EP 98: Advocating for Fair Compensation and Being on Forbes 30 Under 30 with Female CEO Marcela Sapone

 Mimi MacLean:
Welcome to the Badass CEO podcast. This is Mimi MacLean. I'm a mom of five, entrepreneur, Columbia Business School grad, CPA and angel investor. And I'm here to share with you my passion for entrepreneurship. Throughout my career, I have met many incredible people who have started businesses, disrupted industries, persevered and turned on opportunity into success.

Mimi MacLean:
Each episode we will discuss what it takes to become and continue to be a Badass CEO directly from the entrepreneurs who have made it happen. If you are new in your career, dreaming about starting your own business or already an entrepreneur, the Badass CEO podcast is for you. I want to give you the drive and tools needed to succeed in following your dreams.

Mimi MacLean:
Hi, and welcome back to the Badass CEO. This is your host, Mimi MacLean. And today we have on Marcela Sapone and she is the CEO and co-founder of Alfred. She launched Alfred with a mission to help make a universal utility in every home. And since 2014 under her leadership, Alfred has expanded to serve more than 135,000 residents in 44 cities across the United States and Canada. She has been named as Fast Company's Top 50 Most Innovative Companies in 2018, '19 and '20.

Mimi MacLean:
As one of the first leaders in the sharing economy to advocate for fair compensation of service workers, she adopted the company-wide policy of hiring all Alfred staff as W-2 employees. She's been included in Fast Company's Most Creative People List, featured as the face of Consumer Tech in Forbes 30 under 30, and was also a winner of Connect Media's Women in Real Estate Award in 2021.

Mimi MacLean:
Thank you for joining us today on the Badass CEO, please go to thebadassceo.com to sign up for our newsletter. So you'll be notified of our next podcast. And you can find out all my resources and tools that I use there that help support the podcast and all the expenses that go with it. Thanks again.

Mimi MacLean:
Marcela, thank you so much for coming on today. I'm excited to talk about your company Alfred that you co-founded. It seems really interesting and you're kind of changing the dynamic of how someone should be living and making it a community. And you also seem like you have something very exciting to be sharing that you just acquired a company. So I would love to just dive in and first maybe tell everybody what Alfred is and then we'll go from there.

Marcela Sapone:
Yeah, sounds great. I'm excited to be here. Alfred is empowering the most successful and valuable communities today. Our perspective is that the modern world and how we live and what we need to live our best lives has changed. And we want to be your sidekick in hitting your potential. And we're working with the real estate industry to make rental housing more rewarding in lots of ways. Having to do with wellness, community, adding technology, bringing more of a hospitality approach to the industry. So I'm really excited to be here today and tell you more about our story.

Mimi MacLean:
That's great. Now I couldn't clarify when I was looking on your website, is it mostly just apartment buildings at this point or housing communities or?

Marcela Sapone:
So we focus on a category in rental that is anything that's managed and it can be a group of houses that are actually single-family rental. It can be a garden community, oftentimes that have some kind of shared amenity space. It can be mid-rise buildings, high-rise buildings, which you're kind of used to in New York and LA, but more and more communities that are being managed from a rental perspective as this kind of the shift of home ownership is changing in the US.

Marcela Sapone:
And now over 40% of the US population is renting and they're renting for longer. And we are the management platform that helps run these communities. We're full stack. We manage the properties. We bring all the technology in. We bring community events, programming, and really are just changing the industry standard of what it means to rent.

Mimi MacLean:
Yeah. You know what I loved about it is because I think two things are happening as far as social trend. And you kind of now the head on both of them. One is we're lacking community because we're like all in our house because of COVID and we are on social media. We don't have the interaction of knowing your neighbor, having something to do with somebody else.

Mimi MacLean:
So you're offering that. And then two, we also are all lacking time and like finding the right person to help you with cleaning, laundry, to-do tasks. Like you do that as well. So you're saving people time, but also that extra time you're allowing them to go do something fun and connect with other people.

Marcela Sapone:
Yeah, that's really been our mission. So when we started the business out of business school, we were reflecting on our own lives. And my co-founder and I had been really aggressively pursuing what we would call a rockstar career. So we're working 100-hour work weeks. We were strategy consultants and we were working in finance on Wall Street. And reflecting back to that time while we were in business school, we asked ourselves the question, "Well, how are we going to stay interesting people, take care of ourselves, have a family, have a career? How do we make all of that balance work?"

