209 Providing an Excellent Homebuyer Experience - Derek Schairer and Luke Groesbeck Mar 20 2024

Greg Bray: [00:00:00] Hello, everybody, and welcome to today's episode of The Home Builder Digital Marketing Podcast. I'm Greg Bray with Blue Tangerine.

Kevin Weitzel: And I'm Kevin Weitzel with OutHouse.

Greg Bray: And we are excited today to have joining us on the show, Derek Schairer and Luke Groesbeck. They are the co-founders of Foundation. Welcome, Derek and Luke. Thanks for being with us today.

Derek Schairer: Thanks for having us, Greg, Kevin. Excited to be here.

Luke Groesbeck: Thanks, guys.

Greg Bray: All right. Well, let's start out by just getting to know you guys a little bit better. Luke, why don't you start off? Tell us a little bit about yourself and then we'll have Derek give a quick intro.

Luke Groesbeck: Yeah. So, Luke Groesbeck coming [00:01:00] in from Colorado. I've not spent my career in home building. Derek has much deeper home building DNA than I have. We call Derek our home building nerd at Foundation The joke that's not a joke, this is a true story. If you want to talk about home building on a Saturday night, Derek's your guy. He's already thinking about it. Give him a call.

I'm the other sort of nerd. I've spent my whole career in Silicon Valley working on startups, working on tech companies. Derek and I got to work together, and he'll tell you more about this, but we worked together for years at a company called Opendoor, which is how we got to know each other for better and for worse. And it sent us down this path.

Kevin Weitzel: Well, that's the business side of you, Luke. We need to know something personal, not work-related about you that our viewers can learn today about you.

Luke Groesbeck: Oh, no, this is the least interesting part of the show. So, I'm in Colorado. We've been out here for years, but I spent basically my whole life before this in California. I grew up in San Diego, and then I was in the Bay Area for 20 years. I'm probably the only person in Colorado that has more surfboards [00:02:00] than snowboards in their garage. Not a fact that I'm proud of. I just haven't been here long enough to rebuild the quiver.

Greg Bray: All right, Derek, let's get some intro from you there.

Derek Schairer: Yeah, Derek Schairer, co-founder with Luke of Foundation. And so, like Luke mentioned, I've been in home building my entire career. I started in the industry in 2007, right out of college. I started for the Lennar Phoenix division here where I was an OSC. Eventually made my way onto on-site sales and the end of my time there was spent in sales and marketing management.

So, kind of ran the gamut. Finished my MBA and was ready to maybe try something a little bit different. And that's right when a lot of the prop tech was starting to come on the scene. I thought that iBuyers were something that could be extremely valuable to home builders, just based on my experience working with customers during my time at Lennar.

So, I found my way to Opendoor. I was fortunate enough to be able to start and build Opendoor's home builder partnership business. Fortunately, was able to grow it into Opendoor's largest [00:03:00] partnership channel and Opendoor's first multi-billion dollar partnership channel. So, had a great run there. Had a great team and really still believe in what they're doing over there. Was able to build a lot of great relationships in the industry across the country with home builders and really start to work with them and show them what it meant to have a provider that has real modern software solutions.

And so, once you are able to build that trust with them and they started to peek under the hood of what we were doing at Opendoor, they started to ask things like, Hey, you guys have some modern products that I've never seen, but I could really use. Can you help us with that? Can you build that for us? And rightfully so at the time, the answer was no. Hey, iBuying is hard enough. We're going to stay laser-focused.

But as you start to hear these things and gather this knowledge, Luke and I always imagined someone would come and build this. Nobody did. The timing was right. We were both ready for kind of that next chapter. And we called each other up and said, Hey, are you ready to [00:04:00] give this thing a real run? I think there's an opportunity here. That's how we got back together, started Foundation after spending some time together at Opendoor.

Kevin Weitzel: Well, I'm not going to glaze over the fact that you just said that you went from being an OSC to the co-founder of a major tech corporation. That we're just going to have to glance over and it's going to be gone, but we're going to get to one of my favorite parts of this, which is, I need to know some interesting factoid about yourself, personal level, has nothing to do with work.

Derek Schairer: Well, I appreciate reciting back that journey. This is way more interesting than anything I think. So, something that most people don't know about me is I really do love music. I love electronic music, if anyone gets to know me. And so, as a hobby, there was a time where I used to be a DJ. In my free time for fun, I would DJ.

Kevin Weitzel: Now we talking electronic music back to like ELO days, or are we talking to like all this disco that kind of stuff?

Derek Schairer: Well, I mean, we can get pretty deep in the weeds here, Kevin, so I don't want to geek out too much because that could be a whole entire [00:05:00] podcast. But I've played bars, nightclubs, gotten paid to do it. I like house music, really got into EDM. But growing up outside Chicago in the nineties, right, we had a radio station that would pump out all the house music from Chicago, which is where it originated. So, that's really how I got into it since the nineties. So, it's been a while.

Kevin Weitzel: Wow. That's another first, Greg.

Greg Bray: I do think we have not yet a DJ on the show. Well, Derek and Luke, we've hinted at it a little bit and we mentioned Foundation, but I don't think we quite know yet what it is. So, why don't you give us that brief intro overview of what the company's doing, the services you're offering, and who you're trying to work with.

Luke Groesbeck: Yeah, thanks. Foundation is the buyer experience platform for homebuilders. And what that means is, if you take a quick step back, we talk about an oversimplified buyer journey. You start with shopping. How do I find my new construction home in the first place? Then we talk about closing. When we're talking to our Silicon Valley investors, we call it checkout. They think that's cooler, but we say closing. We really mean from a signed purchase [00:06:00] agreement through to close. So, shopping, closing, and then ownership. What's the experience of owning and operating my new construction home?

Today, our first two products, they're generally bundled. They don't have to be. I'm happy to talk about that, but we have a closing product called our closing concierge. And the closing concierge holds the buyer's hand from contract through close in order to generate happier buyers and then more efficient sales teams.

And then our ownership experience gives buyers everything they need to own and operate that new construction home at their fingertips. And the reason we do that, it's not just to generate happier owners, but we actually re-engage these owners on behalf of the builder in order to generate referrals, repeat purchases, and ongoing services revenue.

Greg Bray: So, is that targeted, I'm trying to kind of put this box in my own head, right? You know, you kind of fit into different tools. Are you guys managing the contracts or the communication or all of the above? What exactly is the more detailed pieces [00:07:00] of that buyer experience?

Luke Groesbeck: Yeah. Great question. Not the contracts themselves. What we found is that people have done a pretty decent job at adopting things like E-signatures. Most builders that we talk to these days have gotten that far. The hardest part for buyers of this process is really that window from contract to close, right? You got so excited to sign that purchase agreement. This is your new home, and then now you're waiting 9 to 12 months for that home to get built. Yes, your salesperson should be updating you, but I think what we see happen is that salesperson is out for good reason chasing that next contract.

As builders, you know how to build and sell new construction homes. For most buyers, it's the first new construction home they've built. And so, it is uncertain, a scary process. You're dreaming about that new home, also wondering why your salesperson is maybe not getting back to you as quickly as they were before you signed the contract in the first place.

So again, our closing product holds the buyer's hand, gives the buyer everything they need to know about what's happening with construction, what's happening [00:08:00] with closing, what do you as the buyer need to be paying attention to to make sure everything goes as smoothly as possible.

Kevin Weitzel: All right. So, I'm buying a home from XYZ Builder that uses Foundation. Me as a buyer, am I going to be getting in my inbox or in a some sort of portal, am I going to be seeing, uh, when it goes to framing, when they wire in all my electricity and put in my plumbing? I get to see all those updates in real-time as they happen, or at least as close to real-time as possible.

Luke Groesbeck: Yep, that's exactly right. And so, what Foundation does is, you can think of us as a unified communications platform. Today, you may be getting some of those updates from your builder, but you're getting them across dozens to hundreds of emails, text messages, phone calls, and whatever else happens. And so, we pull all those comms into one place, in a streamlined modern digital experience. One, again, to accelerate sales teams during the closing process and then also to deliver happier buyers.

Greg Bray: So, what was it? You met at Opendoor, you're having a great life, things are hunky dory, the world is wonderful. And you went, gosh, there's [00:09:00] this thing happening that needs a better tool. What kind of triggered that moment of, you know what? There's something that we know we can do better than what's out there right now.

