Andrew: Hey, they’re freedom fighters. Listen to this. Joining me is Ryan Coon, an investment banker who decided he wanted to start a software company instead of going online and going, where’s it going to, where am I going to find my software? Co-founder my, technical co-founder the person who’s going to do all the work.
He goes, I’ll have to figure it out. How to code myself. He spent what’d you spend two years learning to code. Yeah.
Ryan: Yeah, it’s crazy. And thank you for having me. That was our experience. We were stuck here in Chicago, in the Midwest. I didn’t know anyone who could code. And so we said, look, we could go online, go that path. But we also said, Hey, I know a few people who’ve gotten burned doing that. And I’d rather just learn it myself and roll up my sleeves and do it.
And so, uh, some, a lot countless hours learning, learning, going through the huddle, tutorial books built a number of like really shitty. Uh, Twitter, clones, which is what they teach you to do when you’re learning. So, um, a lot of blood, sweat, and tears in that process, but glad we did it.
Andrew: Right. Do you think that was, I should introduce you. Uh, Ryan Kuhn is the co-founder of avail. It’s the platform that simplifies the rental experience for landlords and also for tenants fair.
Ryan: Great. You nailed it.
Andrew: I invited him here to talk about how he launched the company and. Congratulations sold the business. He’s got the full story in him.
We’re going to find out how he did it. Thanks to two phenomenal sponsors. The first, if you’re hosting a website, getting started in business, or frankly just don’t even like your hosting company, you need a better one. Go to hostgator.com/mixergy. The second, if you have a team of people who you’re paying employees, 10 90 nines, international, local, whatever it is, go to rippling.com/mixergy.
And I’ll tell you about those later first. Ryan, do you feel, do you regret. You did it, do you think it was worth the two years of learning how to code before you got up and running?
Ryan: It was critical, I think, critical to our success. And had we not, I would say. It took a lot to build the company. And there were a lot of times where we wanted to maybe give up, frankly. And, I know there’s all the saying of sunk cost and sunk costs. The sunk cost head, but like, I, I kept looking at it.
I invested two years of my life to learn to code, to launch this business. I’m not giving up now. So in, in some ways it was like those handcuffs that kept me, kept me in it and allowed me to persevere when times got tough.
Andrew: Oh, okay. So in that sense, it’s a benefit, but what about, what do you think you would have done better to have spent maybe six months looking for a developer or finding a co-founder.
Ryan: I would also say no. I mean, I think that, um, even to the debt, even today where we’ve got an amazing team of software engineers, On staff who are building code, writing code every day. Um, because I spent a couple of years actually learning. I think our team has a greater level of respect for me, but I’m also able to communicate with them on a different level.
And I wouldn’t have that same, um, same shared vernacular with them. Had I not invested the time in actually learning their side of the world.
Andrew: All right. Fair enough. Um, my goal is to understand how you did this, how you figured out what to create, how you built it up, how you got landlords. That’s a tough market to go after. Right. Um, and then also why you decided to sell, let’s just start with a taste of the end and then we’ll go back into the beginning.
Do you remember the day when you signed the agreement to sell.
Ryan: Of course. Yeah, it was December 15. Um, we’re coming up on the three month anniversary. Um, and so, yeah, it’s been on my mind every day since.
Andrew: Did you do anything to celebrate? Did you get yourself anything you did? What was it?
Ryan: Didn’t necessarily get anything, anything like physical or tangible, but. Um, that day, that evening, my wife picked up dinner from one of our favorite restaurants. We’d had a great bottle of wine, a bottle of champagne, and it was just a amazing way to end what was really a whirlwind. Um, I would say. Couple of days leading up to all of the, the news.
I mean, actually standing here in my home office, in slippers, delivering the news to our team. I mean, um, it was such a remarkable experience.
Andrew: You got into this partially because of a problem you experienced as a landlord, how did you get into owning rental property?
Ryan: Yeah. So if I go back, I mean, I grew up in a family of entrepreneurs. Um, family had a couple of rentals the entire time I was growing up. And then during college, I studied accounting and finance. I did what every most university of Illinois accounting grads do. And they go, they graduate and move up to Chicago.
They take a job on LaSalle street working for a large bank. And so my first role out of school, I was an investment banking analyst working the crazy 90 a hundred hour weeks, creating pitch books, working on deals. Um, and stuff, but that was no time for a social life. So I was making admittedly pretty good money, but I had no time to go out and spend it.
And so I said, look, um, this was also during the, the Oh seven Oh eight financial crisis. And I saw just stock prices were plummeting and I looked at it and I said, you know, if I’m going to invest. This capital that I’m working all of these hours for it may as well be in something tangible, but I can go out and build wealth with.
And so started investing in rental properties, um, and how to translate a lot of fun doing it. But it wasn’t quite as easy as the book rich dad, poor dad makes it out to be so a lot of work goes into it. Um, but
Andrew: example. What’s the hard part.
Ryan: The rental, the hardest part about rental being very honest is any one thing. It’s that lingering like stress it’s that constant?
