219: How He Built & Sold Two Companies for $550M with Ben Reubenstein

Ben Rubenstein has built and sold two companies: Yodle for $342M and OpCity for $210M.

 

In this episode, we break down the operating decisions behind those outcomes.

 

We talk about when venture capital accelerates growth and when it can quietly kill your business. Ben explains why ideas are worthless without execution, how he scaled a 1,000-person sales organization, and the hiring filters that consistently produced top performers.

 

We also get into culture, retention, speed-to-lead systems, and the strategic decisions that position companies for 9-figure exits.

 

If you’re building and thinking about capital, hiring, churn, or long-term optionality, this conversation is a masterclass in how experienced operators think.

Mic Drop Moments

• “Focus is not what you do, it’s what you don’t do.” – Ben Rubenstein

• “It’s more important to have a first customer than an idea.” – Ben Rubenstein

• “Taking venture capital is like taking steroids. You better hit 70 home runs.” – Ben Rubenstein

• “For a lot of businesses, taking venture capital could kill them because the pressure to scale is real, but for a lot of businesses, that injection of cash is what you need to get moving and going, and also to scale the speed that you want.” – Ben Rubenstein

• “The market opportunity is now, and you have to capitalize on it, or someone who has more cash will.” – Ben Rubenstein

• 00:00 Intro
• 01:39 When to Raise VC?
• 04:09 Ideas Are Worthless
• 09:19 The 3 Traits of Elite Salespeople
• 15:01 Culture Doesn’t Happen by Accident
• 22:02 How to Sell – Scripts vs Talk Tracks
• 25:38 Yodel – From Air Mattress to $342M
• 30:01 Op City – Selling for Real Estate Brokerages
• 33:48 Are Real Estate Agents Overpaid?
• 41:08 Calling Leads within 4 Seconds
• 43:31 The Algorithm That Became their Competitive Moat
• 47:23 Why Most Founders Can’t Scale
• 48:35 Setting Expectations with Your Team
• 49:39 Hiring Top Talent
• 53:33 9-Figure Exit Strategies
• 56:01 Don’t Build to Sell (Do THIS Instead)
• 01:00:06 The 80/20 Rule That Saves Startups
• 01:03:31 Setpoint – Private Capital for Asset-Backed Innovators
• 01:10:06 Advice to New Entrepreneurs

Brad Weimert: In 2016, you sold Yodle for $342 million. Two years later, Opcity sold for $210 million, something like that. Today, you’re working on your third home run, Setpoint, which sounds like it’s teed up to be bigger and grander.

 

Ben Rubenstein: That’s the plan. Yeah.

 

Brad Weimert: That is the plan.

 

Ben Rubenstein: That’s the plan, yes. Yeah.

 

Brad Weimert: Thank you for joining me on Beyond a Million. Ben Rubenstein, let me start with you raised something like $45 million for Yodle, shy of $30 million for Opcity, and almost $80 million for Setpoint so far. I’ve never raised any money for anything. Am I missing the boat entirely?

 

Ben Rubenstein: It depends on the type of business, right? I think taking venture capitals like taking steroids, you better hit 70 home runs. So, for a lot of businesses, taking venture capital could kill them because the pressure to scale is real, but for a lot of businesses, that injection of cash is what you need to get moving and going, and also to scale the speed that you want. So, it depends on if you’re creating a lifestyle business. It depends on the speed in which you want to grow. It depends on the category you’re in. Some categories require massive CapEx investment. I think with AI, the necessities to raise as much for a lot of businesses is reducing. But there’s still plenty of business where you need to raise money for.

 

Brad Weimert: Yet in the AI space right now, a tremendous number of companies are raising a crazy amount of money,

 

Ben Rubenstein: Sorry. In AI companies need to raise a lot of money, especially if you think of all the infrastructure you need to buy and all the servers and all the energy and upfront costs. But by using AI, your business might not need to hire as many people, and thus you wouldn’t need as much upfront cash to get going.

 

Brad Weimert: Who are the entrepreneurs that you think absolutely should not be taking on money?

 

Ben Rubenstein: Taking on venture money?

 

Brad Weimert: Yeah.

 

Ben Rubenstein: So, I think if you’re in a more traditional business, which might have lower margins, grows at a slower pace, and just doesn’t need as much upfront capital. I think that’s one. I think entrepreneur who is happy to, with steady cash flow and growth, and is trying to build this maybe just for themselves and their family. I think the people who should take capital are in a world where you need a ton of money upfront, and the total addressable market is so great, and you don’t have time to wait. The market opportunity is now, and you have to capitalize on it, or someone who has more cash will. Maybe a winner take most market or a lot of other businesses are, there can be plenty of them out there, and you don’t necessarily need to race.

 

Brad Weimert: Yeah. So, the great entrepreneur who has a great idea is either going to execute on it with other people’s money, or they’re going to find themselves three years from now saying, “Oh, I had that idea.”

 

Ben Rubenstein: Ideas are meaningless, man. Completely meaningless, dude. I’ve meet some young entrepreneurs and like, “Oh, you need to sign this NDA.” I was like, “If your idea is so replicable and so many other people can do it, that you’re so nervous about telling anybody about this thing, then you don’t have anything,” right? I mean, my first company was Yodle. It was online marketing for small businesses. Maybe at the time it was kind of newer because we started in 2004-2005. But pretty quickly, lots of people were creating websites, driving traffic to those websites, doing basic online marketing for small businesses. We won because of our operational excellence and our ability to scale our sales machine and our support machine.

 

Same thing with Opcity. Passing referrals to real estate agents was nothing new, or even what we’re doing at Setpoint, right? Infrastructure in asset-backed lending and kind of taking these Excel-based world into software. None of it’s that novel. Nothing I would ever be afraid to tell somebody. It’s about execution. So, if an entrepreneur has an idea, there’s lots of reasons why it has to happen now. You need to raise money. There’s lots of reasons why you have to raise money to build the infrastructure to make it happen. I don’t know how we got on that tangent, but ideas, they’re kind of meaningless.

 

Brad Weimert: Well, I think about the NDA side of things all the time because almost every day, like probably once a week, I have some NDA that crosses my desk, and I’m like, “Why are we doing this? What are we protecting against?” And I have to read them because I have to make sure there’s not some weird thing in it that says some other weird thing, right, that blocks me from, whatever, working with somebody, et cetera, et cetera. Non-solicitation, et cetera.

 

Ben Rubenstein: Yeah. I can understand why taking someone’s sensitive data and not using it for some purpose is important for an NDA. There’s lots of use cases for NDA. The, “I’m an entrepreneur, and I have an idea,” is the world’s going to see your idea.

 

Brad Weimert: Yeah, no, totally. Totally. But I guess, like where it brings me is you said, “Look, execution is everything.” I agree with you. I also think that it is rational in some capacity to be afraid that you can’t execute, right? Because of the online marketing companies in the world, most of them don’t sell for $342 million, and most of them still, not most of them, some of them still build decent businesses with some novel idea at a slower pace and still produces millions of dollars for the entrepreneur. And if they expose it to the market, somebody comes and becomes a dominant player and runs with it.

 

Ben Rubenstein: But if that entrepreneur is making millions of dollars on their business, they have all this great cash flow, or someone else builds a business but takes a ton of dilution and brings in a bunch of other investors and has a huge prep stack and then sells that business, they might end up in the exact same place, or the first entrepreneur might make money. So, just because they have a large exit doesn’t mean you have made, you know, printed lots of money.

 

Brad Weimert: I completely agree.

 

Ben Rubenstein: Just because we have a smaller business doesn’t mean you aren’t printing money every single year. So, one is not necessarily better than another.

 

Brad Weimert: No, I totally agree. I was thinking from that NDA perspective or exposing your ideas because what you don’t want, as the entrepreneur who has the 100% owned, all profit goes to your business, is to have a billion-dollar company come in and compete with you that has all the resources in the world that’s like, “That’s a great idea, let’s run with it.”

 

Ben Rubenstein: That’s true. But it’s really hard to hide ideas for long periods of time, especially of anything that’s of any scale. And there’s probably something special that you know or have that makes it unique that you’re able to pull that off where other people can’t.

 

Brad Weimert: Yeah, I love that. Well, I think that’s an important lesson for lots of people at lots of stages. I mean, I find myself right now in that position with AI because the barrier to execution has dropped so greatly in the last year that when I have a good idea, I’m like, “Sh*t, I don’t really want to share it with competitors or other people because maybe they have a little bit more bandwidth than me right now, and maybe they’ll take it to market two weeks earlier.”

