How To Build A Business That Beats Giants Like Airbnb | Co-Founder of Kindred, Justine Palefsky

23:08I think it'll be a lot easier for companies to answer their own questions. Not all of our work was analysis, but a good portion of it was, you know, really digging into a company's data and making an informed recommendation based on that data and analysis is so much easier. I think what management consulting can offer that AI doesn't necessarily replace is the outside perspective. Sometimes just in a company, you're so wrapped up in the things that you've tried in the past or in the politics of your organization that you don't see something really obvious. or um it's politically hard to move in a certain direction um and uh having an external consultant come in can help kind of cut through that noise sometimes and i think ai won't necessarily replace

24:06Olly Fawcett:that component of it got it i've always found a very interesting industry i've never really quite understood why it exists if i'm really honest with you yeah i've always i've always been a bit confused i like again i'm used to sort of small medium side business right we've got you know my main business is a service-based business we've got our clients and you know i'm building i've been building a business and it stayed pretty relatively small comparatively to others but i've known people who've gone into that world and now i know you that's gone into that world i've always just been so interested by i guess i would never engage with it probably because of the size of business if that makes sense but it's also just fascinating to me around that kind of like the consulting side particularly with the teams and the development that are in these big consultancy firms and really like their biggest usps were we've done this for other people multiple times we know the journey you need to go on and the route you need to go on right that's really the value they provide but i do think that what you're saying makes sense around the ai piece because the learnings are in ai you know they're large language models they have that deep rooted learning within them inputting that into you know the questions and answers and the challenges that these businesses have it's just going to become so easy so quickly yeah which is nuts yeah we'll see what happens it's a changing world yeah so after leaving there is this when you went to open door yes now open door was that based in san francisco yes is that a very traditional san francisco business in your eyes in terms of tech i mean you maybe want to explain what it was but was that really like a i can do something that is within the world that i'm kind of grew up in if you will um yeah it's a it was a a tech company with an absolutely crazy premise right um that a lot of people said will never work.

25:46And I was like, great, let's do it. It's a company that allows consumers to essentially buy and sell homes online without needing a realtor. And it's based on this premise of being able to really accurately predict what a home will sell for and how long it'll take to sell. And so it's very risky business, very complex, very hard. And somebody who I really looked up to at Bain actually had just gone to join Opendoor as the 12th or so employee. And I said, you know, if Julia is going to go work at Opendoor, I should go take a look at it. She's wonderful, by the way. Ended up going on to start a nuclear energy company later on.

26:31Olly Fawcett:Nuclear energy company. You guys are crazy. Yeah. So she went to go work at Opendoor and I went and visited and it just felt like this group of some of the smartest people that I had ever met trying to shoot the moon on a huge problem. And I was excited and the energy was really contagious. I'm so glad that I joined because I met so many wonderful people and I think developed a real risk tolerance also, you know, a real excitement for doing hard things, even if they don't work. And, you know, it was absolutely chaotic. And so you built a tolerance for chaos as well. My very first day at Opendoor, I was the like 28th or so employee.

27:21There were about 14 or 15 of us in the San Francisco office and headquarters. My very first day of work, my manager said, we might need you to fly to Phoenix to go meet with Wells Fargo today. And I'm like, today? You know, I don't even have my laptop yet. Like, what do you mean I might need to go?

27:40Olly Fawcett:I don't know what's going to my email, right? And, you know, at around 11 a.m., he came and said, OK, go home, pack a bag, come back, pick me and the CEO up in your Uber. We'll go to the airport. We'll do your onboarding on the plane. And tomorrow we'll bring you to this meeting with a big bank that we want to try and get a big debt facility from. They were like, you're a consultant. You know, you can you can you can do it. So we quite literally flew to Phoenix on my first day of work. the CEO slept at his mom's house in Phoenix my manager slept at his mom's house in Phoenix they had both grown up in Phoenix and me and this woman named Megan who I had you know just met ended up sleeping on an air mattress on the floor of a open door home and you know we didn't have there was no Wi-Fi in the house there were no towels there were no chairs it was quite literally an air mattress on the floor on my very first day of work and I remember saying to myself like this is either the worst decision I've ever made or this is going to be an incredible story um were you really that phased by it because I feel like there's a part of you that's just like this is kind of what I was looking for yeah you know I think I was kind of tickled by it I was like, this is fun.

28:59You know, this is going to be a good story. And I think having worked in management consulting and having not gone to business school was something that allowed me to say, if this all falls apart, you know, I can have a good story for my business school application. yeah um another unfair advantage that i have is that my parents are alive they're healthy and they're local yeah and so if i ever really needed to and i have done this what i need to do i can move back home and get back on my feet yeah and so i think that allowed me to feel comfortable taking these risks yeah of course yeah but yeah it was fun i mean it sounds like a lot of fun

29:46Olly Fawcett:in in working in chaos because i think that in the startup world in to be honest most businesses now within tech within marketing within services within product there is just like very chaotic work environments because whether you're in the states whether you're in the uk if you're trying to build something and innovate it is naturally chaotic and i think a lot of um especially when i've had people or i've spoken to friends who've gone into businesses they're like on the outside it all looks sunshine and rainbows and they're doing great things that automatically for me means in the inside it's utter chaos yeah for you as a high achiever how do you operate well and how do you get the most out of the chaos yeah i think it's um changing how you approach the feeling of discomfort right and that takes uh takes some time uh but i think that as humans we have this natural inclination to say something is uncomfortable or something is painful.

30:46Olly Fawcett:I need to resolve that. I need to fix the pain. I need to make the discomfort go away. And it's a whole different approach when you say this is painful, this is uncomfortable. I'm going to do it anyways. And I don't, you know, if you stop thinking of that as a problem, it's hard. So what? Do you think tolerance for discomfort in the workplace, when I say discomfort, I mean like stress and anxiety and chaos and whatever else that looks like, do you think that tolerance is trending down? Do you think people are getting less tolerant for it? Oh, gosh. I don't know. I think that there is certainly in my experience in San Francisco, there was a huge amount of tolerance for chaos maybe 10 years ago.

