Swinging For The Fences with Rentvine CEO Dave Borden

the culture of your company is everything. It's not one of the things, it's everything. And I would argue that those systems and processes that you talked about, those are generally put in place by the people that work there or at least help. And the culture of how they feel about where they are is going to determine how much they hold each other accountable to doing those systems correctly and helping each other out and taking ownership of everything that they do within the business and holding each other accountable.

Welcome back to Peter Lohmann's podcast. Today, I am beyond excited to introduce Dave Borden, co-founder and CEO of Rentvine, to the show. We're going to get into some dynamic conversations today about the property management software industry, what's going on, where are we going, what's Rentvine up to. Before we get into those details though, Dave, if you wouldn't mind, just take about 90 seconds, introduce yourself for those who may not be familiar with you.

All right, Peter. Well, thank you. I'm beyond excited to be doing your podcast. You're a rising star in the property manager podcast, the podcast world. So thanks for inviting me on. For those of you that don't know me, I have been doing this for a pretty long time. My family business was property management in Colorado. That's how I was introduced to the industry. After some time in the military, I did do— I did run a property management company with my mom for a few years. And that's when I started RentClicks, which was an advertising website, which is now rentals.com. I sold that in 2006. Then I did a few non-industry things for a couple years and met my current business partner, Jonathan Ewen, and we launched a bunch of businesses together. He was ironically working on a property management software at the time that wasn't quite ready yet. He hadn't had any exposure to the property management industry. So it was lacking in the trust accounting department, but it was kind of, he kind of did have a good introduction to accepting payments and doing some minor accounting tasks, but we just, software just wasn't ready at the time. And so we kind of pivoted to doing some, another advertising site and ended up landing on PMW, which is a business that we both still own. We did recently hire a CEO to run that business so that John and I could focus solely on Rentvine. In the course of doing that business, we have about 1,200 or 1,300 customers there and a little over 2,000 websites that we manage. And obviously, we do websites, digital marketing, hosting. We have our own content management system called Nest Hub that's property management specific. And in the course of running that business, we heard over and over again that, hey, We don't love the software options that are out there. And we were like, well, too bad because that's a really hard project. But eventually we, you know, once we felt like the PMW business was stabilized, we went ahead and took it on in about 2018. And we have, we thought we have a pretty good idea of how hard it is and it's literally 10 times harder. So, that's okay. But so that's kind of where we've settled now. We kind of launched, came out of beta in 2021, April-ish is kind of when we look at as our launch date. So that's about just a little over 3 years and that's where we are now. And we have an awesome team and the business is going really well and growing nicely and we've got a lot of really happy customers and 1 or 2 that don't like us, but For the most part, it's mostly positive.

Yeah, can't win 'em all. That's awesome. So you've undertaken an incredibly ambitious project. I mean, building a property management software from scratch to compete in today's world is no easy feat. And there's a bunch of people who have tried this. I mean, I felt like for a while there, just about once a week, I was getting an email from someone who was starting a property management software and wanted my opinion on what was lacking. That seems to have slowed down a bit. I think people realized it's not as easy as it looks. Um, and I'm curious, like what I think you knew, I know you knew going in it was going to be hard. And I've heard you say that it's, it was even way harder than you thought, even though you knew it was gonna be hard. What, what really surprised you as being difficult? Like, I'm, I assume there were some challenges you expected. What was unexpectedly difficult?

It's just so big and so interconnected, the different areas of the software. Luckily, I have just an absolutely incredible business partner who is, I mean, literally a genius at programming. And he's positioned for, he's ready for this because he's been programming since he was 18 years old and he's always figured it out himself and He is the true definition of an implementer. The guy just destroys hurdles and knocks them down. And in addition to being an incredible programmer himself, he's doing just a really great job of building and running the team. So obviously, that's number one. Anybody who's ever trying to start any software company, period, if you think you're going to be able to outsource it to somebody or have a company build it for you, you better have unlimited funds because they're going to take all of them trying to build it. So you have to have a business partner, somebody that has those skills, or you're just not going to be able to do it. And look, I do think there's a little bit of a void of that really high-level talent in the property management industry because I do think there is a perception that this is not a high-profit industry, which it is tough to make money in the industry. But Property managers literally spend trillions of dollars. So that, I think that is what is kind of exposing the industry as like a place where big boy tech wants to play. So having incredible dev talent has made that a lot easier, but it's just so big. There's so many pieces that customers want that need to be connected. And it's just a lot, there's a lot more discipline in, in, in building the software than just like something like a rental site or even building websites for people. It's a lot, it's a lot more complicated of a challenge.

