Deidre Woollard: Hello, real estate investors. If you've watched any of my spotlights, you know I love bringing new companies that are emerging to solve some of the issues that are facing real estate investors. Lessen is one of those companies. I first covered them over the summer when they raised a $35 million funding round. Lessen is interesting because it specifically designed for real estate investors with multiple properties. Its technology is designed to serve as one-stop platform for managing projects across multiple properties in multiple portfolios. What's interesting is Lessen doesn't just connect owners and contractors. It provides access for property cleaning, laundry, maintenance, all the kinds of things that single-family and multi-family property owners might be dealing with. Their new CTO is Chris Bee. He's got a deep background in getting things done. At Zillow, he led teams focused on real estate search. He also worked at Uber and Amazon. Welcome.
Chris Bee: Thanks for having me. I'm excited to be here.
Deidre Woollard: This is a new role for you with a smaller company, you've worked with the giants. What led you to Lessen?
Chris Bee: Yeah, that's a great question. I answer that quite a bit actually. The truth is I've been considering start-ups for a long time. I talked to a lot over the years, especially within San Francisco. I would have coffee chats with founders all the time. Lessen was the first one I came across I thought really had the potential to redefine an entire industry and create something that really hasn't been done before. Property services is a very large TAM in the United States and even larger when you go globally, and there's a big need for technology and property services. It's historically been more of an under-technologized area, and there's no de facto solution in property services that's technology-based. There are services out there obviously and platforms and software that is available but ends up being a little bit of a hodgepodge of listing services, word of mouth, some lead gen services, and then some tech platforms that help professional service grows, do their job, but nothing that's connecting both sides of the operation's marketplace and customer side all in one.
Deidre Woollard: Yeah. You mentioned word of mouth. I think that is how most rental property investors find any service provider these days. There's a little bit of looking at certain rankings, but it still is mostly like, I know a guy who does that network. Why is it so hard to solve this problem?
Chris Bee: Yeah, it's interesting. I think from an investor perspective, a lot of investors underestimate the complexity associated with property services and how time-consuming a lot of the work can be. Especially, smaller first-time investors don't realize the amount of effort and capital required a lot of times to maintain or renovate a property or keep it up to the state that they're trying to reach, or need to resell, or to rent it, or what have you. There's really no programmatic solution to this at current. Obviously, it's a world building and solving for. But at current, there's just a lot of small, fragmented players that are in each market reliability and consistency can be a huge issue, and it typically requires a lot of hands-on in-market management to complete the work that needs to be done. Frankly, the investors are typically non-experts in property services. There's of course exceptions, but broadly speaking, it's not usually their background in forte, and most are more finance and investment-focused, which makes sense, of course. It leaves this really big gap of need where property services becomes a big part of the equation that there needs to be a better solutions for. That's really what Lessen is all about.
Deidre Woollard: Well, I think one of the things that is particularly problematic for a lot of people is, if you're trying to manage properties remotely and you're not there hands on. One of the things that I'm seeing more on the construction side especially has been these webcams, photo, video, this idea of being able to track things now in real-time and multimedia partly because we all have a much more powerful computer on our phones. Is that something that you and the team at Lessen are also taking advantage of?
Chris Bee: Yeah, absolutely. We're working on some foundational technology right now that is going to be powered by some more emerging and newer technologies for real-time video and for just photo and video annotation and eventually get into the world of computer vision, where we can start to understand a lot of what the capture devices are telling us out in the field from a programmatic and algebraic perspective. Some of that's always going to require some human annotation, but just being able to remotely do some of that versus having to have somebody real time in the field. Every single property for every single repair or every single renovation job is where we see a lot of efficiency for the technology realm.
Deidre Woollard: Makes me think about digital twins and things like that. Do sensors play a role in what you're doing as well?
Chris Bee: We've talked about it. It's not something we're actively working on now, but there is definitely a world where that can start to play into the equation. I think the first step in that arena is really more around checkin and checkout and having more of a location awareness aspect to it both from a job tracking perspective and then also from just efficiency perspective and knowing more about the jobs that are being done at the time associated with that and that thing.
