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What a Colorado Tech Startup Learned in Its Own Back Yard

Kevyn Burger March 4, 2019
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Colorado has been a fine proving ground for Silvernest.

Denver-based platform Silvernest bills itself as a roommate matching service for baby boomers, retirees and empty nesters. Using a proprietary algorithm, the Colorado tech startup pairs these homeowners with housemates for long-term home sharing.

“We realized there was an abundance of empty bedrooms that could be put to work so people could use their home as an asset and monetize it,” said Silvernest co-founder and CEO Wendi Burkhardt. “We could help them age in place while creating affordable living space for renters. It’s a win-win.”

From its launch in 2015, Burkhardt and her team were able to use a strong showing in Colorado to demonstrate the broader value of their concept. Silvernest strategically tapped into the state’s resources, from enthusiastic investors to service providers eager to form partnerships.

“We’ve always been a national platform, but we were able to test tools and features here and learn from the user base. We’ve taken the knowledge we amassed and employed it as we’ve expanded,” Burkhardt explained.

Identifying a Local Need With National Legs

Right away, Silvernest identified its role and value as one piece of the solution to Colorado’s complex housing picture.

According to Census Bureau data, Colorado is on an extended growth curve, attracting some 80,000 new residents in 2017 alone. These newcomers have accelerated the demand for affordable housing, driving up rental prices and creating a shortage of livable homes.

“Our government agencies and organizations were convening around this discussion, identifying affordable housing as a key priority and doing the work to address it. We learned from those discussions,” she said.

“Housing is at the top of the list of critical issues in many communities; it’s not unique to Colorado. We see areas with expensive housing being more open to adopting home sharing as an alternative and an option.”

Partnering With Nonprofits and Local Government

While Silvernest is a for-profit company, it’s forged relationships with nonprofits and government agencies throughout Colorado.

“Anecdotally, we know that our area is lacking 15,000 affordable housing units. The cost of housing is a huge issue our community is tackling,” said Claire Anderson, executive director of the Innovations in Aging collaborative in Colorado Springs.

The nonprofit is a Silvernest affiliate, which means it makes referrals and shares information about the home sharing platform through its newsletter and social media channels.

“We don’t provide direct services, so we’re always searching for resources to help our residents age in place,” Anderson said. “Home sharing can be a solution for the affordability problem for seniors and others on fixed incomes. Silvernest is not one-size-fits-all; it allows participants to be creative and find what meets their needs.”

Silvernest is now leveraging similar connections to build credibility in other markets where home sharing is gaining momentum. Recently it signed on as a partner with the South Florida Institute on Aging and with the Mayor’s Office in Washington, D.C.

“People can be leery of the concept; that’s where education comes in. Our network of grassroots allies and supporters, official and unofficial, has helped us build and grow capacity,” said Lisa Smith, Silvernest Partnerships Manager.

“We network with case managers and that brings us referrals. The collaboration component is fundamental to elevating the message and scaling the home sharing concept.”

Getting Buy-In From Local Investors

Early in Silvernest’s life cycle, Burkhardt got a vote of financial confidence when she pitched her startup to the Rockies Venture Club (RVC) as she sought capital to build the platform, improve the user experience and scale the business.

The Denver-based angel investor network backed Burkhardt first in 2016 and then with a 2017 follow-on investment. Silvernest raised $1.3 million in its seed funding round, with money from RVC and a few other early stage investors.

“We like supporting entrepreneurs in our back yard,” said Dave Harris, RVC’s director of operations. “Silvernest was a novel idea at the time and there was no platform connecting folks in this sector. We saw the market as huge and dynamic and only going to grow.”

Harris said the investors thought Colorado would be a good launching place for Silvernest because the state, with its large number of visitors, was an early adopter of the sharing economy. Platforms offering consumers access to ridesharing (Uber and Lyft) and home sharing (Airbnb) had caught on quickly, familiarizing and preparing potential Silvernest users for its twist on the concept.

Silvernest’s potential to create value in the community aligned with RVC’s larger mission, Harris added.

“The social impact side was equally positive. [Silvernest] can help people age at home and provide them with income streams,” he said. “Those benefits coupled with the strong financials are what we like as investors. We want to be doing good while making money.”

Burkhardt was able to build on the early investment; she credits it with helping her raise $3 million in a Series A funding round in 2018.

“The local investors opened doors and made a significant difference in raising capital outside the Colorado market,” she said. “When you’re a relatively new concept, other investors want to see backing from your community. That local support is an important part of the process.”

Local Lessons Fueling Upward Trajectory

In its first year of operation in 2015, Silvernest attracted 10,000 online users. Since then, Silvernest has experienced dramatic growth, now boasting that it has facilitated some 75,000 roommate matches. Burkhardt anticipates it will double in size in the next year.

With its upward growth trajectory, Silvernest is beating long odds. According to the Startup Genome Report coauthored by researchers from UC Berkeley & Stanford, up to 90 percent of tech startups fail.

Burkhardt credits the fast out-of-the-gate pace to the strength of the platform and the lessons in innovation she learned on the ground.

“Denver’s reputation for being open, progressive and innovative played a role in people being open to new concepts like home sharing. That’s been a benefit for us,” she said. “We think Silvernest is in a position to become mainstream, like Uber and Airbnb. That’s what we aspire to.”

Three Takeaways From Silvernest’s Rapid Growth

1. Don’t fear tech: Older consumers are more tech savvy than they get credit for.
Silvernest’s average user is between 60 and 65 years old. “These people were participants in designing the technology we use today and the majority are comfortable using platforms and making purchases online,” said Burkhardt. “Don’t talk down to them.”

She notes a sharp drop-off in tech skills among consumers in their 70’s, 80’s and older; these users often need help with the digital details of online home sharing, from crafting profiles to paying fees.

“As the population continues to age, we will see less of a digital divide in the future,” she predicts.

2. Leverage mobile tech: Boomers are crazy about their smart phones.
Seventy percent of baby boomers have smart phones, according to Burkhardt, and they use them for everything. Silvernest’s statistics find that 60 percent of their firsttime visitors come to the site via their mobile devices

3. Enlist customers in your marketing strategy.
Silvernest is about to launch an ambassador program, which will use testimonials from satisfied users who want to spread the word about the home sharing option to potential users.

“We have passionate fans who are so happy with their experience that they want to share their insights,” Burkhardt said. “It’s better if it comes from them than from us. Before they use the platform, people want to hear about real experiences.”

Stria partnered with Longevity Colorado on content exploring the state’s local longevity market. See the full series here.

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Kevyn Burger

Kevyn Burger is a freelance feature writer and broadcast producer. She was named a 2018 Journalist in Aging Fellow by the Gerontological Society of America. Based in Minneapolis, Kevyn is the mother of three young adults and one rescue terrier.

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