Yeah. I mean, you just said it. There's a lot that customers want. I know that's true. And I think one of the biggest challenges that software companies face is trying to figure out where to prioritize your time and attention, what features to build out versus what, you know, bugs and problems to just leave alone because they're not they're not the most important thing. And in property management specifically, we have this dynamic where there's a huge flourishing ecosystem of vendors, or some people call them point solutions in our space that fill in gaps and are, and in some cases are best-in-class solutions for specific problems. But a lot of those same features are also built into our property accounting softwares. How do you decide which, like, when you're deciding to, uh, implement a feature or, uh, a certain tackle, a certain type of problem with Rentvine, how do you decide how far to take that build out internally, knowing that there's third-party vendors who are going to plug into your open API and potentially have a whole business focused on just that? Like, I'm trying to understand how do you make decisions on what to prioritize and what to build out internally? Versus, hey, let's leave it to the folks who are experts.

Yeah, we have a big dartboard in the office and we just throw it out there. You know, it's funny because John and I, we've built a lot of products for the, for the property management industry. We've built PMW, we built a product called Rent Screener, which was a standalone screening platform. We built a couple other smaller products. And what we learned in the— probably the reason that we ultimately did Rentvine is because the adoption of any of those ancillary softwares without an actual software platform is going to be limited. So, you know, we may build the best screening product, period, but it's just easier if it's integrated with your software. But we also realize that we can't build everything and we can't be the best at everything. So we really do have to pick those battles, and it's really important to make that decision carefully. And we have, we have some, we, we take a we take a lot of customer feedback. We also have to decide how long it's going to take our dev team to do each project. And we have to see the impact to the customer and to our business, to our employees, to our support team, to our onboarding team. You know, everything that we build, we have to evaluate how it affects just the entire ecosystem of what we do. I mean, obviously there's a lot of customer focus around here, and I think that's what we're kind of famous for is listening, but we can't do everything they ask us to do. But we have taken an approach that we've prioritized. You know, obviously it's really important to have maintenance and there are third-party maintenance providers and we're more than happy and willing to do integrations with them. You know, API integrations, not where we go and use our dev team to build it for them. If they have a competent dev team and they can build to the API, then we're pretty much open to anyone that the customer's willing to work with. So, you know, maintenance is obviously really important. Tenant screening is really important. E-signature is huge for customers, dashboards, custom fields. There's a lot of battles that we took on that based on what we heard before we started developing, and then we try to adjust as we're going forward. And there's literally thousands of things that people want and hundreds of potential integrations that we could do. And prioritizing them is definitely a challenge. And when you have a small team against large incumbents, you can't afford to make mistakes because it eats up a lot of the dev time. And if it's not the right one or doesn't have the biggest impact, you're going to hear about it on social media. And that's been a lot of the engine for our growth is that social media people mostly love us. And then when there are negative comments, we hear about it in the sales cycle. And and it affects our growth. So we really try to hit those challenges that are the most important. So I don't know if I answered the question or not, but like I said, maintenance, e-signature, tenant screening. There's other items like inspections. Our inspections work, but they're not as good as like ZInspector or some of the other inspection products. But luckily those guys have built an incredible integration with us, so we don't even have to worry about that right now. There's some CRM and workflow companies, LeadSimple and Apley, that do a nice job. So we've had that on our dev calendar that we've just kind of pushed it back and we're like, hey, if you want that stuff, you gotta for now, you gotta use those guys. We'll, maybe we'll get to it in 3 to 5, 6, 10 years from now whenever we're caught up on the other stuff. But that is the reason that we chose to build the software as an open API. And just, I wanna make sure everyone really understands what that is. I mean, the Rentvine backend is an API and our React frontend accesses that data through the API just like any other software vendor would. So anything you can see as a customer can be shown in another software, manipulated and sent back through the API. So what that truly does is allows a customer to build their own stack if they deem that whatever we've built, we haven't built anywhere near the tech stack that a property manager needs to run their entire business. But we do give them the freedom to choose. Okay, Rentvine's great at maintenance, so I'm going to, I'm going to use theirs, but they kind of suck at inspections. So I'm going to go use one of their integration partners, which makes it a lot easier. And, you know, or one of their workflow or CRM products. And we're fine with that because we realize that we cannot do— we don't have enough time to build everything that a property management— property management is complex, you know that. And we don't have enough time to build everything that every manager needs. So we, we do pick our battles and the API theoretically will handle the rest. Now it does require competent dev team at the other software.

So yeah, I love that answer. Yeah, no, there's a couple of things I keyed into there. One is you mentioned early in your answer, you evaluate the— when you're deciding what features to build out internally versus leave to others, one of the things you have to consider is the load that it may place on your support and onboarding. And I think that's a super important point that a lot of property managers may not think about when they're railing against their software partners for features and, and additional functionality. It's one thing to build the feature. It's another to build all the help libraries and train all of your support team. And then all the onboarding folks have to now know about it and be able to sell against it and So there's like way more to it than just, well, I'm a programmer and I could add this in 5 minutes, right? Everything is just way more complicated than it looks on the surface. What I'm also, what I'm also hearing in your answer is you've taken a pretty opinionated position. I think you've gone into this super clear-eyed, which is like, we're going to build the core trust accounting functionality and we're going to build out some of the most essential things that a property manager needs to do on a daily basis. We're going to make our software available with an open API, and we're going to welcome and encourage vendors and point solutions to build against our core platform. That is quite frankly refreshing, I think, in a different position than a lot of the other software vendors have taken. Now the winds have shifted quite a bit in the last few years, and I think there's a much more open approach than there had been, but it is, it's it's, to me, it's interesting to hear such a clear-eyed articulation of sort of your thesis to building property management accounting software. And I do want to key in on the, the trust accounting part of that. You said on another podcast, I was doing some prep for the show, I love this line, every property manager has a regulatory requirement to do trust accounting. That's a core piece of the business. And I think we do that better than anyone else. Definitely agree with you that it's core. Would love to hear about how you approach trust accounting differently that is, in your opinion, a better way to do it.

