Re-Imagining the Lending Experience with Shayne Skaff

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You want tech and tacos, tacos and tech you know we got tacos and tech is on smash border green guacamole keeper countins counting beans Contador Quentan frijoles found us trying to raise some queso la vida San Diego school of rappy rapping fire tortillas round jalapenos in these modern times a crappy beer and coffee My coding yoga posse fold the body origami we be surfing coronado eating tacos El gordo, the taco stand in pesto lucha libre and sombrero Got a shout out to cost angels by the ocean Watch the sunset la Hoya shores Entrepreneurs trying to get funded When San Diego Startup Week is popping in the summer Oceanside, the Tijuana esti be full of hustlers from couch surfing to penthouses right on the beach Tech leaders who believe stars are within reach we interview and founders who be shooting for the Moon SDTechOS with your host Neil Bloom.

Startups get the party, startups get the.

Welcome to the Tacos and Tech podcast where we discover cutting edge San Diego technologies and the builders making it happen. I'm your host Neil Bloom, San Diego's tech ambassador and together you're going to put a face to the name of today's tech leaders with our own blend of local lifestyle. This segment is brought to you by Cox Edge. Our longtime partnership with Cox Business has helped their engineering teams develop new tech products for small businesses and startups. Cox is investing in Edge capabilities and working with developers and engineers across the ecosystem to deliver ultra low latency compute solutions, helping customers to improve application performance and to reduce cloud transport and on premise infrastructure costs. Interested in hearing more about Cox Edge? Please visit coxedge.com and mention Neil Bloom or freshbroodtech.com for our partner discount. And welcome back to the Tacos and Tech Podcast. I'm your host Neil Bloom and I am thrilled to have friend Shane Scaff on co founder and CEO of Bluma. Hey Shane, thanks for joining the podcast.

Thanks Neil. Glad to be here.

Yeah, it's good to have you on. It's good to see you for a little bit.

No doubt. I want to do these in person from now on.

Yes, while eating tacos. Why don't you give us a quick overview of what Bluma is and then we're going to. We'll dive deep into it but give us a quick overview up front and then we're going to get to know you a little bit.

Yeah, no, absolutely. I mean, Bluma is an AI platform that we built to help automate commercial real estate lending. So we've basically removed a lot of the manual work that it takes to basically do a pre flight origination on a new commercial real estate loan as well as help our customers automate how they audit their current loan portfolio. So really helping them work on one end, being a portfolio manager on the other end, originate new loans.

Okay, well, I'm sure over the last two years and really Covid timeframe with real estate on fire as it's been, you've got some good stories so we will dive into that.

Oh boy.

But let's get to know you a little bit. Where'd you grow up? Where are you from originally?

Yeah, I grew up in a little small town called Los Angeles and I went to started in Santa Barbara for my first couple years of college and then moved down and finished at USD down here in San Diego back in 1995 and then never left. There's not a lot of people that come here and then leave to go somewhere else. I was one of those people that just fell in love with the city and it was my mission to figure out how to make a living down here and I've been able to do that, luckily.

That's awesome. Yeah, people can say the same about Santa Barbara. Not wanting to leave there either, that's for sure.

Absolutely. Yeah. Originally I was thinking that, but you know, back in the early 90s, there was not a lot of industry in Santa Barbara. Goleta's certainly grown a bit and there's more opportunity, but I'd still say not as much as down here in San Diego.

Totally. So right out of college, did you jump right into the tech workforce or.

How did you find your way to tech pretty quickly? The real story is I actually moved back to LA for a very short stint because I thought I wanted to be a talent manager. Yeah. Just polar opposite of where I ended up. That didn't last long, Neil. That was a very short stint as I was in the agent training program at William Morris.

I can see you as like an Ari Gold kind of thing.

