RYAN WILLIAMS: In the midst of the great financial crisis, I went down to Atlanta with my roommate, visited his neighborhood, and his neighborhood was completely ravaged by foreclosures.

JEFF BERMAN: Ryan Williams was still a college student when he saw firsthand the impact of the 2008 housing crash.

WILLIAMS: There was the idea and the opportunity right there. I said, “Well, what if we could start buying some of these homes?” They’re neighborhoods we know, they’re people and communities that may have been prone to subprime predatory lending. Let’s give them a second shot at the American dream. I raised money from some classmates, bought a few homes, rented them back out to people in the community, and ended up selling back one of the homes to one of the previous owners. From there, my passion for real estate really blossomed.

BERMAN: Ryan saw a way to help the community — and gain experience as an investor. This week, he shares how he founded a company to take on entrenched competition in the real estate market, what he learned when that business was swept into the spotlight, and why he eventually decided to exit.

[THEME MUSIC]

BERMAN: I’m Jeff Berman, your host. Ryan founded Cadre in 2014. It’s a tech-powered commercial real estate investment platform. That may not sound like the most exciting thing you’ve ever heard about, but he sold the business recently. It’s a sweat-driven story of an entrepreneur who started way back when he was a teenager.

Ryan, welcome to Masters of Scale.

WILLIAMS: Thank you for having me. I’m excited to be here.

Early days as an entrepreneur

BERMAN: Great to have you here. Like a lot of our guests, you started your entrepreneurial journey early. Can you tell us about your first forays into being an entrepreneur?

WILLIAMS: Yeah, absolutely. My earliest days were in Baton Rouge, Louisiana, where I was born. Baton Rouge is a city that’s divided, and historically has been divided physically and economically. But despite those divisions, what I saw, at least, was opportunity, and a lot of people who were making the best out of challenging situations.

And so, when I think about entrepreneurship, that’s the lens that I always saw the world through. There are always going to be barriers, always going to be challenges ahead of you, but I saw many examples of people prospering despite that adversity and figuring out creative ways to address some of the challenging circumstances they were in.

And so, for me, entrepreneurship is really a state of mind. I had many endeavors that didn’t work out. I actually tried to start a local, sort of bait and tackle shop, selling worms to people. That didn’t work out, largely because no one knew who this little kid was trying to sell this kind of product.

And so the first real venture was my personalized sports apparel business where I was selling these custom headbands and wristbands. Again, born out of a pain point: I couldn’t afford the Nike or the Adidas or the Jordan headbands and wristbands.

BERMAN: How old were you when you did this?

WILLIAMS: I was 13. I went to the local wholesale garment district, bought these terrycloth headbands and wristbands for a dollar, two dollars a pop. Initially, it was just for me, because I wanted to have some kind of design or logos that looked somewhat like the Nike’s of the day.

Then teammates said, “Where’d you get these?” I obviously didn’t let them know what my connection was, but I told them I could provide the same kind of access to them and maybe charge a little bit of a markup. And that’s what I did, and actually made decent money. I mean, hundreds of dollars, but it showed me that there’s a market here. I found a local embroiderer, decided to start customizing these headbands and wristbands. I’d ask what’s your favorite slogan, your team name, or your number?

I’d reach out to my embroiderer. Within 24 hours, I had custom embroidered headbands or wristbands. I actually started really growing the business throughout the state and throughout the region. It caught the eyes of a nonprofit called the National Foundation for Teaching Entrepreneurship, or NFTE, which is based out here in New York.

They said, “We heard about this business you have. Would you be interested in applying to our national business plan competition? You can win a grant and come to New York City.”

BERMAN: And did you go on Google to figure out how to do a business plan? Like how?

WILLIAMS: Must’ve probably been like Alta Vista, whatever the search engine was at the time. I brought the only suit I had, which was the suit I wore to church, ended up going through the pitch, the presentation, won first place, won a $10,000 grant. Most important for me was I got access to mentors who saw more in me than I saw in myself. It was their urging that led me to apply to Harvard, which was a huge inflection point, first one in my family to go. From there, things really took off for me.