31:39Olly Fawcett:Yes. And and I think that, you know, folks who are I think it's easier to bear chaos when you're good friends with each other and in the office and you have some amount of camaraderie. Yeah. To balance out the chaos. Yeah. I think when you're working alone in your room, sitting at your desk, just talking to people over Slack, suddenly the chaos becomes harder to live with. And I think people's tolerance for it goes down. Yeah. It can almost be fun and energizing to be in chaos when you're all in a war room together, whiteboarding. And when you're doing the same thing, but in your separate rooms alone.

32:31Olly Fawcett:it's much less energizing it's very lonely as well isn't it it's very just kind of you're sort of sat there and you're you've got slack messages paying off and emails coming in and you can't turn to someone and just go chat some shit for a bit to kind of reset your mind a little yeah it's kind of that postcode world has really changed a lot of of that right a lot of sense yeah but i would say now you know people who are working at anthropic as an example like that is chaotic You know, there are a lot of people living and working in chaos in San Francisco again. I think it's kind of swung a bit back in that direction.

33:05That's interesting.

33:06Olly Fawcett:So going current. I would just say that, you know, your tolerance for chaos is a huge competitive advantage because most of the companies that have had massive growth or been really ambitious have been extremely chaotic. places to work yeah it's really hard it's kind of what i think a lot of people misunderstand i think in going into if a company says the classic we're ambitious we're doing things differently whatever this is more in the uk market but and it might be the same for what you've seen in the states but that kind of positioning of like we are bootstrapped we're a startup you know yes we might have raised a few million quid or whatever it might be but we're going to do things in a very like fast pacing like in same way and then when people join that and go no i want fast pace and i want chaos the the distance between understanding what that truly means and what actually is i think it's huge like i think it's massively misunderstood when people come into businesses and they go i want to work crazy hours and i'll be here for three years in my mind and like you know i'll get a promotion in that and like we'll do really cool things and it'll be loads of fun and etc most of the time it's pretty difficult work right it's pretty intensive hard laborious boring in some instances but then also incredibly mentally challenging work and I think there's just a bit of a misunderstanding as to what chaos in business really means it's not chaos at a night club that you make it's a very different thing right do you get what I'm saying absolutely and it's part of the reason why we love hiring people who have worked in the startup environment before because everyone will say, I love a fast moving environment.

34:48Olly Fawcett:You're ambitious. You're moving quickly. Sounds great to me. And then they come and say, whoa, this is not what it was like when I was a PM at Meta. It's different. And you don't really, you know, I think some people find it to be thrilling and it's in the right season of their life for that kind of a job. For other people, it just doesn't make sense. And that's fine. but to your point I think people might not know exactly what it feels like you know until they've been there do you kind of think good advice is for people to start small in going into the startup tech chaotic business world is it like starting something smaller and build up don't just aim towards and you just you know postgrad or career change or whatever it might be don't just try and jump into the biggest opportunity you can find with the most chaos do you think it's like a build-up point for that resilience to build or do you just think it's like dive in and best of luck type situation yeah it's a good question and there are many ways for things to work out yeah so i wouldn't you know presume to think there's only one optimal path i will say that in my experience i appreciated having a couple years in management consulting before diving in to the chaos of the early stage startup i think one of the things that bain is absolutely world class in is training.

36:09And I learned how to be an effective person at work and at Bain. I learned how to do analysis. I learned how to be effective in meetings. I learned how to structure my thinking and writing really effectively. And that made me much more impactful than being able to join that early stage environment where you're sort of dropped in the middle of the woods. You startup. And I think Bain gave me the tools to know how to orient myself and start charting my way through the woods, if you will. So I think that having some amount of training just out of, you know, undergrad, and you can get that at big tech.

36:51I think you can get it in consulting. I think you can get it in a lot of different places. I've benefited from that.

36:56Olly Fawcett:I can see it. Yeah. What I would say is I didn't want to stay there too long. The, you know, get some of that baseline training um but don't stay so long that you become accustomed to everything being extremely predictable and regimented and um there's such a hard balance there isn't that because like yeah new chaotic businesses and startups and tech like there is just no time for training right like no time it just doesn't exist yeah and they don't have the you know training and development teams yeah and but it is one thing from traditional business let's call it that i do think is often forgotten about that the value of that like i've done it thinking about my own business we went through a period last year where i was like we don't do any training like we just try and hire people that are better than what we have and that's philosophy but like we're not training people enough we're not like the level of process you put in place but there's a there's this really fine margin where you don't want to become process driven completely and sort of like deep training and they can't do this until this has been ticked off and that's kind of what you're describing but I do think there's so much value in in allowing team to have time to actually develop the skill outside of the implementation right but in I guess in Open Door that didn't exist right there wasn't a lot of formal training um what we did have was a great feedback culture right and I think that's how you can fit it in you know what is a great feedback culture in your eyes um the So a couple examples.

38:27One is enough trust on the team that you could give people feedback and have it not feel threatening or adversarial. Because when it doesn't feel adversarial, you can have lots of open discussions. You don't need to have these formal sort of feedback channels or HRBP to facilitate a conversation. so um when you really trust that somebody's giving you feedback from the perspective of hey i want to help you do your job better um you can have so many more conversations like i remember one of open doors co-founders a guy named jd ross um uh got up and had a presentation on something he was working on came um afterwards came up to me and said okay justine what are all the things wrong with what i just did up there and i said you did a great job but there's thing one two and three that you could think about or whatever, you know, like that's just a, it's just a different kind of environment.

39:26So you can get this in the moment feedback.

39:28Olly Fawcett:Yeah. And then there were also feedback rituals. So we would have regular retros, retrospectives as teams. So we'd have a third party facilitator within the company, but who was not on that team to have a conversation about, let's look back at what we did over the last month and talk about what went well, what didn't go well, what was slowing us down. I actually was the designated retro facilitator for all of Opendoor's engineering teams for years, many years. And I learned so much just by being the one to facilitate that conversation around what didn't go well, what was blocking us, what are the issues that come up.

40:12And I was able to develop a lot of great relationships with the engineering team as well. But having that ritual of carving out time to get together and talk really openly about what we can do differently um is um that's gold especially in an environment where you're moving so quickly you don't have a training and development team

40:28Olly Fawcett:you got to grab your learning from somewhere is there one like key element to giving feedback you think is the most important to consider when you do it yeah it needs to be forward looking and it needs to be specific. Right. So I think saying, you know, that meeting went badly is very unhelpful. It is backward looking without giving somebody a path to how do I make the meeting go better? And it's not specific. You know, the meeting went badly. What does that mean? That just makes me feel bad. It's so vague. Isn't it? Yeah. If it's more forward looking and more specific, it can actually be helpful.

