#289 - Brett Hagler - CEO of New Story Homes - Pioneering Solutions to End Global Homelessness

Chris Powers: Brett, welcome to the show. Thank you for joining me, my man.

Brett Hagler: Chris, great to be on with you guys. Big fan of your pod and a big fan of you, so it's good to be here. 

Chris Powers: I'm a fan of you and everything you represent. Brett and I have gotten to know each other over the last year, and his story and what he is doing at New Story captivated me, so I thought we had just started there.

Will you describe your journey to finding a New story? I would love it if you would talk about your experience in Haiti. 

Brett Hagler: Yeah, so doing something like New Story, which, just for context for the audience, is a non-profit that focuses on providing housing opportunities to low-income families.

We'll get more into how we think about investment, real estate, and a lot of that stuff and innovation. But that's what I focus on; this is the last thing I thought I would do growing up. And so, my quick background on how I got to Haiti and started New Story was that I grew up in Florida, had two amazing parents, sometimes had a fantastic brother, and was just a stereotypical jock throughout middle school and high school.

When I was 18, out of nowhere, I learned that you never know what life will throw at you. And I got diagnosed with a sporadic form of cancer. And so that was a pretty hard time, and hindsight taught me a lot about grit and perspective, and a lot you can learn from that. Then right after that, I got better, which took me some time. I went to college at Florida State. When I got there, most people thought the story would go; he overcame cancer, and everything now in life is full of gratitude and just wanting to make the most of the gift you've been given.

And I went the opposite way and thought that life was short. I want to go live it up and make the most of life. And so when I went to college, I was pursuing what I call the three G's. And the three G's is not gratitude and generosity and God. It was girls' gold and glory. These are the three things that have been the fall of humanity throughout history if you think about it.

And so that was what I pursued. But I loved business; I loved learning about entrepreneurship. I read almost a business biography every week. And I have so had an absolute obsession with startups and business. And After college, I graduated and started a for-profit e-commerce company.

I was raising a bit of venture capital at that time. And around that season, two things happened. One is the big 180 in my life. I made a significant change and reclaimed my lost childhood Christian faith. And I won't get into details of how that happens.

People get whatever they find purpose in, and all different types of ways. But it was clear that my faith needed to be the central point in my life. And so I made many significant changes to my lifestyle, my vision, and how I thought I could use a little bit of the God-given ambition or entrepreneurial mindset in a way that could help some people.

This new perspective on life is channeled through my new faith this time. And I wanted to start giving back a little bit of the money that the startup was making, and it was an e-commerce startup. And this was also around the time when Tom Shoes and War Parker, and many of those buy one, give one brand, were popular.

And so we wanted to have a component to that in our business. And one of the charities we would give to was based in Haiti. And I went on a trip down to Haiti in 2014 to see this charity in person. It was an organization called Mission of Hope. They're phenomenal. When I went on that trip, the last thing in the world that I thought would happen to me was that I would see the problem that the New story is now working on.

But when I got down there, I discovered the problem of kids, families, and people like us needing to have licensed essential human needs around safety and shelter, food, and water. And from my perspective and a first principles mentality, it was apparent that no matter how creative or intelligent or ambitious or you name it, somebody is, If you don't have like literally life's most basic human needs, it's nearly impossible to actualize your potential and what you're capable of and your dreams.

Or I had a family in a place just somewhat to enjoy life. And so that, I'll pause there, Chris. And that was about a little more than eight years ago. And that is the town New story that ended up getting started. 

Chris Powers: Yeah, a lot to unpack there. Let's start. I wouldn't say I'm in a funk; I'm in a weird spot waiting for that experience that captivates me so that maybe it turns me in a different direction.

And I guess I would start by saying, okay, you went to Haiti, you recognized something. It had a significant impact on you. What happened in the following days, weeks, months? Like how quickly did you act on this? Is this something that lived in your brain for a few more years, and then you picked it back up?

Like how did you take action? 

Brett Hagler: Yeah, it's a good question, Chris. It was the intersection of two things. So one was just, from a heart perspective, just people. Different things move people, and for me, just the idea that there's, and then I learned how big the global problem is, which is over a billion people living in inadequate housing. 

And so, from a heart perspective, it caught my attention. It moved me. I couldn't stop thinking about it. And this is a first principle, like a core foundational problem that was solved, whether for a family or a bigger perspective, millions of people. Ideally, there could be so much potential unlocked.

And so that was a heart perspective. But then the other thing, which was necessary and probably would be the story, one of which started without this piece. And the second piece was it caught my entrepreneurial attention because the genesis of the New story was not that I went to Haiti.

Saw people that lived in tents on dirt floors, some of the worst conditions in the world. It's so hard to be around and see. So it wasn't just that I saw that; I wanted to start an organization then. It wasn't that. I tried to find other organizations I could get excited about doing something with housing for some of the most vulnerable low-income families.

