The Key to Building a Successful Startup: LISTENING!

One of the most valuable lessons I’ve learned in the startup world is the importance of making adjustments to your original business premise by constantly listening to your target audience and tweaking your product/service accordingly. If you follow the most successful startups or tech companies, you will undoubtedly learn that their original “aha” moment was not actually the idea that eventually took off. More often than not it was a slight pivot, an adjustment, a new realization that led to their growth and ultimate success. I could list countless examples of “we thought it was going to be X that people wanted, but it was actually Y”.

And so I think one of the most important characteristics of any CEO/Founder in both the startup world and the business world in general is the ability to simply listen to what your audience is saying. Sometimes the feedback doesn’t come in the form of actual feedback, but in the lack of adoption of your initial idea. Sometimes it’s a slight tweak or a major one. Sometimes it’s a matter of messaging or re-engineering the user experience.

In my personal experience launching my own site, The News Funnel, one of the biggest lessons for us was understanding how our customers wanted to receive their news. Our original assumption was that our subscribers would be perfectly willing to go to our site whenever they wanted to in order to check out the latest news….we were wrong. They told us, and we just kept listening. It became apparent that they wanted their news pushed out to them, so we built out a highly customized email notification system that has worked extremely well. In this case, it wasn’t the premise of our site that was wrong, it was the HOW they we got wrong. And we adjusted our product and the results were terrific.

I asked several of my friends in the real estate startup world for their own discoveries while building their sites and the responses were very much in line with my experience. Good original ideas but the execution was something that almost all of them seemed to make constant improvements on.

I guess the lesson for anyone thinking of launching a startup is to pay careful attention to what your users are telling you; either by their feedback OR their inaction, because that is where the most valuable insights will come from.

Here are some really insightful discoveries some of the smartest people I know in the CRE tech space made post launch.

The question I asked each was:

What was the first big discovery you made about your site or the marketplace post launch and how did you adapt?

Jonathan Wasserstrum, TheSquareFoot

That both tenants and landlords wanted brokers involved in the we started building out a transaction team.

>> @TheSqFt

>> @jmwass

>> Connect on LinkedIn

Adrian Hessen, TenantRex

We learned very quickly that most brokers do not want to share data openly. Brokers want to ultimately control their hard earned lease comps. Our alpha release was a public, external exchange model. Today, TenantRex is a private, internal, secure, closed, proprietary, “not available for outside” data exchange or consumption, data-optimizing platform.

>> @TenantRex

>> Connect on LinkedIn

Dave Eisenberg, Floored

First big discovery for Floored was that it is possible to be too adventurous or forward-looking with a customer base like commercial real estate developers. Luma, our interactive 3D engine for real estate presentations, helped leapfrog the industry from poor photography and renderings to next-gen interactive visual presentations, but it has been Protofit, our solution to help move the industry from 2D CAD test fits, to interactive, mobile, customizable test fits, that has taken off much faster. Sometimes one needs to learn to walk before running!

>> @Floored3d

>> @Eisenberg

>> Connect on LinkedIn

Nick Romito, VTS

The biggest discovery we made after launching VTS was how much more people actually wanted to do within the platform. They wanted to run their entire business on it. The Beta version was a really simple way to track leasing but they wanted to complete the entire deal in platform, start to finish. This meant building workflow tools for the brokers, financial modeling for the analysts, and a robust set of API's for the internal technical teams to integrate VTS with their other systems. We went from a front-end pipeline tool to their ecosystem for leasing and asset management in record time. From 0 to 1.7B square feet in two years.

>> @viewthespace

>> @NickRomito

> Connect on LinkedIn

Stefan Martinovic, CREATE

That potential market was larger than we initially anticipated, and we saw a lot of adoption from secondary customer segments.  We then opted to position ourselves as more of a mapping data tool in order to expose ourselves to an even larger potential market.

>> @Create_Tech

>> Connect on LinkedIn

Tom Kiernan, ClickPay

About our platform...