Well, now, and one more item on what you previously said about the point solutions. It's not just the point solutions. It's also the customer. There, we have customers that have some dev talent or dev teams or that they can also use their data themselves. Through the API and build a custom dashboard with a Monday or Data Studio or something like that. So it's not just Point Solutions using the API, it's customers using the API to manipulate their data however they want to with whatever application they want to.

Are you seeing a lot of pickup there? Like, um, I don't know if you can share exact numbers, but are you seeing many customers actually do that? I feel like it's one of those things that everyone wants the ability to do it, but how many people actually have the technical chops either in-house or through a vendor partner to actually build against like an API and get functionality out of it?

I would say most property managers don't, but some have partnerships or employees even, or, you know, maybe a technical company that can help them. And, you know, we do have several examples of that, not only from like individual companies, but also we have, One of our large customers is PMI and they're able to use the data in Rentvine to build a data warehouse for whatever they want, for whatever kind of reporting that they want at whatever level they want from the individual franchise up to the corporate reporting that they want to do globally. So that's one of the more important uses of it is large companies able to slice up their data how they want to. Into the accounting, you know, obviously, and it's going to depend on the system. Some systems are better than others. There's, you know, it just a direct comparison against any of the other systems out there. I do feel like, you know, one of the things you mentioned about property managers railing against people on the support is they also rail against things and then they have their one of their counterparts wants to do it exactly opposite. So there's people, this is how you do it. And then we have another customer that says, this is how you do it. And it literally is exactly opposite. So we do a lot. I think we've taken an approach with custom fields and with settings that allows people to do it whatever way they want to. And with the accounting, we believe that portfolio-based is better than property-based because it gives you more flexibility. And, you know, with in comparison directly to just like an AppFolio, that's probably the biggest, the biggest advantage there is you don't have to do those ledger-to-ledger transfers between properties that are owned by the same owner.

What does that mean? Can you— I'm not familiar with that portfolio-based versus property-based. Can you explain that a little bit?

Well, if you have a customer that owns more than one property, they can hold that in a portfolio instead of having to have a bunch of property silos, which obviously the more properties they have, the more important that becomes. Because if they have funds available in their entire portfolio, but they're negative on one or two properties, they can tap into those funds without having to create a ledger transfer. So, and what we've heard is that that eliminates a ton of customer support on explaining owner statements when they come out every month, which is, obviously a time of, it's one of the times you deal with your customers and it's usually negative. It's why is, what's going on with the money here? And you have to kind of explain that and they may or may not get it. But with a portfolio-based solution, you can, with your larger owners, you're able to do that. Now, obviously we do have 3-way reconciliation in the software and we have accounting dashboards, which a lot of our competitors do not, which are going to show key items, you know, late payments, all that kind of stuff that go into accounting. We, you know, obviously the core of property management for the software part is, is this is the accounting. You all have to do that legally. And if it was easy to do, then everyone would just use QuickBooks and we wouldn't have to worry about all this software and it would be easy, but it's not. And we also do have a QuickBooks integration too that makes it easy to move the corporate data from— for your management fees and that kind of stuff from Rentvine to, to QuickBooks. So like I said that, but, but ultimately you're building a product for property managers. They're not accountants. And unfortunately, the one-man show or the two-man show, they, they kind of have to do it themselves because they may be not maybe they can't afford to hire an accountant. I mean, I strongly recommend and wish that everyone would hire someone to outsource their accounting, but we do realize that everyone can't do that. So you have to try to build a software that turns a non-accountant into at least a competent accountant. And we believe that we've done that.

Awesome. So I know you've talked before, you guys have raised some money in the past to fund, you know, development and all the things that go along with building a software company. Being from the property management world myself and never having raised money before, that world is a little foreign to me. I'd love to hear a little bit about how you made the decision to raise money and then like, how do you decide how much to raise and where to get it from? This is like, I'm, I'm interested in this just as a business person who, who doesn't have any experience in that world.

I already mentioned the dartboard, right?

That dartboard gets a lot of use around the Rentvine office.

