349. Disrupting the Real Estate and Rental Industry with Andrew Borovsky, Co-Founder of Visible

This transcript has been generated using AI technology. There may be minor errors or discrepancies in the text as it follows a natural conversational flow.

SPEAKERS
Susan Sly, Andrew Borovsky

Susan Sly 00:02
So what is up or unreal entrepreneurs, wherever you are in the world, I hope you are having an amazing, amazing day. And I just want to give a shout out USA, you have reclaimed your number one spot. Australia took you over, but you are back in number one with Australia, I believe it number two, Canada number three. So way to go USA. And I'm so excited about this founder today. He is a serial entrepreneur, but he's also someone who is solving a very real and dynamic problem. And we're going to be talking about real estate, we are going to be talking about the economy. And we're going to be talking about some of the shifts that are happening, especially on Wall Street. So, Andrew, thank you so much for being here. And I'm so excited for the this conversation on Raw and Real Entrepreneurship.

Andrew Borovsky 00:54
Awesome. Thanks for having me. And I hope I hope I say something interesting.

Susan Sly 00:58
I'm sure you well. So Andrew, one of the things people love is the origin story, you are a self proclaimed serial entrepreneur. And when people hear that, you know, it's it's not just about the business you're working on, but it's it's there's this whole debate entrepreneurs are born or are they made? Can anyone become an entrepreneur? So what was your very first business?

01:21
Um, so it's actually maybe the easy way to easier way to answer that question was just kind of like, where did actually start, I started a big company. So, you know, my, I started my career at a company called Adobe, which everyone I think, hopefully knows, out in San Francisco, and then from Adobe, I went to Apple and, you know, very definitive sort of companies to work for, if you're a product designer, like myself. And, you know, these are large corporations, you know, multi leveled, highly structured. And so, you know, not necessarily places you go to think of like, okay, I'm going to, you know, build my own thing. And so I really kind of shifted from that by being there for, you know, basically 10 years, you know, I realized that the next step for me, I've seen enough, hurt enough. But the next step for me is to try something on my own. And for me, I think the driving force was, I wanted to do something with my friends, which, which I think a lot of folks do that as well, like, I, by working at these large technology companies, I had met some really incredible people, you know, both on the design side, but also the engineering side of the business side. And so, you know, as it happens, you know, a bunch of us were having lunch, and we're, like, you know, what, if we did this, what if we did that, and at the end, you know, by the end of that month, sort of, we all quit our jobs, and, and, and started a company, so that was the, that was the beginning. And the first company that we did is, you know, just kind of building on top of what we already knew at Adobe, I worked on a lot of this, you know, 2000. So, the shift to the cloud was kind of the preeminent thing. You know, I started when I started, there was still shift CDs and boxes. And then by the time I left, you know, we had Creative Suite, Creative Cloud, these are products that people use today. So that was, you know, a good 15 years ago, more than that, almost, almost 20 years ago. And, and then when I was at Apple, you know, this is obviously the dawn of sort of mobile. So I worked, I joined a company after the first iPhone. So at the second iPhone, this was called the iPhone 3g, even though it was iPhone two, technically, was the first one with, you know, a high speed connection, which, you know, going back to this cloud shift, you know, meant that this was the first iPhone that connected directly to the internet. And so, you know, the first company, I just kind of took those things and said, you know, what, if we did, you know, had some interesting ideas around, you know, you know, mobile devices, think clients that could, you know, people could buy, like a very cheap mobile device for maybe 20 bucks and connect it to the web and, and, you know, get, get all these products and services that were being hosted on the cloud, very kind of topical thing for 2008 When we're starting the company. And it's funny, because though, the other thing that, you know, I was 28 at the time, when we first started, and it's amazing how in your 20s, were just so arrogant. And that arrogance, arrogance actually helps you do great things, because in retrospect, you know, what we were doing was so insane. It was just like doing hardware and software in the Cloud. At the time, you just didn't have really good infrastructure, by the way. 2008 was the financial crisis. So it was also like the worst time, the worst time to start a company you think, but I think a lot of people say say also is sometimes counter intuitively, it's actually the best time to start a company. But that was really it. You know, we did something there and, you know, went around, tried a few different things. And long story short, four years later, we sold the company had a quite a few companies sort of looking to acquire us, Google, Facebook. And then we went with Square, which at the time was a private company in FinTech, you know, doing interesting things with both hardware and software, which is why we're sort of, you know, drawn in but that was the story, you know, that was the first company

Susan Sly 04:57
And Andrew you know, the there's a lot that you said there. And I want to want to pause for a minute because coming out of the tech world, and you and I were talking before the show, so you know, as someone who's been, you know, CEO of an AI company, and then I'm a multi time founder in AI, there's a lot of people who sit around having lunch going, let's start a company, but they don't actually do it, especially on the tech side. Because there's a, there's never a fear, like we can create something really cool. It's how are we going to get to market? How are we going to scale it? How are we going to pay ourselves while we're actually going to do this? So it just hold on for a second, you all said, Yeah, we're gonna leave our jobs and start this. So I know a lot of people who wouldn't do that. So firstly, did you live on beans and rice? How did you survive while you were doing that? Or were you kind of working part time? Because when people are listening to the show, and they're thinking, like, how do I actually go and take that leap to start a business? What? What did you do to support yourself financially, while you were standing up this company?

