Katie Perry (00:00):
I'm Katie Perry, and this is After Earnings, the show that brings you face to face with the executives behind the world's most interesting public companies.
Austin Hankwitz (00:07):
And I'm Austin Hankwitz. And today we caught up with Vishal Garg, the CEO of better.com. Better is a family of companies serving all of your home ownership needs. This includes mortgages, real estate agents, insurance inspections, and even settlement services like title insurance. Now, we talked about the recent re-acceleration of his business and how that came from their refinancing and HELOC business segments as well as the company's path to profitability over the coming years.
Katie Perry (00:38):
Explained the power of better's proprietary technology, which they called tinman. And what tinman does is essentially dramatically improve the experience of applying for and securing a mortgage. The process with banks, he explained involve lots of paperwork, several weeks better's alternative that they're putting out in the market can speed this up to a single day with a dramatically improved ux.
Austin Hankwitz (00:59):
Vishal also cleared up the air regarding his dumb dolphins comment made a few years ago. He talked about how smart beavers are and I'm right there with them. Beavers are pretty smart animals. This interview was a blast. Vishal did an awesome job and we think you guys are going to love it. So let's jump into it. Wow, Vishal, thank you so much for joining us on this episode of the After earnings show. You are the CEO of better.com. better.com is a family of companies serving all of your home ownership needs. This includes mortgages, real estate agents, insurance inspections, and even settlement services like title insurance. So to me it seems obvious that the business model here is to sort of capture a new customer via one of these products and then upsell them on maybe the other products. But could you walk us through your flywheel? What's the perfect customer journey in your eyes as the CEO?
Vishal Garg (01:52):
Well, I think the perfect customer journey for us is a customer comes in, they're looking to buy a better house, get a refinance to take cash out of their home or to lower their interest rates and lower their monthly payments. And they come to us, they apply online. You can get approved in three minutes, which is blazingly fast compared to the rest of the industry. And you've got a preapproval letter for the house you want to buy or you've got an approval for the refinance that you want to do going forward from that in the flow, you can get homeowner's insurance, you can get title insurance, you can even get life insurance for what you need so that you can protect your home and your family. And the most amazing thing is once you do all those things, you can do those things all in one seamless flow. If you need customer support, our loan salespeople are on call 24 7, and if you don't, you can literally get a commitment letter from us within one day through our one day mortgage product and close in as little as seven days. So we have pioneered the use of technology to make the mortgage process cheaper, faster, and easier. And by making the mortgage process cheaper, faster, and easier, we enable people to effectively buy a better house in a better school district with a better commute all because they got a better rate from better.com.
Austin Hankwitz (03:14):
I think that's awesome and we're going to dive into all the intricacies there. But as someone who bought a house, it was actually pre covid. It was 2019. I was working a full-time job. I was commuting every day to downtown Nashville and I wanted to buy a house about 20, 30 minutes south of Nashville. And I'm telling you, going through the mortgage application process and home buying process was like another full-time job in itself, right? I was having meetings with all these people. I had to be here, be there. I had to even take a couple days off of work to make sure that I got all my ducks in a row. So any way that this mortgage application process or heloc, whatever's going on for people I think can be optimized. I'm a fan of it.
Vishal Garg (03:53):
Yeah, imagine if doing it in one day entirely online and maybe spending an hour online to do it.
Katie Perry (03:58):
Vishal, I want to also ask, I'm a New Yorker. I've never bought a house, owned a house, and unlike Austin, I've never been through this process. So I'm really curious for maybe younger listeners, people who have not gone through this process, what did this look like before? What is the from version and what is the two version that better.com is offering? And then I would love after that to get into how that tech works to make it happen. But could you paint that picture for us?
Vishal Garg (04:26):
Sure, sure. So about half of our customers are first time home buyers. And I actually created this company because I went through the home buying process as a first time home buyer myself. And I was like, this is so daunting and it's so bad for me. How bad is it for everybody else? And I realized everyone in America, as they get to a certain age and you want to own your own home, you have to go through this process. 85% of people buy a home with a mortgage and it's the largest financial services asset out there, and yet it's so, so broken. So the way this process works in a traditional sense is you go to your local bank branch, you have to get an appointment with the loan officer who might show up every day or not every day, or maybe Mondays, Wednesdays, Fridays in the middle of Workday like my wife and I did.