What is Cadre?

BERMAN: So let’s talk about Cadre. First, just if you could explain in simple terms, what is Cadre?

WILLIAMS: Cadre is a technology-driven real estate investment platform. I started the business to democratize access to real estate and ultimately alternative investments. It’s a platform where people can log in and invest in either single real estate properties or in portfolios that our team curates for them.

The idea behind Cadre came to me after spending time at some of the most well-known institutions, Blackstone and Goldman Sachs, seeing how much money and wealth was being created, but for a relatively small part of our global economy. I questioned why is this the way of the world? Why can only the 1 percent of the 1 percent benefit? So I decided to build a business that would be akin to a Blackstone, but with a tech stack behind it for the masses.

BERMAN: It’s a platform so that if you’re an investor who can’t afford a $20 million building or a $100 million building, you can actually do fractional ownership, similar to buying into the stock of a company, where you can have fractional ownership.

WILLIAMS: One of the companies that arrived a couple of years before us that I spent a lot of time with early on was Robinhood. In many ways, what Robinhood was able to do in the equities market, we aspired to do in the alternative space as well.

How Ryan Williams built his business acumen

BERMAN: So, the origin of the idea, I appreciate the inspiration and being able to see at Blackstone and Goldman, how much wealth is created for the top fraction of the percent. But why real estate? Why this direction? What was the spark of inspiration for you on this?

WILLIAMS: To know why real estate, you’ve got to go back to those college years. Financial services, venture capital, private equity — I started doing a ton of research on those spaces. What I recognized quickly was that there really wasn’t a way for undergraduates, especially those who didn’t come from the finance world, to get smart in these spaces.

Real estate really resonated with me because I never owned real estate. My family didn’t growing up, but it was always around me. So I had a curiosity about it. The more time I spent learning about it, the more I realized that it was the most important asset class to own to build long-term wealth, yet very few people were able to actually own it, especially people such as myself.

It was a curiosity. I built a curriculum. I recruited some Harvard Business School professors to teach the curriculum, which, again, in hindsight was crazy.

BERMAN: Just to be clear, you are a freshman at Harvard. This is very much a fish out of water in terms of like, this is all very new for me. I’m not seeing the things that I want to learn. So I’m going to do the research myself, develop a curriculum, and then I’m going to just show up and hang out outside the door of the Harvard Business School professors until I find one who says, “I like it, yes.”

WILLIAMS: Yes, that’s right. Fearlessness. It goes back to what my grandfather said: “What’s the worst thing that can happen? People say no.” A lot of people did say no, but I’ve been in the entrepreneurial world. I was used to being rejected.

BERMAN: Right, people said no to your worms at the bait and tackle shop.

WILLIAMS: Exactly, and they said no to almost every other concept that I had thought of. It takes a really strong will as an entrepreneur. I knew all I needed was two to three professors who’d say, “Yes, we believe in this concept and we think others should be able to learn some of these concepts so that they can go off to real estate careers or VC careers or whatever the case may be. And have the same opportunities that people who come from that network have.”

Learning about real estate

BERMAN: So this was the kernel of the idea for Cadre?

WILLIAMS: The kernel of my passion for real estate. This was where I found and learned how lucrative real estate could be. There’s a professor named Arthur Segel, a renowned HBS professor in real estate who taught the real estate curriculum I developed. I’d spend time with him after class, and he would always say, “Ryan, the best way to get into real estate is to get into real estate. It’s nice to have the theory. It’s nice to understand cap rates and all the concepts. But you’re not really immersed in it until you actually are investing, or owning, or part of a real estate firm.” That just stuck with me. I wanted to figure out how to get involved. The next year was the great financial crisis. I believe that timing is everything. That period of time presented a lot of challenges for so many people, but also opportunity. In the midst of the great financial crisis, I went down to Atlanta with my roommate, visited his neighborhood, and his neighborhood was completely ravaged by foreclosures.

BERMAN: Full of subprime?

