Why do PropTech Founders Dress Up Like They're Private Bankers?
An audience member asked this question last December in a PropTech Institute event with Xccelerate at Eaton Club.
We laughed about it then, but it was not until I came across Matt Knight at Vertical’s “The old gods of CRE” that this question came back to mind with much greater importance. You can find his post here: https://verticaltech.substack.com/p/the-old-gods-of-cre.
So, what is the startup “no-suit” dress code?
The startup culture at Silicon Valley has long promoted a relaxed, casual dress code as a statement of what was most important to them - building products.
Do startups with the “no-suit” dress code make for great startups? I have no clue. But, it can mean that they prioritize products over pleasing others. If this is the rule, then PropTech startups are an exception. Weirdly, the casual dress code doesn't exist for PropTech startups, especially to founders. This puzzling phenomenon makes me wonder… Is this a reflection of the startup-client relationship?
PropTech founders need to work closely with real estate professionals. And given most companies are conglomerates, everyone tends to dress up formally to convey seriousness when conducting businesses. Subsequently, PropTech founders would dress formally to mirror clients.
Well, as much as it sounds reasonable, let’s think about this: is this a sign that PropTech founders are spending too much on selling and not spending enough time on strengthening their products?
After being in the industry long enough, my answer has become a strong yes. A lesson I learnt from the mistakes I made as I was building Denzity.
The industry is fragmented and hidden. It takes years to crack the game and years to learn subtle skills like designing deals and warm-up partners. With this approach, PropTech founders spend most of their time networking and building relationships - hoping their patience and efforts would pay off and give them opportunities to connect with the right stakeholders for pitching, just as how the industry has always been.
Here is why this doesn’t work when it comes to PropTech: Digital changes fast! Like, lightning fast!
Real estate firms tend not to make snap decisions. It takes months or even years to make up their mind, as a company, about implementing any technological solutions. By the time you have reached the stakeholders, your idea might be outdated or replaceable. It is no wonder that many people complaining about many PropTech solutions aren’t good enough for their standards. But, are real estate companies really to be blamed? Of course not. PropTech is still at its early stages, and real estate firms have just started warming up using PropTech. Also, it might be some senior executives arriving at this realization. They push the organization forward while still being careful not to offend other executives within the organization. It is a real-life Game of Thrones! That is why PropTech founders need to hustle and put a lot of effort into building relationships to get that one shot.
Being in this awkward dilemma, how can the PropTech industry move forward? I want to propose my suggestions to my fellow PropTech founders.
Instead of spending most of your time building relationships and networking, I suggest putting your foot in the door and giving your first few clients, “sweetheart deals'.” Deals they can’t say no. Early bird discount? Free trial period? Designing the products bespoke to their organizations? Absolutely! Whatever it takes to get a yes from clients. You are focusing on building a track record and showing the clients you have skin in the game. To quote Paul Graham of Y-combinator’s advice to startups, “start by doing the things that don’t scale” - do the grunt work initially to get the solution going or test the demand for your product before building the product. Not only can you save time and resources and avoid building a product no one wants, but clients would also be willing to work closely to provide you with feedback on what they want. Capture the opportunities now!
Initially, at Denzity, we were off to a slow start and fell into the classic trap of a stretched out product-development. We learned very quickly that we should focus on catching the wave of corporate interest at just the right moment. Then, we started giving clients ``sweetheart deals'' to open doors to productive back-and-forth conversations about the product. And it worked! As a result, we arrived at a product with features companies are happy with through better collaboration.
So, should PropTech founders wear suits and ties or hoodies and Crocs? Depends on the occasion, of course. I want to stick with something simple and presentable - putting on a plain t-shirt, a pair of denim, a pair of dress shoes, and a nice blazer on. Don’t overthink. After all, it is what you can provide to the clients that matter, not the way you dress.
More about the author: Darren is the founder and CEO of Denzity, a PropTech startup aiming to make the world of real estate more accessible to everyone. If you are interested in becoming a regular PropTech author, please reach out at firstname.lastname@example.org
PropTech Institute is an independent, non-profit association representing Asia’s PropTech community led by a team of committed professionals. The association seeks to bridge the gap between real estate and tech as well as providing a platform for founders, enthusiasts, professionals, and all those interested in PropTech to share knowledge in the application of technology in real estate. Visit our website to learn out more about PTI!