Culture Building in PropTech
How to create an extraordinary startup culture while selling into one of the most antiquated industries on the planet.
I gave a presentation a little bit ago about creating a culture of innovation within the PropTech ecosystem. I based my comments on my interpretation of the current thinking around company building as well as a synthesis of the thousands of conversations I’ve had with CRETech/PropTech founders, investors, and customers over the last decade.
As I was wrapping it up, it struck me that I wish I had incorporated more direct quotes from the entrepreneurs “in the trenches” building these cultures every day.
So I’m editing my comments and adding thoughts from people who know better than I do.
The first section will be my comments and synthesis. The second section is straight from the mouths (keyboards) of PropTech/CRETech execs.
Culture in PropTech
I realize that PropTech/CRETech as a market has its unique challenges with sales and adoption timeframes. But I’ll start with an overview of how a few books have helped shape my thinking around creating a startup culture.
And you should know that I’m a huge dork and therefore an avid reader of history, business, finance, and tech books. So everything on here is an aggregation of what I have read and learned from these titans of industry over the years. I’m pointing out a few books that I think do the best job of articulating what startup culture should look like in the 2020s, but this is far from comprehensive.
So, on to the list:
I’ll start with the tech sales bible: Crossing the Chasm
Geoffrey Moore’s (20-year-old) book on how to sell a tech product into the market is probably required reading for anyone in the startup landscape. He covers (extensively) the details around customer discovery, market definitions, and how to go from the Early Adopters in the Diffusion of Innovation Curve to the Early Majority (that’s the “Chasm”).
Next is: What You Do Is Who You are by Ben Horowitz
Ben’s brand new book about culture building in tech companies is fascinating in that he draws parallels between leadership and culture building in prison, the Haitian revolution, and several other historical examples to illustrate intentional and thoughtful culture-building. I loved the anecdotes about Kalanick’s Uber and the rap quotes to start each chapter.
Then let’s go to Measure What Matters by John Doerr
One of the godfathers of VC talks about measurable objectives and how to reach them across multiple examples in multiple industries. Google plays heavily here (as Doerr was an early investor), but I also enjoy the parallels with Bono and Zume Pizza and an education startup. Suffice it to say, he does a marvelous job of convincing the reader that their startup should adopt OKRs.
In a similar vein, I love Principles by Ray Dalio
It’s a pretty standard “How I did it” by Some Rich Guy book, but I love the way Dalio built Bridgewater (the preeminent hedge fund on the planet for the last 20 years) with an obsession with quantification and measurable outcomes from the first day. From when he started working on hedging beef futures for McDonalds to how he built “baseball cards” for employees, Dalio has an ethos I love around quantifying everything possible and then letting opinion and experience fill in the rest.
And finally, I love How Google Works by Eric Schmidt and Jonathan Rosenberg
Aside from always being fascinated by Google, the lessons in here that I loved were on stretch goals. Pay attention to how they try to take Chrome and Gmail from 1 million users to 100 million users. Watching how it reframes thinking and changes your view on the problem (and scale) is both entertaining and informative.
So those are my five recommendations for thought-leading books on culture-making in startups in the 2020s. You could probably summarize them as:
- Be intentional about culture and your actions will make culture, not your words (Horowitz)
- Be obsessive about tracking and quantifying everything (Dalio, Doerr, Schmidt)
- Set stretch goals that reframe your thinking (Schmidt, Doerr)
- Be obsessive about customer discovery and market definition (Moore)
The People Who Know
Now that you know my thoughts on culture-making, here are a few comments from PropTech founders and execs on how they are building a remarkable culture within their startups.
I usually framed the question as: “Is there any special sauce or best practice to creating a remarkable company culture in a PropTech startup?” or “What has been the biggest PropTech-specific surprise or hurdle in trying to build the culture you want in your startup?”
