Waypoint CEO Diane Vrkic on Her Platform and the Evolution of Proptech
Diane Vrkic is going on four years since founding technology platform Waypoint, which provides performance analytics for the commercial real estate industry.
The company’s chief executive said she conceived of Waypoint’s model to cut out the tedious traditional methods of gathering, implementing, using and executing on real estate performance analytics while in her five-year tenure at brokerage house JLL.
At JLL, she started out in a strategic consulting and product development role based in Chicago before becoming the firm’s global COO for its energy business, where she helped launch energy and green building development and management services in San Francisco.
Vrkic, a married mother of a four-year-old daughter, left the brokerage in 2009 to form Waypoint Building Group in order to begin developing and launching products to make the commercial real estate industry more efficient. The company was able to evolve its products and grow its revenue by building off of the requests and needs of its earliest clients, which include insurance and investment banking giant USAA, LBA Realty and HCP, Inc., Vrkic said.
Almost four years later, Waypoint now analyzes around $300 billion of assets on its platform, Vrkic said. It currently has 30 employees based in San Francisco and, after a strong 2018, announced the opening of a New York office in January.
Vrkic spoke with Commercial Observer recently while on a trip to New York to discuss her platform, where it fits into the “tech stack” and how much of an influence tech has had on the commercial real estate industry.
Commercial Observer: What was the goal with Waypoint when you first set out?
Diane Vrkic: When we started, the goal was: Instead of everyone spending 40 percent of their time trying to understand performance, what happens if we just give everybody visibility of their analytics so they’re at the starting point from day one? Once that happened, the next step was very client driven. So, our current platform has been in many ways the result of requests that came from our earliest clients. The next part we worked on was: How do we enable teams that are very distributed, with different distributed assets and classes and sometimes with different property management companies on the same platform; how do we enable all of these individuals to perform better?
We then started to automate “mission critical” asset and portfolio management processes that exist and are foundational to the way real estate is managed today. Our system began to automate those two—from understanding variances across your portfolio on a monthly basis to automating an annual business plan to enable a more effective system of records for decision making. Essentially, our platform is built to be a complete performance management solution, with the tools that allow teams to communicate and collaborate and act on any of the plans put in place for their assets. Our system has now grown to become a system of record for all day-to-day performance, management and execution activities.
Tell us about the conception of Waypoint and why you thought it would fit in the space.
I did a number of things [at JLL]. I was given a fair amount of autonomy to create and develop new business lines for the company, which was my focus. I worked on alternative workplace strategy and office utilization to operational improvement and financial improvements and investments in order for our clients to launch and manage energy businesses globally. No matter what I did, there was a very consistent pattern, trying to aggregate financial and operational data in a way that would allow us to understand performance. Once we understood the performance, it was about creating directives that management would [deploy]. The amount of manual effort, time and intensity just to execute an analysis and formulate a strategy was very laborious and time consuming. We’d then just do it [all over] again. Performance isn’t a one-time thing, but an ongoing process we’re all responsible for in our jobs in real estate.
Can you tell me more about that?
When you’re in the industry and you see the way work is done, there are foundational processes that the entire industry relies on, and it’s the same whether you’re a one-billion-dollar fund or a $200 billion fund.
What was evident for me was I didn’t enjoy the work I was doing, because it was very tedious and cumbersome. I recognized we could do more if we had access to better insights. The whole concept—automating performance analytics and creating a tool built for real estate that focused on core assets; financial and operational management practices, developing a platform that will provide analytics and workflow tools—seemed like a great idea.
We’ve been fortunate enough to have these tailwinds that have just really launched [the proptech and fintech worlds]. The appetite for technology that solves real problems in the way in which real estate professionals do their work certainly exists. And the appetite to test, pilot, deploy and change work processes to use tech in a way to make their jobs less tedious and more focused on action [is real]. I think real estate professionals are very rational if they are presented with tech that solves their problems.
How would I, as a user, utilize Waypoint to maximize its capabilities?
We’re a portfolio performance management platform. There are foundational tools everyone has, like an accounting system, and in between all those systems, everybody uses [spreadsheets] to manage their portfolio and execute against any strategic plan put in place for the underlying assets. We fit in the tech stack by sitting on top of the accounting system, so we integrate all of the major systems of record used to store any financial or operational data they have on their portfolio. Our system can ingest all of that information, whether it’s for an individual owner and operator or a limited partner with multiple joint venture partners, regardless of where the information lies. We pull in all that information to be able to present our clients with on demand performance analytics for all of the key indicators across the portfolio and across every asset class.
How would you characterize interest from real estate professionals in your service and tech, in general, over the last few years since launch?
At JLL, my voicemail was always full of people trying to sell me on building technologies. I realized that there are a lot of technologies being developed, but some of them are answers that are looking for questions; there’s a little bit of a disconnect, when you’re not from the industry, in understanding everyone’s roles, responsibilities and the ability to act around solutions. There’s a lot of noise out there. For example, the nuances between the ownership structure and the operational management roles and responsibilities; it’s confusing for folks who are building technologies to know who to speak to. Like, I never had the authority to make capital decisions [at JLL] on behalf of our clients.
The way we think about it is, if you have better access to information, like portfolio and market analytics, understanding how your teams are operating and knowing where you can drive value, it makes every individual better, because their jobs are to drive value for shareholders.
Platforms like ours don’t do the deals for you. We just allow you to operate much faster and with much more visibility. If you present rational people with information to allow them to be more effective, they embrace it.
How does this play in a real estate environment that’s changing rapidly, with the rise of actors such as WeWork?
The world is starting to change, and real estate is starting to change pretty quickly, especially with the WeWork’s coming in, with business models that are taking advantage of opportunities that folks didn’t see previously or weren’t able to act on. Because of that, I think industry leaders know they need to arm their people in a way that will enable them to be nimbler. There’s still a lot of noise and activity, and out of all of that will come a few really great companies that will be part of the foundational tech stack that will become the norm in investment management in real estate, among owners and operators and [financiers].
I think the industry is extremely competitive right now and people want to be creative and are finding ways to increase NOI and enable their teams to do more. That’s a part of the tailwinds that are helping supportive technologies take hold and become mainstream.
What are some of the biggest challenges for you in running a proptech firm at this stage in the cycle?
The ideas that our clients have for the future functionality for our clients have been wonderful, but I think it’s prioritizing our roadmaps in order to ensure we continue to create maximum value and [continue to evolve]. It’s probably the most fun part of the job, just setting the future product direction for the company with my colleagues and thinking through what would drive the most value for the most people and how we’re going to prioritize those things.
Do you envision any big investment firms or lenders, who are trying to develop their own tech solutions in-house, really disrupting the space and companies like yours?
It’s not something that keeps me up at night. And when I think about these larger companies that are developing solutions and also competitors moving into the space, I think it’s wonderful to have competition and it just makes every product better. So, I’m not worried about it, with our team having spent years thinking about this, understanding it and building a solution that actually solves problems and also understanding how to sell it and how to create a good “go-to-market.” For the larger firms like JLL [or Greystone], or any other large firm looking at creating technology, when it’s not your core competency and it’s not the sole focus and mission of everybody in the organization, it’s easy to get distracted. JLL is where I learned the business and have nothing but appreciation for the opportunities that were given to me; I just found a more efficient, effective and faster way to achieve results.