Proptech Pulse: Dave Garland & Tyler Thompson on Scaling Proptech

In this episode, listeners will learn how to build an unshakeable distribution moat to safeguard real estate software against rapid market replication. Managing Partners Dave Garland and Tyler Thompson join the show to reveal the strategic investment and scale-up mechanics used by Second Century Ventures. They provide an actionable blueprint for navigating complex enterprise sales channels and turning raw property technology into a sustainable market powerhouse. 

The conversation dives deep into the unique "buffet approach" framework used to compress startup business timelines and safely execute early-stage product pivots. We explore the rigorous selection criteria used to filter thousands of global accelerator applications and analyze the operational lessons learned from their recent footprint expansion into Mexico City. Discover the specific structural adjustments founders must make to their pitch mechanics to win over multi-tiered brokerage networks. 

As leaders of a global portfolio spanning more than 385 transformative companies, Dave and Tyler offer unparalleled venture expertise. In an era of hyper-rapid AI development, mastering these relationship-backed scaling strategies is vital for long-term real estate technology adoption. Subscribe to Proptech Pulse today and visit our archive to future-proof your digital transformation strategy. 

https://www.lwolf.com/podcast

Transcript

Kyle Hunter Welcome to the Tech Pulse podcast. Your inside look at the world of real estate technology. I'm your host, Kyle Hunter, here to guide you through the latest trends, expert insights, and game changing tech shaping the real estate world. This is your go to source for staying ahead of the ever evolving industry. Let's dive in.

Kyle Hunter Hello everyone. Thanks for joining Proptech Pulse. Very happy today to have a couple folks from reach. Many of you know industry veterans, Dave Garland, Tyler Thompson, and they're going to talk to us a little bit about the Reach program. And you know how other companies are getting involved and what they're seeing in the industry as it relates to Proptech.

Kyle Hunter So I don't know who wants to start. Dave, do you want to kick us off?

Dave Garland Yeah. Appreciate the time here, Kyle, and glad to be on the show and long time, a long time fan of everything that you've been working on over the years, as well as the Lone Wolf Team. As a matter of fact, one of my original mentors in this space was the founder of Lone Wolf, Lauren Wallace. Just a terrific human being, and he was in Proptech 20 years before the word proptech ever became a thing. So it's a it's great to be here. Thank

Kyle Hunter Yeah, and I'd love to dive in to really understand more about what you guys look for and reach and, you know, the types of companies you're introducing. But Tyler, you know, tell us a little bit about how you got into this space. Yeah, absolutely.

Tyler Thompson So I'm a life lifelong entrepreneur. Have always been in real estate in some way, shape or form. I've had tech companies in fintech and ad tech, etc. actually, the way that I was introduced to Dave and to the reach program into Second Century Ventures is I took my last startup through reach in 2014, which was the second class ever. Obviously, it left such an impact on me that when we sold that company that came over and joined forces and and honestly, what's taken place since then in terms of the growth of the vision, our coverage globally, et cetera has been incredibly exciting. But, you know, there's this old hair club for men that says, I'm not just the president, I'm a user. I'm a member. That was me. So certainly reach left an impact and an impression on me. That was good enough for me to come back and to try to make it better.

Kyle Hunter So yeah. And you know, I know Lone Wolf, obviously we've I think we've brought in a few of your previous reach class members and companies into the fold, and it's a great program. And the way that you guys have really grown that beyond the borders and outside of the US, I think has been amazing. And seeing just all of the different companies that come along, maybe tell us about a little bit about the history of reach and, and then, you know, take us to where you know, where you're at today.

