Wendi Burkhardt pitches her roommate-matching service for empty nesters with space to share. And Anarghya Vardhana with Maveron determines whether or not she’s interested in investing.
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Episode transcript
You’re listening to The Pitch, a podcast where we take you behind closed doors and into the world of startups. I’m your host, Josh Muccio. Today, we’ve got an up and coming startup that’s building something for an oft-neglected demographic.
But before we get into it, I have something exciting to announce. Remember the episode titled “Calling All Angels” where Sheel and I talked about finding investors for this show who would be willing to invest after just one hour with the founder? Well, today, I’m excited to announce that we have the investors on board and the dates are set.
On October 4th and 5th in San Francisco, we’ll be recording season two of The Pitch. During that private event we’ll have ten early stage startups pitch to our panel of investors to raise funding. We have our investors committed, so now we’re looking for startups. Applications for season two are due by September 14th. So if you’re a founder raising a seed round and you have a live product, then go to thepitch.fm/season-2 to learn more. As you can probably tell, I’m really excited about this. I want companies to actually get funded on this show. So if you’re a founder, or you know someone who is, tell them about it. Thanks.
All right, let’s get started.
Wendi Burkhardt: So we are facing an aging crisis in the United States right now, which most people are unaware of.
That’s Wendi Burkhardt, founder of Silvernest. Every day in the US, 10,000 people enter their so-called ‘golden years’ as they hit retirement age. And these people are baby boomers.
Wendi: And what that means is that we’re moving a large segment of our population into a state of fixed income. And this same population unfortunately has not planned well for retirement.
But Wendi’s company is trying to do something about it. And of course they’re solving it with technology. I’ll let Wendi tell you more here in a second. Our guest investor today –
Anarghya Vardhana: My name is Anarghya. I’m an investor at Maveron. We are a consumer-only venture capital firm. So by that we mean that we are really hyper-focused on finding, investing in and growing the next big breakout consumer tech brands of tomorrow.
And yes, as you may have guessed, today’s startup is consumer focused. On the second half of today’s show, we’ll find out if Anarghya is interested in investing in our startup today, Silvernest. Let’s go to the studio. Here’s my cohost Sheel Mohnot.
Sheel Mohnot: All right Wendi, tell us about Silvernest.
Wendi: Silvernest is an online roommate matching service designed specifically to help empty nesters, baby boomers, in our aging population, stay in their home as long as they are able to. So we are facing an aging crisis in the United States right now which most people are unaware of. Most of the time we talk about the Millennials. But the reality is that we have 109 million people right now in the United States who are over the age of 50, and 10,000 a day right now are turning 65. And what that means is that we’re moving a large segment of our population into a state of fixed income, and this same population unfortunately has not planned well for retirement. So 44 million of these individuals today have less than $50,000 in the bank saved. However, most of them actually own their home and have their home as an asset that they can leverage in retirement. What we have set out to do is try and address the two biggest issues in aging which are financial stress and isolation, by introducing the idea of having a roommate as you age.
Sheel: It sounds kind of wild and out there. Can you share how it’s gone since then? Are people doing this?
Wendi: People are doing this. And they’re doing it a lot more than most people realize. So we came up with the idea based on personal experience. It largely came out of my father dying early, my mother being in a large empty house and living on her own and wanting to have some companionship. Most people don’t realize that if you go on Craigslist today about 35% of the rooms for rent on Craigslist are actually over the age of 50 today. And if you can look at that in almost any major metropolitan area, those are the statistics, and we know because we crawl around out there a lot. We launched at the end of October, and without doing any paid acquisition to date, we’ve actually had over 4,000 people sign up. We’ve delivered over 2,000 matches, and we have almost 700 of those that have actually moved in together.
Anarghya: Awesome.
This is Anarghya again, the investor from Maveron.
Anarghya: Yeah. I think from a behavioral standpoint it makes a lot of sense. And I know that in other countries and in other cultures there is a concept of the elderly being able to live together and have companionship. Whether that’s through their own homes or established communities. I’m wondering, is the paradigm that it would be two groups of people in a similar age range would move in together? Or is there a case where it will be someone who is in their 70s but also someone in their 20s who also needs a roommate? Like, what’s happening right now in the Craigslist behavior and what have you seen over the last few months since October?