Andrew Borovsky 06:06
Yeah, I mean, this kind of like a great question. At a very high level, I sort of already highlighted this, you know, when in your 20s, you're just there's just things you don't think about, that you end up thinking later, you know, when you have kids, you know, so I would say this is company number three for me. And, you know, I started this company when I guess sir, I was now I'm not Fortunately, I'm 43. Now, so 42. And so definitely a different set of considerations. You know, I was, we're, you know, me, and, you know, my, my co founders were much more concerned about these types of questions at this stage, than we were in our 20s. So I think that arrogance against again, helps you kind of just like, not think through things. And the truth of the matter is, I'm sure you know as well, like, you can figure stuff out, right as you go, like all these things that you tend to be afraid of, you know, you'll everything has a solution. And so sometimes you just, you know, even being in a 20s, it helps not to overthink things. So that's kind of like a high level answer. But I mean, practically, you know, for us was it's actually kind of interesting in in 2008, you know, especially because of the financial crisis, but just generally aware, we were, you know, I think, you know, as a technology industry, raising money from investors was not the first thing you thought of, most companies were bootstrapped. And so, Bootstrap, meaning like, you know, you fund the company, right, until, until you have something successful. So in our case, you know, we did the same thing. And it's funny, I was actually we had lunch with a colleague from Adobe, that we really respected, he was older than us, and we're sort of like, we're thinking of doing this, how should we, how should we, you know, fund it. And he was, like, you guys are, you know, you know, reasonably successful product designers like you are, you're, you know, there's very few people like you, why don't you just, you know, sell your design know how. And so the funny thing about this is that, in addition, we have a product company, we actually created a second coat Company, which was a consulting company, where we became a product design agency, which, as it turned out, in 2008, the term product design it did the product design, discipline didn't even exist, it's sort of like talking about AI, or, like, there, there was a time when no one talked about AI. And so there was a time and no one talked about designing mobile applications. And believe it or not, 2008 people weren't free app store, right. So it's very important to kind of kind of kind of contextualize. So as it turned out, like to have a couple of product designers that knew how to build systems, knew how to build mobile applications, how to work within the Adobe and Apple ecosystem was really valuable. And so that second company, you know, we consulted, you know, we got paid, you know, a couple of $1,000 a month, you know, and we use that to fund the second company. So we essentially kind of run two, you know, side by side. And I think, you know, that's something that's probably still relevant today. And I'll highlight this specifically back in back then. You know, so obviously, now we have this term, which I'm sure you know of it fractional, you can be a fractional CEO, you can be a fractional marketing, that is a COVID invention, right? So pre COVID, it used to be like a Moonlighting, and it used to be frowned upon. Now you can call that fractional, and you could actually work at five different companies simultaneously, no problem. So a lot of people that I sort of mentor in this space today, you know, that people that are afraid of taking that leap, I just go look, can you do some fractional work? Right? Can you like whatever is you doing today? Can you continue doing that on the side, you know, honestly, you know, kind of, you know, full disclosure, hey, I'm doing this on the side, but use the skills you have that you're being paid for at a big company, and continue to monetize that while you're playing with things on the side.

Susan Sly 09:52
And to that, to that point, Andrew as well. I think we're also seeing a shift especially for angels and I am an angel investor, as you know. That we're seeing that one things I want to see with an early stage startup is that they are using fractionals. We did a whole show on fractionals as it has the Andrew and I are doing the show that show hasn't been released yet. But like that I want to see as an angel, like the the days of Oh, you're going to hire early on in you're going to use a bunch of money for full time people when you don't need them yet, you know, while you're while you're in the design phase, while you're in the MMP phase, like you don't need it. So yeah, great market all like that is that is shifted the landscape. And we'll get into Visible in a minute because that's, you know, part of this, like work from home, we're never going back, you know, that whole piece. I do want to ask you something, that one things I'm very curious about, like, you're so nonchalant and humble. And you're for someone who is self, like a self proclaimed recovering, you know, arrogant individual. We sold the company four years later. 90% of companies never get acquired. How did the, how did the acquisition come about?