Yeah, it's great. It's been right so far. You know, when we first started programming, we decided that we were going to internally fund it ourselves and, you know, like we've always done in the past and John's just going to pull all-nighters and build it with our dev team. That was one of our first realizations that, hey, we're going up against incumbents with basically unlimited money. So we can't take a slow approach like that. So we started, we knew that we needed some people to run the front end, back end database, all that stuff that requires a lot of time. So we did raise an initial round of just like a million bucks to hire a few developers to help us with the core software and the accounting early on. And then as we grew, you know, you just kind of evaluate how are we doing. Is the product delivering what we're trying to deliver? Because, you know, remember we, and we set up Rentvine as a separate entity even though it makes perfect sense to combine it with PMW because it's the exact same customer. But on advice of our counsel, they're like, hey, you know what, if you suck at Rentvine and it doesn't work out, you really don't want to have your other business encumbered so you can at least feed your family someday if, if you want to do that. So I thought that was good advice. So we, we, we did have to kind of silo that and keep it separate. And, and then the decision comes like, okay, we do have customers and they're happy, but they want a ton of stuff. Are we on the right track? And if so, do we feel like we're able, you know, we started this company because we want to be the very best at it. We don't want to be fifth place or third place or fourth place. We want to be the best and win. So as long as we felt that we could do that and, and can still do that, then we've gone for additional funding and we've asked, you know, friends and we've, we've done, we use what's called a PPM so far, a private placement memorandum, which is basically you kind of put out a document that says, here's, 100 reasons why you should never invest in this company, 'cause it's probably going broke. It's ba— I mean, if you read it, it's, it's basically what it says. You have to disclose everything that's ever gone wrong. If you've ever been sued by anybody, how much money you think you're going to make, and you have to treat all those investors exactly the same or else you could open yourself up to trouble in the future. And, you know, we were going to friends and family, which is tricky because we had a ton of confidence in what we're doing and we were like, hey, we know what we're doing. We know what the industry wants. But if we fail, I don't really want to talk about it with my dad every Thanksgiving, how I lost $250,000 of his money. So it's a really tough decision to do that, especially. And also, you know, we do have, we have some property managers that have invested and, you know, if it didn't work out, then, and they're a PMW client, but we lost their money. So that's a difficult it's a very difficult decision. And we take it very seriously because, you know, like I said, I don't want to lose anyone's money. And, you know, but we have significant amount of our own money in it too. So, it's not like we're asking everyone else to fund it while we enjoy all the benefits. I mean, we've put off our dividends from our other business for more than 5 years to fund the company as well. So, you know, we're taking the risk right alongside them. And every level that we've kind of gone up, we've increased the valuation of the company. And so, you know, that's the decision is do we feel like we can achieve more with more resources and get us closer and faster to what we're trying to accomplish? And generally, that's been the decision-making process. And we've done a few rounds of funding and we have not reached out to VC and PE. You know, so far, I mean, we're not necessarily opposed to that, but you have a lot more control over what you're doing when you do it through the PPM route because we, you know, they're basically just investing and trusting us to do what's right and they can't really tell us what to do. I mean, obviously if you start going down the VC or PE road, then you're going to get a partner that's going to give you a significant amount of money and for that, they're going to want to have a lot more say in what in how you run the business. I mean, obviously you can set up a, you can set up a relationship that, that works for you, but that's typically the reputation is that they want to have a lot more authority over the business.

Got it. Okay. Thanks for sharing that. So I've spent a pretty good amount of time around SaaS companies. I've never founded one, but I've been, especially in recent years, quite close to a fast-growing SaaS company in our space, one of the things I've noticed and really keyed in on is that talent is so crucial for a growing software company. And I think when I think about my property management business, obviously talent is important, but when I think about what makes someone successful in property management, a lot of it comes down to the systems and processes and really getting those dialed in so that your move-in process is smooth and your client onboarding process is smooth. When I think about what makes software companies successful, I make up that it's way more about the caliber of the talent, the leadership, the developers, the marketing folks, than it is about the systems and processes of, uh, any specific function in the business. So as a CEO, it's, you know, obviously something I'm sure you spend a lot of time thinking about. How do we recruit and retain top talent? What have you learned in the process of starting and incubating several successful businesses that, that we may be able to take away from this and apply within our own businesses?

The culture of your company is everything. It's not one of the things, it's everything. And I would argue that those systems and processes that you talked about, those are generally put in place by the people that work there, or at least help. And the culture of how they feel about where they are is going to determine how much they hold each other accountable to doing those systems correctly and helping each other out. And taking ownership of everything that they do within the business and holding each other accountable. And we've done the core values and the mission and vision. And as a CEO, I'm in charge of the culture in making sure that it is what we promised, but we need everyone here to to own it and to enforce it. And so systems and processes are important in every business, but the company culture, and I think one thing that a lot of property managers, not everyone, but a lot of property managers view employees as a necessary evil. And I come from a small property. My parents did not go beyond themselves. Because they didn't trust anyone else. And I think that's a pretty common ailment in the property management industry. We trust our people. We've gone from 18 to 100 people in a year and a half, and you can't do that without incredible trust. And everyone talks about their culture and either it's real or it's not. And the culture overwhelms people. And if they're not the right fit, they need to be gone. And they will usually, during the interview process and during the hiring process, you want to communicate what your core values are. And if you're good at that, they'll self-eliminate because they'll say, well, God, it sounds like a company that I'm going to have to work a lot at and pull long hours and do stuff. I'm not interested. And when we do miss, you move on immediately and you protect the rest of your employees from a bad decision that you made on a hire. And everyone sees that and gets it and knows that for whatever reason, they weren't a part of the culture. And I do a lot of reading and studying, and I look at that as my most important job. And, you know, we, we push it down and push it up. And if there's core value violations, everyone in the company is, is required to call them out.

