Key Moments
Billionaire Founder: You Need THESE Business Skills to Become Rich | Ankur Jain
Codie SanchezKey Moments
Billionaire Ankur Jain argues against traditional venture capital, emphasizing that taking money from investors focused on quick returns can kill a startup. Instead, he advocates for aligning with customers and strategic partners who are genuinely invested in the product's long-term success.
Key Insights
Jain advises against seeking venture capital in the early stages of a business, highlighting that it often forces a 'rat race' focused on short-term metrics rather than sustainable growth.
The founder of Bilt Rewards bootstrapped his company for years and prioritized taking capital from 'real estate owners' who were invested in using his product, rather than traditional investment funds.
Building a successful business requires solving a significant problem, specifically a '$10 billion problem' for a '$1 billion solution', as housing is a $2 trillion annual spend category ripe for disruption.
Jain emphasizes the importance of building a strong team with friends and trusted individuals, stating that this foundation is crucial for navigating the inevitable ups and downs of entrepreneurship.
At Bilt, teams are capped at 25 people and run as 'mini-startups' to maintain agility and entrepreneurial energy, even within an $11 billion company.
Jain believes successful partnerships start by understanding and solving the stakeholder's problems, not by pitching one's own product.
Prioritize problem-solving over quick capital
Ankur Jain, founder of the $11 billion company Bilt Rewards, contends that the most critical step for aspiring entrepreneurs is to first identify a substantial problem to solve. He advises against starting a company with the sole aim of 'building a big business.' Instead, he suggests rigorously testing one's passion for the problem by asking, 'Can you live in a world where this product doesn't exist?' If the answer is yes, the problem is likely not significant enough to sustain the entrepreneurial journey. Jain posits that a '$1 billion solution' should target a '$10 billion problem,' citing housing, a $2 trillion annual spend category, as an example where a significant pain point exists for consumers and property owners alike. This foundational approach ensures commitment through the inevitable challenges, as founders are driven by genuine conviction rather than fleeting opportunity.
Avoid traditional venture capital in early stages
Jain is strongly against taking capital from traditional investment groups, especially in the first few years of a business. He learned this from his first two companies, where the pressure from venture capital funds created a 'rat race' focused on chasing arbitrary growth metrics like user numbers or subscriber counts, which didn't necessarily benefit the business's core health. This focus can lead founders to build for the wrong customer or market trend, such as the recent AI hype, simply to satisfy investor demands. Instead, Jain advocates for bootstrapping or seeking capital from entities with a genuine vested interest in the product's long-term success. For Bilt, this meant securing initial investment from real estate owners who were potential customers and would directly benefit from the product's functionality, aligning their interests with the company's growth.
Build with trusted friends, not mercenaries
A core tenet of Jain's philosophy is building companies with people you deeply trust, ideally your best friends. He contrasts this with hiring 'mercenaries,' individuals who may have the right pedigree or connections but lack the unwavering loyalty needed during the turbulent early stages of a startup. Jain's experience, influenced by his military upbringing and seeing the strong bonds within teams, emphasizes that genuine camaraderie fosters transparency, resilience, and shared commitment. This allows the team to face crises head-on without questioning each other's reliability. He notes that working with friends and family, while potentially challenging, creates a unified front and allows for 'raw, transparent' communication essential for navigating extreme ups and downs. This approach has led to exceptionally low executive turnover at Bilt.
Structure for agility: small teams, big impact
To combat the bureaucracy that plagues larger companies, Bilt maintains a structure of small, autonomous teams, capped at around 25 people. Each team operates like a 'mini-startup,' encompassing all necessary functions like engineering, product, marketing, and partnerships. This structure forces prioritization, as teams must achieve goals with limited resources, preventing the 'throw bodies at problems' mentality. Jain cites examples like WhatsApp (40 people at $19 billion sale) and Spotify (six-person founding team) to illustrate the power of lean operations. This setup empowers entrepreneurial talent, giving them ownership and autonomy, which is highly attractive to top performers who dislike bureaucracy and seek direct impact. Every team member understands their specific contribution, fostering accountability and a sense of ownership that drives performance.
The 'two-pizza' rule and cultural fit are paramount
Inspired by principles like Amazon's 'two-pizza rule' and military squadron structures, Bilt enforces a strict team size cap of 25 people. Jain believes that larger teams dilute accountability and foster inefficiency. This constraint forces leaders to critically assess whether a project genuinely requires more resources or if the team needs better prioritization. Furthermore, Bilt is 'ruthless' about cultural fit. They prioritize an intensive 90-day onboarding period, during which both the company and the new hire assess compatibility. This allows for a respectful parting of ways if it's not the right fit, preventing the 'slippery slope' of hiring 'B talent' who then recruit more B talent, ultimately degrading the company's culture and performance. The company fosters a sense of belonging through traditions like awarding a Bilt Letterman jacket after 90 days and milestone medallions.
