Letting YOU Invest In Real Estate for Just $100 | Dillon Zhang (Steady)
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Podcast Notes
Wyndly lets you live life without allergies: https://www.wyndly.com
This episode covers the journey of learning and making a passive income through real estate. You can invest as little as $100 and earn a passive income thanks to Steady. Dillon Zhang, CEO of Steady, joins Aakash to discuss how he built a product to help himself and others make money. Dillon Zhang originally worked to make other people rich to taking that risk into entrepreneurship and creating his own software for himself. Dillon when from a very depressing time in his life, comparing himself to his peers to the successful position he is in today.
Dillon: https://www.linkedin.com/in/dillonforrest/
Steady: https://www.steady.capital/
My Website: https://www.aakash.io
LinkedIn: https://www.linkedin.com/in/mraakashshah/
Twitter: @aakashdotio [https://twitter.com/aakashdotio]
TikTok: https://www.tiktok.com/@wyndlyteam
Music: Syn Cole - Gizmo [NCS Release] provided by NoCopyrightSounds
Produced by Thomas Troy
Autogenerated Transcript
[00:00:00] Aakash Shah: Hi there I'm Aakash, founder of Wyndly, where we fix allergies for life. This is Founders and Builders, where I talk to people who are working hard to bring something new and meaningful into this world.
[00:00:13] Aakash Shah: Hey, everybody. Glad to have you back. I'm here with Dylan Zhang, Forest of Steady. I'm really excited to have him share his story on what he's up to. Dylan, why don't you get us started? Please introduce yourself.
[00:00:29] Dillon Zhang Forrest: My name is Dylan. I am the CEO of Steady. We let you invest in commercial real estate for a hundred dollars.
[00:00:34] Aakash Shah: Dig into that a little bit more. What kind of got you started on this path? How did you find this problem?
[00:00:40] Dillon Zhang Forrest: I was working in the tech industry for maybe 10 years or so, just like building startups, consulting, being an employee and I was helping a lot of rich people become a lot richer and I was not accruing, any of that value for myself and I was like really frustrated. I was in a really dark period of my life. I was like super depressed. I was starting to compare myself with my peers. I was just in like a really dark place. I would say just in my life in general and caused by money. I just really needed more money and I was frustrated to see how my hard work wasn't translating to money for myself. It was translating into money for other people. So I decided I was done , building software for rich people.
[00:01:14] I wanted to build software for people like myself. I knew I wanted to use some kind of fractionalization model that felt like the best opportunity for me to build a product for myself to like help me make more money. So I made a list of like 20 different asset classes that I could fractionalize with this business model.
[00:01:29] Commercial real estate was like at the very top of this list because I actually come from a real estate background. My pops had a real estate business when I was growing up and he was like super immigrant dude, loved real estate. So he made the kids work on the family business and randomly as an adult that made me a real state expert.
[00:01:43] That's why it was at the top of the list of 20 different asset classes that could have commercial because I just, knew it so well for my childhood. Then after that I tested all 20 of the ideas with the market.
[00:01:51] Dillon Zhang Forrest: I would tweet about them, write blog posts, tell people about it and commercial real estate also was the easiest one to sell. It was like the only asset class that I didn't need to convince anyone was a good idea. Other stuff like oil and gas, for instance, you had to convince people that it was okay.
[00:02:04] Farmland, like ATMs, there were some like, really crazy alternatives that I was looking into, but commercial real estate was the only thing that people already had an existing demand for. Everything else, I would have to generate demand with commercial real estate. I was harnessing preexisting demand. It was the easiest for me to build, it was the easiest for me to sell. So I was like, alright, I'm gonna do commercial real estate. So that's the idea.
[00:02:23] Aakash Shah: Wow. That was a whirlwind through all the steps from where were you before to how you got here. I think we're gonna break it down just a little bit and kind of step through it piece by piece because where you are right now is you are out in the open. You have investors, our customers that use your platform to invest in commercial real estate.