Love that. So you said early in that answer that the culture overwhelms you, you know, as a new employee or as a, as a prospective candidate to work at Rentvine. I love that because I do think that some of the strongest cultures they take a point of view, right? I mean, honesty, integrity, customer focus, like these are not cultural values. These are just boring moral statements, right? A real culture at a business should be somewhat controversial. It should be the way I've heard this articulated, which I really like, is a good core value is something that someone could reasonably disagree with. And if I were to show up at the Rentvine HQ as an employee on my first day, what would overwhelm me? What would stand out to me that maybe I might not like that's something that Rentvine takes pride in?

Well, I don't know if you wouldn't like it, but because like I said, if you do a good job during the interview process, they should be a good fit. And when they come in the office, they should feel that I made the right decision and these are, these are my people. And we have had that a lot in our office. We have a big open office, high ceilings, open environment, great communication, easy to talk to people. I mean, a little limited on private space for conversations and conferences. I actually, we had to get an annex over here where we do this kind of stuff and have bigger meetings, but I don't know if there's anything that, and like I said, we, we don't have, I will tell you in our entire history, we've had one person quit. So the, and they asked, they kind of called us back a couple months later and said they made a mistake. But so zero, basically zero attrition. I can't tell you how much of an advantage that is when you have to, when you have a new product, you're trying to train, you're trying to get people trying to spread the knowledge and you do that for 6 months and somebody leaves, that's painful. I can imagine it doesn't happen to us very often, but I don't think they'd walk in and, and not like it. We have our core values posted. We talk about it during the interview, and if they for some reason don't know what the core values are when they walk in, then we made a big, we, we screwed up. And so they shouldn't, they shouldn't, they shouldn't get that feeling walking in. But if they do, we probably missed and they're probably not gonna last long. So now, you know, we have, we have a core value, relentless. You know, maybe some people aren't relentless. You know, we want to relentlessly compete and battle to be the best. And, you know, if that's not your mentality, then you're in the wrong spot. If you just want to come in and, and, and plug along and do a little bit of work, and it's, this is the wrong place for you.

That's a great example. I, I love that one, relentless. And that, To me, that rings true for what I know about Rentvine and what I know about you. I think that's, that's a solid core value for you guys. And I like it because just like you were articulating, someone can disagree with that. Like myself, I'm not super relentless. I do things that are easy. I will kind of freely admit that I do things that come easy for me. I have a tendency toward being a little lazy. And so if I was interviewing at Rentvine, I probably would self-select out, and I think that's a great thing, right? If you're trying to be everything to everyone, you're not going to be able to build a core, a culture that attracts the right kind of person and, and, and results in the, um, the retention rate that you've just articulated, uh, which is outstanding. So that, that is super. Um, getting back to the, to the product for a second. Are you able to share anything around growth rate, how many units or companies are on the platform? Any details like that?

Like I said, we kind of officially came out of beta in April of 2021, so it's just over 3 years. And you know, we finished 20— this time last year we had about 30,000 units and now we're over 100 and growing pretty nicely. So we are, we are, you know, 300% plus growth year over year right now. And we expect that to continue for a while. We finished, I think we finished '22 with maybe 140 customers and we're over 600 now. And, you know, they're all sizes. So yeah, it's a pretty consistent growth in both customers and units.

I know you, I think you mentioned PMI is on the platform. Is that right?

Yes, they are.

Okay, great. So that's obviously a big win, right? You pick up, you pick up a franchise and you, you get to add the members as they convert. Any other large customer wins? Like, I assume— I don't know how much you guys go after some of the large institutional players in the space, but I know those are, those are big from talking to some of my other property management vendor friends, they get really excited, right? When they get talking to an institutional client with potentially thousands or tens of thousands of units they can bring over with, with one account. How do you guys think about that? Because I feel when I think about that, just I'll give you my perspective as a property manager, I get a little scared because suddenly you have one customer that sort of dominates your total unit count, and in the past I've had bad experiences there where those folks either try and throw their weight around or they threaten to leave, and now I'm kind of in a tough position because they're such a big percentage of my overall unit count. So how do you enter discussions? Like, um, what's your approach to handling a large potential customer when they start asking for concessions or pricing?

That's definitely a double-edged sword, but it's exactly the same as any other. I mean, obviously, there are other items that go into it like how are you going to logistically handle the transition? But ultimately, I'm telling you, we have a crocodile rule. I'll explain whether it's a customer, vendor, whatever.

Crocodile rule. Tell me about it. This sounds interesting.

