Are you a Gmail, an Uber — or a Jones?
When you see a lot of start-up pitches (last year at Hetz we saw some 1200) the patterns start to show. Each start-up typically pitches a problem it intends to solve, usually on slide 3 or 4 of their presentation, followed by a solution in the slides that follow.
With so many different verticals and strategies it is hard to make generic statements, however one classification has become quite apparent. Most start-ups are in the ‘Gmail’ category, those who try to improve on a current situation, typically by proposing a solution that is 10x-100x better than current standards.
However there is a small group, the ‘Uber’ category, which, rather than providing an improved solution, looks to eliminate the problem altogether (in Uber’s case, the need to hail a cab).
One category isn’t necessarily better than the other, and some problems naturally call for a particular type of solution. For example, we have invested significantly in ‘cloud optimization’ and ‘developer enhancement’ tools. We believe that both are urgently needed and likely to enable the creation of hugely successful companies of the future. But both optimization and enhancement are unlikely to be an Uber, but rather an incremental Gmail. Similarly, the creation of a new marketplace is rarely going to be a Gmail but if successful will nearly always end up an Uber.
Although there isn’t a superior path, knowing which category each start-up falls into is very helpful, while assessing this incorrectly can have painful repercussions. One reason for this is defining KPIs. With a Gmail, the KPIs can use the status quo as a benchmark; 30% enhancement or 50% less cost etc. With an Uber, using such KPIs could be misleading. Imagine that Airbnb (a clear Uber) benchmarked their early success against a hotel chain’s benchmarks: How much cheaper is an Airbnb or what their occupancy rate is, rather than focusing on reaching a critical mass in each location?
The ‘Uber’ overhauling the way people manage property
Jones, a rising proptech start-up, is an interesting story. In effect, we are witnessing a Gmail evolve into an Uber!
The problem Jones set out to solve, back on slide 4, was the painful process every tenant, subcontractor or vendor goes through every time they have to submit a COI (by law every time you enter a building to do a job you need to submit a Certificate of Insurance). This problem may sound niche but there are over 100M of these each year in the US, each of which is then manually reviewed by a property manager. Ask a property Compliance Officer or Risk Officer about the COI part of their job and their face is likely to tell the entire story.
Jones’ entered the market with an automated SaaS solution that does the job 40% faster, 30% cheaper and 50% more accurately (notice — all Gmail KPIs). The story so far has been great, growing their top line 5X despite the Covid-19 pandemic and they are now implemented in over 5,000 buildings including some of the most prestigious property managers in the US. But from interviewing dozens of their clients, while this success may continue, it seems their market is calling for an Uber, not a Gmail.
In a few months time, with thousands of vendors already part of their system, Jones will launch its first marketplace where tenants can reach vendors without the need to check or approve for a COI. The goal is not approving a COI faster but eliminating the need all together, bringing immediate and tangible benefits to the tenant, the vendor and the property manager alike. The new focus is shifting towards building a critical mass and network advantages.
There are many ways start-ups can think about what they do, but one way to bring clarity to your mission is to ask the simple questions that Jones has been asking: Are we trying to improve the response to a problem, or are we trying to make the problem go away altogether?
Whether you are an ‘Uber’, a ‘Gmail’ or a Jones, we are happy to connect — get in touch.