Just pressure around. Am I doing things right? And when is the next vacancy and what’s the market doing? And when is that next? 2:00 AM phone call coming.
Andrew: The 2:00 AM phone call is what someone’s saying.
Ryan: You know, the water’s leaking, the roof is leaking. Um, and, and one, one tip for the listeners, um, that never happens. It’s it’s, it doesn’t happen, but there’s this like ongoing stress and fear that it will.
Andrew: I know I, you know what, we’ve kind of done that. I remember we had a party, somehow, somebody, it was a small dinner party at our place in DC. Somehow someone broke the toilet. I remember we lived in a building where there was someone to fix everything. And so we called downstairs, we had someone come and fix it.
We expected that out of that type of building out of our other rentals, we might’ve called the next day. So not three in the morning. Like you said, that doesn’t happen, but that’s still gotta be stressful for the landlord to hear somebody say the toilet’s broken. I can’t go to the bathroom in my own house.
Now it’s on you buddy. You fix it right.
Ryan: Yeah, you’ve got it. I mean, and especially for individual landlords, they want to do the right thing. They like all of us. Um, I think landlords sometimes get a bad rap around other just greedy, like money hungry folks. Well, no, at the core, we’re all just individual people. We want what’s best for our renters.
Andrew: Okay. And so you had this whole fear, the other one that you had was, did I even charge, did I remember to pick up the rent? I wouldn’t have thought of that, but you know what. Most landlords don’t use an invoicing system. They’re not using FreshBooks. I can’t remember. Did I charge my, my advertisers and I have to go into fresh book or, well, we use QuickBooks now to go and see it and you don’t have that.
So that was another headache. All right. Meanwhile, you’re in school. Is it worth the Ouachita to have rental properties? Was it worth it financially?
Ryan: It was, it’s always historically have proven to be a great tool for building wealth. I mean, you look at some of the most successful wealthiest families in the country. Um, a large percentage of them have become, have gotten to that place with rentals. Um, and it does pay off, um, there’s some additional work and lack of liquidity.
You can’t just go into your, your Ameritrade accountant hits, sell. I mean, it’s a little harder than that, but yeah, it pays off.
Andrew: All right. So you’re doing all that. Meanwhile, you’re in the finance world and you’re not loving it. Can you give me an example of like a typical day or something that will help me see why you didn’t love it?
Ryan: Well, yeah. So if, if you can imagine you’re, you’re a few years out of school. And you’re in your mid, mid to late twenties and you’re, you’re working these 80, 90, a hundred hour work weeks and you’re cranking away at Excel financial models here. Um, whatever the managing director, who’s the head of the group size is like, Hey, we, we’ve got to meet next week with XYZ company and we need materials and we need a model and we need all the comparables.
Um, Like you’ve had this like vacation plan. You were planning on going away for the weekend, going down to Austin with a group of buddies, uh, to go out party on sixth street or rainy street or whatever. Um, and on Friday afternoon, you get a call from that, like managing director in the group. And he’s like, look, Ryan, I’m sorry, but you got to cancel that trip.
You got to work all weekend and there you reach a certain point in every, everyone who started their career in banking has had this experience, unfortunately. And, um, that, that’s kind of what makes the finance world work is that there are these like people doing this work. Um, I just ultimately decided for myself, life’s too short.
Don’t want to waste doing that type of work.
Andrew: I also remember going into, into finance classes and wanting to finance. Career with this vision of what they’d get to do. And then eventually I got an internship and a job, and the reality of it was not nearly the same. You know, that what they get to do is become like Henry Kravitz, put buy orders on Nabisco, get to buy the whole company for pennies on the dollar.
What they actually end up getting to do is what you described. Do they make good money? Absolutely. But it’s good enough money to have a really good house in a, I don’t know, in the suburbs, a really nice one. Great car. But you’re not leaving anything behind. You’re not building anything for yourself.
You’re facilitating other people’s things with a chance of getting rich. And then you realize rich is not so rich when everyone else in Connecticut is that rich too. And what can you really do if you’re always going to be called out, right?
Ryan: Yeah. I mean, it’s not S it’s not fulfilling. You’re not actually building anything.
Andrew: Like with avail. I imagine you get a handful of landlords, maybe a thousand landlords on your platform, unless you suck for them the next month, you could hope to get 1,100 and keep building up from there. Right. And be better for them than you are for the first hundred and leave something behind.
Andrew: right. So then you’re there and you say, I don’t need this anymore. I got to get a company. I got to do something else. You then think back to how you used to have this problem. And think maybe this is the problem that I should solve. I’m imagining you still had it, right? Because you’re still a landlord while you were working finance.
How did you reconnect with your co-founder? Who you went to school with? What was it about him?
Ryan: Yeah, so Lawrence and I had gone to school together. We actually met, um, and got to know each other, doing group projects during a real estate finance class. And so we had this shared interests, shared passion. And even while we were both separately working in finance, we had stayed in touch and there would be things like.