Well, it's going to be a long explanation, but I'll tell you basically a crocodile is someone we just don't want to deal with. Whether it's a, you know, a difficult customer or difficult vendor, whatever. If anywhere along the process we determine that this customer is not going to, is going to be a constant problem for us, anyone has the authority at any time to pull the plug, issue a full refund, and say we're just not a good fit. And that applies to large customers, probably even more so because of the items that you just mentioned. We want them to be good people that we want to work with as well. And, and we don't believe that good, good customers hammer you for concessions and discounts. I mean, it's— everything's a negotiation, and certainly that's, that's fair. And you're going to expect any large company to, to use their size to, to negotiate a maybe a better price or better service levels or something like that. But ultimately, they have to be they have to be good people too. And I tell everyone that, you know, I'll take big customers, but ultimately having a bunch of 1, 2, 3, 400-unit customers is not a bad thing. And, you know, I agree with you that you don't really want to have somebody who exercises too big of an amount of control over your business. And, but if you want to win and lead, you got to, you got to learn how to, to deal with customers of all sizes. And that's, that's one thing we want to do. So we need to be, we need to be able to figure that out.

That's great. I think that's helpful for those who are listening who are operating a property management business. I think there's a lot of corollaries there, right? You can definitely work with large customers as long as they're reasonable to deal with. If they're unreasonable to deal with, asking for a discount 'cause they're bringing 200 units, that's not an unreasonable thing. I'm speaking on the property management perspective. It's one thing to ask for a discount and negotiate a little bit. It's another to just be a jerk and steamroll and demand that when I say jump, you say how high. And I think even small unreasonable customers can be an unbelievable drain on a business.

And we mentioned it in the panel we did, I see so many property managers that take so much shit from their clients and it's just so not worth it. And look, I'm not going to tell anyone to turn down dollars. And my parents— look, my parents were like this. They would take a lot of business that they probably shouldn't have. And I just kind of learned by watching them that that guy's taking up all your time, you know, and it's not worth it. I would— and we've had people ask us to build software to accommodate bad relationships with owners and we're like, if we can't do that for you, you have to work on your relationship with your owners. We can't build a, you know, we can't build better communication with your owner because they don't trust you to, to, to do certain things. And I just— my heart aches for those property managers that take that kind of abuse from their owners. It's just not worth it.

I don't— I don't want you to build software to accommodate my bad customers. I want you to build software to identify my bad customers. I need to know who is the 5% of our clients right now that is taking up 25% of my team's time, right? I think that's a really powerful, um, way to think about some of the data that's kind of, um, beneath the surface in the software that we use every day. There's some insights there that I'm excited about the industry starting to uncover and surface that is going to make all of us just a little bit calmer and a little bit happier at work. Uh, the ability to know where my team's time is going and who are the customers that are, that are really consuming that. Everyone loves— I hope you're not insulted if I call you an underdog story. You're going to get, you're going against some large incumbents. You're getting traction. Um, what's the BHAG? Like what's the, what's the where are you guys headed with the software? What, what, what, what could you look back on and be like, okay, this was a success. I'm glad we took the time and money and invested it because we got to X. Yeah.

So BHAG, that's Big Hairy Audacious Goal, right? For those that— is that, is that a good grade or I'm not sure?

I think it's something from Jim Collins probably.

Well, short term is we want to, we want a million units and I know that's kind of an arbitrary number. But it's also a number that kind of gives us a valuation and just a level of, it gives us a level of credibility to get us to our actual goal, which is we want to win. We don't want to be, we want to lead the category and we don't want to be second or third or fourth or fifth, even though if we are, we'll make a ton of money, but we want to win. We want to be the best. Possible solution out there, the one that everyone feels like they need to use because we're just simply the best and it's the easiest and, and, um, we understand our customer and we understand what they need. And that's, that's, that's what we want to be. So we want to be number one.

Love it. Super clear. Couldn't be more concise. And I think that's really important. You can't, you can't get somewhere if you don't know where you're trying to go. So I love that. Yeah.

One thing in Good to Great is you, You don't do anything unless you think you can be the best in the world at it. We firmly believe that. And, you know, we didn't want to be the 16th best software provider in the world. So we, that's, that's what we want to be.

So speaking of being the best, I'd love to hear what are some of the segments, products, or features that Rentvine is intentionally deprioritizing so that you can remain laser-focused on your ideal customers and being the absolute best for them? Because I know you're— I'm sure you're getting pulled in all different directions. I mean, can you do apartment buildings? Can you do HOAs? Can you coordinate my maintenance with my plumbing company that I own as well? Like, so what are some things that you're like, you know what, that's on the do not do list so that we can be 100% the best in this area?

