Building a Career
Teamwork is at the core of everything David Rice does. The founder and CEO of New Home Star, a Chicago-based new home sales and marketing company, David was a high school and collegiate athlete and worked with a Navy Special Forces recruiter for several years (before ultimately deciding not to join the forces). “I’ve always had a strong affinity for working as parts of a group with a common goal,” says Rice.
New Home Star’s vision is to build the best sales team in the world. Its mission is to use that team to help home builders sell more homes, more profitably. “That’s been the focus from the very beginning,” says David. “It’s taken on different forms of execution, but that’s always been our goal.”
Climbing the Ladder
When joining the Navy Special Forces didn’t pan out, David instead took a role on a sales team selling new homes. “I got in and very quickly starting working with the sort of discipline I would have had with the other path I might have chosen,” he says. “That exceeded what some of the people around me were doing.”
David went on to become the youngest vice president at Pulte Homes, a Fortune 150 home building company, where he stayed until founding New Home Star in 2008. “I had gotten a lot of education and personal development,” says David. “I think that the company was going in one direction [after the economic downturn], believing that cutting costs was the way to survive. I still had this idea that you could survive by focusing on the top line and having a team that generated more sales and stayed induced by the pressures.”
“I had some mentors and some money,” David says, “ so I took a risk.”
Bootstrapping the Business
David financed New Home Star nearly 100% internally. He’d been putting away money since his college years, thanks to a full scholarship and plenty of hard work mowing lawns and doing landscaping. “That allowed me to graduate from undergrad with $32,000 in savings and no debt.” After working at Polte for nearly a decade, “I was able to accumulate quite a bit.”
The only bump in the road came about two years after starting the company. “Pretty soon, I burnt through a lot of [the money],” says David. “I got to the point where for the first time in my adult life, I had to borrow money from my dad. That was a low point.” Banks weren’t lending to anyone at the time, and David had burned through nearly all his personal assets. “We were growing, and that growth exceeded the cash.” David managed to pay back the $100,000 loan in less than a year.
“We wanted to build something big,” says David. “As a result I think we invested more heavily than we would have if we were aiming to be a million dollar company or a $10m or $20m company.” Aiming for multi-hundred dollar top-line growth means you have to “be on top of your business in every single way.”
New Home Star has grown to around 200 employees in the years since its founding. David cites a “maniacal focus on customers” as one key to success.
As a company grows, says David, it’s crucial to understand what the cornerstones of the business are, and never deviate. He starts every company meeting with a picture of a presentation he made five years ago, which lays out New Home Star’s approach to new home sales management. “It reminds everyone that no matter how big we get, we’re going to stay true to those things we think are core to success for our partners.”
David and his management team measure several key metrics formally every 90 days. “There are four or five numbers you can talk to any manager in our company about,” he says. “You’ve got to know what things to measure and make sure you’re measuring those things in the right way. That’s a big part of us being able to scale in the way we have without the wheels coming off.”
Some of those metrics are financial, one is around employee engagement, and another measures what David calls “perceived client value,” which helps the company gauge customer satisfaction.
“We’re a premium provider,” says David. “When the home builder chooses to work with New Home Star, it almost always involves increasing their cost of sales.” It’s crucial for David and his team to know that customers feel like New Home Star’s cost of service is worth the reward. “We have clients answer questions on a scale of 1-5 — very simple — then use those answers to the questions to understand how we’re doing.” New Home Star has been extremely purposeful in determining which measurements are most indicative of client satisfaction and company performance.
As for leadership advice, David keeps things simple. “Keep integrity, character, and ethics on the very front lines.”