Rewiring Real Estate from the Inside Out

Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. You want tech and tacos, Tacos and tech, you know we got it.

Hey.

Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. You want tech and tacos, tacos and tech, you know we got it.

Hey.

Welcome back to tech podcast host Neil Bloom. I am so thrilled to have longtime friend, founder in San Diego, andy Taylor of RetroRate. Hey, Andy, thanks for joining.

Thanks for having me. This is great, man.

I feel like this has been such a long time coming. We were waiting for this moment.

I know I've been kind of huddling in the shadows, waiting for my time to pounce.

And this is it. We, we're live here at the Top Mark studio, if you will. Topmark Capital Studio. I feel like we're in like this cool little floating bubble of a studio.

I mean, it is actually an architectural element that is sticking out over the streets of East Village.

Yeah, it is cool. And this is new retrorate HQ.

Yes.

And you might go back maybe 10 years back to the Evo Nexus days of you, my company, and your. Our past companies.

Yeah. So this is this the original OG crew of Evo Nexus.

Yeah.

Back when it was at 101 West Broadway. We had the whole second floor there.

Yeah.

And there was a whole central nexus of founders that I've known forever now, good friends that are. That are still scattered about. I know, doing business.

Totally. And some of that is the beginnings of the Interlock Capital story too, which is a group of people who've known each other building together and then investing in each other too, which we'll get to as well. So a lot of background. It also was the beginning of what we kicked off our own little happy hour. I forgot we called that. Do you remember the happy hour we called of transplants from SF to San Diego Tornadoes that you were also a transplant. I wasn't actually an SF transplant, like directly from San Diego. I did L. A to San Diego was mine, but lived in SF twice. But you and I started this transplant happy hour at Tornado.

What we.

You remember what we called it? Was it just transplant happy hour?

Memory gets hazy past like 2019 through 2021. I don't even know.

This was way before that.

Tornado is not even open anymore.

I know, I know. Neither is Evo Nexus. I mean, there's like a whole.

Well, it's not downtown not downtown. You're right.

Sorry.

So, yeah, the downtown scene was where we all met, and it's where we're back now recording. Give us a quick highlight of Retro us, like a 60 second, and then we'll, we'll go back to your backstory and then we'll come back up.

Sounds good. Sounds good. So retrorate is a company that's building technology that allows any real estate professional to be an assumable loan expert. Now, I threw a lot at you. You're like, what the heck is an assumable loan? Those are the kinds of loans that you can actually take over from a seller as a brand new buyer. So let's say you wanted to go out and buy a brand new home. Rather than getting a 7% loan, you could take over someone's 2 1/2%, 3 1/2%, 4% loan. And it takes advantage of the fact that, you know, over 90% of homeowners have a mortgage rate that's better than the going market rate. Actually, it's even worse than that. That's like 80% of people have a 5% or lower rate. And so what this has done is real estate market's all locked up, so buyers have lost, you know, hundreds of thousands of dollars purchase power sellers aren't able to sort of move even laterally into the same home because they get less home than what they're selling their current home for. Real estate agents are hurting because transaction volumes are the lowest, has been since 1984. So the whole market's locked up. And so the genesis for this idea was really as I started to watch rates, you know, drive up when I was working, you know, at Credit Karma, just my last gig, and I was thinking, what the heck are people going to do? How is this whole market going to get unstuck? And, you know, after I left Credit Karma, I started to, like, really dive into it because I'd never even heard of it. I thought it was novel, but some new concept that in all my illustrious real estate career, I'd never heard of this thing called Sumo. And it's just, it's just like dark, lost art that nobody knows about anymore. So that's ultimately, you know, the genesis for this amazing.

All right, we're going to dive into even deeper Genesis and what's the current state? Because getting markets unstuck has a lot of prevalence in a lot of different worlds. I mean, startup world, like everywhere needs liquidity these days, that's for sure. So we're going to dive into that. But you specifically have built a long career in real estate tech. Prop tech. You've heard every term, every five to 10 years as it changes. How'd you go from gaming to, to, you know, prop tech, real estate, tech gaming.

Oh gosh. So yeah, you know, I loved being an engineer, but largely it wasn't that I really particularly like to program in C C. It was more that I just like to build things. And the funny thing is like way back when my dad's a contractor so I sort of grew up on the job site building homes. And I remember you start off day one and you're digging trenches, like you know, a one foot one French from the house all the way out to the street because we're going to put, you know, some, some lines in it and then eventually start to frame. Then you can see maybe you're, you're doing a little bit of carpentry and an electrical work. I only realized that I had this connection like way fast forward once I had joined Redfield. So I left, I left Electronic Arts, I went to business school, got my mba, jumped into Apple, was at Apple for couple years. Interestingly I was there that the year before and the year after the iPhone was released and I worked on some iPhone features I didn't even realize were going to iPhone because none of us knew that iPhone was coming out really. Yeah, I was in photo products so I worked on iphoto again. I studied computer science and photography so it's kind of the perfect fit. Like the technical with the artistry. And we were working on some automatic photo categorization. Well before AI was like really a thing and it was, it was largely to kind of detect people. And so a lot of if you ever go into your phone and it has like a list of like here's, here's all photos of your mom or your sister or whatever, that's like some of the early tech that cool. And I had no idea that it was going in. I was like, why would you ever need to automatically categorize photos? Like you got like 15 photos.

Yeah.

But in a world where basically you can take like you know, 30,000 photos in a year and it actually made sense. So left Apple and went to go into the startup world. Because I basically, I thought to myself, if I've lived in the Silicon Valley and I've only ever worked for like electronic cards and Apple Big Mega Corpse, I could never really say that I had the true startup experience. So I found my way eventually to Redhead. And I think what it was is I just really wanted to work on a product that was like utterly like addicted to. And at the time my wife and I were looking at homes and I found myself. I think I went, I think I went into my history on my web browser and just looked and said, where did I spend all my time?