I would call him up and say, Hey, Lawrence, uh, the city of Chicago just passed this new rental ordinance. How are you handling it? Or can you send it, like, I know you just paid a, paid an attorney to draft up of a new lease agreement for you. You mind flipping me over that template that you used. Um, and so it was just this constant, like we were.
We were experiencing the same pain points and we were trying to figure out there’s gotta be a better way to be these part-time landlords. And we couldn’t find them. No one had built it yet.
Andrew: Is there a community, an online community for, for landlords who own a handful of properties to be able to do what you’re talking about, or is it all just as informal as what you had with
Ryan: It is, this is, this audience is so massively fragmented. I mean, there’s 8 million individuals in the us who own and manage rental properties. And I mean, there’s no good central point where they all come together and. Collectively negotiate or collectively work together or share best practices. And that’s really part of what we’re trying to build here at avail.
Andrew: more than just software. Are you thinking? Avail is also going to be the community where someone who has a property in San Francisco gets to talk to someone else in San Francisco and say, what are the new laws about raising rents?
Ryan: Yeah. Actually, something that we, we kind of beta launched about a year ago is this avail landlord community. And. So not only are landlords coming to avail for the functional tools that we offer, they are engaging with each other sharing best practices, um, maybe selling properties to each other. I don’t know.
Andrew: you know what? I didn’t see it on your homepage, but now I did a deeper Google search and I see it. community.avail.co used a Jeff Wood software. I forget what it is. Got it. So that’s now becoming that place where they get to go and talk to each other here. Here’s one broken water lines, landlord. Question Glen McGinnis asks the question and includes a photo of the damage done to his property.
Okay. All right. So you said this is it. You get together with Lawrence. Why Lawrence? He’s not a developer. What is it that the two of you had that you felt like we need each other to do this.
Ryan: I think that the number one thing when seeking a co-founder, you have to be able to trust that person. And because more in tonight at that point had known each other for about 10 years. We had worked together. We had also invested in a couple of things together. We said, well, we know each other, we can rely on each other.
Um, we’re not going to always agree, but at the end of the day, we trust each other. So that, that for us was first and foremost, everything else you can, other skills you can acquire, but you can’t really go out and acquire trust.
Andrew: All right. Before I ask you what, the first thing you did after you learned to code was I want to know, well, let me do a sponsorship ad. Help me out here. You’re you’re a marketer, right? You’re a person who has to explain tough ideas to customers. My first sponsor is rippling. I kind of the problem that I have with explaining what rippling is, is that it does two things.
One is it’s HR software that lets you pay your people no matter whether they’re contractors, employees, if they’re local, if they’re international, whatever. And then the other one is they do this whole it thing. So if you hire a new person, Ryan at avail, you want to give them a new email address. You want to set them up in Slack or whatever software using.
And then if you fire them, You want to quickly be able to take all those privileges away and all those accounts away from one place. And so they do both. I’ve been thinking, do I just talk about one and let people discover the other, do I say both and maybe risks confusing, but also give people a picture of why rippling so special.
What do you think? How do you handle that type of
Ryan: I mean, we’ve got that problem on steroids, right?
Ryan: don’t, we don’t have one or two things. We have five different essentially front doors into our product. And that’s how I would think about it with pitching rippling is, Hey, they’ve got these two front doors into their product. And whether I go to whole foods for bread and I save for the dairy section or I go for dairy and then I pick up my bread, like I would think about it that way, where.
Andrew: instead of pitching the whole thing, focus on one and maybe say, and they also have this other one and just leave it there. And then the next ad focused on the other one and then say they also have this first thing. Okay. That’s good advice for anyone out. It’s hard to AB test because it’s, uh, the problem with podcasting is I’m just going to be put planting a seed in someone’s head and truthfully Ryan, they’re not going to go and sign up.
As soon as they hear this, what they’re going to do is they’re going to think about it. Then they’re going to be frustrated by something a month from now the live with it. Then two months from now, they’ll say didn’t Andrew. Say something. What was that? Oh, yeah. All right, let’s go try this thing and they’ll go to riffling with EFS instead of peas, and then they’ll end up on rippling.com and then go wait, maybe we should give Andrew the credit.
Maybe there’s some benefit. Let’s throw a slash Mixergy and then it’s tough with that. All right. But the upside is for podcast. Advertisers is they do end up getting the customer. The customer becomes more loyal, pays more attention and, um, and they get branding from it. So right. They’re listening to me and you want to demo and see this or any of their other features, rippling.com/mixergy, rippling.com/mixergy.
All right. How did you know what to put in the first product? I know you put a lot into it, but where did you get the ideas of what should go in?
Ryan: Well, I think lived the problem that we were aiming to solve. Um, and so, because we had been these independent DIY landlords, we knew exactly what we wanted and our one mistake. That was in, there was assuming that what we wanted is what everyone else wants. And what I wanted as a landlord was this end-to-end set of tools that would do a, B, C, D E F G when, and we just way over invested in that minimum viable product.
