Findigs: Focusing on Progress Not Perfection to Hit $2M ARR
Steve Carroll is the co-founder and CEO of Findigs, a property rent management software that improves the leasing experience for renters and landlords.
Like many people moving to a big city like New York, Steve had experienced firsthand how difficult it can be to rent a place.
He realized that the vast majority of renters were still paying their rent offline or mailing checks every month.
So he teamed up with his best friend Keith to launch an online payments solution for renters.
People told them they were wasting their time because banks were already solving the problem and could send checks for renters.
But Steve had found the experience clunky and almost got evicted when his bank stopped sending rent checks for several months.
They started their customer research by going to a local bar and asking people how they paid their rent.
Some women thought this was a pickup-line until they'd whip out their phones and show them a Typeform survey.
Just taking a scrappy approach like this quickly got them about 1,000 survey results, which gave them enough data to move ahead.
Today, their business generates around $2M in annual recurring revenue (ARR) with a team of 12 people.
In this interview, you'll learn:
- How the founders focused on progress, not perfection, with their customer interviews and why you should too
- Why they didn't let a bunch of flaws and bugs in their product stop them from getting it in front of customers
- How they discovered a bigger opportunity and pivoted to fixing the leasing process for landlords and renters
- Some big mistakes they made in the early days, e.g., selling their product to customers, that they weren't ready or able to onboard
- How getting out of the building to do customer interviews led to Keith meeting his girlfriend
I hope you enjoy it!
TranscriptClick to view transcript
Omer Khan: [00:00:00] Welcome to another episode of The SaaS Podcast. I'm your host Omer Khan. And this is the show where I interview proven founders and industry experts who share their stories, strategies, and insights to help you build, launch and grow your SaaS. In this episode, I talk to Steve Carroll, the co-founder and CEO of Findigs, a property rent management software that improves the leasing experience for renters and landlords, like many people moving to a big city like New York.[00:00:40] Steve had experienced firsthand how difficult it can be to rent a place. He realized that the vast majority of renters were still paying their rent offline or mailing checks every week. So, he teamed up with his best friend, Keith to launch an online payment solution for renters. People told them that they were wasting their time because banks were already solving the problem and could send out checks for people. [00:01:06] But Steve had found the experience clunky and almost got evicted. Once when his bank accidentally stopped sending rent checks for several months without even noticing it. The founders started their customer research by going to a local New York bar and asking people how they paid their rent. Some women thought this was a pickup line until they'd whip out their phones and show them a Typeform survey by just taking a scrappy approach like this, they quickly got about a thousand survey results, which gave them enough data to move ahead. [00:01:38] Today, about three and a half years later, their business generates around $2 million in annual recurring revenue with a team of 12 people. In this interview, you'll learn how the founders focused on progress, not perfection with their customer interviews and why you should too. Why they didn't let a bunch of flaws and bugs in their product stop them from getting in front of their customers, how they discovered a bigger opportunity and pivoted to fixing the leasing process both for landlords and renters. We also talk about some of the big mistakes they made in the early days, such as selling their product to customers that they clearly weren't ready or able to onboard and how getting out of the building literally to do customer interviews led to Keith meeting his girlfriend. [00:02:24] So I hope you enjoy it. Steve, welcome to the show.
Steve Carroll: [00:02:27] Omer, thank you so much for having me.
Omer Khan: [00:02:28] Do you have a quote, something that inspires or motivates you that you can share with us?
Steve Carroll: [00:02:33] Yeah, absolutely. I'm a big quotes guy, but I think the one that I like to share today is a, is from Oscar Wilde, which is, ” People bring happiness wherever they go and others, whenever they go”, you know”, to me, it just exemplifies the attitude that you need to bring to, to motivate people in a startup.[Omer Khan: [00:02:50] I haven't heard that one before. I like it. Great. So tell us about Findigs what does the product do? Who is it for? And what's the main problem that you're helping to solve?
Steve Carroll: [00:03:02] Yeah, absolutely. So, you know, I'll start with the main problem here. Omer, you know, renting in the United States, if you look at it as an entity is more or less unfair, you know, people have very different access to rental housing.[00:03:15] And what we see in Findigs is it a big part of that comes down to how we actually evaluate who we want to rent units to, and make underwriting decisions, whether or not we're going to issue someone a lease and give them the keys to an apartment or rental home. So, in today's market, you know, if you look at any operator, they have to make this decision. [00:03:31] They're not just going to give you the keys. They have to figure out if you're going to be a good tenant, you're going to pay the rent. And the way they do that today is very much not based on technology, not based on So they're relying on a lot of self-reported information. You know, they ask applicants a bunch of really important questions, and then they asked them to provide documentation, to prove those claims. [00:03:48] And what Findigs does is we create a data layer that exists between renters and landlords to make the leasing process 10x more efficient fraud proof and transparent.
Omer Khan: [00:03:58] Awesome. Give us a sense of the size of the business. Where are you in terms of revenue? How big is the team?
Steve Carroll: [00:04:03] Yeah, absolutely. So, our core product launched over the summer. So, we've seen, amazing growth since then. We are running at about $2 million in run rate revenue. At this point, the team is 12 and quickly expanding. So, it's an exciting time in business.
Omer Khan: [00:04:17] And how many landlords do you have using the product?
