Janine Yorio - Reimagining How The World Invests In Real Estate

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What is going on, everyone? Casey Adams here. Welcome back to the Rise of the Young podcast. On today's episode, we have Janine Yorio, the co founder of Compound. Compound is reimagining how the world invests in real estate, empowering investors from diverse backgrounds and geographies to own a piece of the cities they love. Compound is led by an executive team with deep real estate brand design and finance experience. Overall, the conversation that I had with Janine was absolutely amazing. They recently got acquired by Republic, which is the leading alternative investment platform open to all investors. And we talked about building company culture, building an app, and much, much more when it comes to building a quality product that people love. So before we dive into the episode, make sure you share this podcast with a friend. Subscribe. And that being said, enjoy the episode with Janine Yorio.

What is going on, everyone? Casey Adams here. Welcome back to the show. Today we have Janine Yorio here with us, the founder of Compound. Thanks so much for the show, Janine.

Hi, Casey. Great to meet you guys.

Absolutely. So, Janine, I am fascinated by your story of how you created Compound, which is a real estate platform that allows individuals to invest in portions of real estate. So for those that may not know what Compound is, I'd love for you to touch on what it is that you created before we dive into your story.

Sure. So I'd worked in real estate for a while. I'm a little older than your typical viewers and listeners, but the industry had always been really like, it was great to be an insider because it's such a massive industry, but I always felt like in talking to people about it, there seemed like so much they felt they had to learn and get and understand in order to dive in. And I felt like there was a big opportunity to make something that distilled real estate investment down to its most basic Parts. And so I built an app with a team of very talented people. And the app allows ordinary people to invest in real estate in its most simplest form. So usually when people think about their first real estate investment, it's usually a home. It's not an office building, it's not a shopping mall. And so I wanted to take that same type of real estate and take the minimum investment amount down to a number that everybody could invest in. So we took homes in cities that people know and love. New York, Miami, Austin, Nashville, and we brought the investment minimums down to like $100. We took the ownership of those homes, carved them up, and made them available through an app that connected people so they could buy real estate just like they pay a friend with Venmo. And that was. That was the vision behind Compound.

That is so amazing. When did you start Compound?

So Jesse Stein and I started it in 2018. Took a while. So the thing with selling financial products is everything has to be reviewed by the U.S. securities and Exchange Commission. It's a financial product. So that took a long time. That took over a year to get that done, to build the app and to ramp up. And so we finally launched basically just this year.

Okay, very cool.

And I want to say also congratulations on the recent acquisition through Republic. I'd love for you to touch on, because I know every entrepreneur, right, Their goal is to start a product and then potentially get acquired one day or go public. What does this acquisition mean to you and why did you decide to go with Republic?

So Republic had already invested in our company. They actually invested in a round that we closed last summer. So we came to know the team there. And then we launched one of our offerings on the Republic platform. We did it on the app and we also did it on their platform. They thought that their users would like it, and they'd been hearing from a lot of their users that they would love to see real estate as a product. And then when the pandemic hit, we were actually in the middle of talking about how to launch a broader strategic partnership. The world basically ended for a brief period of time and the CEO and I started talking and we realized that the things we needed as a company, Compound, needed to be successful. Republic had a lot of them. They already had a big in house legal team, and one of the most expensive parts of developing our product was paying lawyers. They have a big customer base. They already have 700,000 customers. So they were several years ahead of us when it came to building out their business. They had the technology platform they have a big team of engineers. So a lot of the same expenses that we were spending separately, we could join forces and, like, basically reduce our operating expenses and also shortcut that startup growth process. So it just was like. And I kind of view transactions. They're, like, dating, you know, like, you kind of meet the person, you're like, do I ever want to see this person again? Can I see myself getting married? And Ken, the CEO, and I, we just. It just felt very natural. It started as kind of like an offhanded conversation. And, like, the more we got into it, the more we realized we had a lot of things in common in terms of how we view business building and hiring and risk taking. And it just felt very natural. And we just kept playing it out, and lo and behold, we got to the altar and closed the deal.

Very cool. Congratulations on that. I'm fascinated.

I'm really happy. They're also based in New York City. Thanks.

