Like many of our most successful entrepreneurs, Anthemos Georgiades was drawn into startup life to solving a burning problem. His passion for relieving the stress for others in apartment rentals has given birth to a venture which has now raised $90 million, has experienced tremendous growth, and boasts a VC line up of some of the most prized investors in Silicon Valley.
In this episode you will learn:
- Incubating a million dollar idea
- The process of recruiting ideal founders
- How to leverage your network for introductions
- The importance of your metrics leading up to the financing round
- Hacking the VC process
- Expectations from investors during the different financing cylces
About Anthemos Georgiades:
Anthemos Georgiades is the co-founder and CEO of Zumper, the largest startup in the rental industry, used by more than 26 million renters last year alone. As CEO, Anthemos has raised $39.2 million in venture capital from investors including Kleiner Perkins, Goodwater Capital, Breyer Capital and Foxhaven Asset Management, including a Series B round in Oct. 2016 when many start-ups were struggling. He has grown the Zumper team to 50 and counting and successfully completed the acquisition of apartment search platform PadMapper.
With a diverse background that includes consulting for Boston Consulting Group and serving as Economic Advisor and speechwriter in the 2010 British Election, Anthemos founded Zumper in 2012 after his own terrible rental experience. He discovered that the marketplace doesn’t work for renters, and the idea for Zumper was born with the goal of evening the playing field and increasing transparency in the marketplace.
Originally from London, he has an MBA from Harvard Business School, MPhil from the University of Cambridge, and BA from the University of Oxford. Anthemos lives in San Francisco, where Zumper is HQ’d, with his wife. He remains a huge Tottenham Hotspur fan, and wakes up painfully every Saturday morning to tune into the live English soccer games.
Connect with Anthemos Georgiades:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrightee. Hello, everyone, to the DealMakers Show. So today, we have another founder and another one that is quite successful in their own paths. So I guess without further ado, Anthemos Georgiades from Zumper, welcome aboard.
Anthemos Georgiades: Hey, thanks for having me.
Alejandro: Really, really nice to have you here and excited for the chat that we have ahead here. So tell me your story a little bit here, Anthemos. What’s your story and most importantly, how did you get started with the entrepreneurial bug?
Anthemos Georgiades: Yeah. It’s a Greek name, British accent. I grew up in London. Never thought I’d be an entrepreneur. Had worked at the Boston Consulting Group. Had worked in politics. But was drawn in to it just to solve a problem as I think so many entrepreneurs are. For me, it’s Zumper, an apartment rental platform. At college in the UK, I’ve had like multiple [00:58] renting apartments. My friend have had to camp out overnight outside the property management office to get access to the new apartment and this is [01:09] you know things coming online, you can order a cab via phone, you can book a hotel online. It seemed crazy that the real estate industry wasn’t moving towards on demand. And so I didn’t really think about it too often because this is kind of 15 years ago but then I moved to another six or seven times into an apartment rentals in London, in Boston, in New York and the process is so bad every time, not just in searching but also in actually like getting the apartment. There was no book [01:41]. And so I finally just gave in and thought no one is going to build this. It has to be me and that’s how I started the company six years ago after business school. So it was never I want to be an entrepreneur journey. It was always a man, there is a really tough problem that consumers experience and no one is solving it. So that’s how Zumper got started.
Alejandro: Got it and before we actually dive in to the journey here, so consulting and business school, this is a few things that I typically hear so from some of our other guests. So I guess how did that consulting experience shape up your approach in terms of like tackling problems and the entrepreneurial journey itself?
