YouSaid · the spoken record

Max Simkoff

lines on the record: 74
first: 2021-08-19
most recent: 2021-08-19
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“My wife supported me to build this company. And when I say support, I mean, like, you know, early days, like, well, income was either non-existent or low in startup days. And like she started her own business and she's a successful entrepreneur in her own right. And she was supporting the family. She was putting aside a lot the amount of stress that I was dealing. And so the fact that she was shouldering all this stuff solely for this purpose because she was like, I want you to do this and I want to support you. That's definitely the kindest thing I can think of that comes to mind.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“To the future of the business. So that's an important part of it. And then, of course, people work with is also important. That applies not only to their manager, but to the other people on their team. They want to feel like these are people that they want to spend time with. And that's a hard thing to get right, especially when you're hiring really quickly, trying to balance this person's a really talented individual and we'd be lucky to have them, but like how are they going to interact with the other people on this team and how are they going to interact with other people on other teams? Are people going to look up to this person or are they going to think they're a jerk? So those things you got to kind of try and get right.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“That's one part of it. It needs to be a place where they feel like they're solving problems they've never been able to solve before, and they're fine and challenging. But other parts are like recruiting. Like, how do we recruit people? How do we treat people in the recruiting process? People make decisions to join a company often off of first impressions. Did they like the call that they got from a recruiter? It sounds silly, but it's like we measure the NPS of our recruiting process. We're constantly looking at that and saying, did this candidate have great experience or did this candidate who turned us down? Did it have anything to do with the way that we manage this process? And we're not perfect. Sometimes it does. Sometimes it's like, yeah, you know, I feel like ideally you would have gotten back to me a day sooner. It's like, that's a problem. We need to be all over that because recruiting is sales, by the way. Time kills all deals. The longer you let people fit good people, the more opportunities they're going to find, the more offers they're going to get. Like you've got to swarm people and make sure that they know how important they are.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“It just doesn't happen. I think what will make this company great in 10 years beyond the fact that we'll have facilitated the ability to sign a purchase contract on a home on a Friday evening and move in on a Monday morning. With everything done in the background completely, magically well, all of your docs signed, all of your appliances protected and connected, integrated with great other companies in our space to provide just it'll be a seamless experience, it'll be that ideally we will be known as a place that hired and helped people start their careers where they then went on to do other great stuff and they'll point back to it. They'll be like, oh, that person was a donor. And people were like, well, I said, yeah, then we should talk to them. We should consider them for this role or we should try and recruit them to do this thing.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Unquestionably, the people that were building business with. It is the, and look, again, the people who build our, if we have the best data science team in the industry, we're going to build the best data science. And that's something, again, we take very seriously. Like we want data scientists to join our company who are building a career, we want them to be known for unique applications of their craft. If you want to build most cutting edge application of computer vision to financial documents, we want you here. And if we can get you here and you can do something remarkable, it has exponential benefit for the company. And that holds true in our industry, and I would describe the industry of real estate industry broadly, not just title and escrow. It's an industry that is historically underinvested in technology. You don't hear about like the new CXO at Microsoft coming from a real estate company.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Line, but like not caring is actually one of the most, if it's rained in and pointed the right areas, it's like a really powerful thing to be able to deploy.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm like, why didn't they do this thing? Asaf's the one who might be slightly worse than I am, had a call from the other day. I was like, whoa, dude, I thought I was principal, but like, this is like a really principled issue for you. Eric Wu at Open Door, I wish I could have his temperament. He's like running through some major barriers. And he's able to do it in a way where he's just a really wonderful person and like very thoughtful and doesn't lose his cool and Eric are probably the ones that come to mind and I'll give it some thought. I mean, even there's like people like Elon Musk. People that again, on that back to that issue of perception, like they just don't care what people think of them sometimes.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“We think we've structured it well. This does not anticipate the use of proceeds from the GoPublic transaction. So there's this stack of capital instruments that you can use that it's really important to pay attention to how they can be optimally used for any given decision.