Series: PropTech Chatter.
Show Notes
Summary
Chris Moreno - Primary Venture Partners
Special mentions
Company: Brookfield, Greystar, Y Combinator, Bilt, Luxor, Prudence, Fifth Wall, Moderne Ventures, NAR Reach,
People: Mark Cuban, Andreas Klinger, Harry Stebbings
Transcript
(Disclaimer: Please be advised that this transcript may contain unintentionally confusing, inaccurate, and/or amusing transcription errors.)
Matt Knight: All right guys. Quick intro. I know it's been a while since we had a podcast episode, but this is me and Chris catching up on a fun, or at least a unique topic this time, our pet peeves, things that kind of get under our skin that hopefully help other people 'cause there’s things that I think we've done a lot of 'em ourselves.
So anyway, enjoy 15, 20 minutes, me and Chris talking through our pet peeves.
Matt Knight: All right, Chris, it's been a long time, man. I know summer's tough, but I'm glad we can get together, and I thought we'd have a little fun if you're okay with it today. And rant a little bit, do some pet peeves. Things that we see happening too often that we wish would stop or die in PropTech. How does that sound?
Chris Moreno: That sounds like a plan. Thanks, Matt.
Matt Knight: I think my first one is, you know, I get pitched a lot like you do. When someone is pitching me and they like talk for 15 minutes straight and don't let me ask questions, don't let me dig into nuance, like, don't let me actually go in the direction that is useful for both of us. They just talk at me for half a 30 minute call. I really don't. I really don't like that. And to be clear, I did that when I was younger. I understand it, but like I just, it happens so often that it comes across as tone deaf, you know, not a conversation. It's more of a rant. Does that make sense?
Chris Moreno: A hundred percent.
Yeah, I'm on the same page. It's gotta be, short and sweet and conversational.
Matt Knight: Yep. What about you? What's one that gets stuck in your craw?
Chris Moreno: I think for me, when someone says they don't have competition or we are gonna be everything and we're entirely new and we are so different, I appreciate the differentiation. I appreciate the so new and the big picture idea, but. I'm really looking for the story of what you're replacing or what your customers are eating today and why they're gonna switch to you, or, yeah, it actually is pretty competitive because your space is so compelling and to be so massive. I think back to like the packages space and you know, we were to say we had no competition. Obviously, that was fun. But of course we have competition because people are using other software tools or it's themselves using a spreadsheet or it's an old school software that is a substitution or a new product that was coming out. That was again, not a direct competitor, but an indirect competitor.
Right. And oftentimes it's, you know, a lot of people nowadays with AI. Their competition is analysts and spreadsheets. Or logins on technology or doing rudimentary lookups. So that's what I look for is the competition one. I hope people dig a little bit deeper and can actually tell me who their direct competitors are.
Matt Knight: Yeah, I think that's a good one. I think there's a certain amount of irrational optimism you have to have when you start a company. And so this is almost the corollary of that is like, no one's gonna build this awesome thing that I can build. You know, like sorry it's unsurprising, but I agree with you that it comes across as naive, not aggressive.
Another one I have is, I feel like we're harping on Founders, but this is, you know, you and I talked to probably more Founders than anything else. One is when you come to me. And you tell me how big real estate is or how big and exciting PropTech is. And I'm like, did you go on my LinkedIn at all?
Like this is all I write about, this is all I think about. This is all I talk about. Like if I'm betting literally my career on that concept and you think you need to tell me that office technology in the office space is a big space. And I'm like, okay, well that was a waste of two minutes.
Like what, what? Its just, again, back to naive, it just makes you look like you didn't do any work up front, you know?
Chris Moreno: Well, it's funny 'cause I think so many, you know, Founders, CEOs, et cetera, when they're raising capital, have been trained to have that traditional three, you know, section, the slide with the three different circles, semi circles on it, that show the TAM, SAM and SOM, and it's pretty funny because, you know, at the end of the day some of the biggest businesses in the world started with incredibly niche target markets. They were solving one little tiny thing. You think about like Superhumans deck to your point was one slide. They didn't dive into telling everyone how big email and how big the challenges work. They showed literally one slide and here's all the problems we see and how we're gonna fix it.
And it's amazing how much time people spend trying to educate others in the real estate market about how big, to your point, the real estate market is - number one, and number two - you know, again, vague things in the future. Great. Okay. You're gonna be big. Great. We'll talk about that, Dan. That's a big market.
But tell me what you're fixing right now, and it's okay if it's small but just show me the attraction and how you get there and what it looks like. I don't need you to be a $5 billion, $10 billion business in the next. You know two years, three years, it's gonna take you a long time, and by the way, I don't always need a billion dollar outcome.
