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Welcome to Bridge the Gap podcast, the senior living podcast with Josh and Lucas. We are in beautiful California at the Senior Living 100 and we have one of the big thought leaders and innovators in the space. We want to welcome Matt Thornhill, he is the CEO of Cozy Home Community. Welcome to the show.
Hey, thanks. Happy to be here.
Yeah. Well, so I saw you last night, you had on a beautiful, bright red jacket and a multi-colored shirt. And I said, I’ve got to meet this guy, because anybody that knows the senior living fan when I was packing my bags to come out here, I was wondering how many black t-shirts I could fit in at one time. And it’s not because I don’t love color it’s because I don’t like decisions around wardrobe. So black always works. Anyways, I digress. It was a great conversation. And then come to find out you are one of the speakers during the innovation time periods of a kind of a Ted talkish kind of a 15 minute high impact discussion. And you were the lead speaker and did it a fantastic stick job. A couple of things that we learned in that that will allow you to speak to, I was surprised you have a whole background of working on Madison Avenue in products and marketing and focus groups and a whole bunch of high level things. Talk to us, starting there with some of that background in how has that transitioned and pivoted to now you’re building cozy home communities. And we’ll talk about that more.
Well, Hey, I appreciate that. And I thank you for not mentioning my clown shoes that I was wearing last night.
Matt Thornhill 02:16
No Lucas, my background is in really consumer behavior. I was on Madison Avenue, working an ad agency for the first, almost 20 years of my life. Then I ran a think tank for the last 17 years that focused on how to market to boomers. And specifically because boomers had aged out of that golden demographic that we had always been focused on. And in advertising that 18 to 49, they’d started turning 50. And in advertising, we just had ignored people over 50 or, or maybe we’d sell them a Cadillac or some Depends or something, Ex-lax or something. But we didn’t know what to do with them. And, and I had back in 2003, I had friends who were in their fifties. It’s like, they’re not dead yet, they’re still buying stuff. So I formed a consulting firm that became a think tank.
Matt Thornhill 03:02
And we went out and researched and said, do you feel like advertising is missing? They’re either treating you as you’re still young, or they’re treating you as if you’re an old person and you’re neither. And that just ended up being in the right place at the right time. All this generational stuff was just starting. And we were just in the right at the right time with a message. And that got me in front of a lot of audiences to really help them understand the boomer consumer at that stage of life. And along the way came senior living senior living game and knocked on our door and said, “hey, we’ve got to understand boomers. And I’m like, “Why? they’re too young for your product and they’re not coming anyway, cuz they don’t really like your current product. Their parents are there and they don’t, they don’t like it.
Matt Thornhill 03:43
So I don’t think they’re…” They say no, no. We need to understand boomers if nothing else, they’re decision makers for our parents. So we did research and got consulting gigs and gave speeches to help educate the senior living sector. And that was my first exposure to it. I didn’t know anything about senior living. Jump forward 10 years, the recession came and went and senior living kind of went away. It came back in about 2016, 2017 and they said, “Hey, we really need to understand boomers.” My business partner and I said, “well, we’ll do a big national research study ourselves because we’re a think tank. Let’s think about this stuff, and see if we can figure out what’s going on and to take the temperature of where boomers are today at this stage of life.” We did that study and then we went out and shared those findings at conferences and events, kinda like this.
Matt Thornhill 04:31
And it was along that journey that it became clear to me that the senior living sector just had a blind spot for specifically the middle market. They’ve got plenty of product for the high end. And the current operators have got waiting lists of people who want to be on the high end. They look at the boomer consumer coming to them and say, “wow, there’s so many of them, we’re gonna be fine.” And they’re right, they’re gonna fill that top five or 10% of the market with the high end product. And then there government sponsored housing for low income boomers, but there’s nothing for the middle. And the sector, the industry is kind of saying, “well, we need to figure out this forgotten middle,” I guess, that’s what NIC calls it. And that got me thinking about this idea and had for years about, why don’t we build some affordable housing? More affordable housing, market rate housing for older adults, where they can live intentionally in community. So that’s what got me from where I was to where I am today.
Well, I love the perspective you have coming from outside the industry, researching data. And then coming into the industry with new ideas. I have heard for years as have you Lucas and Matt, you’ve probably heard this too, as you’ve been studying, I mean there’s no lack of operators, developers, owners talking about the need for middle market product, but it seems like we’re not delivering anything. Matt, what are these things that are preventing us from getting product out there that you see as kind of glaring?
