“What we do is we start small and we start today…today, now is so much better than tomorrow.”
Will is an operator, advisor, and investor for early-stage companies. He has spent a decade leading strategy and ops at start-ups in NYC across a wide variety of industries. He is currently the VP of product and strategy at Rhino (sayrhino.com) and an operating partner at Lakehouse (lakehouse.vc).
In this episode we discussed why Will got into the world of startups, why he has stayed at Rhino for more than 4 years, the challenges with operating in a Business-to-Business-to-Consumer business model, how Rhino grew with no revenue for the first 2 years of operation, why CAC is the North Star for startups, how to network to find the right job opportunities, and more!
Full Episode Transcript:
Kenny Soto 0:02
All right, we are now recording in 54321 Hello everyone and welcome to Kenny Soto Digital Marketing Podcast. Today we have will Berkowitz on the pod. Hey, well, how are you?
Will Berkowitz 0:24
I’m doing really well excited to be here today.
Kenny Soto 0:26
Perfect. So I usually ask a very straightforward question at the beginning of each of my podcast episodes. But I’m going to deviate a little bit today and ask you more of a general question, which is, what got you into startups?
Will Berkowitz 0:48
Yeah, it was a pretty natural evolution, honestly. I spent, I didn’t, when I went to college, I went to Northeastern University, which the only reason I chose there and decided to go that was because you go to school for five years, and you work for 18 months during that five year period. And for me, that was the real draw of college, I wanted to a normal college experience, but I wanted to like get into the workforce faster.
And you do three, six month internships. And in my second six month internship, I worked for a very, very small venture backed clothing company. And I was one of the first five team members, including founders, and we just hustled every day to make the thing work. And that’s where I kind of fell in love with small businesses and what you’re able to do with a very, very small, incredibly talented team. And after I graduated, I worked there for about three years when I graduated in 2012.
And came back to New York City and pretty immediately got an internship at a company called How about way, which was my first, you know, real growth stage venture backed company and just raise a series B, which, in that time was like, not that much money, maybe like 20 million, not the series B as you see today. But that is where I kind of learned the ropes of venture backed scaling startups, and what that looks like, and how to work with engineering teams, and how to build product that creates growth, and what kind of framework for us to do that, and I fell in love with it. I think like, the part that really resonated with me was I love the imaginative nature of building new businesses and venture backed businesses. I think particularly that time in my life, the idea that the entire business model is new, an entire product category, it was new, was really appealing to me. I think as I’ve gotten older, that’s actually changed.
And I’m even more drawn to legacy businesses and understanding how they’ve worked for a long time. But in this at that time, I was really, really into that. And I got my feet wet there. And I’ve never looked back. And every single job I’ve taken since then has been a theater theory as a venture backed company.
Kenny Soto 3:25
Is there a specific draw or appeal to venture backed startups that just keeps you coming to them specifically?
Will Berkowitz 3:38
They have looser rules, I think is probably the first one. There’s more room for error. There’s higher stakes. So for I’m like, incredibly competitive. It’s like probably my master trait is just I want to win. And I think the stakes of venture backed and the room for mistakes given that venture funding really allow allowed me to like feeling brave embrace to swing for the fences.
Do you think it’s pretty different than then bootstrapped? Like when you’re bootstrapping, you can’t fail as big as you are allowed to fail. And venture backed and like, Slack is a really good version of that is like Slack started as a video game and turned into the messaging app that most companies rely on. Like, those kinds of things don’t happen, in my opinion, in my experience in Bootstrap businesses, and I like that you can swing so big and fail and still, you know, find a way to make it work.
Kenny Soto 4:49
Can you tell the audience what Rhino does?
Will Berkowitz 4:54
So, um, rhino is a real estate A platform that basically helps renters get access to the housing they want for lower upfront costs or easier move. And what that means really simply is we have created a network of rental homes, over 1.5 million homes now are on our platform.
And when you go to sign a lease at any one of those homes, the landlord when they’re presenting kind of the lease agreement to the to the renter who’s renting, the home will say, you have two options for the security deposit, the traditional cash deposit that’s like $1,000. Or you can pay Rhino $5 a month. And Rhino will then ensure the landlord for $1,000. We launched it about four years ago, as I said, we’re in about 1.5 million homes now. And really, you know, what our sights are set on is, we have really kind of solved the security deposit and are scaling that product nationwide. But what are the other really big friction moments of renting? And how can we make those easier as well?