(05:13)
And then from there, go visit them. They tell you to bring all your paperwork with you, which you don't necessarily know fully ahead of time. So you have to build, bring your W2 slips and your tax returns. So you've got to go and get all that information. Then you go hand it over to them physically, they start running the process and then they come back to you in a week or so and they say, Hey, we might be able to approve you based on what you've done. And then they send you to a Waco website where you have to upload all the stuff that you already had sent to them, and then you upload all that stuff that you'd already sent to them and you figured like, okay, why am I doing this again? But it's like, okay, well now it needs to be done securely or whatever it is.
(05:54)
So you do that, then somebody processes the loan, takes all your stuff and puts it all together into one package. Then an underwriter looks at everything all together, puts in a bunch of numbers into a system. The system says, okay, you can approve this loan or not approve this loan and this loan qualifies for Fannie Mae or Freddie Mac or the FHA or the VA and or a bank's own program. And then at the end of something like 45 days, they tell you, Hey, you're going to get a notary and he's going to call you and they're going to set up a notary appointment to show up to a particular place. And then you show up to a branch and then you sign all the paperwork. There are about 800 pages worth of paperwork in an average mortgage document. You have to sign somewhere around between 21 to 30 different places. You barely know what's going on, but you're just so glad that it's done that you're like, alright, fine. I want this house. I really want this house. And so I'm going to go and put myself through this process. That is what exists outside of better today even. It really hasn't gotten that much better since I started the company in 2014.
Austin Hankwitz (07:03):
Yeah, I just want to make sure we're on the same page. Katie. He is 100% correct. This is exactly what I went through. It was a living hell for 45 days of me getting a phone call in the middle of the day to try and go do this and go help this person out. Do that. It is unreal. And then I remember I went to the closing and you're right, I signed, it's so funny, I signed my name Austin w Hank because my middle name is Walter, but because the pieces of paper that I gave them didn't have my middle name, I couldn't use it, so I had to resign seven different documents. This stuff is unreal. It is the craziest thing in the world.
Katie Perry (07:39):
And is that because the banks are just not tech companies, they don't have the infrastructure? I know it's good segue to talk about Tinman. What were you guys able to build that the banks and the other mortgage providers aren't able to do?
Vishal Garg (07:56):
So the banks are really focused on credit risk. So after the global financial crisis and we watched all these movies like the Big Short and all that, and we had a massive foreclosure problem in this country, banks basically decided they didn't want to be in the business of making mortgages, and they basically really shut down all technical investment on mortgages. So they basically missed the mobile revolution. They missed now what the AI revolution is bringing and they're stuck in technology. That was from the time the internet first got started in the early two thousands. And so that's the technology that they're working with. Your traditional mortgage broker, they're really focused on the commission that they're going to earn. And your traditional mortgage brokerage company is focused on hiring mortgage brokers who already know you and have got you going through this funnel and running through this process.
(08:51)
Nobody is really capitalized to actually invest technology that works for the consumer in the way the consumer wants to work because the consumer is like, well, it's like a utility. Oh, like ConEd or the cable company, you need it. So it doesn't really matter what the process is, you're going to come to us and you're going to have to go through our way. And since our way is the same as everybody else's way, there is no competition based on customer experience or customer delight. And so what we started with was what is the experience that we want for ourselves as a consumer and then based on what does that experience feel like, what are my needs? So the first need is how much house can I actually afford? So can you tell me how much house can I afford and what you'll pre-approve me for?
(09:35)
Ideally while I'm shopping for houses. So I'm in a house that costs $450,000, can I afford to buy this house $450,000 if I've only got $20,000 down? Or if I've got $50,000 down, what's my monthly payment going to look like? Those are the two numbers that people care about. How much do I have to put down and what my monthly payment's going to look like? And you ideally want to put down whatever your savings is, and then you ideally want your monthly payment to be a little bit more than your renter, but not that much more. And so that's what people kind of want the answer to. And we said we got to give them that answer in three minutes. So we did that and the way we did that was we connected. Ultimately all of mortgages is a matching problem. So you have investors who have certain attributes that they want.