Andrew: Well, what was in that,
Ryan: looking back at.
Andrew: when you say ABC deed, when you went through the list of, of features, what was on that list?
Ryan: So as a landlord, let’s say you have a single family home, um, that you’re looking to rent out. Well, the first thing that you need to do is you need to list that home on sites like realtor.com, Zillow apartments.com. You need to get renters for your, your unit. Then you need to manage all those leads.
Andrew: right. Okay.
Ryan: need to schedule showings,
Andrew: You need to then, um, I think that you still do it now. Do background checks on people, right. So then there’s that. Okay.
Ryan: background check, then lease agreements. You need to be able to customize and digitally sign the leases.
Andrew: Oh, you even did like the hello sign, signature thing DocuSign. You did. Okay. All right. What else?
Ryan: Well, and Andrew, we didn’t, unfortunately like you as DocuSign or HelloSign, we built our own e-signature
Andrew: Yeah, that’s shocking. Okay.
Ryan: mind blown
Andrew: But by the way, those are huge. HelloSign only does that little thing. Huge company, great exit to Dropbox. Okay. So you did that too.
Ryan: Yup. And then the fourth thing that we did is a rent payments. So moving money from rent, it’s a landlord, both with ACH or debit or credit card. And we can report those on-time payments back to the credit bureaus to help people boost their credit
Andrew: Got it. Okay.
Ryan: And then lastly is helping that guy with his broken water, water pipe track, and manage all the maintenance issues for a home. That was our minimum viable product.
Andrew: This is actually, as I see, I’m looking at the first version of the site back when you guys called it rent rental rent solutions, like rent solutions. Got it. Rent solutions. Yeah. I see that just is a list of things. And I don’t know where my eye would go on that first page. When you finally built it, was it good?
That first version beyond, was it confusing? It wasn’t even good. You didn’t what.
Andrew: And then you took it out. You used it yourself first, right? For your properties. Then you went to your friends and you said you’ve got property. Would you mind using this with what problems did they have? Did it feel awkward?
Ryan: I mean, it was the first, first iteration of the site was buggy. Um, it would crash on people. They would be logged out. They would get four Oh four errors. They would, I mean, it was anything and everything. Um, that, that first iteration is embarrassing to look back on. Okay.
Andrew: I wonder if you were to think back on it, what would you have focused on which feature.
Ryan: I think we, we, in hindsight, we would have AB tested it. We would have probably set up five distinct landing pages and probably tried to drive. We would have said, we’re going to spend. Call it a hundred dollars, a thousand dollars to try and drive traffic to each of those five and try and test and say, Hey, we believe through that thousand dollar budget in a day on rental listings, but no one gives a ass about the maintenance feature like that.
Wasn’t we’ve still got it. It’s got the full budget knowing no one’s Googling it. Um, and probably would have iterated into,
Andrew: And now that you’ve done all these, which is the one that’s the highest value that you would launch, knowing what you know now.
Ryan: I got two answers to them. So number one, um, is what gets people in the door. So I mentioned this like foot in the door, kind of get, get them in the door and then upsell them. It’s that rental listings.
Andrew: Yeah. And that’s the time to when you’re out looking for something right. Where everything is changing in your life. You want to do this right from the beginning. That’s when you’re shopping around for software. Okay. That makes sense. What you don’t get with that is recurring revenue, but you’ve got an adore, an entry point, and then you could build recurring revenue.
That’s one answer. What’s the other answer.
Ryan: It is that retention piece. And what do landlords need to do each month?
Andrew: Collect the rent. So you would have then done the, like the fresh books for rent, make sure that people get invoice, make sure that they could pay. Got it. Okay. Meanwhile, you took it out to people. You got those reactions. It must’ve been gut-wrenching to watch your friends tell you this doesn’t work or to tell you problems or worse to not tell you about problems and you know that they exist.
Ryan: Yeah. I mean our, our early earliest users, a couple of them struggled through and have been with us for. I mean years and kudos to them for having persistence to get through all of them, all the awful early versions. And then we’ve just had some people who, unfortunately, they looked at it and said, this, this isn’t doing it.
This isn’t what I want. And yeah, it was painful hearing that.
Andrew: Um, you told our producer, we would watch what new users did. Like we would say, Hey, you click this, but you didn’t finish that. How helpful was that to be able to go through and ask them, why didn’t you finish this? Why’d did you do that?
Ryan: Yeah. I think that user feedback is so important. It’s so critical being able to really, um, just stand over someone’s shoulder. And really try and get inside that user’s head around. What are they thinking and talking with them. I mean, there, there’s no way to replicate that.
Andrew: You also said to our producer at the, the month before you and she spoke, you said last month we put, we got 8,000 new customers onboarded. We definitely can’t do that anymore. By the way, 8,000 freaking landlords onboarded in a month. That’s huge. Isn’t it?
Ryan: Yeah. It’s, it’s crazy thinking about, like, I go back to month, one month, two of building the company and like, we’d sign up like maybe five landlords a month. Well, yesterday we signed up 400. Yeah.
