March 29, 2023
Rowland Hobbs is the Co-Founder and CEO of Stake. Stake is building the financial infrastructure for the next generation of rentals. With technology that aligns incentives between residents, operators, owners, and investors, everyone earns the Return on Rent™ they deserve. A leader in financial product design, Rowland led Accenture and Teneo’s product design practice. Rowland previously founded two companies and has been recognized by Forbes, Insider, and Fast Company. His inspiration for Stake came from a unique overlap of his pro bono work in microlending, loyalty platforms, and banking services.
Julian: Hey everyone. Thankyou so much for joining the Behind Company Lines podcast. Today we have RowlandHobbs, CEO and co-founder of Stake. Stake is building the financialinfrastructure for the next generation of rentals. Rowland, I'm so excited tochat with you, and obviously we've all been renters and, and we've, I'mparticularly interested in the current experience of what renters are dealingwith, how kind of the environment has changed in the last however many yearsthat, that you've seen it change.
Steak has been around since 2018. And,and just from that transition, of course, I'm assuming that's been huge changesto the market. But also this interesting piece of incentivizing people basedon, the life that they're living. Whether it's they're renting a an apartmentor a house or what have you, and how you can kind of impact and influence andkind of, reward them in, in a.
An environment that's not necessarilyself rewarding in that respect. And, people don't think about rewards andrenting. So I'm interested in hearing what Stake has kind of to offer theircustomers and, and more about your journey as a founder. But before we get intoall that, what were you doing before you started the company?
Rowland: Oh wow. Well firstit's great to be here. Thanks so much. Of course. So this is my third startupthird company that I founded. But right before Starting Stake, I was amanagement consultant. I worked with Fortune 500 CEOs. On crises. So it wasliterally like part of a team to be dropped in when companies were like notdoing well.
Like there was sort of like they're inthe headlines for the wrong reasons and we were the team going in, which wasreally great. It was a lot of adrenaline, it was a lot of fun to be able to goand do that, but it didn't have a. , it didn't have a very strong mission orpurpose. Right. A kind of what you'd save a, a Fortune 500 CEO from being inthe news and you didn't necessarily feel like that was super rewarding at theend.
So I really wanted to go back to one Imissed being in the startup world, and then two and two saying that had a, abigger mission, bigger bigger purpose
Julian: to it. Yeah, it'sincredible to think about. I think from, from, another standpoint, bigcompanies when they go through kind of whether it's risk management situationswhere they have.
Manage their, their overall perperception in, in the world. And, and it's different because startups can havesuch a dynamic and quick whether it's a pivot or transition or, or kind of do,but what, in what goes into crisis management, just outta curiosity for theaudience and in regards to, whether it's perception, whether it's operations,what goes into it and what.
interesting situations without getting,I'm sure too detailed. What are some interesting situations you've been in and,and how did you help alleviate the risk?
Rowland: Oh my gosh. Well, myrole was in, in product and, and loyalty. So more or less my role was to beable to make sure that as whatever was happening to the company, stock prices,drop product isn't doing well.
Somebody's hand stuck in the cookie jarand it shouldn't be whatever is going. And so that they don't hemorrhage ontheir core customers. So I've always been worked in loyalty strategies andloyalty programs in my whole career. My first company we worked with AmericanExpress on their membership rewards.
We worked for the Amazon as they createdAmazon Prime. So my job was like, how do you end up keeping your core customersin a crisis? So the problem is you have something bad has happened to thecompany. And you need to keep people engaged, right? And when people arereading in the news or seeing or hearing from their friends, like, Hey, this isa company that's having a problem, you don't wanna go by from that companyanymore.
And so it becomes a self-fulfillingprophecy. We saw that last week with the run on the banks, right? Like, oncethe word is out that, Hey, this isn't working at Silicon Valley Bank,unfortunately that spreads pretty quickly. . My job was to focus there, butthat's a line between like, how do you communicate things better when thingsaren't going well?
But how do you turn it around andactually make people care about the product again? So, but that's what I wasdoing then. And it's it's a fun world because you get a lot of it's a lot ofadrenaline when you come into it, but it's hard to, it's hard to turn a bigship, right? Like a company has that many employees and is that entrenched?
And sometimes, the things are. They'renot ready for the disruption. It happens all the time in in the world today..
Julian: Yeah. And, and inregards to like, when, when you think about loyalty, cuz I think a lot offounders are just oozing at, at keeping their customer not only acquiring yourcustomers, but keeping them and retaining them.
Especially when, things don't work out.Is it, is it dependent on the product? Is it dependent on the program you setaround your customer base and your relationship with your customers? What'sbeen in, in your. Successful for companies to focus on when thinking aboutloyalty and customer loyalty and retention.