Anthemos Georgiades: Yeah, I mean BCG I think you get access to the 23 year olds CEOs who had been working for 40 years and kind of crazy in consulting you take the shortcut in your careers to being in the board room. So I learned a lot from a few companies that I loved, a few companies that I thought are doing crazy things I learned so much. And then at business school, I think the single biggest thing I learned through the case study method which is how they teach it at Harvard Business School but I think it’s true. A lot of business schools was how to make decisions with imperfect information. It was not something I’ve really ever thought about before. But there’s no right answer in business. You rarely have enough data to make the absolutely correct decision and I think a lot of businesses fail especially start ups when they don’t make decisions fast enough and in business schools, the case study methods taught me how to feel confident in making decisions without perfect information and how to use data to kind of then review once you’ve launched, whether it was right or wrong. And so when you think about AB testing frameworks, you think about how many started [03:43] that is a [03:44] grad school taught me.
Alejandro: Got it. Got it. So let’s talk about Zumper here. So how did you meet your cofounders?
Anthemos Georgiades: Yeah. I met Russel who [04:01] engineering products through just the personal connections in London. He had actually interviewed me for a job at a different consulting firm and we stayed in touch. We both wanted to be entrepreneurs. We both had ideas to be entrepreneurs but neither of us have the guts to actually go for it. And then when I moved out to America, Russel was software engineer at Google and I had no technical background so I basically hit up my network for anyone with a technical background living in the US who might be interested in joining and Russel and I really hit it off and he was the perfect cofounder. And then my other cofounder Kurt Taylor I met through his mother who was an [04:43] and it was another example of just pure hustle. He runs all the background of operation and he came from the real estate industry, two completely different background and neither of them was an obvious pick when I started the company at grad school. I didn’t think that either of them originally. It was just purely hustling my network for six months to find people who are really great cultural fit but also have very different skill sets to the one I have. So cofounders are difficult especially if you’re not technical as really hard to find a good technical cofounder but the great thing is once you do and it takes a long time, they are able to attract the next generation of talent in to the company and that’s how you kind of build your engineering team out.
Alejandro: Got it. And I mean it’s quite a few cofounders. So I guess in your guys case, how do you deal with the egos and then more importantly how did you define the responsibilities early on so that you kind of have that healthy culture going on?
Anthemos Georgiades: Yeah. It’s hard. We also actually had a really wonderful fourth cofounder who’s no longer with us. She was our original CPO and after the series A, she moved on to roller, another company and we promoted someone internally to CPO. So it doesn’t always work out and I think that’s fine. We’re incredibly grateful for everything she did and she remains kind of shareholder in the company. In terms of the dynamics, I think in the early days, you kind of through osmosis graduate towards like the things that are important. We have like four people at the company for the first year or maybe five for the first year and so there’s so much to do and there’s so little time and few resources that you actually there’s no real intellectual whiteboarding session that you do to carve out rose. You kind of just all in [06:39] I think where the carving of the rose start to happen for me around 10, 12 people where you no longer just have [06:49]. You start to build depth and management structures. I think at that stage it makes sense. [06:54] the early days and it worked where there was just all hands to the pump. Everyone filling gaps where they could and it [07:02] fulfilling gaps in to where you’re skilled and so I think the most obvious thing to do for that is to hire people with very different skill sets to you that allows you to never really have awkward overlap and egos because everyone is kind of skilled at something very unique. I think if you hire four cofounders like yourself, that’s difficult and luckily we didn’t have that problem.
Alejandro: So I guess in just to like follow up on that, what in your mind and obviously in what you’ve seen creates really that magical relationship between cofounders? Like what have you seen that really works?
Anthemos Georgiades: Yeah, I think it’s probably the DNA of your culture is I think a lot of it is built in the tough times. So in the first two years, Zumper is now [07:52] $90 million in capital. A lot of that is in the bank. We’re growing very quickly but none of that was true obviously in the first two years. We raised like a million dollars in seed money, that was running out so we tried various things that didn’t work and I think the fabric of our culture that is still true today when we have a hundred people is built in the dark days and those days where your stuff is not working, your users aren’t growing, and how you look at your teammates and how you guys turn up on a Monday morning after a really crappy week the week before where maybe someone quit or maybe the metrics went south. When you look your cofounders, your team in the eye and you know they’re ready to go and they’re resilient and they come back in to build and try the next thing and you’ve kind of worked out together this is part of the game. It is not suppose to be easy. You’re supposed to try six things that don’t work. You just get to this kind of motion of you all feel the same and you kind of pull in the same direction. You look at your cofounders and you know that they understand that and that they’re not freaking out, that is where you build real institutional culture and then you try and grow that across the team. So paradoxically, I don’t think the core DNA of a company’s culture is built at ski tracks or offsite. It’s really built in the dark days of when stuff is really difficult and I think Zumper’s culture now is we have a lot of users still remembers and it’s a testament to those dark days and we never take anything for granted.
