Laks Srini is the cofounder and CTO of ZeroDown. Before that he was the cofounder and CTO of Zenefits.

You can find him on Twitter at @laks_srini.


Topics

00:10 – What is ZeroDown?

1:30 – How did they test the idea?

3:30 – What did they learn from companies that failed in the space?

7:40 – Breaking down the product

11:05 – ZeroDown’s customers

13:15 – Expanding to other markets

15:30 – What if a downturn happens?

16:50 – ZeroDown’s hiring strategy

19:50 – What are their hardest technical challenges?

21:45 – ZeroDown’s breadth and product strategy

26:20 – Customer interviews

28:15 – Should everyone own a house?

29:30 – Home ownership in the future

32:25 – Build something you really want to see in the world

34:20 – Working with his cofounders was the most important consideration



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Transcript

Craig Cannon [00:00] – Hey, how it’s going, this is Craig Cannon and you’re listening to Y Combinator’s podcast. Today’s episode is with Laks Srini. Laks is the co-founder and CTO of ZeroDown. Before that, he was the co-founder and CTO of Zenefits. You can find him on Twitter @laks_srini. All right, here we go. Laks Srini, welcome to the podcast.

Laks Srini [00:22] – Thanks, thanks for having me here.

Craig Cannon [00:24] – You are the CTO and the co-founder of ZeroDown. What does ZeroDown do?

Laks Srini [00:30] – We help people buy houses. We think, even in a place like the Bay Area, people with good jobs and healthy finances should be able to buy a home. It all started with my co-founder, Abhijeet. He was the COO at Zenefits. He was making a decent chunk of change, had a great job, healthy finances. He’d moved to the Bay Area about five years ago. He had twins and he wanted to buy a house, only to find out that you need to have 300, $400,000 to spare, not all of your savings, to spare, to be able to buy a house. This felt pretty shitty. Even if you have a great job and making a lot of money what, in any other place in the world, would be considered rich. You can’t even think about buying a house here. Turns out, a lot more people were in the same boat. A lot of our early tenured engineers were just getting married, looking to settle down, and man, we can’t buy a house. It’s going to take us four or five years to save. We thought there has to be some way else to be able to have a path to home ownership.

Craig Cannon [01:36] – This company is super interesting. The structure’s really interesting, but associated with it are massive costs. This is not just prototyping an app and showing someone at Starbucks. How do you even start testing this idea?

Laks Srini [01:51] – Well, we spoke about this for close to 18 months. We even did a side hobby project, which was help Abhijeet buy a house. We tried to figure out, “Okay, what would be the mechanics of it? What is the history of mortgages? What is the history of ZeroDown mortgages? Why can’t we do ZeroDown mortgages to people in Facebook, Google, Apple, Airbnb?” Seems to make sense, these people are good risks. We spoke to a whole bunch of companies that have started to be mortgage providers in the last few years but died. Because we wanted to learn lessons from, not the survival bias, but people who actually did not succeed. We spoke to a whole bunch of real estate investors. We learned about an entire class of assets called single-family rentals that started from the post-financial crisis. Blackstone and Citibank and all these other funds. People who came out of these funds, started companies where they just went and bought massive amounts of single-family homes and rented it out. Their thesis was close to 11 million millennials are going to reach household formation age over the next decade. They’re going to move from these small, tiny apartments, to single-family homes. They’re shit out of luck. They’re not going to be able to buy it. Mainly, so many other factors like student debt, real wage stagnation, and all these other things. They’re going to have to rent it. The thesis was, they’re going to rent it, so might as well rent it from us. We’ll just raise rents every year and have a really good fund doing this.

Laks Srini [03:24] – There’s a company called Invitation Homes, which is public, which owns close to 100,000 homes. There are a few other big funds that just do this. Turns out this is a real asset class that people are investing in. It just turned out to be a confluence of things that kind of came together that made ZeroDown possible.

Craig Cannon [03:44] – It’s a really interesting point about survivorship bias. What did you learn from the companies that failed?

