Entrepreneurs are Not Born, They’re Bred

Venture Capital

In 2007, Steve Melhuish and Jani Rautiainen co-founded PropertyGuru, a Singapore homegrown tech unicorn and led the business as CEO for the first 11 years. Currently, the platform is used by 25 million monthly users with over 1,200 staff in five countries. While he has stepped down as CEO, Steve continues to contribute to the…

Author: May Quadarella
Date: November 13, 2020

Introduction:

In 2007, Steve Melhuish and Jani Rautiainen co-founded PropertyGuru, a Singapore homegrown tech unicorn and led the business as CEO for the first 11 years. Currently, the platform is used by 25 million monthly users with over 1,200 staff in five countries. While he has stepped down as CEO, Steve continues to contribute to the company’s strategy and governance as board director. Aside, Steve is also an angel investor/advisor (25 start-ups) and VC partner (Wavemaker Partners).

Last week, the Vulpes Venture Team had the opportunity to speak with Steve about his venture creation process for PropertyGuru and his advice for aspiring start-ups. As Steve explains it, anyone can be an entrepreneur. “Entrepreneurs are not born, they’re bred.”

As his father was in the Army, Steve was constantly moving around, living in different communities and attending Forces (Army) schools. This taught him to be adaptable and adjustable from a young age, which played well into his future life and career. In the late 80s, the telecommunications industry was starting to grow and develop along with increased investments, which piqued Steve’s interest and spurred him to do a four-year degree course in communications engineering. After graduating with honors, he was hired by a small-sized competitor to the telecommunications monopoly at that time. This was where he learnt the valuable lesson on timing, as the company’s vision for “People, Information and Entertainment, at the palm of your hand” was great, but 12 years too early.

As Steve moved from engineering to product & marketing and then into sales, he found himself running global teams with US$500M in P&L in the Content Creation, Internet and Mobile industry. Yet during these ten years of corporate life, the thing Steve enjoyed most was building new “stuff” and entering new markets, being creative. As a result, he took a break from corporate life and went on a six-month journey in Southeast Asia, visiting countries like Cambodia, Myanmar and Laos. Steve then reprioritized his focus on digital Asia start-ups, where he spent more time angel investing and on his own company, Business2profit, a consultancy providing advice and support on developing new business.

The genesis for PropertyGuru came about in 2007, when Steve was in Singapore looking for an apartment to rent after his previous one underwent an En-bloc. “The first thing I did was to go online and look for property, but there was nothing online.” Steve mentioned. He went on to describe his property search experience as hugely frustrating as he had to go through inches of newspapers for property information in the “Classified” section. “Buying a property is the single biggest investment decision any of us will make. Imagine if there is no transparency; buyers being kept in the dark, stressed and out of control.”

Steve observed that around the world, real estate already had an online presence except in Southeast Asia. Further research also showed that Southeast Asia had roughly 650–700mn in population, over $260bn in real estate transactions and rapid urbanization was taking place within the region. These factors, along with belief that it was the right time for digitalization, pushed Steve to pursue PropertyGuru. “We were set on making the property market more transparent and putting information back in the hand of the consumers to empower them to make confident property decisions.”

Steve first shared his business plan for PropertyGuru with an investor friend, who informed Steve that he knew of someone else in INSEAD with a similar idea for the market, Jani Rautiainen. Coming from a technical background as a coder and computer scientist, Jani had already developed a website called PropertyValue.com.sg. After meeting up, they decided to pursue PropertyGuru together part-time on the weekends due to their individual work schedules. “The first site was horrible.” Steve described jokingly. “At the start, we had to go take photos of all HDB estates and condos, redraw floor plans and even help agents use the internet for the first time!” Yet, it was due to the constant innovation and experimentation that PropertyGuru is where it is today.

Looking back, Steve mentioned that it was a huge risk that he and Jani took. Psychometric tests taken years later showed that they were polar opposites, which meant they would’ve either worked really well or terribly. “We were just two people with an idea. No real estate experience, money, staff, office. But we had vision, belief and determination to see PropertyGuru flourish.” Steve said.

Advice:

As for the advice that Steve had for aspiring entrepreneurs, he summarizes them into three main areas:

1. “Choose a big market and do something that you are fundamentally passionate about or that you know really well.” Steve mentioned that when he looked back, while Singapore only had a 5.5mn population at that time, it had $50bn in property transactions every year, which was a huge market. He also highlighted his passion for digital Asia start-ups, which fueled his vision of building PropertyGuru into something successful.

2. Steve’s second advice for entrepreneurs is to solve a “big pain”. Quite often, start-ups are very passionate about their solution but when you peel back the enthusiasm, there isn’t that big pain that is being targeted. Timing, however, as a factor to play in this, as Steve explains, “Sometimes the pain problem really becomes a pain later on, so you have to keep at the problem and wait for the right time.” He further adds, “Quite often, entrepreneurs get distracted by the bright lights around the business; opportunities to pivot and broaden the idea. I would rather you focus on experimenting and innovating to solve that one big pain.”

3. Lastly, nothing beats hard work. After finding a huge market with a big pain and right timing, nothing will substitute the hard work that you place into the business. Steve remembers that when they built PropertyGuru, “We bootstrapped — working 7 days a week, with little salary and no vacation for the first five years.” This was because Steve and Jani were competing against SPH and MediaCorp, two-billion-dollar media giants that had been doing this for 40 years.

The venture creation process Steve experienced was by no means an easy one, yet his stance towards entrepreneurship is that, “Anyone who’s thinking about it (entrepreneurship) should go for it. I learnt more from two years in PropertyGuru than ten years in my corporate life because there are no rules. You make mistakes and learn as you go along but boy, do you learn, and you learn fast. It’s fantastic fun.”

Today, PropertyGuru is the market leader in five Southeast Asian countries and plans to add new features such as access to financing for its consumers. The Vulpes Deal Flow team thanks Steve for his time and insights and we wish both him and PropertyGuru the very best.

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