PropTech Chatter with Chris Moreno (12/24)

Show Notes Summary Chris Moreno - Primary Venture Partners Special mentions * Company: ServiceTitan, NMHC, US - HUD, RADCO, ECI, Greystar, Uber, Airbnb, Waymo, Katerra, WeWork, Atlanta Tech Village, Saltbox, Industrious. * People: Brian Chesky, Brad Hargreaves, Jay Parsons, Seth Greenberg, Norman Radow. Transcript (Disclaimer: Please be advised that this transcript may contain unintentionally confusing, inaccurate, and/or amusing transcription errors.) [00:00:00] Matt Knight: Hey, everyone. Thanks for tuning in. Last podcast episode of the year. This is with me and Chris Moreno talking about reflections on 2024 and kind of the Fall conference season. And we hinted a couple things we're going to be discussing in 25. We both sort of end up ranting in this one, but hopefully that's good. So enjoy this time with Chris Moreno. All right, Chris, thanks for being here, man. Good to do this. I think at least one last time for 2024. And I thought it might be good to start with looking back on the Fall. I don't think we've talked a lot this Fall since the onslaught of events. What were your thoughts, takeaways, surprises from Fall of 24. Chris Moreno: A couple key things, I think Matt, you know, there are so many people who have been bearish on real estate in general and even getting more bearish on hardware and getting [00:01:00] bearish on the PropTech world in air quotes, I think it's cycles right? You know, cycles like this as Warren Buffett always said, when everyone else is bullish , you should be bearish and when, everyone else is bearish, you should be bullish. And that's how I feel. I think in 2019, I was very excited 2020, I was excited. And then when the onslaught of capital came in, and everyone was raising it. You know, higher valuations, real estate was trading at all time highs in 2021, even in 2022, that's when I slowed down and I saw a lot of people who've been through cycles slow down and or sell, and now, , it's completely changed in terms of landscape. So I'm actually very bullish. I think development and if you follow, whether it's Brad Hargreaves writing Jay Parsons writing, you know, even your updates, I look for trends and things that can sustain. And one great thing is development will always sustain. Government will always be there to slow down development. NIMBYism will always be right. There is a massive amount of money in my [00:02:00] opinion to be made from automation around construction tech PropTech. And one beautiful thing is as the markets sometimes contract when the economy pulls back in certain industries, whether it's software where they can churn, I'm very hardcore around hardware and real estate because it continues to grow. Even if the sales cycles are a little bit longer. We figured out playbooks with some founders that get them there faster. So those are some of the things that stand out to me. Yeah, happy to go deeper. I mean, what's a big standout for you, Matt? Matt Knight: I guess looking back at the fall, it's sort of overwhelming the number of Events that happen, right? And they all sort of have their purpose and their niches and their attendee personas, things like that. And so it's kind of fun to look back on who goes where and why, you know, and which event is trending upward versus which ones are downward and flat and all that stuff. And I'd be curious. As we see next year, what happens in our world of conferences in 25? Cause the thing that I noticed Chris was about the second week of November, there was a lot more optimism. And I don't know if [00:03:00] that's a reflection on the new. Presidency and party coming in or if it's just the fact that the election is over because there's sort of the story, you know Every election year is a little wonky and then all of a sudden november december It's like oh the sky didn't fall and earth didn't explode and there's going to be business next year, right? And so i'm curious what the post election optimism Translates into in terms of our business, because your point, I'm seeing more transactions. Things are happening. And like the, you know, maybe we can touch on the ServiceTitan IPO from last week where there was an actual IPO in our space, you know, and that's a big deal. So I'm curious if you had any thoughts on that. Chris Moreno: I a 100 percent have thoughts in which is. Number one, sometimes you have a lot of people standing around unsure, uncertain in every, there isn't a single person who doesn't like to de risk things. You know, people, I think it's always funny when people say, Oh, you're risky or this person's riskier, that person's too risky. People rarely say they're the ones who are risky, but we all try to de risk things in our [00:04:00] own minds. And so sometimes we just need something for us to start the hamster wheel. And to your point, an IPO like ServiceTitan is a great reminder That okay, this company traded, went IPO. Their stock did not go down. Their stock, skyrocketed. It's a win, win, win. And this is a company that is. Primarily in the real estate world. And this is really great news. I think for a combination, not only of investors, it's great news for founders and operators and builders of very, very hard businesses that we know. And it's great news for development because if people can see returns. Then they can reinvest into startups. They can reinvest into technologies and R&D, and they, that are going to help development. And then they're going to invest in developments themselves. So I'm a big believer that, you know, of the flywheel effects. And, for me, it's also about jobs, [00:05:00] right? So job creation, you know, from all the success, but to your point about the election, I think in real estate, things move slower. So I was talking to some folks, you know, when we were down in Arizona, And some of the movers and shakers they were saying that we're going to move, you know, probably around January, February, seeing a lot of deal discussion now, they may not get done in December, but they will get done at the annual meeting at NMHC and in February. So really excited about, looking forward to that. Matt Knight: Yeah, I have this theory that PropTech in general is, I would say interest rate sensitive, but not interest rate dependent, because as you know, I mean, you sort of alluded to it is. When, the risk of just knowing who the next president is, is now behind us, right? And there's been a little bit of easing in interest rates. You know, if you're not dependent upon a real estate transaction to sell into real estate, it doesn't affect you that much. But if no one's spending money on anything because they can't buy or sell anything, it eventually trickles down to you. So that's what I mean, like, I don't know that we are a Interest rate dependent market, like the debt [00:06:00] markets or like the transaction market. Right? But I think we are adjacent and affected by it. And so it's been interesting to see how, as that eases along with the just question of who will the next regime be is. I mean, again, I think you're kind of saying the same thing I am, is there's just a lot more talk about deals getting done, right? A ServiceTitan or a property transaction or whatever, even in the VC world, just more people bullish on putting capital out. But I don't know if that's been your experience. Chris Moreno: Yeah, and I don't think it matters one way or the other who is elected. Who becomes the head of HUD or who becomes the head of small business administration or the fed. It's more to your point about, okay, we have certainty, you know, a lot of us have goldfish brains. And so we forget even six months to a year or two years ago or four years ago, we forget when interest rates, you know, people were saying, oh, interest rates are so high. And just continue to laugh because like these rates are still lower than [00:07:00] my first home. You know, when I was younger they're still lower than I could pretty much borrow at younger in my life and they're definitel… This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit verticaltech.substack.com/subscribe