Team RentsyncJuly 6, 2022 at 12:00 AM27 min read

E55: Digitization: The "New Norm" for New Developments

"What Spark does is essentially power the sales and digital transaction process for new developments, residential towers, or projects. We are the backend infrastructure that the sales team, the marketing team, the administration team uses to manage everything.” — @SimeonGarratt

Welcome back to Sync or Swim! Today, we speak with Spark Real Estate Software, helping developers to sell and market their homes. Joining us, you'll hear about the unique opportunity that Simeon identified to create a universal software to serve new developers across the globe. We speak specifically about how Spark serves marketing teams as they find more success in the digital world through insights, tracking, email marketing tools, and more! You'll also find out why they have chosen to have a semi-open API and how a recent case study with Marlin Spring illustrates how Spark can be used to generate meaningful reports, and Simeon shares the company's goals for the future (with their current services only being the start of what they plan to do) and lets us in on how he believes the pandemic has impacted this particular industry. Tune in to hear all this and more today!

Key points from this episode:

The story of how Simeon's parents were detained and accused of being spies in China
How Spark serves the sales, marketing, and administration team within real estate
What Spark aims to do: create universal software that works for real estate across the globe
How their software helps marketing teams to be more successful in the digital world
What they integrate into including social channels, all paid channels and capture forms
Insights, tracking, and email marketing tools that they use
Why Spark has chosen to have a semi-open API
Their newest case study with Marlin Spring, which illustrates how Spark can be used to generate meaningful reports
What the company's goals look like to deepen relationships, grow their team, and gain data
The challenge of educating investors about the real estate and new development space
How the pandemic skipped the real estate industry a few steps ahead
The opening of the market to many different geographies because of the pandemic
Why Simeon considers himself to be in the beginning phases of what Spark will achieve
How a growing line item has formed in real estate budgets for software

Links mentioned in today's episode:

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Episode Transcript

[00:00:39] NS: Welcome back to Sync or Swim. I'm your host, Nicolina Savelli. On this podcast, I chat with multifamily and PropTech experts to learn how you can reach more renters, sign more leases, and maximize the value of your assets.

Today, I have Simeon Garratt, the CEO and Cofounder of Spark Real Estate Software, a real estate software firm based in Vancouver that is helping developers sell and market their homes. Thank you so much for joining me, Simeon.

[00:01:07] SG: Thanks for having me.

[00:01:08] NS: It's great to have you here to chat about your vision behind Spark and what this technology is doing for real estate developers, project brokerages, marketers, and sales teams. But I must say there's always a story behind the product and the technology, and your upbringing is pretty compelling. That's kind of how I connected with your team, which was they told me your background, and I was like, "I got to get this guy on the podcast to kind of talk about that first.”

My understanding is that you grew up in China and Malaysia, where your parents were doing Christian Aid work. They were detained and imprisoned in China in 2014, after being accused of spying. Then they were eventually released. I mean, great to have you here.

[00:01:58] SG: Yeah. Thank you.

[00:01:58] NS: But I truly can't imagine what that must have felt like for you to experience. Can we just start there? What do you remember about that time in your life? Maybe you could explain how that experience, if it has, molded you into who you are today and as the CEO of Spark?

[00:02:14] SG: Yeah. I mean, there's, obviously, a long story there. Having grown up in China and spending the majority of my childhood and even work after university back in China, you get to understand the country. So when these things happen, it is a shock. But it's also one of those things like, "Yeah, okay.” It kind of makes sense because you've seen it happen over the years. As horrible as it is, it does happen in places like that.

But it coincided in a very funny year because 2014 was right around the time when I actually started Spark. So it was almost at the very beginning of the inception of Spark. So building the ground or the infrastructure originally of Spark at the same time that my parents were coincidentally in jail in China. So it was pretty tumultuous time, for sure.

[00:03:01] NS: That was stressful, I'm sure.

[00:03:03] SG: It was like having two jobs at the very, very beginning. But, yeah, I mean, I think that that definitely helped me with the stress management levels, once that kind of cleared up 2016, 2017. Now, basically, nothing stresses me out. So it's like –

[00:03:17] NS: How can you be stressed? You're like, "You know what? It's not as bad as it could be.”

[00:03:20] SG: Exactly. Yeah.

