They say that time is money, so saving time is the same as saving money. One startup that’s trying to do just that for its clients is LeasePilot, which helps commercial real estate companies to draft their leases in half of the time it currently takes.
Operating at the cross-section of commercial real estate and lawyers has given LeasePilot a unique perspective on what it takes to find success in the startup world, even with co-founder Gabriel Safar being a former lawyer. Gabriel joined startup coach Roland Siebelink on the latest episode of the Midstage Startup Momentum Podcast on LeasePilot’s journey and what he’s learned along the way.
Roland Siebelink:Hello and welcome to the Midstage Startup Momentum Podcast. My name is Roland Siebelink and I'm the founder and CEO of the Midstage Institute. We help fast-growing startups scale even better. And in our podcast, we invite some of the world's most renowned founders of new and fast-growing startups to share all their learnings with other founders. Today, so proud to have Gabriel Safar here with us, the co-founder of LeasePilot, calling in from Boston. Hello, Gabriel. Welcome.
Gabriel Safar:Hi, Roland. Thank you very much for having me. It's a pleasure and an honor.
Roland Siebelink:Oh, it's absolutely an honor on our side. We had so much trouble finding a little bit of time in your busy schedule, but I'm glad it worked out, Gabriel. For those who don't know LeasePilot, let's just start with the basics. What do you do? What do you offer to whom? And what difference do you make in the world?
Gabriel Safar:LeasePilot's customers are office retail and industrial real estate organizations, commercial real estate companies. And what we do is help them draft their leases faster. That might not sound off the bat super impactful, but a couple of things just to keep in mind. On average, it takes anywhere between 75 to 90 days to go from an agreed upon set of business terms to a signed piece of paper. And that's a huge amount of friction in one of the largest set of asset classes in the world. And what that means is you have a lot of really smart, capable people spending a ton of time banging their heads against the wall. And our job is to help them redirect that time to the most productive things that they could be doing, so that they can create value instead of process paper.
Roland Siebelink:That's excellent. And a great value proposition that I'm sure would be very attractive to all those people with banged in heads. Talk a little bit about how you got to that idea. Did you have a background in that field? What was the crucial insight that led you to want to start LeasePilot?
Gabriel Safar:That's a great question. Yes, I have a background in the area. I'm a real estate lawyer, so I spent the bulk of my professional life drafting leases. And I came to LeasePilot because I was able - relatively early in my career as a lawyer - to start developing a business of my own. And I was able to hire through my firm a career coach. And that career coach and business development coach was really, forward-looking, a gentleman named Stuart Hirsch. And what he tried to do in his coaching was to say, "Let's just not look at how you get business tomorrow. Let's think about what type of impact do you want to have on the world? What type of career do you want to have? Who you want to become." And in doing that, he recommended I read a couple books. Two of the books were hugely impactful. One was The Innovator's dilemma by Clayton Christensen, who actually became an investor in LeasePilot. And then the other book was Tomorrow's Lawyer by a thinker out of London at Oxford, Richard Susskind. And thinking about the ways that lawyers are often so narrowly focused on a specific set of agreements and looking at a document as a work product and not thinking about how that work product serves a larger set of needs. And thinking holistically, it opens up your mind to a lot of opportunities. And that's really where LeasePilot came from. Something about LeasePilot, the way that we look at the world and what makes us innovative is we look at a document itself as a technology. And it's a very old technology. And what the document does is it's a mechanism for capturing, storing, and sharing information about contracts. From our perspective, the documents served the world really well. But in a digital age, the document's an anachronism because it's fundamentally analog. Even if you take a Word document - at the end of the day, a Word document is a document. You have letters strung together to make up sentences or words and sentences, paragraphs, etcetera. And that doesn't play nice with digital infrastructure. At LeasePilot, what we want to do is we want to swap out the document as that fundamental technology powering agreements and transactional relationships, and we want to replace it with a database. Now that sounds pretty easy. It's not. And the reason it's not is because there are certain things that the document does really well that databases don't. And that's communicating nuance and being flexible. That's something that's super important when you have complex commercial agreements that get enforced in court. What we've been able to do at LeasePilot is we've been able to create what we call the illusion of documents, where people feel like they can manipulate the text of an agreement as if it were a document, but everything's getting tied back to a database. The reason we're able to do that is because we've leveraged the inherent underlying structure of certain agreements, and then we can build on that structure and tie back that nuance to the database structure. And that allows us to offer both the efficiency and power of a database with the flexibility of a document.
