The following is a rough transcript which has not been revised by The Jim Rutt Show or by Euvie Ivanova & Mike Gilliland. Please check with us before using any quotations from this transcript. Thank you.
Jim: Today’s guests are Euvie Ivanova and Mike Gilliland. They are the cohosts of the Future Thinkers Podcast, which is one of my personal favorites. I suggest you check it out, if you want to hear some really interesting thinking about things that are going on at the cutting edge of our world. They’re also in the process of launching what they call a Smart Village, a place for people to work and live together, hold events and learn in a righteous way.
Jim: Their Smart Village is very much like a game B ProtoB project, which we’ve talked about on the show from time to time. In fact, Euvie and Mike have joined the ProtoB incubator. And we’re trying to help them get their project up and going. And in fact, it’s their Smart project that we’re going to talk about today, at least mostly. So, welcome, Euvie and Mike.
Mike: Awesome. Thanks for having us, Jim.
Euvie: Thanks for having us.
Jim: Yeah, this should be fun. So, let’s just start with the high level overview. Tell us a little bit about your Smart Village. Where is it? How big is it?
Euvie: Sure. So, we are building it in BC, Canada in the Canadian Rocky Mountains in a very rural area. And we chose that remote of an area for a reason because it just has fewer regulations and more freedom for us to kind of set up our own structures and try things out that haven’t been done before. And the property is 107 acres. So, it’s quite large and it’s part farmland and part hilly.
Euvie: And so, we’re going to be doing a combination of a bunch of things, different hackathons for developing regenerative practices, and clean technology, as well as social technology for how people get along and how they govern things and how decisions are made.
Euvie: So, it’s going to be a bit of a lab, a rural innovation lab. So, it’s kind of hard to say exactly what it’s going to be. But we think about it as an experimental ground for new civilization design. I think that’s probably the easiest way to describe it. So, people will be living there. People will be working there. There will be agriculture going on, a bunch of different events. And it’s going to be exciting. We’re really, really looking forward to it.
Jim: Yeah. I checked out the location when you sent me the coordinates on Google Maps. It looks like a beautiful area right on a river, just below a lake, mountains on one side, some bottom land, enough bottom land to do some interesting things with it. Looks very nice. Checked out the elevation, looks like it’s around 600 meters, something like that?
Euvie: Mm-hmm (affirmative).
Jim: It looks like the climatic zones are somewhere between 5a and 5b, which would give you say, at worst case, wintertime temperatures of -28C or -20F something like that.
Euvie: Yeah. Normally, it’s -5, -10 in the winter.
Jim: The hardiness zones are based on something like the 95th percentile. So, how cold can you expect it to be once in every 20 years, something like that, because that what determines what plants can live there and wildlife and what have you. So, I always looked at that as a very important variable when looking at a location. At that kind of location, you want to be able to do some agriculture, but there probably some things you won’t be able to do.
Mike: Well, actually 60% of the land is being used as a farm currently. So, they grow potatoes.
Euvie: All kinds of vegetables and they raise meat as well.
Euvie: And it’s been used as an organic farm since at least the ’90s. So, the soil is already built up. And it’s very fertile land because it’s in a river valley.
Jim: And with a lake above it, it probably means you don’t have to worry about flooding too much.
Euvie: There’s actually an earth dam to control the flooding. And it was the first earth dam that was built for that purpose in the whole Columbia River Basin. So, yeah, there’s no major flooding. I mean, in the spring, of course, the water levels are higher and it seeps through the ground. So, some of the fields are a little damp, but it’s nothing major.
Jim: That’s good. Those are all important things to think about when you’re choosing a location for one of these startup communities. And if you miss even one of them, you can be screwed. And you mentioned one of the most important, at least as we talked about in our ProtoB incubator, and that is the hassles of dealing with land use regulations.
Jim: Zoning guides, the building people, the health department. Sounds like you’ve done some research on that. Tell us what you’ve learned.
Mike: Yeah. Well, one of the major benefits of this piece of property is that there’s a good chunk of it that isn’t zoned. So, we need building permits and we need to build things to spec and build as we say we’re going to build. But for the most part, we can do what we want. So, we can do a number of experimental dwellings on the unzoned portion of the property. We might do some geodesic domes. We might do shipping container homes, earth ships, cob houses, hempcrete. We’re hoping to give people kind of a sample of all the different ways to live regeneratively and passively in a home.
Jim: That’s cool, that their local building codes allow those kinds of things?
Euvie: Yeah. For the most part. Yeah, I mean, there’s still some regulation for building things that are structurally sound. But we have actually attracted a bunch of people who are familiar with those and who will advise us on that before we start building.
Mike: The current owners of the property actually have a timber framing business. So, they’ve got a ton of experience with building. And they’ve already built two of the structures on the property.
Jim: That’s handy. They can help you navigate through the bureaucratic process, perhaps?
Mike: Yeah. And they’re partnering on our project as well.
Jim: Excellent. So, you mentioned people will be living there. Do you have a sense of what the year-round population might be?
Euvie: We’re going to start small because the social cohesion is really important to us. So, probably no more than 12 people to start. And we’re going to cap it at 50 adults as it grows. But that’ll be over several years that we expect it to grow to that size. We’ve had a lot of interest from people wanting to live there. So, we do have to create some criteria for how we select people.
Euvie: And since some of these people we haven’t met before, we’ve decided that we’re just going to have a testing period where they can come and stay for a few months, we see how we get along. And if they’re contributing to the project, and yeah, if the social cohesion is there, and then if it works, then we can invite people to live there longer.
Jim: That seems to be a good model. I’ve done a lot of research and how these really Kibbutz have done it, for instance. And they were all over the place. Some were open admissions, was turned out to be a nightmare and a catastrophe as you could imagine. Others that overreacted and have a two- or three-year probationary period.