Steve Carroll: [00:04:20] Yeah. So, at this point, you know, we're, we're in over 60,000 units across the United States, that's spread across, you know, 65 unique customers. And what's exciting to us is, you know, those numbers keep getting bigger.
Omer Khan: [00:04:31] Great. So, I want to talk about how you came up with the idea for the business, this business, but before we do that, tell us a little bit about your background. What were you doing before you started this business?
Steve Carroll: [00:04:42] Yeah, absolutely. So, I got my start, my career started on wall street. I worked on the structured products trading desk, which, you know, for your listeners to know anything about finances, were pretty much all cash flows that are real estate backed are going to trade. So that could be mortgage-backed securities. That could be on back on single single family rental or whole loans fix and flip loans. So as on the sales side of that, I got to see a wide range of how products were underwritten and originated. So I've been exposed to real estate at arms length for some time now. And then in 2017, I left to go be the co-founder and chief operating officer for a business called Seated which is a restaurant technology company, which does dynamic pricing for restaurants. So, some of your users may have heard of that, especially if they're in New York area.
Omer Khan: [00:05:26] Great. So how did you come up with the idea full Findigs?
Steve Carroll: [00:05:30] Yeah, I mean, so, you know, for me, I think everyone who moves to New York has a bad experience doing so you've never heard someone who moved to New York and says, wow, that was, that was a really smooth tech enabled process.[00:05:42] So on one hand, you know, I'm seeing this from the perspective of a 20 something year old in New York city, and you just see all the shortcomings, right. You're toyed around with brokers. Then you find a place that you like, and now you, you don't understand the rules of the game. You don't understand what you need and what's required of you. [00:05:58] What credit score is your dog, the right breed, anything related to, am I going to actually get this apartment or home that I want, you're doing all of this in paper, you know, then from there you're going to sign a contract or at least in paper, you're going to mail it, rent, check and paper. It's just obvious to me into a lot of other people that, you know, the renting process in the United States, isn't tech enabled. [00:06:17] So when I looked at that and juxtaposed from my experience on trading floor, where you have people who are originating bonds and securitized products, based off of these cash flows, you can see that there's serious information asymmetry, and you can see that the market really needs something to, A.) Clean up the experience and to, B.) Be a knowledge base and, you know, data center for, you know, both sides of the marketplace. So, to me, the problem really stand from renting in New York city. And just thinking, look like what part of this is a place that you could tackle and really make a better consumer experience. You know, if you look at all the technology that exists in this space, you know, you you can sell them point to one piece really anywhere along the renting life cycle, that is a good consumer experience. [00:07:00] So to me that was a landmark sign that that it was time to try and tackle this business. And we originally got our start in rent payments actually. And we got our start in rent payments because, you know, I was personally afflicted by this problem. You know, as a renter in New York city like over 80% of the country, I was mailing a rent check every month. So, you know, my idea in the beginning was, you know, can we just make it a lot easier for consumers to pay rent?
Omer Khan: [00:07:25] Interesting. So, so that's a very different business to, to where you are today.
Steve Carroll: [00:07:33] Yeah absolutely.
Omer Khan: [00:07:34] How did you get started and, and why I mean it, yeah, I mean, it sounds like there's a pain point there, but like, what was it about that that sort of made you feel like there was an interesting enough business opportunity to just help people find a better way than mailing those checks?
Steve Carroll: [00:07:53] Yeah. I mean, to me, you know, looking at how I interacted with my rental property and, you know, I was in a high rise building in New York city. This was, this was not some, some townhouse that was being rented to me by a mom and pop landlord. This was a professional management company and you looked at everything that I had to do as a retro.[00:08:11] And, And there's just so much of your life as an American rancher. That's a hassle, you know, I had roommates, so we were managing our utilities and our internet and all the furniture that we were buying for the apartment, all of the subscriptions from streaming services to home services, et cetera, all of that, we sort of had to figure out on our own. [00:08:31] So the idea that I had was I was, I was like, look like if there was some platform that was universal, where as a consumer, you know, I can interact with that and I can manage my rental out of it. You know, the natural starting point for me was paying rent. You know, this is a place that obviously is ensuring that you're going to stay in that unit. [00:08:48] You know, you need to pay the rent to not be evicted. So if this were a place where you could basically capture a captive audience, you know, that would be really powerful as a consumer platform.
Omer Khan: [00:08:57] So, how did you get started?
Steve Carroll: [00:08:59] So, you know, we got started by having one of the customers who actually covered on wall street believe in our idea enough you know, they believed in our vision, which at the time was, was very focused around rent payments and they offered to post our first round of funding.[00:09:13] So, you know, pretty quickly we hired a small team. You know, my background is not engineering by trade. So, we had to figure out how to hire, you know, the first set of software engineers to actually build a product. And, you know, pretty quickly we shipped an MVP out in the app and play stores you know, a few months after making that capital and hiring the team.
Omer Khan: [00:09:29] And so did you have a technical co-founder who who's setting the direction for these developers that you're hiring?.
Steve Carroll: [00:09:37] Yeah. So, my, my co-founder Keith has been my best friend for the last 10 years. You know, I met him on the first day of college and while he's not a traditionally or classically trained technical mind he has taught himself a lot about product management and programming.[00:09:52] So I was fortunate to have him and, you know, originally we really didn't know how we were going to hire software engineers and how we're going to build the product roadmap. But that's something that with his background, we were able to figure out together.
