Dec. 4, 2020

The B2B2C Model Targeting Tenants & Landlords Alike

There’s an eviction crisis looming in the U.S.

But it didn’t start with COVID — and it will persist long after.

And solving it means helping both tenants and landlords alike.

That’s how David Sullivan, Founder and CEO at Till, has found the company’s market fit while doing a whole lot of good along the way.

We discuss:

  • The scope of the rental eviction crisis and how Till found its market fit
  • How fines and late fees can hurt both renters and landlords
  • How Till is balancing 2 distinct demand-gen channels in its B2B2C model
Transcript
WEBVTT 1 00:00:06.140 --> 00:00:10.160 when you start actually digging into the pain points. It's kind of crazy How 2 00:00:10.160 --> 00:00:14.270 big the numbers are. Millions of families face eviction risk every year, 3 00:00:14.270 --> 00:00:20.330 paying 50 plus billion dollars of delinquent rent. Welcome to the revenue 4 00:00:20.330 --> 00:00:25.850 Siris on B two b growth. I'm your host. John Grossman, founder and sales coach 5 00:00:25.940 --> 00:00:31.680 at Early Revenue. Let's get going today. I'm here with David Sullivan, founder 6 00:00:31.680 --> 00:00:37.200 and CEO at Till. Welcome, David. Hey, thanks so much, John. Thanks for having 7 00:00:37.200 --> 00:00:41.440 me super excited to have you here, so let's just level set. We, uh Our guests 8 00:00:41.440 --> 00:00:46.380 are CEOs, revenue leaders and venture firms. And our purpose here is to 9 00:00:46.380 --> 00:00:51.480 provide early stage tech founders and their sales leaders insights and best 10 00:00:51.480 --> 00:00:56.180 practices on really two topics that air top of mind for most leaders. The 11 00:00:56.180 --> 00:01:03.570 houses of growing Roseanne exhales and fundraising. So let us get to it. 12 00:01:04.040 --> 00:01:07.120 Thanks again for being here, David. Why don't you start off by telling us a 13 00:01:07.120 --> 00:01:10.960 little bit about you and your background? Yeah. Yeah, sure. So I 14 00:01:10.960 --> 00:01:17.260 started till about two years ago in 2018, and I started it. It tills works 15 00:01:17.260 --> 00:01:21.790 in the rental housing space, and I started it as a result of two different 16 00:01:21.790 --> 00:01:26.600 backgrounds. So, first I spent about five years building a single family 17 00:01:26.600 --> 00:01:30.580 rental housing fund called the American Home. We bought up foreclosed homes 18 00:01:30.580 --> 00:01:34.970 after the great recession. So from 2010 to 2015, we were buying up these homes, 19 00:01:34.980 --> 00:01:39.140 renovating them and then renting them. So we were a rental housing REIT or 20 00:01:39.140 --> 00:01:43.110 fund, and it was interesting. I went into that wanting to learn how to build 21 00:01:43.110 --> 00:01:46.500 a business. I came out of it very passionate about what rental housing is 22 00:01:46.500 --> 00:01:51.630 and means to our country and to the consumer. And most directly, I started 23 00:01:51.630 --> 00:01:57.040 observing the fact that renters as a customer, consumer one they pay the 24 00:01:57.040 --> 00:02:01.320 majority of their expenses every single month to rent and to every time they 25 00:02:01.320 --> 00:02:06.390 have a financial hardship or challenge a ZA landlord myself, I didn't have 26 00:02:06.390 --> 00:02:10.139 data analytics or tools toe appropriately work with them or help 27 00:02:10.139 --> 00:02:14.500 them. And the reality is, you know, most renters want to pay the rent, and 28 00:02:14.500 --> 00:02:18.260 most landlords want to work with renters. And so I became interested in 29 00:02:18.260 --> 00:02:21.980 how you bridge that divide between these the renter and the landlord 30 00:02:21.980 --> 00:02:26.710 customers and then I spent so that companies called American Home and we 31 00:02:26.710 --> 00:02:31.180 sold to a public version of ourselves is that space was consolidating and one 32 00:02:31.180 --> 00:02:36.020 of our investors was a Fintech venture fund called Route 66 Ventures out of D. 33 00:02:36.020 --> 00:02:41.330 C on their an amazing team. And they offered me a chance to go learn the 34 00:02:41.330 --> 00:02:45.720 world of venture capital, which was very different than running a 35 00:02:45.730 --> 00:02:51.130 operationally intensive housing fund. And so it was just a unique moment, 36 00:02:51.130 --> 00:02:55.580 time opportunity that I decided to take, and it was great. I learned a lot about 37 00:02:55.590 --> 00:03:00.190 how the venture world works, what they're looking for in companies and in 38 00:03:00.190 --> 00:03:05.100 founders and same thing. I thought the world of Fintech was essentially 39 00:03:05.100 --> 00:03:08.620 different industry angle than the rental housing world that I wanted to 40 00:03:08.620 --> 00:03:12.620 explore. And then the two worlds just came crashing back together for May. So 41 00:03:12.630 --> 00:03:16.790 really, what I was seeing in the Fintech space was that there are a lot 42 00:03:16.790 --> 00:03:21.150 of trends, whether it's in Data analytics underwriting, risk management, 43 00:03:21.740 --> 00:03:26.640 credit access, insurance, access payments, access towards 44 00:03:26.650 --> 00:03:31.370 personalization of consumer experience. And so I started seeing a non 45 00:03:31.370 --> 00:03:35.680 opportunity that I became increasingly or more and more interested in bringing 46 00:03:35.680 --> 00:03:38.730 into the rental landscape. Which is how do we think about personalizing the 47 00:03:38.730 --> 00:03:44.030 renters experience to improve how they access and pay and stay in rental 48 00:03:44.030 --> 00:03:49.320 housing. So I also during that time and very transparently with them, started 49 00:03:49.320 --> 00:03:53.230 getting the itch to go back to operating. I think I like the pain that 50 00:03:53.230 --> 00:03:58.960 it takes tow operate. And so they were really gracious. Have been There are 51 00:03:58.970 --> 00:04:03.090 lead investors in what till does and are super supportive. And they helped 52 00:04:03.090 --> 00:04:07.450 me think about what Till should be doing innovated and really incubated 53 00:04:07.450 --> 00:04:13.390 out of Route 66 into the world. So that brings me to Till wow. So So you saw 54 00:04:13.390 --> 00:04:20.200 problem. You had experience on the venture side understanding that 55 00:04:20.200 --> 00:04:26.310 component of sort the startup world and what the requirements are. And then you 56 00:04:26.310 --> 00:04:32.060 also saw this what I'll call consumerism opportunity, so to speak. 