Roland Siebelink:You mentioned as a key benchmark in the beginning that without your technology typically it takes between 75 and 90 days between a general agreement to actually having an agreement on paper. How far can you reduce that with your technology and products?
Gabriel Safar:We've seen that come down in half. The reason for that is largely because we're able to release bottlenecks. And there's two ways that our customers think about time and that we think about time. There's the absolute amount of time, which is something that took me three hours or should take me one hour. And we can see at LeasePilot - we take a lot of surveying of our customers - something that took three hours should now take anywhere between an hour to an hour and a half. We're saving more than 50% of the absolute time.
Roland Siebelink:That sounds very, very cool and a very attractive product if you're in that business. Let's talk about your go-to market. Who do you target? How do you reach them? How do you convince them? How difficult is the sales cycle and so forth?
Roland Siebelink:Why is that? Does it have anything to do with what you said about lawyers being conservative by any chance?
Gabriel Safar:Not necessarily. I think lawyers are people - going out on a limb here, they're people.
Roland Siebelink:I'm trying not to respond, but as a European, I don't necessarily always have the bad image of lawyers in my head that the typical American does.
Gabriel Safar:I have a great image of lawyers because I'm one. I understand how hard their job is. And I think often people don't come at what lawyers do with enough empathy. On the one hand, they feel like, "Oh, this stuff should just be done immediately." And on the other hand, when something goes wrong, who's the one who's having the rifle pointed at them? It's the lawyer. Business people talk out of both sides of their mouth when they say, "I wish the lawyers didn't make everything complicated." But the second something goes wrong, we're going to pillory them. You can't have your cake and eat it too.
Roland Siebelink:Some people just don't want to accept that the world itself is a complex place, right?
Gabriel Safar:Well, the world is a complex place. These agreements are inherently complicated, and people aren't willing to tolerate - they're pretty risk averse - and they hire lawyers to have that risk averse function. That's what they do. And that serves a very important function. I think the reason lawyers tend to bristle at a lot of technology is because most of the technology doesn't come at them with any understanding of what they do. And it doesn't come from a position of empathy. It's engineers who are designing something that sounds cool. And they're like, “Why can't you turn this contractual relationship into a set of Mad Libs?" Lawyers, just use it and shut up. And the world just doesn't work that way. When you come at the legal profession with a set of empathy and trying to understand how hard their job is, they're willing partners. What I underestimated as a founder and as an entrepreneur is that ultimately the technology's a super small part of what you're doing. It's understanding people and their incentives and the change management that you need to be able to provide for. That's a massive, massive piece of being successful. And it's so easy to underestimate. What I find challenging about a B2B sale -and especially in the type of sale that we're doing - is you have multiple stakeholders with very different interests. Managing and understanding those interests takes time. And it takes a lot of understanding of your customers. That's one of the things - at least, on my journey as an entrepreneur - I'm trying to get a better hold of so that we can sell with less friction.
Roland Siebelink:Okay. Excellent. What would you say is your ideal customer profile? Is it individual lawyers? Small firms? Large firms? How else do you distinguish your ideal customers from your not so ideal customers?
Gabriel Safar:We don't sell to any law firms right now. Our users are the real estate owners, who are our customers. The reason for that is, they're the ones that benefit from the time-savings. Our users are lawyers, both the internal lawyers at the real estate organization, if they have them, or the outside lawyers working off of a license for our customers.
Roland Siebelink:Yes, exactly. Because in the traditional law firm model, a reduction in time would only be against the incentives of the lawyer's billing practices, correct?