Omer Khan: [00:10:02] And, and what kind of validation do you do to figure out whether this was a worthwhile problem? Like, was it just the research and some of, some of the data points that you described earlier where you're going out and talking to people or looking at what other products were out in the market, but like what, what was that process you went through and how long did it take for you to get to a point where you're like, yeah, I kind of understand this problem well, enough to be able to at least get started with building a product?
Steve Carroll: [00:10:36] It's actually, it's actually really funny because this is a great story and it's actually how well my co-founder met his now girlfriend. So, you know, you look at the market research and the landscape is very clear, right. You know, within a rent penance at the time we were doing this, and this might have changed since then, you know, over 85% of people were paying rent offline.[00:10:54] And tellingly, you know, the commentary that we were getting is like, look, Steve, no banks are actually trying to do a better job of making this easier. So your bank will send a check for you. And I went through that experience with several different banks and did some user testing on my own and found that to be a really clunky experience too. [00:11:10] And actually, I almost got evicted because of it. Because when I set up TD bank, bill pay, you know, they basically just, you didn't send the check and didn't tell me, so for months I wasn't paying my rent unknowingly and you look at the numbers and only 7% of people are using their bank to pay that rent by the bill pay feature. [00:11:27] So the next step, and this was, we said, okay, look, the market the market landscape is clear. You know, people are not paying rent online. You know, we did some research as to, as to why software adoption. On the supply side, on the landlord side, hadn't been higher, but really we wanted to dig into the consumer side of things. [00:11:42] So we put together all sorts of surveys. And at the end of the day, I told my co-founder and one of the guys who was working for us, I said, look, you know, here's my credit card. I want you to go to bars and I want you to get 20 survey results a day here, on why people, how people pay rent and would they use something that made it easier? [00:11:59] So we actually took a really bootstrapped approach of going out in New York city and just talking to as many people and approaching them and saying, Hey, how do you pay rent? Is it, is it easy? Is it enjoyable, etcetera. And once we had collected about a thousand results in that survey, the numbers held up, as we imagined, they would and said, look, we have something here that we can make a lot easier for consumers.
Omer Khan: [00:12:18] And, and so tell me about the story how you are, your co-founder met the woman of his dreams.
Steve Carroll: [00:12:28] Yeah, it's actually really funny. So on the first day my co-founder is he's not an introvert, but he, he's not someone that is just going to go strike up conversation. So, to me, this was a great exercise for him because it's, you know, as on the ground user testing that you can do.[00:12:43] And on the first day I actually, I couldn't be there. I couldn't be out the bar with them. I had something else that other commitment. So, I said, guys, don't come back until you have 20 results. So, they go to this bar and the very first person that they approach, she thinks that he is absolutely making this up as a pickup line, but he pulls out his phone and there's a Typeform survey there and he makes her fill it out. [00:13:04] And it turns out not only does she pay rent with a check and hates doing that. But also she was pretty indicative.
Omer Khan: [00:13:11] That's funny. Yeah. I got to say it's like, I've never heard of anyone doing kind of these customer development interviews by going into bars.
Steve Carroll: [00:13:21] Well, I knew it was a place, you know, we liked bars, so if we could make it someplace enjoyable and have a few beers along the way, and that turned out pretty well.
Omer Khan: [00:13:30] All right. So, so you, you, you get the product built. How, how long did it take for you to ship the first version of the product?
Steve Carroll: [00:13:40] We shipped the first in a little bit under five months.
Omer Khan: [00:13:44] And and just kind of describe what, what it was doing. I mean, obviously there was some kind of interface where if you're a renter, you can go there and pay. But, but what was going on behind the scenes?
Steve Carroll: [00:13:54] Yeah. So, you know, really what we had to figure out is how do you securely connect someone's bank account? You know, you new payment mechanism and then how do you get money from them to their landlord? So, you know, our interface was to this day, you can still download the app on the, on plane, an app source today, which is a really clean interface where you link a bank account, you do that through plaid and then Findigs on the backend what's going on is we're figuring out what's the optimal way to pay your landlord is.[00:14:20] So the whole beauty of this is we didn't have to on-ramp your landlord in order to pay them. We were just going to pay them via whatever means they accept it, whether that's sending a check for them, you know, sending a wire, you know, even, even more bootstrap things like, you know, paying a Venmo, etcetera. [00:14:35] You know, we had had to create that entire backend database and architecture to be flexible around how does your landlord accept rent payments and how are we going to get this? Do the KYC information? No, we're not laundering money. No, we're not sending money to someone who we shouldn't be, etcetera, you know? [00:14:49] And you know, at the end of the day, the punchline had to be, the consumer had to have a 32nd experience and then they, and then we said your rent, your rent payment is handled. So, all, all went on to the backend, steering that Okay.
Omer Khan: [00:14:59] So, so it takes about five months to, to build the product. And then what happened? How did you, how quickly did you get customers?