57 00:04:32.070 --> 00:04:37.360 When it comes to landlords and their tenants, just the lack of data, the 58 00:04:37.360 --> 00:04:41.770 lack of flexibility, the lack of the ability to customize and personalize 59 00:04:41.770 --> 00:04:46.970 the experience. And you did a mash up of all those things. Yeah, it's 60 00:04:46.970 --> 00:04:50.890 exciting is that it's an industry that hasn't changed in a really long time, 61 00:04:50.900 --> 00:04:56.570 and it's a like ridiculously big industry. So there's $700 billion of 62 00:04:56.570 --> 00:05:00.200 rental payments that flow through the system every year. When you start 63 00:05:00.210 --> 00:05:03.930 actually digging into the pain points, it's kind of crazy How big the numbers 64 00:05:03.930 --> 00:05:09.270 are. Millions of families face eviction risk every year, paying, you know, 50 65 00:05:09.270 --> 00:05:14.000 plus billion dollars of delinquent rent. That's like a delinquency challenge you 66 00:05:14.000 --> 00:05:18.760 look at like eviction outcomes for landlords and renters. And it's costing. 67 00:05:18.770 --> 00:05:22.360 It's bad. It's bad for both, Right? There's a societal costs for a renter, 68 00:05:22.370 --> 00:05:26.880 huge one, and it's really painful for them to get back on track and stabilize 69 00:05:26.880 --> 00:05:30.380 their personal life. It's also really bad for landlords like it costs the 70 00:05:30.380 --> 00:05:35.510 landlord, our landlord ecosystem probably 25 to $50 billion annually. So 71 00:05:35.510 --> 00:05:40.590 the numbers air just really big. And so I was really excited to step in and 72 00:05:40.590 --> 00:05:44.280 work with within this consumer problem statement because there's ah lot of 73 00:05:44.280 --> 00:05:47.850 really powerful implications for both renter and landlord. 74 00:05:49.040 --> 00:05:54.800 So did that hypothesis found the business, or did you find that overtime? 75 00:05:54.810 --> 00:05:58.380 I'm curious if the product market fit was there from the beginning, or did 76 00:05:58.380 --> 00:06:03.520 you have to all WTO located. Both have been true. We've actually built to 77 00:06:03.520 --> 00:06:10.820 products in the market, and I think both the thesis has been there and 78 00:06:10.820 --> 00:06:15.260 constant from the beginning. Which is how do you better work with renters to 79 00:06:15.260 --> 00:06:19.580 improve how they and and this is like this is our mission statement. So, like 80 00:06:19.590 --> 00:06:23.050 our mission is to empower renters to thrive in their homes by radically 81 00:06:23.050 --> 00:06:27.890 transforming rent into a positive and personalized financial experience that 82 00:06:27.890 --> 00:06:31.670 has stayed true and that that works like that hasn't changed. And that 83 00:06:31.670 --> 00:06:35.610 works towards this, like end reality that we believe that through 84 00:06:35.610 --> 00:06:39.670 personalizing a renter's experience, you can actually improve a lot of their 85 00:06:39.670 --> 00:06:42.450 problem statements and a lot of the landlord's problem statements. But it 86 00:06:42.450 --> 00:06:46.810 doesn't mean like our build path has been a perfect constant. I don't think 87 00:06:46.810 --> 00:06:52.880 it ever can be. And so one thing we've done well is ah, lot of us on the team 88 00:06:52.880 --> 00:06:56.470 come from this space. So we have been our own customers. We have been the 89 00:06:56.470 --> 00:07:01.690 institutional property owners. Ah, lot of us have our own rental housing and 90 00:07:01.690 --> 00:07:05.720 work with our own renters. A lot of everyone's been a renter at till at 91 00:07:05.720 --> 00:07:09.360 some point in their life. And so a lot of us come into the space with that 92 00:07:09.360 --> 00:07:13.570 backgrounds. We, I think, have a unique understanding at it. We also spend a 93 00:07:13.570 --> 00:07:17.120 lot of time, and this kind of goes to the growth component of the 94 00:07:17.120 --> 00:07:20.930 conversation. But like it's been a really, like deep amount of time, 95 00:07:20.930 --> 00:07:25.600 working with landlords as early partners in our product creation and 96 00:07:25.610 --> 00:07:29.130 making sure that they're highly involved, as we take an even early 97 00:07:29.130 --> 00:07:35.050 pilot out to market and and put it into market and to define what what job like 98 00:07:35.060 --> 00:07:38.860 is a landlord or rent or hiring us to do is we, as we take it into the world. 