Marcela Sapone:
And the only way that you can make it work is by asking for help and having a community, a support system, a way to outsource the things that you don't love that are time-consuming. And getting invited to get access to have exposure to the things that give us joy, some of which we know and others which you kind of have to discover as you grow as a human being. So taking off your plate and giving you amazing new things to experience and live a rich life.

Mimi MacLean:
My father-in-law was in a nursing home a couple years ago. And I remember walking into the nursing home and being like, "Oh my God, look, all these fun things that you could do." I'm like, "Why don't they offer that when you actually have the time, the energy?" Why you to wait until you're 80 to do those things?

Marcela Sapone:
Right. It's not just the bingo night. It's actually like really interesting like they're learning. You're kind of going back to the best days of college. And there's things to look forward to. There are parties that are happening. There are new things that you're learning. And I think that just curiosity and community and feeling like you're spending time with people, making eye contact and just being in the same room as other people, I don't think we all realize how much we actually need that to be fulfilled.

Marcela Sapone:
I think we're all powering through it and things are sort of getting back to normal. But I think that there's been a lot of loss, a lot of grief, and we're still adjusting to coming back out. And it's the time to really spend more time intentionally about who do you want to spend your time with? What do you want to spend time on?

Mimi MacLean:
Well, especially because the suicide rates are so high now, just letting people connect. So you're in business school, you came up with this idea during business school or did you actually ... Because here I went to business school and I studied entrepreneurship having that decision of being like, "Do I take that big job or do I follow like my idea that I came up with at business school?" Did you come up with an idea at business school or did you come up with it after you started a job after business school?

Marcela Sapone:
In our case when I went to business school, my objective I had really one which was find a great idea and a team of people to do it with. I knew I needed a co-founder. Back to this concept of like, "You can't do anything amazing without help." And so I was looking for co-pilot and we were really, I mean, we were kind of dorky about how we did it. We made the Excel spreadsheet and we thought of all these ideas. And we were reading a lot, looking at a lot, going to pitch demos, talking to investors.

Marcela Sapone:
I mean, it was like we called it our venture safari and we [inaudible 00:08:06] the ideas by like how big is the total addressable market? How hard is it to do? And Alfred came out of our need to have more time because while we were going on the safari, we still had to go to class and we had a social experience. So Alfred was solving a need that we had. It wasn't on the list, if that makes sense.

Marcela Sapone:
We started by hiring somebody to deliver the keys to our home and we said, "Here are the things that are kind of taking our weekends up." And then we split the cost with everybody in our housing at Harvard and something miraculous happened, which was like, I was coming home to groceries in my fridge, dry cleaning my closet, packages on my counter. And just the sense of headspace that I hadn't had in a while. And we thought, "Wait, there might be something here." And that became the kernel of the idea that would become Alfred. And it's evolved a lot as we've taken it, but it came from a real need and evolving it to make it a good business, which those two things don't always intersect.

Mimi MacLean:
So you didn't take a job out of business school. You followed this?

Marcela Sapone:
Yeah. We even took a semester off in business school to work on it because we were really in a sense, this was such a hard decision. We had job offers that were really compelling and exciting and we didn't want to like dive into something unless we felt like there was real traction. So we took the semester off to work on it and then we let it run while we went back to school to finish our degree, which is what we planned to do. And we had built enough confidence and that confidence and that kind of yields conviction and clarity. Those are actually the most powerful tools an entrepreneur needs to be successful.

Marcela Sapone:
And for us, we just need a little bit more time to do it. So I think business school can be a really good incubator of a business that you want to work on. And probably even more fundamentally like the people you want to work on something with. However, this might be a little counterintuitive. Looking back and the world's moved even in like let's say like the last five to seven years that we've been building this business, I think that are so many opportunity that in the old days people would say like, "If you don't start a business now you never will because you'll get golden handcuffs."

Marcela Sapone:
There are just so many places that you can learn. New companies, startups, innovation groups within companies. I think it's really about filling your toolkit with as many experiences as possible while you build clarity and conviction on something that you might want to work with or work on. And I don't think you always need to be the CEO and founder of a company. I think it's really, really focusing on who are the people you want to work with every day because starting something from scratch is really, really, really hard. And ultimately it comes down to the people that you're doing it with.

