Apr 26, 2020

The Real Market With Chris Rising – Ep. 42 Nima Wedlake

In this episode, we have the pleasure of hosting Nima Wedlake, a Principal at Thomvest, specializing in supporting portfolio companies and evaluating new investment opportunities in the realms of financial and real estate technology. With a strong background in management consulting, Nima has provided invaluable guidance to startups and large enterprises alike, offering expertise in go-to-market strategy, product-market fit, and sales forecasting. Having previously worked with esteemed clients in the software and biotech industries during his tenure at ZS Associates, Nima brings a wealth of knowledge and experience to our discussion. Join us as we delve into his insights on the dynamic intersection of finance, real estate, and technology.
Episode Transcript

Chris Rising (00:49): Welcome to the Real Market with Chris Rising. Today I talk with Nima Wedlake of Thomvest Ventures. Thomvest is a VC investor in proptech, in fintech, in cyber security. It’s a really interesting conversation. Nima gives us his point of view of where the business of proptech is headed. Are we going to move a lot of the more difficult things about real estate, from notary to some of the other transactional friction costs, to a digital world?

Chris Rising (01:17): And have a good discussion about some of the shelter from home apps out there that are kind of fun. I really think you’re going to enjoy this podcast with Nima Wedlake.

Chris Rising (01:28): Nima, I’m really glad to have you on the podcast.

Nima Wedlake (01:31): Yeah. Thanks for having me.

Chris Rising (01:33): Could you give a little bit about what Thomvest Ventures does?

Nima Wedlake (01:38): Yeah. Absolutely. As you mentioned, Thomvest is a venture capital fund. We’re based in San Francisco, California. We, on the surface, look and feel like any other venture fund you’d see out in the Bay Area.

Nima Wedlake (01:53): We invest primarily in technology companies, as early stages as possible. Although, our mandate is broad enough where we can invest in later stage opportunities, as well. Our check size scales from $3 million to $10 million, in terms of first check. Our total allocation of company can scale up to $30 million plus, as needed.

Nima Wedlake (02:21): From a focus standpoint, we’re really much focused on investment opportunities across three verticals. One is real estate technology, which I’m sure we’ll spend a lot of time talking about today. Another is financial technology. And then, the third is cyber security.

Nima Wedlake (02:37): Within those three buckets, we have folks on the investment team that are focused on identifying investment opportunities across those verticals.

Nima Wedlake (02:46): And then, one thing I can do, also, is step back and give you a sense of history of the fund. I think this fund’s structure, as well, will help inform how we approach our investing on the real estate side of things.

Nima Wedlake (03:02): Unlike most venture funds, we’re investing the capital of one individual, and that individual’s name is Peter Thompson. Peter’s grandfather founded what’s now Thompson-Reuters. And the Thompson family continues, to this day, to own the majority of that business. Peter’s day to day work revolves around managing the Thompson-Reuters business.

Nima Wedlake (03:29): What he’s done is allocated a portion of his wealth towards venture investing. So, we work closely with Peter whenever we’re dilligencing a potential investment. What’s interesting about the setup is Peter’s investment activities don’t begin and end with venture. He has a team up in Toronto that manages his broader investment portfolio, and we work quite closely with that group, as well.

Nima Wedlake (03:55): In addition to the asset management team, there’s also a real estate investing team that’s based in Dallas, Texas. If you think about the three groups I described, we have the ventures group which I spend time with. The asset management group that looks at credit investment opportunities, as well. And then, the real estate group, which manages a portfolio of several hundred single-family homes across the U.S.

Nima Wedlake (04:20): It’s a really nice set of folks that can be useful, when we’re looking at opportunities in the real estate space.

Chris Rising (04:32): When did real estate, and what’s now known as proptech, which, I don’t know, if that name will stick. I think what it may do is it may evolve more into just technology.

Chris Rising (04:42): When did proptech become a focus for Thomvest?

Nima Wedlake (04:45): I think, about six or seven years ago, we started investing fairly actively in financial technology. What spawned that area of focus was really kind of this observation that we had, as we were meeting with companies in the space, that there was this spike in innovation in financial services. Particularly, technology-driven financial services.

