Grant Wernick, The Art of The Pivot, and The Launch of My Career

Pivots over the years have become something of lore in Silicon Valley.  The mantra of “fail fast but pivot faster” is usually in the back of every entrepreneur’s mind as he or she looks to bring product to market.  In 2010, a shopping application called Tote was failing fast.  However, the app’s founders noticed that users were bookmarking images instead of buying them; the team decided to focus on the “pinning” of images and created a new platform called Pinterest.  When Evan Williams was not gaining any traction with his audio platform Odeo, he decided to shut it down, and soon launched a completely new product that eventually became known as Twitter.

These stories are now famous because the companies have become large and influential.  Over the years, I have invested in many companies that have pivoted their product and strategy into something more successful.  However, I have only once experienced a situation where almost the same technological concepts failed in one sector but succeeded in another.  This is the tale of a story that can only happen to who dream big, work hard, and get lucky.  

The year was 2011 and I was struggling to figure out what to do with my professional life.  I was in the process of winding down my walking tour business, Travelgoat, I was a student at Columbia Business School, and I was doing consulting work for Millennium Partners in Los Angeles, working on the Millennium Hollywood project.  Nonetheless, I was still yearning to build my own mobile application in the local travel space, and I was working with my friends at Gin Lane on wireframes for an artificially intelligent itinerary generator app.  Tourists (or locals) would input preferences and the application would spit out a perfect day in a city, with a mix of good meals, cultural activities, museums, parks, and other activities.  

I had started networking in the NYC technology scene and was planning to attend the TechCrunch Disrupt conference that year.  Unfortunately, I had an important meeting in Los Angeles during the conference so could not attend in person.  Instead, I would watch the videos of the startup presentations after work.  I watched many of the impressive presentations but there was one that left my mouth agape in awe and envy.  A new application called Weotta launched, and lo and behold, it was an artificially intelligent itinerary generator.  However, the difference between Weotta and what I was trying to build was that Weotta had a team in place of expert natural language processing and semantic search engineers; I had jack squat.  

After watching the presentation video, I quickly made two phone calls.  My first call was to my friend Dan Kenger at Gin Lane.  I told him to burn the wireframes we had been working on.  Instead of building my own thing, I had decided that I just needed to invest in Weotta.  I was determined to convince the CEO Grant Wernick that he needed my help to build his business, even though I was an unknown quantity in Silicon Valley at the time.  My second call that day was to my friend Rachel Bassini, who was working at NewsCred at the time.  I knew that she was at the conference and was also totally shameless, so I asked if she could introduce herself to Grant and start talking me up.

Never one to back down from a challenge, Rachel complied with my request, and within a couple of days we had scheduled a conference call with Grant.  I was able to impress Grant but to my mild surprise he was non-committal about allowing me to invest in his company.  He said he had to discuss my potential involvement with some of his advisors.  This type of business was new to me as I had come from industries where if people offered you money you typically took it.

A week later I received a call from Grant.  He told me that he wanted me to invest because he was sure I could provide value to Weotta, but others were nervous; after all, I was an unknown quantity.  He told me that it made some of his advisors skittish that I wasn’t a known entity in the Valley and that I did not have a presence on Angel List.  “Angel List?” I asked.  “What is that?  If that’s the only impediment to me investing, get me on the platform immediately.”  Grant explained to me that Angel List was a new technology platform he helped create where startups looking to raise money could meet angel investors looking to invest in startups.  He introduced me to their team and I was allowed to create a profile.  After that I became addicted to Angel List, but that’s another story for another day.

I took the plunge, invested in Weotta, and started to help the team on strategy.  The “special sauce” behind the Weotta application was its core semantic search querying capabilities, which were designed by the company’s co-founding CTO Jacob Perkins.  Within a couple of years, Weotta had built what I believed to be the best search engine for local data on the web and because of this Grant was able to attract investment from venture funds like Google Ventures and Data Collective.  Unfortunately, even though the product was used in 1000’s of U.S. cities monthly potential users of the app just didn’t seem to care how good the semantic search technology was.  