Mimi MacLean:
Yeah. And I would say like by looking at your business idea, I would think the two biggest hurdles and correct me, because I'm probably wrong, would be finding the people to do the actual work and trust and having them show up. I mean, just for even me find help at my home, you want to pull your hair out. So I can't imagine doing that on a mass scale and having them be reliable and trustworthy. I would think that's a huge hiccup. And then also just building out the technology to then be able to pitch it to these property managers.

Marcela Sapone:
I mean, I think you hit the nail on the head. You're like, "Okay, I hear you." Like having a great life is asking for help. And it would be great if I had trustworthy help at the push of a button, but how do you do that? And in practicality like what we wanted to do is build a service layer on top of other companies that existed and be coordinating and managing. And what we found is like the underlying quality of let's say a cleaning company who wasn't very good. So if they messed up, we were losing a customer.

Marcela Sapone:
What we found is that like at the end of the day, this is something that came out so clearly during COVID is that there are essential workers that are like the most profound. They keep our society running. And if you can't find good help and you don't have people you can rely on, like everything falls apart. And so it's about creating a culture and creating unfair advantages for a supply pool that you can kind of start to build that is unique to our platform.

Marcela Sapone:
So the way we thought about in the beginning is we really focused on stay-at-home moms and folks who had left their career and were looking for an on-ramp back to the workforce. And this built confidence because it was being entrusted inside someone's home with their most private, intimate space having access to their home and coordinating their lives. They would go to the grocery store once for everyone in their community. They would be managing the home cleaners for everyone in the building. And there's a sense of like logistics and pride, but also like confidence that this is something that I can do.

Marcela Sapone:
And what we found is that many of them have been promoted through the ranks in our company. I think more than 70% of our company is female, which is pretty amazing. Now, as we've grown, that was just our approach to really taking this hypothesis that like, "Yes, you can have a really amazing trained workforce and you can scale it and it can be a great business." But the way that we've looked the world is like there are all these property management companies across the US managing 640 billion worth of that's the size of just the management industry in the US today. And these management companies really are operating where they focus on management of the asset and not the people who live in the communities.

Marcela Sapone:
And so what we're seeing is like actually this is a great opportunity to bring a different sense of service and hospitality and like the art of taking care of people. And so transforming the jobs from being kind of monotonous and not fulfilling to completely focused on the consumer and the resident. And using technology to do all the manual things that they were doing in the past, we're taking an entire industry and saying, "Let's make these jobs really rewarding and interesting. And if you work for Alfred, you're going to get paid more and you're going to be respected because we care about career paths" like I just mentioned. That's been a key part of like having this unfair labor advantage or workforce that you can trust.

Mimi MacLean:
So you're trying to partner with at the property managers, but now you've bought a property management company. So now you're trying to become the property management. So is there going to be a conflict between like people are going to be like, "Well, I don't want to let you in because then you're going to take my property management position."

Marcela Sapone:
I mean, I think it goes back to what we were doing when we first started the company. It's like you have to put yourself in the customer's shoes. So by being a manager ourselves, we actually really deeply understand all of the ins and outs and the complexity, like the details really matter in this business. And what we focus on are all these big ownership groups that are owning that are the landlords of the properties and we say, "Look, we come in with world-class technology that's going to make it like Uber for your life in the building. And if you want, we have amazing property managers who are running on the Alfred operating system." We call it AOS.

Marcela Sapone:
So you get the full stack. Here's am amazing property manager, here's the technology. And by the way, some of the property management companies are owned by us, but it's really about changing the culture in the industry and using technology to create that leverage for you to be able to make the change. And I think it's in service of the entire industry. So we really think about helping operators, helping property managers and fundamentally how helping landlords be better landlords.

Mimi MacLean:
Yeah because I mean in the past, I mean, I haven't rented a place in a while. But if you were renting an apartment and you had a leaky toilet, I mean, I'm sure it's not tech-driven at this point. It's still like you call up your landlord and say, :I'm in 2A. My toilet's broken."

Marcela Sapone:
Completely. And then you might do it again the next day and the next day and the next day.