Kenny Soto 6:05
What were your initial marketing and growth challenges? And how did those challenges changed as you scaled to more users?
Will Berkowitz 6:18
This is such a good question. So there’s a lot I think the first thing to understand about rhino is it’s a B to B to C business model. And b2b to see business models are fucking fascinating and there might want to the best things about working in Rhino has been learning the intricacies of them. But we partner with landlords, it’s a free sale to landlords, we ask them to offer our product B that gives them benefits. That landlord then offers our product for free to renters, and renters can choose to use our product or not.
This creates a very different and interesting market than most either b2b or b2c businesses, which is we have upfront sales and marketing costs to acquire new partners. And then we have $0 marginal CAC to acquire renters. The reason this is really interesting, because it’s incredibly obsession, we spend a lot of money and a lot of energy acquiring partners. But once we acquire them, they’re on the platform. And we’re able to just maximize revenue from every rental that comes through the door.
And unlike I think most B to B businesses, because it’s free to partners. And because our entire like business model is based is based on aligned incentives, we see very, very low churn. Our partners don’t leave once they start offering why No, and that creates this opportunity, where we’re able to focus really, really heavily on aligned incentives, and then making the renter happy and choose our product. But it creates a host of challenges, which is it takes us a long time to recognize revenue when we, you know, sign on a new partner with 1000 units.
We don’t actually see a revenue opportunity in all 1000 of those homes for more than two years, because we have to wait for leases to turn over for Rhino to be offered. In the very early days. And Rhino I was the first employee who joined before we had a product before we had a website. That lack of signal and lack of direction to revenue was really hard, because we would be doing really focusing on our inputs, trying to grow the number of homes offering Rhino, trying to make sure that when renters came to our site, they had a really amazing experience providing the best customer service in the world.
We did everything we could, but it wasn’t equaling revenue. And we launched in August of 2017. And I think in retrospect, we should have seen this coming. But at the time, it felt really brittle. The first real time we had, you know 1000s and 1000s of units using offering Rhino was in the winter of 2018. But as you may know or may not know, a lot of apartments aren’t leased in the middle of winter, like summer is a really heavy leasing cycle. So we sat there and we’re like, is this working? Is it not working? We had no idea because the lease volume wasn’t high enough.
And this creates some really, really interesting kind of tracking challenges that we’re still working to today, which is our kind of sales opportunities are based on whether leases are being signed in our partner buildings. But that’s a macro economic factor. That’s not like a factor. We actually are in control, which is something that happens in our partner buildings. And what makes that really challenging is because we can’t control it.
And because we don’t have like insight into it, we’re kind of constantly being reactive to what is happening, and how do we understand which of our levers we need to push on to continue growth. And getting down to like, what the exact count guards. You know, we didn’t know if we needed to go to every open house and stand there with a three team offering the product, we didn’t know if we needed to build like an automated email flow that directly offered the product to renters.
We didn’t know if we needed to put iPads in the leasing offices. We didn’t know which candle was going to work that well, because the volume was so low, that was impossible to understand, you know, the signal. And what it comes back to is we just went on intuition. For the first two years, we just every day, we said like, Does this make sense and kept going. And eventually, we landed on, you know, the right magic and also the right scale to understand it really was working?
Kenny Soto 11:16
Was there any way that you created like a system or process to, I guess, hone in on your intuition and know if you’re like heading in the right direction?
Will Berkowitz 11:27
Yeah, so we did two things. And there are two things that I distinctly still live by, I lead product at Rhino today. And what we do is we start small. And we start today. And what that means is if we have like an idea, let’s say it’s like, let’s say I sell computers, and I’m like, You know what, I think students are going to be a really, really big lever for computers, I don’t worry at all about scalability.
I don’t worry at all about, you know, unit economics, I just go to a university, and I start talking to people and start getting into market. And that is the biggest thing I can say you have to do to follow your intuition just like now, today faster and faster and faster, get in front of your customers start talking to people, when you’re not operating on data, because you don’t have the data, you don’t have the scale, you don’t have the, you know, footprint to really run meaningful AV tests, or reach 1000s and 1000s of consumers a way that Facebook allows you to but doesn’t allow right now.
