Venture Talks

How to Sell

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When an entrepreneur tries to sell a software or hardware product into a large commercial real estate company, they often make a huge mistake by assuming all the stakeholders at that company have the same motivations, goals, and incentives for adopting (or not adopting) a particular technology solution.

In fact, part of the reason why PropTech is such a hard nut to crack is because often entrepreneurs have to make three to four separate sales pitches within one organization before they find the internal champions that are key to securing at least an unpaid pilot and ideally a paid recurring revenue contract.  The different personalities that an entrepreneur needs to convince to close a deal in this industry are: the property/asset manager, the building engineer (when hardware is involved), the Chief Information Officer (CIO), and the CEO/COO of the company.  Each of these players has their very own quirks.  

It’s imperative to understand these dynamics and we spend a large amount of time working with companies in the MetaProp accelerator to drill into these.  To further complicate these issues, often different real estate companies will have different power dynamics.  At some firms, for example, the CIO has a lot of power.  At some other firms, the CIO has no power and all decisions are made at the building level.  If you want to learn more about how each firm deals with new technology, please apply to our program, but for a cursory introduction, please continue reading here.

The Property/Asset Manager

The property/asset manager is often the first person to become acquainted with a new technology. They are typically younger than those in the C-suite, very ambitious and often more open to new technology. Ultimately, though, they only care about three letters: NOI — and they know that technology can help them exceed their goals.  If they can increase the NOI on their property, by either increasing revenue, decreasing expenses, or ideally both, they will look like a hero and have a better chance to catch the attention of C-Suite executives, move up the food chain and advance their careers.

Thus, the property manager is often the simplest target for an entrepreneur to make a sales pitch. The pitch to these people is simple: purchase my technology product for $1 per year, and increase NOI by $2 per year or more.  If your technology can accomplish that, then chances are the property manager will become an internal champion.

The Building Engineer

The building engineer has a very different set of incentives from the property manager.  In many cases, especially when hardware and IoT solutions are involved, it’s the building manager and their staff who are actually implementing the technology on a daily basis.  Building engineers are typically not compensated like property managers; they do not make more money when the building has a “good” year or less money when the building performs financially poorly.  They also do not have the same upwardly mobile career trajectory that a property manager might. Once someone attains the status of building engineer, that is typically the job they hold until retirement.

Therefore, building engineers want technology solutions that actually work and save them time.  They don’t want to spend a huge amount of time deploying the solution and training their staff to use it.  They also don’t want to deploy a piece of technology that will make them or their staff obsolete.  They are fiercely protective of their turf and their staff, rightfully so.  Thus, to sell a building engineer, an entrepreneur has to focus 100% on efficiency.  Deploying solution X will lead to Y fewer hours of time for your staff.  However, solution X still requires a full staff to run it, and is not displacing anyone on your team.  

The Chief Information Officer

The CIO is primarily concerned with two things: security and integration.  They do not care how much money the product will make for the firm, or how much time it can save the building engineer.  The CIO wants to know if the technology is secure and encrypted.  S/he does not want to worry about yet another potential breach in the infrastructure of the company, or worse yet, the physical building infrastructure itself.  Also, the CIO spends the day trying to integrate between twenty to thirty disparate technology solutions that are not built to integrate neatly with one another.  They want to understand how your product will integrate seamlessly with what they already use.  If it can’t integrate, the CIO will most likely kill the deal, even if the property manager and building engineer are on board.

Pitches to the CIO, therefore have to focus on security and integration, not NOI and efficiency.  

The CEO/COO

The top of the organization varies the most on their incentives for adopting technology.  Of course, they are motivated by revenue growth, expense reduction, and efficiency.  And like the CIO, they also are concerned with cybersecurity.  However, what they are most concerned with is corporate culture, both internally and externally.

The CEO wants to know how the company is perceived as an early adopter of technology.  Does this make the company more desirable to the ever elusive potential millennial employee?  Do marquee tenants want to be in the company’s buildings because they embrace innovation?  Are current employees more likely to feel content in their jobs because of this technology adoption?  

That’s why pitches to the C-Suite need to be primarily driven by culture.  As an entrepreneur, you need to understand how to tug at the heart-strings of the CEO.  Make them believe that their company is special for adopting your product.

Conclusion

PropTech is not an easy business. This is the unfortunate reality that entrepreneurs face when selling into this industry.  Instead of throwing up your hands and bemoaning the difficulties, embrace the challenges and quirks associated with the space, because once you finally close a deal, it will be all that much more rewarding…

PropTech, Nikola Tesla and the Power of Sound

In the venture capital world, looking out for founders’ collective mental health is nothing new. The most prominent example of this trend is the Investor Pledge for Mental Health.  San Francisco based Kip created the pledge and many prominent funds like Slow Ventures stepped up to the plate and began sponsoring therapy sessions for their portfolio founders.  Starting a company and dealing with the vicissitudes of that journey can be immensely stressful.  

At MetaProp, we have begun working with sound therapist Jarrod Byrne Mayer from Brooklyn Healing Arts.  In these sessions, Jarrod utilizes tools like tuning forks and Tibetan gongs to “re-tune” the bio rhythm of the human body.  Founders exit these sessions experience a feeling of clear mindedness, stress relief, peacefulness, and balance.  It is my experience that the greatest innovations occur when talented people enter this type of mental state.  Sound therapy is only one of many potential gateways.

Interesting things seem to happen during these sonic sessions.  Although I typically keep my eyes closed during these sessions, at one point while the vibrations from the gong filled the room, I opened my eyes, and the sound itself had appeared to “disrupt” the air around me, making it look different.  The sound was almost palpable in the way that a solid object would be.  It made me question whether sonic vibrations created by the proper combination of gongs and tuning forks can disrupt space as we know it.

As I continued to ruminate on the power of sound, I remembered a famous quote by Nikola Tesla, perhaps the most legendary inventor and startup founder of all time.  He once said, “If you want to find the secrets of the universe, think in terms of energy, frequency and vibration.” Tesla was well aware of the power of sound, vibrations, and ambient energy, and this belief system imbued many of his most famous inventions, including radio communications and alternating current.  Tesla claimed that he could sense when his mother had died because they were both “tuned to the same frequency”.

Although he didn’t characterize it in this way, Tesla was hinting at the much-debated concept of a “collective consciousness” within a particular society or group.  The idea of a collective consciousness was first presented in 1893 by French sociologist Émile Durkheim.  Proponents of this theory provide examples of simultaneous invention and discovery as evidence for the existence of this collective consciousness.  For example, is it just a coincidence that Isaac Newton and Gottfried Wilhelm Leibniz both formulated modern calculus at the same time without having any traditional form of communication with each other?  Was there something “in the air” in the 17th Century that led to these simultaneous discoveries, or more likely, were these two geniuses just tuning into the same frequency?  On a lesser scale, we frequently see startups in the same exact space popping up in different parts of the world at the same exact time.

This leads us back to our portfolio sound therapy session.  Is there a way, through sound therapy session, for me as a venture capitalist to influence the collective consciousness of our portfolio?  If all 32 portfolio founders at MetaProp were tuned into the same frequency, what more could we accomplish?  Many of our portfolio CEOs have become friends with each other and communicate via our Slack channel as well as in person to share ideas, experiences, and challenges.  This communication often leads to things like partnerships, joint ventures, API integrations, and more.  However, I often wonder what else we could accomplish together as a group through the power of sound?  Can we collectively put our own dent in the universe?  I don’t yet know, but I am sure going to do my best to find out…