[00:00:48] A.J. Lawrence: I’m really excited. I’m fascinated just because real estate has been sort of this very traditional approach to investment and seems very much that IMMO is taking a very aggressive, very interesting tech forward approach to disrupting the space. I would love to learn more. But before we do, before I geek out a little bit too much here, Sam, where are you on your own entrepreneurial journey now? The company started in 2017 from London Business School. Where are you on your journey?
[00:01:17] Samantha Kempe: Oh, that’s such a big question. I feel like I’m moving so fast, don’t really get to stop and really think about that very often. I mean, as a founder, as an entrepreneur, I feel like I’m constantly learning. I still feel like there’s so many things I don’t know. I feel like every day I’m trying to be a better leader.
[00:01:36] As an entrepreneur, we’ve had a decent amount of success and we’ve been very fortunate, I think. I always find it quite strange when people go, oh, you guys have done so well, and you’re doing all of this and that, and isn’t it amazing? And it is amazing. But I think as an entrepreneur, as a founder, you’re always just more.
[00:01:52] And there’s always every problem that you solve, you then realize actually there’s another 50 problems or challenges that you still now need to solve next. And I think this is pretty common across most entrepreneurs, you’re never sitting still. You’re never truly satisfied with what you’ve built and you’re always hungry and eager to keep improving. And whether it’s improving the business or improving yourself personally, trying to be that better leader for the business, it never really stops.
[00:02:20] A.J. Lawrence: You’re evolving.
[00:02:22] Samantha Kempe: Constantly. Constantly evolving, constantly learning. Stopping often still.
[00:02:26] A.J. Lawrence: What are you finding right now for your journey? Because we were chatting just about sort of how more aggressive you’re becoming and growing with IMMO Capital, what are you finding is most important for you to be learning? What are you diving into now?
[00:02:41] Samantha Kempe: I mean constantly, I think I just meant like leadership skills constantly are having to be stretched. The leadership skills that myself and my other co-founders had when we started up the business and there was just a handful of us are completely different to the skills required to not only lead an organization, but also win business for the organization when you’re 160 people across Germany, Spain, UK, India, and a few other countries.
[00:03:07] So the skills that we need to be developing as leaders ourselves are constantly changing. I think also we’re having to really start narrowing in on the parts of the business that we focus on and really making sure that we’re playing to our strengths.
[00:03:23] I’m the CIO, I’m Chief Investment Officer, which means my background is real estate investments and private equity. So my real focus is very much on all things investment, all things about the investment product, financial products that we’re actually creating for institutions and then very much going and selling that product and winning mandates from institutional investors. So that’s very much my focus.
[00:03:48] A lot of the operational parts of the business, I have other co-founders and colleagues who are a much better placed to be focusing on that. So as we grow and as the business grows, it’s very much being as self-reflective as we can and really figuring out where do we play best, where are we the strongest, and making sure that we’re doing individually the best that we can do for the business.
[00:04:11] A.J. Lawrence: A lot of people talk and I used to joke, I used to wear all the hats. Now, you’ve been taking off many of the secondary hats to focus on the investment as you go. But you mentioned earlier, and I would love to kind of talk a little bit about how you’re working on developing your leadership. Because I grew my business and I had a lot of difficulty when we approached 8 figures because I was still running it like a $2 million company, not the almost $10 million company. And I had to learn after we fell then rebuild. What are you doing now to grow your leadership skills? What’s helping you the most?
[00:04:52] Samantha Kempe: There’s obviously a lot of stuff you can read and there’s a lot of things that you can research yourself and try to take inspiration. Whether it’s listening to other podcasts with other founders or leaders or fantastic CEOs or Execs, there’s always a lot of inspiration and learnings to be gained from listening to other people’s stories. I think the biggest thing is aiming to be as self-reflective as possible and constantly reflecting on things that have gone well, things that haven’t, but most importantly, things that haven’t gone well. How could I have approached those things differently?
[00:05:26] Really asking for feedback as much as possible from my team, which is often quite difficult. I think when you’re leading a business, people aren’t always as open to give truly transparent feedback that we desperately need. So it’s really about trying to create that very safe and open culture environments and to invite that feedback as much as possible. And even when you’re not being given direct feedback, trying to read between the lines to find the feedback, even if people aren’t giving it to you as directly as you would necessarily like.