Wendi: So that’s a great question. And one of the things that we worked really hard to consider or to build into this consideration was allowing both individuals to feel like they were in control. And control means you get to choose. So the homeowner actually dictates the age of the individual. What we’re seeing right now in our mix is about 30% of the pairings are actually inter-generational, which we also think is pretty cool. The average age of the homeowner on our site right now runs about 58. And the average renter, roommate, is about 44. We just had a testimonial from someone who is 39 who just moved in with someone who is 62, and they’re having an amazing experience. Which I think is pretty powerful if you think about what that offers beyond the other benefits.
Anarghya: And then what is your vetting and interview process like?
Wendi: We designed a platform to be extremely scalable. So everything is digital. What we’ve done is we’ve designed a proprietary algorithm that’s a compatibility matching tool. And that’s the first step in the process. Much like an eHarmony or some of the dating sites. Once they’ve gone through that first level of vetting, we do a full background screen which includes a five-year eviction history, sexual offense – all of the big heavy lifters. We do an identity verification on the property so that we know that it’s actually true and valid. And we help do further vetting through the social media profiles and layer on an additional level of insight there.
Sheel: How do you make money?
Wendi: We charge both parties a fee right now. We charge the renter and the homeowner an upfront fee. There’s a base rate of $29.99 and then they have additional options that can be layered on top of that. So things like the homeowners can browse a greater selection of potential renters by paying an upcharge. And then also an autobill pay feature. Which allows them to right now do automatic rent payments digitally. But we’re building in some additional features that can help them do bill splitting and we’ll layer that on as well.
Anarghya: Okay. And how do you think about customer acquisition? You said since October it’s been all organic, and then as you continue to grow in scale there’s two sides obviously. The owners of the homes as well as the renters. How do you think about growing both of those? What has worked, what hasn’t worked so far?
Wendi: What has been really interesting is that as much as this is a two-sided marketplace we’ve literally had to do nothing to get the renters. And we’re seeing renters come in at the rate of about eight to one. What that allows us to do from a paid acquisition perspective is actually focus all of that directly on the homeowner and the supply side. That’s pretty exciting, I think, because in most marketplaces you have to work hard on both sides. We continue to see the increase in the renters go up month over month. We had hypothesized that at some point it would be about 10 to 12, because we want enough supply for the homeowners to select from. And we’re hitting those targets without even trying.
Anarghya: You’re doing a city by city launch?
Wendi: The product is actually fully operational.
Anarghya: Everywhere?
Wendi: Yeah. We launched with a pretty robust MVP. And we’ve actually had activity in 49 states to date. We focused initially on guerrilla and organic tactics in Colorado, because that’s our home base, but we’ve had this organic expansion into Minneapolis. And Los Angeles is taking off like popcorn. And we literally haven’t even started to do any marketing efforts there directly.
Sheel: How much do you charge? So you make $30 one time. And then there’s some ongoing stuff for paying bills and splitting bills. How much is the ongoing?
Wendi: The way we look at it is the combined transaction is worth $150 LTV at this phase of the product.
Real quick – LTV stands for lifetime value, or customer lifetime value, which is a prediction of the dollar value or future cash value to your business from a single customer over time.
Wendi: That $150 is probably low, particularly with some of the other services we want to layer in, but that’s what we look at and calculate on.
Sheel: What other services do you want to layer in?
Wendi: We’ve had a huge demand for insurance. That one’s a really big one.
Sheel: Cool. What kind? Like renters?
Wendi: Renters, home. And we also think there’s some other forms of insurance that we could funnel through there as well.
Sheel: Yeah, that’s a big opportunity.
Wendi: We get approached all the time by all of these other services that want to –
Anarghya: Like Honor and stuff?
Wendi: Not Honor. Not as much on the caregiving side. More on things like home remodeling for aging in place.
Sheel: That’s interesting.
