Shaival Shah of Ribbon: How We Are Helping To Make Housing More Affordable
An Interview With Jason Hartman
Finally, the public sector should seek partners amongst ethical innovators that facilitate — not disrupt — small businesses, first-time homebuyers, and existing homeowners. Innovators hold great accountability for making this a possibility. The evolution of PropTech, or Property Tech, is evidence of the value innovators see within the existing entrepreneurship of real estate. We should not slip into a déjà vu of Tech’s past errors: the innovators, and their innovations, can rise to a new standard of interaction with the communities they touch. Housing is the last frontier to get it right.
In many large cities in the US, there is a crisis caused by a shortage of affordable housing options. This has led to a host of social challenges. In this series called “How We Are Helping To Make Housing More Affordable” we are talking to successful business leaders, real estate leaders, and builders, who share the initiatives they are undertaking to create more affordable housing options in the US.
As a part of this series, we had the pleasure of interviewing Shaival Shah.
Shaival Shah is the CEO and co-founder of Ribbon, a tech-enabled homeownership company. Alongside CTO and co-founder Wei Gan, Shaival founded Ribbon in 2017 to make homeownership achievable. Ribbon allows everyday families to compete on a level playing field with high-net-worth individuals and institutional buyers by upgrading their offers to winning all-cash, noncontingency offers.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
I grew up in a middle-class suburban community, but I only realized later in life how the struggles my parents went through secretly informed my path forward in life. My parents immigrated to the United States from India in 1967 with exactly $24. They spent 10 grueling years acclimating to a new life. Through a persistent undertone of race inequality and treatment, my parents endured some of their most challenging decisions: How much can we tolerate in the service of providing a better life for our children? The inequalities challenged their ability to find a job, secure an education for their children, and purchase their own home. Our lives changed in 1977, when my family, confronted by the Federal Housing Administration’s policy of not insuring a mortgage to a minority family, found the support and generosity of their local community to pool together $30,000 to buy my parents their first and only home. That’s the story of how my family became homeowners. But what homeownership meant spiritually and economically for our family was life-changing. We secured access to better schools, my parents accessed new employment opportunities and we had the comfort of better healthcare options. We went from a low socioeconomic family to a middle-class family. Ultimately, I and my siblings were all able to get college degrees and access to privileges that my parents were never afforded in their developing years.
Homeownership changed our lives, and I have a very strong life mission to help others achieve this monument. What drives and motivates me is fighting inequality–specifically, in housing. The spectrum of homeownership by racial and ethnic backgrounds is shocking. I can’t sit and watch everyday families struggle to purchase a home; it is a painful reminder of what my parents struggled with and a charge to continue this mission.
Can you share the most interesting story that happened to you since you began your career?
In 1997, I was fresh out of the University of California, Berkeley, and I had just started a new job at Solomon Brothers, an investment bank. In my first week, I was asked to pull an all-nighter for a crucial presentation the next day. Naturally, as a 22-year-old at 4 a.m. in an office, I grew restless and needed to shake it up. One of my analyst peers had the not so brilliant idea of tossing a football around to catch a break. We chatted, tossed, and slowly took steps backward until we were on either end of the office. I let loose, the ball went straight up, hit a sprinkler head and one by one, the sprinklers activated across the entire building floor. Hundreds of thousands of dollars in damages, less than one week in. I was waiting for the call to get sent home. Instead, the main partner called me at 5 a.m. and taught me the greatest form of leadership. He asked if I owned it, and I said yes. He asked if it was intentional, and I said no. He told me that mistakes happen, and it is understandable. Making the same mistake again, however, is not. He told me that I am empowered to make choices, but I have to own them. Learn from the mistake and take it to heart.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from?
The longest tenure I spent at a company was three years — typically two years or less. Every time I would leave a company, I would say the same thing: The company didn’t do this or that. Every time, my excuse put the onus on the company. My wife finally called me out and said, “perhaps the issue isn’t these companies, but rather, it’s you.” This hit me really hard and gave me a lot to think about.
My greatest professional success was realizing that I had great fears that were becoming life blockers. Fears of public speaking, fears of making the wrong decision, fears of working hard and it not working out — and the potential shame that comes with failure.
In 2017, at the encouragement of my wife, I decided to leave the security of a stable income and take the leap to entrepreneurship. All of a sudden, my analytical, hard-working, and creative giftings began to take shape. The idea of Ribbon came together and my confidence grew to confront the new challenges of the day in a way that I have never experienced.
