The Exchanges

Q as a business, like Not only what it offers to customers, but the business model, but you brought up loyalty programs, which was kind of the jumping off point. And I think actually the most, the best foundational way for people to understand your business is to understand loyalty programs first. So can you explain how loyalty programs work? And you can use the example of airlines and credit cards.

A So again, the funny, the funny secret again is that airlines are really just loyalty programs and credit card programs that happen to lease airplanes. Right? And so if you take a business like United Airlines, they have their, their passenger consumer airline, they have their cargo airline, and they have the loyalty program and credit card program. What they've done is they've created a currency, miles, that has outsized value to the customer because the ways you can use those miles and the gamification of those miles. Right? So the ability for you to now take those points and book free flights. Once people get hooked on earning miles, because every time you fly, the airline actually buys the miles from the loyalty program business, right? So it's a really important thing to know. The flying passenger company buys the miles from the loyalty program. The loyalty program issues it like, like a currency and sells it to the airline. What they realized is that it was such a big driver of consumer behavior that the banks who are looking to drive spend on their cards could actually use miles as a way to incentivize you to pick their credit card over others. And so they, all these airlines started partnering with banks, and as now you and I use every day, as you earn points on your card, you can transfer them into miles and use that to book free flights. So when you use your credit car…

AI assessment note: “airlines are really just loyalty programs and credit card programs that happen to lease airplanes”

Q where you were like, shit, like I pay a lot for rent and it just keeps getting more expensive. Like, were you talking with friends or did you go the other route and you were like, let me go down my credit card statement or whatever of like, what are the biggest expenses in my life? And then think to myself, how could it be better with these big expenses?

A I mean, so it was actually, it actually came through first, my experience with security deposits, uh, when I was coming in. So I would move from California to New York and like, California rents are expensive. New York was just like a totally different level, and I couldn't believe how much money it cost me to move into my first apartment here in New York. And at the time, the part that really annoyed me was the security deposit that we had to put down to move in. I mean, I remember telling my landlord, I was like, I have good credit. I've never like not paid a rent payment. You can, you're asking me for references on my past landlords. Like you can check and you want me to put down thousands of dollars.

AI assessment note: “it actually came through first, my experience with security deposits, uh, when I was coming in.”

Q You, you talked about, uh, focus and selfishly, I'm just curious, uh, about how you spend your time. Like look at your week this week. How would you say if you had a pie chart of that showed the different ways you could spend your time from managing to strategy, whatever, you know, all the buckets, how are you allocating it right now?

A So I, I happen to be, I think there's like two different types of CEOs. I am very much of the like, get my hands dirty, really in the weeds and actually build and create. So the way we've organized the company, we have essentially different business teams, if you will, that own different parts of the company, right? Whether it's the loyalty team that owns the rewards and benefits part of the product, whether it's our marketing team that owns our acquisition and brand, Or our growth team that works with our Belt Alliance real estate partners. I spend very little of my time managing people because we have such rock stars that lead each of these teams. What I do is at any given day or any given week, what are the three most urgent fires or priorities? And I spend my time going deep and actually executing and solving those. So it's like right now we are rolling out a payment solution for every apartment building to collect all rent payments through built. So whether you pay by check or ACH or credit card or the built card, we collect a hundred percent of payments. That is my number one priority because that is our long-term distribution advantage over anybody else ever entering the market. So that is like number one. And I spend a good amount of my time personally on phone calls and in meetings with every real estate team, whether it's with their accounting teams, the technology te…

AI assessment note: “what are the three most urgent fires or priorities? And I spend my time going deep”

Q Totally. So that's what I'm getting to. Let's just say you've raised around two hundred million, like in that vicinity. Why raise money? Why have VCs breathing down your neck when you had the freedom to control your destiny exactly how you wanted to?

A To be clear, we didn't allow a single VC into this company up until actually just a little bit recently. Um, I, I think entrepreneurs should do everything in their power to not allow venture capitalists to come into their business. VCs don't generally understand how to run a business. They generally don't understand what your business needs are, and their incentives are not necessarily aligned, especially in the early days. I think as you get later stage, it's a little bit different as you prepare for IPO type markets. For us, we asked a really simple question. Who are the most important stakeholders for us? It's the consumers, and it's our real estate partners, and it's the banks. So we went out and the reason we raised money was to create aligned long-term incentives with all of our partners. And so all of the money we raised was from real estate owners, the banks that we work with, Wells Fargo, Mastercar, the payment networks, And that was it.

