Shawn Low on Cofounding a Digital Mortgage Unicorn, Harnessing Leadership and Life’s Non-Negotiables - E25

· Popular,Singapore,Founder,USA,Podcast Episodes English

Think of your teammates, your team members and your employees as LPs. Instead of giving you a financial capital, they're people who are giving you human capital, and it's part of your job as the leader to repay that with interest.  - Shawn Low

Shawn Low is a co-founder at and part of the core leadership that built and integrated home ownership tech company (mortgage, real estate, insurance) from zero to over 500 million in annual revenues. Since its inception, Better has originated over 15 billion in loans and made home ownership more accessible for thousands of Americans. is backed by a story investor group, including Goldman Sachs, KPCB, Ping An, AmEx, Ally Bank and Citigroup. Better has been named to Forbes FinTech 50, CNBC Disruptor 50, and is listed by both Fortune and Crains as the best place to work. Shawn recently began the transition out of Better to be closer to family in Singapore, and he currently serves as an advisor to the executive team. Over the years, he has worn many hats at Better. In his immediate prior role as head of operations, he oversaw 10x revenue growth in two years, while simultaneously improving margins and profitability.

He was responsible for the backbone of Better's global workforce comprising 2,500 plus professionals across Better Mortgage, which does sales and loan fulfillment, Better Real Estate, offshore services, and business operations and strategy. Outside of Better, Shawn is a co-founder of the Black Belt Project, a community initiative that trains kids at the Vatsalya Orphanage in India into award-winning karate black belts. He had also previously co-founded Audible Hearts, a peer to peer crisis support platform for use in Singapore. In his free time, Shawn can be found playing the New York Squash League, teaching Cantonese classes in Chinatown and cooking Singapore and delicacies in his kitchen.


You can find our community discussion on this podcast episode at

Jeremy Au: [00:02:25] Hey Shawn, so good to see you again from the Conjunct Consulting and Audible Hearts days.

Shawn Low: [00:02:31] Hey Jeremy, it's great to be here. Thanks for having me.

Jeremy Au: [00:02:33] It's funny, we've started out working in the social entrepreneurship scene together and then see both of us also do the consulting and startup track as well.

Shawn Low: [00:02:44] Yeah. Our paths have been very similar.

Jeremy Au: [00:02:46] I always remember, just less than half a year ago, us enjoying some Singaporean food in New York and the world just inverting itself so quickly.

Shawn Low: [00:02:57] Yeah. I remember that. It's hard to believe it's actually in the same year.

Jeremy Au: [00:03:01] Well, for those who don't know how incredible a leader and founder you are, perhaps it would be great if you could share what your journey has been so far.

Shawn Low: [00:03:11] Yeah, of course. So I came out of college, really, without a very clear idea of what I wanted to do. I was a biology major in college, spent most of my time in the lab. And then when I decided that I didn't want to go to med school, I didn't want to go to graduate school, and I wanted to go into business, I figured I needed some way to get some practical skills.

So, for the first few years post-college, I went into consulting with BCG, that was like my version of an MBA. I did that for a few years and, ironically, actually, it was one of my last projects at BCG that convinced me that I needed to leave to go join the startup world. And that project was really me providing ground support to the UN emergency response for Ebola.

It was a case team, we were based out of Ghana, it was in 2014, it was the early days of the Ebola response and we were coordinating the various UN agencies to provide support. And it was the first time in my three and a half years in consulting where I realized that I was very passionate about what I was doing. The hours were really long, but it didn't really matter. It was very impact focused, it was about what we could get done. I would call up the health officer in Liberia, realize that the hospital was down; they had four generators, three were down and they were down to their last one, and I would be able to connect with somebody to send them a generator so that they could keep the hospital going, and that the infected people didn't go back into their villages.

That was very real. It felt like it was very impact focused. It was very different for those folks who are familiar with consulting, "Oh, change this font size, change this font type, make this bigger, separate the bullet points, change the color." And I realized that I really liked the focus on what really mattered, the sense of urgency and the focus on moving the needle. And so I moved in 2014 to go into startups. And at that point I joined... I was on the founding team of Better. Better was, in the early days, very chaotic. So I had joined right from the start and was part of founding the company. And in the zero-to-one days, it was everything that you read about in the press. It was the days of fixing the toilet, assemble your own desk.