Andrew Borovsky 11:11
Oh, um, well, I mean, it's sort of first of all, helps not to think about it. We definitely did not, I mean, we saw this purely as just a means of making money. And, and then, you know, at some point, you know, what we were doing was resonating with, with folk. I think, look, I to be personal, 50% of everything is luck, right? So you go back to like, why you should you know, the longer you're on this planet, the more you realize, you know, like, the more you have luck to thank for. Right. So I think that's a humbling experience. Because yeah, it's like, it kind of works works both ways. In our case, you know, we have a really good network. That always helps, right? And this goes back to like, why you should never generally like, you should never burn bridges, you should always be you know, you know, grateful and you should always, you know, answer those cold emails, right, like, pick up the phone, like all these things people tell you about, because, you know, a lot of the people in my life that have been unbelievably influential, were chance meetings, you know, converse chance conversations that I really could have easily ignored, and they ended up, you know, bringing me a lot of value. So I think, you know, really, I won't get into the details, but the culmination of the of the acquisition was absolutely just, you know, a couple of people, other founders, other folks that I've worked with before, both Apple and Adobe that went on to do other things, right. In this case, for example, there are people that I worked with at Apple that then ended up working at Square, so when Square was looking for a company of our caliber, they were like, oh, you know, we talked to Jack at the time, Jack Dorsey, he's like, you know, you should, you should talk to Andrew and his partner's, like, you know, and so these are conversations that, you know, are only possible because you've cultivated this network, you know, professionally, where you have trust, and people, people. I mean reputation. I mean, that's really what I'm talking about. Cultivate your reputation, because that's really, that's really going to drive a lot of these big moments in your life. And I think that's been true ever since.

Susan Sly 13:13
That's, it's huge. I love what you said, you know, not burning the bridges. And there, you know, as a founder, you're gonna get a lot of those cold emails, the cold LinkedIn reach outs and the in and that network, the. Andrew, I have a story for you. So I was there was in the gym. And this guy's wearing a Harvard shirt, and I am an MIT Sloan grad. So you know, like, hey, there's a rivalry, but there's a ton of respect. So like, so would you study at Harvard, we're both like in our 50s. And, and so we start chatting. And anyway, he ends up introducing me to two amazing female angel investors who invest in early stage startups, and I'm doing my new startup in the women's healthcare space for a thumbtack. And, and that was a chance meeting at the gym. Right? And, and you said, the, you know, cultivate your reputation, and really, really deciding, you know, when when people leave a conversation with me, what are those words they're saying about me or thinking about me? which is huge. What, for you? Let's talk about that first acquisition, what was something that happened during that process that you were actually surprised about? Because I'm sure, just with your tech background, you would have had friends who've had acquisitions, and I know they would have prepared you. But what was something that actually surprised you?

Andrew Borovsky 14:38
Oh, great question. Truthfully, I was not very prepared. I mean, again, being 28 at the time, and this was, you know, again, this is still kind of in the nascent years of, of tech as we know it today, where there's a company that's being acquired, like every day, you know, back then you didn't have a ton. I mean, in some ways, it's sort of like probably very technical. It's interesting, you know, valuing the company was difficult, right? Like, what are you? What type of acquisition? Is it? And you and you have, you know, today, right? There's this, it's an interesting gradient, right? There's like several types of acquisitions of like, okay, there's an Acqui-hire, right? So you're acquiring the team, then there's the acquiring the technology, and then you're acquiring a business. And in our case, it's like a combination of all of those factors, but to the different people, we talked to the value different things differently. You know, at the time, it was the first time I heard that word. And like, how do you how do you sort of talk about it, and there's some factors that we had, you know, that were very helpful in our business, our margins were super high, in a business that really didn't have a lot of good, you know, great margins. You know, so we got lucky again, there in some ways. But I guess it's like, it's sort of the arbitrary nature of it, you know, in some ways, right? You think that, you know, companies or, you know, move on? Actually, I would say whether you get acquired, it's very similar to getting funding, right. So when you go to raise a round, or when you get to acquire it, actually, the process is very similar, right? There's a level of diligence that goes on, and then a value gets kind of like attached to you. That process, I think you would agree is quite arbitrary, right? A lot depends on the relationship you have with the with the people, you're talking to, your individual context, your background, what are the things they're interested in? What do they know about what you're building that puts them in a good place to value it later, all those things take, you know, you know, come into effect. And then what's interesting is, I would say a company can create completely different narratives about their business dependent, depending on who they're talking to, right. So if I go to, you know, I might go to a fund today to raise money that's really focused on the consumer. And so we're talking about the business we're doing right now. But like, really focused on monetizing the renter, right? We have a rental rent payment product. So they're like, how can you make money off of the renter, right, and then you talk to a different fund, and like, oh, we see an interesting opportunity in the landlord. Right. And those are two completely different stories, two different areas that you are, you know, in charge, and you're, you know, you're you're empowered to kind of weave differently. So I think being very thoughtful about being very flexible, you know, knowing knowing your audience, and, and presenting yourself, you know, telling the story that they're interested in hearing is very important. And I think it's an art not a science.