Deidre Woollard: I think that's one of the biggest inefficiencies in maintenance and repair, is timing. I think any one of us has ever had to wait for someone to show up for job certainly or also finished the job. How does Lessen start looking at that, preparing people for how long a job might take and taking out some of those little inefficiencies?
Chris Bee: Yeah, there's a lot there. Foundationally, Lessen is combining the operational expertise that we have with technology. There's a lot of quality service professionals out there, some that use off-the-shelf technology to power the businesses, but no one's quite build the technology platform that's purpose-built with custom tools to handle scheduling assignment, project management, remote quality control, and billing and payments, and scheduling all the aspects that go into really providing us and then experience for the specific types of customers we're serving. We look at it as the technology creates efficiencies within our ability to get work done from a more routine perspective and being able to scale our operations and then, of course, we turn that on to our customers in the sense of being able to handle the type of scale and expectations they have as well as grow with them and grow with the type of portfolios that they're building and/or customer saying that we're going into that has more and more folks coming into it on a regular basis.
Deidre Woollard: Interesting. You're funding round was led by Fifth Wall. I've been watching them for a couple of years. They're making big investments in real estate tech and really revolutionize real estate tech. How has your experience been working with their team?
Chris Bee: Yeah. They've been a great partner for us. They brought a lot of insights into the broader market dynamics and other emerging real estate technology that's coming into the forefront. There's a lot of synergy in the space that they're helping create, honestly. They've made some great interest to customers for us and really just been overall a great partner to work with. Like I said, I think they have some great insights and forward-looking perspective on where a lot of technology and space is headed.
Deidre Woollard: Interesting. What are you seeing as far as delays? I've been hearing so many stories this year about delays in getting contractors to fix things, certainly supply chain issues. What are you seeing, and is there any end in sight to those two problems; one labor and the other materials?
Chris Bee: Yeah, there's no doubt. There are some labor and material constraints in property services broadly across all markets and all cities. From our perspective, we believe there's a couple of things that we do that are unique that help us address that, and then I think there's just some foundational next steps that we're looking to take to really meet the next level demand. The more near-term things providing a really high-quality scope of work that saves a lot of service professionals that sales and marketing and customer development time is very valuable. Being able to pay very quickly and have fast payments is another really big part of what we offer to the service growth community. Then having a great technology platform to stream the workflow, nudge people in the right directions, send the right notifications, help with scheduling, help with routing, and all that being part of what we offer being a Lessen service professional. That has helped. It doesn't solve every problem, but does help us reach some efficiencies with the folks we have and also attract new folks in that are in the trades. But the next level of scale is really about starting to attract new talent into the trades from the ground up. We have a lot of friends around friendship programs and training in the right onboarding and bringing people into this world to earn a living and to provide for their families, and to hopefully build wealth and build generational wealth on top of our platform is where we plan to head and where we are headed.
Deidre Woollard: I love that. You mentioned something I want to circle back on, which is scope of work, because I interviewed a contractor recently and he was talking about one of the biggest problems is that a lot of contractors aren't providing a scope of work and also individual investors don't really understand what the scope of work is and don't know how to provide one for the contractor. There's this weird communication disconnect. Is that something that you've seen as well?
Chris Bee: There definitely can be, and that's where our service comes in a lot, is we have professionals that are on staff that are part of Lessen's company that do a lot of the work, that do a lot of initial scoping and understanding of jobs before it's sent off to contractors or vendors to do the work. That's really a lot of the value we provide is in that translation layer, if you will, from what the client thinks they need to what actually gets done out in field, and that's a big part of our platform really. It's the fact that we're combining these two worlds, technology and operations, together and actually getting the work done and taking responsibility for it.
Deidre Woollard: Interesting. Whenever I talk to investors and property managers, I feel like I always circle back to plumbing. This is just perhaps me, perhaps just too many experiences I've had. I'd see it as one of the biggest pin points. Are you seeing that? Is it plumbing, is it electrical? What is Lessen seeing on requests for services?