Derek Schairer: Yeah, it's a great question, Greg. And I think a lot of this stems from just my time working in new home sales and interacting with folks on a daily basis to see how important this purchase is, how important this process is, and how much people invest in it financially, emotionally, maybe even physically, if they're moving across the country. Just being able to look those customers in the eyes and very oftentimes thinking there's just got to be a better way than what we're doing.

The technology evolved since I started the industry to a point where it was ready. The customers deserve better, and sales folks, builders, everybody at those companies also deserve better. So, I think it was kind of that combination of my time working as a [00:10:00] salesperson and seeing what this really means in real life. People maybe heard us say this before, but one of the questions I asked Luke after kind of staring at this for a little bit that I just didn't feel was right. And I said I want to change this.

I said, Luke, I said, why do I have more transparency and communication into my pizza order than I do the biggest purchase of my life? I said that is not right. That doesn't make sense. And hey, Luke, now I know you, now I've, you know, had some experience at a real tech company in Silicon Valley, we can go build something, we can build a better mousetrap that helps everybody on all sides of the transaction. I think that was really my inspiration, Greg, to strike up the conversation about it with Luke.

Greg Bray: You know, it's funny you talk about pizza because now, yeah, you get a text, your pizza is going in the oven, your pizza is coming out, your pizza is ready for pickup. Why aren't you here yet?

Derek Schairer: Yeah, and you can communicate to the person making your pizza, like, thank you. And like, you're a rock star. The fact that I can communicate in an app and get images and a tracker of where my pizza is at in an app is [00:11:00] awesome. But man, if I'm buying a new construction home, that'd be even better because that's something that's like truly, I don't want to say more important, but truly meaningful, a little bit more permanent and a little bit higher stakes than my pizza order.

Greg Bray: Why is this something that builders have such a hard time with? What is it about either the focus or the industry, or the product maybe itself is part of the problem? I don't know. What do you guys feel is getting in the way? Because we don't want to make customers angry or frustrated. That's not anybody's goal, I think, to do.

Luke Groesbeck: Yeah. You know, another way of asking the question is, there's a general belief that all industries are coming online. And so, I think you can ask the question of, well, why hasn't home building gotten there yet? And yes, people have CRMs, ERP systems, construction management software, but why is the buyer experience still offline for most of the home building?

The short answer is that we believe until now, there has not been a great option. That's why we started Foundation [00:12:00] because we recognize that this opportunity was there. Why do we think we're the first ones to do it? We think one of the things that makes it special is this combination of home building DNA and Derek's background with Silicon Valley DNA.

I've spent my whole career starting and scaling startups. Getting this stuff right is genuinely hard. Building an excellent customer experience is genuinely hard. And so, I think, when you look at builders today, most builders haven't had a great option. Now, there are some pioneer builders who have been so motivated that they've gone and done this themselves.

And so you talk to builders who have spent millions of dollars and multiple years to build products to market. In our experience, we love that they have tried, but building great software is hard. This is a skill set. This is what we've done for our careers. We think the time is now.

Greg Bray: You made a comment there, Luke, about an excellent customer experience is hard. What do you guys put into that definition of that [00:13:00] excellent or great or ideal home buyer experience?

Derek Schairer: Yeah, it's a good question, Greg, and Luke and I talk about this a lot. In my mind, this is really a two-part answer. So, I think the ideal homebuyer experience from the customer's perspective, is one where they feel informed, educated, and empowered throughout the experience. Not only does this mean during the construction process, but also into home ownership while they own their home.

That's one thing that the industry has left behind a little bit is that these aren't just buyers, but they ultimately become homeowners. That's something we think a lot about because until Foundation came along, the industry has tended to look at these homeowners as a warranty liability and really not the asset for their brand and business that they should be. So, there has to be a holistic view of what this term means.

The second part of this answer is that the ideal home buyer experience from the builder's perspective, is one that creates high customer satisfaction, [00:14:00] is a creative to both their brand and business while being highly efficient at the same time so they can go and generate new revenue. Now, this is a lot easier said than done, but that's essentially what our product does, and what we're working on every day is to create happier buyers, happier homeowners, and more efficient builder teams and businesses.