[00:02:43] Disclaimer, I do use Steady to be a part of commercial real estate deals that retail investors like myself are not a part of. I wanna kind of dig into more of that zero to one that you kind of expressed. It sounds like you went through this period of seeing what your resources were. You kind of took stock of like, this is my skillset. This is my background. You mentioned that you wanted to find financial security.
[00:03:08] Aakash Shah: I think that's very legitimate. Can you talk a little bit more about how you went from I have a background in commercial real estate through my childhood. I have an engineering software background through my professional career. Can you talk a little bit more about how you brought those together and then crystallized them into the 20 ideas you wanted to validate?
[00:03:26] Dillon Zhang Forrest: I think my big first step was knowing what business model I wanted to do. I didn't want to create a new business model. I wanted to go with a business model that already existed. So for me, that was fractionalized ownership I feel like kind of the professional losses that I've had throughout my career were coming from trying to innovate on the business model. I was just at a point in my career where I thought business model innovation was too risky for me so I wanted to take that off the table. That was like the very first step.
[00:03:49] Aakash Shah: Can you explain fractionalizing an asset It's basically like group buying. Like if you could buy some super cool, fancy asset for like a hundred million dollars but you don't have a hundred million dollars yourself. Let's say you have $10,000, then you can find like a shit ton of other people who also have like $10,000 and then together you could afford the entire asset together and then each of you own one fraction of the whole.
[00:04:11] So you were just saying that you didn't feel like business model innovation was where you wanted to take your next shot.
[00:04:16] Dillon Zhang Forrest: Yeah. I didn't feel like business model innovation was for me anymore. I felt like I was getting older. I felt like I had used my youthful at bats already on other ideas, which unfortunately didn't work out for me. So that was the first step for me was deciding which business model I wanted to use like picking a viable business model.
[00:04:32] Then after that I do think it's really hard for the average person to just pick what skillset they have, like what is their superpower that makes 'em stand out compared to all the other founders? I think that exercise becomes harder and harder to do with each passing year.
[00:04:44] Candidly, I never would've expected that working for my dad would've ever been useful in any way and it turned out to be really useful, but that was not premeditated in any way. My dad didn't do this for my own career or anything like that.
[00:04:55] It was just a family business. It was as simple as that. So I got really lucky with that, but I also do write code. That was really helpful for me too and I could leverage that into this opportunity pretty easily. It's really easy to come up with ideas, but if I didn't have that childhood in commercial real estate, I'm not sure if I would've been able to move forward, even with that.
[00:05:10] Aakash Shah: Okay. So let's dig into that. You kind of had a background in startups. You had a background in software, you had enough experience in entrepreneurship that you, had a understanding of what are the things you have to de-risk? What's the checklist for a successful business? So one of them, it really sounds like where's the edge? What's something that you're doing new? You didn't want to be like Airbnb and create something completely new. You wanted to take an existing business model and port it over.A great example of this is Warby Parker. That's like the original someone sat down, someone thought about what should exist, but doesn't, and it was like ordering glasses online easily. I know it's crazy to think about in 2022 that you couldn't order something online, but when Warby Parker launched in, like, I don't know 2014? It was earth shattering. Then you kind of sat down and you drew on, it sounds like all your life experiences, is that correct?
[00:06:08] Yeah, definitely a lot of it. So the first step was like, you know, I made a list of 20 different ideas that I thought were cool that I thought I could build and commercial real estate was at the top of this list, cuz it was the one that I was most confident that I could build.
[00:06:19] Aakash Shah: It sounds like you felt like there was some founder product fit because you had a background there, right? I'm in healthcare. My parents are in healthcare. My cousin is in healthcare. I feel like I kinda understood the lingo. It wouldn't be starting from zero. It's a lot easier to do something when you have some familiarity with it.
[00:06:38] I still learn a lot more about commercial real estate as I started doing this, but like, I definitely had a very large head start and then after that, when I was like testing it. That was like my first step, I would say my second step was basically the one liner. I mentioned I was trying to sell everything. I was testing all the different ideas.