 

Ben Rubenstein: That’s true. But even if someone got to market two weeks earlier than you…

 

Brad Weimert: Does it matter?

 

Ben Rubenstein: Would they win?

 

Brad Weimert: Yeah.

 

Ben Rubenstein: Like, what businesses that two weeks matters that much? That a month matters that much?

 

Brad Weimert: Not that many.

 

Ben Rubenstein: Yeah. Give me an example.

 

Brad Weimert: Yeah. I mean, maybe the LLMs, right?

 

Ben Rubenstein: What do you mean? Like, ChatGPT was like the dominant player. Claude is smoking everybody right now. And that’ll change soon, too.

 

Brad Weimert: Well, and I guess what I mean is that when one of them launches an upgrade to their model, the other one launches it in 15 minutes. Like, they’re waiting to avoid exactly what I’m saying, which is they don’t want to give up the two-week runway to adjust the course.

 

Ben Rubenstein: Yeah. My guess, most businesses are not that way.

 

Brad Weimert: No, no, I totally agree. I only gave you an example because it’s the only one I could think of. You made me.

 

Ben Rubenstein: I think building a lasting business and the operational rigor to be able to scale is so much harder than, one, having an idea, and two, even if you’re in first place, at first doesn’t mean you stay in first place. Rarely does the one who starts out of the gate hot is the one who’s the dominant player.

 

Brad Weimert: Yeah. Well, I want to talk about the fun stuff, which is you’ve had two home runs, like by all accounts, great companies. Both of them had a huge sales engine involved. I have heard you say that resumes are useless. I know that you’ve hired hundreds or thousands of salespeople. If resumes are useless, how do you identify a good salesperson?

 

Ben Rubenstein: Well, so I wouldn’t say resumes are useless in all use cases, right? I think there’s a lot of roles where your past experience is a great indicator of your future performance. And I think even in some different types of sales roles, showing that you can demonstrate it, maybe a very long sales cycle was helpful. And even at Yodle in the early days, when we didn’t have anything, and we needed people with a really high sales IQ, having done it before was valuable. What happened at Yodle was we built this very scalable machine, right? We had over a thousand people. We made over 80 million cold calls a year.

 

We called every small business in the United States four times. And so, we’d built this really repeatable training process, very repeatable sales scripting machine, and we found that we got enamored with some resumes, but the best performing people, it was more about their innate personalities, especially in this transactional sale. And I think we boiled it down to really three things that if you had these three things, you were going to be great at our company. And if you didn’t have these three things, it didn’t matter what you did in the past. It probably wasn’t going to work out. That first thing was coachability, right? We had coachability isn’t just saying you want to learn something. It’s quickly taking feedback and adapting.

 

And there are some people who are just better at repeating what they saw than others. We had so many hours, so much data on what worked and what didn’t. And I used to tell people like cash flow over ego. You’d sometimes see these big egos come in, and they weren’t able to adapt to the process that we knew worked. So, somebody who was humble enough to take the coaching and smart and able enough to quickly repeat what we taught him. So, coachability is one. The second was work ethic. At least in this job, it was like the more you could do it, the better you got. Right? Like, let’s say you’re more talented at, I don’t know, basketball than I am, but you shot 10 shots, and I shot 200 shots a day. I’m going to get better just from repeating the same repetitive motion over and over and over again. And so, if you could get to that 10,000 hours faster than somebody else who became an expert.

 

So, coachability, work ethic, and probably the most important thing we saw in sales, especially transactional sales, was attitude. I mean, this was a job where you were getting so much rejection. Like, back to the sports analogy, if you’re a great hitter in baseball, you hit 300, right? You failed 7 out of 10 times. At our company, the best people were making say $100 a day in one sale. So, they were failing 99% of the time. So, most people can’t handle failure 99% of the time. It just starts to break them. But if you have that attitude of, “Man, I’ve made 99 calls, the odds are the next one’s going to be a sale.” That positive mental attitude, that strength to fight through getting knocked down over and over, those are the people who do really well. So, coachability, work, ethic, and attitude.

 

Brad Weimert: Okay. Well, since we’re on sales, it’s very uncommon to have a salesperson that has that intrinsically. It happens, very uncommon.

 

Ben Rubenstein: Really?

 

Brad Weimert: Sure.

 

Ben Rubenstein: I disagree. Well, I guess we weren’t targeting salespeople,

 

Brad Weimert: The 99 to one? Well, let me ask you the next question, and we can take it from there.

 

Ben Rubenstein: Yeah.

 

Brad Weimert: Where do management fit into this picture?

 

Ben Rubenstein: So, every single manager, at least at Yodle, was a sales rep themselves.

 

Brad Weimert: Okay. And then brought up to the manager.

 

Ben Rubenstein: Every single senior manager was a manager. Every director was a senior manager. So, we had…

 

Brad Weimert: So, you had layers of management?

 

Ben Rubenstein: Yeah. I mean, we had over a thousand people.

 

Brad Weimert: Right.

 

Ben Rubenstein: We had this big world. So, in your early days of starting a company, you do have to bring some outside talent who has some of this experience. We had the luxury of having done this a while that we were home-growing a lot of our talent, and we built this great leadership development and training program. Just because you’re the best salesperson doesn’t mean you’re going to be the best manager.

 

Brad Weimert: At all.

 

Ben Rubenstein: And just because you’re not the top salesperson doesn’t mean you couldn’t be a good manager. So, we were looking for other characteristics of people who wanted to be leaders in this space. Another thing that we did at Yodle was really separate out the job functions. So, a lot of companies, they’ll have their manager be the HR person. They’ll be, I don’t know, they should be doing more coaching, but they’re doing all this other administrative work. We ripped out all the administrative work from the manager function. So, they were just a coach and in the trenches helping the team get better.

 

But to your earlier point of we found our best people we hired were bartenders, former waiters, people who worked on commission, and we were able to show them that they can make a lot more money if they followed the process.

 

Brad Weimert: Yeah. And I guess where I was going with that statement was that in lots of sales organizations, I see the manager as a critical function to get production from the reps.

 

Ben Rubenstein: Oh, 1,000%.

 

Brad Weimert: Yeah. And that’s what I meant by the intrinsic drive of like that you can fail 99% of the time to keep a sales engine running when there’s a really low close rate, management is a big part of keeping.

 

Ben Rubenstein: Yeah. Well, so people join companies and leave managers, right? So, your manager can definitely make your life difficult and make it so you don’t want to stay, but I think you need a larger culture than just the manager to help people overcome that much rejection. So, we had a role at Yodle. Her title was the Queen of Culture, and she was a full-time person. Her only job was to make it super fun to work there. And we had just contests and competitions, right?

 

Brad Weimert: How big were you when you hired the Queen of Culture?

 

Ben Rubenstein: There was a few hundred. I bet even in Opcity, we choose one of the first people we hired.

 

Brad Weimert: Well, but Opcity was round 2. You had already seen the efficacy of this person.

 

Ben Rubenstein: Yeah. I saw it. Yeah. Well, look, in the early days, we didn’t have any money, so it was hard to invest in that. And the culture had to be from us as leaders putting in those extra hours to say, “We’re going to make this really fun.” But culture’s not something that happens accidentally. You have to be really conscious of it. You have to invest in it, whether it’s through people, through like who are spending time on it, whether it’s through money. I remember a cash machine like this giant. Depending on how many sales you made, you would go in, and then money would be swirling around, and you could grab the dollar bills.

 

We had five life-size gongs built into the wall, so it was like part of the actual infrastructure, and you just hear gongs going off all day. Just the gamification that we had built to make this a fun place to work was important. We went top places to work pretty much every year in Austin. And so, we talked to other companies. What are you doing that is making people love being here? And just thinking about culture and talking about culture, making a very fun environment, made it so the rough parts of the job didn’t seem so bad.

 

Brad Weimert: So, I think about certainly, and I don’t know if it’s right to delineate bootstrap versus venture with this example or not, but I think about lots of bootstrap entrepreneurs that look at sort of values and culture as this placation that has been forced upon entrepreneurship because it’s the right thing to do. And then I know the people that actually leverage it appropriately. How big do you think you need to be to actually set aside all your time or a bunch of time and say, “I need to drive values directly and culture directly to create this company the right way”?

 

Ben Rubenstein: Well, I think from day one, when you have one employee, you should write down your company values. Like, when you hire people, you should say, “This is who we are.” I think it’s the right thing to do when you hire people to set the expectations of what’s going to happen. Because we had so many people, so many things going on, that’s why we hired a full-time person doing that. If you don’t have a giant team, you don’t need to spend an incredible amount of time on culture. I think culture is setting the expectations upfront, hiring people based on those expectations, and then constantly walking the walk and reminding people, “This is what our culture is, and this is what matters to us.”

