July 24, 2006
Cabin 2.0 | A Microsoft executive launches a Maine company to build high-end, high-tech log homes
By Whit Richardson
Two years ago, Anthony Rauseo began searching for the perfect log home. His plan was similar to that of many people: to build a rustic vacation spot in Maine, where Rauseo's been a summer resident since 1982. But instead of reading a book on buying a log home or surfing the Internet for log home-related websites like an average consumer might, Rauseo, a Massachusetts resident, set off on a seven-state tour, visiting 30 log homes and several manufactures over six months, always asking questions and soaking up everything he was told.
Somewhere along the way, perhaps while discussing the R-value of certain types of logs or learning about the heating system a log home owner had chosen, Rauseo, the national technology director for Microsoft Corp., found himself pondering a business opportunity.
"The 'ah-ha' moment came and I said, 'You know what? This is a great business, great people, but it needs somebody who can bring detail and technology,'" Rauseo says, sitting in his makeshift office on the second floor of his still-unfinished log home in Harrison. "That's what I'm doing."
Rauseo decided to follow his gut. Seeing a fit for his technological background in the industry and betting on growth for custom log homes as the baby boomer generation begins to retire, he formed Big Bear Rustic Log Homes LLC last fall and took a sabbatical from Microsoft in April to get the business off the ground. He bought three house lots in a developer's log home community in Harrison, where his company is based, and is completing construction on his family's second log home, which also is the company's model home.
His approach to the business: produce a high-end, round-log home with lots of energy efficient and automated features, and incorporate all the cutting edge technology befitting a Microsoft executive. Of course, Rauseo realizes his lack of experience in the homebuilding field puts him at a disadvantage to existing competitors, but taking to heart what he says is the corporate mantra at Microsoft, "There are no problems in life, only issues to be resolved," he has assembled a small but experienced, team around him to launch the company. Besides Rauseo, Big Bear consists of two paid consultants: Missouri-based Jim Cooper, director of project services, a 15-year log home industry veteran and author of Log Homes Made Easy, and Nebraska-based Craig Peister, director of design and construction, who has been designing log homes for more than 22 years.
Taking lessons learned in corporate America, Rauseo says he's also bringing a different perspective to the construction industry, one that underscores up-front planning such as coordinating with a project's entire team of contractors and subcontractors from the earliest stage of a project, to a direct-to-consumer marketing approach that includes log-home-shaped promotional CDs. He even applied that approach to every detail of his own home, planning everything from an energy-efficiency strategy intended to win federal Energy Star certification to knowing from the beginning which switches will control which electrical outlets. "[These] are very good qualities for a log home builder to have," Cooper says. "He took a much more business approach to it."
Rustic high-tech
As national technology director for Microsoft, Rauseo is in charge of relationships with the software company's industry partners, such as Dell Computer. His job is to make sure those companies keep bundling Microsoft product with their own. Rauseo has a broad range of interests outside the computer world, however, evidenced by the fact that he's left the computer field several times to pursue other projects. "You go through phases in life, and 32 years in the same industry is a lot," Rauseo says. "I think I'm at the pinnacle. I mean, there's not much in the computer field that I don't know or haven't learned."
With 300 to 400 log home businesses in the country, though, competition is already fierce. Companies are constantly looking for innovative ways to lift themselves above the fray, according to Jeremy Bertrand, executive director of the Log Home Council at the Washington, D.C.-based National Association of Home Builders.
To the average homeowner interested in a log home, it can be difficult to sift through the differences between myriad log home companies. Some are small mom-and-pop operations that buy logs on the open market and build one or two log homes a year; others are major operations that mill their own logs and sell several hundred homes a year. In Maine alone, there are almost 40 different log home companies.
Rauseo hopes a high-end product will be his biggest selling point. During his industry-wide search for that perfect log home, Rauseo found Montana-based Neville Log Homes, which has become his supplier. Walking around Big Bear's model home in Harrison, which consists of 55 tons of logs, Rauseo explains excitedly how Neville is one of only three log home manufacturers in the country that can produce 60-foot logs, which he says eliminates the need for butt joints ˆ the joints that connect two logs together in the middle of a wall ˆ and therefore reduces the chance for leaks. Rauseo also has included over two-dozen energy efficient features in his model home, from passive solar heat to the elimination of polyurethane and other non-green materials. He hopes those decisions will make his log home the first in Maine certified by the national Energy Star program, which he says is significant because many homeowners believe that log homes are not energy efficient.
He also made sure the homes were designed to accommodate the 40- to 60-year-old demographic he is aiming to attract. The toilets are all elevated higher than usual, there's always a first floor bedroom and bathrooms that feel spacious are actually designed to accommodate wheelchairs.