41:13You know, hey, next time we should send an agenda, you know, ahead of time so we can stay more focused. The, you know, that is a suggestion. You could say, you know, it felt like the meeting was all over the place and not very focused. So here's an idea for the future that's more specific. It's more forward looking. and it is received much more like hey i've got your back let's talk about ways to improve instead

41:46Olly Fawcett:of i'm giving you a grade yeah and the other way around i guess the the one key element to take feedback and actually grow from it for you what do you think that is yeah um i think it's presuming trust you know i think it is um uh when somebody gives you feedback or has a suggestion um assuming that it is coming from a good place um that makes you more open to hearing feedback that comes your way i think most people are bad at both sides of it you know like i think i think there's like a lot of people again it goes about the thing we were saying before where like people join companies that they say want to grow but then they won't listen to a single piece of feedback right and it's just like you're never going to grow like ever yeah but i think also i can think of times where i've been terrible at giving that feedback just so bad like emotionally driven frustration comes out you're actually just giving someone a grade i think that's a great i love that phrase like you're just going on that but then i think the challenge for a lot of leaders and i love your perspective on this is that making sure that they're feeling heard in something that's really important to give as a feedback point and that feeling of like i've spoken about this before we're not getting anywhere like that challenge i can imagine for you even open door and the other business you moved on to go into like there must be countless things going on all the time where you know there are repeatable offenses is the wrong word but repeatable problems and they're coming from people they're coming from people not actually understanding what's what's being said and learning and growing from that feedback how do you kind of get past that point um it's a good question the uh you know i i think that you sometimes need to escalate the tone of the feedback um even if you are giving the same feedback from a content perspective yeah you know the the first instance maybe is hey here's a suggestion for the future the second instance might be hey we talked about this last time, but really, you know, would love for us to keep this in mind.

43:58And, you know, if it becomes a pattern, then it's something like, hey, I want to have a conversation about this. And the tone with which you deliver that feedback can, you know, communicate, you know, hey, this is something that hasn't been addressed and it's becoming something that you should be worried about. You know, sometimes I think that you're kind of communicating two things when you're giving feedback. One is,

44:24Olly Fawcett:what's the thing that you should work on yeah and the other is how worried should you be about this feedback you know um and people have different personalities there are some people where the first time you give any forward suggestion they're like oh my gosh am i going to get fired i really need to pay attention to this yeah there's other people who makes them worse in a way because they're just panicking sometimes yeah and there's other people who you give them a suggestion they're like i'm crushing they just like gave me a suggestion but like i'm you know i'm the best like and and it in it uh uh you might need to up the tone of the seriousness to that latter personality to kind of like make it come through it feels like open door was like ceo slash founder school for you in terms of the stuff that you learn like these skills like obviously are so valuable and like a massive leg up to when you then build your own business having that kind of like that transition i know after open door you went to homebound yes what was the reason for the move because it feels like open door was giving you so much of what you were looking for yeah open door was giving me a lot and i have absolutely loved my time there um homebound i actually jumped to go join a friend of mine from bain a woman named Nikki who was starting her own business and I was catching up with her and she's so charismatic and so persuasive and she was like Justine you have to come help me build this like I need you it was her I believe in you yeah it was her business so she um uh she put the hard sell on and I was like okay Nikki like I'll come do this you were so worried about working with a friend in that way?

46:06She was a friend, but she was also always more senior than me. She was somebody who I looked up to as a mentor. I knew I had a lot to learn from her. I also was excited to work under a female CEO, frankly. I, at that point, had developed some inkling of, maybe I'll start my own company someday. But I still struggled with the imposter syndrome of, could I be a CEO? And I think Nikki was somebody who I looked at and said, she has a similar personality and communication style to me. She's a mom with a couple kids. And I think she'll be a badass CEO. And I want to see what that journey is like. I want to support her.

46:49And I want to learn from that before I go, you know, do my own thing. So I said to Nikki, I was like, I will, let's do this. You know, I will come help get this off the ground in whatever way I can. At some point, I think I will want to start my own company. Just letting you know. Yeah. And she said, great. You know, like, let's work together over the coming years. I can try and find opportunities to give you exposure that will be helpful for you to start your own company in the future. And when the time comes, I'll support you.

47:22Olly Fawcett:And what was your role at Homebound? I joined as our head of customer experience. Right. I did all sorts of things. So the company was kind of pre-launch. I left a couple years later when we were around Series B stage. So we actually did the full experience design together of what our customers are going through. It was a technology-enabled custom home-building company that was working with people who lost homes to wildfire and needed to build a custom home, which is a very difficult and scary thing to do, especially for someone on a tight budget. And so it was this long, multi-year, very emotional journey.

48:05And so we sat down and whiteboarded out what are all of the phases of this customer experience that we are going to walk people through and kind of built the customer portal, brought the company to launch. And so my job changed depending on what was going on at the time. Nikki was kind enough to invite me to join board meetings or give me exposure. exposure that was really helpful I think for me later on when I ended up wanting to start my own company.

48:40Olly Fawcett:Was there a surprising factor working that closely with Nikki in being a CEO with that kind of company startup? Was there a surprising thing you saw or experienced that really was completely different to how you thought it would be? Yeah I think that the um i mean one is just seeing how messy things are at the ceo level and by messy i mean how unclear some of the decisions are that you have to make i'm being a little inarticulate when you are a ceo any like 49 51 decision um you know gets to you and things that are simpler than that if there's a clear right answer, other people make that decision.

49:30It doesn't get to you. Definitionally, all day long, you get these 49, 51 decisions that are really hard. There's huge downsides no matter which way you go. And seeing Nikki be faced with these impossible feeling decisions gave me a lot of empathy for all the CEOs I had worked with in the past where I was Like, it's so easy to look at a decision and be like, here's a downside of that decision. Yeah. You know, I've got opinions. And what you don't see.