 

Culture doesn’t have to be like, “I have a ping pong table.” Right? Like, I think that’s fake culture, right? I think that’s like you’re pretending to try. If you have a ping pong table but no one uses it, well, then that’s probably bad for your culture that like we have this thing, no one uses it. If you have a ping pong table and all people do is play ping pong all day, that’s probably pretty bad for the culture because nobody’s working. So, you have to step back and like, what does it even mean to have? What is your culture? How do you define the culture? And then how do you hold everyone accountable to living up to that culture?

 

Brad Weimert: So, values probably feed into culture.

 

Ben Rubenstein: Definitely. Yeah.

 

Brad Weimert: And who gets to decide what the values and culture are? Do you pick them? Because you just said from day one, “I want to establish values.” Do those evolve over time? Do you get buy-in from the team to do this? Or executive and management to do this?

 

Ben Rubenstein: Yeah. So, what we did in our very early days, when it was just a few of us, we said, “Who do we want to be?” Because even when it’s a very small team and it’s your co-founders, a few other people, you don’t need to talk about culture that much. You just kind of know, right? Like, you’re spending so much time together. You understand each other. Where it gets scary is you start hiring people you don’t know, hiring people from the outside, right? So, I’ll give you an example. Opcity, a lot of people came from Yodle, and we did it together. We didn’t have to verbalize what we wanted this culture to be because we just knew. We knew what a great culture was.

 

But then you start hiring people, and you say, “Well, how do I make sure these people fit in this culture? How do I make sure that we’re bringing in people and our culture doesn’t get destroyed?” And so, that’s when you need to create the values. That’s when you need to talk about the culture. That’s when you need to highlight, we would always, like right now, we call the Setpoint Spotlight, and we do it in other companies as well. Who are the people who are living the values, and how did they live the values, I think, is very important. And I think those values can evolve and change through time. A good example, I’ll go back to Yodle, was one of our company values to start was customers rule.

 

Like, we love our customers, they rule, they’re great, right? And we want to do what they want. And we learned through time, actually, that that led us to some bad directions, right? Because a customer had asked for something, and then our team would say, “Well, customers rule, so we should do it.” And we later changed that to, “No, we need to own our customer success. We are responsible for our customers being successful.” And if they give us an idea that’s bad and they shouldn’t do, we’re not going to do it because it’s not going to lead to their success. And we’re going to push back on them. We’re going to challenge them and say, “Look, we’re the experts. We own your success. You’re going to be successful because of us. So, this is why you shouldn’t do X, Y, Z.”

 

So, that’s an example of it came from the right place. Like, make sure we keep these customers, make sure they’re happy, and, well, they’re going to be happy if we bring them success, not if we do what they ask us to do.

 

Brad Weimert: Yeah. I love that. I think it’s also a very good sales tool. When somebody gives you an objection that is, I think, a very good way to handle some objections is steamrolling them and just say, “I understand why you would think that, but actually…” and it establishes authority very quickly and gives you a platform to move on.

 

Ben Rubenstein: Yeah. We’re talking about the book, The Challenger Sale, which is one of my favorite sales books. It’s about people don’t buy from the people they like the most, or the people that was their friend, or the people who might have been the expert, right? They buy from people who challenge their beliefs, their status quo, and, “Oh, I thought the world was this way, but that expert came and talked to me, and now I see things completely differently.” So, the best salespeople aren’t afraid to challenge.

 

Brad Weimert: Also, if somebody’s challenging you all the time, you just want them to go away. Of course, it’s different than a single sale.

 

Ben Rubenstein: In essence, is everything I’m doing wrong? Probably not. So, you’ve got to think of what are the things I’m actually doing wrong that you want to challenge that you can help me with, too.

 

Brad Weimert: Yeah. Well, let’s talk about sales for a minute because I want to talk about kind of some of the differences between the ventures that you’ve been a part of and some of the nuances of raising, exiting, running. But from a sales perspective, I think about the structure of the sales process quite often. And you mentioned Challenger as a model to run sales, and I know that you’ve used it. You also mentioned that you were heavily scripted. So, let me with Yodle, let’s start with, as a general rule, there are kind of two trains of thought, two camps in terms of how to sell. And one is scripted, the other is talk tracks. Which one and why?

 

Ben Rubenstein: So, I think it depends on where you are in the evolution of your business. Like, how mature, how many calls have you made, how confident are you in the scripting, how much buy-in there is for your scripting, and the type of sell you’re doing, is it more transactional or a longer enterprise consultative sales? So, obviously, at scale, it’s much easier to grow your team and your presence if something is scripted, right? You don’t have to teach everybody everything. You say, “These are the words you need to use. Make them your own. Go sell this way.” But if you’re giving people a script that doesn’t work, you’re doing yourself a lot of harm. So, I’ll tell you kind of the evolution of how we got scripting to work, but that you can’t do it too soon, right?

 

So, in the very early days, we couldn’t be scripted because we didn’t even know what to say. When I very first started, “This is Yodle, we were selling online marketing, competition with the Yellow Pages.” So, I thought, “Oh, let’s bring some Yellow Pages salespeople. They know how to talk to these customers.” Terrible, right? They did not know what to do. Then I brought in, people say, “Oh, I’m able to sell this. Let me bring some young college grads in.” Still, they thought they were too good for the job. They didn’t actually know what they’re doing either. So, we had to cycle through lots and lots of people to figure out what should we actually be saying? What works? What doesn’t?

 

You need to get enough data points of enough sales have happened, enough sales haven’t happened, that you at least have some raw material of, “These people are good. They make sales. We could potentially start scripting.” So, then we said, “Okay, we have enough calls. We can start building a script.” So, we brought all our top salespeople together, kind of understood what they sold, put our flavor on top of it, and, in essence, we built this script that we rolled out to everybody, and it bombed. It was terrible. Why? Because it was this Frankenstein script. Right? It was no one had ever sold that way with those words. It was a compromise of a bunch of different people’s styles to try to make the ultimate script, and nobody had any buy-in, and it didn’t work.

 

It wasn’t until we took the top salesperson who sold the same way over and over and took literally word-for-word everything he said, and that’s how we created the script. And there was tons of buy-in because, one, everyone want to know what the top guy was saying, and two, sales were made on these exact words. But it took us a long time and so many hours to get there. And still, I would only do that in a short sales cycle transactional sale. That couldn’t work with what I’m doing at Setpoint today, when I’m signed to banks, private credit funds with this very complex, long enterprise sales with multiple parties. So, it is hard because a lot of my network of people that I’ve built who are phenomenal salespeople in the transactional world, aren’t necessarily good in the enterprise world, and vice versa.

 

Brad Weimert: Yeah. What types of sales do you think it’s appropriate for a talk track versus a script, if at all?

 

Ben Rubenstein: I think a sale that is a faster one-call close, right? So, you’re only dealing with one decision maker or one party. And it’s probably a lower dollar amount, so the stakes aren’t as high, and it’s a faster, quick sale. I think if it’s a very repeatable, I’m doing the same thing over and over to the very similar type of person, I think that can be scripted. If there’s a lot of different decision makers here, every sale is fundamentally very different from each other, and the stakes are really high, and the dollar amount’s really high, you often have to be more of a challenger or consultative.

 

Brad Weimert: All right. So, let’s back out to a couple of the home runs here. So, Yodle, I heard that you pitched this on literally the back of a napkin.

 

Ben Rubenstein: Well, Yodle, we started, a good friend of mine, actually, from preschool, his father had a number of car dealerships in Connecticut. His dad was in, two-time, three-time, four, put him in charge of the internet stuff, right? Like, go build us a website and drive traffic to it. At this time, as well, we were in college, and you would see, at our dorm, they would deliver a pallet of Yellow Pages, right? Because it was a high-rise. And that giant pallet of Yellow Pages would go straight to the dumpster. It wouldn’t even make it inside. So, the Yellow Pages market was a $20 billion market where people, you know, small businesses were spending $10,000 a month to have a full spread in there, and no one was even seeing it.

 

So, we’re in this unique moment in time where consumers were going to the search engines, which were fairly new at the time, Google, and Yahoo, MSN, and small businesses were still advertising in the print. And so, there was this disconnect. And so, our belief was the future was going to be people going online to find local businesses, which is crazy to say now, right? But we had to convince people that consumers went to the World Wide Web to find a local business. We had to convince people that was happening. So, I was just going door to door in Philadelphia. I made my first sale the day after graduation. I lived on an air mattress. I moved every two months for two years because we put every dollar into the business, and nobody would give us any money at that time.