Alejandro: I love it. I mean at the end of the day, building and scaling companies especially when you’re at the early stages is all about survival and it’s all about learning to be with each other behind the trenches and really going to war and having each other’s backs.
Anthemos Georgiades: Totally.
Alejandro: So I’m completely there with you. It’s not about the ski trips and any of that you know. Budget in my opinion perhaps should be allocated to something else. I think the startups end up wasting a lot of cash that could really extend runway but that’s a different conversation. So Anthemos, what’s the business model here?
Anthemos Georgiades: So Zumper is the vision for the company is to make renting an apartment as easy as booking a hotel. We envisioned a world in which a renter can find apartments, book in [tour 10:18], turn up the [10:21] and if they want to take the apartment pre-qualify, leave a deposit and book the apartment. Then behind the scenes, Zumper will close the transaction with the landlord and set the renter up with kind of rent payment. So we want to be the first ever kind of full stack rental platform for long term leases and we monetize that two ways. So we have several million users using our platform every month now which is great and next year we wanted tens of millions of users a month and we’re poised to doing that. So the way we monetize this is we either monetize the landlord mainly and we either charge them to leads. Meaning hey, we send you a ton of leads this month that close in to leases. We’re going to charge you per lead or for the smaller landlords we charge them if they’re [11:15] for the transaction. So we tell the small landlords, “Hey, don’t just advertise in Zumper. We’ll help you prequalify renters and actually get the renter in to a lease, signing the documents, paying the first month deposit but we’ll charge you a percentage of the lease fairly. They are the two ways that Zumper currently monetizes them and there are two folks that [11:35].
Alejandro: Got it. Got it. So for the business, Anthemos, how much capital have you guys raised today?
Anthemos Georgiades: Yes, we’ve raised $90 million in capital including a series C that we just closed three months ago. It was like $46 million. So the majority of that is still in the bank but yeah, we raised money in capital [12:00].
Alejandro: And did you diversify this responsibility with the other cofounders or was there one of you guys that has always been leading the chart on the financing side?
Anthemos Georgiades: Yeah. I’m the CEO and I’ve always felt that it was my responsibility to do the fundraising. So seed, series A, series B, series C, I was always the point person in the fundraise. Now my cofounders were phenomenal in bringing them to meetings. They’re both incredibly smart as are my executive team who are also like critical to fundraise where I’ll go in and sell the vision often alone. I’ll set the first couple of meetings often alone but it’s been wonderful as we’ve grown our executive team to be able to bring like our VP of sales, our head of grow, our CPO in to the meetings afterwards when they want to meet the team. And the biggest change in the series C I just raised versus in the early days is having a CFO. So our CFO is fantastic and what he was able to bring to the series C was real credibility where I meet the investors, get them excited about our vision and our story and then they spend hours with the CFO on the second or third meeting digesting our historical financial as we’re talking about where we’re headed. It just really helps to divide and conquer like that while I was meeting new investors again. At scale you get to do that and have those teams. In the early days you as the CEO you are the fundraiser, you are the effective CFO, you’re the head of sales and you kind of have to do the whole thing. Over time, it’s great to be able to bring in your team. It looks better for investors and it makes your life easier.
