In this episode of the Knoodle Founders Hour, host Rosaria Cain sits down with Dennis Webb, a home building maverick who spent decades in high-end retail before bringing a customer-first mindset to Fulton Homes.
After rising to store president during a 23-year career at Silver Woods and spending five years with Eaglesons in Los Angeles, Dennis was recruited by Ira and Doug Fulton to modernize their Phoenix-based home building operations. Over the last 30 years, he has revolutionized the way the company does business by introducing retail concepts to an industry historically resistant to change.
In this episode, you’ll discover:
- The Retail Mindset: The fundamental difference between retail and home building, and why prioritizing customer satisfaction over stock prices or product features is the ultimate key to success.
- A Legacy of Firsts: How Dennis spearheaded major industry innovations, including launching the first home builder website in Arizona in 1997, creating the country’s first digital design center, and leading the charge on Energy Star 3.0 and Indoor Air Plus compliance years ahead of government requirements.
- Radical Transparency: Why Fulton Homes treats its massive $40 million design center like a high-end Nordstrom store, offering complete pricing transparency before a contract is even signed to build deep customer trust.
- Thriving Through Chapter 11: The bold strategies that allowed Fulton Homes to survive the 2009 housing crash, doubling their market share from 3% to 7% and emerging from bankruptcy stronger by doing the exact opposite of their competitors.
- The Future of Home Building: Dennis’s candid thoughts on the current housing affordability crisis, the lack of research and development among public builders, and why the industry must eventually abandon 200-year-old “stick-built” construction methods.
Business leaders looking to disrupt a traditional industry, survive economic downturns, or apply customer-centric retail strategies to an entirely different field will all benefit from this masterclass in innovation.
Listen to the full episode of the Knoodle Founders Hour podcast to hear Dennis’s fascinating stories of industry disruption, writing a book on cruise ships, and his surprising background playing the tuba.
Full Transcript
Rosaria Cain 0:00
Good morning, everyone. Good morning, Dennis. Thank you for coming.
Dennis Webb 0:03
Pleasure to be here.
Rosaria Cain 0:05
Well, what parallels does your boat draw between the world of retail and home building?
Dennis Webb 0:13
We’re all in the people business, and so retailing is primarily people, and I wish building would be more about people.
Rosaria Cain 0:22
Right? No, I can understand that. Is there more to it than that? I mean, because retail, you’re always looking at selection, and you’re looking at how people buy things, and all of what…
Dennis Webb 0:38
The biggest difference in retail and home building is retail focuses on the customer, while home building pretty much focuses on their product, and they’re very keen on what their stock price is, as opposed to taking care of their customer and delighting their customers.
Rosaria Cain 0:59
And I imagine you’re talking about primarily public builders. Are you talking about builders in general?
Dennis Webb 1:05
Mostly this, the public builders. There’s some good public builders, and there’s some good private builders, and I just wish that most of them would do better.
Rosaria Cain 1:17
Right? Well, and you’re in the building world, so you have a front row seat, and you’ve been in the retail world, and so you’ve had a front row seat there. Let’s start by talking about your background in retail, and then we’ll see those parallels a little more clearly when we talk about the building.
Dennis Webb 1:36
So, I started in high school, and I was a stock boy, and then I went to college, and I actually sold suits and put myself through college. So, as I sold suits, it was a pretty good job, because I was pretty good at it. And I stayed five years, because I did a bachelor’s degree plus a teaching credential, and that when I graduated, they made me the store manager, and I kept on with the same company. This is a company called Silver Woods in Los Angeles, and I became a buyer and a merchandise manager and store president. So I kind of rose up the ranks in that organization, and I spent 23 years with those guys. Funny thing happened on the way to success, and that is people stopped wearing suits, and they were not in good shape, as with all stores like that. So, at that point I changed courses and went to work with a guy named Ira Fulton, who owned a retail chain in Los Angeles called Eaglesons, and I came in as Vice President of Stores, and I spent five years with him, and then he sold the company, and he had a clause in his agreement that he couldn’t hire anyone for at least a year, so I stayed with the company he sold it with, and I kept in touch with him and Doug Fulton, his son, who’s now the CEO, and we kind of said, well, let’s get together, and that year was up. I made a trip over to Phoenix. We had lunch, and they offered me the position. I said, “Why don’t you come over here and help us build houses? I said, “I don’t know anything about houses, and they said, “Well, you know about people, you know about marketing and sales, and you, you’re pretty innovative, and so I think you might be able to help us. I said, “Okay.” So I packed up my wife and two kids, and we moved over to Phoenix, and that was 30 years ago.