 

And we were able to fund it because our customers, in essence, prepaid us, and our cost of search engines, we could put on a credit card that was due 30 days later. And that really got the flywheel moving. And after two years of living on an air mattress, going door to door, small business in Philadelphia, and then later New York, we raised our first round of financing from Bessemer. So, we raised $3.5 million to really invest in the sales team, invest in the product, and scale even further. So, when you’re a young entrepreneur, you don’t know what you don’t know, right?

 

Fortunately, I was open to taking a lot of risks because I didn’t have that much to lose. I wasn’t married then. I didn’t have kids then. I didn’t have any other responsibilities then. I didn’t live a lifestyle where I needed much money then. So, that’s the best time to start a business.

 

Brad Weimert: And you can’t believe everything that you read on the internet, but I read a story about you pitching that on the back of a napkin.

 

Ben Rubenstein: Oh, yes. Well, that was when we were raising, so the first two years. So, then we were raising our first round. This is before we went to Bessemer. I remember I was with a VC in Boston, a restaurant, and we’re writing down like, “Okay, so we’re at 1 million here. We’re going to be 5 million here, 10 million here, talking through the whole thing.” And I ordered a drink, and I got carded. I remember that time, the restaurant at the VC, and I thought it was funny. Here I’m asking for millions of dollars, and I can’t even get a drink.

 

Brad Weimert: That’s awesome. Why did you decide that you needed money at that point in time?

 

Ben Rubenstein: Because we could only grow as fast as the people we had. Like, I could only go work so many, like, so I would go to trade shows and meet people at conferences on the weekends and then run the business during the week. I’d go door-to-door to small businesses, and there was only so much of a team, but we’d have to sell enough to then maybe hire one more person. And so, it was just the growth was linear but slow. And I think we were ambitious. We wanted to go bigger. We wanted to go faster. We saw other companies raising money, and so we said, “Okay, we will do something that there’s serious risk, reward too,” right?

 

Because the reward is we got more money, we can go faster, but the risk is this thing can implode, right? And we could lose control of the business. And if we’re not big, it’s nothing. So, I think we made the conscious decision at that time. We’re going for big, and we’re willing to risk some of the health of the company to do it.

 

Brad Weimert: How many times did you raise for that?

 

Ben Rubenstein: We raised four rounds at Yodle. Yeah. I mean, business required a lot of capital as well, but one of the biggest challenges in that business was retention. Had we been able to retain, we retained many customers, but if we had retained even more, it would’ve recurring cash flow in the business, and thus you’d need to raise less.

 

Brad Weimert: Yeah. When I look at entrepreneurs that move from one thing to the next, the most successful ones that I know tend to be in a very, not necessarily linear path, but kind of they tend to be in the same space in some capacity. You went from Yodle replacing the Yellow Pages.

 

Ben Rubenstein: Yep.

 

Brad Weimert: Those are big phone books, to Opcity, which is selling to real estate brokerages. Why the jump? And do you feel like you carried over a lot from one or the other? It seems like it’s a more dangerous transition when you go into a new space entirely.

 

Ben Rubenstein: And the Setpoint’s even different than that, too. Yeah.

 

Brad Weimert: It’s so different.

 

Ben Rubenstein: So, I’d say a few reasons. One is I love learning. I don’t want to do the same thing over and over, and I like a challenge to learn new things. But two, I learned from the previous company, and I really wrote down what are the things I dislike about this company and I never want to do, and what are the things I really liked about it and how do I replicate that. So, Yodle, as I said, was only marketing for lots of small businesses. The nice thing was a giant TAM, giant total addressable market of lots of small businesses. The downside is when you’re not vertically focused, it’s hard to build products that go deep enough to retain customers and get them to love you, honestly.

 

So, there’s a difference between a plumber and a doctor, an HVAC contractor and a real estate agent, right? There are some fundamental they want new business, they need a website, they need traffic, they need reputation management, but there are other pieces that are very different than them. So, I said I want this next business to be a very big vertical, but to be vertically focused because we can go deep into it. I remember at Yodle, we bought a company called Lighthouse that did appointment reminders for dentists. So, you ever get the text message, “Your dental appointment’s coming up tomorrow. Press C to confirm”? That was us. And it wrote right back to their practice management system. That had tremendous retention and worked really, really within dental.

 

And we tried to scale it to other types of businesses as well. But we saw how valuable that deep vertical knowledge was. So, I wanted to go deep in one vertical. Real estate is a huge market that really needs to be disrupted by technology. And we saw a big opportunity there. The second thing I learned was passing leads to people. It’s kind of what we were talking about earlier. Just because somebody can pay for something doesn’t mean you should give it to them. And in the early days of Yodle, we had no money. We’d take money from anybody. And then we learned a lot of these businesses just because they’ll sign up doesn’t mean they’ll stay.

 

And we’d pass a lead to somebody. Let’s say you’re a plumber and we got you too many leads this month, “Oh, I quit. I can’t handle it. I’m overwhelmed.” We didn’t get you enough leads this month, “I’m going to come kill you. Like, you took my money, and you didn’t do it.” I got you just enough leads this month, “Oh, thanks a lot. I’m going on vacation with my wife. I’ll see you later.” And so, in some ways, no matter what you did, you were going to fail. So, my attitude was, I don’t want to sell leads to people anymore, but I do know ways to generate business for people. What if we could take on the calls with the customer?

 

What if we did everything and brought them to that final mile, and they didn’t have to pay us for this? We could charge on a referral. You can take a lot more of the I could sell a lead for $10. I could take 35% of an agent’s commission if I’m serving them a good referral on a plotter, and they’re not risking upfront cash. So, that was the ideas for Opcity of take what we know of scaling a large team and call center, go on a vertical we know very well that has a very big TAM, but be vertically specific, and delight your customer instead of selling them something they can’t handle. Give them something and control the entire consumer and customer experience and only get paid on the backend.

 

Brad Weimert: You said the real estate market is ripe for disruption. I couldn’t agree more. Are realtors the most overpaid people on the planet?

 

Ben Rubenstein: Depends on which realtor. Some yes and some no.

 

Brad Weimert: I agree with you. In aggregate,

 

Ben Rubenstein: The job of real estate agent can be very hard. So, first of all, they’re taking on a lot of risk.

 

Brad Weimert: Their time.

 

Ben Rubenstein: Right. But real estate agents get paid on commission.

 

Brad Weimert: Yes, an egregious percentage.

 

Ben Rubenstein: True. But maybe if you paid people a flat fee or they were a W2 employee, it wouldn’t. So, if you’re taking on some risk, there should be outsized upside, outsized downside. In the United States, we’re one of the only country in the world that pays buyer’s agents. So, I think, do real estate agents, are they appropriately paid? You can separate out, actually, the listing agent and the buyer’s agent, and kind of what each of them does and who it is that they’re working with. So, I’ll use buyer’s agents just as example. So, buyer’s agents used to do three things, find me a house, I don’t know what’s out there; tour that house, help me go see those houses; and then negotiate on my behalf, help me get the best deal on this house.

 

The find me a house, most of that’s gone away with like Realtor.com where I was, Zillow, most consumers can find houses. The only exception to that is the high-end luxury market, where who your agent is, and who they know of off-market stuff, can be really, really helpful. So, I would say in the luxury world of finding inventory, it is probably worth it to pay people. For the majority of people, probably not.

 

Brad Weimert: Well, also, just to be clear, I didn’t say worth it or not worth it. I said overpaid or not overpaid. And so, I would say that that’s an example of a contrived marketplace that should go away. I don’t think that there should be a luxury network that is sneaky and withheld by real estate agents that are controlling that market. I think the buyer and seller should be able to transact. Now, the only thing of those three that you listed that I would argue is of value…

 

Ben Rubenstein: Is the negotiation.

 

Brad Weimert: Is the negotiation.

 

Ben Rubenstein: Yeah. Well, so I go back to, are they overpaid? The average real estate agent makes about $30,000 a year.

 

Brad Weimert: That’s because they don’t sell sh*t.

 

Ben Rubenstein: Exactly. There are about 2 million people in the United States with a real estate license. Half of them did less than one transaction last year, also known as zero transactions. So, the challenge with real estate is the National Association of Realtors would love a real estate agent in every house, right? Because they get paid on the dues. What’s the opposite thing about your barber? A barber, it’s hard to be a barber. You need to be licensed. And the name of the game in that world is keep people out. That’s how you keep prices high. You go to a restaurant, it’s crazy.