Nima Wedlake (05:15): So, this was in the years following the Great Recession. Saw lots of banks take a more risk-off approach to working with consumers. Partially driven by regulatory changes. That created an area of opportunity for [inaudible 00:05:34] to come and take over the role of a bank, from lots of standpoints, particularly lending.

Nima Wedlake (05:43): So, we had the opportunity to invest in a company called Lending Club at their [inaudible 00:05:50]. That company went on to be a public company. That was a great outcome for the firm. It gave us a first-hand view of how there was this growing tidal wave of consumer demand around digitally enabled financial services. In the Lending Club case, it was personal loans.

Nima Wedlake (06:12): So, we continued investing along that thesis, that increasingly folks would move to online channels to conduct their banking needs. That took lots of shapes and forms over the years. We invested in a company called Cabbage, which is in the small business lending space. We’re investors in a business called Tala, which I describe as microloans in emerging markets, where there’s a complete lack of banking solutions out there for low and middle class folks.

Nima Wedlake (06:54): And then, in the last couple of years, what’s been interesting is we’ve seen that same swell of demand for services around the financing of properties, both residential and commercial. Underwriting a real estate loan is a lot more difficult than underwriting a personal loan. So, I think it took more time for the real estate ecosystem to move online, or to move to software, or adopt software, but it’s happening.

Nima Wedlake (07:30): I’ve seen hundreds of companies founded over the last few years in the real estate space. Particularly, that intersection of real estate and finance, where we focus. And then, I’ve just been quite impressed with the quality of entrepreneurs focusing on the area, as well. So, we decided to move with much more intent into the real estate vertical, probably in the last 24 months.

Chris Rising (08:00): You know what I find interesting about the real estate side? I was an early investor in Funrise, and in a coworking, and all that. But none of it has evolved to the speed or the pace that I thought it was going to evolve. I thought crowdfunding was going to get really big, and it turns out that they all pivoted to eREITs and such.

Chris Rising (08:24): But I think the crux of what really bothers me about real estate is, here we are on April 20th, in 2020, 4/20/20, and I still have to, even though we’re on quarantine and all that, I still have to go down to the office once a week and sign certain real estate documents, because governments are so behind, and we still have to notarize things. It’s frustratingly stupid to me, when I can deposit a $30,000 check from my phone. I can move money. But yet, we can’t get a real estate transaction done without tons and tons of paper on the recording side.

Chris Rising (09:03): Now, I mean, the contracts for residential, they’re moving over. But not everything’s there. What do you think has been the bottleneck? Do you think this mobile work that we’re all doing now will push it over the edge, on the real estate side?

Nima Wedlake (09:18): Yeah. It’s something we spend a lot of time discussing internally, for sure, because as I mentioned, the long trend is around increasingly complex financial services moving to digital channels. And, as I mentioned, real estate is probably the most complicated financial transaction, in many cases.

Nima Wedlake (09:44): It’s hard to innovate within this sector for a variety of reasons. You alluded to the regulatory hurdles that companies need to overcome in order to enable things like digital closing or e-signings. And it’s not just at a national level. It’s, in many cases, on a county by county level.

Nima Wedlake (10:12): There’s this kind of built in limitations on innovation as we wait for all of the constituencies involved in a real estate transaction to get on board. As much as we’d want them to change, a startup can’t necessarily, or a software company can’t necessarily lobby for that change the same way maybe other, more well capitalized constituencies can.

Nima Wedlake (10:43): I think it’s, what’s encouraging, at least, is that, particularly at this moment in time, where we’re in the midst of the COVID-19 pandemic. People are forced to adopt digital tools in a way that we haven’t before, at the scale that we haven’t before. I think this will catalyze change, in a lot of ways, and open the gates for more digitally enabled transactions in real estate. I’m encouraged by that.

Nima Wedlake (11:20): This obviously is a terrible pandemic, but if there are any silver linings, I think this is one of them.

Chris Rising (11:25): You would think that, with county and city, municipal governments who are going to have no money, one of the first things they’re going to do is look at how they can be more efficient with their payroll and their transactional side. I’m not confident, but-

Nima Wedlake (11:40): Absolutely.

Chris Rising (11:41): I’m not confident, but I think the private sector could play a big role there. So, it really just comes down to whether counties and municipal governments are willing to outsource some of this to get this technology in place.

