In this episode of the SaaS Founder Show, we have a great conversation with the Founder and CEO of DealMachine, David Lecko.
DealMachine is an all-in-one app that allows real estate investors to scale and transform their business.
Hosted by Insivia’s CEO Andy Halko and VP of Growth Tony Zayas, the third episode of the SaaS Founder Show featured David Lecko, founder of DealMachine. With a focus on simplifying and automating the process of locating homes for sale, DealMachine, a real estate investment software firm, helps real estate investors find more and better deals by automating and managing the process with property owners and targeting high quality leads.
Story of Origin
In 2016, after reading Robert T. Kiyosaki's well-known book, Rich Dad Poor Dad, David, a software engineer by trade, was inspired to become a real estate investor. When David worked to find his first rental property, he was advised by his peers to go "driving for dollars" and look for run-down houses for sale.
Along the way, he encountered a number of roadblocks and as a result, he created an app to streamline the process of finding homes to renovate. In turn, he shared this app with his friends to use for their real estate endeavors: "I wasn't trying to start a business. It kind of helped us to jump start all those things because I was purely just trying to do this for myself...I've been happy ever since."
Passion for the Job
With the accelerated growth of the company which is based in Indianapolis, Indiana, David has been forced to conduct more customer-focused research and spend time on developing the software. However, his passion for the industry remains unaffected; he would like to start acquiring more rental properties in the future: "The passion is still there; it's always just been about prioritization of the best use of my time."
Not an Overnight Success
For an entire year, David lived off of his savings to work on DealMachine. He mentioned that his business partner and co-founder of DealMachine, Dave Oster, is “wildly talented on the development side,” and such experience was extremely pivotal in establishing the company: “Preparation and sacrifice on my side financially, plus the luck of having a great relationship with somebody who is super talented technically are definitely factors.”
David also advised against “jumping into a partnership with someone you don’t know well.” He noted that a partnership could be “more serious than being married if the business is a real legitimate business.” He recommended outsourcing the work to create a “minimum viable product” to sell and to gather feedback from others: “This will prove to yourself that this is something people are willing to buy.” David also suggested fundraising or applying for a loan if generating funds are necessary to establish the business.
During the episode, David also stressed that even though it's easy to get distracted, it's vital to be flexible and willing to make unforeseen and last-minute changes to avoid situations that could impact the growth and expansion of the company negatively.
Preparation Meets Opportunity
DealMachine encountered a few issues that included a monthly churn rate that was too high at 15% and not tackling it soon enough. So, it went on a mission to find the best churn experts to bring down the monthly rate and retain more customers. Insivia was selected to do the job and was able to get DealMachine’s churn rate down to 10%; this is the lowest it’s ever been, driving the company toward its overall goal of 7% and saving the B2B SaaS company $35,000 dollars every month. Learn more by reading Insivia’s case study on DealMachine here.
David made it a point to highlight the importance of active networking and how affiliate partners have been a significant part of DealMachine’s growth in the real estate investor space: “If you can score the biggest influencer or the fastest-growing influencer in your space, you’ll reap the benefits of others just falling in line and mimicking that and that will be really good for your business.”
Turning Negatives into Positives
Towards the end of the interview, David emphasized that with success comes “a lot of copycats,” and as a result, he has learned to focus solely on his mission and to ignore them completely: “As long as we focus on our mission, and we execute that really well, we will always be ahead.”
In that context, he also cited a quote that continues to motivate him: “The amount of uncertainty you are able to deal with in your life is proportional to the quality of life that you can have.”
Two primary goals for David were to have financial freedom and to prove his naysayers wrong. Once he accomplished them, his focus changed to building himself which he views as the “most valuable asset.” He now considers the business a “vehicle for personal development” and strives to be the best version of himself.
Roadmap for the Future
At the end of the episode, David underscored how DealMachine is working to be the “Hubspot of real estate,” and hopes to double in size within the next two years. They are also focusing their efforts on transforming the software into an enterprise-level app for real estate investors.
David provided a few recommendations to other software founders who are looking to start a product or are in the early stages of their journey:
1. Outsource the building of a product and try to see if anything can be sold
2. Participate in industry meetings
3. Find mentors and other experts in your field
4. Always consider how big the ROI can be and to quickly make decisions based on the potential impact
5. Don’t give up!