 

The largest purchase people make in their lives, their largest financial decision is typically their house. And they’re trusting it to someone who, on average, hasn’t even done it in the last year. That’s like if I went to a restaurant and the chef was like, “Oh, I haven’t cooked in the last year.” And the stakes are very, very low for that. So, I do think it’s fundamentally something broken that it’s very easy to become a real estate agent, which leads to this long tail of people kind of making the profession not look great. But to that final point of the negotiate on my behalf, as I said, most people, this is the largest financial decision in their lives, and they’re very scared.

Ben Rubenstein: And so…

 

Brad Weimert: As they probably should be.

 

Ben Rubenstein: You don’t go to the cheapest doctor. You’re not going to go to the cheapest financial planner. If you have a court case and it’s life or death, you’re not going to the cheapest lawyer. And so, good real estate agents who can negotiate on your behalf, especially if you’re not a very competent negotiator yourself, can charge higher rates because the stakes are very high. There could be large fluctuations in what you pay for your house or if you get it at all. So, I do think if you’re a phenomenal negotiator or real estate agent, maybe you should make more, but I think most people aren’t. A lot of people don’t need that either. There’s not so much variation in what you can pay in real estate as there should be.

 

Brad Weimert: Well, but look, the incentive’s the same for a buyer and a seller’s agent, which is 3% historically. So, look, what I don’t…

 

Ben Rubenstein: No, that’s broken a lot recently.

 

Brad Weimert: Yeah.

 

Ben Rubenstein: A lot of that has to do with the market itself though, right? So, I’ll give you an example. During COVID, you’re a listing agent, you get 3% for the sale of the house. That’s crazy, right? Because you could sell a house in a day during COVID. And so, the real estate agents are making tremendous amounts of money. Today, as in Austin, it’s not easy to sell a house. And there’s a lot of work to do to market it, a lot of work to get people to it, and you don’t know when it’s going to sell. And there’s a lot of them never do sell. And so, 3% might not seem that crazy for a listing agent at that point.

 

In most of the world, so it used to be before Zillow and Realtor where I was, if you were a listing agent, you paid to promote a property, right? You paid to put it in the newspaper. You paid decent flyers about that property. And that’s how it works in most of the rest of the world where there are no buyer’s agents and you pay to put it on the listing. What happened was these portals came around and they said they’ll plug in the MLS and they’ll promote your property for free on Realtor. And everyone got really lazy and didn’t want to spend any money on promoting their properties.

 

And then the portals monetize them by sell them to buyer’s agents. So, your property is being sold to other buyer’s agents who then meet those consumers and may take them to some other property as well. So, in essence, I think sometimes real estate agent is making a lot for not doing much, but I tell you, I know a lot of real estate agents who make very little oftentimes for doing a lot of work.

 

Brad Weimert: Yeah. Look, I have a chip on my shoulder about it, because I’ve done enough real estate transactions where the realtor has not provided value. And I also have worked with David Shapiro in town, who’s…

 

Ben Rubenstein: Yeah, he’s a good friend of mine.

 

Brad Weimert: Phenomenal real estate agent. Super knowledgeable, knows the market really well. Incredibly analytical. He is an example of what you pay for.

 

Ben Rubenstein: Yeah, yeah. And he puts a lot of effort into that. Fun fact, he was the mascot of the UConn Huskies.

 

Brad Weimert: I didn’t know that.

 

Ben Rubenstein: Yeah, yeah. We’re in the…

 

Brad Weimert: That’s fantastic. Well, the closing point though that you illustrated is that buyer and seller and what I was trying to get to was they’re both paid on the same incentive structure and they both have two different incentives. So, one is to get a low price, one is to get a high, theoretically, if they are representing the buyer and seller. But if you are trying to get somebody to buy a house and you’re paid on a percentage, you actually want the price to be high.

 

Ben Rubenstein: Yeah, exactly.

 

Brad Weimert: For the transaction to close.

 

Ben Rubenstein: You can make more of it.

 

Brad Weimert: So, then it’s misaligned with the incentive of the person you’re representing.

 

Ben Rubenstein: To sell a house, you don’t make that that much. You just want them to get the volume sold.

 

Brad Weimert: That’s true.

 

Ben Rubenstein: So, you’re incentivized. So, it’s actually, first of all, they’re supposed to be your fiduciary, right? But the reality is the person, if they’re representing to buy it, they want you to buy as much as possible to get that seller to say yes. And if you want to sell it, you are like, just I’ll sell to sort as low as possible just to get the transaction volume because what is a few thousand dollars here or there when I’m making 3% of it, so…

 

Brad Weimert: Wrong incentive structure.

 

Ben Rubenstein: Right. Look, that’s something when we go back to sales, I am maniacally obsessed with thinking about what are all the parties incentives in the whole chain. I actually just built a house here in Austin and…

 

Brad Weimert: That’s what I heard. You’re across the lake from me.

 

Ben Rubenstein: Yeah, yeah, yeah, yeah. I’m right, yeah, right in Westlake. And I really thought through the incentive structure of all the owner of the construction company, the employees of the construction company, the subs, and how they do it. It was a very complicated thing we put together. Not to align all the incentives. Yeah.

 

Brad Weimert: I love it. Well, I want to talk more about that later. Probably off air, but yeah, Shapiro was at your house for New Year’s. And so, he told me, he was like, “Oh, dude, you’re going to have a hard time convincing him to not talk about his speakeasy in his house.”

 

Ben Rubenstein: Yes. I’ll tell you about all the incentives in that.

 

Brad Weimert: I love it. So, back to culture, give me like, I mean, you had a thousand salespeople at Yodle. Opcity was a very different makeup. How many salespeople at Opcity?

 

Ben Rubenstein: So, the actual traditional sales force we’re selling to bringing in brokers and lenders is probably a few dozen. The majority of the people at Opcity were, you can say in some ways part of the product, but there was a sales element to it. A consumer would go on a real estate portal. They’d inquire about a property. We would call them on average in four seconds.

 

Brad Weimert: Jesus.

 

Ben Rubenstein: Yeah. Talk to them about their desires or whatever house they’re looking to buy.

 

Brad Weimert: And this is 2018.

 

Ben Rubenstein: We started in 2016.

 

Brad Weimert: ‘16 to ‘18, right?

 

Ben Rubenstein: Yeah. But then again, I sold in ‘18, but we kept going because I was the chief revenue officer of Realtor.

 

Brad Weimert: Oh, right, right, right.

 

Ben Rubenstein: So, I was still running a lot of that world till…

 

Brad Weimert: I just wanted to put an anchor in because the next question is how do you get the call out in four seconds?

 

Ben Rubenstein: Software and technology.

 

Brad Weimert: Amazing. Well, so one of the things that people don’t– I’m so glad that you just brought that up because anybody that’s listening that has anybody calling for them in any competitive space at all, you have somebody out there that’s doing it in four seconds. And so, if you think that picking up the phone in 10 minutes is adequate…

 

Ben Rubenstein: You’re going to lose.

 

Brad Weimert: You’re just going to lose.

 

Ben Rubenstein: Well, especially in this age of AI. AI, I mean all that call center stuff we built was all pre-AI. I think I’d do things very differently if I was going to build it today. But yeah, so I mean, we saw, had all this data on the consumer and all this data on the agent, and it was in essence like a Match.com, two parties. But in Match.com, you’re bringing the best agent together and consumer together. It doesn’t matter about speed. But speed to lead was very important as well.

 

So, it was like Match.com plus Uber, where Uber, speed is very important, right? I call in Uber. It sends a push notification to all the drivers. We did the same thing. So, we had 150,000 real estate agents who had our app. They get push notification. They’d say accept. We tell the consumer we have the perfect agent for you. Call the agent, bridge the parties, and introduce the two parties and help them get the deal closed.

 

Brad Weimert: Oh, wow. Okay, so that’s super creative. So, you internally picked up in four seconds. Simultaneously, a push notification went out to 150,000 realtors. And I guess it’s regionally specific.

 

Ben Rubenstein: So, we definitely send– so realtors would get very annoyed if you sent them a lot of push notifications that they lost all the time.

 

Brad Weimert: That makes sense.

 

Ben Rubenstein: And so, one of the big secret sauces we had was our matching algorithm that said, okay, this is who the consumer is, this is the information we have. Let’s match all the agents of their– who would be the best fit for this based on their interaction history. Like, when we’ve passed some other referrals, do they actually move them along to close? That’s important for us to make sure the deal closes.

 

Other features like, I don’t know, this person speaks Spanish. That’s a good Yodle example. We’d get you a lead. Consumer only speaks Spanish. They’d say, “This lead sucks.” No, it doesn’t suck. You just don’t speak Spanish, right? So, matching the right agent to the right consumer. And then we’d send the push notification, not a one blast, but one by one by one.