Laks Srini [03:51] – We actually learned a lot about mortgages themselves by actually talking to these companies. You can’t really differentiate that much if you’re selling a mortgage. Because Fannie Mae and Freddie Mac are these government agencies, which define a box which are mortgages that are valid. That can be sold in a securitization secondary market. If they’re not a valid mortgage you have to hold them on your books or you have to figure out some other way of private-label, securitization and all this other fun stuff. All the companies that started doing mortgages, most of their thesis was like, “Hey, if we have a better UX on top of mortgages, it would be great,” Turns out, people didn’t care that much about UX because it was a once-in-a-lifetime transaction. In fact, they wanted it to take longer. Turns out, people care more about a 50 basis points difference, rather than, “Hey, I have an app to do this stuff. It’s okay, I’ll go to my bank, get a printout of my statement, if I can save some money.” CAC was the problem, customer acquisition just became more and more expensive. When the rates were lower, people were doing a lot of refis, refinancing on their homes. They were able to kind of survive. Once the rates started going up the refinances stopped. Suddenly, all of these companies were struggling to acquire customers. That was the biggest lesson that we learned. The entire trillions of dollars of the mortgage industry is controlled by this small box, where you can’t really differentiate that much. It was also for the good, because, for instance,

Laks Srini [05:32] – it’s also consumer protection. If you have to do all sorts of things, people don’t really understand how mortgage works. We’ve spoken to close to thousands of people at least 1,000 to 3,000 people. Not everybody understands how mortgage works. These are really smart people and who work in tech and they understand math really well. They have no idea how much principal they’ve paid down over five years. Everybody’s really surprised when I say even with a 20% down, a 4% interest mortgage you would have paid off only, close to 8% of principal in five years. People are like, “Wow, I did not think that would be the case.” It is complicated and not everybody understands it and people just use it because that’s their score. That was a lot of learning, just by talking to people in the mortgage start-ups.

Craig Cannon [06:25] – How did you go about testing, buying your co-founder’s house? You helped him buy a house, what does that mean?

Laks Srini [06:32] – The idea was to help him buy a house. We, actually, didn’t succeed, we started ZeroDown. Essentially, what we tell our customers is, “We’ll buy the house that you want.” You say, “I want that house.” We’ll buy it for you and give you the keys in seven days with a bottle of champaign and no bank, no escrow, no hundred page documents, none of that stuff. You move in and as you make monthly payments, you start getting a portion of the home every month in terms of purchase credits. You can think of it, almost as vesting in cliff and stock options, like how it happens at work. You get .25% of the home every month. Over a five-year period you get 15% of the home. It becomes easier to buy the home from us at any time you want, after a two-year period. Think of it as a cliff. Anytime between two and five years you can buy the home from ZeroDown. Every year you get 3% of the home. Let’s say, year three, you have 9% of the home. Your company exited, you came into some money you can just buy the home from us at that point.

Craig Cannon [07:44] – And then just create similar terms, similar mortgage terms, then you hit a sort of down payment.

Laks Srini [07:49] – We are, actually, actively working on partnerships that we can easily transition people over to a mortgage, when the time comes.

Craig Cannon [07:56] – Break down the product from a founder perspective. What services do you offer? How do you make money?

Laks Srini [08:03] – We think of it as this vertical, full-stack home buying company, which is what ZeroDown is. We want to help people right from search. Search mostly feels like a solved problem with Zillow and Redfin and everybody is looking at it. Everybody searches for price, bed, bath and maybe, neighborhoods. Ehat we found out that people are really looking for is, “Show me places 30 minutes commute from work, that has a lot of natural light, that has a big backyard.” People often tend to collect all this data from different sources. Let’s take this for an example. I want a home that’s about 30 minutes driving distance from San Francisco, that’s close to good schools. Let’s say, I have a family and good schools are important to me. Now, if I talk to a lot of friends and arrive at this conclusion that I should be looking for a home in the Millbrae, South San Francisco, San Bruno area, because they tend to have good schools. Then I’m going to search for only those places in Redfirn and Zillow. With ZeroDown, if you actually said, “Show me all the places that’s 30 minutes driving distance from the YC HQ,” where we are. You would actually see Albany and Millbrae. Albany is a little north of Berkeley. Turns out, prices of homes in Albany are half of that in Millbrae. School ratings, according to GreatSchools, are actually better. There is some loss of information when you transfer this external research into these different tools. Which can be avoided if you actually use that one tool, which does all of these things for you. Now, we want to build a hyper-localized search