50:00Olly Fawcett:It's really hard, that, isn't it? Yeah. What you don't see is all the other options. You can't always articulate it. Yeah. And you can't always be like, this is why I've made that decision. Because sometimes it's got to be private. It's a business reason. It's a financial reason. It's a, I'm not making that decision because I think that person is going to be with us in three months or whatever it might be. They're really difficult to do. Did Nikki like kind of bring you into those decision making processes? Yeah, I'm sure she didn't bring me into all of them, but enough of them, you know, we would get our sometimes have our one on ones over pedicures on Sundays, you know, and it was fabulous.

50:36And, you know, she would just share, you know, I'm really wrestling with this, you know, with this decision. And it was fascinating for me to hear her, you know, talk through these decisions. And it, you know, made me realize just how difficult the decision fatigue, you know, would be as a CEO.

50:59Olly Fawcett:Do you think, and now you are a founder and CEO, and we'll get on to that journey in a second, But without getting the violins out, do you think a little bit more compassion has got to be had for founders and CEOs from their teams? Yeah, you know, I think that it would be helpful for it is only helpful for teams to have a better understanding of what the CEO job is like. I think it is very difficult to see when you are an employee or more junior in the company, you don't know what the CEO is doing all day. And you see them pop into meetings and then they go away. Yeah, yeah. They're shouting one minute, they're fun the next.

51:47Yeah, exactly.

51:48Olly Fawcett:And so the lack of access, I think, can create mistrust. I think it can create confusion. and I think having the broader team have a better understanding of what does the day-to-day look like and what are some of these decisions like would only be helpful so in an easy way to as I say not get the violins out to your team but be like I'm dealing with this thing this is the thing I'm gonna deal with it it's me but that's where I can't help here or that's why I'm it's a hard on isn't it kind of communicating your life especially as a startup founder yeah because I have one perspective on on founders in the UK for example I think that they are like struggling really bad like and I think there's going to be less of them um I'm not classing kind of like someone building an AI app from their bedroom as a founder just respectfully to that market I'm talking about someone trying to build an actual business and spit out a profit in that outside of bubble tech whatever that might be it's a really hard thing to do like yeah our rates in the uk of businesses doing over a million quid is like less than eight percent or something crazy like it's it's crazy and it goes less and less and less and you just hear about these huge businesses in the uk or the us doing these numbers it's like so rare and people think it's normal and i think there's a small pocket of founders who are trying to build businesses at a small scale you know one to ten million a year that is like the graveyard shift of trying to build whatever you're trying to build but i think the perception of them is that because it's their business it's fine you know if they're struggling or whatever it might be um but equally because it's their business they should be doing the hardest possible things there and i don't think there's anything necessarily wrong with that i just think there's this perception where i speak to a lot of my friends who are founders who are building things whether they've exited not because it's failed and there is a general consensus across all of them whatever shape and size they are is that it's really hard when people don't understand your job yes and that makes it more difficult to be successful and actually you want to be successful for the people that don't understand your job yeah do you know what I mean it's a really hard circle and I think so everyone wants to be found at the moment and an entrepreneur because it's sexy and cool and it is sexy and cool in some ways but it's also very different from what we all put out as founders and what we all see right do you kind of feel the same in your perception yeah absolutely i think that was the most surprising thing for me entering my own journey as a founder yeah i expected it to be hard everybody told me it would be hard i still underestimated how hard it would be and even with the support structure that i had yeah you know oh gosh it's still so hard yeah and it can be a challenge to explain exactly why because it's not only the work hours or um the 49 51 terribly difficult decisions it's also just the emotional weight of needing to make payroll for your employees or keeping the hope alive when everybody's telling you that your idea sucks or the opportunity cost of not being able to be there for your friend's birthday or forgetting to pay all your parking tickets or, you know, like feeling like your life is falling apart.

55:16Sounds like a lot has happened to you. So it's a challenge. And I think that's why for me, having my co-founder is so critically important. I would not have survived this far without her. You know, having somebody who you don't have to mince your words with, you know, who you can not wear a mask around, somebody who's in it just as deep as you can be really lifesaving because you don't necessarily, it doesn't solve all of the challenges. Right. But you at least don't need to be so alone in it.

55:57Olly Fawcett:Do you think anyone can do it? anyone can be a founder yeah i don't think most people would want to you know i think that people would i think anybody probably can you know if they really wanted to but i think that the the inconvenience the challenge the struggle the loneliness the low chance of success yeah would make a lot of people turn out it's quite a big conversation from time to time especially in the uk i don't know if it is in the us i feel like san francisco like everyone's building stuff so it probably doesn't come up that much but like particularly in the social in the uk it's like a lot of people say everyone should just own their own business like as a sort of statement line and i've always felt that everyone should try but everyone should understand that you're very unlikely to be successful and that's very negative thinking for a lot of people but i do think that it's worth trying it but you shouldn't expect that you're going to want or you can do what is required to kind of get through maybe the bad stats yeah um it's funny i started off talking about how negative i think the uk is and i felt like i am being too but like it's an interesting dynamic where like i think so many people want it to work out and it just it's so difficult to build anything if you're building up like um you know health band you're building a soda company you're building a service-based business you're building something in tech like it's so difficult to make these things work so going into starting the business where did the original idea come from?

57:31Yeah so as you know at this point I'd spent a decent portion of my career in the intersection of housing and technology and where we live where our life takes place was always really fascinating to me if we go back to 2020-ish You know, I was working remotely for the first time and feeling really stuck sitting in San Francisco in my little apartment, you know, staring at the same wall day after day. And we can be so multi-hyphenate in so many ways now in our lives. You know, the consultant is also a podcaster or the engineer is also a ceramicist. And I felt like I wanted to be multi-hyphenate in where I lived.

58:24I'm a San Francisco person. I love San Francisco. My family's there. I also love New York City. I also love Mexico City. I love London. You know, I wanted to be able to spend my time in more places and travel more and feel like I had homes all over the world. But it was so darn expensive to try and pull that kind of a lifestyle off. Yeah. And that was really the crux of the idea. It came from this personal need that I felt. How can I... I had to figure out a way to live like I have homes all over the world and actually do it in an affordable way. And I really wanted to create a lifestyle for myself where I could travel and feel at home when I did travel.

