Six Tips for Growing a Successful Proptech Company

By Jindou Lee

Jindou Lee co-founder of HappyCo

When I started out in this industry a decade ago, proptech was not even a word, much less an industry sector. Much has changed since then and the road to building HappyCo has certainly been a winding one.

There is no magic formula when it comes to creating a successful proptech company, and no substitute for hard work, perseverance and remaining true to your vision. At the same time, it’s important to remain flexible and open to adjusting your strategy along the way. Financing realities, rapid advances in technology and inevitable bumps along the journey can make transforming an idea into a growing business an arduous process.

Perhaps most importantly, the greatest idea won’t work unless it finds a customer willing to deploy it to fulfill a business need. My team and I have learned a lot, and a few areas stand out as lessons any early-stage business should consider.

Play the Long Game

Unlike other industries, sales cycles to real estate folks are long and rolling out new technology takes time. Once the product has been purchased, company-wide adoption of technology takes even longer. So, achieving any meaningful scale in proptech will likely take much longer than initially planned. If you’re motivated by making a quick buck, you’ll end up disappointed. It’s a grind that requires patience and relentless commitment to get through these long cycles.

Plan for a multi-year investment of your time, energy, focus and money. Then, create a long-term plan with achievable short-term goals. Recognize that you may be in “start-up mode” for several years, so it’s important to surround yourself with a founding team of innovative, nimble and resilient individuals who will help you reach your growth milestones and are in it for the long haul.

Become a True Partner

Anyone starting a company, especially a solutions-based one, must listen to their customers and work alongside them as they build — then iterate — the product or solution. This is especially the case in real estate. Customers in the real estate industry are seeking true, long-term partners.

Instead of using catchphrases like “we are disrupting the industry,” we took inspiration from the Iron Man suit analogy — we create tools to help people achieve their full potential. We built proptech software that makes our customers better on-site operators, and its ease of use makes their jobs easier.

This approach was a means to our paramount objective to create happier communities. We believe happier communities start with happier on-site teams. The best way to create happier on-site teams is to listen, understand their operational challenges and then deliver solutions that truly solve their problems.

Find Aligned Capital

When we began 10 years ago, no one was investing in this category; today, every investor is suddenly an expert in proptech. However, selling in this industry takes a lot of time. Truly building scale requires patient capital partners who understand the market and are

comfortable with the time it will take to get the company to scale.

Remember, playing the long game is a requirement in this field. That applies equally to the capital partners who will invest with you along the way. Really getting to know the mindset, personality and primary drivers of your investor(s) should be an important part of your due diligence efforts.

Really Understand the Ecosystem

Coming from a different industry — the tech/ gaming world — I realized right away that real estate is very, very complex. There are many layers, and a surface-level understanding is simply not enough. If you want to start a proptech business, first do the research. In the case of HappyCo, I had to gain an understanding of the multiple stakeholders of real estate and then achieve a deeper appreciation of what each of them wanted and needed. For example, I spent months shadowing maintenance technicians around properties to see what their daily routine was like.

Creating a clear picture of who your customer base will be and who really has the need for the solution you’re working to provide is an important step. Once you have a strong grasp of these elements, suspend that thought and start from scratch to re-imagine how to solve their problem.

Start with Solving a Small Problem

Don’t try to boil the ocean by setting out to create an end-to-end platform. Instead, focus on doing one thing really well. I did not set out to build a proptech firm initially; I had started investing in single-family homes as rental properties and realized that the resident inspection process was clunky and inefficient. There was no software at the time to help streamline the move-in/move-out inspection workflow, so I started to research the disparate processes that were being used (almost entirely a pen-and-paper model). Only then could we begin to reimagine how a technology solution might improve the process.

To further validate the idea, my co-founder and I designed a mockup of the inspection app and then cold-called 20 property management companies to see if they would be interested in using it. We got an overwhelmingly positive response and customers willing to pay even before we had built any real software. We knew we had landed on something special because it was a real pain point that our customers wanted us to solve.

Customers Buy Trust

Do what you say and say what you do. Steve Winn, founder of RealPage and a well-known executive in the multifamily industry, once said to me, “We are in the business of selling trust … once a customer is happy with your one solution, they will want and demand of you to solve more problems for them.”

To earn trust initially, it is important to only sell what you can deliver. Don’t over promise and under deliver. As your company scales, you’ll likely reach multiple breakpoints with your team’s capacity to deliver, so get out ahead of this as much as possible. Be honest with your customers. Be accessible to your customers. I have always strived to interact with our clients through regular dialogue and in-person meetings.

Once you’ve earned your customers’ trust, they are far more likely to buy your next product. And then start the cycle over again. And again.

Jindou Lee is the CEO and co-founder of HappyCo, a software company that builds mobile and cloud solutions to enable real-time property operations. Prior to his current role, Lee founded and exited two previous tech companies. He graduated from the University of South Australia with a Bachelor of Visual Communications (Design). He also worked at Midway Games, leadingthe User Interface team to work on classic titles such as “Mortal Kombat, “Gauntlet” and Dukes of Hazzard”.