Success to me is acknowledging fears and deciding to confront them — and to live with the results. I try to remind myself that shame is simply our perception of what others think, not what they actually believe. This has been a great fuel for me and advice that I like to share with others.
None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful who helped get you to where you are? Can you share a story about that?
My father, hands down. A principled man, who worked tirelessly. He had one vision in life and that was to provide for his family and to raise his children with the means that he never had. He was a risk-taker and started many different businesses because he hit glass ceilings as a minority. But, he was never deterred and kept trying. He went from nothing to something and then promptly lost it all during the 1980s stock market crash. Afterward, he started from scratch and rebuilt. He was relentless in his pursuit and undivided in his determination.
Growing up and watching him, I learned the importance of starting with a purpose. He had a mission. It wasn’t changing the world. For him, it was to provide for his family. Secondly, be determined and undeterred. Fight for that purpose no matter what confronts you. Lastly, take risks. He taught that when the score is tallied at the end, don’t regret not taking your shots.
Do you have a book, podcast, or talk that’s had a deep impact on your thinking? Can you share a story with us? Can you explain why it was so resonant with you?
A great book called Family Properties. It is a forensic narrative on the history of homeownership and housing. A detailed investigative piece that weaves incredible personal stories into how redlining and inequality have created the massive social divides in this country. The book talks a lot about how the entire infrastructure of housing — from policy to lenders to landlords — collectively pursued a segregation policy in Chicago during the Great Migration. It walks through the intentional abuses that people of color suffered. It was an eye-opening explanation of what my own family had suffered through, written in plain sight. It was hard to read, yet impossible to put down. So much about Ribbon is based on that book.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“An eye for an eye will make the world go blind” — Mahatma Gandhi
Raised in a place where I experienced a heavy amount of discrimination and bullying, I grew up ready to fight. Shame from the words and the pushing created a long-lasting feeling of anger and trying to distance myself from my Indian identity. I was intentionally “white-washing” myself to fit in which only brewed a greater level of resentment.
The great words of Mahatma Gandhi are a rallying cry to make your voice be heard but in the form of peace. To fight in the absence of violence. To eliminate retaliation and to understand it to be a momentary lack of control, not a response of progress. I love this quote, as admiration often acknowledges the greatness in others that we wish for ourselves. The discipline to achieve this is always a work in progress, but when I hear that quote, it is like a time capsule back to when I was 9 years old living in Danville, CA.
Ok super. Let’s now shift to the main part of our discussion about the shortage of affordable housing. Lack of affordable housing has been a problem for a long time in the United States. But it seems that it has gotten a lot worse over the past five years, particularly in the large cities. I know this is a huge topic, but for the benefit of our readers can you briefly explain to our readers what brought us to this place? Where did this crisis come from?
Buying a home is incredibly hard right now. Over the past 10 years, over $1 Trillion of US Housing has been purchased by real estate investors, turning the housing supply into long-term rentals. The vicious mechanic has become so simple that everyone is trying to do it: investors buy homes and turn them into rental properties, leaving fewer available homes to buy. With little selection, home prices increase, locking consumers out and forcing them back into the rental market. This, in turn, creates more investor demand. As a consequence, the gap between renters and owners is widening with great concern. The Federal Reserve’s most recent Survey of Consumer Finances noted homeowners are more than 40 times as wealthy as renters. Owning where you live can directly influence your access to education, healthcare, and social and civic engagement among other essential factors. For these reasons, homeownership may very well be the last frontier of intergenerational wealth building and scaling socioeconomic classes, which is critical to our country’s shared prosperity — and that shared prosperity is essential to America’s competition on the global stage.
The rise of inflation has only exacerbated it. The #1 hedge against inflation is owning US residential real estate. This entire situation has the U.S. on the brink of becoming a “renter nation” which will become detrimental to the socio-economic mobility and health prosperity of communities across our country.
Can you describe to our readers how your work is making an impact to address this crisis? Can you share some of the initiatives you are leading to help correct this issue?
With cash offers being 4x more likely to be accepted, the buyers in the market that are going to win are the buyers who get savvy on financing in addition to traditional methods. We make homeownership more achievable by up-leveling mortgage-eligible consumers into an all-cash offer with a guaranteed close.