[00:06:53] Dillon Zhang Forrest: So I had a one liner for every single one of these ideas. The one liner was basically like invest in X for $100 and I just ran with it and, I feel really strongly that one liner for your idea needs to be so good that it just sells itself. If you don't have a good one liner, you could keep going without a good one liner, honestly but I would encourage you to just like, not do the idea altogether. Every single part of working on an idea becomes easier when you have a good one liner and going from zero to one, I was able to cross that in like maybe a month or two solely because I had a good one.
[00:07:23] Aakash Shah: You were able to cross going from zero to one very quickly. Is it correct for me to say that you didn't actually build anything? Did you wait list at all?
[00:07:31] Dillon Zhang Forrest: I launched a wait list that didn't actually lead to anything. It was just people signing up and then I was able to kind of connect everything. I guess my initial prototype was just me. It was spreadsheet, email, manual labor, like Typeform survey and I was able to cobble together my first couple iterations of my product that way which was very painful but zero to one, like right there and then I was able to use that, prototype to raise a 500 K round.
[00:07:53] Aakash Shah: I think it used to be called a wizard of OS or, you know, black box. Nowadays it's called No-Code. Actually had a no code platform that you were building on.
[00:08:01] Dillon Zhang Forrest: Yeah. I was no coding it.
[00:08:03] Aakash Shah: You're were no coding it? Wait. I think that's brilliant. One thing I really, really like and something that you and I recognize is very valuable as having gone through this experience before is you really validated the idea. You made sure that there was a market for this before you even built the product, right? So you kind of identified the problem. You were like the average person should be able to get into lucrative real estate deals.
[00:08:27] Then you started looking for the market, which is effectively a way of saying, do people actually want this? How'd you get your first 10 signups?
[00:08:34] I launched it on all my social media platforms. LinkedIn actually got a lot of signs for me. Twitter got a lot of signs for me. You know, got a lot of retweets. Launched on Product Hunt. Things like that. So I did all the standard stuff, you know, starting from there and then after that I started doing Twitter threads. Unfortunately I was one of those douche bags, writing thought leadership, like, you know, tweet threads for a while. I did it, I swear slowly for business. That wasn't my long term Twitter strategy but it worked and I was able to get my first I wanna say like 50 paying customers through Twitter, actually. So actually the quality of the signups that I had for my social media launches, those actually weren't very high quality. The product hunt launch didn't gimme any quality leads. The initial Twitter launch didn't really gimme anything, but the Twitter threads later, once I started tweeting threads that were relevant and stuff like that. That would actually draw in a lot of high quality traffic. So in my initial kind of prototype, I forget the exact numbers, but it was over 70% of my first kind of cohort of users were unaffiliated with me. Over 70% of my first users had never heard of me before they signed up for Steady.
[00:09:29] Aakash Shah: Wait. So I think you just shared, I don't think you realize how much of a like business masterclass you're giving here.
[00:09:36] Dillon Zhang Forrest: Oh.
[00:09:36] Aakash Shah: This is really incredible. First off you just explained that you actually did multiple steps in your initial go to market testing. You did. What was easiest first, a landing page with a survey, for a waiting list that you launched on socials just to see is there any initial interest. Is the one liner intriguing at all? And then it sounds like you kind of maybe work through that lead list. You understood a little bit more about who was interested and who wasn't interested, you collected that feedback and then you actually doubled down and started trying to get in front of a better audience. Personally, maybe I'm wrong. I feel like a Product Hunt launch is actually easier to do than a series of Twitter threads.
[00:10:19] I think there's a difference between how easy it is to get traffic versus how easy it is to get paid kind of customers Honestly I've launched a few things on Product Hunt. I've never really loved the platform, but I keep going there whenever I launch stuff because they make it so easy so there's that. I think organic channels, if you can launch it in organic channels, you get traction in organic channels. That would be best. It's like the best validation.
[00:10:41] Dillon Zhang Forrest: For sure.