Greg Bray: Okay. I gotta unpack warranty liability, that we view our buyers and customers after they've moved in, now as a problem who's going to generate more work for us that we aren't going to get paid for. Is that where you're going at with this attitude of warranty liability?

Derek Schairer: I'm not saying everyone views it that way. There are some companies that maybe look at it a little differently, but I think for the most part, it does tend to get viewed that way, right? You don't view this ownership network that you've built by selling to all these customers, a lot of builders just don't view it as an asset, which it is. We help turn it into an asset, both from a marketing [00:15:00] perspective, generating referrals, generating new business, and monetizing those past buyers. So, it is truly an asset. But yeah, to answer your question, Greg, I think a lot of folks do look at it as a liability. You can tell me if you disagree with me there.

Luke Groesbeck: We've all run into folks in this business, like in any other business who say, I've been doing this for a long time. I've never worried about these buyers and my business is doing just fine. I don't need this. We don't need these newfangled ways of thinking about it. Understand that. Also, lots of evidence across industries that happier customers are better customers.

So, yes, you've been running your business this way for a long time, and your business is doing fine, but happier customers are better customers. And so, if you want a better business, think about customer experience. It's not just a cost center. It's not just a line item. It's not superfluous. Again, if you want a better business, a way to get there is with happier customers. And that's something we care about.

Kevin Weitzel: I've said this on this podcast so many times, and I'll say it [00:16:00] again until I'm blue in the face. Carburetor manufacturers, rotary phone manufacturers had been doing it the same way as well. But guess what? They're no longer even in existence anymore. So, those days, the word track of we've been doing it this way, we're going to keep doing it this way, is nothing more than you're writing over your own gravestone. That's it. You guys are dead on that you have to evolve your system, your salesmanship, your overall communication pathways to match demands of the buyer.

Derek Schairer: Absolutely. Absolutely. And I think, that's well said, Kevin, you got to evolve or die. And, you know, I think you guys do have a lot of folks that come on this podcast that think like that as well. Right? So, we hear that all the time. And we love those folks. We love anyone that's thinking along these lines. We love anyone that's bringing innovation to the industry, but change is hard and it's just hard to do.

And sometimes it's not even in your wheelhouse and a lot of times it shouldn't be. Right? Home [00:17:00] builders are great at building homes. There's a lot of other companies and a lot of folks like us that would never pick up a hammer and no one would ever want us to. We're not great at building homes, but we can build other things that help these builders to make that change easier.

Luke Groesbeck: One of the examples we talk about, I do love Derek's pizza delivery story. But when we say home buildings coming online, we think once it gets online, we're going to look back and it's going to seem obvious in retrospect. We're going to get to that point where people say, how did I do my business before this?

One of the examples we talk about is airlines. Think of your favorite airline or least favorite. Delta, United, Southwest, whoever it is. The way most of us interact with airlines these days, you don't call them, right? You get on the app, you book your flight, you pick your seats, you rebook your flight, you cancel your flight, and it all happens digitally.

Do you think these airlines think of their apps as just a cost center? Is this a customer experience line item? Or did these apps [00:18:00] fundamentally transform the way they do business? Are they dramatically more efficient and effective businesses now that this customer experience is online?

Do you hear homebuilders talking about, hey, we're going to pull our app from the app store? We're going to cancel this because we don't like spending money on it every year. No, of course not. Again, it's transformed the airline business. It's done this to hundreds of industries and it's coming for home building. We're excited to do that and help builders sell more homes at higher margin to have your customers.

Greg Bray: So, when you guys think about the customer journey and you've chosen to begin with this idea of from contract to close, what else are you looking at beyond that? You don't have to give away your five-year plan or anything like that, but what do you see as the other pieces to this that still need to be considered and addressed?

Luke Groesbeck: I don't think we're too secretive about where we're going. Foundation will be the buyer experience platform for new construction.[00:19:00] The entire buyer journey will end up online. We're excited to support home builders and their customers along that journey. One of the reasons we think that's so important is because builders don't want more vendors.

You already have a CRM, you already have an ERP system, you may have construction management software. You don't want four or five more customer experience vendors that each serve a different part of the journey. We think doing a great job with an integrated, seamless, intuitive buyer experience is best served by one vendor. We'll do a better job for buyers, but we will also make your life as a home builder easier.

