Strategies for kicking off a winning PropTech pilot

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Strategies for kicking off a winning PropTech pilot

May 17, 2023
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Pilots are a critical touchpoint for property companies and PropTech firms alike. They give real estate businesses an inside track to innovative technologies and provide tech startups with crucial real-world information on what works, what doesn’t, and ultimately, what is saleable. Getting pilots with the right partners can dramatically reshape the growth trajectory of startups and provide traditional real estate businesses with a big competitive edge, but the actual process can be daunting, particularly for property companies with limited tech experience. 

We’re changing that with this article. We spoke to experts at real estate companies and a rapidly growing PropTech firm to get the inside story on what property firms should do to optimize for their next pilot partnership, and set the stage for a winning, long-term program.


If you’re considering launching a pilot at your property company, it might be tempting to jump straight to looking for partner candidates. Before you do that, though, take some time to get your ducks in a row. Identify where solutions could be most helpful for your organization, and ensure that you have the infrastructure in place to actually execute on what you sign yourself up for. 

“If you’re going to do a pilot it is probably worth going through the effort to map out the entire process,” said Aki Karja, head of Fairstead Ventures, the PropTech arm of Fairstead, a New York-based developer specializing in affordable housing.

“It’s not something you can really do ad hoc. You need to set up champions in your organization who are responsible for seeing the pilot through to success, and this can become very complicated.”

Identifying champions within your team will help not only give your pilot program some internal momentum, it’ll also make collaboration a lot easier for your future PropTech partners. A big part of this is understanding how inherently friendly your organizational structure is to nimble partnerships like tech pilots. If you’re at a major real estate company with levels of bureaucracy, you may find it difficult to get buy-in, and represent all of your stakeholders’ concerns. For a pilot to be effective, “you need to get buy-in from a lot of people,” Aki said. 

Identifying a strong pilot partner 

With your ducks in a row, finding a pilot partner will be much easier. The more you engage with the PropTech community as a real estate firm, the more startups you’ll have reaching out to you, hoping to partner. HLC Equity, a multifamily investor based in Pittsburgh, also runs the tech conference PropTech360. This has led to many PropTech firms contacting HLC to discuss partnership opportunities. 

David Molitor, head of operations for HLC, said that his firm has a few high-priority criteria any tech solution needs to meet if it is to be considered. “How does it work in our portfolio, at our size, in our locations? The next big item is whether it integrates with our existing technology systems.” If it checks these boxes, David said that’s when he would consider a demo, and speak with other users of the system to get their feedback.

Once you get that far in the process, it’s critical that you give the pilot the bandwidth it deserves. “You have to bring the startup founder under the hood and with them look very pragmatically at the problem, what the solution is, and how much money it will take. It’s a very long sales cycle,” Aki said. “Once you gain that conviction on both sides, that there is a value add and a path to something reasonable, you can move forward.” If this process reveals fit, you’ve likely identified your next pilot partner.

As a real estate professional, you may wonder if there are negotiating table faux pas to be aware of when making first contact with a startup. Aki said he doesn’t worry too much about concerns like that. “If it’s an interesting project that will generate value for us while being good business for the startup, I’m certainly interested,” he said. “A lot of startups are founded by very smart engineers. They are not marketing people and what they lack is developing the value proposition for their product. Through discussion, we can help them understand that value proposition from our perspective. Even if the discussion doesn’t amount to anything, this is still a learning process for the startups we partner with.” At this stage of the partnership, trust and openness is very important. You’ll need to rely on your tech partner to communicate and perhaps  iterate in a direction that aligns with your goals, and they will need to trust you to be upfront with your feedback and stick with them through potentially challenging implementation roadblocks. Beginning the relationship with a guarded, overly protective perspective is a recipe for failure.

Ideally, the first contact between real estate firm and PropTech team will be more of a low-key informative chat and less of a sales pitch. Wouter Merkestein is CEO of laiout, a PropTech startup that produces automated floorplans for architects and property companies. “We’re PhDs and physicists, not some big sales engine,” he said.

