Product Leadership at AppFolio with Kyle Triplett

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Probably my favorite thing is to-do lists, tasks, like, you know, where is AI going to change the game for people? To me, it is about ad hoc and particularly recurring tasks that people have to do where they're locked into a screen. That you're going to be able to have AI solutions be able to handle many of those tasks and free up time for you, for your people to be able to go do the more important things. So to me, like if I take a step back and I'm like, okay, why does AI excite me? What gets me out of bed in the morning? It's the idea of building products that create a digital experience that changes the way that people can interact in the physical world.

Welcome to Season 4 of Peter Lohmann's Podcast. This podcast is a show about all things residential property management, from property operations to sales and marketing to growing and managing your team. I'm your host, Peter Lohmann, co-founder of RL Property Management. For Season 4, I have an exciting new guest each week. We go deep into conversation about problems facing professional property managers and the best ways to overcome them. Thanks for listening. Now let's go. Welcome back to Peter Lohmann's podcast. Really excited today to introduce Kyle Triplett with AppFolio. Kyle, you're the SVP of product over there at AppFolio. Welcome to the show.

Thank you. Thank you for having me.

Definitely excited to be here.

Yeah, me too.

So I'd love to have you start by just giving us maybe like 3 to 5 minutes of background on yourself for anyone who isn't already familiar with you.

All right. I don't know who's familiar with me, but you have to bear this story again.

You probably have some fans out there, I bet.

I don't know. We'll see. So I'm Kyle Triplett, you know, thank you for everybody who's listening. Start with just a background on me. I actually began my career in real estate private equity, so worked for a number of years in the space. And at the time we were a Blackstone fund that ultimately became Invitation Homes. So I was the director of investment management for the Los Angeles and Southern California region. And had a really awesome opportunity there to see the rapidly changing single-family space and be part of that growth.

Yeah. What years was this? Just for context.

Yeah. So it would've been beginning of like 2013 timeframe all the way through to 2017. Okay. So right after the IPO and then actually becoming a public REIT. So I did acquisition, disposition, asset management, all those fun functions and Got to meet some amazing people and really developed an absolute love for the real estate space. So I am without a question, you know, I'll be in the real estate vertical in the property management area for my career. Just a huge passion for the physical nature of it. I love the fact that it's a sticks and bricks business, the human connections, all those pieces. So for me, you know, super compelled with the opportunity to be a part of that. And so 2017 timeframe, I met who ultimately became my business partner. And I joined as part of the founding team for a company called Dynasty. And we were focused on building digital employees for the real estate sector. So had a really amazing team of machine learning engineers, traditional engineers, folks who really brought a pretty amazing level of talent to the space. And I was the lucky person to get to join them and be a part of things. And so really a special opportunity to be kind of first to market as far as this digital employee, you know, AI agent concept. Awesome.

What year was this?

So this would've been 2017 and then—

Oh yeah, way early.

So really early. Yeah. I mean, we were, even the way we were like pricing and monetizing things, these things was like, uh, you know, very, very early days. So obviously didn't have the, uh, large language models of today to be able to prop those up, but, you know, used machine learning, deep learning techniques to build our products and You know, we were fortunate to, to grow really quickly. Our flagship product, Lisa, we actually have the, the patent for the artificial intelligence-based digital leasing assistance.

So, oh, that's cool.

We are the first to market there and, and pretty exciting. And so grew that business, got a number of, of enterprise customers, large public REITs folks who did full deployments. And during that process got introduced to Appfolio and originally talked to the founders and leadership team and developed a relationship there. And we ultimately decided that that's the home that we wanted. Just so ahead of the game on believing in this next technology wave of artificial intelligence. And early 2019, which crazy, it's coming up on 6 years for me, I joined AppFolio. So during my time, I've done all different kinds of stuff here. Initially integrating the products, really focused on how we bring it to the hands of the AppFolio customer base. But then ultimately led into the broader product development organization at AppFolio, led a number of different zero-to-one products and projects for the company. Stacks launch, the Max tier that we released, RealmEx and our AI products, in addition to tons of different areas of the product and accounting, leasing, maintenance. So kind of got to run all the different aspects of the product suite. And so I just recently took over as head of product, which, you know, I'm super excited about. For me, it's like, you know, came from a background where I knew I could steer a jet ski, right? It's like a small team moving fast, doing all this stuff. And now it's like the, you gotta get in the cruise ship and figure out how to operate at scale and, you know, maintain that startup energy, that startup speed, that conviction, but also like ensuring that we operate well as a large business. And so anyways, that balance has been super intriguing for me. It's been a lot of fun and I'm super grateful to be a part of things.

