One side of the Austin headquarters of Reaction Housing is utterly unremarkable, a big industrial space with a long row of desks and a bunch of computers. The other side is a tent city.
Well, not tents, exactly. Roughly nine feet high with sloping roofs and curved skylights, the structures are called Exos, and they look more like something you’d blast off into space with than something you’d take on a backpacking trip. Inside, two sets of bunk beds fold down from the walls, leaving a person-size aisle clear in the middle. The walls themselves are made of a proprietary blend of metal and plastic that’s engineered to be recyclable. Just barely translucent, they give the place a soft, homey glow.
Reaction Housing founder Michael McDaniel, a Mississippi native who would nevertheless look just right in a Texas cowboy hat, steps into one of the Exos and sets his coffee cup down on the floor. “All the bones of this thing are the same as the disaster unit,” he says. Except for the blue polka-dot wall decoration. “We’re going to have these be horizontal stripes,” McDaniel says.
To be clear: Reaction Housing’s mission is to make temporary shelters for victims of natural disasters. But before the Exos help victims, they’ll serve as crash pads at a music festival, the result of a deal that Reaction made this summer with the Hyatt hotel chain. “People were kind of worried about music festivalgoers after the show, coming back a little tipsy and seeing the dots,” McDaniel adds.
I’m here in Texas to spend the night in a disaster response unit, but the Hyatt prototype is, if anything, even more important than the original to the company’s long-term success. That’s because, if McDaniel is going to house even a single disaster victim, he’s going to have to make a lot more deals with companies like Hyatt.
Like much of the world, McDaniel was appalled by what happened in the aftermath of Hurricane Katrina in 2005. With available housing all but destroyed, about 20,000 people had to spend six days on cots in the Louisiana Superdome. The stadium had no air conditioning, no showers, too few toilets, and too much garbage, all of which compounded into what the Los Angeles Times called “a sweltering cesspool of human misery.”
McDaniel, however, was more than appalled. Then a graphic designer at Frog, he was moved to action. He began sketching ideas for a better solution. What he envisioned was a kind of modern tepee, something that could be shipped easily and was movable by hand, but that would provide privacy, security, and enough modern conveniences to make it feel at least a little bit like home.
Inspiration arrived in the form of a sleeve of Styrofoam coffee cups. McDaniel decided to mimic their stackable design, with a rigid one-piece “cup” structure and a separate “lid” for the floor that could travel separately. According to his measurements, about 16 of them could fit, stacked, on the bed of a single semitrailer. Each unit would be light enough for four people to carry together, and no tools would be necessary to set it up. After the birth of his twin girls in 2007, McDaniel spent most of his paternity leave constructing a full-scale model Exo in his backyard out of whatever he could find at the hardware store. It was heavier than he wanted it to be, but it was enough, he thought, to prove that his idea was viable.
Oh, boy, was he wrong.
There were, it turned out, no natural buyers for the Exo. Temporary housing is not necessary for most disasters. It’s both more comfortable and economical to rely on hotels, churches, and schools to house the temporarily homeless; only in a Katrina-scale disaster is an Exo-style shelter even useful. And then there was the price: While McDaniel was targeting nongovernmental organizations as potential customers, a single $6,000 Exo was sometimes more than their entire budget per disaster.
Discouraged, McDaniel went to then-Frog president Doreen Lorenzo for advice. With her help, he settled on a new approach: find enough commercial buyers to be able to offset the cost to aid organizations. In 2013, McDaniel took a sabbatical, and he and his designs went out on the road looking for investors.
By the time Hyatt discovered Reaction Housing at a startup competition in 2014, McDaniel had secured enough funding to be able to quit his job at Frog and devote himself to the new company full-time. Hyatt needed an innovative idea: Airbnb was making a killing by providing housing for big events like the Super Bowl and South by Southwest, and Hyatt executives thought that if they could add additional rooms on an on-demand basis, they might stand a chance at competing. “It was corporate love at first sight,” McDaniel says.
Hyatt is starting small. It has purchased 40 specially designed Exos. They sleep two people each and have slightly bigger beds with custom mattresses, linens, and robes, and a separate private bathroom. Hyatt also bought 40 standard Exos that will be donated to disaster-relief organizations. It’s a Toms-style, buy-one-give-one model.
It’s 8 a.m., and McDaniel has returned to the Reaction Housing work space, armed with a box of breakfast tacos.
“How was your night?” he asks me as I creak open the door of my Exo. Truth be told, even with solid walls and high ceilings, it did feel like sleeping in a tent, albeit a very clean tent. More like glamping than camping.
The future of McDaniel’s pods is full of questions. How much will it cost to store and transport the units? How will Reaction, or Hyatt, arrange for electricity and running water? Will Hyatt stick around as a customer after the pilot program is over? (The company plans to test them out this summer; it had to put off an experiment at Coachella when McDaniel couldn’t manufacture them in time.) What other customers might be interested? McDaniel believes he can sell to construction and gas companies to use as worker housing, but he has also fielded inquiries from people thinking of Exos as hunting lodges, guesthouses, offices, playhouses, and doomsday Armageddon shelters. The more commercial clients he lines up, the more likely it is that he’ll be able to get his Exos into the hands of those they were designed for—not-for-profit relief agencies.
“That’s the irony of it, isn’t it?” McDaniel says, grinning. “Capitalism.”
Watch McDaniel discuss his inspiration for the Exo: