13 Feb YBF Success Stories: Equiem Grows from Idea to Proptech Leader in 5 Years
Equiem CEO Gabrielle McMillan on building a company and driving Australia’s ‘Proptech’ revolution
How do you stop an icon from being dated?
This was the initial question that catalysed the journey to Equiem’s birth. In 2011, Lorenz Grollo was grappling with the vacancy risk posed by Rialto’s competition with newer, higher-tech buildings for high value tenants. Rialto needed to become equally as high-tech in order to regenerate itself.
With this mission statement, the idea of creating Equiem as a hyperlocal community platform was developed through a collaboration between Lorenz Grollo of Grollo Property Group, and the York Butter Factory’s Stuart Richardson. By connecting with each individual building occupant rather than tenancy points-of-contacts, Equiem would unlock value equal to, or greater than, the rent collection itself.
Unlike Lorenz and Stuart, Equiem’s CEO Gabrielle McMillan entered the game as neither an expert in property nor tech; instead, she had sharpened her teeth expanding a marketing company. However, she partially credits her success in making the two come together to her unfamiliarity with the industries she was attempting to disrupt, noting that “to really change and disrupt an industry, you need fresh eyes.” Her triumphs at Equiem prove that you don’t need to be an engineer to make it in the tech world, with McMillan even featuring on Business Insider’s 100 Coolest People in Australian Tech.
Equiem’s first platform was, naturally, for the Rialto building, which was launched in March 2012. But in the process of talking to other landlords and managing agents during the development of the platform, it emerged that there was nothing else like it on the market. In fact, Gabrielle describes being floored by the fact that the property industry “hadn’t even contemplated connecting with their customers in this way”, that tenant engagement was still run via singular points-of-contacts on an Excel spreadsheet.
She explains that while other industries spent the 2000s and 2010s getting closer to the customer, property is only just undergoing the same revolution. Dialogue channels with customers are now being opened, and data from customers is used to improve tenancies and add value to existing buildings.
DEVELOPING THE EQUIEM PLATFORM
In describing the late arrival of SaaS to property, McMillan compares her experiences to the famous “faster horses” quote. While industry veterans wanted status quo solutions to better manage and survey their key contacts, her outsider status allowed her to push the property paradigm to pursue Equiem’s model of engaging thousands of tenants via the one portal.
Part of her mission is to involve building owners in end-to-end customer experience for tenants, to make the building owner’s involvement in the tenant’s journey better from the moment tenants get out of bed in the morning. Equiem comes into play by giving building owners better data on which to base multi-million-dollar investment decisions, such as upgrading end-of-trip facilities like showers or bike racks.
Before Equiem, landlords would make such decisions by surveying tenancy representatives, which, given that there is one tenancy representative per company and approximately 60 people per company, accounts for around 5% of their building’s community. Surveying through Equiem’s platform, by contrast, enables landlords to increase their dataset to talk to 70 to 90% of their tenants and gauge what people actually want, thus reducing the risk around investment decisions. Today, Equiem is working with 9 of the 11 large Real Estate Investment Trusts (REITs) to manage over 4.1 million square metres of Premium and A-grade office space, demonstrating the market’s preference for a platform where communication lines between landlords and tenants are opened.
Equiem further revolutionised tenant engagement with the introduction of Community Managers (CMs) for every building. Gabrielle’s big “aha!” moment came when she realised that she was making a community management platform without any Community Managers, which was taking Equiem down the path of being a Facebook-style platform.
What she realised is that she had to leverage Equiem’s point of difference to a social network, which is the hyperlocal community. “Of course it has to be offline as well”, she explains, referring to the physical co-location of the platform’s users. By combining the technology platform with the Community Managers, who are able to build face-to-face relationships and cultivate the community, tenant engagement with the platform increased by 40%.
McMillan acknowledges that introducing CMs was “a big call” that fundamentally changed the dynamics of the business, as Equiem had to quickly learn to integrate up to 50 new employees at a time. Her gamble has clearly paid off. Community Managers were quickly adopted by their present and prospective clients, starting from the first Equiem Community Manager hired in 2014 to the 140 CMs employed by Equiem in 2016. “That part of our business has exploded”, she notes. This hasn’t, however, diluted the company values, with Gabrielle proudly stating that all 140 CMs “are just as Equiem as I am”.
MANAGING SCALING, AND SCALING YOUR MANAGEMENT
Rapid and large scale expansion of a startup can trip up even the most promising companies. In Equiem’s first 12 months, the company launched 3 building platforms in Melbourne, 1 of which was for Rialto. In the 6 months following, another 15 buildings were launched nationally. Gabrielle cites this as a massive learning curve for the company, when they had to put all the processes in place for managing the rollouts, learn to manage client expectations, and take Equiem from a custom Rialto solution to something more repeatable and scalable.
