August 11, 2022
A Q&A with Hameto Benkreira, Head of Growth at PadSplit, a digital affordable housing marketplace
As the affordable housing crisis grows nationwide, PadSplit continues to provide safe, cost-effective housing for low-income workers who serve their communities. Founded in 2017 by CEO Atticus LeBlanc, PadSplit’s award-winning model allows members to find a flexible, long-term rental option that includes furniture, utilities, and access to public transit–all without requiring a minimum credit score.
To build the largest co-living marketplace in the United States, PadSplit uses Plaid Income to automate the income verification process and issue approvals within seconds. Instead of waiting as many as five days to manually verify income, Plaid Income enables real-time verifications, faster completion times, and reduces the need for manual intervention with better data accuracy, fraud controls, and process automation. Here, PadSplit’s Head of Growth, Hameto Benkreira, talks with Plaid’s Engineering Manager, Eric Sprauve, about how they’re using Plaid’s real-time income verification tools to onboard more users and tackle the affordable housing crisis, one rental at a time.
Plaid: Can you start things off by telling us about PadSplit?
Hameto: We’re on a mission to solve the affordable housing crisis and leverage housing as a vehicle for financial empowerment. PadSplit is an affordable housing marketplace so from a product standpoint, it looks like an Airbnb. The key difference is, our marketplace is designed to empower low-income workers who serve their communities.
Plaid: That’s amazing–and so important. You said PadSplit is like an Airbnb but I imagine it operates very differently.
Hameto: First of all, we don’t use credit scores to determine whether or not someone can live in a PadSplit. Instead, we use Plaid Income to give us insights into a member’s recent and recurring income. If you have a credit score, it’s essentially a black box number that accrues over your entire life. Instead, we look at recent income because we believe the best predictor of your ability to pay rent next week is the amount of money you earned last week.
Plaid: How do you gather that information and how does that fit into the application flow?
Hameto: To move into a PadSplit, you first have to become an approved member. You can start that process by visiting our website and checking out our housing marketplace. Once you find a home you’re interested in, you can start the application process, which has three parts. First, you give us some basic information like your name, address, phone number, and social security number. We use that information to verify your identity and run a background check. This helps us reduce risk both for us and our members. Once we verify someone's identity, we move to income verification–which is where Plaid comes in.
Plaid: That sounds like a pretty straightforward process but I’m sure you’ve run into some challenges along the way. Can you talk to us more about that?
Hameto: Anyone who works on product knows it’s never easy. There are always challenges. I used to think income verification would be as simple as asking how much money they make, stamping their documentation, and then passing them the keys to their new home.
Asking about income is the easy part. Verifying it is difficult. You might have a W2, a pay stub, an earning statement from Uber, Lyft, or another gig economy platform. You might have a social security or disability letter from the government or a bank statement. Each of them contains different types of data along with a different set of risks–so you can start to see how things get complicated.
You also have upload requirements like type of file, image quality, and size. If the document doesn’t have their name on it, we’ll ask them to find another document which can take days– waiting for them to go back home, look through storage, search online, or track down old passwords and logins. These are all things we had to keep in mind when designing an income verification platform, which is why I’m so grateful for Plaid!
Plaid: And for the applicant, waiting several days to know whether or not you have a place to live can be a scary experience.
Hameto: Definitely. The average time it takes to manually verify someone's income is five days. With Plaid, it takes just a couple of seconds. We have three different income verification methods that we use with Plaid and each one has its own speed but the overwhelming majority of verifications that we run take just a couple of seconds.
Plaid: That's a game changer for everyone involved!
Hameto: Yeah. Speed is extremely, extremely important. But it’s also about certainty. If you don’t have housing or if you’re housing insecure, moving to a new city, or trying to figure out what’s next then you don’t have time to wait five days to get approved. And if we can’t verify people quickly, they’re going to find certainty somewhere else. They’re going to ask a family member if they can sleep in the basement. They’re going to go to an extended stay motel and pay two weeks of rent upfront or take their chances on Craigslist. So, speed isn’t just a user experience thing. It’s a fundamental value prop.
Plaid: How does Plaid Income and Assets help you deliver both speed and certainty?
Hameto: We offer four different verification methods. When you’re designing a workflow, you often don’t want four different branches but for us, opening multiple verification methods opens up more doors and creates more surface area for access. 18 months ago, we had just one verification method: Income Verification. So, we asked for their documents, you sent them to us, we reviewed them, and then verified them manually. A little more than a year ago, we added Assets and as a result, Plaid took us from 100% manual verification to 30% and we’re still seeing that number edge lower and lower. Now, we’ve added two more verification methods through Plaid Income.
This is fundamentally about access. Speed really matters from a security, stability, and user experience angle. But if they’re not able to easily verify their income online, then speed doesn’t matter. To put it simply, Plaid helps us unlock access.
Plaid: How has Plaid supported your recent success and growth?
Hameto: We recently raised our Series B so we're still still early, but we 3X’d our growth in the past year alone. And prior to me joining PadSplit, I believe the company 3X’d again but don’t quote me on that. We have a membership approval team, which is about one to two people, and their job is to usher applicants through the approval process which includes everything from ID verification to income verification. And even though we 3X’d and 3X’d again, we haven’t had to scale up our team. It’s not always fun to recruit, hire, train, and enforce quality checks. There’s a magic to being able to have a really small, focused, and highly specialized team that supports manual verification and addresses those difficult edge cases. Scaling with Plaid has allowed our team to stay focused and continue to drive value in those ways.
Plaid: That’s amazing. I know we talked about how Plaid has even enabled your team to take some time off.
Hameto: Yeah, we were joking earlier, but the primary person on our membership approval team is taking vacation for the first time in a very long time. He usually works nights, early mornings, weekends, and holidays just because he schedules his work around responding to applicants whenever they apply or send in verification docs. So, I think he’s very grateful to your team for allowing him to take a vacation for the first time in a while!
Plaid: What’s next for PadSplit?
Hameto: As a company, we’re a geographic specific housing marketplace. And even though we’re on the software side of things, the way people experience our product is in real life. So while we’ve experienced tremendous growth where we’re based in Atlanta, we’ve also launched a handful of other markets recently in Florida and Texas. And that’s the next phase of growth for us–finding that product market fit and hitting our stride in new markets.
That kind of growth requires a lot of humility. Housing is different in different places and so with each new location, we have to do our research, get to understand the local market, uncover new users, and potentially new user segments. For example, in one of our new markets, we’re seeing a lot of interest from students and verifying income and underwriting housing risk for students is very different from doing it for someone who has W-2 income or gets paid on a regular basis. So, this is new terrain for us. We’re also evaluating other complicated earner types like people with variable incomes, seasonal jobs, and more. These are all use cases that we’re looking forward to figuring out with Plaid.
Plaid: What advice would you give to fellow product managers or engineers?
Hameto: The advice I would offer is the 101 stuff as it relates to product and growth. Growth is a hypothesis driven line of work. You have to measure everything and run most things as experiments. That’s the way you really unlock growth. That’s the first bucket–data, growth, and experimentation. The second bucket is going to the primary source. One of the things that really humbled me when I came to PadSplit was “dogfooding” with the operations team. That meant actually figuring out how our team manually verifies income. It meant getting to know our product on a more intimate level. It also meant talking to our customers. You might feel like you know your customers but your user demographic might change over time. The last thing I’ll share is this: I think most of your time should be spent pursuing the obvious value props, which for any product usually comes down to cost, quality, access, and speed. If you’re not focused on those four buckets then you’re probably not investing in the right part of your business and you probably won’t be able to scale as quickly.