ROOM8 CEO Jessica Chen on the Mission, Execution & Passion Behind the Co-Living Data & AI Platform
CEO, Co-founder, ROOM8
You could probably count on finding a roommate(s), a place to live, or the combination of the two to be one of the most stressful experiences of human existence.
If you watched “Friends” or “New Girl”, the process of finding roommates is glorified with the possibility of accidentally finding your forever best friends. If you’ve watched insert-your-favorite-crime-show-here or read a roommate horror stories thread on Reddit, you *also* know the possibilities of rooming with a borderline psychopath—the opposite of an ideal situation.
Enter ROOM8—a data-and-AI-driven platform with a proprietary roommate-matching algorithm that allows users to safely and securely browse potential roommate profiles and available properties. Users can vet roommates and browse options with confidence knowing their data is safe from being shared with strangers or sold to anyone looking to capitalize on your data.
Even amid the coronavirus pandemic, there are capabilities in place to vet, meet, tour and finalize a roommate and living space without having to physically meet in person—think virtual tours with landlords and secure video chatting without having to give up your private email address or phone number if you prefer not to.
This idea of a secure, yet meaningful and practical process to secure a roommate and/or a living space wasn’t an idea that popped out of thin air. Inspired, or debatably semi-traumatized, by their own discomfort with the moving process for renters, co-Founders Jessica Chen, Alexis Valerio and Dan Mathews recognize the problem Millennials and Gen Z face today—there’s no one-stop-shop to access housing, roommate and financial product availabilities to make this stressful process easier.
ROOM8 actively works to solve that problem to provide a moving process that includes fewer browser tabs, fewer logins on different platforms and less skepticism of trusting strangers with your personal information. Energy should instead be spent on the important stuff: a good location, a solid roommate relationship and financial protection.
Co-Founder & CEO Jessica Chen was born and raised in Taiwan where her initial career aspirations couldn’t be translated to a specific profession, but a more accurately described feeling of wanting to be engaged and challenged. That profession eventually became accounting and finance as she graduated from National Taiwan University and secured a public accounting and corporate development position at Deloitte. “I had a good career track to be a partner after my MBA. But then at one point, I just wanted more challenges.”
One of the challenges… Tackling business school at UC Berkeley while working part-time in enterprise risk management for a mortgage and insurance company. It was then when she experienced the gripes of moving from Taiwan to California. Craig’s List and Facebook were, and still are, the roommate market leaders—the former doesn’t feel very safe and the latter has a reputation of your data not being as secure as it could be… if only there was a better way… 😉
Fast forward a few years and Jessica was working at CSAA Insurance Group, an affiliated insurance company of AAA, in the innovation department. It was there where she met her now-co-Founders, Alexis Valerio and Dan Mathews. Together, they worked on a project to, “help AAA get younger customers.” AAA’s an insurance company not many millennials had at the time—it was mostly their parents’ insurance company. They were tasked to change that assumption.
With the rise of ride-sharing apps, Jessica said, not as many millennials owned cars. Therefore, instead of convincing millennials to buy car insurance, Jessica and her team thought, “everyone has to go through this renter journey, why don’t we start there?” And there, the first iteration of ROOM8 was born. But in order for the platform to make the impact intended, they needed to take a different approach. CSAA’s operating model was zip-code based meaning they could only house 20% of properties in the US, Jessica said, adding ROOM8, “really wanted to be able to go national without the geographic constraints.”
The ROOM8 dream team of now-co-Founders was so passionate about the platform that they decided to separate from the parent company to pursue its potent potential. Jessica credits the corporate-spin-off success to the strong relationships she had with her former co-workers and superiors. This mentality paired her B2B acumen carried her through those tough negotiations with C-level CSAA executives to continue with ROOM8 as an independent start-up.
