listening to the innovators behind Smart Components work through the challenges of putting the manufacturing process that works so well for roofs and floors to work in walls. “It’s a long process and not easy to do,” Hikel said. “You’ve got to invest for a while before you get return.”
Early-adopter struggles aren’t for everyone, Hikel emphasizes. In addition to getting sales of a new product off the ground, Hikel said that working Smart Component manufacturing into his existing production facilities was no small task. “It’s a different ball game. You’re doing a lot of drilling and bolting that you don’t typically do in a truss manufacturing plant.”
However, introducing a product to the market has perks as well as pitfalls. “It becomes easier to become the roof and floor truss supplier if you have a product that no one else has,” Hikel said, especially one “that’s needed on the job.”
A Slow Start
It not only takes time for an innovator to develop a prod-uct, or for a component manufacturer (CM) like Hikel to get up and running, producing that product; it also takes time to make a value proposition clear to customers. Shelter first approached single-family home builders, a group already interested in pre-fabricated components and speedy construction, pitching Smart Components as an exciting new use of truss technology, imported from the West Coast. That tactic had drawbacks.
As Shelter’s Bob Dayhoff explained, Smart Component production “is, relatively, an expensive start up, so there’s expense that we then transfer in the product cost.” Customers doing comparison shopping experienced sticker shock. “A double-sided plywood shear wall, when you break out the components, is cheaper than the design-manufacture price that we have on the Smart Component,” acknowledged Dayhoff.
Trying to show customers savings meant changing the conversation from price to a framer’s time saving potential. It was an appealing pitch, but it still wasn’t a sure sale. “From start to finish, we could show that using Smart Components was a significant time savings,” said Dayhoff; but there was still the matter of putting a price on that time. “To try to put a savings—a labor savings—on panelizations is almost impossible,” Dayhoff admitted. “A framer
is going to charge you about the same price to set a panel as to frame it.”
“The approach on the west coast was to convince the framing carpenter they don’t want to live without [Smart Components],” Dayhoff explained. The pitch was that shear walls were always necessary, and Smart Components were the best option. That logic doesn’t work on the east coast.
“The lateral loads on the east coast are a lot less than the seismic loads out in California,” Hikel pointed out, so shear walls aren’t always needed and Smart Components can seem like an unnecessary worry and expense. “In California, it’s different because the alternative is much more onerous,” Hikel explained. “Compared to bolting together three pieces of steel,” Smart Components are a breeze; but because that’s not something Hikel’s customers are usually up against, a complicated shear wall is seen as “a pain,” a perception that Hikel saw rub off onto Smart Components.
Dayhoff is convinced, though, that componentized shear wall solutions will catch on. Even though seismic loads aren’t a factor in his market, wind certainly is—and that means Smart Components “could be a great fit.” In single-family buildings, he explained, “the demand load on the building, the shear load, is much smaller than on multi-family units. So really where the Smart Component shines is in a multi-family, multi-story building.”
Mark Pasquill of Universal Component Corporation agrees that there are benefits to offering a product “that’s new to our customers here on the east coast.” In many ways, his experience with Smart Components has paralleled Shelter’s.
Like Hikel, Pasquill has been hearing about Smart Components for a long time. Pasquill started offering Smart Components precisely because, he says, it was a good fit with what the company was already doing. “It’s not a huge leap in terms of our technology,” he explained. “There are a couple of nuances that you have to work out,” he admitted, but that simply meant he needed to start small. Just like Shelter, Universal decided the single-family market was the place to begin.
“One has to be able to walk before you can run,” said Pasquill. “So we were cutting our teeth, as it were, in the single-family market to get a good understanding of what the product does, how it’s designed, how to use it.” And there, like Shelter, Universal ran into roadblocks. “The commercial market is really where it needs to be,” Pasquill said. “If you move to a multi-family market, that’s where you get the volume.” Volume, meaning the economies of scale that bring down costs and increase margins.
Pasquill says growth has been gradual. “It’s been a slow process,” he said, to educate the market about a new product. Momentum builds only as fast as new customers agree to try out the product. “The people who have used it are very happy with it. It’s just getting them to understand it.”
Pasquill points out that “some of the same basic principles apply,” in Connecticut as do in California. Both markets have worked to educate customers and perfect a nuanced sales pitch. “As opposed to putting the product in front of them and saying, ‘this is the price, and it’s going to save you money,’” Pasquill thinks the message with Smart Components is: “This product is a problem solver, not a problem creator.”