Nima Wedlake (11:55): Yeah, I agree. If you look at the GSEs, as well, kind of some of the work that Fanni has done around allowing desktop valuations for properties under certain price points. Allowing digital closings. I think they are, obviously, important stakeholders on the residential side, at least. And they have expressed a willingness to adopt digital technology, so that’s encouraging.

Chris Rising (12:31): That is very encouraging. I did not know that. You also said that one of the focuses for Thomvest is cyber security, and that’s probably going to be real estate tech, proptech and cyber security meet, is going to be a huge thing.

Chris Rising (12:49): I’ve made the point on my podcast, and on others’ podcast recently, that I think we all have our heads down right now because it’s so awful, this pandemic, that we don’t have to be worried about the security as much. But the reality is, there’s bad actors doing really bad things right now. Getting onto people’s laptops through wifi, and moving money, and doing things like that.

Chris Rising (13:12): When I see Jamie Gorman, the head of Morgan Stanley, say, “Our real estate is going to be much different because everybody will work from home,” I find that really hard to believe. I don’t see companies spending thousands of dollars in someone’s apartment to make that safe. I think there will be certain things you can do, and it’s encrypted via the cloud, and things like that, but not everything. I just don’t think the work from home, from a tech security, is something that companies can feel that comfortable with. Do you agree with that statement, or what do you think?

Nima Wedlake (13:44): Yeah. I agree. I think the reality, though, is that, whether they’re comfortable or not, they’ve had to adjust to this new world where the bulk of a company’s employees are working from home.

Nima Wedlake (13:56): Even across our portfolio, where we have companies with hundreds of employees, they’ve had to, and also, no real kind of internal security teams, the way that enterprise companies are able to hire in CSOs and the teams underneath them. They’ve had to scramble to make sure that, A, their people can continue working productively, but then also, continue working in a secure fashion.

Nima Wedlake (14:26): We’re optimistic that there will be many security focused companies founded that help enable that over the next several years. We have, I think, on the consumer finance side, one thing that does worry us, as more folks move to do digital channels for completing transactions, is that that creates lots of opportunities for phishing.

Nima Wedlake (14:57): It’s this digital collection of very personal information. Social security numbers. Bank account numbers, et cetera. I think, collectively, we need to educate ourselves on making sure that we’re not giving any of that information to malicious third parties. We have a portfolio company, in our cyber security portfolio, called Red Marlin, that helps enterprises solve for that.

Nima Wedlake (15:34): They go across the web and they identify fraudulent sites. Think a website that represents itself as Wells Fargo but is actually a third party that was set up in a foreign country, that only exists to scrape your personal information. They can, at scale, identify and then take down those sites.

Nima Wedlake (16:02): I think we’re going to see companies like Red Marlin, they’re going to be particularly busy over these next few months, as everyone adapts to life online.

Chris Rising (16:14): I agree with you. We’ve spent so much time, as a company, trying to make our people aware of the phishing. And really, my parents, too. They’re in their late 70s. Any time something comes in, please, if they’re asking for any information, call me, because 99.9% are phishing.

Chris Rising (16:37): What do you think the greatest impediment to solving some of the friction points around real estate transactions are still there, and aren’t going to go away any time soon?

Nima Wedlake (16:51): It’s a good question. I think there will always be natural points of friction in the transaction process. A, this is a massive, like, thinking about, from the consumer’s standpoint, this is a massive transaction they’re undertaking. It’s, in many cases, the largest transaction they’ll ever undertake.

Nima Wedlake (17:11): The places we choose to occupy and live in are highly important. These aren’t decisions to be taken lightly. Buying a home isn’t the same as buying toilet paper online. Maybe it’s just as difficult these days. But the decision, given how heterogeneous the housing stock is, the decision takes time.

Nima Wedlake (17:47): And then, from a financing standpoint, I think there are lots of opportunities to both speed up the transaction process, and then, make financing available to more consumers. But the thing we need to be careful about is making sure we do that in a secure way, like we discussed. And then, also, kind of at a macro level, make sure we’re not taking on too much risk as a set of homeowners, and kind of getting into the trouble we got in during the Great Recession.

Nima Wedlake (18:24): So, I think, in general, the areas that we look at, from an investment standpoint are, A, how do we speed up the transaction with technology, in obvious ways? I think, given how much costs there is in the transaction process, even 10% or 15% improvements there, in aggregate, lead to massive business opportunities.