Chris Bee: Yeah. There's a blend across our service portfolio. A lot of it depends on the type of job, it depends on the segment, it depends on some segment. But broadly in the renovations just looking at that, there's equal demand, it depends on the home, but there is a pretty good balance between dry wall and wall repair work, flooring and carpet, or hardwood flooring. There is plumbing, of course, as part of that, electrical as part of that. It depends on the home. But on the whole, I think we tend to find a lot of more GC style, handyman style, people that are really able to do multiple things. That's how we attack some of the plumbing work as well because some of these relatively routine, like plumbing does rank high in terms of frequency, they're often componentry for repairs that need to be done and can be routinized, and folks can be trained to do that work even if it's not their direct skill set or background.
Deidre Woollard: That makes sense. I know you can't talk too much about Lessen's client list, but is it mostly REITs and large scale companies? What's the proportion there?
Chris Bee: Yeah. A significant portion is larger institutional investors. But the platform we're building is really for services of all customer types. In the end, once a job is scoped into our process and into our platform, the work in the process looks relatively similar, regardless of who the customer type is. Whether it's a large institutional investor, whether it's a small individual investor runs a handful of properties or eventually into the consumer space. The work, once it's kicked off and a scope is created and workforce has been created, doesn't look that different. That's really where a lot of our skill comes in because we're building a lot of expertise and capability with the initial segments we're working within. But the platform is being built for all the segments that we know we need properties and this is working.
Deidre Woollard: I think that's one of the things that's really fascinating right now, is that you've got managing multi-family buildings, but you've also got these large single-family rental portfolios that are springing up all around the country and they are distributed. How is that creating a new challenge for these investors that may have thousands of homes that they need to keep track of?
Chris Bee: There's is an SFR and MFR. There were some similarities, there were some differences. Again, when you get to the point of a job is actually created and started, they start to look pretty similar. But there's a lot of differences upstream from that in terms of how the job originates, whether it comes from a resident, whether it comes from a maintenance superintendent, whether it comes from the investor, the asset owner who needs work done and needs renovation done. From the tech perspective, a lot of times will change the way the scope is created. Whether it's done with the scoping tool that we ingest or it's done through a manual upload of a scope that is given to us, and the maintenance side of the world, there's integrations with a lot of the property management systems and resident portals that are out there that are already in use and a lot of big multi-family companies. It's really the job origination that differs a little bit. But again, once it gets into the process and we kick things off, they start to look very similar. Assuming you're looking at maintenance category versus a renovation category versus a cleaning job, they're obviously different. But the type of customer, if you look at it matrix, matters less once the job is actually started.
Deidre Woollard: I'm assuming you were brought in to help Lessen scale since you've got that deep background. What challenges do you see that the company faces as it tries to do that?
Chris Bee: There's a few. Like any company, hiring is a huge part of scaling and growing the company. We're building our culture as well. We are a new company which is a very exciting place to be in this high-growth mode and really having all the best kinds of problems. Things are going well and we're building an amazing team and solving real problems for customers. But that does come with a lot of responsibility where we're setting expectations to investors, we're setting expectations to our customers. So far we've been delivering and exceeding expectations in those cases. We're unlocking some real value in the world in doing that. We're running into the fire that is the case for a lot of our customers and really providing a lot of value back to them that they can see is tangible and helping them achieve the results that they're aiming towards. Yeah, we have a lot of the common problems, I would say, of any high-growth company. But I would say they're the big problems you want to deal with. It's been exciting. We've really been building a really strong team and culture and every week new people are joining and it's just been a really fun place to work.
Deidre Woollard: Being on the rocketship is always exciting. You've worked at another rocket chip, Zillow, which expanded rapidly. Now you're at Lessen. Clearly you must care about real estate technology. So much has happened in the past years and real estate really seems to be accelerating, so much venture capital is in the area. What innovations are you most excited about?