Here’s what I got (in alphabetical order):
I used to think building a great culture was about being accommodating, and making everyone feel warm and fuzzy. While I’m not downplaying those attributes, a culture that is too flimsy or lenient won’t produce results. And results are a prerequisite for a great culture. You can feel the momentum. That feeling permeates the organization. It energizes the team and helps to attract/retain top performers. Top performers drive the results — and the cycle continues.
Culture is the culmination of the actions and decisions leaders make. It’s not about ping pong tables or free meals. It’s about what leadership rewards and reprimands. That informs what’s okay and not okay for the rest of the team. And those micro decisions and interactions are what create the work environment and drive the results.
Common’s culture differs from other startups in that our portfolio of buildings creates a highly distributed workforce all over the country — and eventually all over the world. Naturally, as we continue to scale, sustaining the culture and values we’ve built at Common since 2015 will be incredibly important. Right now, I’m making sure we have the right processes and tools in place so all of our employees opinions are heard, even when they’re thousands of miles away from our headquarters. But I’m not alone. Creating a consistent culture means that I’m ensuring others, especially managers, are instilling our values throughout the organization on a daily basis.
“I’ve learned how important it is to have a strong culture and folks will self-select in/out very quickly. It’s also critical to hire and retain based on that culture and the core set of values developed as an organization. Culture isn’t set from “the top,” every single member contributes to it and is responsible for protecting it.”
“We started an internal program called Enertiv Explore, which are company-sponsored activities that can be company-wide or smaller groups. It’s amazing to watch the bonds developed outside the office directly translate to improved productivity and morale at work.
One great example was doing a Tough Mudder together and seeing the whole team refuse to leave a struggling teammate behind. When push comes to shove while scaling a business, it makes a huge difference to know that your teammates have your back.”
“Top talent is not naturally drawn to a property management platform. Our key to building a great culture is finding A+ players who have rental properties. Chances are, they’ve experienced the same pain points as our customers and more importantly, as their fellow colleagues.
When you hire A+ players centered around the same mission, the culture builds itself.
“Startups are exciting but they’re also demanding. We know that our team members often work long hours and make sacrifices to help progress the company, and we don’t take their dedication for granted. We are committed to creating a supportive and fun community as one way to reward and thank them. We recognize each person’s birthday. Host weekly happy hours. Gift personalized swag at key milestones. Not only allow but encourage dogs at the office. People don’t join startups because it’s easy or low-risk, they join them for an exciting ride with exceptional people.”
“This may be a contrarian view, what has to come first is — build a good business. A growing, strong, business will cover 80% of culture. The other 20% is some combination of integrity, compassion, curiosity, development.”
Startups: your ship is sinking, stop talking about the color of your deck chairs”
“In the hectic and often draining early days of building a start-up, it’s easy to obsess over plans for world domination at the expense of building an energised, committed and passionate team to help you reach that goal.
The reality is that people and product go hand in hand — it’s that combination that makes a successful proptech company. Some of our earliest hires were therefore in our People and Culture team who had a specific mandate to look at how we could ensure our teams felt consistently engaged and enthused. Whether it’s our monthly awards programme, bi-monthly socials, summer and winter parties, charity events, team breakfasts, our mental health awareness scheme, or even impromptu karaoke sessions(!), our staff know that they are valued and are ultimately what makes Equiem tick.”
“Culture is a set of guidelines and principles on how each employee of a given company shows up to work. This set of guidelines ultimately becomes how the company shows up to the external world. If anyone intends to build a long term organization, then culture building is one of the most important aspects of the company to focus on. If the intent is to build and flip a company, then who cares about culture!”
Jonathan Wasserstrum (SquareFoot)
“Do you want to be part of the future or part of the past? It’s one of the main questions I ask when interviewing folks from the industry. If you’re bought into the future, we’re one of the best places to do it. Incumbent with building the future though is trying things that don’t always work and recognize that’s part of the process”
“At Starcity, we all believe that our mission (making great cities accessible to everyone) is worth working on, but how we work on it is very important. Silicon Valley (the show and the actual place) has a meme about culture that usually involves ping pong tables, kombucha on tap, and hackathons late into the evening. That isn’t culture — those are just perks. And if you prioritize perks > culture, people will suffer in the long run. So, what is culture?