I think, at some point, I was our head of sales, I was our head with strategy, I had learned more about quality control of loans, at some point, than I ever wanted to do. I became licensed as a loan officer, that was kind of the zero-to-one days, wearing many different hats. And then sometime around 2018, Better really started to grow up and I transitioned into a different phase of leadership, where it was really, "Okay, we've gotten from zero to one, how do we go from one to 100?" And during this phase was when we saw the organization grow from one to 200 people to over 3,000 people today, we had one or two offices and now we're settled in five offices. The company today is making upwards of 500 million in annualized revenues, it's valued in the billions. It has frankly been privilege to be able to lead the organization through this whole zero-to-100 phase, but it's also given me an opportunity, really, to grow as a leader and learn a lot through the process.

Jeremy Au: [00:06:27] That's an amazing arc. How did you personally get started being contrarian?

Shawn Low: [00:06:33] Great question. So if I think back to my more formative years, so college, pre-college, during the army when we were conscripted in Singapore, I think two things have always stood out to me; one was, I never really found myself being very comfortable in situations where there was a very defined path, where somebody said, "Hey, you need to do this, and then after that you do this, and then after you do this." Sure, I would be able to toe the line and do that, but it made me, fundamentally, very uncomfortable. So whether or not it was in school, where you had your schoolwork and then you had your extracurriculars, I was always the student that was like, "Well, what about like these other things outside of the school environment? What about doing stuff in the real world?" I launched a series of community projects, I think, to that effect.

At one stage, together with a couple of friends, we took a $9,000 loan to basically buy candy as 17-year-olds and re-sell that can be right for charity on the streets of Singapore. We made like $40,000, which at that point was crazy. But I remember there was a few weeks as a student, when I was still going to lectures and sections and tutorials, and then worrying about, "What if we are not able to pay back the $9,000," which as a 17-year-old was a lot of money.

The other thing that I think was a big theme for me in those years, I always felt the need to have some degree of social impact. I think social impact and this idea of giving back to the community has always been a theme in my life and it's been very important for me as I went through the years. It's the same reason the Ebola project was pretty interesting to me, it's the same reason that I had to start the Audible Hearts or the Black Belt Project. These are projects that I think speak to a sense that this is a thing that I value.

Jeremy Au: [00:08:19] You've seen leadership in action at so many places, from social entrepreneurship to consulting, to startups. How have you seen that, really, in action at Better?

Shawn Low: [00:08:33] So, I think when somebody joins a company, they join for many different reasons; for some it's a paycheck, for others it's because they believe in your mission or it will give them opportunities to develop professionally. And this is especially true for startups, you're asking people to believe in your idea, to believe that the company will be worth a lot more than it is worth today. So beyond just being able to put food on the table, they are really looking at, "How is this going to benefit me both financially as well as professionally?"

And I think the way to think about this is, really, to think of your teammates and your team members and your employees as LPs. Instead of giving you a financial capital, they're people who are giving you human capital, and it's part of your job as the leader, I think, to repay that with interest. And I think in my role at Better, I think I was always acutely aware of that. Especially towards the end of the time that I was a Better, I was managing this team, not just the 2,500 folks in my org, but, frankly, the full 3,000 people at Better, with the responsibility to make sure that they could bring forth their best selves at work, were happy in our community and were treated fairly.

To your earlier question, I think the true test of leaders, as they say, it's not when things go well, it's when things don't go well. It's, what do you do when your burn rate is too high and you need to cut cost? What happens when you have allegations of harassment in the office? How do you manage the needs of your employees when the world is struck by a global pandemic? These decisions that you make and how you communicate those decisions matter greatly to your company, to the employees. And people rely on leaders to be able to make good decisions based good judgments in those situations.

Jeremy Au: [00:10:09] It sounds like you've gone through quite a few challenges and overcome them. Could you share a little bit more about what you've seen?