I wanted to say, where did this drive for entrepreneurship come from and where did this start in your life?

I have been starting businesses since I was a little girl. I have made these breads that were shaped like teddy bears when I was 8 years old and sold them door to door. I mean, literally every cliche in the books. I had a lemonade stand. I had a snow cone stand. I've been starting businesses my whole life, and I think I got to midlife. And I always worked for smaller companies. I realized pretty quickly working for a big company wasn't for me. And then it was. I kind of felt like it was under my nose. Like, I had always been starting these businesses, but I hadn't really thought of that as a career path for myself. I thought of it more as, like, an avocation. And a friend of mine who's actually in this sort of, like, career motivational coaching said, you know, Janine, I think the answers to your professional happiness are right under your nose. Like, what do you love to do? And it was right there. And it was at that point that I decided to take the leap and start something myself. And it's just. It fits like a glove, you know, it's the perfect job for me. I love bringing people from different fields together, and I love doing publicity. I love managing the team. I love thinking of crazy ideas. So it's the perfect role for me.

Very cool.

How did you get involved with real estate to begin with?

So my mother is actually an architect, and I was raised by a single mother who, so she, for lack of childcare, would drag me with her to Projects. And I literally grew up, like, holding a tape measure while she would be measuring things and, you know, drawing on the blueprints. And so I think I grew up watching the building process. You know, architects are overseeing construction, and so that. That, like, very physical, tangible side of real estate was something that I saw. But I'm not artistic, and I think architecture is sort of like the creative plus the engineering side. So I also, like, I'm power hungry. And I realized early on that the people that called the shots were the people that owned the buildings. And that was what drove me to seek out that industry and to find a seat there where I could be the owner. And that, for me, always very seductive. Like, how do you become that, you know, the titan who owns the real estate?

Totally. No, I love that. And I love the vision with Compound, because it's like, you see these massive buildings, and there's investors backed by it, and there's the people that are making the money are the people that have the investment capital put in. So the product that you guys created, even the playing field. And I want to take it back to when you first were about to launch Compound. What were some of the challenges that you guys went through? Because you guys created an entire new concept when it comes to real estate investing. And I'm sure there was a lot of hiccups in the road.

Have you ever seen that meme that's, like, what people think success looks like? And then, I'm not gonna lie to you, we have had some bumps along the way we had. We started down One path with. The SEC is a nightmare. It's a government agency. Like, if you think the post office moves slowly, the SEC is worse. And you have to. When you're trying to do something new, you have to convince them why it's not more risky than the things they've already approved. And that is just. It's slow. Like, they take weeks and months to respond. It's not like an email where it's going back and forth. So we went down one path. It didn't work. We had to basically scrap everything, start all over again. And it's. I think that's kind of. The birth of a company is always much more bumpy than people are willing to admit. When I look at companies that succeed, there's always the truth and there's the mythology, you know, and the truth is always much messier. And there's a lot more false starts and moments where you're, like, looking over the edge of the cliff. And then in hindsight, when you have a massively successful company, think of all the mythologies surrounding, like, the starting of Airbnb or Uber. They tell you one version, but the truth is, I promise you, those founders were sitting there late at night, like, wondering, how on earth am I going to fund this company? Lying awake, panic stricken, and we had all those moments. But I think I'm also a big believer in the Hegelian dialectic, which is creation always happens after destruction. And sometimes you have to, like, scrap it all and start all over again in order to make something better. Especially, like, I think I'm really big on design, and design is so hard because sometimes you have to take what you made and just flush it because it's. It's not quite right. And, like, trying to tweak it is worse than just starting all over again and starting fresh. And, like, it's a hard process to be a part of, but when it works, it's so gratifying.

Yeah. When you say design, are you referring to, like, for example, a mobile application or the technology itself?

Yeah, everything. I mean, everything from, like, okay, logos, those are pretty easy. You can't go too wrong. But when you think about the user experience and the app and, you know, we originally had in our app this super cool. We spent a fortune on it, this 3D video, but it fell flat. Like, we thought it was going to be the coolest thing ever. And people, people were like, what the hell is that? You know, so things like that where you go out on a limb and you try something and then you get it and it's not great. And that's just part of the creative process, got to iterate and you've got to try things in order to make something that's different.