Steve Carroll: [00:15:09] Yeah. I mean, shockingly people hate sending rent checks. So, you know, we started sending you know, in the first month that we want to product you know, I think we sent like 400 rent checks and 400 payments out to landlords without doing really any marketing.[00:15:23] So it was incredible validation for us. You know, we started running some, some basic Facebook ads from there and just growing our footprint organically. You know, we wanted to be smart about growth because at this point, you know, the piece that I'm missing that I'm not telling you about is, you know, we have this entire vision for a rewards marketplace built on the backend that we hadn't yet built out. [00:15:44] So we were being a little bit throttled about growth because you know, we wanted to have the users and the proof point to that to approach the brands that we were ultimately going to use to fund the whole thing.
Omer Khan: [00:15:55] And, and then how are you charging for that service where you're just taking a fee for each rent payment?
Steve Carroll: [00:16:02] No, actually, you know, part of our thesis here was that we could eventually monetize by other mechanisms. So, we made it a free service for consumers. And what was cool to see actually Omer is actually when we, when we launched it, we had, we said, this is free. You know, we're gonna handle this for you for free, but if we've made it easier to pay rent, feel free to leave as a tip. And, you know, users can voluntarily elect to leave a tip. And actually 75% of people were doing that.
Omer Khan: [00:16:29] So, you've got the product you've made, like, like it would have been tempting to say, okay, let's, let's try to build something on the backend that makes it easier for landlords to accept the payments. And you didn't go down there. Right?[00:16:43] You were just like, well, like we'll just deliver the payment in whichever way they want, and you're not charging people to use the service. So, I guess the only possible objection might be, do people trust the product and connecting up their bank account? And it sounds like people were having enough pain that even that wasn't really an issue for you?
Steve Carroll: [00:17:14] Yeah. I mean, I think we did a good job in the early days thereof really thinking about the UI and the UX around this you know. It's, it's obviously something that we're very wary to do as consumers, but something that we've seen in a lot of places, you know, you, you link your bank account to all sorts of things these days.[00:17:30] And I was frankly shocked at the willingness that we saw in the early rollout for people to link the bank account. But, you know, I think we had enough out there, you know, on the, on the brand side of things, you know, the little content that we pushed people got comfortable with it at a rate that was lot faster than we had originally anticipated.
Omer Khan: [00:17:47] I mean, this I'm surprised, this is like we're in 2021, you launched a product a year ago. And you're saying that still, like, what was the number like over 80% of people are sending checks in the mail?
Steve Carroll: [00:18:02] Yeah, 80% were paying cash, check or money order to their landlord. So the online adoption rates had been, you know, sub 15% and that's inclusive of the, you know, five to 7% of people that were using their bank bill pay on a monthly basis to pay their rent. So, the numbers were quite staggering.
Omer Khan: [00:18:25] That is shocking. So, at some point you shifted to B2B business and started focusing primarily on landlords. Can, can you explain like how that happened and why you decided to, to make that shift?
Steve Carroll: [00:18:43] Yeah, absolutely. So, you know, my background prior to Findigs was, was working as chief operating officer of the restaurant app, Seated a lot of what makes Seated work if you're unfamiliar, is the consumer partnerships. So basically the way Seated works is, you know, if you and I were going out to dinner in New York city tonight, you could book a reservation on Seated and you as a person that made that reservation are going to get a dynamic reward based on the time that we go to the restaurant.[00:19:11] So, you know, if you and I went to Da Umberto in New York city today at 6:00 PM, you might get a 30% of whatever we spend the restaurant. You, you get it back and you're going to get it back to one seat as brand partners. So in credit too, Lulu Lemon or Soul Cycle or Class Pass or Uber. And, you know, having, having looked at those partnerships and understanding how brands thought about their customer acquisition cost and retention economics, you know, a big part of the original vision was to plug in those brands, to this rent payments platform. [00:19:41] You know, if you could control the rent payment. Then you could give brands, a monthly audience and, and use them and tie them to your rent payments. So you could say really cool things like, you know, Omer, if you go to Flywheel this week, you can get $30 off of your next month's rent. Or, you know, if you, if you buy a Casper mattress, you can get $300 off the next month's rent. [00:20:04] So a big part of what we wanted to do was natively negotiate those partnerships and use the control of the rent payment to tie all these incentives for consumers. So, you know, the way that we went about this was first, obviously we had to solve one side of the marketplace, which was, you know, getting people to pay rent through us. [00:20:20] Then pretty quickly I turned my attention to building these partnerships and all of these partners they kept saying the same thing to me, which was really interesting. They said, Steve, you know, we love the idea of our brand, help people pay rent by consuming our partner service. But what you have to understand, and is it when people are moving, that is when they're the most valuable customers to us. So, if you could give us access to consumers, when they're moving, you know, we would have a lot more margin to play with and you'd basically make yourself an indispensable partner to us. So we look at this and said, okay, we already have this audience of people who are paying rent through us. And we obviously know who their landlords are. [00:20:53] So, you know, how do we get access to them when they're moving and how do we, how do we control more of this you know, renting journey? And the natural extension for, for us was, you know, to pick up the phones and to start calling all the landlords and property managers that we were sending checks to, and to figure out what happened for people to move in. [00:21:09] And that's really where we identified just this massive pain point around how rental applications and tenant screening happened in the United States. And that's when we said, look, if we could get this right, you know, payments and everything else would come naturally. But this is, this is clearly the highest friction, highest stakes piece of the renting journey and something that no one seems to be happy with their existing technology around.
Omer Khan: [00:21:32] So just tell us a little bit more about what that process looks like or why it's so painful?