“For us every conversation starts casually: ‘‘We are a bunch of people very excited about actually solving this problem. We were told it is of significance for similar companies to yours and someone mentioned you might be interested. Can we have a chat to see if we could make this tool work for your workflow?’”

This kind of to-the-point early discussion of problems and goals is important for boosting your chances of pilot success. 

In terms of vetting specific startup partners, there are few one-size-fits-all red flags to be aware of ahead of time. However, you should keep in mind the risks that your tech partner may be exposed to. Daniel Farber, CEO of HLC Equity, said that you will occasionally see tech companies that are dependent on venture funding fail as a result of being unable to raise a round. “If they close, where does that leave our data, especially with regard to security? When the market was going up people weren’t really thinking about it, but people are thinking more about downside protection now.”

Finally, when you’re going into your first pilot, be aware of timing. One of laiout’s pilot partners is Areim, a large Nordic property owner. Philip Knis, junior asset manager with Areim, explained that “One crucial factor to consider when we are piloting a tech tool is the element of time. We typically establish clear timelines and deadlines to keep the pilot on track and ensure that all stakeholders have sufficient time to provide their feedback. Real cases or applications of the tool also provide a sturdy foundation for evaluation, enabling a better understanding of the tool's functionality and limitations, and empowering us to provide more constructive feedback.”

Opportunities and pitfalls during the pilot process

With a partner in place, the pilot can begin in earnest. Depending on your business and the type of technology in play, this may be as simple as gaining access to a web-based platform or as complex as working through an on-site hardware system install. 

During the pilot, you should be constantly measuring the costs and benefits of the tool being trialed. You also have an opportunity to embrace organizational best practices even before concluding the pilot. If an IoT pilot reveals an opportunity for substantial energy savings outcomes, that is a lesson that you may want to internalize and explore, with or without your pilot partner. Aki suggested focusing in particular on identifying opportunities to boost your measurement and control capabilities, in that order. 

The best way to avoid subpar outcomes during the pilot itself is to deliberately stay in very close contact with your tech partner. Consider establishing a cadence of touchpoints at the beginning of the engagement, and then sticking to it over time, using each call as a chance to collect new information and represent the perspectives and feedback of your internal stakeholders. 

Winding down a pilot: outcomes

The ideal result for a pilot is the long-term implementation of the tool being trialed. Of course, this is not always the outcome. If you realize that your pilot is not yielding satisfactory returns, it may be time to consider a parting of ways with your partner.

If the time comes that you need to end your pilot, don’t necessarily consider it a failure. A pilot that fails to convert into a long-term partnership could be indicative of misaligned needs more than a specific failing on either party’s side. For Aki, a discontinued partnership is still a chance to educate and guide the startup partner. “Explain what is missing in what they offered. That is hugely valuable for them.” Wouter, of laiout, agrees with Aki’s assessment, saying that he goes into pilots hopeful but not assuming a sale is the most likely outcome. In the event of a pilot failure, “I’d like to know what would make them happy,” he said. Property firms, take note: Even while parting ways you have an opportunity to add value to a once, and perhaps future, partner.

If your first pilot doesn’t meet expectations, don’t be discouraged. Make a frank assessment of where things went off track. Was there a misalignment in terms of desired outcomes, or was it simply a failing on the part of one party or the other? If you find that your pilot program lacks support throughout your organization, and that you have to pull teeth to get stakeholder engagement, consider cutting your losses and holding off on future pilot engagements until you

can marshal more internal support. Otherwise, once you’ve internalized the lessons of your first pilot, it’s on to the next one. 


Every PropTech pilot program will be different based on the unique DNA of the real estate company running it. Nonetheless, these best practices are relevant regardless of your particular niche, strategy, or market. 

If there is any final take away from the conversations we had with experts on both sides of the pilot, it’s the importance of communication. If you communicate with your tech partner thoroughly from day one, setting clear expectations and then staying in contact on what is working and what is a pain point, you stand the highest chance of turning a short-term pilot into a long-term boost to your business.