This week’s conversation is with Alex Fiance and Ankur Jain, the co-founder’s and co-CEO’s of Kairos.

Kairos is focused on solutions that can help solve the affordability crisis for the everyday consumer.

Alex has been leading Kairos since 2013, transforming the company from its roots as a student-run organization into its current focus on building a family of brands designed to make life more affordable.

Ankur launched Kairos in 2008 as a talent incubator and has been recognized for a variety of achievements including the Young Global Leader by the World Economic Forum in 2017.

You may remember Alex from the mini-series we did a few years ago called “The Process” where we learned about young entrepreneurs tackling some of the world’s biggest problems.

Considering how many people are struggling to get by right now, I thought this would be a timely moment to have Alex back on, along with Ankur.

I wanted them to catch us up to speed… What progress they have made? And how have they adjusted where they were wrong?

Alex was early on the journey when we first chatted and now he’s earning his stripes…

One of the companies we discussed during “The Process” called Rhino just announced they raised $95 million, valuing the company at just under $500 million…. a huge milestone for Kairos.

In this conversation, we discuss the affordability crisis, the factors that can make or break a business, and what role luck plays in all of this.

“There is no clear path from A to Z in the startup world. If there was everyone would just do it.”

In This Episode:

What did Mike and Alex discuss during “The Process” mini-series in 2018?

When we talked it was 2018, where we were in our journey was we had felt like the entire ecosystem of Silicon Valley was starting to fund products in search of problems and solve problems that didn’t matter. So we felt like there was an opportunity to go build companies that were from day one addressing real unmet needs of the everyday person. And part of it was feeling like the market had gotten totally disconnected from this everyday consumer. I think part of it was a return to the roots of entrepreneurship, which is supposed to be about solving real problems. And we said, “Let’s identify a set of problems that we think are being neglected that are also in big markets and try to prove that you don’t have to make a sacrifice between making money and solving real problems.”

How has their thesis changed between 2018 and the present day?

We laid out a thesis that really tried to identify a series of problems, anything from the student debt epidemic, to lack of access to childcare, to the ballooning cost of rent, to the cost of senior care. And when we started canvasing the market and trying to say, “Hey, where do we believe we can build companies in these spaces?” I think candidly, we’ve had some really good wins. We’ve also had some realizations that unfortunately, maybe some of these markets don’t have billion dollar startup solutions. And I think part of what we had to learn is that a startup can’t solve everything and some things are government problems and some things maybe aren’t ready yet for technology-driven solutions.

What was their initial dream for Kairos?

That the biggest problems facing society are probably the biggest opportunities from a business perspective not side issues that are hindering opportunities, right? And if we could figure out how to solve these problems, they’re actually $10 billion problems. And so that was the birth of Kairos at the time saying, “Hey, forget about putting people into banking, forget about people going into consulting necessarily as a starting point, if you’re young and you don’t have that opportunity cost right off the bat, what better way to put your skills to work than this?”

The hypocrisy with many who say they want to change the world for the better

There’s nothing worse than the hypocrisy of saying you’re changing the world and it’s bad enough when you do nothing. It’s even worse when you’re doing something that’s actively, probably bad for the world and still patting yourself on the back. San Francisco is one of the wealthiest per capita cities and yet has such an income inequality that as you walk out on the main street, there was a half naked homeless man on a Bird scooter in the middle of market, humping the scooter. And mind you, this was a week after Bird had raised $200 million. So we’re talking about pouring hundreds of millions of dollars into scooters and blockchain-based stickers and right outside the door of the people that are writing those checks, you have some of the worst healthcare crises, the worst financial services crises, the worst housing crises, and there’s just nobody doing anything about it.

The affordability crisis

When you look at the Millennial generation, there’s about $1.3 trillion of student debt, over half of millennials have no savings. If you were to lose your job, which by the way we saw too much of during this last year, if you were to lose your job, you don’t have any cash lying around to cover next month’s rent. You’re living every month paying your rent bills, you’re paying your food bill and transfer bills, you’ve got enough money to go out for a drink. On the side, if you lose that income stream, you have no backup. And then the other way you’ll see a similar stat is 40% of consumers can’t afford a $600 emergency expense. 60% can’t afford $1,000 emergency expense. An emergency expense could be anything from a speeding ticket to a big medical bill, but some moment that forces you to go to a bank account that you don’t have. And all of a sudden you’re taking payday loans and you go into this debt cycle.