I love that. What have you learned when it comes to user experience? Because I'm building an app right now in the podcast industry and just hearing these little bits and pieces, I'm already getting takeaways. And I'm sure the audience is as well. So what have you learned when it comes to user experience? And how did you guys address that from the beginning?

So, like, I think of moments in apps, like, obviously the beauty of designing a mobile app is it's so small, you know, it has to sit on a screen. But there are moments when certain apps just, like, take your breath away, and they're oftentimes not where you think they are. Like on Uber, for me, it's the little car on the map, Right? Like, the fact that you could call the car without ever calling a car that's great. But the moment they took your breath away when you saw it for the first time was seeing the car on the map. There is a. An hr, like a human resources payroll provider called Gusto, which is now a unicorn company and it's the most boring company in the world. They do your payroll, but they have this dancing pig that happens when you log in and it does this little like hula dance and they change it sometimes. Almost like the Google doodle.

Yeah.

I'm telling you, the reason why I never changed payroll providers and I get all these people calling me trying to get is because that little dancing pig. And I think it's those little moments that surprise and delight that really give people, like a really strong brand affinity. And it's really hard to figure out what they are. And it's not just about utility. Utility is great. But those moments where you really capture people's imagination is what differentiates what you're doing. We spent a lot of time, our app has these GIFs for each city. Because what I wanted to do was remind people that even though they may not be experienced real estate investors, that they actually know a lot about different cities. Like you mentioned, you live in Arizona. You know, I assume you know Phoenix pretty well. Right. And you may not be an experienced real estate investor, but you know where the good corners are and the bad corners are hot. Restaurants and the new neighborhoods. And those are all the things you need to know when you're investing in real estate. You do know a lot. And so I wanted those like 10 second videos to remind people that their familiarity with the city forms the basis of understanding what makes a good real estate investment. It's not this esoteric spreadsheet that you start with. It's location, location, location. And like, we were trying to. How do you communicate that without like just that same old icons and text. You know, every website has an icon and text. We made these gifs about each city that are like short music videos.

Yeah.

And like those are little things we tried. I think that was a great one. The 3D video didn't work out. But sometimes you have to try these things to jog that emotional connection people have to a product.

Yep.

Very cool.

When you guys were launching the app on the platform, what was your launch strategy to begin with when it comes to marketing and just getting the word out? Because I know that pivoting point for a lot of entrepreneurs is when you know you only have one time to make a first impression. So what was that like?

I'm not sure. We got that one totally right, to be honest. We again, through our missteps, had time. And so we were able to build a big mailing list, you know, because it took us so much time to come to market. We had a decent sized mailing list of people that were waiting when the app dropped. So that was helpful. We've always done really well with pr. I think I've always found that the press likes new ideas. They tend to like female founders. And getting some strategic placements in the press is always helpful. It's not helpful only from an awareness standpoint, but it's from a social validation. When people see that the New York Times or the Wall Street Journal have written about you, they think your company is much bigger than it really is, you know, and you can give off that perception of success long before you actually have it.

Very cool.

I want to take it back because a lot of young entrepreneurs that listen to this show, they're starting their first companies or they're, you know, getting their company off the ground. If you were to give yourself advice to, you know, janine starting compound 2018, what advice would you tell yourself?

Be gentle with yourself. I think it's a very like all. I'm a big reader of blogs of other people who have been through it because I find it very comforting to know that the journey you're on is not unique. It's something a lot of other people have felt like. I remember for me, it was very eye opening when I watched the movie the Founder, which was about Ray Kroc, who started McDonald's and there was a scene where he's out to dinner with his wife and friends and he realizes he can't relate to any of them. He doesn't want to talk to them about what they're talking about because. Because all he's thinking about is his business.

Exactly.

That scene, that feeling is like. And if you're not talking to another founder, they can't understand. For them, a job is a job and it ends at 6:00'.

Clock.

