01 Sep 2004
Home Sweet (Modular) Home
One mans quest to build a new kind of businessby Roger ThompsonTopics:
Starting a business is never easy. But staking your future and your bank account on a concept thats never been tried before makes it especially difficult. Just ask Stephen Stuntz (MBA 69), the founder and president of Greentech Housing Company, a start-up conceived to change the way modular houses are designed, built, and marketed.
A graduate of MIT, Stuntz launched Green-tech in 1998 following the acquisition of his former firm, Acorn Structures, a custom-home builder. The new owners didnt need two presidents, he deadpans. Eager to move on, Stuntz and two partners embarked on an entrepreneurial odyssey that, at long last, has positioned Greentech on the brink of profitability.
The company set out to be different. Greentech aimed to produce custom-designed modular homes that are highly energy efficient. Reflecting the partners personal values, the firm sought to build homes in an inner-city factory with union labor.
As Stuntz quickly learned, entrepreneurs need a high tolerance for rejection. Prospecting for investors yielded only disappointment. We finally decided to self-fund, he recalls.
Greentech seemed poised for a quick start after getting an invitation to bid on supplying 580 multifamily affordable-housing units for low- and moderate-income residents of Boston. But finding a factory site in the city proved impossible, and the deal died. Searches in Providence, Rhode Island, and Hartford, Connecticut, proved equally frustrating. As a start-up, they city officials regarded us as too risky to deal with, says Stuntz.
Greentech eventually set up shop in Worcester, forty miles west of Boston, in a former trolley-car factory. With a place to call home, the company finally graduated to the operational stage in early 2002. It wasnt long, however, before cracks began to appear in its carefully crafted production plan.
The first order of modular homes languished on the assembly line for months as Greentech struggled to resolve a number of serious production-control issues. Stuntz now has hired a new production-control manager and feels confident that the initial workflow issues have been resolved.
On-site finish work turned out to be a major problem. Its the general contractors job to hook up the utilities and finish interior details once Greentech assembles its modular structures. But a shortage of skilled labor caused the finish work to drag on for weeks. Greentechs solution? Stuntz plans to acquire a small finish-work construction company to guarantee timely completion of future projects.
After an initial rush of orders, Greentechs assembly line fell silent last winter. Looking back, Stuntz faults shortsighted marketing advice. The marketing people tell you to focus like mad on getting orders out the door. But while youre doing that, you arent focusing on getting the next orders in the door, he explains. We now know that we need to be bidding fifteen to twenty projects instead of five to ten, just to get the flow of work we need.
With almost three years of operational experience, the ten-person company has adapted and survived. A pending project for 42 multifamily affordable-housing units would cause the firm to triple in size by years end. While Greentech continues to focus on the affordable-housing market, it welcomes projects from any builder, Stuntz explains.
Despite the companys rocky road thus far, he remains firmly committed to Greentechs unique vision. Says Stuntz: Its a juggling act trying to stay true to the original concept, while making adjustments for survival.
Class of MBA 1969, Section B