AI assessment note: “the reason we raised money was to create aligned long-term incentives with all of our partners”

Q I love it. And I have to ask about this just cause, uh, I'm kind of, you had a great hook in the type of business he's doing now. What, what's the deal with the space exploration business? Like what, what is he doing?

A So we, uh, there's two different things that he's now working on. And it's, you know, I think one of the things that you'll meet my sister and myself and my mom, my little brother. And I think the one philosophy that we have is you don't, you don't have to start a company trying to solve a problem, right? That should always be your starting point. And, you know, right now, What he's been working on is, how do we get things from, like, From you launch things into space. How do you now create that last mile solution to get us to the moon? Right. And so, uh, it's really quite exciting. You've got, think of like the internet in the original days, right? You had point fiber laid under the ocean to get, you know, data from London to New York. That was the most complicated, most expensive part of building this global internet. But then once you get the internet data to New York, How do you get it to every household? It's called the last mile solution. And then once you do that, you can build apps and software and websites and all of that. And so in the space race, you have people like Jeff Bezos and Elon Musk and these who are building the kind of infrastructure, right? The rockets to get from earth to orbit, which is the most expensive, most difficult part. Now what we're doing with Moon Express is saying, how do you create the last mile solution to get, you know, whether it's satell…

AI assessment note: “Now what we're doing with Moon Express is saying, how do you create the last mile solution”

Q What does that look like in the context of built?

A So BILT took, again, a model that we saw work in one space, I'd say, why can't we apply it to the space of housing, right? And so if you think about like the Marriott ecosystem, there's a ton of different hotel brands that they brought together under the one program so that you had enough scale and program kind of like volume, if you will, to make it valuable to the customer, right? Housing's a tricky one because you have essentially like a couple, call it You know, 20 or so large institutional owners and operators, and then a bunch of midsize and regional players and a bunch of longtail folks. And so to even get started in trying to make something work, you have to have access to bring together all of these big players and all these midsize players and get them all to agree that they're going to work under one rewards brand and umbrella together. Now, if you've ever met folks in the real estate industry, the idea of asking for Player X and player Y to work together was like challenge number one, right? And then you realize, okay, if I can get them together, and let's say you get apartment buildings together, there's still forty million people that live outside of these buildings. So how am I going to create it so that anybody can earn points on rent? And then it was, even if you could earn points on rent, it doesn't really matter as you can use the points for something valuabl…

AI assessment note: “get them all to agree that they're going to work under one rewards brand”

Q Do you, do you have any examples of that? Like, do you have any examples of like, basically whether it was with landlords or whether it was just like with anyone where there was something very clearly they didn't want to give on and you were able to structure things in a way where you were able to do a deal with them? Yeah.

A I mean, it, it honestly happens with, with all of these things. Right. And even you look at like, even how we worked with Wells Fargo. I mean, if you just talk to them at the earliest days about this model, it was a scary concept, a new category and all these other things. But if you actually just took a step back and say, wait a second, like, what are you actually worried about? And what's your concern? And what do you actually care about? You find that like all of this stuff All of the, like, usual, we don't launch new programs, we have our established programs, et cetera, was irrelevant if you took a step back and said it's not about the credit card partnership, it's about acquiring a next generation base of banking customers for Wells Fargo.

AI assessment note: “even how we worked with Wells Fargo.”

Q business? And you can take that question however you want. And also how do you not get behind when my visual of you running your business is like, you've been put on like the world's Fastest, strongest Bronco, and you're holding on to the reins, just trying not to get whipped off of the thing. Like, how do you stay on top of the business when it's moving so fast?