And then the more that I looked and the more that I tried to understand how people were attacking the problem, that's when I started to make a list, literally still have a list of problems that I saw from my perspective, which wasn't to say was right or wrong. It was no disrespect to other organizations, but I saw a lot of the status quo, a lot of marketing and branding that looked like it was stuck 20 years ago. 

I saw a limited amount of technology being used. I didn't see a lot of innovation. I needed clarification on why there wasn't more involvement with local labor, local materials, and being able to scale that way.

Anyways, I made a long list. That ended up becoming the thing that made sense to me to think about starting something because it was more of an entrepreneurial journey from the beginning because I saw what could and should be better, not just from the heart side but also from a business lens or an entrepreneurial lens.

And so those two things were the intersection that was the aha moment, and that was about a year from when I first saw the problem in Haiti and ended up calling it New Story. The name New story represents, most importantly, creating a New story in the families that we get to have a chance to partner with, but also a New story and how we think about building a more modern, innovative social impact organization.

That would be a lot different from the traditional kind of models or approaches that I had seen or experienced. And from there, Chris, we went on a limb and applied to this program out in Silicon Valley called Y Combinator. If most people know what it is, they know it's a big deal.

Another sounds like a weird name. It may sound like a car part or something, but we applied to YC, and we're one of the first non-profits to ever go through that program. And so that's how we got started.

Chris Powers: Don't steal my catalytic converter, and don't steal my Y Combinator off my car.

 Okay. When Americans think of inadequate housing, we may think, oh, the window's busted out, or there's a roof that leaks. What does inadequate housing mean to you that impacts over a billion people? Let's start there.

Brett Hagler: That's a great question. So I would assume most people listening have kids, or you would imagine, growing up with your family.

So let's say it's a family of four, and you are probably living in a very small, I'd say probably, less than 500 square feet type of shack that is probably on dirt floors, that when it rains at night, stuff is coming through the roof. It's tough to sleep. If it's raining badly, there could be rainwater or sometimes sewage that is rushing through your floor, so you probably have to stand up at night.

That is common during lousy rain, and you have no protection from intruders, the weather animals. And so you're always on high alert in survival mode, where there's a pronounced physical problem with inadequate housing. Still, there's also a severe distal problem and challenge that comes with not having safety and security.

And so that's what your day looks like. You'd be lucky to have a bathroom. You may not have clean water in the home. You're not going to have a toilet that we know, and probably not going to have a shower. And you're probably not going to have any electricity.

And you're not stranded with anything out under the stars, but you're living in a very inadequate home. And that is, for the most part, most people we try to partner with.

Chris Powers: And all of those things happening. When you begin to reintroduce the American way, I don't even want to say the American way, but a clean way of living or a more stable way of living.

Like what are the by-products of that in kids' and adults' lives? If I was standing up all night trying to escape sewage, I'm not sleeping, I'm probably not going to be great at work tomorrow, or I'm probably sick more if I'm living on dirt roads but a dirt floor. What are things that change people's life by just giving them a good structure?

Brett Hagler: Yeah, so we now have, and we'll eventually talk more about what New Story has done, but to fast forward a little bit, we've now been fortunate to partner with almost 20,000 people, and we have data on that for almost eight years now. So we've learned a lot about what the impact is.

There's a very long list because it touches everything, but the three main things we've seen, number one, are overall health. So that's going to be your physical health. That there are a lot of different ways to measure that. Also, your mindset and your well-being when you know that you have a safe place that is yours, that is on a piece of land that you can plan to be on for maybe the rest of your life or generationally that changes how you can think, how you can plan, how you can set goals.

So the first thing would be health. The second thing would be overall income. So it is incredible and inspiring to P see people increase their income once their basic human needs are met. Here are a couple of examples of how that happens. Many people start tiny businesses, so they'll do that alone, but that's not everybody.

It's simple things like a hardworking mom wanting to show up and be an excellent maid and make a decent living. Or somebody that could be a farmer when they have a place they can count on for safety and not worry about their kids being sick in the morning or getting sick, or the long list of other problems that come from living in survival mode.

They're just simply better. Able to perform better at work. So income would be the second thing. And the third thing would be education. So kids improve their ability to learn, have a place where they can create, get a computer, or do whatever they're designed to do and explore and be curious about.

So those are the three main things: health, income, education, and our opinion. Those are important when we think about changing society and economies, like local economies. 

Chris Powers: I cannot imagine. It's hard to imagine. All right. We've described what the problem is.

Now. Let's go back to the moment you said we; we didn't discuss it, but I'm assuming the e-commerce business either went away or didn't work because you had time to go to Y Combinator. Let's close that loop, and then I want to talk about how we're solving the problems. 

Brett Hagler: Yeah. So ended up shutting that down after about two years.

It was an incredible learning. We're at a college and can give back almost all the venture capital money we raised, which is unique. And so we just realized this is something other than what I want to dedicate my next ten years to building. There wasn't enough. There needed to be more differentiation.

