Homebound CEO Nikki Pechet and her team of 52 engineers, contractors and designers are currently … [+]
Timothy Archibald for Forbes
From his front porch in the hills of Santa Rosa, California, Richard Hicks can see majestic pines, rolling green slopes — and a bunch of unfinished houses. The 72-year-old retiree lost his home to the 2017 Tubbs Fire and moved into a new one built in its place in November. Some of his neighbors who suffered the same began rebuilding before him but he was the first to return. One is still waiting for construction to start. Another lives in a shed put up by Habitat for Humanity.
“I wasn’t going to rebuild,” recalls Hicks, a life-long Californian who’s owned the property since 1980. “At my age I should be traveling and fishing rather than going through the time commitment and stress and hundreds of decisions you have to make. But I kind of backed into it.”
More than 24,000 California homes have been destroyed by fires since 2017. Some owners sold. Others opted for ready-made homes built in factories. Of those who chose to rebuild from scratch, many continue to manage headaches ranging from debris removal to insurance claims to hiring contractors, engineers and architects. Hicks’ relatively speedy return was helped by Homebound, a startup formed eighteen-months ago and now managing the whole process for fire victims.
The Santa Rosa company was founded by tech-executive Nikki Pechet and venture capital investor Jack Abraham, both of whom were impacted by the fires. Seeing opportunity in the ashes, they set out to re-invent home building with software designed to cut the delays and cost overruns that plague the industry.
Richard Hicks, a retired Hewlett Packard IT manager, on the porch of his new home.
Courtesy of Homebound
“As we watched people try to navigate the process and the complexity of everything they had to do to build a home, we knew there were really simple technology tools that were used in other industries that could make the process simpler,” says Pechet, who serves as Hombound’s CEO.
Her software tracks 379 unique tasks that are common when building a home, allowing customers to track the progress as they would a Seamless food delivery or ride with Uber. It was essential for Hicks, a former Hewlett Packard IT manager. He could, for instance, ask questions about the color of bathroom tiles with messages that would be sent to a team of interior designers on staff and send info about any changes made to the rest of the team. The app would also notify subcontractors when and where the tiles were delivered.
The changes, in theory at least, are long overdue. McKinsey has ranked construction one of the country’s most Luddite industries, citing fragmentation and hard to measure financial benefits as barriers to scale. The fires not only created unprecedented demand, they also cleared away some major hurdles to adoption.
Since fire victims already have land and nothing to live in, they have strong incentive to do things quickly. Most also have insurance, and good plans pay up to four-times the lost home’s value, providing people with dedicated money to spend and even more reason to move fast, since most policies cover just two years of alternative living arrangements. Homebound has focused its efforts on Sonoma county in northern California and Malibu in the south, both of which have local governments fast-tracking building permits for fire affected properties and tech-savvy populations ripe to work with a digitally-enabled general contractor.
Progress in the Fountaingrove neighborhood.
Timothy Archibald for Forbes
Pechet, 38, grew up in Minnesota, and learned to use a table saw and power drill in her uncle’s workshop in third grade. She met real estate developer Stephen Ross and while studying at the University of Michigan, and after graduating worked in Pepsi’s marketing department during the day and for Ross’ Related Companies on nights and weekends. She then received an MBA from Harvard Business School and spent eight-years on the road as a consultant for Bain & Company.
Jenna and Sean Pearson purchased their first home, in the Coffey Park neighborhood, before the Tubbs … [+]
Courtesy of Homebound
In 2014, pregnant with her first son, Pechet put down roots. She purchased a fixer-upper in San Francisco and began tracking every dollar and delivery in an Excel spreadsheet. Through her job running marketing for Thumbtak, a marketplace where homeowners can find professionals to lay tile or repair wiring, she began to see the value of combining the two ideas.
“I got to see what was possible using technology to match people who wanted to do work with people who needed work done,” says Pechet. But when the fires struck, Pechet, who also owns a home in Napa that nearly burnt in the Tubbs fire, saw that making an introduction was not enough for people starting from zero. Months away from giving birth to her third child, Pechet figured she would start a company in a year or so, but fate intervened in the form of Abraham, who now advises Pechet as Homebound’s executive chairman.
Abraham, managing partner at VC firm Atomic, was in the trying to rebuild his own weekend home that was lost in a fire. Outraged by the prices quoted by a thin supply of local contractors, he sketched out a plan to import cheaper labor from as far away as Arizona. He brought the concept to his partners at Atomic, which maintains a list of 500 startup ideas and incubates the best of them in their San Francisco office. Their search for a CEO led to Pechet.
She has raised $53 million in funding from Google Ventures, Forerunner Ventures and Josh Kushner’s Thrive Ventures and sources valued Homebound at $200 million after an August 2019 funding round. Its long term plan is to move beyond natural disasters, housing shortages and California. Pechet is working with builders in hurricane-prone Louisiana to be prepared to expand there, while also tapping those crews to work in California. The dream is to convert new home buyers into consumers who turn to their iPhones to design the house of their dreams.
“When I think about the innovation that needs to happen in this industry it is not one thing, it is everything,” she says.