A I mean, number one thing, which sounds so obvious, but people don't do it, is focus, right? And, you know, one of my favorite lines is, great companies die from indigestion, not starvation. They take on too much. They say yes to too many things and they forget what their core business is. And I think one of the reasons to be clear why built works is number one, you have to have the right product market fit, right? Does your product actually solve a problem at scale where there's enough people who care enough about the problem you're solving, right? To want it. Two, and by the way, investors tend to be pretty good at asking that question today. Two is, does it have good unit economics to make it sustainable, right? Where you're not relying on hoping that if this works, then you can make money on that. And you know, those businesses are very hard to scale, right?

AI assessment note: “number one thing, which sounds so obvious, but people don't do it, is focus”

Q right way so that their kids aren't entitled? And you've, you've spoken publicly, right? About the fact that, you know, And you, you just, you come from background, you have a family now where you have so much privilege, you have so much opportunity. How did your parents parent you such that you weren't complacent when you, you didn't have to be doing what you're doing right now with Bill?

A I mean, it's funny, right? Like, I've shared this story, I think, with you over drinks, but You know, so I guess the, the hustle, if you will, really started at like 10, 11 when, you know, here I am getting into middle school and we still had this like immigrant Indian culture where, you know, anything for education, it didn't matter if they had money or not, they figured it out. But anything beyond that, like, good luck. Good luck. Right. And so I remember I was, uh, I was almost 11 years old and I was in middle school and I went to a small school and I really, really wanted to get on the basketball team. I thought like, that is how I'm going to be cool. I'm going to get on the basketball team and meet people. And that's the game. And I like, I thought to myself, if I could just show the team that I could dunk them, I'm a skinny little Indian, 11 year old, you know, and I was like, if I could just dunk the ball. Meanwhile, I'm like five, five at the time, you know, then they have to put me on the team. So I saw a TV ad. I remember for these things called jump souls and they were like plyometric work.

AI assessment note: “anything for education, it didn't matter if they had money or not... anything beyond that, like, good luck”

Q Ankur Jain is Silicon Valley's rising power broker. And then like, you ended up, uh, winning some award that was like the most connected 21 year old in the world. All kidding aside, like, how, what are specific things that you've done? Like, or just like, what is your always on mentality for just be having kind of the ear of some of the most powerful people in the world?

A I know it sounds so silly, but I love to learn. And I'm so interested in different problem spaces. Like I have, I'm that nerdy kid who spent the last, like last weekend, I spent six hours using chat GPT to learn about DNA computing through chat GPT and how it compares to artificial intelligence. And I'm just like a weird nerd and I love this type of stuff. Right. And so the irony is like, My inherent curiosity to learn about this stuff has led me to meet a lot of these interesting people. And I think it's just the fact that we, they see me genuinely sharing and something they're passionate about on top of the fact that I then have a platform for them to plug into that allows me to support their work. Right. And it's like with you, with morning brew, like You get to learn about the coolest things every single day, but you also have a platform for folks like me to get support the work I'm doing by talking with you, right? And I think that combination has just been an incredible way that I've gotten a chance to meet some of the most incredibly intelligent and smart folks like yourself through my business.

AI assessment note: “My inherent curiosity to learn about this stuff has led me to meet”

Q that, yeah, they're the building. So there's Tenet who's involved in this, who's getting the rewards for me spending my whatever it is each month on rent. Talk about what's in it for Toll Brothers. If they were to work with Build or any of these programs, and then who else is kind of in this equation that you had to get on board in order to make it work?

A Like I said, if it was so simple, I'd walk it through in 30 seconds. But what I can say, let's just start from the basics, right? For the customer, the problem, what do we want to solve? Like I said, always start with the problem, and what are we trying to solve? I want to make it so that our generation of renters can get rewards for paying rent, can build their credit, and create a path to home ownership. I was just like, maybe I'll actually start with just like an example story of how annoyingly complex just even one of those three was, because it's just, it'll just put some color around it all, right? So we had spent almost a year touring around the country, trying to pitch real estate owners, trying to pitch banks, because to build a loyalty program, you need your own program. Think of it as Delta Airlines, which for us would be the network of buildings. But you also want the credit card business so that you can earn on all the other spend categories. And like, you can earn Delta miles when you fly Delta, but if you fly United, you can still use a Delta credit card to earn Delta miles on that United flight if you use that card.

AI assessment note: “pitch real estate owners, trying to pitch banks, because to build a loyalty program”