Solving regulatory hurdles can build a moat
Jain shares a critical moment in Bilt's early days where a regulatory challenge threatened the company's core mission: allowing rent payments to contribute to credit history and down payments for homeownership. After discovering their model might be illegal, they spent 18 months in Washington D.C. engaging with housing authorities and mortgage agencies. This persistence ultimately led to formal approval in October 2019, a monumental step that unlocked the ability for millions of Americans to use rent payments toward homeownership. Jain highlights that if he had taken venture capital early on, they likely wouldn't have had the freedom or financial runway to undertake such a lengthy, un revenue-generating endeavor. This fight created a significant competitive advantage and a strong foundation for the company, demonstrating the value of long-term vision over short-term investor demands.
Partnerships thrive on solving problems, not pitching products
Bilt's success in forging numerous partnerships across diverse industries stems from a disciplined approach: deeply understanding each stakeholder's problems before even mentioning their own product. Jain emphasizes that successful partnership pitches begin with listening and identifying what matters to the other party. This client-centric strategy contrasts sharply with companies that lead with a product-centric pitch, which is far less effective. By demonstrating an understanding of a partner's needs and offering solutions, Bilt creates compounded value. For instance, they connect local restaurants to apartment building residents, solving a local business's customer acquisition problem while enhancing the resident experience. This network effect, where each new partnership adds value to existing ones, fuels continuous growth and makes the ecosystem increasingly indispensable.
Embrace the journey, don't trauma bond over misery
Jain advocates for a positive and fun approach to entrepreneurship, a stark contrast to the prevalent narrative of constant suffering. He believes that if running a business were solely about misery, talented individuals would choose employment elsewhere. His own experience, and that of his team at Bilt, is characterized by genuine enjoyment and a 'pinch me' mentality, even amid challenges. He finds it more risky to place one's career in the hands of another company than to build something oneself. Jain encourages embracing the excitement of new opportunities and maintaining a sense of wonder, using the analogy of whether his 8-year-old self would find the current work cool. This perspective, coupled with building a company alongside best friends, makes the difficult aspects of entrepreneurship not only bearable but deeply fulfilling and fun.
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Common Questions
The most crucial element is a deep passion for the problem you are solving. If you aren't passionate, the difficulties and long hours required will likely lead to giving up. The journey is long and hard, making passion essential for perseverance.
Topics
Mentioned in this video
A company founded by Ankur Jain that helps people use rent money for rewards and eventually buy a house.
Used as an example of a company that started with one product (books) and expanded into multiple businesses while maintaining a core platform.
Mentioned as an example of a successful startup that achieved a high valuation with a small team (around 40 people).
Cited as an example of a company that achieved significant success with a very small initial team.
A company whose CEO, Matt HP, partnered with Built by investing $100 million, illustrating a strategic partnership with aligned interests.
Mentioned as a partner in a collaboration for 'Doubleware's Proud 2', highlighting Built's diverse partnership strategy.
A government-sponsored enterprise involved in the regulatory discussions that Ankur Jain participated in to get rent payments counted towards mortgage qualifications.
A government-sponsored enterprise that Ankur Jain engaged with during his 18-month effort to gain regulatory approval for using rent payments towards homeownership.
The company where Ankur Jain's father worked in a junior role after immigrating to the US, marking his parents' early career success.
A local business mentioned as an example of entities that could be incorporated into Built's neighborhood marketplace to reach residents.
Used as an example of a product that launched with a simple, effective hook ('swipe right, swipe left, match') but faced the challenge of evolving into a platform.
A real estate owner that invested in Built, aligning with Ankur Jain's preference for capital from those who benefit from the product's success.
The company whose headquarters building, featuring a virtual reality experience, Ankur Jain admired during the launch of his first startup.
A venture capital firm mentioned in the context of seeking credibility, but suggested to wait until the product is more established.
Ankur Jain and his team spent 18 months engaging with this department to get regulatory approval for rent payments counting towards credit and rewards for down payments.
Mentioned in relation to the 'two-pizza box rule' for team size, emphasizing the importance of keeping teams small and efficient.
Mentioned in a story about Amjad of Replit, who received a skeptical email from Thiel about the company's potential.
A marketer mentioned by Ankur Jain who discussed how traditional education systems can train people to be good workers, potentially hindering entrepreneurial spirit.
Mentioned as part of a collaboration with Disney for 'Doubleware's Proud 2', showcasing Built's creative partnerships.
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