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“These are the people that are like, you could have looked at it and been like, it's done, and like square their stock price, I think, declined by, I don't know, maybe 20 or 30 percent over a month or two period to six month period after their IPO. It's a blip. That company is now worth a hundred times more. It blew people's minds. You got to partner with people who are long-term in nature. I think we've gotten better understanding that we live in a very sophisticated capital markets time, but there's many different instruments you can use to facilitate many different goals for the company to start the company. It's preferred equity from a venture capital fund. Fund the balance sheet to get approval from Fannie Mae. Reinsurance is basically a form of financing. I see it that way. As we approach the public markets, we put in place a senior secured credit facility that gave us the capital to execute a self-funded plan and communicate to the public markets as we're going through that process. Here's where self-funded plan looks like. Money's already on the balance.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Look at, for example, they're the ones who remember that the stock performance of Square or Facebook in the six to 12 months after the company priced. No one remembers this, by the way. No one ever talks about this anymore. But if you take yourself back in time and you remember.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, we've been fortunate, I think, in that I think we've selected our capital partners across the board reasonably well, like from our Series A lead foundation capital, all the way through to the investors in the pipe for our GoPub transaction, folks like BlackRock and Fidelity and Heta Sophia. So the first thing I've learned now over time is you have to really work at finding investors who are truly long-term focused. There are a lot of investors in the world today. We live in a world of instant gratification and OCD. They pay attention to stuff like by the day. If we pay attention to like the value of the company on a daily or weekly or monthly or quarterly basis, we're screwed for long-term returns. Actually, we might be okay for small movements in shareholder value, but there's a mindset of investor that I think I've gotten better at recognizing where they're like,”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Other problematic non digital filled with friction experiences on either side of the title and closing piece that we should own. We should have a solution for them so that we can have a truly integrated horizontal instant digital homeownership experience. You got to go even harder at your core business and remain committed in the same way that you were when you were a startup. And then you have to expand the scope of your ambition because we're public company and we're going to have a lot more cash on our balance sheet and our new set of investors who I'm very focused on making this one of the best investments they've ever made are expecting us to deploy that capital in an accretive way for them.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Informed now by a composite score that's automatically pulled from a variety of systems, looking at everything from like changes in volume, changes in sentiment that's ranked on a 10-point scale, changes in any change in SLAs that are basically measured by the minute with customers. Like how long does it take for our system to respond to any request, any number of seconds or minutes? Like I look at that customer success dashboard and as the head of Dome Enterprise would tell you, because I just did this with him yesterday, I don't look at the top of the list. I look at the bottom. I don't care about the customers that are at scale where everything's going great and whenever I go straight to the like, what's this outlier here? Why are we not perfect for them? Why is this particular component score yellow instead of green? And so you have to do that for your core business. And then you have to expand the scope of your ambition. The way that we've done this, which we've communicated via all of our public facing investor materials, is we've identified two adjacencies in the form of appraisal and home warranty that”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“That short answer is you do both. You get better at your core business, you stay dogmatically committed to being truly excellent at what you're doing. And we have a long way to go. And if we were just truly excellent in our core business already, we'd have 40% market share and high gross margins, all like we'd be done with that part and we could focus on our stuff. So you have to continue remaining relentlessly focused to your core business in a way that you don't lose the Again, like the startup entrepreneurial DNA. I do a weekly pipeline review for the Dome Enterprise part of the business and also for what we call Doma Local, which is where we originate purchase business along with Global Refi's. And I look at every metric to the point where like I look at, we have a customer health dashboard or a customer success team as a weekly report. Every customer success manager writes a weekly report on each customer.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“That I'm pushing it too hard. And you get very accomplished people who are like, I don't know if that's a good idea. And they're like, well, that person's very accomplished. And they're saying it's not a good idea. So I should probably back down. And I'm just missing that to the point where like I told Stuart the other night, and it's funny now, but it wasn't funny at the time. Like we had a board meeting probably a year and a half ago or something. And I don't even remember what it was about that I got crossways with him on about something, but I just wouldn't let it go. I refused. I was like, I have to do this whatever. And he came to my office after And he yelled at me. And I remember very distinctly because the crux of what he was yelling about was he basically was saying, Max, I've enjoyed a lot of success in my career and I've enjoyed solving a lot of challenges. But across both, challenges and success, I've always made a point of having fun. And what you did today is getting me to a point where I'm not having fun right now.