Wendi: There’s a number of services at the home reorganization, like concierge services and things like that. We’ve had a huge approach on that. And we’re actually trying to figure out how we monetize that into the model.
Sheel: Okay, just being frank, the initial pitch, I was like I don’t know if there’s enough of an opportunity there. I don’t know about roommate matching. This other stuff, I kind of like more personally. And it’s probably because I don’t fully understand the market in the matching. I can’t wrap my head around is that a big enough market, can you make enough money there? This other stuff, I like. Could Silvernest just be – I like the name, too – could it just be a service for old people with homes and it could manage a bunch of different things in their home? Is that the plan?
Wendi: It’s interesting that you say that. It didn’t initially start that way, but what has been proposed through some very interesting partners is that ultimately we could potentially be a lifestyle brand for that particular demographic. Now, I think that’s much further down the road. Our goal is to stay laser-focused right now on actually how we monetize the core product.
Anarghya: What feels a little complicated to me is a couple of different cultural things that pop up. One, let’s say if there is a 70-year-old woman who is living alone and she wants to be a part of Silvernest. One party that’s involved is potentially her kids. And how do these folks plug into the system in terms of, “oh, I do want my mom living with this person, or I don’t, my mom doesn’t know what’s best for her, blah, blah, blah.” I feel like there’s so many things like that that could come up. And then there’s multiple siblings who jump into the mix. How do you navigate that? Or does your technology navigate that? How do you tell a story there?
Wendi: It’s a great question, and something that we’ve thought a lot about. Because we actually believe that our secondary audience is that adult child decision maker. We really target between the ages of 50 and about 75. Because we assume that by the time you get to be 75 or 80, you’re probably making different decisions based on acute needs. What’s interesting about that is if we look at that age segment, which is pretty significant, this segment can either be the customer or they can potentially be the influencer, based on being the child. The beautiful thing is we’ve built a fully accessible dashboard – everything is done through the dashboard, through the consumer dashboard. And the user can actually provide access to other individuals, to come in and be able to review the process, look at the profiles in the dashboard, help set up the filtering. So we’ve allowed a shared access for that exact reason.
Anarghya: Okay, cool. And then the other thing that came up was, are there any expectations around the roommate that moves in would provide care or would be there if the older person fell or something happened?
Wendi: That’s up to the homeowner. But what we’ve accommodated for in our particular version of the lease, we’ve allowed for a clause in there that will allow individuals to barter or dictate that as one of the terms of the lease, if you will.
Sheel: Where are you at in terms of revenue run rate?
Wendi: Pre-revenue we’ve been testing out some of the revenue. We are actually turning on the fully-priced product next week.
Sheel: Cool.
Anarghya: Tell us a little about your defensibility? What prevents someone else from copy-catting you? There’s a couple of other folks out there that can do roommate matching, albeit they’re doing it for perhaps a younger demographic. Or what keeps Airbnb from offering a service like this?
Wendi: You bet. So those are the things that of course keep us up at night and we think about all the time. It’s first of all having a specific focus on this demographic and really making sure that we’re meeting the needs of this demographic through the technology as we design it. But even more importantly we believe that part of our ability to scale is through strategic relationships. And so we’re actually working in concert with a number of very significant brands to actually help us secure a relationship with them that becomes a referral channel through those partnerships. Big names like The National Council on Aging, which is actually the largest non-profit organization servicing this demographic today. And we believe that by working in concert with some of these larger organizations – we have six right now that we’re in conversations with and initiating some different pilots with, that I can’t mention. But we believe that that’s a huge part of our defensibility as well.
When we come back, Wendi leaves the studio. Then Sheel and Anarghya talk about what it’s going to take for Silvernest to be a success.
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Let’s head into the studio. Wendi just left, now here’s Sheel and Anarghya.
Sheel: Cool. What do you think about that business?
Anarghya: Super interesting. I like the paradigm, the idea. My dad will be 60 next year and my parents are in Portland. And it’s something I think a lot about. They’re in this big house, and it’s just them. They have a ton of friends nearby and why not live together or something like that? It’s pretty complicated, though. After someone has been living a certain lifestyle for so many decades, and they have their way of doing things, they have their preferences, I think it’s hard to put a roommate into the mix. What do you think?