(10:17)
They want to finance houses in particular places. They want to finance houses to people with FICO scores of X to Y. They want to finance houses to people with debt to income ratios of A to B, they want to finance. So you have basically attributes that are there and then interest rates associated with those attributes. And then on the other side, the consumer has their own attributes and what we try to build is a matching engine between the consumer's attributes, the properties attributes and the bank's criteria or Fannie Mae's criteria or Freddie Mac's criteria, and then building that matching engine and try to run it instantly to be able to get the consumer an easy answer. And that's what we have. We have a large matching engine that matches consumers to the best mortgages for them.
Austin Hankwitz (11:03):
So you guys funded 11 billion in loans in 2022 and then only about 3 billion in 2023. You're on pace to do about the same 3 billion or so here in 2024. If the interest rate environment doesn't change in your favor, AKA, the fed cuts rates, are you all now super dependent on your other business segments to drive revenue as less and less people borrow these billions of dollars to buy homes?
Vishal Garg (11:29):
I think that's a great question. So we built our business on refinancing and refinancing mortgages for consumers. And so in 2021, we actually did almost 60 billion of loans and 2022 as rates came down, we did 11 billion and then we downsized to 3 billion. So we had to literally downsize 95% because the demand for our product basically went away by 99%. Less than 1% of consumers today would benefit from refinancing their mortgage. Based on the way the interest rates that are out there now at 7%, we had to completely reconfigure our business to focus on consumers who were buying houses, and that meant that our tinman technology had to get really, really good. We launched the one day mortgage and now we're starting to see some significant growth. So actually we've now been growing and we expect to grow again for two quarters in a row. And we've been growing at a rate of about 25% quarter on quarter, which if you annualize that, that's over a hundred percent annualized growth. So no, we've now been able to reconfigure the company so that we're in a market segment that's okay with 7% interest rates. And so if interest rates go down, that would be awesome because then our refinance business will be back on fire and we think we can grow multiples of where we are today, but if it doesn't go down, we still feel like we have a path to being able to double the business in a continuous way year on year for the coming foreseeable couple of years.
Austin Hankwitz (12:57):
So walk me through then the path to profitability. You guys shrunk your net loss by 36 million year over year during Q1. Awesome to see that, but you still spent over 40 million of cash to operate the business. So just looking at some of these numbers here, I'd imagine you need to three or even four x the size of your loan volume business to break even. Is that the playbook? Is that what you're inching toward now with this 25% quarter over quarter? Walk me through the clear path to profitability the North Star.
Vishal Garg (13:26):
Yep, totally. I mean, I can't give you guidance as a public company, but what I can do is tell you that you're really spot on in your analysis because we've got to grow the business dramatically and we're on track to do that, to be able to achieve to profitability and get a path to profitability. But if we're able to continue to grow the business in the way that we have been 25% quarter on quarter, it's not going to take decades to hit profitability, it's going to take just a few years. And thankfully we've got the cash to be able to do that with, when we went public, we raised over 565 million of capital, and so we've got plentiful capital to be able to take the two, three years it'll take to three x four x the business and get to a place of profitability.
Austin Hankwitz (14:12):
I appreciate that breakdown. What's causing the surge of growth that you've alluded to quarter over quarter here? I saw that you guys saw this massive 232% increase in the refinancing business, a 54% increase in the HELOC sort of business segment there is that's causing the growth you're looking at or Yes, I mean, okay, got it.
Vishal Garg (14:32):
Yeah, no, we launched a one day HELOC product, which is amazing for consumers. So imagine you've got credit card debt, you've got send your kid to school, you want to buy a new car, you want to consolidate all the other loans that you have into one loan and leverage your home equity or you want to do a home renovation. Being able to do that and get an answer in one day that you're going to be able to fund all these life stage purchases is incredible. And so we've seen our HELOCs on fire, we've also just seen that the one day mortgage is starting to make it dent in the consumer psyche. So consumers are finding out about the one day mortgage. We finally started marketing, we launched the one day mortgage as a test product last year. This year we've started putting marketing behind the one day mortgage product. And consumers are really as we go into purchase season, really looking and saying, wow, that is amazing. That is differentiated.
