In our Making Markets series, learn from exceptional entrepreneurs about their magic moments in company building and important lessons for shaping the industries that matter today.
Lucas Haldeman started SmartRent in 2017 because, working in property management and leasing for nearly two decades, he saw firsthand how challenging it is to oversee a large number of rental units.
How do you monitor heating and lighting usage, grant access to service workers, allocate and manage parking, check for leaks, and ensure buildings are secure when you manage 50,000 apartments? For that matter, these same challenges exist when managing 100 or 1,000 units. So Lucas set out to build the world’s first all-in-one smart home automation platform for multifamily buildings.
SmartRent is a smart building automation platform for property owners, managers, developers, homebuilders, and residents. With SmartRent, owners can install technology systems in their buildings to manage them from afar. From granting prospective tenants one-time keyless access and remotely managing maintenance visits, to leak detection and monitoring heating, lighting, parking, community WiFi, and security systems, SmartRent solves real challenges for property owners and managers.
SmartRent also makes tenants’ lives easier, giving them control over their living environments via an easy-to-use mobile app. Today, SmartRent is used by some of the world’s largest property owners and managers and is deployed in over 210,000 rental units across the US and Canada.
We recently sat down with Lucas to learn what it took to acquire SmartRent’s first customers and why a collaborative sales culture focused on solving customers’ everyday problems is the key to long-term growth.
You started SmartRent in 2017 and have grown the company incredibly fast, reaching 211,000 units deployed, over 600,000 committed units with a $1.8B revenue opportunity from existing customers alone. What is your customer acquisition secret?
There is no secret sauce to magically acquire customers. The only thing that really works is to stop thinking in terms of “acquiring” them. Instead, you have to provide your target customers with a product that truly makes their experience frictionless and their business more efficient and therefore more productive. If your product solves a big problem it won’t be hard to sell it.
I spent nearly two decades working at the intersection of real estate and tech — as an executive at a large rental property owner-operator, as a founder of a property management company, as a VP at Move.com, and more — before starting SmartRent. You could study customer acquisition or marketing or sales forever, but what’s really valuable is actually walking in your customers’ shoes.
I saw firsthand the huge pain points property owners and managers face, especially in showing properties, scheduling maintenance, monitoring heating and lighting usage, and securing building access. The larger their property portfolios grew, the larger these challenges became.
If you start by building a great product that solves a real problem, and then let potential customers test it through pilots or trials, they will want to buy it.
SmartRent created an entirely new market category: smart home automation for multifamily rental buildings, which previously only existed for single-family homes. How did you convince owners to adopt SmartRent for their properties?
I wouldn’t be so bold as to say we created a new category, because there were previously individual smart home solutions, for HVAC control, security, and keyless entry, for example. But what we did create was a one-stop-shop where property owners and managers could control all the physical aspects of their units from afar via one centralized app.
Almost all large rental companies have long wanted to deploy smart home solutions, they just didn’t have the time or technical expertise to investigate dozens of point solutions and deploy them all separately. We also extended our mobile app to tenants, making it convenient to manage many aspects of their home life, from controlling lighting and heating, to granting friends access to their building, to scheduling maintenance requests.
Our platform solves everyday challenges for both owners and tenants alike, so it was kind of an easy sell. That said, property owners love testing a solution at one property before rolling it out to an entire portfolio, so we agreed to do lots of pilots. We knew once they tried SmartRent they’d love it, and we were right.
What gave you the confidence to leave your job as Chief Technology and Marketing Officer at Colony Starwood Homes to become a founder?
It was not a trivial decision, as it was a fantastic job with a great career trajectory. But I’m an entrepreneur at heart and love building new things from the ground up. The reason I started SmartRent was because I saw the real challenges that all property owners faced and recognized there were no comprehensive solutions that could address or solve these challenges.
For owners, adding smart functionality to rental homes is no longer just a nice-to-have, but a real need. When you’re managing a large number of units, you simply cannot be physically present at every building. And there are over 43 million renters in the US who are coming to expect mobile apps to pay their rent, control their home environments, and interact with landlords.
So I had the confidence to start SmartRent because I saw how technology could solve a real problem for owners, while also making tenants’ lives better.
When deciding what type of sales strategy to adopt, what advice would you give founders who are selling into a greenfield market as you did?
I’m a big believer in consultative sales, where you act more like a trusted advisor to help your potential customers solve a problem, rather than trying to convince them to buy something.
In the beginning, sales was just me talking to all the people I knew in the real estate business about my vision for the product. I went one-by-one to the largest property owners in the US and asked them whether they would use our product and what features they’d like to see in it. We collaborated closely with our early customers to build our initial product.
Once you start hiring salespeople, they need to have a very real understanding of the business you operate in, which is why each rep on our team has an average of 15 years experience selling tech solutions to multifamily real estate companies.
Every industry is different, but to really succeed at sales, take a consultative approach and ensure you understand your customers and the constraints they operate under.
Your 20-year career spans executive and tech roles at high-growth proptech companies, founding a property management business, and working in single-family and multifamily real estate. What did you take away from these various experiences when it came to defining early sales strategy at SmartRent?
I just happened to have worked in engineering, at a proptech company, in property management and leasing, in multifamily real estate, and as a previous founder, and all of those experiences coalesced into my starting SmartRent. But you can start a company very successfully without having the “perfect” blend of previous experience. What matters most is truly understanding your market, and like I said earlier, walking for some time in your customers’ shoes.
To define your early sales strategy, do the opposite; don’t focus on defining a sales strategy in the very beginning. Instead, build a great product to solve a pressing problem for your target customers.
Then, start talking to customers; ask them what they think of your product and clearly demonstrate how it can make their lives easier and generate more profitability for their businesses, and let them try it out. This strategy should land you a few early customers, and then word-of-mouth will help get your sales flywheel spinning.
BCV first invested in SmartRent in 2019 and the company recently completed a successful IPO via a $2.2 billion SPAC deal with Fifth Wall Acquisition Corp. Here’s our take.