In the summer of 2015 Weotta was at a crossroads.  The company was running out of money and it’s only direct path to monetization was going the local ad route or selling data to hedge funds.  Grant knew that he needed to raise more money, sell, or pivot.  He put together a deck showcasing the technology behind the app.  He took a sample local query, like “What’s a great place to have tacos and Margaritas for Sunday brunch at 11 AM with my girlfriends?”  Weotta spit back multiple options of places that served tacos and margaritas, and was open on Sundays at 11 AM, just like magic.  The competitors, mainly Google, Bing and Siri, responded with disjointed and incoherent responses.  

Although investors viewed this demonstration as impressive, monetization around local search wasn’t compelling, given the grueling local sales efforts needed to turn a buck in in the space, and the issues the leaders in the space like Foursquare and Yelp have had. Grant knew local search wasn’t the path forward, so he started exploring taking their technologies to the enterprise. Right away there was a lot of interest around utilizing it for querying all sorts of data from CRM to logs. Through Data Collective, one of the investors in Weotta, this deck found its way into the hands of senior executives at Splunk, the publicly traded machine data and cyber security company.  They saw something that no one else did at the time; this semantic search technology, with a few tweaks, could become a powerful weapon to combat potential cyber-attacks at large organizations. Also, they saw an opportunity for meaningful partnership. Splunk is a super powerful product, but only a handful of people in any given organization could use it – could Grant and his team be the partner they had been looking for to unlock the value of Splunk?

After many interesting conversations and a small investment into the company from Splunk itself, Grant, Jacob, and the entire team decided they needed to make the hard decision and shut down Weotta, take a hard pivot, and become a deep enterprise product.  Despite the hardship, the team stayed together and launched a new company called Insight Engines.  Insight Engines would run on top of Splunk, and allow Splunk’s Fortune 500 CIO clients to query important information about potential cyber breaches in a faster and more efficient way.

When you visit the homepage of Insight Engines today, you can see an example of how the technology works.  

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It’s obvious when looking at this query why a Fortune 500 CIO would be interested in quickly obtaining the answer from a cyber security perspective.  What’s less obvious is how similar this query is to a query that I would have asked on Weotta:

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The pivot has worked!  Their product is used daily by some of the largest organizations on the planet, they just raised a new round of financing, and they continues to push the envelope.  They are off to the races.  I couldn’t be happier for them as they stuck to their belief that this type of technology would prove valuable and they showcased a willingness to listen to the market.

40 Reasons To Attend The 2017 MIPIM PropTech Summit

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Like PropTech? Here’s 40 Reasons You Can’t Miss the 2017 MIPIM PropTech Summit!

We are in the midst of next great revolution of technology and there is no better time to be in PropTech than right now. With PropTech accelerating at a breakneck pace, with billions of dollars being funneled into hundreds of startups, it's hard to keep up with the change that is occurring each and every day. To stay better connected and informed, you need to attend the MIPIM PropTech Summit during NYC Real Estate Tech Week.

Quite simply, the MIPIM PropTech Summit is the gold standard of PropTech events, in the center of the PropTech universe. The PropTech Summit serves as an international exchange of ideas and insights into the thriving PropTech industry, where hundreds of leaders from over 15 countries and 100+ companies culminate to discuss and promote innovation, entrepreneurship, and social impact in PropTech. At the same event, you will find scrappy startup founders, Fortune 500 company executives, expert investors, and top government officials, all united under the ideology that PropTech has and will continue to have a profound impact on the world. Through their willingness to share and exchange ideas at the PropTech Summit, the participants enrich the entire real estate ecosystem with diverse perspectives and experiences. The event features influencers like Duke Long and Drew Meyers of Geek Estate Labs who have helped transform PropTech and drive a change in an industry that has just realized its potential to impact the world.