Rosaria Cain 3:53
Now, was at the very beginning at Fulton Homes?
Dennis Webb 3:56
No, they were there for a while.
Rosaria Cain 3:59
1976 wasn’t it?
Dennis Webb 4:02
Yeah, and so this was’ 96.
Rosaria Cain 4:04
Okay.
Dennis Webb 4:05
So it was 20 years after that, so the 30 years I’ve been there, minus the 20 is the 50 year total.
Rosaria Cain 4:15
Now, what did you learn that you put to work in home building?
Dennis Webb 4:21
biggest thing was concern for the people, and trying to modernize the building business. The retail was very detailed, very organized, great systems. We had all the information at our fingertips. In building, we had nothing. It was so archaic. We were writing contracts by hand, and just crazy things like that. So, the first thing I said, “This company is not exactly trailblazing technologies,” so we said, well, let’s let’s start doing this stuff, and we immediately started writing contracts on computers, with which made it much easier, and just a lot of things that we could do that was just made sense.
Rosaria Cain 5:21
When you look at home building today, and you’re looking at what you do and how you do it, many might not realize you’re kind of a maverick. You buck the trends, and you’re much more progressive than most people in the home building industry. I imagine a lot of that came from your background in retail. Talk about that a little bit.
Dennis Webb 5:45
Well, it did when I worked for Hart Schaffner Marx. They were, they were really a top-notch team as far as training and systems, and you know, we had satellites that we were launching for communications around the country, we had world technologies, we had international licenses all over the world, and so it was just way more detailed and really much higher level than anything in the bills billing business.
Rosaria Cain 6:19
Now that makes sense. I know you’re a man of a lot of firsts. Now, if I remember right, if I remember right, didn’t you build one of the first websites of all the home builders in the country?
Dennis Webb 6:32
Yeah, we’re not sure where it was. We were the first one in Arizona. We knew that. I said, I said we should probably build a website. This was 1997 and everyone goes, “What do we need that for?” I said, “Well, in the future people are going to invest, not going to buy houses, they’re going to look at websites.” “I don’t know, maybe not.” And they go, “Well, it’s expensive,” and so I contacted this company we were doing business with, called homebuilder.com and they said, “Well, we could build your website, but it would cost about $5,000” and I didn’t know, is, that good or bad? I don’t know, was that expensive? They weren’t, they were so rare, so I came back to him and I said, “How about this? How about if you guys build us a website, and then we’ll help you sell it to all the builders around the country,” and they did, and so they built us a website for free, and within a year we had sold 100 websites all around the country, and I just helped them sell it. I told them how great it was. That was kind of fun.
Rosaria Cain 7:39
Yeah, and also weren’t you the first to have a monumental design center?
Dennis Webb 7:49
Yes, and we’re actually the first to do a digital design center, and that was a night, that was in 2006 and we were able to really come up with a cool deal, a large design center, 13,000 square feet, and was all linked and prices were available, and pictures and instructions, and it was just a, we were way ahead of the times, there’s probably only 5% of builders in the country that have that set up today.
Rosaria Cain 8:25
What other firsts have you done that I haven’t listed here?
Dennis Webb 8:30
Oh, I shouldn’t talk about those. Kidding. We were the first builder to build all of our homes, Energy Star 3.0 in 2010 and it wasn’t required until 2012 but we thought we’d get a head start, and we really did it to try to help the vendors understand what products that have to change when I have to put in, so the government, the traditional EPA people, Energy Star people, they called me up one day and said, “You can’t say that, you can’t say you’re building this thing because it doesn’t exist yet”. I said, “Well, it does exist,” you know. And they said, “Well, it doesn’t.” I said, well, “So what? What should we say?” Well, “I don’t know.” So I said, “Well, how about if we say we’re building homes that will do future requirements, and they go, okay, you can say that. And so we did, and then everyone jumped on the bandwagon and started doing 3.0 and Phoenix became the largest Energy Star user in the country by far, because of our efforts.
Rosaria Cain 9:53
Now, did Indoor Air Plus happen the same way?
Dennis Webb 9:58
That was a little different. So we were like one of the first to put it in, in 2014 and yeah, and they loved us because we were promoting it, and we were advertising it. You were probably very responsible for that, because we were doing all this stuff, and they go, “Wow, there’s no one out there advertising clean air and LD homes,” and that was just a really strong marketing campaign on our part.
Rosaria Cain 10:28
What other firsts am I missing? Because you’re a man with a lot of firsts.
Dennis Webb 10:34
As far as what?
Rosaria Cain 10:36
Well, as far as business, and as far as home building, and all the things you’ve done, I know that you’re well regarded on the speaking circuit. You’re definitely the first in the organization who have written a book.