Is it, what, what, what, what creates astrong loyalty ecosystem? And is it different based on the product that you're,that you're providing?
Rowland: Yeah, it is gonna bedifferent. I mean, if you're a b2b, it's gonna be different than if you're b2c.If you're a business to business and you're selling to other businesses, bevery different side of business to consumer.
But you know, if you're thinking aboutloyalty, I draw aligned in the middle of a page. And one side is gonna be kindof left brain, the other side's, right brain. You're to have like a very stronglike brand love, like people are in, love products in a way that sometimes theycan't express. And that has to do with relationship, that has to do withfeelings.
It has to do with a lot of stuff that'sreally hard to measure. Yeah. The other side is the things that you canmeasure, which is, churn. How many customers are coming and going, how many arebuying new products from you. Kind of think about. Improving versus decliningcustomers and all that asides that you can directly measure because it's waymore like you can incentivize that change, right?
You can actually put an in sense of,Hey, if you buy this product, I will give you x if you buy this product. Right?And then that's how. Miles work. That's how what we do at Stake with cash backfor renters works. But what you wanna do is that you need to be able to takethat right hand side with like this data, very data focused.
Yeah. And then surround it with brandlove. Right. And, and make it so that people actually care about this thingthat you're giving them. So you can measure it, but you also make people careabout it. .
Julian: Yeah. And how muchdoes like experimenting go into that kind of ecosystem? Thinking about,obviously having foundational metrics to make sure that whatever you're testingor whatever you're putting out there, you can, you can see its success rate.
But also with that creative piece andgetting people attracted, I can go in so many different directions and, and weall have crazy ideas on how to acquire new customers and retain them. But yeah.How much does test, is testing involved in that ecosystem and has, has therebeen a situation where testing.
actually has diminishing effects and,and starts to push customers away.
Rowland: Yeah. Your last pointis well taken. You do have to be careful about, like you need to have a lanethat you're going down, but let you know like, Hey, you wanna. Have an idea,which is where your qualitative research, like your design research could beimportant to at least get the, like, we believe X and now let's go test it.
Yeah. So, with Stake, we do cash back.For renters, the question is how much cash back in each property? Right. Sowhat we provide is, you could have, some of our properties have 2% cash backwhen you pay the rent. Some have eight. . Why the difference? Well, everyproperty's different. Like there's some that are trying to lease up and theyneed to get a lot of heads and beds.
People to sign leases quicker. Yeah. Sothey're probably gonna have a higher. Cashback amounts. Others are just tryingto be able to keep the residents that they have and get them to pay on time, sothey do a lower cashback amount, but we can literally test on our platform inthe same way that you might test like a Instagram ad, right?
Yeah. Right. Where you're saying like,what here's creative that offers 2% cashback, and here's an offer that offers3% cash back. Let's see how it's performing. And, and look at over time. So atStake is created as a way for property owners to be able to use this to figureout what's the best incentive to be able to give.
To get the best result. Now, what I'dadvise for other founders is, you can do these types of ab tests pretty wellusing your CRM systems like HubSpot or whatever. Yeah. But you don't want to beso wild that you're doing like, well, I'm gonna test a cashback approach andthis one's gonna be points.
Or, you need an apples to apples andyour AB test. And also to your point, you don't wanna freak people out by beinglike, well, we stand, what do you, what do you stand for? You wanna be able tomake sure that you keep those kind of consistent for. .
Julian: Yeah. Yeah. Anddescribe Stake a little bit more to the audience who doesn't know.
What was the inspiration behind thecompany? You were working in risk management for l, fortune 500 companies. Whyrent, why rentals, why think about this ecosystem, honestly, and, and being inNew York yourself, why tackle this, this, this huge kind of market? I mean,it's, it's massive and it's, and it's always moving.
It's fast paced. There's a lot ofvelocity. And there's a lot of Stakeholders who, who kind of are involved inthis ecosystem of. What was the inspiration behind the idea and what was thecatalyst to, to start and jump into, to this project?
Rowland: Yeah. So funny. Soreal estate was new to me.
Loyalty had been saying I worked on for25 years, so I was very into. the idea of loyalty, working with a lot of bigbrands. If it was, working with Taco Bell or Weight Watchers, maybe not at thesame time, but you know, like , these are, these are companies that was like,maybe some synergy you might be able to get there so it was, I love this thingof being able to work. to help people spend less on marketing and more onkeeping their customers, like give money, less money to Mark Zuckerberg withFacebook ads. Give more money to your customers and try to keep them improveit. So I love that idea. And on the other hand, I was hearing, every time youhear a loyalty presentation, they talk about the two biggest categories ofshare wallet, which is how they talk about like, how much do we own of thecustomer.