 

From entrepreneurial superstars like:

Matt Ables, CEO, BuiltWorlds

Doug Chambers, VP, WeWork

Al Goldstein, CEO, Avant

Ro Gupta, CEO, Carmera

Brad Hargreaves, CEO, Common

Stephen King, CEO, REXMLS

Riggs Kubiak, CEO, Honest Buildings

Ragnar Lifthrasir, CEO, Velox.RE

David Lyman, CEO, BetterView

Caren Maio, CEO, Nestio

Michael Mandel, CEO, CompStak

Cindy McLaughlin, CEO, Envelope

Ryan Simonetti, CEO, Convene

Leonard Steinberg, President, Compass

Jonathan Wasserstrum, CEO, The Square Foot

Brandon Weber, Co-founder, VTS

 

To corporate heavyweights like:

Guy Bradley, CEO, Swire Properties

Aine Brazil, Vice Chairman, Thornton Tomasetti

Ric Clark, CEO, Brookfield

Robert Entin, EVP, Vornado

Chris Gregg, CEO, British Land

Karen Hollinger, AvalonBay

Takeshi Kodama, PM, Mitsui Fudosan

Will O'Donnell, Managing Partner, PLD Ventures

Johnathan Pearce, SVP, Ivanhoe Cambridge

Lisa Piccard, CEO, Equity Office Properties

Kim Scharf, SVP, DDR Corp.

Jeff Stein, Head of AECOM Ventures, AECOM

Colette Temmink, Executive MD, C&W

Owen Thomas, CEO, Boston Properties

Jacob Werner, MD, Blackstone

Bob White, CEO, RCA

 

We even brought in an all-star panel of judges for the Startup Competitions:

Bob Courteau, CEO, Altus

David Eisenberg, SVP, CBRE

David Goldberg, General Partner, Corigin

Brad Greiwe, Co-founder, Fifth Wall

Dan Hughes, Director of Data, RICS

Sandy Jacolow, CIO, Silverstein Properties

Maria Seredina, M&A, Zillow

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This culmination of leaders will guide attendees through the realm of PropTech. While the star studded speakers, expert led conferences, and industry lauded Startup Competition provide tremendous value to PropTech participants, the greatest value of the PropTech Summit lies in the attendees who have the opportunity to learn and network with top real estate and technology minds from around the world. See you October 11th in New York City. You can’t afford to miss it! Learn more and reserve your ticket here

Why New York City is the Center of the PropTech Universe

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Undoubtedly, New York City is the world’s best market for real estate, where total property value crossed the $1.0 TRILLION mark for the first time ever in 2017, according to the Department of Finance. Real Estate has been notoriously slow adopting new technology, lagging behind other major industries such as FinTech and HealthTech over the past two decades.

However, this lack of technology adoption actually represents an enormous opportunity in PropTech, especially in New York City. Startups are increasingly recognizing this special moment in time, and as the real estate capital of the world, New York City has become a breeding ground for new PropTech companies to operate. Don’t believe us? Just ask BuiltWorlds, who recently dubbed New York City “the hottest place for tech in the built world.” Just prior to BuiltWorlds’ proclamation, MetaProp NYC was excited to have a few of the BuiltWorlds team members in our Flatiron, Manhattan office to talk all things PropTech!

Pictured from left to right: Sam Huffman, Phil Russo, Bryant Donnowitz, Evan Petitt and Matt Gray

Pictured from left to right: Sam Huffman, Phil Russo, Bryant Donnowitz, Evan Petitt and Matt Gray

Who calls NYC home?

In order to stay relevant in the ongoing real estate tech revolution, all the biggest PropTech companies have an established presence in New York City. WeWork, the sixth largest privately held startup now estimated to be worth more than $20 billion, calls NYC home. In addition, heavy hitters VTS, Compass, StreetEasy, Compstak and many more, have their headquarters in New York City. Other PropTech power houses such as Airbnb, Zillow, RedFin, and OpenDoor have offices in the Big Apple. Even tech behemoth Google has dipped its toes in PropTech’s waters with urban innovation organization Sidewalk Labs, the headquarters of which is -- you guessed it -- in New York City.

Quite simply, if you’re a booming PropTech company, a presence in NYC is essential.

