Below is the transcription of our video conversation. 

Kerim: Hi everyone this is Kerim, Kerim Baran with SolarAcademy. Today I have with me Sasha Jokic. Is that how you say your last name, Jokic? 

Sasha: Yeah, Jokic, the NBA player Nicola Jokic same surname.

Kerim: Right. Good to have you, Sasha. Sasha is joining today from Belgrade in Serbia he does spend quite a bit of time in the between the Bay Area in San Francisco area and Europe. He is the founder and CEO of cosmic homes which is an innovative approach to build zero emissions homes that can also operate on an off-grid basis pretty much anywhere in the world. And, today we’re going to talk about Sasha’s Journey as an entrepreneur so Sasha…

Sasha: Thank you so much. Yeah thank you so much Kerim for having me. Really pleasure to do a solar Academy Q&A and dive into what we do at Cosmic. 

Kerim: Great. Thank you. Sasha, tell us a little about the story, maybe a little bit about your background, how you got started in your career, and then how you got the inspiration for Cosmic. Then what happened after that?  

Sasha: Yeah, yeah. So in my last 12 years of career, I’ve been focused on building faster and cheaper construction, leveraging robotics, software, and new materials both in academia, (studying) and as well in the industry, working as a trained architect. My obsession towards creating cheaper housing was really coming from my childhood experience. 

I grew up in Yugoslavia. When I was five, my family was displaced from our hometown, and just in a span of a couple of years, we changed more than 10 different apartments. During that time, I really created this special relationship towards housing, right? It really felt as a shelter for me, and so construction and architecture was this magical process that makes something meaningful as a house. 

Recently, you know seeing that the people are really struggling to get basic home ownership, the housing and security has never been higher in the whole world, and also at the same time, the world realizing, that climate change is actually caused by buildings. Almost 40% of CO2 emissions are coming from the buildings that I designed. So, I really felt responsible for the situation we are in right now. 

So the call of building faster, cheaper, but also cleaner construction was a call for me that I couldn’t, and not respond to. Cosmic is really focused right now on building, as we like to describe, the autonomous homes that are “climate change ready” that are offering a basic housing experience to the masses but as well, giving our planet a chance to really hit the net zero goals, both national and global. 

Kerim: If you were to explain the problem you’re solving, how would you explain that, and then what’s the solution?

Sasha: Yeah. We see that right now the consumers are really demanding more sustainable products, and owning a house is the largest product many of us will ever buy. The problem right now is that the net zero or sustainable homes are actually belonging only to a few because it’s really expensive to build those homes. On average, it’s almost 30% more than building a standard house and at the same time, you see that the government is highly regulating the space, forcing home builders to be cleaner, and so that is really resulting in a high cost.

To kind of unpack the reason why building sustainable buildings are more expensive, we see that on the building system side, we see that right now homes can generate energy and water autonomously, but the real bottleneck is the way we design and build those homes. It is really having all of these super-efficient high-end technology machines, but we still build and design net zero homes like we design the standard homes. That is resulting in really high costs of the ownership both on the construction but also over the entire lifespan, that is, basically absorbed by consumers.

What that means is those machines and the construction products are built as a bundle, and so you as the owner, you can only buy this as a bundle. That means you have to finance it through a mortgage. You have to also build it, the same slow and dirty construction process. 

In Cosmic, really the solution that we are building is we take all of this high-end technology, the water and the energy generation systems and put them in a utility mono-block, that is, highly standardized and are actually decreasing cost significantly over the entire supply chain for building sustainable homes. We are producing those components in a factory and shipping them to the site but also being in a position to finance this technology, through innovative finance programs, we are in the position to significantly decrease the cost of the ownership.  

Kerim: Where is the cost realization happening in this process? Is it in labor? Is it in financing? Is it in eliminating middlemen? I’m just trying to understand that piece a little better. 

Sasha: Yes. What happens is we describe ourselves and we really are an end-to-end construction process for delivering those autonomous homes, but we are a digital-focused company. It means it’s only a software-based company, but we link all of the participants into our platform, and that really enables us to streamline workflows between the moment we meet the customer, all the way we ship and we assemble a building at the site and provide utility service, but really the core of the cost decrease is coming from the way we design buildings. 

By having this utility mono-block that is always the same, repeatable on every project, we can use prefab and then share the cost of the design and engineering and building this mono-block with other projects around, so saving on the construction, but then once it’s built on the site, we are actually not forcing our customers to own that utility box but actually that expensive infrastructure. With standard homes, nobody owns the utility, right, infrastructure that is around the building.