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“To the point probably all of them had to call after be like, I'm really sorry I lost my temper. And I had to be like, no, no, no, no, you don't need to apologize. It's just that's the only way that I'm going to understand.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“I can tell you that one's easy. Have a great board at DOMA. Great. I mean, some unbelievable people. Matt Zaynes, who's our board chairman, is a former COO of JP Morgan Chase. Stuart Miller, who is the executive chairman at Lennar, but was there 23 or 26 year CEO. I mean, he built the business into what it is today and he's done some incredible things. Larry Summers, who's former secretary of the Treasury, Karen Richardson, who was on the board of WorldPay when it got sold for $43 billion on the board of British Petroleum. Our board directors were really amazing. And so back to you, like, what's the fringe of the genius that becomes problematic? Each one of these people has seen so many different situations. They've managed them with grace and poise, and they can manage stress. They never lose their cool. And without exception, I have gotten each one of them to the point where they were screaming.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Like when that credit agency was like, you can't have a credit rating because you haven't been in business. Most people are like, oh my God. And I was like, oh, this is a good one. I was not expecting that. Yeah, and you just got to run through those walls. It's like my wife, she was saying the other night we were talking about our team and like how great our management team is really amazing. And she was like, yeah, underestimate this team at your own risk, you know?”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“That gets back to the screw loose thing. Like, that's probably another screw loose that I have, which is like, I get something pleasure out of this stuff.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's why we got reinsurance. So we were like, okay, well, but if we got reinsured and we used someone else's balance sheet, would that be good enough? And they're like, yeah, but that'd have to be a pretty airtight reinsurance contract. So we went and got one. We got the reinsurer to invest in us. And then we launched our first customers. It was a pilot program, effectively with one of the GSEs where they said, we're going to write a contractual document that says we understand you don't need the guidelines. And as long as this is ring-fenced in a very controlled manner, we'll let you launch this first customer to show that it's working. And once we did that, we then went back to the credit bureau. People were like, look, it's not two years of history, but we're operating business. We're writing policies, and we've got this reinsurance agreement like on the balance sheet, and we got one of them to issue us a rating. But is that one of those things where it's like, we didn't get a credit rating, we would have been dead if we didn't get the GSCs to accept what we were doing.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Like, what do you mean? We're like, well, they have a loss ratio, they make mistakes. It's not a big loss ratio, but why would you let them make some number of mistakes? And I also let our model make some number of mistakes. Now, it might be some number higher than the traditional federal company makes, but that would just be unfair for you to let them do it, not us. And basically they were like, yeah, that's right, just so long as if you're going to make potentially more mistakes, you need to carry more capital on your balance sheet and more capital, that means like hundreds of millions of dollars.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“The second thing was like the title insurer must have a credit rating of at least whatever BBB plus or better. And so we were like, okay, we got this first thing. We got to probably got to talk to Fanny about. But let's also go get a credit rating at least. Let's get that started. So we reached out to these rating agencies and they were like, okay, you want a rating? No problem. You just need to show us that you've been in business for two years underwriting title insurance. And we're like, what? How does that work? No, but we can't do it unless you give us the rating. So why don't you just here's our financials. We got all this investment. Like you give us the rating. We'll do business. And they're like, no, that's not the way I work. So there was that catch 22. And then we went to Fanny and that look, it was, we have a huge debt of gratitude to Fannie Mae for being very innovative at the time. We were like, look, the way we read your selling and servicing guidelines, like it says the mortgage must prove it. Title insurance must prove the mortgage firstly position. I'm like, yeah, that's okay. And based on how your model works, we got to understand it more in your life. But technically, a traditional title insurer doesn't do that.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Initially, in the business, that was a motion that I kind of was like, no one wants to be your first customer. So fine. Like, you got to find somebody who do a pilot and PR value, whatever. We got all that. And we found. And they were like, hey, the only thing is here, like, we'll be your first customer finally, whatever. But like the instant underwriting thing you're doing for title insurance is accepted by the GSE, Fannie and Freddie, because we sell all of our loans to them, just like every other lender. And we were like, well, yeah, we think it's right. They're like, could you show us on the selling and servicing guidelines, which is like the Bible for Fanny? They're like, could you go to the title insurance department selling servicing guidelines? Tell us how you meet these criteria. And we pulled it up. And it's like, the title insurer must prove that the mortgage is in first lien position.