Home is an emotion.
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It’s rare that leaders talk about the role of emotion in business. Leaders are to be objective, strategic, calculating. Some leaders, however, know the importance of balance.
Jarred Kessler is one of those leaders and is no stranger to unconventional thinking nor to unconventional career paths. He started as a writer for the comedy series “The Tom Green Show” and eventually shifted into a finance career on Wall Street. It was there an idea began to emerge and three years ago he launched EasyKnock, a start-up which allows homeowners to tap into their equity by selling their home to EasyKnock and staying on as renters.
His organization has since attracted $300M in funding. I had a chance to catch up with Kessler and learn, about everything from the role of emotion in his work to the future of real estate.
Chaka Booker: What made you realize there was a market for EasyKnock?
Jarred Kessler: In financial services I learned 25% of homeowners can’t access their own equity. Another third of the US housing market has no mortgage to begin with. You have people in their homes, they have all this equity and they can’t do anything with it. It’s an issue of access. Helping people go from a non-liquid experience to a liquid experience gives them choices, I wanted to figure that out through financial engineering, marketing and technology.
Booker: Why can’t people just tap into the cash through a line of equity? How is this better?
Kessler: After the credit crisis, lenders were fined, rightfully so, and consumers were put into a specific box where they have to be a W2 worker, have a FICA score over 680, they can’t miss a credit card or mortgage payment. If you miss one of those you’re knocked out of the market. As a result, 50% of the people that apply for equity lines are rejected. The whole ecosystem is just not designed for today’s American consumer. That’s where we fit in.
Booker: Were there other entrepreneurial ideas you considered?
Kessler: We started with the notion to give consumers choices. The first idea was to help buyers and owners connect directly online. That evolved into allowing people to be renters in their own home. There were parts of that idea we couldn’t quite get right. But a piece of that idea came to fruition and it evolved. The bigger idea of choice turned into a specific idea.
Booker: How long did it take to land on the final idea?
Kessler: A year and a half.
Booker: EasyKnock helps people who already have a home. Have your wheels started turning on helping people without access to homeownership in the first place?
Kessler: That’s something we always think about, but at this part of the real estate cycle, we’re going to wait because I don’t think it’s a good time for us from a market risk standpoint. It is something very much on our minds that we want to build in the future.
Booker: Successful entrepreneurship is often about identifying consumer need. What need are you fulfilling?
Kessler: When people sell their home to us, they don’t have to move. They’re getting money. That’s a physical need. More importantly, the emotional need is people love their home and they want to stay. It’s not just an object. It is filled with memories. You sent your child to the prom from that house. You celebrated moments there. You mourned moments there. Every memory is tied to their home. By allowing people to stay in their home we are maintaining an emotional connection. People often use EasyKnock more for that benefit than anything else. That’s something we’re proud of. There are few companies that help people financially and emotionally, and that’s what we do.
Booker: Did you know you’d be filling an emotional need when you started?
Kessler: When you talk about financial services, it tends to get villainized. But from the start, I wanted to take my finance experience from Wall Street and help people on Main Street. I thought about the needs of the people, financially and emotionally. When we started out, it was important to give people a sense of release and comfort and strength.
Booker: How does this aspect play a role in your organizational culture?
Kessler: It’s one thing for people in an organization to get a paycheck. But when they know they’re on a mission and every day they see a review from someone saying, “You’ve helped me, you’ve changed my life,” it becomes three dimensional, less about numbers. Especially our people on the front lines that get thanked by customers. Making that the mission is important. It creates a culture where people come into work motivated. Looking at work from the mission standpoint, changes how you feel about the work.
Booker: What’s going to happen in the real estate market in the next six to twelve months?
Kessler: I don’t know the exact direction of the market. But over the next three years, I don’t think it’s going to continue going up. I believe a bigger percentage of the market is going to be rentals because people are gradually more comfortable not owning their home anymore. There has been a mind shift toward acceptance of renting. I’m pretty confident of that.
Booker: You’ve written a book about how technology will change real estate. What change is coming?
Kessler: Choices and flexibility will increase. Consumers will have more choices in the way they sell their homes—to an I-buyer, a real estate agent, themselves or some other model. The role of an agent is going to be valuable but will change by customers leveraging tools like EasyKnock. Customers will have more transparency into the price of their home, which also gives them more choices. Flexibility will increase because homes are going to become more of a liquid asset due to companies like ours.
Booker: I interviewed Mike Miedler, CEO of Century 21, who said the role of real estate agents would shift but not go away because it’s a complex process and because millennials like “experiences.” So, agents who focus on experiences and leverage technology can have great careers.
Kessler: I couldn’t agree with him more. He knows what he’s talking about.
Booker: As an entrepreneur, what keeps you up at night?
Kessler: As a consumer-facing company, you want to make sure the people in your company share the product offering the right way and it’s not misconstrued. It’s like if an Uber driver swears to a customer, that makes Uber look bad. We try to do everything to train people well and mitigate misunderstandings about what we do. But you can’t control it 100%, so it’s what keeps me up.
Booker: What did you learn as a comedy writer and then on Wall Street that lent itself to entrepreneurship?
Kessler: Being a circular thinker and a linear thinker. Linear thinking is looking at numbers, analyzing things that have been proven. But a circular thinker anticipates what will happen, has an idea and tries to execute. My creative side helped me with the circular side and my linear side came from financial services. Having those two together allows you solve the financial and emotional need for consumers.
Booker: Are there times when you need one type of thinking versus another?
Kessler: When you’re trying to understand what a consumer wants, that’s not necessarily linear. As you’re building the consumer experience, that’s when circular thinking comes into effect. When you’re figuring out capital markets and how to set up the business financially, leverage the linear thinking. But the advantage is in the ability to do both.
Booker: What advice do you have for entrepreneurs hoping to launch an idea of their own?
Kessler: Be prepared to push a boulder up a mountain without water or food for a while. You must have the stomach for that. Also, there’s going to be people telling you it’s not a good idea. You can’t care what people think. If you believe it’s a good idea, you got to execute on it. Be prepared to scale. But figure out a way so you don’t keep spending money to scale, so eventually scaling is organically built within the framework of the company. Really unique amazing customer service and technology are the other areas of value I would focus on.
Booker: What are you reading? What continues to keep your thinking sparked?
Kessler: I like podcasts about the evolution of industry. Walter Isaacson’s Trailblazers podcast. I like to read books about grit, Angela Duckworth’s book is a good one.
Booker: As a parent, how do you balance the responsibilities of family with being an entrepreneur?
Kessler: The number one reason I do my job is I want my family to be proud of me. That’s what drives me. You’ve got to manage your time or time will manage you. My kids and my family come first, no matter what. You have to keep that in mind. It’s a tough balance. But if you can’t balance many things, then you should not be an entrepreneur.
The conversation has been edited and condensed for clarity