And then they do other things. When you're a founder, every moment, not only when you're awake, but even when you're asleep, you're dreaming about the business. And that all consuming nature is both a blessing and a curse. And I think learning to deal with that stress and learning to kind of be in that seat with all of the pressure around fundraising and hiring and business development and product, product development is really hard. And like, just learning to deal with the stress, I think for me was the biggest that was the biggest shift in my life. I'd always had jobs that were high pressure, but I'd never been the front man taking all the arrows before. And like having to deal with that stress and learn not to freak out over everything, I think was the biggest change for me. It came, it happened, but it took. It took honestly like a year. For the first year, I couldn't really eat, which was wonderful for different reasons, but, you know, it was just, it was so stressful.

Yeah. I want to ask you, when it comes to fundraising, like you said, what experience do you have in fundraising and what have you learned through that process when raising money for an idea?

I think that despite what you hear, I think raising money, the first check is often the easiest because at that point you're selling, I always call it, you're selling champagne in a dream, you know, and people can project onto you this vision of massive success because you haven't done anything yet. So it's all hopes and dreams. And then once you start doing things, there's only disappointment. Right? Because everybody's hoping that you're like uber out of the gate and very rare does that happen. So from that moment on, it's much harder to fundraise because then people can. Then it becomes all about metrics. You know, that's the word that you always hear. What are your metrics? What are your KPIs, what are your month over month? XYZ. And it's very difficult for it not to be disappointing, right, because everybody's hoping that you're that, you know, black, black sheep who comes out of nowhere and builds this massively successful unicorn company in three months. And that's so rare. But once people realize, oh, she's on a sort of slow, steady growth trajectory, it's another one of those meaning another possibly very viable company, but unlikely to be that out of the gate, huge home run that people were secretly hoping you would be. It's harder to fundraise. And I did find that to be true for me as well.

When you guys originally launched, did you launch on mobile and desktop or was it just an app to begin with?

We launched on iOS and Android, but we didn't. I mean, we had a website, we always had a website, but the app itself was only on mobile. And then we subsequently launched a web app, but it's much more limited in functionality.

Got it. What made that choice clear for you guys? I know a lot of, there's a lot of web based platforms that are very successful. What made you guys go all in from an app perspective.

I think the fact that we wanted to focus so much on the younger consumer, we saw the success of Robinhood and we wanted to be part of that ecosystem. Like when we thought of the things that we wanted, we wanted to be on the phone of somebody who has Venmo, Coinbase, Robinhood and we just wanted to be on that same Apple sub menu. We wanted to feel like we're part of that ecosystem. And yeah, web apps, great, but it's not how people that are of a younger generation transaction and so we thought it was really important to be mobile first.

As a user of Robinhood, I just totally made that connection when it comes to, I use Robinhood when it comes to trading. And from a real estate perspective, you just made that very clear in my mind of the platform itself. And I think a lot of people that get the app and see it and use it, they'll make that correlation. So that's super cool that you guys saw that category. Because I'm 19, there's a lot of 18 to 25 year olds that listen and you nailed it right on the head of that younger individual who's utilizing platforms like Venmo and Coinbase and Robinhood. And I think it's super cool that you guys identified that because like I said, she nailed it on the head for sure.

Well, and now that we're part of public, they're more of a web based platform. They are launching an app. So we, you know, it's when you merge with a larger company, obviously there's always like a little bit of a cultural shift. But they, their users do skew very young as well. So they understand the need for launching a mobile app and it's coming. But we're going to ultimately migrate our app to be part of theirs.

Very cool.

So what cities are you guys in right now when it comes to? If someone's listening right now and they want to go invest into a commercial building, where can they look? Right now.

Today we have three live offerings on the platform. Nashville, Austin and Miami. The Austin offering sold out, but we'll find something new in Austin, bring that to market and then we have some really exciting new offerings coming down the pipeline. We wanted to be responsive to all the population movement we've seen post pandemic. So we're focused on some city, some areas that are just outside of major cities where people have been decamping during the shutdown. So we've got some really exciting stuff there, some more investments that are more focused on yield. So we really want to make sure there's a compelling menu so that people can build a customized real estate collection depending upon what they want in their real estate portfolio. If it's all very speculative, you know, high risk, high return stuff, they can do that. But we also want to be there for the person who's a bit more conservative and give them something that's more of a slow, steady payout.