Jim: But it seems like something between three months and a year probationary period seems like something that has worked fairly well in the Israeli Kibbutz community, idea long enough to really be able to see if people cohere with the other folks, and yet not so long as it seems like a life sentence and probationary status.
Mike: Yeah, exactly. Yeah, someone mentioned to us recently that four seasons is a good way to test. Just give people a year, give yourself a chance to see them change throughout the season, because people kind of get used to things and climatized and drop the mask a little bit after that amount of time.
Euvie: And especially, the Canadian winters, if people haven’t experienced that, they might not be used to it. And it changes people’s disposition as well. Because it’s cold outside and people spend more time inside. There’s less sunshine. So, obviously, it changes people’s mood. So, it’s useful to see how people respond to that.
Jim: Yeah. I think that’s a very good point, particularly a relatively extreme climatic location, like you guys are in where there’s a big difference between the summer and the winter. And there are just a lot of people that aren’t cut out for those northern winters.
Jim: Now, onboarding brings up an obvious next question, which is governance. Are you going to have a formal mechanism in place, essentially, a constitution for your community, or you’re going to kind of try to grow that organically as you go?
Mike: I think it needs to be organic. We need to develop things over time by testing and experimenting. I don’t think we really get to dictate a rule set, and then hope that people are going to adhere to that. The main thing we want to do is lean into conflict when they arise, and try and have just regular open communication as much as possible.
Mike: So, the main rule I could see is maybe a meeting every week, or every couple of days or something like that. The whole group gets together, talks about what we’re doing this week and what the plan is for next week, and any grievances anyone has, stuff like that.
Euvie: Yeah. Just kind of a council. Everybody sits in a circle and works it out. And I think that while we only have a few people there, that will probably be sufficient. As we grow in size, we will probably develop more formal mechanisms for governance.
Jim: That seems very reasonable. Yeah. Below 20, I used to say the same thing about companies back in the days when I was an entrepreneur. At 20, you can manage the thing around the lunch table. When it gets above 20, you might have to think a little bit about structure.
Mike: Yeah, exactly.
Jim: And again, the Israeli Kibbutz are an interesting example. Their original constitutions called for a weekly meeting, which most of them still have. But over time, they realized that is kind of ridiculous to have 100 people discussing the nuances of the repairs for the sewer system, for instance.
Jim: And so, they started creating committees and task teams and delegated those with areas of responsibility, though the members of those task teams and committees did have to report back to the general meeting, which had the power to dissolve or create or override the task teams and the committees, which I thought was kind of an interesting hybrid and kind of a flexible structure that allowed to be adaptive over time.
Mike: Yeah, yeah, that sounds good. The other thing is, we’ve got a fair amount of experience now with facilitating kind of larger group Zoom calls to try and do some collective sense making around global issues and also around personal kind of development. So, I think bringing that experience into this location is going to be really helpful, too.
Jim: Yeah. That is really good that you guys have that experience. Because again, trying to learn that on the fly can sometimes be a disaster as well.
Mike: Yeah. For sure.
Jim: So, what’s the economic model for the people who live there? Let’s say you get to 50 adults living full time in seven years or something like that. How do you anticipate that they will make a living?
Mike: Well, that’s a tough question. Because what people are good at, what they like doing is as diverse as the people themselves. So, kind of dictating that at the beginning is going to be pretty difficult. We have had a number of experiences over the years kind of doing this digital nomad thing, working online and traveling around the world, that has shown us that you can have really excellent group coherence with a complete separation of the income.
Mike: So, if everyone’s working online, freelancing, pulling in some sort of income and you have that separation, then really the only thing … It’s like dating in a way. If you know you’re compatible with someone, then really, the next thing you have to worry about is chemistry. And I’m only speaking about that from the online dating world. And that’s how Euvie and I met.
Mike: So, I think it’s kind of the same thing here. If that’s the initial focus that people have their income coming from the online world, then we have a lot more space to figure out the group dynamics first.
Mike: And then over time, we’re going to be running a number of different startups and businesses and events. So, the way the village itself will make money at the very beginning will be a combination of like Airbnb style rentals and experience-based rentals, really. And then doing big events, conferences, workshops, retreats, and stuff like that.
Euvie: Yeah. And we do anticipate that there will be more cooperative ventures at the village in the future. But I think that just to start, making that requirement that people are self-sufficient is going to give us some runway to figure those things out.
Jim: Yeah. It certainly has its pluses. But of course, it also has its minuses, which it means that you’re going to be selecting from a relatively narrow demographic of people who figured out how to essentially make the game of digital nomad work, which is a fairly elite slice of the population.
Mike: Potentially, our experiences that having lived that and done that for almost 10 years is that the population of people doing that kind of thing is a lot bigger than we first anticipated and then most people anticipate.
Mike: It’s actually extremely attractive lifestyle for young people. And you really don’t have to have that much experience or know that much to get something off the ground. There are tons of Freelancer websites. And as long as you’ve got a good profile and you do your work really well, you can have work constantly coming in.
Jim: Yup. My daughter lived that life for quite a while and did very successful. But of course, she’s had to spend a lot of time on client development.
Mike: For sure.
Jim: I counseled her early on. Just budget 30% of your time for business development. And she said, “I thought that was crazy, Dad, but you’re right.”
Jim: How about agriculture? You guys intend to operate an agricultural business there as well?
Euvie: Yes, yeah. I’m very interested in regenerative agriculture and permaculture. So, kind of mimicking ecosystem on the farm, so it’s not just monoculture, and the type of agriculture that improves biodiversity and increases soil. So, as far as the business aspect of it, this is something that we’re new too.
Euvie: So, we’re going to try a bunch of different things and see what works. And the previous owners of the property actually gave us exactly that advice because they tried a bunch of different things. But they went all in each year, like one year, they just went all into pigs. Next year, they went all into deer. They raised deer for meat for a while.
Mike: And we’re not talking about experimenting with a dozen deer. They went to 200 deer in the first year.