Our model can also encourage more housing inventory to be available and through the certainty of our offers, our homebuyers can secure their homes with a 2–5%+ cash discount, making it more affordable. We simply upgrade your mortgage pre-approval — it makes their mortgage a cash offer for the seller. In markets where conventional offers, and certainly FHA or VA offers, are pushed to the bottom, it’s a game-changer for everyday folks.
Ribbon’s core product is called RibbonCash. It enables families — especially first-time homebuyers who can’t afford a substantial down payment — to compete on a level playing field against those high-net-worth individuals and investors purchasing homes. When a family decides to make an offer on a home, they’re falling in love. Kids have chosen their rooms, and the parents are already thinking about how to renovate the bathroom. We believe in the power of achievable homeownership, and we see our tools as an essential pathway toward it.
We strongly believe agents and lenders in the ecosystem are essential advocates for everyday consumers. They know their communities best. That’s why we work with, not against, the real estate ecosystem to give everyday people an upper hand against Wall Street and iBuyers.
The implications of Ribbon’s platform to the real estate industry and agents/homebuyers are monumental. Homeownership is a critical ladder for growing personal wealth, a child’s educational success, and physical and mental health.
Can you share something about your work that makes you most proud? Is there a particular story or incident that you found most uplifting?
One story sticks with me and keeps me in tune with why we’re doing this. A family was looking for a home in a very particular part of Raleigh, North Carolina. Their child had special needs, and they required a particular school district to meet those needs. In a growing market like Raleigh, they couldn’t compete and lost offer after offer. It increasingly became a daunting reality where they would not be able to provide the specialized education that their child required. When the family and their agent came to Ribbon, we were able to help, upgrade their offer and be a part of them winning a home in that district. Today, that young child is receiving the education the family hoped that district could provide. That’s why we do what we do. Consumers and families should always have the right to a home.
In your opinion, what could others do to further address these problems?
In the past, most of the innovation in housing has focused on home discovery. Zillow, Trulia, and Realtor.com provided a great consumer service to put more control in the hands of the consumer. However, the process of buying and selling your home, the transaction itself, has never seen any innovation or it’s been primarily focused on “disrupting” small business agents or loan officers, which is not part of our belief system.
Our belief is to level up the experience with an open platform that allows all folks in the transaction to participate. This creates the first-ever market network for housing to simplify home buying and selling while creating novel financial offerings that make a difference to everyday families looking for a home.
Our call for others in the real estate ecosystem is to be mission-centered for who is at the heart of the real estate transaction — the people. From buyers searching for a starter home and sellers upsizing as they expand their households to local agents desiring to thoughtfully serve their community and combat historically racial wealth gaps from real estate ownership. When we take caring for people out of the real estate process, we have failed our community and our economy.
Can you share three things that the community and society can do to help you address the root of this crisis? Can you give some examples?
It is urgent that homeownership is once again attainable for everyday Americans. It is the very hallmark of prosperity, and a better, richer, fuller life every citizen should access if desired.
Homeownership is possible when everyday people believe it is something they can achieve. If we can receive further community and societal support, we can help bring this to many more people. Firstly, we can create awareness of what is happening in the market with the struggles that first-time homebuyers are facing today. Secondly, we need better education for homebuyers to understand their financial decisions and learn the alternative options that meet their needs. Thirdly, we desperately need policy change. Many of the mortgage offerings constructed don’t reflect the current market climate. How can Fannie, Freddie, FHA, VA, and others adjust their mortgage purchasing requirements to enable better outcomes for their homebuyers? It is going to be a group effort to make this a reality and to combat the trend toward a “renter nation.” The great news is that we are all very deeply aligned in helping the consumer and when that core mission overlaps, magic can happen. We just have to be intentional about it.
If you had the power to influence legislation, are there laws which you would like to see introduced that might help you in your work?
It is imperative that the government steps up where possible to protect economic mobility, intergenerational wealth building, and real estate’s small business backbone.
Build Back Better promised the construction and purchase of affordable housing for low-income families, and investment in down payments and housing vouchers. Any of those efforts separated from the proposal could foster a homeownership trajectory. Congress and the White House should consider all routes to preserving homeownership achievability and fair outcomes for its people. States of all political dispositions stand to benefit from a resurrection of such housing initiatives and higher homeownership rates. We must follow through with federal investments into housing and increase that spending.
Second, the mortgage purchasers and insurers need to come together to edit their programs to ensure their buyers are competitive. Sadly, today, the level of uncertainty that exists within the mortgage process is a blocker — with a need to make underwriting verification on buyers and homes seamless and instant. Work with new companies who can bring this level of solutions into the fold to form together.
