Startup Sitdown Q&A: PinProps
Sit down with Michael Malone and Ryan Al-Sharieh, founders of PinProps, to learn more about how they are changing the world of commercial real estate.
MEET MICHAEL & RYAN.
Real estate meets tech in the duo behind Wichita startup, PinProps. Michael Malone, CEO of the startup, brings to the table years of commercial real estate experience in Wichita. Ryan Al-Sharieh, COO of the company, brings with him years of tech startup experience in Dallas, New York City and Washington, D.C.
Their paths converge at PinProps, which is seeking to disrupt the world of real estate with software that allows sellers and buyers to connect more easily and efficiently — even on properties that aren’t on the public market.
To get some more insight on their company and startup life in Wichita, we caught up with Michael and Ryan in their Epic Center office.
So how did you guys meet up?
RYAN: "I’m back here because of family. I came back and I realized there wasn’t really much of a tech scene, so I was like, ‘Well, I’ll go to my second love,’ which is real estate. I met Michael at J.P. Weigand, actually. You know, he started talking about this idea, and I was like ‘Oh, looks like there’s some potential here.’"
MICHAEL: "So, I met Ryan at Weigand. I knew he had a tech background — knew that he was in tech — and I was trying to start this thing. I was like, ‘Ryan, come join me.’ He was like, ‘No man, I’m not going to join you if you’re not full-time into it.’ So I said, ‘Deal.’ So come May 2018, he and I just started grinding."
Could you break down PinProps for us? What is it, and who’s it for?
MICHAEL: "Yeah, so PinProps is basically a marketplace platform that allows you to post properties and get connected with buyers in a faster way — in a prioritized way. That’s the 50,000-foot in the air view."
"So, for example, you own a couple duplexes or a retail center. You don’t have to sell it, but you kind of want to sell it and you don’t want to publicly market it."
"You could either have your agent, or you, ghost post a property. So you get the ability to get matched with thousands of buyers, but they don’t see your price point. They don’t see classified information. They don’t see sensitive information. And then you can pick which buyer you want to reach out to."
"It’s kind of like Bumble, in essence, in that sense. A lot of the marketplace-type platforms right now are focused on comp (comparable) sales — what have things sold for? That’s not our competitive advantage. We’re not trying to be another comp service. We want to learn what you are willing to pay for that building, and what the odds are of you paying for that. What are the odds of you buying that building? What are the odds of your closing on that building?"
RYAN: "It’s more of a predictive approach."
MICHAEL: "And the whole grand-scheme goal of PinProps is to create more liquidity in the marketplace."
So the benefit for the seller would be that they can put something out there without publicizing it just to see if there’s any interest in the market. And the benefit for the buyer would be what?
MICHAEL: "So the benefit to the seller is I can now have all my properties posted on an online platform, and I can get matches to buyers. I know exactly what my building could sell for instantly. I don’t need comps anymore, so I can manipulate my price and get a different set of matches. That’s really freaking cool for a seller."
"As a buyer, I’ve just unlocked the treasure chest of deals, because now, everything’s for sale. Now you look out the window and make an offer on everything. Everything can be bought for the right price. And that’s never going away."
So PinProps kind of unravels the mystery of commercial real estate a little bit.
MICHAEL: "Yeah, there’s no more backroom deals, there’s no more having to know the right people. You might have a database of 59 people, but you’re only calling those 30 people that you really, really know. That’s not bad. I mean, I do that. That’s just human nature. You call the people you’re most comfortable with. But this allows you to not only potentially contact those 59 people as well as those 30, but then 50, 100, 200, a million people who are looking. Now we don’t have a million people yet. In essence, as PinProps grows, your Rolodex of contacts grows."
Would this be a subscription service then?
MICHAEL: "So we’re still kind of figuring that out, to be frank. We have an idea that we’re working with right now, with some advisors that we’ve been talking to. Our goal though, is to keep the marketplace side of it free and to make money in other ways."
"I’m kind of an anti-establishment person. I hate the system. And I don’t like how I have so many subscriptions. I mean, I hate it, but I love Game of Thrones, so I have a subscription for HBO now. But I will get rid of it in June."
RYAN: "Yeah. I mean, right now, one of our competitors has about 90 percent of the market share because they are so dominant. They can continually raise the price every year by $150 a month because there are no viable alternatives. So we’re hoping to become that viable alternative."
MICHAEL: "We had a guy upload close to a hundred properties on our site. He said, ‘F- it, it’s free.’ I mean, there’s no reason not to."
What gave you the idea for PinProps?
MICHAEL: "I was posting a property on LoopNet and was like, ‘There’s got to be a better f-ing way.’ This is like a billboard. I’m paying for a billboard."
RYAN: "You post and pray."
MICHAEL: "I was tired of posting, and I was paying, you know, a lot of money for a service that I didn’t feel like was giving me enough value. I said, ‘I want something to work for me.’ And then that was kind of a start of, like, ‘I can make something myself.’"
So what were the first steps in making this happen?
MICHAEL: "It started with really thinking about why I don’t like the current products out there, and about what I would like in a system. Then I had to go find developers."
"So I just started networking. I eventually met with Kenton Hansen, who helped me find the developers, or devs, who then built it at Ennovar. And then after that, when I got Ryan on board, we left Ennovar completely and found devs internal."
RYAN: "That was very important because one of the biggest things about being a startup is that you have to be very, very agile. You have to pivot, pivot, pivot, pivot. So you’re adjusting to the market and growing in the most functional way possible. When we’re doing that, we can’t be outsourcing devs."
How important was that networking early on?