Love this story. So real estate private equity background, got your feet wet in real estate, fell in love with it, and then founded or co-founded basically an AI startup before AI was a buzzword. Sold it to Appfolio and then stuck around and have risen through the ranks there. That's not something you see every day. Usually the folks who sell to the big co, you know, they put in their year or two and then they bounce and maybe go do something else. What was compelling for you about AppFolio's culture or the organization that you're like, you know what, this is awesome. I want to stick around. I want to grow. I believe in the mission.

I love it. Yeah. So I, you're totally right, by the way. And you know, my other business partners, as much as I love them, have gone on to do different things. And for me, it was the love of the real estate space and my belief that, you know, even during the process of kind of vetting, you know, if we were going to exit, who would we want to exit to? I felt like AppFolio had an incredibly special opportunity to change the landscape of the industry. I'm a genuine believer in that. And we had some folks enter the business like Shane Trigg, who's now the CEO of the company, who I deeply believed in and really like instilling this vision, this idea that we could power the real estate industry, that we really could change the way that folks do things, change the experience for our customers, change the lives of our customers. And I felt like it's unique to have an opportunity to make that big of an impact at scale, and I wanted to be a part of that. And so that was the big motivator for me, is just loving the space and actually believing that AppFolio was the right company to be able to, to kind of truly change things and change the landscape.

That's awesome. And I think we've really seen that AppFolio somehow, for being how big the company is, seems to release products and product updates at a very rapid pace. It's always impressed me, actually. And I wanted to ask you, as head of product over there, and you've been involved for quite a while, had your hands in Slack and a lot of other success stories, like, how do you get such a big company to release on such a regular cadence and just take risks and try new things? And this feels like— that feels like what I make up. I've never worked at a big company, but what I make up about it is that it would be really hard and challenging and there'd be everything by committee and it would be old stodgy thinking. And that's not the vibe I get from AppFolio at all. Like, how do you keep that pace up?

So it's a totally real stereotype to think that, like, I think that we, you know, it's easy to fall in that trap, right? AppFolio is a growth company. And at the end of the day, if we're going to be a generational business, we're going to be a growth company. I don't think there's any other way to operate, but at rapid pace, you know, willing to really embrace innovation and change the way you do things. So I'll try not to rabbit hole too hard here because it's something I'm actually really passionate about, but I believe that speed is a superpower and specifically speed of execution. So to me it's the best strategy and it's incredibly powerful. I don't personally have any interest in going slow, just to be totally honest with you. Like we're, we're here.

I'm bored. We're speeding this up. I'm going to get bored.

Like real, real talk. So, uh, you know, we're here to change the industry. We're here to change our customers' businesses. Our customers don't want to wait. You know, they don't want to wait for, you know, what's the next wave? What's the next big thing that's going to happen? And so, you know, driving a culture of momentum, driving a willingness to disrupt ourselves, to me, that's totally crucial to being that long-term growth company, being that generational business. So, you know, something that's super important to me is that AppFolio doesn't rest on our laurels. Like we don't just say, oh, you know, we're big. We have a lot of scale, like great job, high five everybody. Like that's, that's not what gets me.

Which would be tempting.

I mean, it's tempting, no doubt. And you know, fall in that trap and we've maybe even had instances of falling in that trap. And like, you know, one of my favorite comments I heard actually pretty recently from one of our R&D team members was like, Affolio feels like a startup again. It's like this, it's like beyond exciting to me to drive that culture forward, to make our people understand that they're part of something bigger and have an opportunity to make a real impact. Like this is an awesome industry to actually make real impact in. Love speed. I could talk about it all day, but it's not enough to just be fast. Like that's actually, you know, it can't only be be speed. There's principles in how you execute and how you execute well while still moving quickly. And so like some examples I'd throw out there, extreme focus, like have to have extreme focus on what you're doing, like really very clear mission, very clear vision. You have to be customer obsessed, like know the problems you're actually solving. If you're not customer obsessed, doesn't matter if you're going to move fast. And another one I'd throw out there is like a refusal to accept constraints. Like, you know, don't just assume that because something is working the way that it's working today, that that's the way it's going to be forever. Like, don't accept constraints, have a willingness to disrupt, you know, kind of operate under that lens. And at the end of the day, the thing I care the most about on this, like, you know, speed of execution type of concept is the say-do ratio. What we tell our customers we're going to do, we deliver on. And that's like very, very important to me. So anyway, it's like TL;DR, super important part of our strategy to be agile, to drive innovation. Launches like Stack, launches like RealmX, those wouldn't have been possible without this mentality. And like, I'll give you like one example here on why I think if companies don't do this, they're at risk. Let's use the AI example. I don't think anyone predicted the speed at which generative AI would be changing the technology landscape. If they tell you that they did and they're not Sam Altman, I don't believe them. So like, honestly, yeah, it's just, I think understanding though that there's a technology wave that you create a vision. That you understand how it can impact your customers, you know, we were able to actually leverage our culture of agility, this culture of focus, and to be first to market along the large, you know, PMS providers with a suite of GenAI field products. So that's incredibly exciting to be a part of. You know, I think like that's the competitive advantage that Appfolio will have. And I love that you're calling it out.