But what would a log home built by a Microsoft exec be without a raft of technology?
Rauseo's home has amenities like cell phone-controlled heating and air conditioning systems, and a computer system that monitors for leaks or disruptions in electrical service.
Although a high-tech log cabin might seem incongruous, Rauseo's partners say the mix of modern gadgetry and rustic styling will be a good mix to attract the soon-to-be retired baby boomers and vacation homeowners. "Anthony does a great job of blending high-tech with a very earthy type of home," Cooper says. "That is something that is unique and something that people want as homes become more and more cold and technological."
A virtual company
Innovative ideas and high-tech homes are no good without a way to broadcast their existence, Rauseo says. So taking cues from Microsoft, Rauseo says he's focusing much of his attention on marketing. He declines to discuss his startup costs, but Rauseo says 90% of the money he is pumping into the company is going straight to marketing efforts, including mass-mailing postcards to wealthy areas of New England, log-home construction seminars the company will host this fall and marketing for the book Log Homes Made Easy, penned by his partner, Jim Cooper. Landing the Energy Star certification for his model home could place him on the cover of two log home magazines, he figures.
However, he believes that open houses in Harrison and seminars will be the two biggest engines driving business. "I know I have great product, but if you don't get out there with it and market it, you don't win the game," Rauseo says.
Rauseo says some people have called him crazy to get involved in the custom log home business in the middle of a cooling real estate market. But he maintains that the customers he is targeting ˆ baby boomer retirees, senior citizens, and vacation and second homeowners ˆ are not as affected by trends in the real estate market as traditional homeowners. "This is not the type of the house that's going to be bought by a 20-year-old," Rauseo says. "These people are a little bit more protected from inflation and interest rates and rising gas prices."
Bertrand from the Log Homes Council agrees, saying that log homes are a niche that can continue to grow independent of trends in traditional housing. Bertrand says 25,000 log homes are built every year in this country, a number that has risen significantly, driven mainly by the retirees and second homeowners Rauseo is betting on to make his business a success. "They've been planning for their custom home for many years and a slight market slowdown isn't going to stop them," Bertrand says.
Not surprisingly, the high-tech log homes Rauseo wants to build are expensive. Rauseo's 4,700-square-foot model home, which includes all the bells and whistles, would cost a homeowner about $1 million, he says. Big Bear offers a 768-square-foot, two-bedroom, one-bath log home called The Tin Cup for around $88,000, not including all the interior fixtures, but Rauseo says the average home he expects to sell will be in the $600,000 to $1 million range. Already, Rauseo says he has two projects under way ˆ one of which is a $4 million, 10,000-square-foot home in northern Wyoming ˆ and is in negotiations on 18 more.
Rauseo has about 26 off-the-shelf designs available from Neville, which customers can customize with Peister's assistance to their own specifications. Big Bear will sell homes anywhere in the country, but Rauseo says he wants to focus on the Maine market, where he is forming relationships with local construction teams such as Naples-based John Carver & Sons Builders, which will be in charge of construction. In many ways, Big Bear is a virtual company, with an office in Rauseo's Harrison home, but consisting mostly of partners around the country and teams of local contractors. Organizing it, though, means making sure the team involved in every construction project is involved with the entire process and not just called in when needed on a discreet task ˆ something Rauseo says he's learned from the technology world. "The construction industry is interesting. It's still running the way it was running 50 years ago," Rauseo says. "Contractors come in, don't talk to each other; people come in, do their little thing and leave. I did things all different."
For example, Rauseo organized the building of his own home by bringing the team together up front ˆ electricians, HVAC installers, plumbers, carpenters ˆ to talk over all the details. "Everybody was right there as a brain trust solving problems," Rauseo says. "You'd never see that in residential construction."
That approach is similar to how he developed his business model: Work out all the details up front ˆ everything from signing up partners and suppliers to copying the pine plank floors in Paul Revere's 18th Century Boston house for his Big Bear homes ˆ then set the people and pieces in motion. While it might not be the typical model in the building industry, at least some of the people he's working with say that's not necessarily a bad thing. "The positive side of a computer background is a thought process that is very methodical, arranging things in steps, the way software is developed," Cooper says. "You can call it sequential thinking. The ability to break down processes into sub processes is very beneficial when organizing a construction project."