Yeah, I was trying to be an Ari Gold. Before I knew what an Ari Gold was. I found out that that was not the route I wanted to take. And I honestly, a big part of that was I just wanted to be back in San Diego. For those of us that have been down here a while, we know what the reader is. The reader was. And I don't know. Does the reader still exist down here? I don't even know.

I think it does, actually, yeah.

Does it? All right, so I looked in the classifieds for a job, and I got a job selling hard drives and memory for a distributor in Carlsbad. And. And that's what I came down to do. I was. My first sales job selling memory and hard drives in. I guess that was 1996. Yeah.

Oh, wow. Okay. That's a. That's a cool first job actually, to like to learn sales boots on the ground, you know, as tech's ramping up.

100%, dialing for dollars. And I learned a lot about the hard. The hardcore sale. Then I kind of went up from there. I got another job selling big enterprise computer systems for a company called avnet, basically selling VMs and VAC systems. There used to be a computer company called Digital Equipment Manufacturer, which sold the Compaq, which sold hp. That's where I spent seven years at Avnet. And that's really where I got my idea for my first company, which was called maintenancenet.

Yeah, tell us more how. And I'm curious also, not just where the idea came from, but when you need to take the leap and actually do it, especially with co founders.

Well, I'm super lucky. I am one of those individuals that had a father that talked to him about entrepreneurship and actually the importance of kind of owning your own destiny and carving your own way. And my dad was a business owner. Talked to me a lot about the good things as well as the very difficult things that I would encounter if I had chosen to go that route. I always thought about it. And as part of my 10 year plan at the time, you know, my plan was to start my own business by the time I was 30. And while I was at Avnet, you know, I was open to what that could be. I knew I. Avnet was not my long term deal. When kind of the dot bomb hit in 2000, hardware margins went plummeting. You know, we went from making 30 points of gross profit to single digits. And basically, and you remember this time, I mean, computer systems became totally commoditized and I couldn't make money on selling infrastructure. And so I switched to what I could make money on, which was selling services and software. And that really became the idea for maintenancenet, which was, if I can sell a service contract on a piece of infrastructure I sell today, I could go back next year and renew it, and then I can renew it again the year after that. And that was extremely profitable. Business to sell. So I saw the annuity that existed with software and with service contracts. I have a partner, Scott Heron, and I got together. I went to Scott and said, hey, I've got this idea. I want to automate how I renew coverages for my customers. We built a little MySQL database. It was super, super rudimentary. I was basically using that to notify me when to go renew coverages at my customer base. So it wasn't at this point that I was thinking, I'm going to go and build this company and take it out on my own. I started by just using this thing that Scott and I built. And once I was comfortable enough with my financial situation, meaning I could actually jump ship and have enough to survive for for a little bit, I did. And that was 2004. I quit that job, took maintenance net out and it was a long, hard fought. 12 years.

Yeah. Were you in Carlsbad north county the whole time while building that?

Yeah.

Okay.

Yeah. Our offices were there the whole time. Yeah, we moved in different places. We ended up on Melrose and Palomar Airport Road. And it's actually. If you drive by, you'll see the Cisco sign. We eventually got acquired by Cisco and the building's still there and a lot of the employees are still there as well.

Oh, that's cool. You'd love to see that. That's for sure. Was that Cisco's first presence in San Diego?

I think it was their first San Diego acquisition. We were their 180th acquisition for Cisco and actually John Chambers last acquisition before he left.

Oh, that's cool.

Yeah.

And were you there for a while as part of the acquisition?

We got inquired in 2015. I had a contract that had me there for a year. And so I did stay and help transition things over that year, which was more challenging than I had thought because what happened was the executive that bought us or that led the acquisition for Cisco ended up leaving and going to Microsoft, which left us kind of floating within Cisco, which is never a good place to be. And so we kind of had to resell it within Cisco a couple of times. But yes, as soon as my year was up, I jumped out. Basically. That's. That's when I got involved more with my investing through Mooring and. And then eventually started the sandbox.