Alejandro: Got it. Got it. And your cap table I mean as I was reviewing I just felt as I was looking at the Oscars of Silicon Valley, the red carpet. So I saw NEA, Kleiner Perkins, Graylog, Andreesen Horrowitz, just to name a few. How did you find these investors?
Anthemos Georgiades: Yeah. So I as British person moving to Silicon Valley in 2012 I have never run a startup before. A lot of it was completely bottom up. I have no experience doing that. Saying that, I have connections through both business school and previous people that have gone through BCG venture capital and most of your listeners and entrepreneurs will know so much of this is about like getting warm introductions to VCs so I did have a couple of cheats to get in through the network or through the BCG network. And [14:42] in Silicon Valley is married to [graphics 14:43] mostly in terms of great companies just break out and succeed [agnostic 14:48] as to where people went to college or if they came from a wealthy or poor family. It is not closely married to [14:55] and that’s where it’s still on [14:58] I think Silicon Valley has a long way to go where when I got my first introductions to VCs to Kleiner, to Andreseen, to Graylock, to NEA, it often came through my graduate school network where someone was like, “Hey, this guy is leaving HBS. He was with HBS 10 years ago. Could you meet him?” And so whereas that doesn’t guarantee any success we obviously have to have really good numbers and a really good story to tell them. You shameless have to mine your network and I think all CEOs and entrepreneurs have to find that edge of how did they meet one of these investors, how did they meet someone that knows them. So yes, we have a great cap table. We love our investors. It was incredibly difficult. You always have more no’s that more yeses in fundraising but it was ultimately about just hustling my network as much as possible.
Alejandro: And talking about hustling the network, was there any because I mean those networks that you have I think the network of Harvard is really fantastic and then you know the BCG as well but is there like any process that you followed to really like leverage the network?
Anthemos Georgiades: Yeah. Not really actually. I kind of looked through in Crunchbase which connections I have into which fund. If you don’t have those connections, I think this is where like a lot of these accelerators and incubators, Y Combinator or Techstars or Launch are really good where you can apply. They take every, some people go and warm their—if you have a brilliant idea, they’d be crazy not to take it and then their entire value is obviously give you a three month program and then at the end expose you to liek 40 investors. We didn’t go that route because I have the network but if I didn’t have the network and some people have the network and still do it, they are really good cheap in to getting scaled quickly.
Alejandro: So I guess like I have one thing to follow up on this. I was really impressed when because it’s not hard, it’s almost impossible to land VC such as Kleiner Perkins on literally your first financing round, the seed round. So what was that process like you were talking about, yes, your network of Harvard but can you share with us like what was that process of landing Kleiner on your seed round?
Anthemos Georgiades: Yeah, sure. I mean to a point network gets you an intro but a lot of intros are 10 minute meetings where the VC immediately decides it’s not for them which is totally fair. So you still have to land it and once you’re on the door it doesn’t matter where you come from you have to have something good. So for Zumper our vision as I mentioned was to make renting an apartment as easy as booking a hotel and so instead of going in with just an idea, I built like a really crappy version of the end game that I wanted to build. And we built this website using an outsource development shop in Europe that just tested one assumption of the end game which was can we get users in 2011, 2012 just as mobile was coming online to apply and close apartments from their phone. And even though that sounds so obvious six years later, people just weren’t doing this in 2011, 2012 and we created a bunch of data that overwhelming shows the renters wanted to be applying for apartments from their phone. They wanted to close apartments like they book a hotel and so took the status of like 35 different apartments we leased using the technology in San Francisco to VCs and said, “Hey, we’re really going to rebuild all of this but here’s some data that shows this really can work at scale,” and that’s how we raised the first million dollars from some of the names that you mentioned.
Alejandro: Got it. Got it. And we were talking about the $46 million round which was the C round, C as in cat and basically what you were talking about I mean what I’ve seen is that you guys have shifted a little bit the strategy. So I saw for example Axle Springer which is you know more kind of like the corporate. So what I wanted to ask you here is in terms of on boarding let’s say this type of, because it’s a different beast, you know type of investors so how does the approach from evaluating an investor that is a VC, an angel or an angel group shift towards evaluating a potential strategic corporation that is looking to become part of your cap table?
