The question of whether real estate companies are using too many proptech providers doesn’t come up often. When it does, the answer is usually found when the two first come together.
For that reason, proptech founders are intent on getting their services right — right from the start. Not getting their services provided properly from the get-go usually means having to pivot or die.
“Initially, we were primarily working with firms that did their own property management and operations in-house, in addition to collecting capital and doing the asset management side of things,” said Vimal Vachhani, co-founder and CEO at CREx Software, a Manhattan-based startup founded in June 2021 that provides real estate data integration and analytics software services for institutional commercial real estate owners and asset managers.
“We did have a couple of clients reach out initially who said, ‘The analytics out of our core tools are great, but we want to enhance them. We need some additional customer reporting,’” Vachhani said. “That was the initial solution we had built toward.”
Both parties eventually realized, however, that that solution missed the mark. “What the customers and we found was that what they had in their core systems was actually sufcient enough,” said Vachhani. “Our thesis was wrong as well — adding enhanced analytics on top of what comes out of these core platforms. It was a nice job, but it didn’t move the needle and really solve the immediate pain, versus five clicks. It didn’t justify the usage.”
By the end of 2023, Vachhani saw that CREx Software needed to pivot its services or risk more customer losses.
“A few customers ramped down their use of our platform,” said Vacchani in a rare public admission for a CEO. “The transition back to Excel-based reporting was fairly seamless for them. It highlighted a key lesson: We may have misjudged where the real pain points were.”
What CREx Software learned in making its pivot was that the true friction wasn’t in the insights provided, but in collecting data from systems and software outside the four walls of the customer’s organization, Vachhani explained. “The bigger need lies in integrations, automation and creating a foundation for analysis, not just delivering analytics.”
As a result, CREx Software found that the market need was in centralizing data from third-party property managers and solving master data management issues. The company rebuilt its software from the ground up, targeting asset managers with 10 to 50 properties — a market underserved by high-cost solutions. CREx Software also spun off a consulting arm to address broader needs, as the pivot significantly improved the company’s traction, especially in automating investor reporting and integrating disparate systems.
Other proptech providers, such as Chicago-based WithMe, avoid being untangled from customers by providing narrowly focused amenities they hope are superior enough to displace competitors’ products.
“We make lives better through convenient, technology-enabled amenities for the multifamily industry,” said Jeff Lail, chief operations officer of WithMe. The coffee station product in multifamily common areas.
“What we offer allows residents to print securely through our application,” said Lail. “The budget is a known monthly line item for the property tech. They don’t have to be involved at all. It’s turnkey from service to fulfillment of product, and it’s all done automatically with our system. It’s uncomplicated and predictable.”
“Even with coffee, every resident gets an allowance based on what the property management company or the ownership group has agreed to provide,” said Lail. “We control that. So we’re helping untangle some of those more complicated things. Of course, you want your on-site staff doing things that bring you money, not doing things that don’t.”
In providing such simple and reliable products for property managers, WithMe has established long-term relationships with 80 percent of the top 50 National Multifamily Housing Council companies and reduced the threat of being dropped as a proptech service provider, said Lail.