You just have to test that hypothesis as quickly as possible. And really, really pay strong attention to the qualitative factors. And so the framework is, don’t worry about how it scales. Just get out there. What is the smallest version of the test that you can build that actually replicates it at scale? And do that today? Not tomorrow? Not the next day? Not next week, do it today.
Kenny Soto 13:13
I know that you will provide a very interesting answer to my next question. Why is CAC so important?
Will Berkowitz 13:24
Yeah, certainly like CAC is is basically the measure the CAC LTV ratio is a measure of your efficiency. And so it is one of the things that actually like makes Rhino, I think such a good business and one that I’m like so excited to work on every day is because we have this large upfront CAC, but zero marginal CAC. As we go on, our business gets more efficient. This is exactly the opposite of if you are like selling a commodity product where nearly every repurchase moment, you have to, you know, re win the customer.
And for us, because we have already won the landlord and it’s an exclusive relationship with that landlord. We never have to like when the customer again, as they lease apartments, they just choose Rhino and it makes our business so much more cash efficient, where we can spend our money on product engineering, headcount, partnerships, new products, etc. Instead of spending that money on Facebook and Instagram, and Google and LinkedIn or whatever, like because we are not spending that money directly with these large advertising platforms.
We’re able to use every dollar that we make and every venture dollar that we have in far more efficient ways, rather than just handing it off to big tech and I think you know, the best growth platforms really find a way to right now what we’re seeing is move dollars out of the advertising tech and into product lead to growth and platform lead growth. And that is like, I think the holy grail of business models right now.
Kenny Soto 15:23
You’ve alluded to this in many ways, but I want to hone in on the fact that you were employee number one, and you’ve been with Rhino for about four years, if I’m correct. What makes what makes a team worth this type of time commitment?
Will Berkowitz 15:45
Yeah. Yeah, there’s, there’s two things that stand out to me. I’ve worked for lots of good people and lots of bad people. But there’s one place that makes Rhino, why I kind of choose every day to continue going with Rhino and building it. It’s not easy, like, going from zero to one is really hard. There are some like dark days there. And there’s lots of days where like, I want to quit, and I feel like it’s never gonna work.
And I cannot believe we built such a fucked up business. And there’s lots of days where I feel the exact opposite. Like, we built the best thing in the world. But I think what it comes down to is we have built a incredible team of empathetic, hi, high EQ, competitive, and mostly egoless.
Builders. And, you know, even back to the very early days of Ryan, it was just for me and three other people. I think the thing that made us work so well together was no one cared if they were right or not. We just cared about getting to the solution. And problem, the CEO, I think model that the best. He was non defensive when he was wrong. If people if partners or renters approached him on an idea, he hadn’t said it in like that version, he was the fastest person change. And he didn’t discount their views.
He didn’t say they don’t understand it, yet. He didn’t say that, like, they’re looking at the world wrong, he like figured out a way to make Rhino malleable to what they needed. And that malleability is like really what’s gotten us through the first four years of this. But I think beyond that, as companies get bigger, we’re now you know, 230 people, we’ve taken that same energy to how our internal processes work in our internal culture works. And that malleability has allowed us to like, go from 40 people to 230 in the last 18 months, and the culture is going to change.
But that malleability allowed us to embrace that change at every step, and that’s what makes it continues to make it a really, really great place to work. And then in addition to that, like I really like winning, and this has given me an opportunity to win and see what it’s like to build a company when you’re in the pole position. And that’s been really fun.
Kenny Soto 18:18
What core skills, they can either be hard skills or soft skills, have you leveraged consistently throughout your career, and not just with Rhino, but just with all of your jobs?
Will Berkowitz 18:32
Ah, I have basically no hard skills. That’s like literally none. I’m like a bad writer. I, I couldn’t, you know, digital marketing stuff. I can find my way on any digital marketing platform. But I’m definitely not an expert. I lead product. Now, I’ve never been a product manager anywhere. So I have very good hard skills. But I have I have a few, I think important soft skills, which is I think one is listening. my direct reports, I trust with the world and I try to listen to them as actively, and often as possible.