Shawn Low: [00:10:19] Yeah, of course. I think the biggest hurdle that I had in growing Better was, frankly, scaling alongside the company. I think there's a common saying in startup land, "Different stages of the company require different people." Company scales three times a year for three years, it is suddenly 30 times bigger than where you were three years ago. This evolution really required me to roll. And specific to me, I think it required me to not just think like I was in consulting on what needs to be done, especially when you're managing large groups of people, it's finding ways to be authentic, finding ways to connect at scale, tapping into the emotional leadership. That was a very big learning, I think for me, in managing large teams.

And I think a lot of the challenges that I saw as Better grew was helping people scale alongside the company and giving them opportunities to grow. One thing that some companies do is that the default option, especially a lot of VCs, they like to recommend like, "Oh, the company is going through a different phase, you should just lay off this person, you should just hire above them." And in some cases that makes sense, but more often than not, what I found to be true has been, "If you hire well and the people you hire right at the beginning, if they can grow and they have the potential to grow, helping them grow along the way and pushing them to grow will ultimately help your startup and your venture grow." They have the operational context, they know what the issues are. And at the pace that you're growing, the six months or 12 months that somebody needs to come on to operational context, I think it's just very long.

And that's really been the key learning that I've had in this whole blitz scale journey for Better, which is, one, I needed to grow. And for me, growing meant emotional leadership, but then I needed to look out at the leaders that I had brought in and figure out, "How do I help them grow? Where are they being blocked?" For some other people, it may not be emotional leadership. For other people it may be they are really naturally gifted at that, so then it's about maybe they need to understand what good management systems look like. For other people, maybe it's they need to learn to delegate better. I find that if you are successful at helping people scale, naturally a lot of the other problems, the tactical issues around recruiting, finance, marketing, all of those things will naturally take care of themselves, and that has been my experience there.

Jeremy Au: [00:12:37] There are a lot of people who wondered to themselves whether to become a management consultant, and there are many management consultants who say they want to become part of the technology sector as executives or founders, so what do you think is the value of management consulting for someone in their career?

Shawn Low: [00:12:57] So, the way I saw management consulting, the analogy I like to give people is, it's like going to a gym. Imagine if you were an Olympic athlete, the gym is great because it allows you to build different muscles, your leg muscles, your thigh muscles, your arm, muscles, your chest muscles. It's a little bit like how consulting exposes you to many different industries and many different challenges that businesses face. You may face a restructuring, in some of the cases you may be looking to value a company, so it's like building all these muscles. And some people decide that's what they want to do, that's why you have bodybuilders, you have some people who decide that's professionally what their interested in doing. But then there are other people that say, "You know what? I actually want to become a world class swimmer," or, "I want to become a world class track athlete," and then go do that thing. In those cases, if you need to become a swimmer, well, maybe you actually need to work a lot more on getting the right swim structure.

In that way, I don't think it's that surprising. I mean, consulting has this reputation for people coming in, doing it for two years, three years and then going off to find a thing. That's not a bad thing, in my opinion. And I think it actually works, even for the consulting firms. To me, it's a good thing because it means that this gym is really successful, it's helped to create this community of people who understand many aspects of a business, and so when they go on to start their own business, especially in the early days of Better, I was the head of sales, I was also running an operational team doing quality control, I was also managing valuations and at some point I became our head of people, and I drew a lot of my understanding of how to do these things, perhaps not at 100%.

But in the early days of a startup, from zero to one, as I'm sure you must be aware, Jeremy, it's not about getting it perfect, it's about getting it good enough so that you can move to the next thing, and eventually you will have specialists that will come in. But in the early days, when you are the only person and you suddenly are caught with, "Okay, how do you design compensation? How do you design career progression?" Those are the experiences that I had at BCG to draw on, which proved invaluable, especially in the early days of starting my own thing.

Jeremy Au: [00:14:54] Now, what's interesting is that we were both management consultants and we are both people who grew up in Singapore and ended up having substantial technology startup experience founding in the US, how did you find that transition?