Dennis Webb 10:50
Yes.
Rosaria Cain 10:51
That’s another first. Yeah, so I didn’t want to overlook anything that you’ve done that I might have missed, because there are so many things, like your design center is amazing, and one of the, one of the largest in the country.
Dennis Webb 11:05
Yeah, it’s the largest physical one in the country. And we do $40 million out of there, that’s the size of a large Nordstrom store. Get back to a retail comparison.
Rosaria Cain 11:18
What makes that special? And how did your retail background kind of lead the way for you to do that?
Dennis Webb 11:25
We do exactly like a high-end retail store. We treat our customers like gold. We give them all the things they want. We invite them to a browse night every other Thursday. We give them food and drinks and things like that, and they’re just, they’re thrilled. But the most important thing is, we are completely transparent with them. We tell them all the prices of everything, which most builders don’t do, and we’re just honest with them. And what happens is, they trust us, and they’re able to say, “Hey, I know how much is that going to cost, there’s no secrets,” and that really helps.
Rosaria Cain 12:08
Now, how different is that? So, let’s talk about that. You let people know what the prices are before they buy a home.
Dennis Webb 12:16
Correct.
Rosaria Cain 12:16
How unusual is that in the home building industry?
Dennis Webb 12:20
To my knowledge, no one does that. What we do, some of them will tell them the price of options when they sign a contract, but they don’t really like to. We tell them before they even buy the house, we give them an electronic thing, so they don’t have to go through the Excel spreadsheets and all that, so they have all the information at their fingertips, it’s all on their personalized portal on the internet.
Rosaria Cain 12:47
Well, then, when do home builders tell them how much it’s going to cost?
Dennis Webb 12:51
When they get to the design center?
Rosaria Cain 12:53
Okay.
Dennis Webb 12:54
It’s like no turning back.
Rosaria Cain 12:56
Oh, okay, ah, that’s amazing, and that’s probably why you do so much business in the design center, because you have transparency and you have people that trust you.
Dennis Webb 13:07
Correct, and we’re not pressuring them to sell to buy quickly, it’s a process that takes about three to four or five, six weeks, and we extend that we love that, and the buyers don’t feel pressured, and things like that.
Rosaria Cain 13:26
It’s a real experience. What made you looking at all these firsts, and everything you’ve done? What made you decide to write a book?
Dennis Webb 13:36
I had done a lot of things, not just in home building, but the retail part as well, and I started the book a long time ago, and that was the, it was when Ira had sold the company to Edison Brothers, and the first chapter of the book is called The Acquisition, and that was the first chapter that I wrote, and I wrote it 25 years ago, and it was just one chapter, and I kind of put it away, and then I thought, you know, now I got a whole bunch of stories in home building, and I can take all the retail stories and take all the home building stories, and I really wanted to talk about the retail principles that you use in home building, and it’s lost leaders, and it’s gift with purchase, and purchase with purchase, and just all these retail tricks that everyone uses in the retail business, but no one uses it in the home building business, and they looked at me like I have three eyes, but all of us are retailers that we all came out of Eaglesense, so you had Ira and you had Doug and you had Norm Nichols, and we were all in retail, we didn’t know any better,
Rosaria Cain 14:59
And as luck would have it, Fulton Homes is one of the larger privately owned home builders in the country.
Dennis Webb 15:05
Yeah, we’ve done pretty well, and it’s not just me, it’s everybody. We’ve had some great contributors to the cause, but the thing was, everyone had passion, they all wanted to do well. The funny thing, so we were in chapter 11 in 2009 you remember that, so we were 2009 to 2011 we were in chapter 11, that was terrible, and but we came out of it so strong, we became a much, much better company, when we entered chapter 11, we had a 3% market share when we left. It was 7% plus a lot of cash, so it worked out really well.
Rosaria Cain 15:50
What do you think was behind that success during a dark time for home builders?
Dennis Webb 15:55
Fear of going out of business.
Rosaria Cain 15:56
Yeah, well, fear is a great teacher.
Dennis Webb 15:58
That’ll do it.
Rosaria Cain 15:59
Yeah.
Dennis Webb 15:59
We all kind of liked it here. We didn’t want to leave, and the banks wanted to liquidate us, and we said we can’t do that. So we had to hit home runs every time. We couldn’t just hit all singles, and we did the opposite of what every other builder was doing. We kept building, we kept innovating, we kept.. we started doing energy efficiency. That’s what led to all that energy efficiency stuff. And we differentiated ourselves between us and the other builders, and it paid off.
