Episode 29 - Ryan Abernathy, DROP Structures

Update: 2022-05-19

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Prefab Review

Hi, my name is Michael Frank and this is The Prefab Pod presented by Prefab Review where we interview leading people and companies in the prefab housing industry. Today, we're speaking with Ryan Abernathy, the founder of DROP Structures. Ryan, thanks for joining.

DROP Structures

Thanks, a lot man.

Prefab Review

Well, it's great to have you. Just to start, can you tell me a bit about the history of DROP Structures?

DROP Structures

Sure. So DROP Structures started in February of 2017 over a chance meeting and beer which is always a good start to a good story. And it was myself and 2 other people - brother-in-laws. And I previously built a small unit and the first 2 people were my partners Brandon and Matt and they had built one. They'd had an idea for doing small spaces for about 6 years I had built one and actually approached someone about doing it: my brother-in-law. And he was busy and couldn't do it,. And then I got heavily involved with photography and advertising. And then, when we met, we we like, “hey, let's do this.” We had a couple of beers shook hands. And then we started to build the first one in February of 2017. We incorporated in October of 2017 and we've been along on the ride ever since.

Prefab Review

That's awesome. And it sounds like you said your partners have backgrounds as builders?

DROP Structures

No, so I'm from California and the first job site I remember being on was in Pacific Palisades and my dad's been in construction. So I've been in construction on and off my whole life. Brandon was in Restaurants. I guess you could say that he had started a couple of restaurants and Matt was an amazing all-hand and he does everything. Each of us have a lot of skills in a lot of varied areas. But yeah, I'd say I came with the most construction background knowledge.

Prefab Review

Got it. So you built the first unit. And yeah, then what happened?

DROP Structures

So we built the first unit in the back of an Arctic Spa warehouse. Artic Spa is a hot tub company. And it had no electricity and no lights and was based on a random design but we built it. The reason that we shook hands and got started is that three weeks later, we entered it into a home and garden show here locally in Canada and had some amazing responses and then it was like a handshake deal. It's like, “hey we've both had or we've all had this idea, let's just see if this works.”

Prefab Review

Oh, cool.

DROP Structures

It got tons of reviews and did amazingly well which was really good but then, when we were like, “okay, we're gonna make a go of this” it was all under just a handshake partnership. We ended up selling the unit. We had to learn how to transport a unit: wrap it and do everything in that regard. And once we sold that one, we were like, “hey, lets have a go of this.” We locked in a massive contract. Well, not massive. It was massive to us at the time. And we got a Caterpillar to build them a portable office. And once we locked in that contract, that got our foot in the door. And we were able to get some capital to get started. We didn't take on any money. It was just bootstrapped the whole way. So yeah, then it just continued to grow from there.

Prefab Review

That's great. And was the that first basically a version of the model that you have on your site or is that different?

DROP Structures

No, so it's funny. The “Mono, ”I would say for the time being, was our flagship. It was definitely the most iconic piece. Like our banner picture on our website which was a picture that I took. So it goes on to the design aspect and photography and that was just the amalgamation of nature, material, and architecture. Our first unit actually, what would say now would be our Alpha model. It was a side entrance with a shed roof and patio doors on the front. It was 8’6” by 12’.

Prefab Review

Oh, cool. Okay, so then you got some capital and then at that point did you have your own factory? How does this work?

DROP Structures

Yeah, that's one thing that's super important for us. I really like Tesla and Apple. I like brands that uncrate things that are super classy and one of the things that's great about Apple is that I bought an Airpod yesterday, and the packaging was awesome. I pushed the button on the back and it seamlessly integrated with my phone and everything else. And so I feel like Apple has done a really good job of looking at it from the client's perspective and being like, “this has to be simple for the client.” We've always built everything in-house. And there was an aspect where we were going from this transitional period of being like, “hey, we're just doing the backyard.” You don't necessarily need a permit. We need a permit and we didn't have the infrastructure for it. We didn't have the ability to build it right down in the area where we live. There's a massive pre-manufactured home builder we like. And I think this is really good and interesting, where a lot of companies divert and go different ways. It's like, “hey you know what would be really easy? We've got our plans. We will get these guys to build it. And so we had this other company build it.

Prefab Review

Yeah, I mean we see that all the time. Like ADU builders that are you know, building their homes out of a Champion factory or something like that.

DROP Structures

Yeah, Champion is a really good one. They actually have a facility or one of their subsidiary companies has a facility here in the town that we're in and you know it's just different. I'm not saying one's better or worse. It's a lot about the owners and what they want to do with their company and where they want to go and…