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“How large, and we needed to get very clear on how we would change the focus of the business and the prioritization of how we're spending resources to accommodate effectively investing through the cycle. And we made some tough decisions. We had to lay off the number of people, which is a very hard thing to do in general. It's especially a hard thing to do when you're also saying, by the way, we're going to accelerate spending in a part of the company. We're having to let people go at the same time that we've just closed a new financing and that that financing is earmarked for ramping up hiring of certain other kinds of people, one that needed to happen. Usually that's the kind of thing that you want to do over like a month or two. It's like, okay, we got to plan. It was like, no, no, that's DEF CON 5. And we need to get this right because the other thing you can't do is whatever you do now, if you didn't get it right and you find you have to do something again in six to eight weeks, that's a disaster. So that was one. And then another was we started trying to sell customers.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of them actually was last year when the pandemic hit. We'll never forget this, it was on March 13th that we closed our Series C financing. It was all earmarked for like R&D investment and accelerating our product roadmap and vision. But we did it on the backs of like pretty healthy real estate market where we had a significant revenue stream that was subsidizing some of our plan. The country went into lockdown and the real estate market dropped off a cliff. And in that one, it was We need to very quickly, inside of a week or two, figure out how we do not compromise our ability to invest in the business in the way that we wanted to without introducing the kind of risk to our company that could cause us to go out of business. Real estate transactions stopped. The revenue stream that we had depended on to subsidize some of our plan, we had no certainty as to how it would come back.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Going to figure it out. And the reason it has to be tempered sum is because sometimes people are telling you they're either telling you something that can't be done maybe or they might be telling you something else. If your initial reaction is like, I'm shutting down, you're wrong and like, well, we got it can be done. You might miss some other important piece of information that's leading them to say that it can't be done. Is it that some”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is impossible. People are sending rockets into space. They're making cars that don't use gas. I mean, just go back 10, 15 years and think about the things that people thought would be impossible then. Getting something delivered to your doorstep in two hours or less. It's all possible. I've learned to try and be careful on this one. The minute someone tells me I don't think we can do this. My default is like you're wrong. Like that can be done.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“My loose screw is that I refuse to take for an answer that something is not achievable on a reasonably short timeframe. Anything, anything. And look, I think last year there's some, and I used this example last year, you know, our business had an extraordinary year last year, and there were many things that, you know, as we planned for this year, we were trying to set aggressive goals and stuff. And it was very fortunate. It happened to be the same time that not one, but two companies for the first time ever created a vaccine inside of 12 months to solve a national health crisis. You get in your own head, we're like, well, how are we going to do X or Y for our instant digital mortgage closing business? I'm like, guys, like, look at what these companies just did. And I'm not trying to bag on us, but like that is nearly impossible. And they did it inside of 12 months because they had to, because they got purpose and they had clarity of vision and they worked well as a team and they got it done. So nothing.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Reforecast, I think your job is to be like, is there still an ability to hit these goals for the end of the year? If so, no. Like we're not doing a reforecast. You now have new information. You're a couple months into the year. Like you're trending ahead of plan on certain areas. That's great. How do you do that in other areas? You just, you have to be a cheerleader and you have to will it. If you start having conversations about, well, yeah, it's right. Maybe that won't happen. Then you just start second guessing everything. Bottom line is like you got to set aggressive goals and you should have a culture where people know that the process of setting the aggressive goal and the ability to achieve ideally sometimes outperform but many times fall short of them it's productive and healthy it shouldn't be a reason that you get more conservative and goal setting”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is it on how they tell the story? Is it on sales expectations? Is it what I have learned and where I think is positive is that you should always set aggressive goals. You should know when it's time to change the goal. There's no benefit to setting an aggressive goal at the beginning of the year. And if you're halfway through the year and you're like so far off, there's not even a chance you're going to make it. It is damaging to morale to just be like results be damned. Like we set a goal, we said we're going to do it. But until that