Anthemos Georgiades: Yeah. In the early days we love the exposure to Silicon Valley investors. So watching board members from the early investments are [19:38] who now runs Good Water but was originally Kleiner and then Eric [19:42] from Kleiner and they’re both experts at product market set. How do you take a company with those tractions, 10 million in revenue. They are brilliant about. And then as we looked at the C round, Axle Springer are fantastic good example [19:59]. The other large investor in this round [20:05] scale so once you have product market set, how do you scale that? How do you scale like 20 million in revenue to 200 million in revenue and we didn’t need the more product set investors because we already have fantastic people at that. So I think as your company matures, you look for investors that have something that you don’t have and so for us, we’re not yet doing $100 million in revenue. We want investors who look at $100 million in revenue as table stakes but they won’t agree to a billion. And so as you mature you look for a different kind of investor and that naturally tends to happen.
Alejandro: Got it. And were they like obviously now you’re opening here the cap table to a different breed and I guess when that happen probably at a strategic level let’s say from a board perspective or something you know, maybe you receive some type of recommendations whether it was with this corporation or with other corporations as to what perhaps to look for and what to avoid. I mean if you could give some kind of like tips you know both fronts it would be really fantastic. Because I speak with a ton of founders that are perhaps opening up the possibility of bringing on corporations and I think that you need to really do it right.
Anthemos Georgiades: Yeah. It’s a good question. We’ve only been working with Axle Springer for four months now but they are fantastic. I think just up front boundaries before you close the round is super important. So you know I think Axle Springer very used to appraising companies that match their scale. We’re very clear with Axle Springer that we have a lot of consumer scale so a lot of people use our platform on a monthly basis but we’re still building the [21:55]. Obviously they knew and I think for us it was like telling Axle and the rest of our investors that there are going to be months where we massively beat plans and there will be months where we’re behind plans. And we’re just a little earlier than obviously a public company so our gross is spikier. And it was just [22:11] during the process that it’s a startup, we’re at growth stage but not to expect to be able to predict our courses like that public company again. I think if you set these expectations from the very beginning that are super important. I think it’s easy not to set those expectations and get caught in the relationship where neither side is being clear on what they expect. So all good companies have multiple offers on the table. You can set the expectations and then see what happens and if it’s not a good fit upfront, you can go with the different option on the table. For us, I think they fully understand the entrepreneurial journey and we’re really excited to have them on board.
Alejandro: Got it. Got it. So in terms of timeline, you were mentioning that the C round, you guys closed this 46 million a couple of months ago. So I guess what was the timeline of this C round compared to perhaps your seed round of 2012?
Anthemos Georgiades: Yeah. I was just talking to a friend of mine about this. He’s raising money now. I say like in the first pitch to the day the money wires, there’s always been around like a minimum of three months. You’ll get terms sheets and yeses hopefully quicker than that but this process takes a while and as the money increases and a few rounds become more complicated, it can take more than three months as well. So I think three months is an efficient round. I know entrepreneurs who spend nine months raising their rounds which is a long time but they got great rounds done. They were [sexy 23:47] company and really fantastic fundraisers but the rounds just take a long time, due diligence take a long time. So I’d say your first month you spend like getting first, second, third meeting. Your second month you spend getting term sheets and documents signed. Your third month is getting kind of diligence done and getting the wires in to the door. And as you know as and your listeners know, you’re going to get a lot of no’s on the way. For every successful fundraise, every single company have a lot of no’s. You just can’t get spooked. That’s just part of the game. Every fantastic company has had hundreds of no’s on the way to kind of huge outcomes and you just can’t take it personally.
Alejandro: Got it. I mean…
Anthemos Georgiades: It’s just part of the game and it doesn’t [24:30].
