On today’s show, we have Mark Hearst who runs HearstX. Mark has worked as a tech executive, investment banker, management consultant, and held operations and business development positions in the PropTech space. Mark is a fellow podcaster and host of Espresso PropTech. Please also check out his Substack where he shares insight about what he learned each week. In this episode, we talk about scaling companies, sales, advisory roles, and web-free applications within the pro-tech space. If you are enjoying our podcast, please check us out on Spotify or Apple or wherever you listen to your podcasts. And if you enjoy, please leave us a review. This helps us get more amazing guests to you, give you guys the best and most informative content on technology in the built world. 

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All right, let’s get this episode started. Mark, you have a very well-decorated career, and it seems now you focus mostly on advisory roles. If you can explain briefly how you got into advisory roles and the world of startups. 

Absolutely. And just to start up, Martin and Owen, thank you so much for having me today. Excited for this conversation. The advisory and consulting work that I’ve done is kind of this next phase in my career. I think I’ve been around the block for a little bit, in a number of different industries, starting out in the financial services area, investment banking and management consulting. Then I spent a really long time in enterprise B2B software, both with some large companies like Siebel, which was subsequently acquired by Oracle, and had a number of startups in that space. At that point, after 15-plus years, I was looking for a little bit of a change, and into the PropTech area, looking for something that I think I personally enjoyed more and was more than just a nice paycheque. I thought that real estate and PropTech could be that. 

I was fortunate enough for that to actually be the result of that chance that I took there. Good choice. Yeah, exactly. Then, I worked for a couple of years for a PropTech startup, validating again that it was a good decision. And then I was at a crossroads of, do I go to work for another PropTech startup or do I need to seek another path? I spent a long time talking to a number of different companies. Early-stage companies, a lot of them could use my background and the skills that I had accumulated over time, but most of them weren’t willing to pay a good salary that I could actually sustain myself on. So, I decided at that point to try and find a way to flip the script a little bit and move into an advisory and consulting role where, one, I got the chance to work with a number of different companies, not just one single company. There was the opportunity to pick and choose my clientele a little bit more and then if it didn’t work out after six months or something like that, we could part ways and move on. 

I was fortunate enough to get tapped into some of the incubators and accelerators in the tech ecosystem, at least over here in the US. Many of those are extending into Europe and beyond. So, I started out with Plug and Play, which is a global early-stage company, and they have a fantastic real estate and construction programme, which I’m a mentor in, and continue to be to this day. And that was really the catalyst that got things going for me. One, in terms of having access to both a wide variety of entrepreneurs in this space, as well as an ecosystem of partners and having the brand of Plug and Play behind me and the ability to parlay that into other opportunities in the space. 

Nice. How did you get involved with Plug and Play? It sounds like that was where everything kind of exploded. It was really networking. I was talking to some former colleagues of mine and looking at different areas that I might explore, and just happened to glance at LinkedIn on this one particular person’s profile that they were connected with somebody at Plug and Play, and they introduced me to them. They connected me with the right person, and it was off to the races there. So, definitely the power of the network and talking to folks. Your network, yeah, exactly, as people say. And people are, in my experience, really generous both with their time and their willingness to introduce you to folks. Because you never know where it’s going to go. Some of these introductions can lie dormant for a number of years, and then you can circle back, and things can take off from there. Things can take off immediately, or there are often times where there’s no opportunity or things just don’t jive, and you took a shot and it’s time to move on. 

Yeah, in my experience, just one conversation with someone, you think nothing will come of it, and suddenly you’re in a different situation with them, with a very exciting opportunity, which could lead to something. 

So, I never underestimate the opportunity to have even just a half-hour chat with someone. It might seem pointless at the time, but it can be valuable. Absolutely. Often, the opportunity may not be where you initially thought it would be. So, during these conversations, it’s important not to have a narrow focus. Instead, keep it a bit broader and touch on various topics. This approach can create ideas and spark further discussions, which can lead to other things to explore. 