Yeah, take us through a little bit of that. Some people jump right back in to start the next company, I think. Sandbox for you. I don't want to take the words out of your mouth, but you were thinking you could help start a bunch of companies. Right? Was that the original thinking?

Yeah. I mean, well, the reality is one, I didn't want to jump right back into operating. I mean, maintenancenet, we weren't a company that was heavily funded, so we raised a little bit of money. In the early days, it was a million three total in 05.

Oh, wow.

Getting through the recession was really hard. I mean, we almost didn't make it through that. And then again in 2010, you know, just. It was a long road. You know, a lot of people think, oh, oh, they're so lucky. You know, these guys, you know, were able to sell to Cisco and make, you know, make all this money. And what they, what a lot of people don't see is what happened over that 12 years, which was mostly very, very difficult things. So I needed a. I needed an operating break. So in answer to your question, that's why I didn't like just jump back into something and operate. Scott and I had set up boring. And we were already making investments prior to the sale. And so we thought this would be a great opportunity once we're totally out, to put more effort into going through deals, putting more effort into actually working with founders that lacked the skill set that we had, which is really in productization and commercialization of the product. At Mooring, we look for really technical founded businesses. They could build product super technical, but they don't know how to package it up and then take it to market, which is really what we're good at at Mooring. And so that's really where we spent our time. We spent our time looking for companies really in SaaS, B2B enterprise, because that's the space that we know that were technically founded, where we can come in and help them on the business side really kind of productize and then take out and help them with their kind of go to market strategy. We made seven investments over a couple of years and we worked very, very heavily with them at first. And then kind of once they get their Series A, we kind of step out. What happened over those first couple years after so I left Cisco in 16 was that we just weren't finding enough here in San Diego. And so we were investing in other states. And that wasn't something that we wanted to have happen. We wanted to stay here. We wanted to help build things here. And so that's where we set up the sandbox. The sandbox, Very simple. It's not like a profit center costs us money. We set it up in Sorrento Valley. You've been there and we really set it up so that technical founders had a place to come and build their ideas. And some of those ideas would resonate with us and we would fund through mooring and others would not. And you know, they can still build in the sandbox and stay for a period of time. And then, you know, we were doing that and that's, you know, we. One of the companies that was being incubated in the sandbox was the idea of my co founder at Bluma, Mike Pursal. We were having such a good time doing it, I decided to actually run it. That for me a lot of what I do happens just organically. I can't do anything that's forced on me. And so I knew that it was just a matter of time where I was working on something that would eventually pull me in enough to where I'd go back in and operate. And that was really what happened with Bluma. We were building the software to really help automate Mike's bank, ABP Capital. And C3 got deeper and deeper involved and we were at the stage of going out to find external capital and rather than go in and bring in a CEO, I decided that I'm going to go take that on. And that was 2019 and haven't looked back.

So you originally built the software for like one customer in a sense, right? Kind of like they're like test pilot. Yes, kind of incubated it in a sense with the first customer. Has it changed much now that you've gone to a whole bunch of other banks?

It has changed from a perspective of initial focus. So we were building the platform, we were going to market in 2020, so January of 2020 and we were going to market initially with the ability to do the pre flight analysis on these loans. Basically means like generally a new deal or in some cases a refinance deal. But when Covid hit there was literally no origination going on, there was no pre flight. So we had to pivot really very quickly to portfolio management. Because what was super important when Covid hit was how is this market going to impact the current loans that I have on my books. Right. And so we were able to show them that. So we can basically automate how different regions were being impacted by Covid and what that impact was doing to kind of vacancy rates, say in one region and you know, if vacancy rates go skyrocketing, what's the impact on the specific loans that a bank might carry in that region? So we could show that to them kind of real time. As that data becomes available, that's really where the focus shift happened. Initially we built the product, we're going to go to market really heavily on the pre flight origination side. And then when Covid hit, we moved to really building out more of the functionality on portfolio management. And now we've got two phenomenal offerings for our customers that are both in the market and we're selling today with great success.