Alejandro: Just out of curiosity, Anthemos, like how many no’s did you get for example on your seed round if you have to count it?
Anthemos Georgiades: Oh yeah, on the seed round back in 2012, we had probably five investors come in to the seed round so we kind of had five yeses who put in small checks. But oh we must have had like 20 persons or 20 people say not now or later. And to be fair, some of these 20 did indeed come back later to invest but in Boston and I pitched all of the east coast investors first because I was on the east coast and they were straight no’s. Everyone in Boston, everyone in New York were straight no’s and [25:15] didn’t get second meetings but then a month later we came to Silicon Valley and we found a much better product market set for the kind of investor who was prepared to come early and invest early and we got a lot of yeses very quickly. So you kind of just have to [25:29] but just to be clear yeah, we had far more no’s than yeses at the seed round.
Alejandro: Got it.
Anthemos Georgiades: It’s part of the game.
Alejandro: Got it. Got it. Absolutely. Absolutely. And in terms of preparation, Anthemos, how has the preparation like preparing before going to market to start engaging investors, how have you seen with your business, with Zumper, how have you seen that changed over time as the rounds were maturing?
Anthemos Georgiades: Yeah. I mean I think at seed round it’s like an [26:02]. At series A, you got to show product market set in a sub vertical. At series B, you got to show product market set across the board with the revenue and then at series C, you got to show real traction and real revenue and a proper P&L. The one unifying theme in every fundraising I’ve run is momentum. There’s never like an exact number you need like when Uber raised money or you know Zillow raised money, there’s never like a number they have to be at. Every company is completely different and there’s no gold standard. But I will say the one thing is true is that you always raise on momentum. So when you go in to a fundraising in terms of preparation the most important thing is that your last six months are great and your most important metrics are all growing really nicely so kind of five, six months in a row that is a fantastic story to tell to an investor.
Alejandro: Got it. So I guess for a marketplace or let’s say for the people that are listening to us like what kind of metrics do you think for the most part if we’re talking about hyper growth companies, like they should be a little bit more mindful about?
Anthemos Georgiades: Yeah. To give you odds, at the seed stage and the series A stage of growth cuts, all about supply side where a two sided marketplace chicken an egg, on day zero you have no renters and no landlords, how do you solve that? So we solved it to the first two years purely by getting landlords on board through various kind of product strategy and so our growth cuts for the first two years that we raised the [27:41] were purely about landlords and listing. How many landlords did we have on the site? How many listings do we have on the site? After that, it changed to more consumer. So the series B, we’ve done story now look at how quickly the renters are growing on the platform. Now we have supply so the six months curve at the series B was all about users and millions of monthly users and then at the series C it was much more revenue curve. Look how quickly our revenue are scaling. So if the story has changed in a way that merits the focus of the company but what is consistent every single time we’ve raised is that for six months in a row, we had really, really quick growth. And investors love that story because it’s easy to believe that you can continue to do that.
Alejandro: Got it. You know it’s interesting that you mentioned the chicken and the egg. I was also doing, I’ve been doing marketplaces for I think like 10 years now and I remember in the last company, I would go and meet with investors and they kept asking me for the chicken and the egg. And at one point I just told one I just feel like I want to step on the egg and shoot the chicken because it was so repetitive. But I guess you were saying then here the shift, kind of like shifted more from like growth of users perhaps retention to more kind of like deep revenue growth. I guess the question that I would ask you and perhaps some advice for some of those that are listening, that are building a business that is more around the network effects, the marketplaces, should they walk the other way if the investor is asking too much about revenue early on on the financing cycles?