59:19So I was actually, back to Bain, had a Google sheet with a bunch of Bain alums who lived all over the world. And people were adding their homes and saying, hey, does anybody want to come to my place in Paris? Like, I just need to get out looking for a place in New York if anybody can host me. And so I saw this trusted subgroup kind of doing their own ad hoc home sharing and home swapping. And that created the spark of an idea that was like, what if we could coordinate among trusted communities? And instead of having to spend so much money to get a vacation rental or a hotel, we just solve each other's problems and stay in each other's homes.

1:00:15And by letting somebody who I approve of stay in my place while I'm out, I can earn nights to go stay somewhere else. And by working together as a community, we all can unlock unprecedented value. And so that was the idea. I got in contact with Opendoor's CEO and said, you know, I'm thinking of starting a company and I don't know exactly what it's going to be, but here's the problem that I want to try and solve. And he said, you know, you've got to do it.

1:00:48Olly Fawcett:Why did you go to him out of interest? He'd become a mentor and he knew what I could do. I also talked with Nikki about it, Homebound CEO. But also those are the most helpful first angel checks are the CEOs of companies that you worked at in the past, because that is a vote of confidence from somebody who knows you. And then investors in Homebound or investors in Opendoor who believe those CEOs see that that CEO believes in us and say, oh, can you introduce me? So it's a really helpful first supporter to have that can provide a signal to the rest of the kind of investing world. Yeah, definitely.

1:01:39Olly Fawcett:Did anyone in the early stages challenge the idea? Almost everybody. Yeah. There's a surprise. The, you know, people who I knew said, I believe in you. If you see something here, okay. I don't see it, you know, but I'll support you. People who I didn't know were just like, I don't think this will work. You know, hasn't home swapping, home sharing, hasn't been tried before? Why isn't this already big? Do people actually want to let somebody stay in their home and not get paid for it? I don't think anyone will do that. You know, a lot of investors tend to make a lot of money. And they're like, why would you ever need more affordable travel?

1:02:30You know, they're like, I would never let somebody stay in my house. When I go to London, I stay at the Dorchester. So like a lot of people don't get it.

1:02:38Olly Fawcett:You know the audience, right? Yeah. the um uh so it it felt crazy i think to a lot of people um and it i think um uh it felt overly optimistic you know to think that people would trust each other um in this way but this is like 2020 2020 2021 2021 but like this is a period where like uber kind of overcame the same challenge right of like why would you get in a stranger's car that was kind of like a piece that i felt like they were spoken about a little bit airbnb i know you must get compared to them all the time yeah in many ways many ways but like that did it was kind of forms of it existing right yeah um i don't know how many times it's been mentioned to you but like the holiday the film which obviously this is like huge part of it yeah as you said like these platforms did exist before right because that was based off something that did exist so like the idea was there did it feel weird to you that people just couldn't see what you could see so clearly.

1:03:37Yeah. I think the huge difference between our model and something like an Uber or Airbnb is that people are not paying each other. And I think that was a part where people said, wait, hold on, this is never going to work. With Uber and with many marketplaces, over time, you have the supply is professionalized. It's people who are doing it as a job. And the demand is consumers. The thesis behind Kindred was we can create a marketplace where everybody is both a host and a guest and that people will let someone stay in their home not for cash but for the ability to stay in someone else's home later on and that is a very different kind of marketplace um so the the the core difference just to kind of level set between something like a kindred and an airbnb is um first of all kindred is primary residences, people joining with their real home where they live most of the time.

1:04:37It is a give to get network. So you have to contribute in order to be able to stay. You earn nights by letting people stay at your home that you can spend to stay somewhere else. Members don't pay one another to stay. They pay for the cost of cleaning at the house that they're going to, and they pay a service fee to Kindred, but they don't pay a nightly rate. They're essentially paying with earned nights. Importantly, because people are not earning revenue from hosting on Kindred, it's a model that doesn't make sense for investors. You don't earn money to pay your mortgage or your utility bill.

1:05:22And that was purposeful. We felt that that model already existed, the short-term rental world. If there's investors who want to run a side business and earn money, that already exists. We didn't need to rebuild that. What we wanted to build was something for true peer-to-peer sharing among consumers. And so we designed it in a way where even as we grew, it wouldn't make sense for investors to participate. And we wanted it to be something that had a gentler impact on cities. You know, if it's professionalized supply, over time you're going to be incentivizing investors to go buy up 10 homes in Venice.

1:06:07Olly Fawcett:What does exist now, right? Exactly. There is problems in various parts of the world. Exactly. So it's a much more sustainable vision for travel where you're not converting homes into investment properties. you're just filling those real homes when somebody's gone for a couple weeks um here and there when you're building out the idea in your mind initially like very early stages are you going off the concept first or the business model first like which is which was more important to kind of make sure had something problem first right i think that's the that's the core thing um and that's the advice that i would give to any founder is get really clear on what is the problem that you are trying to solve and be agnostic to business model, be agnostic to product, do whatever, as long as it solves that customer problem.

1:06:58Because if you are actually creating a better experience or offering something that's way more affordable, solving a real problem, the rest can fall into place.

1:07:10Olly Fawcett:And how did you then get the idea from an idea to week one of you work on this officially yeah so first i knew that i wanted a co-founder right yeah and interestingly i had built enough kind of products in my career at that point that i felt like you know we're gonna have to iterate our way into the product and validating it first i need to make sure i have the right partner so co-founder actually kind of came first before really finalizing the product or business model interesting um so i was connected to my co-founder taz through the open door ceo um we essentially were reconnected because we had known each other at open door um we locked ourselves in a cabin in the woods for about a week nice we got to know each other um in a really deep way that was quite intense um really intense yeah talked about all sorts of fun stuff um we sat in a cabin for five days we sat in a cabin for five days yeah in the woods like cooking you know going on hikes talking about our greatest fears our relationship with our mothers whether any of us had a criminal record like the and also talked about what are our hopes and what are our goals and what kind of leaders would we want to be um and then lastly we did tons of customer interviews we put out you know onto LinkedIn like does anybody want to do a call with us and called people and tried to learn about their pain points and their desires and whiteboarded business ideas basically.