It can be a profitable business. You know, it doesn't have to be venture capital. Nowadays, there's so much private equity and so many investments and angel investors don't always need a 50 or a 100X return. Sometimes they're okay with a 10X or a 5X or a 20X in two years.
Which is more of what I'm tending to see right now.
Matt Knight: That's a whole other thread we can go down, but I know it's your turn for a pet peeve.
Chris Moreno: Yeah, so I mean, you know, the competition one is a big one for me. I think the other one is, you know, you hit on the long ones that are not clear and concise. I think also one of the things I like to dive into is like, who are the right and wrong customers? I hear people a lot of times say, oh, everyone's our customer.
Oh, it's so big. Like they can all be great. Like we're going after this sector and what I don't hear enough of is this is my ideal customer. It is Brookfield and Greystar, and it's this identified buyer. I'll give you an example. It might be a development partner, or it might be the CFO or it might be actual regionals because the corporate office isn't gonna make the decision on us, it's gonna be something at the more regional level or property level manager.
You know, it could also be that it's developers or architects who are making those decisions. So, I think a lot of times thinking about that and even some folks selling to other prop techs, kinda like what happens in Y Combinator. So, you know, telling and using examples of here are our great customers and here are horrible customers.
I think not enough people dive into our, you know, bad customers are X companies and here's why. And oftentimes it's the large companies that are too slow in making decisions. So instead, it's better to go to the small and medium sized owners, especially in the first year, two years, three years, because the larger ones are gonna do RFPs and they're gonna look for you having thousands, if not tens of thousands of units, or hundreds of thousands of units before they'll even, give you the time of day.
Matt Knight: Yeah, it's almost like a product customer fit versus a product market fit. Right? There's a stage at which your company is ready for, you know, Greystar's compliance monster, and there's most stages where it's not. And just knowing which is, which is, I think, the nuance of being a good Founder.
Chris Moreno: A hundred percent.
Yeah. And I think I'll also, have you gone down those paths of why those could be good customers or not and you know, I think being confident enough. In your decision making, but also being coachable enough to ask questions of maybe where we've got something wrong. So I, love Founders who are open to that, and I think some of the best Founders are definitely coachable and they listen.
As I learned from Mark Cuban, he said the first thing he writes down on a piece of paper is when he had go into a meeting is listen.
Matt Knight: Well to take some time off of bashing Founders for a minute. Let's point the gun at ourselves for a minute. VCs, I have one where I get sort of frustrated when people expect me to memorize their strike zone as if it's not like dynamic and changing every quarter and that I could memorize, I don't know, several hundred strikes.
'Cause you know, I track 60 or so funds that are PropTech only or PropTech mostly, and I mean, just like you, I know another 200 that are just generalist VC funds and corporates and family offices that do thesis or whatever. Right. And so, oh, that's clearly not in our thesis. And I'm, well, we change a thesis every quarter and I can't keep up with 300 theses like I'm gonna try and help and remember roughly your stage in geography, but if you've overallocated to AI and now you're back on crypto, I was good. That's news to me. How would I know that? Thanks for telling me. So it's more of a like unfair expectations. Like I'm trying to send you stuff you like, but I'm not gonna memorize everybody's strikes on every day. You know?
Chris Moreno: No, I think that's a great one to share. You know a lot of the things we just covered, I made mistakes on, right? Every single one of them I made mistakes on in the early days and, and still learning. And I think in the VC and investing side, a hundred percent, I'm still learning there.
And I think in the early days I thought, well, hey, I'm the investor. I need to know all the answers and tell people what to do. That couldn't be more further from the truth. I think, someone who's a great example of who has empathy as an investor in one of the best returns I've ever seen of a fund that I've invested in is Andreas Klinger, outta Europe, and he talks about how he is not the smartest person in the room.
And it's funny enough, he, he really was focused on technology, SaaS, you know, and now he's actually diving deep into hardware and real estate, which is really awesome. He is putting out a lot of content. So I recommend him Matt, you know as a good person, as a good example. 'cause he you know, really does say, Hey, I don't know, and I am just along for the ride, and I'm here to support the Founders and the teams and the CEOs and these leaders who build, and I need to get the heck out of the way, and I need to do anything but tell them what to do. I need to help them through challenges and as I call it, I learned a long time ago from Eric Tomberg, you know unblock.
How do you unblock? People in front of you, and then how do you move with speed you know and move quickly. So those are the things that I think a lot is CEOs need that help from their venture you know, capital partners or private equity partners, and then also from their angel investors.
