Let’s Talk (Prop)Tech Stack

Let’s Talk (Prop)Tech Stack 

The pressures of operating an essential business through the peak of a pandemic forced the multifamily industry to be more open to innovation. Operators had to quickly meet operational challenges by adopting new technologies. A flexible technology stack (tech stack) was the linchpin required to maintain business continuity. 

At the same time, theThe resiliency of multifamily has attracted a record influx of institutional capital driving asset prices to all-time highs. This has put more pressure on yields and increased scrutiny on technology’s role in driving operational efficiencies which, in turn, has driven more entrepreneurs, venture capital and new technologies to our industry than ever. 

At the same time, the opportunity to solve problems and create value has attracted more entrepreneurs and venture capital to our industry than ever, and seemingly endless options for building out tech stacks. 

While there may be seemingly endless options for building the tech stacks or investing in many complex solutions, a flexible technology stack (tech stack) has become the linchpin required to maintain business continuity and meet shifting performance demands. 

In this Multifamily Innovation Conference – Atlanta (MICA) session, First Communities, VC firm Fifth Wall and PropTech startup Knock clarified misconstrued conceptions of the tech stack and explored real-world strategies for how forward-thinking owners and operators evaluate evaluating, implement and maintain a 

growth-focused tech stack for a competitive advantage. maintaining it a healthy tech stack to to give its owners and operators users a competitive advantage. 

The panel included Vik Chawla, Partner at Fifth Wall; and Pauline Houchins, Executive Vice President of Development and Property Operations at First Communities Management; with moderator Demetri Themelis, Co-Founder of Knock. 

What Is a Tech Stack? 

A tech stack is a set of tools that works together to achieve a goal. A full stack (aka single stack) is the type of platform offered by companies such as RealPage, Yardi and Entrata. It’s an all-in-one system. 

A growth stack is a flexible stack that includes different components such as a CRM platform and is open to integration so that it can help its users focus on growth and performance. 

A point solution single stack is a tool with one specific functionality, such as a chat bot or resident ID screening tool. 

Themelis said strategic technology investment should be transparent, productive, cost effective and valuable. It shouldn’t be created in a silo, or be rigid, reactive and fragmented. 

“It shouldn’t become a point of pain,” he said. “It should be a strategic part of your operations.” 

It must, because apartment communities generally spend about $30 per unit per month on their tech stacks, according to RealPage estimates. “By adding efficiency tools, it can help a company’s bottom line with each ‘brick’ stacked onto its system,” he said.

First Communities is a fee-managed company with 65,000 apartment homes. Houchins said her company considers many factors when deciding about tech, which is key, because “it will be the framework of our business and is used to make revenue decisions.” 

• First look at the integration to make sure it works 
• Then check out the interface (Is it user-friendly and intuitive?) 
• Next, learn what data analytics it can provide (Are the data easy to digest? Can the data be regurgitated so that all groups in our company can use it?) 
• Then there is pricing: (Can we justify the cost for what we assume we’re going to get out of the product?)” 

“We use a blended approach, choosing several supplier partners, because having competition breeds innovation,” Houchins said. “Using different providers gives us different information. If you are only trusting one source, it could be tainted. That doesn’t mean it’s a bad thing, but having variable sources is more valuable.” 

Chawla said he looks to invest in companies that provide a modular approach and partners with “best of breed” tools. “We prefer using nimble, forward-looking companies, who employ the right kinds of engineers who will help you to build for the future,” he said. 

“It’s dangerous to base your business on using companies with products focused only on driving cash for them because often those companies are not modernizing their systems; they will fall behind. Instead, stitch together solutions that use future-looking technology; and that doesn’t mean it has to be a bundled platform. Make sure its APIs fit well so you can future-proof your business.” 

When vetting companies and products, Chawla said it’s crucial that your technologists “have a seat at the table and are part of the decision-making process.” 

Chawla said he goes with best-in-breed solutions because “cheaper options with bugs can lead to a massive loss in efficiency.” 

When choosing front-of-funnel solutions, he said, “it’s very clear which providers are in front of this on this.” 

It’s Important to Establish Core Goals 

Houchins said First Communities looks for value-driven and results-driven platforms that improve efficiency and deliver data on specifics such as lease conversions. 

“Will choosing this tech be exchanged for some kind of revenue that we’re going to see?” Houchins said. “Is our solution helping us to reach our goals? If not, we look to make changes in our tech stack.” 

Chawla pointed out that companies can only improve on what they can measure. 

Houchins said that companies should determine their core goals – an important step that leads to success when choosing technology partners. 

Themelis said, “Your goals should be your North Star. As a supplier, we only want to partner with customers who we know we can help. So, it’s important for us to know the company’s goals and pain points.”

One core goal for First Communities is increasing its assets’ worth. To find a platform that is aligned with those goals, Houchins shares her KPIs with prospective vendors. 

“Some come back and say, ‘We can help you with all of this,’” she said. “But when you look at it, maybe they can only meet 10 percent of our needs, so that’s not an alignment.” 

In one case, Houchins said she found a technology solution that she thought was “amazing,” but after implementing it, the management team was puzzled when it did not receive much feedback from onsite staff. 

“It came down to us not properly ‘ramping it up’ internally and with enthusiasm during the training period,” she said. 

Houchins now tests the product for 60 to 90 days. “Regardless of how wonderful the product is, if you don’t know how to use it, you’ve wasted a lot of time and money.” 

Technology providers can improve the technology onboarding process. “It’s more than a few YouTube videos and a textbook,” Chawla said. “It’s important to train customers the way they want to be trained.” 

Themelis said operators should spend just as much time toward developing a strong relationship with the provider as they do when reviewing the product. 

“The topline is: If you can give customers a great experience it creates a great word of mouth effect,” Themelis said. “Renters will be happy and it creates a repeatable cycle. You get better resident renewals, and renewals are the linchpin to success; 50 percent of your revenue is already living in your property.” 

Houchins said, “If Covid-19 taught us anything, it’s that we can adapt to anything technology-wise. We can use tech to keep our residents happy and want to stay.”

Here is the replay: