You’ve heard the success stories. Two guys and their dog started a company in their garage and it just went public on NASDAQ. Roommates in college were annoyed by the difficulties in finding a place to live so they created software to make it easier which was later purchased by a large company for millions. We love a good story with a happy ending.
However, startup successes are rare. In fact, many startup stories are never heard because they fail to make it past a certain chapter. An unfortunately popular chapter of startup ruin is scaling. After finding traction, many founders think that they have found their fit and are destined for glory. The reality is that there is still a long road from a steady revenue stream to a successful, profitable business. Investors only compound this situation. They risk losing their money for the possibility of a big payoff so they push for growth above all else. This “blitzscaling” can lead to precipitous failures that often come as a surprise to even those working at the company.
The problem starts when the solution is developed in a vacuum. The famous garage scenario creates a situation where technologists are building without the valuable expertise of those they’re aiming to sell to. This is particularly true in PropTech as founders often come from technology but don’t understand the nuances of what building owners or operators actually want. A number of organizations have sprung up to help tech companies get past the “trough of sorrow” that sets in after initial momentum is lost. One of these is the accelerator, an organization run by investors and coaches that take startups under their wing to help hone their offerings and introduce them to potential partners. But most accelerators are focused on startups just getting their ideas off the ground.
In the PropTech world, Upward Labs is working to break that mold by giving startups access to what they struggle to get anywhere else, a chance to scale. Based out of Hartford, CT the company hosts startups with working products with initial traction for a six-month program that gives them a seat at the smartest round table in the industry, a table that can provide expertise, pilot sites and write checks. Already at this table are companies like The Hartford, Hilton, Travelers, UBS, Carrier and more.
We built Upward Labs to go deeper with the startups and refine their product so it’s offering measurable value and solving a real pain point.
Shana Schlossberg, CEO & Founder of Upward
“Many accelerators are mostly focused on preparing companies for demo day,” explained Shana Schlossberg, CEO & Founder of Upward. “We built Upward Labs to go deeper with the startups and refine their product so it’s offering measurable value and solving a real pain point. Throughout the program, the startups work alongside the pilot and corporate partners to develop commercial use cases, pilot them in the Lab’s commercial and residential buildings and refine the product based on the results.” With eighteen companies already in its portfolio, spots are quickly filling up for their next cohort starting mid-May. Companies interested in applying to the upcoming cohort need to do so by March 16.
One of the companies that have gone through the program is Aura Air. They make a personal air quality assistant that alerts to current risks based on user behavior profiles, provides recommendations and filters air accordingly. The team was experiencing difficulties expanding to the verticals including commercial property, multi-family housing, hospitality and healthcare. So, they joined Upward. Thanks to the program, Aura Air now has pilots at a major Children’s Hospital and a hotel chain. These high-profile pilots will surely help bring attention to the young company and its innovative product.
“Upward is a playground where you work with very big corporate partners and learn from them through their needs and problems, and then execute pilots with them,” said Roei Fiedberg, VP of Sales and Business Development at Aura Air, who are in their fifth month at the Upward program, won the 2019 Red Dot Design Award, an internationally recognized symbol of quality. “We’ve had a great pilot process with Upward allowing us to scale up and penetrate the market with the best low hanging fruit for us—now we’re going to manufacturing with 10,000 units.”
Missing the mark on product/market fit is always a big danger for startups, especially in PropTech. It can be particularly difficult to get past when a founder is sticking to their initial theories. The “growth at all costs” that was once applauded is now seen as limiting and detrimental to the success or longevity of a company. This method of leadership often expands to the company culture and soon everyone is stuck speeding along with no brakes.
This culture of bootstrapping and “failing fast” is an adrenaline rush but doesn’t often scale up. Saya Life, an AI-powered submetering platform for water, realized their original customer target, insurance companies, weren’t receptive to their offering. They didn’t want a product, they wanted data. So, Saya Life focused on collecting data and improving their services for two years before they were able to convince their prospects of their value proposition. Now, their solution acts as an open ledger where everyone who is a stakeholder in the economy of water has clarity and visibility on how the water flows, how it’s used, what it costs and how to reduce the costs. They have also built out a robust platform that allows more IoT products to partner and plug in, expanding their network and increasing the utility of their product.
I’ve been to accelerators before, but nothing is as well organized and specific to what we are doing like Upward.
Sanjay Poojary, CEO, President and Founder of Saya Life
One of the unique things about Upward Labs is that their program requires their portfolio companies to come to Hartford for the course of the program. “Coming from California, I was worried that going to Hartford would take me out of my focus area,” said Sanjay Poojary, CEO, President and Founder of Saya Life, now in his fifth month in the program. “However, that apprehension quickly subsided as I watched our company start to scale,” he continued. “I’ve been to accelerators before, but nothing is as well organized and specific to what we are doing like Upward. We got the feedback loop we needed through the partners and are now working on pilots with a few Property and Casualty Insurers. I have to give Upward kudos for their program.”
We all love dreamers. Nothing makes fills our heart with more pride in the human spirit than the idea of someone sticking to their dreams and succeeding against all odds. But most success comes with the help of others. Tech might be able to be built in a vacuum, but business success only comes with strong networks and a flexible attitude. A great idea has the potential to change the world but only if it is executed upon well. Failing fast might be a good way to bring products to the market, but when it comes to relationships, you only have one chance. The property industry is built around relationships so it is even more important that PropTech startups live up to their commitments. Many commercial property companies have been around for decades, if not generations, and are built around a conservative approach to risk. When you already have a profitable portfolio, adopting new tech can be nice, but the gains are quickly offset by any risk of failure or extra operational complexities. Getting larger clients and scaling a technology might be harder in the commercial property sector than almost any other.
Finding partners like Upward Labs can be the difference between a smiling team of engineers ringing the closing bell on the trading floor to yet another forgotten technology with little more than a CrunchBase profile to prove it ever existed. If you are interested in applying for Upward’s May session contact Rachel Dantess with questions.