Joseph Woodbury: The Airbnb of Storage, marketplaces, moats, raising $75M from a16z

[00:00:00 -> 00:00:06] Neighbor started with the idea of unlocking underutilized and underused storage space in [00:00:06 -> 00:00:12] people's homes and turning it into a marketplace. I think you should choose companies by how hard [00:00:12 -> 00:00:17] they are to start. The biggest companies were the hardest to start because that's what gives them a [00:00:17 -> 00:00:21] moat and moat is what gives you monopoly. The only thing you want to create is a monopoly.

That's [00:00:21 -> 00:00:27] what you want. My worst experiences of mentoring students is when they set up 50-50. Across their [00:00:27 -> 00:00:31] portfolio, they can earn a million dollars a year. Well, that's not just a million dollars a year.

[00:00:31 -> 00:00:36] They're putting a cap rate on that. So, we're increasing the value of their portfolio by 20, [00:00:36 -> 00:01:05] 30, 50 million dollars. Welcome back to the Startup Ignition Podcast. Thank you so much for [00:01:05 -> 00:01:12] watching every episode.

This is now, I think this is episode 53 or 54. Maybe. I think it's 53. I'm [00:01:12 -> 00:01:18] pretty sure it's 53.

Hopefully, if not, I'll correct it in post-editing here. But welcome [00:01:18 -> 00:01:21] back to the Startup Ignition Podcast. I'm Tyler, your host. This is John.

We're your fathers. [00:01:22 -> 00:01:22] Hello, everyone. [00:01:22 -> 00:01:28] Father-son duo in startups and everything that has to do with technology, SaaS, software, [00:01:29 -> 00:01:34] venture. But today, we have a special guest.

We have Joseph Woodbury here live in the studio. [00:01:35 -> 00:01:39] Thank you so much for coming on the podcast, Joseph. I'm super excited to have you. He is the [00:01:39 -> 00:01:45] CEO of Neighbor, which started back, I don't know how long it's been now.

When was the first [00:01:45 -> 00:01:51] inkling of Neighbor's idea? Eight, nine years ago now. Yeah. Wow.

Eight, nine years ago. Yeah. And [00:01:51 -> 00:01:57] he's the founder, CEO. So, the original founder of the idea, he was a BYU student.

I met him when he [00:01:57 -> 00:02:02] was working on it. It was exciting times. Yeah. Yeah.

So, Joseph is the founder and CEO of Neighbor. [00:02:02 -> 00:02:10] Like John just said, a storage marketplace is how you define your product. Founded in 16, 17, [00:02:10 -> 00:02:16] 17, 2017. And you do have co-founders around it.

I do. I remember you had like a team of three or [00:02:16 -> 00:02:21] four of you that were working on the project. Did it start as a student project specifically at BYU? [00:02:21 -> 00:02:26] Absolutely.

Yeah. And so, that was a team that helped you do it. Neighbor started with the idea [00:02:26 -> 00:02:34] of unlocking underutilized and underused storage space in people's homes and turning it into a [00:02:34 -> 00:02:38] marketplace, basically like the Airbnb, but for storage. A little teaching moment here.

I call it a [00:02:38 -> 00:02:45] sharing economy. Yeah. It's kind of like Airbnb, Uber, all that where, you know, he can become a [00:02:45 -> 00:02:51] gargantuan storage company like Uber is a gargantuan taxi company and Airbnb is a gargantuan lodging [00:02:51 -> 00:02:57] company without having to own the assets. Yeah.

And it's just leveraging the sharing economy and it [00:02:57 -> 00:03:02] was a brilliant idea. Now, one thing that's funny in the history, you might not know since it's at the [00:03:02 -> 00:03:07] beginning, he spelled neighbor differently. We'll maybe go into that and I want to find out how he got [00:03:07 -> 00:03:12] the right URL or domain name. Cause I've never heard that.

It is neighbor.com. Yeah. It's a fun [00:03:12 -> 00:03:18] story.

Yeah. Well, let's hear that story later. He didn't spell it as neighbor the right way. And [00:03:18 -> 00:03:24] it was, I was, I'm hoping and crossing my fingers.

It was nay, like a horse neighbor. I don't know. [00:03:24 -> 00:03:29] We'll hear that story in a second, but let's get to his bio and go. So I know that you've been [00:03:29 -> 00:03:34] backed and you're wearing the shirt right now in studio from by album and Pellion local firms here.

[00:03:34 -> 00:03:39] And I know I was telling you pre-podcast, I looked it up and I, I was like, wow, there's been a lot [00:03:39 -> 00:03:43] of capital that's been put in this company. So I'm, I'm sure you have more investors than just [00:03:43 -> 00:03:48] Pellion on an album here locally in Utah. Who else is? But how great are those investors?

Yeah, [00:03:48 -> 00:03:52] of course. Yeah. Great. We love all of them.

Phenomenal. I mean, the Utah investor ecosystem. [00:03:52 -> 00:03:56] Blake was just on the podcast. Amazing.

Yeah. Blake's awesome guy. Yeah. Yeah.

We work with Chad and Ben [00:03:56 -> 00:04:04] there too. Yeah. Um, yeah. So they let our seed round Pellion and album and then Andreessen Horowitz [00:04:04 -> 00:04:08] let our series a round and then group called fifth wall, let our series be around fifth, a little [00:04:08 -> 00:04:15] firm Andreessen Horowitz.

Yeah. No big deal. No AZ 16, not anybody too big. And then what makes you [00:04:15 -> 00:04:21] super interesting is that you chose a category.

Most founders don't like to touch. Like the marketplace [00:04:21 -> 00:04:30] industry is a hard nut to crack. Yeah. And I know we've referred many a founders your ways over the [00:04:30 -> 00:04:36] years.

And it's just cool to see where you've taken neighbor, the traction you've been able to get, [00:04:36 -> 00:04:40] the company you've been able to build, the money you've been able to raise and the revenue you've [00:04:40 -> 00:04:47] been able to achieve on what typically is looked at as like the scary kind of stepchild of entrepreneurship. [00:04:47 -> 00:04:53] Right. Yep. Um, so cool to go into that, but everybody let's welcome Joseph to the podcast.

[00:04:53 -> 00:04:56] Thank you so much for coming. It's going to be fun. Thanks so much for having me. No, thank you.

[00:04:56 -> 00:05:01] Thank you for coming. Um, before we go into it, Joseph, I do have an icebreaker for you and I'm [00:05:01 -> 00:05:06] going to spring something on you really quick. I like to play games with either, uh, John and our guests [00:05:06 -> 00:05:10] or just our guests before we get into the podcast. So which is it today?

So today we're going to play [00:05:10 -> 00:05:20] what's in your storage. Okay. So today, why, since we have Joseph, the founder and CEO of neighbor.com, [00:05:20 -> 00:05:25] which is a marketplace of storage and utilizing, you know, the sharing economy of storage, we're [00:05:25 -> 00:05:29] going to do a couple of rounds of what's in your storage.

First round we're going to do what's in [00:05:29 -> 00:05:34] your personal storage. So we're going to get a little personal. So I want to hear from both John [00:05:34 -> 00:05:40] and Joseph. What is one thing you would keep forever?

You're never giving away one thing. [00:05:40 -> 00:05:46] Your wife or spouse or loved one or family would tell you to get rid of. Oh my gosh. And it's [00:05:46 -> 00:05:51] going to be a good question.

And one thing that says way too, one thing that is physical, that says [00:05:51 -> 00:05:57] a lot about you. And then one thing that would confuse people if they knew you had it. So let's [00:05:57 -> 00:06:02] start with the first one. So what's one thing you are keeping forever, never giving away.

[00:06:02 -> 00:06:06] Who to start? Either one of you. Okay. I'll go first and let the guests have time to think about [00:06:06 -> 00:06:10] it.

I'm interested to hear my dad's actually. Yeah. Cause this is a, this, there's two [00:06:10 -> 00:06:17] legendary items. One thing you don't know about John, he's a massive hoarder, like a huge hoarder.

[00:06:17 -> 00:06:23] Like if you go and call him our pack rat. Yeah. Okay. That's even worse for sure.

But he keeps [00:06:23 -> 00:06:29] everything. So I'm interested to hear this. Okay. What's one thing you won't believe this.

I was a big [00:06:29 -> 00:06:36] baseball, football, hockey card, tops, card collector, box, shoe boxes full from my era. [00:06:36 -> 00:06:41] Think how old that is. And she puts no value on that. My wife and wants to throw that.

[00:06:41 -> 00:06:47] Oh, that has huge value. That's like insanely huge value. Come on now. Yeah.

There's been times I go, [00:06:47 -> 00:06:51] Susan, you didn't throw those away. Did you? And then see, I have to go in the deep crevices [00:06:51 -> 00:06:54] somewhere and make sure she hasn't thrown them away. So that one's really important.

And, uh, [00:06:54 -> 00:06:58] and you know, so your card collection, my card collection, but I'm going to do in the second [00:06:58 -> 00:07:04] one too. And I got this Harvard athletic Jersey from somebody who really went to Harvard in the [00:07:04 -> 00:07:10] day. It was Gregory Peck's son. And I know Gregory Peck's a very famous actor starting to kill a [00:07:10 -> 00:07:16] mockingbird suit, one of the most famous actors of all time.

Right. And so I, my aunt was, uh, [00:07:16 -> 00:07:22] actually a nanny for very wealthy family in Beverly Hills. And she actually has had dinner with Gregory [00:07:22 -> 00:07:28] Peck and his family. And I went down and visit her one time and Gregory Peck's son gave me his [00:07:28 -> 00:07:35] athletic Jersey from Harvard.

And I prized that Jersey. Now I wore it a lot as a kid and all that. [00:07:35 -> 00:07:40] So it was a little tattered, but I took that into the marriage and she one day threw it away. [00:07:40 -> 00:07:47] She threw it away, threw it away.

Oh my gosh. Okay. So that's, that's the one your wife begs you to [00:07:47 -> 00:07:52] get rid of. Yeah.

Okay. How about you? Let's go. Let's go with Joseph's one thing you're keeping [00:07:52 -> 00:07:57] forever.

One thing your family or spouse or loved one is telling you to get rid of. Yeah. Um, so [00:07:57 -> 00:08:03] crazy story too. I actually have a, the one thing I'd never get rid of.

I have a second edition [00:08:03 -> 00:08:09] book of Mormon. Oh, so cool. Second edition. Yeah.

And not first edition. Yeah. You're not that [00:08:09 -> 00:08:15] first editions are worth a hundred thousand plus. So much money.

Yeah. Um, and, and I actually got [00:08:15 -> 00:08:21] this, I did not get this. I got this from a non-member, uh, this family we grew up with [00:08:21 -> 00:08:28] that bought this old collection of books and in it, they found this second edition book of Mormon. [00:08:28 -> 00:08:33] Then you, we were members of the church.

Was it done at the grant? What's the name of the printing [00:08:33 -> 00:08:37] press? The one in Palmyra? Was it printed at the same place or a different place?

Yeah. Different [00:08:37 -> 00:08:42] place. Okay. Yep.

That's cool. Uh, and, and gave it to me and, and yeah, it's definitely never [00:08:42 -> 00:08:47] thrown that away. Uh, so our viewers and listeners that don't know about this. So we're here in Utah, [00:08:47 -> 00:08:54] prominent religion is the Mormon or LDS church.

Yeah. And the book of Mormon first edition is [00:08:54 -> 00:08:59] very limited and super valuable. And the second edition probably is pretty valuable too. Yeah.

[00:08:59 -> 00:09:06] Yeah. So what's the thing that your wife wants to get rid of? My wife would say, why do you have all [00:09:06 -> 00:09:11] these like shirts hanging in your closet from high school? I still have like all my high school [00:09:11 -> 00:09:17] clothing and never wear it.

You know, it's just mostly just wear, uh, uh, t-shirts that like my [00:09:17 -> 00:09:22] investors give me now. That's most of my wardrobe. All right. Well, we're going to get you a startup [00:09:22 -> 00:09:27] ignition t-shirt for sure.

Okay. That's funny. Yeah. I definitely got rid of all my high school [00:09:27 -> 00:09:31] t-shirts.

It's just like, I don't know. There's no reason to rep the high school anymore, but Joseph [00:09:31 -> 00:09:37] apparently has them all. That's awesome. Okay.

One other thing or two other things. What's one thing [00:09:37 -> 00:09:44] that is an item that would say a lot about you? What comes to mind? I'm going to have Joseph.

Yeah. [00:09:44 -> 00:09:55] Yeah. That's a tough one. Um, item that would say a lot about me, uh, or what's one thing that [00:09:55 -> 00:10:00] would confuse people if they knew that you had it?

That's the other one. Like they would be surprised [00:10:00 -> 00:10:04] that you have something like that. Yeah. Yeah.

Anything come to mind on either of those two? [00:10:04 -> 00:10:11] Well, I don't know. So I, people know me for my hobbies, like pickleball and golf, but some people [00:10:11 -> 00:10:19] don't know what a avid chess player I am. So I have a chess board.

