Phoenix from the ashes: the ex-Katerra executives leading Modulous in the US

When US tech giant Katerra filed for bankruptcy in June, the news ricocheted though real estate markets across the globe. The Softbank-backed modular construction pioneer had raised a massive $2bn (£1.5bn) since its launch in 2015 before ultimately collapsing under debt. Its demise was high-profile and painfully public, not just because of the fall of a seemingly untouchable business, but because of the loss of thousands of jobs. A start-up that had grown fast and grown big, Katerra left a 7,500-strong workforce drifting in its wake when operations ceased. A brutal and difficult time for many. But if a silver lining is to be found, one could argue that the implosion of this tech behemoth was the catalyst for a large-scale redistribution of talent. Take the four former Katerra executives now leading the US roll-out of London-based digital construction firm Modulous. Based in Seattle, Janet Stephenson, Kassi Mast, Eva Talbot and Jennifer Caldwell (pictured) have reunited to drive the expansion of their one-time rival. A fresh new chapter twinned with the benefits of working as part of a familiar, well-oiled machine from the outset is a powerful combination – one not to be underestimated. “On a very basic level, understanding how someone works creates speed and efficiency,” says product director Talbot. “Some of us have been working together for years, and that enables such a rapid foundation of trust between us as a team. We have a lot of shared experiences and lessons learnt together. It’s an ideal set-up really.” Here, the newly formed “Modulous Four” reveal how they plan to introduce some of the UK’s practices around off-site modular construction to the US and discuss why they want to be seen as executives who happen to be women rather than women who happen to be executives. I think that finally some of the financial institutions and the insurance organisations are starting to demonstrate an interest and a conversation around what sustainability looks like – and we can help Janet Stephenson, Modulous A complex tale First though, some background. Four executives, two companies and eight job titles spanning the collective move from one business to another makes for a complicated tale. Modulous, like Katerra before its collapse, specialises in off-site modular construction of sustainable, affordable homes. Katerra was known for a focus on mass timber and building its own assets in its own factories, whereas Modulous is characterised by a more scalable, “asset-light” approach. The latter is anchored by a digital SaaS platform to deliver designs, costs and programmes at concept stage before the manufacture and construction of the assets themselves is outsourced to a preferred supplier network. Four months after Katerra filed for bankruptcy, Modulous announced its US expansion. “With a nationwide shortage of more than five million homes, there has never been a greater need to accelerate housing development in the US,” said co-founder and chief executive Chris Bone at the time. Of course, the expansion itself was only half of the story. The creation of a team to lead the roll-out made up solely of Katerra alumni ensured that the news hit the headlines. Modulous initially approached Katerra’s former head of platform sales Stephenson to join as US managing director, and she brought Mast, Talbot and Caldwell on board as operations, product and design directors respectively. The approach from Modulous, says Stephenson, was part of a “humbling” response from the wider industry to the situation that she and thousands of others found themselves in following the collapse of their former employer. “As a result of a spectacular end to Katerra, we ended up getting a spectacular response from the industry,” she says. “We had the opportunity to talk to an awful lot of companies between the four of us and Modulous was a clear stand-out. Now, over the first few months, we have been tasked to look at the UK business model and work out what we need to do to adapt it to the US market.” When I had to make a list of people and pick a top three… it was purely about talent, and it just so happened that the cream of the crop ended up being women Janet Stephenson, Modulous [caption id="attachment_1116786" align="aligncenter" width="847"] Modulous private market and shared ownership apartments in Bicester, Oxfordshire[/caption] Greater flexibility That adaptation will be fuelled in part by changes to the wider world and in part by the main differences between Katerra and Modulous. The latter, says design director Caldwell, will instantly bring much more flexibility to the market than the team was used to previously. “It is basically the difference between asset-heavy and asset-light,” she says. “Our prior experience of this market was very asset-heavy. We had our own factories which ended up driving a lot of the business, and where we could work was therefore specific to where the factories were. Modulous is very asset-light, which gives us a lot more flexibility and the ability to reach broader markets and geographies, and to deliver that much more efficiently by having a heavier focus on the software.” From a logistical perspective, the connection to a UK business is a huge leap forward, adds operations director Mast. “We have a lot of regional experience here in the US, but we are also now armed with this international partner in Modulous. That will set us up with a great base as we start looking to build [construction and manufacturing] partnerships.” For Stephenson, a Brit living in the States, the Modulous connection brings with it some of the UK accreditations and standards around modular construction that will instil a huge amount of “confidence and trust in the overall process”. It also opens the floodgates for a deeper focus on the sustainability performance of materials used, and the overall building delivery and operations. “It would be fair to say that it is still a much easier sell on the operations value for sustainability in the UK,” she concedes. “But the world is waking up to these issues, and because of our link back to the UK company we will be starting with a really solid baseline for those clients over here who are interested in supporting a