Mimi MacLean:
Now you just go on your app and you're like, "My toilet's broken. SOS. It's flooding."

Marcela Sapone:
Yes. And you get an immediate response and a timeline by which it's going to get fixed. And then after it's fixed, you're asked for feedback and that full feedback loop creates transparency and that hasn't existed. And it's also giving the consumer more power. Now, when you see suddenly there's an issue where I have everybody on floor five with toilet issues, "Oh, there's something wrong with the pipes."

Marcela Sapone:
So it makes more sense, too, from a management perspective. And there's been a resistance to kind of embracing technology in the real estate space for lots and lots of reasons, but it's actually a really exciting thing to be able to have.

Mimi MacLean:
It's amazing that it didn't exist before.

Marcela Sapone:
It's kind of shocking, but the thing about a restaurant in the old days, everything was run with paper and pencil. And now you have inventory systems, point of sale systems, OpenTable. I mean, there are 30 different types of software that's being used to manage a standard restaurant. There're only one type of software currently ubiquitous in the rental space and that is accounting software.

Mimi MacLean:
I know. See, I grew up in the real estate industry and my husband is, that's what he does for a living. And so it's funny because like my dad just owned a bunch of apartments all through New Jersey. And when he died about eight years ago, I kind of originally took it and he was still doing it on his accounting paper. And I was like, "Oh my God, how is this not like all automated?" And like my mom just handing cash.

Mimi MacLean:
I'm like, "What is going on?" This was only eight years ago, seven years ago. And to find that software, I couldn't believe how antiquated it was and it just blew my mind. And there was nothing you're talking about. This was just the accounting of keeping track of it all and it wasn't even that advanced for.

Marcela Sapone:
Right. And I'm sure they had accounting led to, by the way, collecting paper checks.

Mimi MacLean:
Yeah, totally.

Marcela Sapone:
It's like the majority of the planet still pays with paper when it comes to their home and rent.

Mimi MacLean:
I know or cash. Like my mom used to drive around and pick up the cash from everybody from all the renters, which is nutso. And then, okay, so you had this idea like, "Okay, we got to come up with the technology," but about obviously everything costs money. So did that work like as far as like, did you immediately out of the gate go try to fundraise? Did you win a competition that gave you fundraising? How did that work?

Marcela Sapone:
Yeah. I mean, we pitched at the Harvard Business School competition New Venture Competition, which is like a big tradition every year. And we won that totally unexpectedly because I'll tell you when we applied to part of Harvard Business Schools like venture group, they denied us. They're like, "We don't think this idea is good."

Marcela Sapone:
And so to then present and win the whole competition was pretty fun for us. And then we went and we pitched at TechCrunch Disrupt. So if you've ever watched Silicon Valley and the Pied Piper, we had that experience. We were on stage, thousands of people watching and we won TechCrunch Disrupt as well.

Mimi MacLean:
Oh wow.

Marcela Sapone:
So those two competitions are what then kind of attracted venture capital to us. I think Jess and I were in the beginning kind of thinking about this as a bootstrapped thing for a while, but we had people writing us term sheets on napkins when we first started.

Mimi MacLean:
So you're like, "I'll just take the money and run with it and just grow faster than we thought."

Marcela Sapone:
Yeah, and we did and we did. And we've always been parsimonious with capital. So like now there's so much venture money and if you're starting a company, you can get what would've taken us three rounds in the very first one.

Mimi MacLean:
But do you have to give up a lot more percentage of your business or?

Marcela Sapone:
No, not necessarily, but it's also, also a much more crowded space. There's so many people who have ideas and it's actually not that easy to get funding,.

Mimi MacLean:
But people, VCs and private equity are willing to come in earlier now. Because we've done a lot of angel investing and now you're always competing with VCs or bigger companies. They never used to touch that stuff.

Marcela Sapone:
That's right. Everyone's going younger, so to speak.

Mimi MacLean:
Yeah. What would you say looking back you wish you knew when you started back in business school?

Marcela Sapone:
You know what's interesting is like things. You know them in your gut and you know them intellectually and then like they get pressure tests in lots of different variants. And you have to just keep coming back to what you know and your why and reaffirming principle-based decisions for why you do things. The way I would describe it is like you're writing a symphony. You're also like constructing all the instruments. You're hiring all the musicians and finding them and recruiting them. And it's not like they're just people waiting in line to do this. You got to convince them. And then you got to coordinate with.

