This High School Dropout Sold Shipt To Target For $550 Million. His Next Startup Could Be Worth Double.

B ill Smith drives his black car through the streets of downtown Birmingham, Alabama, and ends up in an apartment building.

He said that this used to be a brothel.

His company, Landing, rents fully-furnished, flexible-lease apartments in this old industrial city. Smith, a thin man with intense blue eyes, walks into a sunny one-bedroom with a railroad layout that goes for $1,800 a month, a 20% premium to what it would rent or empty. It is decorated with innocuous furniture, inoffensive linens, even taupe colored dishware, all designed and manufactured by his team. He says that someone wants to move into an apartment in five days and needs to be able to acquire it and make it beautiful.

As the way Americans live and work has changed, Landing offers its members instant access to move-in ready apartments with the flexibility to rent for as short a period of time as they please. Landing is cheaper than a hotel or a corporate apartment and more predictable than anAirbnb, which makes it appealing to people who don't want the hassle of figuring out housing.

The majority of Landing's $200 million revenue comes from the 20%-to- 50% markup that it charges over its cost of renting apartments from owners of multi- family buildings. Fast-growing Sunbelt cities like Las Vegas, Phoenix, Austin, Atlanta and Nashville are where it operates.

Smith sold his previous company to Target for $550 million. According to his estimates, 10% of the 40 million Americans who live in apartments could choose to live in a furnished home within a decade.

Smith thought it would take five years for a change in living to be made. We think we can make $1 billion in revenue by the year 2025.

At a recent valuation of $475 million, Landing has raised $237 million in venture capital funding. The company's revenue increased six-fold from 2020 to $83 million in 2011. His track record and revenue growth made it less than he wanted. Smith says raising money in this market has not been fun. Landing still qualifies for a spot on this year's Forbes Next Billion-Dollar Startups list as one of 25 venture-backed companies that are most likely to reach a $1 billion valuation.

There is huge potential in new models of real estate and huge risk. Smith has a lot of data and is trying to manage it. Which cities have both demand and potential profit? How can they save money? Pricing and marketing may be adjusted for the season. Smith relies on his firm's data and proprietary algorithm to make his decisions. This is the only way this model will work according to me.

Smith, who is worth an estimated $400 million including cash from Shipt, is up for the challenge. I like to solve complex problems.

Smith's father was a Cellular One agent and his mother was a medical transcriptionist. Smith remembers asking for a briefcase for his birthday when he was five years old, and lugging his computer to his dad's house for weekends after his parents divorced.

He didn't like school. He dropped out when he was 16. He sold Nextel phones after school and made $4,000 or more a month for a teenager in Alabama. Insight Card Services was established in 2009. He sold his business to Green Dot at the age of 28.

He began buying local real estate when he was a millionaire. He showed up at an auction to buy 33 condominiums and then decided on the spot to purchase seven floors of the John Hand Building. His winning bid was more than half a million dollars. He said, "I am like, 'Oh my gosh, what did I just win?'" I started shipt and was able to fill it up. The headquarters is now Landing's.

“Bill Smith is very unassuming, very different from your Adam Neumanns and your Travis Kalanicks.”

Smith invested $3 million of his own money to launch the same-day delivery service. It was possible to get Shipt in 27 cities across nine states. He had an ownership stake of 50% at the time of the sale to Target. He says it didn't feel like a huge life change even though it would appear that way. I live in the same place and do the same things I have done before.

Smith kept a list of 30 ideas for businesses in his phone, and after he left Target, he began to think about which one to tackle next. Whatever it was, the venture capitalists wanted to fund it. Ian Sigalow, who led Shipt's first outside funding round at a pre-money valuation of $45 million, said he would have given him money if he told him he was doing moon exploration.

Homeowners who needed repairs were targeted by Homesie. He said it was a flop. No one signed up after we tested it for a while. Smith took over the website and turned it into Landing. "Consumer companies are either a rocket ship or they are not and if it is not a rocket ship I don't want to waste any time on it."

The idea for landing had been in his phone for a long time. When he was a landlord, he saw how often medical residents at the University of Alabama atBirmingham would take apartments they needed for just a year. In 2016 he moved temporarily to San Francisco, one of America's toughest housing markets. He was trying to find a job for his family while he was on the website.

He wanted to make it easier for people to find furnished, flexible-lease apartments that didn't cost corporate rates as they gained more flexibility on where to live. Smith put up some money and eventually invested 15 million dollars.

It was difficult to launch Landing. Smith's youngest child, who was born with special needs in June of last year, required multiple surgeries, and he was juggling the demands of a startup with those of his other children. After Covid hit, offices shut down and Landing's fate was in doubt.

According to Landing's CFO, all of this has made Smith humble. Bill Smith is very low key. Woo said that he was different from Adam Neumann and Kalanick. You either get the ego or the killer instinct.

While the potential is enormous, Landing faces plenty of competition, from venture-backed startups in the flexible, furnished rental space like New York City-based Blueground to hotels that have moved further into extended-stay options. Long-term stays for remote workers are one of the fastest growing categories on the platform.

Capital intensive running a business like this Landing has secured $150 million in credit to help pay for everything from the leases and technology to furniture and shipping. To maximize profitability, it uses the algorithm to fill the apartments, constantly gauge demand, scout locations and set prices in real time. It says it has 7,000 apartments but admits it's not profitable yet.

Landing uses software to list apartments first, then signs leases and sets them up with furniture within a few days once it has a renter, rather than signing a lease with a landlord upfront. Landing is able to quickly reset prices or leave properties that no longer make sense by signing one-year leases with property owners. Marcus Higgins, the company's chief operating officer, used to work for Oyo Hotels. As soon as you get a few things right, you have to turn it and do it again.

High school dropout Bill Smith is worth more than $400 million from his startups Shipt and Landing.

The nomadic nature of Landing's customers makes it difficult. Kendyl Cochran spent most of the past year living in Landing apartments with her boyfriend and dog after learning about the company on TikTok. She wants to do 12 cities in a year. They lived in Landing apartments in Atlanta, Baltimore, Austin, Dallas, Denver, Tucson and Salt Lake City, which cost between $2,200 and $2,500 a month. It was great for them but every time they moved out, Landing had to find someone else to live with.

Keeping costs down is dependent on the cookie-cutter design. Vietnam is where the firm makes its furniture. They are shipped back to a 280,000- square-foot warehouse in Alabama. Smaller warehouses can be found in Las Vegas, Austin and Lakeland.

When ocean freight costs went up, the firm was able to jam more of its kitchen chairs into a shipping container by stacking them. Coffee tables and side tables will be assembled in Alabama instead of being shipped to save on freight, as part of a new line of furniture. CFO Woo said that landing has shaved installation costs by more than 50% by using its own trucks and drivers.

The big question is how many people will want to live in temporary housing, month-to-month, and whether they will be popular enough to make the financials work. Steve Cadigan, a future of work consultant and author of "Workquake," said that the world of work is in a massive period of experimentation. The digital nomad has a shelf life until you want to start a family. The older we get, the more we enjoy continuity.

Smith thinks that the housing market is so big that even a small piece of it will be a home run. "Not everyone is going to live like this, and not even the majority will, but millions of Americans are going to live flexible lifestyles."

There is a 1912 bank vault in front of the company's headquarters that serves as a board room.

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