[00:10:42] Aakash Shah: I mean, when my company, Wyndly where we fix allergies for life, that actually started off of Reddit. Our first traffic came from us, engaging with people on Reddit and I think you hear this a lot, right? Find where your community is that's going to want what you're offering and see if you can get that organic interest which actually Twitter and LinkedIn. It makes sense that that's what works for you.
[00:11:02] Dillon Zhang Forrest: Yeah.
[00:11:03] Aakash Shah: Talk to me. Can you explain a little bit more about the process of how did you gather feedback from that first list of wait list signups? And then even that second list. Tell us more about that customer discovery process.
[00:11:14] Dillon Zhang Forrest: Once I had all of these signups, I created a landing page to describe how I thought the first version of the product was gonna work. It would be like, hey, sign up here, like fill in this information. You have to connect your bank account here. That would've been like the critical thing to like test us, to make sure this idea would actually fully work like that conversion really required people to connect their bank account. So I first launched that wait list. After that I launched a one pager, which was like, kind of the, the warmup for an actual user experience and then I just like, saw like how many people would be into it. I had like another type form where people would be like, hey, I wanna invest X amount of dollars and when I launched that and I saw like how many people were going through the actual type form to say like, yeah, I want to invest this much. Yes. I'm willing to link my bank account and then like, if, once they filled out that survey, I would actually send them like a personal email myself again, where I'm like, hey, this is how I'm gonna connect your email and so I'm using this API called Modern Treasury. So I would send them a modern treasury email to connect their bank account to Modern Treasury so I don't actually have to touch their bank account at all. Keeps them secure and everything. And as long as they were willing to do that, then it was like, you know, we're in. This is like the fully converted user and it works like people were willing do it.
[00:12:18] Aakash Shah: This is incredible. It feels like you are doing the like perfect founder's playbook, which is you committed to a high touch experience that was going to get you as much feedback as possible, but it wasn't very smooth so the only people that were gonna make it all the way through were people who were very, very committed to this idea. I love this and you said this is how you got your first investors onto your platform.
[00:12:42] Dillon Zhang Forrest: Yeah. I got my first revenue that way. Oh, another important step that I did, I took like a week where I made my entire calendar available in 15 minute increments for everyone on the wait list to just book time with me to learn more. That was like another thing if people were willing to invest their time to meet me and learn more and when I launched that Calendarly link, my entire week was like booked like back to back to back with like all these 15 minute meetings. So that was another thing that I did super early on to validate demand.
[00:13:05] Aakash Shah: One through line through this whole thing is you've been very on top of validating that people actually want this in little ways and I really, really like that. So I think one thing that we haven't touched on here is Steady is actually a marketplace, So talk a little bit, about how it's a marketplace and then I'd love to shift the conversation from how you found the initial investors to how you found the initial real estate deals.
[00:13:33] Dillon Zhang Forrest: So my big thing with the marketplace is thatcustomers actually don't care about the whole marketplace thing. That's like sheerly an investor thing, or like a founder thing. That's like founders and investors will nerd out over marketplaces.
[00:13:43] Aakash Shah: It's a business model
[00:13:44] Dillon Zhang Forrest: thing.
[00:13:44] Right, right. It's a business model thing, but like customers, like really, really don't care. Like even when we go to Airbnb, we don't think about how excited we are to go to the marketplace. We just like wanna get a damn room, right? So the thing with us too, is when we think about the marketplace we needed to be a marketplace because I wasn't gonna internalize the entire value chain myself. Like I knew I needed some kind of supplier to give me commercial real estate. I wasn't gonna go buy properties myself and that was like one of my contrarian insights I learned from my pops. It's just a terrible idea to buy your own real estate. You should be a passive investor instead. So that's what we do. We actually did need to find all of this inventory from these other suppliers and that's kind of what led me to realize we actually kind of need a little bit of a marketplace dynamic here so that we can complete the value chain and actually deliver value to our users.