Support at the government level

One major endorsement that New York City has working in its favor is the highly enthusiastic backing of the New York City Economic Development Corporation (NYCEDC), helping to further establish NYC as a most favorable place for technology companies. The NYCEDC’s recognition and dedication to PropTech in NYC has given the city a competitive advantage in the rapidly growing PropTech world. Thanks to their efforts, New York City (specifically Silicon Alley) has become the second most dynamic ecosystem for tech, trailing only Silicon Valley. With steady cooperation and support at the government level, New York City is well equipped to retain its PropTech dominance.

Elite academic institutions

Another key factor in NYC’s PropTech dominance  is the high concentration of universities with specialized programs in real estate and technology that make the city a magnet for entrepreneurs. In this regard, Columbia University’s dedication to PropTech has been the gold standard. This year, the university’s Center for Urban Real Estate (CURE) and MetaProp NYC teamed up to successfully create the world’s first Pre-Accelerator for earliest-stage PropTech companies.

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In addition, Cornell Tech’s massive expansion on Roosevelt Island will churn out tech-savvy entrepreneurs with its highly immersive program starting this year. In addition, NYU’s Schack Institute of Real Estate, as well as Fordham’s Real Estate Institute, are premier universities that graduate talented individuals every year who either go on to start their own companies or become major influencers in the space. This dedication to PropTech at the student level has made NYC a hub of youthful innovation and has attracted the attention, investment and validation of New York City as the PropTech capital of the world.

NYC Real Estate Tech Week and the MIPIM PropTech Summit 2017

Finally, New York City hosts NYC Real Estate Tech Week which has become the “Davos of PropTech”. Hundreds of PropTech leaders, entrepreneurs, strategists and influencers from around the world will meet in October for a week-long series of events, anchored by the MIPIM PropTech Summit, the single biggest global event in PropTech. Last year, Reed MIDEM, the #1 global real estate conference organizer, chose New York CIty as its first host city in the United States. With more than 500 attendees from 15 countries, the Summit has become a magnet for the best of the best real estate and technology leaders to come together to share their latest innovation insights. For more information on NYC Real Estate Tech Week and the MIPIM PropTech Summit visit realestatetechweek.nyc and www.mipim-proptech.com/en.html.

Bill Rudin, CEO of Rudin Management Company speaking at the 2016 MIPIM PropTech Summit

Bill Rudin, CEO of Rudin Management Company speaking at the 2016 MIPIM PropTech Summit

What We Learned from the Latest Open Application Season

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PropTech has never been more exciting and we're thrilled to be living in the middle of the action.  The MetaProp Accelerator at Columbia University team is proud to share that we again received hundreds of applications for our program.

Unsurprisingly, we'll all be swamped trying to get through the flood of applications over the coming two weeks. Although I find the stack of applications a bit intimidating, I am also excited for this final push.

One of the best parts of my work at MetaProp is having the opportunity to meet passionate entrepreneurs from different backgrounds and places every day. Historically, both technology and real estate have lacked diversity and inclusivity. Our open application season is an opportunity for our team to work to make our little corner of the world more inclusive by inviting everyone to engage with us on a level playing field.

We crunched the numbers last night and found some interesting stats.  I figured that our community would appreciate some real time insights from the open application period...

Geographically, nearly 25% of the companies came from NYC - our home base and the center of PropTech. The other 75% or so of the startups came from 69 different cities and 25 different countries. Most interestingly, almost 30% of program applications came from outside of the US.

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There are more interesting and truly different ideas buried in this stack of applications than we have ever seen before. It is clear that more entrepreneurs are focused on real estate than ever before and as a result, founders are thinking way outside of the box and we are very excited to see how this type of thinking will affect this industry. We'll be looking at applications from startups solving big problems in interesting areas of PropTech, including smart cities, residential brokerage, tenant advocacy and sustainability.  I'm confident that we'll be able to select a great group of entrepreneurs again for the 2017 accelerator program.