That's a real physical chess board [00:10:19 -> 00:10:25] where the pieces move by themselves when you play it. So if you move your piece, it moves the piece [00:10:25 -> 00:10:30] physically to its spot, takes your piece, moves it off and does this. So maybe they would be surprised [00:10:30 -> 00:10:34] I have something like that and wonder, man, you're must really be in it. Yeah.

Cause you only [00:10:34 -> 00:10:41] have that if you really like chess. How about you, Joseph? Anything that comes to mind? Yeah.

Um, [00:10:42 -> 00:10:50] I mean, it's boring, but I have a lot of books. I love books. Um, got a whole bookshelf full of [00:10:50 -> 00:10:55] pretty much any book I can get my hands on. You have like a big book collection?

Yeah. Yeah. Yeah. [00:10:55 -> 00:11:00] Like old books, antique books, like business books.

Mostly definitely not business books. I hate [00:11:00 -> 00:11:04] business books. Yeah. I'm like, those are kind of boring.

Yeah. Super boring. Mostly like [00:11:04 -> 00:11:09] classic literature. Yeah.

I love to love to read. That's cool. That's a hobby of mine. Which I'm [00:11:09 -> 00:11:15] just going to ask since we're here, what's like your favorite novel of all time?

Well, um, you know, [00:11:15 -> 00:11:21] I'll give you a couple of categories. My favorite biography of all time is a book called with [00:11:21 -> 00:11:25] malice towards none. It's a Lincoln biography. I love to read Lincoln biography.

I read a bunch [00:11:25 -> 00:11:29] of them. That's my favorite. Wow. You're a huge Lincoln fan.

Huge Lincoln fan. That's not a novel. [00:11:29 -> 00:11:35] That's a true biography. You like biographies a lot.

I do too. I do too. Yeah. Uh, and then novel [00:11:35 -> 00:11:42] probably lame is Rob.

Uh, Oh really? Yeah. Uh, love that book. Very profound.

I think everyone [00:11:42 -> 00:11:46] should read it. It's read the on a bridge version. Yeah. It's better.

I have a similar, [00:11:46 -> 00:11:52] very long book. Count of Monte Cristo. Yeah. So good.

Yeah. I think so much. I love both those [00:11:52 -> 00:11:58] movies. They just came out of the TV series.

Yeah. Count of Monte Cristo. You see that? Oh, [00:11:58 -> 00:12:02] did they?

Yeah. Oh no. Yeah. It looks pretty good.

Well, actually I've watched both of them. There's [00:12:02 -> 00:12:06] one made in France. Oh, I'm into it. Yeah.

There's one made in France, one in America. Yeah. The one [00:12:06 -> 00:12:12] in France was really heralded, but of course, French language and dubbed. But the, I watched the US [00:12:12 -> 00:12:18] one was really good too.

But my, you know, the James, uh, Caviezel or that was so good. No, [00:12:18 -> 00:12:22] not James Caviezel. What's his name? Anyway, Caviezel, the actor that made it in like 2002, [00:12:22 -> 00:12:27] that's just a really nice.

So good. Yeah. Yeah. For a two hour movie, right?

Yes. But man, [00:12:28 -> 00:12:34] how do you put that book into two hours? Yeah. Yeah.

Anyway. Okay. I have so many more units, [00:12:34 -> 00:12:38] but it takes so long to answer these questions. Maybe I'll skip them.

Maybe I'll, maybe I'll do [00:12:38 -> 00:12:45] one more, do one more. Okay. Do one more. Okay.

So we'll go to the founder storage unit. Okay. So [00:12:45 -> 00:12:50] here's four things. Let's go quick, rapid fire on this one for both of you.

So first thing, [00:12:50 -> 00:12:58] one founder habit that is necessary and worth keeping. One, one founder habit, one founder [00:12:58 -> 00:13:03] habit that every founder should have. That is definitely a focus. You should, you would say, [00:13:03 -> 00:13:10] Hey, do this monthly bookkeeping, monthly bookkeeping.

Yeah. Wow. Founders and startups [00:13:10 -> 00:13:14] often don't do their bookkeeping. And then all of a sudden they're 10 minutes into a venture and it's [00:13:14 -> 00:13:19] going pretty well.

And they get, you know, interested investors or people and they want [00:13:19 -> 00:13:22] to see their bookkeeping or they will see their financial statements. So I was the last 10 months [00:13:22 -> 00:13:28] gone and they go, Oh, I haven't done any bookkeeping. That's not good. Yeah.

Well, it's one thing you [00:13:28 -> 00:13:34] would recommend. I would say, uh, irrationality, uh, just, just, you don't start a startup unless you're [00:13:34 -> 00:13:39] a little bit irrational. Like you have to have the risk. And then the smarter you get, um, the worse you [00:13:39 -> 00:13:46] get, uh, you know, you got to keep that, that just absolute willingness to try out bad ideas.

[00:13:46 -> 00:13:53] I think there's a reason why, you know, like freshmen in universities are much more entrepreneurial [00:13:53 -> 00:13:59] than like seniors or MBAs or master's students. Right. It's because the more educated you get, [00:13:59 -> 00:14:03] they kind of beat the entrepreneur out of you. Right.

If, if, if, you know, I've heard a lot of [00:14:03 -> 00:14:08] entrepreneurs say, if I knew how unlikely and how hard this was going to be, I never would have done it. [00:14:08 -> 00:14:14] Yeah. Exactly. Like I, I, we did this not because, uh, it was easy, but because we thought it would be [00:14:14 -> 00:14:21] easy.

Yeah. Yeah. Yeah. And, and, and the reality is as you get more smart or experienced or comfortable [00:14:21 -> 00:14:27] with the business world too, you start assessing risk differently.

Right. And because now also you start [00:14:27 -> 00:14:32] having something to lose. Right. Right now you've created, you know, I'm just going to say, you've [00:14:32 -> 00:14:36] probably created a lot of wealth for yourself.

Right. And maybe it's paper right now, but you create a lot [00:14:36 -> 00:14:41] of wealth and you don't want to lose it. So you start saying, Oh my gosh, I gotta be more careful [00:14:41 -> 00:14:47] now. Right.

When you're 22 year old college student, you can go for the gusto and there's not a lot of [00:14:47 -> 00:14:52] consequence. I might lose some top ramen noodles. And that's right. Your Pell Grants funding your [00:14:52 -> 00:14:58] startup.

Yeah, exactly. Okay. So at the flip side of that, then what's one founder, uh, one founder [00:14:58 -> 00:15:05] habit everybody should throw away discard right now. Hmm.

Like what's, what's one of the biggest things, [00:15:07 -> 00:15:11] you're talking to founders, mentoring news founders. You're just like, Ooh, don't do that. [00:15:11 -> 00:15:19] Or don't be that way. Co-CEOs.

Co-CEOs. Yeah. That's actually, I agree with that. Like just, [00:15:19 -> 00:15:25] just ego in general, like just get it out.

Like you, the founder, one of the things I loved is when [00:15:25 -> 00:15:30] we started neighbor, my, me and my two co-founders, we sat down and we, we had a conversation [00:15:30 -> 00:15:34] of like, what's founder going to mean at neighbor? Like what's this title founder going to mean? [00:15:34 -> 00:15:41] And we decided it means two things. One, you get to start with a lot of equity, right?

Like [00:15:41 -> 00:15:46] founders get a divvy up the equity and you get to own a ton of the company. And two, it gets, [00:15:46 -> 00:15:50] it means you get to stay. You started the company. Yeah.

And that's it. Yeah. It doesn't [00:15:50 -> 00:15:55] entitle you to be in a meeting. It doesn't entitle you to a role.

Like the minute I'm not the right CEO, [00:15:55 -> 00:16:00] like bring in the right CEO. Yeah. I hope I'm the CEO 20 years from now, you know, but we all said [00:16:00 -> 00:16:05] that in our individual roles. It's like, it's like, we just want the best person in our, in, [00:16:05 -> 00:16:09] in each roles.

And, and we have to like strive every year to be that person. And if we're not [00:16:09 -> 00:16:14] that person, you know, founder doesn't entitle you to anything. And it's so good. It's like the [00:16:14 -> 00:16:19] book, good to grade.

Your main role is getting the right people on your bus, sitting in the right [00:16:19 -> 00:16:23] seats. Cause you can't do it all. You're not scalable. You have 24 hours, right.

And you need [00:16:23 -> 00:16:29] other good people. And yeah, you can't, yeah. A lot of founders get their egos get hurt. If [00:16:29 -> 00:16:32] somebody hot comes in the company and starts doing really well, they'll go, man, I'm not as [00:16:32 -> 00:16:38] needed as I once was.

Yeah. Guess what? That's kind of your goal. Yeah.

Yeah. And like, it's great to [00:16:38 -> 00:16:43] be needed, but like, you got to deserve it. Get better. Yeah.

Right. Like, like, you know, [00:16:43 -> 00:16:47] you can be great. So I'm going to build on something real quickly. Um, so I'm going to ask [00:16:47 -> 00:16:54] Tyler this, what's the first principle of what not to do.

I teach in the bootcamp, our startup [00:16:54 -> 00:16:59] ignition bootcamp. What it was the first operational principle. I say never, when we, we go down [00:16:59 -> 00:17:04] the cap table and we're saying, don't ever do what? 50, 50.

Yeah. 50, 50. So, cause I'm [00:17:04 -> 00:17:09] building on top of your two CEO things, you know, a company can have two masters, right? [00:17:09 -> 00:17:14] Two leaders that call the final shot.

You need a benevolent dictatorship. And also that's [00:17:14 -> 00:17:20] why in 50, 50 is a disaster in my history. My worst experiences of mentoring students [00:17:20 -> 00:17:26] from BYU or other schools or the thousands I've mentored is when they set up 50, 50 and [00:17:26 -> 00:17:30] they come and say, we're disagreeing with our problem. And they put no mechanism to break [00:17:30 -> 00:17:35] the log jam.

Those are the absolute worst situations and it's bad. And so that's kind of the same [00:17:35 -> 00:17:40] principle you said by two CEOs. Sure. Yeah.

And, or I also just like the whole ego thing. [00:17:40 -> 00:17:44] Right. Like, because like someone who's not teachable, not humble, that thinks they know [00:17:44 -> 00:17:47] everything. And they're just like a, a bowl in a China shop.

That's just going through [00:17:47 -> 00:17:50] everything. And it's like, no, this is the way, and this is what I'm going to do. [00:17:50 -> 00:17:53] But I'm the one who knows it. I'm the one that's going to be front and center.

[00:17:53 -> 00:17:57] Those type of founders usually don't make, you know, what this session of icebreaker [00:17:57 -> 00:18:02] reminds me of how whip smart Joseph is. I was always so impressed at how, and you're [00:18:02 -> 00:18:07] very pensive and thoughtful about principle. You just really are perceptive. I'm not [00:18:07 -> 00:18:10] trying to make your head big, but I, when I first met, I go, man, this guy's whip [00:18:10 -> 00:18:16] smart.

Yeah. So it's because he likes to read so much. Yeah. Yeah.

Yeah. All right. [00:18:16 -> 00:18:19] Let's go. Yeah.

Well, I'm going to cut it. I'm going to cut the icebreaker because [00:18:19 -> 00:18:22] otherwise we're going to spend the whole episode on this icebreaker, even though it's [00:18:22 -> 00:18:27] a fun one. And you know, I like to see what's in Joseph's storage units per se, but [00:18:27 -> 00:18:32] we're going to move on because I want to get to you. And before we move into your [00:18:32 -> 00:18:35] story and like, take us back to wherever you want to take us back to Joseph, I [00:18:35 -> 00:18:39] kind of want to give the viewers and listeners a little bit more of an idea [00:18:39 -> 00:18:44] of neighbor and like the size and what you're doing right now.

I don't know if you [00:18:44 -> 00:18:49] could give us any kind of idea of where neighbors at today. Employees and then we [00:18:49 -> 00:18:54] can rewind and go back. Okay. Where did it start?

Yeah. So what, like just give us [00:18:54 -> 00:18:59] any kind of information. Brag to us about neighbor. Yeah.

Give, give us the awesome [00:18:59 -> 00:19:04] bragging. Well, a neighbor neighbor has done amazing. Like we've got an awesome team. [00:19:04 -> 00:19:10] Um, we've scaled this.

We're in pretty much every city in all 50 States. Um, now we've [00:19:10 -> 00:19:16] got users renting out space, uh, uh, storing their items. We've raised about $75 million. [00:19:17 -> 00:19:22] Uh, like you mentioned at the start from some of the top investors in the world.

And, you [00:19:22 -> 00:19:29] know, I think, I think neighbor, um, speaking to the vision, uh, you know, does Utah have [00:19:29 -> 00:19:34] an Amazon or an Airbnb or an Uber or one of these companies? Like I think neighbor has a real [00:19:34 -> 00:19:42] shot at being Utah's version of that. A big, big public company, um, that they can kind [00:19:42 -> 00:19:46] of create the next level of ecosystem that we want. So like that, that's our goal with [00:19:46 -> 00:19:52] neighbor.