Dave Garland Sure. Yeah, I think that probably probably makes sense to start from the beginning. And Second Century Ventures is the strategic investment arm of the National Association of Realtors, founded in 2008 and was really established at that time to drive innovation and empower entrepreneurs to revolutionize an industry that that's often resistant to change. And so, you know, the stated mission is to define and to deliver the future of the world's largest industry by serving as a catalyst to emerging technologies, new opportunities and top talent, etc.. So, you know, the launch at the time of CV was a strategic decision by Na leadership, sort of reflecting its community or commitment to community and putting members of that community ahead of the real estate tech trends. And so really, our primary mission has been to be that strategic benefit for this community and ensuring that the community is always on the forefront of new technology and is always equipped with the best tools to to serve the consumer. To date, we've made a lot of investments. I mean, we have investments in over 385 companies around the globe, but by far our best investment has been in reach. And reach is really the real estate industry's premier startup, accelerator and scale up program, globally recognized and launched in 2013. And really, the intent of that is to bring some of the best technologies into the ecosystem, to meet the members where they are, to meet, you know, to meet the needs of the practitioner at scale. And so includes technology in the prop tech sector, in the age tech sector, in the insurance tech and fintech, etc.. I mean, if we can find those collective challenges practitioners share both and globally, then we can we can meet those challenges with really impressive innovations.

Tyler Thompson Yeah, Kyle, the early mission of Reach was to be more proactive in our approach to technology and not reactive. Certainly back kind of 2012, 2013, you remember those times. And you know, there's we go in waves of fear of disruption in fact is what Dave and I truly believe is that realtors and practitioners will always be to the center of the transaction. Right? That doesn't mean that they can they can be complacent, that they don't have to change. Technology is the tool that helps you perform better. But we do believe that we win with people. And so the idea was, let's find the best technologies initially in the United States and residentially focused, and let's make sure that there are allies as they build, as they grow, they keep realtors in mind, etc.. And we really built a formula around that of kind of building community around those companies. And so really any stakeholder that's important to their success and survival. So that's practitioners, that's developers, investors, technologists, it's other big tech companies like yours etc.. That's you know, the early relationship with Lone Wolf came into play and we we felt like we built such a great formula for that, for success and making sure those companies are successful during the program and beyond, and they become part of that community that we started to look beyond that. Can we replicate that formula in other asset classes or other geographies? And so that was really kind of the beginning of the conversation that Dave and I had, along with other partner, Mark Birchbark, who's a senior vice president at Na. And it made sense. And so really, our first step after that, Kyle, was we started looking at the commercial space and commercially focused technologies, which is a totally different world from what we've got on the residential side. So that opened up a bunch of opportunities for us. And then we started to kind of see some interesting global opportunities, groups that were coming to the US, and we thought, why don't we go to them first? Right. Let's find them even earlier in the process, and maybe build the same types of communities in these other geographies. And I think that what Dave and I found is that even though I think we do a number of things really well in the US in terms of the way that we we transact real estate, we kind of operate with blinders on as well. Right? There's one way to do it. This is the right way. And I think it was refreshing for us to see how other people operated and start to bring in some of those ideas. And, you know, the market has been incredibly receptive. Those companies have actually done incredibly well in their own geographies as well. But, you know, I'd say maybe 5 to 10% of those kind of bubble up at the top and have an application that, you know, that applies to the US market.

Kyle Hunter Yeah, I mean, it's really cool when you're out and about and in a position like I am, and when you're attending events and you're talking to these different tech companies, how many of them just feel that sense of community as you related to, you know, where they said, oh yeah, I was reach of this class or reach of that class, or, you know, you went through part of the program or applied to the program and still, you know, where someone who got traction and really had that desire to to find a group of like minded folks that are looking to solve problems specific to the industry. And I think the other piece is that you've always kept the broker and agent, you know, obviously coming from Na kept the broker an agent center as far as that's what you're looking for, specifically in the space and then being able to take that model, you know, really cool, not just to other ancillary or outside of residential, but other places, in fact. I mean, I think you guys are launching somewhere new right now, right? I mean, you guys were in I know you're in Europe and Middle East and. Yeah, maybe tell us about what you're working on right now.

Tyler Thompson Yeah, we're.