Euvie: Yeah. So, the advice that they gave us is just try a bunch of little things all in the first couple years. See what you like, see what’s profitable, see what fits with your personality and your lifestyle. And then focus on a few things after that.
Mike: One thing is that we’re focused bioregionally at first. We’re trying to figure out what scales in terms of principles that can be run across different bioregions. But what specifically do we need to do to get this thing running in our bioregion.
Mike: And one of the things that’s most interesting to me is hemp as a building material. And in our region, that’s actually one of the largest growers in Canada for hemp and cannabis plants and everything. So, for us to either partner with neighboring farms, who already have hemp or to start drawing that on our property wouldn’t be a huge difficult process.
Mike: And then I’m looking at creating hempcrete bricks is kind of an alternative building material that we could experiment with on the property. And maybe over time, it could become a regional supplier.
Euvie: I wanted to add something actually to the previous question about the kinds of people that we will be living with to start. One of the things that we thought about is doing workstay programs where people can come and exchange their labor for accommodation and contribute to the farm or to one of the other ventures. So, that wouldn’t require them to have their own online income because their room and board would be provided. But that would be more for short term people, like for a few months, let’s say.
Jim: There’s a program called woofing, woofers.
Jim: And our area here, we have a lot of itinerant woofers that come through, at least we did before the COVID, worked on small or sometimes not so small, alternative agricultural projects. And people who were using that program found that people were generally a good quality. And you could get them in fairly good quantity if you wanted to.
Euvie: Yeah. And apparently, woofing was founded just in the same region by somebody who lived in Nelson. That’s what I found out recently.
Jim: That’s interesting. I did not know that. Somehow I thought it started in the UK, but I would not claim to be an expert on other than that I know several people who have been woofers and people who have employed woofers and all of them seem to speak well of the program. It’s interesting.
Jim: I like this hempcrete idea. That’s kind of interesting because as crops go, hemp as long as you’re not trying to grow it for marijuana is actually a real easy crop to grow. It’s pretty hard to kill, actually.
Mike: It’s a weed.
Jim: Exactly. Producing biomass with that stuff does not require a high level of expertise.
Mike: No, and it sucks in carbon in the growing process. And as just standing there as a brick, it’s a carbon negative building product.
Jim: Very clever idea. I might have to look into that because I’m also a farmer. And though I will say I’m more of a gentleman farmer, where I have hire other people to do the actual work. And my wife is much more active in alternative agricultural programs than I. So, we’re constantly thinking about these things. We have a friend who grew some hemp for the CBD market and ended up losing their ass because they were a year late into the CBD gold rush. And it might be something for them to do with their expertise of being able to grow hemp. Take a look at that.
Jim: Yeah, very good. What about ownership model? This is one that when we start to think about ProtoBs, I think there’s lots of different options here. Let’s say people who move to the place with the intent of living there permanently, let’s say they pass the probationary period. Are you guys going to have ownership in common of all that land in the buildings or is there going to be a common ownership with individual ownership of the houses? You have ideas on how that might work?
Mike: Yeah. We’ve talked about this a lot. And actually, this conversation has dictated the funding model that we pursued at the very beginning. Because to set up a community land trust before you own the land, I don’t know if it’s just in Canada or if this is the same in the states, it’s a very lengthy, very expensive, time consuming and complicated process that would actually make us miss the window to even acquire the property.
Mike: So, the main thing we’re looking for now are loans, kind of patient debt capital to get things started. And then those loans at some point in the future when both sides agree, can convert potentially into equity.
Mike: But what has been most interesting for me personally about this whole process is figuring out a way to tokenize it on the Blockchain to have tokens that represent your ownership of the property. And if we look at subdividing the property, that’s a bit of a pain in the ass. I would actually much prefer there be some sort of joint ownership.
Euvie: You will have the right to use specific buildings.
Mike: Yeah, or that maybe they lease the land under their feet and then own the building that the land is built on.
Jim: Yeah. That’s the land trust model, typically, where the land trust will give you a 99-year lease on a quarter acre and you build your house on that.
Jim: And then there’s usually some formula on how your heirs can renew the lease at some step up in price after 99 years.
Jim: And then, of course, there’s the condominium structure. There’s co-op structures. There’s quite a large array of legal entity structures that can accomplish different kinds of things. But truthfully, one has to sort of get some sense of what it is you want to accomplish before you choose the legal entity structure.
Euvie: Yeah. And this is also why we’ve chosen the loan structure as our kind of startup model for raising funds. And we’ve just registered a basic corporation. And we’re doing it that way to start because it’s simply the easiest, the most agile, and the cheapest way to get started, too, because time is of the essence. And we found this property, and we do have a deadline for completing the purchase of it. So, we’re going that way to start, but that is not our intention to go forward that way.
Jim: So, it’s [inaudible 00:21:13] convert it into another one of these more cooperative style structures.
Euvie: Yes, absolutely. That’s the intention.
Jim: That’s interesting. Yeah, I know you guys are out looking to raise some money. Why don’t you talk a little bit about your fundraising program? And I’ve asked our producers to jam this show through as quickly as we can through our production process, so we can get it out in time to maybe be helpful and helping you guys round up investors.
Mike: Well, thanks. Yeah. So, as we mentioned, we’re looking at collecting loans from basically 50 to $100,000 on average. And we’re going to use that money to purchase the property and to start building some of the kind of smaller accommodations for people to come live there. We’ve had a lot of interest. Basically, every single person who’s pledged any amount of money has expressed their interest to live there pretty much immediately.
Mike: So, we had some other ideas of what we wanted to build first. We thought we were going to do a makerspace first or an event center. And it turns out, what we need to do right away is build the accommodations.
Euvie: Yeah. Build more dwellings. So, we’re looking to raise 2 million Canadian dollars, which is a little bit less than American. And most of that is going to go to purchasing the property. And the remainder is going to go to building these new accommodations.
Jim: Have you carefully budgeted how much you’re going to need above and beyond the land purchase?
