Lean Process: The Tiny Homes Story www.a2smallhomes.com Casey Walton Derek Sanborn

4/22/15 - One night we had a drink or two…. Target Market: Millennials in the early parts of their career (24-30 years old). The Problem: As a young professional, there are no home ownership options that don’t require me to go into major debt. All current housing options provide more than I need or want. Alternatives require me to “throw” away rent money. The Solution: A community of “tiny” homes. A home where one or two people could live comfortable but not require a huge financial investment.

Validate the problem. Test #1: Call our friends and gather qualitative information. Asking questions like: What is your current living situation? What do you like about it? What don’t you like about it? Are you planning on buying a house soon? Why? We learned: No one would really tell us the truth. Everyone was “happy” with their situation. People have a sense of pride/embarrassment about where they live Where people choose to live is a complex decision based on many factors This was a poor test and probably was unnecessary.

Validate solution: People want to live in tiny mobile homes Test #2: Facebook ads -> Landing Pages -> survey and phone calls https://usabilityhub.com/tests/2846d2a1ca54/results/7cc7e21350e0

E. A. Our $5 Logo!

LanderApp: Free 30 day trial of Costs: LanderApp: Free 30 day trial of UsabilityHub: Free if you help others test their ideas SurveyMonkey: Free Facebook Ads: $150

56 Survey Responses How old are you? What is your current living situation? Who do you live with? Would you ever consider living small (300-600 sq. feet)? Why or Why not? What’s the biggest obstacle preventing you from living small? What’s the most appealing part of living small? Contact Info / Can we contact you

Key learnings: Our demographic contained a lot of people outside our target market Living small wasn’t strictly about saving money Largest obstacles are: Financing for the house – You can’t get traditional financing for a home 40K. No where to put their tiny home – You can’t simply put your tiny home on a plot of land Our business idea finally took shape. We are going to build a community, a utopia, for people to come and place their tiny homes to live in. Our business model would charge them rent to keep their tiny home in this community.

Risky Assumptions we needed to test: People would come from all around to live here with their tiny homes People would pay us lot rent Test #3: http://tinyhouselistings.com/listings/ - Is a site where people can post available spots for rent or wanted spots to rent Call/Email 20 people and tell them we had a space for rent 100 miles away from them Call/Email 20 people and tell them we had a space for rent 50 miles away from them Call/Email 20 people and tell them we had a space for rent 25 miles away from them, for $600 Call/Email 20 people and tell them we had a space for rent 25 miles away from them, for $400

Key learnings: People were not willing to move far with their tiny home Tiny home people were cheap, and wanted $200 /month for rent We are going to build a community, a utopia, for people to come and place their tiny homes to live in. Our business model would charge them rent to keep their tiny home in this community. We also learned by calling RV parks: That tiny homes, from a legal perspective, are nothing more than mobile homes. Running an RV park is not cheap to get setup Townships don’t want RV or Mobile home parks in their townships because you can’t tax a home not built on a foundation and brings down housing values

6/1/15 – Time to give up or pivot? Will people buy a tiny home that’s not mobile? (built on a foundation) Is our market so price sensitive that there might not be a feasible business here? How would we design and build these homes?

Test #4: Survey 29 Survey Responses What size house do you want your tiny home to be? Roughly, what would be the fair market value of your house? When are you looking to purchase a tiny home? I would purchase a tiny home that wasn't mobile. Rank the following based on how important they are for you to have in your community What else would you like us to know about your tiny home needs?

Validate solution: People want to live in small homes and aren’t price sensitive Test #5: Facebook ads -> Landing Pages -> survey

Cost to Date: FacebookAds: $450 Unbounce Landing Page: $50

Test #6: Housing Expo: Are people serious enough about this to come see us? Is 650 square feet the “right” size? $1,000 for EXPO space $250 for building supplies

Test #7: Meetup Group: Are people serious enough about this to come see us? Who are our early adopters?