Shawn Low: [00:15:11] There were two transitions in my mind. There was a transition from the work environment, I think, in Singapore to the work environment in the US. And then there was a separate transition that I think was from corporate America into startup land. I think the first transition of going from Singapore to the US; I think the US in general, my personal view is that because the economy is a lot more dynamic, the opportunities, I think you get exposure to a wider array of things, just structurally, I think that's true.

The other thing that I think is true, and I want to be a little bit circumspect with saying this, but I do think that the US tends to be a lot less hierarchical, there's less of, "You need to go down this path, you need to toe the line." It's very much of, "Oh, you think you can do better? Go do it. Don't worry about hierarchy. Almost be a little bit more willing to break things in order to make the new thing." And I think that lends itself to people being slightly more receptive to new ideas, new ways of doing things, new solutions to solving all business problems. The second transition, which was from corporate America into startup land, was not feeling like everything needed to be this balance...

And speaking as an ex-consultant, I'm a little bit guilty of over analyzing things and trying to, "Oh, I need to figure out exactly what the right answer to this thing is." But frankly, when I was in India and I needed to find a new place to plant our new office, I don't have three months to go do a location analysis of what the labor wages are in different locations; I have three weeks, maybe, to pick a location and then start moving people there and start hiring in those locations. So it becomes, what can be done in three months can also be done in one hour, it's a question of, what is the right time to invest? Understanding that there's a trade off to that. If I spend an hour, I'm obviously not going to be as sure of the answer, but maybe I don't need to.

And I think that that was a big change. The big change of, it doesn't have to be perfect. Sometimes, actually, it's better if it's not perfect because that's not the thing you're optimizing for. In some cases you're optimizing for speed, in some cases you're optimizing for being able to resource allocate and do many things at the same time. If those things are important then sometimes you have to sacrifice some degree of quality.

Jeremy Au: [00:17:29] One thing that's always impressed me about you is your continual ability to learn and to adapt. You're always thinking and bringing those strengths into the new thing, while also building new skills just in time. How do you go doing that?

Shawn Low: [00:17:48] To be really honest, I don't know. So I think that one of the things that I've found to be very useful has been to always keep an open mind and not be dogmatic about your perspectives, your opinions, about how things are done. That is easier said than done, because I think a lot of people aspire to do that but if you actually talk to them and they take the time to reflect, they will find that, actually, in practice I don't think that's actually true. I think more often than not, people are actually very wedded to their ideas, this is the way things need to be done. And I think that in some specific instances, like Apple, I don't think would have been the way it is, or Amazon would have been the way it is, if not for their charismatic and mercurial founders who were very insistent on the way things were done.

And I think that there's something to that, especially when it comes to product development, customer experience development. But when it comes to you, personal development, I think we should always be open to input from people in order to develop myself as a leader to with scale the company from series A through to series D. Along the way I actually ended up getting a personal coach, an executive coach, who works with me on a weekly basis, takes feedback from my reports, from other people in the company and helps me grow as a result of that. Initially, I was frankly a little bit dismissive, because I was like, "No time for this, this doesn't make sense." But then I realized, especially at the scale that we were growing; one, if I didn't actually scale along with the company, I didn't improve myself, that either I would be left behind, somebody would replace me because I was just not doing a good job.

And I think that opportunity to have coaching, I think was incredibly valuable to me, and I would actually encourage other founders, other executives in fast-growing startups to consider that as an option. It's not the right option for everybody, but at least in my case it was incredibly valuable and I think I have emerged from that process a lot better, as a leader and as a person.

Jeremy Au: [00:19:53] What would you say are some common misconceptions about growing a company from zero to one, to 100, to a unicorn?

Shawn Low: [00:20:01] Oh, I have a long list of these. I'm going to try to do rapid fire and then we can talk through which ones are interesting to engage. One is this idea that great entrepreneurs or great founders need to have great risk appetites. So Malcolm Gladwell actually published a really good article in The New Yorker called "The Sure Thing" and I think he did it, I think, in 2010. And he talks about the story of Ted Turner and how everybody talks of Ted Turner as this great entrepreneur and it's like he must have taken a massive amount of risks and therefore big risks, big return. But when he actually fleshes out the story, you realize that actually before Ted Turner got into the television network business, his family had already owned all the billboards in the region. And so when he started a television network, he just basically advertised it on all these billboards.