Mike: Fairly carefully, but we weren’t anticipating having to raise quite a bit more money for the future development of this project. So, one of the things that we’ve thought of is loan forgiveness, once the structures are up and running. In some ways, it’s almost like a promissory note. So, that people can invest in any of the different businesses that we start up on the property.
Mike: And from the very beginning, we’re trying to figure out how to template and scale this whole project so that other people can start this on their own. We’re not trying to be like the hub of smart villages in the world. We want this to be replicable and scalable.
Mike: So, we’re building a lot of kind of content production into this. We’ve partnered with a documentary film team, who were going to tell the story as this whole thing unfolds. We’re going to be trying to host a lot of different events and give people the chance to check out how these buildings are built and what they’re like to live in.
Mike: So, yeah, I mean, the scalability and replicability, again, is probably the most important thing to us at this point.
Euvie: I want to explain what Mike said by loan forgiveness because you didn’t really dive into that. So, we’re asking people if they would be interested in forgiving a portion of their loan in exchange for staying on the property, in exchange for different services, like events or use of the makerspace or whatnot, or if they would be interested in forgiving a portion of their loan in exchange for some form of ownership in the future. And that structure is still to be determined. But we are giving people that option.
Jim: Yeah. You might use a little bit different language because forgiveness, particularly on that last one might sound, I don’t know what, not quite businessy enough. One language that covers the case say, for instance, where you’re going to get a building lot in return might be what they call debt for equity swap, even though it may not quite the equity, debt for lease swap, or say, you have $100,000 invested and you have the option or the opportunity at some point to swap that out for say $100,000 worth of building lot, for instance.
Mike: Yeah. That’s much better term.
Euvie: Yeah. It is much better term. It was actually our lawyer that used the debt forgiveness term. So, that’s why we’ve been using it but yeah, you’re right, swap sounds much better.
Jim: Yeah. I would use swap. And for tax reasons, I understand why they would use the word forgiveness because there’s tax consequences to forgiving loans.
Jim: You don’t actually want to do that because forgiven loan is taxable income to the entity. Anyway, it’s very, very complicated. And some of the things that we’re starting to dig into in the ProtoB incubator is to explore this space, because as it’s very complicated. And no one structure is right for every project. You really have to think through how much capital you have access to, where you’re going to get your capital for growth over time because at least back of the envelope, can easily cost 10 times as much to build out the structures on a community as it does to buy the land.
Jim: So, over overtime, the need for capital will go up quite substantially as you build out, as you take a rough rule of thumb is the total capital you may need to invest in built structure, hard to see how it could be much less than $100,000 per adult. So, if 50 adults, that’s $5 million. That’s two and a half times the land. And $100,000 per adult is a relatively conservative budget.
Mike: Yup. Actually, kind of works out to be quite similar of what we predicted, it’s going to cost.
Jim: And then again, if you do things like do debt for lease swaps, so that people then get a building lot, but then they’re responsible for financing the construction, that’s an interesting way to minimize the amount of capital. The entity itself has to raise and yet still get the buildings built. Of course, you have to have a reserve for your shared space, I assume that’s part of the plan. Actually, let’s talk about that a little bit.
Jim: So, let’s assume there’s some form of individual lease or something, long-term lease on the residential structures. I’m presuming and I looked at the slide deck you guys had, or it was actually a website. Looks like you have the idea of investing a fair amount in shared infrastructure as well. Could tell us a little bit about what you have in mind there?
Euvie: Yeah. Well, we want this place to be basically a lab that people can come in and use to prototype different ideas and inventions or processes. So, makerspace is going to be really crucial for us or kind of a shared tool shed, as well as a coworking space where people can sit and collaborate with each other and bring in their teams.
Euvie: So, we’re also going to have different structures for recreation and focused on health so that people can have a good lifestyle and running a business can be quite stressful. So, being able to relax is also really important. So, eventually, we’re going to build a gym and a sauna and things like that.
Mike: There’s another part of that too, where the sponsorship really plays a role with the fact that we’re producing so much content. And we actually have a partner on our team who has set up makerspaces and innovation centers all over Western Canada.
Mike: And generally, the way he’s gone about getting these things set up is to get sponsorships and donations from the companies who make these tools. Because coming into a makerspace will give you a taste. But it’s not exactly the place you want to be working from if you’re going to start manufacturing a product or building something is a full-time gig. So, it’s kind of a good setup to be able to have these things sponsored. And then people can just buy their own equipment straight from the company.
Jim: I’ll give you another idea for a makerspace. We built a very successful makerspace in Stanton, Virginia. My partner and I, we eventually converted to a not-for-profit. And one of our hypotheses, which turned out to be correct was that there was a vast amount of unused and quasi abandoned machine tools, hand tools, supplies of all sorts in the basements, barns and garages of the region.
Jim: Turned out it was true, I would say 80, 90% of the equipment, including some very high end stuff we were able to basically scrounge or buy for next to nothing from people. Oh, yeah, it’d be cool to have a woodshop. I haven’t used it in 15 years. Yeah, I’ll sell it for five cents on the dollar. I’ll just give it to you.
Jim: And that’s worth exploring, too. You may be surprised at how quickly you can ramp up. If you’re interested what we’ve been able to scrounge, take a look at stantonmakerspace.org is it or .com? I don’t remember. I think maybe .com. And happy to put you in touch with our folks that are still running that place. They may be able to give you some clever ideas on how to get stuff for nothing or damn close to it.
Mike: Yeah. I appreciate that. It’s funny, we don’t even have the property yet. And people are already doing that with us.
Jim: Yeah. Same thing happened to us. Literally day after we got our property, people start showing up with stuff. And then we had a fire, probably the landlord’s fault. But after that, we had a huge outpouring of donations from the community to replace a lot of the stuff that we had lost, which was very interesting.
Jim: So, don’t underestimate that, as a potential way to bootstrap a makerspace. We have now our third generation building. We have 6500 square feet full of interesting stuff.