Well, there’s there’s probably a couple of things. Probably the most fundamental thing is the nature of real estate development, and I didn’t really understand this before I get into it is, how do I maximize the amount of money per square inch of dirt? How do I enrich myself the most from the developer’s point of view? The local communities want the biggest piece of property built there that they can get so they can get property taxes if it’s a for-profit operator. So they’re interested in everything being higher end. So it just didn’t work for building kind of middle income housing for any age group, much less the older age group, so I think that’s one of the problems. The second problem is is that the current operators, a lot of the operators that are at the high end for senior housing they said, okay, and a lot of them are non-profit operators.
Matt Thornhill 06:56
And they kind of feel like, “well, we’ve kinda worked ourselves up here to this end of the market. We’ve got a little pressure from local municipalities about our nonprofit status. We got to figure out the middle market.” It’s almost like they’re doing it for self preservation versus doing it for trying to meet a market need. And I’m not going to say anything bad, because I need to partner with those folks to bring it to the market, my concept to the market. But it was just kind of interesting to me when they would admit to me in conversations as I was kind of shopping the concept, they’d go, “yeah, we really need a middle market solution. We don’t really know how to do it.” And the closest they can come is to essentially downsize their existing product. And that’s not necessarily the right way to go. A couple years ago, the architect firm Perkins Eastman did an exercise where they brought in some of the smartest folks in the sector and said, “let’s do a blank slate project.” What if we started with a clean sheet of paper, what would we come up with? And they published a great report. That’s got 10 ideas in it. And one of them is let’s build more affordable housing and how do to it. So, I don’t know if I answered your question.
Your question. You did, you absolutely did. And we could chase some rabbits on that topic for a long time. But I’m curious, I think it’s gonna take some trailblazers like you to invest and get these communities out there like you’re doing and prove the model, and prove that what the boomers want and that it can be done. And then that starts to move things into motions. Because there will be other people that then say, “hey, this can be done.” But really importantly, I think it would be interesting to hear. And I heard you talking a little bit about this. I know you couldn’t unpack it all, but you’ve learned a lot of things in your research about the boomer generation. And this market that you speak of that has informed the Cozy Home model. Could you share just a few of those things for our listeners,
Yea, I’d be happy to. There’s really a couple of demographic things, and then something we found in our research. The demographic thing is that in our study we asked people about their, where they were financially and savings for retirement and stuff, and 53% of the respondents, and this was a huge study, 4,000 completed, so a legitimate national research, 53% of the respondents boomers said I’ve got less $100,000 saved for retirement. So you ask them “okay, well what, what are you going to live off of?” And they go, “well, social security, Medicare and the equity in my home.” It’s like, not if you don’t sell your home. So that’s a number that’s kind of out there. How are they going to be successful with that? The second number out there is that 40% of boomers today don’t have a spouse or partner.
At the same time 20 years ago, when the last generation with this age, it was only 25%. We’re talking about tens of millions of people who don’t have a second income, won’t have a second social security check. Don’t have a caregiver in the home, when they get older. We’re going to have to find ways for us to take care of each other. We don’t have the money and we don’t have the partners. We’re going to have to take care of each other. What are we going to do if no one’s creating those communities? Well, we’ll build the golden girls house one. Well, nobody’s doing that. That was part of the inspiration for me to say, “okay, how do we meet this need?” And then kind of a separately. I’ve always thought, I happen to be involved in a church that has small groups and we are intentional about kind of sharing each other’s lives and living together.
Matt Thornhill 10:56
It’s like, “well, it doesn’t have to be a church model, but why aren’t, why don’t we think about that for the stage of life?” We are now empty nesters. We’re now at the stage of 60 to 80, we’ve got these bonus years here. Why aren’t we thinking about, “oh, how can we come together and support each other through the stage of life and be intentional in living in community?” The reason people stay in their homes is they got nowhere to go. “Oh, only thing I can afford is I’ll sell them my house so I can have some cash available to live off of and I’ll go live in an apartment.” Well, you going to know anybody there? “No.” Do you want to live an apartment? “No.” So why don’t we create a different type of place? So the idea behind cozy home was a smaller home, maybe a 1200, 1400 square foot home, two bedroom, two bath with a master and a spare or maybe two masters for a roommate situation, individual homes. And you put eight of them together on about an acre, put a ninth building in the middle. That can be a common house and then build multiple colonies like that to make a cozy home community. So that’s the concept behind it.