[00:14:26] Aakash Shah: So you knew that your investors wanted to invest in commercial real estate deals. You needed to find those commercial real estate deals, but you are not a massive hedge fund that can just buy up commercial real estate property. You needed suppliers. You've talked about how you were able to leverage the internet and modern techniques and emails and whatnot to find that people wanted this offering. How did you find your first commercial real estate deal? How'd you find that first person? How'd you convince them to take a risk on this relatively new thing?
[00:14:58] Or maybe it's not new and correct me.
[00:14:59] Dillon Zhang Forrest: So I found my first couple deals through just my network. I guess one of the advantages that I was able to build throughout my career was just like a pretty expansive network. So I was able to find people through my network. I was able to like get into some of those deals. I also failed to get into some deals as well and in the process of seeing which suppliers were willing to work with me and which ones weren't, I was able to see that there's a certain kind of risk profile that some suppliers have that other ones don't and that risk profile doesn't actually correlate with like how good the suppliers are. There are some suppliers who have just like such good inventory and like, they're very happy to work with us and then there's other suppliers who are super risk averse, you know, very famous on Twitter, but like, maybe not actually like, as strong as some of these other suppliers who are more okay to work with different kinds of investors.
[00:15:41] So to the suppliers, like we are an investor and there are definitely some suppliers that will only work with high net worth individuals, for instance. They don't wanna work with a fund or a fund of funds or anything like that and that's totally fine. It happens, but it also has been a while for me to try to figure out how we wanted to spin up supply, how we wanted to scale up the supply side of our business.
[00:15:59] Aakash Shah: So that sounds like that was a really aggressive crash course on how to understand suppliers, how to understand their needs, how to understand, how to sell to them. You gave us some numbers on how bad the initial round of consumer interest was versus how, when you kind of doubled down. How much hustle did it take to get that first deal?
[00:16:21] Dillon Zhang Forrest: When I got that first deal across the finish line I remember being really relieved. It was very, very hard. It was really scary cuz there was still like all these unknown unknowns. It was definitely really scary. I could not have half-assed it I would say. There were so many things that could have gone wrong and actually a couple things did go wrong actually in the first couple times that I tried to launch it. So I think it took like two or three tries for me to get my very first deal done and I even had a false start where I thought I got a deal done and then last minute I fucked something up with the supplier basically they just didn't communicate something well, and then we just like lost our allocation.
[00:16:52] So that was on me. But yeah, there was like so many things that could go wrong that you're just not even aware of when you're going from zero to one there cuz you haven't done it yet and then after that, everything should become much easier. We haven't struggled nearly that much since like every single time we've deployed capital ever since that first time has been easier than the last time.
[00:17:07] Aakash Shah: Yeah, I believe it. They're literally your partners, right? So you build better relationships. It sounds like it just started with like reaching out to people on Twitter, through your network on LinkedIn. Did you ever just call people up out of the blue? Were you cold calling? Did you go to any conferences? How on the ground were you pushing to make this first deal happen?
[00:17:26] Dillon Zhang Forrest: Pretty on the ground. Yeah, to get that first deal. I didn't have to do any cold calling, but I did talk to every commercial real estate professional that I could try to access. Even though I had a big head start, I still never actually worked in commercial real estate myself and I had never worked with syndication or financing before. That was completely not a part of my childhood at all. We were more in like property management, marketing. I took a bad tenant to court once to kick him out of his apartment. Like, you know, things like that. Like, I wasn't actually financing anything and my business now primarily is about financing. Yeah. Yeah.
[00:17:54] Aakash Shah: So we've covered a lot of the early founder's story here, where you do the initial ideation. First, you de-risk the market side of the business model. Then you de-risk the fulfillment side of the business model. It sounds like you were pretty confident that this was possible, like operationally and from a product perspective. There wasn't necessarily new technology that had to be invented to make this happen.
[00:18:18] Dillon Zhang Forrest: Right, right.
[00:18:19] Aakash Shah: That's inherently de-risked right there. Right? Like that was just something that when you chose this idea in the first place.
[00:18:25] Aakash Shah: Help me understand what the grand vision is for.