Mike: Cool. This is one thing I’m super excited to get working on. Because I love building stuff in my hands. And I learned how to do some carpentry. This year, I built my desk, built an eight-foot desk for myself. I plan on building a conference table there. So, yeah, looking forward to that.
Jim: Yeah. I love that stuff. I built our bed. Actually, our first generation bed, eventually, we replaced by almost identical, but using much fancier woods and stuff by a professional. But I couldn’t find a good bed that had built in bookshelves, for whatever reason that’s fallen out of fashion. And so, I said “Oh, shit, I can build a king size bed with two bookshelves built in. That can’t be that hard.” Turned out it wasn’t that hard.
Jim: So, yeah. And I understand the attraction. And I think the kind of people that would like to live in a place like your Smart Village, some percentage of them, they’re not all, will be very interested in doing those kinds of things. That’s a real good and attractive amenity, shall we say.
Euvie: Yeah. Actually, to kind of circle back to one of the earlier questions of what kind of people will be there first, yeah, Mike mentioned digital nomads, but actually, a lot of the people that have been interested already have some sort of a business that relates to what we’re doing. But they want to transition into more of a Game B version of it, let’s say, or more regenerative, more sustainable version of it.
Euvie: So, that’s also one of our kind of, how would you say, types of people that we’re looking to attract and have been attracting. So, their business is not necessarily digital, but they already have a business. So, for example, an architect who wants to do more passive homes or more sustainable homes, or a real estate developer who wants to focus more on smart villages rather than conventional developments, things like that.
Jim: That’s very interesting. How about the artistic side of things? People have a business on Etsy, for instance?
Euvie: Yeah, definitely.
Mike: Actually, one person interested has business on Etsy. Yeah, there are a ton of these kind of DIY or kind of like more on the ground human level stuff. There’s another couple that are chefs that want to be involved in this.
Jim: Cool. Chefs reminds me of a question I have on my list. Have you guys taken a position on whether you’ll do communal dining or not? That seems to be a key question in the design of intentional communities.
Mike: Well, one thing that we want to do is have these kind of pockets of micro villages all throughout the property because there’s kind of in the unzoned portion, it’s quite hilly and it’s forested. But there are these little benches that could hold probably seven to 10 dwellings. And we wanted to have kind of a central hub in the middle of all of these different dwellings and then have multiple hubs throughout the property. And those hubs would have communal kitchen, maybe even recreation center, or kind of like a hangout space, living room, media center, something like that.
Mike: So, yeah, we’ve been thinking about doing different variations of communal living, maybe one level that’s very highly communal, one middle ground, and one kind of like separated individualistic micro village.
Jim: I like that. Because one of the things I tried to pound the table a lot on in our ProtoB work is we don’t really know the answers of what’s going to work and what works for different kinds of people is likely to differ.
Jim: So, I think doing experiments, you guys should be commended by the fact that you don’t have an ideological position on things like that. But rather, hey, let’s try different things and see what works. And actually, we may find out that different things work for different kinds of people. And there’s nothing wrong with that.
Mike: Well, the burgundy jumpsuits are definitely mandatory for this.
Jim: I can tell you what, I want to throw in 50 bags of Kool-Aid.
Jim: If things get a little off kilter.
Euvie: Yeah. There’s this idea out there, I suppose, was in my research about intentional communities and regenerative villages that more communal living is better, but I don’t really believe that. I think you want to be able to accommodate all types of people in a diverse array of people and give them the opportunity to live how they want to live, as long as the system that they’re living within is for the most part regenerative.
Euvie: So, some people don’t want to have communal showers and communal kitchens and stuff like that. They want to be in their own bubble and come out when they feel ready to do so. They’re just more of naturally introverted people. So, we don’t want to leave those people out of the equation here.
Jim: Yeah. Essentially, the Israeli Kibbutz have explored across that whole space. And they originally started out with all of them having mandatory communal meals, period. There wasn’t even kitchens in the individual apartments. But over time, it’s become much more of a mixed model. So, I think you’re onto something there. And that there are definitely people who never cook for themselves and always get the meals at the communal dining hall.
Jim: But then there’s other people the other extreme who typically cook almost all their meals, typically Saturday night right before the weekly big meeting. It’s sort of socially bad form not to show up for the dinner before. And so, it’s kind of nice to have a more flexible model.
Euvie: That’s one of the most exciting things for me is people ask us, well, how are you going to do this or how are you going to do that? And my answer is, I don’t know. And it’s not out of ignorance. It’s because I’m purposely choosing not to know so that something can emerge to allow space for emergence. Because the way that I think about it is if we know exactly what we’re doing, then we’re not innovating.
Jim: Yeah, I agree. I like to tell people, our President Eisenhower, who was also the general in charge of the Normandy invasion, the biggest military action in the history of the human race, except maybe the Battle of Kursk over there in Russia, that might have been a little bigger. He’d always say, “Planning is indispensable, but plans are useless.”
Jim: What I love the tension of that. It’s useful to think it through, what are the dimensions of the problem space and what are some possible configurations and a high dimensional design of a location? However, don’t be dogmatic about it. When you actually start doing it, you’re going to learn things that you’re going to learn on the ground that are quite different from what you thought conceptually, when you were in the planning stage.
Mike: I like Mike Tyson’s version better.
Jim: Which is?
Mike: Everyone has a plan until they get punched in the mouth.
Jim: Yeah, that’s right. Or punched in the face or something. Yeah, or maybe it was punched in the mouth. Yeah, really, I’ve heard that version, too. I like that a lot. That that appeals to me a lot.
Jim: Let me dig into one of my favorite little more prosaic questions, because again, it’s critical to making these things work. You mentioned building houses and pods of houses up on benches. Benches are tough for things like water and sewer. How do you guys intend to handle, particularly sewer that always seems to be one of the things that’s a real problem and getting approval from health departments and things like that, particularly up on bench lands?