Laks Srini [09:43] – that like, “Show me homes near farmers market.” We just, actually, did a tag where, “Show me homes that are great for dogs.” We look at close to dog parks, big outdoor space and stuff that, and we try and collate all these things. That’s search. And then, the next big thing, is, “Okay, I want to buy a home, what real estate agent do I use?” We work with a lot of partner agents who are experts. We have this curated list of agents. We have agents who are experts in San Francisco. We know agents who are experts in Oakland. We have agents who are experts in Peninsula and South Bay and so on. Because, again, homes are hyper-local and you need to know the neighborhood really well to be able to help, so we help with that. Then the financing itself, with zero down payment and that’s the biggest value. $200,000 in the bank today, is way more valuable than $200,000 in the bank five years from now. So being able to do that today, is a huge, huge value. Then we actually do the deal execution. We take care of inspection, appraisals, the walkthroughs. Because we are buying 100% of the house upfront, we want to make sure it’s a really good house. Because it’s your house, you want to make sure it’s a really good house. That’s why the search also comes in. To be able to, eventually, we want to add tags, “Hey, show me neighborhoods that performed well during the 2001 crisis, 2008 crisis.” We are actually launching an ultimate home buying guide for engineers, where we crunch like, 50 different data sets and try to figure out, “Okay, what are the things you should take into account

Laks Srini [11:20] – as you consider where to buy a home.”

Craig Cannon [11:23] – Speaking of engineers, what kind of customers do you have right now and how do you go about evaluating customers that would be a good fit?

Laks Srini [11:32] – We have customers that are designers, product managers, engineers, directors, emerging market directors, investors, store agency juniors. We have a fair variety of customers in the Bay Area. We have a pastor, as a customer. The biggest thing that we evaluate is is there income healthy and do they have some savings. Because we help them build the rest of the savings to be able to buy the house from us five years from now. We are, basically, making a bet on five-years-from-now customer. We are saying the future you is going to be way more successful. The future you is going to have way more money. The future you is going to be way more, all-around awesome. That’s, kind of, what we evaluate for. It’s a pretty fast, three to five minute qualification flow. You just connect your bank account using Plaid, let me look at an asset report. We look at your income. We say, “Craig, you can go and buy a $1.4 million house and here’s a great real estate agent.” Once you say, “I want that house.” The next thing you know, is you get the keys in seven days and a bottle of champagne.

Craig Cannon [12:43] – It’s wild. Now, how does this work in a market that, I don’t know what the temperature of the market is right now in the Bay. You hear about all these all-cash offers that happen immediately. How does ZeroDown work?

Laks Srini [12:54] – We, actually, give our customers the power of an all-cash offer. We basically, arm our customers with all-cash offers so that they have way more probability that they close the home of their dreams, fast. When we started the company, I thought one of the things that’s going to take the longest is people to go find homes and us actually closing on it. But, probably, 75% of our customers, so far, have bought homes in two or three weeks.

Craig Cannon [13:20] – Really?

Laks Srini [13:21] – They’re in the home in a month, month and 1/2. From the time they hear about ZeroDown a month and 1/2 they’re in a home. Which is crazy. I can’t even believe that. But it’s amazing.

Craig Cannon [13:33] – I understand this in the context of high paid engineer or, you know, Bay Area folks. How does this go about expanding to other markets?

Laks Srini [13:43] – There are a lot more cities. One of the things that has become a characteristics of the unaffordability crisis in the country, is the most desirable places where people want to live. The places where the most desirable jobs are are the places where people have been priced out of the market. Seattle, Denver, Austin, Salt Lake, DC, New York, Boston. All of these cities are viable markets for us. We are planning to be in Austin and Seattle in the next couple of months.

Craig Cannon [14:20] – How do you go about growing?

Laks Srini [14:23] – Cities is one. Lastly, it’s about education and how do we explain this to people, how do people understand this. Because it’s a new way of doing things. If you, actually, look at the math at ZeroDown, against rent, even though the monthly payment is higher than rent, but at the end you get purchase credits that’s worth 15% of the home. If you take that into account, it actually ends up being cheaper than renting. Being able to explain that really well.