Yeah, pretty much everything you just mentioned. I mean, we do have limited capability to do like HOA. I mean, we can take payments and do books and, and documents, but we're not going to let you make pool reservations and tennis courts and gate compliance. And we, we don't do all that stuff. If you want to do very basic stuff, no problem. Multi, we are fantastic at handling multi. However, the people that we know the best are single-family residential long-term property managers. And there's thousands of companies out there that can get us to that million-unit goal without us having to build and develop and waste our time on other areas. So we're staying laser-focused on single-family, the, you know, NARPM-type crowd, even though they're only 10 to 15% of that customer. We, that, that's who we're going after. The single family, we've, there's way more than a million units available there. And once the coffers are fat and the war chest is big, we'll move on to some of those other items that you mentioned. So on the deprioritization, a lot of times that identifies itself. I mean, when we moved into this, we're like, you know what, we're going to build the best software we can for each category. And it may take 20 years, but in the meantime, Like I said, we have a fantastic inspection integration with ZInspector. We're not gonna mess with that for a while. We'll just say, go, you know what? Go use ZInspector. We have a two-way integration. You can send your, your inspections back from the app. You can create work orders from the app. So why do we need to go do that? Workflow CRM, we have Aptly, we have LeadSimple. We're not gonna mess with that for a while. We may do it someday. But for now, it's go use them because we're not going to build it for you right now. You know, we're focusing on what's the most important and critical and, you know, we have some things to work on and that's what we're going to do. So, we're going to stay laser-focused on single-family and we're going to avoid integrations where somebody's doing it better than us. If they're not doing it better than us, we may take it on. But as long as there's people doing it better than we are, we're not going to mess with it.

Wouldn't be doing my job if I didn't ask you at least one question about AI. Obviously AI has taken the world by storm in the last couple years. There's been some AI integrations in some of the other property management platforms. Where's Rentvine? How are you thinking about AI? Any AI tools that are out right now? Anything planned?

So we think we can lead that. We think we can lead the charge there as well. So I mean, we've already integrated some of the AI property description stuff. And it's funny with AI, you know, you have to train it and you have to get better at it. When we first launched it, there were some fair housing problems in it and we've kind of dialed that in and, you know, you can't clean it out completely, but it's pretty dialed now and it saves, it saves tons and tons and tons. When I started RentClicks, people were coming off the newspaper and they'd write in 3BR, 2BA, like, guys, it's not a newspaper ad. You've got 1,000, you know, write as much as you want. So property managers, no offense, and I'm throwing myself in there, we're not, you're not great at writing awesome descriptions, but AI is. So use it and just make sure there's no, you know, you got to read it first, make sure there's no problems with it. But that's one, you know, one of the areas that the few that we do get complaints on from others, you know, the only system we ever get any complaints on people switching from is that Folio. And usually it's, because it takes a little longer to find what you're looking for in Rentvine than AppFolio. And we've kind of identified that that's our global search. Well, we're rolling out a global search next week that is, you know, going from a weakness to a strength. And there are, we're going to launch the first component of the AI assistant into that global search, which is going to be, you can create charges from the global search. So charge this tenant $500 from Mike's Plumbing or charge this property $300 from Mike's Plumbing. It'll take you right to the appropriate screen with all the, all the information filled in and all you have to do is approve it. It can be typed in through the global search or it can be voice activated. And we're going to add those in in a priority of customer use. And we believe that we will have the, the, you know, the 8 or 10 most, uh, time-consuming, uh, you know, and time-saving AI, uh, actions in our global search by the end of the year.

So that's awesome.

We're gonna, we're gonna lead that area as well. We— but it's— I still, I think AI is kind of a buzzword, and it's not AI like you see in the movies where it's, you know, vacuuming the floor and mixing your kids' food and that kind of stuff, but it is extremely helpful. And if you, ultimately what we want to sell with that, those integrations is time, because I know that people will pay a lot more money for time than they will for software. So we're going to lead in that area as well. So we're, and we're going to have the first one out next week. And we're also cleaning up the global search. That's like I said, we're going to take it from a weakness to a strength with the iteration we're about to launch.

You have a great perspective on the industry. You've been into the, in the industry on both sides of the table. And by that I mean, you not only did you grow up in property management and have operated a property management business, but now you've also been on the vendor side, what we think of as the vendors, PMW, Rentvine. Tell me a little bit about what are you seeing for the industry over the next 1 to 3 years? Let's ignore AI for a minute. Let's think more about industry dynamics, M&A trends, growth, consolidation. What, what are some things that listeners should be paying attention to for the residential property management space over the next 1 to 3 years?

I think you're going to see a lot of the same, but I do think you're going to see a tremendous amount of investment and interest more additional interest from PE, VC. I do not from a software perspective. I do think the interest from PE has waned a little bit because I think they kind of realized it was harder than they thought, which is really good news for the individual operator that I've heard for 10 years how scared they are that the PE's going to come in and take them out. And it's just, it's such a boots-on-the-ground business that it's really hard for them to compete. And I think everyone's seen a lot of those guys come in and try to run portfolios and they have 20%, 30%, 40% vacancy rates and they're getting sued left and right and it's really challenging. But as AI is important, I think you're going to see a ton of investment into the space because it has been identified that there's a ton of money flowing. Like I said, I mean, a 400-unit customer spends about $100,000 a year on plumbing. That's one, one category of maintenance for one company for 400 units. It's enormous. You know, you guys know how much money you spend and people are— as people are going to try to slice and dice and get a piece of that as much as they possibly can. So I think you're going to see continued investment into the industry, not only from a technology perspective, but also from a, from a private equity and, and, and owning and managing perspective. And they— there will be, there will be more roll-ups and consolidation. But I think that it's, it's— that is an opportunity for the individual operator that wants to keep doing what they're doing, to compete on service and support. And because those big companies just can't, they, they, they can't They can't seem to scale the support and customer experience that a smaller operator can. So I think it's going to be a lot more of the same with bigger investment.