Euvie: So, the area that we’re building is called Kootenays. And all of it is mountainous because it’s all in the rocky mountains. So, there’s a lot of expertise in the area about building specifically on hillsides. So, there’s a lot of people who specialize in that. And the current structures there, one of them is built on the hill.
Mike: True, really.
Euvie: Well, one of them is kind of at the foot of the hill and the other one is really up on the hill. And they all use septic tanks and the old pump water. And they don’t have any problems with water pressure and don’t have any problems with sewage. So, I think that expertise is already there.
Jim: That’s good. Yeah. And the other nice thing is today, there’s been a lot of work on advanced septic systems, so-called sandpile systems, or aeration systems, et cetera. So, there’s more options to choose from. Though I will point out that some of those more modern systems are quite a bit more expensive than your traditional septic tank drain field.
Jim: And you might check with the health department because often, in fact, they almost always will grandfather in the old septic systems, but they may require more advanced systems for new construction. That’s certainly worth looking into.
Mike: One of the structures on the property is actually fairly new. It’s within the last couple of years that they built it. And that was built by the owners of the property. So, they’re quite experienced with that stuff. And they’re going to be involved in the building process going forward.
Jim: Yeah. Very cool. Talk a little bit about the surrounding areas. Again, when I looked on the Google Earth, it looked like there’s a beautiful lake up above you guys. And there’s two or three ghost towns or very small settlements nearby. How far off do you have to go to a place that might have, say, a supermarket, something like that?
Euvie: Yeah. So, there are a couple of towns nearby. They’re not actually ghost towns. They’re very vibrant and have a lot of eccentric people living there. That’s part of the reason why we chose that region is because it does have a lot of really interesting people. It’s not just hillbillies, although there’s nothing wrong with that.
Jim: Hey, don’t be making fun of us Hill Williams?
Mike: Hill Williams. I love that.
Jim: That’s a more dignified version. We live deep Appalachian Mountains myself. And I even own few pairs of shoes. So, shit.
Mike: So shit. Hill Williams. I got to remember that.
Euvie: Hill Williams, that’s great. Yeah. Well, there’s a supermarket in the town 30 minutes away with all the food that you would need. And it has a couple of restaurants and coffee shops as well for people who want that. But there’s a small shop that specializes in particular in local grown produce, just like seven minutes drive away from the property.
Euvie: For other services, if you need a big hospital or a full-on bank, then that’s an hour and a half drive away. And in Canada, we measure everything and in hours of driving because the distances are large. And sometimes you got windy mountain roads, so the number of kilometers doesn’t tell you anything.
Euvie: Yeah. So, I would say that basic services are mostly in the town half an hour away. And more advanced services are in a city hour and a half away.
Jim: Which city is that by the way?
Euvie: It’s Nelson, which is widely regarded as one of the coolest cities to live in Canada because it has so much art and culture.
Jim: Very cool. And looking at the map looked like about six hours to Calgary, something like that?
Jim: That’s your closest real big city.
Euvie: Yeah, yeah. Well, Kelowna and Kamloops are kind of medium sized cities are about 100,000 people each. I think Kelowna is about five hours away. Kamloops is about six.
Jim: Got it. So, it’s pretty remote, but not so remote, that you don’t have access to anything. That’s an interesting kind of location.
Jim: And I definitely take to heart. Same here in the mountains of the Appalachians, we strictly talk about how long it takes not how many miles it is because nobody really cares. Going over to our county seat, for instance, is about nine miles by drone flight, but it’s about half an hour drive by the actual roads that are available.
Mike: Yeah. One thing where we’ve partnered with a whole bunch of companies in the region already. And one of them that we’ve partnered with is called Tesla Tours. And so, they’ve set up a Tesla car sharing program. And they’re investing their money in the autonomous portion of these cars, so that within a couple of years, hopefully, it’ll be as easy as just called a car on your app, step in and then you’ve got an office for an hour and a half to get to Nelson, if you know what I mean.
Jim: It might work, it might work. I mean, I would be a little leery about autonomous cars on windy ass mountain roads with logging trucks and green trucks and things of that sort. At least our roads here aren’t so good about it making that how far do you go off the road to avoid the head on into a logging truck? I’m not sure I’d trust the Elon Musk software for that point yet.
Mike: Yeah. I mean, before it’s even legal, it’s got to be at least 20 times safer than a human driver. But we’ve got some experience with that just having driven around the area in the Tesla on autonomous mode. And it feels pretty safe. There kind of a few hiccups now and then. You can’t just totally fall asleep at the driver’s seat. But it feels pretty safe for the most part. And there are a few sketchy moments.
Jim: That’s the issue though. I think I’ve done a lot of research on autonomous cars, like we’re having an expert on the show week after next, which is yeah, doing the 99% ain’t all that hard, but it’s the 99.1% that kills you or the 99.9% that kills you.
Jim: And particularly in bad weather when the visibility is limited, and particularly in the Tesla. I mean, unfortunately Elon Musk has chosen not to go with high end sensors. And he just thinks he can use his cameras and a little bit of radar. Well, most experts believe if you don’t have LIDAR, it ain’t going to work too well in a heavy snow or in the fog or things of that ilk.
Mike: We’re several years out anyway. So, I’m just kind of imagining it as a potential fun future. But we’ll see where it goes.
Euvie: Yeah. I’m less stoked about the technology part. I wouldn’t say I’m a Luddite, but I think that sometimes low-tech solutions are just more resilient. So, I’m entertaining that as an interesting option for the future. But I’m also just trying to ground it and okay, what if it doesn’t happen? How do we do it? And people just drive.
Euvie: And that’s how people live in the region. That whole region, people are just used to it.
Jim: Yeah, where I live, it’s an hour’s drive to the nearest supermarket, over three mountain ridges. And so, you only go once every two weeks. No big deal and make sure you got plenty of beer in stock.