Regarding PropTech, I actually have a side question. What do we call this space? We have PropTech, ConstructionTech, affordable housing tech, built environment tech, and real estate tech. It’s all under one umbrella but with so many different terms. 

It’s funny because the intro question I start off with in my podcast is, “How do you define PropTech?” It’s a nebulous term and covers a broad area. I think it often comes back to the fact that real estate is massive and covers many different aspects. To have a singular term that immediately makes sense to everyone in this space is a bit hard to expect. However, when people outside of real estate need something to grasp onto, PropTech has taken root primarily because it’s easier to say than real estate technology. While I think the built environment is a great definition, outside of real estate and real estate technology, it’s not as catchy and doesn’t resonate as well. It works well within the broader real estate area, but it hasn’t really taken hold. 

I like PropTech, and I certainly agree. There are so many subdivisions within that. As you mentioned, construction tech is a completely different area than your residential and then your commercial. The thing that I’ve learned about real estate and really what has, I think, lit a passion within me is that there are so many aspects to it beyond these kinds of big mega meta categories, you know, everything from different real estate classes like storage and, you know, warehousing and all the different kinds of financing opportunities and things like that. There’s just an immense amount of areas in which people are participating in real estate, making money and building businesses. It’s what’s made it really fascinating for me. All assets are like $330 trillion or something. I guess that alone indicates the scale of what we’re dealing with here. Yeah, the largest asset in the world in our universe, real estate, $330 trillion. Absolutely. And growing in places like the US, with the housing shortages, there’s kind of no seemingly endpoint to how this can grow. 

 For many, many folks beyond just being part of a job or a business, a business that they built, at least on the Resi side, it’s been this vehicle to transfer wealth intergenerationally. So, buy a house, appreciate, pass those, pass the house or the sales, the proceeds from that onto your next generation. So it’s, it’s kind of what, if you can get into the game, there’s a lot of upside, but you know, it’s with down payments and things like that, the bar to participate can be high for a lot of people. Yeah, yeah, yeah. Mark, you mentioned podcasts. So you are a host of PropTechExpressO podcast. So what led you to set it up and what is it about? So PropTechExpressO is a podcast specifically on PropTech that I’ve been hosting for three years now. So I’m in season three. I do 25 episodes a season, so approximately two a month. It kind of started after I moved into this advisory area, and I got invited to be on somebody else’s podcast. And I enjoyed the experience, and I was, I thought, you know, this was something that maybe I could do as well and bring a different spin on it. There wasn’t, at that time, a lot of podcasts about PropTech. It was kind of early days of that episode. So I saw an opportunity for a niche and initially, you know, I just started interviewing friends of mine that were in PropTech. So it was an easy conversation. That’s how you start. Yeah, easy way to start, easy conversations to have. And from there, it naturally moved into clients that I was working with, and they were interested in exploring this channel to get their brand and their name out there in a different channel. And then after a while, asking people that I had. I’d run into and they were always really interested in being part of a podcast. There’s a little bit of a novelty to it and certainly, as we entered the pandemic and people were looking for opportunities to have more conversations and zooms and online conferencing became the norm, any stigma or concerns people had with recording online really went away. Everybody and it just became part of a natural conversation and way to communicate, so it wasn’t for either side a big deal. And because at least for my podcast, I’m recording them all online, the scheduling, while it can be a little bit of a back and forth, there’s a lot more flexibility with it, so it wasn’t as big of an overhead and something that they had to plan their day around or anything like that. So it was really easy. And now, after doing this for the last couple of years, I receive outreach from various PR firms that represent early-stage PropTech companies, who would like to get their clients on the podcast. So I now am, fortunately, in the position of not having to continuously look for guests. We still do that, of course, but it’s amazing how things snowball. As you produce more episodes, you build up a following, and then your name gets out there, and people are definitely finding you. I continue to be surprised that people are reaching out and wanting to be on this podcast. So it’ll happen to you sooner than later, I’m sure. It’s a great tool, and it’s also a great tool to pick the best out of people. 