Susan Sly 17:39
Oh, it's definitely the, the story they're interested in hearing. And now we have data. Because data, you can't build good models, without data and the data that the user stories and the journeys are, there's so much data, not just in the the physical interaction with whatever the product is, but from the mobile device from the wearable from whatever it is. And even going through that I'm sure you've had that conversation as well. Like, what kind of data are you generating? And what kind of value is there to it that maybe data that other people don't have? And what are they willing to pay for? And that's, that's a whole other age that we're in right now, in terms of I, you know, what you said in terms of an acquisition, what is that value? And going through that even myself, I just literally before our show, came from a coffee meeting. And and this particular investor was like, well, the value of your company is in the data. And I said, Well, some people might say that, some people might say the value is is the number of users it you know, it's again, it's such an art, there's no science to it. So, I, you, you have this, you know, this strong FinTech background, and then you go and start Visible. And you guys have raised I believe it's 15 million in seed funding right now. Did you have a lot of investors they're like, oh, it's Andrew. Here. Do you want money? You know, I know friends who've had multiple exits and they can literally walk in with a napkin and people will write a check to them. Was it like that? Or was it you know, just given the climate was a different?

Andrew Borovsky 19:29
So. Yeah, great question. I'm trying to find the best way to answer that is combinational factors but you're you're you're you're definitely you're definitely hitting hitting an important point there. So this is the first time right going back to I bootstrap the first company. A second company I worked with a very strong, I was not the CEO. I worked for a very strong CEO, Ryan Williams at CADRE, this is the second company and real tech enabled real estate private equity and Ryan's a master you know, storyteller, and has a great network and is really good at raising money. So this was the first time that I raised money, like firsthand. So very new to me. First time I was CEO, you know, playing the CEO role. So it's, it's all new. I guess some of the advantages that came with that is that, you know, I cultivated that network, right. So in the first half of my career, I was, you know, cultivating network of other professionals. But the second half, you know, since I was at Squaure and Cadre, afterwards, you know, now I started to kind of create connections with, you know, people who are investors. And I think I look at, you know, when I, when I decided, okay, we're going to start this company, I, you know, the way I looked at it is like, Okay, this is my chance to call in all those favors, right? Like, I've worked with people, for a long time, I help other investors, advise companies build companies before knowing that someday, you know, I might need their help, you know, when I go to raise money, and that was really, that was really the case here. You know, we raised our money from, you know, our main seed investors, Thrive Capital, out of New York, led by Josh Kushner, and, you know, I've known Josh for 10 years, you know, leading up into this. I met him, he actually helped advise the Square acquisition, he is the one that we, you know, connected me with Ryan to do Cadre. And, and so we've just known each other for a very long time. And, and, you know, prior to this, I think every time that Josh called, if he needed something, some help with, you know, usually some product design building issue with one of the portfolio companies, I was there, and I would try and help as much as I could. And so when it came time for me to raise money, I think he, he was like, you know, I'll return the favor, you know, and he's the one who really pushed me to do this, gave me the confidence to do this. And then to kind of, you know, so that helped and I think on on, you know, our other investors, Khosla ventures. So Vinod Khosla, who runs Khosla Ventures is somebody that again, I've known since the Square days, he was on the board of Square. I presented to him at while at Square, you know, many, many times, he was also an investor in Cadre. And so, you know, again, you know, I think I think there was a personal relationship there. That was very, very important. It was not a napkin sketch, I did have a presentation. And I think while the presentation was short, I think it was like six or seven slides. I think it was a good one, like, I look, it's one of those things, you know, sometimes you look back at your presentations, you're like, oh, wow, what was I thinking, but this this one was, I think it was we had a pretty tight narrative. And so it was a combination of like, okay, I have the track record and the experience to do this. And the idea is interesting and novel. Um, you know, it's definitely a leap of faith on on, on the, you know, on the side of my investors, but I think they had a lot of good data at that point. Yeah,

Susan Sly 22:48
You said the that Ryan was a masterful storyteller. And what it's Andrew, every, every startup, you've done all of your experience, it's like, you're, it's like, you've got this backpack, and you're, you're bringing an experience that you're learning from others. And I know mentorship is really important to you. The, what was it about Rya that made him a great storyteller? And what have you pulled from him that you used in your pitching because I'm the I think pitching is an art. There are a lot of books on it, and you know, so on and so forth. But at the end of the day, as someone who I've, you know, sat on both sides of that table, I would love your perspective on what makes someone a great storyteller.