That's right.

Then. So I sent them. At the time, Riffin didn't have a job site. It was. I just sent them an email to try to figure it out. It's like jobs at careers at ECC them all. And eventually got an invitation to come interview. And so I was in there from 2009 to 2015 and started out as a lowly product manager one took a pay cut and salary cut, you know, to go work for him. And yeah, at the end of the day, I ended up being, you know, director, product and kind of running, running a big team, you know, between Seattle and San Francisco.

What time frame was this? Like, where was Reddit's place in the market compared to like a Zillow or something?

So Redfin was like basically in this world where it's a funny genesis story between Redfin, Zillow and Trulia. It turns out that all three of those companies were founded by roommates of one another.

No way.

Yeah. And they all went kind of like separate directions. So they all basically started at the same time and just had different, entirely different trajectories because Zillow went the display advertising route. Effectively. If you go to Zillow and you type in 19 104, this is zip code for South Park. Right. Then you're going to find the homes there. But more importantly, you're going to find the agents that have paid to advertise against those homes. So they're basically connecting hot the drop buyers with agents that want to, want to help them out. Yeah, Redfin makes money as an actual real estate brokerage. So they don't get paid until someone makes a commission on a sale.

Right.

Or purchase of a home.

Okay, that was, was that the original business model when you joined? That was the plan to be the agent?

You know, I think it always was kind of to be the agent. I think it probably leaned a little bit more into like automation. Like we can do this on our own. We don't need agents. Yeah, screw those guys. We're gonna cut them out and cut out the fee. And it was y. You know, we're, we're basically. It's always taken this, this tact that we're going to use technology to solve problems that are human made and in doing so we're going to create real extra value. And one of the initial premises of the company was well, we can give you back a rebate because we saved so much money, we don't need it. It was a nice marketing. Now that that turned out not to be the best marketing pitch for the long run because then everyone could brand us as like a discount brokerage and.

Right.

That had long term effects but overall it's always been a very tech forward traditional brokerage.

Okay.

In that sense.

So it grew and grew obviously. I mean it is a major player, obviously. And even during, I'm guessing your time frame there, you saw it.

Yeah, I mean I think I was employee 115 at the company. Something about there and little. In fact we're actually in San Francisco at the time. So even though Redfin is Seattle based, most of the consumer facing development took place in sf. So much of what you see and much of what you touch on the site is you know, built in San Francisco. So I found myself kind of flying back and forth but I would see this thing just growing and growing and growing both in, you know, headcount for, you know, HQ headcount and engineering and product and then certainly agent headcount as well. So yeah, I think by the time I left it was about 1500-1700.

Oh wow.

A lot of growth.

Yeah.

At some point you're like, this is not a startup anymore.

It wasn't. And that's, that's. I love Redfin, but maybe I'll say it was one of the best places I've ever worked. Love the people I work with. All super smart, sharp, I always call it contrarian but not competitive. Like because we're trying to shake up an industry. I loved that we're in this position to be troublemakers in the industry and that we knew we were doing right by how loud people would scream that, you know, oh, I can't believe you're doing that. Yes, we're doing that because it's good people, good for consumers. But yeah, you wake up at one day and you realize it's not the startup that you, you had originally joined. And yeah, you know, you're spending more time doing ABC testing on link colors, which makes sense. That's perfectly valid. And that's what you should be doing when you've got the traffic.

Yeah.

Because that like little small.1% swings can make all the difference in the world. But you go from where we're like, hey, what do you need to do? It's like, well, I Need to build an iPad app. What are the requirements? Build the iPad. Great. That's. That's big, you know, Greenfield, Blue Sky. Like, thinking to text optimizations just wasn't fun, or at least not for me. Yeah, different people have different kind of areas.

But that was your first time experiencing that because you said you'd been in big tech before, but you already had this feeling where you're like, oh, it's. I'm not doing the big impactful thing every day.

Well, exactly, yeah. It's like when you bring in big tech, you don't realize that a lot of things you're working on are, like, really relatively small in the grand scheme of things. And then once you see it at a startup and you realize, oh, my gosh, these things, that if I was at that big company, it would have taken me two and a half months, and now I'm able to do it in 15 minutes. Yeah, sign me up. Like, that's. That is a. That is a feeling of liberation. Yeah, that's a. That's a feeling that allows you to learn. And really, you know, I don't have to go to committee. I don't have to ask, like, 15 people to do these things. I can just try it out because I think it's the right thing to do. And that's. Honestly, that's like one of my hiring philosophies, too, is like, how. How adept is someone at going after it and just, like, being on their own and making the right decisions because they know it's the right decision.

Yeah.

But anyways, yeah, so I left Redfin and didn't know what I was going to do, but found my way to a role that I'd never even heard of, called an entrepreneur in residence. Eir, a lot of you probably know what this is, but if you've never heard of it, an entrepreneur in residence is kind of a sweet gig. It basically means get paid to go work at a VC firm, and your job is to effectively scout for them. You help them out on deals. So I would help. And I was working at Social capital up in the Valley poll also, so I'd help them out on deals. I'd help them out doing diligence on, like, you know, companies. I'd sit in on pitch meetings and get my thoughts on product. The neat thing about that, too, is that you get to listen to all these pitches and then ultimately get to stay in the room with the VC stock smack or ask very thoughtful questions about the. About the companies. And usually the outcome, you're There for, like, six to eight months is a pretty common time frame.