Today's episode is brought to you by Appfolio. The team at Appfolio gave me a lot of creative freedom. With this sponsored spot. And I wanted to highlight a couple things that really impressed me about AppFolio. The first is they have been super early to AI. And if you want to learn more about how AppFolio thinks about AI and what the heck an AI factory is, which is an awesome internal phrase that they use that I think is one of the coolest things I've ever heard, go back last season and listen to the episode called What Is an AI Factory with Kat Allday. Kat Allday is the head of AI at Appfolio, and I did an hour-long interview with her to learn all about how Appfolio thinks about AI and property management. Basically what Appfolio has done is create a suite of products that they're calling Realm that are all AI powered. And some of these have actually been around for years and are some of the favorite features of property managers who use AI. The newest AI product that Appfolio is coming out with is called RealmX. And if you haven't seen this yet or been on the beta for it, it is an incredibly powerful conversational AI, similar to ChatGPT in some ways, but built specifically into your property management software that has access to your data and can actually answer questions and help you do your job. Learn more about Appfolio and RealmX at appfolio.com/ai. Thanks to Appfolio for sponsoring this episode. One of the things that also strikes me about Appfolio is that you're continuing to invest in, you know, what I think you guys call small SMB, basically operators like me and my peers, right? Folks who have 100 doors to 1,000 doors, call it, under management, or even up to a couple thousand. Scattered Site, SFR, third-party management. Our industry often feels like it's kind of, or our segment of the industry can sometimes feel like it's sort of a backwater, not a backwater, but like, I mean, if I was building a third-party management—

maybe from certain, you know.

Yeah. Yeah. But you guys are definitely focused on us, which feels great. What about this market segment gets AppFolio excited in reinvesting and coming to our conferences? And like, it's clear that, that, that's been a focus.

Yep. 100%. Yeah. Thank you for calling it out. So to be super clear, absolutely continue to invest heavily in SMB and single-family, you know, if you want to pair property types to it as well. But SMB space for us, we love our SMB customers, no doubt about it. The product began with an SMB focus, so we have successfully scaled our business. We have brought on larger and larger operators. We have, you know, enterprise-level firms using the product now. Very successfully. But we still have a massive install base of SMB customers that we want to serve, and we still sell a very high count of SMB customers every single year to switch to our software. So, you know, this is, this is not going to change. SMB will continue to be a core part of our product strategy. I can say that with extreme confidence. And actually, we're thinking deeply about how do we better serve our SMB customer base. So what are their product needs? How do we think about, you know, packaging the products in a way that is going to really align sort of a cost-to-value concept, make sure that people are actually getting the value out of the software, you know, and then what tools can we enable to even share and value together? Like, I think that's another important part of the relationship, especially with SMB companies. So look, I believe AppFolio is the right solution to power SMB businesses. I'm biased in saying that, but I genuinely believe it. You know, we hear from customers who switch from other providers. About the amount of efficiency that we deliver. We hear about mobile capabilities that help them when they're in the field, they're doing, you know, tasks outside of the office. We get big marks on usability, on ease of use, on being able to actually, you know, use our interface. Very intuitive. That's typically one of the big things that we sell on. And the fact that we try to create experiences that are in one place. So even when you're using outside point solutions, using Stack partners, which we absolutely encourage, we still think having experiences drive through a single place, having that system of record, it's a game changer. It creates truly meaningful value for people. So, you know, our aim is really to be a long-term partner for SMB customers, businesses. We want them to have access to the same level of innovation, the, the same type of insights, the same, same type of support that a larger customer would get. And so that, that's again, an important part of our product strategy, important part of our business strategy.

Love that.

And you know, not for nothing, but some of those small customers turn into big customers eventually, which I love that, like no joke, the, the growth, you know, and percentage growth of our SMB customers. Like if I think about, you know, folks who are ambitiously trying to operate, ambitiously trying to grow, we want to make sure that they can grow on AppFolio, give them the tools they need to break through that ceiling, get past, you know, the, the 1,000 unit mark or whatever the cycle is on how quickly they're churning owners versus getting new owners, like break through that cycle. Scale their business to another level. And you know, those are absolutely like, you know, loved customers at AppFolio.

Yeah, that's awesome when there's a big success story of growth and, you know, they can legitimately say like, oh, I've been using AppFolio since we were 50 doors or 100 doors and now we're 2,000.

The coolest stories. Like people come in, they're a small business, they start with, you know, 100 units or whatever, and then they're scaled up and they're a couple thousand. Like that is, it's incredible.

So it's gotta make you feel good.