And it just blows my mind, Matt. When investors you know, try to tell someone else what to do with their business, whether it's moving their company, who they should hire, how they should pivot, where they're wrong. So those are some of my pet peeves on the investment side, and I think you're seeing some great people you know, support Founders.
Matt Knight: Agreed. Your turn or my turn?
Chris Moreno: My turn, I guess so. The one with VCs that annoys me there, there are some VCs who I just send deals to on an extremely frequent basis. And these people, several of them are billionaires, some of them are a hundred millionaires.
They do not need to work another day in their lives yet. They are some of the most responsive people I've ever seen in my life - number one. Number two, they have the care to send me an email with sometimes one, two, or three paragraphs of why it's not a fit for them. But thank you for sending it our way. Or we did meet with this person. You know, maybe things have changed, but let's hold off.
And so I think that clarity, what I love, you know, the pet peeve I have is. Number one, when people just don't respond at all when you thought you were in their wheelhouse. So if they tell you they're investing, it's in their wheelhouse and it seems like it's a good fit, and you tell them why it's a good fit but they don't respond, Hey, no worries. Things fall through the wayside. But I think when someone just says, no, it's not a fit, or, you know not what we're looking for. I love it when people tell me, especially 'cause that, that confuses me. If someone says, okay, you invest in this space, yet this is in that space. Maybe it's a competitive.
Maybe it's, they've already looked at it. Maybe they're not cutting checks. So usually that's what I look for. And then that's where I spend my time. I spend my time with the people who, you know, tell me - this is great. Tell me it's not a fit. But hey, I'd love to dive back in. Or, hey, I'm gonna have a call with this Founder, but I wanna be upfront, may not be a fit for us for right now.
And I'll tell you, I just had a call with a VC this week who cuts $1 million to $3 million cheques. Had another call with another one who cuts $2 million to $10 million cheques. Both of them were like, you know, we went through a couple companies, they were like, this company is directly in our wheelhouse. I wanna check this Founder now.
And one already had a call and already got back to me and said that was epic. I am so stoked on what they're building, but these other three companies, I'm not. But you know, happy to help them where I can. And so I always say like, you know, is there one I always try to think about, not just, hey, I can't help.
It's also, hey, if this isn't a fit for me. Here, have you heard of this person yet? Have you heard of Matt Knight? Have you heard of the team at Prudence? Have you heard of the team at Fifth Wall or Moderne or, NAR Reach and Bob and the team over there. That's what I think about is are you discovering the people out there?
And if you are an expert in that field as a VC and you're not gonna invest, can you just say, hey, this one's not a fit for me right now, but have they talked to these two people? So that's how I think about it a lot.
Matt Knight: I think this is my number one pet peeve with all adult human beings in the business world to me, this isn't a prop tech thing.
This is an adult business thing. It's like if you're not responsive to people, you are a poor manager of your time. And I mean, I don’t know that's very black and white, but it's like - Virtual assistants are so cheap right now. There are email automation systems, like there's no excuse of like, I'm just too busy.
Right. My hunch is that this is a corollary of the old way of thinking of like, if I appear busy, that makes me important. Like the cult of busyness. Versus productivity. And it's like, to me, a
Chris Moreno: Hundred percent. Yeah. Matt,
Matt Knight: Virtual assistants that are not expensive. There are ways to do it.
If you value people's time enough to do it right, you have no excuse for just being completely unresponsive. And so this is probably my number one. If I could give any one advice, it would be to come up with a system to respond to everybody. 'Cause one thing I do is every morning, I'll type out this phrase, not a fit for me.
But best of luck because I get a million, you know, crypto things and movie scripts, and we're a Sri Lankan break dancing company and whatever, right? Like, and you don't want me to help because I can't help you. So I don't have this Messiah complex that I can help everybody, but I respond to literally everyone, and my assistant helps me with it.
And so to me, probably tell from how I'm talking about this, this is number one. If you do not respond to people. And I can tell you, me, personally, I've always given thought to me reaching out to you in the first place. I don't spam or randomly email anybody. If you don't respond, I lose a tremendous amount of respect for you.
And to your point on deal flow sharing, relationship sharing, like I'm not gonna send you my best stuff because it's gonna make me look bad when you don't respond. When one of my rockstar Founders comes around asking for intros, you're off the list because you just don't respond to people.