1:08:47Olly Fawcett:I've interviewed a few co-founders on this show now and no one's ever done that level of intensity but it feels like you're basically putting yourself through the slightly more challenging moments as quickly as you can that you're going to have as co-founders to work out how you both react how you both connect yeah and whether or not this is going to work yes very purposefully yeah and you know we had a set of hard questions right that we wanted to like pre-mortem you know what if we disagree on the third hire um what if there's a big um newspaper article we're on the cover of forbes and they only feature one of us and not the other how would that feel how would we handle that you know is there a moment where you knew it was going to be the right partnership in those five days um yeah you know i think that the some of it came from uh the moments like being able to go in and out of these really difficult conversations and then go like make deviled eggs together at 11 in the night you know 11 in the evening like being able to um have honest difficult conversations and not have it create um uh resentment right i think was just a beautiful thing to realize like wow okay we'll be able to work through things um and as long as we can work through things together and keep our relationship strong i just felt like we could do anything are you guys different enough to be confounders yes that was a big um something you know a big thing that we needed to pressure test um uh the i think we're on paper look more similar um than we actually are our brains work totally differently um and uh i think that has been a really kind of expanding relationship um because i now i'm sort of mind melding with someone who approaches problems in a totally different way yeah um and it's helpful to deeply respect um your partner's superpowers and know that they will crush that more than you ever could you know and um and then have the reverse be true as well yeah so you come out of the woods do you get straight to work on building the platform or is it raising cash yeah the uh both um we you know gosh this was pre-ai and so building the old days very hard neither of us were engineers so we needed to kind of fake it you know and and stitch together a product experience with a bunch of off the shelf or no code tools um so a lot of what we were doing was you know we created an instagram to use as a listing page and our back end was an air table that did matching and we were the concierge that match made people.

1:11:49And so we started just kind of hacking it to see if we could get people on home swaps. And then simultaneously, we went to started with our kind of trusted network to try and raise some money so that we could pay ourselves. And this was a time when I was making no money. And so I actually went back and lived in my parents, that garage room that, you know, was always open to anybody. I took advantage of that. And yeah. And we ended up raising money off of a, you know, off of a two pager, just a two page doc that said, here's our idea. Here's some of our initial proof points and what we were able to achieve with this really hacky like V1 product and here's some of our research.

1:12:36And again, I really think we were able to raise money not because of that idea, but from the people who had worked with us before and believed in us as people. And then there were some others who had a kind of trust proxy. So people who trusted the CEO of Opendoor then by proxy said, okay, if he thinks they're great, all in the next.

1:13:01Olly Fawcett:It's worth a stab. Yeah. Or a go, sorry. How much did you raise in this initially? Our pre-seed was a million. Wow. And you raised that pretty quickly based off of network, your careers, some of the idea. I mean, yes, it's got to be there. It's like at least a big tam. Yeah. Yeah. Yeah. I think, you know, fundraising is really different in the earlier stages versus the later stages. Right. Right. Sometimes I like to say that like early stage is romance, later stage is finance. You know, like in the early stages, it's like, do I trust you as a founder? Do I think that you have an ambitious, big idea?

1:13:44Like, are you, does it seem that this founder is absolutely obsessed with this idea? Do I hear good things about them? You know, a lot of our investors did a ton of reference checks on us so really it's about who you are um and uh and then later as you get more traction get into later stages it's much more just about the numbers interesting with that initial

1:14:07Olly Fawcett:million where did that go for you guys i imagine tech is a big part but did you start to build team immediately yeah so we um we started by just recruiting some kind of part-time or contract help. We had some friends of ours who worked with us at Opendoor or other companies who were able to kind of moonlight with us. So we weren't ready to make full-time hires before we had developed the product a little bit further. So we sort of like beg, borrow, steal for capacity. And that's a really hard part in the company building process is when you don't really have a team, but you're starting to get some traction or some customers.

1:14:51So you're super busy all day long just doing customer support. And you don't have the time to then go build the app because you're busy doing customer support. And so you sort of got to push through that time period. And we were able to find some folks part-time and some folks from the Philippines who could help us with you know with coordination and some wonderful uh people who actually are still supporting us in in some ways today um and uh then we were able to get kind of v1 um of our product out and that was really helpful for um the next the next steps recruiting engineering was really hard why is it hard um we were well it's just very competitive right in san francisco you know engineers that we were talking to trying to get them to come join this home swapping idea that didn't have a product yet and they're like oh you know i'm making 800 000 a year at stripe right now so like you know my wife would probably be pretty mad if i like it's just like really hard um to get people to take such a huge bet um when the opportunity cost is so high um and so what we actually ended up doing was we got enough traction with our like stupid little early MVP product with like pretty designs for what we wanted to build to then go raise money from Andreessen Horowitz.

1:16:24And that was really powerful, both from a brand perspective, you know, the rest of like candidates and folks seeing that we were legit and also gave us money to go do an acqui-hire. an acquisition of a small early stage company where really you're acquiring the team. So we brought on our CTO through an acqui-hire. He had started a dating app company and realized that he would rather be a CTO than a CEO. And we had some mutual investors. We actually had an investor, this amazing woman who is like by the numbers, one of the most successful investors um uh in china um she was like i have somebody i want you to meet i think you know if he comes to work at kindred it would be an amazing um fit and by the way the last time i introduced two companies it was um musically and bite dance and they ended up becoming tick tock oh my god so like you should probably you know and we were I was like, all right, I'll meet him.

1:17:34Olly Fawcett:She's the OG connector. She knows us connect. Yes. So we went out to dinner and really hit it off. And we ended up bringing Brian on. And that was just a hugely trajectory changing moment for Kindred where we were finally able to build the thing that we knew we at that point had a market for. When you're starting to build team, how did you position? Were you always going to be positioned to the CEO? Was that kind of like your your sort of you're not co-CEOs, are you? You're just CEO. No, we're CEO and president. Yeah. So and that was one of the things that we worked out in the cabin, actually, in the woods was if we work together, what would our roles be?

1:18:15And so we decided, you know, it's really important to both of us that we're equal partners. And from like an equity perspective, this is also controversial. A lot of people think that one founder should have more equity so that there's a tiebreaker or what have you. And Taz and I said, no, we want this to be equal. And so we decided we'd do it 50-50, but kind of split responsibilities based on each of our superpowers.

1:18:43Olly Fawcett:Nice. In that, as the CEO and you're starting to build a team, and this is only five years ago, which is absolutely crazy how quickly you guys have grown. did you have an idea of the type of environment and workplace and culture that you wanted to build internally within the business did you have that very clearly on in your mind based off of where you'd been previously yes uh we actually wrote a little manifesto about the kind of culture that we wanted to create um i think we saw starting a company as the as an opportunity to build the kind of culture we always wished we had worked in right And, you know, some components of that we borrowed from things that worked for us in prior companies.

