The Next Big Thing in Homebuilding: Foundation’s Digital Platform

Foundation, established in 2023 and headquartered in Boulder, CO, is a start-up aimed at transforming the homebuilding industry. This innovative company, co-founded by Luke Groesbeck, Graham Place, and Derek Schairer, positions itself as the "Shopify for Homebuilders." The core mission of Foundation is to bring the new home shopping, purchase, and ownership experience online, thereby helping homebuilders sell more homes, more profitably, to happier customers.

The idea behind Foundation germinated when the founders, who previously worked together at Opendoor, observed the significant gap in the homebuilding market. The offline nature of the homebuilding process posed a stark contrast to the digital advancements in other sectors. This realization led to the inception of Foundation, aimed at bridging this gap by offering a comprehensive buyer experience platform for homebuilders.

Who Are the Minds Behind Foundation?

Luke Groesbeck, one of the co-founders, has over 15 years of experience helping start and scale venture-backed start-ups. His extensive background as a founder, product manager, and product executive has been instrumental in shaping the vision for Foundation.

Graham Place, responsible for software development at Foundation, brings his experience from working at Opendoor, further solidifying the technological backbone of the company.

Derek Schairer, another co-founder, was the former GM of Opendoor’s homebuilder business, where he created the company's first billion-dollar partnership channel. With over 15 years in the homebuilding industry, including a tenure at Lennar, one of the nation's largest homebuilders, Derek’s expertise is invaluable. His passion for building a better platform for residential real estate and new construction drives Foundation’s mission forward.

How Does Foundation Aim to Transform Homebuilding?

Foundation’s primary objective is to bring the traditionally offline homebuilding industry online. This transformation addresses a critical issue: the outdated and cumbersome process of buying and owning a new home. By introducing a digital platform, Foundation aims to streamline this process, making it more efficient and user-friendly.

Homebuilders, who sell approximately $250 billion worth of homes annually in the U.S., are in dire need of modern solutions. Despite the industry's economic significance, many aspects remain offline, leading to inefficiencies and customer dissatisfaction. Foundation’s buyer experience platform seeks to resolve these issues by providing homebuilders with tools to enhance their sales processes, improve profit margins, and ultimately deliver a better customer experience.

Why is the Homebuilding Industry Ready for Digital Transformation?

The homebuilding industry, despite its massive scale and cultural importance in the U.S., operates largely offline. This is particularly surprising given the digital advancements in other sectors. The U.S. is significantly underbuilt, with estimates suggesting a shortage of 2 to 6 million homes needed to house American families. Bridging this gap requires innovative solutions that can scale quickly and efficiently.

Foundation's platform is designed to meet this need by bringing the entire home purchase and ownership experience online. This shift is not just about convenience; it's about empowering homebuilders to run better businesses and helping to address the housing shortage in the U.S. By digitizing the process, Foundation aims to help builders sell more homes at higher margins while ensuring a smoother, more satisfying experience for buyers.

What Unique Opportunities Does Foundation Offer?

The opportunity for Foundation lies in its ability to modernize a traditionally offline industry. Homebuilders spend over $10 billion annually on technology, customer acquisition, and commissions. Despite this significant investment, the industry's digital transformation has been slow. Foundation sees this as a tremendous opportunity to introduce a platform that can handle the complexities of homebuilding while offering a seamless digital experience.

The question Foundation poses is simple yet profound: "Why do you have an app for tracking your pizza delivery, but not one for the biggest purchase of your life?" This highlights the discrepancy in digital advancements between everyday conveniences and significant life purchases. By addressing this gap, Foundation is set to revolutionize the way homes are bought and sold.

How Did the Founders' Experience Shape Foundation?

The founding team’s experience at Opendoor played a crucial role in shaping Foundation. Derek and Luke worked together on the partnerships team at Opendoor, which became a major driver of customer acquisition. Graham was involved with Opendoor Mortgage. Their collective experience in dealing with homebuilders and understanding the potential of digital products in transforming businesses laid the groundwork for Foundation.

The team’s insight into the homebuilding industry and their expertise in digital solutions enabled them to identify the key challenges and opportunities. This background ensured that Foundation was built on a solid foundation of industry knowledge and technological prowess.

What Problem is Foundation Solving and Why is it Important?

Foundation addresses a core problem: the offline nature of the homebuilding consumer experience. This offline approach leads to inefficiencies and a subpar experience for both homebuilders and buyers. Foundation’s buyer experience platform brings this process online, helping homebuilders sell more homes, at higher margins, to happier home buyers.

The significance of this problem cannot be overstated. The top 300 U.S. homebuilders alone sell over $250 billion worth of homes each year. These builders play a critical role in addressing the housing shortage in the U.S. By providing a digital solution, Foundation helps these builders operate more efficiently and effectively, ultimately contributing to the construction of more homes.

What is Foundation’s Long-Term Vision?

Foundation’s long-term vision is to become the platform for homeownership, extending beyond just new construction. The U.S. housing market is underbuilt by millions of homes. By helping homebuilders bring their processes online, Foundation aims to facilitate the construction of these much-needed homes.

Beyond addressing the housing shortage, Foundation envisions a future where the entire homebuying and ownership experience is seamlessly digital. This includes everything from the initial search to the final purchase and beyond. By achieving this vision, Foundation will not only transform the homebuilding industry but also set a new standard for the residential real estate market.

How is Foundation Positioned for Success?

Foundation’s early traction is promising. The company’s first customers are set to go live in Q1 2024, with interest from leading national builders and fast-growing regional and local builders. This early response indicates a significant shift in the industry, with builders recognizing the value of Foundation’s platform.

The company’s strategic location in Boulder, CO, and support from Group Partner Garry Tan further bolster its position. With a strong foundation in place and a clear vision for the future, Foundation is well-equipped to lead the digital transformation of the homebuilding industry.

Conclusion: Why Foundation is a Game-Changer for Homebuilding

Foundation is not just another start-up; it’s a transformative force in the homebuilding industry. By bringing the home purchase and ownership experience online, Foundation addresses a critical gap, offering homebuilders a way to sell more homes, at higher margins, to happier customers. The company’s innovative platform, combined with the founders’ extensive experience and industry knowledge, positions Foundation for success. As the homebuilding industry continues to evolve, Foundation stands ready to lead the way, ensuring a brighter future for homebuilders and homebuyers alike.