They have the real ideas. And I think listening is so important and be unwilling to understand where you’re wrong is so important. Particularly in early stage startups, like all of your assumptions are wrong. And you have to be okay with that. And you have to really listen to understand when someone is pointing to you that you’re wrong. So you can pivot quickly. And the other one is urgency. And I’ve mentioned this a few times already today, it’s like today now is so much better than tomorrow.
Every time you say like we’ll do it tomorrow, we’ll do it the next day. Those things compound basically never happening. And so I think the two skills I’ve I’ve been able to really harvest is like, I’m going to be faster than anyone else. And I’m I’m going to do it now where everyone else does it tomorrow. And I’m going to be able to take in more information than anyone else. I’m going to be a better listener than anyone else.
Kenny Soto 20:11
What advice would you give to a college graduate? who is graduating this year? They’re looking for jobs this summer, and they want to get into the startup space, whether it’s a marketing role, product role, what have you, and they just don’t know where to start?
Will Berkowitz 20:32
Yeah. It’s a really good question. So I think there’s three kind of paths that we should talk about, I think the first one is big tech, big tech, like associate pm roles. And probably like the best entry point, or associate associate, you know, growth roles are probably the best entry point there are hiring freshly out of college all the time, those roles are competitive. But there are lots of them. Going to Google or Facebook, or, you know, Amazon as an APM, is like a really, really great way to enter the tech ecosystem. I’ve never worked at big tech. So that’s definitely not the path I took.
The path I took was about networking into very early stage startups, and basically offering to work for free to get in the door. And that was like I worked at in a restaurant, nights and weekends to make that work. But that was like, what I was able to do to get my foot in the door, and then be able to prove value and turn that into a full time job in a matter of weeks. But that’s actually like one other path. But I think the kind of best path is, if you went to college, and depending on the college you went to, there are so many people in tech, that you have some connection to, that are incredibly open to talking to you for 15 minutes.
And I don’t think people, you can underestimate the power of a cold LinkedIn message or a cold email that’s written well, and I answered probably, I don’t know 10 to 20 of these a week in LinkedIn, or email, and it’s like, people who went to the same college that I went to, just moved to New York City and one understand New York City tech scene. Maybe when I worked at a place that I used to work or work for someone that I used to work for, and if they write a thoughtful, you know, LinkedIn message and say, like, why there’s a connection between us what they’re looking to do, and what they need help with, I respond 80% of the time, and truly help them point them into a direction of how they can kind of find what they’re looking for, with like any of the resources I have.
And I think the the important thing to understand there is like, if you send 30 of you can probably find 30 people who fit this mold for you, you have some distant or very relevant connection to they work in a field that you’re very interested in. If you send all 30, a thoughtfully, well written message that is earnest, you’re going to get responses to at least 10 of them.
And if you take those 10 people, and you meet with all 10 and you ask them for who are other people I should talk with, or what are roles I should apply for, you are going to end up in hiring funnels. In no time. I think the hardest part of it is 20 of the 30 are going to not respond to you. And that rejection is really hard to stomach. You have to really put yourself out there you’re like going out on a limb to say that you’re valuable and this person should talk to you.
That is a like a hard thing for your ego to get over and putting yourself in a place where you can be rejected is really difficult. But I can like guarantee you there’s no downside. And if you can, like bite the bullet and do it that is probably your fastest way to growing your network when you don’t know anyone.
Kenny Soto 24:27
That’s great advice. And I would personally add that sometimes you just got to accept the fact that it might not be 30 people that you need to reach out to it may be more than 100 because in my case when I got my first marketing job, it took me more than 100 people to contact and probably around 600 job applications sent before I even got my first interview.
So I definitely agree with you there will that you just gotta be able to deal with rejection. But also keep in mind that if you’re past that number 30 maybe change the The tactic, don’t use a template, if you will make sure everything’s hyper personalized. Look at someone’s LinkedIn profile, but don’t want to do that. What are they posting? Where are they commenting on? Can you find their Twitter account? What do they share on their Twitter? That way you can actually get more context about who they are, before you even send out that quote, unquote, pitch to get advice.