Nima Wedlake (18:50): And then, B, we’re looking at novel approaches to home finance that either distribute risk amongst parties more effectively or make home ownership a viable option for larger groups of folks.

Chris Rising (19:07): A year or two ago, I had had a lot of people on my podcast talking about blockchain, fractionalized ownership. None of those things have seemed to come to pass. Have you all looked at either of those kind of strategies?

Nima Wedlake (19:21): Yeah. We have. We spent, probably around the same time, 2017 into 2018, we spent a lot of time thinking about blockchain as a technology, and a lot of folks identified real estate as an interesting vertical within which to apply that technology.

Nima Wedlake (19:44): Fractionalized ownership is a fascinating concept. I think it’s, again, going back to the heterogeneous nature of the housing market, I think it’s just inherently difficult to create a liquid market in real estate, whether that’s residential or commercial. So, while you can use a technology like blockchain to fractionalize a property, and then, sell those equity strips, creating a robust liquid market where folks can buy and sell those equity strips is something that no technology can solve for. It’s more about generating demand for that sort of asset.

Nima Wedlake (20:37): And I think lots of experiments were done. It was kind of borne out that there isn’t really a robust set of buyers for those equity strips.

Nima Wedlake (20:48): Where we have seen interesting innovation on the fractionalized equity side of things is, instead of more of a peer to peer marketplace that’s being created, there are companies like Unison, Point, and many others that connect home buyers or existing homeowners with institutional sources of capital that are interested in buying an equity strip in their home.

Nima Wedlake (21:21): So, if you think about the Unison case, instead of taking on a second mortgage or a home equity loan, you can sell 10% of your home to, in the Unison case, it’s typically a sovereign wealth fund on the other side of that transaction, and I’d say, sorry, go ahead.

Chris Rising (21:43): Do they have [crosstalk 00:21:44] rights, though?

Nima Wedlake (21:46): They don’t. They have, if you think about what a sovereign wealth fund is solving for when they’re buying strips of U.S. residential real estate, it’s almost like a hedge against CPI, a hedge against inflation. They don’t have liquidity requirements in the same way you and I do. So, they can be kind of silent partners in a residential real estate transaction in a really interesting, unique way.

Nima Wedlake (22:20): I think what Unison has done really well is connecting those two parties, the homeowner and the fund that has that sort of return profile in mind.

Chris Rising (22:31): That’s pretty interesting. Wow. So, let me ask you this. You look at this awful pandemic we’re going through. Here we are mid, end of April. I have to imagine that the entrepreneurs of the world are out there, busy pitching and coming up with ideas about how to solve problems. Have you seen any ideas that are kind of specific to the work from home, the mobile workforce, that are exciting? And if you can talk maybe just conceptually about what they might be.

Chris Rising (23:03): I just don’t think that entrepreneurs are the type, that even though we’re in this horrible period, that they just stop thinking and working. What’s your impression?

Nima Wedlake (23:13): Are you looking for company ideas that kind of take advantage of this work from home environment that we’re in, or are you looking for how folks have adapted to work from home?

Chris Rising (23:30): I would say both. Obviously, the biggest example is Zoom. I was on a call earlier this morning. I was like, you know, for the last four years, we’ve been sending out Zoom meetings, trying to get people to do video, and nobody would. They’d all just call in.

Chris Rising (23:46): They do it too much now. Now I can’t, people have, not do a Zoom call. So, Zoom would be one example. But there’s a lot of others. We were screwing around with one called Mural. It’s kind of a digital whiteboard. But found it wasn’t exactly what we needed. But there are things that existed. But I have to imagine people had some premonitions or have some ideas. So, I would say it’s both sides of the coin that you were just talking about there. What do we do working from home in the short term? And then, what are longer term strategies in a mobile workforce?

Nima Wedlake (24:16): Yeah. Absolutely. I would say, on the mobile workforce side, we’ve seen a large number of companies that are trying to enable efficient work from home routines. One way I’ve described it before is the kind of Uberification of work, and that’s not a great term. But if you think about what makes Uber interesting from a driver’s standpoint is they can kind of turn on and turn off their ability to work based on their personal schedules, and they don’t need to show up to an office. There’s this dispersion of workers that’s really interesting.