The rat race

You can be doing well and you can be making the cash flow needed to cover your expenses as you were making it, but you never make enough to be able to put it away and having a meaningful dent as a backup. And that rat race, I think, is what causes so much anxiety and stress for everybody. And what you see throughout the seasons last year with COVID, it’s just been so damn stressful because if something trips, then what do you do. The average person is hanging by a thread, which is why this has been especially scary.

How does Kairos determine if an issue is worth building a company around?

Is this a real problem that people are dealing with. Is it a big enough problem that’s affecting both the number of people and the scale? There’s a lot of problems that affect a handful of people that a lot of problems that affect a lot of people in a little way, right? So is the magnitude big and the reach big, and then from there, the question frankly is, are people spending money on solving this problem? Because if they are, that’s a business opportunity. If people are spending money on rent and not getting value back and it’s putting them in a hard position, that is a private market failure.

The housing crisis – why their company Rhino has taken off

When we were looking at housing, everyone talks about rent. They forget to talk about how expensive it is to move into an apartment. Just moving in, you got to pay first month’s rent, last month’s rent, maybe security deposit, moving costs. We just talked about 50% of millennials not having any free cash savings and you’re talking about putting up thousands of dollars just to move in, right? That doesn’t make sense. So when we asked that simple question, we discovered that there’s $45 billion of cash locked up in rental security deposits, right? That’s money that’s taken out of people’s pockets in an average of $1,400 per household, right? Again, 50% of millennials have no savings and they’ve either had to borrow money or take whatever income they’d scrap together and lock away $1,400 on average in their security deposit. It sits there, the landlord can’t use it, you can’t use it and it can’t generate interest by law. What a stupid concept, right? And yet for decades, we’ve just done this and not thought about it because 50 years ago, rent was 150, 200 bucks and you put up a one month deposit it didn’t really matter. But now rent has skyrocketed taking up 40 or 50% of your annual income. One month deposit suddenly are pretty painful to deal with.

How does Rhino work?

We didn’t reinvent the wheel. We said, “What happens when you rent anything else? When you rent a car, you don’t give Hertz $10,000 in cash in case you get into an accident, right? You pay them five bucks per day in that case to have renter’s insurance, right? We said, “Why don’t we do the same thing for security deposits?” When you rent and sign a lease for an apartment, instead of paying $1,000 dollars of cash, why not just pay $5 a month for insurance that protects the landlord in the case of damages or something, right? And that was the concept. And we launched it and it was a pain and hard to launch, but once it got off the ground, suddenly it became those obvious no-brainer, right? It’s like, “Let’s now scale to over a million apartments in the country.

What’s the relationship between Kairos and Rhino?

Kairos operates as a portfolio of brands that we start to solve these problems, right? With these companies, what we always do, we start with the problem first. So in this case with the security deposits. We actually wrote a piece about security deposits, right? And we said, “Is anybody already working on something in this space or not? If they are, come partner with us to co-found this business and let’s launch it together. If no one is working on it, or willing to starting just with us or find someone to come help, start it with us.” Right? And that was with Rhino. I’m the co-founder of Rhino with Paraag, who’s our CEO. We started this thing, launched it off the ground as a Kairos company.  It’s one of our five Kairos’ brands today and then we build out a team around it to execute and we fund it for as long as we can. And we’ll bring in outside partners if we need to finance the business as it grows.

What determines whether a company can successfully make it?

Getting something to have product-market fit is the hardest thing anyone can do. It requires a lot of timing and luck and the right product and the right strategy all to come together. that the world has become so saturated with ideas and so saturated with products and so saturated with startups that it doesn’t even matter anymore if you have a cool solution to something. If people can’t understand it quickly and you don’t have a distribution channel to reach people. And so what we did with Rhino, for example, is one, it was so simple. Pay $1,000 cash deposit or a $5 a month insurance policy instead, right? So that if you heard it once, you can understand it without having to be distracted with 100 things competing for your attention. But even then, we said, “What is the distribution channel?” And it was, there are 43 million apartments across the country today that requires security deposits, let’s get those landlords to partner with us and offer it to you as the alternative. Now I don’t need to spend time competing with the bajillion Facebook ads that you receive every day to pay attention to this. And I think that also gives you as a business owner, a way to consistently scale, because as you probably have seen so many times, and we’ve seen even with our own failures, it’s like something can launch, it can look really good, you can get the press article and feel great about yourself. And then you quickly past that early adopter phase and you just end up in this black abyss, right? And if you have a good distribution strategy from day one, you can roll it out and continue that growth path just by executing on that distribution.

What do they attribute their success to with Rhino?