Smart Component suppliers on both coasts are coming to the same conclusion: introducing a product means starting at the beginning of the build process. “What we have to concentrate on going forward,” Pasquill explained, “is getting education out there to the engineer and the architect—getting them to recognize the product and specify it.” The shift, he says, from reaching out to framers and homeowners in the single-family market to approaching engineers and architects in the multi-family and commercial markets is a shift from pitching the product as a perk to explaining it as an essential part of the package. With shear wall components, Pasquill said, he’s providing building designers “a solution to a problem they might otherwise not know how to solve. And that’s a totally different approach to selling.”
Dayhoff agrees that new products give building designers options, letting them present new possibilities to building owners. For example, a designer working on a pedestal construction project that needs a two-hour exterior fire rating might find that using fire treated wood and Smart Components allows for wood rather than steel construction. An extra story to accommodate a penthouse or mezzanine might even be possible within the parameters of the relevant building code. Collaboration in the preliminary stages of design means the designer can see all the tools in the tool belt and fully evaluate all the alternatives before drawing the plans.
Hikel explains the strategy for Shelter rests on focused recommendations presented at the right time, for the right project, to the right person. “We try to find places where there’s a lot of glass,” he noted, such as a sun porch or another space with little inherent capacity to resist shear loads. And, of course, he’ll suggest a Smart Component “whenever a proprietary shear wall from another manufacturer is specified.”
As Pasquill put it, Smart Component suppliers are still in “education mode, trying to get architects and engineers to recognize the product for what it is—a damn good product.” Bringing shear wall components in at the beginning of the process and getting Smart Components “specified within plans,” Pasquill explained, means “you’re not trying to reinvent the round wheel square (as one guy put it to me a little while ago) with something new-fangled.”
“Because plans themselves, especially on large buildings, take so long to develop, it can certainly take three to five years before [a new product] starts to catch fire,” observed Dayhoff. By that point, he says, the slow process of convincing framers that building shear walls with components isn’t scary, and that it’s “faster and easier” than the alternative, will be over. A critical mass of builders and designers will be accustomed to “seeing a building go up and seeing how [Smart Components] saved them time and kept them from going to a more expensive alternative like steel.”
In other words, Dayhoff sees a rosy future at the end of the slow road to market growth. “It was a tough sell,” he admits, recalling Shelter’s first outreach efforts. “The hardest part,” he said, was the first step. “Getting that first component in,” Dayhoff explained, that’s what everyone worries about. “It’s just fear of the very first component.” Dayhoff predicts design professionals will be an easier group to bring on board than framers and builders. They are much more likely, he thinks, to see Smart Components as “another arrow in the quiver, another tool in the tool bag.”
Pasquill is very clear: he’s not rushing out to market Smart Components “as something cheap and cheerful,” because they’re not. Instead, he’s saying to potential customers: “Come to us. We have this range of tools in the box that can solve problems for you.” That might be a Smart Component, but it could just as easily be a roof or floor truss. For Pasquill, booming Smart Component sales aren’t the primary goal—a new product is just one more reason for customers to see him as their “go-to person.”
Ultimately, Universal sells Smart Components for the “same reason we do light gauge steel trusses: it’s another product in the arsenal, another margin stream that allows us to expand our company.” For Pasquill, the value proposition is simple: solving customers’ problems and building a better support system for their projects means making money.
In that sense, his message to the market hasn’t really changed. Especially on large jobs, Pasquill noted, many general contractors “don’t like dealing with multiple people. They want to deal with a one-stop shop.” Pasquill tells the story of how builders reacted when Connecticut and Massachusetts adopted new building codes: they scrambled to collect all the information they needed to secure permits, and they showed up at his door, asking where they could get sealed engineering documents with wind load calculations and wall bracing specifications. “We would give them the sealed drawing,” Pasquill explained. As part of the service, they’d replace complicated, code-mandated braced wall nailing patterns with simple Smart Components. “That’s really how we started to plant the seed,” Pasquill said, by telling customers, “you need this information for your building inspector; we can do it for you.”
Pasquill’s business model, at its core is: “they have a problem, we solve the problem.” That outlook got him interested in shear wall components and makes him ready to welcome whatever innovations are around the corner. “I don’t see Universal as just a truss manufacturer,” he said. “We’re engineered components.” That means any component that can help customers build better.