And so we thought, instead of spending 400k a month burning on Facebook ads, why don't we return the money? And then, after that, I had the idea for a New story. And so we were able to, I could go back to a lot of those early investors, and they helped seed New stories.

This change was, this was more in a philanthropic way. So yeah. Then we applied to White Combinator. For those unfamiliar, it's regarded as the world's top startup accelerator program. They've produced companies like Airbnb, Coin base, Door Dash, Instagram, and Stripe. It's quite an impressive list.

And we went out there at that time as a, as fully as a non-profit, and we had a phenomenal experience. And I wonder if you want me to discuss that, Chris, or specific questions.

Chris Powers: Let's go in with what you think the idea was. Or did you go with this huge problem, and we're here at YC to figure out how to tackle it?

Or did you already have an idea? And to expand on that, when I think of YC, I think about it for these for-profit companies. They were guiding you for a non-profit. How did they help you in a different way than they helped other people? 

Brett Hagler: It's a good question. Then I'll ask you the last thing you said first.

No, they didn't. And that was the best part about going through the program. And I envisioned that there would be some differences as a founder. There will be some nuance, but you should consider building an organization, whether non-profit or for-profit, in many of the same ways, right?

Having many of the same standards, thinking about how you're recruiting talent, how you're doing branding, how you're doing marketing, how you're thinking about the quality of your product, and what is different about what you're solving. And so when we went through, this is a long time ago, and our model has entirely changed ever since.

The mission hasn't changed, but we've learned much higher impact, leverage, and ways to deliver that mission. We focused on the problem of. Feeling like charity was a black hole. And when you gave, you needed to know where the money was going, what was being done with it, what was being, who was being impacted, and what were the overhead expenses.

It just all felt like a black hole. So we added a lot of transparency to that process. And we built a crowdfunding platform where you could go online and see families that we had on the platform. You could give directly to that family. A hundred percent of that donation would go toward that family.

And then, when they moved in, we sent a move-in video back to that donor. So there was a lot of transparency and that process and crowdfunding, which was, back almost a decade ago, there's always going to be different things, and crowdfunding wasn't like this huge wave, but there were many new crowdfunding sites.

And so that was like the original model. It was still focused on housing. We still had the same mission, but how we delivered that mission is about night and day different from today. But that was how we started, and we've always had this. We call it pioneering solutions to end global homelessness is our mission.

And so we want to understand the problems behind the problem. It's pronounced the core problem is people not having adequate housing, but what are other problems restricting them from getting that housing? And we want to believe many of those problems must be solved with traditional methods and systems.

And so our job and where it's worthwhile to exist as an organization is to come in and identify those problems and then pioneer solutions so that we can create, break down barriers and give people a better opportunity to access adequate housing. 

Chris Powers: Okay. So let's cue in on that for a second.

How do you go about finding the problems behind the problems? Because of this, you can use this framework in for-profit or non-profit. What did you all think about it? 

Brett Hagler: Yeah. So let's use a New story as an example, and I would say, let's think of it less as non-profit or for-profit, but just thinking about problems, right?

So, today, I'll fast forward. We focus on solving two big problems that restrict people from access to adequate housing. So after you do this for eight years, there are two main ones that we're dedicating the organization to solving.

The first one is just the overall cost. Of a house, right? So if you have a cost, the cost usually needs to be lowered. And so we spend a lot of time, a lot of R and D, hiring team members, civil engineers, architects, creating partnerships, creating r and d projects to decrease the cost of that home, right?

So that's the first thing that we focus on. And then the second problem is that even if the home is lower cost, which is excellent, you still have to solve the problem of how it gets financed. And so the other problem we work on is a need for more housing finance for very low-income families.

And so those are the two main problems that we work on. And we dedicate a lot of our staff and resources to creating solutions. And we can go through some of them, but those, I'd say within any business, those are more of the kind of systematic like root problems that we feel if we can solve, have the biggest, that's where the most leverage is and how we can have the most significant impact.

And so we've made this choice of saying we're going to intentionally stop or significantly slow down just trying to raise money, brace philanthropy to fund houses and build the homes, how they've always been built, and just only be reliant on philanthropy to fund the homes and build them because, If we could keep doing that would be great.

We could do tens of thousands of those, which would be amazing. We've decided there's a way more significant, a hundred x thousand x bigger opportunity that if we can solve those core problems, we're helping change the more extensive system, and that's what we want to go after.

Chris Powers: And do you think, like, just in general, like finding the problems behind problems, it's something you have to learn along the way like you wouldn't have known that necessarily from day one, was there like an exercise you all went through or was it just trial by error where it was finally like a light bulb went off, was like, no, these are the real problems.

Brett Hagler: Yeah, that's a great question. It's both. It's certainly been in our and my co-founders and our team, like our DNA, to try to exist and solve big those problems behind the problems. And then the second part would be a lot of testing and experimenting.

And unfortunately, with that usually comes failure comes challenges. Sometimes you're intentionally choosing a more complex path, but you're doing that, especially for us because our North Star is impacting those we can. You're choosing to go through those because you think what's on the other side of actually bursting through those problems behind the problem will lead to the most considerable outcomes.