MICHAEL: "It was everything. And to give Wichita credit, we do have a lot of devs who want to help people out. I mean, if you called any dev in town and said, ‘I need help on something,’ they’re going to listen to you. And they’re going to either say, ‘I can’t do it, but he can, or she can,’ or, ‘Yeah, I can do it.’"
"It’s a good ecosystem. I wish it was bigger. I wish the pool was bigger, but we’re not Dallas. We’re not Austin. I mean, we’re not that big. It is what it is, but thank God for remote work."
What’s it like testing something like PinProps in Wichita?
MICHAEL: "I’m really grateful for Wichita, and I’m pretty surprised at Wichita for being really good at what we’ve been testing it for in the marketplace. My biggest worry, and Ryan’s biggest worry — everyone’s biggest worry — was, you know, can Wichita handle a startup testing? Because you’ve got to test. I mean, Uber in San Francisco is not the same Uber when it came Wichita. It was completely different."
RYAN: "The amount of real estate being bought and sold in Wichita is incomparable to Dallas, to Chicago, to one of these big cities."
What made real estate ripe for something like PinProps?
RYAN: "When I started working in real estate, I was blown away by the lack of good technology. I mean, LoopNet has been around since about the ’90s. I don’t know about Michael, but that’s when it hit me. I was like, ‘Oh my God. There’s a huge hole here that needs to be filled.’"
MICHAEL: "My reason was just that I wanted a better product. There’s got to be a better way to do business."
What are some of the successes you’ve experienced so far?
MICHAEL: "We have 375 properties. And we’re still growing. And we’ve got some going up into Michigan and places like that. And we have 78 users."
RYAN: "Those are high-profile users too. I mean, a lot of them are. I can’t say their names because they would want to remain private, but they’re very big figures here in Wichita and the region, as well."
How are investors reacting so far? Have you had any venture capital interest?
MICHAEL: "I started talking to some VCs. They love the vision of what we’re trying to do, but they need to see a little bit more traction."
"But now we’re in Q2. We’re going into a conference in Vegas this May and I have set up some really big meetings there. That will put us a little bit more on the national radar. We have some meetings in Tulsa now that we’re getting into. We’re getting some meetings in Dallas now. So we’re starting to finally figure out how we need to push this thing. Quarter one was, ‘Let’s learn as much as we can.’ Quarter two is still learning, but it’s ‘Let’s push. We’ve got to really grow.’"
A lot of mystique gets wrapped up in VC funding and startup funding in general. What do you think about all that?
MICHAEL: "If you can bootstrap it, bootstrap it. Don’t take money just because you see some company raise $10 million in their Series A. If you don’t need $10 million, don’t take it."
"Yeah, it sounds cool to say you raised $100 million, but you just lost 30 percent of your company. So when you sell it for half a billion dollars, is that really that cool?"
"At the same time, don’t be greedy. I’d rather have 7 percent or 10 percent of a really big pie than 100 percent of a company that’s worth zero because I was too stubborn and prideful to take money."
Any advice to someone sitting where you were a year or two ago using old technology they want to change?
RYAN: "I would say MVP — Minimum Viable Product. As fast as possible. Because chances are, when you think you know what you need, you’re probably wrong. And you need an MVP to test that out. So something doesn’t have to be perfect to push it out to market. That’s where a lot of companies die — when they spend a lot of time trying to perfect a product that’s not what the market wants, or they spend too long perfecting the product, and they’re no longer relevant."
What do you guys think about the talent ecosystem here in Wichita, especially in tech development?
RYAN: "I mean, we have a tremendous amount of talent. Everyone that works with PinProps is legitimately an all-star — and I’m saying that after having seen the people in Dallas and wherever. People who work here are actually really, really good. Part of my criticism for Wichita is that they just need to recognize the great talent that’s here, and utilize them."
MICHAEL: "The threat we have is remote work. Granted, our next dev is probably going to be from Chicago or somewhere like that. But that being said, I think one thing Wichita is lacking is understanding that just because you live in a place that is really cheap to live in, doesn’t mean you pay people as if it’s that way."
In the same vein, what stops you from moving your company elsewhere?
MICHAEL: "Two reasons. One, right now, is tax credits, especially for angel investors who don’t know us personally. You know, if I say, ‘Give me $50,000 or give me $20,000," But your exposure is only $10,000, man, I mean, that’s not that bad of an investment."
"But also just the cost of doing business here is so cheap. If a VC said, ‘I need you to move to Denver,’ I would be like, ‘Dude, look how cheap my rent is. Look how cheap my employees’ cost of living is.’ We don’t need to be in a hub of tech to grow a tech company."
Are there any downsides to being a startup in Wichita?
RYAN: "You have the stigma against you."
MICHAEL: "And you’re also always a step behind everybody else. So if I start a proptech (property technology) company in New York, where the proptech scene kind of started, I’m really good, because I’m talking to the best of the best, getting advice from the best of the best, and my mind is coming from the best of the best in my field."
"If you’re not in those markets where all of that is at, we’re always going to be a step behind. But that’s not Wichita’s fault."
What’s next for PinProps? What should we be keeping an eye out for?
MICHAEL: "Growth beyond Texas is everything. That’s our quarter two vision — let’s get down to Texas as fast as possible, to get a good market fit there."
RYAN: "We also want to really crisp up the product to make it the best experience for our users as possible. And now we know what they want. We’re moving out of the MVP stage, into our 2.0 one."
As PinProps grows, so does Wichita’s legitimacy as an ecosystem for disruptors and entrepreneurs. Keep up with Wichita’s Entrepreneurship Challenge and keep an eye out for more Startup Sitdown Q&As as we explore the wide range of Wichita founders. Contact us if you have anyone you’d like to recommend for future content.