Tell us About the Business. How Did it Come About?
It was 2016. I was working with my previous company in the private equity space. I was managing a deal, which was worth 2 billion+ Euros. It was regarding buying a Western European agency and property management company. And because of that, my team had to do a lot of due diligence on not just the business, but also the entire real estate sector globally. We found that there was a lot of innovation coming out from the US and India at the time and then closely followed by China. But Europe was quite a bit lagging behind.
At the same time, what I realised was that the market was super fragmented and hence the cost to serve the customers was quite high. The speed of transactions was low, the brokers were always fighting with each other, and the customer service was minimal – and so were the regulations. Anyone could have become an agent without any certification, which affected the client experience a lot. So we went back to the investment committee and said, you should not invest in the target, but you should also stay away from the sector because it’s just not tech and service-ready.
So that investment never happened. But very soon after, I had an opportunity to meet senior executives at large companies like Countrywide. And what I realized was that their C-suite was quite oblivious and almost arrogant to say, “yeah, we’re fine, nothing’s going to shake us. We’ve been around for decades and centuries, nothing ever moved us”.
But just within a short span of time, Countrywide’s shares value went down. It has lost 90% of shareholder value and a got eventually bought out by Connells last year. This whole research process gave me an opportunity to really look under the hood of the industry and see a huge chance to create a platform that could consolidate the property market.
What Have You Learned so Far?
I think the biggest thing I’ve learned, is that business intelligence is not about being the smartest person in the room, it’s about knowing what the market actors need and at which exact point of time. So it’s more about predicting and timing more than anything else. If you know how the consumer psychology, user behaviour, investor behaviour, that is the key to creating a successful formula for building a business. And I personally figured out that my biggest learning so far was how can the timing be broken into stages.
At which point in time a given product is hot? What are people talking about? How do you convince people to buy something today and tomorrow?
So a lot of times what I have noticed was that the product could be amazing, but nobody wanted to use it because they found it to be too complicated. But three years later, everyone loves that product. This means that the product was indeed great from the beginning – it was just pushed to the market too early.
So it’s all about knowing what to build at what point. You can’t be too late, and you definitely can’t be too early because you struggle with users then. And if you’ll struggle to get users on board, this will affect your revenue. If you’re too late, the market will be already too competitive, many people would have already done it and getting users onboard will become much more costly.
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What Challenges Have You Overcome? How Have You Responded During COVID?
From 2017, my business was relying mostly on residential property rentals in London and major UK cities. During COVID, many tenants decided to stay put and just extend their leases to wait for the pandemic to pass. At the same time, here was another part of the market, which was growing really well – property sales.
So I decided to build a new set of online services dedicated to buyers ad investors. I took a bit more calculated risk and didn’t have a crazy amount of funding sitting in the bank, but managed everything in a smart way. And it worked – through COVID, I never had to let anyone go (unless performance linked) and managed to keep the company alive while most of competitors failed. So it was a case of introducing a new, stronger proposition to a new segment of the market.
We focused on introducing new kind of tech that don’t involve much of on-site operations and make remote performance available. The new product was built on the base of machine learning, AI and computer vision, some of the most cutting edge tools that are available across any industry. And we’re using that in real estate.
What Are Your Plans for Growth?
The main focus is on building our tech stack. Last year we have decided to develop a solid tech stack for a product that would accurately price valuations and rental yields for the UK market. So the growth plan for this year and the next few years is going to be to sharpen those algorithms to come up with very accurate pricing, both on value per square foot or rent per square foot basis in the residential real estate.
The application of this is far and wide. The major one links to property sustainability. Thanks to the algorithm, we’re now also able to value current and potential sustainability index on any property. So we can not only rate current sustainability of a property, but also project and value sustainable improvements that can be done to increase the sustainability of a home.
Property sustainability will become more and more important: around 20% of all CO2 emissions in the UK are contributed by residential real estate. And there’s a huge potential to turn properties more “Green” – especially the new builds. The real challenge is going to come from retrofitting and changing the existing properties – especially the Victorian houses that haven’t been renovated since decades. So we’ve developed the tech to enable smart improvement decisions for planners, governments, investors, lenders and buyers – all parties involved to make decisions instantly. In the next one or two years, we will continue to build data and empower better decision making in the real estate field.