Basically, we do it in the same way with this autonomous home. That means the system such as energy generation, solar and battery, the water generation, rainwater collection, air moisture collection, also water recycling, heat pumps – all of those household machines, we flat-pack into basically assets-class that can be financed through PPA (Power Purchase Agreements) so consumers when they buy a house, they can have options, whether they want to own everything, see the cost which will be very high, or say, “I actually want to live in this sustainable home,” but then all this equipment will be owned by Cosmic, who will then operate utility for the household but as well get the benefits of selling the utility service through other users through the virtual meets. So basically, that’s the long explanation of how everything works here. 

Kerim: You said the cost would be high if the consumer bought everything up front, but I’m assuming that would still be advantageous to doing a traditional home. Would that be… 

Sasha: Absolutely, yes. Absolutely, yeah. We don’t intend to penalize customers who are not willing to participate in this innovation, but rather give the options. One of the cores of building this company is to make it human-centric. 

Essentially, we are taking this high-end infrastructure financing and the high-end construction process that usually happens in the high, you know, really big project developments over the city and putting all of that force into those individual residential units and giving that experience to ordinary people. 

So we want to really give the power to people to control how they want to own and how they want to operate their buildings. In the moment when they purchase a house, they can decide whether they want to really have full control over the process and the ownership, or they want to have it Cosmic, as a platform to really help them run these very sophisticated and complex systems, that are right now part of the ordinary buildings. 

Kerim: Understood. Perhaps, we can dig in a little bit to the product. Would you mind? Maybe share us slides and pictures and talk a little bit about the specific features.  

Sasha: Yeah. We are building the online platform. Our basic set of features is the design configuration. So basically, we design the algorithm, that is, taking the standardized mono-block and then create design options based on the site analysis, the zoning, the code compliance, energy modeling, and then as a result, we have this personalized building information model or BIM, that is, easily implemented by conventional home builders. 

So basically, once we have a design completed, the next step is the purchase. So, in this step, customers can decide and customize… 

Kerim: And, what are the elements that are in that design? I’m assuming there’s a PV solar array. There is probably a battery, heat pumps, you mentioned. 

Sasha: Yeah.

Kerim: What else? 

Sasha: Yeah. So, we have the pseudo features, both on energy and water. On the animation side, it’s pretty much standard, commercially-proven components that people right now are installing in their homes: solar, batteries, heat pumps connected to the energy generation system. Also, water heaters and other systems and appliances that are all electric appliances connected to the system. 

On the other side, we have a water generation parts, which is, as I said before, the water collection through rain-collecting as well as the air moisture collection which is a novel technology which we can see other companies are right now also advancing. Cosmic is using that as a… 

Kerim: Is that similar to Source.co, if you know that company, Source? 

Sasha: Exactly, yeah. We are working with Source on technology. There are suppliers for the water generation system. And then also the water recycling, there’s a huge possibility of creating zero-based buildings. We are offering our customers to either decrease the amount of water used but also released from home. There is also a possibility which is still very high-cost, of creating completely closed-looped water systems which is also part of our first pilot projects that we are working on for the next year.  

Kerim: Got it. Do these options all come in as one package? Or do you have the option to pick and choose, or how does that work?  

Sasha: Yeah. So, we are right now starting just with one mono-block utility. It’s a foundation. Inside of a foundation, we flat-pack all of those components, and they’re always the same for this first phase. But as we grow as a company, as we are a digital-focused company, we can create different 3D models of utility. So, it’s basically a library of mono-blocks or utility blocks that can be either a foundation, it can be a wall, it can be a roof. It really depends on the application and the type of the building that we are working on. 

Kerim: In this infrastructure asset, or this piece of the asset, when you’re talking about the whole finished home versus the piece that you guys are involved in in designing and delivering, what percent of the total asset value or cost is your piece? 

Sasha: Yeah. So these are some rough numbers. It’s almost 30%. If we see the cost, this is the cost of building a zero carbon house with a traditional construction process. So, the cost of design, delivery, also the equipment, the procurement and installation, it’s almost 30% of the entire cost. That is the amount of money we can save to our customers, if they decide to pursue the finance or the PPA program we are offering. [cross-talk] our systems. 

Kerim: Oh, I see because that initial cost essentially can be financed through you guys.

Sasha: Exactly. 

Kerim: But it could also be financed through a mortgage too, if you think about. 

Sasha: It can be. 

Kerim: So then, but there’s also probably an actual long-term ownership advantage you bring. 

Sasha: Yes. 

Kerim: Probably. 

Sasha: Exactly. Yeah. 

Kerim: Is there an upfront cost savings too, if they decide to pay cash up front versus a traditional home? Or is it about the same or is it more? 

Sasha: Yeah. So, we’re probably looking into 10-15% less if they purchase everything and own everything. 