Sheel: I agree with you, it can be. My parents have done it, actually.
Anarghya: Oh wow.
Sheel: They live in Pittsburgh. And they’re both retired. They have a guest in the basement and my mom makes them food. And it’s actually not about the money, it’s more companionship.
Anarghya: And security, almost.
Sheel: Yeah, and security. And my parents travel a lot and this person’s home. That’s nice. And they really like it. They had someone, actually they don’t anymore. He got married, and they actually went to his wedding.
Anarghya: That’s awesome.
Sheel: But then he moved out. He decided it wasn’t good.
Anarghya: I think the move, what you’re talking about, what makes sense to me, is a younger person. Maybe someone who is in college in that area, or just starting a new job and is single and needs a place to live. I think that makes a lot of sense. My grandparents have done that in the past with students. And I know that in Palo Alto, a lot of families will host student athletes over the summer. Or even my sister, I think, has lived with a couple in Palo Alto a couple of times.
Sheel: Another friend of mine, his mom recently got divorced, she’s retired and was just at home kind of getting a little depressed. And she took on somebody as a roommate and it has totally changed her life. She loves it. They bake together and all this stuff. My first instinct was that there isn’t much there, like how much could you make on the roommate matching service. But I actually think the other stuff, there’s a huge opportunity providing services to older homeowners.
Anarghya: Yeah. I think they really need to hone in on building this brand, the Silvernest brand. Such that it becomes synonymous with 50 plus tech lifestyle, or whatever it is. It’s for them to figure out. But I think if they get to that point, where I’m 60 and I know that the service that I use is Silvernest and I use it for finding this roommate, but even if I have or don’t have a roommate I use it for other things, because it’s my go-to place. Honestly, my parents will call me and be like “what’s our Netflix password?”
Sheel: Oh my God. All the time.
Anarghya: So just having a dashboard that is able to give you this information, whether that is other digital services, whether that’s getting a house cleaner, some kind of toilet mender, whatever it is.
Sheel: Yeah. Grocery shopping. All of those things. Maybe we’re morphing what the company actually is.
Anarghya: But I think it makes sense to use this roommate system as almost a beachhead and then build a really strong brand around it. Build a brand of trust. I think trust is the most important thing here, and then offer additional services that make sense.
Sheel: Yeah. Does it fit in with what you guys do at Maveron? It is consumer-focused?
Anarghya: Yeah. It’s definitely consumer-focused. We definitely want to spend some more time understanding the rest of the market. The reason I asked the defensibility question is there’s a lot of players out there who are working on the real estate home space. One of our portfolio companies Common is in that area. And just thinking through how Silvernest can emerge as a leader or be really defensible. I think that’s something I would dig into, looking into the competitor landscape and stuff.
Sheel: Cool. But you would talk to her further?
Anarghya: Yeah, I would love to talk to her further.
Sheel: Cool. Good to hear. I like it, actually. I would say she turned me around on it.
Anarghya: Yeah.
Sheel: Only hearing about the idea before this, I was pretty skeptical.
Anarghya: Interesting. I think for me the path that I took through the conversation was, I think the idea is really interesting and I have definitely seen it implemented in India and other countries and it makes sense. What my biggest question was, how does this become a big venture scale business? I would love to dig in more and understand how she grows that revenue number, how she acquires users on both sides? She is going to have convert some users, because there are people who are in their 60s and they Airbnb. And do they Airbnb and join Silvernest? I don’t know. But I think there’s a lot of different things that she’ll have to do and it’s almost a little bit of a category creation here.
That’s all for today’s show. Thanks for listening.
You can find me on Twitter, Facebook and Instagram @joshmuccio and Sheel is @pitdesi or follow the show handle @thepitchfm. To join our weekly newsletter and get behind-the-scenes stuff that we don’t share on the podcast, go to thepitch.fm and subscribe by email.
We’ll be back with a new episode next Wednesday. I’ll see you then.