Oh, really?

Oh, yes. It's. It's short. They're shortcakes. It's kind of like a lot of people describe it as a landing pad for people that are in between jobs.

Okay, so you're looking to join one of those companies?

Maybe.

Well, yeah, it is usually one of three outcomes. You either join a portfolio company for. For. For the VC firm, you. You join the firm itself and continue on in the VC world, or you start your own thing. And so at that point, I decided, I want to start my own thing. And I don't know what it was. I think it was somebody. My. My joke was that there was a lot of people coming in and being able to say, once you get to the point where you actually have a live pitch with a vc, you've already been vetted.

Yeah.

You've gone through, like, tons of comments. So if you get there and your pitch is like, garbage, which sometimes they were, then it really gave me confidence that I could actually do this myself, because I was like, look, I worked at a couple, you know, I've worked at Big Mega Corps. I worked at, like, you know, small startups. I know how to build products. And some of these pitches just don't make any sense. I. I thought I could do better. And, yeah, call it hubris or whatever, but I went after it. And so we started this company called Approved. And to do that, I actually ended up recruiting one of my. My close friends and. And co workers from Redfin. I had just left, so I didn't.

Recruit him out of.

Out of Redfin. Just so, you know. Yeah, he just left and, you know, and I started this thing. I think he was on my hiring committee at Redfin, so I'd known him for, like, a decade at that.

Oh, wow.

And we had a good, like, you know, close communication style. We knew we could do this. So we were building mortgage point of sale technology at a time when mortgages just were terrible. Yeah, go. And the whole idea is like, when you go from Redfin, where you can type in 1, 2, 3, Main street, land on a really beautiful details page and get all the information you want, and you go into the mortgage world and it's like stone age, like.

Yeah.

Beating on other people's skulls with, like, femur bones. It's just. It's ridiculous.

Yeah.

So we're like, we do better than this. And Rocket Mortgage hadn't launched yet. And.

And did that also come from roommates as well, too?

No, it Was funny because I remember we, we are just about to launch approved, which is mortgage point of sale. We thought, oh, we've cornered the market, nobody knows about this stuff. And then Rocket Mortgage spent like I think $10 million putting together a Super bowl ad. And, and we're freaking out like what does this mean? Like they just trumped us. But actually what it meant was that every lender on earth actually wanted this technology. So we would go around and sell proof technology in a white label fashion to mortgage lenders, brokers, whomever, anyone who didn't want like a really crummy experience for the consumers would use approved. And it turns out that what we built was a really great Legion business.

Yeah.

Because we had all these applications filed of people interested in homes they didn't even have to complete a transaction. It was just use this to just get pre approved.

Pretty much, yeah. As a matter of fact, I mean it's sort of like in a world where basically technology lets you get approved pre approved or lets a thousand people get pre approved in the same time it takes to pre approve one person over the phone.

Yeah.

With a person on the other end. Loan officer. Then that's really great. And yeah, that just, that just leans into the fact that people, especially people who are buying a home, they're, they just got home from work and they put the kids to bed and you know, the Traffic's from like 10 to midnight and you pre approved people when they're sitting in their underwear in bed and waiting to go to bed. So it worked out great. And that opened up a whole new category of people that we could sell to. And so that was anyone who's doing Legion, anyone who had great people based advertising, credit, karma, nerd wallet, Zillow. Right. All the above. So we went out after them in earnest.

Okay.

So that's right when I met you, I think you started approved and you, you enough moved to San Diego.

Right.

For we start approved in San Diego.

Yeah. So we'll call it like, you know, you have these like midlife crisis. You're like what am I doing with my, with my life? And you know, it's convenient from San Francisco to, to Palo Alto. Yeah. Like driving down the peninsula is, there's nothing that'll spike your blood pressure like that. It's, it's pretty terrible.

Yeah.

Even though they're not that far away from each other. I think the kids were all at this was like this perfect confidence. The kids all had to switch schools because they were basically graduating from elementary or you know, whatever. Is next. My wife's company had just been acquired, so she was free agent. Free agent. I had just left Redfin and I was working as a EIR at Social Capital. And so I was a free agent. And we said, what are we going to do? We thought about moving to like doing something crazy like let's go move to Australia or Argentina or take a sabbatical somewhere. I was starting this company though, and I wanted to be, you know, within sort of lying distance of the major centers. And you got to keep in mind this is 2015. So this is all pre Covid, pre remote work. The prevalence of like cameras and this, it just didn't exist. So the infrastructure wasn't there. So you really had to be present in many instances. So we decided to, to come back. Yes, I'm originally from, from San Diego, you know, born and raised and left for the Bay Area for college and went to Stanford and then Berkeley afterwards for grad school and thought I was going to be there for the rest of my life. And when it came time to kind of figure out really truly where do I want to be? I really wanted to be in San Diego. And so at the time I didn't know really anything about it. I grew up in my little neighborhood and I really experimented much. And I think I googled neighborhoods in San Diego that are like San Francisco and really seriously. And I got a result from like Airbnb. They had those like neighborhood pages at the time and they were highlighting south park and north park. And so I went on to Craigslist. It's all within an hour, right? Yeah, I went on to Craigslist because that's where you still found apartments for rent. It's not where you go now. Found a place that had a open house for Friday. This is two days later. Flew down Friday morning, went to the open house, FaceTimed it with my wife. Oh, wow, look at you way ahead. Yeah, FaceTime with my wife, put in an application. And then that night when I was flying back home, I got a. The landlord called, say, hey, you got it. You've been pre approved. Yeah, that's it. So I got home within this all within like 48 hours, 72 hours of like making that decision. It's like, I guess we're moving to San Diego. Like we.