Katie Perry (15:27):
Yeah. One thing that's interesting about the position you guys are in Vishal is it seems like the consumers love the product. It's clearly serving a need. I noticed you won Forbes Award, you CNBC disruptor, you're being recognized for this product that you've built and there's this discrepancy of the reception on the street and investors and we have a lot of retail investors who watch this show. So how do you sort of bridge that gap for someone who's investing or might be never use the product? How do you carry that product story that seems strong over the markets to get more investors on your side and believing in the business?
Vishal Garg (16:07):
Yeah, I think that's a really great question. I think on Wall Street right now with FinTech, so out of favor, we're in the absolute dumpster fire of out of favor because we're in mortgage, which is the most disadvantage because of the high interest rate environment sector in FinTech and then within FinTech as a whole, FinTech is really out of favor. So if we've got two bad things going for us, so I would say we are in the place of peak disbelief. People aren't sure whether this is going to carry through, whether we're going to be able to make it or not. I think when you look at why we're going to be able to make it, we're going to be able to make it because we are truly disrupting this $13 trillion industry with a superior product offering and the consumers keep coming, they are coming.
(16:56)
We don't have a lack of consumers. What we actually need to do is keep getting better at converting the consumers that come in and get pre-approved with us and then turning them into a funded loan. So for instance, about 20,000 consumers a month come and get pre-approved with us and about a thousand of them turn into a funded loan. Now if we can take that 5% conversion rate, and this is very similar to 20 years ago with e-commerce, lots of people would look online and then they'd go to your local store to buy the product. It had to get so fast that it was actually faster to get the product online than it is from the local store. And that's what we've been driving towards. Speed, speed, speed. And I would say where we're at today is very similar to where e-commerce companies were in 2001, 2002, 2003 in the depths of the dotcom bust. And we're just continuing to serve more customers, we're continuing to grow and we think that we're just going to power our way out of this.
Katie Perry (17:52):
That does make a lot of sense. It's like a reverse thematic where some companies benefit because they do AI tangentially and then you have places where you're bucketed with a category that is out of favor. Shifting a bit, I noticed one thing stuck out to me in the earnings call and there was a mention of recently shifting your compensation model for your brokers and what surprised me was I thought you moved from flat or a standard compensation to commission. And I was curious, is that the standard? Because I would assume salespeople had performance drivers tied to commission. So what was the rationale for that before? What is the reason for moving and what do you think the impact's going to be?
Vishal Garg (18:40):
Yeah, so when we first started the company, we were the tech is going to do everything. The tech is going to do everything and the salespeople are really customer support people. And honestly for eight years when we were growing 300% year on year in 20 18, 20 19, 20 20, 20 20, we grew 800% as we were building the company on refinancing mortgages, the consumer does treat the salesperson and doesn't need that much help from the salesperson because you're going from a 5% interest rate to a 4% interest rate. Most people can kind of understand that. And so we built our entire company on a non-commissioned model where the salespeople were more customer support people When it comes to buying a house, the salespeople are actually integral to the process because they're really helping a consumer figure out down payment versus monthly payment. They're helping a consumer figure out if the house is going to appraise or not appraise.
(19:33)
They're figuring out and really being almost a therapist in the process of going through this 60 day process could be six months, could be 18 month process. And what we needed the salespeople to do was to be much better at following up with the consumer and talking to them. And so our model was incentivizing transactions was not incentivizing a nurturing relationships. And so we shifted from the transaction based model to a nurturing relationship model, which required us to change the compensation model to commission salespeople. And we started actually recruiting experienced salespeople from the industry to come on and leverage our platform. So one of the things we also talked about in the earnings call is that on our platform, an average salesperson in the industry does like four loans a month and helps four customers a month on our platform. They get to help 18 customers a month. And so it's four x more efficient and four x more productive for them. And so we can take people from the industry and transform them and transform their earnings potential. We started hiring more experienced salespeople and that has led to improved conversion rates and been powering the growth that you have seen so far.
