The interview by Mario Bekes (MB) for Alive 90.5FM with PowerHouse Homes Founder Waco Tao, took place in Sydney, Australia last year, for the book launch of 50 Unsung Business Heroes Volume 2. The interview coincided with PowerHouse Homes’ 10th birthday. During the radio segment Waco shared the “light bulb moment” of when the idea behind PowerHouse Homes was conceived.
MB: What brings you to Sydney?
Waco Tao: Among the many reasons, the number one reason is to attend this book launch by Purpose Publishing. I’d like to also congratulate you for also being one of the heroes featured in the book. Being one of the heroes myself, by duty I must be here.
Secondly, there are so many other likeminded people at events such as these and you’re always able to pick up their inspirations and their vibes. There couldn’t be a better opportunity for you to share your inspirations and visions and to learn from each other.
The third reason is on a more personal note. I can’t help but cast my memory back to twelve years ago, when I was about to land at Kingsford Smith Airport, where the plane was circling before landing. I was running late for my meeting and I decided to look out of the window to see some shipping containers sitting in Port Botany. I think this is what you call a light bulb moment, because I thought, why can’t we turn these containers into a solution to solve the housing crisis in Australia.
To cut a long story short, it took me sixteen months to work out that something like this did not exist around the world—not that I’m a hesitant person, things of this scale take time and preparation. In London there was something similar, where they turned shipping containers into offices and accommodation. But, no one had used the structure of shipping containers to be integrated into housing, especially on a large scale, commercial fashion. So I thought, maybe it’s my job to do it. Lots of research and development in terms of money, time and investment were poured into the concept during the sixteen months.
MB: So at this point you had no money, no one to back you up and so on, what did you have?
Waco Tao: My head. And I have guts—I’m a bit of a daredevil.So when this opportunity occurred to me, I thought, I have to do it. I didn’t have backers but I had another business, which I still have today, Models Inc. The business services the property development market and has done so for the last 25 years. And it’s been a very glorious 25 years.I always joke, there’s not really that much difference when you make architectural models, which are usually a 1:100 or 1:75 scale, compared to what we do now. Now we make big models, 1:1 scale. The principle is exactly the same. You need to have a level of passion and it’s something that I still have today from the first day that I began the business.
MB: What were the biggest obstacles you faced in launching PowerHouse Homes?
Waco Tao: The first obstacle we faced was the mindset of the general public towards prefab housing. Generally a lot of people think that prefab houses are built from shipping containers—which they’re not of course. From a layman’s point of view they definitely look like shipping containers. And first homebuyers think, I’m not going to put my family in a shipping container. A lot of people don’t give themselves the time to investigate and to realise that our proposition is better than what traditional housing offers. Instead, they simply say no.
The second obstacle is banking, or funding. Generally speaking, the average family does not have the sufficient income to be able to buy a home, they’ll go to the bank to get a loan so that they can pay a builder.
At this moment, obstacle one is definitely becoming less of an obstacle. First homebuyers who aren’t able to buy a home have to look at alternatives, whether that’s an extension or so on.
MB: What were the biggest obstacles you faced in this industry, converting shipping containers into homes?
Waco Tao: For our business to take off, we faced two main obstacles.
There are so many obstacles you’d have to come across.Funding is definitely one huge issue, I came to Australia from Shanghai 30 years ago. Not being a second generation migrant, I started everything from scratch.Having no backers and not exactly a deep pocket, I had to run on what they call a “shoestring budget” and I had to be smart about how I spent money.The second obstacle is the newness of the business that is PowerHouse Homes, it’s unchartered waters. It’s brand new and you have no idea what lies in front of you. In hindsight there’s so many things that I should have done, but at the time I had no idea and I also didn’t have anyone to guide me on these kinds of decisions. Due to the innovative nature of the concept, every time you test the waters it costs you money as well as everything else.For me I think the biggest risk is that you might be pumping in 10-14 hours a day continuously for three years and there’s no guarantee of success at the end of the day.
Waco Tao: What is the difference between your prefab homes and traditionally built homes?
WT: There’s four characters in Chinese, duo kuai hao sheng (多快好省), which in this case be translated and applied to mean that you get more out of what we offer and it’s much faster as well. For example, double-glazed windows and 30mL thick stone benches are a standard, you don’t have to pay more to upgrade to these fittings.Not to mention windows that are ground to ceiling, too, as well as 100% thermal protection in walls, ceilings and floors—it’s fully insulated like a fridge.
We’re better, in many ways. Our prefab homes are more affordable than traditional houses. My definition of affordable housing is that it has to be affordable enough at the point of purchase, as well as for the rest of the product life cycle, all the while as the cost of energy increases.
Our timeframe is better than that of traditional housing, with our prefab homes being built and completed in 10-12 weeks. They’re also better looking because they’re steel framed (so termites are not a worry).
They’re also far more energy efficient and actually save energy. Our first prototype, which we built in 2009, reached a six star energy rating (and at the time the national standard was four stars). It wasn’t something we aimed for, it was sort of accidental.
MB: During the time that you were setting up PowerHouse Homes, did you have anyone mentoring you?
Waco Tao: I didn’t. I was basically the mastermind and orchestrated the whole thing by myself. I did have some so called partners in the early days, however it became
clear that their vision did not match that of mine and over time they dropped out due to various reasons.
MB: From your initial light bulb moment, what was the next moment for you that you realised you were achieving something?
Waco Tao: When I first started this venture, there was hardly anyone in our space and it’s quite the same today. Not that I believe in the idea of competition, I personally think the word should be taken out of the dictionary altogether.Having read the book, Blue Ocean Strategy, I learnt that there’re so many things to focus on other than cost, for example, innovation. So what I’m saying is, never believe in competition.
On the other hand, because there’re no competitors or industry players to talk to or to benchmark against to learn from, you’re alone. In a traditional industry, there’re industry leaders and so on. But in this scenario, you are your own benchmark, your own standard. So it’s very hard to know when you’ve done something right or wrong and to know the gap between you and your rivals.
Even today, the industry is very much so still in its infancy. I know there are players out there, but they’re very quiet and they’re also doing things that are quite different to what we are doing. Personally I’m different, if I’m doing something, I want people know, so that they can benefit from it.
MB: How do you get your message out there?
Waco Tao: Growing up I was very shy and timid, I trained myself to be bold and outspoken, and especially when I came to Australia. I began public speaking and making my voice heard and sharing my knowledge and passion with others.
When I realised that PowerHouse Homes had a future, it was last September. I was invited to speak at a housing conference in KL. Going back to 2009 when I launched the company in Perth, there were around 30 people who I delivered a speech to. In KL, there were over 1000. From 30 people to 1000 people in less than ten years time, it means that the popularity, acknowledgement and recognition of the industry by the general public is taking shape.
MB: Have all of the efforts paid off?
WT: To an extent our efforts have paid off, we have put so much out there to let people know about what we are doing, to let them know that our product is superior,and from an environmental perspective our product is far more sustainable.
For more info, visit www.powerhousehomes.com.au.To listen to the podcast online, listen at
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