Five Tips from a Strategic VC to Accelerate Growth of your Proptech Startup

Andrea Jang at CREtech LA 2019

Recently, I was asked to share my thoughts with Forbes on how proptech startups should approach strategic growth within the commercial real estate industry. While we covered a lot of ground, there are a few things I wanted to add here.

As Growth Lead for the Americas at JLL Spark, I guide proptech startup founders on strategy and sales growth and help teams navigate the myriad of decision makers within the commercial real estate industry. I also educate commercial real estate leaders about technologies that are creating new value to this industry.

Startups can overcome adoption challenges and accelerate growth by leveraging a strategic VC’s prominence and network of contacts. Unlike traditional consumer-facing tech that aims to reach hundreds of millions of consumers, proptech decision makers comprise of a finite group of executives with backgrounds spanning IT, real estate investments, property operations, legal, accounting or other. While these individuals may be learning about new technologies through the web, more likely, they are gaining insight from peers, “boots on the ground” analysts and associates, commercial real estate innovation leaders, or strategic VCs themselves.

Find a strategic VC aligned with your goals and vision for the future, who can offer advice on how to utilize resources, make introductions, and support growth and adoption across the industry.

How to Identify a Growth-focused Strategic VC

1. Deep knowledge of the end user, gaps and pain points. An effective strategic VC will have a deep understanding of the target end user, their core business objectives and workflows. By understanding the gaps and pain points of your target clients, a strategic VC can help refine your product and message to resonate with your clients.
   For example, my experience working with property managers enabled us to identify a crucial pain point that property administrators face with managing certificates of insurance. When JLL Spark invested in Jones, I presented the solution to JLL’s regional property management leadership and scaled the platform to reach over 400 buildings in less than 8 months.
2. The ability to communicate effectively with the client. The ideal strategic VC will be able to frame and communicate the benefits of the platform in a way that the target client understands. A well resourced strategic VC will have a strong growth team to be your partner every step of the way, helping facilitate the right introductions that align with your goals and top initiatives.
   When we made an investment in Dealpath, one key initiative was to help the company expand their 100+ institutional client base to reach JLL’s key partners. Leveraging the network I established through my background in capital markets, we presented the platform to key investment management leaders, leading to adoption by global real estate owners and operators.
3. Access to an extensive network. A well-established strategic VC will have access to a multitude of different potential clients. JLL Spark benefits from its parent company JLL, a world leader in real estate services, providing a network of established relationships to proptech startups looking to reach new clients.
   VergeSense, is a great example of the dynamic relationship between startup and strategic VC. The team worked with JLL Spark to deploy a pilot across 3 JLL offices in London, implementing more than 550 sensors across 200,000 square feet. In a matter of weeks, JLL had a dynamic dashboard with insights on space utilization and how employees were using the workplace, allowing JLL management to more effectively manage their real estate footprint.
4. Strong understanding of distribution channels. While having access to a strong network is crucial, it is important that a strategic VC understands which channels are best for product distribution. The team should be able to identify both direct and indirect channels and leverage their network for effective and efficient scale. Target VCs that have proof of strong relationships with everyone from brokers, property managers and real estate investors to fundraisers and corporate occupiers of real estate.
5. Understanding of the businesses you are attempting to transform. Ultimately, it is important that your strategic VC truly understands your core business and the verticals you are attempting to transform. When a new product is launched, a strategic VC that understands your platform and core verticals will effectively leverage its network and distribution channels to fast-track advancement. Strong adoption of your platform in year one is essential — the ideal strategic partner is one who can successfully guide you throughout your journey.

The tips above are based on my experiences in commercial real estate, and I suspect they hold true across similar relationship-driven industries where barriers to entry are high. I am passionate about breaking down the barriers in commercial real estate to ensure that our industry benefits from digital transformation. Stay tuned for my next article which will cover how to present your proptech startup to prospective landlord clients.