Property technology has radically impacted the way we live and travel, but the real estate industry has successfully resisted most attempts to innovate.
Prospective homeowners can qualify for mortgages from their mobile phones, but until there are more companies to help them find affordable housing or adequately plan for the largest purchase they’ll ever make, proptech can’t create optimal value for consumers.
After the success of startups like Airbnb and smart-home players like Google, Amazon and Samsung, investors are “searching for good ideas and quality execution,” according to Jake Fingert and Lionel Foster of VC firm Camber Creek.
“Starting a business is hard, but we now have a path for proptech lined with funders and advisers that can propel entrepreneurs over early obstacles through to maturity and deep market penetration.”
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In an article they describe as “a call to current and would-be proptech entrepreneurs to solve the problems that are close to home,” the authors identify eight issues founders and investors should focus on, along with the estimated TAM for each opportunity.
“What you want as an entrepreneur is funders nodding in agreement with your pitch before you even have a chance to finish it,” write Fingert and Foster.
Since housing accounts for as much as 18% of the U.S. economy, “these are problems that everyone can understand. More entrepreneurs should call proptech home.”
Thanks very much for reading,
Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist
Proptech still has fundamental problems for entrepreneurs to solve
How I navigated my pregnancy as a Series A founder
When Kelsey Mellard, founder and CEO of telehealth platform Sitka, realized she was pregnant a few weeks after raising a $14 million Series A, she was faced with several decisions.
How would she break the news to her leadership team and employees? What was the best way to plan her transition to maternity leave?
“While the experience wildly varies and there is no ‘correct’ path to take, I want to share what worked for me while I was a pregnant founder and CEO,” says Mellard, who shared her pre-leave checklist and transition plan with TechCrunch+.
“My investors had chosen to bet on me,” she writes. “So now, me having a baby was going to become part of our new game plan, and they understood that.”
Use chronological scenario planning to help your startup get through a potential recession
People who burn wood to keep warm through the winter know how to calculate how many cords they’ll need to chop and stack. Creating a winterization strategy for a startup is a less straightforward process, however.
In this environment, entrepreneurs should build decision trees that can help them manage 36 months of runway, recommends Gaetano Crupi, partner at venture capital firm Prime Movers Lab.
A three-year outlook “is a more appropriate time horizon for collecting more information so you can decelerate even further (with cash to pivot) if things are worse in 12 months, or accelerate if things are better in 18 months,” he advises.
Use chronological scenario planning to help your startup get through a potential recession
Astrix Astronautics’ Fia Jones on wooing Peter Beck to launch her startup
In 2019, Fia Jones reached out to Peter Beck, CEO and founder of Rocket Lab, with an invitation to discuss her idea for revolutionizing the way we power satellites. At the time, she was a 19-year-old physics student at the University of Auckland.
Last month, Rocket Lab brought a cubesat created by Astrix Astronautics, the company Jones co-founded, into space.
Once deployed, the unit will capture 200 watts of power that can provide inexpensive power for constellation satellites.
“For other founders, I’m not saying they should chase down another CEO in their industry. But I think it can help to have an expert in the field, or someone who has credibility and clout, to back them up,” says Jones.
Astrix Astronautics’ Fia Jones on wooing Peter Beck to launch her startup
Right-size your tech stack to withstand the downturn
Reducing headcount is often the first place founders look for savings, but it can’t hurt to take a closer look at your tech stack.
Early-stage startups don’t have a formal purchasing process, which means companies growing at scale are left paying for unused software licenses or automatically renewing contracts locked in at high rates.
“The question is not whether there is waste or inefficiency, but rather how much,” says David Campbell, CEO and co-founder of Tropic. In this article, he shares three ways to assess startup software spending.
VCs shouldn’t confuse risk management with not funding diverse founders
In 2021, Black entrepreneurs received a record amount of venture capital, but since the downturn began, they’ve seen a significant drop-off, found TechCrunch reporter Dominic-Madori Davis.
Investors flowed $1.2 billion to Black founders in Q1 2022, but funding is at just $324 million so far this quarter.
“Our allies and communities need to be part of the solution by investing in our companies or becoming paying clients,” says Kerry Schrader, co-founder of Mixtroz. “Clapping from the sidelines only goes so far.”
VCs shouldn’t confuse risk management with not funding diverse founders
Late-stage tech companies must do right by their employees: Reassess your 409A valuations
Growing valuations are the ultimate goal for companies of all stripes, but for startups planning to endure a period of financial drought, lower valuations could make it easier to hire and retain employees.
“Reevaluating your 409A now is actually the right thing to do for your employees, because their equity isn’t up to date with the rest of the market,” says Frederik Mijnhardt, CEO of Secfi.
Late-stage tech companies must do right by their employees: Reassess your 409A valuations
Your startup pitch deck needs an operating plan
Including an operating plan in a pitch deck shows prospective investors that the founding team has a clear idea of how they will spend any monies received, suggests Haje Jan Kamps.
“For most companies, you should include major milestones: product launches, partnerships signed, and major product revisions shipped, along with other key performance indicators that show traction.”
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