Marcela Sapone:
You're doing all of those things at the same time and it is incredible like mental chess game. And it's hard to even imagine those circumstances until you're in them. And what we do is like you regress into like your reflexive, most basic level of training. So to answer your questions succinctly it would be like the things that I really believe and the values I really have, like repeat them to yourself every freaking day and keep coming back to them. Because over the long-term, you're making so many decisions all the time, the majority of them need to be right. But all of them need to be principled or you lose sight of why you're doing something.

Mimi MacLean:
But it's probably easy to cut corners.

Marcela Sapone:
Yeah, it is. It is.

Mimi MacLean:
To get to wherever you need to get to because you're like juggling.

Marcela Sapone:
Yeah. And you have lots of advice from people have different context than you and have a different perspective. And investors are, remember they're motivated about making money and like, "Yeah, mission's great." But some people like it's a duration, like each investor has their own. What you want to find are capital partners who are going to be in it for a long-term and are going to go with you for multiple rounds. It's been really nice that we have had that in our capital partners.

Mimi MacLean:
Yeah. And right now, I'm currently working with another person on an idea that I've been toying around with. And he's a perfectionist much more than I am. And even today he's like, "I think I realized that like we just need to launch and not be perfect." And I was like, "Yes, exactly."

Mimi MacLean:
"Like 80, 80% role like you don't want perfect" because you always have to pivot and change based on what the client says. You're never going to be right anyway, even if you wait to be 100%.

Marcela Sapone:
Don't let perfect be the enemy of good.

Mimi MacLean:
Yes. So true. And I'm sure that's how you guys were too. You're like, "Okay, when did we launch? I have this built, I have this whatever." So you started in New York City. How did you find your first apartment complex or whatever to do it?

Marcela Sapone:
Yeah, we were pretty scrappy. So our office was in Union Square and it was a size of a closet. And we went out around Union Square knocking on doors with the biggest buildings. And started up by getting residents fired up about having the service. And then they emailed the property manager and said, "What is this? Can we have it?" And that invited us into rooms in the corporate offices of some of these big real estate companies.

Marcela Sapone:
And then we were getting our education in real estate because that's not where we started. We really started with a consumer value prop about saving time and saving money through trusted help. And learning the real estate space and learning how real estate works, which is every dollar that you spend is a dollar that's not in my pocket. That's the mentality in the real estate space. So you have to create savings immediately. And from our perspective, we built the most powerful technology in the residential space. Like I know that for a fact, but it's taken us eight years to do it. And it's been an eight-year education and it's not always been easy.

Mimi MacLean:
So [inaudible 00:23:57] to come into like the homeowners space, because [inaudible 00:24:02] now.

Marcela Sapone:
I can't hire enough people. Like back to your original question or your point, like that sounds really tricky like managing a giant labor force and all. Doing it in homes would be very, very hard, but what's nice is that we're building the network to allow that type of coordination to take place. So I think it's on the roadmap, but it's just far away so.

Mimi MacLean:
Yeah. Like having a home you're like, "God, this is so much work. It shouldn't be this much work and so difficult of keeping track of everything." There's nothing that streamlines it. It's ridiculous.

Marcela Sapone:
I agree with you. I think home ownership is completely overrated and that people should rent and rent for longer and that flexibility, mobility are awesome. And I think that's a trend that's happening is people kind of focus more maybe on ownership of a second home or a vacation home. But yes, I think that homeowners need help too. And so Alfred will be there one day.

Mimi MacLean:
[inaudible 00:25:00] but what'd you say it was? How many billion dollar industry at the takeover first?

Marcela Sapone:
$640 billion.

Mimi MacLean:
Yeah, do that one first. And where did Alfred come from?

Marcela Sapone:
So I grew up being a giant Batman fan and Alfred for us really embodies the ethos of what we're trying to do because at the end of the day I think each of us really just wants to live our best life. And if you look at Batman, he's just a normal person, but who's decided to be extraordinary. And through the help, assistance, mentorship, technology, and help with his mentor Alfred, he becomes a superhero.

Mimi MacLean:
I love that.

Marcela Sapone:
That's what we're trying to do for everybody is just help people be their superhero version of themselves.