[00:06:04] And then also asking for advice from other people as well, whether it’s peers, whether it’s friends, whether it’s family. I’m on some really fantastic WhatsApp groups with other entrepreneurs and founders, and I think reaching out and asking other people how they would approach problems is always really helpful.
[00:06:24] And just even talking through challenges. And I personally find just even the talking through the process of the problem, you end up being able to solve the problem on your own often. You just needed to be able to articulate it, you needed to be able to talk it through with someone. And then whether that’s kind of you’re doing that informally with friends or family or sort of peers in the industry, also then where possible, if possible, having a coach as well.
[00:06:52] I always say a coach is pretty much like a professional therapist. They are incredible at helping you realize and sort of tap into your true potential and be self-reflective and figure out how to start the next day as a better leader.
[00:07:06] A.J. Lawrence: Well, there’s a lot of things you said that would be very, very interesting and I think very powerful for an entrepreneur. But I love what you said about being able to share what you’re facing, the problem that you’re trying to solve with another entrepreneur. Because I’ve noticed myself, I’ll say it in my head, I’ll be thinking about it, but the actual moment of articulating it to someone else and having to structure it so it actually makes sense versus just all the random points about a concept I need to do in my head.
[00:07:36] I’m like, oh wait. Literally by the time I finish I’ve already sort of, and I still need more, but it’s like, okay, yes. I was just letting it be noisy, now it is so much more structured. So I love that you go through that process because yes, it is so powerful I find. I’m like, oh yeah, it’s noise in my head.
[00:07:59] But the times I’ve had a good coach, it’s been amazing for my business and for my own journey. But it is so hard sometimes to find the right type of coach for where you are. For you, what is the process you go about finding your coach or how you work to find your coach?
[00:08:15] Samantha Kempe: I mean, you can find sort of professional coach, and then I find that there’s also I have plenty of other people in my life who I’ve sort of assembled around me who act up coaches, but possibly in a more formal, informal capacity. But in terms of finding the right coach, I think, like you said, it’s very hard to find the right person as with finding a friend, right?
[00:08:37] You’re not going to bond or feel that you can fully trust or open up to just anyone you meet, right? You really have to feel that you connect with that person and you can build a relationship and a rapport and trust them. Because like I said, they’re essentially a professional therapist and you’ve really got to have that trust foundation to be able to open up and really dive deep into being very self-reflective and being very self-critical at times.
[00:09:01] So the way I’ve gone about it, I’ve interviewed or met with a bunch of different coaches and didn’t choose the first person that I met, and waited until I found someone who I did connect with. And then even then, did one or two sort of trial sessions to start off with. You also got to invest in spending some time and see whether you feel that their style as well is going to work for you. Because I think lots of different coaches have lots of different styles.
[00:09:28] I think there are a lot of coaches out there that have done these coaching qualifications, and I met a lot of them, unfortunately, and I just didn’t really feel much value coming out of it. But then some we meet, as soon as you start talking with them, you just feel like. They get it. They get it, they understand.
[00:09:44] And different people have different approaches. Sometimes, I’ve really benefited from people asking those very open-ended questions and as you said, I’ve then kind of gone down this route of having to structure and articulate my thoughts and I’ve sort of come to those conclusions myself.
[00:09:59] And then there’s other times when I’ve really benefited from someone where I’m just like, please just tell me the answer. Tell me what I should do. I don’t know what to do right now. Like I just need someone to share their experiences, you know? So I’ve often found that the best coaches is people who’ve been there and done it.
[00:10:16] They’ve got the war wounds. They completely understand. They’re able to share some of their own experiences as well. It’s that balance of helping you figure it out yourself, but then also being able to step in and give you really practical suggestions and advice of how to tackle challenges that you’re facing.
[00:10:31] A.J. Lawrence: No, that’s a 100% correct. It is very difficult. I had a great coach and I would constantly beg him for the cheat codes. Like, what are the cheat codes to do this? And he would just say, I don’t know, how would you do it? And he would make me articulate and then say, okay, that’s interesting. I did it this way. And I was like, why couldn’t you have said that first? So yeah, it is that kind of balance and play to pull and push and just sort of help you move forward.