Dave Garland City right now, Mexico City. We just kicked off our fourth cohort for Reach Latin America, and we have some exciting new partnerships that will be announcing in the next couple of weeks, as well, with organizations that essentially are an expansion of our community. And that's that's core to our thesis right now, which we believe that relationships are always going to power this industry, no matter what technological innovation you're going to throw at it. Real estate has historically and will continue to be a belly to belly business, and especially when you get into other regions around the world, you really see that happening at scale. So, you know, if if we believe that relationship power the industry, we also believe that your relationships are inspired by by good communities. And so essentially, if you were to distill down what we do best at Second Century Ventures is we're community builders. And so we're building this community of practitioners, owners, operators, brokers, developers, governments, and we seek to understand, like the core constraints of all of those respective practitioners within the community. Right. And those those constraints are oftentimes shared challenges and efficiencies, friction points, whether the friction point be within the transaction, whether it be post transaction with asset enhancement, whether it be the insurable of an asset, the affordability of an asset. That's where you get that crossover effect into other industries. And the fact of the matter is, is the real estate is the biggest industry in the world. There's no industry that is not touched by the real estate ecosystem, which means there's no human earth that's not touched by real estate. So, you know, look at it from that perspective. It's extraordinarily important for us to find those common challenges across the board and then go out and find the best solutions that, you know, meet those challenges where where they need to be. And when you look at all of the areas in the world where we operate, like, for instance, in Latin America, the challenges that we find here, whether it be in Mexico, whether it be in Brazil, Colombia, oftentimes those challenges are the same type challenges that we have in the United States, North America or Europe. And the idea is the best technologies and the best ideas. They don't care about borders, because if they solve that core challenge, then we can bring them from one market to the next. And from an investor standpoint, that's essentially growing an addressable market for the benefits of the organization in which we invest on one hand, the other on the other side of the equation. And getting back to the community building aspect is that if you have a good community that's hungry for innovation, hungry to solve their problems, what you also have is a phenomenal distribution, opportunity and distribution, we believe, is going to be a core differentiator or core moat for emerging technologies in the next couple of years, especially in an age where you can create technology at scale much quicker than ever before. So distribution becomes that competitive advantage. And so every single one of these communities that we have writ large becomes a solid distribution channel, provided that the technologies in which we invest can solve those problems. And so we're active in these regions, meeting these brilliant entrepreneurs that are, that are that are really, really taking a chance and solving, solving big problems in respective communities. And really, what Tyler and I try to try to look out for is, okay, what can we what can we bring from one geography to the next to help solve problems both domestically, globally, etc. and the crew? We just just made investment in seven additional companies that will be announcing next week. And and I think that when practitioners look at that, I think that they'll find at least 2 or 3 companies that that they can say, wow, that if I applied that to my, to my day to day operations, that that would really be beneficial to me, or I should try that. And that's, that's really what we're looking to try to achieve, whether it be in Latin America, North America and Middle East, Southeast Asia, etc..

Kyle Hunter Enjoying the Proptech Pulse podcast. Don't miss a beat. Hit the subscribe button and stay in the loop with all of our latest episodes. And hey, if you're loving the content, leave us a review! It really helps us grow and reach more real estate pros like you. Also, don't forget to follow us on our social channels. We're sharing tips, trends, and behind the scenes content you won't want to miss. Find us on all the social platforms at Get Off!

Kyle Hunter So, Tyler, you know, you guys get a lot of applications, I'm sure. And I've heard that, you know, there's a lot of companies that get in and don't make it. What do you look for when you are you know, when these companies are applying, what are the types of value sets that that make you say, you know what that is someone who meets our criterion for entering into this program. And obviously it's a limited group. So you have to go through that selection process. But you know, listeners would love to hear, you know, what goes into that.

Tyler Thompson Well, I'd love to say this. Formulaic, right. You plug in a few things and spits out answer, but the fact is that it's probably probably more madness than method. We've done this a number of times, Dave. What are we, the 47th cohort, 48th cohort now globally. So we see we assess thousands of companies every year. We get well over 1000 applications globally a year. We distill that down to short lists for each region. And then there's sort of scrutiny in interviews and a number of things that go into that. We take into account what all of these stakeholders say is missing in the industry. So sometimes it's thematic. We're looking for certain types of solutions, but other times you find exceptional founders that have a different perspective about how to support practitioners, etc.. And so really, you kind of boil it down to maybe 20 companies per region that we really like. And then you start to say, how does this cohort look, right when you put these founders together? Because it's equally important in terms of how they get along and how they work together as it is in terms of how we're going to be working with them. And so there's a lot of thought that goes into the way that we make up a class and who's participating in a certain year. Timing is important for companies as well. Right. Where are you in terms of your life cycle? Are you ready to take on a bunch of new business and a bunch of interest? We have companies that have applied 2 or 3 times before they get into reach, and they always look back and say, we're grateful that you didn't accept a few years ago because we weren't ready for, you know, for what we experienced during the course of the program. And so there's a lot of thought that goes into that. But we do rely on kind of our guts from time to time in terms of making sure that we bring the right people. And honestly, as we look back at the previous cohorts and founders that have become great friends, for the most part, we've done a really good job. And these are people that now care about this industry, deeply care about the people that really make it run in terms of practitioners, realtors, etc. and so we're proud of that group and how they've come together. But there is quite the process, as you can imagine, especially with each region kind of taking it down to call it 6 to 9 companies per year.