And one more thing, let's take us through a user of neighbor. So a customer, [00:19:53 -> 00:19:58] so somebody needs to store something or somebody has extra space. Those are your two types of [00:19:58 -> 00:20:01] customers. Can you explain that a little bit more?

That two sided market? Is that still the, [00:20:01 -> 00:20:06] is that still the demographic and that's like the, that's right. Yeah. So, so, so our viewers [00:20:06 -> 00:20:11] and listeners can really understand the business model.

Yeah. So, uh, we deal with the same [00:20:11 -> 00:20:16] customer that any storage facility does. It's just someone who's either wants to store their [00:20:16 -> 00:20:22] vehicle, like their boat or RV or, or, or trailer. Really?

Is that like the popular items is like a [00:20:22 -> 00:20:26] vehicle? Oh, we do a ton of vehicle storage. Wow. And then we also have individuals that want to [00:20:26 -> 00:20:32] store like boxes or business inventory or things like that.

So, so that customer is, is not unique [00:20:32 -> 00:20:37] where we're unique is instead of providing it with a storage facility, we have actually four [00:20:37 -> 00:20:43] different types of, of hosts. We call them hosts that provide space. One's like a residential host. [00:20:43 -> 00:20:48] This is like, I rent out my art, my RV pad guy stores his trailer on my RV pad.

You rent out your [00:20:48 -> 00:20:53] shed or your garage or just any space you have around your home. That's where we started. We started [00:20:53 -> 00:20:58] as like the Airbnb of storage. That's what we grew to all 50 States.

That's the core of our business. [00:20:58 -> 00:21:03] Still like the biggest component of our business today. So if I have half of my garage, I could [00:21:03 -> 00:21:09] rent it out three years, rent it out. Yeah.

Like I'll use a couple of Utah examples. Like we've got, [00:21:09 -> 00:21:15] um, a guy, uh, actually not far from here in American fork who, you know, couldn't afford to [00:21:15 -> 00:21:21] buy his first home. Um, but like wanted to buy his first home. And so he found a home that had a [00:21:21 -> 00:21:28] little extra space behind it and, uh, bought it and rented out that extra space for some like [00:21:28 -> 00:21:34] trailer and RV storage.

And it pays 50% of his mortgage. Yeah. So like now he can afford this [00:21:34 -> 00:21:39] like bigger home, you know, the bigger lot that he wanted to get, uh, basically house hacked through [00:21:39 -> 00:21:45] neighbor. Yeah.

Yeah. I don't want to stop you. I got, you just made me think I, there's a lot of [00:21:45 -> 00:21:49] young people in order to afford a home right now. I know many of them here in Utah that do this, [00:21:49 -> 00:21:54] they get a home and they kind of build an in-law apartment a little bit so they could [00:21:54 -> 00:22:00] pay half their mortgage for another people.

But why not build some space storage and not have to [00:22:00 -> 00:22:07] deal with the people and renters and clog toilets and all that hassle with humans. Right. Does that [00:22:07 -> 00:22:12] make sense? I think I actually think you could be a good idea for helping people do what they're [00:22:12 -> 00:22:17] doing without having to deal with humans.

We, we do say like the gig economy has been awesome. [00:22:17 -> 00:22:22] And you mentioned some of those companies, uh, and it's economically empowered so many people. [00:22:22 -> 00:22:29] However, at the end of the day, most gig economy solutions are jobs, their work. You think like [00:22:29 -> 00:22:33] you want to earn money on Uber, you got to go drive around.

Like you're trading your time for money. [00:22:33 -> 00:22:38] You gotta be a landlord. If you're Airbnb, Airbnb, and the person stays for two nights and then they [00:22:38 -> 00:22:43] leave and clean up a lot of most people end up hiring a management company to manage their Airbnb [00:22:43 -> 00:22:50] neighbors. The first, you know, big nationwide marketplace is like truly passive income.

Like [00:22:50 -> 00:22:56] take my space. For example, I rent out my RV pad. My current renter moved in probably 13, [00:22:56 -> 00:23:02] 14 months ago. And I spent 20 minutes helping him, like showing him the space on the first day.

[00:23:02 -> 00:23:08] I have done literally nothing for that ever since. And I get a direct deposit in my bank account every [00:23:08 -> 00:23:12] month pays my utilities. That's awesome. And it's just like free money.

I wasn't going to use that [00:23:12 -> 00:23:16] space. I don't, I don't own an RV. So like, I didn't need that space. It was just the right [00:23:16 -> 00:23:19] house for us.

And we happened to have a little RV pad next to that. [00:23:19 -> 00:23:23] That's fantastic. Yeah. I mean, let's maybe, yeah, let's go.

[00:23:23 -> 00:23:26] That was the first thing he was going to go down as you said four things. [00:23:26 -> 00:23:28] Yeah. Yeah. That was the first, what's the other three?

[00:23:28 -> 00:23:33] Yeah. So, so, so then, um, you know, we've got the smaller residential hosts like me, [00:23:33 -> 00:23:37] but then we have what we call power hosts. And these are guys, you've heard of maybe people start [00:23:37 -> 00:23:42] to invest in Airbnb. We get people that start to invest in neighbor and they'll like buy more property.

[00:23:42 -> 00:23:48] Um, like we've got a guy that has a large property up in Lehigh that's earned 250 K on our [00:23:48 -> 00:23:55] platform. Um, you know, and you just bought a large lot, uh, and, and stores a ton of vehicles [00:23:55 -> 00:23:59] on it, or it has a small warehouse, you know, we get individuals that have like a small warehouse [00:23:59 -> 00:24:02] and they'll rent out like the whole warehouse. It's kind of funny. You're saying this because [00:24:02 -> 00:24:12] the number one best use of space is renting out to mobile homes or RVs because right.

I won't name [00:24:12 -> 00:24:16] the family. We know them really well, but they're here in Utah County, basically billionaire, [00:24:16 -> 00:24:23] the King of mobile home parks. Wow. Cause you take that land, break into 200 square foot pads [00:24:23 -> 00:24:30] and rent it at very hyper square foot space.

When you think about it and also low maintenance, [00:24:30 -> 00:24:34] just what you're saying. No cap. So yeah, that's an interesting idea. I'm starting to think I should [00:24:34 -> 00:24:39] go get some and get on neighbor.

We'll have, we'll have real estate investors. They own 10 rental [00:24:39 -> 00:24:45] properties and they'll start, you know, they'll rent out, um, their garage or, or some space on [00:24:45 -> 00:24:50] neighbor. And it's great. Cause you know, their net cash on that property mortgage is $2,300 or [00:24:50 -> 00:24:57] rents $2,300 a month.

Mortgage is $2,000 a month. So they're earning $300 a month in net cash. [00:24:57 -> 00:25:01] And they come with, they layer neighbor on, we generate them another $300. We just doubled their [00:25:01 -> 00:25:05] net cash.

Yeah. And they'll do that for a while. And then they'll start doing the math. And [00:25:05 -> 00:25:10] they're like, why am I buying more rental properties?

You know, if you had take, take [00:25:10 -> 00:25:15] Utah, if you had 500 K to invest in Utah, that would buy you roughly a townhome, right? It's [00:25:15 -> 00:25:20] about a townhome in Utah right now. And you could rent that out for call it what? 2,000, [00:25:20 -> 00:25:26] 2,500 a month.

Um, so you're talking like 25 grand a year in rents. If you Airbnb'd it, [00:25:26 -> 00:25:32] you could probably push your yield up to like 30 to 40 grand per year in rents. If you took [00:25:32 -> 00:25:40] that same 500 K, that would get you an acre lot, maybe in the right spot, two acres, you [00:25:40 -> 00:25:43] know, like an acre to two acre lot. And you could earn a hundred thousand dollars a year.

[00:25:44 -> 00:25:48] So instead of $25,000 a year, like a hundred thousand dollars a year, renting it through [00:25:48 -> 00:25:51] neighbors. So all of a sudden, what's it's stuffing it full of vehicles or something? [00:25:51 -> 00:25:55] Just vehicle. Yeah.

There's so much to what's the going rate for storing a vehicle on neighbor. [00:25:55 -> 00:25:58] It depends on your area. I mean, if you're in downtown New York, it's like $600. [00:25:58 -> 00:26:05] Yeah.

If you're in Lehigh, you know, it's anywhere from, you know, 70 to $150 a month. [00:26:05 -> 00:26:11] Yeah. Okay. I'll do it.

Yeah. You tell your PR guy, let's do a little mini, um, [00:26:11 -> 00:26:16] show following you and me figuring this out and have me be a guy and I'll do it here in Utah County. [00:26:17 -> 00:26:21] I'll do it. Let's make some money.

If you guys want to do it, let's make it fun and I'll do that. [00:26:21 -> 00:26:26] And we'll, we'll, uh, have it be a kind of a story we could put out on the internet. [00:26:28 -> 00:26:34] For sure. Yeah.

And by the way, like for anyone that is interested, you included, we have a little [00:26:34 -> 00:26:39] site called, um, it's just neighbor.com slash income. And what it is, this cool tool called [00:26:39 -> 00:26:46] blueprint. When you go to that, we will pull up a satellite view of any lot in the country and you [00:26:46 -> 00:26:53] can zoom in on it.

And then you can actually blueprint out to the centimeter, uh, how you're [00:26:53 -> 00:26:58] going to design the lot, map it out. Yeah. And it'll use local pricing data to say an occupancy [00:26:58 -> 00:27:02] data to say, here's how much you're going to earn off of this property. And you can know like how [00:27:02 -> 00:27:05] much you're going to earn before you even buy the property.

That's cool. Let's make a story. I want [00:27:05 -> 00:27:10] you to coach me and let's film it and make it fun. Oh my gosh.

Let's do it. So I, cause I hear about [00:27:10 -> 00:27:18] the other ones. Yeah. So, so the third is we actually work with large owners of commercial real [00:27:18 -> 00:27:23] estate.

So big REITs. I don't know if you're familiar with the term REIT, real estate investment [00:27:23 -> 00:27:29] trust, big publicly traded owners, uh, sometimes publicly traded owners of, of real estate. And [00:27:29 -> 00:27:35] they own office space. They own retail space.

They own a multifamily space. And we'll go to these big [00:27:35 -> 00:27:41] portfolios and we'll say, you have a lot of space that could be rented out. So let's take, we work with [00:27:41 -> 00:27:48] a $30 billion apartment REIT. Um, and they've got apartment buildings all over the country.

And, and the [00:27:48 -> 00:27:52] first way we work with them is they have excess parking. The city makes them build so many stalls [00:27:52 -> 00:27:58] per unit. And so they end up with extra. We take all that extra.

We rent it out for long-term [00:27:58 -> 00:28:04] vehicle storage. They like it because it's very stable and it looks like their core rents and [00:28:04 -> 00:28:09] it flows straight to their NOI. So they're taking this money and across their portfolio, they can [00:28:09 -> 00:28:14] earn a million dollars a year. Well, that's not just a million dollars a year.

They're putting a cap [00:28:14 -> 00:28:18] rate on that, you know, so we're increasing the value of their portfolio by 20, 30, 50 [00:28:18 -> 00:28:18] million dollars. [00:28:18 -> 00:28:20] Because it's an NOI cap rate. [00:28:20 -> 00:28:21] It's an NOI cap rate. [00:28:21 -> 00:28:25] So that's really good.

Do you have, so, you know, there's local REITs here, right here [00:28:25 -> 00:28:28] in Utah County. So do you work with Sundance Bay? [00:28:29 -> 00:28:31] Uh, I don't know if we work with Sundance Bay. Honestly, I don't know.

[00:28:31 -> 00:28:32] His name's Stan Ricks. [00:28:32 -> 00:28:33] Yeah. [00:28:33 -> 00:28:34] Good friend of ours. [00:28:34 -> 00:28:36] Yeah.

We'd love to, love to talk to him if we don't work with him already. [00:28:36 -> 00:28:39] Just went to his birthday party. So if you want to be introduced there, I'd love to see [00:28:39 -> 00:28:40] that happen. Help him.

[00:28:40 -> 00:28:41] That'd be great. [00:28:41 -> 00:28:46] Yeah. He turned his, uh, uh, real estate fund into a REIT about five years ago and [00:28:46 -> 00:28:47] he's been thriving. [00:28:48 -> 00:28:48] Yeah.

I'd love to meet him. [00:28:49 -> 00:28:49] Okay. Let's do that. [00:28:50 -> 00:28:50] Okay.

[00:28:50 -> 00:28:52] That's another thing. Hopefully we can follow up on all this business. [00:28:52 -> 00:28:53] Yeah. [00:28:53 -> 00:28:54] What's the fourth thing?

[00:28:54 -> 00:28:58] So that's not the only way we'll work with these apartment REITs. Like most apartment REITs [00:28:58 -> 00:29:03] actually have built storage lockers in the interior for their tenants as like a tenant [00:29:03 -> 00:29:08] amenity, but their tenants never use them. Um, they're like 20% occupied. So we'll take [00:29:08 -> 00:29:12] all the rest of them and rent them out to the community for, for item storage, where you can [00:29:12 -> 00:29:15] come store your items in the nice apartment building across the street.

