The EG TechTalk Academy, in association with PiLabs and supported by CBRE, closes for entries in September. In the first of a series of Meet the Judges interviews, EG talks to investor Nick Leslau and PiLabs managing director Dominic Wilson about what tech means to them and what they will be looking for from TechTalk Academy hopefuls.
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Nick Leslau, chairman, Prestbury Investments
I’ve been a bit slow in my approach to and try and understand what’s going in the proptech world, and the industry’s been a bit slow to embrace it.
I started investing in proptech about 12 months ago and I see an awful lot of proptech businesses, and there are an awful lot more out there. The TechTalk Academy will be a wonderful opportunity to see more of them come to the surface and get a hearing early on– earlier than they otherwise might have done.
I do feel there are many, many more businesses out there with great ideas – small start-up tech businesses and very early stage tech and proptech businesses – and I would love to see them and give them a hearing.
What is going to be of paramount importance is whatever the tech does it has to have a genuine value-add proposition.
We know property is the biggest industry on the planet. There are thousands of facets to it, but in the space in which it is or wants to operate will it have a genuine value or does it just make a little more efficiency here and a little there?
What we are interested in is something that is scalable and transferable. If it works in this market, will it work in other markets? We’re not just looking for a good idea, we’re looking for a good idea that has a big end game to it.
In any business, management makes you a fortune and loses you a fortune. My experience to date is that the techy companies I have seen, many of them are very good on the tech side but maybe not so good on the sales side, as a lot of these young guys have no experience of selling. Having a great idea that I probably won’t – no, actually definitely won’t – understand is not going to be enough.
What we are interested in is something that is scalable and transferable. If it works in this market, will it work in other markets? We’re not just looking for a good idea, we’re looking for a good idea that has a big end game to it.”
Tech is going to have a quite devastating effect in some areas of property.
Leases in this country are feudal. We are going to move to a more American model where everything is more inclusive. The Office Groups, the Regus’, the WeWorks of this world with short-term lettings will be absolutely the norm on smaller lettings.
The world is changing and gravitating to inclusive deals so landlords will have to become hoteliers and the role of smaller agents will disappear.
There are many places where we are inefficient and as an industry we need to be more efficient because, at the end of the day, when the landlord starts paying the bills as opposed to the tenant through a service charge, that landlord is going to demand a much higher level of service and much lower cost.
There is that whole space that needs to be made more efficient and technology is a very good way of doing that.
Dominic Wilson, managing partner, PiLabs
At its heart, the TechTalk Academy really identifies with one of our values, which is that we want to support nascent innovation no matter how early the stage.
The way this competition has been structured is that it speaks to particular group of companies who are at that early stage and who are looking to grow and are not yet at that fully mature stage. That is – from PiLabs’ point of view – one of the purposes of our capital.
Through PiLabs and the management investing we have done about 28 investments now, including our latest cohort.
Companies that have done very well include companies like Airsorted – a company where the idea was on the back of a napkin when we invested in it, and we have invested in that company three times now.
We have also invested in Trussle.com and YourWelcome, a digital services platform for short-stay, which is very big in the US.
We probably see more people from outside the industry than within the industry. We think having some domain expertise is helpful but, equally, having a fresh idea and a fresh approach from outside the more archaic property industry also helps.
Our view on founders and on teams is more about the skillset than the experience.
We like to see the technical experience within the team, as we are backing tech companies, and we like to see some strong business development expertise, but you have got to be able to sell into real estate companies and organisations, which is not easy. Where there is perhaps a more esoteric or niche area, knowledge of that industry can be helpful, but it is not a requirement.
The property industry is maturing and evolving in regards to technology. If you go back to 2014/15, really people were focusing on things like online estate agency. I’m not saying that’s basic, but it was a more simple outlook, whereas now we are looking at things like AI for property management, drones, construction tech, 3D printing of buildings, BIM models.
Within property there has been a common misconception that disruption has meant people losing their jobs, but disruption is a good thing.
Disruption, in our view, is people coming to the table with a different paradigm and a different idea to how things have been done previously and that can lead to a change in how the industry works, disrupting that thought process.
Ultimately for an idea, a technology, a company and therefore an investment to succeed, it is all about collaboration and integration.
You can have the best idea and think that you are going to rip up the playbook and operate on the margins on the outside, but the chances of you actually doing that against larger, real estate corporates and incumbents is probably quite small as a young start-up.
It is a gradual process. There are a lot of clerical, menial tasks in real estate across several different segments that are ripe for automation.
And that doesn’t mean putting people out of work, it means freeing them up to concentrate on the high value, bespoke services that they should be doing – those that their shareholders, investors or clients are actually paying them to do.
Ultimately, what we are looking to do at this stage is back exceptional people and exceptional founders.
Secondly, it is important to understand the size of the market within which that particular company or idea is looking to fit.
That market needs to be big enough – and we are talking several billions of pounds preferably – so that if you make a dent in that market the company is going to be a success and be profitable.
Ultimately it is the founder’s company, it is their vision, it is their lives in most cases, so they really need to own that and be ready for that.”
The third element, and I will probably be a little more keen on this that some of the other judges will, is what I call a little bit of the grit in the oyster.
Entrepreneurship is not easy, there are a lot of obstacles, a lot of emotional highs and lows. You need to have a bit of inner steel to overcome that. It is not going to be an easy ride even with the best tailwinds. All of our companies that have been successful have had that in some way shape or form.
We do our best to support, invest and guide through all of that but ultimately it is the founder’s company, it is their vision, it is their lives in most cases, so they really need to own that and be ready for that.
Even we here at PiLabs have been through testing times, have had to make some personal sacrifices. I don’t know a company in our portfolio that hasn’t had to do that at some juncture. Whether those sacrifices are financial, familial – probably the most common – whether it is about hiring and the difficulties that can go with that, there are several and all the more successful companies have had to go through that.
I know some investors will actually look for that hardship in other parts of people’s lives to see if they are ready for it.