Steve Carroll: [00:21:39] Yeah. So, you know, I touched on this a bit earlier, but basically, you know, when you apply to a rental home in the United States, you are going to be applying into a black box. You know, for the most part, you don't understand the requirements.[00:21:52] What is the credit requirement? Is your dog the right breed? Has someone else applied before you, you know, what is the income requirement? Am I going to need a guarantor? You know, all that stuff is fairly opaque. And it, and it's opaque because as an operator, trying to make a leasing decision, right? [00:22:07] Most of the information is coming from the applicant who wants to rent your unit, who, you know, has a perverse incentive here, you know, you're, you're incentivized to over report your income. So, they have these elaborate processes on the backend set up to validate the claims that people are making about their income and employment and assets and savings and identity. [00:22:26] So that the whole process, you know, for, for most landlords Property managers across the United States is going to take at least three days, three days from the time that you apply to a rental home to the time that they can actually give you a yes or no. And we looked at that and said, you know, this, this, this, this space has not been nearly sophisticated enough about how they're thinking about injecting outside data and technology.
Omer Khan: [00:22:45] Right. But, but that's the pain from the renter's point of view. But what about the landlord? Why did they.
Steve Carroll: [00:22:52] Yeah.
Omer Khan: [00:22:52] What were the pains that they, they had?
Steve Carroll: [00:22:54] The pains, they had they're, they're myriad, but they start with this understanding that their process is incredibly time consuming. It takes three hours of manual work per application. And furthermore, they understand just how beatable it is. You know, it's very easy in today's day and age. If you're basing your underwriting decision on someone who's uploading a document, you know, everybody knows what Photoshop is. So they have to do these extensive you know, research processes to validate the information they're looking at is legitimate.[00:23:23] So, you know, the stat that gets thrown around a lot is that 97% of landlords and operators encounter, at least two instances of fraud in their leasing process in, in a one-year period. So, you know, fraud, especially in, in, you know, the coronavirus area where we've moved much more digital is all too common. [00:23:42] It's something that keeps these guys up at night. And then there's a host of regulatory challenges and compliance challenges, because obviously this is an important decision for them that the government is just not going to let them make on their own. So, it really comes down from a ton of efficiency standpoint. [00:23:55] You know, they're spending so much time reviewing rental applications with the hopes of catching fraud, which they're not their ability to do. And all the, while you look at the, the lawsuits have happened in the last two years alone, we've seen more class actions around, you know, discrimination and tenant screening and automated decisions going wrong. You know, it's something that can wipe out entire portfolios.
Omer Khan: [00:24:14] Okay. So you, you initially started talking to landlords to figure out how you could get, I guess, more visibility on, on tenants before they move in, because to, to help fuel this reward kind of business that you were thinking about this business model, and then you, you, you started to understand that there was this pain point that landlords had that there was an opportunity to, to solve.[00:24:45] How long did it take for you to get to a point where you, you, you decided, okay, we need to kind of change plans at least for now, and start focusing on building a different product?
Steve Carroll: [00:24:58] Yeah. I mean, this was, this was months of research Omer. You know, looking at this one thing that we knew was this is an incredibly crowded space. You know, if you Google tenant screening, those, those ads are incredible competitive. So we really needed to understand exactly how it worked. Not only from a process standpoint, you know. What are the current clients are doing today, but also from a regulatory standpoint, you know, or their trip wires that might be being crossed that people don't even know about.[00:25:25] This was six months of research and understanding, you know, what do customers do today? Where do we see the loopholes in that? How can the process be augmented with technology and automation before we were actually comfortable to say, look, we can create a differentiated product here.
Omer Khan: [00:25:40] And did you find that the landlords you were speaking to were already using some type of product?
Steve Carroll: [00:25:48] Almost universally, yes.
Omer Khan: [00:25:50] And so there was, there was the pains associated with the general process, but it sounds like even though it was a very crowded market, there was still a bunch of issues with whatever incumbents there were in that space?
Steve Carroll: [00:26:08] Absolutely. And, you know, I don't want to speak ill of any existing companies or competitors. But you look at these and you know, their, their satisfaction with them was, was extremely low and it was low because. You know, a lot of these guys place all of the onus on the operator, you know, the technology just moves information around. It doesn't do anything to help you structure it to help you augment your workflow to help you task track or anything like that.[00:26:34] So they were incredibly frustrated. You know, this process shouldn't take as long as it does. And they understood that, which is really where we saw the opening.
Omer Khan: [00:26:41] Okay, so you're building now and another product. And so how long did that take for you to come up with a solution for landlords?
Steve Carroll: [00:26:52] Yeah. It took, you know, well, it depends on what you count is has come up with solution because we, we thought we had a solution several times along the way. And then it turns out that as soon as we actually, you know, try to put it out into the wild, we realized that there were in shortcomings in it. So, you know, from the time that it took us to go from customer research to the time where we actually had something that we felt like was the first version or the MVP of what we could scale on top of, you know, that is that's a five month period there.
Omer Khan: [00:27:22] So, so give me an example of what you said. You put it out in the wild and you realized that, you know, you hadn't quite nailed it. Can you give me one example of that?