And that's going to be the same for businesses as well. 

Chris Powers: Okay. Let's describe how you're doing it, and we'll start with where you are doing it and describe the situation. We described what it's like to have inadequate housing, but we described the more significant situation in a place you decide to go to.

Brett Hagler: Yeah, for sure. And for context for the audience, we now primarily work in Latin America, Mexico, and El Salvador. I'll describe what we're working on in Mexico and the future of New stories. And so I'd say almost every, and I don't want to say a hundred percent, but nearly a hundred percent of non-profits are primarily focused on, and my example with, housing raising money.

So on this podcast, Hey everybody, donate, and we'll collect that money, and let's say it's $15,000, and then we're going to use that money to go. That $15,000 to build a house for a very low-income family, and then they will move into that house. That's standard across the board.

We did that for a long time, and there's a lot to be proud of because you can do that dignifiedly. You can do that in a still innovative and unique way, and we did much of that. We've realized that it takes a lot of work to scale when discussing one of the world's most significant and expensive problems.

So if you think about today, There are about 1.6 billion people that live in the type of conditions we talked about before. That number is expected to double to 3 billion people. And so you do the math, and it's like there's no way you'll be able to raise enough philanthropies even to make a dent, and the problem because it's just the problem is so big. It's so expensive, and so what we're doing, Chris, is instead of us, our whole model of getting people into housing, being dependent on us raising philanthropy, and then being able to build a perfect house for that family, we want to do it in a way that we call it just market-based. 

So what we want that family to do is not have to be dependent on New Stories or other charities or the government coming in with charitable aid. And we want them to have an opportunity to get a loan for a new house or to be able to fix their home in a way that they can pay for it, which is profitable in that market.

And so we are just essential, it's fundamental. We're trying to make these local markets efficient. And work for underserved low-income families in a way that they can afford the cost of the house and that they could also afford the financing, and that whoever is building the home or lending to that family, we're unapologetic about this.

It needs to be profitable to those providers, or else nothing will ever scale, and you won't be able to get all of the more significant impacts you need and change the system. Chris, in summary, we're trying not just to build homes but build housing markets and these environments that operate on a lot of the beautiful components of capitalism and doing that in a way where today it's just an efficient market.

Chris Powers: I asked you this at our event together. How does a current, is there even a market today in any, how does it work today? How do people, if you live in a, you described some of this housing where it's four pieces of plastic, almost tilted up, and duct-taped together.

 How does that even transact? Or do you build it, and you get it? Or how does it work?

Brett Hagler: Yeah. So many today, many families try to, they try to self-build that inadequate housing structure. And that can happen over 10 to 20 years when they're slowly trying to store away the cash they're making.

They're slowly trying to add a wall or a floor. It could be more efficient. It's like it could be a better home. So that is how that's like the status quo of how it happens. And so what we're doing and coming in, I'll give you an example of a project we've been doing in Mexico: we'll partner with existing kind of just.

People in the market. So to us, that looks like a land developer, a home developer, and a local bank. And so, let me explain how that works. So we come to an area where we know there's a lot of demand. These families dream of having a life-changing home on land they own.

So we choose that area, partner with a land developer, buy a large piece of land, and develop that land. And what we did in this project is we started to market and promote the idea of a family buying their land and then eventually, if they do a lot of the proper steps, seeing the dream of being able to afford a new house that would be built through a mortgage.

And so we created marketing material, all types of stuff for the families to understand. And then they started by actually buying their lot. First, so their land lot first, which, in America, we might think that's extremely expensive, and there's a lot of time like it's not easy, but it's way more affordable for a family to buy a small piece of land after we've gone in and bought a larger piece of land and developed it.

And so what that does, Chris, As families start to pay and it doesn't take long, it may take 12 to 18 months. So they're building a credit history they didn't have before because they need a track record or credit history. And then they're also gaining collateral.

That's a good market value, which would be that piece of land. And so from there, after they've completed those payments, they're in a much better position to move to that next step, which would be getting a longer-term loan, in this case, a mortgage for a new house. And so we partnered with a local bank that we found and told them about this model and this project.

And so they're going to be financing mortgages for all of these homes we're building in this area, which is about 200 houses. And then, we found a developer that will be building. Those 200 homes, and we did a construction bridge loan to get those homes built. And then once they, the families move into the new houses, the mortgage provider comes in and provides, this is classic real estate development, provides a takeout to put up the construction bridge loan.

And then families can afford a lower-cost home because we used innovation and architecture to lower the cost. And then they can also afford the required financing because they're in a much better area. They own the land, have a credit history, and have a home that is a good product with a market value.

And that's how they're able to get that loan. So that's one example. So that's a lot different than going in and saying, Hey, we want to raise. That example historically would've cost about 3 million in philanthropy, which is fantastic. And we did that. We've raised almost a hundred million in philanthropy in our first eight years, and that's great.