point, you just can't give in. There will be a lot of, like you set an aggressive goal and you get like, usually the way it works is everybody's happy in November. You like finalizing the budget and people are feeling good. The sky's the limit. December, the board's approving the budget and you're kind of getting a little nervous because in the board meeting they're like, no, are you guys sure that this is then you're like, yeah, sure, right? People are looking at each other like are we going to get our credibility damage from the board halfway through the year? It's usually like February, March where there's a lot of people being like, we do a”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Mostly the things I've learned, I hate to say it, but like I have ignored a lot. Like you said aggressive goals for the business. And the earlier you are, the more aggressive they should be. If you miss some of those goals along the way, it does not mean you should set less aggressive goals. That is a mistake. Your kowtowing to normalcy. Startups are impossible. Founders are not normal people. They've got to screw loose. All of them. It's just a matter of where it's loose.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“If you're not a believer, this is a bad place for you to be. Find a place where you do believe in the long term. And again, that's the issue of perception, like what prevents CEOs from doing that, I think, is this other perception thing where they're like, oh no, if this person's important and I ask them to leave, how are people going to think about me? Are they going to think that I have my head in the sand? Are they all going to quit? You can't think about it. That's a decision you have to make with confidence in the future and completely disregarding whatever negative perception there might be in the short term.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“When you have people in the organization who have made it clear that their perception is that you're not on the right track and they don't get on board, they need to be fired. And I wish someone had told me that sooner. And it hopefully doesn't happen often, but I can think of one instance for early days when we had an individual who was like, I just don't see it. They're like, I don't see how we're going to be at X or how this strategy is going to be Y. And I tried to get them there a little bit. And then you realize, and this is, I mean, this is something that's horrible to realize when you're a small organization. But if that's what that individual is telling you, the founder and CEO, you are high if you think that they're not having drinks with your entire team. They're out there being like, this is crazy. Guys, should we really be here? Like, why don't we all just quit in unison? Because this thing. And so, and the only thing you can do is just, as you tell them, you're not a believer.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of making the bridge where it was like, Look, guys, long term actually now, and the best way you then manage perception there is like good news. Now the long-term vision is even better than it was. I told you a year or two ago when you were joining and your partner was telling you we were crazy for leaving your big company job to join the startup that the company could get to 50 million in revenue within a couple years. Well, guess what? Now it's going to be like a couple hundred million revenue sooner. That's better, right? Now we just got to deal with the challenge of like integrating this company and transforming the operations all the time. That's when it worked out well. I'll give another example. It's like.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“They've locked everyone else out. There's four providers. They're all public. Grow fast at a typical software company. You're sitting there and you're like, well, but I told everybody that I raised my Series A that this was like going to be a software business, basically, and like would scale organically. And in that sense, the way that we bridge the gap was we were like, well, who could we, is there a unique partner that we could find to help us solve this problem and still maintain the long-term vision? Because the problem was we go and buy a title company. That was the obvious. It's like, we'll go buy a title company, buy distribution by day. But if you bought one that's for sale, again, the reality of M&A is that like it's highly risky. And especially a startup buying large company is just like it should. It won't work. And so we had to figure out, well, is there somebody who is not trying to sell a title company and who if we were to buy it from them, we could make them a large shareholder and be part of the journey. And that was what Lennar became. And so we found the way.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“The trickiest part about it is retaining confidence in the long term while also allowing the people justifiably are trying to challenge certain assumptions that you have to show them that you're listening. And so like the balance between I'm listening to this thing that you're telling me that you think is important and oh shit, if this thing that you say is important is true, everything I've been saying about what happens in the future is false. So like how do I balance that? And look, I'll give you a couple examples of like in a positive sense there were people early days who were saying to us once we got the business kind of working like we were instant underwriting refinance federal insurance policy but we're doing it in a handful of states with a small number of customers and there were a lot of people who were like look you need scale like you need distribution if this is working this is an industry where it's basically”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Who's never operated a business to be your COM? You need an operator. We didn't need an operator. We needed somebody who's going to be really creative and then who's going to just out-execute everyone else and set an example for the people who they hired. I think the reality is he probably just ended up working twice as hard as any seasoned operator because he needed to figure it out. I talked to our chief data science officer. Everybody brought something new to the table and I think that was really important because there were so many naysayers along the way.