The Depositary, a PropTech software company designed to bring greater transparency to regulatory compliance within the residential property sector. We spoke with the Co-Founder, Kristjan Byfield, discussing their start up approach, challenges faced and their exciting upcoming launch!
What was the inspiration behind The Depositary?
Our most successful PropTech adoptions as an agency have come from an audit process we have operated for nearly a decade now. Each year, around November, I sit down with every member of staff individually and we talk through their experience in the role over the last year. Firstly we look at their interaction with our customers to identify any friction points and then we look at their job efficiency and satisfaction. We then sit down as a whole company and discuss the various points that have arisen and usually pick 2-3 to then focus on. We then set about seeking out the best possible solution for that and that way we find products that meet our needs and expectations. This process, 3 years ago, unanimously highlighted the ‘end of tenancy’ process as a major burden on all fronts: much of the staff work (around 85%) was zero value chasing yet our average file was taking 3 hours of man-hours to complete and, industry research, found many agents to be spending in excess of 4 hours. What is more, tenants found the process convoluted, opaque, frustrating and, even the most complimentary tenants we had (of which I am glad to say we have lots), immediately adopted a ‘now I get ripped off’ mentality the moment this process began. With nothing remotely coming close to touching this process, and after an instant interest to partner from TDS, we made the decision to develop this ourselves.
The Depositary has been completely self-funded to date. Why did you decide the lean/bootstrap start up approach as opposed to looking for investment?
There were several reasons behind this. Firstly, developing a product for a heavily regulated and licensed space meant that we had to partner with at least one licensed scheme in order to build something viable and compatible. We knew that working alongside TDS (or any of the operators for that matter) would inevitably add delays to the process as we worked in harmony to build a viable product and then, later, to get it fully integrated. This was greater than we had imagined and cemented the value of this decision as we otherwise would have spent months on operating costs whilst at a virtual standstill.
Secondly, I have seen all too often that funding a project too early and (especially in my eyes) for too much too early exerts the wrong pressure on the business and makes you try to meet metrics which, at an early stage, should not be the focus- not until you have built the right product. We will look to do a raise in the not too distant future (I would anticipate sometime in 2020) but will only be looking to raise enough to fund what we see as critical plans within that next 12 month period- partly operational/staff growth to meet client demand and then funding for the next products we have planned of which there are at least 3 in early concept stage development. Raising funds, hiring a C Suite, being too ambitious too early exerts immense pressure on the business and founders and, ultimately, can also taking up a huge amount of time and resources that would often be better spent on the product itself.
What are the challenges The Depositary has faced when delivering a compliance product in a licensed area?
There are really three key issues we faced here. Tackling an area of compliance means that you can’t just build an MVP and roll it out and hope for the best whilst fixing things as you go along. A product will either deliver a compliant service or it won’t- there is no halfway mark. As such, we had no choice but to build out a very comprehensive product from day 1 which became far more technical than even we had originally imagined which meant building the platform cost nearly 3 times more than our early estimates (but we are still very happy with what we’ve built for the costs).
Secondly, whilst being compliant, we also understand that every agency has its own processes and idiosyncrasies and these form part of the brand’s identity. Building a system to a ‘best practice’ standard and then expecting agents to transform processes to adopt our product would have made adoption (especially on a larger scale) very hard to achieve. As such, and creating a hugely complex element of the build, we have designed a platform that, whilst being compliant, can adopt the processes and procedures the agents want- not what we think they should be doing.
Thirdly, as touched on earlier, operating in a licensed space meant that our ability to launch a viable & attractive product meant partnering with another company. We have been very lucky that, as a partner to date, TDS has been extremely supportive and accommodating however businesses have their own priorities. There have been times where they have had to focus their efforts elsewhere be that for operational and/or staff changes or major events like the fire they suffered at their HQ. This has ultimately led to periods of time where it has felt we have been ‘sat on our hands’ a bit but that is just part of the process. Whilst, at times, frustrating, in hindsight this has often given us time to look at the product closely and develop a much richer comprehensive product ready for almost an agent of any size when we do finally publicly launch.
What are the opportunities and challenges you face in terms of integrations and collaborations going forward?
Probably the biggest challenge we will face when we do publicly launch is the need to integrate with as many CRM systems as possible as quickly as possible. Duplicated data entry and ‘interface fatigue’ are real challenges for PropTech in the resi space now – whether those burdens are real or perceived. Whilst some CRMs already operate on a fairly ‘open API’ basis that is certainly not the case market wide and especially with some of the largest operators to this agent demographic. Thankfully there have been some exciting developments in this space in recent months with several people creating solutions to this with the likes of Best Agent Marketplace driven by Charlie Wright, the Innovative Collaboration Group (driven by Iain White) and also Tennoc (headed up by Louis Harwood). We know full well that achieving the broadest integrations we can take time and considerable development but we’re sure we will get there over time.
I’m a huge advocate of collaboration within the PropTech space so we will be looking to partner with as many suppliers as we can that we feel will bring value to both the agents who adopt our product and their customers. Excitingly we have already agreed to partner with AnyVan to give tenants the ability to easily book removal services at key touch points through us and we are also in talks with a major deposit alternative as well. Once we launch we will be keen to integrate with inventory providers, cleaning services and utility providers as we will facilitate a lot of these processes for agents. Where possible we will be looking to develop revenue producing partnerships with a view to sharing those earnings with our member agents if not allocating the lion’s share of revenues to them.
Can you talk us through the upcoming launch?
Our current launch plans are to be able to soft launch sometime in July allowing agents across the UK who are TDS members to join up if they wish. However, we know all too well that July-October for many letting agents is peak season and the thought of adopting a new product/process at this late stage would simply not be an option. As such, we intend to fully launch in early October with the intention of using the EA Masters as our springboard event. Thereafter it’s full steam ahead- we hope to onboard at least 400 agency offices in our first year and grow rapidly there onwards. Exciting times ahead indeed!
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