zero-carbon future. “I think that finally some of the financial institutions and the insurance organisations are starting to demonstrate an interest, and engage in conversations around what sustainability looks like. And we can help, of course. When we’re running models now around sustainability performance and healthy material choices for the environment and occupants, we can make sure those unit metrics are economically sound.” For Mast, the opportunity to work as part of a company that promotes sustainable design and construction wasn’t just a bonus, it was a prerequisite. “My background is in engineering, and I started off my career in oil and gas, which is, as you can imagine, not the most sustainable or environmentally conscious environment to work in,” she says. “I transitioned into construction later so, for me, this focus on sustainability is really significant because it marks a strong evolution in terms of what I believe in and what I want to support.” The sucess of all of these ambitions and plans ultimately rests on the product itself. And that’s where Talbot comes in. The US offer, she says, will mirror what is available in the UK – effectively a flexible kit of parts that can be customised digitally and then outsourced for manufacture and construction. The issue, she says, is that until now there has been no standardised approach to modular work in the US. “It has been very bespoke,” she says. “There is a lack of efficiency in that approach, so what we are hoping to do is define a very concise kit of parts for modular housing specifically for the US, and then we are going to use that to build all over. It will be sustainable, comfortable, healthy housing at scale, enabled by asset-light manufacturing.” Now, with the experience I have, it has afforded me the wonderful opportunity to be the mentor to others that I could never find for myself Eva Talbot, Modulous Purely about the talent These are bold ambitions from Modulous’s new US team. And their grand plans go beyond the nuts and bolts of the business. Any mention of the fact that every member of this executive team happens to be a woman has been purposefully left until the end of the interview. These four executives leading the expansion of a UK tech business in the States has nothing to do with their gender. But it cannot be denied that all-female executive teams are as unusual in the US as they are here in the UK. And that brings with it a degree of responsibilty. “It is so important to talk about the business first,” says Stephenson. “When I had to make a list of people and pick a top three, it was completely based on the fact that they are all ‘rock stars’. It was purely about talent, and it just so happened that the cream of the crop ended up being women. “There is a responsibility among women to create a culture that supports everyone, and we are very lucky to be in positions where we can actually influence that. But interview us again in six months’ time and you will see a very diverse group of people making up our team. It won’t stay all-female forever. That’s not what we are about. We are about full inclusion and really understanding a culture of psychological safety where anyone can thrive.” And, adds Mast, there are ways to approach that responsibility to role-model without letting it take over. “I’m the oldest of six,” she says. “I have four younger sisters and have worked in male-dominated industries for my whole career. It has always been a personal goal of mine to impact the industries that I work in so that my sisters don’t have the same experiences that I have had. “I want to drive change by being extremely capable at what I do and not putting the fact that I am a woman at the forefront. It is not a day-to-day fight, but it is something I am passionate about.” For Caldwell, a background working on construction sites in the field of “traditional architecture” has presented challenges over the years. But, she adds, access to support from mentors has consistently made that easier to handle. “I have been fortunate throughout my career to have that support, and it is a privilege to be in a position now to be that support for other people.” As for Talbot, the trick to tackling an industry that needs to become more diverse is, quite simply, not to leave. “Traditional architecture, construction, real estate – these are very challenging professions,” she says. “As a young woman I considered leaving altogether. But that doesn’t change anything for anyone. “Now, with the experience I have, it has afforded me the wonderful opportunity to be the mentor to others that I could never find for myself. And it’s not just about women. It’s about everyone. We need to open the doors, hold them open and run as many people in as we can. I decided a long time ago that I am not going to abandon the profession because it makes me mad. I’m going to stay and work to fix it.” And there you have it: four executives who happen to be women rather than four women who happen to be executives. Tiny little sparks The end of a company doesn’t have to mean the end of the talent operating within it. In fact, the opposite can often be the case as employees disperse and move on to other things, either individually or as part of a re-formed group such as the Modulous Four. For operations director Kassi Mast, the resettling of some of Katerra’s brightest stars has been inspiring to watch. It is also likely to be instrumental in moving the modular construction industry forward faster and in the right direction. “When a company has such a big, public ending like Katerra’s, it releases all of these tiny little sparks,” she says. “Those sparks light fires in other places as people move on, and we have been left with this incredible network of contacts across the sector – people who are all trying to change the industry in the same way that we are.” Caldwell agrees: “We have all been so interested to see where our colleagues have been landing. There is just such an incredible amount of talent out there in difference places now, and together that will be a driver for a new way of delivering projects.” To send feedback, e-mail emily.wright@eg.co.uk or tweet @EmilyW_9 or @EGPropertyNews Photos © Modulous (Left to right: Janet Stephenson, Kassi Mast, Eva Talbot, Jennifer Caldwell)