Jim: Yeah. I thought about getting electric car but I couldn’t find an extension cord long enough. Speaking of technology and Elon Musk though with digital nomads, one absolutely indispensable thing is going to be high quality internet access. How’s the internet access at the property?
Mike: Right now, it’s about 10 megabits per second down. And that’s through a satellite.
Euvie: It’s not a satellite.
Mike: Or it’s like a dish, not a satellite. It’s a dish, that beams the internet, I think, to the nearest town.
Euvie: Yeah. From the mountain.
Mike: But there’s really an interesting project happening there. There’s a fiber optic internet company that started in Kaslo, the town that’s 30-minute drive from our property. And they’re really supplying the entire region with fiber internet. And this is gigabit connections, and our little town is next up on their agenda. So, we might have to throw a bit of money at it to rush it along. But we’re going to have pretty awesome connections within the next year or so.
Jim: That would be good.
Euvie: And also, we are investigating another option of just upgrading the dish and beaming a gigabit connection there from the tower. And the internet company in the nearby town that’s half an hour away, it’s actually a local internet company that was started there. It’s not one of those big national companies. So, their offices are right there. You can go meet them. Their servers are in the basement of the old, what is it, courthouse building. So, yeah, they’re cool people. And it makes it a lot more possible to get things done like that.
Jim: Yeah, that’s good. I mean, we have fiber runs right by our farm. And unfortunately, our phone company are a bunch of fucking buffoons.
Mike: Aren’t they all?
Jim: Yeah. We’ll pay for putting a point of presence in down the road and running fiber, good clean copper up to our farm, which is a mile off the road. And years and they still haven’t done it yet. So, if you guys have a forward-thinking local internet company, that would be great. Here’s another thing to look for. And then it’s our ace in the hole is again, Elon Musk and his, was it Starlink?
Jim: Starlink system. Yeah. I’ve actually signed up as a beta for that. And because we do have such crappy internet around here, hopefully will be relatively early on his list. He claims he’s going to prioritize places that have poor internet coverage.
Jim: And they’re talking about day one offering 50 down and 5 to 10 up, which would be great, at least for a family. If you have 50 people that live in there, and maybe you have to put four or five of them in. But that’s another possible fallback position if it turns out that it takes longer than you think, which sometimes it does, to get a fiber type solution out to where you’re at.
Euvie: Yeah. That’s something we’ve been talking about, too.
Jim: Yeah. I would suggest you sign up for the beta right now, all right? They don’t know you don’t own the property. Just give them the address. And the sooner the better.
Jim: Let’s see. Another one of my favorite topics, other people don’t give a damn about it. But what about things like child care and education? I think of the modern world in the big city, it’s fine to be single, it’s fine to be middle aged and have a good income, but it kind of sucks to be young with kids and really tight income. What have you guys thought about making your community family friendly? And I know because we talked about a pregame that you guys have a youngin yourself.
Euvie: Yeah. This is something that I’ve thought about a lot. And it’s actually interesting that in the area, a lot of families homeschool. In the nearby town, more of the children are homeschooled than not, even though there is an elementary school there.
Euvie: So, we’re planning to do something similar. I don’t have very much faith in the public school system. So, my plan over kind of a long-term plan is actually to develop a school for kids that’s cooperative with the other families in our village and in the area as well.
Jim: It’s interesting. Does Canada have the equivalent of what we have here in the United States called charter school systems? Charter schools where private individuals can set up a school and yet get full government funding for it, which is kind of interesting because it provides an opportunity to be able to hire professional teachers, et cetera. Of course, the downside is you fall at least in part under their regulatory framework. So, there’s cons to it as well.
Jim: But in some of our ProtoB thinking here in the United States, one of the kind of jurisdiction shoppings that we do is try to figure out which jurisdictions have the most favorable charter school.
Euvie: I’m not sure. Our kid is only 10 months old. So, I haven’t thought that far into the future in terms of the actual structure of it. But I know that there are several alternative schools in the area, forest schools and whatnot, and Waldorf schools. And so, lots of people to talk to, to figure out how they’ve done it.
Jim: Yeah. That’s I would say an important thing to look into. Because charter schools in the states, I mean, typically will provide $10,000 or more per student per year. And that’s a really significant resource to use to build out your school as opposed to having to scrounge volunteers and not necessarily all that affluent parents can afford to pay. So, it’d be worth looking into and seeing if that’s an opportunity where you are.
Euvie: I know that there’s one forest school in the area, where their tuition is half of it as covered by the government. So, they’re probably under some sort of a structure like that.
Jim: Well, I would say, those especially if you’re going to appeal a lot to people with children, that would be an important thing to figure out as soon as you can. Because as you know, that’s a critical concern, maybe not when they’re 10 months old, but when I get five or six, I guarantee I’d be number one on your list is how we’re going to handle education without sending the kids off to the government sausage factory.
Jim: And we think that’s a really important thing to explore in these ProtoB communities. Let’s go back to the finish off, we’re getting close to the end of our time here. On what you guys need to get over the line on your fundraising and what kind of terms you’re offering? Maybe some of our listeners can reach out to you, which will put on our episode page, a way to get a hold of you, if they’re interested in the proposal. So, maybe quick form of how much you still need to raise and what are you offering?
Mike: So, there’s been enough pledge for us to purchase the property, but I don’t anticipate everyone’s going to convert. I always kind of want to oversubscribe and then go from there. So, we need 2 million total to do the initial development and to purchase the property. The structure we’re setting up for funding is loans. We’re doing 3% annual interest rate and we start paying back after five years.
Mike: The thing is with that is that there are a number of people that are like friends and family who are coming in that we know personally for a long time that are investing. They’re skipping straight to the investment part.
Euvie: Like equity.
Mike: And so, there is some opportunity for us to pay back some of the loans a little earlier. We’re just not building that into the contract. But that is one of the things I hope to do that we could make payments within the first year.
Jim: Now, on the details, the 3% annual, do you intend to pay that currently or you’re going to defer that for five years also?