They talk about travel and shopping. Butwhen you really think about how much you spend every. Your biggest cost is yourhousing cost. It's not travel or shopping. It's, so when, call it ChaseSapphire, which is really good at, marketing their card, they, they're lookingat getting people to shop more, but they don't consider housing.
So the initial thing was, well, how canwe tap in to housing? . Mm-hmm. . And so for the first two years weexperimented with a lot of different ideas. We experimented with should it beyou get equity in your home that you live in as a renter, should you getpoints? What about coupons? And the best way I could learn to get up to speedfast was becoming a broker.
In New York? Yeah, so I've never donethis before. I showed a lot of apartments in New York. And if you've ever beenthrough like the rental process in New York, there's nowhere more crazy thanthan New York. We're looking for an apartment. But it was a great way to talkto a lot of renters really fast.
I was really not very good at it, to bevery honest with you. I was not a very good broker, but I was able to talk to alot of renters and so you'd asked them what they cared. Like, put differentthings in front of them. Would it make you help you rent this apartment orthis? And there was one moment where a renter stopped me and he was just like,it's the money stupid.
Like I just care about the money. Likeit's just the money because rent is so expensive. Yeah. It's only the money. Sothat's where we focused on the cash back approach. And cuz people just careabout the cash. They don't care about like a coupon to Applebee's. They don'twanna manage points that are kind of.
Oh, what am I'm gonna do with thesepoints? I have to go in and manage it. They, it's, it, they're worried abouthow expensive the rent is and how to be able to make savings and theirfinancial journey easier. So the so Stake, in 2020 created a cashback rewardsapproach. And we rolled that out just as Covid hit.
Yeah. So I mean, like literally it waslike we were rolling it out and the world comes, to a, to a crashing halt. Butwhat was fascinating is as Covid hit, there was more subsidies or more help andwhat was called the rent moratorium came in, which meant that people didn'thave to pay their rent on.
Right. They, they, in many areas it waslike, Hey, we're, well, that became a big problem for owners and operators, cuzYeah. If people aren't paying their rent, they're not making money. So webecame very popular at that point because we were giving a positive reason forpeople to pay their rent. Hey, pay your rent.
Yeah. And you get cash back wherebefore. It was very negative. You don't pay your rent, you get evicted or youget a late fee. So we were able to come in with a very positive solution tohelp owners and operators and still get more money into renter's wallets in theprocess. So we created this kind of win-win at, at the right time in 2020.
Julian: Yeah. And, and from a,from a founder's perspective, did you go after the operators first or did yougo after the consumers? I'm assuming it would be more strategic to go over theoperator. Create that kind of ecosystem, and then they kind of trickle that downto whoever the rentals are, and then they kind of pay back and they, theycreates that system.
It's like you're pitching almost thatthey'll, they'll get the rent money on the time that they want to andincentivize that. What was the strategy? Did you go after operators and how wasthat learning process? .
Rowland: Yeah. We went afterthe owners and operators first, once we figured out what the consumers wanted.
So that's what we did at first. We didthis thing of like becoming brokers and, and using the, the New York brokeragesystem to be able to meet renters, figure out what they wanted. But that wasnever gonna scale. That was just a way to learn, sure. Because we couldn'tfigure out how to actually influence the renters.
We couldn't help the owners andoperators. Once you went to the owners and operator, What you get in realestate is, and, and this is something that was a problem for me at first. I'dworked with mostly Fortune 500 companies, most of my career, like big companieswhere it's like even if it's big and doesn't move that quickly, at least it'sone company.
Yeah. Real estate is highly fragmented.Right. You may get an owner who owns, let's call it 90 apartments, but they mayuse different property manager. . And even within their organization, there's abig difference between the people who manage their revenue, who manage theasset. What they mean by asset is the property and the property managers are onsite.
So it's very, very fragmented. Yeah, andthere's not a lot of, even though that you have a couple big players who managea lot of properties, there's actually not like a big company that owns all theproperties. There's a few that are big, but they're not as big as like aFortune 500. Yeah, so what we had to learn was how to be able to find the rightrevenue managers with the right sort of portfolio, who had the right problem towork with, we're now 40,000 doors across homes across the us.
But it was, that was the process oflike, Hey, we talked to the revenue manager. We're talking to people at thebeginning, mostly in Georgia and Texas, who are, having a hard time withdelinquencies. Now we've expanded quite a bit. It's been a process to kind ofget that go to market, right? Yeah.
Like can get the right people who who arethere, and it's a very fragmented world. Rentals are very fragmented. So I hadto learn a lot in, in, in that last in, in those couple years there.
Julian: Yeah, I, I, I've beenin those rental lines. Those are definitely brutal. Especially with 50applicants in one location in East Village and going to the same apartment.