Craig Cannon [14:57] – This is the thing, right. I heard about ZeroDown, when you guys were in the batch, it seems great. I imagine a lot of people who are not in the tech industry and especially those not exposed to early startups, all the time, hear this stuff and they’re like, “Hmm, I don’t know about this.” Maybe they even remember 2008. How do you communicate that to someone?

Laks Srini [15:18] – I think part of it is, just enough people having done it.

Craig Cannon [15:22] – So, if you have a friend who’s done it.

Laks Srini [15:24] – Yeah, we are doing about a dozen homes a month right now. I was actually, on Saturday, with customers doing video shoots of, how do they think about ZeroDown. How would they explain ZeroDown to a friend? All of that stuff helps.

Craig Cannon [15:41] – Okay, now, in terms of where the market’s going if there were to be a downturn in the housing market how would you guys evaluate that?

Laks Srini [15:53] – ZeroDown is actually a long-term holder of homes. Our, the fund that we run, is a five to seven year fund.

Craig Cannon [16:03] – Can you talk about the fund really quick?

Laks Srini [16:06] – ZeroDown is actually two businesses. We have a tech company and, what is called, a propco, property company. The property company is actually a fund that actually goes and buys houses and holds them. The fund has a lot of infrastructure. It has legal, audit, external fund administrator. It has backup servicers. That’s also part of the safety net because these are people’s houses and we don’t want to be blasé about it. We want to have protections, even in case anything happens to us, that the contract can be honored. The fund, actually, has a lot of infrastructure around it. Now, the fund is a long-term horizon and we actually believe, we are bullish on real estate in Bay Area, Seattle and all these different places, over the long term. The reason we are is, also this is where the jobs are. If you look at the job growth in these markets, the wage growth in this market. We believe that these jobs are probably going to be the most evergreen jobs in the next few decades.

Craig Cannon [17:07] – How many people you now?

Laks Srini [17:09] – We are about 17.

Craig Cannon [17:12] – 17, okay. Not as big as I thought, given how things are going.

Laks Srini [17:19] – We’d like to be at 25 full-time.

Craig Cannon [17:22] – I was going to say, how do you go about hiring for all these diverse roles, when essentially, you have these two structures in your company?

Laks Srini [17:31] – We have a Director of Capital Markets who used to work at Fortis Investment Group. We have, our GC is from YC Continuity. Our marketing person used to be from YC as well. We are also looking at people who can straddle and play multiple roles. From being an IC, to being a manager and building out an entire team. Not everybody can do that. We are trying to be selective about hiring those kind of people who can straddle that entire range. We have our engineering team in Vancouver. We’re going to be building our data science team in India because we’re doing hyper-local search for every city. How do Google bus routes affect home prices? How to do Facebook bus routes affect home prices? We’re doing a blog post, soon, about how does greenery and tree cover affect home prices. These things, kind of, help and matter. To be able to do some of these fast and for many cities. We want to build the right team to be able to do that kind of stuff.

Craig Cannon [18:37] – And you’re distributed.

Laks Srini [18:39] – We are distributed. We’re not fully, remotely distributed, but we have offices.

Craig Cannon [18:42] – You have offices.

Laks Srini [18:43] – We have an office in Vancouver. We have one person in India, right now. We’ll, maybe, have an office there.

Craig Cannon [18:49] – What led you to make those choices?

Laks Srini [18:50] – At Zenefits, I had built an engineering team that was Vancouver, Bangalore, SF. Vancouver is in the same time zone, two hours away and you find some amazing talent there. We were also heavily influenced by the PG article about 95% of talent is outside the U.S. One of the ways we grew really quickly at Zenefits in terms of hiring, was we were able to tap talent all over the world. It was just easier to bring them to Vancouver in terms of immigration, than the U.S. But now, we just know great people there.

Craig Cannon [19:27] – It’s in your network at this point.

Laks Srini [19:29] – It was all in network, we’re not trying out completely new people.

Craig Cannon [19:32] – You’re not optimizing for lowest costs.

Laks Srini [19:35] – We know and trust the people. We want to build, like I said, the right team, the right person who can straddle all the way from being an IC, actually do the work. To be able to switch gears without a team. To be able to do that.

Craig Cannon [19:50] – Okay. All the remote folks are not, well, sort of, kind of remote, are on the tech side, on the product team?

