00:02:57 · Sebastian Johnson, Zeynep Yavuz-Willson
[00:02:57] S0: Yep. [00:02:57] S1: And beyond that, it touches everyday lives. Like, if you think about accounting, you think about property management, real estate, law, you know, these are touching everyday lives of people, and I think that's what really inspired me. The second thing that was important was that I knew that for some of these industries, by just selling AI tooling to them, we could transform them. But for some other industries, selling them technology was not going to work. And and I can talk about that in the context of Legora, where I believe selling the technology is making real difference in the way lawyers and legal professionals are, are doing their work today. [00:03:38] S0: Yeah. [00:03:39] S1: Whereas in the property management space or in the real estate agency space, or in accounting and insurance, we just didn't have that. You know, these industries were not buying the technology. We were not seeing the same market pull. But the opportunity was still there to transform these huge industries. A lot of investors would look at property management or real estate, and will say, I'm not investing in this again. [00:04:01] S0: Yeah, [00:04:01] S1: yeah. Because so many people have been burning, including myself. I remember when I got Dwelly's first, like when I saw the first pre seed deck, was like property management or like real estate. No. Because it's so hard, right? Yeah. So, you need to think about this in creative ways. You can't be like, I'm just going to do a seed investment and see how it plays out. [00:04:20] S0: Yeah.
00:04:20 · Sebastian Johnson, Zeynep Yavuz-Willson
[00:04:20] S0: Yeah. [00:04:20] S1: There are not that many firms, I think, who can really get behind this thesis and say, I'm going to think creatively. I'm not going to have like a rigid way of investing, and it's not just going to be capital to do this anyways, but I am going to go try to transform or help people transform property management and real estate and accounting and insurance, even though these industries are not buying any technology. [00:04:42] S0: Looking at Dwelly specifically then, given your, I don't know, your experience being burned in this industry, what made you kind of get over that? Right? What made you think actually what they're doing or the approach that they're taking, I'm still going to get involved?
00:04:42 · Sebastian Johnson, Zeynep Yavuz-Willson
[00:04:42] S0: Looking at Dwelly specifically then, given your, I don't know, your experience being burned in this industry, what made you kind of get over that? Right? What made you think actually what they're doing or the approach that they're taking, I'm still going to get involved? [00:04:55] S1: First, I mean, I met them and I think like when I first met them, I was kind of like, you see their hustle and they had such deep industry insights as well because they had built a business in real estate. Yeah. And that's important because they had built a business in real estate. They knew that driving organic growth in that market is close to impossible structurally, Because a lot of the contracts, rental contracts, as you know, The UK are three to five years, and people will just renew them. Yeah. So, if you want to turn that landlord or tenant away from an agency, good luck. You know, you have that window that's going to happen in three to five years. Yeah. Same with property management. You know, a vote happens in a building once a year. And you need to convince everyone to vote to change to you. So, dragging organic growth in this market is really hard. [00:05:39] S0: Sweat.
00:05:39 · Sebastian Johnson, Zeynep Yavuz-Willson
[00:05:39] S0: Sweat. [00:05:40] S1: Then if you were doing venture investing, right? All you care about is growth. Like all you care about is organic growth. So, obviously that makes sense, right? You do classic venture. It doesn't just fit in your mandate. So, you say, I'm not gonna invest in this property management, leave it. But then with our mindset, what you can do, and this is how we do our investments out of our creation funds. We still have the ambition to say, okay, yes, venture, classic venture investing, maybe it's not going to work, but this is still a huge industry that's arrived for transformation. So, let's think of a way that will work that can transform this industry. And there we knew that inorganic growth to get to some scale was key to effectively seeing how we can start that transformation. When we get to certain scale and we drive better customer service, then ultimately organic growth will be there. And maybe the organic growth is not going be at the same rate of a Legora. It might not be as fast because the market structure is different, but that's okay because our goal is not necessarily to invest in the fastest growing company. We want to invest in the company, be part of the journey for the most enduring company, and that's what I'm focused on.
00:06:53 · Sebastian Johnson
[00:06:53] S0: And so, when you look at Legora and you look at Dwelly, so your thesis was Legora is in an industry that can buy the technology and implement it and see value there. Dwelly is a very different type, sort of like back to front. If you want to get the growth, you have to buy the growth, right? You have to buy the company's
00:07:07 · Zeynep Yavuz-Willson
[00:07:07] S1: You have to buy your customs. Yeah. Have Because buy you cannot get your customers. You know, in law, there was just such market pull. Yeah. You know, everyone... And it's just the way also the legal market is structured. If you look at the law firms, you know, there's AmLaw 200, and there's like the notable companies of Europe. When one of the prominent law firms buys a technology, all the other law firms are watching that. So, they're like, okay, I did also buy AI. So, the adoption of AI in legal was just so fast because there was a market pull. Well, then you look at property management. Yes, if they did buy tooling, they would also be transformed with AI, but they're just not buying because the structure of property management and real estate is that it's incredibly fragmented. Yeah. So, you don't have the same domino effect and the market pull. Even if you were to build the most amazing product, they might not buy. Yeah. So... And we see that particularly, I would say, in Europe compared to The US, and this is why I'm I'm very excited about, like, investing with GC and partnering with founders with this strategy in Europe. Mhmm. Because I know the plain vanilla venture way of doing is not going to work, and we need to think creatively. And, at GC, we can't think creatively. Right? We have so many different investing strategies. We think about capital solutions creatively, and if we don't have the capital solution that's required for that company to succeed or to disrupt that market, we'll innovate it. We'll come up with it.