Rowland: It's the line out thedoor where like the, everybody's putting their name in and you're just like,you gotta get your money in right now to be able to do it. It's there's not alot of time to be able to think about it. New York's brutal for that. Yeah. Imean, yeah. But it was a good place to be able to talk to a lot of renters reallyfast, so that was good.
Julian: Yeah. Yeah. And nowdescribe the, the mechanics of, giving. Historically it's been difficult to.Have incentives or even pay rent with a credit card, right? It's always have tobe a cash transaction or some kind of transaction that, that is liquid. Right.Describe what it meant to be able to, not only give cash back, but also createhonestly, the mechanics behind being able to pay rent without having to do likean ACH transfer or give them a check or something like that.
What was involved in that? .
Rowland: So we started, there'ssomething called property management software. So property management softwareis what the owner's using to be able to figure out, hey, who's in five H versusone D, and how much are they paying and have they paid on time? Sure. So youcreate these integrations with the property management software.
So what happens is, That propertymanagement software tells Stake if somebody's paid on time Stake, puts thatmoney into their Stake account if they've paid their, their rent on time orcompleted whatever action that the owner wanted them to, to complete. Okay. Sothat was kind of phase one for us.
Like that was just the like, Hey, we cansee that somebody has done the action that the owner wants 'em to take. We cangive the renter the, the cash back and then again in the app. Then we created away for the renter to pay directly using Stake pay, which is our, our visadebit product. So it's a debit card, it's full checking account, and they canearn even more if they pay through Stake.
So now they can pay however they werepaying before. But we actually incentivize 'em to pay through Stake as well,through Stake pay. So we can cover everybody on a property cuz everybody we'retied into the property management software, but we also have Stake pay, whichcan which can help. And so we kind of do both.
And that means that there's no fees.Like if you're paying with a debit card, we have no fees. You're just gettingmore cash back when you pay with the steak Visa debit.
Julian: Yeah. Yeah. And howdoes this change the ecosystem? I can think about so many different ways thatthis change. , the rental experience, being able to even choose properties thatsay, in the future, give me a better percentage back on my steak debit card.
Is that kind of what the overall, orone, how has the market changed in terms of renting and renting habits? Andthen two, what are, how does, how do you see steak playing in this long-termkind of relationship with, with renters and now operators, being that it seemslike renters have a little bit more of a choice than the.
When they're thinking about finding theproperty that is gonna best not only serve their living conditions, but alsoreward them for, for that relationship of paying rent and getting a, getting apercentage back.
Rowland: Yeah. I think that theworld, so when during Covid and up until maybe even six months ago, and stillin some markets, rents were increasing dramatically.
Mm-hmm. , now they're kind offlattening. And it's becoming a little bit more of a renter. Yeah. Than it,than it was before. We've been doing cash back through both of those. I thinkthat what we, what we see is you see renters who are choosing to save thatmoney was, was fake and are saving for something.
So as you get to know what somebody'ssaving for, as mentioning kind of that heart and, and mind before the heartside of it is like, Hey, I'm saving to go for. I'm saving to buy a home.Somebody else is savings. They want a new car, somebody else is saving becausethey want to, lower their student debt or pay off their loans.
And those are real emotional reasons.Those are somebody thinking into the future. So because we know people reallywell, we have this really strong emotional connection, right? Yeah. Because wekind of know what they're saving for and we can help them reach those goals. Soyeah, we have a lot of renters who are want to, we call 'em Stakers.
So, Stakers who wanna stay at a Stakeproperty cause they want to keep earning. And we give them reason. We give themincentive to be able to do it for the owner, what's great of being able to say,Hey, I want a sticker coming in, is they're getting somebody who has a higherpropensity to pay on time because they want the cash back.
So you're getting a renter who, who'smore likely to pay, and you also get somebody who's more likely to stay. So youget somebody who's more, you get both the pay and the stay. Like, I stay herebecause I get more cash back. I pay my rent sometimes, so I get cash back andwe've created a win-win.
In a world where renters and rentalsaren't always in a win-win, right? Yeah. It, it feels a little adversarial andit can feel tough. So now we've created a how everybody can come together andeverybody comes together around the money . So yeah, we gotta make it work onboth sides. .
Julian: Yeah. Yeah. And I knowyou mentioned you were across, I, I think you said $40,000 across the us.
What's been exciting about not onlybuilding that traction, but what, in terms of the next. What, what are youexcited about in terms of, are, are new features or just expanding more of the,the doors that you're kind of servicing more customers, you're providingdifferent programs. Tell us not only about how you're able to get to thattraction, but also what you're, what you're excited about in terms of the nextyear that that's to come.
Rowland: we just launched ourcredit builder products. So we now not only give you cash back, but you canreport your on time rent payments to the three credit bureaus. So, that's statecredit builder. We launched our express paycheck products, which means thatrenters can get their paycheck up to three days earlier.