Steve Carroll: [00:27:31] Yeah. So, when you're, when you're looking at this, you know, a big part of what the objective is is to, to validate key pieces of information, right?[00:27:40] Your leasing decision is going to be based off of someone's identity their income, how long they've been at their job, their previous landlord references, you know, a whole host of inputs, which are actually different for everybody. So, you know, in the beginning, we didn't realize just how different everyone's leasing logic was going to be. [00:27:59] So, you know, per the fair housing act and per the fair credit reporting act, you know, as someone who's evaluating someone for rental property, you have to have a standardized way that you do that. So usually, you're going to see people who have a point ranking system. So, you know, you're going to apply and you're gonna get a score. [00:28:16] And, you know, oftentimes the highest score will be the, the person that gets to be the tenant or wins that partner. So, in the early days we thought we'd set up this, this, you know, beautiful scoring system. And then we just kept realizing that like, there's so many inputs we didn't, we didn't even have, you know, we thought it would be enough to say, okay, we're going to weight the income requirement differently, Weight, your employment requirement differently. But as it turns out, you know, landlords across the country, they have so many different inputs that are going to include. So, we had to go back and, and, you know, figure out how to make our backend flexible to accommodate basically any, you know, decision tree. [00:28:50] And so doing. It's like people look at the product. And I said, you know, this is obviously a lot cleaner UI, a lot cleaner UX than what we're used to, but you know, what about this one thing that we need to have as an input and you know, our responses hang on, we'll be back to you.
Omer Khan: [00:29:04] Okay. So, one of the things that I often see when, when founders are going out and trying to talk to prospective customers, especially in a market where there's already a bunch of different solutions, is that it can be hard to get people's attention or time for them to talk to you. So, what was your experience with that? Were you finding that it was pretty easy to get time with these landlords? And, and, and, you know, like you mentioned earlier, these were sort of like the mom and pop type landlords you're talking about larger companies. Like how hard was it to get attention?
Steve Carroll: [00:29:45] Yeah. I mean, look, I think this is obviously one of the key challenges in any business, especially ones trading a new product, right. Is how do you even stand out from, you know, separate this, the signal from the noise in the space. So I think we had a few sort of hacky advantages, you know, one that when we were reaching out, you know, the first people we reached out to are people that we've been on behalf of their tenants already. So, you know, our original customer base came from people that we sent checks to or sent payments to. So, you know, you could very easily pick up the phone and call them and say, hi, you know, we've been paying rent, we have some questions. Can we talk to you? So, you know, for the first few clients, we, we really were bootstrapped about the way that we got them that way.[00:30:23] As we transition more into a traditional outbound sales approach, you know, we had to get really scrappy around our email marketing content or copy rather our touch points. And then, you know, basically how do we incentivize customers to refer other customers? But so far that's been the primary way that we've grown is just being very effective about, you know, copywriting writing very short, punchy emails, getting to understand their process well, before we reach out and then obviously qualifying leads and getting the right person.
Omer Khan: [00:30:50] Okay. So yeah, let's, let's talk about that because outbound sales has been the biggest driver of your growth. What does that process look like? Presumably you guys are, building some kind of list doing what, cold email outreach.
Steve Carroll: [00:31:07] Yeah, exactly. So, you know, looking at the landscape today, you know, you, you, there's all sorts of ways. You know, these people have to make themselves easy to find, right? Because they have units that they're trying to rent. So we actually come at this our sales purchase to come at this, from the perspective of someone who's trying to rent one of their units, you know, that's, that's who, who we ask our sales people to put themselves in the shoes of and to, to go through.[00:31:28] To find target customers, you know, just by basically pretending to need to rent apartments, you know, and, and looking at it. What is the process going to be like for me as someone who wants to rent one of your units, and then, you know, once we find them, which you can do in a whole host of different ways in today's day and age, you know, there's listings, aggregators, you can reverse into what software people are using. [00:31:47] And moreover, you know, they're doing a ton of marketing, right? So we find them that way they publish, you know, what the application process looks like today. And then we find a few key things based on what they tell you. The application process is going to be like for the tenant that we key in on. And we use those as our leading edge of the spear and pulling all content.
Omer Khan: [00:32:04] Got it. Okay. So one of the things you mentioned before we started recording was some of the, the experience you had in the early days with, with finding customers and, you know, getting them onboarded manually and some of the issues that sort of that created. Tell us a little bit about that, because I think there's a useful lesson there for, for a lot of people.