Anthemos Georgiades: Yeah. Great question. Well, first of all, your point about quashing the egg and shooting the chicken. Two sided marketplaces are so difficult. I’m so glad I did it. I don’t think there’s a startup I could have launched that taught me more. It’s so hard to get marketplaces liquidity so correct, the beautiful thing as you know is when you have it, it took us three years to get to that, it just runs and you just grow naturally when you have both sides but it’s so hard to get to it. In terms of investors, I guess two comments. One is I wouldn’t be too pressured about it too early. Raising money first, marketplace businesses is still really difficult and I’ve raised $90 million and I’m still saying it is difficult. And so I wouldn’t be too pressured. In the early days, you’re going to need to take all the capital you can get. You are going to get a bunch of no’s so I wouldn’t rule people out too early. There could be investors who are fantastic. They may not understand marketplace as well as you but they may be able to bring a brilliant way of thinking about how to bring the supply on [30:20]. So I wouldn’t be too picky early. The reality is often in the early stages, you’re going to want to take all the capital that’s given to you and you may not have multiple term sheets. Saying that, if you do have multiple term sheets the second point is of course, like before you get to liquidity, revenue is irrelevant and if revenue gets in the way of bringing either the consumer on to your platform or the supply side person on to your platform, you should not be trying to charge. In the first two or three years you will kill your marketplace if you create any barriers to entry from either side. And so back to your point, yes, we want investors who are supportive of the fact that we didn’t try to monetize the platform for the first three years because it would have created a barrier to entry. You’re right that is wrong advice. Saying that, in the early days you kind of need to bring on all the capital that you can. Your job as the CEO and the founder is to convince your investors of the reason to do this.
Alejandro: Got it. Got it. You know marketplaces and liquidity is king like you were pointing to finding what you need in the shortest period of time because otherwise they’re going to go elsewhere. So Anthemos, there’s always a first time and you know I guess this is the first time in the history of the DealMakers Show that I’m able to interview someone that has been involve on the M&A but more on the buy side. So you acquire not long ago Pat Mapper and how did this come together?
Anthemos Georgiades: Yeah. It was kind of [31:51] as early as we did to buy another stock up that was kind of four years in. It happened but I wouldn’t say it’s like an obvious part. I knew the CEO for a while. They’re struggling to kind of grow their audience because they didn’t have enough listings whereas Zumper at the getgo we had a lot of unique landlords on the platform that no one else had. So strategically that was a good marriage where they had a great consumer brand and we have really fantastic supply side inventory. So we bought them. They were super lean team of under five people and it’s been a great deal for Zumper like we have one backend, one sales team and then two consumer platforms. Pat Mapper caters to 25 and under and kind of big college populations. Zumper which is a little bigger in terms of audience now caters more to urban professionals moving within cities. Really good strategy to differentiate the demographics and we’re super happy with how it went down.
Alejandro: Got it. In many instances, really acquisitions are great to either feel growth on the company itself, either on the product or perhaps by adding a great talent, but unfortunately many M&A transactions fail really on the integration side of things. So I guess for those listeners that are looking at acquiring other companies to perhaps grow a little bit faster, what kind of advice would you give to them?
Anthemos Georgiades: Yeah. I mean I called it like a cheat [33:33] my team. It was at the time Pat Mapper example almost the same size on consumer but now Zumper is much bigger but we called it like a cheat and your job as the founder is to identify like vertical cheats where overnight you become bigger than your competitors. So M&A are strategic [33:48]. It is your job not just to do the day to day but once or twice a year you should be doing stuff that has a completely linear outcome where one day you’re doing you know 3 million users a month and the next day you’re doing 5 million users a month. That’s your job. Saying that to your point, we see the deal was a successful and yet M&A is really hard to integrate. You’re exactly right. We saw it would take three to six months to integrate Pat Mapper and their backend that engineering project we worked really hard and quickly just over a year to integrate so we underestimated like how much work was required to integrate them by 3x. And so just be prepared that however smart, however many smart people have looked the deal and thought about whether it will work, it always take a little bit more time than you think it will to integrate because there’s always some gremlin kind of hiding in the works that you’re going to find.
Alejandro: Got it. Got it. And for you I guess personally and professionally because I think they both come together, so how has your leadership and management skills changed over the time from leading the company of let’s say four to ten folks initially to a company of over a hundred employees?