99 00:07:39.340 --> 00:07:42.870 And so we've taken two products in the market. We've taken a product called 100 00:07:42.870 --> 00:07:47.710 the Rent Alone, which helps a rent or pay rent when they're facing some form 101 00:07:47.710 --> 00:07:52.150 of like, episodic hardship. And then we've taken another product, flexible 102 00:07:52.150 --> 00:07:57.600 rent into market. That very simply breaks rent, which is the largest 103 00:07:57.600 --> 00:08:00.950 expense usually do on the first of the month, and it breaks it into smaller 104 00:08:00.950 --> 00:08:06.030 payments that aligns with the renters cash flow, so it helps thio better 105 00:08:06.030 --> 00:08:10.690 proactively, budget and pay for rent, and it works with both on time renters 106 00:08:10.690 --> 00:08:14.870 and delinquent renters. But the payment schedules adapt differently, and so for 107 00:08:14.870 --> 00:08:18.830 a non time renter keeps rent budgeted and prioritized. But for a delinquent 108 00:08:18.830 --> 00:08:22.980 renter, it actually stabilizes their ability to pay and then starts baking 109 00:08:22.980 --> 00:08:26.640 into the schedule what we call move ahead mechanics or ways that the renter 110 00:08:26.640 --> 00:08:31.460 can actually move to become a consistent on time pair. And so, in 111 00:08:31.460 --> 00:08:35.760 both of those products coming to market, we have had thousands of learnings, 112 00:08:35.770 --> 00:08:39.980 right, as is the case and have you adapted product in the market. And some, 113 00:08:39.980 --> 00:08:44.820 like more material pivots and changes and some, you know, less material ones. 114 00:08:44.830 --> 00:08:49.100 And it sounds like in both cases the insight that you can provide the 115 00:08:49.110 --> 00:08:56.100 consistency of communication about the status of payments that's clarified for 116 00:08:56.100 --> 00:09:01.590 landlords so that you don't have that that friction or that back and forth 117 00:09:01.600 --> 00:09:05.770 there's just there are now options that that Lebanon has other than prediction. 118 00:09:06.140 --> 00:09:10.320 Yeah, that's right. Yeah, So in today's process, if a renter is struggling to 119 00:09:10.320 --> 00:09:14.120 pay, um, the first thing is that the landlord doesn't know that until it's 120 00:09:14.120 --> 00:09:19.330 too late, like rent is late and then really, like the whole industry has 121 00:09:19.330 --> 00:09:24.020 operated for decades on, Well, there's two sticks that you used to get a 122 00:09:24.020 --> 00:09:28.110 renter to pay. You can hit them with a late feet, and late fees usually occur 123 00:09:28.110 --> 00:09:30.910 between the 3rd and 5th of the month. Kind depends on the state for 124 00:09:30.910 --> 00:09:35.260 jurisdiction and a late fees. It's actually very similar to what a payday 125 00:09:35.260 --> 00:09:42.690 loan is. It's a 50 toe, 250% a P R, which is kind of absurd, and it gives 126 00:09:42.690 --> 00:09:47.440 the renter two weeks to pay. And most renters that have a cash hardship don't 127 00:09:47.440 --> 00:09:50.180 actually earn enough money in that short period of time to solve the 128 00:09:50.180 --> 00:09:55.960 problem. Or it's always a result of I need to pay rent and I need thio kind 129 00:09:55.960 --> 00:10:01.110 of fill in the blank on something else, like fix my car or by my kids back to 130 00:10:01.110 --> 00:10:04.480 school clothes. There's something else pulling at that cash, and then the 131 00:10:04.480 --> 00:10:07.620 other stick that landlords have is evictions, and so landlord can step in 132 00:10:07.620 --> 00:10:11.070 and say, Hey, like you still haven't paid, haven't paid your late fee like 133 00:10:11.080 --> 00:10:14.510 we're gonna file on. Eviction doesn't mean the renters evicted. But it 134 00:10:14.510 --> 00:10:18.630 doesn't mean the renter has to pay the legal filing fees in most places for 135 00:10:18.630 --> 00:10:23.020 that eviction to be cleaned and then to stay in the home. So it adds another 2 136 00:10:23.020 --> 00:10:28.040 to $300 in 15 days. And so you take a cash challenge renter and I think, like 137 00:10:28.050 --> 00:10:31.700 one notion we're challenging and industry is that actually wait. Hold on. 138 00:10:31.710 --> 00:10:35.290 If we step in and work with our renter's at the beginning one, we can 139 00:10:35.300 --> 00:10:38.710 know more about them, toe work with them or productively, but to if we 140 00:10:38.710 --> 00:10:42.330 don't exacerbate their ability to pay with late fees and eviction filings and 141 00:10:42.330 --> 00:10:46.120 we actually work with them, one will improve their experience. It should 142 00:10:46.120 --> 00:10:50.020 actually stay longer and renew more frequently because we improve their 143 00:10:50.020 --> 00:10:54.080 experience. But to we actually improve their ability to pay because that cash 144 00:10:54.080 --> 00:10:59.640 goes towards paying rent, which is like the ultimate objective. So in such a 145 00:10:59.650 --> 00:11:04.680 timely products, given the environment that we're in now, I e. I don't know 146 00:11:04.680 --> 00:11:11.330 how you would consider co vid in a way, ah, blessing or the fact that your 147 00:11:11.330 --> 00:11:13.970 product might be a blessing as a result of what's been happening with Cove. It 148 00:11:14.540 --> 00:11:19.060 Yeah, it's it's interesting. So a lot of people bring Cove it up to us 149 00:11:19.070 --> 00:11:23.060 because I think it's it's naturally obvious. Like, Whoa, there's a tailwind 150 00:11:23.640 --> 00:11:27.670 because of Cove it for this. And I think a couple of things were true. So 151 00:11:27.680 --> 00:11:32.100 first, like the problem statement we've been working on this well before co vid. 152 00:11:32.110 --> 00:11:37.800 The problem statement existed, like critically so pre cove it, like 50 153 00:11:37.800 --> 00:11:42.310 billion of delinquent rent pre Cove it Right now there's like, I don't know, 154 00:11:42.310 --> 00:11:45.960 there's lots of different estimates 30 to 50 billion of delinquent or deferred 155 00:11:45.960 --> 00:11:49.290 rent right now as a result of Covitz. So it definitely has exacerbated the 156 00:11:49.290 --> 00:11:54.260 problem, but it's even recognize like Post co vid. Whatever world exists in a 157 00:11:54.260 --> 00:11:57.820 few months. Hopefully it's still something that we need to be paying 158 00:11:57.820 --> 00:12:01.330 attention to, and Biden's administration is actually called it 159 00:12:01.330 --> 00:12:04.260 out, which is interesting. Like eviction reform will be part of their 160 00:12:04.260 --> 00:12:09.130 core housing agenda, and part of eviction reform is likely requiring, in 161 00:12:09.130 --> 00:12:14.700 many places pre eviction measures such