You got your storage [00:29:15 -> 00:29:16] locker. It's much closer. [00:29:16 -> 00:29:17] Great idea too. [00:29:18 -> 00:29:19] So that's the third category.

[00:29:19 -> 00:29:21] Um, told you whip smart. [00:29:21 -> 00:29:21] I know. [00:29:21 -> 00:29:26] Yeah. And, and, and seriously, these guys are earning six, seven figures a year on neighbor.

[00:29:26 -> 00:29:31] Um, and then finally we actually work with the storage facilities themselves. So all the [00:29:31 -> 00:29:34] largest storage companies in the country, they post their space. [00:29:34 -> 00:29:38] So you're becoming a channel partner for them, a channel partner for them. Cause we've got [00:29:38 -> 00:29:41] all this public storage.

Number one, they're number one, $50 billion. [00:29:41 -> 00:29:45] How did, okay. So this, you sent, you brought this up. So you're actually helping them as [00:29:45 -> 00:29:46] a channel partner, fill their vacant space.

[00:29:46 -> 00:29:51] Yeah. In fact, public storage has every location in the country listed on our platform. [00:29:51 -> 00:29:56] Let me ask you this at first, when you started though, you were a big disruptor. [00:29:56 -> 00:30:00] I, in my opinion, I think to them, right.

Yeah. How did they first treat you? [00:30:01 -> 00:30:06] Oh, well, it's funny. Um, you know, do you know what the largest company in the state of Utah is?

[00:30:07 -> 00:30:08] Uh, extra space storage. [00:30:08 -> 00:30:12] That's right. Yeah. Yeah.

Like out of everything that's ever been started, [00:30:12 -> 00:30:18] this is how big storage is like just a quick aside on the storage industry. Um, because [00:30:18 -> 00:30:23] marketplaces, you know, you may, maybe a quick aside on marketplaces too. You mentioned [00:30:23 -> 00:30:29] marketplaces being hard and they are hard. They're extremely difficult and I could talk about why, [00:30:29 -> 00:30:36] but they're also the biggest outcomes.

Like all of the biggest companies are all marketplaces. [00:30:36 -> 00:30:41] Like Google's a search marketplace, you know, website creators, searchers come together and [00:30:41 -> 00:30:46] at its core, every marketplace is just a search algorithm. Yeah. Sorting space.

Um, Amazon's a [00:30:46 -> 00:30:52] marketplace, obviously. It's just the first part of it. The launch is hard to get the chicken and [00:30:52 -> 00:30:57] egg of the two-sided marketplace. Yeah.

If you think about it, like we get hosts on our platform, [00:30:57 -> 00:31:03] uh, we get renters and there's no hosts, the platform's valueless to them. And then we get a host [00:31:03 -> 00:31:06] and there's like no one to book their space. It's valueless. So when everyone shows up to your [00:31:06 -> 00:31:13] platform, a marketplace is worthless to everybody and until more people.

So you literally have to [00:31:13 -> 00:31:21] have people willing to sit there and a valueless marketplace. Yeah. Critical mass and wait and like [00:31:21 -> 00:31:27] stick it out until it's worth a little bit. Yes.

Yeah. And then, and then it's worth a little bit [00:31:27 -> 00:31:34] more. And then eventually over lots of time and effort and hard work, there's enough renters to [00:31:34 -> 00:31:39] where like the hosts get booked really quickly and there's enough hosts that the renters have lots [00:31:39 -> 00:31:44] of choice and price disparity. So with that, would you say the demand side of that, that equation is [00:31:44 -> 00:31:50] much more important than the supply side?

Well, that's the age old debate supplier demand. And [00:31:50 -> 00:31:57] the reality is in the early stages of a marketplace that shifts about every three to six months. Like [00:31:57 -> 00:32:02] you go from demand constraint to supply constraint to demand constraint to supply constraint. Yeah.

Uh, [00:32:02 -> 00:32:11] and, and, and then you get bigger and usually one, one of those two ends up dominating where you become [00:32:11 -> 00:32:16] a supply constrained or a demand constrained marketplace. Yes. We're so hyper local. Most [00:32:16 -> 00:32:23] marketplaces have, you know, you use Uber, you live in Utah, but you use Uber in Chicago when you have a [00:32:23 -> 00:32:28] car in Chicago, right?

Airbnb, you use somewhere else. Neighbors kind of the first like super hyper [00:32:28 -> 00:32:34] local marketplace where I want my storage actually as close to my house as possible. Yeah. So, so we deal [00:32:34 -> 00:32:40] with this dynamic in every single market.

It's different whether we're supply or demand constrained. [00:32:40 -> 00:32:46] It's like on a market basis. What a great PhD primer. Our audience just got in marketplace for [00:32:46 -> 00:32:54] sure.

Yeah. Concepts. Very exciting what you're saying. Um, so, so, uh, you have this marketplace [00:32:54 -> 00:33:01] concept.

Well, what we want to be is we want to be the best place for a renter to go. Cause at the end [00:33:01 -> 00:33:05] of the day, even though you talk about supply and demand in a marketplace, who gives you money, [00:33:05 -> 00:33:13] your demand, like the demand is who pays you. Yeah. And so like, we want to be just the no brainer [00:33:13 -> 00:33:19] solution where you have no reason to start your search anywhere else, but on neighbor.

com. Yeah. [00:33:19 -> 00:33:27] And so adding these, these traditional self-storage facilities is, is the perfect fit for that because [00:33:27 -> 00:33:34] now they can come on for years. We've been saying like, you know, peer to peer stuff is, is maybe [00:33:34 -> 00:33:40] cheaper or closer to your home.

Right. And now they can see that on our website. They can see the [00:33:40 -> 00:33:44] traditional self-storage option. They can see the public storage unit or the extra space storage [00:33:44 -> 00:33:49] unit.

They can also see the garage in the neighborhood and then they can compare them all in one place. [00:33:49 -> 00:33:54] They don't need to check across different websites. So why would you start your search [00:33:54 -> 00:33:58] anywhere else? Like if you want a storage facility, we got it, you know, back to this [00:33:58 -> 00:34:03] question though.

So at first, did they view you as an enemy? So, so I brought up extra space storage, [00:34:04 -> 00:34:10] which is now a great partner of ours and, and, and just amazing what they've done. Like [00:34:10 -> 00:34:17] go, go have Ken Wooley on this podcast. Like talk about one of the, the, the, [00:34:17 -> 00:34:22] like undersold Utah entrepreneurs.

He's had, he's had the best outcome of any entrepreneur in Utah. [00:34:22 -> 00:34:27] Yeah. And, and yet when you think about like, who are the, who's the Matt Rushmore is so dominant. [00:34:28 -> 00:34:32] Yeah.

Yeah. Who's the Mount Rushmore of like Utah entrepreneurs. I don't think most people put them [00:34:32 -> 00:34:37] there, but you should, you know, like who's had a bigger outcome? Nobody.

Yeah. Um, so you should [00:34:37 -> 00:34:41] have them on and, and we love having them as partners, but I'll tell you, we're going to go through [00:34:41 -> 00:34:47] you to get them on. Yeah. Yeah.

Uh, the, the, the first year we were in business, we were neighbor.com [00:34:47 -> 00:34:57] N E I Y B O R.com. Wait, N E Y N E I Y B R.

So we essentially replaced the G, the G and the H with [00:34:57 -> 00:35:02] a Y. Yeah. Kind of like Lyft, but way more complicated. Yeah.

Um, a bunch of us old codger [00:35:02 -> 00:35:06] investors, mentors were saying, you gotta, you fix that. And we were like, yeah, you go get the [00:35:06 -> 00:35:13] domain for us. Yeah. Like help us out.

Um, so, so extra space storage sued us and we were like six [00:35:13 -> 00:35:20] months old as a business. Um, and we're like, what? Uh, and we got a lawsuit, like actually got [00:35:20 -> 00:35:26] served. Like this guy in a Harley jacket shows up, you know how it is.

It says Joseph Woodbury, [00:35:26 -> 00:35:33] you've been served. Neighbor storage Inc. Yeah. Has been served.

And what it was, we start leafing [00:35:33 -> 00:35:38] through the thing and we had done a door flyer, um, that we, cause, cause you know how we got our [00:35:38 -> 00:35:44] first house? We knocked doors. Yeah. We literally just went out and I wanted to ask people.

I wanted [00:35:44 -> 00:35:48] to ask you how you drummed up the first demand. I mean, a very manual, like do things that don't [00:35:48 -> 00:35:55] scale. And so we had this door flyer that we'd given out and it had, it just said on it, do you [00:35:55 -> 00:36:00] have extra space in your home, you know, rented out on a neighbor and interesting, like we're [00:36:00 -> 00:36:05] competitive with extra space on the demand side. Like we acquire the same demand where we're not [00:36:05 -> 00:36:09] competitive on the supply side.

Like they're not trying to get hosts. Yeah. So this was a host [00:36:09 -> 00:36:14] geared flyer. You use the term extra space.

They circled the term extra space and said trademark [00:36:14 -> 00:36:21] violation. Of course it's not. You're, you're allowed to use you defend it. So, so how knit [00:36:21 -> 00:36:27] neighbor.

com with what money? Yeah. You know, like how are you supposed to defend that? We talked to [00:36:27 -> 00:36:31] attorneys and they're like, yeah, this is a slam dunk win for you.

Like this, you don't even have [00:36:31 -> 00:36:36] to try on this case, but it's still going to cost you 50 to a hundred K people. So this is a good [00:36:36 -> 00:36:43] TJ moment too. I always tell people this IP law is the most expensive branch of law. Right.

And they [00:36:43 -> 00:36:47] don't trade for equity to startups that have these problems. They want their cash. Yeah. They want to [00:36:47 -> 00:36:55] be paid their fees.

Right. And it's super expensive. Yeah. Yeah.

So, so, so fortunately, um, [00:36:55 -> 00:37:01] through some contacts, actually through some of our investors at Pelion who knew, um, Ken, Ken, [00:37:01 -> 00:37:08] they reached out to him and said, like, are you aware of this? And Ken was awesome and was like, [00:37:08 -> 00:37:13] no, no, no, we shouldn't be doing this. It was just some of their IP attorneys, you know, going crazy [00:37:13 -> 00:37:20] at the lower level. Justifying their existence.

Exactly. And, and so it all went away. Um, but like, [00:37:20 -> 00:37:25] oh my God, that was our first experience. Uh, but, and now we're like these super close partners and [00:37:25 -> 00:37:29] we love, we love working with them.

Right. There's another lesson you're teaching here. And that is [00:37:29 -> 00:37:34] having good investors, good advisors, good mentors can help you through things like this. Because, [00:37:34 -> 00:37:40] um, over my career of mentoring, there's been many people that have received a cease and desist [00:37:40 -> 00:37:46] or trademark violation or like that.

And they come so panicked. And if, when you're a startup, [00:37:46 -> 00:37:50] you probably panicked a little, you go, what the heck? Right. I mean, a little bit, [00:37:50 -> 00:37:54] you're six months into it and you hadn't had this experience in life.

And all of a sudden this lawyer [00:37:54 -> 00:37:58] from this massive company is still in this. And I've had people come over to my house, like saying, [00:37:59 -> 00:38:04] do we just give up and stop this business now? And I go, no, first of all, settle down. I promise [00:38:04 -> 00:38:12] you five years from now, you'll laugh about this.

And I go, it's not very funny right now. And it's now [00:38:12 -> 00:38:16] to you, it's kind of comical, right? And he tells a fun story at the time. Were you a little panicked?

[00:38:16 -> 00:38:20] Oh, for sure. It was like, it's like, I got to figure out how to deal with a lawsuit. [00:38:20 -> 00:38:25] But then you had mentors and investors that could calm me down and say, this is just part [00:38:25 -> 00:38:28] of business. This is what lawyers do.

This is what big businesses do to slow down competitors. [00:38:29 -> 00:38:32] Sometimes there's all sorts of reasons they do this. Even if there's no legal standing [00:38:32 -> 00:38:36] that they would ever win on it, they have the money to do it. You don't have the money [00:38:36 -> 00:38:41] to defend yourself.

Yeah. Yeah. That's honestly though, like, you know, you ask where you panicked. [00:38:41 -> 00:38:47] And if I really think back to it, I probably should have been, um, back to this, [00:38:47 -> 00:38:53] like rationality.

I was kind of like, we'll be fine. Like, yeah, no, no, that's the naivete [00:38:53 -> 00:38:57] that's needed by an entrepreneur. I believe that neighbor was going to be, it was just going [00:38:57 -> 00:39:01] to be successful. Like this was an inevitable idea, right?

It's just like inevitably going [00:39:01 -> 00:39:05] to be successful. So I was kind of like, Oh, people probably get sued all the time, you know? [00:39:05 -> 00:39:10] And they do, you know, and that action is just a slow down tactic. Most of the time.

[00:39:10 -> 00:39:14] Yeah. Welcome to America. But let's redo those four are fascinating though. Run through the four [00:39:14 -> 00:39:18] because we just are summarizing something really important.

So number one is the core business of [00:39:18 -> 00:39:23] a person renting out half of their garage to somebody else in their neighborhood. That's [00:39:23 -> 00:39:27] why you're called neighbor. Yep. Second one is what was the second one?

