Wednesday, August 5, 2015

Q&A with Fundrise

1) What makes your family business experience unique?

Ben: I worked with my father for 10+ years in commercial real estate development, and then started a new business with my brother Dan in 2009.  Together, Dan and I built a decent-sized real estate company, which almost naturally led into a high-growth technology company, called Fundrise.

Family business is rare in innovation-driven sectors.  Usually family businesses grow out of the opportunity to leverage generational wealth, reputation, and infrastructure, like in real estate, for example. Success in tech depends on a compelling product that solves a problem in a new way. Product-market fit is what ultimately matters. Fundrise is unique in that it sits at the intersection of technology and real estate. Our experience is unusual as we need both a powerful product and a deep network.

Dan: Our father was a pioneer in real estate development in his day, and we’ve continued the same legacy of identifying creative solutions to real estate problems. In our case, we used the Internet to innovate the way real estate projects are financed, by giving individuals the opportunity to participate for the first time ever. We’ve brought tech to an antiquated, slow-moving industry -- we’re doing to real estate what Tesla is doing to the auto industry.

2) How is it different from running a "typical" small business?

Ben: With a family business, every decision has another layer of complexity to consider, like the many sides of a diamond. How will this affect the family? If you are busy or stressed, it’s easy to miss a facet. Work associates come and go, but family is forever.

3) What do you love about family business?

Ben: I love the complexity. It adds more facets to the diamond. Every triumph is richer as a result.

Dan: There is a built-in level of trust in a family business. As we’ve scaled from funding a single, $300K project to dozens of multi-million dollar developments around the country in four short years, this foundation of trust has been critical to our rapid growth.

4) What do you hate about family business?

Ben: The complexity! Managing a cutting-edge, high-growth business means managing complexity -- the family aspect adds another layer to an already challenging business.

5) What's a myth about family business you'd like to debunk?
Ben: Many people will say family business is difficult. Others seem jealous of the leverage family can bring. No matter what, each day is a new opportunity to make good things happen. You have to work at the relationship.

6) What three things have been key to your success?

Mentorship - Experienced advisors and board members are critical to making good decisions and have led us to the place we’re in today -- with more than 50,000 individual investors using our platform to deploy tens of millions of dollars of capital into real estate projects across the country every month.

Contrast & Compliment - My brother and I are different people. I worry about everything, and he is healthfully optimistic. I stress out about driving to the suburbs during rush hour, and he is happy to fly to Hong Kong for a 2-hour meeting.

Serendipity - Obviously you have to work hard to be in the right place at the right time, but it simply amazes me how many good people have come into our lives through the most unlikely of circumstances.

7) Would you advise others to go into family business?

Ben: Yes, but start small. Let it grow organically. You learn a lot of new things about people, even close family, when you start to work with them.

Dan: Absolutely. It’s proven that a business run by a team of family members is more resilient and more likely to succeed than any other kind of company. Not only has the family dynamic helped to get us to where we are today, but it is what will ensure that we continue our hockey-stick growth and outpace the competition.

8) What difference has being a family business made in your sales?

Ben: In the early years, when you’re not sure if you are going to make it, we were able to attract the most well-respected real estate players in the whole country, like Silverstein Properties the owner / developer of the new World Trade Center buildings, in no small part because of the reputation of our family real estate business.

9) What difference has your family business made in your community?

Dan: We started Fundrise so that we could change who had the power to invest in local real estate. Real estate investment has typically worked like a country club, where the price of admission is millions of dollars. We set out to change that and drastically lower the barrier to entry. And, as a result, we have been able to build some pretty cool projects as a result. For example, Maketto, which was the first real estate crowd funded property in the whole country, has 175 individual investors from the community and will be opening this spring.

10) Would you advise siblings to start a business together?

Ben: Yes, but initially as a side business. Buy a building to renovate together. Co-author some articles. First learn what it means in practice before quitting your day job.

Dan: The rapid success of Fundrise, and the fact that we’ve created a base of thousands of individual investors with the ability to fund millions of dollars worth of real estate every month, is proof that siblings can work incredibly well together. We both end up working harder and with greater accountability because of our family ties.

11) Do you incorporate your children in your family business? Why or why not? How old are they? What are their roles and responsibilities? We are very open to incorporating children at our business.

Ben: My kids are 3 and 1 years old. Dan is recently engaged. I would tell our kids, “Go dig ditches for a few years before considering working in real estate with us.” You want them to make their own decisions.

12) What's a day in the life of a family business (share a rough outline of your family and business daily life)?

Ben: Divide and conquer. There is a lot of work to do and ground to cover. A family partner lets you double your workload and move fast. At the most basic level, if we have a critical meeting or conference, we can just sign up as “Miller,” and then sort out later who will attend.

13) Do you think family business should be a priority for others (lawmakers, service providers, college students...)? Why or why not?
Ben: How many companies think in terms of generations? Multi-generational outlook is extremely powerful for taking on intractable, long-term problem

No comments:

Post a Comment