Laks Srini [19:58] – Sharon’s in Seattle.

Craig Cannon [19:58] – Of course.

Laks Srini [20:01] – For now, our design is mostly on the tech side.

Craig Cannon [20:08] – On the tech side, what do you foresee being the hardest technical challenge?

Laks Srini [20:14] – It’s the entirety of the experience. I use tech, I think about tech as a great enabler. When you’re looking at homes, how do we deliver the right homes, to the right person, at the right time. What are you looking for? Just being able to do that itself, is not super easy when you want to do it at scale. Then there are aspects of the asset management, deal execution and whole bunch of stuff there. That’s where a lot of our Zenefits automation and those kind of capabilities come into play. On the asset management side, a bunch of us from the team have experience. I worked at D. E. Shaw, which was my first job out of college. A couple of our folks on the engineering team were all people I hired out of college at D. E. Shaw. They followed me to Zenefits, they followed me to ZeroDown. There’s a little bit of that there. We’re looking at it as all these pieces but all of them need to connect and have a coherent, single experience across search, agent, deal financing, deal execution and actually living in the home. Because these first-time homeowners often have no idea of the things that could go wrong. We actually, provide this concierge app where people can text us if, “Hey, my sink is broken.” And we’ll connect them with high quality service providers in their neighborhood. We actually give them a concierge service which will come every six months. Make sure they do preventative maintenance, change the light bulbs, switch out the batteries, caulk the bathrooms, kind of stuff. Just making the entire process of home ownership easier.

Laks Srini [21:52] – We also have a rewards program, where if they buy furniture, in Burrow or they use Feather, they get some discounts. If they buy a Ring doorbell, they get some discounts.

Craig Cannon [22:01] – The breadth is really wild for such an early company. Why did you choose to go that way?

Laks Srini [22:07] – It was part of our DNA from being at Zenefits. One of the biggest lessons there was this thing called the hub-and-spoke model. Zenefits, the software itself was the HR, payroll, benefits. But there were so many other spokes like time and attendance systems, 401k, commuter benefits, health insurance and all of that stuff was set up in a way that you can make so much money off all the spokes, that you can give the hub away for free. That was the original Zenefits business model. But ZeroDown, we don’t want to, really, make money off the financing. We want to keep that cost as low as possible or as at cost, pass it on to the customers. Any savings we do as we become larger and have scale and our cost of capital goes down we want to pass that on to the customer. Now, there are many ancillary things around the home in a home buying transaction. There’s search, brokerage, escrow, insurance. And while living in the home, all these different services. There’s so many players that take a small transaction piece of the pie. If we can pull it all in one, great experience. One, is we can make money off other places. In fact, we charge the customers at $10,000 upfront fee. That’s how we make money. We split commissions with the buy-side broker. Those are the two big things we make money. Then we make money on the concierge. If people choose to buy furniture using rewards and get a discount, we make a small percentage of that. Now, having all these together, not only means that we can give the home at cost. But it also means that we can build

Laks Srini [23:44] – a single, coherent experience for the customer. We want people to have a jaw-dropping experience when they buy a house. Which is not something you associate with buying a house usually. It’s one of the most painful processes that you go through in life. But so far we have a hundred NPS. It’s almost incredulous when you talk to people. I can’t believe how fast this happened. Like, “We wanted that house and in 15 days we were in the house.” Which is extremely gratifying and that’s why we do all these hard things.

Craig Cannon [24:17] – Yeah, makes it exciting.

Laks Srini [24:20] – But we the biggest thing we want is for consumers to have this amazing experience across. From the time they start to search for homes until the time that they’re living in the home.

Craig Cannon [24:32] – I just find the product development method really interesting. To just go so broad from the beginning. Rather than pick one, you know, obviously, maybe search was figured out. I just think it’s cool. Who’s PM’ing all of these things?

