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00:10:38 · S2, S3
[00:10:38] S2: Got it. And how much did the role of, you know, promotions and discounting play when it comes to the growth strategy at Uber? [00:10:46] S3: It's a it's a... It's an amazing question. Sometimes I hear that as a kind of concern whether Uber growth was sustainable during those days, And these concerns are partially valid, but in reality, the pricing discounts are necessary, let's call it, kind of necessary investment into the market. Because any marketplace, and especially ride hailing marketplace, reaches its top performing state where your, you know, ETA is minimal, where the idle time for the driver is minimal, just at a certain scale. And before you reach that, you can be easily kicked off from the market. So your goal is to reach that state as soon as possible. And the fastest way to grow to a certain market share is through discounts, through promotions. But they should not be too radical because you always need to keep in mind that you don't want to find yourself in a position when you compete with the public transportation instead of other ride hailing apps. We have these learnings as well, being too aggressive. [00:11:57] S2: And and did Yandex also involved in this price wars? [00:12:01] S3: Yeah. Definitely. It was it was fierce competition. I think it was one of the fiercest competition next to China potentially. [00:12:11] S2: Oh, interesting. Very interesting. And and you went on to build a leading company. So was it a conscious choice to move away from a marketplace to get into into prop tech space?
00:12:11 · S2, S3
[00:12:11] S2: Oh, interesting. Very interesting. And and you went on to build a leading company. So was it a conscious choice to move away from a marketplace to get into into prop tech space? [00:12:24] S3: Actually, yes. Because I was looking at the leading space as a industry where marketplace is needed as well. So when I left Uber, I was kind of looking for right industry to apply my marketplace knowledge. And with my cofounders, we created a long list of potential kind of applications of our marketplace expertise and letting space by the high level look of it. We felt that it's it's an amazing fit for a marketplace model because supply is fragmented. Demand is fragmented. There is no kind of single middleman. There is no no marketplace pretty much already in the industry. And the main limitation was and still is the transaction frequency. In the ride hailing, you can kind of book in a taxi pretty much kind of several times a day. In the letting space, especially in the long term lettings, the average tendency is couple years. It makes kind of your life a bit more difficult, but all other fundamentals are perfect for launching a vertical operating marketplace. [00:13:35] S2: Got it. And and did you sell the the company and and that's when you moved on to UK, or was... Is it... Are you still part of the company? [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.
00:13:45 · 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?