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Amount of data with it, which is great. But a mass amount of scale, but it also brought a cash flow stream. It was a business at scale. We wanted for a variety of reasons, but it helped us really build like a going concern business. That would probably be the biggest one that early days, I certainly focused a lot on. And then look, again, it's a truism, but like you have to get the best people and those people by definition, they need to bring something new to the table as people. If you just hire people from the industry where you're playing it safe, you're going to be constrained by inertia and why things can't be done. And we dealt with that like our COO when we hired him. He was one of the youngest people to make partner at McKinsey. And he was in their digital insurance transformation practice. And so like one might say at the time they're like, why are you hiring this individual?”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Shareholders were expecting a return. And so it is to me, it's like a lot of these businesses, they get very focused on like, we're so passionate about delivering the best thing. We'll figure out the business. It's like, but you might not. And if you don't, you just raised a bunch of money from investors and you have nothing to show for it. And so that work served us well, like especially in a business where we were taking real balance sheet risk. We had a predictive model we wanted to apply to underwriting title insurance transactions initially in a totally different way. which meant that after we'd gotten permission to do it from people like Fannie Mae and Freddie Mac and we needed to be capitalized in a certain way such that we would have plenty of runway to do what we needed to do so like we found a reinsurer who became a strategic investor in the company like they put cash into the business alongside a reinsurance agreement we had we partnered with one R we bought their title business from them in early 2019 and it brought a massive”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“You know what the biggest one has been, which is really basic. I think it helps to keep in mind the proviso here is like this long ago, this stopped being a concern, particularly on the back of us going public. But for a long time, your primary concern is don't let the company run out of money. It's just such a simple thing that a lot of people miss. A lot of founders, especially, I think, so they fall in love with their idea so much that they don't realize they're running a business. Again, they didn't start a think tank. They started a Delaware Corporation.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is and then picking out all the fees based on the geographic placement, not unreading text. The outputs then being for that model are much more accurate fee information. So we make less errors in calculating closing fees, getting the information just turned faster. That sounds silly, but like when it's a human being doing it, they need 30 minutes. When it's a model doing it, it needs less than three seconds. So those are some examples of the inputs and the outputs for the various models that we use.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“We've started applying computer vision as our model construct on the same unstructured data we get. So this is literally a lot of those same PDFs now, instead of just using an NLP model, a natural language model to understand language syntax, we use computer vision to understand the geographic placement of certain bodies of text or phrasing on pages to operate in much the same way that the human mind works when it looks like a title person who's looked at thousands of closing statements. They don't read all the text on every line and say, well, this says there's a fee of this amount due of x and there's that. And so it must be a closing statement because I read the language to understand. The human mind looks at the document and it says, I see tables in a certain format. I see shading in a certain way and I see a signature line at the bottom. That must be a closing statement. Now I'm going to pick out the fees that matter. And we're training our computer vision model to be the most accurate it can be at immediately understanding from the document what it is.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm always looking at it on every single transaction. On the escrow side, the closing side, This is where our inputs are much more unstructured. Our inputs are typically PDFs that we get from the lender, closing statements, information on the transaction. And we're having to apply the models that we're using now are primarily, first, many times we have to use optical character recognition just because sometimes the PDFs aren't even like structured. There's just a flat image file that we get. So we have to use an OCR model to actually just pull out the text from the image. And then we are typically using natural language models to understand the syntax of what's being said in the text. And we're training them to understand the syntax that somebody working a title company would have understood, to know that certain information about the vesting of the property might confer certain tasks that need to happen, for example. And in the last thing we've recently started using, which I'm really, really, this is what, again, I just am so fascinated by this, is now because we have so much information coming to us from our customers.