Which means they can pay their rent ontime if they're using our banking product. And we launched Stake pace. You'regetting more money with that. So we plan to keep on offering more and morefinancial incentives cause we think the problem isn't. , you picked the homebecause it's probably near where you need to live.
You all of that's kind of covered bythe, the asset, like the fiscal side of the location. Yeah. But what you don'tget is the help around your wallet. Like, how am I gonna keep affording this?How do I afford to stay in this neighborhood? How can I keep savings? Yeah.While I'm renting here. And we really wanna be able to have people come out atthe end of that doing better.
So one of the cool things that we'restudying right now is the effect on the overall c. We call it community healthindex, which is not just how the renter's doing. Are they saving more? And notjust how the property's doing, is the property doing better? But it's a wholecommunity improving as people are renting in that area.
And we're actually looking at that froma lot of economic indicators. So I think. We'll give more data to owners toshow how much better their cash back is doing. We'll give more to renters to beable to help them save more, and then we'll do more for the community to showlike, Hey, here's how when you have Stakers in a neighborhood, the wholecommunity does better.
So that's kind of the, the three, thethree legs of the stool that we think about is renter rental, and then thecommunity overall, like how is the community doing?
Julian: Yeah. Do you have anyhypothesis on how it'll affect the community? , you know what, what, what'sbeen able, what's what you've seen as positive outcomes for Stake?
Rowland: Yeah. We've seen, Imean, for the community, we've seen people spend the money locally. Mm-hmm. .So it means that a lot of the money can go more locally. But we've also seenindications and we wanna see how the data really comes out of this, but surprisedus is how much people are spend. on everyday essentials, right?
Yeah. That they might be, if that's hey,they're spending on their medication that they may need or they're spending ongrocery, but they're doing it in the neighborhood directly. So we think theycan have a lot of impact on the on, on local economy where it's been trickyrecently. Mm-hmm. , for local economies to bounce back after, after Covid.
I think there will also be otherinteresting side benefits, and these are only anecdotal, so we haven't got thewhole data yet. Sure. But a lot of people talk about things like, Hey, I'm ableto spend on the things I love. Like I may just go in, like, want to take adance class, or I may wanna be able to, I want to go and, and sign up at thegym.
And this allows them to be able to spendmoney on something that they may. Really wanted to do. That's just kind of forthem. So I'm really interested in, in those stories as well, like what they'redoing to just be able to treat themselves, like it's tough to rent and money'stight. And then if you can go and do that Pilates class or if you can go andtake that dance class or whatever it is that you wanted to do, that's reallyawesome and that helps that that's a better thing for the community, is also betterfor the, for the resident as well.
Julian: Yeah. Yeah. What aresome of the biggest challenges that Stake faces today?
Rowland: we're doing somethingreally crazy hard. Like we're going and saying to landlords, how about you givemoney to your renters? So you don't normally think of your landlord's. Like,the person is like, just like handing out cash . So, so we're on the, we're onthis transformation of changing how real estate can work.
It happened in other areas. It happenedlike with credit cards that happened in hospitality. It happened with Amazonand Amazon Prime. So it's not a new idea of being able to create a win-win inthis way, but it is a new idea for real estate. So the challenge for us is thatwe have done well by having partners who take that risk and go.
I like the way you're thinking aboutthis. I want to prove it out with my portfolio. Yeah. The challenges that youwanna be able to get. People who can start imagining what the world's like, ifthat works. So, painting that picture, painting it with data and showing thatthat data, like, and so we have it.
When you spend $1 in cash back onaverage you get $2 and 14 cents in return. So we, the challenge becomes findingpeople who are willing to be able to. Take that journey with us to being ableto keep proving that with data. Yeah. And showing where that is. I think thatthe economy right now, It is a challenge because it's making budgets really,really tight for real estate.
But at the same time, it gives us thisopportunity because they need better ways to outperform. Like, yeah, it'sinterest rates are a lot higher, which isn't great. For owners and operators,it's a lot harder than it was. Three, four years ago, or even just last year,to be able to refinance a property, buy property.
So I think that it's kind a double edgesword, right? Budgets are tough, so it's harder to be able to win. But on theother side, it's also there's a lot of opportunity to be able to show ownersthat they can outperform. Yeah. An environment that they really need tooutperform. They, they have real problems in front of them that need to, to.
Julian: Yeah. Yeah. I lovethis next section. I call it my founder f faq. So I'm gonna hit you with somerapid fire questions and then love it. Let's see. Let's do it.
Rowland: Cool. Cool. I love therapid fire.
Julian: All right, perfect.Let's do it. First question is, what's particularly hard about your job?
Rowland: Remaining connected tothe renters. Yeah. So you're focused on owners so much. And I love just theside of being able to talk to renters and hearing what their, their challengesare, but remaining connected to them. So I try to talk to them every week, butthat's always a thing, it's a double side of marketplace, so you have to focuson, on both sides.
