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Entrata’s Handling of Founder’s Scandal Showcases the Company’s Core Values

Utah-based property software company Entrata landed in the news recently for a reason that they would rather not be. The company’s founder and then-board member, David Bateman, sent an unhinged email to several Utah political leaders and tech sector executives, plunging the company into crisis management mode. Bateman’s email, which only had the word “Genocide” in the subject heading, was laced with antisemitic vitriol and conspiracy theories about how the Covid-19 vaccine will lead to “systematic extermination of billions of people.” It’s not the first time a company has faced public outcry thanks to the behavior of their CEO (ask Tesla), but instead of a performative slap on the wrist, Entrata took deliberate action in not only removing Bateman from his position (in the company and on the board), but also showcased the kind of character that they spelled out for themselves in their company values. Up until now, people probably hadn’t put much stock into how the company defines itself. But the fact that Entrata is taking their core values to heart, one of which being “Be Excellent to Each Other,” indicates that the company can recover from this scandal.

We can’t really talk about Entrata’s values without talking about Bateman’s email. Bateman sent his vile rant at exactly 4:59 a.m., according to Forbes. In a flash, the email had leaked to the press, but what was interesting was the refreshing speed of Entrata’s response to the scandal. Later that day, at 5:32 p.m., Edmunds issued a statement that Bateman’s opinions “were his alone, and do not reflect the views or values of Entrata.” An hour after that, Entrata’s board of directors asked Bateman to resign. Two days later, Bateman was instructed to divest all of his equity holdings in the company. The degree of which Entrara severed ties with Bateman had deeper implications than just letting go of a member of staff.

Entrata not only ousted their founder, they effectively cut off a hand that had fed them for so long. Bateman bootstrapped Entrata for almost 20 years before the company managed to raise $507 million in funding last summer from a group of Silver Lake investors. Coincidentally, that new funding allowed Entrata to hire their current CEO Adam Edmunds, who would later publicly denounce Bateman for his email.

Though it’s been around since 2003, Entrata only recently shed its “startup mode” status into a legitimate player in the multifamily software industry. Entrata was originally known as Property Solutions when it was founded. Its software helped owners and landlords track and collect payments from their buildings. The company was founded by Bateman, Johnny Hanna, Mike Trionfo, and Ben Zimmer after they won a national M.B.A. business plan competition (where later CEO Adam Edmunds became intrigued by the initial pitch). 

In an interview with Utah Business last October, Hanna explained that the idea behind upending the property management solutions that were available at that time came from one of the other co-founder’s wives, who happened to be a property manager. “She was always sharing the headaches associated with property management,” said Hanna. He came up with an idea to build a software company that would streamline the whole process for her. Property Solutions was born. Entrata, a more “end-to-end” system, was unveiled in 2012 and included accounting, customer relationship management, utilities, insurance, and more. Now, Entrata’s software is used by over 20,000 apartment complexes around the country, and it provides users with a variety of capabilities such as websites, mobile apps, payments, and resident management.

Entrata’s platform provides multifamily property managers with over 20 technology solutions accessible through a single login from any browser or device. It was also built around an open API that allows any vendor to be linked into the system and allows users to customize the platform to meet their specific needs. 

But it sounds like the company struggled in its early years because it didn’t have a cohesive set of core values like it does now. Johnny Hanna, one of the aforementioned co-founders would later leave Entrata in 2015 to co-create Homie, a peer-to-peer real estate platform that connects house buyers, builders, and sellers without the use of a middleman, recalled experiencing a medley of problems because of the lack of a company thesis. “A lot of our challenges were self-inflicted wounds due to a lack of focus on culture,” he said. The “culture” that Hanna described wasn’t a cohesive vision, but more of a back-and-forth on how to build a product that didn’t actually exist yet.

Today, Entrata has defined core values, such as “we show respect to our customers, team members, and partners by valuing their time, addressing their challenges, and discussing their ideas in order to deliver world-class service,” which was something they perfectly owned up to by ousting Bateman. Entrata has since reached out to a local rabbi to help them comprehend the roots and impact of their now-former colleague’s prejudice. At their behest, Rabbi Sam Spector met with Entrata’s executives to, as Forward writer Arno Rosenfeld put it, “walk them through the history of classic antisemitic conspiracy theories like the blood libel and the claim that Jews were responsible for spreading the Black Plague through Medieval Europe.” Entrata even offered a six-figure donation to put towards repairs and renovations for Spector’s crumbling synagogue, Kol Ami. “Spector said he was heartened to see the company and political leaders across the state condemn Bateman,” continued Rosenfeld, “but never expected that Entrata’s response would go beyond severing its relationship with their founder.” Entrata plans to invite Spector back to speak to the company’s whole 2,500-person workforce (which is split between the United States and India).

If the company can continue to grow post-Bateman, it will be an intriguing case study, not just for other companies looking to keep themselves out of hot water, but how committed a company needs to be to their core values. Entrata showcased more than a performative olive branch, they’re standing by what they’ve spelled out for themselves, and their community is taking notice. Members of Utah’s Jewish community are praising Entrata for building bridges. Going the extra mile provides longevity and peace of mind with shareholders, the general public, and the potential customers therein, especially now when prospective employees now expect to see their prospective employers pursue a higher purpose.

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