Derek Schairer: And the one thing I'd like to add too, cause we've been talking about Foundation as a platform a lot. That is absolutely the right way to think about us. The one thing though that I think that's worth mentioning to your audience is that this is all white label. So, we're not building a platform to get Foundation's brand out into the public. We're building the platform to get our home builder's brand [00:20:00] front and center and stay front center from contract to close and into home ownership.

So, when Greg and Kevin Home Builders comes and works with Foundation, it's the Greg and Kevin logo. It's the Greg and Kevin brand. We do everything on behalf of the builder. You can't find the Foundation brand to the consumer. I think that is an important distinction to make when we talk about it. We're not trying to be the brand even though we can and will when we are on our way to building a platform. We are not trying to be the brand or take the spotlight. We want to position the builder in the best light possible because these are their customers and their buyers and their owners, and they should maintain that relationship into perpetuity.

Greg Bray: I can't wait to see the Greg and Kevin logo. That's what I'm excited about. It should at least have some sideburns in it. Right, Kevin?

Kevin Weitzel: We have to incorporate sideburns, at least on half of the logo.

Greg Bray: So, again, kind of hinted at this before, but most builders don't go into it trying to have a bad experience. [00:21:00] What gets in the way of this bigger customer experience? One of the things I think of is, is because you're crossing departments. You're trying to touch different places and I think that that makes it a little bit harder to get one person to say this is how it's going to be, this is what we're going to do, or whatever. Who should own customer experience at the builder? Whose department is best suited to say, Hey, this is what we should be striving to be. Any thoughts on that?

Derek Schairer: Yeah, absolutely. I mean, we've been fortunate enough to be around a bunch of different companies across industries that do provide a great customer experience. And I'm not trying to hop out on the question here, Greg, but when I think of these companies that do provide excellent customer experience, it's not just a single department. It is a part of their company culture through and through. And what this does is it allows it to be looked at as a companywide investment that has real ROI when you have [00:22:00] everybody in the firm buying into it.

Put a little bit more plainly, it's not one single role at a company that should own the customer experience. It's something that needs to persist as a focus for every department, every employee, and be a part of the culture if you actually want to do it at the highest level. In home building, this is a really easy example to confirm why you need to do this because in home building, there are so many touch points that can influence customer experience.

It starts with how marketing makes you feel through emotion and language. It then moves into all of your personal interactions, starting with OSCs to onsite sales to concierge to construction managers, all the way to preferred companies like titles and lenders. And so, I think it's everyone's responsibility along the way.

I might hear some folks, well, we don't own our title. We don't own our lender. They're just preferred. It's really important that if those folks don't work directly for your company, you really got to align yourself [00:23:00] in 2024 with companies that have that same culture to get the great results in a competitive market that everyone wants. That's definitely easier said than done, but I think it's really important.

Luke Groesbeck: I also think the software industry has done a disservice to home building. Home building just hasn't been served by great software solutions yet. We've all had this experience where you go through a sales process, you get convinced to buy some software, somebody drops it off at your door. You never hear from them again until it's time to renew and they're trying to raise prices on you.

In those cases, the process of actually using the software is so painful that it doesn't save you time. It doesn't save you money. It doesn't make anybody's life better. So, I think so many folks and so many teams have been burned by that. We heard this this week, spent nine months trying to set up some construction management software. I think it could have been okay, but then the guy who set it up left the company. Did that do anybody any good?

When we talk about great software, it's not just the buyer [00:24:00] experience. Now, we are proud of our products. We build consumer-grade products. We deliver an excellent buyer experience. But you need that same level of attention. that same level of care and detail applied to the operator products, internal products. And so, as a salesperson, you should be able to deliver that experience seamlessly. So, I think we're proud of is how effective we can make salespeople with great products, again, not just for buyers, but for internal teams too.

Greg Bray: Well, guys, just kind of heading into a landing here with our time. We really appreciate the insights you guys have shared, but I got a couple more questions, so hang on. If somebody out there is going, alright, we need a better customer experience. I know it in my heart, you know, we can do better. We're not ready to buy Foundation tomorrow, but what is like one place they can start? What is one suggestion you have for just where to even begin trying to improve a customer experience?