But yeah. Remaining connected to thetrue end customer is, is a big challenge.
Julian: Yeah. And I'm thinkingabout, rewards programs and you've had such an experience with loyalty andcustomer loyalty. Our rewards programs. I guess let's, let's backtrack on thisquestion. What is the situation where a rewards program or loyalty program haveyou seen just not necessarily successful for either a certain type of productor service?
Or are rewards programs and loyaltyprograms underserved in terms of most products or services and companies thatare out there? What's your opinion on that?
Rowland: People. , there'salways 10th burrito free, right? So they'll go and be like, we have a loyaltyprogram weekend with 10th burrito free or 10th coffee free, or whatnot.
And that's loyalty. That's a loyaltyprogram, not a loyalty strategy because if you're just doing 10th burrito free,you're giving away something that you may not need to give away. So you may belosing money and you have no data to prove that's gonna work. So a loyaltystrategy is where you say, I have this very particular area I need to make moremoney on.
I need, I need to change behavior. .Mm-hmm. . And what is thing I need to change behavior on and can I target thatand make that change happen? So I think that a lot of times people go and belike, well, I'm gonna sign up for a loyalty network where, hey, there's, theyget some points in this network that may be a lot of work to put that in andyou're not gonna get a lot of return and you're kind of doing it because youjust wanna attach the word loyalty to, but it doesn't have a strategy to it.
So I think that's where, and I, I, trustme, I've seen a lot of loyalty programs fail a. As a consultant that waskeeping me in business. Right? Yeah. Is that, that a lot of people couldn'tmake them work. And that's because they couldn't target the right thing. But ifyou think about people who really make it work, Amazon Prime, more peoplebelong to Amazon Prime than voted than the last election.
So they made it work. Right. So there'sones that are like so good at being able to make it work that they've really.And then there's a lot of stuff where it's like it's a 10th burrito freestrategy, and that doesn't, that's, that's just not that
Julian: interesting. Yeah. Andis that because of the way that you mentioned it, they target the wrong thing?
Is, is the wrong thing, say theincentivizing the, the wrong behavior that they're looking to kind of re,having the customer kind of reengage with? Or are they targeting, the wrongincentives? Product. What have you seen in some of those common miStakes? Whatloyalty programs that other founders who are maybe thinking of retaining theircustomer can kind of, avoid the miStakes of , of, of other, of other companies?
Rowland: Yeah, I think that youhave to, so it's just not knowing what the size of the problem is. So how muchdo you spend today to acquire a customer? Your cac, like you have your cost ofacquisition, right? What is that lifetime value of that customer? And then howmuch are you willing to pay? , to get a new one.
Kind of then times by how long thatyou're, you're gonna be able to keep them. You can start getting a sense of thesize of like, what is this worth to you? And if you don't know what it's worthto you, you can't size how to do the loyalty program because like you justdon't know what you're willing to spend.
And when you don't know what you'rewilling to spend, you end up kind of trying to not spend. Right. You're justtrying to find a freebie . And when you try to find a freebie, people don'trespond to free. Cause they kind of see it. And that's why you get the like,yeah, hey, what if we just gave this away for free?
Or give some swag or like, whatever itis, you wanna be able to give somebody that's like, you just haven't reallysized the problem here correctly. So, yeah. It starts with data. It starts withknowing your business and then it, it's like, okay, well, instead of spendingon the top of the funnel, like just getting customers, can I spend a little bitmore to keep the customer.
Julian: Yeah. Yeah, no, that,that well said. In regards to your experience, this is not your first startup.This is at, I think your third startup so far. What, what have you, what issomething you know now that you wish you learned earlier on as a founder?
Rowland: That's such a toughquestion. I would say, , the hardest thing as a founder is knowing as you scalewhen to let go. Mm-hmm. , of , like you want your instinct to, to stay veryinvolved in all the different things. I'm sure if you asked my team to be like,yeah, everyone's probably too involved in too many things, but like it's whendo you start letting go and go, like, okay, that's running itself and nowyou're in more of a, a leadership position.
But when does that time come and how doyou find that that difference? And I'm not sure if I've ever, I mean, I thinkI'm getting better at it. It's my third startup. You never get perfect at it.Yeah. But I think it's the hardest thing. Cause all the things that you did asa founder early. Like the things that got you from zero to one aren't thethings that they're gonna get you from one to three, right?
Yeah. Like the way that you did thatfrom zero to one is you were there like you had to go like the, as an example,I had to go and show a lot of apartments. If I was going showing apartmentstoday, that'd be a really bad idea for, I'd be wasting my time. But it was theright thing then. But my instinct is still to go and talk to the renters, as Iwas mentioning before, like, I want to do that.