We're super proud of it. It's super high impact. But when you don't bring in that whole market component, there's no way it can scale or compound. There's no like example to that local market of a land developer, a home builder, or a bank to do any of it themselves because they're so dependent on somebody coming in with philanthropy to do it.

That one project historically would cost about 3 million. And we're now working on this project, and it will only cost a new story about $50,000 in philanthropy for the same outcome. So think about that leverage, impact, and how much more we can do. And the last piece is in this example; again, this is all from an impact kind of North Star.

The best part is that we don't have to be there and keep doing it because we can like to show the product and market fit and demonstrate it. And then that kinds of existing businesses, land developers, home builders, a lender, they can see that this is profitable and an underserved market, and they can keep doing it. They don't have to be dependent on a New story.

So there's so much more impact that can compound over time by proving these out. That's an example of what we do. That's a lot different than how we started, and it took almost eight years of learnings to figure out the highest leverage use of our resources.

Chris Powers: And when you think about going into like different markets where they have different leaders or different sets of rules, or is there something that if you're living in these type of conditions, that almost every government or community is accepting of these essential things that you're trying to bring together?

Are there countries out there or regions that are like, we wouldn't let this happen to our people; we want to control it. Or, for the most part, are people very accepting of the idea?

Brett Hagler: Yeah, we have a staff that tries to prioritize going to places that are going to be friendly and want us there.

Unfortunately, that's not every place. The majority of places do want it. A lot don't have the resources or even sometimes some of the, we call it technical expertise, which is a phrase a bit the know-how, right? Sometimes, they need knowledge or understanding.

And so we come in and do it all locally. That's what we like. That's the highest impact, the best way to scale and do it locally. But we can still bring great techniques, architecture, design, or lower-cost building methods, right? We're bringing that to this area.

And then we're also helping bring some of the financing pieces that many places today may not have. So the best ways that municipalities can help new story now is just being very friendly with a lot of their permitting and like a lot of stuff in similar in us that is important to us because I don't think I mentioned this yet, but we primarily have built large communities.

So think of a hundred, 200, 300, sometimes up to 400 home developments, which come with roads, services, and many basics.

Chris Powers: Okay. We'll go back a little bit. You said 1.6 headed to 3 billion. The problem would be shrinking. What is causing it to double?

They have more kids, or how is this expanding?

Brett Hagler: Yeah, there are a couple of things. I, which is slightly above my pay grade, am like trying to explain it well. People are; there's not enough inventory being built, right? So there needs to be more new inventory being built to catch up with the increased population.

A lot of the income is in some parts of the world, which has encouraged ways has moved up a little bit, but they are still going through extreme poverty, trying to get out of it. Many people are still in a very low-income place, so even if they're increasing from $3 a day to nine to $10 a day, that's very meaningful in many areas of their lives.

But it's still a meager income actually to afford housing. So that isn't increasing in the way that it should, the income levels around the world, the climate's a big piece of it, and many other things.

Chris Powers: Okay. And then back to the housing and getting the housing costs down, but you're going into markets, parking with, partnering with home builders.

Are you all giving the home builders plans and techniques to build this? Or are you participating in that in some way? Or are you leaving it up to them?

Brett Hagler: Yeah, it's a good question. It's a combination of both because there are competent local builders that we're able to work with, and we want to respect that and learn from them.

And so we by no means want to come in and be like, this is precisely the way, this is exactly how you have to do it. But we also can come in and provide Certain expertise that our team has and that we've used other, in other communities or countries, specific innovations that we're working on that they don't currently have but want to try out.

And so they'll adopt whatever that method might be. And so we get to take best practices from all our different areas. We also have an innovation lab at New Story, where we'll test different methods through an innovation lab. And then what works from there, we'll slowly expand that to other areas through housing developers adopting whatever that innovation is.

And the big idea is again, we want to like to catalyze and prove a lot of these things, help get product market fit, and then eventually, like, we can exit and pull out and have them carrying on and compound the impact without us having to be there to do everything, which is the big goal and strategy.

Chris Powers: I will talk about that briefly, but I want to ask one more thing about construction. A lot of folks who listen to this are in real estate. Maybe this is a more selfish question, but is there anything you've learned in building this stuff that when you look at American buildings and development, man, we could build this stuff so much more efficiently and cheaper, or is a lot of what you are studying only good for the type of housing you're trying to build?

Brett Hagler: Yeah, it's a good question. Unfortunately, there are a lot of differences. One is just; it starts with like overall land costs. Or, we can get land for such a lower price. And so that brings down the overall cost for one of the methods. I'll walk through a couple of methods we have that have worked.

So one method that we have, which is the more, more basic method but has been excellent for helping low-income families get started with adequate housing, is this straightforward idea to set up the architecture of the home in a way where families can, like, basically have the home grow over time.

Very basic and straightforward, but like showing from the beginning, families are signing up for a smaller starter home, right? And that, Depends on the area, but that square footage will be much smaller. But it's designed like the roof is designed in a way the foundation's designed in a way.