So on that note, we would like to ask you something which you are quite skilled in, sales in the PropTech and the real estate construction. So, whatever term we’re going to use, maybe just all three or all four or five or whatever it is. 

When it comes to sales in PropTech, real estate, and construction, I believe that understanding the unique needs of your target audience is critical. Each of these sectors has its own set of challenges and opportunities, and being able to communicate effectively with potential clients can make a significant difference in your sales success. 

First and foremost, it’s essential to have a deep understanding of the industry you’re working in. Whether it’s PropTech, real estate, or construction, you need to be well-versed in the latest trends, technologies, and market dynamics to effectively sell your product or service. This knowledge will not only allow you to better position your offerings in the market, but it will also help you build credibility with potential clients. 

Next, it’s important to develop strong relationships with your target audience. Networking and relationship building are crucial in these industries, as word-of-mouth recommendations and referrals can play a significant role in driving new business. Attend industry events, join relevant professional associations, and actively participate in online forums to connect with potential clients and partners. 

When it comes to the actual sales process, it’s important to focus on the unique value proposition of your product or service. Be clear about how your offering addresses the specific pain points and challenges faced by your target audience. By demonstrating a genuine understanding of their needs and presenting a compelling solution, you’ll be better positioned to close deals and grow your business. 

Finally, don’t underestimate the importance of excellent customer service and support. In industries like PropTech, real estate, and construction, long-term relationships are often the key to success. By providing top-notch customer service, you’ll not only create satisfied clients but also foster a positive reputation that will help you attract new business in the future. 

In summary, to excel in sales within the PropTech, real estate, and construction sectors, it’s crucial to have a deep understanding of the industry, develop strong relationships with your target audience, focus on your unique value proposition, and provide excellent customer service. By adopting these strategies, you’ll be well on your way to achieving success in these competitive markets. 

So, what are some of the key tips that you can give for people involved in sales in the industry? Well, I think the number one thing I’ll talk about is figuring out how to obtain business cases of clients you’re working with that you can share with other customers. These business cases are invaluable; they’re proof of concept. The more you can gather, the better, because everyone’s situation is slightly different. As you develop this library of business cases covering various customer sizes, different geographies, and other dimensions, you’ll be able to find ones that are truly applicable to the clients you’re selling to.  

Moreover, the fact that someone allows you to use their name and logo lends credibility to your service, making you appear more trustworthy and encouraging people to take a chance on you. Sales in the industry is undoubtedly a numbers game. Very few sales occur quickly, as sales tend to involve extended cycles with companies. It’s rare to find a single decision-maker with both the authority and available budget to make an immediate purchase. Having a plan that includes flexible pricing or the ability to conduct early-stage proof of concepts, either for free or at a highly discounted rate, can help. This approach enables people to start using the system and provide feedback. You’re often designing these solutions not entirely in isolation, but you need people to actually start using them and point out any incorrect assumptions or processes that don’t work for them or need adjusting. This way, you can refine those aspects and improve the solution before presenting it to a larger audience. If you can develop relationships early on, people are more likely to work through any issues inherent in early-stage solutions.  

Later, especially when dealing with larger companies, the bar is higher, and they are far less forgiving. It’s better to have gone through several cycles with companies and worked out as many issues as possible. So, start small, and perhaps to shorten the sales cycle, offer something like a proof of concept or a free trial, whatever it might be. Indeed, provide something where the commitment isn’t too significant; you want them to see the value and be willing to pay, but not to the extent where they need the CFO’s sign-off or face a substantial upfront cost. If you have some form of staggered payments or if your business model allows for it, these approaches make it easier to engage with customers. 