I mean, it makes you honestly, Hopefully you can kind of tell like authentic passion for it. It's like incredible to watch and talk to those people, see their faces as they do it, you know, and, and like the concept that we can help them scale without them having to like even on a linear level necessarily grow their headcount or grow their, like they are able to do things efficiently to like really scale their business to new levels, new heights, achieve their goals.

Just, it's very cool. That's awesome. So these property management customers, You know, one of the things about property management software is that the surface area that you have to cover is massive, right? Accounting, leasing, maintenance. There's all these little nooks and crannies of the software. Is there anything where your team has developed some awesome features or products that you wish more folks knew about or were taking advantage of? 'Cause you just kind of like personally love it as a pet project, but Literally, like a huge usage. Yeah, like literally every day.

Yes. Like we have— so we have investments across the whole platform. Like, you know, the extreme focus piece is critical. You don't want to bite off too many major initiatives at any given time. But at the same point, we are doubling down on our investments in R&D. Like we are not in a position of pullback. Like we're innovating across all different parts of the platform. So, you know, I think about areas like maintenance, accounting, leasing, screening. Honestly, successful customers, when I think about like who is getting a lot of value out of our product, they are staying up to date with the changes, the new features, the like agile development, and they're trying and adopting things. They're actually like focusing on getting the most value they can out of the system and utilizing that wide range of tools. So you could be in accounting, you know, we, we released a bank feed, which is like a new reconciliation process to pull transactions directly in. You know, that's the kind of thing that's like really exciting to, to see customers utilizing. Could be using, you know, maintenance requests and using our O portal to be able to make sure that their owners can actually like approve maintenance requests. There's just, there's so many examples across the platform of things that, that folks can utilize that I want to see more and more of. You know, you have Stack, you have RealmX, you have the big ones, and I'm like very proud obviously of those releases., but they are already getting tons and tons of adoption. So to your point, it's what are all the smaller features, the things that, that people can use and should be using. You know, I'd also pinpoint like not just the major workflows of like leasing, accounting, maintenance, also just delivering experiences to owners and to renters. And I think using AppFolio, you can actually create experiences that rival what, you know, maybe a bigger national company is able to, to do or to, to put out to their stakeholders. So I'd highlight things like owner portal enhancements, you know, customized performance reporting for owners. I'd say big investments, you know, which you just saw from Future conference. Yep. In Folio Space and the end-to-end resident experience. So all these things that, that like allow us to make the experiences for renters or, or owners better all through the property managers so that we are empowering our customers to be able to empower their customers with the best possible solutions. So I mean, there's tons of examples, but like, yeah, every day, like we see different products, you see the different levels of adoption. And one thing I will say just on differences between market segments, we do see a lot of times lower adoption of the actual product features with some of the SMB customers than we do with our larger customers. Like they do, you see, you tend to see more power usage, particularly in a lot of the like leasing, maintenance, accounting workflows. So I would just press people to really think deeply there about what are you not using today? Why are you doing it outside the system? There's so many things that people can get access to that are literally included in their subscription that they're able to just go in and make their business better.

Yeah. I remember in my early days and when I first started my property management business, man, I got to know my property management accounting system like back of my hand. Like I clicked around every nook and cranny. I wanted, I was reading every feature release like word for word, 'cause I wanted to make sure I was getting every dollar of value. Exactly. Yeah.

I want people to feel like the cost they're paying is like having real value delivered for that. Right. Yeah. So we call it what's new. It's like what's new in the product. And so like if you're an AppFolio customer and you're listening, like go click the what's new, read about it, like actually, you know, help training all those pieces. The other thing I'll throw out there too, as we think about AI tools, there's opportunities to make it easier for people to utilize features through things like natural language without having to learn, you know, different UI patterns. And so there's, there's new opportunities to think about how we make it easier for folks to interact with software too. So just know that we're thinking about that too. So, you know, we know that it can be a lot to learn. People are extremely busy. You know, there's, there's change management even on your, your own platform. Like to, to go out and, and kind of adjust to new features.

So you mentioned Folio Space. I'd love to hear a little more about that. That was unveiled at your National Future Conference, which was just, uh, about 3 weeks ago. What's the story there? Like, is this something that's replacing the existing resident portal, or how's it fit into sort of the broader picture?

Yeah, so overall, yes, we do see it ultimately replacing, um, our resident portal. We think of Folio Space as this, uh, sort of end-to-end resident experience. Like, we want to create a best-in-class experience for the property manager to be able to offer to their residents. Mm-hmm. And so, you know, I would add in, you know, we had our acquisition of LiveEasy, which was super exciting. And so that's really bringing in like resident concierge, the ability for folks to be able to get access to internet, to utilities, to moving services. So we're thinking really a lot about like the journey through the Folio Space app. And yes, it will ultimately be a replacement, but there's tons of value that we want property managers to be able to allow their residents to, to get access to. And ultimately even share in the, the economics of that as well. That's another really important part point for us. So if you think about like the whole resident journey, you kind of go from, let's call it like, you know, listings and showings into the application and screening phase. Then you get into resident onboarding, the concierge, all the different services that folks need to actually get into the unit. Then you have things like benefits, you know, what are some of the, the benefits that they get during the lease phase? And then ultimately where we may even go with, you know, a lot of, call it larger multifamily buildings is like community IoT, you know, different features that folks need when they're living at the building. So thinking of it really as this like kind of all-encompassing resident experience resident app that's consumer grade that gives property managers the ability to give their residents amazing experiences and then ultimately again, you know, share with that FOIA and the economics of all that.