Austin Hankwitz (20:50):
Makes sense. I think that's awesome. And before we move on to the next section of the show here, just to kind of link a little bit longer on the financials, you guys are sitting on half a billion dollars of cash essentially on your balance sheet despite that and despite obviously having a couple years easily of runway, your stock price, I'm looking at it right now, it's 42 cents, right? It's pennies. So what's the disconnect here? Do you have any kind of points of data that you'd like to tell the retail investor listening right now to go look at on the income statement or the balance sheet or look up this very specific data point and track this one quarter over quarter over quarter to get a better sort of realization on how the business is doing versus focused on maybe what the stock price might be doing?
Vishal Garg (21:39):
I think that's a great question. I would tell you that again, we're in peak disbelief and that's why the stock price is what it is. I try to pay attention to the fact that we're helping and growing our customer base. These customers are going to keep coming back to us because once you go to better.com, you can't go back to the old process of going to walking into a bank branch or a mortgage broker shop and doing that. They're going to come back to us for all their other needs. You can see the revenue growth that is coming. You can see the origination volume growth that is coming and then there's this going to be this upside moment, the moment that they start cutting rates, right? This company is going to absolutely zoom. And when you think about where rates are today, it's not a matter of if they're going to cut rates or not across the world, like the Swiss have already started cutting, the UK has indicated they're going to start cutting, the ECB has indicated they're going to start cutting.
(22:38)
The Fed is likely to start doing cuts and they're indicating that. So we're going to be coming out the other end of the cycle and you're going to see not just us, but all these other mortgage companies start to come back in favor because they're going to be able to achieve profitability much, much faster. Homes are going to become much more affordable. The other number I would tell you to look at is the pent up demand from millennials into buying a home. And so as rates come down, there's going to be this mad rush to buy a home. And in the meantime, the number of mortgage companies and the number of mortgage brokers in the country has declined by 50%. So from a peak of 170,000 mortgage brokers in the country, we're down to less than 80,000 mortgage brokers now outstanding doing deals. So demand is going to be through the roof. The number of mortgage brokers out there has come down by half and you're going to see the ones who are able to survive are going to really thrive.
Austin Hankwitz (23:32):
Listen man, I see it. I see the North star, I see the end game. I'm right there with you. Something you said that resonated with me is the people that are sort of these repeat customers, they find you guys, they wanted the heloc, but now they realize they used the HELOC to renovate the kitchen so they could sell the house, they sell it now they use you for their next mortgage, just whole out, right? So I think that is also something pretty important. And do you guys sort of track kind of the bunny hop there, sort of the upsell? I mean, do you have any data you could share off the top of your head of people that tend to buy one product and now they're repeat customers for another?
Vishal Garg (24:06):
I don't have that data disclosed publicly, so I won't be able to tell you. But rest assured that the percentage of people that come back to us, the percentage of traffic that's organic, there's some numbers out there that is very, very healthy and we continue to intend to grow that.
Austin Hankwitz (24:23):
Got it.
Katie Perry (24:24):
Alright. We're going to shift to the next part of the show where we learn a bit more about you and your leadership style. You got to start with the question everyone always asks you. You had an unfortunate moment where there was a leaked zoom video, there was a layoff, there was a lot of criticism, and I'm just curious what it's like to wake up one day and be the main character of the internet. What does that feel like? It seems horrifying, but I would love to hear your perspective of how that felt in that moment.
Vishal Garg (25:00):
Honestly, the first feeling was, wow, I messed up. I totally messed up the execution of this. The second feeling was horrifying because I was like, I don't want this to be the reason or the way that I am remembered or better is remembered. And third, I was like, I've got to fix this and we've got to be out there with a customer value proposition that allows us to get over this and causes consumers to continue to pick us as the place to be to go get a mortgage online. And so I would say I really messed up. I didn't manage the process with the level of empathy and care that I should have. I was trying to lead from the front, I was trying to take accountability and I did a poor job of displaying while I might have displayed accountability of displaying empathy. And so that's on me and I've worked really hard to fix that and fix my hard charging leadership style.