[00:03:22] NS: Yeah, absolutely. So just a quick question, and this doesn't relate to anything to do with the industry or anything, but they were released. Did you play a big part in getting them like released or working with Canadian kind of –

[00:03:35] SG: I did, yeah. So I was on phone calls with the head of foreign affairs in Canada. Once a week for almost two years, I did multiple trips to China to visit with lawyers. It was a consistent – There was a lot of money that had to be raised to pay for the legal fees and all of the processing that has to happen. Unfortunately, being in jail in China is not free. You had to actually pay for it.

[00:03:57] NS: Oh, wow. Okay.

[00:03:58] SG: Yeah. So you basically get a bill that allows them to eat and drink and brush their teeth and things like that. So it was pretty [inaudible 00:04:06] for sure.

[00:04:06] NS: That seems like it's like a motivation to put people in jail if they're getting paid by the people who are in jail. I don't know.

[00:04:13] SG: But you would have to pay. But then it's basically like being in an internment camp, so it's a little not quite as exciting.

[00:04:19] NS: All right. Okay. Well, good to know. Yeah, definitely a stressful time. I'm sure that it had you very focused and made you a very focused individual. So moving on to what Spark Technology does. Quick pivot there. Can you expand a little bit on how exactly the platform helps real estate developers, brokerages, marketers, and sales teams? Then we can kind of dive in to the specifics. Yeah.

[00:04:43] SG: Totally. Yes. So we essentially – I mean, my background was working in the sales and marketing of new development projects in the residential space, primarily between North America and Asia. So I did that for a number of years, and what Spark does is essentially power these sales marketing and digital transaction process for new development residential towers or projects.

So we are the backend infrastructure that the sales team, the marketing team, the administration team uses to manage everything from their CRM, their inventory, their floor plans, the allocations, the digital contracts that they write, the commissions, deposits, and then things like the reporting on the backend, all wrapped under one umbrella that talks to each other that allows for transparency in the organization. We work directly with developers and/or the project marketing firms that are selling and marketing those projects.

[00:05:35] NS: Right. Now, this isn't on my list of questions, but it does bring up the question because you mentioned that you did it predominantly in Asia. Did you originally launch this thinking that it was going to be a North American product or kind of an international product? Is there a difference between those kinds of processes that you've noticed?

[00:05:52] SG: Yeah. So the mindset from the very beginning, which I think was a big differentiator between us and other platforms that existed, was we wanted to build a software that worked across the board. Whether it was in Qatar or New Zealand or Miami or Seattle, it didn't matter. We wanted to build a base infrastructure that basically spoke the language of new development sales and marketing.

Most of the regions in the world that do pre sales, it's a very similar process. Yes, there's different terminology. But the base level stuff is quite similar. So we originally had a goal to be as broad as possible. Now, that has led us into working in just over 80 cities currently, with more being added all the time.

[00:06:33] NS: Right. Okay. Yeah, that makes sense. I mean, you kind of answered this question, but you're focusing on new developments. The reason being you're obviously familiar with new developments. So that was something that you felt passionate about and knew a lot about. Would you ever expand the platform to go beyond new developments? Or is that really what the niche you really want to focus on, and you think that that's a really strong offering to have that kind of focus?

[00:06:58] SG: So new developments has always been the spearhead in the market, and I think it was the least, I guess, touched part of the development space. You look at the resale side, real estate agents, commercial, a lot of these other platforms. There has been a lot of tech focus, whereas in the new development side, it's traditionally been very, very old school. So that was where I saw the biggest opportunity.

We already do play in the lease up and rental side a little bit. We do play in the commercial side, when it's in the podium of the building. We do have things like digital ID scanning and verification that has applications outside of just the new development world. A lot of the projects that are on the platform may already be built. So it's really if the developer is owning and operating a project, there is applications across the board.

[00:07:47] NS: Got it.

[00:07:48] SG: We also manage all of the broker and agent relationships between the developer and those groups. So that can live outside of the actual new development space. But our primary focus is still always going to be surrounding the new development or at least the developers themselves.

[00:08:02] NS: Makes sense. Yeah. I think that you hit the nail on the head when you said that seems to be a part of the process that has been the least like attended to. I know that I've had a lot of people on this podcast, and no one really specializes or caters to that part of the process. It's kind of the whole way through, but that part kind of gets in a lot of cases like just overlooked or last minute. Or it just isn't – The amount of time and attention to it just kind of wasn't there. So to have that kind of attention on those parts, which is very important for the longevity and the success of something that you've spent so much money and time and resources on to have that like platform there to help is super important.

Now, we try to focus on marketing on this podcast, obviously. So I'd love to hear more about how this solution specifically helps marketing teams to be more successful with their new development projects. Could you share anything about that?