Will Berkowitz 25:21
Yeah, absolutely. Like, that is exactly right. And like, literally don’t have a template, like the stakes are high enough. And the volume of like, potential targets is low enough that this is not, you know, sales, an element where you’re like, automating templates to email people, this is not the place to like, focus your automation skills. That is not the way to do this. I look at this more like Account Based Marketing.
This is study your, yeah, it could be 100 200 or 300. Best targets, understand them deeply. And write very thoughtful bespoke, short messages like concise, it could be like, you know, 10 sentences, it does not need to be long, it’d be less than 10 seconds could be five sentences, but make them bespoke and thoughtful. And like, I’ll give you a really good example of this as I did, like a fireside chat for a group of people several months ago, and three different people who were looking for entryways into real estate tech, sent me a note afterwards and said, You know, I am really interested in getting into real estate Tech, I really enjoyed meeting with you and hearing your perspectives.
I’m not interested in Rhino because rhinos out too late stage, from where I want to go. Are there any really early stage firms that you would recommend looking at? Could you do you have any introduction, then then would you mind spending five minutes talking about it, and I responded to all of them. And it was personal to me, it was contextual to a cat I just gave, and it was incredibly actionable. I knew exactly what they were looking for. And it didn’t take me like, guessing what I needed to do to help them it just they said exactly what they want. I knew exactly what I could do to help them.
Kenny Soto 27:23
It seems like right here, we can end the podcast, but I do have one last question for you. This is hypothetical. If you had a time machine and can go back 10 years into the past with everything you know, today. How would you get to where you are in your career now? Just faster?
Will Berkowitz 27:46
Um, I think there’s two things that I would do differently. Um, the first one is, I know probably it sounds ridiculous, but like, just be more audacious. be less scared of rejection and be more focused on like, what the upside is, and continually putting myself in high high upside scenarios.
Good example of this is like, when I was probably 23, or 24. The CEO How about we a company I worked at are the CO CEO of how about we a company I worked at and reported directly to this CO CEO. Went to work at Uber in like 2015. And I remember thinking at the time, like, Oh, my God, there’s no way I can get a copy Uber, absolutely not like that. Like, why would they hire me. But in retrospect, like, I was just keeping myself away from theoretical rejection, that only hurt me.
And there’s nothing positive about, there’s no reason that I shouldn’t have like, started applying to those jobs or networking with those people to try to get jobs there. And I remember me like drawing this line that like, That person could get a job in Uber and I couldn’t get the job to do or so I would have been more audacious and believed in myself a little more.
The other thing I don’t think I did a very good job of very early in my career is building a peer network. It wasn’t until the job before Rhino where I really started to build peers that I rely on like daily for advice. And that peer network, particularly in your early 20s, is so critical. And it feels really weird. Like, friendship building in the context of business. But if you’re able to build that peer network, it’s not just about jobs, and it’s not just about like, advice and empathy and connecting with other people on shared experiences is one of like, the most important things that you can optimize for very early in our careers exposure.
And what I mean by that is, unfortunately, people are able to dream and make decisions within the confines of what they have been exposed to. So I’m able to my dreams are basically built around what I know. And if you were able to build that peer group very, very quickly, your exposure set increases. And by increasing your exposure set, you are able to understand, you know, new areas of business, new tactics, different strategies, different types of business models, different people who will much more much quick, more quickly shape you into the person that you want to become, because you’re able to see more information in a faster period of time.
A good example of this is like, crypto, like, you’re able people are able to go way deeper into crypto crypto way faster by having friends that are also into crypto. If you know, no one was into crypto and you tried to get into crypto, it’s much deeper learning curve. And so that pure set really matter for your ability to find those opportunities. And so the two things I would focus on definitely being more audacious and building that peer group. Faster.
Kenny Soto 31:33
Amazing. Well, if anyone wants to find and connect with you online, where can they find you?
Will Berkowitz 31:42
Connect with me on LinkedIn, my name is Will Berkowitz and I’m on Twitter. My handle is wellpar k with two Ks wi ll. B E R K K.
Kenny Soto 31:54
Amazing you have listened to another episode of Kenny Soto is Digital Marketing podcast. Thank you well for your time and thank you to you the listener for listening to another episode. And as always, I hope you have a great week. Bye.