Dave Eisenberg, founder of Floored</a href>, speaks about the company’s unique 3D technology and the challenges he and his team are facing while trying to get wider adoption in the commercial real estate industry.
Floored is innovating with a tool that allows brokers, owners, and future occupants to experience a space without being in it; sometimes, before the space is even built. To do so, Floored takes static, two-dimensional renderings and turns them into three-dimensional virtual models you can “walk through” on your browser. Brokers use Floored for virtual showings and to demonstrate the post-renovation potential of a space. Commercial real estate owners use Floored to create realistic models of spaces before they are built. In an industry where 2D renderings are the norm, this 3D visualization tool stands out.
Innovation, however, does not happen without bumps in the road. Eisenberg shared some of Floored’s challenges and how they have overcome these roadblocks.
First, some CRE professionals do not value technology. It is up to tech entrepreneurs to educate industry professionals about the value of technology in saving them time and money. Floored hosts “Lunch and Learns” with existing and potential customers such as architects, developers and brokers. The in-person presentations allow them to showcase the product and its potential.
But getting in front of CRE professionals is difficult. Since the target community is not necessarily active on social media, there are fewer opportunities to reach users online. Floored’s engagement strategy is an “old school” enterprise sales approach where growth is a function of leads from calls, emails, and referrals. Following lead generation, the company identifies the largest potential customers and the senior buyers for each prospect. In-person demos work best, and the most successful interactions occur when customers value both the innovative product and the competitive advantage gained through early adoption.
However, getting the meeting doesn’t necessarily guarantee a sale for Floored. One of the most common objections is that there is no room in the budget for 3D visualization. Since real estate budgets are made months in advance of projects, Eisenberg and his team are learning the art of catching decision makers at the right time to be included in the project budget. They try to identify future projects early on by staying on top of development news and tracking filings. Additionally, the company has strong working relationship with existing customers, which gives them a glimpse into their customers’ development pipeline.
Beyond these difficulties, Eisenberg identifies a macroeconomic challenge: there is too little venture money in the CRE tech sector. VC investment tends to follow customer demand, and the CRE industry is not looking for software. In fact, many CRE professionals actively avoid it. VCs prefer to invest in companies with a lot of traction and fewer customer objections. Despite this difficulty, Floored raised $5.3M from several investors late in 2013.
Finally, Eisenberg has a word of advice for founders in CRE Tech:
If you have no real estate background, you are faced with the additional challenge of learning about and engaging a new community while validating the software’s usefulness to that community. There is a speed of adoption problem since growth is a function of using one’s contacts to build a network of target customers, and those coming from the industry are able to leverage existing networks. However, Eisenberg believes that coming from a pure CRE background is not a silver bullet for success either. Founders from a CRE background may miss opportunities to find creative technological solutions, as they lack fresh eyes on the industry. Many newcomers make the mistake of keeping the product free for too long. When customers get used to a free product, there is a chance that they will not understand the value and prefer not to pay for it in the future.
Alyssa Murrett is a market engager, working to grow and expand the retail user base across CompStak's markets. Alyssa graduated from Cornell, focusing on real estate finance and investment. When not trying to find a faster commute to work, Alyssa spends her time on the beach, checking Buzzfeed, and playing tennis.