1:19:27And others were, hey, we've really always wanted, you know, X or Y. So some of the pillars of it were one we refer to internally as give a damn, which is basically we want to make sure that every person we hire really cares. They need to care about this mission. They need to care about each other.

1:19:50Olly Fawcett:they need to care about the impact of their work um the especially as companies get bigger and if they're successful or have flashy fundraisers you start getting a lot of kind of like mercenaries people who just want to ride the hype but um they don't really you know live and die by the mission or they um you know do their nine to five and then say oh that thing over there that's not my problem um and so we wanted to kind of future proof against that and say we need to care and we need all of our team to really care um and uh so that was just one example but we had a lot of kind of principles that we uh wanted to to make sure um uh you know that kindred really lived up to is there do you have a a approach or a technique to hiring the perfect people for the culture environment you want yeah it's a uh it's a hiring is really hard um we've uh made lots of incredible hires we've made some mishires as well um i think that getting to know a person outside of their job has actually been one of the more effective hiring strategies because you start to understand their motivation.

1:21:09And when you understand somebody's motivation, it's easier to understand, you know, are they really mission aligned? I really believe that when you have a strong why, you can bear any how. I think that's like a Viktor Frankl quote or something. If people really believe they'll have the grit to get better and learn and work hard and you know improve on the skills that they were um weaker on if they don't have that strong why it's tough do you

1:21:46Olly Fawcett:remember as the product enters the market do you remember when it started to gain momentum and actually become the thing that you guys had sketched out in the cabin you started targeting Team 4, you raised a bit of money. Do you remember the moment where it kind of happened? Yeah, I remember the moment when I realized that it was happening. And we grew really from referrals, you know, friends inviting their friends. And that's a really great way to grow because your customers can do some of the onboarding for you. You know, they like tell their friends all about it. And so for a while, everybody on Kindred was like only a couple degrees of separation away from being tasked because we invited our friends first and they invited their friends.

1:22:34And so and I remember one moment when my mom called me and she said, Justine, I'm at the dermatologist. And she just said she heard about this cool home swapping thing that she is going to try. And that was one of the first moments where I was like, well, somebody, I don't even know how this person found out about Kindred. I, you know, she just discovered it. And I started hearing more and more of Kindred coming up in the wild, you know, or getting text messages from friends. Oh, I'm at a wedding and people are talking about, you know, how they're staying at a Kindred. And it happened suddenly where it felt like I knew everybody on Kindred.

1:23:14And then overnight, all these people were finding out about it and joining it. And it was a topic of conversation. It became this sort of like, if you know, you know, like travel hack.

1:23:26Olly Fawcett:How did that make you feel? Proud and also totally terrified. I thought I might be gay. Yeah. Explain the second bit. You know, this is, of course, what you hope will happen. You hope that this thing that you're building becomes something that can change culture. And the stakes just get higher. And sometimes the fear is that you're just building a bigger stage on which to fail. And the, you know, responsibility gets just bigger and bigger. You know, I've talked to some of my friends and they're like, you know, as Kindred gets bigger and, you know, raises more money and gets more established, do you feel like you've made it or that you can relax a little bit more or that you've done it?

1:24:26And it actually is the exact opposite, where the stakes are low and it's just me and Taz and felt like a group project. But when you have raised a substantial amount of money, you have hundreds of thousands of users all over the world, the stakes get higher. and in some cases the imposter syndrome can grow you know it's like oh people you know really are expecting a lot of me and of this company in a way that just wasn't the case when we were a really small grassroots social experiment yeah has it ever got too much that

1:25:08Olly Fawcett:level of pressure for you absolutely how do you get out of that feeling yeah i think so So Taz and I have both had moments of burnout. And I think that burnout, like there's a burnout that you can't come back from. But there's also burnouts that are like you have a you sort of hit a wall, but you can come back from it. And I think she and I both have had moments where we were just really overwhelmed. And sometimes we talk about our relationship as a seesaw because we kind of take turns like lifting each other up. And I think the important thing is having somebody who can help look out for you and catch those signs of when you're really burning the candle at both ends or when you really need some space.

1:26:03And we can cover for each other. and so there have been times when Taz has said Justine go take a week off you know I've got this send me a note with all of the things on your plate like you need to go rest and that's been life-saving yeah and I've done the same for her many times it's always comes back to a point that

1:26:24Olly Fawcett:you probably couldn't do it by yourself you could but it wouldn't have been nowhere near as enjoyable I certainly wouldn't want to. I would have I would have quit. Really? Yeah. I don't think I I don't think that I could have had the the resilience to to stay in it without without Taz. Is the one point part of I mean, you guys have raised over 100 million. I think your team's over. Raised about 150 million. Yeah, it's a lot. And how big is the team? Around 100 employees. Those two big 100 numbers. Yeah. Like which one feels more pressure for you? Is it delivering for those that have backed you or is it delivering for the team?

1:27:04It's a good question. They both are a lot of pressure. I would actually say the number that gives me the most pressure is that we have 400 ,000 Kindred members all over the world counting on this product. And that's a lot of people. That's a lot of trips. Yeah. You know, we at this point have just crossed a milestone where Kindred members have hosted one another for half a million nights. Wow. And the that's a lot.

1:27:41Olly Fawcett:And that's in what, four or five years? Yeah. Wow. About four years since we launched. Wow. So it's it's it's a lot of people. And it's a wonderful thing to see because you realize how much value we have created for people all over the world and all these experiences that they're able to have that they just wouldn't have been able to access without Kindred. And on the other hand, it's a lot of pressure where I look myself in the mirror every day and I say, don't fuck this up. you know people are counting on you do you feel that you are the leader and CEO that you wanted to be when you first started I am hard on myself I think I have done the best that I could do but one thing that is frustrating about being a founder and CEO and frankly I think anybody in a particularly stressful role is that I'm operating from a place of overcapacity.