Andrew: that’s unreal. The scope, the ability that you guys have to grow. All right, let’s come back to that. So when you have so many different things that you’re doing, and so many different features and bug requests, uh, bug bug reports, How did you know what to fix without being overwhelmed? How did you get the product to the point where now 8,000 people in a month, 400 people in a day would say, we want to sign up.
What did you do to improve it so much?
Ryan: I, I mean, I think it’s just that persistence that we go back through it. It’s like, look, every day we have to just get a little bit better.
Andrew: So was it across the board everyday a little bit better? Or did you say we’re going to prioritize this one thing? We realized that the best thing we need or the what’s bringing in the most customers is, is helping them list and rent their properties. Let’s just hack that until we get every bug out of the way.
Is that what you did or did you do across the board? We’ll solve problems as they spring up?
Ryan: Yeah, we’ve, we’ve done kind of a hybrid. So early on, and for a number of years, we would iterate through that product funnel. So we would say we’re going to do a three month deep dive and improve everything around listings the next three months for everything around that tenant screening next three months for leases next three months, rent payments.
And then all of a sudden it’s a year has gone by. And it’s been a year since we visited listen. And so it’s time to go back there. Um, that we did that cycle for a few years. Believe it or not. Now we’re, we’re a little more targeted about, um, kind of looking at funnels and where do people drop off?
Andrew: Without saying we’re giving up any of these features. Why didn’t you say, you know what? No one seems to care about this one feature maintenance requests. They’ll be okay with handling the phone. Let’s remove it and we’ll come back to add it later. Why not?
Ryan: Because even though a lot of people were not using it, some more, some people were, and those people were getting value out of it. And we didn’t have the wherewithal to cut it and take that away from those people. We felt that it was our duty to continue serving and providing them with those tools that they had come to build their business on.
Andrew: By the way, Ryan, why is, why is that such an important thing? Wouldn’t most tenants say the pipe burst. I’m just going to go and call my landlord. Um, it’s their responsibility. She’s going to handle it right now. I’m not waiting for any online tool.
Ryan: Yeah, a big part of that is the ability to have, have records and be able to track it and have that paper trail. Um, that’s the biggest thing that both landlords and tenants appreciate is, um, Then they go to court and say, Hey, I submitted this ticket three days ago and the judge says, prove it. And they’re like, well, here’s a phone.
Like, I, I don’t know
Andrew: Right, right. Let me go through my text messages and see where I said it. Was this clear enough? Or did it happen on a phone call? Got it. All right. That makes sense. So a tenant says I want to put it in and then I want to know that they’re, they know that now it’s being watched. Makes sense. All right. You, um, in those difficult times, how did you in Lawrence keep each other going.
Ryan: Um, I mean, I, one of the amazing things about having a co-founder and by the way, I think every entrepreneur doing building in their companies should potentially think about having. And co-founder, um, one of the amazing things that I’ve found with Lawrence over the years is there everyone has good days and bad days.
We just so happen to, I w I would Zig when you would, and I’d be down, I’d be, I’d be ready to give up. And he just have, you know, had a breakthrough at the product or marketing and he’s on top of the world. And we would level each other out in such a way that really made sure a powerful combination and led to us not.
Andrew: I found that the best relationships I’ve had, not just work relationships, but life relationships. It feels like pedals where I’m really down, they’re fully up. And then we switched positions and by switching like two pedals, we keep the thing going instead of stopping and feeling bad for myself. Um, all right, so you
Ryan: I’m going to steal that.
Andrew: do it.
What’s what’s the lowest point for you personally?
Ryan: Lowest point for me personally, um, was, and it’s hard to pinpoint any exact, but it’s, if you go back, I mean, right. I guess I can share a couple of things. So number one, um, By that a few years ago. I mean, I’m now in my early to mid thirties. Right. And a lot of my friends tried and started my career. Like they’re now reaching the upper levels of, of finance and they’re well for making, you know, mid high sixties figures a year and they’re doing well, they’re crushing it in their careers.
Um, and I’m still banging away at code and working day and night trying to build this company. Um, so I think at times that can get, get people down. Um, and then I would say that the other thing, um, would be, um, And just around, you know, when things didn’t go well with whether it’s partnerships or investors or customers, and I would be sharing our story about, you know, building X, Y, or Z with an investor to get that like rejection email would be somewhat, especially with some of them, those stung.
Andrew: Did you use it to fire yourself up later on? Like I’ll show them. Yeah.
Ryan: Yeah. Um, one of the, one of the, I mean, even in still today, I find that, um, there’s a couple of investors that, um, weren’t particularly helpful along the way. And, um, I, whenever I kind of see the name come up, it’s like, okay, it’s time to like really work extra hard right now.
Andrew: I want to talk about my second sponsor. Usually Ryan, in these ads for HostGator, I asked the guests for an idea, but let me throw out an idea my, of my own for how to use HostGator. I feel like for you, if you were to say Andrew, how could I even use hello skater? Here’s what I’d suggest. The S the story of a landlord would be an interesting podcast.