There were 10,000 failures to get to the current strategy. As entrepreneurs, we just accept that as part of the process. For some people it hits really quickly and  it skews entrepreneur’s perception of how long something takes, but really this took a lot of social proof of landlords amongst other landlords. And for us, being able to really build conviction that this was a real problem, just helped us deal with all the bullshit and rejection along the way. We accepted that we’re going to be rejected a million times but the mathematical part was we need to talk to enough landlords to find those true believers and we had people like Barry Sternlicht from Starwood who saw it early and really helped create that social proof and boulder rolling downhill.

What percentage is luck?

In the case of Rhino, 50-50 is fair. We’ve been at it a while. If our success took two years, not years and years and years of foundation behind it, maybe 80-20 luck, right? But with entrepreneurship, there’s a misconception that there’s these overnight successes, because they exist and they get a lot of media attention, but it biases you. The average life-changing fund-returning exit event in the entrepreneurship space actually takes about eight years. It’s getting a little faster with the current market, but really eight years. It’s almost this thing entrepreneurs are blissfully ignorant about. If most people knew that the average thing will take eight years, they wouldn’t start the startup they did. It would be constructive for more people to understand that going in. A lot of what we talked about two years ago was why mission-driven founders are more likely to stick around. The fact that we’re not purely motivated by money and we’re motivated by this thesis and belief that you can solve problems and make money, has helped us stick around. A lot of people will give up, and then they’ll never get that moment because they gave up too early, right? If you’re not willing to keep iterating, willing to keep finding or take that last meeting, it could take 100 meetings or 1,000 meetings, but where it shows up maybe luck, but that willingness to keep fighting is probably not luck, which is why I think it’s 50-50, right?

What keeps Alex up at night?

Mine is a fear of missing something that I was supposed to have caught that will then let a lot of people down and result in layoffs or overspending and just failure. Failure from something that I didn’t know I needed to do. It’s not going to be something I forgot to do. It’s something I didn’t know I needed to do because we’re punching above our weight and growing into things that we haven’t done before. So all of a sudden I’ll lose sleep over what I don’t know.

What keeps Ankur up at night?

I think the hard part is when you’re a founder and you’re working on a startup and you’re running a business, it’s everybody working with you, what you say are the goals and objectives are just taken as truth, right? It’s like, we need to reach a million dollars to be successful this quarter, right? And everybody in the team knows that that’s what they’re marching towards and they have a clear sense of reality, right?  I think the scary part is when you go to bed that night, if you’re being honest with yourself, you completely made this. There is no actual answer here. You’re making up these set of reality rules that everybody in your organization has to play by. And they are assuming that it is a fixed truth for what that direction or that goal or that success state looks like and every day you just… For me it’s, I’m going to bed, is that actually the right success state? Am I actually marching everyone towards the right path? Because there is 100 variables going into this that I’ve just had to make an educated guess to the best of my knowledge and ability at that moment, right? And I got to be willing to change it. That keeps me up at night.

How do they deal with bureaucracy when striving for change?

It’s very hard to remove power and control. Any business owner, any entrepreneur, deals with so many different stakeholder – they all feel the need to have their power and their control. Whether it’s your investors, your board members, your partners that are paying you, your clients, your customers, the government, everybody wants their control over what you’re doing, right? One of the things we have to constantly ask ourselves is how in the world can we take what we want and do it in a way that makes it a win, win, win, win, win for all the stakeholders so that they can selfishly get on board, right? It’s not about asking them a favor. It’s not about us trying to force it down their throats. It’s about creating that room.

What issues do they foresee our society facing in the next 5-10 years?

When people talk about inequality, they talk about the richest and the poorest. There’s always been the Rockefellers and the homeless crisis. That’s been part of capitalism since the beginning. It’s when the middle and just normal people are suddenly so separate where you could have done everything right, done all the things gone to school, gotten a degree, gotten the job and yet you still can’t even afford the basic stuff. That divide is where unrest happens and riots happen, and from a business perspective, I think you’re going to start to see two very different worlds of products to these two different markets. And then you’ll have a separate set of products in the world. Think about what you saw with like Parler versus Facebook, where people started going into extreme ideologies. If business products and the way you shop and buy and the services you use start getting segmented, there’s a real risk there of unrest. So hopefully we can figure out a way to bring it together, to create financial products that can be beneficial to all. We hope that more awareness about the data and the extent of these problems will create more people working on it. More shots on goal of people who aren’t us is a fantastic outcome.


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Co-Founder at

Alex Fiance is co-founder of Kairos, a company building and funding solutions to today's big challenges. He is on a mission to focus the world's brightest young minds on innovating in areas where old industries and governments have failed.