as payment plants or payment structures 162 00:12:14.700 --> 00:12:19.320 that work with the renter. So, like in the housing world, everyone outside of 163 00:12:19.320 --> 00:12:23.310 housing world is now paying attention to like the potential eviction crisis, 164 00:12:23.320 --> 00:12:29.090 which is really like positive, I think, for the industry. But the reality is, I 165 00:12:29.090 --> 00:12:32.370 think, like the industry has recognized this problem statement well before co 166 00:12:32.370 --> 00:12:37.120 vid and it will exist well after co vid the other. Like as we think about our 167 00:12:37.120 --> 00:12:40.880 business, I think two things were true. Well, two things definitely are true. 168 00:12:40.890 --> 00:12:45.120 There's definitely a tailwind behind flexible rent and better working within 169 00:12:45.130 --> 00:12:49.020 the renter community. Like one of the reasons why we work our landlord 170 00:12:49.020 --> 00:12:54.150 partners quote unquote hire us or deployed. The program is because we can, 171 00:12:54.150 --> 00:12:58.620 through tech and data, solve a really hard challenge in keeping rent 172 00:12:58.620 --> 00:13:03.610 prioritized and working with the renter. Some landlords definitely are more open 173 00:13:03.610 --> 00:13:07.200 to working with renters these days. The reality is it takes their site teams or 174 00:13:07.200 --> 00:13:10.920 the property management teams an incredible amount of time. So they 175 00:13:10.920 --> 00:13:17.040 quote us like 123 hours per renter per week because they're having to do it 176 00:13:17.040 --> 00:13:21.410 manually. So piano landlord do some of this manually, they can start to. The 177 00:13:21.410 --> 00:13:25.140 reality is like there is no time, and the site teams now have to be focused 178 00:13:25.140 --> 00:13:29.720 on. How do you keep a community clean? Healthy? How do you make sure all the 179 00:13:29.720 --> 00:13:33.490 maintenance stuff is getting fixed as every renter sits in their home all day, 180 00:13:33.490 --> 00:13:38.080 every day rather than leaving site? And so we actually step in, and we saw the 181 00:13:38.080 --> 00:13:42.410 huge, like operational logistics challenge for our property management 182 00:13:42.410 --> 00:13:46.010 partners and site team partners. So there is definitely a good tale in 183 00:13:46.010 --> 00:13:50.680 behind flexible rent. We've also found, like adoption has been amazing from the 184 00:13:50.680 --> 00:13:54.120 renter side. Our application rates in the communities we serve our like 185 00:13:54.120 --> 00:13:58.310 through the roof. And so the other reality of Cove it is that the rent 186 00:13:58.310 --> 00:14:02.060 alone, our first product that went into market, we have pulled back on 187 00:14:02.060 --> 00:14:07.010 significantly. There's limitless demand from the landlord side, which can feel 188 00:14:07.010 --> 00:14:11.010 good, right? They want to get paid on time. The reality is with the credit 189 00:14:11.010 --> 00:14:16.620 models. There's two challenges. You can only approve so many renters, and so 190 00:14:16.620 --> 00:14:19.990 you actually create a bad renter experience and a bad landlord 191 00:14:19.990 --> 00:14:23.490 experience all at once. So when you goto landlord say, Hey, that's what our 192 00:14:23.490 --> 00:14:28.080 product, as they say, Oh, that's cool. You pay us on time like with using a 193 00:14:28.080 --> 00:14:32.040 credit solution. The reality is because you're writing credit, you can only 194 00:14:32.040 --> 00:14:37.620 approve, like 1% of the renter base. And then the second, the second reality 195 00:14:37.620 --> 00:14:42.390 we've seen is for the unit Economic store. For the consumer, the rates 196 00:14:42.390 --> 00:14:47.100 actually have to be pretty hot. And so flexible Rent actually solves both of 197 00:14:47.100 --> 00:14:50.010 those problems. We thought the two products would work hand in hand, but 198 00:14:50.010 --> 00:14:54.630 it turns out that flexible rent can actually step in and approve. Like 90% 199 00:14:54.630 --> 00:14:59.280 of renters. All the renter needs is to have cash flow, no credit check, no 200 00:14:59.280 --> 00:15:03.740 other like approval requirements for them to join the program. And the 201 00:15:03.740 --> 00:15:09.480 landlord actually makes more money more frequently with flexible rent. Because 202 00:15:09.480 --> 00:15:13.560 we're working with so many renters in a given portfolio and we're collecting 203 00:15:13.560 --> 00:15:18.710 rent in smaller chunks, the landlord other reason landlord hires us is 204 00:15:18.710 --> 00:15:21.630 because they're on time. Cash flow actually goes up pretty dramatically, 205 00:15:21.640 --> 00:15:25.490 so we get a whole bunch of delinquent renters to pay us part of the rent on 206 00:15:25.490 --> 00:15:29.320 time and the landlords on time. Cash flow is actually going up 5 to 10 207 00:15:29.320 --> 00:15:34.330 points percentage points, like in the first like month or two. So that's Ah, 208 00:15:34.340 --> 00:15:37.770 that's been a really great value proposition to recognize, and that's 209 00:15:37.770 --> 00:15:42.450 been something that's helped our partnership in sales process. So, uh, 210 00:15:42.460 --> 00:15:46.960 interesting product in an interesting market in a growth market, tell us a 211 00:15:46.960 --> 00:15:51.970 little bit about the growth that you've experienced and the growth trajectory 212 00:15:51.970 --> 00:15:57.490 that you're on. Yeah, so we go to market through landlord partners or 213 00:15:57.500 --> 00:16:02.260 owners, operators and managers. And so we are a B two B two C distribution 214 00:16:02.260 --> 00:16:08.040 model. And so there we look at growth from two angles. We first need partners. 