00:02:13 · Sadi Khan
However, it takes weeks to get access to your home equity, and it costs thousands of dollars in origination fees, both for you and actually for the lender. Aven set out to solve this problem. We built our flagship product, the Aven Home Equity Back Credit Card Home Equity line of credit in the back and a credit card in the front with a goal that in as fast as fifteen minutes, we want to reduce your interest rate by 50%. Aven isn't stopping there. We're excited to continuously invest in building new and better products that are the lowest cost, most convenient, and most transparent access to capital for homeowners across America. How About seven years ago, I retired from you Facebook and stepped down, and I was taking some time to figure out what I want to do next. Retirement was very challenging for me. I've been an engineer and a product manager my whole life. I felt that I didn't have much value I was creating in society in my retirement time. It didn't last very long. You know, my wife would claim that I was only retired for three months. I would claim I was retired for six months. So the truth is somewhere in between there. But I became excited about this core thesis that I think most people in the world, when they're looking to solve problems, will end up solving problems that are about helping society be healthier or be wealthier. And if you want to help society be wealthier, you either want to help people make more money, or you want to help people save money. One of the interesting graphs I stumbled upon at this time was this publishing from the CFPB, which published this graph, which to this day is actually our North Star graph. And it's a graph that shows that the total revolving balance, the total balance on credit cards since inception of credit cards, has grown to up to a trillion dollars over the last three quarters of a century. And so this graph kinda just goes up and to the right, and doesn't seem like it's decreasing anytime soon. But there's another very fascinating line that was overlaid on this graph. And this line shows you the interest rate on this credit card revolving debt. Over the same period of time, so over half a century, the interest rate on credit cards have actually hovered between 20 ish to 20 ish 25% for this entire period of time. If you look back in history over this time, we've invented the internet.
00:04:27 · Sadi Khan
We've invented all of the modern tech companies we see in Silicon Valley. From Facebook, Google, Nvidia, Amazon. But we haven't been able to reduce the cost of interest on a trillion dollars of credit card debt in this period of time. Heck, at this point, we're inventing entirely new currencies, from Bitcoin to Ethereum. But the cost of capital for consumers has really not changed. In the pursuit of helping society be wealthier, by helping consumers in America save money, and we thought we can build better products for consumers to help them save money. And that's how we started Aven, which is taking the largest asset class that US consumers own, which is home equity, which is also the most inconvenient to access. It costs thousands of dollars to access home equity, and today it takes about three to four weeks to get access to your home equity. And we decided to make that much, much more efficient by machining this process for maximal efficiency. We were able to bring this down to be almost as fast as fifteen minutes, with transactional costs that are orders of magnitude lower than anything else in the market, and put it in a form factor that consumers are comfortable and already are familiar with, which is a credit card. And we launched our flagship product, the Aven Home Equity Card. Through my time at Microsoft and Facebook, probably the single most important thing I learned is the value of an extremely elite technical team. The differential between the ninety ninth percentile or the ninety ninth point ninth percentile engineer and the ninety fifth percentile engineer is fast, is not small, is a huge amount. The amount of resources you spend on the and retention of the absolute best technical talent far surpasses any other investment you should make and can't make. When we look for the best technical talent, and at Aven, my and I think the team's single highest priority, is the collection and retention of the absolute best technical talent in the world. There are three main things we look for when we look for great technical talent. The first is raw intelligence. We are unapologetic about looking for the absolute smartest people we can find in the world. We will ask for SAT scores and other forms of standardized tests, as controversial as that may be sometimes.