Laks Srini [24:51] – It’s almost all of us. Because we have folks who talk to customers all day long. That needs to come back and constant feedback in terms of what do people really want. We have, again, almost all of us try and talk to customers, in terms of, “Hey, why did you do this thing, why did you not end up going with ZeroDown, what was your reasoning?” We try and just understand what objections people have. How do people think about the process? That’s how we even came up with searches. Because when people are talking about a home one of the first questions we ask is, “Okay, tell us more about the kind of home you want. What are you looking for?” When you hear people talk, that’s what you hear. You hear things like, “Hey, I want my commute to be efficient.” If two people commute, it’s a machine problem to optimize that commute, right. Machine can do a way better job in optimizing your commute location, based on homes that are available, than humans trying to optimize for that, right. Machines can take your choice from 10,000 homes to 20 homes. 20 to one is a human problem. 10,000 to 20 is a machine problem. That’s the whole point of building search. Just by listening to people and and hearing what they want. There’s a lot of anxiety around home ownership, right. It’s like, “Oh shit, so far I was living in a rental, if there was any problems, I’ll just call my landlord. Now, what happens if something happens?” That’s where the concierge comes. You always have help, it’s a support line for your home and it’s 24/7, you just text us and we’ll take care of you.

Laks Srini [26:37] – That’s the way that we think about the different stages.

Craig Cannon [26:40] – Okay, let’s break down the customer conversations a little bit more then. Are you sending out every employee into the field to literally knock on doors of ZeroDown customers? How does that process actually work?

Laks Srini [26:53] – We do a lot of customer interviews and we record them and we disseminate them. Everybody listens to it, to continuously learn. We have folks that are talking to customers all day long. Trying to explain how ZeroDown works. We listen to the questions that people ask. We try and understand what are their concerns. What is good, what is bad about this. What are the barriers to them just, no-brainer, I’m just going to do this. We constantly try and iterate and learn from that. I think that’s the thing that I love about YC the most as well, because the effect of compounding on this learning is huge. The things that you learn week over week, over week, it just compounds to have massive advantages.

Craig Cannon [27:41] – I think, because I just keep hearing it from you. So many times people are like, “Oh yeah, I talk to customers.” And you’re like, “When was the last time you actually talked to a customer?” And it’s usually a month ago, two months ago. It doesn’t sound that’s case for you guys.

Laks Srini [27:54] – Saturday. We drove over to customers houses to do a bunch of customer videos and testimonials. Which is very important.

Craig Cannon [28:03] – Where do you go from here?

Laks Srini [28:07] – We want to make it possible for everybody to be able to own a house, no matter where they live. It’s a path, it’s a long process. But we want to help as many people as possible as quickly as possible. Which is why we’re going to be in Seattle and Austin soon. We, probably, will be in five or six more cities next year.

Craig Cannon [28:33] – Because core to your philosophy then is everyone should own a house? Okay. But why? Millennials move around.

Laks Srini [28:42] – Wouldn’t it be cool if you are living in a house for five years, you own some ownership in that house. You should be able to take it with you. Why should everybody own 100% of every home? Wouldn’t it be cool if you can take your home ownership with you where you go, like a 401k. You can take your 401k around, it’s not tied to a company. It should be that, at any point you should be able to sell some part of the home, for money. Should be liquid. Home is a financial hub, right. It’s where most of your wealth, for most people, is trapped in this brick and mortar. How would that work? Those are the things we often think about, as the future. How does home ownership look, at least for the generation of people that are growing up like, five, 10, 15 years from now. What would make it really easy? What would make it sense, honestly.

Craig Cannon [29:41] – This is what I’m wondering. Do you sweat the details of what a house looks like? You said, “You know, in a crazy world where everyone basically lives in the pod hotel version of a house.” Or a world where it’s.

Laks Srini [29:51] – I don’t think that would be the case.

Craig Cannon [29:54] – But does it even matter?

Laks Srini [29:51] – I don’t think everybody is going to live in a pod hotel because, even today, I think space is important to people. I think people make all sorts of choices for space. People commute crazy amounts in the Bay Area. People commute from Antioch, Tracy and like, three hours, one way, to go to a job because they get a larger space. It’s close to schools. These things are important. I think these are fundamental, human things. I don’t know if that will ever get replaced. There will be a class of people at different stages in life. Maybe there’s a stage of life where you live in a pod hotel or a community building. Then there’s a different stage where you don’t. That’s, kind of, how I think about the world.

Craig Cannon [30:45] – Do you think autonomous cars affect your business in any way?