(26:05)
The thing that we have discovered is that consumers still come to better.com, hundreds of thousands of consumers a year come to better.com, get pre-approved. And the reason they do that is because of the value proposition that we offer that we're cheaper, faster, easier, and just plain better is still so valid. And I think ultimately the comeback of the company and it's reincarnation to not only help people with their refinances but also help them with their home purchases is going to ultimately result in a story that ends with not my Zoom layoffs, but ends with creating an awesome company that's helped millions of homeowners.
Katie Perry (26:48):
Yeah, there's also that element of the tech bubble and being too online guilty. Does a family in Michigan buying their first house? Do they see that? But I really appreciate the honesty there and the candid explanation, so thank you for sharing that.
Vishal Garg (27:06):
Thank you.
Katie Perry (27:07):
So you mentioned you're sort of in this reincarnation, you're rebuilding the culture essentially after this one moment that you're moving beyond. Do you think that that misstep continues to impact recruiting efforts or is the strength of the product or perhaps for brokers the upside of selling more loans? Is that what's going to help your recruiting efforts? And what has the impact of that been on people wanting to actually join the team and work for the company?
Vishal Garg (27:37):
That's a really great question. When we started to decide to grow again last year in the fourth quarter, one of the concerns that we had was are we going to be able to recruit loan officers to come and join the company and come and be salespeople with the company? And the response has been amazing. We put out ads for about a hundred positions. We got over 1700 qualified people to apply for those positions and go through the interview process. And that told us that the things that we have, which is the large customer base that we have, which other people, other mortgage companies simply don't have the large customer base that we have. The fact that we do have a culture that rewards performance and the fact that we have a culture that it rewards transparency and is really hard charging does actually matter in a job like sales and is positively correlated with that. And so people I think appreciate the honesty, appreciate the fact that we've gotten better at what we do. We've gotten better at hr, we've gotten better at employee relations. We've gotten better at that over the past two years since we've had that misstep and humbling moment that we did. And honestly, we've actually seen no problem with recruiting as we've started to grow again
Katie Perry (29:01):
And as a CEO be real with us. Is that your least favorite website, Glassdoor? Because it seems like it's obviously skewed as someone who's looked for jobs and it's good to get a gut check, but it's just so nuanced. People are motivated by different things, they have different experiences for different reasons. How much do CEOs just completely hate Glassdoor? And I know you got to play nice with them, but your view on that?
Vishal Garg (29:29):
Glassdoor is a great website to promote the jobs that you have out there. The ratings on Glassdoor, if you look at almost every CEO now out there that had to do any kind of layoffs, which basically means every tech CEO, there's really no one that has escaped scathing reviews on Glassdoor. And there's really no one who has escaped not being having to do layoffs versus the growth that they had post the pandemic. So I think this is just a fact of life. It's just out there. And if you run a company, there's going to be reviews of your leadership. Just like if you run a restaurant, there's going to be people who are going to be happy customers, people who are not going to be happy customers. The one thing I think I know is the people that I care about the most, which is my prospective home buyer and my customer. They're not going on Glassdoor to find the company that they're going to work with for their mortgage. They're going on Credit Karma or Lending Tree or Bank Rate. And they look at our reviews on Forbes, on Business Week, on Wall Street Journal. And I think when they look at those places, our reviews are extraordinary and our customer experience is extraordinary. And I think ultimately that's what's going to drive the company to success.
Austin Hankwitz (30:50):
I can appreciate that being relentlessly focused on the product and the customer. And it seems like over the last two years, you guys are really focused on employee relations and sort of turning around this sort of culture. So I think that's really cool. Now, my last question here as we continue to talk about leadership is how do you separate being a CEO is hard. I mean, you make hard decisions, you got to focus on shareholders, you got to, there's so many other different things that are kind of barking at you as a CEO. So how do you sort of disconnect yourself and separate the human desire of just being a liked human being versus making those tough decisions that's best for the longevity of the business?