That's really exciting. I think for property management business owners, every dollar counts at a small scale, and that's awesome. Today's episode is brought to you by PropertyMeld. In property management, effective maintenance operations are more critical than ever. With rent prices increasing and vacant properties lingering on the market, I've definitely noticed that in my market, there's little room for inefficiency. Even if your company isn't profiting from maintenance, it can't become a cost center for your business. That's where PropertyMeld comes in. As the leading property maintenance operations solution, they help property management companies optimize their maintenance processes, managing costs while protecting against liability. By the way, we use PropertyMeld at RL Property Management, which is my company, and we love it. PropertyMeld scheduling tools streamline repairs, reducing turnaround times and boosting efficiency. Real-time documentation safeguards you against lawsuits. While clear communication keeps stakeholders informed, ensuring satisfied residents and a strong reputation. With insights from over 8.5 million work orders, PropertyMeld helps property management companies like yours make smarter, data-driven decisions to elevate operations. Visit PropertyMeld.com to connect with an expert and keep an eye out for their brand new monthly property maintenance operations benchmarking report, delivering invaluable insights into industry trends. Thanks again to PropertyMeld for sponsoring this episode. I want to come back to AI just for a couple moments. So I had a great interview with Kat Allde last season, very well received. It was awesome to hear like the AI factory, and, and it's clear that you guys have been very focused on AI long before LLMs really burst onto the scene. And of course, with your background, even more so. It still feels really early, like in, in even now, like the full rollout of all of RealmX and Flows and everything is, is ongoing. Where are we headed from here? It's, I, to me it feels like very fuzzy. Like it's, I normally feel like I have a really pretty clear picture of where the industry's going over the next few years. When it comes to AI, I don't feel that way. Like I feel very, unclear. I assume you have a little bit of a further view on the horizon.

Yeah, but I won't, I don't pretend to say that I know, you know, where, where AI will head for the broader technology landscape.

So I could certainly give you thoughts in property management though. In property management.

Yeah, absolutely. So I'll, I'll actually, I'll reverse course a little just to think about like the, how we got here, you know, because you mentioned that and, you know, we had our AI initiatives and AI factory and we've had a lot of these things running for a number of years. And so here's where I can definitely pinpoint, I'll give a ton of credit to actually AppFolio's founders who showed us the vision that they had for AI within the property management industry many, many years before, you know, the hype of what you see with AI today. Right. That's cool. I love that. Yeah. I mean, they were just to go back to like, you know, what made AppFolio successful and some of the big moments that were like critical underpinnings, the founders had successfully jumped on and really thought about cloud and mobile, both as two like major technology waves that occurred that sort of propelled that Folio's product forward. And, you know, they, they had like, uh, you know, we're close to Santa Barbara, so it's like a technology waves exercise. They're thinking about like the next wave, the next thing that's going to kind of happen. And, you know, this is 2018 timeframe where we're all talking and it's basically like AI is going to be the next wave. It's going to hit, it's going to happen. And we're particularly early. It actually took longer, I think, even than they were anticipating for this kind of like bigger technology shift to occur. But I just give them a ton of credit because that was like one of the most important reasons for the acquisition of our company was just the acknowledgement, their conviction, the investment in AI, our belief that like we were going to join a larger company that actually believed this was going to change the industry was just super exciting. And AI is, again, I don't want to rattle us too hard on the, on the AI topic. I could talk about it for too long, but like AI is a broad term, right? Like it's a, it's an umbrella. It's a discipline. There's like a lot of subcategories beneath that. And if you fast forward 4 or 5 years into the reason that we're talking about this right now, it is the emergence of generative AI, the ability to create content, to have large language models and foundation models, to have the titans of technology, like pivoting into what is becoming the sort of underpinnings of the next wave of tech. And AppFolio found itself super well positioned to take advantage of this. We had, we've been bringing talent in for years. We'd had initiatives up for years thinking about how we would build and embed AI products. We had centralized data, so it's like a benefit of not being super acquisitive. We had, you know, our data wasn't spread across all these different solutions.

And which is not something to take for granted in the property management world.

Totally, totally. I think like I was super grateful as this wave hit that we were actually like competitively positioned to move quickly on it. So, and having data in a, in the right place and with the right structure and format is like a critical part of being able to interact with, with LLMs.