215 00:16:08.040 --> 00:16:12.410 We need to work with landlords. And so we primarily work with institutional 216 00:16:12.410 --> 00:16:17.230 owners and managers, meaning institutionalized processes and they 217 00:16:17.230 --> 00:16:21.190 owner manager, at least 500 units. Although most of our partners own 218 00:16:21.190 --> 00:16:27.250 manage between 1000 to 50,000 units, it's kind of like our core sweet spot. 219 00:16:27.640 --> 00:16:33.120 So we usually start with pilots, usually around 1000 unit pilot with our 220 00:16:33.120 --> 00:16:37.780 partner, and then, after 2 to 3 months of the pilot, we look to expand from 221 00:16:37.780 --> 00:16:43.720 there, and so it's gone really well. We added 20,000 units that have access to 222 00:16:43.720 --> 00:16:49.440 the program in the first, like 45 months of the program being out in the 223 00:16:49.440 --> 00:16:55.490 market, and we have since added about 25,000 units in the last 40 days for 45 224 00:16:55.490 --> 00:17:00.360 days, and the growth pipeline is just continuing to build from there. The 225 00:17:00.360 --> 00:17:05.220 other, like really great stat around our partners, is that we've lagged into 226 00:17:05.220 --> 00:17:11.540 about 45,000 units with them. Today they control about 750,000 units. So 227 00:17:11.550 --> 00:17:15.440 toe us partnerships are not about just getting a landlord to try the program. 228 00:17:15.440 --> 00:17:19.109 It's about giving them a really great experience and their site teams or 229 00:17:19.109 --> 00:17:24.250 their property management teams A really great experience. And then it 230 00:17:24.250 --> 00:17:28.540 comes down to serving the renter well. So we actually I talk about growth 231 00:17:28.540 --> 00:17:32.440 being first, we get landlords bought in and then site teams bought in. Then we 232 00:17:32.440 --> 00:17:36.040 have a product marketing function that has another growth funnel that converts 233 00:17:36.050 --> 00:17:41.550 renters in their rental homes, apartments or homes specifically into 234 00:17:41.550 --> 00:17:46.040 the product. And that's been like so does that. I was just gonna ask if it 235 00:17:46.040 --> 00:17:50.170 sounds like there's sort of two separate and distinct demand generation 236 00:17:50.170 --> 00:17:54.560 channels, right. You have to go find the owners, the property owners and 237 00:17:54.560 --> 00:17:58.690 you've got to go market to them. And then once they say yes and you are 238 00:17:58.690 --> 00:18:03.720 successful with a pilot, then you have to turn on the demand. That engine for 239 00:18:03.720 --> 00:18:09.060 the consumers, the actual renters. Yeah, that's right. So we have, ah, growth 240 00:18:09.070 --> 00:18:13.450 function. But until then, we have a product marketing function, both with 241 00:18:13.450 --> 00:18:18.680 two separate funnels. But the customer acquisition costs is even though it 242 00:18:18.680 --> 00:18:22.410 sounds like there's two different functions needed in this B two b two c 243 00:18:22.410 --> 00:18:26.350 conversion reality is like the customer acquisition costs is extremely low, 244 00:18:26.360 --> 00:18:31.550 like we're not outgrowing budgets on Facebook or Google or others. What I'm 245 00:18:31.550 --> 00:18:36.560 finding leads and where do you find the initial owner leads? So Brady, who's 246 00:18:36.560 --> 00:18:39.860 our chief growth officer and a co founder, he leads our growth function. 247 00:18:40.240 --> 00:18:45.250 We started just like hard knock life style. A bunch of us came from this 248 00:18:45.250 --> 00:18:49.140 industry, and we, even with like early product development, started calling on 249 00:18:49.140 --> 00:18:52.440 relationships and just asking them, like, what about this problem statement? 250 00:18:52.440 --> 00:18:56.900 How could we work on this with you as the product came into view, like, What 251 00:18:56.900 --> 00:18:59.930 do you think about it? Would you be willing to partner at pilot? It give us 252 00:18:59.930 --> 00:19:05.970 feedback on it, and so that has just led to an organic funnel. And it's kind 253 00:19:05.970 --> 00:19:09.860 of been one like this. This industry has too long tails in it. There's the 254 00:19:09.870 --> 00:19:13.300 institutional long tail and the mom and pop or do it yourself landlord, long 255 00:19:13.300 --> 00:19:18.120 tail. And while we only focus on one today, it's just kind of endless. It's 256 00:19:18.120 --> 00:19:21.910 kind of amazing how many different players in the space and so through 257 00:19:21.910 --> 00:19:28.350 referrals and just very intentional, like diligence on the Internet. We've 258 00:19:28.350 --> 00:19:31.940 built a really big funnel of groups that we work with. And then now we've 259 00:19:31.940 --> 00:19:37.670 hired to other growth leads that both come from this B two B sales experience 260 00:19:37.670 --> 00:19:42.180 within prop text and the multi family industry. Because it is, it's really 261 00:19:42.180 --> 00:19:47.020 important to have the sales knowledge of how to operate a B two B sale to a 262 00:19:47.020 --> 00:19:51.290 landlord or property manager, and critical in that is understanding the 263 00:19:51.290 --> 00:19:55.900 lingo and the problem statements that are, and and the orig structures that 264 00:19:55.900 --> 00:19:59.570 we have to navigate because there's lots of different versions of it. 265 00:19:59.570 --> 00:20:03.740 There's owner owner operators, owners with third party managers, just third 266 00:20:03.740 --> 00:20:09.100 party managers and Mawr versions of those and so navigating all of those 267 00:20:09.100 --> 00:20:12.760 different types of partnership structures takes a pretty intimate 268 00:20:12.760 --> 00:20:16.690 understanding of what the industry is, who we need to be talking to, how we 269 00:20:16.690 --> 00:20:19.940 need to be partnering with them, how we need to be demonstrating value to them 270 00:20:19.950 --> 00:20:26.160 both in the initial like partnership process, but then also in the expansion 271 00:20:26.160 --> 00:20:30.760 