It's those same people, [00:39:27 -> 00:39:32] but they go like, we call them power hosts. They start investing. They start making a business out [00:39:32 -> 00:39:38] of it. Just like 150 K or a hundred K a year on the platform.

So somebody that somebody that says, [00:39:38 -> 00:39:42] I'm going to have 10, I'm going to actually go buy property just to put on the neighbor system. [00:39:42 -> 00:39:47] That's right. Okay. Number three is existing big REITs and apartments.

Apartment owners, [00:39:47 -> 00:39:53] retail owners, office owners, unused space that they can turn into money that actually increases [00:39:53 -> 00:39:58] their net operating income, bringing lots of value. And the fourth one is the existing storage [00:39:58 -> 00:40:06] industry as partners. That's right. Yeah.

And for us, it's like, we don't care for how you develop [00:40:06 -> 00:40:10] this business model. It's really cool. Yeah. It's awesome.

And it's good for the customers, [00:40:10 -> 00:40:15] right? Like we don't care. Use a customer, what space you end up in. We want you to end up in the [00:40:15 -> 00:40:21] right space.

Consumers always win when disruptors like you change an industry and bring in new ways. [00:40:21 -> 00:40:28] It's incredible. Look at lodging. Airbnb has made lodging better.

Uber has made taxis [00:40:28 -> 00:40:33] 1,000 times better. I haven't gone in a taxi since my first Uber ride because I hate taxis. [00:40:34 -> 00:40:41] Are your storage like massive partners happy with what's happening within your marketplace and within [00:40:41 -> 00:40:46] their side of the supply and the traction that they're getting within your platform? [00:40:46 -> 00:40:52] Yeah, I think so.

I mean, you mentioned Airbnb. They just talked in their latest release about all [00:40:52 -> 00:40:58] the work they're doing with hotels right now. Yeah. And they talked about certain use cases where a [00:40:58 -> 00:41:05] hotel is better.

You know, like if you're just showing up for one day in a city and you just want [00:41:05 -> 00:41:10] to like be in and out, a hotel is actually like a better experience, right? If you're going to stay [00:41:10 -> 00:41:16] for a week and like really, you know, get into the city, Airbnb is a way better option, you know, [00:41:16 -> 00:41:19] like a tradition. And you know, there's a hybrid happening now. I just got to tell you, because [00:41:19 -> 00:41:25] this is, you're bringing up that these disruptors transform an industry and then become the incumbent [00:41:25 -> 00:41:30] and part of the incumbency, right?

So what's happening now is I just went to California and [00:41:30 -> 00:41:36] Arizona and there's actually people buying homes that have like seven bedrooms and they're renting out [00:41:36 -> 00:41:42] these bedroom and having a common kitchen for single travelers that just want to come in for [00:41:42 -> 00:41:46] one night and not have, because a lot of places say it's like one night, they don't like doing one [00:41:46 -> 00:41:50] night rentals, right? Cause then you have to clean and it's expensive also with the cleaning fees, [00:41:50 -> 00:41:57] they've made it.

So now you can have seven bedrooms in a house, rent them out on Airbnb and not have, [00:41:57 -> 00:42:01] and it just economically and mathematically is working really well. That's kind of what you're saying. [00:42:01 -> 00:42:06] Yeah. And it's, it's, it's like the word that I would use, you know, use the word incumbent, [00:42:07 -> 00:42:11] a marketplace, again, it sounds really simple.

What you do is you create a market, [00:42:11 -> 00:42:17] right? Like you create choice. Whereas before there wasn't choice, you know, there weren't as many [00:42:17 -> 00:42:24] options, marketplaces, they expand the pool of options and they centralize them into one place. [00:42:24 -> 00:42:29] You don't have to comb the internet.

Like I'm sure you could have found, you know, actually like [00:42:29 -> 00:42:35] someone's space to store your stuff on would have been really hard. You had to go like Craigslist [00:42:35 -> 00:42:39] or something and leaf through and, and the trust problems not solved. So marketplaces solve the [00:42:39 -> 00:42:47] trust problem. It's like, now there's one place you can go to and you can look at all of the options [00:42:47 -> 00:42:53] available.

That's what Amazon did. Right. There was lots of stores, even online stores that you [00:42:53 -> 00:42:58] could go to and like, fine, there's pets.com and whatever.

Amazon is just like, what if we put that [00:42:58 -> 00:43:02] all in one place? Yeah. And made it really easy where you could search and filter through all of [00:43:02 -> 00:43:07] the options all at once, pick the top one for you and buy it. We'll send them the money.

We'll take [00:43:07 -> 00:43:11] care of sending. And then it has reviews and feedbacks too. You probably have review feedbacks [00:43:11 -> 00:43:16] for years, right? Absolutely.

A trust factor. We need to, we need to go into his history real quick, [00:43:16 -> 00:43:22] but I'm going to say one last, uh, teaching thing here too, cause it's so important. So on marketplaces, [00:43:22 -> 00:43:26] like we've said, they're hard, but you're saying how powerful they are, which is completely true. [00:43:26 -> 00:43:30] So I just want our viewers and listeners to have the right perspective here.

I'm going to see if [00:43:30 -> 00:43:34] you agree with this statement. Marketplaces are extraordinarily hard to get off the ground [00:43:34 -> 00:43:38] because of that waiting period of that two-sided market, the buyer and the seller to get the [00:43:38 -> 00:43:44] critical mass, whether it's geographic or nationwide or worldwide, whatever your geography is, [00:43:44 -> 00:43:50] if that's important or whatever constraint there is on that's a, uh, like geography in the marketplace, [00:43:50 -> 00:43:56] you have to have buyers and sellers of good numbers to get it going.

But at first you'll [00:43:56 -> 00:44:02] often have too many on one side and everybody's going to question the value at first. Right? So [00:44:02 -> 00:44:07] here's my hypothesis to you. I want to see if you agree.

If any of our viewers and listeners are [00:44:07 -> 00:44:13] thinking about marketplaces, they have to be very careful to do good lean startup validation and make [00:44:13 -> 00:44:22] sure their idea is really wanted and desired. Yes. And it has to be a good marketplace idea. [00:44:22 -> 00:44:29] If I think weak marketplace or tangential or halfway marketplace ideas will not make it through that [00:44:29 -> 00:44:35] early stage and die.

And why I would tell most entrepreneurs not to pursue a marketplace first. [00:44:35 -> 00:44:41] Yep. Here's why I think you worked. And I'm just be honest here.

You're super smart. You're super, [00:44:41 -> 00:44:46] I mean, you're really one on the top intelligence of the students I've run into from university and [00:44:46 -> 00:44:50] you're super pensive. You're a deep thinker. Everybody listening to this can see that.

[00:44:50 -> 00:44:58] And you also had a hugely good idea in a, probably a sharing economy vertical. That's even stronger than [00:44:58 -> 00:45:04] Uber and Airbnb. That's what I feel. That's right.

So that all has to come together to get through that [00:45:04 -> 00:45:09] first phase. So everybody will wait the time for the marketplace to start being productive. Does that [00:45:09 -> 00:45:14] make sense? Do you agree with what I'm saying?

I completely agree. And an emphasis on market size, [00:45:14 -> 00:45:21] like marketplaces do not work in small markets. Even if they're good ideas, even if people want [00:45:21 -> 00:45:26] them, if you were to start like a snowboard sharing marketplace, there'd be people that would want to [00:45:26 -> 00:45:31] like rent your snowboard. It's not a big enough market because let me put the hard, you put it one [00:45:31 -> 00:45:36] way, which was excellent.

Let me put it a different way. The business we've had to build, we've had to [00:45:36 -> 00:45:46] build a full blown e-commerce business, uh, to acquire renters, right? Uh, then we've had to build a full [00:45:46 -> 00:45:52] blown SaaS business to acquire all of the hosts and spend double the money to acquire all the hosts [00:45:52 -> 00:45:58] and to build like enterprise grade SaaS that works for these $30 billion companies. Yeah.

And we had to [00:45:58 -> 00:46:03] build a whole payments company in, in the middle because off the shelf billing, like stripe billing [00:46:03 -> 00:46:08] doesn't work for marketplaces because it, the transactions are so much more complex and there's, [00:46:08 -> 00:46:12] you don't have three price levels. You have infinite price levels. You build your own payments [00:46:12 -> 00:46:18] company, we had to build three companies. And what do we get for it?

All the revenue that we bring in, [00:46:19 -> 00:46:25] which everyone calls, we'll, we'll, they'll, they'll call your revenue GMV instead. We get this [00:46:25 -> 00:46:29] tiny little portion. So we have to do all the work you did. Uh, and instead of keeping a hundred [00:46:29 -> 00:46:34] percent of the revenue, we get to keep, you know, fraction, a fraction of that revenue.

And we have [00:46:34 -> 00:46:39] to build three other businesses also and pay for those businesses very hard. So it needs to be [00:46:39 -> 00:46:45] really big to where you get a tiny fraction of enough payments that it pays for the whole thing. [00:46:45 -> 00:46:51] So question on that marketplace size or that market size from the beginning, did you set out [00:46:51 -> 00:46:58] to do something with storage? Like you identified, wow, storage is a huge market.

Yeah. Let's do [00:46:58 -> 00:47:02] something there because now it seems really obvious, right? Like, Oh yeah, there should be [00:47:02 -> 00:47:08] an Airbnb of storage or a marketplace of storage. But when you were building it and this didn't exist, [00:47:08 -> 00:47:14] like, was it always going to be within storage?

And I think that's a great segue into like the [00:47:14 -> 00:47:19] history here. Yeah. This is where my co-founder and I pair really well. Okay.

Pause on that. Cause [00:47:19 -> 00:47:24] there's one important thing. Yeah. James Currier of NFX.

Yeah. Okay. You have you follow his [00:47:24 -> 00:47:29] newsletter. Incredible.

Everyone should. Okay. So he wrote in 2019, a legendary article called [00:47:29 -> 00:47:34] the software for the next 10 years is not marketplace, but market networks. What you [00:47:34 -> 00:47:39] just described is what I've been preaching for 20 years to people.

Cause I figured out when they went [00:47:39 -> 00:47:44] to go to marketplace, I said, you're going to have to build a SAS to make it work. Right. Okay. So [00:47:44 -> 00:47:47] James Currier put it in.

I just want to know if you were aware. It sounds like you are, of course, [00:47:47 -> 00:47:53] love his stuff. Yeah. And what it is, is that you truly have a marketplace is going to have to, [00:47:53 -> 00:47:58] the way you become indispensable to one side of that marketplace is by having that SAS.

[00:47:58 -> 00:48:01] Right. Does that make sense? And you get, and guess what? You don't get to charge for it.

[00:48:01 -> 00:48:05] Yeah. Yeah. And you get to give it away for free. Yeah.

And so, so, but this is important [00:48:05 -> 00:48:09] to understand. So there's a great article. People should look up James Currier about market networks [00:48:09 -> 00:48:14] and he redefined the term and that's what you have basically done. Do you agree?

Yeah. Yeah. Well, [00:48:14 -> 00:48:20] a lot, a lot of times we do try to say monetize that SAS if you can. Sometimes you can.

[00:48:20 -> 00:48:26] Like, cause there's basic good management tools or business, you know, tools or customer profiling [00:48:26 -> 00:48:32] tools that these, you know, provider side people can use and end up actually implementing within [00:48:32 -> 00:48:37] their business. Like if someone wanting to put hair salon marketplace together, if you empower [00:48:37 -> 00:48:43] the hair salon with a management tool. You can monetize the SAS if the SAS you're building [00:48:43 -> 00:48:49] is their core business.

Yeah. If the marketplace you're providing is tangential to their core [00:48:49 -> 00:48:54] business. You cannot. For example, these apartment REITs that we have, their core business is [00:48:54 -> 00:48:59] apartments.

Yeah. They do. They actually don't care about the million dollars a year we bring [00:48:59 -> 00:49:04] them. They don't care about it unless it's the easiest thing they've ever done.

Yeah. [00:49:04 -> 00:49:09] So smart. It's like, if this costs them time away from their property managers, they like [00:49:09 -> 00:49:13] us because we come in and say, you get pitched on ancillary income all the time. We're the [00:49:13 -> 00:49:17] first people that are not going to make your property managers do anything.

It's going to [00:49:17 -> 00:49:22] be completely easy. That's how you make tangential work. Or you can charge for it. If you're building [00:49:22 -> 00:49:27] like we've built full on CRM, we've built it.

We have the world's best storage CRM and no [00:49:27 -> 00:49:30] one pays for it because we're giving it away for free to all these tangential. [00:49:30 -> 00:49:34] I know that was interrupting, but that's what he just said is so important for us. [00:49:34 -> 00:49:39] No. Yeah.

So important. Yeah. Let's get to his history. I think everybody that is building [00:49:39 -> 00:49:42] a marketplace needs to watch this episode.

You just said, we're going to tell this. [00:49:43 -> 00:49:48] This is so good. It's core. You can't sell this if it's tangential.

Cause I think a lot [00:49:48 -> 00:49:52] of entrepreneurs mix that up too. Yes. It's so good. Okay.