Steve Carroll: [00:32:27] Yeah. So, you know, over the, the way that I look at, you know, sales in general, at startups, you know, having, having done this in restaurants and now landlords and property managers is, you know, in the, in the early days, you know, you are creating as little friction as you can. You know, your, your salespeople are probably counting a verbal yes, as a win.[00:32:48] And you know, anybody who is going to use your product is a win for you because you have nothing. You have no brand, you have no recognition. If you can get people to use a product, that's key to iterating on it and making it smarter, better, faster, stronger, et cetera. So in the beginning we were casting a really wide net, you know, casting a wide net, not only across types of operators. So, whether they had single family homes, class, a apartments class, B apartment, class C apartments, but also based on what their process was like, you know, we weren't really understanding because we didn't have a knowledge base, how they were doing it in granular detail. So when we would show them the product demo, which was the same for everybody in the early days, we were just kind of gunslinger. [00:33:25] We're trying to be like, well, if this is what we can do, we can make this process so much more efficient because we have all this outside data and all of this proprietary, you know, algorithmic rules-based approach that we're gonna take to this and the clients we're looking at would say bots is great. [00:33:38] But what they're not thinking about is, is what actually goes into implementing this. So we got, you know, seven or eight clients who were just totally different customer profiles with totally different workflows. And we, we looked at them and said like, look, you know, our technology is clearly superior to what you're doing, but we don't support your workflow. [00:33:54] There's plenty of pieces of this that you're going to have to do manually. If you want to switch over to Findigs because we simply haven't built it yet. And you know, the mistake that we made was they said, screw it, Steve, like, this is so great. If you could do what you said you're going to do, then we'll do those things manually. [00:34:08] As it turns out, you know, creating those manual friction points is something that you just can't do if you want to sustain them long-term because the people that are actually using the product are not the decision aid. You know, there, there are people who are downstream in the leasing staff, in the underwriting staff, and they're going to hate that they achieved, created this manual work for them. [00:34:26] So I think a big mistake and a big learning for me would be, you know, even if people are really excited about using the product, you have to think about who the end users are going to be. If it's not the decision maker and what implications you're going to have there, because they can just pocket veto. And you want to create a seamless experience for them to get them to be a sticky customer for the long term.
Omer Khan: [00:34:43] So was that because you were just getting a real diverse set of customers and the product wasn't designed for that. Or was it like just, you know, you had plans to kind of build that workflow in and the product was behind what the market needed? Like which one was it or was it a combination of both that..
Steve Carroll: [00:35:08] Combination of both, to be honest with you. I mean like in the beginning, you know, we said, look, here are the pain points that we want to solve. You know, we want to make these things easier. And then you have all of these outside processes that people are going to undertake.[00:35:20] And, you know, it's very much tied to the difference in client profile, right? Someone who has high-end luxury apartments, you know, they're going to, they're going to have a separate workflow. Did they go through to, to make underwriting decisions and someone who has single-family homes, maybe, you know, in a more rural area. [00:35:36] And we were casting such a wide net. So talking to all of these customer profiles and just saying, look like we know we don't have a lot of these workflows built out. You know, we know they're going to have to do these things, which, you know, in, in, in many cases they're already doing offline, but you know, they, they have the process at least formalized and documented. [00:35:51] So it's a combination. I think the, the different types of customer profiles sort of begets this different type of workflow, which we didn't have because the product was definitely, you know, very nascent at the time. And you know, that, that created the headaches that we ran into.
Omer Khan: [00:36:05] You know, w what are the other challenges you know, if you're going into a market that's crowded that has competitors that maybe have been around four years is figuring out, you know, what's your differentiation. And what was that for you? There's obviously like you talk to customers or prospective customers and you figure out these are the opportunities, but then also you're not gonna be able to build the perfect solution and catch up with what the competitors may have been trying to do for years in a matter of a few months.[00:36:39] So you, you always have this gap in terms of, okay, the product is new, where we're kind of an unknown quantity. We're trying to play catch up. We're trying to solve these problems. How, how did you tackle that and how did you sort of figure out, okay, based on what we are capability today, this is the way we should differentiate ourselves.
Steve Carroll: [00:36:59] Yeah, no, I think it's a great question and obviously whenever you have incumbents who are in this space for decades, you know, there's going to be elements of that business that you just can't compete with. So where we really set out to compete was we're going to create a product that makes it a better experience for people to apply.[00:37:15] And it makes it quicker for them to get into apartments, but on your side of things, we are going to be the best in the business at taking an ML with the human in the loop approach and a rules-based approach to validating all of these really important things from identity to employment, et cetera, we're going to do that better than anybody else. [00:37:31] And we're going to do that because, you know, we, we think we have the team in place to build the most sophisticated leasing engine and decision trees, you know, in the business. And it's that sort of look like they believe that our data is more sophisticated and when they believe that, that's why they were willing to sort of take the gamble on, on creating these manual headache, because they thought that we were accessing a level of granular information and process that they couldn't get with our other software providers.
Omer Khan: [00:37:56] And then how do you charge for the product? I mean, we talked about the, sort of the consumer piece of this and you know, what your plans had been, but did you take a different approach when you, when you built this landlord solution?
Steve Carroll: [00:38:09] Yeah, I mean, we looked at this and we looked at what everyone's costs were today. You know, they're, they're already paying for somebody to do this for them. So,it's a simple usage based cost.
Omer Khan: [00:38:19] Okay, so it's, what is it? Is there, is there a, is there a flat monthly fee? Is it based on the number of properties, transactions? What is it?
Steve Carroll: [00:38:30] Transactions, rental applications.
Omer Khan: [00:38:32] Okay. Got it. How does that work in terms of late that that's feels like that's a number that could fluctuate quite a bit month to month.
Steve Carroll: [00:38:41] Yeah. You know, actually it looks a lot like SaaS revenue. It looks a lot like recurring revenue because you know, these people manage large portfolios and their leasing volumes and their application volumes are actually quite predictable, you know, over the course of a year, you, you know, how many units are going to turnover for the most part, within a few percentage points.[00:39:00] And you know, how many applications you got for vacant unit. So, you know, we're still, I would say flexible you know, nimble enough to have pricing flexibility on that because those volumes are so predictable.
