In Brad Feld’s book Startup Communities, he lays out the principles that he thinks make for a successful startup ecosystem. One of these principles is “give before you get.” He believes that the act of giving to a community, without any thought of a return, is fundamentally important in building the community’s strength. Plus, from his experience it usually returns more to the giver than they could ever expect.
This struck me because it stands in sharp contrast with how the commercial real estate industry operates. Almost nothing seems to be given without asking for something in return. Because of this, the real estate industry has had a lack of a collectivist community that, in my opinion, often holds it back.
After meeting Andy from Realla, I found a great example of “give before you get.” His UK-based commercial real estate marketing platform released a free property portal last June. They used sophisticated software to ‘crawl’ over 900 property agent websites and offer a free search feature. Already they have over 90,000 listings that are being viewed by 65,000 unique monthly viewers. Their user base is growing by 15% month over month and they already list 3x as much commercial stock as the next biggest portal.
Their phenomenal growth is partially due to the property landscape in the UK. CoStar does not have the same presence in the UK and Loopnet does not exist. The existing commercial portal landscape is weak, and tenants and investors searching for CRE online are not well served. With over 90% of tenants searching online at some point during the acquisition progress, even when using a tenant rep, Andy thought there was a stark disconnect between the way commercial real estate was traditionally marketed, and the way people wish to search for it.
The site is not completely a case of altruism, mind you. By offering this portal Realla has been able to capture a large market for its marketing and CRM tools. “We use the goodwill generated by portal leads to build our relationships with our agent and landlord customers and encourage them to use our marketing and deal management tools: marketing automation; lead tracking; workflow tools and reporting to landlords.” Andy explained. He came up with the idea while working on the investment team at British Land. He would routinely get 50 glossy property brochures a day that would be spammed to his inbox whether or not the property fit his buying criteria. The waste – in terms of time and money – was obvious. In this sense, the UK and the US are very similar.
Andy was soon introduced to his co-founder Ian Parry, who had grown up developing machine learning and big data solutions as the 12th employee at Autonomy (which later became the largest software business in the UK, before being acquired by Hewlett Packard for $12bn in 2011). After Autonomy he co-founded Globrix as CTO, an early residential portal in the UK, growing it to over 2 million users per month, before exiting to Zoopla. They saw creating these crawling algorithms as an effective way to enter the CRE market and drive adoption for their marketing tools. To date, they have not had to pay for any advertising and have relied on organic growth provided by goodwill and great SEO that come from their free property search tool.
He admits that the UK is behind in adoption of technology for commercial real estate, but from what I have seen they have quite a good community of proptech startups. Some of this might be due to the cultural collectivism that comes with having dual agency for the huge majority of transactions. But, I feel that it is at least in part due to guys like Andy and Ian ‘giving before they get.’ They plan on duplicating their strategy in other markets like the US, UAE and Europe in the near future, and have already started in France. If they have the kind of adoption and growth in those markets like they do at home in the UK, they might very well get much more in the long run than they ever expected.