Andrew Borovsky 23:34
Oh, absolutely. I love this. And I because I obviously try, I try and try and play that role now more than more than ever before. But so I've been very fortunate because when I joined Apple, you know, Steve Jobs was still alive. I mean, Steve Jobs is like the quintessential, you know, storyteller, this is what really brought Apple back from a brink and made it the powerhouse it is today. And you know, what, you know, even so many years after, you know, his death, I mean, what they do over and over again, and all of their presentations to tell the story. So that was that was, you know, my first foray, you know, my first CEO that was a master storyteller was absolutely, Steve. After that, it was Jack, I mean, Jack Jack is, you know, absolutely, you know, it's all about crafting narratives and telling, you know, telling a story about whether it was, you know, you know, Square originally in terms of like, you know, appealing to that small merchant, and empowering that small business, right to grow all the way through the stories he tells today around the value of Bitcoin, right, obviously, a huge, huge topic for him. And then, you know, it's, it's been very consistent. So Ryan, I mean, in some ways, Ryan is just kind of continuing that tradition. And really, I mean, what is so what is what is that story? It's really about connecting the things we're building to, like the human experience, right? It's not about right, obviously to Technology. You know, it doesn't matter how many back going back to like Apple, or if you recall that whole thing they remember, remember when Apple was still like, almost dead. They talked about, you know, megahertz remember was the last time you talked about megahertz, right? When you're when you're buying a computer, right Apple single single handedly killed the spec, right? Because they were like, you know, Steve introduced this notion of like, I'm buying this computer to edit my photos, I'm buying this computer to take videos on my loved ones, right and preserve those memories. Right? Yes, it sounds really benign, but like Apple invented, right in the late 90s, early 2000s. And I think some of the most successful companies today you take whether it's Jack Dorsey or Brian Chesky, at Airbnb, right? You know, like, what, what does the Airbnb selling, right? You kind of alluded to this, it's the freedom, the freedom to, you know, exist in this amazing world of ours, right, like work, you know, work from, especially in the light of COVID, like work from a different town of, you know, every month, I mean, that's, it's about, it's about the human experience. And they do a great job of like, talking about the traveler, right, and then the owner, right, being able to like, kind of monetize, you know, these properties that you've, like, meticulously crafted to create, you know, beautiful experiences, connect people to, you know, the places, you know, around the property. You know, that's that's that, you know, and Ryan was the same thing. I mean, we did, we created a commercial real estate, right, private equity company, but the story there was around, you know, real estate, commercial real estate, you know, as a real estate in general, right, is the number one way to create intergenerational wealth, right. So when wealth gets passed on from one generation to another, it's in the form of real estate more often than not. And, you know, at CADRE the story was, you know, all of the wealthiest people in the world, the most successful people in the world, keep that money in real estate, and often more often than not the commercial real estate. And so the, the mission of CADRE was to democratize access to this asset class to give more people, regular people access to this, you know, tool that, you know, allows them to build wealth and pass that wealth on to their children. Right, that is the fundamental story. And so I think we every company, every great founder, and every great company has that has some story, some mission that fundamentally connects to the human experience.

Susan Sly 26:48
And Cadre was,

Andrew Borovsky 26:51
I love that you mentioned that, because that was the inspiration for a lot of different companies that came along afterward that offered like fractional ownership in, in, you know, single family, and different things like that. Yeah. So it's, I love your explanation, Andrew, of being a master storyteller. And I love the stories you told to you exemplify that. So let's go to Rent, what is the story, you as the CEO tell about that user experience or the user journey and how rent ties to, to something aspirational? Alright, so I'll just do, I'll do two dice, because there's actually two companies, there's the Visible company that we started, that's the kind of official name of the company. And, you know, our, our mission, quote, unquote, is, you know, to create, you build a financial network for real estate, right, so we're looking at real estate broadly, and trying to solve all sorts of problems around it. And they're, you know, the human story really is around the fact that, as you know, you know, in the United States, like for most Americans, you know, their home is the most valuable asset that they own. Right. And if you don't own a home, then more often than not, your goal is to own a home, right? For all of those reasons. And, but yet, if you look at everything, so you look at this, like everyone wants this one thing, this greatest asset a person can own, but last time you bought or sold a home, or you tried to get a loan against a home where you tried to, you know, pay rent, or or collect rent, or, or, you know, invest in real estate, all of those processes are terrible, right? I mean, it's not a pleasant experience, you love moving into your home, everything leading up to moving into your home is just awful. So, you know, it's largely because of the fact the way we transact all those adjacent transactions around real estate, have really are driven by processes that haven't changed since the 50s. Right? So a lot of a lot of a lot of issues are so it's slow. It's very complicated, very expensive. And so the broad mission of the company was, you know, given our payments background, given my background in commercial real estate, and like understanding what it means to invest in real estate, you know, how do we go through and like, fix all of those things, right. And it really requires a first principles thinking around creating truly like a new network, like a network, like Visa is a network, right? Create a network for moving money, right and being able to move money and attach the money movements to a piece of real estate and that's, it's also a ledger problem is a whole bunch of things there. But it's a very technical problem. The solution is very Technical. But as I mentioned before, it unlocks a lot of these use cases that are, you know, we all know and understand the pain points around, right. So when we thought about the first thing to do, okay, so do we do mortgages, right? That's a painful process, do we do home equity loans, still a painful process? Do we do real estate investing? You know, all those things. It's interesting. They're very macro dependent. And as you know, when we started a company in 22, last year, it was basically a wash because the rates are super high, things are very volatile, but the real estate hasn't really connect corrected. And so as a seed stage company, you got to pick your battles, you got to plant your flag on, right on a beach head. And you got to you got to take hits correctly. And so we thought Rent was an interesting one, because there we saw as we dove into it, there's problems on both sides. Half of all real estate that's for renting estates. And by the way, a third of all real estate in United States is for rent, right? But half of it is what are what we call kind of mom and pop landlords, individual owners, right? So people like you and me, that might own two, three properties, and we rent them out. That's actually massive, half of all rental inventory in the United States is owned by people like that. And what's staggering is 80% of all payments are done via cash and cheque. Right? Quite half of it is cash. Right? It's, it's, if you look at dollar volume amount, I think it's maybe outside of the drug trade, the single greatest use of cash, right? In North America, right?

Susan Sly 31:31
I have a relevant story to this, Andrew, because I'm my dad, I talked about my dad, he was a, an engineer on every show. And I'm his POA. And he has a five-plex. And I just got an email from the property management team. They're like, did so and so pay the rent on like, I am in the US that property is in Canada, she would like literally slide the cheque under his door. Like I have no idea if she slid the cheque. So to your point, I just want to attest to that like not a surprising statistic.

Andrew Borovsky 32:04
I'll just say one thing on top of that is none of our investors believed us. Like when we told when we went to our investors who said we just uncovered that 80% of all all payments, rent payments in the United States are done this way. They're like, That can't be true. They have to independently verified. So you know, so it was a very interesting problem for landlords, right? Okay. So suddenly, you realize the fact that actually all the infrastructure we have to do is as something as basic as collect rent in an income property, you know, there's no infrastructure. But on the renter side, we also saw an opportunity of all of these people, as you know, you alluded to before, people that are renting you no longer, right, because of the affordability crisis we have because of the high rates. And and you know, all of those things tied to the fact that we have in this country still an issue building more real estate, amazingly. Right. So there's a supply, supply issue. But But what we found a single you're paying your rent is half your paycheck, the biggest payment you make every month for like, from the age 20 to maybe age 35, staggering, like your prime years, and you get no credit for it. Right? Going back to like credit building credit, right. So your next step, if you want to go from renter to owner, you need credit, and you're not building credit with the main payment you're making every month. So we saw an opportunity there to Okay, let's go, we can do digital payments, digital payments that build credit, and both sides win, right. So the renters get a way to build their credit, and a convenient way to pay rent, the owners can get, you know, a very convenient way to collect rent. Without that, you know, it should not be a monthly event where you collect rent money, we call it streaming Money. Money should stream into your account from all your income properties. You shouldn't have to think about it. So so that's the story behind Rent app. So Rent App has been live since January 1, we are so we're live for like 90 days. This is our fourth rent cycle. This this week on Monday was April 1. And and you know, we're growing, you know, we're doubling every month. So we've we feel like we have a very strong product market fit on both landlord side and renter side. Yeah, it's very easy. You can check it out rent dot app. I can talk more about it in in detail. But But yeah, that's that's kind of where where we're at. And that's, that's the human story we're solving to answer your question.

Susan Sly 34:25
Well, yeah, if you ever need someone to attest to the problem, that is we just did you know, we just sold that property. And it was not going to be seamless for me to collect rent on that property whatsoever. And we had cash payers, we had cheque payers and you know, to your point, right, and, and I think we're living in a very interesting time. I'm an internal optimist, even though you know, I work in AI and there's a lot of like, for people who are outside of Silicon Valley, quote, unquote, like there's a lot of misinterpretations of AI and AI is going to take over the world and so forth. We're we're hearing about a housing crisis in the United States, which you alluded to talking about, like, we don't have enough housing, plus there's inflation. But let's also talk about people who are choosing to rent. So there are people who are in my generation Gen X, and even your generation late millennials who are choosing to rent, they can actually afford to buy a house, but they're choosing not to. And and you and I were talking about that before the show and how the pandemic really shifted that. It's like, I'm work, you know, people think, oh, work from anywhere, that's just a Gen Z phenomenon. It's not, there are those of us who are saying, No, I want to work from where I want to work. I want to work on my terms, I'm doing things fractionally. Can you talk about just from a socioeconomic standpoint, because you're so in this, and so research, some of the trends you're seeing there?

Andrew Borovsky 35:55
Sure. I mean, it's interesting. It's a it's a multi layer problem. And first of all, of course, you know, the reason we built Rent app. And what makes us what makes us a little bit different is every tool that's been built in this space before almost every tool that exists, they go after landlords, which tend to be older, don't have a lot of appetite to like, you know, learn something that's as complex as Salesforce effectively just for the purpose of rent collection, which is why by the way, you know, that's the answer to a question of why people like cash or cheque. It's a lowest common denominator user experience. Between the two generations, the 50 Somethings and a 25,25 year olds, they both understand cash and cheque. And so for us, the idea was, well, if we go out through if we create a product that's very renter friendly and delivers value to the renter, while the renter is our salesforce, they go out there and actually recruit the landlords for us. So we have an interesting stat to share, which is that if a renter goes to rent.app and sends a payment to their landlord, unsolicited just sends a rent, rent payment, nine out of 10, landlords acceptance, a 90% acceptance rate among this older demographic, and that's a testament to like kind of how we built this product. So we're really focused on this younger group. The other reason to focus on it is because 80% of 25 year olds rent. So that's, that's an incredible figure, right? Like, that's, that that's just crazy, right? And there's a whole ecosystem around renters, I mean, everything, you know, everything from, you know, furniture to, you know, to landscaping. I mean, it's it's really interesting like that, you know, what it what it means to be, you know, that age. There's also a word that we like, it's called adulting. Have you heard that one? Yes, adult adulting is like a theme. And so we're very much into that. And I think it goes back to like, why we think credit building is important. So to, you know, to what you said, a lot of people are choosing to rent because it gives them the freedom to move around the country, in some cases moving around the world. It allows them to kind of, you know, experiment with different types of housing, a different, you know, I want to be rural, right, there's a bunch of people move to like, you know, out of out of Williamsburg into the Catskill Mountains, and then came back, you know, a year later saying, that's not for me, right. And so that experimentation, you know, people really, like right now being locked into the same thing for 30 years. And so we fully support that. And I think we've ramped up, you know, the key ingredient that was missing in this was credit building. Right? So now we're giving people the ability to build a credit history that's on par with if they owned a house, right, a lot of people used to hesitate, you know, to rent for so long, because it felt like this missed opportunity, right to, to build it, you know, build a credit history, you know, reward that point where you're ready to buy a house. So I think that's, that's really, the other thing I wanted to know, in what you said, it's interesting, we tend to have this conversation around, it's the younger people that want to, you know, to be more mobile, and can be more mobile because of COVID. And remote work. It's interesting that I think that trends are actually a little bit different. If you're a young person today, I'm sorry, for if you're a 25 year old, you're probably gonna have to go back to the office. And the problem is, there's a lot of you at that experience level. And so I think most employers actually have a lot to the extent that they want to rally everyone back into the office, it's pretty much an ultimatum, right? They're gonna go out there and say, you got the book back in the office. But if you think of like a 35 year old, a 45 year old, somebody with tenure, somebody that has unique skills, like going back to, you know, most of the people that are very valuable in artificial intelligence, are actually in their 40s. Right, these are people have been working in this in this space, right machine learning large language model space for a very long time. So those are the people that actually have more negotiation power when it comes to you know what, I'm just going to work from Italy, you know, so that's another kind of interesting, interesting trends. And people have this really binary conversation around it, like everyone's going back to the office or everyone's not going back to the offices. Like No, no, it really depends on the type of person right and to depends on the age group, some people are definitely going back, some people are never going back. And the other piece and maybe last thing I'll say, that's kind of interesting is we have a lot of these arguments around. I'm sure you read, you know, I'm based in Miami, right? I used to live in New York, and before that in San Francisco, but then we, you know, in the tech world, especially everyone's like, you have to be in San Francisco. No, you have to leave San Francisco, you have to be in New York, you know, you have to Oh, Miami is the best or Miami is the worst, you know, Miami is on the way up, Miami is on the way down. And it's also like, Guys, it's not that binary, it sort of depends on where you are in your life, like, Do you have kids? Do you work in a, if you work in AI, and you have kids, you're going to be in Bay Area, like I guarantee it, that's that's the only way you know, that that's where all the talents concentrated, every all the kids are in the schools are not moving out of those schools, right? If you're in your 20s, you should probably spend your 20s in New York, you know, so it's, so I think that plays into, again, going back to this kind of being a renter, like it's a it's it's a it's a quality of life, career opportunities. You know, meaning a partner having kids opportunities, sort of like balancing act, right. And the more flexibility you have the better.

Susan Sly 41:12
Well, to that point. And it's it's interesting, because the, you know, as someone who is, you know, been working in AI for a long time, and I don't live in the Bay Area, but they're in my I go, I go there a lot. A lot of friends in my cohort, Andrew, who are becoming empty nesters, we still have one at home, but they're gone. And they own one property somewhere. And it's usually a very nice property, but they're doing is they're like, Oh, we're going to be in Scottsdale for four months. And we're going to be in Miami for four months. And they're working really, and they want really luxury rentals. They don't want you know, the rental. And then we're seeing more and more rentals. In the cities. Like even here in Scottsdale, we have a grouping of rentals called the Optima. They're not cheap. But you're you know, you're in the gym. And there's someone from a who's had three exits with a Harvard PhD. Yeah, here for the winter. They don't want to be in San Francisco. And we're seeing that more and more. And Gen X has the highest divorce rate. Now there's so many things that are happening. And so I the reason I wanted to bring that to light is because there was this sense for a lot of people for a long time prior to the pandemic, that renting was a downgrade maneuver. And I love what you're doing that I thought in my research, the most fascinating thing to your point was the credit score, because there are a lot of people who don't do debt, but they aren't building any credit. And this is this was absolutely genius. So my last question for you. There's so many things I can ask you. But you said the first problem solve is going to be rent, do you have a line of sight to the second problem that you're going to solve with Visible?

Andrew Borovsky 42:57
Yeah, absolutely. So it's very interesting. And it ties ties into this product and kind of the original vision for Visible. So, you know, we talked about building history, building a building credit history for renter and why that's important because it really impacts your ability to you know, borrow money from meaningful things in the future, right? Most meaningful being probably your home. So what's interesting is there's a parallel to that to the homeowner. And what we're finding is, you know, somebody about owns two or three property, it's very hard to get the first property up and running. Because as a new revenue, you know, income property owner, you just find all these issues, right, like you find it's not as easy as you thought. The funny thing is, by the time you have your second or third property, and that's, by the way, in this demographic, we're talking about half of all rentals are owned by people who own two or three rentals, that's actually like the sweet spot. And it's because basically, by second or third, you kind of stabilized, you figured out what it means to be an operator, you know, to use actually a Cadre term. And so we asked our landlords we have now a lot on our platform. We said, Okay, how do we help you like we're helping the renters? How do we help you. And the number one thing a successful, Income Property operator wants to do is to buy another income property. And what's interesting is the problems that they run into are very similar to first time homeowners, which is by the time you own a third property, if you're an individual, you're actually kind of like in the eyes of a traditional banking system, you're over leveraged, right? Like because you have three mortgages. And one of the best ways to actually prove that you are in a good place financially, is cash flows. And if you're collecting rents using cash or cheque, it's very difficult to establish a history of being able to successfully collect cash from all these income properties. So what's interesting is every landlord on our platform is building a different type of credit history, which is this is basically cash flow history. And that that cash flow history tells us that they're very good at what they're doing and they we should have help them buy that next income property. So we'll we'll be rolling out by the end of this year is in a limited way, probably like a pilot, that's what I kind of my goal is, is we're going to take our best landlords, and we're going to say, we're gonna help you buy your next home. Your next income property, we've seen your account, we are your point of sale system, we see money come in. Right consistently, we see you're good at what you're doing, and we're going to help you finance this next loan. And the reason why this is great, going back to, you know, kind of the, you know, where we do social good, is, if you, you know, there are other choices, nine times out of 10 is what are called hard money loans. Hard money loans, is basically you're talking about loan sharks, you're paying super high interest, low duration rent loans, well, by the way, they're secured by the property. So you do you don't do well, they'll take the property away from you. And basically, it's, it's somebody that you know, from somebody else that you know, that comes in gives you a bunch of money to buy this property, and then you have to really quickly stabilize it, and then you get a real bank from normal loan. So we want to just smash that industry want to come in there, we think the opportunity is massive, and, you know, to create a transparent, fair product that is, you know, underwritten by, you know, digital cash flows, which we control, you know, using our system. And, and I think the last thing I'll say is, the best parallel to that is something like Affirm. You know, Affirm, we're huge fans of that company, right? What Affirm has done is they smashed this ring of payday loans, you know, what you paid 600% APR, you know, to get a few days here or there in order to make a purchase, you know, Affirm has, has really, you know, brought that from out of the shadows into something we have predictable interest rate, predictable repayment schedule. So we'd like to do kind of like an Affirm for homeowners income property owners.

Susan Sly 46:50
I love that I'm excited. i The, you know, of the 400 founders that I've interviewed, sometimes I'll finish the show be like that company, you know, I can see where this moonshot is. And it's so clear and obviously, not your first rodeo, Andrew. And I relate to everything you're saying. I mean, even going through multiple real estate transactions, especially as an immigrant to this country, because I'm looked at differently even with a great credit score, they're like, Okay, you're over leveraged, or you're self employed or whatever, they're not even looking at cash flow. And so I love what you're doing and it's so disruptive and it's so smart. And so thank you I'm excited for when I purchase my next rental property to use all of your products.

Andrew Borovsky 47:40
Thank you so much. Thank you for your kind words and thank you for having me and letting me kind of tell the story hopefully it was interesting.

Susan Sly 47:44
Oh, it was an it absolutely was and so for everyone listening is if you're in the US get and you're renting, go to rent dot app and check out Visible ,follow Andrew on all of his social he is fascinating. As an entrepreneur, I foresee a biography I foresee so many different things. And Andrew, thank you for your humility and transparency on Raw and Real Entrepreneurship. So with that, everyone God bless go rock your day and I will see you in the next episode.