[00:08:59] SG: Yeah. So there's a couple different ways where Spark actually will empower and accelerate the marketing processes inside of the developer. In these processes, again, marketing new developments is a very, very broad term. There's a lot of things that live underneath that. Anything from billboards to realtor showcases, to pamphlets that go out, to email blasts.

But where we really specialize is on anything that touches the digital world. So we integrate into all of the social channels, all of the paid advertising channels. So we create dedicated links, landing pages, and lead capture forms that will live behind all of those channels that track the ROI, the spending of each of those channels, where the leads come from, and then tracking those leads all the way through to a purchase or a fall off and being able to provide good insights for a developer to where their money's working, where their money's not working.

We also have a platform inside Spark called Carpenter, which allows you to build, manage, and send out mass email marketing templates, similar to something like MailChimp for being able to tie that into actual inventory, floor plans, buyer information. So tying all of the things from the early lead stages all the way back into the purchasers and the closing. Then we also have things like our drip campaigns and our automated sequencing for leads that sign up. So managing those communication flows and the processes that live behind the scenes for the sales teams, the reminders, and then everything from hosting all the assets for marketing brochures, etc.

Then on the flip side, we would also integrate directly into the point of sale systems that these developers are using in their sales centres or on their websites, digitally powering the inventory, the pricing, or the actual touch screens, interactive displays that the marketing teams are designing and building for the actual buyers. So there's a lot of different pieces where we play, but we really live behind the scenes kind of powering the information, not actually doing the marketing, per se.

[00:10:52] NS: Absolutely. You made me think, because Rentsync, actually, the company that runs this podcast, and we have a marketing agency. This sounds like a beautiful marriage, actually, between what we do on the agency side and what you are doing from like the technology side of things. Are you integrating with any other platforms right now? Like do you integrate with – If there's any other platforms that you've worked with, like even property management platforms? Are you currently integrating with those?

[00:11:22] SG: Yeah. I mean, we have a huge amount of integrations. Some of those are run like directly through our API. A lot of those are run through Zapier. So we have essentially a semi-open API where people can actually push and pull data from our system. So a lot of times, we don't even know all the platforms that Spark is integrated into because a developer can take that and do it themselves. But there is – We integrate into accounting platforms. We integrate into larger ERP backend systems. We integrate into other marketing automation systems. In some cases, there's a huge number of groups that we do integrate into, and our integration policy is very, very open. We like to be able to work with as many people as possible.

Then even if – On a lighter level of integration, we would also work with agencies very heavily. We actually have an agency login.

[00:12:07] NS: Oh, wow. Okay.

[00:12:09] SG: That allows the agency to go in and create the creative, implement the templates, create the sequencing, and then basically give access to the sales team. So you don't have to have them sending it and have a third party. It's a much more direct access point for that. So we actually have a login credential that's just for agencies to go into Spark and build collateral for the clients.

[00:12:28] NS: I'm going to have to talk to our client services VP because I think that this is something that could actually help them quite a bit with managing a lot of those processes and things. Now, is there – I didn't put this and I know I'm kind of catching you off guard. But is there a client or a case study or anything that you feel that has really taken advantage of your product and what you offer and kind of any metrics or outcomes that you can share from that experience they had working with you?

[00:13:11] SG: Yeah. So we actually just released a new case study yesterday, which is all about – It's called Knowledge is Power through a company called Marlin spring out of Toronto, and they basically go through how they use Spark to really generate reports that allowed them to extract real data out of the system to make decisions on all the next projects that they're going to build, the buyer, the demographics, the geographic information, the pricing matrixes, all that stuff, and how they use Spark to kind of be the backbone of that.

We had another – The other case study that we just released actually was with a brokerage out of Austin, and it's called how an Austin-based brokerage use Spark to sell more than five projects or sell out five projects. So we're starting to do – We do pretty in-depth case studies with these clients. We sit down. We really go through the process. We try to make it as informational and educational as possible and not just a light fluffy case study that says, "Hey, look at look at how good we were.”

We want to give information to the industry about these processes because I think that's how everybody gets better is by creating less friction and opening up some of these things that maybe are questions for other people in other markets. But those two specifically I think are phenomenal examples of case studies that really kind of dive into the power of what spark does and how it actually has had direct impacts on two different types of clients.

