Knock Talk: Ep. 13 – Multifamily technology trends and opportunities for growth (yes, even now)
This week, our host Steve Wunch, Knock regional vice president, sits down with a special guest, Knock Co-founder and CRO, Demetri Themelis. They talk about all things multifamily front office technology, and dive into the trends driving the multifamily industry.
Watch the episode or read the transcript below.
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Steve: Hello everybody, welcome back to Knock Talk where we are shedding light on all things front office multifamily tech. I’m Steve Wunch, regional vice president for the mountain region strategic accounts, and a 27-year veteran of the multifamily space. I am excited to introduce Demetri Themelis, our co-founder and CRO here at Knock.
Demetri, I’m so glad to have you here to talk with us today! For our listeners and viewers, would you please go ahead and introduce yourself, and tell us a little bit about why you started Knock?
Demetri: Alright, thank you Steve. I’m looking forward to the conversation. My name is Demetri Themelis, and you pronounced it just right. Thank you for that. I hope you didn’t have to practice that too much.
The reason we started Knock was because – Knock was born out of the frustration of being a renter, and going through the customer journey from a renter perspective. Having rented in Seattle, New York City, San Francisco – some really competitive markets – we understood firsthand where in the customer journey there were pain points for, who are today our customers, property management companies.
And so, we sought to improve that customer journey and bring to bear on behalf of the renters in the world the benefits of technologies we’ve seen transform other industries. For example, when you were looking for an apartment in 2013, there was nothing on-demand about it. And the way you’d book a dinner reservation online or book travel online, watch content online, or a fitness class. You’d see what you liked on an ILS ad or a Craigslist ad or a website, but you’d have to pick up the phone or email and book an appointment.
We felt like we could bring on-demand to the equation and help streamline the customer journey. So as an example, we started more with a focus on scheduling, and over the past five years have really evolved to a full-fledged intelligent front office, with our core product being a CRM. And, really helping our customers with the entire customer journey: how they attract, how they convert and how they retain.
Steve: Very cool. Thanks for that. That’s a nice set up for our conversation.
So, as the founder of the company, you’re in a lot of conversations with multifamily operators, with tech investors, with our customers. You’ve got a really unique vantage point in terms of seeing what’s going on in our industry. So, to kick things off, now that we’re 6 months into COVID, and this pandemic has really created this recession here, in the states and elsewhere, what do you see in the next 6 to 12 months? How to do see things looking for the industry?
Demetri: So, when you think about taking a step back – a multifamily portfolio is a city. You might have thousands of units, and tens of thousands of renters that are living your properties. There’s a whole host of needs and requirements, and boxes that need to be checked, and processes that need to be managed in order to operate successfully. And, that means there’s a need for a lot of interesting technology solutions.
Traditionally, managers have been faced with two choices. You could go with a large full stack solution (we won’t talk about names today) where you can buy everything from one provider. And it’s all one provider, but maybe everything isn’t as great as you’d like it to be. But, it’s all in a one-stop-shop. Or you can cobble together all kinds of little point solutions to build a technology stack to serve all of your needs.
And so, our view for the future is that there is going to be a pretty clear bifurcation. The idea of consolidating parts of your tech stack into best-in-class groupings makes sense – not fragmented point solutions, and not fully consolidated one-stop-shop, single-stack tech stack either. We see a best-in-breed split happening in a back office – ERP, accounting platforms and front office solutions.
And a front office solution – the core of that is a CRM. That’s our core product today. But, there are so many technology solutions that can and should be deployed to attract renters, to convert them and retain them. And so, you can use your imagination. There’s quite a bit that needs to be built to create an efficient tech stack there.
And so, that’s kinda how we see the future at Knock. And, we intend to be – today our core product is a CRM. Ultimately we want to leverage all the really wonderful data we have about the customer journey, and use that to create intelligent solutions that plug nicely into a CRM and help our customers do their jobs more efficiently and keep everyone happy along the way.
Steve: That’s great. I think anything we can do to make the onsite teams’ lives easier, especially these days, is a big win for everybody.
Ok, so you shot down my first question about what does the future look like. I hope this next one comes off a little bit better. What do you see as blind spots? Where do we need to be looking where we’re not seeing in the multifamily space, and what’s your position on that?