What Equiem got right in scaling their management was a commitment to a consistent company culture, set by the initial core leadership team. Gabrielle reflects on the initial passion and strength of this team, and the way that their initial team building and development created an enduring “platform from which to grow in terms of culture”. This involved getting the initial team to bond and learn to leverage one another’s skills, preparing them for the rapid growth that Equiem would soon face.
A crucial attribute of the Equiem leadership team in scaling effectively was their ability to make quick decisions about taking people on board. Being able to quickly let go of new hires that didn’t fit the company culture, mission, and work ethic, created a healthier work environment to keep moving forward.
This constant pruning, as well as hiring on “attitude rather than aptitude”, ensured Equiem had a broad attitudinal alignment of different people that results in a strong base of like-minded people from which to launch new platforms. While technical proficiency is not totally irrelevant, for Gabrielle the most important thing is to “get the right people on the bus, we can shuffle the seats around, and as long as everyone’s going in the same direction, we’ll be good”.
AUSSIE PROPTECH GOES GLOBAL
These days, however, Gabrielle focuses less on hiring and more on international expansion strategy. After a year of market research and assessment, 2017 will see Equiem expand into the UK, US and New Zealand, with future expansion into parts of Asia on the cards as well.
For Equiem, the biggest factor in timing this push to new markets was how well they could maintain their Australian market presence. “The Australian market is our biggest priority,” McMillan explains. That the company is the market leader in proptech tenant management is beyond doubt, with Equiem currently holding over 30% of the market share for premium and A-grade office real estate. However, the executive team feels that the time is right to pursue new markets as the Australian market is being tended to by a strong and experienced team, and so is not at risk of being compromised by international expansion.
Gabrielle also credits Equiem’s market position to a group of supportive clients “who have really been on the journey with us”, and who now see Equiem’s international success as their success. Alongside this supportive customer base, the push for Equiem to go global has been facilitated by their recently closed second external investment round, which drew on existing investors as well as personal investments from the founders of Aconex, Leigh Jasper and Rob Phillpot.
London’s high real estate density presents a tantalising opportunity to achieve incredible economies of scale relative to the Australian market. The UK capital has four times the square meterage of the Australian market, condensed into the size of Sydney, while at the same time sharing many cultural similarities to the Australian market. Furthermore, many property owners in London have property throughout Europe, a fact that Equiem incorporates into their expansion strategy by conducting trials with select property owners and select buildings to then roll out through their European portfolio into the single market.
This strategy of entering markets in large, high density, English-speaking cities to implement through regional portfolios will likely be employed in Hong Kong and Singapore as a way of expanding into Asia. While this strategy has proved successful in Australia and shows promise for London, cultural and linguistic differences may require some tweaking for Equiem’s strategy in Asian expansion. Equiem will look to partner with companies already established in different countries across Asia in their entry strategy.
One of the most important aspects of Equiem’s model to adapt to the local environment is the Community Manager role. Here, Gabrielle explains that she has considered partnering with concierge or resource management companies, to ensure that the Community Managers put in place can curate the building’s content and atmosphere in a way that matches but also exceeds local needs and expectations.
Expanding into the US will require greater product flexibility from Equiem, as McMillan notes the need for a paradigm shift in US landlords’ perception of their buildings. “They haven’t really been thinking about their building as a community, as full of people, and what you can do when you connect all those people,” she says, highlighting how the Australian market feels “quite ahead” in the way it integrates property, technology, architecture and services. The US premium and A-grade market, meanwhile, might have security guards in the lobby, but rarely high-end concierges or end-of-trip facilities. Connected buildings as communities are beginning to get traction, though, something that Equiem intends to fully take advantage of.
For Gabrielle, the move from security guards, to concierges, and finally to Community Managers, “speaks to where the world is going”. The success of the community managers alongside a SaaS that curates and manages hyperlocal building communities demonstrates the “convergence of macro trends coming to life in a building”, where the emergence of the services economy has become the new competitive advantage for buildings seeking to attract top tenants.
The recent purchase of JAGONAL, an office space leasing platform (https://jagonal.com.au/), has primed Equiem to expand the technical capability of its platform even further. While the initial period after the acquisition will be spent evaluating JAGONAL’s business model and capabilities, there is potential for Equiem to incorporate technologies such as JAGONAL’s 3D visualisation tool into the existing Equiem platform. The end result would be an even more complete end-to-end property platform that can elevate Equiem and JAGONAL to even better outcomes in Australia and overseas.
Equiem’s impressive 30% market penetration has proved that the desire exists among landlords to reconnect with tenants. The combination of offline community managers and an online platform has not only revitalised Rialto, but also breathed life into the entire premium real estate market, connecting Equiem’s 50,000 users with their buildings and with one another.
If you are interested in an Equiem solution for your property, or simply want to find out more about the cool things this Aussie proptech startup is doing, go to http://equiem.com.au/