On a flight from Los Angeles to New York, back in October ‘22, Builders Patch founder and CEO, Kanan Ajmera, was seated next to Peter Boatwright, Director of the Integrated Innovation Institute at Carnegie Mellon University. What started as a casual conversation on matters of housing and our solution for the industry, bloomed into an opportunity for Builders Patch to sponsor a challenge for the brilliant students studying product development and innovation at CMU.
Peter explained that the challenge is a 15-week hands-on course designed for a diverse team with unique academic backgrounds and work experience in new product development. The course utilizes the integrated New Product Development (iNPD) approach developed over two decades at Carnegie Mellon. Graduate students are tasked with identifying opportunity gaps, conducting in-depth analysis to draw insights, testing hypotheses, and ultimately integrating their findings into a product concept or business case for the sponsors. The course aims to teach students processes, ideas, and methods that encourage interdisciplinary invention, resulting in the development of new products that have been successfully patented in the past.
What was the challenge proposed to the students?
Given our strong focus on data-driven innovation in the affordable housing sector, we were interested to pose a similar challenge to the students. We identified the following problem statements as a starting point for the students.
- Understanding the supply-demand gap and predicting demand trends in the US housing market is a complex process involving multiple stakeholders
- The housing development process is riddled with complexities and developers might not be equipped to navigate it with accuracy and speed
For the last 4 years, Builders Patch has been delivering value to developers, lenders, and other stakeholders alike through its revolutionary solution. Through this partnership with Carnegie Mellon University and the Integrated Innovation Institute, we wanted to further draw attention to our nation’s housing crisis. Our goal was to encourage skilled students to learn about the barriers to the development of affordable housing and think creatively about how we can tackle these problems.
Meet the CMU team
The group of students that Peter and his team put together to work on our housing challenge demonstrated an impressive mix of skills. It was a global team with a background in Software Development, Product Development & Strategy, Industrial Design, Research, Business Strategy, and Data Analytics.
Meet Yanzhi Zhao , Yining Wang, Brielyn Chua, Nila Gao, Shirui Lang, and Harsh Raj who together took up the challenge to innovate within the affordable housing sector as part of their capstone project with us. The team brought together professional experience of over 15 years across industries such as Construction and Real-Estate, Design Consulting, Technology Development, E-commerce, Consulting, and Hospitality.
The approach adopted to solve the problem
With a brief introduction to the sector and an initial prompt, the team set out on their journey using the iNPD process.
With no experience in the US affordable housing sector, the team started as six blind mice not knowing their way around policies and concepts of the industry. However, brainstorming their way through the sector, the team quickly understood the stakeholders involved and the value being exchanged through extensive domain research and business analysis to form opportunities for innovation.
This process led them to identify and narrow the focus on housing developers as the key stakeholders because they are:
1. Closely connected to all other stakeholders
2. The end-users with maximum potential for impact
Building on their previous understanding and mixed-method research approach through industry white papers, 50+ survey responses, 30+ user interviews, and 2 expert interviews, the team formed key actionable insights:
1. Low visibility of information on affordable housing discourages developers
2. Demand outpaces supply in the affordable housing sector
3. Complexity in navigating governmental programs stifle development
These insights together with a detailed opportunity analysis led the team to form 'how might we' statements cethat accurately capture the motivations, actions, and challenges that affordable housing developers face.
The team started developing concepts in this phase through different methods to generate innovative ideas. Following up on the most promising concepts, the team created concept posters, explaining the design and the use case through storyboarding. Presenting these concept posters to developers and conducting think-out-loud design sessions allowed the team to not only refine the concepts but also further develop some of the ideas that users saw value in. The team also expanded on these concepts by creating low-fidelity wireframes and prototypes to emphasize how the proposed solution would work for different users and allow preliminary testing with a varied group of stakeholders.
After iterations and user testing, the team selected one concept to refine and develop into a high-fidelity prototype that shows all the features, interactions, and visuals of the solution. This was done while factoring in the responses and feedback collected throughout the project via interviews and directed critique sessions. Taking up key insights from separate concepts and combining the best-identified product attributes into one, allowed the team to design a working prototype of the final product concept with the goal to create a product that is useful, usable, and desirable to the users. This along with a detailed development of tech stack, product roadmap, developing a pricing strategy, projected return on investment & cash-flow pro forma, marketing & customer activation, growth strategy, and future scoping was done thanks to the well-rounded skill set within the team.
Challenges and Learnings
With a complex project domain akin to the housing sector, the team did navigate several challenges. Some of them apart from learning the ropes of the sector itself were:
- Scaling and modifying academic concepts to fit the real world
- Balancing divergent and often conflicting motivations of different stakeholders
- Recruiting participants and facilitating an open space for ideation
- Navigating the treacherous documentation around governance and policy
While the team was quickly able to ramp up their understanding of the sector, there were a few other notable learnings that the team pointed out:
- Understanding of the continuously expanding supply-demand gap due to effects like slow economic activity or suburban sprawl.
- Limiting nature of governmental policies around accessibility despite being available
- Affordable housing funding is a complex and long-drawn process despite state and federal programs
Apart from these, the team also noted the strengthening of their innovation toolkit and design thinking mindset through the opportunity to work on a real-life problem while getting their hands dirty as major takeaways from the process.
The final outcome: what came out of this challenge?
The final outcome of the project is a solution that empowers multiple stakeholders in their decision-making process. During the 15 weeks, the team zoned in towards understanding the stakeholders within the affordable housing development sector and the relationship they have among themselves.
Building on this central understanding through the iNPD process, the team presented a solution that is revolutionary in its approach to addressing the core issue of securing funding for different affordable housing projects.
Not only does it help developers to break ground faster but allows them to do so with more certainty around the complex financing process. The solution is able to:
- Help both new and experienced developers to keep up with the ever-changing nature of funding programs
- Navigate the site discovery process with ease and efficiency; saving time and money
- Enter and grow in unexplored markets by effectively addressing common woes
The solution also understands the pain points of lenders and streamlines the vetting process of a project. It helps lenders with a centralized repository of past and upcoming projects for them to pool resources and focus on projects that have the potential to make the maximum impact. Using both publicly available and proprietary datasets, the solution predicts the success of potential projects through a machine learning model giving lenders the peace of mind they seek. The solution is a great start to reduce some of the complexities that developers face in their processes and will only get bigger and better with use.
The Builders Patch team extends their gratitude to the CMU team for their wonderful work on this very important issue. If you are interested to learn more about the solution, feel free to reach out to us through our website or social media.