Well it makes a lot of sense, and Lucas we’ll have to make sure we share some of your slides if you’ll allow us to of your model, those visuals for our listenerss they can connect on YouTube and on social media with us and see some of the model because it makes sense. What you’re describing when you can see that. You also get into I believe your model Matt, correct me if I’m wrong also deals with some efficiencies that you think you can gain through. I believe it is manufactured offsite homes. Right? Right. Can you talk a little bit about that?
Matt Thornhill 12:31
The second element of, or I don’t know what number element it is, but I kind of baked a lot into Cozy Home just because I was thinking not about how we do things today, but how are we going do things five or 10 years out in the future? And one of the things at the time when I started came up with the concept that construction industry was struggling with not finding labor, still struggling with that. It’s like, well..the future. I mean we’ve been building houses the same way for a hundred years. Well there’s a growing number of modular home manufacturers that are creeping up, they’ve been around, but they’re getting better and better that essentially build the equivalent of a stick-built house, but build it in a factory. And I’m not talking a mobile home or a manufactured home with a railing underneath it.
I mean a metal, I’m not talking about a trailer. I’m not talking about a tiny home. I’m talking about a traditional wood built home. That’s built inside a factory, in sections delivered on trucks and then trained into place and stitched together. It’s interesting. It enables you to kind of build the foundation here on the parcel while the home is being built in the factory and you can shorten the whole build cycle completely cuz once the home shows up it’s installed and done in a matter of a week or two and you can have people moving in two or three weeks after it’s been delivered.
Yeah. It’s very it’s very exciting. So another aspect of this I think we can’t avoid talking about because you guys kicked it off with the color conversation, right? You’re a colorful guy, but your communities look like colorful communities, at least on your renderings and so forth. So tell me a little bit, I believe you have some also research into the intentionality behind that. Talk to us about that.
Matt Thornhill 14:16
Well, again, this may be one thing that I’ve baked in that I…it’s not critical to it, but it’s important to me and that’s why it’s on the concept model that’s on the website, CozyHomeCommunity.com, thank you very much. And that is that there’s, I came across a Ted talk from an industrial designer named Ingrid Fatel Lee who was doing industrial design work and found that when she was presenting her kind of thesis stuff to her professors, they said, “oh, Ingrid, your work just brings us so much joy.” And she’s like joy? I wasn’t trying for joy. I was trying for thoughtfulness and good use of materials and I didn’t know what they were talking about. She started looking into it and found that joy was something that can be built into the environment. And she spent the next two years researching it and wrote a book now called Joyful that’s out about how we can take things that maybe we are not thinking about and apply it to the built environment and how we create and build things. She found some work that had been done by an environmental psychologist in Canada, and he’s an academic who’s written papers and, and studied how people respond to different images and different things. And one of the things that she points out is that people really respond positively to bright colors. Those who are listening, not watching, I have on a basically Caribbean colored shirt and our homes are based on a Caribbean color palette. And Ingrid points out. It’s like, “if you think about third world countries, a like in, in Africa or south America or developing countries in the Caribbean and there’s everyone wears bright collars and they’re beautiful.
But when we became a modern society in the 1850s the next thing you know, everything in big cities went gray and black and beige off white. And that’s the color palette that you’ll see just about everywhere. And what Ingrid found was their places in the world where they’ve gone and they’ve taken those drab environments like, like public schools and they’ve painted them these bright, colorful colors and it’s changed the whole attitude of people in the community or at the school. They’ve done it in senior living. They’ve she found things like hot air balloons, and lighter than air objects, and foliage and all those things really impact how we feel.
So if there’s science around how color and how those things can make you feel, why aren’t we building it into our, especially our senior living environ. And if you look today, I mean, they’re beautiful buildings, but they’re all the same. There’s nothing different about them. And as I’m trying to develop a new concept, I thought, well, at the very least, I want people driving by to see a Cozy Home Community go, “okay, that’s different, and it actually is drawing me in and I don’t know why.” And it’s drawing me in because of the colors.
Yeah. Well, so I’d like to kind of wrap up my last few minutes talking about, because we talked a lot about how research has designed every aspect of this community. You’ve put a lot of thought into it. It’s going to be built differently, it’s designed differently. The colors are a little bit different. Well also figure it’s going to have to be operated a little bit differently, right? When you’ve looked at the landscape of how existing communities are operated, talk to the operators, we have a ton of them listening to this show right now. As cozy homes are popping up over the next few years all across the country, what does the operator that wants to, or would need to be able to operate that, how does their mind need to change as far as how they approach that operation from a traditional community?
