Being the founder of a tech company that creates websites for real estate agents across the USA I attend many tech and real estate conferences. Recently, the National Associations of Realtors had a tech conference at the famed Fontainebleau Hotel in Miami Beach. It was 2 days of speakers predicting where technology in the industry was headed. Everybody was talking about AI.
Along with Realtors and brokers in the audience, there were many tech companies in attendance. Some of them were accompanied by their investors. One venture capitalist was a nervous young man, concerned about the $2 million he had just dropped on a new, unproven, tech concept. He was there to get the lay of the land, to read the tealeaves.
On the second day of the conference, they had a face-off. There was a table on the stage with 4 judges and, one, eight new tech companies were given 3 minutes to pitch their product to the judges. A regular Shark Tank. After their pitch, the judges had a chance to ask hard-hitting questions. To be honest, seven out of the eight companies were terrible. They took a sliver of an idea and tried to turn it into the next Meta. How they were able to convince VCs to fund these still befuddles me.
I am fortunate. My company DPI Showcase Web Sites is now celebrating its 20th year in the tech field. We have grown from a regional company to a national one. And we have done this without going after or accepting any VC funds. Yes, this was a long, and sometimes precarious journey, but in the end, we are in a better place. We have the autonomy to constantly recreate our product to be better and outperform many of our competitors.
So how did DPI get here without going after investors? The first step is to have a good product. As a marketing person, I always try to place myself in the mind of the consumer. Do they understand the product or the message? Would I be willing to buy this product? Do I fulfill a need? The better your product, the easier it is to sell or to attract consumers. If it takes you longer than 30 seconds to describe your product and its benefits you have a problem. If your product, or concept, is too fringe, then maybe you should reconsider.
It is always important to go back to Maslow’s Hierarchy of Needs. We believe that our product, websites for real estate agents, is the foundation for all marketing programs. To prove that you are a true professional, you must be online with a proper website. People will Google you. After that, you can then add any other marketing products to enhance the website’s traffic or obtain leads. As a tech developer, the higher you go up on the “Needs” ladder, the less of an audience you have at your disposal. It’s just like movie subscription services. Many people will keep the basics, like Netflix, but give up secondary services like Hulu.
The next step is funding. DPI was fortunate because at the time we ventured into the website business we had a profitable printing company that was able to fund this new product line. DPI originally stood for Digital Printers International. We kept the DPI initials because it had the benefit of years of marketing and brand exposure.
If you are starting from scratch, write a business plan with projections of costs and revenues. This is your roadmap to where you are headed and what it will take to get there. After that exercise, if you still feel committed to the project, talk to your family members about helping you with seed money. See if you can get an SBA loan. The rates there are more affordable than the return a VC is looking for. Watch your expenses. Many large companies started of a garage. In today’s Zoom world, an office is irrelevant. Be careful about who you choose as a partner. You want someone who will be the Yang to your Ying. If you are a programmer, then you should partner up with a marketing person. And vice versa. If you do have a partner, clearly define your roles and responsibilities. Do it early and in writing.
Get to market ASAP. Start the cash flowing. I remember Windows 1.0. Boy was that hard to use! But over time, Microsoft improved their product to become the powerhouse they are today. Around 6 years ago, due to changes in technology and mobile phone use, we had to recreate our program from scratch. It took a year, but we didn’t stop our efforts during that time. Once the new version was completed, we upgraded all of our clients to the new system.
If you do receive VC funds, make sure you have enough to last. It’s hard to go back to the well for more funds. Don’t go out and get an expensive office or a fancy car. Fly coach. Make those dollars last. I spoke to a friend who had received funds for a startup. My first question was “How long will the funds last?” He told me 2 years. They were able to make it last 6 months longer, but unfortunately, they were unable to deliver a viable product and that venture came to an end.
Today, DPI is venturing into creating AI products geared towards our already existing, well-established, client base – real estate agents. We have already created two tools funding it out of cash flow. But we keep questioning ourselves if it would be easier and faster to go after VC funds. We still haven’t ventured into the light.
Mark Weithorn is the Founder & CEO of DPI Showcase Web Sites, a 20-year-old tech company that provides websites and CRMs designed for brokers and real estate agents. He can be seen at www.DPIshowcase.com