partnership process so similar in terms of sale process. But does that mean you 272 00:20:30.760 --> 00:20:35.170 have to customize the messaging and the approach you take for each of those 273 00:20:35.180 --> 00:20:40.900 distinct markets? Yeah, yeah. So Brady and our team have done an incredible 274 00:20:40.900 --> 00:20:46.610 job looking at who are all the different potential partners. And while 275 00:20:46.610 --> 00:20:49.480 all of their challenges, all of their challenges, actually boiled down to the 276 00:20:49.480 --> 00:20:53.600 same exact problem statement. So we actually can start with the renter. And 277 00:20:53.610 --> 00:20:57.630 that's that's the persona we prioritize. Like if a renter succeeds, a site team 278 00:20:57.630 --> 00:21:01.840 succeeds. If the site team or property manager succeeds their owner or manager 279 00:21:01.840 --> 00:21:05.650 succeeds, and if they succeed, we succeed. So it actually all just starts 280 00:21:05.650 --> 00:21:09.530 with the renter. Like very simply, every persona we sell Thio or Partner 281 00:21:09.530 --> 00:21:13.650 with has the same problem statement. How do we get renters to pay rent more 282 00:21:13.650 --> 00:21:19.290 effectively. That's actually our core product, KP I. But from there, like yes, 283 00:21:19.300 --> 00:21:23.410 a different you know, third party manager persona is gonna have a 284 00:21:23.410 --> 00:21:28.110 different problem statement or need to solve for than an owner operator. And 285 00:21:28.110 --> 00:21:33.100 so our growth teams in a really good job mapping out like who might need us, 286 00:21:33.110 --> 00:21:37.960 what problems do they specifically face? And then how do we build a 287 00:21:37.960 --> 00:21:42.340 communication process that helps them understand what we can do for them? And 288 00:21:42.340 --> 00:21:45.800 if there is a good fit, it will move forward. And so they've done a lot of, 289 00:21:45.810 --> 00:21:50.780 like user mapping, journey, mapping, sales, enablement collateral building. 290 00:21:51.240 --> 00:21:54.610 That's actually like one of the key things they've done, I think really 291 00:21:54.610 --> 00:21:59.150 Wells they they've built up. The reality is in the speed of the sale, 292 00:21:59.150 --> 00:22:03.300 you can find a champion, but they have to communicate internally about what we 293 00:22:03.300 --> 00:22:08.160 dio. And so how do we empower them to be as productive as possible within 294 00:22:08.160 --> 00:22:13.550 their or so you have to equip them toe productively communicate? That's great. 295 00:22:13.560 --> 00:22:17.620 So with with all of the changes that have occurred not only in the business 296 00:22:17.620 --> 00:22:22.830 since you've been growing, it But given the situation with with co vid has it 297 00:22:22.830 --> 00:22:27.800 changed the way you manage the team? The team obviously has grown. Have you 298 00:22:27.810 --> 00:22:32.400 changed the style or how you manage a remote team? I think your remote first. 299 00:22:32.400 --> 00:22:35.250 Or maybe you have you always been remote first. Or maybe that's the first 300 00:22:35.250 --> 00:22:40.860 question. No, we So we're headquartered out of D. C. And the majority of our 301 00:22:40.860 --> 00:22:46.280 team is in D. C. We do have a customer success team out of Atlanta, and I 302 00:22:46.280 --> 00:22:50.940 think Cove it has changed a lot of people's preconceptions about business 303 00:22:50.940 --> 00:22:55.090 and start ups and what is required. We've made the decision during Cove it 304 00:22:55.090 --> 00:23:00.910 to become a remote first company. We will. As vaccines are available, we 305 00:23:00.910 --> 00:23:05.280 will become like we will meet in person 1 to 2 times a month. But the focus 306 00:23:05.280 --> 00:23:09.500 will be on relationship building and creative work, things that are better 307 00:23:09.510 --> 00:23:14.350 like done in person. I think we've also realized like you could be hyper 308 00:23:14.350 --> 00:23:18.650 productive in a remote first environment. People can live where they 309 00:23:18.650 --> 00:23:23.370 want to live, like live the lifestyle they wanna live outside of work, live 310 00:23:23.370 --> 00:23:27.330 in areas that are much more affordable, like D. C. Is pretty bad. It's not as 311 00:23:27.330 --> 00:23:33.270 bad as like San Francisco or or other areas of the country. So you asked 312 00:23:33.270 --> 00:23:36.270 about how we've changed, how we've operated. I think becoming a remote 313 00:23:36.270 --> 00:23:41.980 first company is one. I think we put increasing emphasis and focus on 314 00:23:41.990 --> 00:23:45.790 asynchronous communication and written communication. Actually think like we 315 00:23:45.790 --> 00:23:50.740 write and use notion. It's kind of like our own internal wiki, and it it's 316 00:23:50.740 --> 00:23:54.950 improved our, I think, our decision making and speed. We've also been like 317 00:23:54.960 --> 00:23:59.540 I've been hammering a project management process that's similar 318 00:23:59.540 --> 00:24:04.050 across the entire org's. So we use a sauna. As many most groups dio. 319 00:24:04.060 --> 00:24:09.200 Everyone runs in a prioritized kon bon, and every week we're looking at, like 320 00:24:09.200 --> 00:24:13.150 what's in motion now and what is coming next? And do we all kind of agree on 321 00:24:13.150 --> 00:24:17.840 what's next to that? Like people don't need to check in. It's like, Yeah, once, 322 00:24:17.840 --> 00:24:22.290 once you knock something off, just like start ripping on the next thing, Um, 323 00:24:22.300 --> 00:24:26.960 it's allowed people to start moving really quickly, like I think our team 324 00:24:26.970 --> 00:24:31.790 is moving faster now than it ever has been. Part of that is not just due to 325 00:24:31.790 --> 00:24:36.030 like these tools. Part of it's just like the team forming together and we 326 00:24:36.030 --> 00:24:40.470 have part of going remote first is we've hired six people during co vid. 327 00:24:41.040 --> 00:24:45.660 We have five people on the team that I've never personally met, and, uh, but 328 00:24:45.660 --> 00:24:53.480 we've been able to hire them out of Denver, Utah, Kansas, Pittsburgh in one 329 00:24:53.480 --> 00:25:01.750 in D. C. And so it's opened up our like talent. Framework National. I think 330 00:25:01.750 --> 00:25:06.680 that kind of like democratized access to talent across the country is that 331 00:25:06.680 --> 00:25:10.640 there's gonna be a long standing impact of that broadly and the like. The tech 332 00:25:10.640 --> 00:25:15.050 start up in business ecosystem. I think you're right there on. I think that's 333 00:25:15.050 --> 00:25:18.370 great that you've taken advantage of this situation. And I think a lot of 334 00:25:18.370 --> 00:25:22.500 the statement you made around optimizing work remote, I think is so 335 00:25:22.500 --> 00:25:26.620 true. There's just it's so much more efficient and when you can or when 336 00:25:26.620 --> 00:25:30.240 you're able to meet toe, do the creative stuff that's necessary, I will 337 00:25:30.240 --> 00:25:35.420 say one thing like, Yeah, one thing that kind of sucks is if work feels 338 00:25:35.420 --> 00:25:41.690 mawr transactional relation all, I think like you can fire from like a 339 00:25:41.690 --> 00:25:45.950 zoom to another, zoom to another zoom to another zoom and be pretty 340 00:25:45.950 --> 00:25:50.950 productive signs you like, prep for them all in advance. But you miss, like 341 00:25:51.440 --> 00:25:55.580 just having coffee with people and seeing people always and chatting with 342 00:25:55.580 --> 00:26:00.260 them and what I really misses. I missed like people on different teams that 343 00:26:00.260 --> 00:26:04.750 till seeing each other in engaging like I talked to pretty much everyone but 344 00:26:04.750 --> 00:26:09.620 like is one of our engineers talking to one of our customer service reps as, uh, 345 00:26:09.630 --> 00:26:14.310 probably not. And so that's what I think the in person time is needed for, 346 00:26:14.310 --> 00:26:18.360 like relation all development. And fortunately, I think that that's that's 347 00:26:18.360 --> 00:26:22.820 not just unique to you. I think that's across the board, so I don't think that 348 00:26:22.820 --> 00:26:27.190 that's anything to worry about. I think that takes care of itself in time, 349 00:26:27.200 --> 00:26:31.660 fingers crossed, right, so I've got a couple other questions for you. So 350 00:26:31.670 --> 00:26:35.940 what's one thing that you would recommend to other founders that they 351 00:26:35.940 --> 00:26:42.770 either start to do or stop doing? Given your experience, one thing I'm I'm 352 00:26:42.770 --> 00:26:47.640 personally working through. I wish I had done a better job of earlier. We've 353 00:26:47.640 --> 00:26:53.960 done a pretty good job of is having a structured hiring framework in place. 354 00:26:54.840 --> 00:26:58.870 It would be one. I think we've had a structured process, but that is 355 00:26:58.870 --> 00:27:03.770 different than a structured framework for evaluation. Yeah, for evaluation. 356 00:27:04.240 --> 00:27:10.850 And we've had, like, we're probably 80% effective in hiring and people, culture 357 00:27:10.850 --> 00:27:14.520 and talent culture. And what I've realized is it's not just about the 358 00:27:14.520 --> 00:27:18.450 framework on finding the right person and bringing them in, but it's the 359 00:27:18.450 --> 00:27:24.200 exact same framework for on boarding, like quick cultural alignment, which is 360 00:27:24.200 --> 00:27:28.100 pretty key in a remote centric environment. But also it's actually 361 00:27:28.100 --> 00:27:32.010 this, then the same exact framework for personal development within, like 362 00:27:32.020 --> 00:27:36.080 ongoing personal development. And so every person should be improving. The 363 00:27:36.080 --> 00:27:39.740 hard thing about these places and environments is that everything 364 00:27:39.740 --> 00:27:44.260 progresses like every month, every quarter. And if people aren't keeping 365 00:27:44.260 --> 00:27:49.430 up at their own individual pace like they can fall behind or, like, get 366 00:27:49.430 --> 00:27:54.450 pissed in place, and so that that would be one and then the second thing, which 367 00:27:54.450 --> 00:27:58.900 I've just noticed. So I was thinking about this Second thing I've noticed is 368 00:27:58.910 --> 00:28:03.190 we actually shifted our leadership meeting from Monday mornings to Friday 369 00:28:03.190 --> 00:28:09.570 mornings, and they are like much, much better meetings, and I think like 370 00:28:09.580 --> 00:28:14.660 everyone steps into the well. I think everyone steps in the week Mondays cold 371 00:28:14.670 --> 00:28:20.920 like they're trying to boot themselves up, have coffee, get into context like 372 00:28:20.930 --> 00:28:24.960 some people do a good job on Sundays prepping. But it kind of depends on 373 00:28:24.960 --> 00:28:30.350 everyone's like weekend family time. Family is life. And so, by shifting it 374 00:28:30.350 --> 00:28:34.310 to Friday, you actually start the next week fully in context because you just 375 00:28:34.310 --> 00:28:39.010 had the meeting on Friday and people are firing by Friday like people have 376 00:28:39.010 --> 00:28:44.090 context opinions. So I don't know that was just something that we accidentally 377 00:28:44.090 --> 00:28:47.790 did. And I was like, Whoa, wait, This meeting this week was way better than 378 00:28:47.790 --> 00:28:54.070 last like that. I really like that. So So that's a really cool idea. What's 379 00:28:54.070 --> 00:28:59.760 something that's surprising about your product, how it's being used or 380 00:28:59.770 --> 00:29:06.200 something surprising about your customers, Anything come to mind? I 381 00:29:06.200 --> 00:29:11.410 don't know if surprising, but I think just like it's been a good motivator 382 00:29:11.410 --> 00:29:16.640 behind our team recently, like we're having a pretty profound impact on a 383 00:29:16.640 --> 00:29:20.380 lot of renter consumers. They're pretty challenging point and we've helped a 384 00:29:20.380 --> 00:29:24.200 lot of people stay in their home as a result, and that's been just like, 385 00:29:24.210 --> 00:29:30.180 really cool I'd say like from a stats perspective, like the application and 386 00:29:30.180 --> 00:29:35.980 adoption rates have been really surprising when I bring those upto VCs 387 00:29:35.980 --> 00:29:40.780 or other people in this kind of prop tech market the that B two b two C that 388 00:29:40.780 --> 00:29:44.890 having the two distribution channels, I think there's like a certain app and 389 00:29:44.890 --> 00:29:49.750 adoption rate that people expect, and right now we're still learning into it. 390 00:29:49.750 --> 00:29:54.650 But like it is, far far exceeded our expectations. I mean, we're in 391 00:29:54.660 --> 00:29:59.700 communities were approaching 50% application rates. These are like multi 392 00:29:59.700 --> 00:30:04.140 100 units communities, so that's that's been surprising. But on a personal 393 00:30:04.140 --> 00:30:09.500 level, which there's a strong mission drive behind a lot of our our entire 394 00:30:09.500 --> 00:30:14.480 team and company culture, like you have a renter on the phone with their CS 395 00:30:14.480 --> 00:30:18.100 team crying and thanking them for keeping them in their family and their 396 00:30:18.110 --> 00:30:23.300 their community. And that's just like that's the ultimate motivation that 397 00:30:23.310 --> 00:30:27.290 that we need to keep going. So that's that's been like, really cool. There's 398 00:30:27.290 --> 00:30:30.610 like a lot of hard things about this, and not everything goes perfectly in 399 00:30:30.610 --> 00:30:34.210 any of these scenarios, and so you can look at, like, moments like that. It's 400 00:30:34.210 --> 00:30:41.420 like it is worth the brain damage. We're all going todo uh, it's so nice 401 00:30:41.420 --> 00:30:47.030 to get those kinds of messages directly from consumers. They're utilizing your 402 00:30:47.030 --> 00:30:50.140 product. That's got to be better gratifying and satisfying to the 403 00:30:50.150 --> 00:30:56.220 developers and to the customer success folks. And you guys have founders, 404 00:30:56.220 --> 00:31:00.220 right? Yeah, We had a renter say, like, This is the best thing that's happened 405 00:31:00.220 --> 00:31:07.410 to me since Cove It It's like, Whoa, yeah, that's, Ah, it's great that you 406 00:31:07.410 --> 00:31:12.070 guys are providing this kind of impact. And it's just wonderful to see that 407 00:31:12.080 --> 00:31:17.680 that you've found number one a really interesting and engaging product at the 408 00:31:17.680 --> 00:31:26.280 right time, And investors have voted with their checkbooks behind you, and 409 00:31:26.740 --> 00:31:32.250 landlords and tenants are signing up, and it sounds like that growth is 410 00:31:32.250 --> 00:31:36.660 happening organically. So things air pumping on all cylinders for you guys. 411 00:31:37.040 --> 00:31:42.040 Yeah, thank you. It's good right now, not not without all of the like build 412 00:31:42.040 --> 00:31:46.170 challenges that always exists in these environments. But we have really good 413 00:31:46.170 --> 00:31:51.110 product market fit. The core theme behind it, like this personalization 414 00:31:51.110 --> 00:31:55.070 opportunity in this landscape, is absolutely enormous, and there's a lot 415 00:31:55.070 --> 00:31:59.160 of demand interest sitting behind it from both landlords, renters and 416 00:31:59.160 --> 00:32:04.800 capital. Well, it's exciting space that you're in. And it's really great to 417 00:32:04.800 --> 00:32:09.540 hear more about the details about how you got to where you're at and just 418 00:32:09.550 --> 00:32:13.030 It's a great combination of your background and the idea that you have. 419 00:32:13.040 --> 00:32:18.410 Um it's been great to learn about your organization about till and wish you 420 00:32:18.410 --> 00:32:21.960 guys continued success on a going forward basis. Thank you, John. Thanks 421 00:32:21.960 --> 00:32:26.220 for having me on super happy that you could join us. What is the best way if 422 00:32:26.230 --> 00:32:29.360 folks want to reach out To which best way to reach out to you? Yeah, you can 423 00:32:29.360 --> 00:32:34.760 just email me. I'm at David at hello till dot com me and find me on Twitter 424 00:32:34.760 --> 00:32:38.830 on that homes and homies and those were the two best channels. Shoot me a note. 425 00:32:38.830 --> 00:32:42.680 I'm happy to schedule time and talk about till on the rental housing market. 426 00:32:43.140 --> 00:32:47.450 Fantastic. Well, thanks again. And thank you everyone for listening to 427 00:32:47.460 --> 00:32:52.670 this episode of the revenue Siris on the B two b show. I'm your host 428 00:32:52.680 --> 00:32:57.160 Congressman, founder in sales coach at earlier revenue. And until next time 429 00:32:57.540 --> 00:32:57.960 I'm out. 430 00:33:01.040 --> 00:33:04.870 Are you an early stage tech founder? That's frustrated by limited sales. Do 431 00:33:04.870 --> 00:33:08.090 you lack the time to dedicate to a traditional sales training program? 432 00:33:08.100 --> 00:33:11.870 John Crispin's early revenue sales program helps early stage founders 433 00:33:11.880 --> 00:33:15.670 accelerate sales. In large accounts, he's built a playbook that transfers 434 00:33:15.670 --> 00:33:19.080 what he's learned as a founder and sales later into a condensed, easy to 435 00:33:19.080 --> 00:33:22.860 implement program. If you're ready to increase your startup sales capacity, 436 00:33:22.840 --> 00:33:26.260 visit early revenue dot com to get started today.