Imagine if you decided you were going to do landlord interview podcast, you just reached out to your customers and say, I want to know how you got into rental. I want to know how you handle these issues and just make it interesting conversation for new landlords for experienced landlords. To hear how other people handle the issues that they have to cheer them on when things, when, and to see the possibilities, to hear their frustrations and realize, Oh yeah, I could avoid that.
Or, ah, I go through that too. That would be interesting. It doesn’t take much time to record a conversation. You put a little bit of effort into researching them. You put a little bit of effort into recording the interview, but after an hour, you’ve gotten to really understand someone. You learn more, you publish it on your site.
It becomes its own standalone thing that then brings in more potential customers and help feed your community. If you were decided to do that, I would say go to hostgator.com/mixergy, because if you use that URL, I get credit. But also because you get the lowest price from HostGator. And then you just throw up a simple WordPress site.
You start asking people to do interviews. You can host your podcast on Libsyn. You know, where the actual audio files are uploaded to Spotify, to iTunes, to everything with a one click, because Lipson will do it, but have your own homepage where you promote it, where you get to show it to potential guests, where your audience gets to discover you.
And then through that they discover avail. What do you think of that idea?
Ryan: I’m writing it down right now.
Andrew: If, if you decide Ryan that this is something you want to do, put me together with whoever’s on your team or me and our Ari, our producer will do it. We will lay out the whole process. It doesn’t have to be a headache.
That’s like, here’s how you run through guests. Here’s how you make sure that they know what’s coming up here, the tools, boom, and you get it up and running so that Ryan just sits down in the seat, has a doc knows exactly who the guest is, helps the guest shine. And then the audience gets to know Ryan and gets to know the business.
Alright, there you go. And even if I would do that for you and anyone in my audience, even if you don’t use whole skater, the reason I suggest you use HostGator is it just fricking works. It’s inexpensive and it’ll grow with you. hostgator.com/mixergy people. All right. You continue to grow at, at some point you did raise money.
The first raise. What was that like?
Ryan: So our first thing first, very first Caterpillar is, um, we went out to friends and family. We, um, we’re in the Midwest there’s, um, Midwest is a little bit different than. They’re not in the Bay area. Um, in order to actually raise any, any amount of, kind of real money here in the Midwest, you have to not only have an idea, have a product, but you’ve got to have like six, seven figures of revenue.
I mean in order to get venture capital here, it’s like the bars is stupid high. Um, so we went out, we, we, um, Lawrence and I put money in early on. We then raised from friends and family. Um, did that a couple of times, and then we were ready for professional money after already investing call it four years of our life into the business.
Andrew: And you raise 4.2 million series a, um, from a St. Louis, a VC firm cultivation capital, right. Just months before you sell the business. All right. We’ll get into the sale in a moment, but in order to get them to take it, to take you seriously, you had to build up your customer base. One of the problems that you’ve had with avail was there is no real community for landlords.
If I wanted to, in the early days, get new listeners of my podcast, I can go to hacker news, their Reddit forums. There’s now there’s indie hackers. I can name tons of communities. In fact, too many, you get distracted by them for you. What did you end up doing?
Ryan: For us, we, we, more or less like AB test their way into growth. And there were a number of ways, number of things that we tried, most of them failed. Um, but there’s a couple of things that we stumbled upon that worked really well. Um, the one in particular is content. So these independent landlords for some landlords, um, a lot of them don’t know what they’re doing.
They’ve got full-time jobs when rent doesn’t show up on it, what do they do? They go to Google and say, Hey, what do I do rent? And we on, we had created some blog posts, some educational content that said if rent is not paid on time, step one. Call your tenants to ask them, like, did they forget? It’s it’s like basic bare, like really basic stuff, but, um, no one else was doing this.
And so our content quickly got picked up in Google, um, and early on, and even still today, it drives a significant amount of traffic and new user signups for us.
Andrew: Um, and that was you figuring out us SEO in the early days. It was just you saying, I think this is what they’re going to care about. I’ll write it. Who’s the person who dug in there and said, we’re going to figure out search engine optimization.
Ryan: Okay. I mean, that was also my co-taught. That was Lawrence to me. I mean, we were both writing code, writing content and trying to figure out how to reauthorize us for Google and what books, what tutorials can we watch on YouTube around a SIOP?
Andrew: I’m looking to, uh, a modern SEM rush just to get a sense of what’s going on. It looks like you’re even getting traffic from Bing. Is that an intentional thing for you guys?
Ryan: It is a little bit, I mean, there’s, there’s some people who are still using thing as their go-to search engine. Um, and we, we believe in building, uh, an inclusive platform. And so, um, even those folks who are using thing, we want to make sure that they can find us.
Andrew: Why is apartments.com sending you traffic?
Ryan: Uh, one of the, one of the features that we offer is the ability for landlords to come to avail and, um, create a listing for their property and send that listing over to apartments.com with the push of a button.