Nima Wedlake (25:14): We’ve seen similar models across some areas of financial services. There was a really interesting business in the life insurance space that was acquired last year by Prudential called Assurance. One of their innovations was around building tools for a network of third party agents that could plug in and start selling life insurance policies.

Nima Wedlake (25:49): So, they would log into their Assurance platform. They would set up a dialer, and they could start selling policies. They would have all the information around a policy application show up on their screen. And they could sell from the comfort of their own. That business scaled incredibly rapidly, both on the number of agents on their platform side of things, and then, also, the number of policies that they were binding. It was a multi-billion dollar acquisition for a company that was founded, I think, only four or five years ago.

Nima Wedlake (26:35): Really interesting innovation around how, what a future workforce looks like. And then, I think we’ll see similar stuff on the real estate side, as well. Agents becoming their own, real estate agents becoming their own enterprises, in a sense. We’ve seen a number of companies that I had described as brokerages in a box, where you don’t need to hang your license on the Remax flag, or the Better Homes flag, or the Compass flag. You can work with a technology company and plug and play, really.

Nima Wedlake (27:24): So, there’s a company called Side that is probably the largest in this brokerages sort of space. And then, if you think about the transaction process, lots of companies that are in that digitization of the transaction space that have a network of notaries, for instance, where you can do FaceTime notary, and it’s this …

Chris Rising (27:49): That would make my life so much easier.

Nima Wedlake (27:52): Yeah. Exactly.

Chris Rising (27:54): That is, to me, the biggest frustration, is the notary. And it’s all run state by state. Even down to county by county. So, it’s a hard thing to make it uniform across the country, but I sure wish they would.

Nima Wedlake (28:07): Yeah. I agree.

Chris Rising (28:09): How did Thomvest react, overall, as a company, to the work from home, the safe at home ordinances in San Francisco? Was it a shock to the system for you all, or had your company operated in a way that this was not a big deal?

Nima Wedlake (28:27): I would say it was a relatively smooth transition. We don’t have a massive investment team. There are about 10 folks in the San Francisco office. The nature of the work we do requires us to be out of the office quite often. Meeting with companies. Meeting with different stakeholders in the venture ecosystem.

Nima Wedlake (28:55): And then, also, we had started adopting Zoom as a communication tool before shelter in place and the pandemic hit our shores. So, from that perspective, it was fine. I think the thing we’re trying to figure out now, to be frank, is how to invest in companies, knowing that we may never be able to meet a founding team or an executive team in person, or never spend time in their office. We’re never going to build that deep, personal relationship that you can’t necessarily achieve over Zoom.

Nima Wedlake (29:39): We have several prospective investments we’re in process with. We haven’t made an investment yet, in this post-COVID world. But I think that’s one of the discussions we have pretty frequently, is can we get comfortable making an investment, writing a check, when we haven’t met a team in person?

Chris Rising (30:01): I just don’t think it’s possible.

Nima Wedlake (30:02): I think it’s a question a lot of funds are grappling.

Chris Rising (30:04): I don’t think it’s possible.

Nima Wedlake (30:07): That might be true. Yeah.

Chris Rising (30:09): What I think may happen, and I feel pretty strongly that if someone’s going to give 50 million, 25 million, 10 million to me in an investment, they’re going to want to shake my hand, and know who I am, and know. But I think the introductory part that has always been, for me, of, fly to New York. Fly to Montreal. Fly to Chicago. Go meet with these funds. Just to have them say, “Oh, it was good to meet you. Let us know if something good happens,” Or, “We’re not interested.”

Chris Rising (30:38): Those will, I hope all become Zoom calls, because the cost is hard to justify, and there’s an easier way to have first meetings. I think that the reigns of power are getting transferred to Gen X and millennials right now, and the boomer way of doing things, outside of the fact that we have a 73 year old president, a 77 year old guy running against him, I think every other company, you’re seeing this transfer in leadership, and it’s going to happen really fast, coming out of this.