Matt Thornhill 18:05
Well, I, again, I’m thinking about how senior living is going to be delivered in the future for the mass market. Again, the middle market. The model’s moving towards senior living as a service. I’ve talked to venture capitalists to say, that’s where the money is, aging in place. And you’ve got to deliver in people’s homes and where they are, and that’s all well, and good. But it’s very cost ineffective to do senior living as a service when you go and point to point to individual houses. So given that it’s like, “well, why don’t I aggregate seniors together for senior living as a service?” And I don’t have to be the operator. I don’t have to provide the services. The services can come from the community at large, outside the walls. And maybe they come from a senior living operator down the street who says, great.
“I’ll actually quote, operate the cozy home community, but essentially I’ll use my resources to provide resources to that community.” And that way the cozy home community itself doesn’t have to be full service all within aided community, you know, 24/7, we bring resources in as they’re needed. It’s funny, COVID has accelerated this, it really changed the whole sector, changed everything. But one of the things that we were thinking is like, “eventually we’d get to telehealth.” I didn’t know it was going to happen in three months when COVID hit, but I knew that eventually we’d get there. I knew that eventuall older adults would be very happy with their groceries being delivered, they wouldn’t have to go to the store or their prescriptions being delivered. It’s like, again, it happened overnight like that. And that just makes the model for Cozy Home work because we don’t need the added expense of all of that being done kind of onsite on 24/7 for, we need it on demand and delivered. It’s much more cost effective.
Well I’ve got so many things that we could talk about because there’s so many existing real estate assets, senior living operations that we talk about all the time, Lucas that are currently kind of being retooled, they’re being renovated, they’re being repurposed, they’re being repositioned all over the country. And as the model you were just talking about where senior living has a service. And we see all these new models where senior living providers are taking their services beyond the walls. And it’s still very much needed, but you’ve got the built-in acuity healthcare going on in the senior living communities. I could almost see a model where the Cozy Home Communities are built in near proximity. And then all of these built in services can then be scaled and as needed go into the Cozy Home Communities. It seems like such a viable model. And you are able to meet parts of the sector that maybe that specific senior living community wasn’t wasn’t designed specifically for, but there’s equally importance in both of those segments. So what a great conversation, I can’t wait for our audience to connect with you if they don’t know you already. And if they don’t know your model, we’ll obviously connect them to you.
Matt, I think your position here in coming and talking about innovation. It takes a vision, right. And you had a really, a amazing way to kind of sum up how that is because the people in senior housing and the people that are here at this conference and many others, it’s somewhere in collectively this group in our minds, give some encouragement to the listeners that, that weren’t able to hear that kind of departing vision you know, parting words.
Matt Thornhill 21:49
I’m happy to do that. And my little Cozy Home concept is not going solve the middle market issue. It’s going to address it. And my goal is to show that there’s just a different way to create housing that people want versus housing people need at this stage of life and a different model that we can set up. So that’s really the driver behind it. But when I look at the category and when I was running the think tank and, and working with the category, the sector of senior living, I really feel like everybody in senior living today, we all talk about it’s going to change, it’s going to change. Well, how is it going to change? “I don’t know, it’s going to change. We know it’s gonna change.” I’m reminded of… I think that everybody in senior living has, I call it a Walt Disney moment, a Walt Disney opportunity. Because, Walt saw an opportunity to buy up a bunch of land in the middle of central Florida, far away from the water in this little backwater called Orlando back in 1960.
Matt Thornhill 22:49
And in 1971, they opened Walt Disney world, which is now the second most visited attraction on the planet. So it went from nothing to that. And when it opened 71 it was a little sad because Walt had died. He died in 1966, 5 years earlier. And the legend has, it is at the opening ceremony. His widow there, Roy Disney was there other dignitaries and somebody leaned into Walt’s wife and said, oh, it’s such a shame that Walt’s not here to see this. And she apparently turned to them and said, well, “if Walt didn’t see it, we wouldn’t be here.” And to me, that’s the opportunity we have for senior living. We’ve gotta see what the future is, and then go do it. And it’s not just me. We all need to, because there’s just unbelievable opportunities. You guys are young and smart to be in it because this is going to be a growing category for the next, I don’t know, 40 years. So that was my, my closing thought.
Matt Thorn hill CEO, Cozy Homes. And this has been a great conversation. We’ll make sure that we connect with all of your information in our show notes. Everybody can go to BTGvoice.com, check out all of our episodes. And thanks for listening to another great episode of Bridge The Gap.