What we can learn from PropertyGuru: An investor shares his thoughts

Chris Evdemon is an entrepreneur and angel investor based in Beijing. He is a Partner at Innovation Works, China’s leading early stage technology venture capital fund. Chris is also a Director of Finn Evdemon Capital Partners, an angel investments firm based in Singapore and an investor in PropertyGuru.

In the past four years, Singapore has been quietly-but-steadily brewing one of South-East Asia’s first, dominant, cash-generating online verticals, certainly one of the very first to successfully make the jump from a domestic Singapore to a truly regional play.

PropertyGuru still has some way to go before it realizes its full potential and before the team cashes in on its hard work, but its progress should serve as a beacon to all aspiring entrepreneurs in Singapore and the region.

For the lucky few that have been involved with PropertyGuru from the beginning to date, the course has offered a number of invaluable lessons in entrepreneurship and in angel investing. It is impossible to fit them all in a single blog post and in any case, some learnings are always company or situation-specific. At the very least however, the following should serve as straightforward advice for simple issues that are nevertheless often overlooked by founders and investors alike.

Start early, create a product that is superior to your competition, a product that your customers are willing to pay for, and stay ahead of the curve all the way.

PropertyGuru was not the first online real estate portal in Singapore (or in any of the other markets that it has since entered) but it started early enough, and right from the onset it had the best product in the market, both in terms of design and user experience as well as quality of data.

It provided a new medium and additional transparency in a market previously monopolized by SPH and a tool that has since been — almost religiously — helping real estate agents in their daily work, marketed at a price that they are willing to pay. We are in the services business and quality of service should be the foremost preoccupation of every entrepreneur in this sector.

As a result of PropertyGuru’s efforts, conversion to paying customers and subscription renewals have been amongst the highest in the world, by comparison to its peers.

Choose the right early stage investors and make them work for you. Align everyone’s interest around your vision. Be fair and transparent in all your dealings.

Jani and Steve, the PropertyGuru Founders, had several financing options early on, as well as in the course of the last few years, including individuals, angel funds, government-backed programmes, corporates and VCs.

They chose a small group of trusted individuals with very diverse backgrounds, from hedge fund management, to angel investing, to people with an academic profile or hands-on VC/PE experience. They did not linger in their selection process and did not make the 2-to-1 or 3-to-1 matching or other similar schemes a priority.

Selecting your early stage investors is a lot more than just about the money. Each one of the investors could and did contribute in specific areas: continuous brainstorming around the business model and in terms of the international expansion in due course, sourcing of talent and senior executives, various industry leads and relevant introductions, advice on further financing or potential exit options and preparation for the ensuing negotiations, as well as installing the discipline and accountability that is so important (and yet so easily forgotten by most founders) by putting in place a proper corporate governance from the beginning, and so on.

The list is long. Good early stage investors bring additional confidence to entrepreneurs, at a time when they need it most.