We talked to Max Ball of Lofty AI about the Artificial Intelligence-backed real estate investing platform.
First of all, how are you and your family doing in these COVID-19 times?
Max Ball: My family and I have been pretty lucky and are doing quite well. Thank you for asking. I had a minor case of COVID-19 back in early April, but thankfully it only lasted a week, and I didn’t have any breathing issues.
As with most startup founders, your life is essentially a quarantine, so the adjustment from an every-day-life perspective wasn’t anything too crazy for us.
Tell us about you, your career, how you founded Lofty AI.
Max Ball: I have a background in business development and marketing, having worked at large companies and startups alike. I realized pretty early on that I wanted to work for myself and knew that startups were my calling. I met my now partner Jerry when we were working at a hedge fund in Los Angeles. While there, he told me about the original concept for Lofty AI. The idea came to him when he was living in the Arts District in Los Angeles. He’d learned from his landlord that his condo had doubled in value over just the past few years, which was unheard of. After hearing about these insane returns, Jerry’s goal was to find out how the Arts District differed from other neighborhoods that averaged 2-3% appreciation, which was considered the norm in the industry.
We eventually quit our jobs at the hedge fund and started by looking for specific geotagged hashtags (i.e., #coolcoffeeshop) on Twitter, allowing us to hopefully find neighborhoods at the tipping point of growth like the Arts District was 2-3 years prior. We would drive around for hours every single weekend for a few months until we realized that this phenomenon was happening in hundreds of neighborhoods across the U.S., and there was a huge opportunity to find out about these hot neighborhoods before the rest of the industry and capitalize on that growth.
How does Lofty AI innovate?
Max Ball: We look at data in a completely different way from the rest of the industry. This allows us to accurately predict property appreciation better than anyone else. The type of real-time, alternative data we use ranges from the types of dog breeds in a neighborhood to sewage data, influencer trend patterns, electric scooter frequency, and much, much more.
Our product helps real estate investors instantly find the best investment properties in over 40 U.S. markets, and make significantly higher returns than the market averages.
How the coronavirus pandemic affects your business, and how are you coping?
Max Ball: The Coronavirus was definitely a reality check, but thankfully we hadn’t gone on a hiring spree right beforehand, and we were able to raise a round of funding during the pandemic to increase our runway.
The pandemic definitely affected how people view real estate, which naturally affected our company as a whole. We saw a large dip in new users in April but saw a large increase in new users come mid-May and June due to low-interest rates and peoples’ uncomfortability with the stock market going absolutely nuts.
Did you have to make difficult choices, and what are the lessons learned?
Max Ball: We did. This came in the form of having to reduce our burn to withstand this potential 1+ year pandemic. We spent a ton of time figuring out which costs to cut to increase our runway. Thankfully, we didn’t have to let any of our employees go, which would have been horrible. I think the lesson learned is, when you’re running a startup, to always prepare for the worst and always have at least 24 months of the runway at all times. It sounds like a lot, and it’s tough to not spend your funding on a new website, marketing, new hires, etc. –– but the reality is that the majority of startups die simply because they run out of money. Founders truly never know what will happen, and it’s better to be prepared than not.
How do you deal with stress and anxiety, how do you project yourself and Lofty AI in the future?
Max Ball: Once you realize that running a startup is a marathon and not a sprint –– you’re able to cope much better on a day-to-day basis I’ve found. For the first year of our company, we’d all work 10+ hours per day and every single weekend because we thought that’s what you had to do to succeed.
After going through Y Combinator last summer, we learned that the best, most successful teams have a balance, which allows them to reduce the stress and anxiety of both themselves and their employees. I project us sticking with a work environment that definitely stresses working hard, but also playing hard. We truly believe that taking a day or two off every week can have extremely positive effects and help reduce the risk of burnout. We also plan to integrate meditative practices into our culture, which positively impacted my partners and me.
Who are your competitors? And how do you plan to stay in the game?
Max Ball: We don’t have direct competitors per se, but I guess you could consider any companies or funds that help real estate investors buy properties easier and make higher returns.
We plan to stay in the game by focusing on technology first. This is rare in the real estate industry because it’s always been lagging in terms of tech adoption. Because we look at data from a completely different perspective than any other company, we’re able to build a moat around our tech that is unmatched in the industry.
Your final thoughts?
Max Ball: I really appreciate this interview opportunity. We’ve been fans of your magazine for years, so it’s truly an honor.
Top of the month
Resources10 months ago
TOP 105 Niche Sites to Submit a Guest Post for Free in 2021
Resources5 months ago
A Complete Guide on How to Start a Fintech Startup in 2021
Lifestyle3 weeks ago
How Long Does it Take to be Good at Piano?
Resources3 weeks ago
Chromecast with Google TV vs. Amazon Fire TV Stick 4K: Which is the Best Streaming Device?