The walls are designed in a way where they can expand and grow over time, and it usually takes less time. And we're showing the family that vision from the very beginning. We have a VR visual experience that we show families, which is cool, where they can see, oh, in two years or three years, if I save X amount of money, which will show them a path for that, then I could build a new room or start to build my second story.

So that's one fundamental component, but it is very effective in getting lower-income families into that good home. That's smaller to start, but they can see how it grows other things that have been exciting for us. 3D printing has been fascinating. We've done that with; I'm sure many people know they're listening with a startup called Icon Out of Texas, which is doing a lot of work in the US.

It's fascinating, but still very early in the long journey. And then we are finally going to do, looking like we're going to do our first modular prefab project. We have looked for almost six years to find something lower cost for where we work and think we found something.

And so that will go through our innovation lab and pilot that we have yet to discuss. So those are three examples. And then we've also tried to work through getting local labor at a reasonable price and sourcing a lot of materials at once. So a lot of essential components.

Chris Powers: So that leads to the question, which is an obvious answer, but you said that once you can prove one successful project, capitalism, and market dynamics take their force and bring this forward. It doesn't require New stories to keep developing one after the other.

You just talked about using local labor and local materials. What is the impact of creating a market of you all going in and creating this? What are the other benefits we discussed that the people with the houses get, but what does the whole community get when this is all said and done?

Brett Hagler: Yeah. I was freaking love that, thought Chris. Because that's what's getting me so excited and getting us so excited, I'll use one phrase I've been saying, and then I'll unpack it. So again, New stories did a lot of this, and many traditional non-profits do a lot of this where they can be great, like even excellent, at delivering a service.

But families are still, they're still charitable beneficiaries, right? And so that's one way to do it, and I'm not knocking that. We've done a lot of that. We love it.

Chris Powers: And that, to be clear, that's, Hey, I give you house for free, and that's charitable, and that's the transaction.

Brett Hagler: Correct. There could be the family usually has some input where they're paying a small amount or they're helping; there's usually some component of that, which is excellent and essential, but at the end of the day, it's still a charitable beneficiary. Compared to that, the idea of that same family not being dependent on becoming a charitable beneficiary but becoming an active participant or a customer in the market.

And that is the step change we're working on that we see and are betting the organization's future on. And back to your point, Chris, I mean not to get too crazy, but that can significantly change these economies, right? Because the apparent benefits in the FU at the beginning are paying local workers, that's paying local developers, that land developer is making a profit.

That lender is making a profit so they can hire more people and have more money that they can lend, right? But then also the families moving into these homes are increasing their income, building more of a credit history, and building more of a net worth or an asset they didn't have before.

And you could think about all the trickle-down effects of that. So yeah, we're Unapologetically, and I believe in the most beautiful version of what capitalism can be and the capitalistic markets can be. And it would help if you did that in a way that is our whole reason for being that is more than fair for the families.

And that has a lot of guardrails set up. But that's what we get excited about, and that's what we think can change not only the lives and the trajectories of individual people and their dreams but also the local economies. The more I've gotten into this work, the more I realize that that is the thing.

Changing the economies is the main thing that can have more significant ripple effects. Not just today but decades into the future. And housing. Just think about the US. Think about what home ownership and housing have done here, the good side of it, and some of the downsides of it that, ideally, should have been done a lot differently.

It's inspiring. And so that's what we're trying to do internationally.

Chris Powers: I remember us having a conversation. You and I were sitting at a table watching some folks play flag football, and we were chatting about some of this, and I just asked you; you entered the game on a for-profit mission, and you ended up in a non-profit mission.

How do you talk to other people who want to do something like this, that are thinking about this? And for you not to say this in the most positive way possible, that New story is never going to maybe your lifetime, be able to get to all 3 billion people. So you could make this argument.

The problem, you keep tackling it one day at a time. But when people are coming to you now as a leader in the non-profit world, and they're entrepreneurs by nature, they're impact driven. What are you guys talking about? Is it you helping them get off the ledge and do it? What kind of questions are people asking?

I'm interested. Bringing entrepreneurship to this line of work is fascinating.

Brett Hagler: Yeah, it's a good question—answer in two ways. So first, you don't have to have a non-profit to do the work, right? Like you don't have, it doesn't have to be structured that way, for me and my story and how we started it.

It turned out that was the genesis of it. And that's the best structure for us to keep for a long time. While we still need to get into this, Chris, we're New stories raising impact investment funds with a return. And so it's not to say that we can't have components of our organization that can throw off returns and profit, but at our core, we are a 5 0 1 non-profit.

So the first thing is that you don't have to structure it as a non-profit. So the New story started about a year and a half ago. We incubated a venture capital fund, and we spun it out. It's called Home Team Ventures. And my co-founder of New Story, Alexandria Alai, is now running that full-time; she's the managing director.