However, there is one glaring area for improvement...Despite our best efforts to find and recruit female entrepreneurs, less than 15% of 2017 applications came from female founders. From a social and cultural perspective, the technology industry -- and venture capital in particular -- is often not a comfortable place for women.  This is bad for society, bad for our PropTech community, and bad for business: statistically, female founders perform better.

We're committed to solving this problem.  In fact, the partners at MetaProp have been discussing a number of specific initiatives inside PropTech and the broader business and social communities to identify, promote and support female entrepreneurs.  In addition, this year I made it my mission to reach out to all of the smartest people I could think of who have promoted women in technology and real estate. What was their take?  Generally, I heard the same thing.   It is a "pipeline issue."  If this is true, that means that there simply are not enough women who are encouraged to take the leap and to start their own PropTech company.  Therefore, there are not enough women applying to any accelerator programs.

So, here's a challenge...in 2018, I'd like to challenge our MetaProp team and our partners to have 40% of total applications submitted by female founders.

Internally at MetaProp, we are working on even more innovative solutions to achieve this ambitious goal.  More on that soon.  But, change has to come from the community too.  Everyone can be a part of the solution.  If you have ideas for ways that MetaProp, our partners, friends and community can build a stronger pipeline of female PropTech founders, please respond in the comments section or send us an email at info@metaprop.org.

We will be announcing the 2017 class in the next couple of weeks. Please stay tuned!

How We Choose You: A Look Inside Our Open Application Process

With applications closing tomorrow, we are busy reviewing applications, interviewing startup CEOs and making offers. It is a very exciting time in the office but I also understand that it can be nerve-wracking and confusing for CEOs. This blog post is intended to demystify the application process for you if you are currently finishing up your application or waiting to hear back.

In terms of the process, after we receive your application on F6S or Angellist we will review your application and reach out to schedule an interview if we think your company might be a good fit. Typically, a CEO will be interviewed two to three times throughout the process by myself, Aaron and often one or more partners. Our Investment Committee reviews the application after the interviews. If you make it through the Investment Committee, I will reach out to start due diligence. If a company makes it through due diligence, we send an offer letter.

Sometimes this entire process can take less than two weeks. Other times, it takes months. For any applications submitted recently, we will expedite the process and get back to you before the end of the month.

Throughout the process we try to be respectful of each entrepreneur’s time — your job is, after all, to build a company — not to prepare for interviews and put together data rooms. Still, if you are selected for the accelerator you will enter our portfolio and we have a responsibility to our LPs to vet each company thoroughly. That means we cannot take any shortcuts.

The interview process for the accelerator is different from our process for a fund investment because we are looking for more than just great investments -- accelerator companies need to be excellent investments AND a great part of the cohort. We have found that the best cohorts consist of companies that are ready to start selling into real estate and that represent a broad range of asset classes. It is extremely important to us to have a diverse group of CEOs with experiences and personalities that will compliment each other. For a cohort to be successful, we need each CEO to bring a unique perspective to the forum and also to be supportive to the other CEOs. We work hard and our program is very serious, but we also care about building a lasting community with shared values.

Below is a list of some quick tips for a successful accelerator interview:

  1. Explain the problem. Make sure to fully explain the problem you are looking to solve early on. We want to make a bet on someone who is obsessed with solving a big problem — and willing to pivot to solve it.

  2. Be professional. This one may seem obvious, but make sure to respond promptly to emails, return requested materials quickly and show up on time.

  3. Make it a conversation. We are, at the bottom, investing in you and your team. The more conversational you can be during your pitch, the more you will connect with us.

  4. Talk about your team. We want to know you have the team to grow your company by 500% by February.

  5. Have a plan. Our team can help you the most if you are ready to grow very quickly. Show us that you know who you want to sell to and how you want to reach them.

  6. Be ready. We can move quickly, so have your basic diligence materials ready to go so you can send them to us right away. It shows us that you are professional and ready to fundraise.

  7. Know what you want. We are here to help you and we appreciate when you have already thought about how you would get the most out of our program.

If you have any questions, send me an email at lcollins@metaprop.org. Good luck!

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Apply for MetaProp NYC’s 2017-18 Accelerator