Ryan: And then when we do that, there’s some traffic that kind of comes back our way.
Andrew: And is it because the listings then also refer to an avail.co link? Uh, got it. Okay. Got it. Got it. Um, is that something that’s that’s public? I feel like I’ve maybe entered a spot with you where you’re not comfortable.
Ryan: No, no. I mean, yeah.
Andrew: Did you work out any P any partnerships with any sites to get customers?
Are there partnerships there or is it just advertising and content?
Ryan: For the most part, it is advertising and content. Um, it really is now that we’re part of realtor.com. Um, realtor.com has a massive consumer audience. And has started merchandising avail and there’s avail links on, on realtor.com in a couple of places. Um, I wish that we could have gotten them as a partner, but for the acquisition, um, probably would have increased our revenue numbers, increased user numbers.
Andrew: Yeah, I see them there. Um, They’re starting to grow in the amount of traffic that they’re sending over to you. They still have not baked, beaten doorsteps.com or duck, duck go. But realtors climbing up there as far as traffic, right?
Ryan: Yeah, they’re climbing and realtor also owns doorsteps. And
Andrew: I see.
Ryan: that’s another one of their, uh, one of their properties.
Andrew: We should then get into the sale. You from early on said, I’m going to think about this as a business could be sold, right? And how did, how did that, how did that impact your decisions day to day and the way you structure the business?
Ryan: Okay. Well, I think that you raise outside capital and you take money from investors. You owe it to them as the CEO of the company to, um, always have in the back of your mind. I’ve got to do what’s right for, for me, for my team and for our investors. And so, um, along the way, had optimized for those things.
Um, and so that impacted day to day in the sense that I was always mindful and kept the list of who are the potential acquire and how do I consciously build relationships? And deliberately build relationships with those people within those companies, so that if, and when they ever decide to go out and want to enter the rentals category, for example, that they think of us.
Andrew: What’s a, what’s an example of how you did that, of how you stayed in touch with someone on your list.
Ryan: Yeah. Yeah. I mean, I, I think it’s somewhat basic networking where, um, I would pre COVID. I made, uh, made goals around traveling and. Spending a certain amount of time in whether it’s San Francisco, New York, Seattle, um, different parts of the country where some of these bigger companies are headquartered and reach out to people and say, Hey, I’m going to be in San Francisco next week.
Um, can we grab coffee or a beer and, um, build those relationships. And when you see them pop up on LinkedIn yeah. Messaged them or like, like what they post, I mean, Um, it’s hand-to-hand like just building good relationships with good people.
Andrew: How did the sale come about? I mean, if you’d raise money in July and sold, when was it? December of 2020. That’s pretty quick. Where did the, where did this all originate?
Ryan: Yeah. I mean, we were, we were not actively looking to sell. Um, and so when, um, we had raised capital, we had, um, coming out of COVID miraculously, we had a couple of unplanned months of profitability. I mean, we are our business and I feel a little guilty saying this. Like, we, we grew stronger during COVID. Um, and so we
Andrew: business, that’s not obvious.
Ryan: Well, I think, I mean, through COVID everyone was looking to go digital and even things like rent payments, um, there was a shift towards digital payments. Um, and so that was something that we benefited from. Um, and then, so, so we weren’t looking to sell, but, um, within a couple of organizations, they, they did say less kind of summer and fall.
We got a few inbound, um, people who I had relationships with reach out and said, Hey, we’re looking at this category. Are you open to talking?
Andrew: Why do you think there were a few people who are interested in the category suddenly in 2020?
Ryan: Well, I think that rentals, I mean, roughly a third of Americans rent their primary residence and a lot of the bigger companies in the space, um, big well-known name brand companies, um, historically had ignored the rentals category. Um, realtor.com was one of them where they had not, uh, invested a lot in rentals and somewhere along the line, they had a strategic decision and they said, this is an area that we want to invest more in.
Andrew: Was it also that, Oh, so it’s the rental market that they were interested in. It wasn’t the management for the landlord management model. It was the, the rental itself.
Ryan: Well, I think there there’s a handful of things where, um, they all, and it makes good sense where these, these big companies are looking at. That service, um, homeowners. Home-buyers right. They’re looking at who are home buyers. Five years from now. Well, they’re renters today. Um, so there’s this like further up funnel, um, type of approach.
And I mean, even read the Fenton who, uh, I believe last week or a couple of weeks ago, announced. Their intentions to, to purchase rent path. Um, I mean, they’ve, they’ve been talking publicly about this opportunity and so I think com um, it is a big, um, big opportunity.
Andrew: I would have imagined that apartments.com would have been one of the suitors because the thing with apart, well, the thing with apartments.com is often they get people to list, but they don’t have that ongoing relationship if they, if they work with avail. And obviously if realtor now, does realtor have a rental marketplace?
Ryan: Yeah. So, um, you were anyone in the audience. You can head over to realtor.com and look for rental properties.