And what Home Team Ventures does is invests in early-stage technology companies that focus on significant breakthroughs, construction, housing, and architecture. And so we're literally, and those are full-blown for-profit companies, trying to create products that are changing something.

And if those products work, the market is so big, then ideally, the thesis is that it's going to scale and it's going to be a big company. And you don't have to think about starting a non-profit. There are a lot of ways that you can work on some of these problems in a way that can be for-profit.

There's financing business and all types of stuff you could think about as an entrepreneur. Then the second thing is if somebody does want to start a non-profit, then to me, it's all about how to do you. What I get excited about is how you create an organization that has the potential to have an impact at scale.

And that is what's so exciting to me as an entrepreneur, is to have the ability to work with incredible people, to create something that, and we still have a very long way to go, but has a chance to impact millions of people. That is our goal; that is our north star.

That is what we're designing the organization for. And that's what gets me up in the morning. And that's what's so exciting to me. And it's way less about it being a non-profit. Is it a for-profit? Are we going to go public, or are we not? And it's more that we have the opportunity to create something world-class that can impact millions of people.

And that's a phenomenal journey to go on. And so That's what I've decided to do, and we've decided to do.

Chris Powers: I have so much respect. I am asking you two questions about philanthropy in general. I'll speak from my experience, and then you speak from yours after I ask the question. But some charitable organizations are enormous, and some people would tell you don't give them money.

It all goes to corporate. By the time it gets to the cause, it could be better. And then some say everybody has an opinion on these things. From your perspective, you started this conversation with your all's transparency in showing people how somebody like me should do due diligence on a non-profit before giving them money.

Brett Hagler: Yeah, it's a great question. They should have some simple, compelling material on their website or listen to it somewhere. It shouldn't be like this Easter egg hunt to find where is the information that you're looking for, right? That should be clear and transparent about where and how the money's being allocated and where it's going.

The new story has a group of donors that's a smaller group that we call the builders. And the builders only fund our team, our opex, our plane flights, and our R&D, but they're choosing to do that. And so we make it very clear and transparent about, hey, if you're giving here, it goes to a bank account that pays my staff that if we're making a recruiting trip, it's paying for that, et cetera.

And those people have opted to do that because many of them are leaders, entrepreneurs, or business owners, and they understand, Oh, that's what it takes to scale something. So I want to live there, while other people, which is 99% of our other donors, they're giving more to the projects, right?

Or to an exciting r and d or innovative project they know they want to give to. So ideally, Chris, you should know how the money is allocated. And ideally, you should have a, you shouldn't know what that is, and you shouldn't have to find that. It would help if you didn't have to be hard to find.

Chris Powers: And every philanthropy should be able to provide that if you ask them to find.

Brett Hagler: Correct. Yeah. And I actually would say that there's not; I think sometimes people get too caught up in looking for this perfect ratio, or like, I think that the management team at that non-profit should be doing what they think is best, but they need to be able to explain why they're doing it right.

And so as long as that's clear, giving to them is excellent. The other thing would be just. Returning to what I was talking about earlier is trying to understand how they are and what's behind the problem they're working on. And what are you as a potential partner or donor, like what do you and your spouse want at that time?

Your kids, right? Like my spouse and I sometimes will, we'll give this something because we care less about the more prominent term, massive strategy, and all this stuff I've been discussing today. And it's more of, hey, this has hit our hearts. It goes directly to this person or this cause.

And I maybe care less about the whole more extensive picture strategy, all of that stuff. So it depends on what you want to do now. And ideally, the last thing I'll say, Chris, ideally if it's something that's going to be a more extensive partnership, whatever that means for the person listening, your family, suitable?

That could mean a thousand dollars, $10,000, a million dollars more significant than I do think it's important to; you don't have to become, like, super close with the management team, but you should ideally have an understanding of who are the leaders at the organization. And to converse with them or learn, read what they've written, like you would do in a business, suitable?

You should think about who that leader is, what they have written, and their track record. Can I talk with them? If you were going to make a more significant investment. So I would try a similar process if you commit to a non-profit more.

Chris Powers: The second question was, I've raised money for real estate, but I'm offering people a return on their money and tax benefits.

And you've raised a hundred million in eight years for philanthropy, but you've also raised money for a for-profit deal. Can you describe the differences and your thoughts about raising money for philanthropy? That's something I've never done, but being more involved in my life will become part of my journey along the way is being more involved in this, and I have no idea how to even think about it, like best practices.

Like how do you think about it?

Brett Hagler: I'll answer it in two ways. I'll say how we've raised philanthropy. Then, how we're thinking about raising just overall capital for the rest of the decade, which part of it is philanthropy, part of it impacts investment that may not have as high enough returns as someone as excellent as yourself, Chris but does have a return with it.

On the philanthropy side, there are many more commonalities than differences in how you would raise capital. So for us, we've primarily raised money through individuals and high-net-worth families, and those folks are looking for a few main things.