Mimi MacLean:
Have you seen the new Batman movie?

Marcela Sapone:
I have. It is so long.

Mimi MacLean:
It's over three hours. I couldn't believe it. I sat through this and it dragged down a little bit, but it went faster than when I ... When it was over, I was like, "Wait, that was three hours?" It was very dark movie, like dark like lighting, but it was a good movie.

Marcela Sapone:
It was a good movie. And I saw it in East Village in a movie theater with a lot of a very eager New York fans. It felt very Gotham.

Mimi MacLean:
Hmm. Well, because it was kind of like it was in New York in a sense right?

Marcela Sapone:
Yeah.

Mimi MacLean:
So it was good. So okay, just to wrap it up. What advice do you have for anybody who's starting out tips, tricks? I know we talked a lot about ... You've given a lot of great advice, but anything else that you would like to end on as far as advice? "One, don't start a business or you go get a job or I wish. Do this or do that or."

Marcela Sapone:
Yeah. Okay, number one. I'm not very good at this, which is always the thing about advice is like you have to have a shortlist of people that you admire and look up to. And ideally there's even some level of like apprenticeship or sponsorship happening because the best way to learn is with other people helping you. And you can never stop doing that even if you are a founder or CEO or the number one CEO in the world.

Mimi MacLean:
They even have coaches.

Marcela Sapone:
Yeah. I've always had a coach and I just keep adapting and changing and getting new coaches. So I think focusing on your growth because actually here's the thing. When you build a new business, the rate of growth that you have as a company is really, in some ways, completely correlated with your own rate of growth.

Marcela Sapone:
And so you want to be expanding your capacity as a human being at a pretty astonishing rate. You got to be kind of extraordinary and be committed to being extraordinary. And my advice on doing that is to get help and to have people who are helping you along the way, like coaches and friends and mentors and sponsors. And it helps you stay accountable to that and stay inspired.

Mimi MacLean:
Yeah. That's great. That's great. I mean, mentors, I wrote a book in the fall and one of the points that I brought up was that women don't get enough mentors. I think was it high 70% of men have mentors throughout their career. And I think women are half of that. And I look back on my career and I'm like, "Wait, I never had a mentor." And I'm like, "Well, that was a big mistake. What was I thinking?"

Marcela Sapone:
Well, it's not easy. It's like part of the whole culture. And like if you look at how men socialize versus women and it's kind of like more natural, I think women need to learn how to also be mentors to others. And Madeleine Albright used to say that, "There's no space in the professional sphere for mediocre women and that you got to show up more prepared and more able than the other sex." I think that's true. So we're all working extra, but we do need to find time to like bring everybody along for the ride. And it's really satisfying.

Marcela Sapone:
Like my most inspiring meetings over the last two weeks have been meeting with people who are younger and going, "Wow." The world's changed and it's satisfying and fulfilling. So be a mentor and have a mentor.

Mimi MacLean:
It's true to like reach down and like you said. I think the reason why we're also is like we have other commitments. If it's taking care of our parents or taking care of our kids or taking care of, we kind have to do it all. We're the ones getting the teacher gifts or the birthday presents. Typically, the guys it doesn't even go on their radar.

Marcela Sapone:
Totally. Well, that's why we created Alfred. Just try like, "And I'm sorry that I can't offer it to you and everybody out there, you got to live in an Alfred building," but that's part of it to give you back some of that time.

Mimi MacLean:
Yeah, that's true. Thank you so much. This has been amazing. I wish you the best of luck. A very, very exciting company. And it sounds like you are just on a major growth trajectory. So congratulations to you.

Marcela Sapone:
Thank you.

Mimi MacLean:
And if anybody wants to learn more about Alfred, you just have to go to helloalfred.com.

Marcela Sapone:
That's right. Thank you.

Mimi MacLean:
Perfect. Thanks so much.

Marcela Sapone:
Talk soon. Bye.

Mimi MacLean:
Bye.

Mimi MacLean:
Thank you for joining us on the Badass CEO. To get your copy of the Top 10 Tips Every Entrepreneur Should Know, go to thebadassceo.com/tips. Also, please leave a review as it helps others find us. If you have any ideas or suggestions, I would love to hear them. So email me at mimi@thebadassceo.com. See you next week and thank you for listening.