Rosaria Cain 16:35
When you look at home building as an industry, especially with your background, where do you see the future?
Dennis Webb 16:45
They have to innovate. We have to build houses completely differently than we do today. They’re not affordable. We use materials that don’t work well. We use wood that cracks and burns, and termites love it, and it’s just not a good material. Concrete, same thing, it heaves, it moves, it fades, paint chips and fades and burns, and all this stuff. So we’re using terrible materials, and then we’re building up by hand, we’re building it like we did 200 years ago, it’s crazy.
Rosaria Cain 17:24
How do you see that changing? So, I hear what you’re saying, but what are the solutions to those, those issues?
Dennis Webb 17:31
That’s a $64 question. And there’s been a lot of companies that have tried to do this and talk about modular and talk about robots and all these different things, I think it’ll be a combination of things in the future, and someone will figure it out. It’ll probably be a foreign company, and then they’ll spend the money on research and development, because currently the builders, particularly the public builders, ignore research and development – that’s a bad thing, you know. And they kind of like it, how it is, because it’s they’re fat and happy and everything like that, so this will be a departure.
Rosaria Cain 18:06
What do you think keeps them from from changing and leading to their extinction? Why don’t they want to do research and development and try new things?
Dennis Webb 18:20
They really care about the this year’s quarter quarterly results, and if they do research and development that goes into year two and year three, and they don’t really want to look that far ahead. It’s kind of a, it’s kind of an archaic business.
Rosaria Cain 18:38
What do you think the ops? So today we’ve got high interest rates, we’ve got a lot of factors that are, that are certainly giving the industry headwinds.
Dennis Webb 18:47
Yeah.
Rosaria Cain 18:48
What do you see as the biggest obstacles right now?
Dennis Webb 18:53
Affordability, and that’s there’s just so many people that can’t afford houses, and you have whole generations now, and we have to really work on that. We have to work on trying to make these things affordable, but they’re not affordable the way we’re doing it. We’re just not materials are way too expensive, everyone’s charging too much, lands is crazy, the regulations from the cities and municipalities are crazy. There’s just so many things that are broken. It’s got to be fixed.
Rosaria Cain 19:28
Is it fixed anywhere else in the world? Is anybody doing this right?
Dennis Webb 19:33
Not quite.
Rosaria Cain 19:34
Well, that’s what I thought. Okay. All right. So, in that, interesting too, that even with those obstacles, every country is is facing similar, similar extinction with the
Dennis Webb 19:48
countries outside the United States are building modular type buildings, they’re not building stick-built stuff where they drive 100 miles to a site and dump a truck. Truck and put stuff together, so, but they’re not building the volume that we’re building either.
Rosaria Cain 20:10
Well, in a lot of countries, also, they are, they remodel, they never actually tear down their homes, so I mean, and land is such a premium that there’s not really the space that they have in this country, so in a lot of ways home builders in the US are leading the world because we do more of it with the space, and I would think we would be more efficient and more cost efficient as well because of that, but it doesn’t seem like it’s working out that way, maybe it used to, but it’s not now.
Dennis Webb 20:41
One of the problems is there’s no General Motors in home building. There’s no big players. It’s a very fragmented business. You got three companies that are doing pretty, you know, got Len R and Dr. Horton and maybe Pulte, that distant third, but they’re doing, you know, 80,000 homes a year, Pulte and Dr. and, and, and I mean Dr. Horton and Lennar are doing 80,000 a year, but other than that, there’s nobody really doing big volume. The public builders are responsible for about 50% of the closings, and it used to be 25% 20 years ago.
Rosaria Cain 21:24
That’s an interesting trend.
Dennis Webb 21:26
So, what’s what they’re seeing, what we’re seeing is a lot of our mergers and acquisitions, and just a whole bunch of consolidation, and that’ll continue.
Rosaria Cain 21:36
What do you think the fate is of younger generations, especially Gen Z? There’s a lot of talk about Gen Z, and what they’re not doing. A lot of them still living at home, they don’t drink, they don’t have families, they’re not as social, generally speaking. I mean, with your observations from both the retail and the home building sectors, what do you think of that?
Dennis Webb 22:01
It’s too bad, I think. What’s happened is, there’s a lot of things in our society that have this.. we kind of thought, is this a great idea, and maybe it wasn’t so great. And I look at the iPhone, I see what that’s done, and there’s been some great things with the internet, and walking around with a computer in your pocket, you know, but there’s there’s some things that aren’t so good, and the antisocial thing, and people not being as communicative, and just things like that, and I think that’s changed. It’s changed retail too, they don’t want to talk to people, they want to just kind of, you know, I just want to go on my iPhone and order stuff from Amazon. I’m okay with that.