[00:10:57] Well, I think that’s really powerful, especially since you are having success with IMMO Capital but still needing to grow to feel like it is the type of success you want. And I’d love to talk about that later. But what I was really fascinated was just the approach that IMMO is doing is so much more of a data-tech focus approach. And I see a lot of other real estate trust funds, etc. How is that evolving now in the space, given all the fun AI and other technologies, where’s this going? How are you creating this unique space for IMMO Capital?
[00:11:36] Samantha Kempe: Yeah, so I think the real estate sector is one of the most undisrupted categories so far. And there’s reasons for it. It’s a very offline industry still. It’s bricks and mortar. It’s everything from the home you live in, the infrastructure, the train stations, it’s logistics, it’s offices, it’s shopping centers. Real estate is all around us.
[00:12:02] And so it’s also the biggest asset class in the world and it touches every part of our lives. It is a really big chunky category to be disrupted. But to me, that’s also very exciting because it hasn’t really been disrupted so far. Proptech is still relatively nascent, especially in Europe. The US is definitely more advanced when it comes to Proptech, but there’s still a significant way to go.
[00:12:28] In Europe, there are Proptechs emerging and some good ones, but in general, it’s still very, very nascent. And in the space that in particular that we’re playing in today, which is very focused on being a tech-driven institutional investment management platform, particularly focused on the residential space.
[00:12:47] And just to give a bit of background, the rental sector is in desperate need of professionalization. Just in the UK, for example, 85% of the rental stock is owned by sort of mom-and-pop or unprofessional landlords and that means that generally, renters are not given a product or service that they deserve. And there is no other consumer-facing markets that is able to get away with charging consumers so much every single month for what is typically-
[00:13:18] A.J. Lawrence: Without delivery.
[00:13:20] Samantha Kempe: Yeah. What is typically a terrible product and a terrible service. And then on the other side, we work with the institutional investors, the long-term investors such as pension funds, who would love to invest into the residential sector because they really love long term, very stable income streams the residential does provide.
[00:13:39] But they’ve historically not really been able to access this space at scale because the granularity and the fragmentation of residential property and means that using traditional manual processes is completely inefficient to be able to invest into this space at scale.
[00:13:56] So we recognize that. We also then went about figuring out how can we remove those inefficiencies with technology and we realized as well that we needed to build that technology across the whole value chain. And it’s a very long value chain. It’s everything from doing data analytics to identify the right markets, to then source the assets, to then acquire, retrofit, lease up, manage, portfolio manage, do the finance, the accounting, everything.
[00:14:25] The entire value chain is incredibly long and there was no one in the market really doing it well that we could just plug into and say, okay, we’ll outsource that part of the value chain. So we’ve really had to build the entire value chain pretty much from scratch, which in hindsight was an absolutely mental and mad decision to do, but it’s also been probably the best decision we’ve made because it is the only way to be able to tap into and unlock this asset class for institutional investors. And now that we are on the road to really cracking it, because the barriers and the hurdles are so high, it means that we’ve got a very large moat. It’s a very defensible business that we’re aiming to develop.
[00:15:12] It’s not easy, incredibly hard for anyone to try and step into this space and we have the benefit of sort of first mover advantage in this very much this blue ocean space. There are people starting to replicate and try to build similar businesses, but yeah, it’s a very hard business.
[00:15:30] I mean, I genuinely welcome more competition coming into the space because I think it needs more people pushing the boundaries and championing it and starting to unlock other parts of the ecosystem for the benefit of everyone. But yeah, it’s some big hurdles to be jumping over.
[00:15:48] A.J. Lawrence: Yeah, I think it is really fascinating because I have seen a raft of companies trying to do this but they seem to be more focused on individual cities. And having lived in London 20+ years ago and gone through the craziness of trying to rent a flat. I love London. London is one of my favorite cities in the world, if not my favorite, but I will never rent a flat again in London. Doesn’t matter how up, down, left, right, or center.
[00:16:15] But then also I’ve lived in Spain, and that same experience of just the unprofessionalism, the craziness, the rules changing, everything is on one hand so structured by the Spanish bureaucracy, but yet the reality is it’s so flowing, the experience where it’s very uneven.