Are there any mistakes you see people make to start with? Mistakes can come in various forms. One mistake could be hiring the wrong type of salesperson to begin with. I think that’s a common error, and it could involve hiring a very senior, expensive salesperson prematurely when the product is not quite ready, and the company infrastructure is not prepared for that sort of individual. Having the right sales resources from a human perspective at the beginning is crucial because they will have to do everything – making cold calls, developing collateral, engaging in numerous conversations, and acting as a part-time marketing and design resource. People who are later in their careers and more senior may not be as willing to roll up their sleeves and take on all these tasks. 

Indeed, in the early stages, it is recommended that the founders do most of the selling. They need to hear from the customers, and founder-led sales are great because nobody can sell a product quite like someone who has built a company from the ground up and truly understands the narrative. It’s essential for founders to be close to the customers, listening to their feedback and understanding their reception of everything from the marketing pitch to the UI and implementation. There are so many aspects of it that founders need to see and experience, rather than isolating themselves and becoming detached from their customers. There’s nothing more important than founders being part of all those early sales and not delegating that responsibility to other departments. 

The customer needs to see the founder’s passion and dedication, even if it means witnessing the struggle and effort it takes to make the sale. It can be challenging for founders, especially those with an engineering background or those who haven’t been customer-facing and commercially focused before. Perhaps their personality or preference is to concentrate on building the product rather than engaging with the customer. However, that’s not a recipe for success. As a founder, you must love your customers, embrace them, and seek their feedback while truly understanding their pain points. It often takes numerous conversations to expose the underlying issues, and it may not be in the first conversation that they’re willing to admit it or that you can identify the true pain point. It could be masked by other things you initially thought you needed to design a solution for, but later realise that if you don’t address this problem, you’ll never solve the issue you ultimately want to tackle. It’s undoubtedly a journey, and you need to have many conversations because there will be variations and nuances in all the groups you interact with. 

Should we move on to Hurstex? Yes, let’s move on to Hurstex. So, you’re an advisor and consultant in the firm environment. Why would someone choose to partner with you? Well, I find that most of my business comes from referrals from either friends or other people I’ve worked with. It’s generally not from a Google search that they find me. When looking for an advisor, it tends to come through a network, perhaps one of the accelerators we’ve spoken with. So there’s a referral element that’s definitely part of this ecosystem. Being involved in the industry through the podcast and other activities adds another point of validity to the service, showing that I have a network and contacts within the space. 

There are many people who can help startups, but I think my specific focus on and interest in the real estate space brings a unique understanding of trends and potential regulatory issues that could impact the businesses they’re looking to build. This could also include the network I can help provide access to or the relationships I’ve built with early-stage VCs and investors, which may lead to access to capital that startups always seek. 

Some of the reasons they come to me involve looking for founders I enjoy working with and those tackling interesting problems. It’s definitely a match on the other side as well. I’m looking to understand and add value to these companies. I don’t just want to take a paycheck from them; I want to help build their businesses as well. If they have success, they may continue our relationship, form a different one in the future or refer other businesses to me. I believe in the idea that what goes around comes around, and I try to help companies I get in touch with in some way, even if it’s not the perfect fit or the right time. I think paying it forward benefits all parties in the long run. 

Is there any process you follow when working with founders and startups, or does it really depend on the type of business or founder you work with? There are definitely differences in groups, as everyone is at a slightly different stage and has specific needs. What’s common is getting to know the company, trying to understand their objectives and the milestones they’re aiming for, and determining where I fit in and what I need to do to help them. There’s a discovery phase and relationship-building process that begins with every group. 

Intertwining various systems to create a more bespoke solution for them is another aspect, as well as identifying other people within my network that I can put them in contact with to help them progress. Often, they’re looking for exposure, so figuring out which conferences and events they need to attend to make a name for themselves and engage with potential customers is another part of the early stage. 

