Let’s start today’s article with a quick story
When I got into the real estate industry in 2013, I met one of the most interesting people I had ever met till that point in my life. His name is Amir, and he is a real estate agent in Bangalore.
I first spoke to him over the phone and fixed an appointment to meet him at his office. Little did I realize that his office was nothing by the local tea shop near his house I learned that Amir did not have a real estate agent license because, well, you don’t need a license to be an agent in India. He spent 2 hrs every day posting FAKE listings on all the property portals to generate leads using the old ‘bait and switch’ tactic. There is no equivalent of Multiple Listings Services (or MLS) in India, so property portals are filled with incorrect data about properties (which often don’t exist in real life). All of the data about who properties were available for sale or rent was promptly noted down on his diary, which he religiously carried around with him everywhere he went and never shared with anyone.
His mode of running his business was chaotic, unstructured and had limited touch points with technology. But that didn’t seem to affect his income, as Amir made as much money every month as a highly trained software engineer in the city!
While Amir was an agent, there are multitudes of similar businesses who operate in a similar way – Property managers, paying guest operators, small time real estate developers, and many more.
And while Amir is in India, real estate businesses work in a very similar fashion in countries like Brazil, South Africa, Indonesia, Egypt, and many others.
Selling software to the real estate industry in emerging economies is really different from selling it to developed economies.
And that is going to be the focal point of my write up today – Selling PropTech in Emerging Economies.
For context, TheHouseMonk has active clients in over 15 countries and many of them are in emerging economies. My learnings are a summary of our iterated attempts to find product market fit in different parts of the world
5 important points to keep in mind –
1) Build mobile first solutions
Most users in emerging markets have gone from having NO computing device – Directly into having a smart phone in their pockets. They have completely skipped the desktop/laptop era of computing! These users are really comfortable with mobile apps, but struggle quite a bit with laptops, so having a browser or desktop based application might be difficult to drive mass adoption. Being a desktop based product does not normally work, so start with mobile focussed solutions.
2) Integrated solutions are better than niche apps
In developed countries, I have often noticed that consumers prefer to use multiple apps with clearly defined use cases for each app. In emerging economies, companies prefer an integrated software platform over buying unbundled software. In markets where software adoption is in its infancy, buyers don’t want to talk to multiple vendors – They want to buy everything from 1 company. So you need to make sure you have enough features when going to market.
3) Features vs UX is not a debate. You need both
Most product managers always fight on what’s important – Having a great UX or packing your product with features. Let me settle that debate – You need both, and it’s non negotiable
Remember the earlier point I mentioned about integrated software? You need to have those features to attract and bring the customer to you, but a great UX is non-negotiable as you would otherwise lose the customers you have signed after deployment.
4) Relationships are extremely important
I have noticed that in the US, typically the best product wins irrespective of the relationship between vendor and customer, but this is not the case in emerging markets. Most buyers are not used to ‘self onboarding’ themselves onto software products, and need to speak to (And possibly meet) a sales rep before they buy. It is super important that you train your sales team to speak the local language, and build a relationship with the customers.
It is always good to set up a subsidiary in these local markets to sell to these customers. Establishing partnerships with local businesses who resell your products is another great way to build your presence.
5) Subscription is better than licensing/1-time fee, transaction fee is better than subscription
Pricing is always a challenge, in any part of the world, but in emerging markets, it is trickier. Access to capital is a big problem for most businesses, so getting anyone to pay an upfront fee for, say licensing, is a tough ask. It is always better to go with a subscription fee over licensing.
Ex. If you are an IOT company which provides smart locks, and are looking to sell your products to hotels, it would be better if you charged a monthly fee to them for having provided the locks, vs charging a big 1-time fee upfront.
If you can charge customers once a transaction has happened, that’s even better!
Ex. If you are a marketplace, instead of charging brokers to list their property – see if you can charge a fee every time they get a lead, or every time they get a confirmed booking through your service.
A broader point to keep in mind is that most of these countries and companies are using software or technology for the very first time, so they need extra hand holding and deeper sales cycles to help them adopt technology, and make them truly understand the value that can be delivered.
You might have noticed that selling technology in emerging markets is a lot harder than selling in developed countries, and you might be wondering – Is it even worth it?