WILLIAMS: Subprime. His own home was up for being foreclosed on, had gone through the short sale process. So, there was the idea and the opportunity right there. I said, “Well, what if we could start buying some of these homes?”

They’re neighborhoods we know. They’re people and communities that have had a hard go at life in a lot of ways and may have been prone to subprime predatory lending. Let’s give them a second shot at the American dream. I raised money from some classmates, bought a few homes, rented them back out to people in the community, and ended up selling back one of the homes to one of the previous owners, making three times our money. From there, my passion for real estate really blossomed. We started buying more homes, thousands of units we acquired. Now, this was sort of my night job.

My day job was working in finance to pay off my student loans. I got to a point where I had enough belief and conviction in the understanding of real estate to say, you know what, now it’s time to take the next step in my journey.

When Ryan Williams decided to go all-in on Cadre

BERMAN: What was that inflection point? Was there a moment where you said, okay, I’ve got enough confidence, I’m far enough along where I can leave finance and go do this?

WILLIAMS: After my first year at Blackstone in their real estate private equity group, I saw what they were doing — thousands of homes on a weekly basis. I was buying one or two maybe on a quarterly basis. I didn’t necessarily have the same level of belief that the investing we were doing was going to accrue to the benefit of the community. The same way that if I were to have invested in a community, I’d know I’d care about both doing well and doing good.

BERMAN: For a lot of people in this situation who made it to Harvard, have made it to Blackstone — I mean, we’re doing pretty well right here, and you’ve got this drive and you’ve got this idea. They might say, I’m going to be an intrapreneur. I’m going to do this at Blackstone. I’ve got the security of Blackstone behind me. What gave you the confidence and the impetus to say, I’m out? I’m going to go do this on my own and not do this here?

WILLIAMS: I decided that I had done well enough financially. I wasn’t going to optimize just for the next dollar. Instead, I wanted to have an impact. I also thought a lot about if I didn’t go out and build this kind of business, I’d regret it down the line. Number one, but number two, someone who may not have the same goals and mission in terms of promoting self-determination amongst the underserved, which is kind of like my founding principle, and I always said, in order to get unconventional outcomes, you have to do unconventional things.

The origins of Cadre

BERMAN: So you’re at Blackstone, you see this opportunity, what are the steps you have to take to actually jump?

WILLIAMS: The next step for me was to figure out how do I build an MVP? How do I build a product where it’s easy for people to log in and invest in real estate projects? So my second year of Blackstone, by night, I was building out my business plan and building out the first version of the product and an MVP.

BERMAN: And did you have a technical co-founder? Are you coding?

WILLIAMS: I don’t want to hype up how dynamic it was, but they were very immersive, dynamic wireframes. The first version of the product and the platform I built. The first actual asset was an asset that I was able to secure via a relationship with Jared Kushner, who was one of my earliest partners as well.

And then the investor base — those who were buying fractional stakes — from my network and then from friends and family who had gotten to know over the years. So we kind of built proof of concept. At the time, too, this idea of technology — which is hard to believe because this was 2014 — but the idea of technology changing real estate was still crazy to a lot of people.

PropTech, FinTech, these were still slogans and phrases that people sort of laughed at. So, in many ways, we were very early, which is probably one of the reasons why the folks at Blackstone were supportive that I was not going to a competitor. Instead, I was taking this moonshot, but I think in a lot of ways, it was eating at some of the core principles of the business at the time.

BERMAN: More with Ryan Williams on his decision to exit Cadre in just a minute.

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BERMAN: Welcome back to Masters of Scale. You can find this conversation and more on our YouTube channel.

Building Cadre’s client base

I wanted to hear more about how Ryan built Cadre’s client base. He had a much more complex offering to market than, say, a consumer product.

WILLIAMS: The B2B, which is really what I think we were, and the B2B2C business as well is a very different playbook. Especially when the underlying industry is one that is used to everything being analog, offline, relationship-based. So my approach to scaling the business was a little counterintuitive, which was to start at the top of the customer pyramid, if you will, starting with the most sophisticated, discerning, analog offline potential partners, but also the ones that have the most gravitas and the most trust.