He gave a couple of examples. He gave that example, he gave another example of a trader who made a really big bet on credit default swaps in the last financial crisis. And his whole point was that true entrepreneurs, yes, they are willing to take risks, but the really great ones are attracted to deals that frankly lack risk because they are able to see and value things in a slightly different way than regular people, or at least than the conventional wisdom. And I think that's a very key insight, which I've personally found to be true even in working with our founder, Vishal. The biggest insights is not because we were feeling risk-taking or we wanted to just take a risk and bet on something; no, it's because we saw that there was a massive opportunity. We did our research, we knew that there was a huge arbitrage there and therefore once the timing was right, we just went in.

He makes this statement in the article called "great entrepreneurs are really like great predators, they understand timing, they understand that it's a sure bet and then when the timing is right, they go in for the kill."

Jeremy Au: [00:21:52] That's great all by itself. I mean, I think you've perfectly encapsulated why great founders have the responsibility to systematically de-risk the business and, like you said, go in for the kill. What are some other misconceptions that you think of?

Shawn Low: [00:22:09] The other thing that I think is true, at least in startup land, seems to be that somehow you have to be a prick to be successful. I actually personally have found the opposite to be true. I think the best things in life tend to come from things that compound over time. And it's true of financial investments, I think it's true of relationships in general, the networks, the connections that you make with people. If you treat people with integrity, fairly, those relationships will compound over time, and I think over the long run, provides you more opportunities to be successful. Another one that I've seen happen a lot is experience and how people value experience. I think experience is important, but I tend to think that experience tends to be a little bit overrated and, frankly, a little bit overvalued, this one's definitely true at Better.

Before Better came along, loan officers in the industry were mostly commissioned. So when you take a home loan from a bank, typically the loan officer would get 1% of the commission. So on a $300,000 loan, the loan officer is getting $3,000 in commission. And so when we came along and we said, "What if we took people fresh out of college who are in completely different fields and train them to be loan officers so that we can break that mold and figure out 'is the industry loan officer getting their $3,000 commission because they really generated that amount of experience or could we find a better model that serves the customer better?'"

So we ran as a non commission model, we trained our loan officers from scratch. So we like to give this as an example, actually, to people that want to invest in our company. Our average loan officer at Better closes something like about 50 loans a month, if not more. The industry average loan officer closes something like four loans a month. And by the way, this is all public information. Every single closed loan in the US, there's an electronic database, you can go... And what we've seen actually over the last two years is that if you look at the industry top producing loan officers, you have all the industry people, but then you suddenly start seeing all these 25, 26, 27 year olds that Better has trained, who are suddenly topping these loan originators' charts on the Scotsman's Guide.

And I think the key lesson there is, again, it's not that experience doesn't matter, but it is that, at least the way our community, our society in general, I think has been constructed is that, I think, we end up sometimes assigning too much value to it. And I think because of that it's worth always taking things back to first principles and asking, "What is the real value that's being created by this job? And what is the real value that's being generated from this experience and is there a better way of doing that?" And in our case, we found that actually there is, there really is a better way of doing it, and it generates a lot of value, not just to our employees and the loan officers we train, but it generates a lot of value to the customers who end up saving hundreds if not thousands of dollars from not having to pay these commissions. Those, I think, were a couple of bigger nuggets that I've taken away from experience

Jeremy Au: [00:25:05] One misconception that people have had is that you have to burn relationships and burn your personal life in order to be successful at startups. What do you think about that, from one married man to another?

Shawn Low: [00:25:19] Wow, that's a tough one. I can only speak from my experience at Better, and it's hard for me to generalize. But I will say that starting a company is very difficult. So before Better, I had all these other community projects that I was working on and I was playing a lot more squash, and I was doing all these hobbies and interests. And then, when I started working at Better and increasingly as I became more and more involved in the company, it really did end up taking up, frankly, personal time with my family and my wife. And over time, I think I've tried to find the balance. But the reality is, I think, especially when you're starting up, I think there are diminishing returns to... You can't be working 24/7, at some point you're going to burn out and that's not helpful either.