Kerim: That’s actually, I was thinking, from the lens of looking at electric vehicles because that’s actually a different dynamic there. They’re generally 20% more expensive than regular cars but they’re about half or maybe even more than half as costly to operate because to fill up an EV battery costs like a fraction of what it costs to fill up a gasoline tank. And they go approximately the same amount of miles with that. 

Sasha: Yeah. 

Kerim: I was wondering if the dynamic is similar, but you are actually saying that they even save cost. I’m assuming that’s probably because of your streamlined process of delivering. 

Sasha: Yes, more standardized. All of the decisions are made during the design process, and that’s the key of having standardized communication and operation of the entire supply chain but also using capabilities of prefab, not everything. We are not intending to penalize everything except the utility part. 

One of the biggest inside, actually, on the cost saving side, we figure the inside of the utility box or the foundation, we basically flat-pack all of the mechanical, electrical, and plumbing that are really costly when it comes to building a building like an ordinary building. Like those building systems are usually going as a narrow network through the building and so coordinating with the construction workers was always the hardest part of everything onsite. 

So, right now, you actually have this box that is coming to the site assembled as a really easy and fast process.

Kerim: So that saves labor costs, I assume. 

Sasha: Yeah. 

Kerim: Yeah. Got it. 

Sasha: Yeah. so I have actually a video here, just a short video. I can also play it. Now, this is the first house that we built with our construction process. 

Yeah. Here you can see the proprietary systems, the patented systems for a foundation. It’s a steel chassis, a combination of steel and wood. And then we have a fast-fascinating system or self-leveling system that are really increasing the speed and decreasing the cost of building this structural part of the building. 

But the goal is really to have this library of building blocks that can be anything, not just the foundation. It really depends on the strategy, as we expand. Having more versatility on the utility box will probably be key to scaling this up on different applications and different sites of the buildings. 

Kerim: I understand. Thank you for sharing this. Where are you as a company in your journey right now? Can you tell us a little bit, how far into the early stage of a startup you are? What’s next? What are your current challenges or wishes? 

Sasha: Yes. Right now, we are still in the pilot phase. We launched back in May and just in the last couple of months, we managed to get almost 3,000 people, 2,000 customers from the U.S. that are willing to purchase a house from us, and we lined up having a pilot phase over the next six months where we expect to deliver somewhere between 7 to 15 homes. That will be our pilot. And then after that, we already have now…

Kerim: And this is in the Bay Area? Those buildings are going to be in the Bay Area? 

Sasha: Yeah they’re spanned through California. We have it in the Bay Area, and then we also have it in LA and just two or three projects. Those are our three projects here. And then we also have a couple of ADUs. We have a lot of people inside of urban areas willing to bring in the, like housing, ADUs in their backyards, whether as an investment or as the additional space for extending primary houses. 

Most of the customers that we are right now working with are actually in those remote areas where you don’t have utility service at all, sometimes. And so, we bring this life-changing service to those customers, either individuals who want to also build this as an investment or just have a retreat house while they’re working remotely, but a lot of people like small boutique, real estate investors willing to build a community of homes, that we expect to deliver in the second part of next year and start working on these large developments, where we see a big scale. So, it’s a community of between 5 to 200 homes built in nature, with all of the utility service as a mini grid built by Cosmic and operated by Cosmic. It’s the way of how we are going to scale this and seeing the younger generation are willing to spend more time in those areas and having this flexibility when it comes to job location. It’s definitely the future of construction itself, I would say. 

Kerim: Yeah. and so you’re in the process of fundraising for both – maybe we can kill the presentation at this point. I’m not sure if you have more things to share, but I wanted to talk a little bit about your financing process, too. 

So, I assume you’re raising some capital for the projects themselves, as well as, maybe for the operating company that will build this. 

Sasha: Yes. Exactly. So, we’re right now in the process of raising the equity and expecting to close the round within the next two months. We also have the fundraising on the internal infrastructure fund that we are also expecting to raise a debt financing for us to deliver those first pilots that I previously mentioned. 

Kerim: What else would you want to share with interested parties at this point? 

Sasha: Yeah, I think we’re really building a next-generation housing company, that is a really ambitious plan. We really are aware of what are the challenges, but building a capable team is one of the really primary things within Cosmic. 

We are right now, still a five-member, full-time people but expanding and hiring. So, anybody interested in joining Cosmic, we’d love to hear from them. And, also, anyone who’s interested in working with us or has some plans of building anything from ADU to a large single 3,000 square feet of home wherever it’s located right now, in any part of the U.S., we would love to talk with them and explore options of working with them. 

Kerim: Right. Sasha, thank you very much for everything you shared and your time. And, hopefully, we will do a recap of this or further down the road, we’ll reconnect and see your great progress. 

Sasha: Thank you so much, Kerim. Really enjoyed the conversation, and thank you so much for the opportunity to share more of what we are working at Cosmic.