Demetri: Yeah, I would say the biggest blind spot that we see, and ultimately, it’s one of the reasons why we started Knock, is that operators don’t have a lot of data in the first place to see performance. So, when they buy technology, they’re rushing into the decision and the implementation. And, they don’t really have a framework to understand the impact those decisions are going to have to their NOI, and the value that tech can bring ultimately to their company. I like to say, ‘They’re running barefoot into the thorns.’
So, I think ultimately, the lack of data, and the lack of visibility, the lack of a framework to make informed decisions about tech buying / tech procurement decisions they’re making is a really big blind spot for companies.
I think a lot of folks are quick to adopt new solutions, but they don’t have the right infrastructure in place to evaluate whether or not those solutions are impacting their bottom line effectively. So, nobody wants to just be chasing shiny objects. You’d like to be spending time and making decisions that are truly adding value for your residents, your teams, your communities, your portfolio. And, without having a very consistent framework in place for measuring impact that different technologies can have on your conversions, [and] your bottom line it really makes a lot of effort and investment dollars wasted.
And so, to answer your question directly, it’s just the blind spot is bad data. You can only improve what you can measure. And, if you don’t have the ability to measure, the ability to improve anything is significantly diminished.
Steve: Yeah, that’s great advice. And, I hope our listeners are taking away that holistic approach to making a big decision like this because I think that we don’t always account for the cost. We just get a new solution and plug it in. And, it kinda delivers, but it doesn’t really deliver what we need. I love that, so thanks Demetri.
What about on the opposite side of the coin? Those were some of the blindspots. What do you see as some of the bright spots that are going on in our industry right now?
Demetri: Well, without a doubt, the brightest spot about multifamily is the people, the assets the fact that were as a resilient of an industry as we’re in. I think that as challenging as a year it’s been for all of us, we have to take a moment every single day and remember that we’re all serving a fundamental human need: shelter. So, whether you’re a multifamily operator or a supplier like us, we are all fortunate to offer services, solutions and products that are supplying a basic human need. And given that, we’re in such a resilient sector of the economy. That’s not something we should overlook. Being grateful is such a key to bringing joy and happiness and bringing meaning to what we do every single day.
It’s not sexy to say that the bright spot is that we haven’t taken a huge dive. And, we have to be really grateful for that.
Second thing I’d say is for the last – since 2008, we were one of the first industries to really recover in the Great Recession. As people were leaving their homes and moving into rentals, and multifamily portfolios have been performing very strong for a long period of time. Revenue was walking on through the door, and rental rates were going up and up. Occupancy is up, we’ve been meeting all kinds of leasing thresholds in pretty much every market in every segment around the country for a long time.
And, it’s been a while … you say, ‘bad habits are developed in good times.’ And, I think there have been a lot of bad habits developed around operational efficiencies. When you don’t need to be laser-focused of eeking out operational efficiencies, you kinda overlook things and mold grows. And, I think one of the coolest things I’ve seen this year, and I’ve kinda mentioned it before, is this renewed sense of focus on creating operational efficiencies for multifamily portfolios.
And, for us, thinking about front office solutions, how to be creative and even, just sometimes getting back to the basics, we’ve been very fortunate. We’re sitting in a place where customers are paying a lot of attention, and how we can be better about earning our keep in a really rapidly changing, dynamic, fluid environment. And, so a big bright spot that will serve us well, not only getting through this year, but for years to come, is that it’s the first year in a long time that folks are paying really close attention to costs, and operational efficiencies and all of that.
Steve: So, we talked about what you see in terms of front office technology and some good things to be on the lookout for. Um, trending things… Everyone always wants to know what is the latest and greatest is, so from your perspective, and from what you’re seeing and hearing in your conversations, what do you think are the most important things for multifamily owners and operators to pay attention to currently?
Demetri: Yeah, so three things that come to mind.
On the supplier side of things, just seeing a huge uptick in requests for integrations. I love that. I love the idea of suppliers working together. I think when times are good, everyone is focused on their own thing. And, sometimes you can get a bit siloed from other suppliers in the industry. But, in times when everyone is needing to change their business models and find new ways to add and communicate with customers, we’re seeing a huge spike in the willingness of other suppliers who are willing to work together, and who want to work together to help our customers. And. we’ve been a big proponent of that. And, we’ve made a lot of investments in that for a long time, so that’s nothing new to us. But, it’s great to see that spirit of collaboration really gain traction this year, even just in the number of partnerships we’ve announced. It’s been a really exciting year in that regard.
