They say big corporates worry about two guys in a garage usurping their business with innovation. For real estate, an industry with so little innovation, it could be 3 young guys in a Castle.
I speak exclusively with Castle Founder and CEO Max Nussenbaum to get a peek above the ramparts.
What is the problem Castle is trying to solve?
It's really hard to be a landlord.
You can hire a property management company, but they're expensive and you lose all control. DIY is a pain and there are no tools to help you out.
If you want to rent out a room on airbnb, you don't have to know anything; they help you with everything. As a landlord, you're kind of on your own.
What's your solution?
Castle is a web app that helps landlords with all aspects of managing their property. Something that makes it as easy to rent out a property for a week to a year.
Where are you in getting to product/market fit?
We're pre-launch, so it is very early stages.
The plan is to start with an online rent collection service. It is the most compelling feature they (landlords) are willing to pay for right away.
We're launching a closed, private beta where the users have agreed to meet with us on a regular basis.
If all goes well, full launch will follow 2-3 months after that.
How many are you signing up for the Beta?
For the beta, we've got 10 landlords and are hoping for close to 20. We want to keep it small.
We'll on-board them one at a time, spending a few days with each; a hands-on experience for those early customers. It's a nice mutually beneficial trade: on the one hand they are doing us a favour; on the other, they are among the first to ever use this. It's an opportunity for those landlords to have unsurpassed customer service. Their feedback also really influences the product.
Who do you see as your competitors?
Long term, we're gunning for the property management industry. Property Managers who have 10, 20, 30 units are our immediate competitors.
Saying that, apathy is our biggest competitor.
Landlords use 'home grown' systems that they have cobbled together over the years, using spreadsheets and various methods that take more time to use and maintain.
We don't see software companies as competitors as most target the big management companies.
What do you see as your biggest challenges?
The three of us are relatively young and this the first company we're starting ourselves. It's a giant learning experience for all of us.
The challenges I worry about the most are the ones I don't even realise exist. The unknown unknowns, that's what worries me the most.
Who is on the Castle founding team?
I'm Max Nussenbaum and as CEO I look after marketing, sales and design. Scott Lowe is our CTO and Tim Dingman is COO. All three of us are landlords.
How did the three of you meet?
We restored a house together a year ago and took in first tenant this month. It's a 100 year old house in Detroit.
Congratulations! Does restoring a house, being landlords and starting a tech company take its toll?
We're all young, and have no families. We work mostly normal hours, with devs working typical developer hours. Tim is still in his previous job, coming on full time in September (so currently working nights and weekends).
We all live together, so there are no boundaries between work and personal life.
Do you receive any outside help?
We're supported by Venture for America, a post-collegiate fellowship programme that sends people to start-ups in economically-developing cities. They give us lots of support and also have a seed fund. The $30k allows us to pay ourselves next to nothing while we build out the product.
Economically developing? Is that another way of saying Detroit is a city that is struggling?
Detroit is seeing a resurgence. There's a great start-up community in Detroit.
What is innovative about your technology?
Most tenants and landlords communicate primarily over the phone. As a result we're building a mobile-first web app, and focusing communication via text message.
And how does this work in practice?
We link to landlords' and tenants' mobile phone numbers. Everything is automatically applied over text, like late rent payments.
The less frequently the landlords has to log in to our app, the better we are succeeding. They are automatically notified with what is going on.
What future features do you have planned?
There are different possibilities, depending on the feedback we receive.
Big areas of focus are lead creation, background checks, move-in/move-out check-lists, maintenance handling, and preventative maintenance advice.
On that last point, tenants are often reluctant to report small problems. They are worried the landlord will be annoyed with the call or not want to deal with it. Castle will genuinely help solve this problem.
We're also looking at integration with accounting, taxes and the finance side.
One of these will be next after payments.
What's your approach to product management?
Our work practices are pretty informal right now; the three of us are always around each other.
We're big on Trello. Can't speak highly enough about Trello.
As CEO, can you code?
I am not primarily a developer, but I have a bit of those skills. I found that being a little bit of a developer was helpful in a previous job.
Instead of having to go to a development team, I have enough skills to implement a marketing idea. Those skills help me make minor interface tweaks on my own, before being checked over. It's a more collaborative approach, that doesn't compete with the developer's time.
Where did the idea come from?
All of this grew out of this house we've been restoring and becoming landlords ourselves.
We started talking to independent landlords asking for advice on restoring the house and becoming landlords. We didn't really see any good answers, or tools that we loved.
So one thing led to another and we decided on building something ourselves for ourselves.
Right now the main focus is getting product to beta launch. Then building up the product and customer base in beta, in preparation for a launch to the general public, while raising some money to build out the team.
We want to approach fundraising from a position of strength; we want to demonstrate real traction.
Is there anything you need to help at this stage of your business?
The real thing that is the biggest help is talking to as many landlords as we possibly can. I try and talk to at least one landlord a day. Staying close to your customers is super important.
People introducing us to their landlords is very helpful. Our best ideas have come out of those conversations.
If you could wave a magic wand to make one person do something for you, who would it be and what would they do?
Taylor Swift come to our offices, and perform a private concert for our morale; especially my morale.
If Castle becomes wildly successful overnight and you become impossibly wealthy, what would you do next?
I would definitely throw a giant party, invite all my friends and family to come, pay for them to travel, invite all our customers and just celebrate.
Suppose you one day IPO, what would you state in the prospectus as the biggest risk to your business?
In general, the biggest worry is the next up and coming start-up, if I was the head of a public company.
I wouldn't be concerned about giant companies in real estate. The biggest risk is new versions of how we got started.
Thanks Max, is there anything else you want to add?
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