Euvie: It starts accruing right away, but the repayment starts after five years.
Jim: And that’s both interest payment and then some capital repayment. What’s the actual structure? Is it like a 15-year mortgage or interest only for 10 years, and then a balloon? Because I’m sure you have to work out those details?
Mike: Yeah. Interest is first, we pay the interest first.
Jim: So, you pay interest. And then is there a time when the loan itself is scheduled to be repaid?
Euvie: We’re thinking probably about 10 years.
Euvie: But again, I mean, we need to raise more funds. This is kind of the bridge to get us on the property. And we need to raise quite a bit more after that. So, there’s a fair chance that within next race, we’re going to pay back a bunch of the loans or give people the option at that point, because we’ll have known them for a period of time to switch over to the equity model. So, we have about one third of the needed money in initial investment rather than loans. So, we actually don’t need that much in loans to get this off the ground.
Jim: Got it. So, let me see if I can phrase this in a way that would be intelligible to people who think about making investments. Does the loan have a term to it? Does it end at some point? I mean, in other words, do you have to pay back at period X if nothing else ever happened?
Mike: There’s nothing in the contract that says that at this point.
Jim: So, basically a 3% open ended loan that you will pay back at some time in the future, but no conditions that basically say when or under what conditions?
Mike: Is this something we can add. But I mean, yeah, at the point right now? No. And people have asked if they can do individual negotiations on the loans. We’ve said tentatively, yes. So, we’re having those conversations. But really, yeah, we have to kind of leave it open at this point.
Jim: Okay, yeah. Understandable. But from an investor perspective, that’s not too attractive. But from a managing your own cash flows perspective, totally understandable.
Jim: And you also expect, there may be some opportunities to swap debt for equity or debt for services, et cetera, as the project gets underway.
Mike: Exactly. And like we’ve been saying, this is a bit of a template, a lab, a testing ground for this type of thing. And we do intend and the interest is incredibly high right now to start projects all over the region and all over the world. So, we do intend on kind of templating and then replicating this model. So, from an investment standpoint, if you’re interested in the equity swap, there is a lot of opportunity-
Euvie: For growth.
Mike: … for upside on that.
Jim: Very interesting. All righty, Mike and Euvie, this has been amazingly interesting. I really just love this stuff. It sounds like you guys have done a tremendous amount of thinking. I like the way your heads are screwed on right from an essentially an experimental mindset. Not to doctrinaire but willing to try lots of things and see what works.
Mike: Jim, I wanted to ask you one question, actually, before we wrap up here. We’re doing incubator programs. And that’s something I’m putting a lot of thought into right now, what kind of innovations do we want to focus on?
Mike: And so, when we are talking to people like yourself in the Game B space, I want to ask the question to you, what would you do as an incubator program? What innovations would you focus on that you would build a contest around?
Jim: A contest around, interesting. I mean, is this for to make a business or to accomplish a needful new innovation that makes life better for communities like this?
Euvie: The latter.
Mike: Well, I would say it could be either actually, because for hackathons, there’s typically some sort of cash prize. And there’s a sponsor that gives that prize. So, they’re generally interested in the solution that’s going to be created. And maybe they might be interested in investing into that solution as a company. So, both sides really, we can do not-for-profit and for profit.
Jim: Gotcha. I’ll throw out one of my pet favorites, that’s completely unfashionable, but it’s actually pretty important. We all know, there’s lots of interest in photovoltaic electricity, and I’m sure you guys will install some at some point. They already have some on the property.
Euvie: We do.
Mike: Yeah, we already have a lot.
Jim: But when people don’t pay anywhere near as much attention to even though it’s actually a much better quality yield is thermal solar for heat. PV at its best converts 10 to 15% of the sun’s energy on the area that it hits into electricity. A decently engineered solar thermal heating system can capture 60, 65 maybe even 70% of the energy that falls on the collector plates. And the collector plates are a lot less expensive than the PV systems per square inch.
Jim: And so, I believe that the area of building family or small cluster size thermal solar-based heating systems is underexplored. So, I would love to see somebody do a project like that. Hell, I might even put up part of the price.
Euvie: Very cool. Yeah. Thanks.
Jim: And certainly, in Canada, getting free heating that would be a good thing.
Mike: Yeah, definitely.
Euvie: Yeah. Actually, speaking of heat, one of the things that we talked about is septic tanks generate a lot of heat when the stuff decomposes. So, we’re talking about using some of that heat for heating in the winter, wrapping water pipes around the septic tanks and putting that water through a heating system.
Euvie: And another thing that we’ve talked about, one of our partners, the current owner of the property, as a manager of a timber framing business, so they produce a lot of sawdust as a waste material. So, we’ve talked about compost toilets or compost heaters, because again, compost produces a ton of heat. So, interesting way to use the waste.
Jim: Yeah. I like that. Other one, I’m sure you guys have thought about, is what we do at our farm, we have a good size wood furnace outside and we have a heat exchanger into our boiler system. So that if we go away, the boiler fails over. But if you’re going to have people there all the time, you don’t even need that. Outside wood furnaces that use hot water heating are amazingly great ways to get cheap heat in rural areas.
Jim: And of course, it’s carbon neutral. As long as you’re not cutting the forest down and building parking lots on it, trees fall over, I don’t know a few hundred thousand trees. So, we always have trees fall over. You cut them up, let the forest continue to grow, and it will eventually recapture all that carbon. And we heat pretty much exclusively when we’re in town with our pretty good sized, hot water wood furnace that heats our house.
Euvie: Yeah. That’s actually exactly how the current three buildings are heated on the property in the winter.
Jim: Yeah, very good. All righty, guys. Best of luck with your project. And we’ll be talking regularly.
Mike: Awesome. Thanks, Jim.
Euvie: Great. Thanks so much for having us.
Production services and audio editing by Jared Janes Consulting, Music by Tom Muller at modernspacemusic.com.