Chris Rising (31:13): So, I think, people say, “How can I get a few things better?” But I just don’t think, as a human being, we’re at that point of, someone could argue back, “Well, people trade on Etrade all the time.” But the investments you’re making and the ones I’m making, there’s not as much public information. There’s a lot of gut feel to it. There’s a lot of just the assumptions you make. They have to feel good. There’s a lot of intuition to it. Maybe I’m showing I’m a Gen X-er more than a millennial or a Gen Z, because there’s a lot of people who think that AI will take away any sort of gut feeling whatsoever. But things don’t change that much that quickly. That’s my take.

Nima Wedlake (31:53): I think you’re kind of capturing the heart of our internal discussions, here at Thomvest. I completely agree that that first meeting, super efficient to do it over Zoom. An entrepreneur can share his screen, and we can run through his or her pitch deck quickly and efficiently. I think it also is an efficient method for, during the data gather process or the diligence process. We can schedule back to back meetings with every executive on a team, across engineering, marketing, product, sales. I’ve found that process to be quite efficient when done over Zoom in a three-hour block.

Nima Wedlake (32:40): But the gut piece is the thing that I think we haven’t gotten over the hump on. There is value in going to a company’s office and getting a sense of the culture, and sharing a beer with the team, and really getting a sense of how they think about the company building process, because it is a multi-year journey. And then, also, we’re making an investment, and it’ll be a multi-year relationship, as well, we have with the company.

Nima Wedlake (33:15): I think the kind of human element of things is something we’re still trying to get over. I think, ultimately, we’ll have to, unless we want to close up shop. We’ll get there, and I think time will tell if we can truly replicate the investment process digitally.

Chris Rising (33:34): There was a lot in what you said about meeting people, about team culture that, as a big office investor, makes me feel good that there is still going to be a need for office. It may be different, just like the office of the ’70s and ’80s is very different from the office of 2020.

Chris Rising (33:51): I still think that a company is made up of people. Those people have a culture. That culture is what drives a company to be profitable. You’ve got to have a headquarters to do it. It doesn’t mean you can’t have a distributed workforce. It doesn’t mean you can’t work on different in-person hours. I think those things are all going to change, and they’ll be led by leaders who are Gen X and millennials saying, “We can do this better and more efficiently.” But you still need to have a place where the culture is, the same way sports teams do, and big companies do. The small companies need that, as well.

Chris Rising (34:21): Let me ask you this, because I always ask, you and your company from San Francisco. You’ve mentioned Dallas. You’ve mentioned in Canada. Just what’s some of the basic infrastructure that you all use, from e-mail to project management? Are you guys Slack users? How do you make the company work, both from a remote basis as well as in person basis?

Nima Wedlake (34:49): We have a mix of tools we utilize, both that have been built in house, and then, you know, software tools that we license, like Slack. Like Outlook for e-mail. We use, I would say, e-mail primarily, as a communication tool, just because a lot of our communications are external in nature.

Nima Wedlake (35:17): And then, in terms of tools we’ve built in house, I would say three big areas, and each have been quite useful. and I can also go into some of our rationale for why we build tools in house versus outsourcing or licensing.

Nima Wedlake (35:34): Number one, we have a portfolio of 30-plus companies, all at various stages. One thing we’ve been attempting to do is establish a better pace of, I would describe it maybe broadly as data collection, across the portfolio, and that takes the form primarily of company financials and financial plans.

Nima Wedlake (36:02): So, we’ve built a system that can take in quarterly P&L, and then, input it into a database, and then, visualize that P&L across a variety of analyses in a pretty efficient way. So, now we have this very up to date view on how a company is doing. How they’re doing relative to their 2020 forecast, which, we’re in the midst of lots of replannings as a result of COVID. But it gives us great visibility into portfolio company health.

Nima Wedlake (36:43): The second big tool we’ve built in house is one that we use to track our own performance. What’s our ROE look like at a portfolio level? Can we slice and dice our [inaudible 00:36:57] by vertical fintech or cyber security, for instance? What are our goals for the year, both at a personal level and at the firm level. We try to capture that all in one system.

Nima Wedlake (37:10): And then, the third system that we’ve developed is effectively a CRM. It’s a tool we use for managing all our interactions with prospective investments. The reason we built that, as opposed to using something off the shelf like Sales Force is because if you think about the data associated with private companies these days, over the last five years there’s been really an explosion of data available that we can access programmatically, through services like Crunchbase or Pitchbook, and then, aggregate that data.

