Pippin / Rent the Backyard

Summer 2019Inactive

Autonomous homebuilding factory for the $1.7 trillion housing crisis.

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Pippin / Rent the Backyard

Summer 2019Inactive

Autonomous homebuilding factory for the $1.7 trillion housing crisis.

Save

Company details

Pippin is building the autonomous homebuilding factory for the $1.7 trillion housing crisis.

Building a home requires human labor to: measure, cut, lift, drill, paint, and attach. This labor is used for a building’s: structure, vapor barriers, windows, insulation, siding, roofing, electrical, plumbing, fixtures, appliances, and cabinetry. The construction industry solves this complex variety of tasks by dividing them among tiny companies of specialized artisans. Few lessons learned are shared and the industry has had no growth in labor productivity since 1947.

Building technology, methods, and materials have advanced and the constraints limiting home manufacturing can now be removed. Regulations have changed to allow small and simple accessory dwelling units (a.k.a. ADUs or backyard homes), making it easier to mass-produce housing. Pippin started in the ADU market with its brand "Rent the Backyard" and will build duplexes, quadplexes, and eventually large apartment buildings.

Location

San Francisco, CA, USA; Oakland, CA, USA

Founded

2018

Actionable insights

If you only have a few minutes to spare, here’s what investors, operators, and founders should know about Pippin / Rent the Backyard (S19).

Demand hid the throughput problem. A $10 million-plus contracted run rate looked strong, but ten delivered homes left too few repetitions to train a six-station line or absorb fixed factory costs.
Cheap labor delayed learning. Generalists paid to learn one-sixth of a house produced weak specialization. Experienced trade leaders would have cost more early and less than slow factory learning.
Backlog consumed cash. Customer financing lagged purchases while materials rose as much as 30 percent and unit labor nearly 50 percent. Each sale increased working-capital exposure before production caught up.
Shutdown reserves protected trust. The founders counted refunds and closure costs before stopping. Every customer received a home or full refund, protecting households whose deposits came from borrowed home equity.

Overview

Pippin tried to manufacture housing the way a modern factory makes a repeatable product. Its consumer brand, Rent the Backyard, sold compact accessory dwelling units to Bay Area homeowners and handled design, permits, factory construction, delivery, and installation. The company began with an even broader offer: it would finance the home, manage the tenant, and split rent with the homeowner for 30 years.

Demand arrived faster than production learning. By December 2022, Pippin reported more than $10 million in contracted annual run rate but only ten completed homes. Its factory needed volume to specialize labor and absorb fixed costs, while every presold home pulled cash forward for materials and exposed the company to price increases before customer financing closed. Pippin shut down after four years and delivered a home or full refund to every customer.^[1]

Three views of cross-laminated-timber wall panels being lifted and marked inside the Rent the Backyard factory — The six-station line asked each worker to master a large share of the home. Low output limited the repetition needed to turn that broad job into specialized factory work.

Rent the Backyard ADU moving from its Oakland factory onto a truck and then being craned above a residential lot — A nearly finished ADU left Oakland by truck and crossed the last obstacle by crane. The method reduced work in the yard while concentrating cost in factory planning, logistics, and long-lead materials.

Finished Rent the Backyard ADU interior showing bedroom, living area, and bathroom — The finished home was credible. Production volume stayed too low to cover the factory's fixed costs.

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Founding Story

Brian Bakerman and Spencer Burleigh met at Carnegie Mellon, where Bakerman studied electrical and computer engineering and Burleigh studied statistics and computer science. They applied to Y Combinator's Early Decision program while finishing school. Their friends in the Summer 2018 batch made the program feel attainable; acceptance in October 2018 gave them a reason to abandon conventional recruiting and work on the company before the Summer 2019 batch began.^[2]

The policy opening was clear. California had begun stripping away barriers to accessory dwelling units, but a homeowner still had to find a designer, navigate a city, finance construction, hire a builder, and manage a rental. The founders combined those tasks into one offer. Rent the Backyard would pay for a prefabricated studio, install it, find a tenant, collect rent, and split the proceeds with the homeowner. The owner contributed land and received increasing equity until owning the unit after 30 years.

Bakerman summarized the promise to TechCrunch: “The goal is to have no headaches for the homeowners.”^[3] That sentence also described how much the company put on its own balance sheet: construction capital, permits, tenant selection, maintenance, property management, and a contract that could outlast the homeowner's tenure.

Early manufacturing came from partners. Contemporary reports named prefabADU and Node, while Rent the Backyard owned the homeowner relationship and project orchestration.^[4] The founders later opened their own Oakland factory under the Pippin name. ADUs were supposed to be “minimum viable housing,” a small cross-laminated-timber module that would produce repetitions before Pippin combined and stacked modules into duplexes, quadplexes, and apartments.^[5]

Burleigh credited YC with changing their commitment level: “YC helped give us the confidence (both personally and financially) to go all in and focus most of our time on our company during school, and all our time on our company during the summer.”^[2] That confidence got a factory built. It also made the founders believe they could learn a mature manufacturing discipline quickly enough to survive.

Timeline

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Actionable insights

If you only have a few minutes to spare, here’s what investors, operators, and founders should know about Pippin / Rent the Backyard (S19).

Demand hid the throughput problem. A $10 million-plus contracted run rate looked strong, but ten delivered homes left too few repetitions to train a six-station line or absorb fixed factory costs.

Cheap labor delayed learning. Generalists paid to learn one-sixth of a house produced weak specialization. Experienced trade leaders would have cost more early and less than slow factory learning.

Backlog consumed cash. Customer financing lagged purchases while materials rose as much as 30 percent and unit labor nearly 50 percent. Each sale increased working-capital exposure before production caught up.

Shutdown reserves protected trust. The founders counted refunds and closure costs before stopping. Every customer received a home or full refund, protecting households whose deposits came from borrowed home equity.

Overview

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