1:28:56You know, so many times I'm doing something and I think, man, if I had more time or more headspace, I would have done a much better job with that. And so you're not really like at peak performance all of the time because you're spread so thin, you're under so much stress. I forget who it was, maybe Paul Graham, who said that building a company is like trying to do integrals while you're running from a tiger. You're trying to make the best decisions you can while also bearing all of the stress and working really late hours. And so, you know, there are times when I say, man, I didn't do a good job there.

1:29:38I should have done better there. It's very easy to be very hard on yourself. But I think when you take a step back and give yourself the grace of, man, we're moving mountains every day and look what we've done. that perspective is when I am able to you know forgive myself for not being able to give 100 % to each individual task that I'm doing and say you know what we're going to do the best we can

1:30:02Olly Fawcett:because like the product you develop the product a lot as well right in terms of the idea is stayed as an idea but I know you've just released new features and you're constantly thinking about how this can last a lifetime multiple lifetimes right how do you look at the product and the platform from your perspective and i guess internally yeah so part of my job as ceo is to take the long view and make sure that we are future proofing yeah the company and i think one thing that i've always been paranoid about is trust and how we would maintain trust as we grow kindred is based on It only works if people trust the product and trust each other.

1:30:44And one thing that I was very aware of from the very early stages is that it can feel like this tight-knit community when you're at 1 ,000 members or maybe 5 ,000 members. But now we have 400 ,000 members. It doesn't feel quite as intimate anymore. And so one of the product evolutions that we're really excited about is evolving Kindred from feeling like one home swapping community to being more of a platform that can also host trusted sub-communities of folks who have something in common to be able to connect them to stay at each other's homes. So we're starting with larger kind of identity based subgroups.

1:31:36So one example is the Women Travelers Circle. And having a community of just women who love to travel actually creates a lot of trust and camaraderie because you have something in common. And I'm actually staying right now at a kindred home in Chelsea with a member who I met through the Women Travelers Circle. She's also a founder. She's starting a natural skincare brand. She's a single mom with her daughter and an adorable cat that I am now taking care of. But having that commonality, that shared experience makes it feel more like sharing homes with a friend instead of a stranger staying in my home.

1:32:20So we're building out a network of circles. We want a whole ecosystem so that anybody who joins Kindred can be a part of a subgroup or be a part of many subgroups where they can find people who they have something in common with. So we're launching the families circle, families with school age kids or infants. It's really helpful for them to be able to swap homes with other families with similar age kids. They have all the gear. They often want to travel at similar times of year.

1:32:55Olly Fawcett:Room split out. Yeah. And they just can bond over like, hey, there are toys everywhere. Sorry, it's a little messy. And they're like, don't worry, my house, there's toys everywhere, too. And but the idea is to have a really rich ecosystem. So friend groups, you know, alumni of certain universities or schools, people who need wheelchair accessible homes or people who are love cats and want to take care of each other's cats. There's a vision of Kindred being an ecosystem of home sharing communities instead of just a single home sharing community. And that's something that we're working on right now to future proof trust.

1:33:38We want to be able to have most people be able to be a part of Kindred and have a really relevant experience to them.

1:33:49Olly Fawcett:Amazing. I love the idea. It's almost like personalized on another level. it's like really subbing into you might all even you know be the same age or whatever but actually the personalization of different people and what they want out of those experiences it makes total sense it's like a better version of filters do you know what i mean yeah that's how i think about it um where do you want kindred to go what's your ultimate ambition for it yeah i want kindred to create a world where people can access the life-changing experience of travel in a really abundant way. I don't think travel should just be a luxury.

1:34:30I think it should be a way of life. And I think it's something that should be accessible to everybody. I want kids to be able to grow up saying, oh, I spent a month in Paris and then two weeks in South Africa. I really think that when we are at the ends of our lives and looking back at what we did over our precious time on Earth, the things that people remember are the shared experiences that they had with their loved ones. It's the connections that they were able to make and the memories that they made. And traveling, especially traveling in a community driven way where you're making these wonderful connections and relationships with people all over the world.

1:35:18You're stepping into their lives like quite literally. You're not just swapping homes. You're really kind of swapping lives. It builds connection and it builds empathy in a way that is really expanding and valuable. So I think that there's a richness in life that is accessible when you can have something like home swapping be a part of your lifestyle. So I want this to fundamentally change the affordability of travel. I want this to fundamentally change the empathy that people have for others who are from a different part of the world, which I think is very important right now. And I want people to be able to better understand themselves by stepping into a new environment.

1:36:16Olly Fawcett:Amazing. I love it. So what does it take? what does it take to build a business like this and and how much have you had to put in and what is it taking away from you as well yeah I think it takes just not stopping you know that's a it's that is easier said than done but so much of I think success in creating a company is just not quitting yeah you know even when it's hopeless and um you know or even when it's really hard and painful. It's just not stopping. So I think, you know, being able to stay in the game is the goal. What it's cost, you know, it's cost a lot. I think my co-founder and I joke that we've probably aged, you know, about 30 years over the past five years.

1:37:12I'm a woman in my 30s, like, getting very transparent. I've been thinking about when am I going to have kids? You know, I froze some embryos with my partner. I'm like, I can't deal with kids right now, but I'm 35, you know, like I want to be able to have kids. I'm not sure when or how to fit it in. So there are some like life things that feel like really meaningful trade-offs. Yeah. And hopefully it doesn't have to be a trade-off, but it's intimidating thinking about, you know, raising a family while working in the way that I'm working right now. There's also just a, you know, the cost of having my work take up so much of my life.

1:37:57I think there was a period of time where I was missing people's birthdays or, you know, my social life has, you know, has seen better days. Um, and, uh, so it, it, it takes up a lot of oxygen and, um, at some point, you know, you need to know that that will be the case and get comfortable with it and find ways to prioritize what are the things that I really can't drop, um, and design systems around not dropping those things and forgiving yourself if you drop things outside of that.

1:38:31Olly Fawcett:I think that's some great advice. Justine, it's been a pleasure. I've loved your story. I mean, what a, what a career you've had, what a, what a story you have as well. um in five years you've achieved so much and it's fascinating to find out some of the ways you've done it um but congratulations to you and the team because i know it's not just you um sometimes um but i'll be excited to see the next journey and where you go with everything um it feels like you guys aren't going to slow down or stop um an amazing concept an amazing business and thank you for coming on and tell your story it's been an absolute pleasure i'll see you soon perfect