Rauseo's also chosen to organize his company this way so it can run with minimal oversight from him when he returns to Microsoft as national technology director in September. And even if he eventually leaves the technology world altogether to manage Big Bear full time, which he hopes to do, it's unlikely his management style is going to change. "Most builders are control freaks. They tell the contractor 'Any time there's a problem call me,'" Rauseo says. "What I say ˆ and this is the Bill Gates technique ˆ 'Call the person who can fix it, don't waste time coming up the bureaucratic channel.'"
Somewhere along the way, perhaps while discussing the R-value of certain types of logs or learning about the heating system a log home owner had chosen, Rauseo, the national technology director for Microsoft Corp., found himself pondering a business opportunity.
"The 'ah-ha' moment came and I said, 'You know what? This is a great business, great people, but it needs somebody who can bring detail and technology,'" Rauseo says, sitting in his makeshift office on the second floor of his still-unfinished log home in Harrison. "That's what I'm doing."
Rauseo decided to follow his gut. Seeing a fit for his technological background in the industry and betting on growth for custom log homes as the baby boomer generation begins to retire, he formed Big Bear Rustic Log Homes LLC last fall and took a sabbatical from Microsoft in April to get the business off the ground. He bought three house lots in a developer's log home community in Harrison, where his company is based, and is completing construction on his family's second log home, which also is the company's model home.
His approach to the business: produce a high-end, round-log home with lots of energy efficient and automated features, and incorporate all the cutting edge technology befitting a Microsoft executive. Of course, Rauseo realizes his lack of experience in the homebuilding field puts him at a disadvantage to existing competitors, but taking to heart what he says is the corporate mantra at Microsoft, "There are no problems in life, only issues to be resolved," he has assembled a small but experienced, team around him to launch the company. Besides Rauseo, Big Bear consists of two paid consultants: Missouri-based Jim Cooper, director of project services, a 15-year log home industry veteran and author of Log Homes Made Easy, and Nebraska-based Craig Peister, director of design and construction, who has been designing log homes for more than 22 years.
Taking lessons learned in corporate America, Rauseo says he's also bringing a different perspective to the construction industry, one that underscores up-front planning such as coordinating with a project's entire team of contractors and subcontractors from the earliest stage of a project, to a direct-to-consumer marketing approach that includes log-home-shaped promotional CDs. He even applied that approach to every detail of his own home, planning everything from an energy-efficiency strategy intended to win federal Energy Star certification to knowing from the beginning which switches will control which electrical outlets. "[These] are very good qualities for a log home builder to have," Cooper says. "He took a much more business approach to it."
Rustic high-tech
As national technology director for Microsoft, Rauseo is in charge of relationships with the software company's industry partners, such as Dell Computer. His job is to make sure those companies keep bundling Microsoft product with their own. Rauseo has a broad range of interests outside the computer world, however, evidenced by the fact that he's left the computer field several times to pursue other projects. "You go through phases in life, and 32 years in the same industry is a lot," Rauseo says. "I think I'm at the pinnacle. I mean, there's not much in the computer field that I don't know or haven't learned."
With 300 to 400 log home businesses in the country, though, competition is already fierce. Companies are constantly looking for innovative ways to lift themselves above the fray, according to Jeremy Bertrand, executive director of the Log Home Council at the Washington, D.C.-based National Association of Home Builders.
To the average homeowner interested in a log home, it can be difficult to sift through the differences between myriad log home companies. Some are small mom-and-pop operations that buy logs on the open market and build one or two log homes a year; others are major operations that mill their own logs and sell several hundred homes a year. In Maine alone, there are almost 40 different log home companies.
Rauseo hopes a high-end product will be his biggest selling point. During his industry-wide search for that perfect log home, Rauseo found Montana-based Neville Log Homes, which has become his supplier. Walking around Big Bear's model home in Harrison, which consists of 55 tons of logs, Rauseo explains excitedly how Neville is one of only three log home manufacturers in the country that can produce 60-foot logs, which he says eliminates the need for butt joints ˆ the joints that connect two logs together in the middle of a wall ˆ and therefore reduces the chance for leaks. Rauseo also has included over two-dozen energy efficient features in his model home, from passive solar heat to the elimination of polyurethane and other non-green materials. He hopes those decisions will make his log home the first in Maine certified by the national Energy Star program, which he says is significant because many homeowners believe that log homes are not energy efficient.
He also made sure the homes were designed to accommodate the 40- to 60-year-old demographic he is aiming to attract. The toilets are all elevated higher than usual, there's always a first floor bedroom and bathrooms that feel spacious are actually designed to accommodate wheelchairs.
But what would a log home built by a Microsoft exec be without a raft of technology?
Rauseo's home has amenities like cell phone-controlled heating and air conditioning systems, and a computer system that monitors for leaks or disruptions in electrical service.