Omer Khan: [00:39:13] Got it. Okay. There was one other thing I wanted to ask you in, in terms of the, the, the sales process. So, you're doing the cold outreach. Once you get people interested or responding, you're doing a demo. And then what does the sales process look like? How long does it typically take to close?
Steve Carroll: [00:39:37] Yeah, So I think we're, we're very fortunate in where our engineering team has spent a lot of time is making the lift on the operator or the end client fairly easy. So, you know, our sales cycle is, is, you know, in this space, usually measured in months. Ours is measured in weeks.
Omer Khan: [00:39:53] And, and again, sort of just give me one example of, of why you're able to do that better than some of your competitors?
Steve Carroll: [00:40:00] Because we've built out this understanding, you know, with each client, we've gotten smarter about how they're doing it today, and we understand what it is takes to peel off that side of the business for them.[00:40:11] So I think, you know, you look at this and most other competitors are going to want to replace of your software. This is going to be one small function of what they want to have you sign up for. So, to do that as a, is a big rip and replace effort, you know, we've taken the approach of saying, how can we make it really easy to use, Findigs for just this one function today, not disrupt anything and, and have our engineers have the framework to be able to implement this without having to go and rip and replace everything about your operation. So, so it's, it's sort of that nimble and sort of tactical approach that we've taken on peeling off this, this piece of it.
Omer Khan: [00:40:47] When I looked at the, the Findigs website up in the navigation, you have four for landlords and for tenants. And so my initial impression was, oh, they, they built this for landlords. And then now it looks like they're doing something to make it easier for tenants to pay their rent as well. And then when we started talking, you were like, no, it was the other way around, which is interesting, but sort of going forward.[00:41:13] I mean, you're, you're serving both those customers today. What's the plan. What's the vision? Are you, is that something you're going to continue to do? Are you eventually going to focus because more and more on landlords? Like what, what, where where are you going with this?
Steve Carroll: [00:41:28] Yeah, absolutely. I mean, to me, I think, you know, comes down to the piece of the transaction that we own, you know, this is, this is historically been a place where there's, there's very little trust on either side.[00:41:39] So if we can get this right, and we can be the trusted intermediary here, you know, not only can we create a more efficient process for our landlord clients but consumers also trust to handle the rental application in a fair and standardized way. So, our vision is very much to balance both sides of this market and ultimately to make renting in general, much easier. [00:42:00] You know, we think that, you know, by owning this part of the workflow, no, there's, there's plenty that can be done to make it easier to apply to apartments, easier to move into apartments, easier to manage a rental. So ultimately, we see this as, as sort of an attack point of upbringing, great UI and great UX and grades, consumer experience to both sides of the marketplace.
Omer Khan: [00:42:18] All right. Great. Well, on that note, I think we should wrap up and move on to the lightning round. So, I'm going to ask you seven quick fire questions. Just try to answer them as quickly as you can, ready to go?
Steve Carroll: [00:42:29] Sure.
Omer Khan: [00:42:30] All right. What's the best piece of business advice you've ever received?
Steve Carroll: [00:42:34] Never treat your transactions like relationships and never treat your relationships like transactions.
Omer Khan: [00:42:40] What book would you recommend to our audience and why?
Steve Carroll: [00:42:43] The culture code, because micro-behaviors matter a lot in startups.
Omer Khan: [00:42:48] What's one attribute or characteristic in your mind of a successful founder?
Steve Carroll: [00:42:52] The ability to understand when they're wrong very quickly.
Omer Khan: [00:42:55] What's your favorite personal productivity tool or habits?
Steve Carroll: [00:42:59] Wim Hof breathing exercises.
Omer Khan: [00:43:01] Oh, yes. I'm a big fan of Wim as well.[00:43:04] What's a new or crazy business idea you'd love to pursue if you had the extra time?
Steve Carroll: [00:43:08] Oh man, there's too many ideas. Let's see. I think that access to venture capital and fundraising dynamics need to change and a startup is going to do that. I think, you know, C pace and clean energy loans are a place that we'll see a lot of validation in the next 10 years. I would love a washer that automatically put my clothes in the dryer, but I don't have much domain expertise there.
Omer Khan: [00:43:28] Well, we have this, you know, I, I grew up in England and, and most people just have a combo washer and dryer, and they're actually terrible. Like your clothes come out, just like so wrinkled.[00:43:45] What's an interesting little fun fact about you that most people don't know?
Steve Carroll: [00:43:48] I'm an avid bridge player.
Omer Khan: [00:43:51] Wow. And finally, what's one of your most important passions outside of your work?
Steve Carroll: [00:43:55] Animals. Yeah, big on, big on my rescue dog and, and helping foster here in New York.
Omer Khan: [00:44:02] Awesome. Well, if people want to find out more about Findigs, they can go to findigs.com and if people want to get in touch with you, what's the best way for them to do that?
Steve Carroll: [00:44:13] They can hit me up on LinkedIn.
Omer Khan: [00:44:15] Awesome. We'll include a link in the show notes to that. Steve, thanks so much for joining me and getting us up to speed on, on your, your journey and the story and I love how all of this business started by hanging out in New York bars.
Steve Carroll: [00:44:36] Thanks Omer. It's been a pleasure.
Omer Khan: [00:44:37] I wish you guys all the best. Take care. Cheers.
- “The Culture Code: The Secrets of Highly Successful Groups” by Daniel Coyle