Nima Wedlake (37:51): So, in our CRM, we have, gosh, I would say a couple hundred thousand companies that exist in the CRM, and whose data is kind of updated on an ongoing basis. That includes who their investors are, where the company is located, how employees do they have? What vertical they’re in, whether it’s fintech, real estate, et cetera.

Nima Wedlake (38:19): So, we have all this data that we can use before ever interacting with a company in order to inform who should we go out and speak to. So, that’s become quite an effective tool for prospecting I would say. For example, the CRM can proactively identify for us a really interesting real estate technology company founded by an entrepreneur with a great track record that has investors who we respect, and say, “Hey, Nima, you should go out and talk to company X for these reasons, based on public data signals.”

Nima Wedlake (38:58): I would say that’s made my work, as an investor, much more efficient. I have a target list of companies that either the system has identified, or I have identified and then input into the system, that we manage via the CRM.

Chris Rising (39:20): And it wasn’t an endless pit of money to get that in place. I think that, every time I try to create a CRM that specialized, it’s been more expensive than just using something off the shelf and doing the best to tailor it. Sounds like the only success story I’ve ever heard.

Nima Wedlake (39:38): I wouldn’t call it a success story yet. It’s still very much a work in progress. I would say it’s taken more time to get the product to a place that we think we’re getting real value out of it. Just like any software project, everything takes twice as long and is twice as expensive as you’d hope it would be.

Nima Wedlake (40:00): We started building the CRM in 2018, and we’re still kind of building new features in partnership with a external development group. What’s been interesting, I think, in the last couple years, is the rise of these low code, no code application builders. One of the most prominent ones right now is a tool called Airtable. In Airtable, you can mimic a lot of the functionality that we developed in the CRM and you don’t need a computer science degree in order to do so.

Nima Wedlake (40:44): So, I think the time to market, let’s call it, for tools like CRMs that are custom in nature, is shortening pretty dramatically. I’m actually, from a software philosophy standpoint, I think more and more tools like CRM will be built in house, and kind of bespoke in the sense that it meets the particular needs of that company or the industry they’re in. And they’ll be built by non technical folks, because it’ll be like using Excel, in a sense. It’ll be dumbed down enough for us non-engineers to build.

Chris Rising (41:36): That’s terrific. You’ve got, in the world of proptech, there’s been newer funds that have evolved over the last four or five years. I know the team at Fifth Wall pretty well. I know Metarop. But how collegial is the D.C. world around proptech? Has it evolved the way a lot of the VCs off Sanghill Road evolved back in the ’80s, and ’90s, and 2000s, or is it more predatory, in your point of view?

Nima Wedlake (42:10): I think it’s become quite collegial, which is great. Obviously, the Fifth Wall folks, the Metaprop folks have done a great job building real estate focused funds. I would say, though, most investors in the real estate vertical are similar to us. More generalist in nature and recognize the growing opportunity within real estate technology, and started spending some real time understanding the space.

Nima Wedlake (42:46): So, both across the verticalized funds, and then, the generalists funds. There’s a high degree of collaboration. Sadly, it was one of the, I guess, maybe not sadly, maybe fortunately, one of the last days before shelter in place was ordered in San Francisco, I hosted a dinner of real estate technology investors in San Francisco, at a restaurant called Cocare, which is an incredible Greek restaurant in San Francisco. I miss not being able to go there, but fortunately, I had that one last supper, I guess.

Nima Wedlake (43:29): I think bringing together folks in the real estate vertical and investors in the real estate vertical is quite important, and I think we all are working pretty collaboratively. What’s cool to see is there are lots of kind of, real estate is this massive asset class. So, different investors have different focuses within real estate. So, I spend a lot of time with the brick and mortar ventures folks, and they are very much a construction technology focused fund. So, lots of learning being shared across funds, as well.

Chris Rising (44:13): Let me ask you a little more personal question. You are a millennial who’s in shelter in place. No kids. Not married. How are you keeping your social life? Is there any technology we should be aware of? I hate to think you’re just sitting around staring at a computer screen the whole time. How’s your shelter in place life going, and is there any software out there we should know about?

Nima Wedlake (44:37): I would say it is going. It’s maybe less ideal than I would like it to be. One thing that I’m sure a lot of your listeners have done, that I’ve been fortunate to do a few times, is the Zoom happy hours. Although, I will say it’s not the same as a normal Friday happy hour.