BERMAN: What’s an example?

WILLIAMS: Goldman Sachs.

BERMAN: Good example.

WILLIAMS: Right, exactly. You think of Goldman, you think of this behemoth, and you think of this institution that is relatively slow-moving in the scheme of technology companies. You think of a lot of domain understanding and expertise in investing. What I wanted to do was build a moat around some of these highly sophisticated partners, from a distribution standpoint, get them to buy into the concept, get them to distribute our product to their clients. From there, I thought you could then go down the customer pyramid, if you will, to a wider range of investors that maybe didn’t have all the quote-unquote sophistication, all the infrastructure that someone like Goldman had, but would look at Goldman as a social proof point.

That meant the sales cycles for getting some of these partners to bring their clients onto our platform to invest were much, much longer. As an investor, a VC, you’ve got to be willing to understand that this is more of a marathon, a fast marathon. It’s not a sprint. And the rewards from a lot of that investment early on in building an infrastructure that is trusted, credible, has all the safeguards you would want in place, a well-curated platform, will pay dividends down the line.

After a lot of conversations with folks like Goldman and J. P. Morgan and the Ford Foundation, some of these bigger institutional clients, we ended up winning a few contracts and we were able to strike some partnerships less than two years since I started the business with some of the biggest names in the financial services world.

Once we’ve got those investors to say, you know what, this is a really unique way to give our clients access to real estate at smaller fractional bite sizes with liquidity, then being able to go to independent advisors and direct to individuals became infinitely easier. But the muscle that we, at least, had to be able to build was we needed to have a really clear playbook for these longer sales cycles, meetings, and engagements where we knew what meeting one was going to need to look like to hook up those investors on the concept of what we were looking to do — the value proposition. We knew that we were going to need to meet them in person because it was very much a relationship business.

We had one shot at technology demos and giving them a view into what this would entail because there was already skepticism. Then there was an ongoing client relations management side of this as well, where we had to bring on domain experts who could cultivate those relationships. We spent the first few years building a highly concentrated base of significant whales, if you will. I like to use a fish and whales analogy, and we were able to get those investors to say, yes, we believe in this business. We believe in the product. It really differentiated the brand.

BERMAN: Were the Goldmans committing minimum dollars to be invested as part of these deals, and then they were passing on the opportunity to their clients, and they just knew that they could fill up to that number?

WILLIAMS: What we did with Goldman, which, as far as I know, hasn’t been replicated, was that we secured a $250 million commitment from Goldman, the institution. They had about a thousand subadvisors and clients beneath that commitment, and those were the individuals that ultimately owned fractional stakes in the properties of the portfolios that we built for them.

So, I would say it was really building that critical mass of high-impact, large enterprise-like clients that gave us the ability to then open up access to a wider range of folks from a position of trust.

Navigating under Jared Kushner’s spotlight

BERMAN: One of the most unexpected challenges Cadre faced was around media attention it received during the first Trump term because one of its earliest investors was Jared Kushner, who suddenly had a role in the White House, which might have created conflicts of interest.

WILLIAMS: We got a lot of attention. It wasn’t necessarily for what I thought the reason would be. Taking a step back, Josh and I were in school together, a couple of years ahead of me, and Jared had been really supportive in one of my real estate businesses and also on a personal level. I got to know them in a very different context than the world has seemingly gotten to know them. They were still relatively early in their careers. When I was thinking about partners and thinking about the kind of people I want to work with, those two, off the bat, checked every box.

My experience with them has been incredible. I never anticipated the geopolitical focus on the business. I always made it clear to Jared and Josh that I had certain principles and values, and those values, are for me, values I would never forsake and I would never concede on in any way, shape, or form: respect, integrity, transparency, empathy. These are all things that I was raised with and in all my experiences and times with them, there was a genuine respect for those values. We didn’t always agree on everything, and I don’t even think Jared and Josh agree on everything. What we did agree on was we wanted to do what was best for Cadre and to move the business forward, because it was a company we all had a deep passion for.