Andrew: So they’re in the same boat where they, if they have avail, they have a sense of what’s coming on the market because suddenly rent’s not getting paid or things are happening, the trigger, the sale, and now they can start to work with the company throughout the rental. Experience when they list during the, uh, the management process.
And then when they come back and list again. All right. What a great acquisition for them at your height? How much revenue did you do before you sold?
Ryan: Yeah, I, we can’t talk specific numbers, but we were growing quickly. We’re a venture backed company. Um, we were doing well, I mean, mid, mid seven figures, I’d say.
Andrew: Okay. All right. And then the acquisition cash or stock,
Ryan: Um, it was, it was cash
Andrew: it was cash? Wow. So now life has not changed. You’re still in the office day to day. You’re still dealing with all the issues still dealing with fraud issues.
Ryan: from time to time. I mean, we’ve
Andrew: in this. Yeah.
Ryan: Yeah. Um, one of the, one of the, or there’s really two areas of fraud where, um, number one, and this is awful that this occurs is, um, individuals will go onto a site like Craigslist, for example, and they will pull photos of a home. And let’s say this form at one, two, three main street, you enter a USAD one, two, three main street as available for rent.
You own this home. Well, some fraudster would come, they would grab your photos and they would themselves go list your property as per rent. And then people would contact them and would actually wire funds to someone who didn’t own the property. It’s awful. Um, it costs renters every year. It’s terrible. Um, second form of
Andrew: happened by the way. There’s this entrepreneurial who I interviewed. I don’t think he’s comfortable with me saying it publicly, but it happened to him. He came to San Francisco, doesn’t have patients or time to go through and look too much. He found the place he liked, he wired the money so that he doesn’t lose the rental and he wired it to a fraudster.
And. I don’t know how it ended up, but last I heard, he was just trying to figure out how to get his money back. I don’t think it’s going to break him, but it was a good five, $10,000 deposit that was gone. And then the terrible feeling of having been ripped off like that. All right. So that’s one. So they list it and then they get paid through you and then you automatically start paying the money to the, to the fraudster.
Ryan: Well, that won’t happen or that shouldn’t happen directly through our system where that can occur is when the renter wires money from their bank account outside of avail, because we’ve now got a lot of balances and a lot of the KYC processes. In place to make sure that people who are using our payment system are who they say they are.
Andrew: Okay. So that’s one, what’s another one.
Ryan: Second one is around payments. Um, and because we’re, we’re processing money from renters for landlord, and we’re moving millions of dollars of rent payments each month. Um, there’s unfortunately, situations where. Let’s say hypothetically, you wanted to both our renter and the landlord account, and you wanted to try and pay yourself and, um, do some nefarious things like, um, people, people unfortunately are try these things.
Um, and it’s, it’s really unfortunate that, I mean, I often think about, um, what must they be going through in life to make them so desperate to want to steal?
Andrew: I wonder if it’s desperation or it’s just w that’s a fun hack. Let me see if I could pull it off. And then that’s the only thing that comes to mind. I don’t know. But you now have a system to block that. Have you been really ripped off? Do you have a bad experience?
Ryan: One or two really bad experiences early on in the company’s existence. And in hindsight I’m, while it hurt back then to lose a couple thousand dollars, I’m grateful for that because, um, it’s a lot different losing a couple of thousand dollars early on, then getting to the scale of millions and then, Oh shit.
Andrew: Yeah. Wow. I love the name of it’s avail.co for anyone who’s listening. What’s the best part of having done this? You came up with the idea, you struggled hard. It’s a five-year experience or so, right. It must’ve seemed like 50. Now that you’re done, what’s the best part. Looking
Ryan: got no hair from it. I mean,
Andrew: It looks good. What is the best part? What’s the part that was worth all that suffering.
Ryan: you know, honestly it was actually our building, our team. Um, and being able to do this and Sharon, um, sharing that experience with so many good, talented people, um, that I think is my favorite part of the part of building this, this whole company, um, has been the experience to interact and work with so many bright, talented people.
Andrew: Hmm. It’s not even that big. How big is your team?
Ryan: Right now we’re about 50.
Ryan: We’re about 50 and we’re still hiring. And, um, so hiring across sales, marketing operations, like, um, it’s, it’s a lot of fun.
Andrew: Well, considering how big you got with such a small team. It’s impressive. Congratulations on getting here. The website for anyone who’s listening. If you are a landlord and you’ve, haven’t digitized, I guess everyone in my audience, if they’re doing anything, they’re digitizing it. Go check out. avail.co a V a I L dot C O.
I want to thanks to sponsors who made this interview happen? The first, if you’re hosting a website, go to hostgator.com/mixergy. I’ll be helping Ryan and his team. If they want it. To create their own podcast for landlords. And the second, if you’ve got a team of people that you’re paying, if you go to rippling.com/mixergy, they’ll make it easy for you to pay them.
Even if they start to move from city to city, state, to state or even country to country, they’ll help make that whole process easier. rippling.com/mixergy. Thanks, Ryan.
Ryan: Great. Thank you, Andrew.