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“A single title examiner at any one of the other incumbent title companies that have been doing this for 100 years who ever, when they're pulling their reports, says, you know what, I'm just going to look at one more thing because I'm not sure that I found everything. I'm going to go look at the five-year CAGR on the zip code level HPI. And if it looks like it's off, I think I'm going to pay special attention to this title report.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Other stuff that we found is actually kind of interesting is census tract data, which is like a surprisingly robust data source. I forget what the time series. This is like done every five years or something like that. But they collect a bunch of stuff. And so we found, for example, and this, I think, is a perfect example of how dramatically different what we're doing is from the traditional way, we found that from the census track, they create something called the housing price index, which is basically just an index of like how much the average or the median home price in any given area appreciates. And they do it at the zip code level. We found Signal in that data set on the compound annual growth rate from one census data set from the previous at the zip code level HPI. So we basically were saying the five-year CAGR on the zip code level housing price index is strongly predictive of certain categories of title defect risk. Now, I just want to put this in perspective because this is now back to the 50,000 foot level. There's probably not”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“To a point, and then they invert. So it's like, okay, two bedroom homes have more risk than one on certain categories. Three bedroom homes have more than two. Four bedroom homes have less than three. And I'm sure you have a data science background, so you probably had many times where men people want to talk about the cause or late. They're like, what's the reason for this? Me not being a data scientist and being more in the business side, I'm usually one who's like, guys, we don't care about those. We're not in the causation business. We're in the correlation business. If that thing's got enough statistical, predictive capability at 100,000. The model”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“The input side for the title insurance piece underwriting, what we've done is very unique. We use only property specific characteristics. So a number, hundreds of input variables, none of which are unique to the individual in a property transaction. And that's important because once you start getting data on individuals, you can run into a number of challenges, especially in the insurance context, discriminatory underwriting decisions, prejudicial stuff, all that kind of stuff. So our data science team built only a property characteristic specific model. What are some of the inputs? Examples, number of bedrooms and bathrooms in a home. And again, you might hear that one be like, oh, that's like pretty simple. Well, turns out that when we built our initial model at scale on hundreds of thousands of completed what are called preliminary title reports, ones that had all the answer key information, we found that in particular parts of the country, the number of bedrooms and bathrooms in a home was linearly predictive of certain categories of title defect risk.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, this is what I love about our business because the business output stuff is like so, what are we trying to predict when we're underwriting title insurance policy, we're trying to predict the risk that there is some outstanding ownership interest in the past that would cause a loss. And so that one's pretty straightforward. Where we got lucky, quite frankly, is remember the whole construct of the industry before we came on was all these companies were spending time doing all the work and documenting all the issues. There was an answer key for every transaction that titled companies were very proud of. They're like, we're the best at doing the research. We found all the answers. We're like, great, we'll take those answers and we'll plug them into a model, right?”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Pay attention to the constraints of what everybody else is doing and look to academic research or whatever's the most cutting edge stuff that's being used and apply that, experiment with it, get a data science team underneath you that's creative and willing to do those things. He really has set the tone for how we build out that approach. So those two ingredients, I think, were critically important for me in the past, and we've carried them forward to DOMA.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is the curve trending in the way that you want? Ideally, if you're impacting attrition the best way, you should see that curve come up. You should start at 100 and you should be losing less people at any given point in the curve going all the way up to the point of maximum tenure. So great business people defining the outcomes and then great data science people borrowing as best they can from academic research. And that is something that, again, I really took to heart when we started DOMA. I would argue that our chief data science officer hire was certainly one of the most important in the company's history, if not the most important, because the business is built around it. We took that search extremely seriously. And the person who clearly stood out is Andy Madavi. He's still our chief data science officer, and his luck would have it. He'd spent most of his career as a tenured professor of astrophysics. He was and remains like one of the most unbelievably creative but still yet practical individuals about like, hey, if you don't.”
2021-08-19 · Invest Like the Best · Max Simkoff - Redesigning the Home Buying Experience - [Founder’s Field Guide, EP. 47] · IDENTIFIED FROM THE TRANSCRIPT · source