Is that a personal brand thing? It’s about getting their name out there so that when people see other things on LinkedIn or other marketing channels, it’s not the first time they’re hearing of you. There are so many companies fighting for attention in all spaces that you’ve got to hear a company name five or six times before it starts to stick and you begin to remember the visual brand that you’ve created and distributed. There’s a lot of brand building and utilisation of different channels required. But nothing beats meeting people in person. Zoom has been great because it allows you to avoid travel, but getting to meet someone, see them face to face, look them in the eyes, and not have them distracted by a mobile phone or moving in and out of an office space shared with a spouse or a flatmate is really hard to beat. In-person interactions encourage people to be less guarded and more genuine and honest in personal conversations. I always encourage people to take advantage of that when they can. 

My mind is keen to ask you about some Web3 stuff. I just had one last question about the startup world, mostly concerning your advice for companies looking to scale. It may sound like a silly question, but I’m curious myself. Is it one thing to primarily focus on when scaling as a company, or is it the combination of many different things which then gives you what you need to grow? I would say it’s really the combination of things. There are certainly exceptions to that rule when something is the perfect fit, and it hits the right timing, creating a rocket ship right from the start. But for most companies, it’s a combination of things. It’s definitely a balancing act, especially for early-stage companies where resources are constrained. There are so many aspects of a potential product that they’re trying to build, so many things that need improvement, that it’s hard to figure out precisely what needs to be done. However, I think your question highlights the absolute need for focus to make things successful. If you’re too broad and too distracted, you risk not solving a problem or only solving part of a problem. While that may initially get people interested, they may be less willing to move forward as they dig deeper and realise your solution only solves 75% of their needs. You’ve got to focus and ensure that what you’re offering solves 90-95% of a problem that someone has. I think they’ll be willing to compromise a little if it’s solving less than that, but it will be challenging for them to justify moving forward with you from both a monetary and time perspective. 

I would say, stay focused. The hard thing is, again, when you’re talking to VCs, they want a vision, an expansive view, and the ability to know that you’re chasing a market that will provide outsized returns for them. However, you’ll never get to that if you don’t focus and execute well on a core element to begin with. You’ve got constraints with time and money, and you’ve got to make sure you focus on and get things done. Then, you can talk about a larger vision but don’t get too distracted by solving everything for everyone. 

Okay, is it the right time or one? Yeah, go for it. I know you’re desperate to ask, so let’s move on to Web3. I can’t say enough about it to get too involved in this conversation, so I’ll leave you guys to it for the next few minutes. No, don’t say that. I just wanted to get your thoughts on Web3. You also write a Substack titled “What I Learned This Past Week,” which is about Web3. I liked one of the subtitles, “Hype Running Far Ahead of Reality,” which is something I encounter quite often when I look into blockchain companies. It feels to me like people are trying to reinvent traditional businesses with the hype words ‘crypto’ or ‘blockchain’, like trying to create a new LinkedIn on blockchain, or a new Reddit on blockchain, when there’s no material reason for doing so. I just wanted to gauge your thoughts on that. 

Web3 and real estate are definitely in the early stages for sure. I think, in the long term, there is massive potential to apply blockchain and related technologies to many industries. However, for real estate, it has been a laggard regarding the adoption of technology in general, so like Web1 and Web2, it still has a way to go in many areas. Jumping to areas not yet focused on by real estate businesses themselves may interest entrepreneurs and people pushing the edge in applying Web3 to real estate, but as far as broad adoption, at least in the US, it’s going to take a bit of time. 

I do think there are some fascinating early-stage opportunities for Web3 outside of the US, especially in emerging countries where the state of real estate and government infrastructure is not quite as mature. In those areas, I think Web3 can be injected and begin to make inroads quite quickly. 

One of the ones that jumps out, which I think is most exciting for me, is title and ownership, being able to establish that irrefutable nature on blockchain that, in many of these countries, has not existed to date. If you can get these systems in place and established, particularly around real estate and land, you can start to lend against it. For these landowners and entrepreneurs, it’s not only evolutionary but revolutionary for their economies. So, I think blockchain will probably see its first mass adoptions in emerging countries as opposed to more established countries like the US, Europe and maybe even China. 