I love that. That, that's like a reaping the harvest metaphor is coming up for me where like you invest all this time and effort of like properly formatting the tables and keeping it up to date and like you finally get to sow some of those, uh, I don't know what I'm mixing up my metaphors, but And if I'm being totally honest, like, you know, there was, there was a time period where it's like, okay, is AI actually going to hit and have the impact and the outcomes that people are kind of thinking that it would?

Well, that's obviously out the window now, I think, as far as like belief in our business on it. But like, I was just very grateful that, you know, we were able to, whether through, you know, good vision or fortune, just be able to kind of step into this next wave. So to the original question, just on how it's going to change the property management industry, You know, I, I can go through a lot of the releases that we just did, but at, at a high level, it really is about driving true efficiency within our customers' businesses. And what I mean by that is there's a number of different areas that you can kind of pinpoint that have real value and we can create real outcomes in. So you can think about things like reporting, the abil— the ability to query your data in natural language super easily, get answers back. Be able to filter that information without having to, to kind of navigate, join tables, do any of those pieces. Very exciting. You have communications. That's one of the biggest things that we see just generally with generative AI is, you know, people using ChatGPT, whatever, to run communications. We're embedding all of that with context, and that's a really important word. We have context over what you're trying to do. You're able to actually curate responses do a lot of repetitive communication, surface that up to people and have them be able to just say, yeah, that's great. I want to change it, make it more professional, make it more friendly, whatever it is, saves a ton of time. Let's see. Probably my favorite thing is to-do lists, tasks. Like, you know, where is AI going to change the game for people? To me, it is about ad hoc and particularly recurring tasks that people have to do where they're locked into a screen. That you're going to be able to have AI solutions be able to handle many of those tasks and free up time for you, for your people to be able to go do the more important things. So to me, like if I take a step back and I'm like, okay, why does AI excite me? What gets me outta bed in the morning? It's the idea of building products that create a digital experience that changes the way that people can interact in the physical world. So like you're now able to go spend more time on human connections, spend more time at the physical asset, which as I said before, is like one of the things I love about real estate. You have to like, everyone has You're going to go, yo, no matter what, you went into a building today, you did something that touches real estate. It's very cool to me that these advancements in technology can create experiences that give time back for people to do more of that. So anyways, that piece to me is incredibly exciting. It changes like the user's life. It gives them time back, meaningful time back in reporting, communications, to-do, training, whatever it is. The last thing I'll hit on is just around outcomes. And you know, when I think about the next wave of AI and, you know, we'll talk about it in this, in the terms of our vertical, but this is really true across the board. AI needs to deliver actual outcomes to be valuable. This is not like just for the sake of marketing or saying we're different. We'll build traditional UI where it makes sense. I'm not injecting AI for the sake of just, you know, we want to market something. Yeah. Like the outcomes that can be created, we want to fundamentally change the margin profile of the property management business. We want people to be able to scale their business with far less headcount than they would otherwise have to, not have to linearly grow headcount in order to be able to scale. You know, a lot of people have staffing challenges. A lot of people have issues in hiring. They love their staff, but they want to be able to have people have more fulfillment in their job to actually feel better about the things they're doing. These are real things that can be accomplished, and we can use any number of the new experiences that we just released as examples of this. But again, like change the margin profile, give people more fulfillment in their jobs, free them up to be in the physical space.

Love that. I'll give you my own sort of, uh, pie in the sky AI wish. In third-party management, it turns out that there's a small handful of clients and properties that take up most of my team's time. And to be able to identify those would be amazing. Like, we all have guesses and usually like my sort of back rule of thumb is like, if I know a client's name, there's usually a problem. Like, it's surfaced to me that many times, like, all right. But it'd be great to have some more, you know, objective view on like, this is the kind of thing I feel like before AI it would've been this massive project and you're doing all this data analysis and, but now I feel like with the right AI you could just be like, all right, list the top 10 owners that have communicated with my team the most over the last 1 year. Or, you know, some query like that.

So yeah, a couple areas actually that I love that example. So you have, let's do the reporting side. That's what you just touched on. We have this concept internally, we call it text to data. It's basically in natural language, in text. You can ask a question, get data back. So yes, query the database, be able to get that information back. Number 2 would be actually creating communication tools so that you don't necessarily have to be the one doing all of those follow-ups. Like, how do we automate some of the communication proactively to be able to say, you know, you get into predictive analytics and some of the capabilities there. If it is like a work order that's going to set off the owner or whatever it is, you know, predicting and then communicating proactively is the type of optimization that we're, we're thinking super deeply about. So there's, there's a lot of ways to kind of like drive forward on solving these problems through AI. And I would love to have an opportunity to be able to have people not have to feel like, you know, they're dealing with that difficult resident, difficult owner. They're able to actually like proactively take care of some of these problems.