So it probably got you to build that second product quicker than, or sooner than you were planning.

Definitely. Yeah, I would definitely say so. We would have probably gone even deeper on the pre flight side and yes, we would have taken longer to build out portfolio management for sure.

How are you managing not just the company but like your focus over the next few years where you're going kind of with COVID still up in the air like that, like what's the next year horizon look like?

Well, I mean Covid has changed a lot of stuff, mainly on the. So Scott runs day to day at Mooring Ventures, the sandbox we shut down when Covid hit because we couldn't have an incubator, a physical incubator when Covid was around. So we have still three sandbox companies that are out there in the market. And again Scott does all of that operations. And then I'm running Bluma full time and that's where all of my focus is today is on Bluma and we just closed a series a couple months ago and that's really going towards hiring of sales and marketing. And so most of my time is spent interviewing resources to bring on across a number of different departments. So obviously sales and marketing being two of the main departments that we're hiring in and then really helping to take the strategy that we have and the vision to another level. I mean ultimately where we're taking Bluma is to being a marketplace so allowing, allowing lenders and borrowers to come together, having the platform match like borrowers and lenders because we have the DNA of borrowers in our system and we also have the lenders lending profiles. So what they want to lend against we can very uniquely bring those two parties together very, very quickly. And so that's ultimately where we're going. That's where all of my time is spent putting the pieces together that take us from here to there.

Yeah, commercial, residential, all the above is all commercial.

All asset classes. Yeah, in commercial. So no resident, we're not doing anything in residential today.

What is the change of working from home kind of COVID life done to the commercial industry? Can you speak to that a little bit, yeah.

I mean it's been super interesting. Obviously not fun a year ago. Certainly over the last couple of quarters it's gotten a lot better. But I mean we saw like industrial and multifamily asset classes come back from an origination perspective, very, very strong. And the other asset classes that you would think have suffered like office space and metropolitan areas and hospitality. Right. I mean hotels and such are still crushed. So you know, everything's going to come back and it'll come back at its own time and in a different way. So even, you know, there's still office transactions happening and kind of the way office space is being utilized is going to change a bit. But I don't personally, I'm just giving my opinion now. I don't think it's going to happen in a dramatic, as a dramatic way as we initially thought. What I see people want to get back to the office and so yeah, there's going to be more flexibility I think by employers to allow people to work from home in a different way than previous. But I think the office space is going to still be a real thing. People still want to interact with one another and I know my people can't wait to get back together. I'm actually in my home office now, but we have a new office space being built out in Encinitas right now. So once that's done, we're back in the office.

That's awesome. Another downtown Encinitas company which is cool.

Yeah.

That's becoming a little tech hub between Flock Freight and Equid and you guys, right?

Yeah. We're right down the street from Flock Freight and we're right down the street from ABP Capital, which is our partner at Bluma. So that's going to be super convenient.

For us on the commercial side also something interesting we've seen is just that, you know, landlords or building owners, they're, they're getting creative. Something in San Diego like biotech's coming downtown hardcore like up to 2 million square feet of lab space potentially downtown. That was all planned to have like Google and Facebook. Right. And boom, they're pivoting and finding other, other use cases.

Well, that's what happened is that's what happens, isn't it? Doesn't it? It's like, it's, you know, think like disasters happen and what pops up, you know, everybody thinks they know but you know, nobody really knows and then nothing is ever as bad as you think it is and it's just different. Right. And I agree, like I surprised I've seen the same thing. I, I'm surprised to see biotechs, you know, looking downtown really only because where have they always been? Like right around UCSD area. Right. I mean, that's just been it. Serrano Valley, you know, La Jolla, Torrey Pines area. That's what, just what we expect. But you know, everything has to move somewhere. And I think downtown is a great place. I think there's a lot of, a lot of opportunity down there and I think a lot of it is wonderful things that, that you and startup San Diego has helped kind of revitalize because, you know, the vents down there, you've got tech companies, more tech companies have been focused over the years down there. And so downtown has become this kind of nice place, not this scary place to do business where you can walk to get food and basically, honestly the same reasons I moved to Encinitas, because people want to be in a cool place that is easier to recruit people into, that doesn't require them to drive everywhere. And I think downtown is that cool place.