Rosaria Cain 22:52
Yeah. No, that whole e-commerce thing really took off.
Dennis Webb 22:57
Yeah.
Rosaria Cain 22:57
What do you see about the future of home ownership. Now, I know we talked a little bit about modular and how homes would be built and how they’re different. Do you think AI has a has a part in that role?
Dennis Webb 23:11
I think it does, but not – it’s not going to be this pill, it’s not gonna be the golden thing that saves the world, you know, the big thing is housing has to be affordable, and when half the people can’t afford a house, we’re in tough, we’re in tough shape, and with interest rates the way they are, you know, everyone’s another one could pay $5,000 for a monthly house payment, just too expensive.
Rosaria Cain 23:43
No, it is definitely messy. What are your goals as an author? Are you going to write another book, do more speaking?
Dennis Webb 23:56
I’ll continue to do speaking. I enjoy that. That’s fun.
Rosaria Cain 23:59
Yeah.
Dennis Webb 24:00
My speaking has been well represented. People like it. It’s kind of, you know, I kind of tell stories and make it fun, and things like that. Not going to write another book. One’s enough. This took me four years to write, and it’s very time consuming, and I, it’s just, you know, I didn’t know how I was going to do it, you know. I said, well, I got to get going here, you know, and I couldn’t sit there and leave the office at 630 and then write for two hours, you know that’s not going to work, so I did it on vacations, so I go on a cruise, and I’d be at sea, and I’d have my laptop, and I’d type in, you know, three or four chapters, and if you take enough cruises, you can write a book.
Rosaria Cain 24:55
Well, that leads to my next question, looking at the personal side. What habits and routines keep you grounded? And I have a feeling travel has a big, has a big role.
Dennis Webb 25:05
Travel is good. Yeah, and I do weird stuff, you know? I play golf, and I make furniture. I have a woodworking shop in my garage, and I play the tuba, do I don’t think I told you.
Rosaria Cain 25:24
That’s a pretty big instrument. Do you have it handy?
Dennis Webb 25:29
It’s not handy, but it’s in the next room.
Rosaria Cain 25:32
Oh, I’d love to hear you play. We had one of our guests sing a few bars, so it’s not completely unknown, right? What do you want to be known for?
Dennis Webb 25:47
I guess being an innovator and changing the industry a little bit, particularly when it comes to things like options management and taking care of customers and things like that, I think we’ve done some marvelous things over the years, and we’re nationally recognized.
Rosaria Cain 26:13
Well, I’m going to close this out with a final question. Tell me one thing about you that would surprise people.
Dennis Webb 26:23
Besides playing the tuba?
Rosaria Cain 26:24
Well, you should have saved that. I’m sorry, I didn’t give you on that.
Dennis Webb 26:30
My degree is in music, and that’s why I play the tuba.
Rosaria Cain 26:35
And there you go.
Dennis Webb 26:36
All these guys have Bachelor of Business, Business Administration, or something like that. No, I have a Bachelor of Music degree.
Rosaria Cain 26:44
Well, that’s great. And do you sing?
Dennis Webb 26:50
I used to. I was in the college choir.
Rosaria Cain 26:53
Well, you have a great deep voice, that’s why I ask.
Dennis Webb 26:56
We have a good face for radio too.
Rosaria Cain 26:58
Well, you have a good face for broadcasting, I would say, as well. So, if you were going to write a book on your life, what would you call it?
Dennis Webb 27:07
I already wrote it!
Rosaria Cain 27:09
Well, I guess that.. well, that’s not your whole life, but I guess that does sum up a good portion of it.
Dennis Webb 27:16
Pretty much, it’s my whole business life.
Rosaria Cain 27:17
That’s absolutely true.
Dennis Webb 27:18
I left out a lot of my family life, because it’s not that interesting.
Rosaria Cain 27:22
Well, that’s good. You don’t want an interesting family life, Dennis.
Dennis Webb 27:25
No, no, you’re right.
Rosaria Cain 27:28
Well, thank you for spending this time with me.
Dennis Webb 27:30
It’s been a pleasure.
Rosaria Cain 27:31
I appreciate your wit, your candor, and your eye on innovation in the home building world.
Dennis Webb 27:38
Well, I appreciate your friendship these last 27 years or something like that, long time
Rosaria Cain 27:44
It has been a long time, and yet it has gone by really fast.
Dennis Webb 27:49
Yeah.
Rosaria Cain 27:50
Well, have a good day. And thank you for joining us.
Dennis Webb 27:53
Thank you very much.