Culture is a shared system of values, intelligence, social norms, and customs that are shared collectively by a group of people. Starcity is a culture- and values-driven company. This means that while our outcomes are important, so are our means of achieving them. We’re a collective of multi-disciplined people that agree on the fundamental values that allow us to do our best work. Without that we are unlikely to build a team that lasts through the ups and downs.”
“Good culture equally attracts certain people and detracts others. It’s unique — some people should walk into the office, think you’re all batshit crazy, and walk out. Others will find it to be their dream culture and never leave. So long as you have enough of the latter you’re good.”
To the extent we’ve “created a culture,” it’s one where our people take their work very seriously, but don’t take themselves too seriously. This manifests itself in things like:
+ Not punching in when you get to the office or worrying about face time, but being reachable by clients 24/7
+ Wearing jeans to work, but putting on a sharp blue suit to take an important meeting
+ Managing a large team of people, but also volunteering to refill a soap dispenser or water a plant.
“At Rise, we’ve been deliberate in ensuring that every team member understands and contributes to an action-oriented culture. Our company is at a stage where execution is the number one contributor to our success. Over time that may evolve, but for now we only have room for doers. I think the result is that we have not only an incredible, lean team, but we have a bunch of folks who are deeply committed to our mission and one another because they are directly responsible in delivering for our customers every day.”
“Culture is not created by professing a certain set of values, it is set by people practicing them. If culture matters to you, define the culture you want early on and look for those qualities in your hires.”
Flexibility is a core value for Kasa.
“That core value is expressed through our remote and distributed team. We have team members across 15 states and 4 countries. Team members are empowered to do work wherever they feel most productive. We don’t care how or where you do your work but rather what you accomplish.
This attracts people who want this kind of autonomy and who are motivated by a pragmatic and results-oriented culture. At Kasa, we’ve had team members do some of their best work while staying at home with their children, working at local coffee shops, or spending time with fellow veterans or class alums at a reunion.
The result of this value is a culture that attracts people who increase our chances of executing on a highly flexible product. Building a global brand is a hard ambition for any company; by intentionally aligning our culture and our business model we increase the chances that we get there.”
“At Convene, we’ve demystified culture in order to better understand it. Convene’s culture is based on our values of GRIT — genuine, relentless, integrity, teamwork — and our philosophy of becoming 1% better every day. These shared values and beliefs formed our cultural foundation. Since we’re hyper-focused on employee and team member experience, our values and philosophy are made clear during hiring, solidified during on-boarding, and maintained through rituals.
One ritual at Convene that has allowed us to build and maintain a culture of gratitude is writing hand-written notes of appreciation. Every week, our executives write thank you notes to team members who have gone above and beyond for their colleagues. It’s really important to take a moment to notice the hard work that goes into building Convene, and it speaks to how our team is always genuine and focused on teamwork.”
The culture of a company can not be an afterthought. It is really what will make you succeed or fail. I’ve come to realize that you have to be very intentional in creating the foundation for culture. This means working on the core values that define the type of company you want to work for and the kind of people you want to work with.
What not to do — Just be a cool place to work at
For comparison, at my previous companies, I thought we could just hire people who “fit” into the cool vibe we had going on. Initially, we were a ragtag team of cool hipsters that had similar values but we never really defined specifically what matters to us and so the culture evolved on its own. While it was still a great company to work at, the culture became too much of a hive mind because we were hiring for “fit” vs creating a culture that fosters differences in opinion, quick actions, and faster wins. Personally, I think it stunted our growth and we could have accomplished a lot more. That being said, we did have a successful exit, but could it have been better? Most likely, with the right culture.
Taylor Odegard (Navigator CRE)
“The council of many is wise. As a hyper growth company, we don’t have the luxury of focus groups and extended workshops that take a lot of time, so instead we rely on our team members and our great clients to seed us with all of the ideas that make our platform unique.”