[00:14:26] NS: Nice. Yeah, awesome. I'll have to include those links to those case studies in the show notes, so everyone can check those out. So where do you see, as you mentioned, growth education is very important to the industry to keep evolving and innovating? Where do you see Spark in the next two to three years in terms of kind of business expansion and growth? Are there any developers you feel are doing some innovative things right now that you'd like to see using Spark? Like what are your thoughts on that?

[00:14:52] SG: I mean, Always. I mean, for us, it's really just about the expansion across all major markets. So we've already had a big focus, and we work in most major cities. But where it really becomes powerful is once we hit a certain threshold of ownership of that market because it really allows us to actually add a lot more value back to our clients because of the amount of data and information that we can share.

I think the next two to three years is really deepening those relationships. So one is the expansion of just territory, and the other side is expanding the product into more and more services underneath what a developer does. So taking on more of the transaction pieces, diving into larger scale, data amalgamation, parsing, and then turning that into information that we can give back to clients, and really just deepening the product relationship with Spark.

We've been growing at about 100 percent a year for the last couple of years. So I'm assuming our track is to keep doing that for the next couple of years. So really, we're going to be expanding the team significantly, really getting into the customer service and the curation of how we onboard, how we treat clients. It's also a very interesting part where the software company that also – Being in the real estate world, you also have to have that very relational aspect to it. It's not just like buy your Netflix account because this industry is extremely relationship-based. So we have to treat that the same way.

[00:16:13] NS: It's very customized. I find every single client has a different thing, a different set of needs, requires a different personalization. Really, like you said, that one-on-one communication with the client is important to maintaining that like long-term relationship with them and following through their whole journey.

Now, I missed this, and I want to go back to it because you mentioned something about growing the technology. I understand you did a series of funding for Spark. Can you share maybe some of the positive and maybe the negative feedback you got during that process, and how that's kind of shaped the vision so far?

[00:16:49] SG: You mean from the investor side or from the client side?

[00:16:51] NS: Yeah, from the investor side of things. Yeah, the investor side. So when you did your funding for – You did a round of funding for the actual technology. What was kind of the positives and some of the negatives? Because I feel like it's great. Like it looks great. It feels great. It looks like a really well-thought-out and well-marketed product, and I'm just curious what you kind of learned through that kind of round of funding.

[00:17:12] SG: Yeah. I think the pro and the con out of that is almost actually the same thing, which is that it's very hard for outside people to understand this specific market, right? The pro is that they don't understand it, which means there could be a huge greenfield opportunity. But the con is that they don't understand it, so it's a lot harder for them to get to that position.

I'm sure there are some other ones, but that's probably the biggest thing was just the education around what we actually do, what it means to get on a client, what a client actually means, how we price. It's not a typical SaaS company, in the way that you're just able to turn it on, turn it off, give us a credit card. Half of these are a number of companies. Half of these are paid through different entities. Half of these are pushed six months before they're supposed to launch. There's a very one-to-one relationship here that's really almost half of a real estate company, as well as being a technology company.

I think the biggest learning is just how do we educate, and that kind of segues into the same way when we're trying to target clients or digital marketing. How do we target potential clients that aren't necessarily looking for a software platform? We get a lot of real estate agents that sign up that think it's for them. So how do we get out of that and be able to market the product to a way that, no, this is not for agents. This is for developers and project marketing firms. But the terminology in different regions is very different. So how do you take all of that and boil it down into a single thing that is a metric that people are going to understand?

[00:18:38] NS: Right. Which is probably just your SEO on Google ranking helping you to target like real estate agents or just seeing it come up on their Google searches, and then they're signing up for it. Yeah. I think that it's a growing profession. Like I've been in the multifamily industry and kind of this space for about two and a half, almost three years now, not very long. I will say, I mean, I knew all about rental properties. I knew about new builds, and I knew those things, but I didn't understand like who was part of that process and who got those off the ground and like that they had dedicated marketing teams and all of that within the whole – I just pictured guys with hard hats, right?

Learning all of that and understanding all of the processes and all the things that come together, it is something that not that many people, unless you're living and breathing it, really understand or know. Yeah. From the investor side, obviously, if investors don't understand what the industry does or what the processes are, it can be hard for them to throw money at you. But, also, it goes to show that you were able to kind of sell through regardless, given your experience and your knowledge in the industry.

In your experience developing solutions for the real estate industry, how have you seen things progress in the last I said five years? But I want to say like in the last two years, since maybe the start of COVID. How do you see the industry evolving? You kind of answered that, but I think I'd love to hear your thoughts about what you saw happen and any transitions that you saw or any changes you saw within the last two and a half years or so.

