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From online rent collection to digital tenant screening, to remote renter utility use control and smart home monitoring, the latest in digital technology is modernizing the real estate industry — and fast. One of the American cities where this is abundantly evident right now is Portland, Ore., home to a growing number of innovative real estate startups bent on disrupting the legacy sector.
Take Cozy, for example. Founded in San Francisco in 2012 by recent Nike+ Techstars Accelerator mentor Gino Zahnd, the pioneering digital property management service for landlords and renters set up shop in Portland in January of 2013. Zahnd says Portland’s previously overlooked and increasingly competitive hiring market, rich with talented software engineers, was the top motivator for his company’s move to the Rose City.
“We opened a Portland office because we started finding high-quality software engineers here,” Zahnd told Free Enterprise. “Over the next two years, people in our San Francisco office were moving to Portland. When we would hire new people, we’d give them the choice of San Francisco or Portland, and 100 percent of new employees chose Portland.”
It wasn’t long before 15 employees began working out of Cozy’s Portland outpost. Eventually, with only three workers left at its California office, Zahnd closed the company’s offices there and went all in on Portland, moving its headquarters to the city of nearly 700,000 residents with a mellow small-town feel.
“The decision was perhaps the best thing we could have done,” said Zahnd. “With Cozy solving problems that affect landlords and renters everywhere, we aren’t the type of business that needs to be in Silicon Valley selling to other businesses. And it so happens that we can have a much higher quality of life in Portland because real estate, and basically everything else, is much less expensive, including running the business.”
Portland — long home to big-name leading innovators like Boeing, Intel and Nike — is now flush with 35-plus startup accelerators, incubators and other support programs for smaller, early-stage tech companies like Cozy. Riding a rising tide of entrepreneurial innovation in the real estate tech, health tech, clean tech and education tech sectors, the city recently ranked 10th on the 2017 Innovation That Matters report. The newly released analysis — conducted by 1776, the U.S. Chamber of Commerce Foundation, the U.S. Chamber Technology Engagement Center (C__TEC) and FreeEnterprise.com — examines the health of technology-driven startup ecosystems in 25 American cities.
In the midst of a tech renaissance (giving rise to its recent Silicon Forest moniker), Portland shot up two places on the comprehensive report this year. Gains in startup density, startup culture and access to skilled talent fueled the city’s ascent. Also contributing to its improvement is a recent boost in area venture capital funding, further catalyzing local innovation culture amongst entrepreneurs flocking to the city from neighboring regions, and from out of state.
Somewhat similar to Cozy, Househappy is another tech-driven Portland real estate shaking up the field with its photographically-centered home search platform for homebuyers, many of them millennials tiptoeing into the homebuying market for the first time.
David Manougian, a Portland native and former Golf Channel executive, joined Househappy as its CEO in 2015, a move that was driven by the abundance of skilled local tech talent.
“[I looked] for brand potential, a unique customer experience,” Manougian said, “a business reason for the company to exist, and, most of all, the talent level of the people. In the case of Househappy, it met and surpassed all these areas, especially the people.”
Under Manougian’s leadership, Househappy — now flush with an estimated $4 million-plus in venture funding — recently acquired fellow real estate tech startup GruntWorks, formerly based out of nearby Beaverton, Ore.
Meanwhile, IOTAS, Inc., a Portland-based IOT real estate tech startup that makes smart apartment technology for renters that integrates with Amazon’s Alexa voice-activated personal assistant and Nest’s digital thermostat, has also reeled in significant venture capital in recent days. The nascent company has raised more than $5 million in four funding rounds, with infusions from the Oregon Angel Fund, the Portland Seed Fund and Rogue Venture Partners. The upstart’s smart home technology learns tenant’s arrival and departure habits, enabling often costly utilities like lighting and heating to be used only when residents are home.
On top of a relatively affordable cost of living — and the cost of running a new business — especially when compared to Silicon Valley, Zahnd also cites Portland’s historically open, collaborative startup ecosystem, as well as the city’s “independence streak” that continues to attract and keep founders in the city.
“It is a much, much smaller ecosystem than the Bay Area, so it’s significantly easier to get to know everyone in the startup and tech community here,” Zahnd said. “Portland is a much more collaborative city in general, and that characteristic seems to be a product of Portland’s history of being a maker, small business kind of town.”