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.
00:08:37 · Sebastian Johnson
[00:08:37] S0: That's interesting. So you've got the capital and the flexibility to adapt to different models of the businesses. You look at the services industries across Europe, right, you know, let's say you take that go to market in that you have in the law firms or people are buying technology versus, you know, the kind of the roll up play, where are you... Or what other service industries are you looking at where you think, okay, this is a prime opportunity for AI? You mentioned accounting, maybe it's accounting, maybe there's other services industries that you're thinking. Yeah. What are those services, and how are you thinking about equipping those services with capital?
00:09:10 · Zeynep Yavuz-Willson
[00:09:10] S1: So, there are a number of them that I mentioned. And the other thing is that I would say, you know, doing this in The US and Europe is different. Yeah. But we've done a lot of the thesis work holistically as a team, so as a global team. And we've already mapped out those markets. So, property management is one, real estate is one, legal is one, and insurance, and within insurance, have MGAs, you have the TPAs, like the claims management, you've got BPOs. So, it goes really deep within insurance and the brokerage space. Then you have wealth, is also another category. And particularly, by the way, if you just like think about accounting, real estate, property management, wealth, insurance, these are not even in house functions necessarily. What I mean by that is that they're selling to SMEs, and they're selling to people. So, these industries will just continue to exist. They will never be fully disrupted with AI. People will be living in buildings. There will be property managers. People will be looking to rent, and people will need to file their taxes, and people will need to get insurance. And all of these are regulated industries, and that relationship that you have with the broker, that customer relationship actually is the key mode. So, what we try to do with the AI transformation work that we do is that how can we free up the time of the agents, the real people who work in these industries, so they can really focus on the relationship side? Because that is the mode. It's not the admin. You know, the admin needs to get done. That needs to be automated so that you can really focus on the relationship. And I think, by the way, that's really interesting is that we always are talking about or trying to understand, like, the moat in AI, And I think more and more people are realizing, like, even the moat in AI is that customer relationship, is the trust that you have with your customer. It ends up being kind of the only moat now that we see in AI. And like the challenge of AI, in my perspective, is not going to be a technological challenge in Europe. Obviously, AI is a technological challenge, and, you know, robotics, and there are different layers of it that needs to be still figured out, but the pace of acceleration on the tech side is happening incredibly fast. Yeah. We're not catching up with is more the change management piece.