I’m excited to start 2022 with a conversation that I had with a former colleague from Reddit, Samantha Carow. Both an all-star engineer and engineering manager at Reddit, she left a year ago to start a company and build a product that helps first time homebuyers.
Samantha is the co-founder and CTO of DwellWell. She co-founded DwellWell with her friend, Matt Canzoneri in January 2021. DwellWell is a platform that helps first time homebuyers navigate the complex and opaque process of buying a home. They offer step by step educational guides, multiple decision making tools, and also connect buyers to vetted real estate agents.
Interestingly, Samantha told me that throughout her career in tech, she had never once considered starting her own company. She had never had the entrepreneurial bug. But that changed the summer of 2020 when Matt pitched her the idea of solving the problems that first time homebuyers face.
Fast forward to March 2021, they had built a “shitty” (her words, not mine 😃) first version of their product, raised a $1m+ seed round and were building out a proper beta of the product with a talented team that would launch later in the year.
I wanted to connect with Samantha to hear what she’s learned in the 12 months since leaving Reddit and starting a company.
In our conversation, Samantha talks about:
My questions are in bold; this interview has been lightly edited for clarity.
Let’s start at the beginning, can you give me a quick overview of the company and the founding story?
Samantha Carow: I'll start off by saying I never, ever wanted to be an entrepreneur or a founder. It has just never been something that's interested me at all. No one in my family's entrepreneurial. Nearly everyone in my family has worked at the same company for 30 years.
I met my co-founder, Matt Canzoneri, in 2013. We worked together at a startup, called Preact from 2013 to 2016. In 2016, it was acquired by Spotify. I left to go work at Reddit and Matt went to business school, but we had kept in touch. In 2020, during the pandemic, we were both living in L.A, Matt reached out to me and said he had a really cool idea, but needed a technical co-founder. He said that residential real estate is broken and he wants to build a company to fix it. I told him, ‘are you out of your mind? I’m pretty sure the real estate market is cornered. There are a lot of big players already.” But he convinced me to come over to his house to talk about it.
So in May of 2020 I went over to his house and we sat outside in his yard – 10 feet apart – and talked about the idea. He asked me, ‘Sam, how would you buy a house? If you're so smart and you think real estate is so easy, how would you buy a house?’
I fumbled through my response and told him I’d maybe look online for a few houses, then go to the open houses, meet a random agent and then somehow magically get the house that I liked best.
Immediately the problem became clear to me. I have a college degree, and the past three generations of my family have been homeowners, and yet somehow I had no idea how the process worked. If I was confused, how was the rest of the world faring? Nobody actually knows what they are doing when they go to buy a house. Even worse, if you try to learn about the process online all the resources are thinly veiled advertisements by real estate agents or mortgage lenders. There is no single source of unbiased truth that walks you through how to purchase a home step by step.
That’s when it clicked for me and I realized that if I don’t pursue this idea with Matt, I’m going to be pissed when somebody else does. I couldn't say no. Throughout the rest of the Summer and into the Fall of 2020 we continued to talk through the problem and what potential solutions would look like.
What was the first version of DwellWell?
SC: It was essentially a PDF. We wanted to validate that this was a real problem people care about. We had done hundreds of hours of homebuyer research and interviewed first time home buyers. But we wanted to validate our approach to solving the problem.
We spent a couple hundred dollars on some Facebook ads that drove people to a Squarespace page. The landing page said the home buying process fucking sucks. Do you want to learn how to make it easy? Put your email here and we’ll send you a PDF.
The PDF was a step by step guide from how to get pre-approved, to finding an agent and the questions to ask them, to how to do a closing inspection. It was a PDF with no strings attached, except you had to give us your email.
I like that lo-fi approach. Did you get positive feedback from people that used the PDF?
SC: I had a stranger reach out to me and ask if I could connect them to agents in their area. I was so surprised. I remember calling Matt, interrupting his dinner to scream 'WE JUST LANDED OUR FIRST USER' and they were requesting an agent from us because of our shitty PDF. It was crazy and super validating.
That’s great that you were getting positive feedback so early. Was there anything you spent a lot of time on pre-launch that later turned out not to matter?
SC: The only thing that we had to completely scrap was our first round of video content. We rented this awesome studio and shot hours of really beautiful footage, but the audio was too echo-y to use! So we had to reshoot everything.
Other than that, I can’t think of anything we spent a ton of time on that didn’t matter. We were almost annoyingly pedantic about what it was we were trying to accomplish, so any time we started veering off track, we were able to come back to our goal of delivering a simple, step-by-step guided path towards buying your first home. We spent a LOT of time winnowing down our goal so that we didn’t waste time on stupid stuff.
