As PropTech Companies Continue to Scale, a Successful Talent Acquisition Strategy is Critical.
The PropTech industry is growing rapidly. As new startups are formed, and existing companies continue to scale, hiring the right talent is critical. The most important lesson that I have learned over my career is that the quality of your team often determines the difference between success and failure. A common mistake that companies make is hiring solely based on a candidate’s experience. Prior experience is important, but you cannot underestimate the importance of making sure that the candidate is the right culture fit, that they are passionate about the company’s mission, and their motivations are clearly understood.
Hiring the right talent is important for all companies, but it is even more critical for early stage startups where every role is vital to the success of a company. A bad hire can derail a company’s growth trajectory, it could cause your most talented employees to leave, and it can ultimately lower the productivity of everyone else at the company.
Recruiting firms have been around for a very long time. Many recruiting firms may specialize in a certain niche, but often offer generalist services. I was very excited when I first connected with the folks at LMRE, because 100% of their focus is on the PropTech Industry. They understand the industry inside and out and offer tremendous value for PropTech companies who need help with scaling, along with the prospects that they help recruit.
I had the privilege of interviewing the founders of LMRE, and we covered a broad range of topics including LMRE’s value proposition, the current state of the PropTech industry, and the future of the industry. Below is the interview.
What is it about PropTech that motivated you to build an entire business model around it?
“So we were moving along well within what I would call traditional real estate. We were placing a lot of agents, asset managers, property managers, and also construction professionals. But, in and around the back end of 2018, early 2019, we could just sense there was a growing need for talent within real estate and technology. And at the time we thought about how to pivot and reposition our business, and we decided at that point to go full tilt and rebrand the business completely. We became the first company that is 100% focused and dedicated to provide the best talent to this growing market. We rebranded from the company called Lloyd May into LMRE and started the business effectively at that point. Luckily we had about 12 months before COVID hit to hit the ground running. We spent all of those 12 months networking, going to every event and forum, and meeting with the key VC players. And then the world stopped. But as things have picked up we've really traded on those relationships, so we're very fortunate that we were able to develop those connections pre COVID. And that's why we're seeing a really big ramp now. Our clients are a combination of VC companies that are investing heavily into startups, large consultancies, as well as corporations that are building out their real estate functions. We have dedicated teams within the US, UK, and Mainland Europe. We are also just about to hire a head of APAC.”
You mentioned that you have built a lot of relationships with VCs. Are you finding that the VCs are doing the recruiting, or are they just introducing you to their portfolio companies?
“I always say that the VCs are the power brokers of the space because they're the ones who get to choose who they invest in and basically they dictate who's growing and in which location. Because of their LP relationships, they can obviously make the introductions. One major benefit for us supporting a VC firm is our international presence. We are able to offer uniformed services in the UK, in Europe, in the US. Our footprint it's a key thing that helps us relate to our clients, and really build on that relationship. Due to our presence across markets, we can also offer reliable insight and help businesses break into the different markets as they expand.”
With so much money flooding into the space, PropTech firms are hiring at a feverish pace. What types of roles are in the highest demand? Are there any specific roles that are proving to be a challenge to fill due to a tight job market?
“The job in most demand across all markets is a PropTech salesperson. I would argue that's the job in most demand but that's also the most tricky one because there is a limited number of people that have the expertise and skill set to quickly deliver results. Top salespeople can go out to the market and basically get any job that they want, and companies are realizing that if they want these people, they have to pay a premium.
Another role which has a short supply of talented professionals is Technical Product Managers. Every time they move they earn about 30% higher salary than they were before.
Additionally, there is a huge demand for data scientists and data analysts. Many of the candidates for these roles come from industries outside of real estate (we have seen a number come over from Fintech). Any candidate who has three to four years of data analysis experience is highly marketable because we see so many open roles in this space.”
Are there any major differences between the ways that companies in Europe operate compared to the US?
“It takes a bit longer to complete the hiring process in the UK and Europe legally because of notice periods. Because the PropTech industry isn't quite as evolved as other industries, the process requires a lot of explaining to candidates about what the new company is, what they're doing, and what their growth trajectory is. There is also a bit of a cultural difference in a reluctance to risk. In the States, people are willing to take more risks. And since they have the legal framework in the US to be able to leave within a couple of weeks, the process moves much quicker there.”
I would love to hear the story about how the 2 of you came together to launch LMRE?
“Lu and I (Richard) were co directors in our previous company, (Lloyd May) working within the traditional real estate industry. In 2018 we decided to pivot the business and set up LMRE as we saw a growing need and requirement within the Real Estate sector for tech and innovation. We decided to focus 100% on PropTech and haven’t turned back since!
We have more than doubled our headcount in the last 12 months and increased our fee income by 218% in the same period. Along with our existing US, UK and EU teams we have recently opened in Berlin, launched a tech vertical, and set up a dedicated research function to support our strategic and C-Suite hires. We are also in the final stages of launching LMRE in the APAC region which will enable us to offer truly global talent management solutions to all of our clients.”
The industry is changing rapidly and there are many new business models that are forming. Tenant Amenity Apps are gaining popularity, the iBuyer business has gained a lot of traction, and we are seeing a lot of marketplaces that are forming. Which segment of PropTech are you most excited about?