Let's go. You didn't apply it to Evo, Nexus or anything yet. It was just. Let's just.

I had done my research and I knew that these, these sorts of things existed. And yeah, so I knew about San Diego Venture Group. I knew about the Connect program.

Yeah.

Although they weren't connected at the time.

Time. Yeah.

I knew about Evo Nexus. I was starting to think about those things. And so we had kind of started the process of, of putting it together.

Okay.

But certainly when I knew I was moving to San Diego, that, that made it, you know, a real deal there.

Yeah.

And you had a sell nav on this too.

I had to sell, yeah. So not only had I convinced this person to join this company, I was like, yeah, move with me to San Diego. And he said, all right, if you can go and get, if we can get funded and this is a real thing, you know, not that it's not a real thing, but it's sort of like, you know, if I'm going to like go and move cities that I need to, you know.

Yeah.

I need to know that it's, it's real, then let's do it. And so we moved down and it was the best decision we ever made. It was really, it really, really is good. Yeah, I, I love it down here. I feel like the, it took me. They were screwing things. Right. One of them was people weren't responding to emails past like 5:30. And I took that initially as a what are people doing? Why aren't they working harder? Why aren't they doing this? And then actually what I realized is that people have a healthy respect for work life balance. You understand, especially at the startup world that it is a marathon, not necessarily a sprint now. Make a mistake in the startup world for a long time now. And I realize that actually there are times when it is in fact a sprint.

Right.

You have to sprint. You have to understand when is it a sprint and when is it the marathon and when you transition between too.

Right. You can't burn people out on a sprint every day because then you can't run the marathon.

Yeah. Because then you're just burned out. You're just like trimming through and.

Right.

I, people are going to differ with me on this.

My philosophy, that's the, and that's the criticism of San Diego in general is that just people just don't work hard enough or long enough because they value quality of life more. It's like, yeah, we found balance to get the things done and then go do the other things that we also.

Need to get done. It's kind of like ruthless prioritization. I remember when I was at Redton and you know, we found out that we're pregnant with our third child. And one of my reports, who was just Having his first child was freaking out because he was wondering, how am I going to do all this? How am I going to juggle the amount of work I have with raising a family? I said, look, having child's the best thing that you can do because it forces you to be. To ruthlessly prioritize what you're working on.

Yeah.

You really have to think, what is it? And that's actually. That's. Honestly, that's the startup. Needless.

Yeah.

Like you. The neat thing about a startup is no one's telling you exactly what you need to do. The scary thing about a startup is no one's telling you exactly what you need to do. And so you need to every single day, put together a list of like, these are the things that I need to do, and this is the order I roughly need to get them done in. And this is like, how much time I give myself.

Yeah, that's what it is. I know from, you know, the point you need to get to, it's on you to carve the path straightforward for sure. So you and Nav in San Diego. How did he like San Diego, by the way? Because I know eventually he. He's still there. He stayed up in San Francisco right after the acquisition.

He did. After we found out that we were. We built this like Legion, you know, monster. We started receiving some offers and through a strange turn of events, I showed up at a meeting trying to sell credit karma on this technology. I wanted them to use it, you know, as a front end for their own mortgage business. And it became very clear that they wanted to part of the company. And we had just closed a round of funding. I wasn't. I really wanted to give it a shot, like, go do. Do the startup thing on my own. So we pushed them off for a year and then when it came time to raise a proper seed round, we opened discussions again. There was. Thank goodness they're still, you know, interested because that was. That was it.

Wow.

They were really good kindred spirits. I felt like they had the same general philosophy and, like, shaking up the financial world the way that Redfin had had shaken up the real estate world. And so very similar philosophies. Really great, you know, founders, good people. I love working there too. Yeah, it was good. So, yeah, we sold in August of 2018.

Oh, wow.

Like three years, right?

It was a.

Three years. Three years from start to acquisition.

Yeah. Which is pretty quick. But the funny thing is, again, this is all free remote work. So we were down in San Diego. We just moved down here we're like, this is it. Bought a house. Kids had just started school and then we found out we're being made offers for a role in San Francisco. Which I have to say was pretty tough, right? Because like my family's down here, my extended family, mom and dad, sister, everyone, we had just like, you know, moved down here. And that was a big move. Like you're going north to south like that. And for me to have to say, hey, by the way, we're going back up, that was, that was rough. But the kids had just started school, so for a full year I was doing the commute thing. So fly up on a Monday morning, 5:30, come back on Thursday night. It was fun for about like two days. And then I'm like, there's so much Breaking Bad I can watch.

Yeah, totally. I remember talking to you throughout and I remember you always saying, can't wait to be back in San Diego. You know, like. But first you had to move the family up. You had to be at Credit Karma.

Yeah.

For how long did you end up being in Credit Karma then?

I was there for four years.

Oh, wow. Was it a four year earn out? Like was that kind of the plan when they acquired you?

Yeah, I mean it's, it's. I mean usually it's not uncommon for, you know, acquisitions to be like, you know, 50% or some percentage of is in cash and the other 50% is, is, is vested. And people take the equity that you had that was sort of unvested from the startup, turn that into company equity, the company that's acquiring you, and then that gets reset and the whole Silicon Valley works in that standard four year testing cycle. One year, Cliff. The rest of three years is usually monthly or quarterly. Yeah, investing. And so that's what we did.

Okay. And Credit Karma was growing leaps and bounds then too. So you're watching your equity just continue to grow there as well.

Yeah, well, exact. Well, but it was all private company too.

Right.