Kyle Hunter Has there been any that you have missed on? And you're like, man, I wish we would have. You know.

Tyler Thompson Actually, it's funny, we had a conversation last night with a couple of founders. They asked the exact same question and I'd say, yeah, there are a couple that maybe we missed out on that. Maybe we were a bit late to get to, etc. but it's hard to kind of bemoan that factor, to feel sorry for ourselves because we've hit so many that have been these, you know, absolutely happy accidents for us. And so that's the business we're in. You're not going to hit them, all right. You just it's impossible. There's too much going on there. There are too many variables. We feel incredibly lucky that we got the ones that we did that have become real kind of foundational for for what we do from a mission perspective.

Kyle Hunter Yeah, I know you definitely have had a lot of stars in there. So I know that we work with several of them even today. I think tether most recently is one of the partners that we've worked with. And so we've certainly appreciated that partnership with Vanessa and Martin. Two more questions really quick. What is some of the gaps that you guys help fill when you see a company? And a lot of times you have a startup, you have someone who has a great idea, you know, but there's they don't know it all. There's things that they're missing. What are some of the types of things that you see that these startup companies need help with or miss, that they either gain from, you know, their fellow folks in the cohort or yourselves or others? Frequently. I don't know if you want to grow.

Dave Garland Yeah. I mean, it's a great question because every company is going to be at a different part in their journey. Right? And what we're looking to be is value added investors. I mean, look, our money is just as green as any other VC. But but our differentiator is not only distribution, but it's what value can we bring to the table, whether that's knowledge, whether it's connectivity, whether it's assistance. And some companies, they're in the middle of a raise. They need they need capital to continue the evolution of their product or their distribution strategy. Other companies just don't know what they don't know. I mean, the industry, as you know, is a incredibly large and dynamic and ever evolving industry with a lot of key players, whether you're selling director, brokerage, selling to what? To team, selling to enterprise, every single one of those channels requires a completely different skill set, mindset, etc. and some companies just need that assistance. Other companies need talent and they just don't know where to get that respective talent. Other companies just need better information on go to market strategy. So so we provide a buffet table of opportunities for companies that come into our Reach program. And what we ask of these companies and the entrepreneurs. And what we filter for is the entrepreneurs that come hungry. You know, we want the we want the curious, hungry entrepreneurs. That's like to admit that they don't know everything, but they want to know everything they want to digest. Oh, and, you know, really from a lot of pattern recognition, we say, okay, you can't eat it all at once. Let's, let's let's pick your poison, pick what you want to go after first and let us help you, you know, let us help you, you know, hone that product message to if you're selling to an agent, let's make sure that you truly understand that. Agents pain. Let's introduce you to a number of folks where you can get that better understanding of how they're going to utilize your product or service. And that oftentimes is a big needle mover. I mean, it's rare where we see a company that comes into our program that doesn't pivot a couple of times and that pivoting can become costly. And so what you know, what companies tell us after the fact that we help them most with is we shave years off of that journey. And if you can save two, three, four years off of a founder's journey that has monumental implications for not only the way that they feel and behave as leaders, but also for the economic value of their organization as they get closer to, to maturity and, and and a potential exit.

