Today, I am delighted to share a conversation I had with Zach Aarons, Co-Founder and Partner of the $40m MetaProp PropTech venture capital fund.
I want you to stick with me right through to the end of this one, as Zach shares some absolute pearls of wisdom and imparts some gifts as to how you too could follow in his footsteps as a very successful investor into other real estate businesses and entrepreneurs. There are so many of what I refer to as ‘transferable skills’ that Zach relays through our conversation.
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Resources mentioned
Contact Zach Aarons - well, you will have to be a super-sleuth to discover his email address, but in the meantime here is the MetaProp website and here is a link to Aaron Block and Zach Aarons' book PropTech 101
Property Deal Tips & How to Reach me By Telephone
Link to the Podcast feedback survey
TPV Apprentice Programme info HERE
Today’s must do’s
Subscribe to and review the show in iTunes…and while you are at it please help us to spread the word by telling all your friends too!
Send in your property stories, questions or moans to podcast@thepropertyvoice.net and we will try and feature YOU on the show too!
#PropTech: A guide to how property technology is changing how we live, work and invest – a link to the latest book.
Property Investor Toolkit – here is the book link on amazon.co.uk & amazon.com in case you would like to get yourself a copy to accompany this series
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Transcription of the show
Hello, and welcome to another episode of The Property Voice podcast. My name is Richard Brown and as always, it’s a pleasure to have you join me on the show again today.
Today, I am delighted to share a conversation I had with Zach Aarons, Co-Founder and Partner of the $40m MetaProp PropTech venture capital fund.
I want you to stick with me right through to the end of this one, as Zach shares some absolute pearls of wisdom and imparts some gifts as to how you too could follow in his footsteps as a very successful investor into other real estate businesses and entrepreneurs. There are so many of what I refer to as ‘transferable skills’ that Zach relays through our conversation.
Property Chatter
Zach Aarons
Zach started MetaProp in 2015 with a couple of partners; having previously personally investing directly in PropTech businesses since the turn of the decade.
MetaProp is a Venture Capital Firm with a $40m fund writing $0.5 to $1.0m cheques (investments), right across the PropTech spectrum. ‘Faster, better cheaper’ are the keywords…sometimes also even into what does your job for you…the robots are coming…albeit slowly!
Embracing a culture of open innovation – be prepared to try things and fail.
Separation of becoming a customer and an investor in tech-enabled businesses…why consider both? If you invest, you also have the potential to achieve both ROI and NOI. A tech investment upside is often much higher than any real estate investment but you get to realise the NOI or bottom-line profit gains first if you do.
Overcoming misaligned incentives – often 4 sales of the same product are required within the same organisation…touching on different factors that appeal to different stakeholders, such as the property manager, the building engineer/facilities manager, the CIO/Technology person and the board/C-suite. This is transferable into different businesses, including property…figure out who the key stakeholders are and then answer their different issues, which may be different.
Constantly evaluate your sales funnel, constantly innovating as you go. PropTech is about solving built solutions with digital solutions, which is very difficult.
Always look for the personal motive…
Looking back to your early twenties…how did Zach get going?
Zach started already on first base, born into a family of means, good education, located in New York so was immersed into culture and business early in life. He formed a travel and tourism start-up…both on and offline. There was not a lot of support to build tech back in 2007, but Zach developed a desire to invest in people that did know how to build technology. This then led to investments in tech-related businesses. Which then led to an addiction to working with early-stage tech-entrepreneurs.
Then, Zach entered a real estate business but with an angle in social media marketing back in 2010, when social media content marketing was only just emerging. He also went to business school – where he met Zak Schwarzman, who became a partner in MetaProp. Stu Ellman from RRE Ventures advised Zach to focus on real estate technology. He knew PropTech would explode, back in 2011. Crucially, Zach took that advice and became one of a few people doing this at the time.
Aaron Block
Accept people’s generosity…accept people’s offer…just say yes, but also ask for stuff too. Jobs – people don’t get stuff unless they ask for it. Steve Jobs literally called Bill Hewlett at aged 12 to come to work for HP. When Aaron Block offered to build out the operations behind what is now MetaProp, Zach simply said 'yes'.
Hustling – Zach deliberately decided to be Mr PropTech…but he also decided to put himself out there, trawling for investors, searching on Angel List until 1am…chasing after the entrepreneurs. Getting himself out there. In other words, he hustled...a lot!
Amplify your voice – i.e. leverage. MetaProp has a current fund is $40m, which will scale even further. Not all personal funds of course. So, personnel, tech & culture with scale – team, get the message out there, write books (people understand their methodology around the world), teach a class at Columbia Uni…create network effects (150 former students). Time, work and scaling operating companies. Have a complimentary skill set with one another. Partners should be expert at different things, amplified by staff and tech systems. You have to be out there in a thoughtful way that does not cripple your business.
This podcast is an example, but Zach has someone next to him and infrastructure to help him do this, which should also lead to more entrepreneurs reaching out as a result. Be ruthless in cutting out what is not core.
‘Eat your own dog food’…take your own advice. So, they got serious about adopting technology internally for example.
An outward focus – looking for the business and the founder but what about the back-office part. Buy into your vision and then part with their cash.
Zach moved the conversation to NOI and away from ROI…in other words, investing to create additional value for their business first…but can also multiply their returns with icing on top. NOI through engagement and ROI through investment…along with careful curation. Not just about money-on-money return, it’s also about sponsoring, promoting, piloting PropTech companies. This is about broadening the conversation essentially, but also about the holistic, cultural approach.
Advice on how to get started
Pick a really, really narrow part of the industry be one of the best in the world and then create opportunities from that. Back it up with experience. Your interest has to dovetail with your experience. Tell a story that is coherent and resonates with your past, present and future.
Contact MetaProp – read the industry trade rags, industry online publications…book PropTech 101 available on Amazon. Email Zach…figure out what his email address is…trial and error.
Be willing to fail…embrace this…a one or two-time failure is OK…but too many is not so cool.
What does Zach need – if you are looking for funding, then a warm intro works best 😉 He is always happy to meet real estate investor with money.
Remember, if you want to talk about anything from today’s show, or just talk property investing more generally, email me at podcast@thepropertyvoice.net, I would be happy to hear from you! The show notes can be found at our website www.thepropertyvoice.net
All that is left to say, is thank you very much for listening once again this week and until next time on The Property Voice Podcast…it’s ciao-ciao.