Gabriel Safar:It depends. That's the simplistic view. And it's often the view that many people have. If you think about the profitability of an organization, that might actually not necessarily be true. One of the things that I thought about when I was a lawyer is how well am I getting paid? What am I able to collect on my bills? As customers are really looking for value, and real estate customers and any commercial customers looking at business arrangements, they're savvy, and they don't want to pay for lawyers that aren't providing value. If you think about it from the perspective that we can help a law firm increase that ratio of value to unit of billing, you can actually help them be more profitable. That said, we still sell to the real estate companies because making that nuanced argument is just painful with law firms.
Roland Siebelink:I can see that. Basically, you sell to the actual users, the real estate companies. What's your go-to market there? Do you have an ICP in mind? Do you have specific tactics in order to reach them? Do you use an existing network? How do you go about that go-to market? I'm only asking because I know that's always the question on the mind of all the listeners to this podcast. How do you actually design a go-to market for the product?
Gabriel Safar:Yeah, we're experimenting right now. What we've been doing is we've had a very direct go-to market. And I've experimented with a lot of different go-to market strategies. Early on, I just loved the idea of inbound marketing. And I thought, "Oh, we put out content and you do all of these magnets and people come to you and then they just sign up for the product." I realized that that was incredibly naive. I think it can work at scale, but making a content-based marketing strategy where people come to you and they're truly qualified and you're not wasting your time following up on irrelevant, inbound leads requires a lot of investment in the way that you do your marketing, the team, the content delivery. It's a heavy lift. What we've found extremely effective, which shocked me, is just calling people. And the cold call has been so effective. And what I learned about cold calling - which I did a lot of them myself - was you cut to the chase and you lead with a question that's on people's mind. What drives me batty to no end is when you get these cold emails that say, "Will you meet with me?" No, I'm not going to meet with you when you ask me that. If you start with something - what we use is "Fast and responsive leasing." It's almost like "Fast and responsive leasing, that's almost an oxymoron." And it's something that our customers are thinking about because they're feeling like their leasing is slow and unresponsive. That gets someone's attention.
Roland Siebelink:Very good. And sometimes it's good to hear that some of the old techniques still work better. It does require you to have a pretty good idea of who is on your target list if you do any cold outreach. How did you reduce the universe to those companies where you feel like you'll have the biggest chance of success? Is that still part of the experiment or do you have a pretty good idea who to target at this stage?
Gabriel Safar:We have a very good idea who to target at this stage and we invested quite a bit in that. And I think that's right in that reaching out to the right people is key because your conversion ratio will be zero if you're calling the wrong people. What we did was we invested quite a bit in building a list. We were not able to buy a list from anywhere, but we tried many times. What we did was we built it company by company, by reading trade magazines, by scraping databases, by all sorts of different mechanisms. And then what we did was we would put companies - we use HubSpot as our CRM - we put a large set of companies into HubSpot. And then we needed to think about what makes a customer a good customer for LeasePilot? And ultimately, it's about leasing and leasing activity. You can't find that. There's nowhere where you can go and ask, "Tell me how many leases a given company can have." And it's very hard to find a clear direct relationship between any one attribute. You can have really big companies that own a lot of square footage, but have really big leases and they don't do many of them. We had to look at taking a combination of the number of buildings, size, type of ownership structure. And we built a model with five attributes that we thought would contribute to making a customer good or not good. And then what we did is we said each one of those attributes needs to be knowable by searching three sources: their website, ZoomInfo, or LinkedIn. That's it. No telephone calls, nothing that's secret. And we call that a fit score. And then we paid a resource, a contractor, to go and just do that research. We'd say here's the hundred companies for you to research. And then we made a very structured process where the researcher would research and they would hit a certain stage in the research where they would say, "Here's a fit score." Then I would review that fit score and I might reject it because they would get things wrong. And it took a lot of learning. We'd go back and forth and then hit the stage where we would say that it's hit a stage where this company has been sufficiently vetted that it's okay to add contacts to it. And then we identified who our key personas were and who we wanted to sell to. For each one of those companies, we added three to five contacts. Our focus is on qualifying an account, and that's super important. But you can't speak to an account. You have to talk to human beings. You have to talk to people and contacts. And so, we identified who were our core contacts that we wanted to talk to. Then those went into the database after we pre-qualified an account.