Yes. Yeah, how do you, how do you kindof learn the new things that you need to do at the right time for the companyand stop doing the things that may have worked early on, but you just can'tkeep doing it, so, yeah. Yeah. So I think it's, that's always a tough thing forfounders to, to get. And and at the same time, you don't want to bake out whatyou're really good at.
Like, you may be the person who's like,yeah, you're really good at, if you were. An engineer, and you're really goodat coding and now you're not coding anymore. Well, that's a shame because maybethat's what you should be doing, right. That's what your, your, your secretsauce is, yeah.
Julian: Yeah. Yeah. And what'ssomething that you, you tend to, you find yourself spending more time on thatyou would like to spend less time on, and what's something that you spend,lesser of the time that you want to, but maybe want to spend more time on?Anything that come to mind?
Rowland: I spend too much timeon.
I hope our investors aren't listening,raising capital, . And I, and I wish I could spend more time on selling. Yeah,I think the, I mean, we've raised, we've raised over 17 million. It's, we'redoing fine, but it's always more time consuming than you expect. And it'salways on. Like you don't Yeah.
Really stop with, with that side of it.And I wish I could spend more on sales. Yeah. The reverse of that. Gosh. Imean, I think that in the company, one of the things I, I go back to the renterthing. I wish I could spend more time talking with our renters. I love doingproduct work. Like I'm naturally somebody who likes to really get involved inthe Yeah.
In the product. But more time gets takenwith investors and, and sales. Sales. Great. I don't mind doing the sales work,but I wish I could spend more time with with our renters. We just had teams outall across the country visiting all these different property everywhere andmeeting renters and whatnot, and I was so bummed not to be able to, to go.
I mean, it was a decision not to be ableto go to focus on other things, but I would like that it was, yeah. So those,that, that's the time where you actually see like the impact that, that we'rehaving in people's lives. Yeah. And, and that keeps me really. .
Julian: I love that. I lovethat. And I always like to ask this next question cause I love how foundersextract information or knowledge or anecdotes from anything that they ingest.
So if you're, if you were to think back,whether it was early in your career or even now, what books or people haveinfluenced you the most?
Rowland: People, I'll startwith books. Measure what matters, which is, is is probably the only businessbook I think anybody should read. I think that the, kind of the OKR frameworkwhile really hard to pull off mm-hmm. and you have to keep working at it topull it off in a good way. But it's kind of the Bible, like when I get stuck onsign, I go back.
To, to measure what matters. And I thinka lot of people do, so I'm not unique in that, but I would just kind of givethe so I'm not a big business book person. But I do like that. I think the, thepeople that have influenced me the most,
I always look at hospitality. So I gotto work with very early days was what was called Starwood Deferred Guests,which is now Marritt Bonvoy. So it's the group that really created loyalty for,for Starwood Hotels. And anybody who stayed in Starwood hotels at that pointwas like they loved Starwood hotels.
Yeah. Cause the loyalty program isgreat. And the people I worked with there were just so. at how to be able tocombine that like heart and data and be able to get the heart around it. Yeah.And one of the things that they very early days taught me is that if you'reable in a hotel to be able to get the front desk staff to be able to mention,to greet somebody by their name within 10 minutes that you've created, like, Ican't remember what the number was, some dramatic increase in loyalty, likethey're more likely to stay in that property again and whatnot.
And it's just as simple as likerecognizing and seeing that person and recognizing them by name. Yeah. Hey, ,and so it always stuck with me like this kind of like simple idea that seemslike, but they'd actually followed through with the data. They knew exactlywhat it was and that's how they trained their front desk staff.
Right? They trained their staff to belike, if we could get this to happen. So it wasn't just a loyalty point. So itwas this loyalty like heart as well that was built into it. Yeah. So, that wasreally fundamental or foundational for me. as I, as I kind of learned. And Ithink it's important just not only in, we do loyalty for, it's what we sell,but also just in your business, like what are those things that really thatmatter to people?
A lot of times it's just very simplethings like thanking somebody, welcoming a customer. Yeah. More impactful thananything else.
Julian: Yeah. The trainingpiece is interesting and, and having everyone around a culture, so it's likethis, this common experience that guests can share amongst each other. And, andthat's kinda like the, the, the goal is not only a shared experience, but thefeeling behind.
And so exciting to hear about, waysthat, that other companies are doing it successfully. Whether, you, you have asimilar product or, or your product functions in a different way. Creating thatkind of ecosystem is hugely important for the success. And I like to make surebefore we.
Obviously, I know we're clo comingthrough the close of the episode, but before we give you a chance to let usknow where we can find you and where we can find steak is I wanna make sure wedidn't miss anything. So is there any question I didn't ask you that I shouldhave or that you would have liked to answer?