So that led to everyone, in a lot of different ways, making selfless decisions — Jared extracting himself from the business when he went down to D. C. after having brought so many of his relationships under the tent. Josh encouraged me to find my voice and speak truth to power when there were things that I saw that I didn’t agree with, especially in light of George Floyd’s murder in 2020. I would say overall, our company and our team grew from that experience and from having so many connected, politically connected partners because it wasn’t just Jared and Josh.

We also had the Soros family as one of our biggest backstop partners and Mark Cuban, who I communicated with on a weekly basis. We had the whole full political spectrum, but Jared and Josh were there from the early days. For me, my relationship with them preceded all of the media focus.

BERMAN: How did you deal with some of the negative attention that this brought to you?

WILLIAMS: The first thing I would say is I was very naive about the media world. I probably, in hindsight, could have gotten ahead of some things earlier, but you can spend all your time managing media, and then the business suffers. I had some incredible mentors who I went to whenever there was a story on the horizon.

Cultivating a team of mentors

BERMAN: Who were some of those mentors?

WILLIAMS: People like Vinod Khosla, who I would talk to. Vinod was great in that he gave me this advice that still resonates with me today, which is the most important attribute, in his mind, of an entrepreneur is who do you listen to for what advice? That’s a muscle as well, right? It takes time because early on it’s sort of trial and error. You listen to one person who gave you certain advice on one concept or theme, and you realize it was not the right person to listen to.

What I did was I built, I guess a little cadre, if you will, of advisors around me who I knew would be great for certain challenges. Vinod was super helpful as it related to managing the team and keeping everyone focused in-house while there were media stories surrounding the business. I spoke and spent a lot of time with Michael Ovitz as well.

BERMAN: Who’s seen his share of controversies he’s had to deal with.

WILLIAMS: Right. Michael was great as well, making sure I kept my head on straight and focused on the main thing, which was making sure our business continues to scale and achieve product market fit.

I actually talked with Josh Kushner a lot as well too. Josh had a very unique perspective, obviously being in his seat but was incredibly supportive throughout. I consider myself really fortunate that despite all of the craziness that came with being a CEO and a founder, plus at that time, I had this network of people around who cared about me.

One of the things I learned from that experience is you can never over-communicate to your key stakeholders. I had to get in front of it. I had to stand in front of the company and say, “Hey, tomorrow this is going to be something that’s out. Here is the truth of the matter. Let’s stay focused. I’m carving out six hours of my day for one-on-ones. Anybody who wants to talk with me about anything that’s bothering them or they’re excited about. I’m here for you.’”That was like a leadership evolution that I had to develop.

BERMAN: It sounds deeply consistent with your personal values, transparency, openness, right? You were creating opportunities for yourself to talk to the people you wanted to get to, and you’re giving that opportunity to your team to say, I’m here. The list of advisor names is just a who’s who. Is there a secret that you want to pass on to people about how to build that level of advisors?

WILLIAMS: What I would say to people that want to build that kind of cohort of domain experts, is it’s got to be a symbiotic relationship. There has to be something you’re bringing to the table. You can’t come with your hands open every single time asking for something.

For me, as I thought about some of the investors, other than investing in the business, which was great, it was also keeping people close to certain themes and trends that I saw in real estate or alternatives, sharing with them insights that I saw that may be helpful for them, sharing perspectives about other founders that were emerging that I had gotten to know that I thought would be interesting for them, interesting for them to get to speak with, and then just making sure you deliver on what you say you’re going to do.

For me, it was following up with communications, whether those were weekly email updates on how the business was doing, asks I had of people, but then also insights I wanted to share. It was just about being consistent and ensuring you held yourself accountable as well in those dynamics.

Deliver on one, and those engagements become like a snowball, and this person is, I really would love to connect you to this person and this person. Before you know it, you’ve been able to build a really strong group around you. But I think so often people look at those dynamics as transactions in a lot of ways because they’re like, okay, what can I actually bring?