Vishal Garg (31:29):
I think ultimately you always have to take the tough decisions. That's what you get. That's why you're there. You're the leader. You're supposed to take the decisions that other people aren't able to take. You're supposed to have people and empower people to make the decisions that they're capable of making. But the really big, hard strategic decisions are the job of the ceo. And that's why we're here. And honestly, the rewards of being a founder of creating something and having it out in the world and having people use the product and having people be happy using the product, those rewards are extraordinary. And so if you want that reward, you have to take accountability for everything that goes along with that. And so I think just think of it as par for the course
Katie Perry (32:13):
And Vishal continue to get to know you a little bit better. I saw you went to high school at Stuyvesant. My best friend went there for people listening, it's the hardest high school to get into in New York. And I was reading about some of the side hustles you had, and that really resonated with me. I've always been, growing up, I would always find weird ways to make money. So you were selling study guides, flipping clothes. What is the most surprising way you've ever made a buck in your life that would surprise people listening? Now,
Vishal Garg (32:41):
I think the most surprising thing that I did was there used to be a store downtown called Century 21, and I'd go to Century 21 and I'd find all these discount designer clothes and then I'd put 'em on eBay and people would buy them. And this was in the super early days of the internet, like 19 95, 19 96. And it was great because if it didn't sell on eBay, I would just return it to Century 21. And so it was one of those things where your downside was limited to zero and your upside was two or three x. And so I like that and I learned how to, from there, I learned how to trade and how to work on Wall Street and all these things. But I remember just figuring out the opportunity and then driving towards it to keep on pushing towards it. That killer instinct. I really learned on the streets of New York City and going to Stuyvesant High School
Katie Perry (33:41):
Century one's definitely a throwback.
Austin Hankwitz (33:44):
I don't know anything about this high school. I don't know anything about New York. What's the mascot? Do you guys remember?
Vishal Garg (33:50):
It's a peg leg. It's like Peter Stuyvesant, the peg, like the governor of the
Katie Perry (33:56):
It's a wooden leg.
Vishal Garg (33:57):
Yeah, it's a guy with a wooden leg.
Austin Hankwitz (34:01):
That's funny.
Vishal Garg (34:01):
Like a pirate.
Austin Hankwitz (34:03):
So what are the causes you seem to be pretty passionate about is increasing access to education, specifically strong public education. So what do you think are some of the biggest challenges that are pushing and keeping our public education school systems down right now? And what do communities and maybe our government need to do for the next generation to make sure that they're as well-educated as possible?
Vishal Garg (34:27):
Well, I think I've always been passionate about public education. During the pandemic, the biggest challenge for public school students was the fact that they simply didn't have, if you went to a economically disadvantaged area, they just didn't have laptops or devices with Zoom or wifi hotspots. So people were trying to do homework on their parents' mobile phones. So you have fourth graders, fifth graders trying to do homework on their parents' mobile phones. Now many of us live in advantaged areas and we have iPads and the kids were able to do studying, but I distributed something like 30,000 laptops, zoom devices and wifi hotspots to public school students at about 20 different public schools in and around New York City and to enable online learning. And then beyond that, what I've been really focused on, we created a program here at Better that enabled high school students to make a decision if they wanted to go to college or not, or if they wanted to get a certificate. So we did a program with Google where they have these Google certificates and we said we created a path for them to, if they take a certificate in a field that is economically ative, then they can get a job immediately and they can get a job all throughout college. So creating pathways for them to afford education, creating pathways for them to find jobs without the traditional credentialing that comes with college. I think that is another really great thing that can come out of public education.
Austin Hankwitz (35:59):
Yeah, I'm right there with you. I wish I had the solution. I was pretty fortunate to go to a public high school that had a lot of funding, but in the same token, my girlfriend and we obviously ended up in the same places. She got her MBA and all the other fun stuff that come with that. But I totally agree, we've got to raise the bar as it relates to public education. So I commend you on the thousands of devices that you were able to share. Now, I'd love to end the interview with a funny question. We all know that dolphins might not be the smartest animals, so I want to give you a chance to redeem yourself. What are some of the smartest animals out there in your humble opinion? Raccoons, dogs, cats,
Vishal Garg (36:44):
Orangutans, beavers.
Austin Hankwitz (36:47):
Okay.