So yeah, we, we watched them grow, I think. So we went from, you know, a 10 person startup here in San Diego. We, we got acquired and everyone but one went, went up with us and we joined Credit Karma. Actually most of them are still there, which is great. Yeah, I think that's speaking volumes to like how good a company credit card is. And we were there for, for four years and after year two it was, it was announced that they were being acquired by Intuit. So we went from a 10 person startup to a 1500 person, like series A ish, B ish, kind of feeling company even though they're beyond that to a big 30,000 person. Like you know, public, public megacorp. Yeah, you know, and it was great. I mean it's, I don't, I don't sort of. I think it was the right move. Thank God they didn't try to go public like right during COVID That would have been disastrous. Intuit was very good in the deal. They still continue to honor the terms of the offer. Great leadership team there too. And yeah, they did a good job like integrating that.

So yeah, another company that has this big San Diego presence into it, which has huge San Diego office.

Absolutely. Well, that's all. That's, that's where Turbo taxes right down here in San Diego.

Yeah.

Acquired by Intuit in like the early 90s, I think.

I don't think I realized that was an acquisition too.

Yeah.

TurboTax was its own company started by two people in San Diego and I think in the 80s maybe and acquired in 91, 92 or 93.

Where are those two people and why aren't they LPs in?

That's, that's what I'm, that's the question to ask for sure.

We're working on it.

We'll get them on. Anyone here, early listeners, come join the pod and let's talk about it.

For sure.

I love that.

Yeah, that's, that's the TurboTax Mafia, right?

Yeah.

And they're one of like the original like design thinking companies.

Right.

They have this hardcore like pro design principles that you see a lot of people spin out of TurboTax Group who are just like experts at product design.

Well, I think it's, it's, this is my philosophy. If you can take any sort of design ethos, good customer experience and apply it to a really shitty experience, then you've got yourself a winner.

True.

Right, so mortgages, real estate.

Yeah.

Finances like trust and will. I mean things that otherwise don't have any sort of front end or like terrible experiences. These are things that are like great startup opportunities.

True. Yeah.

Generally expensive and so you. Wallet credit karma. And during this acquisition I remember you kind of going into like their new products or ventures area. So you were starting to look at a wider range of stuff.

Yes. So I joined Credit Karma as the general manager of the mortgage team which is called the home team. So don't want to call it home because people are like the homepage, like. No, no, no. It was the, the, the mortgage vertical. They were doing rate table based advertising to you know, credit Karmas 150 million members and then we would connect them with top 25 lenders across the country that could do right by them based on what they were. And it's. I know a lot of you probably use LendingTree. You go, you put your information in, you hit go and then like literally your phone explodes.

Yeah.

Because there's so many different offers that hit you up and like they're not data, they're just like, they're just.

It's spam.

Yeah, spam. And so what we did is we're like, well let's use technology, like the approved technology to do a one to one match. And so that's the difference.

Right.

I'm not on, you know, tinder, I'm on match.com because I want you to go out, go on that date, get married, have kids. Like it's a long term relationship. Right. Like we get paid the relationship if we make a financial match. Yeah, that makes sense.

And the incentives are aligned, better aligned there.

Exactly. I eventually did also take over a what we call like the new ventures sort of group and it was basically let's look at other startups in the space that working there, like potential acquisition targets for credit karma into it or could be. You know what happens is like as you grow to be a bigger company, you face the classic innovators dilemma.

Right.

We grew the mortgage vertical from like 4 million to you know, 100 million. And once you're at 100 million, like you know, annual run rate, you know, something that's spinning off $4 million doesn't look as interesting.

Yeah.

But you want to always sort of keep it in the back of your mind that this 4 million could be.

The next one, could be the next hundred million dollars.

So how do you do that? We have a whole team that's job it is to basically project out and try to you know, read the TE and figure out the future.

Amazing.

So that's what our team did.

Smart to even start that as a private company.

I thought so.

Yeah.

Yeah, I think it was very, very.

I think I even met some of your colleagues because we did some deal review of other prop tech stuff within interlock with you and some other credit karma people.

Fantastic.

Yeah.

So thanks for bringing them into the fold. All right, so this is your what a what an experience to go from big tech, VC and then startup back to big tech again?

Yes.

What's what powers you to want to go do the next thing like start all over again?

You know, that's the question I ask every day when I wake up in the morning. Because like the first time you go, you start something, you don't know what you don't know. You don't know like the, the slog that you're going to get in. Like, yes, there's a freedom to it, but like, it's also like when I said credit karma, I had a team of 15 people whose job it was to like market the things and build all the assets and on the, on social media and you know, handle SMS marketing. And now I'm just kind of doing.

It on my own.

And you sort of forget, you know, all, you know, how much like resources and support you had.

Yeah.

Second time you don't forget that you know that it's out there and how much hard work is going to be. And so there is a little bit of like consistent insanity, I think, that's involved in starting companies.

Yeah.

Starting companies is a completely irrational thing. Like totally. The, the most likely outcome is going to zero.

Yeah.

Just statistically the most likely outcomes go to zero. Yeah. So you don't do it because you, you think you're, you're going to chase fame and fortune. You do it because it's something you want to do, you feel passionately about.

Yeah.

And so that's certainly the case with Retro, which we started. And again, the genesis for that was, it was just something I'd never heard of before. And now you fast forward. Like if I started in 2009, so it's been 16 years that I've been real estate tech and hearing about a brand new concept that you've never heard about is kind of cool.

Yeah.

Like it's, it's like you're in Harry Potter and you discover this new spell.

Yeah.

And you're like, oh no, Voldemort's in there. It just, you know.

Yeah.

You don't know. Like, well, what is this? Go explore this area.

And so, and, and it's existed, it's existent, it's just kept under the radar for whatever reason. Consumable loan lore.