Derek Schairer: There's a couple of ways where people can start to just [00:25:00] shift their mindset, which I think is what you're asking, Greg is like, how can I start to go down this path? There's two pieces that can really be helpful to builders. One is to stop thinking that customer experience ends at closing. That's a really easy trap to fall into. But if you look at it from the customer's perspective, building the home is the exciting part.

When they actually have to move into the home is when the stress and reality hits. It's also the most likely time when the builder salesperson they've been working with and leaning on for guidance over the past 9 to 12 months tends to go away. So, then you have this lack of engagement, and that starts to deteriorate the trust and relationship that's been built over the last 9 to 12 months and start to have negative brand sentiment. One of my favorite sayings is trust is earned in drops and lost in buckets. Builders have to start thinking at post-closing as part of that experience.

The second piece to the answer, I think is builders tend to have this mindset that they have to do it alone, that they have to do [00:26:00] everything from processes to software. It has to be homegrown and in-house. That's just not the case in 2024. You don't have to do this alone, and it's not just Foundation. There are resources that you can use to help outside of home building that are in other companies' wheelhouses from gig workers to outsourced and automated gifting companies to other software vendors.

So, you can start to go down this path and not think that you have to do this alone, build it yourself. And it's okay to sometimes say, like, hey, I don't know what I don't know, but I'm going to go find someone that can help me start down this path.

Luke Groesbeck: And then I'd also say, come talk to us. We're happy to chat, happy to give you a look at what we've built. Happy to talk to you about how we think about this. We're pretty collaborative by nature. So, one example, we were just talking to a top 20, top 25 builder. They spend multiple millions of dollars a year on their technology teams. They did the hard work over 10 to 15 years of building [00:27:00] their own internal version of a closing product.

Now, we think our, product stands up pretty, pretty well at theirs, but this is going to be a long relationship with a builder like that. And so, what we'll do with them or with you, any of your listeners, is we'll do design reviews. If you have your own products, if you want to build that stuff, come talk to us, we'll show you ours. Happy to take a look at yours, share feedback, share lessons learned. We're here to help bring homebuilding into the future. It's not going to happen overnight. We're excited to make friends along the way.

Greg Bray: Any, last words of advice that you'd like to leave with our listeners today to help them move forward?

Luke Groesbeck: We talked about this a little bit earlier. Stop thinking about customer experience as a cost center. That's not what it is. It's an investment, and it's an investment that we've seen have dramatically high ROI. This is not about spending money on something. This is about making money via happier customers.

Kevin Weitzel: You know, before we wrap, Greg, I have to ask Luke one very, very important question because it's been stuck in my brain this [00:28:00] entire interview. With all those dang surfboards, do you guys actually have a surf park there in Colorado to go to, or are these now just wall art?

Luke Groesbeck: It's wall art. It's expensive wall art.

Kevin Weitzel: Just checking. Just curious.

Luke Groesbeck: This sounds obnoxious. There's river surfing in Colorado. There's little standing waves in some rivers you can take a surfboard and surf on them. I have not partaken yet.

Greg Bray: Derek, bring us home. Any last words of advice?

Derek Schairer: I just want to echo, you know, Luke's thoughts. There are different ways to think about customer experience. The one takeaway is you don't have to do it alone. There may have not been great options in the past, but that's not the case anymore, right? We weren't around 12 months ago. We are now. We're here. The industry has been really receptive to what we've shown them and what we've done. So, excited to work with home builders for home builders to really move the industry forward together. That's just something that's really important to Luke and myself and why we're here and why we started this company is we're passionate about [00:29:00] helping home builders and their customers in any way possible.

Greg Bray: We appreciate you guys spending some time with us today, and it's been great to learn a little bit more about what you're up to and certainly wish you the best with that. If somebody wants to learn more, what's the best way for them to get in touch and reach out?

Derek Schairer: Yeah, they can visit our website, which is buildwithfoundation.com, or they can email Luke and myself directly at founders@buildwithfoundation.com.

Greg Bray: All right. Thanks again, guys. And thank you everybody for listening today to The Home Builder Digital Marketing Podcast. I'm Greg Bray with Blue Tangerine.

Kevin Weitzel: And I'm Kevin Weitzel with OutHouse. Thank you. [00:30:00]