Before your co-founder, you [00:49:52 -> 00:49:54] were just going to go in there. We want to go back later. Where did you go high school? [00:49:55 -> 00:49:58] Where'd you grow up?

I grew up in a little town just outside of Vegas called Boulder [00:49:58 -> 00:50:02] City, Nevada. Okay. But you've ever been to the Hoover Dam? Yeah.

That's us. We built [00:50:02 -> 00:50:06] it. That's there you go. Okay.

And so you went to high school and then you came out to [00:50:06 -> 00:50:12] BYU here in Utah for college and then finished your college career. And when did you meet [00:50:12 -> 00:50:16] your co-founder and when did this all start with neighbor? Yeah. So, uh, and were you [00:50:16 -> 00:50:21] entrepreneurial beforehand?

Absolutely not. I, I, I, my co-founders and I, I don't think [00:50:21 -> 00:50:25] we ever thought we'd start a company and different, different people are different. [00:50:25 -> 00:50:30] And some people are like, I'm determined to start a company. Wow.

Um, I grew up in, in [00:50:30 -> 00:50:35] Vegas. There aren't a lot of tech startups in Vegas. Like everyone's a lawyer, a doctor, [00:50:35 -> 00:50:39] an accountant, personal injury attorney, the personal injury, all the billboards, my [00:50:39 -> 00:50:43] family, they're all attorneys. Okay.

Um, not personally. Carter's brother went to the [00:50:43 -> 00:50:46] dark side too. He's an attorney. Yeah.

Yeah. And so like, I honestly, I thought I'd like [00:50:46 -> 00:50:53] go to college and be an attorney. Yeah. And then, um, my freshman year, someone, uh, I was [00:50:53 -> 00:50:57] looking for like things to get involved in clubs.

And I had this friend who was like, [00:50:57 -> 00:51:02] you should join the investment banking club, uh, at BYU. And so I was like, okay, I'll do [00:51:02 -> 00:51:06] that. And he's like, a lot of people were there. It's great.

So I joined, I didn't know, I didn't [00:51:06 -> 00:51:12] even know like what an income statement was, you know, I knew nothing, but I went and I was [00:51:12 -> 00:51:17] like, this is amazing. Like there's a whole new world here. And I was like, I'm going to [00:51:17 -> 00:51:23] go work for an investment bank this year. And everyone was like, no, no, no, you, you [00:51:23 -> 00:51:26] wait till your junior year.

And then after your junior year, I was like, no, no, no, no, [00:51:26 -> 00:51:31] I'm doing this this year. So I applied to a bunch of them. I, and, and fast forward, [00:51:31 -> 00:51:37] I got this internship right after my freshman year to go down, uh, to a bank called Columbia [00:51:37 -> 00:51:43] West Capitol in Phoenix, Arizona, small boutique, like a hundred million dollar deals. Um, and, [00:51:43 -> 00:51:46] and I was, I was like, I know nothing in the interview.

I was like, I know nothing [00:51:46 -> 00:51:51] about this, but I will work harder than anyone you've ever had. And they were [00:51:51 -> 00:51:54] like, we're not going to give you one of our spots, but we're going to talk and see [00:51:54 -> 00:51:58] if we can open up an extra spot. And if we can, we'll give it to you. So I got [00:51:58 -> 00:52:06] it.

I show up and they're like, build an LBO model, uh, LBO, leverage model. All you [00:52:06 -> 00:52:13] have to know is like, think in Excel, that's like 500 rows deep, you know, and it's this [00:52:13 -> 00:52:18] recursive model. I never used Excel before. Like never, I didn't even know what Excel is.

[00:52:18 -> 00:52:26] And I had this PDF guide. And so I'd sit there until midnight or everyone go home at five. And [00:52:26 -> 00:52:34] I'm just like typing in things until I figured out like how an LBO model worked. Um, so then [00:52:34 -> 00:52:43] I get back, uh, uh, took accounting 200 and like aced the class.

Cause now I knew what EBITDA was [00:52:43 -> 00:52:49] right. Um, left on my mission and got back from my mission. And I was like, okay, now I'm doing [00:52:49 -> 00:52:54] this investment banking thing. And I, I did a call with one of my friends that had worked at that [00:52:54 -> 00:52:58] investment bank with me, but he was several years ahead of me.

He was, you know, closer to [00:52:58 -> 00:53:04] graduating and he had gone on to get a job with Morgan Stanley and their tech practice, tech investment [00:53:04 -> 00:53:10] banking practice. That's like what everyone wants to do. And I was like, Hey, I'm back. Let's catch [00:53:10 -> 00:53:15] up.

And he was like, do you still want to do investment banking? I was like, absolutely. He [00:53:15 -> 00:53:22] was like, don't. I was like, what, what do you mean?

Like you, you did this. He was like, I want you to [00:53:22 -> 00:53:26] call everyone who, you know, that went and did investment banking and ask them how they liked their [00:53:26 -> 00:53:31] job. And so I did, I called a couple of friends and they all hated it. Yeah.

And we're like, don't do [00:53:31 -> 00:53:36] this, please. And so I called him back. I was like, okay, no one likes it. What should I do?

[00:53:37 -> 00:53:42] He was like, well, you should do consulting. He had left Morgan Stanley. Now he's a Bain and company. [00:53:42 -> 00:53:49] And I was like, what's consulting?

Never heard of this before. And he was like, well, it's, it's, [00:53:49 -> 00:53:53] he kind of gave me a description. I was like, okay, I'll trust your judgment. How do I do that?

[00:53:53 -> 00:53:58] Yeah. He's like, well, Bain's coming on campus. They have interviews in two weeks. And he's like, [00:53:58 -> 00:54:01] you probably not, it's probably not going to work out for you, but like, you should just do it for [00:54:01 -> 00:54:05] the experience.

You can apply next year. Cause I had just gotten back from my mission. So I was [00:54:05 -> 00:54:10] like, okay, cool. Uh, let's do this.

Like, will you do a couple of practices with me? So we did a [00:54:10 -> 00:54:15] couple of these like case practices. And I learned afterwards that people will do like a hundred of [00:54:15 -> 00:54:21] these case practices. I got the interview and then to my surprise.

And I think to his surprise, [00:54:21 -> 00:54:28] I got the job. Wow. So then I went in, uh, the summer job with Bain. Wow.

Okay. That's right. [00:54:28 -> 00:54:35] So, so, uh, the summer after my junior year, I interned with Bain and company. They gave me a [00:54:35 -> 00:54:39] full-time offer at the end of that summer.

And I was like, this is the dream, right? Like this is, [00:54:40 -> 00:54:43] this is all I ever wanted, you know? So I accepted it on the spot. Where was it out of?

Was it in [00:54:43 -> 00:54:49] Boston? Dallas. Yeah. Oh, Dallas.

Okay. Out of their Dallas office. Um, I loved my experience there. [00:54:49 -> 00:54:54] It was, it was a ton of fun.

So accepted this Bain and company offer and then came back to BYU to [00:54:54 -> 00:55:01] finish my senior year. Okay. My co-founder Preston Alder, he, that same summer I was at Bain and [00:55:01 -> 00:55:08] company, uh, right before the summer started, he and his wife had just gotten married. And a week [00:55:08 -> 00:55:13] after they got married, they moved down to South America to work for this humanitarian org.

So you [00:55:13 -> 00:55:18] can imagine like you just got married. You haven't even moved into apartment yet together and you're [00:55:18 -> 00:55:23] leaving the country. What do you do with all your stuff? You know, you've got these like now [00:55:23 -> 00:55:27] combined stuff.

People gave you a bunch of wedding presents and you don't want to take it to Peru with [00:55:27 -> 00:55:34] you. Um, so he needed a storage unit and he tried to get one and kind of had the same experience that [00:55:34 -> 00:55:41] a lot of people have, which is that all the storage units close by were totally full storage is 95% [00:55:41 -> 00:55:46] occupied nationwide. So like over half of all storage facilities are just totally full. So he couldn't find [00:55:46 -> 00:55:50] one.

He was going to have to drive half hour. There's a lot of hoarders in this world. There [00:55:50 -> 00:55:56] are. Yeah.

Well, and, and not just hoarders, like I think hoarders get a bad rap, but yeah, [00:55:56 -> 00:56:03] but a bad rap Tyler, but, and some people truly are hoarders, but, but you think of what's driving [00:56:03 -> 00:56:09] the storage industry. It's the affordable housing crisis, right? It's like it used to exist in San [00:56:09 -> 00:56:15] Francisco and New York. Now it exists in Austin and Salt Lake city and Milwaukee, like all these [00:56:15 -> 00:56:20] flyover cities that didn't have this before.

You can't buy a $300,000 starter home. It doesn't [00:56:20 -> 00:56:25] exist. Yeah. There isn't one.

Yeah. You know? So like people are having to buy smaller and smaller [00:56:25 -> 00:56:31] spaces, uh, for more and more money for more and more money. And if you can't have a home big enough [00:56:31 -> 00:56:35] for your family and your belongings, you get a home big enough for your family and you get a storage [00:56:35 -> 00:56:41] unit for the belongings, kind of the life things you just need.

Last night, a good friend couple, [00:56:41 -> 00:56:45] we were with them and they said one of their children, adult children's having to move back [00:56:45 -> 00:56:51] into their home. Right. And both that couple, the young couple that has to move back in with their [00:56:51 -> 00:56:57] parents, they had to clean out some of the house and jointly share price costs on a storage unit [00:56:57 -> 00:57:03] because they have to store it now. And it's cheaper boomerang kids as expensive as storage is.

[00:57:03 -> 00:57:08] It's a cheaper cost per square foot than living space. Of course. You know? And, and so like, [00:57:08 -> 00:57:14] that's just the reality that exists in the country.

It's why, it's why this industry does 10 times more [00:57:14 -> 00:57:19] revenue than the entire taxi and limo industry that Uber and Lyft disrupted. Yeah. So Preston [00:57:19 -> 00:57:24] basically was like, I want to do something around this and looped you in. Well, what Preston was like, [00:57:24 -> 00:57:29] was like, I'm not going to pay these prices.

One, it's going to be like several hundred dollars a [00:57:29 -> 00:57:33] month. He's like, I pay several hundred dollars a month for my rent right now in Provo. And so, [00:57:33 -> 00:57:38] so he was kind of stubborn and he called a bunch of his friends and found a friend that let him store [00:57:38 -> 00:57:44] in his garage over the summer. Didn't even think about it.

He goes to South America. He gets back [00:57:44 -> 00:57:49] three or four months later, goes to pick his items up from his garage. And he's just kind of thinking [00:57:49 -> 00:57:55] about it. And he's like, okay, one, I felt so much more peace of mind knowing my items were in a nice [00:57:55 -> 00:58:00] clean garage in a neighborhood I trusted.

I actually felt safer here than in a storage facility on the [00:58:00 -> 00:58:04] Yeah. It's scary going to the storage facility. That's not manned by anybody for sure. [00:58:05 -> 00:58:11] And then two, I saved a ton of money and he's like, there has got to be empty space in every [00:58:11 -> 00:58:16] neighborhood in the country.

I just don't know how to find it. No one knows where it is. [00:58:16 -> 00:58:23] Why hasn't someone created like a directory or a marketplace where you could find the space? [00:58:24 -> 00:58:29] So he's the genius that had the idea for this.

And he's the visionary. He's the one that was like, [00:58:29 -> 00:58:34] you could create a storage marketplace here. Well, we run into each other. So he, his major, [00:58:34 -> 00:58:39] he was a strategy major at BYU.

I was a strategy minor. So we'd taken a bunch of classes together. [00:58:39 -> 00:58:44] His wife ended up going to Bain and company. She was a year ahead of me.

So like we knew each other [00:58:44 -> 00:58:48] that way. We were good friends at BYU. We'd met through our, our majors. We did all our group [00:58:48 -> 00:58:53] projects together, things like that.

And so I ran into him a couple of weeks after the semester [00:58:53 -> 00:58:59] started. And he was telling me about this idea he had. I remember going home to my wife that night [00:58:59 -> 00:59:04] and just saying, Preston just had the best idea I've ever heard. Like I thought all the good [00:59:04 -> 00:59:10] marketplace ideas were taken.

Yeah. Um, this was so early in the market. So no, brilliant. Yeah.

[00:59:10 -> 00:59:16] Well, it actually, I don't know if it was early. This was, this is better than Uber and Airbnb to me. [00:59:16 -> 00:59:23] It, Airbnb and Uber people don't realize are 17, 18 year old companies. Like they both started in [00:59:23 -> 00:59:30] 2008.

Yeah. This was 2017, you know, 2016, 2017. So I guess, yeah, you were 10 years behind that [00:59:30 -> 00:59:35] movement, I guess. They were, they were big, massive multi-billion dollar.

In fact, I did a [00:59:35 -> 00:59:42] research project with a professor in school about Uber, which at the time was a, you know, [00:59:42 -> 00:59:50] 40 or $50 billion company. Um, and the whole sharing economy and how, you know, some rules [00:59:50 -> 00:59:55] about how sharing economy companies. So like I'd had some brief exposure to sharing economies [00:59:55 -> 01:00:01] through some research I did with this professor. And when he shared it with me, my first thought [01:00:01 -> 01:00:08] went to, this is brilliant.