Although a high-tech log cabin might seem incongruous, Rauseo's partners say the mix of modern gadgetry and rustic styling will be a good mix to attract the soon-to-be retired baby boomers and vacation homeowners. "Anthony does a great job of blending high-tech with a very earthy type of home," Cooper says. "That is something that is unique and something that people want as homes become more and more cold and technological."
A virtual company
Innovative ideas and high-tech homes are no good without a way to broadcast their existence, Rauseo says. So taking cues from Microsoft, Rauseo says he's focusing much of his attention on marketing. He declines to discuss his startup costs, but Rauseo says 90% of the money he is pumping into the company is going straight to marketing efforts, including mass-mailing postcards to wealthy areas of New England, log-home construction seminars the company will host this fall and marketing for the book Log Homes Made Easy, penned by his partner, Jim Cooper. Landing the Energy Star certification for his model home could place him on the cover of two log home magazines, he figures.
However, he believes that open houses in Harrison and seminars will be the two biggest engines driving business. "I know I have great product, but if you don't get out there with it and market it, you don't win the game," Rauseo says.
Rauseo says some people have called him crazy to get involved in the custom log home business in the middle of a cooling real estate market. But he maintains that the customers he is targeting ˆ baby boomer retirees, senior citizens, and vacation and second homeowners ˆ are not as affected by trends in the real estate market as traditional homeowners. "This is not the type of the house that's going to be bought by a 20-year-old," Rauseo says. "These people are a little bit more protected from inflation and interest rates and rising gas prices."
Bertrand from the Log Homes Council agrees, saying that log homes are a niche that can continue to grow independent of trends in traditional housing. Bertrand says 25,000 log homes are built every year in this country, a number that has risen significantly, driven mainly by the retirees and second homeowners Rauseo is betting on to make his business a success. "They've been planning for their custom home for many years and a slight market slowdown isn't going to stop them," Bertrand says.
Not surprisingly, the high-tech log homes Rauseo wants to build are expensive. Rauseo's 4,700-square-foot model home, which includes all the bells and whistles, would cost a homeowner about $1 million, he says. Big Bear offers a 768-square-foot, two-bedroom, one-bath log home called The Tin Cup for around $88,000, not including all the interior fixtures, but Rauseo says the average home he expects to sell will be in the $600,000 to $1 million range. Already, Rauseo says he has two projects under way ˆ one of which is a $4 million, 10,000-square-foot home in northern Wyoming ˆ and is in negotiations on 18 more.
Rauseo has about 26 off-the-shelf designs available from Neville, which customers can customize with Peister's assistance to their own specifications. Big Bear will sell homes anywhere in the country, but Rauseo says he wants to focus on the Maine market, where he is forming relationships with local construction teams such as Naples-based John Carver & Sons Builders, which will be in charge of construction. In many ways, Big Bear is a virtual company, with an office in Rauseo's Harrison home, but consisting mostly of partners around the country and teams of local contractors. Organizing it, though, means making sure the team involved in every construction project is involved with the entire process and not just called in when needed on a discreet task ˆ something Rauseo says he's learned from the technology world. "The construction industry is interesting. It's still running the way it was running 50 years ago," Rauseo says. "Contractors come in, don't talk to each other; people come in, do their little thing and leave. I did things all different."
For example, Rauseo organized the building of his own home by bringing the team together up front ˆ electricians, HVAC installers, plumbers, carpenters ˆ to talk over all the details. "Everybody was right there as a brain trust solving problems," Rauseo says. "You'd never see that in residential construction."
That approach is similar to how he developed his business model: Work out all the details up front ˆ everything from signing up partners and suppliers to copying the pine plank floors in Paul Revere's 18th Century Boston house for his Big Bear homes ˆ then set the people and pieces in motion. While it might not be the typical model in the building industry, at least some of the people he's working with say that's not necessarily a bad thing. "The positive side of a computer background is a thought process that is very methodical, arranging things in steps, the way software is developed," Cooper says. "You can call it sequential thinking. The ability to break down processes into sub processes is very beneficial when organizing a construction project."
Rauseo's also chosen to organize his company this way so it can run with minimal oversight from him when he returns to Microsoft as national technology director in September. And even if he eventually leaves the technology world altogether to manage Big Bear full time, which he hopes to do, it's unlikely his management style is going to change. "Most builders are control freaks. They tell the contractor 'Any time there's a problem call me,'" Rauseo says. "What I say ˆ and this is the Bill Gates technique ˆ 'Call the person who can fix it, don't waste time coming up the bureaucratic channel.'"
Most Recent
Most Recent
Comments