While you started with an educational piece via a PDF, what was the vision for the product that Matt and you came up with in his backyard?
SC: We see three verticals. First, there's the education piece. But education has to be delivered at the right time for your specific situation, and it cannot be overwhelming or boring. All of the resources that are out there are not delivered at the right time and you have to go find it yourself. We help people stay focused on what’s important for them now. For example, if you are just beginning the pre-approval process, you don't need to simultaneously do a deep dive into contingencies or the appraisal process -- that comes later.
The second vertical is the decision making tools. Today, most decision making tools really suck. What has a generic mortgage calculator ever told you? Most are not very relevant because they don’t know anything about your personal financial situation. So beyond education, we also want to give tools that can recommend what type of mortgage people should get, based on their budget, the type of house, the county, and more. For example, maybe a house only has 60% of the features that they want, but it’s 40% below their budget. We can help advise them on what they could do with the extra money. Most loan officers aren’t going to do that. They are going to take the full approved mortgage and stretch their budget.
The third part of our product vision is a marketplace. Today there are agents on our platform that we’ve pre-screened. They have to primarily represent homebuyers. They have to do a certain number of deals per year. They have to have been licensed for a certain amount of time and they have to be an expert in the area that our buyers are looking to buy. When our users are ready, we introduce them to a super agent on our platform. People can trust our referrals because we don’t get paid a percentage of agent commission, so we won't ever pressure them to buy something that is a bad fit. Instead, our agents pay a subscription fee to be on our platform. Our job is to introduce you to the best agents that are tailored specifically for what you're looking for. We are not incentivized for you to purchase a home at all, so you can be sure that we're actually giving you the best agents that are going to be right for you.
It sounds like you are making a real effort to only refer people to an agent when they are truly ready to buy a home. I could imagine a scenario when cash is tight and you might be tempted to be more liberal in your referral policy and refer people that might not be as ready to buy a home. How do you ensure that doesn’t happen?
SC: Agents don't want a bunch of unvetted lukewarm leads. These are the types of leads most existing lead-gen services provide. It's much more useful for agents to be introduced to high-quality, pre-approved opportunities, even if that means there are fewer of them. It's more time efficient for everyone.
Gotcha, that makes sense. How has your product strategy evolved over the past year?
SC: Two main things stick out to me. When we first started out, we knew there was a problem with home buying, but there were so many problems. It would be really easy to flail around, and not be disciplined about what we wanted to solve first.
The key to building a resilient, sustainable business is to stay focused on the core mission -- homebuyer value. We put a master plan doc in place to stay focused, plus a moonshot doc for future projects that we shouldn’t be thinking about right now.
We knew we had to be homebuyer-obsessed, but putting parameters around our potential customers has been super helpful for product strategy. We categorize our homebuyers into three buckets: Imminent, Hopeful, and In-Flight. Imminent homebuyers are those looking to buy in the next six months, while Hopeful homebuyers want to buy a home but aren’t quite ready to get serious. In-Flight buyers are those who are already in the process. Our product focuses strictly on Imminent Homebuyers right now -- our focus is laser sharp. There are a million things we could build for Hopeful Homebuyers, or those who are In-Flight, but Imminent Homebuyers need our help right now, and we build products for this niche only.
The other thing that sticks out to me is user feedback. We did probably 100 hours of homebuyer interviews before committing to DwellWell. These interviews set our path for what we’re building today, and we continue to seek feedback. The feedback we’ve gotten has been so eye opening; something as simple as a dumb button that we thought was obvious turned out to be confusing everyone. Some users left our platform because we didn’t have an option that allowed them to continue as an all-cash buyer. It’s just been so eye opening that many of our UI/UX and financial assumptions about our users have been incorrect.
Let’s talk about customer acquisition. Over the past year what have you learned about marketplace dynamics and how to effectively acquire customers for each side?
SC: The agent acquisition side has been pretty easy for us. Agents hear about us and they're like, “yeah, duh, I need this service.” Right now, we aren’t charging agents, so a lot of agents ask us what the catch is. It’s simply the “right time, right place.” We need to make sure that the supply and demand of the marketplace is balanced before we start charging.
In terms of marketing, we're still experimenting with what works best. We mostly run search ads, social media ads, and some audio ads. What we’ve found to be most effective is when we run ads that are focused on specific geographical regions. For example we have a regional San Francisco ad, with San Francisco imagery that has delivered much better results on the home buyer side of the business.