A lot of people can share that you might not necessarily think is valuable to hear. But some of these folks who are in kind of high places actually enjoy learning about.

Inside the decision to sell Cadre

BERMAN: So you mentioned landing the Cadre plane in a way that was successful for your investors and your stakeholders. Why did you decide to sell the company?

WILLIAMS: It was one of the toughest decisions I’ve ever had to make. It was challenging because, in so many ways, your identity can become inextricably linked with what you do in your profession. For me, I saw that certainly happening.

When I started the business, the vision was democratizing alternative investments. Real estate was the beachhead product. The pandemic was sort of a shot in the arm in that it showed me the importance of diversity and diversification.

The question for me was, how do I most efficiently diversify our business such that we have multiple business lines that can endure any market condition? There are two paths that we could take. One was we could go out and raise additional capital to build other mini cadres — a credit, and private equity, and farmland, and infrastructure. Or we could partner. The building path, in my mind, was a much longer path. It was a more expensive path, just given where the markets were. It was a less certain path in a lot of different ways. The partner path was really interesting because we had so many inbounds from large institutions that were interested in what we were building and doing, in acquiring the business. We had interest from other fintech and consumer tech platforms as well.

What I wanted to optimize for was a partner that could allow us to diversify our product offerings as well as our distribution. A partner that had mission alignment, because, yes, we could go work with you name your big institution, but at the end of the day, it’s not necessarily a guarantee that why I started the business would be what they were interested in.

BERMAN: You may be selling your soul along with your company.

WILLIAMS: Exactly. You probably are. Fortunately for me, I had engaged with this company, Yieldstreet, many moons before. I got to know the founders really well. We both had alignment on the mission. We both cared about broadening access to alternatives. They took a different approach.

They focused much more on the retail investor base from the outset. They focused much more on credit and debt-oriented products. But it was a perfect complement. After spending some time with the founders, some mutual shareholders, and investors, we agreed to join combined forces, technically sell the business in what was at the time the largest transaction of that year in fintech land.

I’m proud of the team who really led a lot of the blocking and tackling of getting what was a complicated transaction done in an environment where there really wasn’t much M&A happening.

I’m really grateful for all the investors that believed in me and had conviction despite some saying stay the path, stay standalone. It had been a decade since I started Cadre. This was a great way for me to leave an impact, a mark, and ultimately fulfill the promise of why I founded the business.

What’s next for Ryan Williams?

BERMAN: So what’s next?

WILLIAMS: I landed that plane, and I’m just starting to think about takeoff for my next journey. But I can tell you this: It will be a company at the intersection of financial services and technology.

I’m spending a lot of time now speaking with potential clients, customers, doing all the fun due diligence, as well as prospective investors in the business. I’m excited about applying the learnings. A lot of people are like, “Ryan, aren’t you gonna take some downtime?” It’s actually somewhat therapeutic to be able to apply the learnings from decisions I made that worked out and that didn’t into what’s to come next. I want to focus on working with people that I share values with, that I care about, that have the same incentives as I do in terms of financial as well as mission.

I want to build on what I’ve been able to do. But I’m an entrepreneur through and through, and that’s where I feel most fulfilled, that zero to one phase. I love to be in the midst of ambiguity and absorb it, and to me, that’s the essence of entrepreneurship.

BERMAN: We can’t wait to have you back on to talk about the new thing.

WILLIAMS: Can’t wait as well.

BERMAN: Great. Thanks so much for being here.

WILLIAMS: Thanks for having me.

BERMAN: Ryan’s resilience and drive have already helped him scale one business from scratch. His story is a testament to the power of building and nurturing a network.

When you sit in person with Ryan, you can feel this energy. It’s different with some entrepreneurs than others. He exudes it. You want to root for him. You believe in him. You’re excited about whatever he’s talking about. I can’t wait to see what he does next — and hopefully have him back on Masters of Scale to talk about it.

I’m Jeff Berman, thank you for listening.