Laks Srini [30:49] – I don’t think so. Autonomous cars are cool. It might enable people to live farther away but I don’t know, just because the commute is easier it still takes that much time. There are places on the East Coast where there’s great public transit. People travel three hours on a train. Maybe those kind of things will become easier.. But I don’t know, I guess we would have to step into that world, I can’t make the transition in my head to see myself living more than 10 minutes away from work.

Craig Cannon [31:22] – I’m in the same boat, I would never do that. I guess, the core of the question is it doesn’t really matter for your business right now.

Laks Srini [31:29] – It doesn’t. I think people have to live somewhere. It’s inherently human that you want to make the space your own. If you really think about home ownership the fundamental rights are, ability to profit from sale. When you own something, you can profit from sale. Ability to customize it, reshape it, remodel it, make your own. If I gave you an iPhone and said, “You can’t install “any software on this, you can’t put a cover on it.” Then it’s not your phone, right. That’s what happens to a rental, most of the times. Ability to reshape, remodel and make it your own. Finally, I think, ability to have a stable, cost basis, over a period of time. That’s what mortgage really does. It locks in your payment for 30 years. With ZeroDown, you have five years of stable payments. Nobody will raise the rents on you or kick you out. You can remodel, reshape the home, to make it your own. You build these ownership, you build these credits in the home. You get the profit from these credits because they’re a percentage of home value they increase with the value of the home. That’s how we think about ZeroDown.

Craig Cannon [32:39] – It’s great. Just kind of wrapping up. For founders who are listening, who still haven’t figured out what they want to build you, obviously, spent a lot of time researching ZeroDown and then you just executed. Did you go through other ideas?

Laks Srini [32:54] – Oh well, a lot. At the end of the day, if you are not doing something that you truly believe should exist in the world or be there, it’s going to be very hard. There are going to be deep, dark days. There are going to be really bad days. There will be great days, but there’ll be really, really bad days. If it’s not something that you’re super committed to and you want to really see in the world it’s hard to stick with it. It’s hard to just do a start-up, for start-up sake. I think, this is the thing that spoke to us.

Craig Cannon [33:29] – Walk me through that, though. You basically hit a point where you were trying one thing, or thinking about one thing, thinking about the other thing. Then you just felt the energy?

Laks Srini [33:37] – Yeah, we just kept coming back to this. The biggest reason that we might not have done this is because it’s really hard. There’s all these different aspects. There’s capital markets, there’s educating consumers and basically making sure all of these things work together. Again, it’s a broad play. That was the biggest reason we were like, “Can we do some enterprise HR, SaaS thing, that’s easy? Money just comes in every month, it’s beautiful.” It didn’t quite excite all the three founders as much as, “Hey, this is a real problem.” There are people in the Bay Area today making more than $200,000 household income but they can’t even think about buying a house. How do we go about solving that? Home ownership is part of the American dream . We want to, kind of, revive it and bring it back.

Craig Cannon [34:36] – Did you feel that same kind of enthusiasm about your co-founders? Were you shopping around for?

Laks Srini [34:42] – The company or the idea itself? I had made up my mind that if I were to do another company it was going to be with Abhijeet Dwivedi. That was the most important thing for me. Because again, startups are hard, you’re going to be spending a lot of time together, might as well have fun, while doing it and do it with people, who you like, as people. That was the most important consideration. Then this idea just spoke to us because it was a problem that Abhijeet was facing himself. Turns out, a lot more people who are facing the same problem. At one point, I thought our marketing strategy will be, I’ll just stand in front of University Avenue, holding a board saying, “Buy a home with no don’t payment.” Let me explain how. But it definitely feels like that. That so many people with really good jobs and healthy finances, are just stuck in this loop of trying to save up enough for a down payment. Cost of living is high.

Craig Cannon [35:42] – That’s why people leave the Bay.

Laks Srini [35:44] – Yeah, so we want to save the Bay Area.

Craig Cannon [35:50] – All right, man, thanks so much for coming in.

Laks Srini [35:52] – No, thank you, thank you for having us.

Craig Cannon [35:54] – All right, thanks for listening. As always you can find the transcript and video at blog.ycombinator.com. If you have a second, it would be awesome to give us a rating and review wherever you find your podcasts. See you next time.