Yeah. And that the support function, the customer service function within the property management business, definitely agree. It's an area of challenge and struggle for companies of all sizes. And I think the bigger you get and the less experience you have in the industry, the more that shows up. Man, I would love to crack this nut. I've experimented with structuring the company a little bit differently so that we have a dedicated support team who's focused on addressing inbound requests from property owners and residents and doesn't have operational duties, and then letting the folks who are actually executing the work of managing property, trying to separate out so they're not constantly being interrupted by what a software company would think of as support requests or tickets, right? Hey, why do I have this late fee? Or let me get a copy of my statement. Those are, those are essentially support requests that normally most companies are handled by the property manager, but I'm actually experimenting with segmenting those out. What are your reflections on how we can be better as property managers so that we could scale to hundreds or thousands of units without that part of it breaking down?

You know, a lot of the stuff that you mentioned can be, you know, we would like to help out through, through some software, some software integrations. And we look at the portals as the, as the area to do that, the tenant, owner, and vendor portals. To increase communication. And one of the kind of altruistic things that we look at is like, we feel like those are your customers, not ours. And we think that some of our competitors interfere in that relationship, whether it to market to them or contact them directly for products and services. And we believe that that's your relationship. So we think that it's possible for us to strengthen that relationship through the use of excellent portals with, you know, your tenants are your customers, your owners are your customers, your vendors are your customers, and they can communicate with you through the software in those portals. And we want to give a lot of additional value and services in there, which will strengthen your relationship with your customer, which obviously improves customer retention, helps you add more business. But to specifically address a lot of that stuff that you're talking about is it's tough for property managers to scale with the, like I said, the profit limitations in the, in the industry. And a lot of people have done a good job of increasing their profit per unit. There's vendors that can help with some of that stuff. You know, I do also think that everyone needs to be evaluating where appropriate using like remote team members for a lot of those tasks. And, you know, I don't, a lot of people don't like to work with remote team members, but man, there's a lot of really great people in other countries that make a lot less money and in their country, it's still a nice wage. So, I don't ever feel good about underpaying people for things, but, you know, in poorer countries, $1,500 a month is a heck of a lot of money. So I don't think you should feel bad about doing that as long as you can, as long as you can get the level of service that you require for your customer. And I think that you're able to do that more if you're able to try, you know, that's where your processes do come into place. And I also do think that you kind of have to have some internal people that are really, really good on, on what you, what you do to be able to train and assist when, when, that part of the business doesn't operate as smoothly as it should. But I think that that's truly one way to be able to scale that economically and improve those service levels. I think a lot of people are doing that, but a lot of people are doing it way better than others. And the customer contact is, it's the most important thing for us. It's the most important thing for you guys. And the better you handle that, you know, a lot of owners just want to talk to you. And if you can't do a good job of handing that off and if your people don't care as much as you do and don't have a good process of handing, you know, if you are going to have a trouble ticket taker and then have them pass it off to whoever's going to deal with it, as long as that handoff is good and hey, you know, here's who's going to be coming to your house. And as long as the support level and service level is great, you can do it. But that does require a lot of discipline and it requires a lot of paying attention to that. And again, I think that's a cultural, like a business culture thing. If you have a great culture of whatever your core values are, your people will do that for you. And if you don't, they won't. So that's why I go back to the culture being just, it's the one thing in everything that makes everything else work. Great cultures, are awesome and successful and bad cultures, you can't overcome it. You can't overcome it either way. You can't overcome a great culture with— if you're, if you're not good and you can't overcome a bad one. If you're, if you're a great worker and you're in a bad culture, it's just, it's just, you got to work on improving that.

Love that, Dave. That's really my takeaway here is that focus on culture. I think you did such a nice job of articulating that. Big takeaway for the folks who are listening and trying to grow their own businesses and are— over time, I've kind of moved away from my focus on systems and process. And I think every year that goes by, I start to focus more and more on the people. So I love that explanation. Thank you for coming on the show, Dave. This has been outstanding. For folks who want to follow along with you and Rentvine, where's the best place for them to do that?

Well, obviously you can check us out at Rentvine.com. You can email me at Dave@Rentvine.com and I'll either respond or pass it along to the appropriate person. We'd love to have you come on board and help us, help us build out the software that property managers deserve.

Awesome. Thanks so much, Dave. This was great.

All right, Peter, thanks a lot.

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.