“Sustainability is a huge one. I think the issue with the sustainability side at the moment is that no one's quite worked out who pays for it. I don't think there's an obvious demand for tenants or buyers to go and pay 20% over market rate for a sustainable property. I think the things that are going to drive real value are IoT, smart buildings, and smart spaces. You've got the likes of WiredScore (global) who are valuing these properties based on the quality of their internet connectivity. If you can provide 100% internet connection, great air quality, the ability to move around the building without friction, these things will significantly improve tenant satisfaction. Another company is Deepki (European), who analyze big data and help other companies with their ESG strategies and reports in order to reduce the environmental footprint of their properties.
Another area that we are really excited about is affordable housing. We are seeing solutions that are helping the everyday man and woman be able to afford a place to live. It is an issue that's getting bigger and bigger and prices continue to climb. We recently hosted a webinar with a fantastic and experienced panel to discuss affordability and revitalization within urban districts.” Check it out here:
Joining a startup can be rewarding, both financially and from the perspective of helping to build something really special. However, it also comes with significant risk because most startups fail. When working with a recruitment consultancy, how do you determine what the best path for them is, and how do you help to guide them to make the best decision based on their goals?
“That’s a really good question. Our job is to present the facts in a highly informed professional way. And in our resourcing and in the communication we have with our candidates, we have detailed conversations around where they are and what might not be working, what their motivations are, and what their longer term aspirations would be. And then we just talk through what options are out there and who we work with. We find out very quickly whether somebody has a propensity for risk, or whether somebody wants to be more creative, or wants more autonomy. Do they prefer a smaller environment, or would they prefer to be in a structured, more organized, corporate setting. What we do in our conversations within our resourcing is work out very quickly what best suits their desire. It is not a one size fits all, so we have to tailor our marketing and our roles to the candidate we're talking to.
Many candidates hear that certain companies are planning an IPO, and they want to go join the company in order to participate in the financial upside of going public. But then we get deeper into the process, and we realize that they don't have the drive, the dynamics, the skill set, or the way of thinking that a tech company or scaling company really needs, and then we have to pass on them, or recommend a different role.
The best possible way for us to help a candidate make the best decision based on their unique circumstance, is that we always encourage a lot of due diligence. We highly encourage our candidates to do their own due diligence so that they can decide for themselves if they think this company is on the right track, whether or not they believe in the founders, and do they believe in the business model. The same is true for our clients who are hiring. We do everything as professionally as we can to matchmake effectively, but there needs to be some due diligence on both sides as well. We will always plant seeds if we are confident that a candidate is right for a role, but ultimately it's the candidate who decides where they go. And we facilitate everything needed to make it happen.
We have seen people that have come out of the corporate world that go into the startup world, and the chaos throws them for a loop. It's just such a different work environment, and I've seen people in the startup world that just can't survive in a corporate structure without autonomy. It's really interesting how different the two environments are from each other. In some rare cases where a candidate is determined to join a startup, they will come back and say ‘well actually, you know, it's a 10x what I expected it to be, and it's not for me, and I need to get back to something a little bit more structured’. But we're pretty good at sifting out those kinds of people who just clearly won’t thrive in a startup environment.”
There is a huge debate right now about working in an office, WFH, and hybrid. During the recruiting process, are you getting a lot of questions from candidates about if they will be required to work in an office? Have you seen companies being flexible on this subject? Have deals fallen apart because a candidate only wanted to work from home, but the company required them to be an office.
“It’s so interesting how things have changed over the last two years. I don't believe that anyone could have predicted this massive shift that's taking place. In the beginning of the pandemic we probably made a few mistakes by having that discussion too late in the process. Now it's one of the first questions we ask our clients and candidates. A company may be looking for somebody to come to the office every day. Ultimately, it's still the client’s choice at that point if being in the office every day is right for them. There are some clients who said actually, ‘you know we can't find anyone locally so let's look for a fully remote candidate’. They now don’t need to limit their search to their HQ city. Even if they want to stay in the same time zone, they are able to broaden their search by 50X rather than just five miles.
For the most part, companies have had to adapt. Generally speaking, everyone has to offer some sort of flexibility. The smart companies realize that they're going to lose out on a lot of talent because they have rigid policies around being in the office. But everybody has to adapt to the new world or they will lose out on great candidates that are looking for a level of flexibility. Balance is the most important thing.”
Collaboration
After spending time with the leadership team at LMRE, it became clear that synergies exist between their company and PropTech Future. PropTech Future’s mission is to contribute to the greater good of the PropTech industry by reporting on trends, highlighting amazing new companies, and helping to continue to support the overall community. With talent acquisition being critical to the success of the industry, we decided that both companies can collaborate to support the industry as a whole.
I am pleased to announce that proptechfuture.com will now feature all of the open job postings for LMRE. If you are open to a change, please browse all the open roles on either proptechfuture.com or LMRE.tech. Roles are constantly being added, so make sure to check back often.
If you are looking to scale your PropTech company, I highly encourage you to reach out to the folks at LMRE to discuss how they can help support your growth initiatives. Richard can be reached at richard.lloyd@lmre.tech and Louisa can be reached at louisa.dickins@lmre.tech.