I completely agree because emerging countries don’t have that many regulatory bodies regulating every part of the industry. With crypto in general, there is always the notion of trying to replace this or that, which goes against how the current government operates and the rule of law functions. Trying to sell the idea of replacing courts or some part of law isn’t going to work very well. 

In the US, the SEC has the power to completely crush and hamstring industries around crypto. They’ve been, in many cases, reluctant to provide guidance. There’s this grey area where companies are not willing to invest because they know the SEC can change the rules at any time, potentially causing their businesses to dry up. Unfortunately, this has been a significant restriction to broader innovation and adoption of crypto. 

However, to your point on areas that I see gaining traction, I do think construction is showing some interesting use cases for blockchain. There are areas where supply chain and understanding how materials make their way from being created to becoming part of a building are being tracked. So, that’s a use case that’s also gaining adoption. 

I’m going to plug a company here that I do a bit of advisory work for called Revenate, which operates on the Web3 payment side for real estate construction, residential construction works, and commercial as well. In the US, you have General Contractors (GCs) that oversee and run these projects, but the labour and actual trades are done at the subcontractor level. Many of these subcontractor groups are made up of foreign migrant workers. Payment to these groups has always been a point of friction in the past. Revenate is working on a solution that combines both Web2 and Web3 technologies to help facilitate payments using smart contracts. 

So, real-time payments are also possible, where something triggers a smart contract and pays you. For example, you complete a task, provide evidence that it’s been done, capture it using your phone or a digital twin solution, verify it, and then payment is made. Subcontractors and vendors supplying materials for this process will benefit from improved timing and efficiency. 

We haven’t got long left.So, we’d best move on to the off-topic. And one thing we haven’t asked for a while, Mark, on here, is maybe really touch on it, but if you had an unlimited budget and you were to invest in any emerging technology or trend, what would it be? Unlimited budget, where would I invest? This is probably not my area of expertise, but I would say stuff related to climate. And there’s a massive opportunity in that for real estate, right? Whether it’s the production of cement and concrete, which is a major contributor to greenhouse emissions. There’s a ton of opportunity there. I’d love to see improvements on the other materials used in construction, whether it’s timber or other things. I think we’re not going to stop building; we’re just going to continue to build, but we need materials that are friendly to the environment to prevent it from further eroding. So, I’d be looking, with that, since I could place unlimited bets with my unlimited budget, I’d definitely be looking for things to invest in and around climate and the environment to ensure that we reverse the trend. I do think that there’s the incredible, innovative nature of humans; we will overcome this, a way to reverse course and hopefully create better environments than we’re currently living in today. 

Sounds good. Is there any book that you can recommend or you’ve been currently reading? I have been very behind in my reading, so I don’t have a great book to point to. On the sales side, there’s a book that I’ve really personally enjoyed reading and certainly that I know a lot of different folks in the sales area read is called “Never Split the Difference” by Chris Voss. The stories are great. The principles are ones that you can definitely apply. If you’re looking for something that you can enjoy reading and take away and apply it to day-to-day, I think that’s one that I can put up there for people to read. 

Mark, where can people find out more about you? I’m active on LinkedIn and respond to messages and outreach there. You can shoot me an email at mark@hurstx.com. That’s probably the next best place to get in touch with me. You can also fill out the form on my website, or even on the PropTechExpress website. You can subscribe to my Substack newsletter as well, and there are mechanisms there for you to direct message me. 

Alright, Mark. Cool. Well, thanks a lot for your time. We appreciate it. Thank you. Thanks so much for tuning in to this episode of the Bricks and Bytes podcast. If you’re enjoying the show, please feel free to rate, subscribe, and leave a review wherever you listen to your podcasts. We really appreciate it. And we’ll catch you in the next episode.