Yeah.

It turns out that if rates are like really, really low for extended periods of time, there's no, there's no necessarily need for assumable loans even. Even though actually like in practice what ends up happening is like rates kind of jump around all the time. So there's, there's always room for rate arbitrage.

Arbitrage.

Yeah.

Is effectively what it is. But yeah, no, this is popular and like you know that the early to mid-1980s and it turns out that because there wasn't technology really, to speak of that Internet, there was no way of doing process automation. People completed loan applications on pen and paper and they taxed everything.

Yeah.

If you found someone even had a fax machine. True. And so everyone who used to do this has retired or, you know, got your died and they're, they're not in the business anymore. So no one knows how to do this. Everyone had kind of forgotten, forgotten about it for a long time. And I was reading this article, I believe it was in the Wall Street Journal, and, and no one was doing this. They're like, what happens if rates rise? What about assumable loans? What is that?

Yet someone's still pumping out assumable loans. Like the government is still being like, here you go, soldier, have a government assumable loan.

Exactly. Well, as it turns out. And so everyone says the first question I usually get is like a, is this real? Yeah, is this real?

Is this legal?

Is it legal? We think I'm in crypto. Come on. Sorry, Cryptograph. B, which loans? How many of them are there? And it turns out that every government loan, DAFA is just immediately simple. Something written into the contract that says you can assume this loan. And that's great. What it means is that loan originators, when they originate a VA or an FHA loan, they take on less risk because it's backed by the federal government. So you, you don't have to worry about that one necessarily like defaulting in the same way that you would standard 30 year paper. And so the deal you make with the devil in that regard is that, you know, it has this assumable loan clause which means that someone else can take it over. That's. That makes a lot of sense. Right. The government's job, you know, at least in creating this VA and FHA programs to get more people loans. And one of the ways you can do that is you can allow them to be transferred. It's good for, you know, not just people that are like, you know, unrelated buyers and sellers. It's also good for people that like, imagine like a, a veteran couple and you know, one of them dies and the surviving, surviving spouse wants to take over the loan. That's a great thing for them.

Yeah.

To be able to take that loan over, you know, rather than getting a brand new 7%.

Yes.

Take it over and continue to make the payments.

I didn't picture it that way. I thought it was more because, you know, active duty have to move a lot and maybe they.

That is another reason. Yeah. Okay, so it's basically it's there to support, you know, our military.

Yeah.

And getting them at homes. And I think that's a, that's a good, noble cause.

Totally.

And I think adding some level of automation and process automation, you kind of see like a pattern here. Right. Improved was all about like process automation on the mortgage. Mortgage fronted. This is all about how do we apply process automation to the mortgage suitable space so that more people can take advantage of this thing.

Yeah.

And it's, you know, it's an interesting problem because it's also a problem that people don't know they even have. They don't know that exist.

Right.

But consumable loans are growing about 140% year over year in terms of like transaction volume. 25%, depends on who you talk to. Roughly 22 to 25 of all the originated loans are government loans. So it means. That's a lot. Those are all suitable and means there's more of them out there than you think there are. Totally. So.

But it sounds like you're saying none of the parties involved even know that this clause is in there. So the home buyer, the seller, maybe the Lynn. I guess the lender knows that they've got that.

Well, the lender knows, but they're, they're not incentivized to like not necessarily tell you that it's right. You know, they don't, they're not going to tell you, hey, by the way, as terms of your contract, we're required by law to allow you to transfer this. They're not going to tell you that. No, they will get a brand new 7% loan. Of course they want that. Interesting. And so it's interesting because you have all these assumable loans out there and there's a ton of them. But even listing agents, those are the agents who are representing the seller in the home transaction. They don't even know they have. They're selling this house that comes with an assumable loan on it. And that's a, that's a. Think of the assumable loan because it comes with a house. It's like just a piece of the house. I mean, they're going to sit all day and talk about stainless steel, you know, appliances and granite countertops. And they don't talk about the number one thing that comes with the house, which is the fact that like you could save thousands of dollars a month.

Yeah.

Like it's huge.

A month.

Yeah, A month where you're going to save half a million dollars in total interest.

Yeah. No appliance stacks up to that right?

Yeah.

Your LG dishwasher is only going to last for 10 years and get a new one.

Here's like a free adu, you know, just plop down in terms of cost.

Yeah.

And it's, it's a very, it's a very, you know, calculable, you know, number that you can put in terms of the financial value that you're creating for someone. And the problem is of course, like this identification problem, like knowing which homes out there have these things on them, knowing precisely what it's going to save you. Because in the normal world you go out and you, you're going to get pre qualified for, you know, a loan and it's going to say, Neil, you qualify for this rate. Therefore, with the amount of money you have to put down, this is your upper bound on the homes you can be looking at. You go to Redfin and then you look at homes that meet that criteria. In this world it's a little different because you could be taking over someone's loan. But also all the loans are different. Like they all originated in different days, meaning they, they have different terms. The different terms remaining, they have different rates. Even homes that are like side by side by exactly the same person could have vastly different rates. What they, what their credit score at that point influences it. So there's so many different things. You go, you, you apply and you're looking for these homes. They have these different, you know, rates on them and these different like, you know, loan terms and you have to kind of flip the search process on its head in order to kind of find these things. And so that's what, that's what we're doing at Retro Raid is we, we started out first and foremost by just trying to build the, the world's best corpus of, of single blown information. And it's really dirty. Real estate information is incredibly dirty. I mean it's, it's like you're talking like mainly entered in information originally from the, the listing agent.

Yeah.

You know, I painted into an mls, like, you know, engine. Then it goes into, after it's sold, it gets into property records. That's going into like a county recorder's office. Yeah, Deeds. Sometimes it's typed into a computer system, sometimes it's typed onto a card and filed away into like some Dewey Decimal system land, you know, and so, and then keeping track of like the rates at the time they originated. Like we're talking about information that most sellers don't have. Even though you start making payments and after a year you don't even remember what your rate is. Just like that. You just remember your monthly payment. So what we've done is we've taken all that information, the, the MLS information, the property records, the, the, the, the rate information, automated valuation models, like how much we think the home is worth and we put it all together and we were able to sort of like then stack, break it against homes. That same home, if you were to buy it on go market with that, the primary. And so we can give you a real sense like in real time, how much is this home going to save you if you were to assume it versus buy it outright?

And this is intelligence that's just as powerful to both the potential home buyer and the realtor. So the realtor knows how to market.

It and therefore the seller. So. Right. If we go back to like what are you trying to do? You're trying to unstake the market. Yeah. Sellers can't move laterally into the same home because rates are so high. Buyers have lost hundreds of thousands of dollars. Purchase power agents aren't doing volume because like the whole market's stuck and therefore loan officers suffer and real estate agents suffer and the whole, you know, industrial complex suffers.

Yeah.

And so it's powerful because if you're a buyer, again, that's the easy and obvious way to explain. Yeah, you can save thousands of dollars a month and you know, hundreds of thousands of dollars in total interest for sellers. You can sell your home for more. And as a matter of fact, in practice what we're seeing is that you'll, you'll put, let's say you put your house on the market for $500,000 and you are expecting $500,000 offers. But the homes that, that are getting consumable offers on them are seeing 50 to 100k, you know, bigger offers. What ends up happening is basically there's, there's the price that you're going to get. But if you're a seller and you're actually selling this other piece of the puzzle, AKA this loan.

Yeah.

Then you should be compensated for that. I think the seller doesn't get all of it. Like you want to split the difference. Like the buyer should get some value out of it, the seller should get some value out of it. But that's a, that's a very real value for. Very cool. Yeah.

Well, congrats on building this. I know I've been watching and waiting in the wings as you build this new company. And us at Interlocker, super excited to have joined you late last year.

Yes.

And so thanks for having us in it. What's so a few things on that. So now that you have built and launched, right, you're testing it, would you say you're live or in beta?

We're live in 10 states and we built up that technology for real estate price. So basically if you are a buyer or seller, send your agent our way, they would use this technology, technology to help sell your home for more or help you find homes you might not even consider. Okay, got it.

So you what? The tools to build products, by the way, have completely changed. I know we've talked about this a little bit.

It's a very different world than it was 10 years ago.

Yeah.

What took us a little about that, like what's it gone through to like actually build product and ship it and actually get it live in the hands of, you know, first users?

You know, I'd be lying if I said it didn't make me feel like a little bit like a dinosaur. I'm not that old. No, I just, you know, play an old man on TV with this, this green beard. But it's kind of crazy like the, yeah, the sorts of things that I would have thought was just science fiction, you know, even a few months ago, the rapid pace of change, especially in terms of like artificial intelligence, it's just mind blowing. Know, I'll, I'll go and put together a mockup. So basically we have a team here in San Diego, we're downtown because I think that's where it's at. We'll talk about that later too because San Diego's got lots of different like nexuses of tech and I will put together a FIGMA mock as the product team and send it over and like just yesterday they took this FIGMA mock and you know, FIGMA itself has tools that will convert your mock ups into like react components. You didn't have to do that. We took a screenshot, we fed it in a chat GPT and it came up with pretty damn good looking code. Yeah, that's remarkable. Yeah, I mean things that, yeah, kind of like just really finicky code like in user interface. Super easy. Yeah, you wouldn't necessarily want to use it for proprietary like you know, back end stuff because I don't know how much do you want to feed the beast on your own proprietary stuff. But like for user interface, great, super fantastic. Makes it, makes it go very rapid.

And now there you don't even have to feed figma. You just describe it in a sentence, what you want somewhere and it gets you all the way to there as well too.

Oh, even that. Yeah, I mean even that is great. I've gotten pretty good at like the prompt engineering. I would say that I don't use a lot of like, you know, OpenAI and chat GPT in my day to day work largely especially for things like marketing. So if I'm doing a blog post post or I'm doing like, you know, social media or whatever, I do still believe very much like authentic. And there's, there's something that's just a little off. You can, you can definitely read it. You can hear it in the tone.

Besides the long dashes, that should be short dashes, which is just a standout.

You know, the real travesty is like I, I love, I love putting in dashes in like all of my writing. And so for whatever reason and like I look like I was already creating like AI generated content, which is just unfortunate for me.

Yeah.

But yeah, I guess I'm just going to have to learn to deal.

You'll have to learn to deal with that. But you have definitely got unique tone to your guys blog post. Like it came right out the gate with its standout content, you know, to a certain regard. It speaks to a very, I think, specific audience.

Yeah.

Which is great. I think that's also very you.

But yeah, you should check it out. A link to blog post. Yeah, I think, I think, you know, our, our tone is always trying to be contrarian but not competitive. We, we like to sort of view things with a different perspective and you. Ultimately we kind of want a little spin on it. Like, let's talk authentically. Let's like, let's have a little sense of humor in it. I mean it's, it's real estate and. But it doesn't have to be boring. I mean, buying house is fun. Really. I mean it's, it's, it can be stressful.

Yeah.

But ultimately, buying a house, buying a new place.

Yeah.

It's fantastic.

Yeah.

Envisioning your family in a whole new spot. It's why people spend so much time on Zillow. Just like imagining, you know, all the time.

