#4 Property Solutions

  Thank goodness for chivalry. Nine years ago while attending BYU, Dave Bateman kindly brought lunch every day to his wife, Amanda, who worked at an apartment community in Provo. “We’d be eating, and someone would come in to pay rent,” he says. “And she’d pull out the paper ledger to write it down.” Deciding it was no longer 1994, Bateman (like any good entrepreneur) knew there had to be a better way. “Here was this multimillion-dollar company using these antiquated systems. It was archaic! That’s when the idea popped into my head.” The idea: Property Solutions, a provider of online tools (website portals, online payments, marketing strategies) for the multifamily industry. The pop: More than $11 million in revenue in 2010, landing on the Inc. 500 two years in a row, nearly 100 employees and more than $2 billion in processed online rent payments. Now that’s what you call a meal ticket.

The first thing my business partners (Ben Zimmer and John Hanna) and I did was get a team of students and survey 450 apartment communities. We asked 17 questions and got surprising answers. The biggest was “Do you allow residents to pay rent online?” Out of 450, not one allowed tenants to pay online. This was late 2002, and that stat blew us away. Right then we knew there was an opportunity.

We felt fortunate. In regards to the Internet, things were progressing pretty quickly at that time, and we were excited there was still a niche where we could create technology and have success. But we knew we had to move quickly.

The first product we created was a payment processing tool that allowed people to pay rent online. We built an off-the-shelf, template-based apartment community website where people could choose the template, type their name, and voila! They now have an apartment community website. 

We wrote a business plan and entered it into BYU’s competition. We were undergrads competing with BYU MBA students — and we won. We got $25,000 in cash and $25,000 of in-kind services.

Fortune Magazine sponsors a nationwide business plan competition called the MBA Showdown. They wouldn’t let us submit our plan because we weren’t MBA students, but the dean of the Marriott School called them up and convinced them to let us apply. 

We had three days notice, but we submitted a revised plan to Fortune Magazine. After a number of judging rounds, we won this one, too. The national showdown! And now it’s funny. Everyone thinks we have MBAs, but we don’t. In fact, I’m a college drop-out.

We got $50,000 in cash from that contest, and between the two contests we had a bit of capital to get things started. Like a lot of startups, we took out an initial round of funding from angels — about $700,000. But after that, we decided to bootstrap. We’ve taken a different approach to the way we’ve financed our business. 

The first three or four years we had really slow growth. There was a lot of heartache trying to make payroll. But we pushed through, and in 2006 we landed a few key relationships. From that point on, growth has been exceptional. 

With a small marketing budget, we’ve had to find ways to be creative. At the biggest trade show of our industry, you can spend $10,000 for a logo decal on the wall. Since we didn’t have the money, we hired professional break dancers to come to the dinner party — dressed in Property Solutions garb. Everyone thought they were our employees, and there were thousands of people glued to our guys spinning their heads on the dance floor. People swarmed our booth for the next three days of the show. 

Now that we’re growing, we don’t know how to market with money. It’s like, “What are we supposed to do with this kind of budget?”

Becoming a public company is the goal. We’re growing. And we’ll continue to grow. We have the biggest competitive advantage with the caliber of employees here in Utah Valley. There’s no place like it.