Thinking more to the operator side of things… one thing I think is cool is that 2 to 3 years ago, I’d be on panels or give speeches, and a lot of folks… I’d ask the room, ‘Do you know what a CRM is?’ And, very few people would raise their hand. I feel like now, we’ve passed some critical mass threshold where clients, operators now all have knowledge about what a CRM is and what it ought to do for a portfolio. I still think we have a lot of work there, and room to improve on overall client-side education of what is a CRM and how can it benefit your organization? But, I’m seeing that operators are starting to treat their leasing efforts like a sales organization.
I hate the stigma attached to, ‘We’re landlords. We’re property managers. We’re leasing agents.’ All those stigmas associated with that. Sometimes, I’m like, ‘Stop! You guys are a high-performing sales and marketing organization!’ If you’re going to think like a high-performing sales and marketing organization, you’re focused on very different things. You have customers. You’ve got revenue. You’ve got product. And, you need to understand your funnel, and you need to be able to make data-driven, predictive decisions. You need to be able to allocate resources effectively.
I finally feel like that stuff is finally taking hold in multifamily. The more that operators continue to adopt the mentality of performance marketers, and performance operators, we’ll finally get over that hump where we’re no longer talking about how multifamily is so far behind when it comes to technology.
As clients and operators start to evaluate technologies like high-performance companies in other industries do, we’ll close that gap very quickly. It’s a trend we’re very supportive of, of course. But, it’s something I see happening, and we’re having those really elevated conversations with clients all over the country.
The last thing is just the importance of paying attention to our people. I was on a plane 2, sometimes 3 times a week for most of the last few years. And, this year, I’ve been cut off from our team. And we get the pleasure of seeing each other, now, more often face-to-face with Zoom, but is a difference. The fact that we’ve all been so cut off from one and other – the people that we work with – it makes it really difficult to keep up with how folks are doing emotionally. It’s been a really challenging year, and everyone is working really hard. So, I don’t know that you’d call it a trend necessarily, but I think it’s going to be really interesting to see which companies are able to do a really good job maintaining the fire internally and keeping the esprit de corps alive inside their organizations. You know, I love to pay attention to which companies are doing a good job at that and adopting those types of processes or competitions, etc. The more we can invest in our teams, and make sure our gas tanks are full internally, we know we’re going to be able to take care of our customers better, and that is ultimately good for our business.
Steve: That’s awesome. You’re so spot on. If we weren’t able to do that when we were able to get together in person, and shake a hand or give a high five, it really makes you feel like you’re going to suffer hard if you don’t have the right tools and resources in place to do that now. Great stuff.
I have one final question for you. It’s probably my favorite question I have in interviews like these. It is, what are you personally excited about in the future of multifamily? What geeks you out?
Demetri: I’m excited about an industry that continues to get smarter. The smarter this industry gets, and I talked about it a minute ago. The most sophisticated this industry gets, the positive feedback loop is created for suppliers like us. That means better ideas get to come to us. That inspires our engineers to want to go create and build creative solutions. Those creative solutions help our clients elevate their game, and then identify new problems which creates this really cool positive feedback loop.
The thing that really excites me is that for the first time in a long time there’s so much focus on how to create efficiencies in our workflows. People are paying very close attention to retention more so than in years past. Thinking about 50% of next year’s revenue already lives in your property if you have a 50% retention rate. And so, just hearing people talk about operational efficiencies and retention – underserved areas for so long – I just know that in the course of a year of suppliers listening to customers and trying to build solutions, we’re going to see some really cool stuff come about. Not just the quick fix, band aid solutions to get through the pandemic, but the types of solutions that are going to forever dismantle some of our long-held assumptions, and really untangle some of the complicated cost-structures that have been plaguing multifamily for a long time, because there hasn’t been a deep emphasis on solving some of those problems. Now that we’ve got the attention, I think it’s really important we do something with it, and not waste this opportunity.