There are more than 76 million baby boomers who may be looking for their next residence. Many want to pay off their mortgage, lower their living expenses and stay on their own but be near friends and family. Keeping life interesting but making it more simple is ultimately what experts say this demographic is after.
This week’s “Uber of X” company, Silvernest, is closer to an “Airbnb of X” in that it pairs those over age 50 with others who have space in their home. It’s a “sharing economy” housing alternative focused on allowing baby boomers to age how they prefer to. Matching lessees with homeowners through a digital platform, complete with a flat fee and background checks, Silvernest already has more than 10,000 users in the first year of its launch.
Silvernest’s Ceo and cofounder Wendi Burkhardt spoke to PYMNTS about this growing sector, its role in the sharing economy and why the focus doesn’t always need to be on millennials for the future of the housing market.
Explain the concept here. What is Silvernest?
Silvernest is an online roommate matching service, specifically geared toward people over 50 years old. We are focused on leveraging the shared economy to help introduce a unique alternative for the aging population to help them be able to age in place.
Tell us about the history of the company. How did it get started?
The company was formed by myself and some early cofounders, a husband-and-wife team, Chuck and Debra McKenney. They are both baby boomers who had become empty nesters, and they were also working in the aging space because they were developing alternative group home in the Alzheimer’s environment. And so watching people transition out of their homes and having that experience in their family, that led the McKenneys to question, “Why wouldn’t we take advantage of this extra space?” So the purpose is to either help an aging loved one or to really be able to create a different aging solution. We partnered because they were friends of mine and their background is in real estate and commercial real estate specifically; my background is in tech. I had just lost my father, and my mother was living across the country in a large home with a lot of extra room for the first time ever in her life, and so the opportunity resonated very specifically for me in both my and their personal experience. So that’s what kind of drove it first. And then between our collective backgrounds, we recognized this opportunity and decided to engage on it.
How does Silvernest work?
The process is designed to be really easy. The homeowners who have the extra space log in and create a listing that tells what space is available and that has photographs. It takes them through a wizard that helps them set that up. They also fill out a sequence of questions that help us identify using a proprietary algorithm the best type of roommate that would be matched with them.
The roommates log in and browse all of the available listings. They can see the property, they can see the amenities, the rent and the general location — we don’t give out the exact location. Then if they’re interested in that property, they fill out an application, which is also taking in a sequence of data that goes into our algorithm to take into consideration if they’re a match for that particular property and person. If they are, we forward that over to the homeowner who gets to review the information.
It’s like a dating site in that sense, although we’re not in the business of dating. But the flow of it can work similarly in the sense that the homeowner can see the people who are interested in the property, review their profiles and understand which of those matched. They can be filtered down, and then the homeowner can make contact with those in whom they’re interested. They can also use the back end of our system to set up a lease and also set up an automatic transfer of payments so that they go from account to account. The goal is to make it very easy.
We do an identity verification on the homeowners when they set up their profile, and when they find someone they’re interested in leasing to, they can initiate a background screen on the renter.
The fee today is $29.99 for the homeowner, and that allows them to use the service for three months, with unlimited communication and unlimited matches. They can set up a lease also through the dashboard. The renter pays a $29.99 fee for the application and background screen.
We don’t take a fee out of the rent on the lease, but we are introducing a new product in February 2017 that will offer some value-added upgrades.
Can you share a startup battle wound or learning takeaway since founding?
There is always something. We’ve been fully operational for just over a year, and we’ve had more than 10,000 people sign up from all 50 states. What’s been exciting for us is that during the first seven months of last year, we were growing 35 percent per month, and that was strictly organic. We weren’t doing any paid acquisition at that point in time. That was really phenomenal, and we’ve seen it continue to grow, month over month.
I think you learn a lot in those beginning months. When we launched last year, that was really our new product, and we just upgraded the product in October of this year. We learned so much about what was important to these users. The first thing that we learned was that we thought that the renter would be very comfortable running a background check on themselves and sort of pre-qualifying themselves and then applying to as many properties as they wanted to. What we learned was that was not the case because of the way that people look and shop for properties that they’re used to finding a space and then revealing more about themselves before they are ready to take that step. So we originally launched with the renter paying the fee a little earlier in the process. Then we learned that we had to push it back because people just weren’t comfortable sharing that information until they were committed to a particular property. So that was a big learning.
Knock on wood, we haven’t had any terrible hiccups so to speak, but I think a lot of it has been us learning about the behaviors and the nuances and shifting from what our assumptions were about how the customers would be and how they would behave to what the reality of that actually was.
This Uber of X or Airbnb of X trend: What does it mean to you?
I think that we’re at a really exciting time in history. It’s interesting because we get asked a lot about the sharing economy. This particular age demographic is rapid adopters of that economy. I saw a statistic the other day that there are more Uber drivers over the age of 50 than the younger set, which is really interesting. So I think that what is exciting for us is that we know that in the next 14 years — by the time we get to 2030 — almost 40 percent of our population is going to be over 50 years old. And when you look at that relative to the sharing economy, I think in our world, when you look at the Airbnb of X or the Uber of X, what I recognize is that this aging demographic, which is largely made up of boomers, they change everything that they have ever touched — and aging will be no exception.
I think the sharing economy becomes a really critical consideration and the alternatives that are presented in aging. There is a lot of companies focus on the millennials, and so one of our bigger challenges to get people on board with the size of this [boomer] opportunity and that it’s huge. The shared economy, as it’s being employed as it is today, I think it will continue to drive new innovations and experiences in the way that we age and things we haven’t even thought of yet.
How much funding have you received for Silvernest?
We’ve successfully raised about a million dollars.
What does the future hold for the Silvernest brand?
Next year we are focused on rapid expansion and a couple key markets. And then it’s our hope that we’ll be fully expanded and have awareness at a national level by 2018. We really want to be a household name and want people to recognize that we are the brand of choice that services this demographic with this particular solution.