One, people recognize and respect excellence. It's how they've made, had some success, or they respect it, and it's distinct. And so we always try to have a high standard when we're presenting something when we're trying to be thoughtful about how we're explaining something, materials we're creating like we're just, and always trying to keep a high standard.

And that is, sometimes, to give ourselves only a little credit, but that's sometimes distinct in the non-profit world. We wanted to avoid coming at it and saying, " Oh, these are the non-profit charity guys, " so I should expect a different type of pitch, pitch deck, or thoughtfulness.

Like many of our peers at Y Combinator, we wanted to have the same standard as an outstanding growing for-profit startup, so we tried to; the first thing is to keep that high standard, and people respect that. The second thing would be this kind of mantra that I say sometimes is that bold idea attract bold people.

And so when you are talking, maybe one example, I won't say the name of the individual, but a very well-known person in Silicon Valley, and this is a true story. So if I emailed him or said, Hey name, would you and your family like to fund one house at New Story? It's going to cost $10,000. The person's so busy; he gets so inundated with all types of things.

It's not really that bold; it's not that distinct. It's common. If I sent that guy another email and said, Hey, would you and your family want to fund an entire community, and it's going to cost 2 million, and you can fund the entire community of 200 houses? He did it right because it came at him of, oh, I don't get at this is different.

It is bold and is a more significant swing. And so we've tried to do that, and that's how we've had a couple of tremendous examples and stories like that. We've raised a couple of million dollars at once by pitching these bigger ideas or more significant projects.

And so that's also really important because bold ideas attract bold people in philanthropy. And the third thing is it goes together but can articulate your vision just like a regular founder probably would, but also has a very detailed plan of execution of what you all need to do in the short term.

And people appreciate and understand that. You know, none of those things are like anything unique, but those are three things that come to mind that have worked for us. They're not easy, right? Because they require a lot of thoughtfulness, a high standard, thinking bigger, et cetera.

That's usually just like in the for-profit world. You'll get a more significant fundraiser if you have many of those same qualities.

Chris Powers: What would you tell somebody? That trip to Haiti had yet to be a trip. Still, you just watched a YouTube video; we might have yet to have this conversation today for folks with the means to do. Is there any replacement for going and being on the ground and seeing it yourself? How do you encourage people from that perspective?

Brett Hagler: Yeah, that's a great question, Chris. So that trip changed my life. The other gentleman on that trip is somebody you've got to know. Chris and some people listening might know this guy, Mike Ata, who was the co-founder of the founder of Garden City Companies.

So we've been best friends since middle school, and we went on this trip together, and it changed the trajectory of our lives. We weren't planning on it; we knew it would have some impact. And when somebody goes, you don't need to have as high expectations; this will change everything.

But I think. The simple idea is to get out of our comfort zones and do something so easy to say no to, punt, or put off. When we get out of our comfort zones and do something that is distinct and that a lot of other people aren't always doing, we get a lot of benefits from that.

And so I think everyone would significantly benefit from getting out of their comfort zone, some of your bubbles, what you're used to, and just really understanding and seeing more of what the majority of the world is indeed, and so for me, like I grew up in a great household, like super lucky in, in hindsight, like basically hit the jackpot from just parents. We weren't wealthy but had everything in a comfortable, excellent American home.

And I never understood how so much of the world lives until I was about 23 years old. And that just really hit me, man. It just really hit me. It gave me perspective and a bigger picture of the world. And that's so healthy for all of us, not just in our journey of trying to discover some more purpose or something like that, but also in how we think about it.

Building businesses or companies or cultures and having that perspective is only additive to our lives. So I highly attend, recommend people going and experiencing that. And you can do it on the cheap; you could do it as a volunteer. You could; there are so many different ways to do it.

Chris Powers: That's a perfect way to bring it home. If one man, I think you know how I feel about you. You're very inspirational. I'm rooting for you, and I know many people are. If somebody wants to, this listening wants to know more about what's going on at New Story or get in touch, Where would you point them?

Brett Hagler: Yeah, I would go to our website. It's Newtoryhomes.org. So I would go there, you could see more about what we do. We have two documentaries up on our website. One was one the Apple TV did, which is fantastic. And then another one that we self-produce ourselves. So you can learn more about our work there and how people can get involved.

Anybody could donate any amount they want on our website; we have this other program that's a little higher level called the Builders Program. And so that's this private group of families and companies that give to our team, our operational expenses, and our r&d budget.

So that's another way to get involved. And then the third way, which is relatively new, is that we will have different impact investment funds that people will eventually be able to invest in later this year. And so, if they give us their email, we can share when those are available later this year.

Chris Powers: You're the man. Thank you again for joining me today, buddy.

Brett Hagler: Thanks, Chris. Very thoughtful, curious questions, man. I appreciate it.

Chris Powers: I hope you've enjoyed this episode of the Fort Podcast. Be sure to follow us on your favorite podcast platform or hop over to YouTube to watch full video episodes if that's what you prefer.

For more information, you can check out fort pod.com.