But I do think that if you are planning on starting a company, you should probably be prepared to give your heart and soul and make it a massive priority for you for a while. It doesn't have to be that way forever. Again, most very high-performing startups are growing at three to five to eight times a year. If you're growing at that pace, I think that it's probably important for you to be not distracted and really focused on just doing that thing. And then, sure, don't do it forever. That's why I think a lot of people who are involved in high growth startups, they do it for a short concentrated period of time, and then at some point, hopefully, the business reaches a certain scale where you start bringing in a professional management layer, you start being able to delegate, you get time off, blah-blah-blah.

But, particularly in the early stages, as much as I would say, "Make sure you have work-life balance," I do think that it is a continual challenge that you will have to negotiate. And I think startup founders will do themselves a great service by not trying to do too many things, like being very focused on... Sure, take care of your personal life, family always comes first, don't compromise on that. And that's my personal belief, don't compromise on your relationships, don't compromise on family. But outside of that, if you want to be the startup founder that's like, "Oh, I have a startup and I'm trying to grow it, but I'm also trying to do this other community project and I'm also... Have one arm trying to do some other thing and it's..." People get ourselves into a lot of trouble doing that.

Jeremy Au: [00:27:42] I think you speak to a virtue of reality, which is that, the work of the startup is a massive number of sprints and it's a marathon at the same time, and then how do you balance that? And it displaces so many things and then you have to really prioritize the few things that are left. I remember personally that there was just startups and my then girlfriend, who became my fiance and wife, and that was it. And then, like you said, as the company grew and started stabilizing with executive leadership, then I added one more hobby to my life, which was doing improv; even then, that was the only hobby I had. It's so true. How about you? How have you seen that arc for yourself over time? So you said starting out, you were very focused on the startup, family first, have you seen things change over that arc?

Shawn Low: [00:28:34] Yeah. I think along the way, as with anything, I think you get better at negotiating your own internal trade offs and your own personal challenges. What I found to be very helpful is try to build routines. If exercising is a non-negotiable for you, meditating is a non-negotiable for you, make sure that you prioritize those things. Start setting up certain boundaries. I wanted my weekends to be as not distracted as possible, and not that people couldn't reach me, I always had this, "I'm always available." I think at that point, because if I'm managing a massive team where things can always blow up, especially if you're running the operational teams, you always have to be available. What I tell the teams is, "If it's urgent on the weekends, call me. I'm not going to look at Slack, I'm not going to look at text messages, if it's urgent, call me," and people do.

And after a while, I think, if you set up those kinds of systems to help yourself... Tactically, I move all the apps that have notifications. I shut off all notifications option my phone. I move all the apps that are potentially going to be distracting onto the other screen on your iPhone, so it's not the first thing that when you unlock your phone that you see. Oh, that's all these bubbles that then need your attention. I think if you make a deliberate effort to take control over your time, then it will happen for you. But if you don't and you just allow things to happen to you, then you're always going to feel underwater.

The other thing I actually found to be quite useful is doing calendar audits every now and then. Even if it's taking like 15 minutes to just look through your calendar for the last two weeks and go through and say, "Hey, these things I shouldn't have." And actually out of that, one of the things that I learned at Better was I wanted to connect more with people and I needed to do that on a more regular basis. In the early days it was just like, "Oh, whenever I remember it, then I would remember to do it." But then after a while it got too much and I ended up getting to a point where I had one of my assistants basically help me schedule. Every week, I would do a skip-level with somebody. Every day, I would remember to wish one of our managers on their birthday a happy birthday.

Those kinds of systems, because there are things that are important, things that I want to do. But I know that if I don't programmatize and automate, I don't build a routine around it, it's not really going to happen. That was an insight that came up from the calendar audit.

Jeremy Au: [00:30:45] Now, that's so funny. I similarly switched off notifications for most of my apps and I love calendar audits. This must be something that's a common thing.