Rowland: Anything come to mind?Oh my gosh. No, I think we, we covered it well. Sometimes people find on myLinkedIn profile that I really like popcorn and we talk about popcorn, but Ithink that it. It's funny in this thing with being a founder right now, maybethe thing we haven't talked about is the state of it's tough out there rightnow.
Yeah. Like raising capitals will bereally hard for a bit. Yeah. Like the valuations have shifted. The market hasshifted from a year ago. There's a lot of conversation about like, Hey, how doyou manage, burn and build to stockpile cash and, and all of this. . I wouldreally encourage founders or maybe even just talking to myself in this andreassuring myself, but I think you also have to have conviction on your idea.
Mm-hmm. and survival's important. Likeyou do want to be able to survive and get to the other side, and you do need tomanage your money well, but. It's also like it's by definition risky. Likebeing a founder and doing a startup is risky, and this is a time where makingbold bats can really pay off if you have really strong convictions.
So I would try to encourage everybodywho you know, on founders side to. , tune out the noise, like turn off Twitterand don't look as much as like people saying like, gosh, like the, the sky'sfalling. And really look and see what your business is doing and where you canmake some big bets. It's gonna be, it's gonna be wild, it's gonna be reallyscary the next, 24 months for sure.
But I also think that it. Be bold at themoment is a good thing to do. Yeah. So I mean, my, my kind of thought that wehaven't gone into is just the current environment is, is wild at the moment.
Julian: Yeah, I love that. Andbecause you brought a popcorn, and I actually have strong opinions on this,what are your top three , what are your top three?
How would you rank the, the top threemicrowaveable popcorn brands by quantity of popcorn, fullness of kernels,flavor? Oh man, I have an opinion on this. Let me hear yours.
Rowland: Okay. Okay. First,never microwave popcorn. What are you doing? Making microwave popcorn. In apinch. Pinch. This is not Oh, oh, well then it's, or rather popcorn, it's gonnabe the orval.
Really? We always go for orval likekernels or that, but we never make microwave popcorn . Although there was,there was actually, oh my god, what was the brand that we got years ago? Therewas a microwave popcorn. I. Years ago and I accidentally ordered five cases ofit instead of five boxes. And we ended up with like, like just our closets werelike popcorn popcorns.
Yeah. So much popcorn for a while. Butanyway. So you tell me cause say Orville for, for that I've popcorn, but it'snever microwaved.
Julian: Yeah, I'm going, I'mgoing. Recently, believe it or not, skinny pop has reached my top in terms ofthe fullness. Yeah. It goes skinny pop then it. Then again was actually CostcoKirkland brand, and then Orville right below that, if we're thinking flavor andyou wanted the, you wanna like really indulge, we go pop secret Of course.
Really get that, artificial but butterflavor. Yeah. Cause it's gonna have the like
Rowland: Yeah. That's gonna belike a lot of Yeah, I know what you mean. Yeah. Yeah. Okay. But the, I gottatry it. What was the first one again?
Julian: The skinny pop, theskinny pop pop came out with a, Strong microwaveable popcorn brand.
Yeah. Yeah. And if
Rowland: and then I'm gonna tryit this weekend. I'm gotta try it. And this maybe pull me off. Cause I always,we always do it in the skillet. We have the whole thing. And like, you have toadd the red pepper flakes and the Oh, okay. You can like that. Yeah. Yeah. Ohyeah. We gotta do it. Like, but I, you may, you may convince me to gomicrowave.
Julian: I have to. I have to.Well, Rowland, it's been such a pleasure chatting with you, learning about yourbackground, your experiences, really the whole loyalty ecosystem and how,honestly, founders can think about better ways. Really address the, thebehaviors that they wanna rein Ree. To bring their customers back and retainthem.
That's been a fascinating conversationalso about renting and, and how you're kind of creating this whole ecosystem toreally support people who are, spending a lot on their, their daily lives. And,and the more that we can foster that and give them the ability to spend, Ithink long term is gonna have some longevity.
So. Last little bit. Where can we findyou? Tell us where we can find steak. Give us your LinkedIns, your websites,your Twitters, all your plugs. Let's hear where, where can we find you?
Rowland: Yeah, so you can findStake at stake.rent sst, a k e dot rt steak.rent is where we are on the web.And then everywhere Twitter, Instagram is at Get your Steak.
So get your steak is everywhere. And thenI'm at rotos on on Twitter and. But it's R O W L A N D H O B B S. So that W'ssneaky. It's in there, .
Julian: I love it. Rowland,it's been such a pleasure chatting with you. I hope you enjoyed yourself, andthank you so much for joining Behind. Company Lines today.
Rowland: Yeah, thank you somuch.
Julian: Of course.
Rowland: Take care.