Totally.

That's super cool. How has the business shifted through the pandemic? I know you guys are based in New York. That's one of the hotspots of COVID So how have you guys adapted to everything happening in the last six months?

So we've all had to work remotely, but that's not unique to our company. And that was pretty easy. We'd always had kind of a half New York team, half remote. Our engineers, our designers are overseas, so it just meant everybody was now remote. So that was easy. What was interesting about what was happening outside of our company during the pandemic is that these direct to retail investment platforms grew exponentially. So we saw Robinhood investors move the market dramatically. Well, the same thing was happening to the alternative investment platforms. Platforms like crowdstreet Public saw record volumes. Republic had the biggest three months they've ever had during the shutdown. And so I think what that showed is, first of all, when people have more time on their hands, they're investing. Investing right now is really fun. Obviously, there's a lot of volatility in the market, and that can make it very exhilarating. There's also desire. There are a lot of cool new products that are allowing people to invest. And I think the stimulus check put some extra money people's pockets, and they suddenly felt like they were more equipped to invest. When you're not spending money on commuting and haircuts, you might have that extra thousand dollars to invest that you didn't have before.

Absolutely. Very cool.

When it comes to, you know, the real estate market, adapting what you guys have built, have you guys had any drawback from seasoned real estate investors, or what does that look like from your experience?

Of course. I think real estate is one of the industries that's very slow to change. It's. It's not a place where people love what's new and different, because real estate is where you park your money after you did that new and different thing, made a fortune, and now you want to put it somewhere safe. There's a big resistance to, like, dealing with the new kid on the block that might, you know, not succeed. And that's not necessarily quite as true in other industries. So it's always harder, I think, to penetrate kind of the old line real estate companies to convince them to try something new. But there have been a couple of massive streams that caught the entire industry by surprise. Airbnb being the biggest of them. It literally came from outside the industry and upended the entire industry. So I think now they realize that they cannot ignore tech and what's new, because if they do so, they do so at their peril. I used to use the example of WeWork also, but obviously that hasn't worked out quite as well. But say what you will about WeWork, it still completely transformed the office industry. It may not have been the massive success that its investors had hoped it would be, but it dramatically changed how we view office space and how we view branded office space, I think, in a way that we're never going back from. So the real estate industry knows they have to pay attention. They know that change happens whether they're willing or not to participate. And they've also seen people make a ton of money, so there aren't too many people who don't want to listen whether they actually want to do it and transact on the new platforms. That's a slightly harder conversation, but everybody's watching to make sure they don't miss it.

Yeah, totally.

When it comes to building team culture in your organization, what have been some of the, you know, principles doing? So.

Like, I think work is. Is a place to enjoy yourself. Like, I. My job is much more than just a job, and I love to have fun at work. I think, like, I'm very big on humor generally. You can see, even in our, like, if you look at our Instagram feed, like, I think being funny is to be funny is to be human. And I think there's so much about investing that's so lacking in that humanity. And I want to be human with it. And we're all very human in our office. We make tons of jokes. Some of them are bad, some of them are good, but you've got to take a risk. I think it's important to be kind, which is another thing that's sorely lacking from both tech and real estate. They're both industries that seem to not only attract people that tend to be backstabbing, but they, they almost praise that. It's kind of the greed is good mentality. And I'm just not. I'm not wired that way. I'm surely ambitious, but I think that I've learned life is Long. And I would rather be known as somebody who's kind than somebody who's so ruthless that I have no friends left when it comes time to take score. So I think our team is really tight. We all get along really well. We're all really different. We have every ethnic background and people from all around the world on our team. Different ages, different genders. But the unifying fact is they're all hilarious and their meme game is super strong. So that's what keeps us all together and on the same page.

I love that the meme game when it comes to corporate culture is. That's amazing to hear. When it comes to just being a female founder. I know it's, I look at that and it's so amazing. Like you said it earlier where it's like, where did I see the statistic where it's like, majority of companies are male founded. When it comes to venture capitalists and just raising capital Overall with you and your team being a female founder, what have been the challenges that you would tell young female founders that you went through or just what was that process like?