[00:18:29] Dillon Zhang Forrest: The grand vision for Steady, like we really want to help people make more money. That's really what it comes down to. Like, I just wanna help you make some fucking money and if we can do that then we've done our job. The way that we get paid is that, you know, we take a cut of whatever money we can make for you. So we are highly incentivized to do a good job and so the grand vision, like right now, we want to be that go-to place for you to invest in commercial real estate. Like there just, isn't a good place for the retail investor to go to if they want to invest in commercial real estate. Long term, we want to be able to give people the ability to make money from commercial real estate and then maybe even other stuff like the name is Steady because we want to give you steady returns, but commercial real estate is not the only asset that can give you steady returns. Like we wanna be able to get into at some point maybe oil and gas, private equity, you know, things like that. But for now, like we're really sticking with commercial real estate. We want to do a great job with one product first and then after that maybe we'll have earned the luxury to be able to explore other products too.
[00:19:18] Aakash Shah: Commercial real estate is huge. You can definitely build a billion dollar company just enabling people, average retail investors to get into safe, commercial real estate deals. You're literally unlocking a whole asset class. I think it's brilliant. You've been on this journey I think you said two years?
[00:19:37] Dillon Zhang Forrest: Let's see I started Steady, I think, 16 months ago now.
[00:19:42] Aakash Shah: Okay. What would you tell yourself 24 months ago before Steady, advice that if you could step into a time machine that you would go back and say hey, this is what I would like you to know.
[00:19:52] I would've said stop working on B2B SAS. I was really speeding my wheels, like working on B2B SAS at the time and I probably would've told old Dylan, the thing that I just said about the one liner about like how vital the one liner is. I need to credit my good friend Daniel Jones for that. He's also a YC founder. I met him maybe a month before I started Steady. He played a massive role in this company because he's the one who really impressed upon me how important that one liner is. I think most founders, when they hear a good one liner is important. No one would disagree with that. We're all like, yeah, sure. Whatever. But the magnitude of like how much easier your life becomes when you have a good one liner it's like night and day. The whole zero to one should not be hard if you have a good one liner. If zero to one is hard and you have a bad one liner, then the number one easiest thing you can do to make your life easier is to just get a good one liner.
[00:20:39] Aakash Shah: I totally agree. I think the biggest proof point of that is you got a bunch of random people over the internet to link their bank accounts. That doesn't even sound like I went through it. A very unsure experience.
[00:20:51] Dillon Zhang Forrest: Yeah. It wasn't great. I'm not proud of it.
[00:20:53] Aakash Shah: Oh no, no, you are proud of it cuz it got the job done and that's what matters, right? A lot of the very early steps of a company is getting it done and moving it forward and focusing on the one thing that matters and you understood that the thing that mattered was getting the customers and getting the deals going.
[00:21:10] Dillon Zhang Forrest: Yep.
[00:21:11] Aakash Shah: Where can people find you?
[00:21:13] Dillon Zhang Forrest: Let's see I'm on Twitter. At Dillonzfo D-I-L-O-N-Z-F-O. My website is steady.capital.
[00:21:21] Aakash Shah: Thank you for coming on Dylan. I really enjoyed this conversation.
[00:21:25] This episode of Founders and Builders is brought to you by Wyndly. At Wyndly, we fix allergies for life with personalized treatment plans that train your body to ignore your allergies.
[00:21:36] Our doctors use an clinically-proven treatment, allergy immunotherapy, to train your immune system to ignore its allergy triggers. By exposing you to naturally occurring allergens in gradually increasing doses, we fix the root cause of your allergies. Plus the entire Wyndly experience is convenient and easy with telehealth visits and medicine sent right to your door. You never have to go to a doctor's office.
[00:22:00] If you want to live without allergies, then visit https://www.Wyndly.com that's wyndly.com. Remember, life's better without allergies.
[00:22:10] Aakash Shah: Thanks for listening to Founders and Builders. Make sure to subscribe and share this episode with a friend. You can find more episodes at https://www.aakash.io. That's aakash.io, or just find Aakash on Twitter @aakashdotio.