Right.

Not just a new house, new kitchen.

And so like you, you. I mean, it's not just a home, it's something that you live in that you experience day after day. And like, and yet most of the experiences are pretty terrible. So like, how do you make it fun? How do you bring it back? And like, I think it should be fun. I think we should talk about it in a, in a positive light and not be sort of like, you know, down on it all the time. Totally. So, yeah, our blog post reflects that.

Totally.

Although, Although I've been told that the blog post, because it is kind of fun, isn't, isn't keyword dense enough and isn't probably like the best for SEO, but like, I don't really care.

I think it's, I think it starts with authenticity and then you add in, you know, the document dark magic that you need to.

For sure. Exactly.

Yeah. And now.

And GBT can help with that part.

That's where ChatGPT can help. Right. Take this article that I really like already that I wrote and help me find ways to like, you know, amplify it.

Yeah, amplify it in every sense, for sure.

Exactly.

You mentioned the San Diego tech scene a little bit. So I know you've got, in the day and age, post Covid, you know, it feels like you got, you build a company everywhere.

Yeah.

Why? And what's the, the feeling within your own company of being a San Diego company? And tell us about, you know, being in a hub of other startups that you're building.

Yeah, I mean, I, I, I think I mentioned it. I alluded to it at least a little bit. San Diego is such a collaborative space. I'm not saying that other spaces aren't like this. I don't, I don't say this to the detriment of any other community, but you come into San Diego and everyone seems to know everyone else, even though it's like sort of, I would say, like at least like medium, largest at this point. Yeah, everyone seems to know each other. Everyone really wants everyone else to succeed. And they're just so giving of their time and helpful in that way. In a way that you don't necessarily see that. At least I didn't see it in San Francisco. Maybe this is more likely in San Francisco, but I just think it's, it's a very collaborative spot because we're not just trying to, like, support each other. We're trying to support San Diego itself as a, as a, A technology center. Yeah, And I love that. I would say San Diego is like, really spread out. San Francisco has the advantage. Like, it's seven miles by seven miles.

Seven by seven. Yeah.

San Diego is like, it stretches from, it's like from Tijuana basically, to Oceanside.

To Oceanside to like, Bo Springs.

Yeah. To Ver Springs. And it's just like, it's, it used to be that there was like really three major centers, I'd say downtown it's like 2015 downtown. It was like the Sereno Valley area and then probably the Carlsbad Encinitas. So those are the three big circle I'm generalizing here. And it was funny. Like, you go. You try to, like, hire someone from, like, incident. I remembered this, like, from the last company. Like, hey, where are you working? Incinitas. Great. Well, we're downtown. Oh, sorry. No one would come down. Which is wild to me because, like, this is the only real place where there's like, an actual, like, a density of public transportation. How trolley and. And. Or the buses. And by the way, for people who don't like trolling buses that live in San Diego, like, I'm coming from San Francisco, man. Like, I've seen some things on the. The Mission 14 bus. Mission 14 bus has its own Yelp page. Like, you should go look. It's one star. It's. It's. It's all kinds of, like, you know, real life.

Yeah.

San Diego, I. I eat a hamburger off the floor of the bus. I swear to God, it's the cleanest, nicest publications.

Yeah.

And now the trolley goes up to UTC area, which is kind of a new hub in its own regard, where a lot of. I think downtown moved to. To utc. To a certain regard.

Yeah. I think. I think Covid was not good to most urban centers.

Yeah.

And San Diego recovered faster than a lot of other urban centers.

Yeah.

And you still see it, but it's still recovering.

Yeah.

But that's one of the reasons why we set up shop here. Downtown East Village. It's really great. Like, there'd be. We're only, like, a few blocks from the ballpark. You can probably see it from here looking out the window and at least.

The corner on a bridge right behind you.

Yeah.

Yeah. And basically there will be days when they're having their day games, and, you know, we'll ship some code and we'll hear the cheering fans from down the street be like, yeah, yeah, we shipped it.

That's awesome. And I. I love that you. I mean, we have this mutual feeling of bringing back the hub. You know, that was not just Evo Nexus downtown, because that was definitely dozens of companies, but every building next door also had a few different companies in it and would converge. So I know we want to make that happen again. And you're doing it by housing yourself in a place that's got, I think, five or six companies at various times, Right?

Yeah, it's. It's true.

Yeah.

We've got top Mark, you know, Mike Nicoletti and they were also former unexs. True. From different companies.

Yeah, they were part of Trials AI at one point and they had their own startup. Yeah, totally.

Exactly. And then there's the Jared also Upcycle. Upcycle, yeah. Also kind of startup. There's by the way there's more spaces opening up and we're trying to figure out like let's just, let's make this whole area hub.

Come on down to East Village here for for sure. Promissory is now starting to be here which is a bit of a spin out team from Trust and Will.

Yeah. Brian. Yeah, Brian and Eric.

Yeah.

And so as well. And so we, we've got Build Day Founder Build Day that we just kind of started to, to try to do like pop up density if you will. Once a month we started one location North County. Second location was Convoy and then this will be our third location will be top mark, our downtown hub. So once a month, third Thursday is what we're calling it every month. Place where everyone can just like real founders can build alongside each other. And so hopefully this is like a bit of a test to see do any of these locations or GEOs, could they sustain a full time hub. So this is like my own little like test.

Yes.

Like which one? What we found was super interesting was when we did the first one in La Costa, people are driving up from Little Italy to come join the first build day. I was like, whoa. And they're like yeah, we have WeWork memberships but we'd rather come be alongside people who are building real tech. Like okay, that's something right there. And now we got downtown going and we're going to add Borrow Logan as our next spot most likely.