Chris Bee: There's quite a few. There's really a range of new innovations and technologies. Some of them are somewhat simplistic in the sense that real estate, by and large as category is a little behind in terms of technology compared to other industries if you compare it to transportation or commerce or energy maybe. We have this opportunity really to just build what technology is capable of in the modern era, because there's a lot of advancements just in the ability to do somewhat basic things that have changed quite a bit in the last year or even 10 years. More specifically, some of the areas that I think where some of that can be applied. There is a lot in the whole transaction process with regards to mortgages, regards to closing, regards to creative financing for first-time home buyers or for any home buyers in that regard. Fractional ownership, there's a few companies that are working in that space. There's a lot of interesting configurations using technology to empower that. But then as you move forward, I think property services is obviously the area that has a lot of opportunity to modernize. That is in the way they're scoped, the way they're signed, the way they're performed. Some of the things that we're starting to build towards and now driven marketplace matching, real-time video and eventually computer vision applications that could start to assess quality, streamlining supply chain. There's all these areas that technology can help. Some of which are, I don't want to say straightforward but more industry problems and others are more advanced industry problems. But there's a lot of, say, low-hanging fruit and there's a lot of higher hanging fruit that we're excited about going towards.
Deidre Woollard: I think it's interesting. We've seen so much energy and so much money go toward proptech. I'm hearing more lately about contact construction technology and things like that. I feel like we're getting closer to coming from the outside of real estate and now into the nuts-and-bolts. Do you feel like Lessen is more on the proptech side or more on the contact side or somewhere in between?
Chris Bee: I would put us in more of the proptech camp I think, but somewhere in between is probably fair. Like I said, we're solving some problems that are relatively foundational and looks like SaaS application solutions that are super valuable because they just don't really exist at the scale and in the niche that we're serving. That in and of itself is super valuable. Then, as we build to the next level of scale, using our data to start to do more predictive analysis and understand maintainability cost and understand supply chain optimizations and understand the marketplace dynamics and how to properly incentivize the supply side of the marketplace to always meet demand. Some of that is bringing new people onto the trades. Some of that's better utilization of people already on the platform. There's a lot of really interesting tech that is going to be built there. That puts us in a spot where the first part of this is something that is pretty well understood then the next phase of this is really just amazing where this thing is going to head.
Deidre Woollard: Well, let's wrap up with talking about that. Where do you see Lessen in five years?
Chris Bee: We are on a path where we believe we will be the dominant property services provider in United States and maybe in the world. We have great capital partners, we have very clear customer demand. There's truly a need for this in the world right now and we've got some great relationships that are helping us get there. I think there's really no stopping what we're doing right now. I think it's on a great trajectory and sky's the limit in terms of where we'll be in five years.
Deidre Woollard: Interesting. Is the plan to evolve from the larger players into the smaller players and make it more of a consumer-facing product that maybe works for mom-and-pops as well?
Chris Bee: Yeah, absolutely. I think there's a lot of similarities there. They say once you get past the initial customer relationship side and scoping side of things and when you're into actually performing the work, especially from a technology standpoint, it starts to look very similar. It doesn't matter who owns the house necessarily. It's still floor and four walls and a roof and plumbing and electricity that needs to be worked on. We're building towards the universal solution that will allow us to we provide for all different segments, any property that exists. Essentially, whatever service work need to be done is the world we plan to build towards.
Deidre Woollard: Interesting. That led me to one more question, which is, one of the things that I like about the idea of this as a platform is it ends up being a log for the future. If you sold a property or something like that, it's almost like the car maintenance plan in some way. Is that part of the vision as well?
Chris Bee: We've talked about that, the idea of a HouseFax, like a CARFAX where you have a service records. Yeah, that may just takes some time to aggregate those. We've been in business for less than two years as it stands. But yes, in time and as property start to change hands, by all means. We have the records now. You would have this amazing service record history that would give a lot of confirmation or security to somebody who's buying a new property from a previous owner.
Deidre Woollard: Yeah, I just love that. Well Chris, thank you so much for your time today. Listeners, you can learn more at lessen.com, stay well, and stay invested. Thank you.
Chris Bee: Thank you.