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Colin James Belyea
Founder of Building PropTech
I used to work for an asset management company in their VC team. The company also had an industrial real estate fund invested in warehouses with a portfolio of warehouses across Europe.
Every warehouse was let out, so occupancy was 100%, but every warehouse was not full - i.e. not 100% utilized. All that spare capacity was 'hidden' from the market because the warehouses were occupied, but that capacity in our portfolio alone represented hundreds of thousands of square foot not being used.
When you multiply that across all warehouses you realize that the market, whilst short from an occupiers point of view, is in fact long in terms of space available.
Traditionally, companies have always had to design their supply chain around warehouses that are fixed in terms of their location and their lease. At Stowga we free companies from the restraints of physical real estate and enable them to store their inventory in exactly the right place, at the right time for the right price.
We raised £1.8m from angel investors, VCs and one corporate (CBRE).
We have tried to make the Stowga platform as self-service as possible. By allowing any warehouse to sign up from anywhere in the world we have been able to scale to 18 countries without ever doing any paid-for marketing.
The logistics industry is inherently international so we rely on our clients telling other clients. Because of the niche industry we are in, the only marketing we do is content which we do entirely in-house and then through relationships with a handful of key journalists we are fortunate enough to get very good PR.
By far the most effective thing we have done is creating our own content, and the content that is most effective is content generated from unique data.
We have a database of over 140,000 warehouses, easily the biggest in the world, we capture nearly all online traffic in the UK, we monitor all import and export data every month to look for correlations with logistics prices and we also have a whole load of unique data provided by our clients.
With all this we try and write articles that give our clients something no one else would be able to give.
Realizing that what we were building was not working from an economic stand point. A whole load of our key metrics were through the roof - suppliers acquired, customers acquired, transactions, etc - but one day we realized that the more deals we were doing, the quicker we were running out of money.
Our business model was simply wrong. We knew had to change things, we knew how to change things, but those changes would have a huge short term impact on revenues....and of course we were up against the clock with money running out and pressure from investors.
This is a big topic and a lot of what I have to say is negative but I think the big thing I have learnt is that the real estate industry is extremely slow moving and there are very little incentive to embrace change. That makes it tough if you are trying to sell in to that industry, particularly if you need to operate on tight timelines.
My thinking is that what we will see is a load of proptech entrepreneurs startups fail but they will then go and start more property investment companies that are tech-enabled. The property side of things is pretty straight forward, the tech is not.
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