It’s worth noting that CSAA believed in ROOM8 so much that they still have a small stake in the company, no longer as the majority shareholder. Sanjiv Parikh, Managing partner of Avanta Ventures described the transition as an “exciting milestone,” for the venture capital arm of CSAA Insurance Group. “It started as an innovative idea that progressed into a pilot, and then successfully grew into a business that was ready to independently enter the marketplace.”
THE REAL TALK
What gave Jessica the courage to give up a profession in the corporate world that traditionally seems comfortable and stable for the world of entrepreneurship? (Which is basically every *but* those aforementioned adjectives.) From her first career aspirations in Taiwan, to business school in California, to working her way up the corporate ladder, to investing in companies prior to ROOM8, the ideas of creation and problem-solving are what always motivated Jessica. “Knowing there’s such a big pain and then knowing we have the solution is what really propelled me forward.”
If you’re looking to start your own business, know it’s exciting to identify problems and strategize about how you and your company can solve them. However, Jessica cautions aspiring entrepreneurs to note it’s a whole different ball game to actually execute. A strong network to tap into and a team to initiate and user-feedback are key but Jessica admits “luck and timing” have a lot to do with it.
To the “strong network” point, Jessica shared that the fundraising, infrastructure and legal foundations for ROOM8 came together with introductions from her business contacts. She got her foot in the door, thanks to tapping into her network, but it was her business acumen and strong vision that ultimately led to successful fundraising. Jessica admits though, fundraising is not an easy feat to conquer, especially as a female. Jessica advises female entrepreneurs should invest in and seek out mentorship and memberships to organizations or accelerator programs, like ROOM8 investor’s Plug and Play’s. “You just need to write a really good business case, have an awesome idea and if you’re accepted into then you’re a part of the network you can leverage their resources.”
Her next piece of advice stems from the importance of “luck and timing,” and the presence of Covid-19 ups the ante. “Viability” in revenue AND profit margins are what Jessica says investors are looking for in a Coronavirus-shocked market. Investors, Jessica underscored, “used to only look at revenue growth and now are looking for more profitability a little bit earlier just because of the uncertainty of COVID and the economy.”
An aspect that Jessica thinks supersedes profitable and financial viability is having a similar world view with investors. “When you’re pitching or selling something to either a VC or corporate customer, that person needs to believe what you believe—it’s very difficult to convince somebody to believe something fundamentally different,” which Jessica noted was advice she herself had received from a mentor of hers.
ROOM8’s goal to be THE housing and co-living platform for young people to establish safe, plentiful relocation and roommate experiences, while encouraging financial literacy and freedom, wasn’t a hard sell for investors to get behind. “I think that was the best advice I got because if they don’t, then I can save my time and energy.”
Then, of course, come the mechanical pieces of fundraising, Jessica said, meaning pitch decks, public-speaking and listening skills. It is always best to do a mock pitch and have people critique you beforehand so you don’t go into the room unprepared, which brings us full circle to the importance of a strong network. “The power of the network is something I have such a deep appreciation for,” adding she feels this appreciation more intensely now as an entrepreneur than when she was in the corporate world. Entrepreneurship can be isolating if you don’t make an effort to surround yourself with people who have the same goals and can help you get to the next level.
The corporate-to-start-up pivot of ROOM8 focused largely on the matching algorithm where users answer a few yes-no questions, some establishing questions like schooling, occupation and a 40-character description of themselves, and they’re left with a home screen of options they can scroll through. ROOM8, with its independence from its parent company, pursued implementing a meaningful apartment inventory partnering with one of the nation’s largest apartment owners and operators. The partnership was formed when the real estate company, whose name Jessica wasn’t willing to share, was experiencing their customers walking into their leasing offices and asking to be matched with a roommate.
“I think that was a very critical moment for us, not going after the ‘Craig’s List’ model at all… that contributes to the reason why we were able to grow very quickly,” Jessica shared. From the beginning, ROOM8 went after the institutional landlord route where they work with the big guns in real estate and connect to their Enterprise Resource Planning (ERP) property management systems to onboard tens of thousands of apartment inventory in all major metropolitan cities in about 23 states. This allows ROOM8 to get the most accurate property availability and pricing in real-time, unlike their competitors, Craig’s List and Facebook. Five percent of the apartment inventory is from individual landlords posting directly to the platform.