Yeah, that'd be amazing. So I want to ask you about sort of like product leadership at a company when you're coming out with a new product and this really affects I think about this too in the context of my property management business. Like when we're getting ready to make a change in our business that's going to affect owners or residents, you reach a point where you're like, all right, we're going to do this thing. We've been working on it for a while. And you reach a decision point where you're like, do we release this now or make this change now? Is it ready for market or do we keep going until it's like perfect? And I feel like there's this tension between you want to get it out in the market and get feedback,, but you also don't want to put out something that's not ready and is going to cause problems for your customers. So like, how do you know when a new product is ready for release? You don't want to get caught in this like perfectionist mindset, but you know, you got to meet this quality bar. Like, I really like, as an engineer and sometimes kind of a perfectionist, totally.

Like, it's a very real thing in R&D. Such a good question. So look, the agile mindset is to put products in customers' hands and iterate. And like, you know, back to that mantra of speed. So I will say as a larger company, you know, we have to do that safely. We don't want to put things in customers' hands that are going to get them or ourselves in trouble. But I am a big believer in phased development. And I think, you know, you can start with alpha or beta customers. You can get that feedback early without doing the broader release. You can curate who you're going to work with. So you kind of lower that level of risk. You know, I think those are important parts of that process, but we do talk about internally the concept of an MVP, a minimum viable product, right? I think what's important is if you're going to go the route of agile development, you're going to put products in customers' hands and you're going to iterate, which honestly, I think most of the time is a better, a better way to go than doing some kind of like long waterfall project where at the end, maybe the market's changed and you don't even have the right product anymore. So I, I'm a big fan of like innovating through iterative development. But that said, what you don't want to do is to have an MVP where you walk away after you release it. So I think there's a tendency to like, you can get things out, but oh, it's out. So like, let's move on to the next thing that, that would be the no-no is like, make sure that you continue to durably invest in the thing. If you're going to release to customers, you're going to put it in their hands. And this is something that, you know, we've had to do a lot of learning on and look in the mirror at too, is just to say, okay, How do we create that durable ownership if we're going to put products in customers' hands and we're going to go from beta to what we call like a live all release to all customers? How do we make sure that we're getting that feedback, that we make the adjustments to the product, and then we have durable maintenance over, or we're making sure that the iterations are captured and ultimately it's meeting the full need.

So that makes sense. Yeah, totally. And I, and I, now that you mentioned it, I've seen not at Folio, but I've seen other software and even outside of the property management world where like a new feature gets released and then it stays the same for 5 years and it sort of isn't maintained, isn't updated, and it's kind of like, well, what, what even was the point of that if you're just gonna like let it?

So yeah, we call 'em like check the box features. Like I don't want to be in a situation where it's just a check the box feature and then you kind of walk away. And it doesn't mean that, you know, that's, that's perfect, that you're always gonna get it completely right, that every single thing will be done, but I think This is part of that extreme focus concept is when you're going to prioritize something, you're going to go out and make it happen. Make sure that you actually can run the cycles on doing it the correct way and durably maintain it, which is kind of like a question of resource allocation. Yes, it is an allocation question without a question.

Yeah. You're sort of like every time you go to develop a new product, you're sort of implicitly agreeing to maintain and improve it for essentially indefinitely. So it's a big decision, I guess.

Sort of leads us to like the reasoning behind Stack on one of the many reasons too, like why have solution partners? Why have app partners? Why have technology partners kind of come in and make sure that we're able to, to offer up all these different solutions? Well, beyond just we want our customers to have choice, there are areas that we don't want to have to build every single thing. And it's great for us to be able to have point solutions who are wonderful partners to us. Who are going to be able to prop up these things. And we can't pretend that we can continue to grow at just this exponential rate on biting off every single thing. That's not feasible for a business. So like that, that's literally one of the reasons why you like create the platform, create an ecosystem, allow people to build on top of it. And you have this sort of virtuous cycle through all parties. And what we care about is unifying the experience for customers, having a single place where they can really go and get all the things that they need done., but have the, have the openness that allows them to do what they need to do and not have to have us sort of half-ass check each of the boxes.

Sure. Yeah, I hear you. I was gonna, so I was gonna ask you about Stacks. That's great. You, you led us there. So when AppFolio released Stack, I think it's fair to say that it was kind of a shocker. It was like, wow, so AppFolio's really opening things up and they're gonna, you know, bring in these point solutions and vendor partners. So what motivated that change? Like why now? I mean, not now, it's been years, but. What, what happened essentially that, that, that caused that product to really get momentum and, and come to market?