Chris Moreno: That, that's amazing, Matt, because to your point, I have and it's fine if people don't get back for a while. I get that too. But it's hilarious. 'cause there's actually a startup right now, or I shouldn't say there's not even a startup anymore. And there's several now, you know, who are, you know, at raising it or, or profitable and they're at 20x, 40x, 50x where they were. And people are just like, I should have looked at that deal. I should have at least given him a chance or invested back then we invested and it blows their mind how many people will not take a look at a company. 'Cause they'll say, oh, it's hardware. I don't do hardware, or I don't do X. And I'm like, wow. Okay. Interesting. And what I've learned is, you know, something probably happened. Harry Stebbings on the 20 Minute VC talks about this, they talk about how people want to reserve. Oftentimes when people won't say no or they won't respond, is they don't wanna respond to say No because they're too busy right now in diligence, possibly. Number two, they don't wanna say no because they wanna hold out in case they do wanna say yes. And so it's kind of this, this challenge. So I've always learned, Hey, you know what? It's just better to be upfront.
Say it's probably not a fit for us right now. There's plenty of time. There's no rush here. You know, and if you're actually building a great business, you don't need that one customer. You don't need that one investor. There will be others. And so I think that's the key thing I've learned is that fundraising is a shots-on-goal and it's not relying on one person, it's having probably multiple term sheets, multiple people who wanna invest with you. And it's more importantly getting the customers. 'Cause if the customers love you, you'll actually find there's lots of great customers out there in real estate who also cut cheques. You know, obviously with the big Bilt’s announcement this week. But they just raised a $10 billion valuation and they got turned down by everyone in the early days.
What they instead did was bank rolled it themselves and then they had customers who were using them actually cut cheques, and that was their focus. And that, you know, very similar for us at Luxor. We never raised from a VC. It was a hundred percent angels because the VCs laughed in our face.
Why the heck would a package locker? Or why do you think that this package business is gonna be a big thing one day? You know? So most people turn them down.
Matt Knight: Well, and to be clear, and I know we need to wrap up, being slow is not the same as not responding. Right. Oh, I got your vacation responder. Sorry, I was outta town last week for the fourth. Or, hey, we're heads down doing a sprint this week and next I'll catch up with you in two week. All of that is fine. Like I have no, that's business. Oh, I'm on maternity leave or paternity leave. Fair enough. Right? What I'm talking about is this, like six months has gone by and not a peep. And I followed up with you twice. You know, you're gonna see me at Blueprint or CRETech and you're gonna apologize profusely. Like that's what I'm talking about. Like people that just do not respond. That is not okay. In my opinion. You have to say something, even if you say, I hate your guts and tall people are the devil. At least it's a response. Like that's, I'm a grown man. You can tell me that and I'll be fine. But people don't do that. It just drives me crazy.
Chris Moreno: Yeah. Yeah. I mean, and that helps provide clarity. It helps provide closure so the person isn't wasting their time. 'Cause you know, sure there's AI emails and, and bots sending phone calls and things like that.
But yeah, you're right. I, any phone call I make is gonna be a personal phone call. I do have assistants who help me, and I have a team who helps me at the end of the day, my focus, my emails even, you know, I am hitting that send button. I don't like emails coming out from me generally, unless I did it, unless it’s obviously a newsletter or something like that at scale.
But generally if I'm inviting someone to lunch or I'm inviting someone to a call, if I'm sending someone a deal, I've taken the time to write those couple lines. I actually, funny enough, there's someone, I was just talking to a VC and Founder who in their email they say, I only write five sentences or less in every email in their signature.
I was like, oh, that's kinda interesting. So no matter how long the email is or, or request, they'll always respond to just, you know, a couple lines. And I was like, that's actually pretty smart.
Matt Knight: It's clever. Yeah. All right. I know we're at time, but this was, I don't wanna say it was fun, but it was cathartic, at least for me.
I don't know if you enjoyed it, but I thought it was fun.
Chris Moreno: Oh, it always is great to chat. I think it's good to, a good reminder, of how I can be better. I'm not perfect, so I'm not, I don't try to pretend that I get back to every email and many of them are. The annoying thing I think today, Matt, is that in the case of AI, in the case of automation and now that people are sending automated DMs, messages on LinkedIn, phone calls, everything's automated. I think IRL and making it catered. And I think you and I, when we send an email that everyone's pushed the button and been written by us. I think it makes such a huge difference. So I think that's the big difference. I think we should talk more about that, more around AI and automation and then also the communication of people, whether it's VCs, Founders, companies, I think that we could do a whole episode, discussion on communication style and brevity and time.
Matt Knight: I like that. The second order effects of AI on our businesses. That'd be kind of fun. All right, let's close it here. We'll do another one. Follow up and happy summer to anybody that's listening.
Chris Moreno: Talk soon. Thanks Matt.
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