Totally. And other in north county too has become a hub. Biotech in Carlsbad obviously has grown up too, and gaming as well. Looking back, just like since you've been operating in north county area and maybe just San Diego in general, has it felt like the scene for startups has completely just filled in and more resources or do we still have a long way to go of things we need to provide to make successful companies here?

Oh, I think we have a long way to go of where we should be. Right. Or where we could be. So I'm saying we're at a place that is so much better than 10 years ago. And I think there's just a, there's a long, long, long way that we can take this. And again, I, you know, I had traditionally not been focused on what was happening in San Diego outside of just building my company. It really took getting out of maintenance net to actually talk to guys like you and Ashok and some others about like the startup scene here, because I'd been out of it for 12 years. Really? Yeah. And what I've seen over the past six years has been better every year. I mean, it's just gotten better and better. North County, I mean, Carlsbad, there was like no restaurant options during the days of me in Carlsbad. And now you've got great restaurants and retail opening up there right off of Palomar Airport Road there is that forte. What is it?

Yeah, the breasty area.

That whole breasty area.

Yeah, for sure.

And so, yeah, it's exciting to see. And then the startup game here has changed. I mean, you've got really smart people that are taking the plunge in a way that wasn't happening previously. I think that has a lot to do with the ecosystem. There's more angel and seed investment opportunities and more people willing to, to invest at the seed and angel round here in San Diego. And it's just, it's really nice to see. Obviously Mike Cran has had a massive part to play there, just bringing people that, that can fund, that want to fund together with, with these startups. So yeah, I'm excited by the possibilities and want to, want to be a part of what's going on or continue to be a part of what's going on. Not just with my own startup, but helping the other startups as well.

Yeah, well, you are a big part of it and I think actually what you said about being heads down, focused during maintenance, that probably what we need most entrepreneurs to do first time around, focus, learn the entrepreneur, founder skill set, stack. Right. Then on number two, you're not learning while also doing and you can give a little bit of that time back to the community. So I agree that first time through, you know, be a pro entrepreneur, run a great company, that's the best thing you can do for the ecosystem because it's good for employees, it's good for exits and then have the exit, which also is good. And then once we've completed that loop, you know, then you find ways to give back, which you have in multiple ways. So yeah, your story is a great, not just great for what it's been good for you and your company, but just hopefully for inspiring others to do similar to give back once you've learned and it's been good for yourself.

So I appreciate that.

Yeah, speaking of, the last thing I said was there wasn't a lot of restaurants around. There has always been taco stands in San Diego since the Spanish came here. At least I'm sure. Do you have a favorite taco spot?

The taco stand in Encinitas? I'd say that. And mainly for their homemade tortillas. I love those homemade tortillas.

Yeah, it's consistent and it's consistently always aligned to get in because of that. So yeah, we like the taco stand too. And now it's around the corner from your new office.

I know, I can't wait. Yeah.

Well, Shane, thanks so much for being on the podcast for what you're doing in the community and congrats on Bluma. We're excited for it as well too.

Thanks Neil. Look forward to seeing you in person here.

Yeah, likewise. Cheers. Thanks for joining us on the Tacos and Tech podcast with Neil Blum. Thanks again to Cox Business for helping make this possible by expanding the reach of the San Diego tech ecosystem. Big shout out to at the School of Rap for our rad intro music and this podcast is edited and mixed by Patrick Norton at citizenrecording.com you can find Neil Bloom on Twitter eelbloom and on LinkedIn as well as well as fresh brewed Tech and Tacos and Tech Pod on Twitter too.

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