 

And the time delay between the pushes, dependent on the relative difference between the different agents. So, let’s say agent number one and two are pretty similar. We think they’re both close, but number three and four are much might not. We’d wait a lot longer before sending the push notification to three and four.

 

Let’s say one through four are similar. We’d speed up that push notification a little bit. But the goal was not to blast everyone at the same time, right? The goal was to get the right, right? Because we wanted the right person who is available right now.

 

Brad Weimert: Deliver the outcome.

 

Ben Rubenstein: Yeah.

 

Brad Weimert: Yeah. So, your team contacts them immediately. While you’re finding the right person, your team is talking to them so that they can then bridge the call to the realtor that can actually do it.

 

Ben Rubenstein: Yeah, I mean, the software, so they inquire on the property. So, we already have some information about them. We then call them up and we’re asking additional information. In the background, our software is ordering everybody. And then when it’s time to speak to somebody, there’s a push notification.

 

Brad Weimert: Yeah, I love it.

 

Ben Rubenstein: That the, what we call CSR sends out.

 

Brad Weimert: So, I wanted to focus on it because this is sort of like the mirror in the elevator situation. The hypothesis or this is a, maybe it’s lower and it’s not actually true. But people say that the reason mirrors got put in elevators in the first place and still are, is to distract people with the journey in the elevator.

 

Ben Rubenstein: Huh. I thought it was to make it feel less claustrophobic.

 

Brad Weimert: I would think that too, yeah. But I’ve heard this. So, anyway, but the principle is still relevant, which is, if something’s going to take time, you have an option of reducing the time or filling the space so it feels like less time.

 

Ben Rubenstein: So, that’s exactly something we do at Opcity. So, there was two sets of questions we would ask the consumer. The first set was stuff that was important for the matching. And the second piece was information that was important for the agent later, but it didn’t matter for the matching. So, we were filling the time with actually valuable information. So, the first question would be like, where are you looking to buy a house? Even though we potentially had some of that information. What is your price point, right? Those things that we would then push out to the agent.

 

While we’re waiting for the agent to respond, other information of, what’s important to you? Looking for schools. Do you have kids? Like, all the critical information that the agent wants, but isn’t as important for the matching piece?

 

Brad Weimert: Yeah. I think it’s such a good takeaway for everybody because you think about any area in your business where you’re trying to optimize, there might be another path to do that, right? Or where you can’t actually improve the metric any further, but you can improve the experience.

 

Ben Rubenstein: Yeah. Look, there are some, I think one of my biggest learners from Yodle is churn was our number one metric. We were always fighting, but there’s some things that were just so fundamentally broken in or just you could get so many smart people to incrementally make changes. How do you make step function changes? And then say, buy a company like I was saying at Lighthouse, which just fundamentally changed the churn profile. And then you put your same salespeople on that and all of a sudden, it’s a much better business. So, I think sometimes we’re too obsessed with incrementally trying to change the things that are broken in our business instead of just saying that’s going to be broken. I don’t want, I should actually find a way to make a step function, really big change in my business.

 

Brad Weimert: I love that. I think some of that, and I guess I’d like your opinion on this, the way that I think about that is in order to focus on the step function changes, sometimes you have to allow things to hit the ground and be messy.

 

Ben Rubenstein: Oh, you have to be okay with fires burning, right? Like, if your job is just to put out fires, you’re a firefighter and you’re not driving your business, you have to be okay of what fires are good to burn, right? I think a lot of people, and I find myself in the same trap, you have important and urgent. And I say, what did I do in my today that was actually important that drove the business forward? Or what did I do today that was really urgent? It was a fire I put out, but it didn’t actually drive the business.

 

And it takes a certain someone that’s okay with letting the urgent things burn to say, I’m just going to focus on the important things. Even if I’m not going to feel it right now, this is the important thing to get my business. I think any good entrepreneur lives by the 80/20 rule, right? I need to put in 20% of effort to get 80% of the value, but I can’t be a perfectionist because that final mile takes so much effort. If I just focus on that, I won’t be able to drive my objectives of what I’m trying to do.

 

Brad Weimert: I like to refer to myself as a recovering perfectionist.

 

Ben Rubenstein: Yeah, it’s very difficult to be an entrepreneur and perfectionist.

 

Brad Weimert: Yeah, man. There are a lot of very, very, very brilliant people that do not accomplish anything in their life because they are focused on all the details to no end, right, or to their own detriment.

 

Ben Rubenstein: That’s why it’s important to have a co-founder that kind of balances you out there.

 

Brad Weimert: Well, what I wanted to ask you about the difference in size between Yodle and Opcity. So, you went from thousands of salespeople or a thousand plus to a core team of a couple dozen or whatever. How did that impact culture? And the reason the tie here is that, and you can answer it in the same breath, how you thought about culture differently, but how do you allow fires to keep burning and maintain culture when you’ve got staff that’s like, hey, fix the f*cking fire, dude?

 

Ben Rubenstein: Yeah, yeah. Well, so just to clarify, so Yodle, although had a thousand salespeople, Opcity still had over 500 people who had these CSRs, people talking to consumers. So, it was a similar type of person, similar culture that we’re trying to build. Now, Setpoint’s very different because we only have about 10 salespeople.

 

Brad Weimert: Yeah. We’ll get there.

 

Ben Rubenstein: So, it’s very, very different.

 

Brad Weimert: Setpoint’s a totally different thing all together.

 

Ben Rubenstein: Very different world there.

 

Brad Weimert: Well, then tell me the culture answer relative to fires, right? How do you maintain a good culture where you, as the owner, look at it and say, hey, I’m just going to leave these things burning, and you’ve got people on the team that are like, hey, how about, this sucks, fix this?

 

Ben Rubenstein: I think a lot of it is expectation setting, right, of saying, we don’t have unlimited resources to the team. Here are the things that we are doing right now, and here are the things that we’re intentionally not doing. I think where people get frustrated and they’re like, these things are broken and no one even knows or even cares. I think if you say these things are broken and we’re intentionally not fixing them right now to solve these other problems which you see happening, people will seem to appreciate that.

 

I mean, if I learned anything about being married, I would say expectation setting is everything. Like if I could be gone for two weeks, then I set the right expectation, everybody’s happy in my house. If I’m like five minutes late, I set the wrong expectation, there could be some problems in my house. And so, I’d say it’s very similar with the company as well. It’s all about expectation setting, right? Are these things burning and broken because we’re not paying attention? Or are they burning and broken and that was an intention? That’s a feature, not a bug. And we are okay with that burning because we’re not investing in that area anymore, but we’re investing somewhere else.

 

Brad Weimert: Yeah, I love that. I love that. So, to close the loop on sales and I want to talk about Setpoint, you’ve had this tremendous background in hiring a sh*tload of people in fast cycle sales. That’s an intense situation. And the first one was high churn with the customers, right? And then you worked on fixing that because you didn’t like that about the first business. What I get from that as an entrepreneur, I mean, there are lots of lessons that I think have come through it, but when I think about hiring people in general, and you can apply this to sales or others, how do you know what are the indicators within, let’s say the first two weeks that you don’t have a good salesperson or you don’t have a good employee? And how do you handle it?

 

Ben Rubenstein: Well, I’ll start with the employee, one, I want the employees to be teaching me things. I want them to be pushing me, right? Like…

 

Brad Weimert: All of them?

 

Ben Rubenstein: Well, ones that I’m interacting with and people who maybe report to someone who reports to me to be pushing them as well. So, some of the best employees you know out of the gate. Their just output is intense and they’re learning so fast and they’re asking such good questions and they’re just so engaged, right? I’ve made a lot of hires where I thought were going to be good and turned out not to be. I’ve never had somebody who I quickly, pretty early on was like, oh, I don’t know, and they turned out to be good, right? It doesn’t go the other way.

 

So, you know early on for their early actions. I would say on the sales side, somebody who is just eager to learn, right? Who’s the best salesperson? I want to learn from them. How many calls do you have recorded? Can I listen to them all? Can I see the transcripts? Let me get into gong. Like let me, they’re hungry for information. They’re not waiting for it to be given to them. So, I would say early on for an employee or salesforce, proactivity, right? And you know, you know right away if they’re just like, help me, give, if they’re expecting you to spoonfeed it to them, they’re going to always expect to be spoon fed.

 

Brad Weimert: So, I think what I heard is that kind of functionally listen to your gut on the front end because in this whole…

 

Ben Rubenstein: I don’t know if that’s your gut. You can really look at data of how much activity did someone do to try to get good.

