HomeBeat.Live – Post mortem (31.08.2022)
Prof Galloway description is spot-on: A start-up founder assembles people and capital around a vision to build something groundbreaking. Something which does not already exist in today’s market.
In 2016, we started HomeBeat.Live (PropTech), because we believed that through empowering asset-owners in multi-family buildings, we could change the deadlock in wide-spread inadequate property management service for HOA buildings (75% of asset owners are not satisfied with the service they receive).
Our model was centred around the belief that making such a tool, when easily accessible, would kick-start a grass-root movement that would re-write the status-quo. “Empowerment of individuals” is one of the most commanding dimensions behind the general success of our digital world today.
However, we failed.
Analysis:
Projection.
We projected our own willingness to change things for the better in HOA buildings, on other co-owners. The harsh reality however is that too few people are willing to actually lead that change, put personal effort in and make a new reality happen.
Timing.
We still believe that a data-container & platform, fixed to real-estate assets is the future. The data-stack of buildings has intrinsic value. Just like the maintenance-booklet to a car increases its value. Data and platform-sovereignty has its merits. However, the general understanding for this isn’t yet present in the market.
Capital.
We vastly underestimated the need for massive capital in a B2C approach. We chose B2C because of 1. Our vision of empowering the end-user and 2. B2B was already crowded with an excellent leader gaining momentum (kudos to Casavi – excellent execution guys!).
Decision making gap.
HOA buildings are very slow in making decisions. Typically only once a year and only regarding the absolutely necessary. As we convince an owner to register a building, it often takes months if not years to get the majority of owners in an HOA to embrace it, understand its value and ultimately be willing to pay for it.
Culture – Group dynamics.
In many markets, especially in Germany, people actively avoid sticking their necks out in groups. They tend to avoid confrontation. Although HBL is beneficial for the common interest of the HOA, people tend to avoid the often emotional discussions, especially when hijacked by a loud minority.
Culture – Digital distrust.
With data-abuse scandals abundant, a calm and rational discussion on the benefits of a digital platform has become impossible in many communities.
Execution:
It was impossible to test the market without actually building the product as there were no bearing points. It’s a novel product, there wasn’t anything like it in the market. Hence we needed to go all-in and build a first MVP. We spent a year doing so burning through personal savings.
In 2017 we got our first angel investors, who allowed us to go from an MVP towards a first go at market entry: a mobile app, optimised landing pages, funding to run first marketing campaigns, etc.
In 2018 things looked rather good. We got selected for an accelerator program, participated on dozens of events and received lots of positive feedback. We extend HBL with a PRO version subscription incl. cost optimisation, analytics and document management.
In 2019 we tried distribution partnerships with 2 large multinationals and received an international innovation award. As metrics on direct B2C were still insufficient (acquisition cost), we hoped to alleviate that problem through distribution partnerships and direct sales to property managers as potential multipliers.
2020, as Covid hit, was very hard. We only just managed to avoid bankruptcy. We got lectured the hard way on the term “shelf-ware” in relation to working with large corporations. However, Covid did bolster a novel opportunity: we anticipated an acceleration in digital co-ownership meetings as physical meetings were no longer an option. We extended HBL-PRO with a powerful voting tool.
Early 2021 We closed another round, betting that Covid would change the market dynamics, this time with enough capital to really try to make B2C work. We also re-engaged into direct sales to property management firms.
Today, the numbers tell a clear story: HBL cannot sustain as a stand-alone product.
Fazit:
It has been a very laborious and nerve-wrecking ride. In hindsight, we managed to build a feature-rich, working product on a very tight budget that generated revenue. Economically however, HBL couldn’t make the numbers work.
On a personal level, it delivered on broad experience in entirely new fields. We learned to navigate massive uncertainty and remained honest with respect to each participants’ commitment.
Would we do it again? Not quite the way we did it. We learned some harsh truths. But we would commit again on a vision to improve the status-quo.
Lastly, we want to thank our employees, the freelancers, the investors and partners who believed in us and enabled us to come as far as we did. As well as the thousands of users who engaged with an entirely new product. Eternal gratitude goes towards our families to bear with us through the ups and downs.
We did the math and executed the pivots: HBL cannot sustain as a stand-alone product under current market conditions. Hence we are winding it down gracefully. Life goes on!
Bruno & Anton.