Lifeselfmastery's podcast I Startups I Venture Capital
00:13:45 · S3, S2
[00:13:45] S3: We founded that company in 2018, and we sold that business in 2021 completely. So there is no connection to that business at all. And, yeah, we sold that three years ago. [00:13:55] S2: Oh, okay. Okay. Got it. Got it. Interesting. And and you built 20... You know, how how is it different from any other, you know, traditional letting and property management company? And and how did you go about, you know, thinking about solving this problem?
00:14:11 · S3, S2
[00:14:11] S3: Yeah. I think the difference between traditional property management company is that we significantly leverage technology, especially language models, because the industry is super labor intensive, especially communication Like, majority of the agents' work is pretty much communication with tenant, landlord, or maintenance provider or some governmental bodies. This, especially now with the huge investment of LLMs, can be significantly digitized to empower agents to do a more value add job. So this is kind of the difference with the letting agency model. On top of that, our growth strategy is based on two main pillars. One is we acquire traditional leading agencies, and we recently posted news about our first acquisition in HAL where I'm currently based. And second pillar of our growth is partnerships with agencies because, yes, you can buy businesses, but not all businesses want to sell. Not all owners want to sell their business. And then vast majority of them want to continue develop their businesses. So we propose them kind of a partnership so they can bring their supply on our platform. We help them to increase efficiency similarly to what we do on our own portfolios, and then we share some... We share this upside in some proportion. So this is kind of a main difference between traditional property managers because they do not offer their services to other property managers. [00:15:52] S2: Correct. And and do you see AI will disrupt the the market and, you know, there'll be no need for agencies going forward?
00:15:52 · S2, S3
[00:15:52] S2: Correct. And and do you see AI will disrupt the the market and, you know, there'll be no need for agencies going forward? [00:16:02] S3: I don't think so. I believe that letting space is a quite quite a traditional area where still people, especially landlords, would need someone to speak to. So AI is not enough to to basically deliver the end to end service for landlord and for tenant. It should be a combination of AI and the human in the loop. That's why we position ourselves as we're not selling a software to agencies. We are providing kind of a work. I think the closest analogy would be an outsourcing, but it's far more beyond what outsourcing companies are doing because we provide still kind of a technological product solution for both landlords, tenants, maintenance providers, effectively turning traditional estate agents into kind of AI enabled platforms so they can focus on the main activity they are good at, winning new business and maintaining relationships with clients. [00:17:05] S2: Correct. And is your ICP really small agencies, or is it, like, big agencies like Knight Frank and Dexter's?
00:17:05 · S2, S3
[00:17:05] S2: Correct. And is your ICP really small agencies, or is it, like, big agencies like Knight Frank and Dexter's? [00:17:14] S3: We hope to grow at kind of certain day to a stage where we can offer our services to Dexter's. Before that, we should prove that we are capable of delivering these results at a smaller scale. So for the time being, we focus on letting agencies with a portfolio of 500 to few thousand properties. Dexter's is definitely quite bigger with with a range of, like, 20 to 30,000 properties in their portfolio. But one day, we'll be there definitely. Because fundamentally, our models are different. Dexter's are doing 17% EBITDA margins. Traditional small agents are doing somewhere in the range of 10 to 15, rarely 15, usually kind of close to 12. And our target state is 35, 40% because we are a tech company. We're not a traditional brick and mortar business where a lot of tasks are done manually. This is the main difference. So fundamentally, there is a room for partnership with Dexter's definitely. And I would be super happy to see that happening. [00:18:21] S2: Yeah. No. Absolutely. And, you know, you you and I have been part of marketplaces, and marketplaces at times can get messy, you know, because even though but there's a lot of communication happening and, you know, a lot of things are being... Need to be reinvented all the time. So how do you approach building and maintaining company culture, you know, fast growing start up legglers?
00:18:46 · S3
[00:18:46] S3: Yeah. This is a really great question. I've been thinking about for quite a period of time, especially after my experience at Uber and seeing the culture evolution at Uber. And when kind of thinking backwards about our company culture in my previous venture, and I... And, basically, I was thinking about that for the only reason because we are building a new company right now, and I want to kind of make everything as good as possible leveraging my learnings. And what... Like, my last point in the thinking process is that company culture, do you want it or not, is a natural continuation of the founder's culture. And when the team is growing, the company still kind of just pretty much mirrors the personality of a founder. And if there are several founders, the company mirrors kind of several personalities. And I think the core point here, if you are not a solo founder, is to reflect on how reasonable kind of conflicts and tensions between founders that naturally happen in all companies basically cascade down throughout the whole organization. Because if, as a founder, you can easily solve any tension, but then kind of teams that are managed by these founders can get into significant clashes and... That we saw in the previous business and spent some time to basically fix it. So right now, I think it's... My kind of way of thinking is that you cannot just design any culture you want. The culture of the company will be a continuation of your personality. What you can really focus on is how to develop yourself and how to kind of make sure that any tension between founders does not cascade down throughout the company. So you should kind of... From the executive level, show employees, show team members how to resolve conflicts, especially when you know where these conflicts might happen because you know where the tension between founders might happen. So this is current... My my current way of thinking. Definitely, there is no kind of ideal answer because not... There are not too many data points on how to build a culture in the fast growing companies. As far as as far as we know, all of them had their ups and downs in building that. So
00:21:19 · S2, S3
[00:21:19] S2: Yeah. Totally. And, you know, I I worked in in the real estate industry here in The UK, and sometimes, you know, when you look at letting agencies, as you had mentioned rightly, it's a very traditional industry. How do you balance innovation with traditional aspects? And where do you see the real estate industry here in The UK can be optimized for technology and innovation going forward? [00:21:50] S3: Yeah. I think while kind of many companies and many startup founders say that they want to disrupt an industry, I don't think this is a right approach, in the very traditional market like real estate and especially in The UK. That's why we position ourselves in kind of driving rather evolution, not the revolution in the market. We want to leverage the gains already existing in the market and bring significantly further efficiency of the business, at least tripling margins, and growing the customer service level for tenants and for landlords significantly, but building that on top of the current kind of industry achievements. It's not possible to drive evolution when you do not understand why certain things work this... Basically, the way they work right now. That's why kind of you you naturally have to balance between innovation and traditional approach. That's my current way, I think. [00:23:00] S2: Got it. And, you you know, you... You've been an experienced founder. How... What role do you think, you know, timing plays in startup success?