Vishal Garg (36:47):
Beavers. I mean, they make jams. The beaver is an amazing animal. They make these dams, they have these communities. They're really, really intelligent. I would say the Beaver is my favorite of all of them. Beaver, just in terms of how tenacious and how cooperative and collaborative they are and the things that they're able to achieve. Love it despite being such a small animal. Love it.
Austin Hankwitz (37:14):
What an awesome answer. The beaver, the that. I was not expecting that. Team. Beaver. Vishal, what an awesome interview, man. I really appreciate you walking us through the business model of better.com. Kind of pulling back the curtain on the numbers here, the long-term vision, the mission, the North Star, the product and everything you've been able to do for the communities in New York as well. Thousands of devices during Covid. That's really cool, man. So again, thanks so much for joining us on this episode of the After Earnings Show and hopefully we'll have you back pretty soon after the cut rates and when you guys are profitable.
Vishal Garg (37:48):
Thank you so much, Austin. Thank you, Katie. This was really fun. I enjoyed it.
Austin Hankwitz (37:52):
Katie, what a interview with Vishal here. I thought it went well. I learned a lot. I didn't really, as someone who has purchased a home in the past and I've seen the dark side of borrowing hundreds of thousands of dollars going through that mortgage process, I can appreciate someone who is trying to turn around and cause disruption and innovation in that industry. I think he did a really great job of breaking down some of the key growth drivers, the HELOCs, the refinancing, and I didn't know actually that his business was built on refinancing back in 2021, which makes a lot of sense, right? Interest rates were near zero, so of course everyone was running to go refinance their mortgages. And if Rocket Mortgage was backed up, why not go to better.com and use them? So I could totally see that and I'll be rooting for 'em. I have no idea what they're going to do here. Over the coming years, I learned a lot. I thought it was an awesome interview, but what did you think? Yeah,
Katie Perry (38:50):
On the flip side, I've never been through that process. So I also learned a lot about the pain that's involved and seems like an industry that was so overdue for disruption and for someone to build a technology that's able to do all of this matching and pairing up in a way that was much quicker. I think he said 45 days the old way, one day this way. It's pretty amazing. And also hearing him talk about the consumer reception to it, he mentioned organic growth. It seems like a product like this would have a lot of organic growth via cross-selling to other products or even word of mouth amongst people's friends. So that was really interesting to hear the product market fit and what the story is there. And then also that dichotomy between the strength of the product and what the street's saying literally. So hearing him kind of voice over what do you need to believe as in retail investor looking at that 42 cents stock price into the future? Do you believe in the industry? Do you believe in the tech? I thought that was a really good explanation. Also, we got kind of real with him. We asked him some hard questions. He's been the main character on the internet. It was really interesting to hear what that was like from his perspective and how that's changed him as a CEO and whether the likability or lack thereof bothers him as a CEO and a human being. So all in all, super candid, but learned a lot about the industry and better.com overall.
Austin Hankwitz (40:18):
Yeah. Did you buy it? I kind of bought it. I thought he was certainly remorseful about, it seems like he's grown through the experience and it seems like he's someone that wants to put the best foot forward and have better employee relations and really build a company that's not just so focused on the shareholder, but also on the person that's actually building the company, the employees. So what did you think about that?
Katie Perry (40:44):
Yeah, I got what he was putting out there. I've worked closely with a lot of CEOs and founders, and based on what I've observed, I never say never, but would never want that job. I care too much about people liking me. And just totally candidly, you got to separate that as a leader of a company and make really hard decisions and own them. And that's hard, and that's why they get paid the big bucks. And that's part of the deal, which he explained, but that can't be easy. So I appreciated. And also, he didn't really make excuses. He completely just owned up to what had happened, what he was trying to do and what's changed since then. So I thought it was a pretty good response to a tough question.
Austin Hankwitz (41:25):
Most definitely. Well, with that being said, everyone, thanks so much for tuning into this week's episode of the After Earnings Show, brought to you by Morning Brew and Labs. Be sure to like, subscribe, share it with a friend, and maybe if you need a HELOC or a mortgage or something, check out better.com and let me know what your experience was like because I've not used the platform, but I'd be really curious to know if you actually think it's better than the traditional process. Thanks everyone, and we'll see you on a next episode.