A big goal for us in the future is to build a global community for real estate agents and homebuyers so our users can ask hyper-specific questions about the locale they're interested in. The more we can bring these groups together, I think the easier it'll be for us to acquire home buyers and agents.
Interesting, I suppose you face a similar problem that dating apps do. Purchasing a home is an infrequent event. If your platform helps quickly buy a home then they won’t be your customer for another 5 to 10 years. Is that where you are hoping the community angle will help by creating longer term relationships with your customers?
SC: There are a couple of different ways that we think about it. Right now, we’re staying very niche. We are only focused on first time homebuyers. If we deliver all the educational content and refer them to an agent, it’s totally possible that they might stop using our product after the introduction. But we don’t think that’s particularly beneficial to the homebuyer– DwellWell is going to be your best source of neutral information. We think buyers will understand that, and stay on the platform.
We also want to continue to provide value to homebuyers through the home buying process. We’re adding the ability to get pre-approved directly within DwellWell. Homebuyers can also take notes during home tours, and rate them during the walkthroughs. Once you've seen five homes, they start to blend together and it's hard to remember which had what, so it’s important for users to keep organized. We'd also like to bring inspection recommendations onto our site as well as insurance company recommendations.
We also want to provide value after they’ve purchased the home. Ultimately DwellWell can become a home management platform as well. But that's in the distant future. Right now, we have to nail the education for first time homebuyers in order for us to build trust in the homebuying community.
I really like the future you are envisioning where DwellWell becomes a home management platform.
Changing gears a bit. A year ago you left Reddit and went all in on DwellWell. What’s been the most challenging part of the past year?
SC: Distribution! It’s really tough to get in front of the right homebuyers at the right time. I think this is the most common challenge startups face, so it’s not particularly unique to us. But it’s what keeps me up at night. Especially because DwellWell has the potential to help over a million first-time homebuyers every year -- I just want to be able to help each and every one of them, so they don’t make mistakes or feel worried about their home transaction! It gives me heartburn every time I see someone buying a home without having the pertinent information.
I 100% agree with distribution being a challenge. Okay, new for 2022, I'm going to try out a quick fire round at the end. Short, less than a minute answers.
What do you know now that you wish you'd known a year ago?
SC: There are lots of tiny things I wish I knew earlier, but I don’t have a particularly satisfying answer for this. The one thing I wish had occurred to me earlier in my career was to ask “what is your fear” during conflict. My cofounder and I are able to argue gracefully because we’re able to boil down our disagreements to this single question. You can really empathize and understand why the other person is objecting to you.
It’s really easy and comfortable to be a victim of conflict when you don’t have the experience to understand that most disagreements come from fear. And it’s easy to remain a victim when you don’t have the tools or wherewithal to ask this question. I think this is also applicable to individual contributors trying to manage up and sideways, to startup founders understanding one another, and even in your personal relationships. I would encourage anyone to handle conflict by asking something along the lines of, “what is it that you're afraid will happen if we follow my approach?”
That’s a great question to get straight to what might be driving the conflict. What book do you recommend the most?
SC: Honestly, I never recommend business related books. So I have to give you A Tree Grows In Brooklyn by Betty Smith as my number one book recommendation of all time. If you want something business for startup founders, then I’d say the Startup Playbook by Sam Altman has been really helpful for us.
What are you most proud of from the past year?
SC: There’s nothing more thrilling than watching users flow through the application you built, and hearing how much value it’s brought to their lives. When we interviewed our buyers and agents alike, we’re hearing the same thing: DwellWell is different, and important, and has had meaningful financial impact. It makes me feel emotional just thinking about it.
I’m also proud of the team we’ve been able to build. Our engineering, design, and marketing teams are brimming with hardworking, passionate people.
I’m sure that’s very exciting and encouraging to get that positive feedback from your customers.
Final question, what's your advice to an entrepreneur starting a company in 2022?
SC: I was very, very afraid to start a company and leave my full time job. I think the worst part was when I was straddling my full time job and the decision to quit. The moment I gave my notice, I wasn't scared anymore. I think it's really easy to be scared and to sit in that fear and have it result in inaction. But once you take the action and take the jump, in my view, it becomes way less scary. So my advice is don’t wait. If you want to do this, don't let your life go past you, be brave enough to do it.
I hope you enjoyed my interview with Samantha and learned a few things. If you did, give it some love on Twitter with a RT or Like. This helps more people discover my newsletter 😊 -Tyler