Like what's the market, you know? And so like you asked you, I think you [01:00:08 -> 01:00:14] asked, did you guys look for something in a big market? No. Preston solved his pain.

Like [01:00:14 -> 01:00:17] we weren't looking for something in a big market. But it just so happens it was a huge market. We [01:00:17 -> 01:00:22] checked the market after, you know, and it turns out and I was like, oh my gosh, what is the size [01:00:22 -> 01:00:27] of the market? I mean, you just said it's bigger than the taxi travel business.

Is it bigger than [01:00:27 -> 01:00:33] Airbnb? Airbnb is huge too. It's massive. Yeah.

But Uber is actually a bigger company than [01:00:33 -> 01:00:39] Airbnb. Do you know that? I know. Uber is $150 billion company now.

Uber is pretty slick. And [01:00:39 -> 01:00:45] there's room for two big leaders, right? Uber and Lyft and there's Airbnb and Vrbo. Yep.

Although [01:00:45 -> 01:00:51] those were both winner take all. During free capital during Zerp, there was room for two to like [01:00:51 -> 01:00:57] spend hot against each other. Do you know how big Lyft is now? It's a $5 billion company.

Yeah. It was a [01:00:57 -> 01:01:00] $40 billion company. Now it's a $5 billion. Yeah.

It's a clear number two. [01:01:00 -> 01:01:06] Uh, Vrbo, I think same, same thing. It's kind of like Airbnb kind of took most marketplaces [01:01:06 -> 01:01:10] are winner take all in the end. Eventually once the venture capital dries up.

But I do [01:01:10 -> 01:01:15] know the couple out of the Cayman Islands, I've studied them and I don't know the person I mean [01:01:15 -> 01:01:20] I've studied them that started Vrbo back in the day and they ran, they got the $8 million [01:01:20 -> 01:01:25] revenue with like 4 million net profit each year. Just one couple ran out of the Cayman Islands. [01:01:26 -> 01:01:30] Yeah. Crazy story.

Then home away and all that. Yeah. Yeah. But, but I agree years.

I [01:01:30 -> 01:01:37] really, I'm liking it. I'm liking your vertical better. I certainly, well, we haven't even [01:01:37 -> 01:01:41] touched on AI. Yeah.

Um, and, and the, the power that AI is playing. Okay. But so your [01:01:41 -> 01:01:45] history. So then he did this, then he, you guys came together.

How did you two connect [01:01:45 -> 01:01:51] and say, we're doing this? So, so, um, he, he came up with a whole name for it and was [01:01:51 -> 01:01:55] like, I'm doing it. He kind of pitched me on it and pitched our other co-founder, Colton [01:01:55 -> 01:02:00] Gardner, who was at the university of Utah. So he's our, our, our kind of token you representative.

[01:02:01 -> 01:02:08] Um, so that we could truly say like, we're, we're a Utah startup. Um, and, and we just [01:02:08 -> 01:02:13] started working on it while we were in school. I actually don't think any of us were like, [01:02:13 -> 01:02:17] had the intention of like, this is going to be our full-time jobs. We just thought it was [01:02:17 -> 01:02:21] a fun project, you know, like, let's get this up off the ground.

And so we did all sorts [01:02:21 -> 01:02:25] of cool stuff. And it just started as a, as a survey website where you could go on and [01:02:25 -> 01:02:30] fill out a Google form. If you wanted to rent space and you could go on and fill out a different [01:02:30 -> 01:02:35] Google form. If you were willing to like host your space.

Yeah. And we did all the things [01:02:35 -> 01:02:41] in between. So if we got a renter, we would call the renter and we'd say, okay, what do [01:02:41 -> 01:02:45] you want to store? And we call the host and we say, okay, they want to store this.

How [01:02:45 -> 01:02:48] much do you want to charge? And the host would give us a price. And we'd call back the [01:02:48 -> 01:02:51] renter and say, okay, they want to charge this much. You good with that?

Okay. [01:02:51 -> 01:02:54] When do you want to move in and call back the host? They want to move in this date. Does [01:02:54 -> 01:02:59] that work?

Okay, great. We'd send them both a PDF and then the renter would Venmo us. [01:02:59 -> 01:03:04] And then we would Venmo the host, their portion. And that's how we operated the marketplace [01:03:04 -> 01:03:11] until eventually it got to the point where that was too much work.

And so we built out [01:03:11 -> 01:03:16] a very basic website where they could see each other on a map and they could find, they could [01:03:16 -> 01:03:21] find the location they wanted and book them. It still didn't have payments. So once they [01:03:21 -> 01:03:26] booked on the website, it saved us all the call coordination, but now we still reached [01:03:26 -> 01:03:30] out to them for Venmo. They'd pay us and then we'd pay out the host.

Well, then eventually [01:03:30 -> 01:03:33] that stopped working because Venmo shut us down. My co-founder. [01:03:33 -> 01:03:38] You're a business and you're doing it through personal. Yeah.

And I think my co-founder is [01:03:38 -> 01:03:44] like still locked out of Venmo to this day. Um, and so then we had to build payments into [01:03:44 -> 01:03:49] the product and it, by our second semester of our senior year, we're like, man, there's [01:03:49 -> 01:03:53] people that are seriously interested. Like this is solving a real pain. This isn't just Preston's [01:03:53 -> 01:03:58] pain that he solved, which is, I think where most good, uh, platforms start is solving your [01:03:58 -> 01:04:02] own personal pain.

But, but we got a lot of market validation. They're like, there's a lot [01:04:02 -> 01:04:09] of people that want to use this. Um, and so two months before we graduated, we all called [01:04:09 -> 01:04:14] our full-time jobs and said, Hey, we're not showing up. So called Bain and company.

Funny [01:04:14 -> 01:04:19] story here. I called the business school was very worried about this. The, the, I had some [01:04:19 -> 01:04:22] people at the business school that were like, you cannot renege on Bain. You're going to ruin [01:04:22 -> 01:04:27] our reputation.

You know, you know who else had that problem? Who that I mentored Adam Edmonds. [01:04:27 -> 01:04:33] Oh yeah. That was his first mentor.

He's been on the podcast. He, one week before KPMG job, [01:04:33 -> 01:04:41] he reneged and the professors freaked out on him. And I had to go tell him he's an entrepreneur. He's [01:04:41 -> 01:04:45] going to do this.

Right. They want those placement. So, so they did that to you too? Yeah.

They were [01:04:45 -> 01:04:50] like, you're the worst for doing this. Well, so as I was kind of worried, like, how's Bain going to [01:04:50 -> 01:04:55] take this? Um, but I called my partner who I'd worked with the prior summer. Awesome.

Awesome guy. [01:04:55 -> 01:05:02] And you know, he said to me, he said, he said, I think this is a great decision and I'll tell you [01:05:02 -> 01:05:07] a story. He said, when I first started at Bain and company, he's like, I thought Bain was the [01:05:07 -> 01:05:13] dream job. My friends had started this little company.

It was a little cooler company. Like [01:05:13 -> 01:05:17] they're so coolers. And they asked me to come be the COO and help, help them start the company. [01:05:18 -> 01:05:23] And I was like, sounds really fun, but like, I can't turn down Bain, you know, like I gotta go to [01:05:23 -> 01:05:27] Bain and company.

He's like, do you know what that cooler company is called? I was like, no, [01:05:27 -> 01:05:33] he's like, it's called the Yeti coolers. Oh my gosh. So he's like, he's like, I wish I'd taken [01:05:33 -> 01:05:39] that job.

So he's like, I hope you're successful. Like Bain's always going to be here. Yeah. Like [01:05:39 -> 01:05:46] go have fun.

Um, so we did it like, and he should have just backed you. Right. It's like, I think [01:05:46 -> 01:05:51] back to Venmo, Venmo should roll out the red carpet for you instead of, you know, slapping you down. [01:05:51 -> 01:05:54] They should have said, we got a business thing.

We'll wake it really worth it. Let's do it. [01:05:55 -> 01:05:59] Well, I think a couple of years later, they did end up rolling out a business, a business. No, [01:05:59 -> 01:06:02] they do.

Yeah. Yeah. But they still take 3% for the business. They didn't have that at the time.

[01:06:02 -> 01:06:07] Yeah. But 3% is still high. Cause you running your own payments company, you're paying a lot less. [01:06:07 -> 01:06:13] Right.

Right. Yeah. So, um, so yeah, I mean, we hadn't raised any funding, like zero funding. [01:06:13 -> 01:06:18] We'd done some of these business competitions where, you know, I think we'd won probably like 20 [01:06:18 -> 01:06:24] grand in, in business competition stuff.

Um, and we were all like living off Pell Grants, [01:06:24 -> 01:06:27] essentially. I still remember meeting with you in those days for a couple of things here and there. [01:06:27 -> 01:06:34] Yeah. Yeah.

It's fun. Yeah. And, and so it was a little bit of blind faith there. Fortunately, [01:06:34 -> 01:06:40] later that summer, we raised our seed round.

Um, cause we just didn't pay ourselves anything. [01:06:40 -> 01:06:46] So, and we, we had young families. Like we had just, I had two kids while I was in college. Yeah.

Um, [01:06:47 -> 01:06:52] and it's a risk. It's, it's a risk, but we did it. Yeah. If you don't take those risks.

Yeah. Stuff. [01:06:53 -> 01:06:59] I mean, you, if you went the way your father-in-law, I use that term as an analogy, [01:06:59 -> 01:07:03] you would have, why do you know, what are you doing? You got to support this family.

You know, [01:07:03 -> 01:07:08] that, you know, it's a, if you don't take that risk, right. You'll never know. And never [01:07:08 -> 01:07:12] happened. Just like the Bain guy lamenting.

Oh yeah. I've spent 20 years at Bain, but I could [01:07:12 -> 01:07:17] have been at Yeti. Yeah. And I think you made the right choices.

Yeah. And I do think you made [01:07:17 -> 01:07:21] the right choice. There's always a job. Yeah.

You know, like if people think they're taking a risk [01:07:21 -> 01:07:28] with a startup, um, but, but I, you look at it, if the startup fails, you got awesome experience that [01:07:28 -> 01:07:33] people really want to hire you for. Yeah. We look for, we, we love like ex-founders. Yeah.

Like [01:07:33 -> 01:07:37] you learn so much on the way down. Yeah. Almost more than you would learn on the way up when it's [01:07:37 -> 01:07:45] all working. Yeah.

Um, we love to hire those people and for all the reasons you got job offers [01:07:45 -> 01:07:49] before, you're still going to get those job offers. Like the downside is you lose a couple of years. [01:07:49 -> 01:07:53] That's the downside. A couple of years in your early life is not risky at all.

I mean, [01:07:53 -> 01:08:00] the power compounding principles, you've lost hardly anything, but let me just say this. Um, just, [01:08:00 -> 01:08:06] I just want to, I, I, I think there's less risk in being in control of your destiny, doing [01:08:06 -> 01:08:12] the entrepreneur path than taking a job in some ways, because right now the jobs, you know, [01:08:12 -> 01:08:16] the job market is not always, and also half the people that should be entrepreneurs couldn't, [01:08:17 -> 01:08:22] they're not good workers for other people.

Sometimes they should like, yeah, they, and they're [01:08:22 -> 01:08:26] not going to be happy that way. They need to be a founder. So not everybody should be a founder. [01:08:27 -> 01:08:33] That's 100% true of probably a small percentage, but I'm just saying true founder material is not [01:08:33 -> 01:08:37] great being number two, number three, number four, number five, or number 24 at a company.

[01:08:37 -> 01:08:41] Right. And it depends. Like, I think you get a mix. You get those guys that are like, [01:08:41 -> 01:08:45] they, they cannot work for anyone else.

Yeah. But you also get guys like us where, [01:08:45 -> 01:08:49] I mean, I was headed on the professional services track. So was Preston. So was Colton, [01:08:50 -> 01:08:54] you know, we were like totally content to just go be a high performer at a company.

[01:08:54 -> 01:08:56] But you still had the potential. But we were like, [01:08:56 -> 01:08:57] Go the other route. Yeah. [01:08:57 -> 01:09:03] Uh, we were like, this must exist.

Yeah. Like someone's got to do this. Yes. There was a [01:09:03 -> 01:09:06] tipping point for us.

It's what you, Tyler loves of my saying he picked up for me. What do you say? [01:09:06 -> 01:09:11] You ask sometimes when we're interviewing for a potential investment, one of your last questions [01:09:11 -> 01:09:17] is what, what is the reason you feel you cannot not do this? You know who I got that from Adam [01:09:17 -> 01:09:23] Edmonds, Adam Edmonds, when he turned down KPMG, he goes, John, I cannot not do this.

Right. [01:09:23 -> 01:09:28] It's a weird double negative sense, right? It's so much better than, you know, and this can work, [01:09:28 -> 01:09:34] but sometimes you'll get, um, folks that are like, I want to start a company and I don't care [01:09:34 -> 01:09:38] what it is. They're like, I just see all the success of like people that start companies and [01:09:38 -> 01:09:43] like, I must be a part of that.

