The Built Environment Bulletin with Zach Gorman, RealReports

Welcome to ‘The Built Environment Bulletin’, with Tabitha Francis, our Q&A focused on the North American Built Environment.

Our Q&A series is an opportunity for our Head of PropTech, Tabitha Francis, to discuss all things Built Environment, Start-ups, and Career with different founders from across the region. Each week we will ask Built Environment innovators burning questions and quiz them about their products. We hope you find it insightful and enjoy getting to know the founders as much as we have.

This week we have been in touch with Zach Gorman, Co-Founder of RealReports.

In a competitive market during a period of increased industry scrutiny, real estate agents need new tools to stand out and provide value to clients. RealReports provide comprehensive property information for every home in the United States, powered by data from 30+ best-in-class providers (everything beyond MLS data). Each report also comes with Aiden, an AI copilot, which provides actionable insights and answers any property question instantly. Real estate agents use RealReports to win more deals, generate leads, streamline property research, and build trust with their clients.

How did you find yourself in the Built Environment sector?

My journey into the built environment sector was a bit unconventional. Initially, I pursued a degree in Arabic and international security, spending the beginning of my career in defense. Afterward, I transitioned into the music industry as an electronic music producer and touring artist. Beyond composing, I also did all of my own design, branding, and marketing, which I leveraged into work for other artists, labels, and numerous other companies. Eventually, I began to focus on product design which landed me in the startup world. In 2017, one of my close college friends was starting a proptech business in the brokerage space and after collaborating together on a few projects, I joined on as co-founder.

What was the mission when you set out to create RealReports and what is unique about your business vs competitors?

Our mission has always been to make real estate data more accessible. Building technology in the brokerage space has allowed us to experience the many problems and pain points that arise due to data fragmentation. For example, whenever we would try to enrich our home search platform with new data, we’d be faced with months of negotiations with providers, prohibitively expensive contract terms, or data that was simply messy and poorly maintained. Moreover, anytime one of our agents was doing research on a property, they would often have to spend hours tracking down the data they needed due to these same barriers.

The big takeaway from these experiences is that nearly every proptech company is running into the same issue. Every startup in real estate has to build some data infrastructure to power their products, and having to wait six months to integrate data or pay six figures in order to access it is a death sentence. I believe data accessibility is one of the biggest hurdles that stands in the way of true innovation in our industry, and RealReports are our solution to this problem.

You can think of RealReports as an AI-supercharged ‘Carfax for homes’. RealReports provide comprehensive property information for every home in the United States, powered by data from over 30 best-in-class providers and Aiden, an AI real estate copilot, which can answer any property question instantly. RealReports are the ultimate tool to help real estate agents win more deals, generate leads, and build trust with their clients. There are numerous “property report” products out there, but most of them are just MLS data. RealReports are far more comprehensive and provide unique value to agents (and their clients) throughout every step of their process and workflow.

What are some of the challenges you have faced within the Built Environment sector?

I think one of the major challenges is time. This industry is very archaic, traditional, and protectionist. We’ve had to humble ourselves and learn that even though we’re a startup and want to move and build as fast as possible, in our industry, you have to take the time to get to know the players and build real connections. A cold email (even with a great value proposition) is simply never going to be enough to get a deal done. You need to build up credibility, traction, case-studies, and relationships. You need to go to conferences and have face-time (and a few drinks at the bar) with the people who you want to do business with. The reality is many of these firms have been burned by partners in the past, especially startups, which can run out of money, or pivot to a different product or business model. Our industry requires trust, that’s just the way it is.

The other part of the “time” challenge relates to adoption. The agent and brokerage space is notorious for slow and low adoption rates for new tools and technology. It’s all about knowing your customer–agents are insanely busy managing clients, offers, and deals. You need to meet them where they are and make it so adopting your product requires as little change to their workflow and existing behavior as possible. That’s why one of our big initiatives while rolling out RealReports to brokerages and MLS’s has been to also integrate with the tech stack and tools used by their agents. This includes CRMs, offer management platforms, and more. The more deeply integrated you are, the faster you will see adoption.

You’ve recently raised- congratulations. It hasn’t been an easy landscape for those looking for funding. What would your advice be to those looking for new capital?

My first piece of advice is to be honest with yourself and acknowledge that raising any amount of capital in this market will not be easy. I would challenge founders to question whether venture capital is the route they even want to take, because as enticing as it can be, most businesses do not need to be venture-backed in order to be massive, profitable companies.

More tactically, I would advise that if you’re a pre-revenue business, raise money before you launch an MVP or go to market. Because of the market volatility that’s occurred over the last 18 months, many funds have raised their expectations for investment. The second you have any revenue, you will be assessed based on your growth/progress and if you don’t hit certain benchmarks month-over-month, you won’t get investment. It’s easy for an investor to say “great progress, but come back to us in a few more months when you’ve grown even more.” So, if you’re pre-revenue, stay pre-revenue and raise capital on the idea and the team.

I also think it’s important to understand the psychology of investors, especially in this market. I will be the first to admit that I’ve had a lot of pride going into fundraising and when I didn’t get reaction or results I was looking for from investors, I sort of balked at them and thought, “Well, what do you know?” But the reality is, investors have their own priorities and mandates. They’re optimizing to return the fund for their LPs, so more than anything, you need to be able to clearly chart a path for your business that helps them accomplish that goal.

Lastly, I would say that one of the most important things you can do when raising capital is build relationships with investors and only take money from people you truly want to partner with. If the vibe is off, run in the other direction. Your investors become part of the fabric of your company, which can be an immense benefit with the right investors, but a terrible hindrance if they’re the wrong investors. We’re incredibly lucky to have found some truly amazing investors that participated in our most recent round.

With this capital secured, what are your plans surrounding the deployment of it?

We’re looking to stay lean and grow. We want to put a lot of the capital into the development of our product, adding in more data sources, accelerating sales, and becoming profitable as quickly as possible. Once you’re default-alive, you’re free to build the business on your own terms and that’s incredibly important to us.

As we’ve all seen, the market has changed dramatically in the last 18 months. How do you think that has impacted hiring across the sector?

There have been a ton of layoffs across our industry, which means there is a lot of talent looking for work right now. While I don’t celebrate this, as an early-stage founder, having a surplus of talent available is very advantageous and drives salaries down so that great talent is somewhat more affordable. Startups are always seeking to be as capital-efficient as possible, and hiring is one of the biggest expenses, so it makes a big difference.

In the same vein, I think many early-stage companies are looking to stay as small and lean as possible. Nobody wants to go through the painful layoffs like we’ve seen so many businesses forced to go through over the last 18 months. That also means companies will be preferential to candidates who can work and provide value beyond their discreet role or job description. Especially in early stage startups, having someone who is can wear multiple hats should be a prerequisite.

Finally, what are your predictions for the talent in the North American Built Environment sector?

This isn’t specific to North America, but I anticipate that the advent of AI will change a lot about talent and hiring moving forward. Certainly AI will replace some jobs entirely, but I think it will be people who use AI that will replace people who don’t use AI.