[00:16:38] I like this approach and I do think the scale you’ll be able to achieve is going to be just amazing. Because yes, I’m seeing stuff where people are individual cities not looking across a risk adjusted-
[00:16:53] Samantha Kempe: Absolutely. And it’s also about taking capital from the institutional world, which from the conservative, very reputationally focused sort of long term capital providers like pension funds, and they deploy huge amounts in any one go.
[00:17:10] The most common question we get is how does this scale? How can we invest hundreds of millions into this product? Does this strategy go beyond just the markets you’re currently in? How fast can you deploy the capital and scale up?
[00:17:24] So the residential market is the largest asset class in the world. 98% of the residential asset class is this granular housing stock. And institutions, especially over the past 12 months, with the current crisis. There’s a lot of headwinds affecting a lot of other markets and asset classes. But there’s incredibly strong tailwinds behind the residential sector, which means that because it’s a basic human need you’re serving, you’re providing housing for people, there are so many strong tailwinds to this sector.
[00:18:00] That meant that the institutions have continued increasing their allocations to the residential space and they’re all struggling to figure out how to deploy at scale. They’re not looking to just deploy 10 million here, 20 million here. They want to allocate 100 million, 200 million, 500 million, plus, plus, plus. And they’re being forced to look beyond traditional real estate opportunities and start to think more creatively about how they can start deploying into residential in ways that currently don’t exist.
[00:18:34] So the past 12 months have actually been incredible for us in terms of the silver lining of the crisis. We’ve actually got more institutional investors and demand coming to us than ever before.
[00:18:50] A.J. Lawrence: Yeah, in a sense, because you have this investment, the rise in interest rates almost is going to benefit you because cost of capital is becoming more expensive than the traditional buyer going out. So you can kind of stay in this, you would take it, you can stay more fluid here in the space.
[00:19:15] Samantha Kempe: Yeah, absolutely. I mean, the interest rates have been really, obviously, it’s meant that fewer people have been able to get mortgages, unfortunately. It means that there’s even more rental demands because more people are not buying as much for their own occupation and that they’re staying in rental accommodation.
[00:19:33] There’s a chronic lack of supply coming through on the resident, even pre-crisis. The deficit between the amounts of supply coming through versus the amount of demand has been huge for years and years. Every year we’re not building enough housing. And that’s gotten worse over the past 12 months with both construction cost inflation and with interest rates going up.
[00:19:57] It’s just meant that construction projects, the numbers on those projects just don’t stack up. They struggle to stack up pre-crisis and they’re almost impossible to stack up at the moment. So there was already a lack of supply, new supply coming through, and that’s just gotten even worse over the past 12 months. So the pressure on existing supply in the market is huge.
[00:20:22] And then there’s also a lot of other factors that make it incredibly attractive for institutions to be investing into the existing residential space. Part of it is around the environmental benefits of investing into existing housing stock and upgrading and retrofitting and reducing the carbon emissions of these homes.
[00:20:42] In the UK, for example, 30% of the UK’s carbon emissions comes from housing. In the UK, we’ve got some of the oldest housing stock in Europe that is desperately in need of being retrofitted and insulated to upgrade its EPCs and so there’s a massive environmental impact that can be gained. And obviously when a lot of institutions, they’ve got quite significant ESG-related objectives, this is also a really fantastic way for them to be meeting them from an environmental perspective.
[00:21:12] And then from a social perspective, as we mentioned already, it’s outrageous that consumers are not given a better quality housing product or customer service. In the UK, the Department of Levelling Up, Communities and Housing, they did a white paper last year that said 25% of our private rented stock in the UK is substandard and 12% is what they would class as a category one hazard, which means it’s not even fit for human habitation.
[00:21:42] It’s shocking that this exists. And then you have really tragic stories like before Christmas, don’t know if you heard. There was a really, really sad story. There was a two year old boy who died because of mold in his rental.
[00:21:54] A.J. Lawrence: Yes.