So I've got to start a company. And like, I just want all the [01:09:43 -> 01:09:46] success that comes with that. And it's like, I think that can work. I've seen that work.

There's, [01:09:47 -> 01:09:52] there's some people that are, that make that work, but it's like, you know how hard this is [01:09:52 -> 01:09:57] going to be? Yeah. Like this is going to be so hard. Don't, it's a non-economic proposition.

[01:09:57 -> 01:10:01] Mark Andreessen calls it a non-economic proposition. It's the worst way to make money [01:10:01 -> 01:10:06] is starting a company because the failure rate is so high. The best way to make money is to go to [01:10:06 -> 01:10:11] painting like my salary would be a million dollars a year. Blue-blooded, blue-blooded.

That is the [01:10:11 -> 01:10:16] world. If what you care about is making money on a risk adjusted basis, do not start a company. [01:10:16 -> 01:10:22] You should only do it in my opinion, because you really think this needs to exist and you want [01:10:22 -> 01:10:28] to be a part of building that. Like that's it.

It is, it is not for the outcome. And I think [01:10:28 -> 01:10:35] we have a very outcome-based state. Like it's just a commentary on Utah. You look, what are our big, [01:10:35 -> 01:10:39] massive public companies?

Like, do we have any big, massive public tech companies? We've got [01:10:39 -> 01:10:46] Qualtrics. Entrada. Yeah.

Which I'm really excited about. Yeah. Like I think Entrada could [01:10:46 -> 01:10:52] be- That's Adam Edmonds. Yeah.

That's Adam Edmonds. That could be a namesake for Utah. Yeah. But so [01:10:52 -> 01:10:59] many companies, they sell and you take some of our biggest successes that have seeded so much and like [01:10:59 -> 01:11:04] totally grateful that they came before us, but take like Omniture, for example.

I don't think people [01:11:04 -> 01:11:10] realize that Omniture is still alive and well, and it's a $15 billion company. No, I know. [01:11:10 -> 01:11:15] It's called Adobe Experience Cloud. Yeah.

But guess who gets the credit for that? Not Utah. Yeah. [01:11:15 -> 01:11:19] Adobe does.

Yeah. And it's like- No. Omniture could- Those of us that know Omniture sold at [01:11:19 -> 01:11:25] $320 million, their first year Adobe owned it, went to a billion. Yes.

Yeah. And they're now $15 [01:11:25 -> 01:11:33] billion. Omniture could be a publicly traded, massive, standalone company today that's like attracting [01:11:33 -> 01:11:40] talent and spitting off entrepreneurs all over the place. And like- And they did do that [01:11:40 -> 01:11:44] anyway, but yeah.

He did do that anyway. Who am I to judge? Like I might've made the same exact [01:11:44 -> 01:11:49] decision. You know, it's hard to turn down such an attractive offer like that.

Yeah. But I hope that [01:11:49 -> 01:11:54] there are some people out there. I hope I'm one of them, but I don't know. I don't, I won't know until [01:11:54 -> 01:11:59] I'm in that position.

You know, I hope there's some people that are like, no, I'm going to build a big [01:11:59 -> 01:12:04] public company regardless of whether it's the best economic outcome for me. Like I don't care about [01:12:04 -> 01:12:09] making money. I just want to build a big company. If it's just to make money, you'll actually never [01:12:09 -> 01:12:15] make it.

Right. Okay. But if you have a vision of what the world could be and the people you could [01:12:15 -> 01:12:20] help with your product or service, and that's what matters to you, then learn how to take care of the [01:12:20 -> 01:12:25] money side. Right.

But this is your primary motivator. Then you'll make it. Yes. We got, [01:12:26 -> 01:12:30] we got to ask your last question.

We got, we got to wrap up, but this is so good. This is a great [01:12:30 -> 01:12:35] transition into the very end of this podcast. And I want to ask you two things as we wrap up, [01:12:35 -> 01:12:43] because that was a great final note. One, I want to ask you the last ending words for all the [01:12:43 -> 01:12:49] marketplace entrepreneurs right now, because there's been so much gold in this, but like if [01:12:49 -> 01:12:53] a marketplace entrepreneur comes up to you and he's like, you're doing neighbor Joseph.

And how have [01:12:53 -> 01:12:57] you gotten there? How have you built this? What have you done? What are you telling those people?

And [01:12:57 -> 01:13:02] how can you broadcast this today on the podcast to like final parting words? That's the first one. [01:13:03 -> 01:13:09] And then the second one is then just overall, what's like one thing you want to leave everybody [01:13:09 -> 01:13:14] with. So marketplace specifically, and then all entrepreneurs specifically.

So marketplace [01:13:14 -> 01:13:21] specifically, first, I'd say if back to what we said, if, if you don't think this absolutely must [01:13:21 -> 01:13:26] exist, and this is like your, your life goal, get out now, like, don't do it. They're like, [01:13:26 -> 01:13:33] seriously, don't do it. Don't do a marketplace. But if you think that, that the world must have [01:13:33 -> 01:13:38] this, then marketplaces are the best business model out there.

In fact, I think you should [01:13:38 -> 01:13:45] choose companies by how hard they are to start because the, the biggest companies were the [01:13:45 -> 01:13:50] hardest to start because that's what gives them a moat, right? And moat is what gives you monopoly [01:13:50 -> 01:13:55] read zero to one by Peter Thiel. He says, the only thing you want to create is a monopoly. That's what [01:13:55 -> 01:14:02] you want.

You want a monopoly as a business. Oh, um, because everything else is competitive and goes [01:14:02 -> 01:14:08] to zero and marketplaces end up monopolizing spaces because they're so hard. And because no, [01:14:09 -> 01:14:15] if someone wanted to do what we do, they would have to go city by city, every single city and get the [01:14:15 -> 01:14:21] supply that we have. It was hard for us.

It'd be even harder for them because they have to convince [01:14:21 -> 01:14:26] them to leave our platform. We had to convince them to try something. There was no alternative. [01:14:26 -> 01:14:32] They have to convince them to leave our platform, which is sending them tons of renters and has all [01:14:32 -> 01:14:37] the demand.

They don't have any demand. So marketplaces have these incredible moats and [01:14:37 -> 01:14:43] moat is an increasingly important thing in the age of AI. And you're building a digital product is an [01:14:43 -> 01:14:49] example of that. Lyft had it's in the ZERP period, zero interest rate period, had the ability to get [01:14:49 -> 01:14:55] capital and buy customers.

But then when money became expensive to buy customers, they went down. [01:14:55 -> 01:15:01] So if I was an investor in the age of AI, the only companies I would be putting any money in [01:15:01 -> 01:15:07] are marketplaces. Because you look at the seven powers, uh, framework, like they're the only [01:15:07 -> 01:15:13] companies right now that have any hope, you know, like of, of being standalone. If you're building [01:15:13 -> 01:15:20] a digital product, AI can do that better.

And these AI companies that are growing 10 X year over [01:15:20 -> 01:15:24] year, that looks attractive, like to join that company. Like I want to join that company is [01:15:24 -> 01:15:30] growing 10 X year over year is exciting. Just like it looked attractive when you had these like [01:15:30 -> 01:15:37] DTC companies, there's different phases of startup. They grew super fast, but they were really easy to [01:15:37 -> 01:15:41] build.

So as soon as there was profits there, eight competitors came in, sucked up the profits [01:15:41 -> 01:15:46] and they all went bankrupt. The same thing is going to happen with all of these fast growing AI [01:15:46 -> 01:15:50] startups. You're actually at a disadvantage for starting today. The guy that starts in six months [01:15:50 -> 01:15:54] is an advantage over you because he's using better technology.

And the guy that starts six months [01:15:54 -> 01:15:59] after that has an advantage to you in building your digital product. He can build everything that [01:15:59 -> 01:16:03] you built for a fraction of the cost. The asterisk on what you're saying comes back to, [01:16:03 -> 01:16:09] it's got to be the right combination of founder. Yes.

Size of market, the vertical, the dynamics [01:16:09 -> 01:16:14] within the players in that industry that you're disrupting. Right. All that has to come together [01:16:14 -> 01:16:20] just right. And you were saying the complexity or the hard difficultness of building the marketplace [01:16:20 -> 01:16:25] is actually better.

It means you'll make a lot of money if you can make it work. And yes, the moat. [01:16:25 -> 01:16:32] Okay. Last question.

For general entrepreneurs out here, we have lots of first time wannabe [01:16:32 -> 01:16:38] entrepreneurs, et cetera. What's your tip you would leave them on? One piece of advice. Oh man.

One [01:16:38 -> 01:16:47] piece of advice. Um, all that matters, like you, you, I appreciate this. You said I'm, I'm very smart. [01:16:47 -> 01:16:54] I, I actually question whether that's true or not, but what I will say though, but I don't think [01:16:54 -> 01:17:01] that's the determining factor.

I think it's all about work, like work, work, work, period. There [01:17:01 -> 01:17:07] is no other way to do it. Like if, if we don't have a $50 billion company in Utah, it's not because [01:17:07 -> 01:17:12] people haven't tried, like it's hard. And, and the only way to build a successful startup is just to [01:17:12 -> 01:17:19] work at it.

You're going to have major down periods, major difficulties, every single startup. [01:17:20 -> 01:17:26] I know a lot of the CEOs at Utah companies neighbor looks really attractive. I'm sure from [01:17:26 -> 01:17:32] the outside end, like raised $75 million nationwide, crushing it, uh, from Andreessen Horowitz. I also know [01:17:32 -> 01:17:38] the founders of all the most successful companies in, in, of my cohort.

I don't know a lot of the [01:17:38 -> 01:17:44] older guys. I know of my cohort, those guys, you would not believe the difficult things they [01:17:44 -> 01:17:50] have to deal with behind the scenes. Like it, there is not a single hot company in Utah that [01:17:50 -> 01:17:55] hasn't gone through or is going through like extraordinarily difficult things. There's no [01:17:55 -> 01:17:59] such thing as overnight success.

Yeah. And they made it in spite of that because they worked their [01:17:59 -> 01:18:05] tails off. And you bring up the point. So I'll say this for average, intelligent, hardworking [01:18:05 -> 01:18:10] people will always outperform one single genius, right?

That's what, that's kind of a point you're [01:18:10 -> 01:18:16] saying. So you're just saying, get ready to roll up your sleeves and work. Yes. So if, so I say this, [01:18:16 -> 01:18:23] if you just want to be rich and you're kind of lazy, but you, that's what people that there's so [01:18:23 -> 01:18:27] think of all the entrepreneurs in Utah you've met that kind of fit that description, right?

Right. [01:18:27 -> 01:18:32] They really just want to be rich and successful. Right. Okay.

But they really want to play video [01:18:32 -> 01:18:37] games. A lot of the day, they're not really wanting to buckle up and work hard. Like when [01:18:37 -> 01:18:42] Tyler was doing dev mountain, that's all he did. Right.

He had to be at that company the whole time [01:18:42 -> 01:18:46] and he had to be there and they had to, you know, office together and they had to figure things out. [01:18:46 -> 01:18:49] They went through hard times. There were times when they go home at night and think it was all [01:18:49 -> 01:18:54] crashing down. So you're kind of just saying reality check.

This is going to be super hard. [01:18:54 -> 01:18:57] This is the hardest thing you can do with your life. And you're going to have to get rid of like [01:18:57 -> 01:19:02] most things in your life. Distractions.

It's kind of like how bad do you really want it? Are you [01:19:02 -> 01:19:08] willing to work as hard as you ever worked in your life for years? For years. Yeah.

And it's all [01:19:08 -> 01:19:16] going to be paper forever. Yeah. Well, Joseph, this has been incredible. Thank you.

Thank you for [01:19:16 -> 01:19:22] helping me trick Tyler. And also thank you for this incredible episode. Yeah. Thank you.

Yeah. Thanks for [01:19:22 -> 01:19:26] having me on. I think this is a must watch for every single entrepreneur, of course, but I think [01:19:26 -> 01:19:31] specifically for the marketplace entrepreneurs. And I love what you said.

If I was investing today, [01:19:31 -> 01:19:35] it's marketplaces, baby. A hundred percent. That's with, and with the caveats. Yeah.

With [01:19:35 -> 01:19:40] the caveats, right? All these, no caveat, but those things got to line up. Stars got to line. Okay.

[01:19:40 -> 01:19:44] Thank you so much for watching this episode of the startup ignition podcast. Thank you, Joseph, [01:19:44 -> 01:19:49] for coming on again. It has been a pleasure. Tune in, like, subscribe, reach out to Joseph.

The guy's [01:19:49 -> 01:19:53] such a nice guy. He's got a big following. Go follow him on LinkedIn. Give him a follow wherever [01:19:53 -> 01:19:58] I'll see it's on social media.

Go follow his company neighbor. They're doing rent your space. Yeah. [01:19:58 -> 01:20:02] And rent your space on neighbor.

That's the last shout out we'll give. So thank you so much for [01:20:02 -> 01:20:03] watching. We are out.