Tyler Thompson Well, Kyle, I'd say now, considering how fast we can develop technology, shaving 2 or 3 months off the process is a game changer, right? And so really it's just it's about adding efficiencies. And it's Dave mentioned we have companies across the spectrum from actual startups that are just scratching the surface from a revenue perspective. We've had really big companies come through people doing 100 to plus million top line, which is interesting. And that's why we kind of changed from being an accelerator to a scale up program, because we want to be inclusive of some of those other other companies, but it really is different for every one of them. And it's only some of the most seasoned founders come in. And it's basic stuff about the way you pitch right, being concise and those types of things. And some of the younger founders, it's more about deal structure, right. And how you structure deal with, with the large brokerage or an association, others. It's just like, you know, they've bootstrapped and they're raising their first round. And, you know, what do we need to do to prepare for that? So really it's part of what I love is it's never the same. There are some prescriptive things that we do during the course of the program, but I think the magic is in the strategic plan that we try to execute with each individual company.

Kyle Hunter Yeah, I love that. I mean, a buffet approach and finding a good founder and basically identifying what they're looking for and provide the tools and help that you guys, as long time practitioners can help or at least, you know, lead them to the right place and connect them with the right folks. So those are all great practices for those in those cohorts. Last question. You guys work together. You're both managing partners. How do you divide the work? How do you figure out who is pushing who who's doing what? Like tell me a little bit about how that.

Tyler Thompson You know, I'm going to take this because I benefit I benefit more from this partnership. I've had a number of great partners in my life. I've had.

Dave Garland And this is where we disagree. We don't disagree about much. I disagree about this.

Tyler Thompson But this this has been the easiest partnership there. Honestly, it's it's really natural for us. And in any good partnership, you know, there's a shifting of who does what and how much someone does at a specific time, etc. but for Dave and I, it's been pretty easy from the get go. We we naturally know what our strengths are. I think we complement each other. Dave's good a number of things that, you know, I'm not as good at. And so it's it's a very easy thing for us. And and it might be shocking for people to hear we don't sit down in game plan. You take this, you take this. You know, if something needs to be done, one of us is jumping in the way we present. You know, we prefer to present together on stage or in podcasts because it is natural. And the fact is that between the two of us and actually the our third party, not many people see, we kind of cover the bases necessary for what we think makes a great investment team, by the way, that extends to the broader team, too. I think I would be I'd feel bad if I didn't talk about the broader team. Every one of these regions has people in the region. Running those programs is impossible for Dave and I, with 50 to 60 companies each year. So I think a number of the listeners will know, like Ashley Stanton, who runs the residential program in the US, who's an absolute rock star with her team as well. We have that type of talent in each of these regions, which makes our jobs a lot easier.

Kyle Hunter Awesome. Dave, do you want to give your side of the take?

Dave Garland Look, I, I would add that it's it's rare where you have partnerships that last five years, seven years. But I mean, I've been partners with Mark for going on ten plus years now. And that really speaks to that nature of, you know, you kind of know when, you know, it's very difficult to put on paper, like the specific segmentation of tasks. We agree on the broad strategy. And we all know like, like let's, let's, let's get stuff done. We've got our we've got our key goals and we've got our vision to, to build this community. I mean, and it's we're building something that's never been done before in the world for the benefit of the largest asset class in the world. And for that, it takes passion, it takes commitment, it takes camaraderie. And I mean, yeah, there's there's always struggles along the way. But I mean, we've handled it so well together. I'm grateful it's been the greatest partnership I've ever had, you know, in my, my business career. And I'm grateful for it, not just for, for for Tyler and Mark, but also for the, you know, the overarching team. And you have to have that machine working and everybody kind of going in that same direction and, and moving toward that same vision. And we're super excited about the future and we're very proud of our today.

Kyle Hunter Yeah. Well guys, really appreciate the conversation and looking forward to the next class. Thank you all.

Tyler Thompson Thanks.

Kyle Hunter Thanks it.

Dave Garland Take care.

Kyle Hunter Thanks for tuning in to the Prop Tech Pulse podcast. Looking to take your real estate game to the next level? Check out our cutting edge tools. Visit Al wolf.com to learn more and see how we can help you succeed. I'm your host, Kyle Hunter, and I'll catch you next time as we continue exploring the future of real estate together. Don't forget to subscribe, leave a review and stay connected. Until then, keep innovating and thriving in the world of real estate.