Third, is a national review of discrimination in every aspect of housing. How are home appraisals actually being conducted, how can we make them more empirical and less subjective? There is hard evidence that Black families have their homes valued at a lower rate than their white neighbors. We are in 2022 and this is still happening. A deep investigation into the buyer underwriting process to identify where bias is coming into play is dire. Do we really believe the use of credit scores is not a biased outcome?
Finally, the public sector should seek partners amongst ethical innovators that facilitate — not disrupt — small businesses, first-time homebuyers, and existing homeowners. Innovators hold great accountability for making this a possibility. The evolution of PropTech, or Property Tech, is evidence of the value innovators see within the existing entrepreneurship of real estate. We should not slip into a déjà vu of Tech’s past errors: the innovators, and their innovations, can rise to a new standard of interaction with the communities they touch. Housing is the last frontier to get it right.
What are your “5 things I wish someone told me when I first started leading my company” and why? Please share a story or example for each.
Great question, one that I think about all the time. Here goes!
One: There will come a point where you will have to transition from a Founder to CEO and it will feel like puberty! You will shift from spending 90% of your time on product building to people and culture building and it will be really hard. But, find what makes you great at building products and apply it to building culture. There are many parallels.
Two: Every deep dark insecurity you have about yourself will be exposed and you will have to confront it! I still remember the moment when we went from “nobody” to “somebody” and had a TV appearance with the great Diana Olick at CNBC. For years, I would talk and nobody would listen, but doing a national TV interview, all of a sudden, I was tongue-tied. I am still sweating to this day from that interview!
Three: Your principles will confront painful tradeoffs on a regular basis. Put honest, brave, north star people all around you and listen to them. Take a loss today for a win tomorrow, every single time. I couldn’t do what I do if it wasn’t for my incredible co-founder, Wei Gan. I go a mile a minute and carry a lot of responsibility for the success of Ribbon. It creates an intense level of pressure which can lead to short-minded decisions. From confronting people’s problems or a tradeoff that challenges the principles of the mission for financial sustainability, it is important to step back and lean on those that will tell you what you need to hear, not what you want to hear. Forever grateful to my dear friend, Wei!
Four: You will only be as good as your leadership team. Ensure the harmony and collective respect among your leadership team, draw up your social contracts and edit them every time a new leadership member joins to be inclusive. We have spent a lot of time recently working on a strong leadership rhythm and it has made a big difference. More open communication, shared understanding, context sharing, and establishing accountability to ensure reliability. It allows for more thought, more voices, and more success.
Five: Realize you have already won by taking the leap into entrepreneurship. Everything else is gravy. In 2017, we were a set of words on a keynote presentation. And with each successful step, you create more intrinsic value. But with success, comes pressure to go further, be bigger, more valuable. We are constantly chasing the next thing. But, the most beautiful moments occur when you hear from an early employee or see years of work translate into meaning today or watch your team collaborate as one because they care so much for something that used to be your lonely feeling. Those are the moments where you realize we won by just starting.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
“COB” — Communities of Belonging. Locally, regionally, nationally, and globally.
I believe in a world where communities can be inherently diverse, where embraced differences become the social currency of value. Communities where people are reliably sharing in the creation and the profits that are generated and enjoyed together. Respecting that we all come from different levels of privilege, or lack of, and to meet people where they are.
The movement itself, I have thought long and hard about. It starts with equality in housing and mushrooms from there. It may not be solved in my lifetime, but I hope others take it, make it better, and move it further. Part of living is dreaming of a future beyond ourselves.
Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might just see this, especially if we tag them. :-)
John Roberts, Chief Justice of the Supreme Court.
Fundamentally, progress is built on policy and law at the highest of levels. It has always been a dream of mine to speak directly to the Chief Justice, ask the hard-hitting questions, and understand the psychology of our Supreme Court Justices that may lead to their interpretations. I think it would be super cool to ask, listen, learn and question one of the most powerful people in the world.
How can our readers further follow your work online?
I would love to hear from your readers and to further share where I can be helpful. I am on Twitter (@shaival) and Linkedin (shaivalshah) as my preferred social media platforms. We also have Ribbon Home social accounts that I am connected to. And of course, you can learn more by visiting our website at ribbonhome.com.
This was very meaningful, thank you so much, and we wish you only continued success.