 

Brad Weimert: So, if you have an indicator early on that it’s not the right person, do you terminate right then? Or is it a one-strike, two-strike situation?

 

Ben Rubenstein: I mean, ultimately, if you know you’re going to part with somebody, the right thing to do, the humane thing to do is talk to them about it sooner rather than later, right? Like, having people on a pip and making them suffer for another month and then maybe they’re looking for a job that’s bad for the culture, that’s bad for you. Like, if you know someone’s not going to be around, the right thing for them, for their career, for you is just a move sooner. That doesn’t mean you can’t give them severance or help them on their next, wherever they’re going next. But keeping someone around that both parties know is not going to be around for the long haul is not good.

 

Brad Weimert: Okay, before we talk directly Setpoint here, what was the path to exit for each of these companies? Because the first one you had, what, like an 11-year run with Yodle?

 

Ben Rubenstein: Yeah.

 

Brad Weimert: And then Setpoint was like two or three?

 

Ben Rubenstein: A little less than three, yeah.

 

Brad Weimert: Obviously, you came to Opcity with lots of experience, right? Fundamentally, how did you look at the ramp up and exit of Opcity versus Yodle? And did you do anything dramatically differently?

 

Ben Rubenstein: Well, Yodle, we had opportunities to exit along the way. And I think we started drinking a lot of our own Kool-Aid at times and maybe held on for a little longer. Yodle, we filed our S-1. We’re actually going to go public.

 

Brad Weimert: Oh, wow.

 

Ben Rubenstein: And then decided to hold off on that because of some customer churn. That probably may have been the wrong call. And we ultimately sold to someone else in the space who was a strategic web.com and believed that they– because their huge customer base could upsell our product to them. Opcity was a little different. We sold to Realtor.com who was our largest partner. So, we were the largest customer of Realtor.com. And we, in essence, took their excess inventory, right, their leads that they couldn’t sell to other parties and took this trash and made it treasure, right? We got referrals from it. And they saw, whoa, look what they’re doing with our inventory. We can do that with even more of our inventory and make even more from the asset that we have, which is the portal.

 

So, look, if you build a business to sell, you never will sell it, right? It has to be a healthy, standalone business. The best people to sell your business to are partners, people who, by them owning your product, not only will they get the revenue you have and the EBITDA you have, they will make their own business better. And because of that, they’re willing to pay more for it.

 

And I think my attitude on Opcity was it’s better to leave a party too early than too late. Like, you’re never going to be able to time it perfectly, with the market, with where you are in your own sale, the cycle in your business, with the culture. So, that was one where we saw an opportunity and we said it might be a little early, but we like this team and now it’s the right– as I said, better to leave too early than too late. I think some of it is reading your team as well. Like, at Yodle, the team had been around, core team, 10, 11 years. People start to get tired after that time. And so, reading within your world are people in it for 10 more years, 20 more years.

 

Brad Weimert: I’ve talked to quite a few entrepreneurs that talk about that sort of stumble into a sale and when they get to the table, they realize, sh*t, I’m not positioned to sell right now. And you just said if you’re building it to sell, you’re doing it wrong. You should be building it to have a great business.

 

Ben Rubenstein: Yes. It gives yourself more optionality because you could always walk away.

 

Brad Weimert: What was the ramp to sell for Opcity? Did it surprise you that Realtor.com offered $210 million? Or was there a point where you were like, I should start tooling this to sell to Realtor.com?

 

Ben Rubenstein: Well, we knew their business very well because we’re their largest customer and we had a relationship with the CEO and CFO when you’re the largest customer. So, I’d say step one, build the relationship with those strategics who potentially could buy you to understand what they want, what’s important to them. I think somebody like Realtor.com was looking for this new objection of energy at that moment in time. But you can’t build your business hope. Like, you have to have, in essence, heat on the deal, right? The best way to sell a company is if multiple people want it.

 

What is something worth? Well, something’s worth what someone’s willing to pay. And the best way you get someone to pay more is you have multiple parties who you’ve built relationships with for a long time, who are coming at it at the same time, who both want to buy you. So, I don’t know if that’s helpful advice or look at their business, but you don’t sell your business of, oh, I just woke up and sold my business one day. It’s a long journey of cultivating relationships, having multiple parties interested at the same time, being prepared with all your metrics in your data room. So, if somebody wants to make a move, you’re prepared to show them the right thing.

 

Brad Weimert: I think I really like talking about it because as we started the conversation, we talked about when to take venture capital and when not to, and the pressure that comes with the strings that come attached with that money.

 

Ben Rubenstein: Yeah. They need liquidity eventually too, right? So, that might not be the ideal time for you.

 

Brad Weimert: And in some capacity, you’re looking at the exit the entire time because the point of the VC is to get their money back.

 

Ben Rubenstein: Well, I’ll give you the opposite that they thought we exited too soon actually, right? Because they need to keep that money working. That’s not greedy. It’s their model, right? So, their model is you raise money from LPs. You collect management fees over a certain number of years, and then you return that principle with additional return on top and then take a carry off of that.

 

If you’re waiting too long, then their LPs are getting antsy and want their principal back. If you’re going too short, well, that money wasn’t put to work long enough. For us, we had two $10 million exit. They probably came in at like a hundred some million dollars valuation. You’d say, whoa, two extra turn in a year or two, that’s great. That doesn’t like returning the fund for them as well.

 

In the VC land, 9 out of 10 things fail, right? So, they only make money if there’s one or two deals that return the entire fund. And so, they want gigantic exits and they’re willing to pump in more money to put their money to work, which they need to, and also to result in those big, big wins. So, if you’re going to take money, really make sure you’re very aligned with your investors.

 

Also, there’s VC investment, there’s family offices who have different mandates. There’s PE. So, money has different mandates and all money’s not the same. So, know where’s your money coming from. And the people who are giving your money, where do they get their money from and what are those people’s incentives?

 

Brad Weimert: So, the most important thing for taking on money is being clear on your alignment with them.

 

Ben Rubenstein: Not just them, but I would start the entire chain, right? What is the mandate of this fund? How many more years do they have on the life of that fund? What is their incentives? And then where do they get their money from? Are they trying to raise the next fund? What’s the dynamic between the partners? There’s just so many dynamics in incentives. People are people when they respond to incentives. Who are all the people in the mix and what are all the different incentives that could both help you or hurt you?

 

Brad Weimert: Yeah, God, I love that. Yeah, I love that. You said earlier, with Yodle, and I don’t know if we were recording at this point or not, but you said you would give good leads to a plumber and they just wouldn’t respond in time. So, they would burn the leads, right? And you, for years, would be frustrated and say, what the f*ck?

 

Ben Rubenstein: How do I make this plumber pick up the phone? Yeah. We’d record all the calls. We’d show them, we got you these opportunities. You got to act upon them. Do the same thing at Realtor. We’d pass you these leads and look, they closed. I have the data, but not with you because you didn’t follow up on them.

 

Brad Weimert: And then you had the realization, oh, wait, it’s my fault for giving them the lead in the first place.

 

Ben Rubenstein: Right. When they say, okay, I’m still quitting, just because you showed me I run a bad business. I’m still quitting. Like, what do you want me to do? So, it’s…

 

Brad Weimert: Well, I think that…

 

Ben Rubenstein: Customer selection is very important.

 

Brad Weimert: I love that. Yeah, I think that looking at incentives and ownership throughout the entire chain to figure out your next action is incredibly prudent and also difficult.

 

Ben Rubenstein: Look, the hardest thing to do in any startup is stay focused, right? And focus is not what you do, it’s what you don’t do. And saying no to money seems insane, but it’s the 80/20 rule, 20% of your customers are causing you 80% of your headaches. Twenty percent of your customers are leading to all this churn. Customer problems are not even across all of your customers.

 

And so, we learned, for instance, in Yodle, we loved working with lawyers and dentists or plumbers or like high-ticket items, right? The lower-ticket items, painters and others, they churned at a very low. So, you try to start to see patterns of, what is the type of customer who’s going to be good for you and you’re going to do exactly what they want and they’ll keep paying? And what are the customer that they seem like they want to give you money, but they’re not going to be around very long? They’re going to cause you a headache.

 

Brad Weimert: Yeah. I think my experience is that it’s hard to do that do when you’re early in your journey and you’re just trying to pay for things, right? It’s hard to say no to customers.

 

Ben Rubenstein: So, that’s one reason to raise money, because you can be more selective because you say, I’m going to make a little less now, but I’m going to do the right thing for the long haul. Or if you’re trying to bootstrap, yeah, it’s hard, but that’s why some people win and some people don’t, because if you bring in a bunch of customers and it looks like a lot of revenue, but it costs you so much to do it or it drains all your resources, you can’t grow, then you’re stuck, right? So, how do you make sure you don’t get stuck and you can keep growing?