Discovered the importance and challenges of data exchanges. It originally seemed simple - present a balance that someone owes to pay their rent and let them pay it online by e-check and credit card.  It quickly became apparent that we needed to exchange much more data to have a viable solution.  We also needed to integrate with dozens of real estate accounting software programs - some of which are old DOS based systems and aren't built on a modern architecture with available APIs like ClickPay is.

It's not just software - it is also service.

The second discovery was the importance of service.  I believe we originally underestimated the challenges of building a world-class team and technology to handle the service for residents and the property owners and managers.  It was not just software and payment processing we were providing.  Service was just as important if not more important. This is the largest payment tenants make every month and it is very important to them and they often need to rely on customer service for help.  We are now processing billions of dollars for tens of thousands of properties for hundreds of thousands of residents.  We had to build out a service solution to scale to meet this need.

About the market...

Our DNA is electronic payments but we discovered that the market wanted a solution to unify all payment channels and methods including money orders, paper checks, all credit cards and American Express along with online payments. Our goal is to use our one-of-a-kind technology to simplify, streamline, and make it more secure and efficient for both the tenant and the property owner/manager to transact. The paper check may go away someday but it is not gone today.  Property managers don't want multiple vendors - one to handle their paper checks and one to handle their online payments.  With ClickPay, we enable them to streamline their entire receivables process.

>> @ClickPay1

>> Connect on LinkedIn

Isaac Palka, Zenly

After launching Zenly, we discovered that people nowadays try to avoid human interaction as much as possible. We had set up multiple customer service channels to assist users through the apartment rental process, including email, phone, and live chat. However, we realized that our users generally avoided interacting with customer service and preferred to go through the online process entirely on their own. Most users especially avoided phone calls and preferred to reply by text or to log back onto Zenly. As a result of this consumer behavior, we've added more features to make Zenly even more of a self-service platform.

>> @isaacpalka

>> @zenly

>> Connect on LinkedIn

Erik Eliason, Storefront

When Storefront launched in 2012, we were focused on building a marketplace to help merchants find and rent vacant retail space. While that continues to be a significant part of our business, we were blown away by the types of spaces brands were looking for and the spaces being listed. We decided to adapt rather than limit this activity and we now have kiosks, cafes, event spaces, showrooms, stores within stores and of course, entire retail stores available on the site.

Today, you can can still find the perfect retail space, but we also have unique venues including Santa Monica Pier, rooftops at Wrigley Field, and even two US battleships.

>> @erikeliason

>> @Storefront

>> Connect on LinkedIn

Michael Mandel, Compstak

One thing I found very interesting, was the fact that many of our prospective customers were using general market overview data (like market reports from brokerage firms) to underwrite building acquisitions and mortgages.  It never would have occurred to me, that data that was so "macro" in nature would be sufficient for underwriting.  In particular, I remember having a conversation about analysis of the Empire State Building, a building that is literally at the intersection of 3 Manhattan submarkets, is 3 blocks from 2 other submarkets, and is at the border of 2 of Manhattan's greater markets (Midtown and Midtown South).  How could looking at a submarket or market report of asking rents tell you what rents in that building should be? This isn't even accounting for the fact that it is the second tallest building in the city, one of the largest, and a truly unique asset.

In any event, these tools inspired us to build tools that allow our customers to look at data at both a macro and micro level.  We also allow them to establish their own parameters to filter data - custom map boundaries, sorting by floor, building class, lease type, transaction date, etc.

>> @CompStakCEO

>> @Compstak

> Connect on LinkedIn

Isaac Herrera, Flyer IO

The biggest thing we have learned since we launched the first version of Flyer IO; is that real estate professionals don't want to learn how to do new stuff, they are comfortable with the way they do their business. That's the challenge for us building technology for this industry, where we need to solve their time-consuming problems without being intrusive or getting on their way.

We have been working on a new version of Flyer IO that will address this point, and I’ll love to get your feedback on this as soon as we are ready to launch.

>> @FlyerIO

>> Connect on LinkedIn