Anthemos Georgiades: Yeah. I mean your job moves from doing jobs in the first few years. I mean you’re doing various jobs, head of sales, head of finance, head of fundraising, head of like DZ. And then now your job at five, six years in with a team of a hundred with higher and amazing executive team who are all better at doing their jobs than you would ever be and so your job is almost as a CEO is to like hire yourself out of a job where you hire people, where you look at them and you think, “Wow, I can’t believe you report to me. I learned more from you than you learned from me,” and then your job as CEO is to do kind of two or three things, that is to continue to advance like the vision and the mission of the company and keep everything strategically aligned. Your job is to raise capital and your job is to kind of hire and retain the best talents. That is where your focus is and even though you kind of missed doing some of the stuff and the weeds and my team continue to tell me to get away from the weed and continue to [36:12] the 50,000 set, you have to let it go and trust your team to do a better job than you were doing.
Alejandro: Got it. And you know I think hiring is definitely tough but retaining is even more complicated so is there any things that you for example seen yourself that work on that front?
Anthemos Georgiades: Yeah. Retention is something I think about every day. When people ask me what I’m most nervous about it’s how to keep our amazing team together, a couple of tactics and then one thing that really worked. So one is we’ve always promoted within so whenever we needed a role, we always prefer to promote someone instead of hiring from outside. Unluckily we’ve made some phenomenal early hires so the company that have all scaled to leadership roles, that’s fantastic for retention because those people know that we could have hired from outside but we bet on them and it worked and so Zumper is a place to build they’re career not somewhere else. The second one is have a vision and a mission that people agree with and we all wanted to [37:13] this vision make renting an apartment as easy as booking a hotel. That’s quite motivating for people. At the end of the day though, whether it’s senior people, junior people, interns who we want to bring back is all under pinned by culture. How does the day to day at Zumper work? How much respect is there? How flat is the company? How autonomous can people be at the junior levels? Culture is everything and so investing in people making sure I as the CEO spend a lot of time as much as possible with people who don’t report to me is absolutely critical and that is ultimately like the fabric on how most companies are run. And it is the culture that keeps people here, not the compensation or anything else. It is ultimately the culture.
Alejandro: Of course and I agree with you there, Anthemos. So I guess let’s say we had the opportunity to put you in front of your younger self, Anthemos, in 2012 before you were to close that seed round, what would be that piece of advice that you would give to your younger self with everything that you’ve learned having this journey ahead of you?
Anthemos Georgiades: Oh wow, good question. I think I’d say forget everything you think you know and everything, your education [38:28]. All of it is going to be important and it will come out at the right stage. The most important thing is to surround yourself with an amazing support group because it is so much harder to build a company than I thought it was and the emotional resilience you need to get through the dark days and come back to the bright days even now is what [38:54] just get harder like yeah, we have more revenue now but with that there are people [38:58] and like huge revenue targets we have to attain and so the most important thing is surround yourself with a network of family, friends, mentors, peers, your team, your investors, whoever is an emotional crutch for you where you can take from them but also maybe get back to them as well when they’re having a tough time, that’s the single most important thing is look after your mental health because it is lonely and it is stressful and if you’re able to kind of be resilient you have a great outcome but it is really hard on some days to push through, so build that around just [39:35] and you can be happy while running your company.
Alejandro: Of course. Of course. So that was great. So what is the best way, Anthemos, for people that are listening to reach out and say hi?
Anthemos Georgiades: Yeah. If you guys are Zumper website, you can kind of kind at zumper.com the Contact Us or on Twitter I am just @anthemos, A-N-T-H-E-M-O-S on Twitter and yeah, I respond to people. So I’ll read it if anyone tweets anything interesting or if I can be helpful in anyway.
Alejandro: Fantastic. Well, Anthemos, it has been a pleasure to have you on the show. Thank you so much.
Anthemos Georgiades: No. Likewise. I really enjoyed it and great stuff.