How To Dominate A Competitive Market

A Seattle rater and consultant shares lessons he has learned working with the top green builders

Green building is like any other endeavor.  Look at a local market and you will see most green builders going about their business the usual way—doing good work but competing with one another for the best jobs.  You will also likely see a few companies that have managed to rise above the herd.

The latter companies are the ones who create a recognized brand based on their green building expertise.  They're less affected by price pressures and stay busy even when the real estate market cools.

The obvious question is: how did they get there?

You can get a good perspective on that question from industry professionals who work with those market leaders as well as with the rest of the pack. That's why we decided to spend some time with Tadashi Shiga.

Shiga is Principal of Evergreen Certified in Seattle.  He has worked with 250 builders in what may be the greenest building market in the U.S.  His company provides verifier and rater services for programs that include PHIUS+, HERS, ENERGY STAR, and the Seattle-area's BuiltGreen program.

Here are what he sees as the answers to that question.

1.  Partnerships are powerful

More builders will rise to that top tier when there's healthy consumer demand for green building. The best way to create that demand is to get industry and government working together, which is the case for Seattle's BuiltGreen certification program.

Shiga says that BuiltGreen is similar to LEED Gold.  To get certified, a home must perform 20% better than the Seattle energy code and has to meet additional requirements that include indoor air quality and recycling.  It has become a real benchmark for local build quality, with more than half of local new construction now meeting its standards and some types of housing doing even better. "I estimate that 90% of townhomes and row houses here have certification," says Shiga.

He credits much of that success to a partnership between government and industry.  The program is offered by the Master Builders Association of King and Snohomish Counties—the Seattle metro area—but has been embraced by local permitting authorities.

Certification from BuiltGreen qualifies the builder to build a bigger home in certain areas and for faster permitting from the City of Seattle.  "I've seen them take six weeks off the permit time," says Shiga.  This has increased demand for green among consumers and builders.

2.  Standards are a starting point

Some builders seem to view program standards as performance ceilings.  The market leaders understand that they're minimums.

All of the 250 builders Shiga works with are pursuing BuiltGreen certification but just five have committed to exceeding the minimum standards.  Only three of those builders consistently succeed at it.  "We have five Passive House projects underway and will probably complete about 10 NetZero projects this year," he says.

In other words, in a market where consumers already embrace the benefits of a green home, just being green isn't enough.

3.  Architecture is Job One

While home performance is crucial, it's not enough.  "The top green builders offer sexy, cool designs," says Shiga.  "Their homes aren't just green—they're beautiful."

Builders that epitomize great green design include Dwell Development and Green Canopy.  They're two of the three consistent high performers Shiga mentioned (the other one is Cascade Built).

For instance, Dwell (which this newsletter profiled in December 2018) has won awards for architecture as well as for home performance.  Its projects sell faster, and for more dollars per square foot than any other local spec builder.  "People would buy from them even if they weren't green," says Shiga.

The same goes for the other top builders.  In each case, when visiting their websites you're greeted with two things: the company's commitment to making a difference for the environment—its green message—and photos of beautifully designed homes.

In this regard, Shiga thinks builders can learn something from the electric car industry, which was the first to demonstrate the power of combining aesthetics with environmental commitment.  "Electric cars didn't take off until Tesla came out with one that offered high performance and a real cool factor."

4. Passion and purpose are superpowers

How well a home performs and how well it's designed are reflections of the builder's priorities.  Those priorities grow out of what the builder sees as its defining purpose.

Of course, it's a cliché to talk about the purpose-driven company, but the fact that so few companies in any industry give this concept anything more than lip service makes it a powerful differentiator.

"The top builders are all driven by a purpose," says Shiga. "They each have a very clear vision about how they want to lead their field."  That invariably includes positioning their environmental commitment as something that helps make the local community a better place to live.

That commitment starts at the top of the organization.  "Company leaders have to really drive it," he says.  "Leadership is required to get employees and subs on board, and if you don't get them on board it will be an uphill battle."

In fact, he says that the best builders truly invest in their teams.  This creates a reputation that attracts the best workers.

5.  Leaders aren't afraid to share

Shiga regularly teams up with Anthony Maschmedt of Dwell Development to give presentations about green building to groups of consumers and builders.  He says that type of information sharing is typical for the top green builders.  "A great thing about truly sustainable builders is that they want to help each other out," he says.  "Their mission includes helping save the world, and they know they can't do it alone."

They also know that information sharing is a great business strategy.  Besides the obvious benefit of raising name recognition, it also helps the builder get better.  "The presentations that Anthony and I do are great networking events," he says.  "They're an opportunity to learn from other builders, contractors, and designers who are building green homes."

Public information sharing can also uncover business opportunities.  For instance, once Shiga became known, technology providers and product manufacturers began asking him if he knew any builders that would be interested in trying their products.  That led him to start EkoVate, a company that serves as a matchmaker of sorts between the two groups. He also saw a demand and became the area's first AeroBarrier installation company.

6.  There's no fast track

The final lesson is that patience pays.  Builders who want to rise in the green building game shouldn't expect to get there overnight.  "We advise them to start by taking baby steps," says Shiga.

"Get some training on building science.  A good start is one of EEBA's seminars or its annual Summit," he says.  "Then sign up for a program such as BuiltGreen or LEED that can give your homes some type of certification.  Then find a good consultant or HERS rater to help you along the path."

If you understand and follow the above lessons, and if you seek to join that top tier of green builders, then you will gain a real marketing edge.  A lot of builders have no idea how to attract a following on social media but a company with a real purpose, great architecture and a commitment to sharing information will find it easy.  They will earn more than likes: they will build a reputation that commands higher prices and helps carry them through the inevitable market shifts.

"Following these lessons is an insurance policy," says Shiga.  "The building industry is coming into a downturn.  What I learned from the last downturn was that the companies that did well were the ones that built a brand and gave real value to homeowners."

Tadashi Shiga is Principal of Evergreen Certified in Seattle. His company provides verifier and rater services for programs that include PHIUS+, HERS, ENERGY STAR, and the Seattle-area's BuiltGreen program.


Gord Cooke
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re: How To Dominate A Competitive Market

Saturday, May 11, 2019 7:41:54 AM

The elements of this article ring true to my experiences with great builders all across North America. Great thoughts

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