[00:21:55] Samantha Kempe: And that is just unacceptable. And it’s absolutely shameful that that exists. So bringing institutional capital into this space to raise living standards in existing communities is also incredibly impactful from a social perspective. So yes, we’re aiming to very much create this investment financial product for institutions, but there’s huge benefits from an environmental and a social consumer perspective. So it feels really there should be a win-win on many sides for many people.
[00:22:27] A.J. Lawrence: Well, I agree. I just know the lack of quality in housing in multiple layers economically. It’s so beyond frustrating. You talked about the idea that the success you’re having just didn’t feel the way you thought, but when you look forward, how are you going to define what your success is going to become? And then how are you going to actually make sure that you are enjoying that and recognizing your own success as you move forward?
[00:22:58] Samantha Kempe: Yeah. So I think from a business perspective, business success is, I mean, there’s obviously very tangible milestones in a big new client mandates. We deploy X amounts of capital or actually we did some NPS scoring across all of our residents and I think our NPS score was higher than even Apple or Microsoft. And for the real estate industry, I think the average real estate industry has a minus NPS score.
[00:23:29] A.J. Lawrence: They have. Way down.
[00:23:30] Samantha Kempe: So for us, that was also a moment of success where we’re like, we’re doing something right. We’re delivering a great- and it goes beyond just a rental experience for the consumer. It’s, like I said, it’s a basic human need that you’re serving so you really feel like you’re delivering something to people’s lives. And that’s sort of being validated by these sorts of really high NPS scores, which is great.
[00:23:50] Whether it’s we do a fundraise and, you know, last year we were very fortunate. We raised Europe’s largest Series B Proptech round. So that, for a moment, it felt like a success. And then we thought, Oh my God, all the things we’ve got to-
[00:24:04] A.J. Lawrence: More work.
[00:24:06] Samantha Kempe: So there’s lots of little successes. Personally, I don’t dwell on them for too long because I know that there’s still bigger challenges to solve but I also take a lot of motivation from seeing us grow the business and doing right by not just our residents or investors, but also really importantly, our own people, our own employees. Making sure that we’re doing our best to create a business that is a place that they are happy to go to every single day. And obviously we don’t always get it right, but we always strive to do our very best for our employees.
[00:24:42] So when, I don’t know, you hear people, they’ve got a new mortgage or things like that, or that you see that they’re very proud telling people or their friends or their family about working at IMMO, or the successes that they feel they’re having at work and you see the team celebrating their successes, that definitely feels like success when you get to see that as well. And it’s an honor. It’s an honor. And it’s very humbling to be able to help deliver that for people.
[00:25:09] A.J. Lawrence: Well, no, I think it is that great experience to be able to create something that you are getting your own financial benefit from, but then also seeing their lives be better. That is really impressive.
[00:25:22] How can someone that is interested in learning more about what you’re doing with IMMO and your own entrepreneurial journey, how can they find you? Besides being active on LinkedIn, what’s a good way for them to learn more about what you’re doing?
[00:25:35] Samantha Kempe: Yeah, always happy for people to reach out to us. And if I’m not the right person for them to speak to, I’m always really happy to direct them to someone else in the business who can help them learn more about I don’t know, whether it’s on the investment side or the operation side or the people side or the tech side or the marketing side. I think we’ve got really fantastic people at IMMO who are always willing to help and chat and talk to others outside of IMMO.
[00:26:01] So people can either reach out directly via LinkedIn or from an investment perspective or from a real estate perspective, because that has been a lot of our focus for the business, capital raising from institutions, we do have a lot of content out there whether it’s through white papers or articles or podcasts or panels that we’re on. But yeah, so people can sort of tap into those if they want as well.
[00:26:28] A.J. Lawrence: Great. We’ll make sure we include those in the show notes and in the email and the social media when we start talking about this episode.
[00:26:36] Sam, thank you so much for coming on the show today. I really appreciate you joining us today. I hope you have a wonderful evening. Thank you.
[00:26:43] Samantha Kempe: Thanks so much. Thanks for having me.
[00:26:45] A.J. Lawrence: All right, everyone. Thank you so much for listening to today’s episode. Please, if you enjoyed our show today, send it to someone who you think can learn something from this. And as always, I can’t wait to come back and have another amazing entrepreneur for you to learn from. All right. Talk to you soon. Bye-bye.