Yeah. So, I mean, there's, and, and it has, I mean, still only been about 2 and a half years, right? So it's still newer, but it has scaled incredibly quickly. Just, you know, it's been awesome. There was certainly some like dogma, if you will, in AppFolio history around being more of a closed ecosystem, you know, wanting to, to build a lot of the experiences ourselves and, I think the, the theme of why still remains. The theme of why was we believe that we can really curate the best possible experiences for customers, make it easy for them to do things in a single system. But there are ways that you can do that without having to also be more of a closed ecosystem. And so, you know, we made the push to actually open up to make AppFolio open ecosystem for partners. And actually, I'll talk about this in a minute, but even giving now read/write tools for customers directly as well. So a pretty big shift in strategy. I think that came certainly from the backgrounds of some of the leaders coming in the business. It came from listening to our customers. So this goes back to that. If you're customer obsessed and you actually listen to the problems they're having, folks were wanting to use outside solutions for many different reasons. Blocking them on doing that, not a winning strategy. We wanted to actually give them choice, give them the opportunity to work with outside partners. So I'm super excited about Stack and, and honestly, the results that we've seen have been pretty jaw-dropping. So in that time period, we have close to 4 million units now that are, that are connected to Stack. That's like, wow, pretty astonishing number. And so that's incredible given the timeframe that we're talking about. But the reception, the adoption, and the relationships have been amazing. So I love our Stack partners. I've literally, you know, even friends with, with some of our, our folks or founders that we get to interact with. And so when we think about customers needing more breadth, more depth, don't want to be locked into just our solutions, those were a lot of the big motivators for us. And I can say we're not pulling back. Like we are certainly pushing more towards being even more open, surpassing even a lot of the people in the space with how open we are at this point. Again, we released a read-write API that's available to customers. So if folks have developers on staff, If they want more access to their data, if they have the capability to do a lot of that, we're providing those tools directly to them as well. So anyways, it's been a fantastic endeavor for us.

I think a big success for AppFolio. I would agree. And I think what's interesting to me about Stack, and you really hit on it with your answer earlier, you talked about the founders and they painted this vision of AI and they were way early and they were early on mobile, they were early on cloud, like they nailed this. And you articulated how like it, it became clear at a certain point that like the, the prior beliefs around opening up to partners needed to change. And so you, you changed and it worked. That is fascinating to me. So my management company's been around for 11 years. There's things that I believed in the early days that I was early on and I was right, and now like everyone's doing it, but there's things I was wrong about and that we've incorrectly held onto these beliefs for way too long and trying to tease those out and be like, okay, no, I'm still right on this. We're just early. We're going to stay the course. This is a part of a core foundation to our success. It's how we got here. And then other things where you're like, all right, you know what? That was a dumb idea. We just need to totally reverse course. I'll eat my humble pie. Figuring that out and having the wisdom there is so challenging. So You've been around a few bigger companies now. You did a startup, you've got product leadership at a bigger company. Like, what can you share for listeners about how to understand when something's part of your core values, it shouldn't change, versus like, no, this is an opportunity, or we were wrong, like, let's revisit?

It is such a good question. You use the word, you know, principles. There's like principles and conviction around things that you genuinely believe, those should be very hard to change. And I think, you know, there's basically like different degrees on your willingness to adjust your business. And again, a lot of that comes down to like the values, the principles that you have, sort of the roots of what make your company different or unique. I think not to keep, you know, beating this horse, but like the concept of being customer obsessed and listening, And being very close to the market, I think, will actually allow you to challenge your principles when necessary. And I would just say having like dogma or beliefs for the sake of those beliefs is, is not the right way to go. It's much more about like there are core values on who you are that you don't ever want to lose, but remain nimble, open to learn, and be willing to adjust if you see and hear things in the market. That same intelligence, that same creativity that made you create those early predictions, Don't assume that you're going to bat 1,000 on this. Like, I think like there has to be, again, that willingness to disrupt, that willingness to learn, that willingness to like to be wrong. And I think that those are things that are super healthy when you get enough data, enough information to know that the market's changed. And again, this speed concept, we think about one-way door and two-way door decisions. This idea of like, if you go down a certain path, is it a one-way door? You can't ever go back. Be really hesitant on those decisions. Have a lot of data, have a lot of conviction, understand. But when it's two-way doors and you can move and you can pivot, be quick to be decisive, make decisions, be wrong, and adjust. And like, as long as you continue to, to pivot, to iterate, I truly believe that those are the companies that end up being the most successful.

Love that. Kyle, this has been awesome. I appreciate your candor coming on the show today and kind of opening up a little bit with product and AI at AppFolio. Thanks again.

This was a lot of fun. Absolute blast. Thank you for having me.

I love being on the show. Thank you.

All right.

Thanks, Kyle. I hope you have enjoyed this episode. If you like the show and want to get connected to the community, you can follow me on Twitter @PSLohmann and subscribe to my email newsletter on my website, peterlohmann.com. I try to share as much valuable property management content as I can on a regular basis. Thanks again for listening and have a great week.