The platform is completely free for users but if there’s a transaction that takes place in the app, ROOM8 gets a commission from the company or landlord renting the property. “We don’t want to ‘nickel and dime’ the users; we want to make money out of the big guys who are willing to pay and have the money to pay.”
Co-living isn’t a trend in the housing market that isn’t going away. Whether it be the traditional x-amount of bedrooms for x-amount of roommates or communal living for professions, start-ups or even content collaborations, like TikTok houses, the renting journey is here to stay so long as housing prices and education costs continue to outpace living wages. “It’s a lot more about lifestyle—we still believe that the renter’s journey could be a lot better.”
ROOM8 has much bigger goals to address financial freedom for Millennials and Gen-Z who are plagued with student loan debt. How do users use the rent payment to improve the person’s credit? How does ROOM8 increase customers’ purchase power? How do they ensure customers’ belongings as they rent properties?
These are questions, Jessica said, ROOM8 is actively trying to answer and provide solutions for. They got a head start. Through a partnership with Liberty Mutual Insurance, ROOM8 users can purchase renter’s insurance for as low as $5 a month. “We wanted to help to educate our users and be able to provide benefits for them.”
ROOM8 has a 30% success rate compared to dating apps’ 25% success rate and with the coronavirus stay-at-home orders slowly lifting across the country, the platform has seen an uptick in their downloads and usage. However, Jessica shared, it’s still not comparable to pre-pandemic numbers. People are moving back home to save money or downsizing to save money or relocating from major cities to suburbs, or a combination of the aforementioned.
Jessica mentioned some interesting relocation insights from their users—people are moving out of cities like New York, San Francisco and Chicago, but not that far away from these major cities. For example, New York City dwellers moving to Connecticut or New Jersey or Long Island. It’s a trend they’re keeping an eye on.
“We believe in co-living and organization so we think eventually it will go back to the pre-COVID level, but I think the way how we define ‘urban’ is gonna become a bigger bubble,” meaning these communities that were an hour+ commute to the closest city are growing in residents. More people means more real estate opportunities, which means more opportunities for ROOM8 to thrive.
As CEO, Jessica shared she’s responsible for the team dynamic, the bottom line, the success of the company, and the relationships she makes and maintains on behalf of ROOM8. The key to her keeping the CEO-juggling act up is prioritizing her time by degrees of importance—she says it forces her to focus. A typical day could include reviewing contracts, landing new business, networking with entrepreneurs, investors and customers, as well as one-to-one meetings with her staff and co-Founders in order to get a holistic perspective of the business—how ROOM8 functions in today’s real estate market and overall economy. Jessica describes her decision-making process as “data-driven.” “It’s less about my gut feeling. I’m the type of person who needs to collect a lot of information for me to feel like something makes sense. That is what I also spend a lot of time doing.”
Her time spent with ROOM8 isn’t limited to a typical 9-5 job where she can close her laptop and ignore her emails until the next day, it’s “24/7 thing.” If she’s not crossing off her 31st country off her travel list, Jessica shares she’s probably working. “When you start a company, it is just a part of your life, there’s just never gonna be a time where you just turn it off. If you feel like you need to turn it off, it’s probably you’re not enjoying it as much.” There is no such thing as a work-life balance to Jessica—life is work and work is life. As long as Jessica feels positivity and happiness from herself and the people around her, she’s ready to give it her all.
Jessica describes her team’s dynamic as purpose-and-passion driven, saying, “we genuinely feel like we’re a team. We want to do good and give back to the community as something we genuinely like and are passionate about… There’s nothing more validating than the things you’ve created is being used and loved by the customers.”ROOM8, Technology, co-living, entrepreneurship