[00:20:18] SG: Yeah. I mean, huge transitions that, I think, things that were already happening slowly in the industry that COVID Just basically accelerated those, and it skipped us five years ahead, unfortunately. The biggest thing is that now the de facto process for doing deals in a new development is all digital, whereas primarily before it was all paper, faxes, couriers, spreadsheets, etc. Now, it's all DocuSign, digital transaction management, digital tracking.

All of the things that the rest of the world has been doing for a long time has now become the standard because you couldn't go in person to sign things. You couldn't go into the sales centre. You couldn't write a deal. You had to do it digitally. So this is where – These were all tools that we had built, that were maybe utilized. I would say 10 to 15 percent of our clients were going the digital route. Now, I think 99 percent of new clients that we bring on are all in the entire digitization of the contract process and everything that we do. That's probably the biggest trend.

The second thing I would say that we saw was the opening up of the buyers' market to different geographies. During COVID, especially, it wasn't about just your local market because people were moving around a lot more than they had historically, because you didn't have to be in the office. I could move to Austin or I could move to Miami or I could move to Seattle. So, we found the marketing campaigns and the targeting for a lot of these projects expand out, just based on the fact that there was a lot more people moving around, right? We're seeing the Miami market projects advertising in Toronto, right? We have Texan projects advertising in California because there was such a big migration.

[00:21:58] NS: Yeah. I feel like, as a marketer, how do you know that that's going to happen? How do you really – You have to look at so many data points and learn and see what's actually happening because how do you know you're supposed to be marketing to people in Miami when you have a development in Toronto? Like it's crazy.

[00:22:17] SG: Of course. It's why you need Spark because that's what we tell you.

[00:22:18] NS: Exactly. There you go. There you go. Well, I mean, and do you think that we're going to see like – Have you seen anything shift? Like everything's going digital, but have you seen that shift at all now? Do you think that we've kind of reached like a peak in that kind of movement, and now we're starting to see things level out? Or you're seeing like remote because remote work is now just become a thing that a lot of people are doing. You see that continuing to be part of that process.

[00:22:48] SG: I don't think the remote work necessarily is the driving factor for that now, for the digitization of the contract of the sales process.

[00:22:54] NS: No, of course. Yeah.

[00:22:54] SG: I think that that's just starting the – It's opening the mind of the real estate industry, especially in new development, to the possibilities of doing things digitally. So this is like the first step of that. There's a long list of things that are coming that are going to make this process better, and that's a lot of the things that we're building is to accelerate and make it more accessible, give information faster, create a lot more transparency, a lot more integrations to other platforms that you're using.

I think we're still in the very early stages of this, and I think that we're going to see a ton of growth as real estate developers get more and more comfortable. The big sign that that's the case is five years ago, most developers didn't have a line item in their budget for software. Now, it's like –

[00:23:38] NS: Which is crazy.

[00:23:39] SG: Yeah, right. So before, it was like the really value sell, what it was that they were going to move something else out of their budget to put it in there. Now, those line items exist. So now, we're just starting to expand those budgets into more and more facets of the business and more and more areas. As we do that, we create more value, and they get to see that value tangibly. So I think that's really where the mentality of this industry is going.

[00:24:02] NS: It's funny that you say that because I have noticed too, in our clients and a lot of the marketing directors and coordinators, they're getting younger and younger. I feel like because the people who are at the helm of these never really had to deal with the digital component before. Now, they're like, "Okay, I might need to bring in some experts who are in their early 20s.” So it's kind of a nice thing too generationally to see that there's a future for kind of that generation of marketers and to enter this kind of industry as well, which I feel like has traditionally been older kind of.

I won't say anything further than that, but it feels like it was a very traditional model, and it's nice to see that there's an expansion there in the different generations and learning an exchange of knowledge. So finally, last but not least, if listeners are looking to connect with you or visit Spark, where can they find you and where can they kind of learn more about Spark?

[00:25:03] SG: Yeah. I mean, easiest thing is just to go to our website, which is spark.re. I mean, RE as in real estate. My email is simeon@spark.re. It's pretty easy. Pretty much, if you Google my name, there's, obviously, a lot of things that are going to come up. But I'm pretty easy to find on LinkedIn or our company website or whatnot. So that's the best place to get in touch with us for sure.

[00:25:24] NS: Awesome. Thank you so much, Simeon, for taking the time today and sharing your knowledge, and thanks for joining me on this episode of Sync or Swim. Until next time, keep swimming.

[00:25:35] SG: Thanks for having me. I really appreciate it.