00:06:38 · Sadi Khan
I will personally review transcripts and look at exactly what grades people got on what classes. For engineers specifically, we look for people who've taken courses in operating systems, distributed systems, compilers, games engines, the hardest technical courses one can take. And how did they do on them? And importantly, did they attempt the really, really hardest courses that can be taken? Intelligence is massively underrated and how important it actually is in helping build products and companies. So that is our number one and most important thing we look at in technical talent. The second is work ethic. You can have all the intelligence in the world, but if you don't want to apply it, if do not have the motivation and the endurance to apply that intelligence, you're not gonna create much output or much value to society. And so we look for people who have the endurance, the ability to work hard consistently over time. At Aven, every Sunday at 6PM, our entire leadership team meets to identify and finalize and lock in our roadmap for the next seven days. This allows us to operate with high precision and high velocity, and it gives us a very important thing, which is we should not be wrong in our roadmap for more than seven days, Cause we revisit our roadmap every seven days to make sure we're working on the right set of things in the right priority order with the right set of people. The third thing that's really important.
00:08:00 · Hannah Lee
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00:08:15 · Sadi Khan
[00:08:15] S0: Part in elite talent is an alignment of the mission of the enterprise, in our case, the mission of reducing the cost of capital for consumers, with the ambition level of that person. Trying to reduce the cost of capital for all of America is an extremely ambitious undertaking. So the person that we need to bring in needs to be super smart, super hardworking, and has to have an alignment with this mission and an alignment with the ambition level of this mission so they can sustainably work on this for a very long time and push the boundaries of how we would achieve this mission, day in and day out. If Aven are to be successful, we will drive the single biggest change in the cost of capital in American history. And we need to find the absolute best talent in the world so we can do that. And if we can't find the absolute best technical talent, we will not be successful. And that is why we spend so much of our time and so much of our energy on this specific problem, and it's probably the most important thing I ever learned at Microsoft and at Facebook. Aven's flagship product, the first product that we wanted to build, was a home equity backed credit card. The reason it was very important for us to understand the legal and regulatory landscape for this product is because this is a very highly regulated industry. It is both a mortgage product and a credit card product. And it's very important for myself, as the founder, to have a deep understanding of the regulatory landscape for this product to, a, understand, can we build it? And, b, to make sure we build it in a safe and compliant way. That's why I went through and read personally a lot of the regulations in this space, whether it be Dodd Frank Act, Card Act, TILA, and others. I think it is very, very important for the founders and the CEOs to be very deeply involved in the details of the products that are being built by the company. I think in the case of founding a new company or building a new product, even at a big company, oftentimes the core value is the inventing of something new, something that hasn't existed before or something that hasn't been built yet before. In order to build something new, I think you must first understand the history of what has been tried before so that you can efficiently build something new. Most new ideas are terrible. Most new ideas are bad.
00:10:40 · Sadi Khan
There are very, very few new ideas that are actually better than all the old ideas before. And so in order to assess that, in order to deeply grok whether or not your idea is better, it is often very useful to understand what were the ideas, at least the big ones, that have been explored and built before. Why is your new idea better than what has already been built before? And in order to do that, you must often invest the time to understand and learn very deeply about this industry and this domain and all the smart people that have come before you, so that you can come up with good new ideas and assess that they are indeed better than what has been built before. In the first two or three years of building Aven, we made a series of product decisions, and a series of people decisions, and a series of process decisions. I think in the product, we would have been even more ruthless in prioritizing the feature set that we were building for in the first version. And I think this is, you know, generally true for for most PMs when they launch a new product. They... If you were to look back and ask any product manager what products they've launched before and what they would do differently, almost all of them would tell you, I would have cut these, you know, five out of the 10 features and shipped a smaller, narrower version of this product to a fewer set of people and really deeply gone into a kind of a more focused product feature set. And so I think that also applies to Aven, and I think it applies to the product that we built. I would have kinda made it narrower and simpler in the first version. The other big thing is in the early days, there were these really funny stories of consumers going through our origination process, not sure that this was real. And we would get tickets and calls to say, we don't know if you guys are a scam or not. And we'd have to respond, including sometimes myself, saying, no, we're we're very real. We're a real company, and we're here to help you get access to your home equity, and we have a real product that you can use. And sometimes it was that ability to talk to somebody at the company, and they were to hear from somebody's voice at the company that gave them the confidence to continue and go through our application process.