So I think one misconception that men always have is they think women help other women. So all these well intentioned men are always like, you should meet this person, she's a woman and you guys would have so much in common. And my response is always, because she's got the same, you know, genetic makeup as 50% of the population, I'm supposed to find common ground with her. Women tend not to help other women. I think it is harder for us to succeed and to raise capital. It's not harder for us to get noticed. I think it's harder for us to actually get the other things we need. And so I find that women actually tend to be a little less helpful. I'm not blaming them. We often have more on our plate. We have families and we have expectations around child rearing that take time away from doing our jobs. But there's this conception amongst men that there's this like very cliquish girls network that has a helping handout for all of them and it doesn't work that way. And I've actually unfortunately found the most helpful people for me, career wise have almost always been men. And I think so then the lesson that can be learned is, especially nowadays where we're talking about diversity initiatives, yeah, it sounds great to ask women and ask blacks and ask people of color how to make the change. But the truth is the men control most of the power structure and they're the ones that can actually help the most. It's unfortunate that that's the way it is, but it just is right now. And I think it's important to be realistic with women when they're looking for who's going to help them because the few female CEOs on the, you know, on the Fortune 500 are inundated with emails from young women looking for counsel. And those women are just trying to, you know, keep their spot, whereas men don't have that same groundswell of people looking for mentorship. And so, you know, I think women have to learn to look to men for help. And I think it's true of all underrepresented minorities that unfortunately we have to look for the people who are in power to help us. It may not feel as natural, but they're the ones who can most likely lend an actual helping hand.

Yeah, absolutely. I love that.

I want to touch on just social media while we're at it. How have you guys leveraged social media to get the word out? I know that you brought up memes and having that personal relationship with the user. How have you guys utilized social platforms to spread awareness for compound?

I don't know if we've used it to maximum effect. I think our Instagram feed is really strong, but we've never really gotten that sort of groundswell of users that I would have expected. Facebook, I'm sort of mistrustful of and I don't think it's, it's the right age demographic for our product. Twitter, I don't know. We've actually done pretty well by Twitter when it comes to connecting with journalists and other influencers. I find Twitter very stressful because every time I go there I find myself fighting. But I think we could probably do a better job on social media. I think we've actually had more success having one on one conversations on Reddit. Reddit's been a good source of social media for us. We like to think about how we might attack, but I don't think come up with a good way to merge real estate and TikTok yet. I think we will, but you know, every social media platform in my opinion is a little flawed in different ways. LinkedIn I find to be just sort of awful and filled with job seekers and people looking for money and not necessarily real customers. So I think my favorite is probably Instagram when it comes to connecting with the demographic that we're going after. But I think it's hard to, to talk about real estate in a square image. You know, it's more nuanced than that.

Yeah, totally.

I have one more question before we wrap up, Janine, and that is obviously you guys recently merged with Republic. What are you excited about after this recent acquisition?

I mean, Ken's vision for Republic is to turn it into the Amazon of investing, meaning that you can search by category and find all different alternative investments. Today they offer startups, video games and real estate. But his vision is much broader than that. And I'm excited to like, I'm an experienced real estate investor and if I want to invest in Paris real estate, really hard for me to do it. Think about how it is for the average person. Why should it be so hard? Why shouldn't we be able to touch down in a new city, you know, drop a pin on a map and see real estate opportunities, you know, within five, ten miles around us, you know, see a Google street view. Like, the way that investing works today is so opaque and it needn't be. And I think the vision for Republic is we're just getting started, but the vision and the potential is enormous and I'm excited to make real estate investing truly international and really easy.

Very cool. Well, where's the best place where people listening today can learn more about Compound as well as Republic?

So we merged Compound Interpublic and the best place to find out about about us is at Republic Co Realestate.

Perfect.

Monarch Legacy of Monsters An Apple Original Series the world is on fire. I decided to do something about it on November 17th. This place, it's not ours. Believe me. The most massive event of the year arrives. If you come with me, you'll know everything. I promise. Monarch Legacy of Monsters streaming November 17th only on Apple TV Plus.