Shawn Low: [00:30:53] Yeah. I think it's an occupational hazard for people who ever came out of consulting background and who have still continued to be on that crazy life, I guess, I would call it.

Jeremy Au: [00:31:01] Yeah, it's so true. Now, one last question is, if you go back in time 10 years, what advice would you give yourself?

Shawn Low: [00:31:10] I think if I went back in time 10 years, first, I would probably say, "Eat whatever you definitely want to eat at that point, now it really hurts you when you do that." When you're 20 and you have the metabolism of a 20-year-old it's very different, that's one advice that I would give myself.

But I think one thing that I would probably say that I've learnt in my own experience and I actually get as a question a lot from people is, people ask me like, "I want to go into startups, and how do I pick the right startup?" I wish that I had known... To some extent, I wish I could say, "Yes, I picked Better in a very thoughtful and methodical way." No, Better happened to me. I was fortunate to be at a time where I really didn't know very much about the startup world and just kind of fell into it and it kind of did really work out, which is great.

But if I had to go back, I think there were two things that I would have thought about very differently. One is, if you're intending to join a startup, what stage of a startup do you want to join? The experience that you get at a series A startup versus a series C start up is dramatically different. The way you're compensated at a series A startup and a series C start up is also dramatically different. People, oftentimes, when you think about, "Oh, this company grew like 20x in three years," they don't think that, "Oh, actually the people who were early there, actually their investment and your equity grew 20 times."

So when you actually look at a comp sheet of any fast-growing company, I bet you that when you look at total compensation, when you include a value of equity and everything, the people who join even just 18 or 24 months earlier, the comp is dramatically different because when the company grows 10 times, the value of equity grows 10 times.

But obviously not everybody can make that trade off. Depending on where you are in life, what your financial obligations are, your capital requirements are, you may not be able to make that equity-cash switch, so I think people should really think about that. It was not something that was very intuitive to me. The other thing that I think is important to think about is, and this, I think, came up particularly off WeWork and is, "To us, is the startup really a tech startup?" People say, "Why are things called startups? Isn't a tech start up just a new business?" I think my answer to that is, "Yes, a tech startup is a new business, but the reason why we call it a tech startup not just any other regular new business is because the tech startup is valued very differently."

Most businesses, most industries, you're valued at 2-3x revenue multiple. Tech startups are valued at 8, 10, 15, 20x revenue multiple. And if you want to have those kinds of multiples, tech startups fundamentally must have the technology impact, the unit economics of the startup. Is it changing? What is it changing about the customer acquisition costs? What is the technology changing about the labor cost? What is it the technology changing about the distribution costs? Like if you use Amazon; Amazon, at some point, they decided to go from manual labor in their warehouses to an automated warehouse. So their pick and pack went from maybe 50 items an hour to 500 items an hour, that has dramatically reduced, it's 10x... They used technology to 10x lower their labor costs.

We've trained and through the technology helped our loan officers be 10x more productive. Our loan officers originate 40-50 loans a month, 10 times that of the industry. That's the power of technology and it has massive implications for our customer acquisition costs, massive implications for our labor costs. So as people think about joining a new startup, the thing I would pose to them is, "How is this tech startup using their technology to fundamentally change the economics of the transaction and therefore justify their 10, 15, 20x revenue multiple?" If they're not able to do that.... Because WeWork is a good example. The reason people said WeWork is not a tech startup, it's because when you look and you break down the unit economics, it's not that it's not a good business, it can very well be a good business it could be yeah Keller Williams, the problem is that it's not a tech startup because it cannot justify the valuation. It could justify a 3x valuation maybe, but not 8, 10, 15x valuation.

So I think those are the two insights that I personally have in my time at Better and I think as people think about joining startup land, it's things that I wish I had known and it's things I hope people would consider as they think about moving to the space.

Jeremy Au: [00:35:32] Thank you, Shawn. That's an incredible amount of insight, actually.

Shawn Low: [00:35:36] Yeah, glad to. And thanks for having me. This was fun.

Jeremy Au: [00:35:39] Thank you.

Shawn Low: [00:35:40] Yeah, take care.

broken image