Roland Siebelink:You talked in the beginning, Gabriel, about the different stakeholders that you have to navigate in B2B sales. I'm assuming those maps to the personas that you are looking to contact, did you find a specific role in the company that's almost always your best entry point and then some other stakeholders come in later in the process? Or do you try to get in through any stakeholder and just see where it lands first?
Gabriel Safar:The first answer is it's not always the same stakeholder. But the second answer is we don't just try to reach anyone and get in. We've narrowed it down to a series of three to four stakeholders that matter. We will look at those different stakeholders and we have different sets of email campaigns and cold call scripts for each one of those stakeholders that are specific to them.
Roland Siebelink:Excellent. Okay. Very good. Do you do those in parallel typically or more, we tried this one first and then if that didn't work, we try to campaign on the next stakeholder?
Gabriel Safar:I'm too impatient to do things sequentially. I do them all at the same time. And I've had people say, "Is that good?" You know what, if I get an email and a colleague of mine gets an email and we share the email, we're talking about that company; that's a good thing. It doesn't bother me if I send four emails to a company. I don't even care if it's the same email if they have the same role. What I care about is, is that message clear and is it something that the reader or the recipient it's on their mind. And I find marketing people aren't good at that. They put too much marketing, gobbly goop that they find in some thesaurus rather than putting themselves in the shoes of the person who is the recipient of the information and asking them "Do I care." In that way you meet them where they are.
Roland Siebelink:Yeah, exactly. I love that. Very good. Can you talk a little bit about some indicators around traction at LeasePilot? Where are you at? How far have you grown? How do you see yourself having success in the marketplace?
Gabriel Safar:The thing that we watch most obsessively - actually, there's a couple things that we look at really obsessively. What indicates traction from our perspective is the number of transactions or leases that are handled on our platform. Just to provide a bit of context, last year we processed around 1,600 leases on LeasePilot's platform. This year, we're expecting to do around 3,500 leases on LeasePilot.
Roland Siebelink:Okay. That's more than doubling up. That's great. Very cool. What other metrics - you said you have a few metrics that you watch obsessively - what are some of the others that you also have?
Gabriel Safar:Our approach to metrics is really about starting - I'd say subjectively - we try to figure out what do we want to understand? What do we want to learn? And then we work back to build KPIs. One of the things that we really want to understand is, are we creating value for our customers. We define value in terms of speed. We have an in-app survey, which is asking our customers how much time did you actually save? We obsess over that and we're seeing that it's between 75 to 50%. With some of our older customers that aren't able to answer any more because they don't remember what it was like to actually prepare a lease without LeasePilot.
Roland Siebelink:Amazing story, Gabriel. Really appreciate this. If people want to hear more about LeasePilot, where should they go and what could they help you with?
Gabriel Safar:Great questions. Thank you for asking that. Where they can go is to our website, which is LeasePilot.co. No com, just dot CO. And what they could help us with is - we're looking to engage with thoughtful, smart people that really want to change the way that lawyers interact with documents and forms and to help them think about creating more value for their end customers. We welcome those conversations. We're thrilled to have been invited to participate in the World Economic Forum. We're a group of one of the hundred global innovators. Thoughts matter and conversations matter.
Roland Siebelink:Yeah. Very cool. Excellent. People, visit LeasePilot.Co, not com, and you will find everything there is to know about LeasePilot. Is there anything you want them to download or look at, in particular?
Gabriel Safar:Yeah, we have a full demo on our website that's a video. Check out the demo. One of our philosophies is to be super transparent, so we don't hide the ball. Everything's right there up on the web.
Roland Siebelink:Excellent. Okay. Gabriel Safar, thank you so much for your time. The co-founder of LeasePilot, calling in from Boston. It's been an honor having you on the podcast and I appreciated your key insight into how to build a go-to market. I think a lot of founders will love it too.
Gabriel Safar:Thank you very much, Roland. I appreciate you inviting me.
Roland Siebelink:Absolutely. Thank you, listeners. And we'll have a new episode for you next week. Bye-bye.Roland Siebelink talks all things tech startup and bring you interviews with tech cofounders across the world.