 

Brad Weimert: Yeah. I sort of look at it, my path has been be heavy on protecting the downside early on. And as I had more liquidity, both sort of on the balance sheet and on the P&L, meaning that I put some money away and I had cash flow, then I could take bigger bets and I could be more selective about not taking things on just because they paid.

 

Ben Rubenstein: Yeah, I think I was doing the opposite. I was making bets with other people’s money. But you had a lot more stability and I had a much riskier path doing that.

 

Brad Weimert: Right. 100%.

 

Ben Rubenstein: You’re going for the home run, like a single is not okay.

 

Brad Weimert: Yeah, yeah. I find it endlessly fascinating to hear about this. So, before we close out, I got to hear about, God, I have like 1,800 other questions.

 

Ben Rubenstein: We can do a part two if you want.

 

Brad Weimert: I love it. I love it. Yeah, well, with a different backdrop next time. So, Setpoint, you went from your through-line with the other companies, sales team, relatively short sales cycle. Then functionally, you’re going into like a banking platform that’s enterprise, that’s super complex. What are you doing? And just explain what Setpoint is first because, well, actually, let me try to explain it, because I’ve heard you pitch it from stage. I’ve heard your team pitch it from stage and I’ve also, now, I don’t think I’ve actually pushed the button, but I’m going to invest in the fund. But Setpoint is a software platform that helps asset-backed credit manage their transactions.

 

Ben Rubenstein: Somewhat. I think we do that in other things as well.

 

Brad Weimert: Okay.

 

Ben Rubenstein: So, a good way to think about Setpoint is there’s two pieces. There’s the private credit fund, which is our capital, other LPs capital that we lend to lenders. We don’t lend to individual consumers or in every business, we’re lend to lenders who have different models and it’s very short hold. The ultimate collateral is US residential real estate, but very short hold of any asset that we have.

 

The other is the software piece of it. The software, we are infrastructure in asset-backed lending for both the lenders and the private credit funds and banks where they get that capital from. So, if you are a lender to somebody and you– most, that’s probably not your money, right? You have some other facility that you’re getting it from. That facility, there’s a lot of tracking, right? So, you have a lot of data that’s coming in that you need to organize. You have complex concentration limit covenants. You have a borrowing base that’s constantly changing. You want to request funding, return, capital. All that’s done very, very manually today. And so, our software automates a lot of that process and makes it a lot safer. So, your question was like, how did I get into this world and why did I do that from it.

 

Brad Weimert: Yeah, I want to know that, but to clarify, the software, and this is the way that I’ve at least internalized it, the software has many, many, many, many, many people using it and assets that go through it and you’re using it as an opportunity to find good assets that you can use for the fund.

 

Ben Rubenstein: Sometimes. So, I’ll use an example of, we don’t lend anything in auto, but a client of ours is Carvana, right? So, you go buy a car from Carvana. Carvana gives you an auto loan for that. Carvana’s not a bank. Carvana doesn’t have this money. So, where’s their money coming from to give you this loan? They either work with private credit funds or big banks like Goldman and Citi and others.

 

Carvana, the asset that they are allowed to borrow that money to then provide to you is the ultimate car, right, is there’s a VIN number associated with that car. So, their bank that they get that from has a lot of reporting requirements for Carvana. We are taking those reporting requirements out of Excel and email and automating all of those things. Carvana will then use those pool of loans and securitize those pool of loans and there’ll be all these other investors who are part of that. We are helping to diligence those documents and do everything to automate that. So, again, that’s all about out of Excel.

 

We also work with large banks and private credit funds like Silicon Valley Bank who will lend money to a bunch of different borrowers, right? All those different borrowers need to report to the bank. All that reporting is coming in all types of different formats, which is very challenging for a bank to see what’s happening in a macro level and manage all of these facilities and make sure everybody, there’s no fraud committed and everyone’s doing the right thing and they actually have that ultimate collateral, those assets. We automate all of that process as well.

 

Brad Weimert: Got it.

 

Ben Rubenstein: So, it’s a very different type of business than my previous business.

 

Brad Weimert: Incredibly.

 

Ben Rubenstein: What I love about it though is it’s very high retention because we’re operationally embedded in these businesses, very high margin because this is a real software business. We don’t need as many humans to do this. What’s hard about it is it’s a long sales cycle, getting into banks and private credit funds, and these lenders, it’s just a long journey.

 

Now, how did I get into all this? So, Yodle, I sold Opcity, I sold at Realtor.com. I have a bunch of cash from the sale of the other two. And I meet all these really interesting entrepreneurs and founders of all these different companies who want to talk to Realtor.com. So, I start to do some angel investing. I joined the board of these companies, and then my co-founder and I, we start personally providing debt to these guys. They have these interesting models where they’re helping people buy before they sell or doing a bunch of other things in real estate.

 

And we see really high return for the level of risks and we’re getting really high return on our capital. But because we’re operational in these businesses, we see something that other people who are lenders don’t see, which is human error, mistakes between the seat and the keyboard. These guys are buying houses, selling houses in these new models daily. And although their facilities say, look ironclad, the reality of what’s happening is there’s a lot of mistakes in Excel, mistakes in email, they thumbed up. They’d fund a property with a thumbs up in Slack. So, there must be some software that attracts all of this. And there wasn’t.

 

And so, we said, okay, we can build that software and said, it’s not just helpful in real estate, it’s helpful in all of asset-backed lending. And that’s when we raised our first round from Andreessen Horowitz. We raised our second round from Citibank and Wells Fargo, who were important strategics, and just have been off to the races on that. So, some lessons on that are raising money. We’re talking about from before. Sometimes you do it for the money, sometimes you do it because you want people to care that you win, right? So, for somebody like Citibank and Wells Fargo who are really hard to get into, having them invest in us has been very helpful.

 

Brad Weimert: That makes total sense. Do you look at all of the partners for Setpoint is strategic. Like, I always think…

 

Ben Rubenstein: All of our customers?

 

Brad Weimert: Well, I think, so there’s the customers investing, but then I think about like in Andreesen Horowitz and I think about sort of what potential lever that could be, and for people that don’t know, like very famous venture capital.

 

Ben Rubenstein: Yeah. Yeah, a16z, I mean, the reason you go with Andreessen Horowitz is their network. They have 450 people who work there who aren’t even investors to help their portfolio companies.

 

Brad Weimert: Wow.

 

Ben Rubenstein: So, yeah, they have a massive network of support for a startup, but also, the number one thing we need is new revenue, new business, and they make phenomenal introductions.

 

Brad Weimert: Amazing. Okay, well, we’ve lost our time to ask you another thousand questions. So, I have a bunch of them, but Ben, a lot of that stuff, I think, is super applicable to lots of different stages in business, which I love and I love hearing about. What advice do you have for brand-new entrepreneurs starting out today?

 

Ben Rubenstein: Well, I’m excited for them, right? That’s some of the most fun times of the business, the zero to one. My advice would be take risks. You want to treat your kind of career like your 401(k) or any investment portfolio, take a lot of risks early in your life and because you can make up for it later and learn quickly and figure out what doesn’t work. I think one huge lesson for me, we talked about in the beginning, ideas, the idea doesn’t matter. I think the customer is what matters.

 

So, Yodle, my first company, we started within a car dealership and we built for that car dealership knowing we were going to scale it out. What we ultimately built in the beginning is something we pivoted and changed a lot. We had a first customer. Same thing with Opcity. A friend of mine had started residential real estate brokerage here in Austin, in Dallas. They were 2% of the market, but they bought 40% of the online leads. So, we had a first embedded customer. Our office was in their office. And we could learn and grow with them.

 

Setpoint, we started our first customer as well because we were lending money to them. And we’re our own private credit fund. So, we’re a customer there as well where we build the Formula One car in essence for us, and then bring it out to everybody else. So, I think it’s more important to have a first customer than an idea, right? Have somebody who this party will give you money to solve a problem for them. And it’s not consulting. It’s something that you can build and then bring out to other parties.

 

And then, finally, we talked about it earlier, but the hardest thing for startups to do is stay focused and focus on what you do is what you don’t do. Do one thing really well. Focus on it, and just let other fires burn, and focus on what’s important, not urgent.

 

Brad Weimert: Love it, man. That’s awesome. Well, until next time.

 

Ben Rubenstein: Yeah, thanks for having me. This is a lot of fun.

 

Brad Weimert: Absolutely.