“If they raise VC, they usually get stuck and it’s a bad outcome for an otherwise good company.” Brad Hargreaves on which proptech companies should seek (or avoid) venture dollars. And more, from the founder of General Assembly, Common, and now, Thesis Driven.

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I think Brad and I met back in the General Assembly days, which was one of the early code schools based out of NYC (interestingly, with a physical presence, not online only). He later started Common, a notable co-living starting, and now has a trade publication called Thesis Driven. Brad describes it as covering the ‘future of the built world’ and it’s a really interesting read for me. Enough so that I wanted to catch up with him via Five Questions.

Hunter Walk: For me it seems like Thesis Driven is both “one thing” and “a lot of things” [media company, community, educational programs, investment fund] but all which center on your love of, and expertise in, proptech. Is that fair? How do you describe what you’re doing these days?

Brad Hargreaves: That’s fair, although lately we’ve been a lot broader than proptech. “Future of the built world” is both awkward and the best descriptor I’ve come up with.

Technology is a part of that story. AI is having a tremendous impact right now across the real estate industry – operations, development, underwriting, design – all of it. We write about AI’s role as well as teach workshops that help real estate operators figure out how to use it. I have an education background so I just can’t keep myself away from that business.

But to our readers, shifts in the real estate capital markets are just as important. We’re at a weird moment in time right now where old mainstays – office and multifamily – aren’t looking as stable as they once were. So investors are looking at categories they wouldn’t have touched ten years ago. Cold storage, outdoor hospitality, niche industrial, healthcare housing, and more. Everyone’s also trying to figure out how to “seed fund” emerging real estate operators. It feels a lot like the venture ecosystem in ~2010.

Over the past year we’ve been using our platform to match investors with innovative real estate operators; it’s still early days but so far we’ve seen a lot of success there.

HW: I appreciate that not every essay is about AI or some technology startup – you actually do quite a lot of work on regulatory, design trends, socioeconomic and cultural changes to living. Do you find different types of reactions from the community? How much are you trying to explain ‘the now’ versus ‘the future’ in this analysis?

BH: We have a very broad scope for a trade publication. I’m sure that’s frustrating to some readers who only want to read about proptech or capital markets, but I see it all as inseparable. If you’re a PE shop or an institution investing in real estate, you can’t ignore any piece of it. You have to understand the role of AI. You need to have a grasp of cultural trends and what preferences – or regulatory policies – may be downstream of those. You must understand how financial markets are moving.

The easy path here would be to crank out reports on AI. But the future of real estate is also about social and demographic shifts. Birth rates have fallen dramatically and immigration has plummeted. Who is going to live in all these new apartments? Over a hundred colleges close every year due to a lack of students. What happens to that real estate? Those don’t draw as much attention as my writing on AI but I think it’s just as important.

I generally aim to give people insights into what might happen 6 to 36 months from now. I’d love to speculate farther out as well but I don’t want to risk anyone calling me a futurist.

HW: Two of the companies you cofounder – General Assembly and Common – both were in areas post-funding saw the venture capital hype cycle take hold – from being in-fashion to less trendy. How much did those narrative swings impact the way you built the business, and ways it helped or hindered what you ultimately wanted to accomplish?

BH: They were very different. With General Assembly we nailed the timing. We started working on it in late 2009, just before learning how to code became sexy and every Fortune 500 B2C company needed to get digitally savvy. We sold in mid-2018 right before the pandemic and AI hit. 

But I’d say General Assembly’s concept was never particularly trendy among VCs. We believed having a brick-and-mortar presence was important, which scared many investors but ultimately allowed us to build a great enterprise business. Two of our last three rounds were led by family offices, which in hindsight enabled us to successfully exit when we did.

Common was a much tougher situation. The coliving concept got very trendy very quickly. Six to ten companies raised meaningful venture rounds, which led to a lot of competition and compressed margins. Ultimately we and many of our peers made bad economic choices in the name of grow-at-all-costs, and many of the decisions I make today at Thesis Driven are informed by mistakes I made at Common.

HW: Related to this question about venture capital, what advice do you give proptech founders about whether VC is the right source of investment capital for their business? 

BH: If they’re genuinely building technology, venture capital can be a great path. Vertical software is a great category for VC. There are also interesting data and marketplace opportunities in real estate that could likely have venture-scale outcomes.

The challenge is that there are a lot of asset management businesses out there that don’t have a good path to raising seed capital outside of venture. These businesses need to exist and can be great companies – asset management is an excellent business – but they usually don’t have the predictable, exponential growth arc that venture needs. If they raise VC, they usually get stuck and it’s a bad outcome for an otherwise good company.

HW: How much do you ‘bring your work home’ – with three kids have any of them shown similar interest in these areas? Is Thesis Driven multigenerational? 

BH: I’d love to build a multigenerational business, but the next generation has to want it. I won’t pressure anyone into it. Our oldest is nine, right now he wants to buy a farm and run a farm-to-table restaurant. He did have a very successful pie-baking business last Thanksgiving. We’ll lean into their interests, show them love, and see where it takes us.

Thanks Brad!