Nima Wedlake (45:03): And then, in terms of other software tools, a couple things. One, there is lots of Zoom-like products that I think are more social in nature. Snapchat actually has a desktop video conferencing solution that I would say is a little bit more fun than Zoom, and it allows you to throw on filters and whatnot.

Nima Wedlake (45:29): There’s a app called Houseparty that allows you to play games as you FaceTime with friends, which is slightly better than Zoom for socializing. And then, the other thing, prior to shelter in place, I really loved playing board games with friends. One thing we’ve done is we’ve recreated that experience by playing digital versions of board games. Settlers of Catan is a great strategy board game, and they have an app, and iPad and iPhone app, and I think they actually have a desktop app, as well, but, yeah.

Chris Rising (46:15): They do. Yeah. I can’t tell you why I know that, but I do.

Nima Wedlake (46:19): I would say, it is extremely buggy. It’s not the best built application. But once it starts working, it is fun, and it gets the job done, in terms of being able to socialize.

Chris Rising (46:33): I’ve got a couple of group of friends, and we’ve been doing pokerstars.net, and then, have the Zoom open next to it, and just play poker for a couple of hours. Play a little Texas Hold ‘Em and talk at each other. That’s [crosstalk 00:46:50].

Nima Wedlake (46:51): I’ve noticed it’s harder to talk trash on Zoom than it is in person, so that kind of ruins it, in some ways.

Chris Rising (46:58): That’s right. I know you’re also, both Thomvest and yourself are on Twitter. What’s your Twitter handle, so the audience will know it?

Nima Wedlake (47:10): My Twitter handle is nimajw. N-I-M-A-J-W.

Chris Rising (47:14): Terrific. I’ve always liked Twitter, but I’ve been amazed, in this stay at home world that we’re in now, some of the funny and really cool things. Some of the toxic things that are on there, but some of the funny and cool things.

Chris Rising (47:30): One of the things that seems to be popping out, at least on my Twitter feed, is all the memes making fun of the Silicon Valley, and San Francisco, and what life was like, going to parties before and all. Is there anything on Twitter, any people you like to follow, you think are fun, or anything you’ve learned over Twitter over the last month?

Nima Wedlake (47:50): There’s obviously been, I would say most of my Twitter feed is COVID-19 related these days, and lots of debates amongst people that are probably not qualified to have them, about different treatments and their effectiveness.

Nima Wedlake (48:06): I would say one account that, it’s an Instagram account that I really like, it’s a comedian named Trevor Wallace. He does really good videos that are kind of making light of situation that we’re in, and some of the struggles of shelter in place. I would recommend that one.

Chris Rising (48:30): Terrific. Well, Nima, I really enjoyed the conversation. I think it’s really great to hear your perspective. I think one of the biggest thing that’s going to come out of this pandemic and the shelter in place is that any thought that a company couldn’t digitize or couldn’t be mobile is gone, and you’re going to have new CEOs who, he or she, and I think there’ll be a lot more shes, are going to say, “How can we be most effective?”

Chris Rising (48:57): I think proptech and cyber security and fintech are going to be areas of growth. I really wish you luck in this, and I really hope we’ll be able to have you come back and tell us about some great technology you will have not only invested in but have been able to exit from over the next year or so. Thank you so much for being on the podcast.

Nima Wedlake (49:17): Yeah. Absolutely. Thank you for the opportunity. It was great chatting, and when this is all over, maybe we’ll grab a beer in person.

Chris Rising (49:24): I would love to. We’ll do it up there on King Street, so I can walk around Mission Bay.

Nima Wedlake (49:29): Yeah. Sounds good.

Chris Rising (49:29): And to all of our listeners, please subscribe. You can go to any of the podcasting platforms like Apple Podcasts and follow us. And please be sure to follow me on Twitter @chrisrising. And you can also find me on Instagram @chrisrising as well.

Chris Rising (49:45): We really appreciate you listening during this time. I know it’s been difficult for a lot of people, and hopefully these podcasts are giving you a little bit of information about the world and what it’s going to look like when we get out of this pandemic. Thank you for listening to the Real Market with Chris Rising.

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Rising Realty Partners

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