In 2017, Ankur Jain had sold a company to Tinder, had become its VP of product, and was hating the conversations he was having. He was living in San Francisco, where Silicon Valley types would talk about solving big problems and bettering the world—“and then the kind of stuff I would keep hearing about was, like, ‘We’re building crypto stickers,’ ” Jain says. This in a state where the median household price had hit twice the national mark, and in a city that over the past five years had seen median home prices nearly double. And it wasn’t as if the housing stock had astronomically improved. “The more these things became expensive, the less you got as a consumer,” he remembers realizing. “In what world of private-sector markets does that make sense? And that, to me, spells opportunities to change a whole model.”
Even some highly educated, relatively well-paid San Franciscans— buoyed by lucrative jobs yet awash in student loans—could not afford to buy a house there, and homeownership nationwide had been largely dropping for more than a decade. “Then the worst part is, everyone tells you that the only way to ever build wealth in your life is homeownership,” Jain says. This was made even more annoying by the fact that what people did spend to put a roof over their heads—often, especially for young people, paying rent—helped their homeownership hopes very little, even as nearly half of American renter households paid more than 30 percent of their income on the expense. As far as Jain could tell, reliably paying rent only sapped one’s savings. Since few renters could pay rent via credit card, their reliability rarely, if ever, translated into an improved credit score despite rent being so many people’s largest monthly expense. It didn’t even earn you cashback or points like buying gas or groceries or airplane tickets did. Rent was an exceptionally big drag—which was, in its way, exciting.
Jain had been developing a theory of profitable betterment: Take young people’s biggest problems—ones surrounding massive sums of expenditure, like student loans and healthcare costs as they and their parents age—and see if entrepreneurs could reshape them to actually improve one’s life trajectory. “It’s like the age-old adage of ‘Follow the money,’ ” says Jain. “Where are people having to spend money? If you give consumers a better experience, you can disrupt legacy markets.”
That was the guiding principle behind the venture studio, called Kairos, he began as he departed San Francisco and moved to New York. (The incubator shared the name with the wildly popular networking society for aspirant entrepreneurs Jain had founded while a student at Wharton. This had made him a darling to some of the world’s most powerful business elites as they sought out connections to bright, young talent.) And that experience-centric principle drove two of Kairos’ first companies: Rhino, which created a system that allowed renters to avoid paying an enormous up-front security deposit on an apartment and instead contribute a small monthly fee as insurance; and Cera, which aims to make home care for the elderly more affordable and is currently operating across the U.K. “People thought it was, like, a nice-to-tell story,” Jain says of Cera. But he says that, today, both it and Rhino are $500 million businesses. “It’s actually both helping people and making a lot of money because you’re solving a real problem.”
Yet rent—useless, savings-sapping rent—remained Jain’s most loathed nemesis. He had his question, which was ambitious yet simple, as he liked one to be: What if there were a way to help turn renting into a pathway to homeownership? He just couldn’t picture what the answer would look like.
Jain likens building a startup to putting together a puzzle. There’s a mess of pieces—hundreds of them. But at any given moment, a founder and their team have to focus on where to put whichever they believe at the time is the most important piece. Only once that’s set should they move on and look at what seems to be next. “If you try to piece it all together from the beginning, you’ll be lost with where to even begin,” says Jain. “There are so many issues that will happen, you’ll never build the foundation.” And while an entrepreneur may have an initial idea, a startup actually doesn’t know in the beginning what it will build. “Imagine a puzzle where you don’t have the image,” he explains, “but you have to imagine what that image is.”
Jain started asking around to see what was already happening in the homeownership space. He leaned on his formidable, possibly unparalleled-for-his-age network (he’s now 31), asking for connections and conversations. Most of what he saw were techy takes on rent-to-own systems—which seemed innovative and cool, until they seemed useless and even sinister. He felt that the programs preyed on lower-income people by using nearly incomprehensible math to increase the prices over time. “You would never use these programs unless you absolutely had to, and that is the first sign something is predatory,” he says. That clashed with Jain’s ideals. “Technology companies, at their best, improve the quality of what’s best-in-class and democratize access,” he says. “Meaning, if you are someone with high income, you would want this product because it’s better and more affordable. And if you are low-income, you also want it because it’s better and more affordable.”
So he kept having talks and leaning on his network, and eventually he developed what seemed like a vision worth pursuing: a rewards program. He spoke with Barry Sternlicht, founder, chairman, and CEO of Starwood Capital Group, who told Jain about Starwood Preferred Guest, the beloved hotel rewards program that Marriott International acquired when it purchased Starwood Hotels & Resorts Worldwide in 2016. Jain learned about how hotel groups and airlines thrived off not individual bookings but their loyalty programs.
Consumers know the basics of a loyalty program. It creates a form of currency, often called “points” (though airlines typically call theirs “miles”), which have a particular value. Sometimes that value is assigned essentially internally; a Starbucks Rewards card awards points that can be redeemed for Starbucks products. But the value of points can also be agreed upon by a pair of partners— including two distinct rewards programs. A hotel program could create partnerships with airlines in which the hotel members exchange hotel points for a certain amount of those airlines’ miles. The customer doesn’t see that once that exchange occurs, those points are actually sold from one company (the hotel) to the other (the airline).
Such systems have been invaluable to airlines during the pandemic, when United, Spirit, Delta, and American Airlines all collateralized their loyalty programs to raise billions while flights were grounded. American Airlines’ offering this past March reportedly set an aviation industry record by raising $10 billion.
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