AI dominates conversations in multifamily right now, and it's clear that path forward isn't necessarily a straight line, nor is it obvious which directions to turn.  I had the pleasure of chatting with Zlatko Bogoevski, Founder and CEO of BetterBot, on their journey bringing BetterBot to market, including the pivots they made and where they found success.

Some great highlights:

• Product development in concert with clients, and how that feedback defined strategy.
• The comfort factor of giving up control to AI
• How AI positively impacts the effectiveness of team members
• Future growth of AI in multifamily

BetterBot is actually an Elite presenter at our upcoming Multifamily Demo Day, so please join us to see their solution in action: Multifamily Demo Day 

Brent Williams: Hey everybody. My name is Brent Williams. I am Chief Insider at Multifamily Insiders, and today I have the pleasure to talking to Zlatko Bogoevski. He is the Founder and CEO of BetterBot, a name that you all probably are familiar with, and today I get to hear his founding story. So Zlatko, thank you so much for being with me today.

Thanks, Brent.

Zlatko Bogoevski: It's my pleasure.

Brent Williams: I'm a big fan of hearing how people got to where they are now and all the hills that they had to climb, all the troughs that they went through, how they learn from each experience. And so I'd like to rewind the clock, if that's okay with you. I like to, let's go back a couple of decades.

You said your entrepreneurial journey started a couple of decades ago. And I like to hear that start. And then let's kind of go through that process. What you learned along the way, what you took in, what you maybe discarded or learn what not to do. I think those are fascinating.

So could we talk about those early days of your entrepreneurial journey?

Zlatko Bogoevski: Absolutely. As a child, I grew up with computers and technology. I consider myself a product of the internet generation. On top of that, I grew up in an entrepreneurial family and that was always encouraged. So, from an early age, I knew that I was always going to be an entrepreneur, and I was encouraged at home.

So, I started my first company in 2000, and being a techie, I was eager to take on all sorts of projects in order to support myself in tech. And it was very exciting. While it was exciting though, it was not very successful at the time. I learned some really important business lessons. Especially things that you shouldn't do.

The most important lesson I learned is the lesson to focus. Because in those early days, I was taking on all sorts of different projects. Somebody would need a website. I'll jump in. Somebody would need some software written. I would jump in. Somebody would need a network built. I would jump in and do it because I was comfortable with all sorts of technology.

And I was taking on different projects and that lack of focus made it very difficult to build a profitable business.

Brent Williams: You know, it's so funny you say that. Even today I feel the call to build something and I have to say, okay, no, no, let's focus on what we're doing. And so it's, I remember, I don't know how many years it was probably a decade ago.

My cohort, Felicia and I, we had to go back through and go, you know what? What can we ditch because we were trying to do too many things and we weren't doing any of those things really well. We were doing all of them just on an average level. And so I feel that in my, in my heart, I feel that.

So you're learning to focus. What was that next step? Where did you focus to?

Zlatko Bogoevski: Well, the next step was to essentially focus first on learning how to build a real business, which means whatever I did, it had to be profitable. Because at this point, you know, I had a family to support, and it was time for me to get more serious about building a business.

I knew that that's what I wanted to do, but I had to look back and not repeat some of my previous mistakes. Because when you don't focus, it's very difficult to build a team. It's very difficult to build a brand as well. So to me, the first thing was learning how to build a business and then choosing the an industry vertical to focus in.

And for me, that became PropTech. And finally, to really start paying attention to technological trends. One thing that I started realizing is that innovation doesn't happen gradually. It happens in leaps whenever new technology comes out. So for example, if you look at when companies are built, they're always built around these technological advances.

So, for example, the microprocessor comes out. That's when we see the PC revolution. Then, graphical user interfaces come out. That's when we saw a lot of applications become popular and we saw mass adoption of computers in the workplace and at home. Then the internet came out. That's when we saw dot com businesses being built.

Social media came out. That changed the way people advertise and build communities. Apple comes out, apps come out, those apps became the next wave of businesses. So I started really paying attention and this was about 10 years ago on what is the next wave going to be and how can I build a business around that?

Brent Williams: And so 10 years ago, so 2014-ish, what, what did you see coming down the pipeline?

Zlatko Bogoevski: At 2014, one thing that happened. I rebooted my business and renamed it Buildermind. Like I said, I started focusing on PropTech. And then what that allowed me to do is to build a real business that solved a real problem.

I started working with companies in construction, facilities, maintenance, and some other areas in PropTech. And I started helping other entrepreneurs develop massively successful companies. But for me, that wasn't enough. I wanted my own product. And that's when I started paying attention to what the trends were.

At that time, I identified three trends. First trend was big data. I knew that as we're amassing more and more data, that there are lessons to be learned and there are going to be a big need for analytical tools to mine that data. The second trend that I identified was blockchain. I knew that that had potential to change industries.

And the third trend I identified was AI. Now, when I identified those three trends, I quickly discarded big data, because I was not passionate about it. It seemed too enterprise for me, and as a product builder, I was not excited about building a product based on big data. Blockchain? Now that was very interesting.

I was following that movement very closely for years at that time, but I didn't know how I could build a company that could monetize on that. And I had no interest personally into doing an initial coin offering or going down that route.

Brent Williams: I think most people are still struggling to figure out how to make that happen into a business.

So you are not alone in that respect.

Zlatko Bogoevski: I was not alone, and I'm glad I didn't go down that route, because I was very interested in blockchain technology, but AI, AI to me, just captured my imagination immediately, because I could see problems that I was trying to solve with enterprise software technology that could be solved with AI, potentially, and I started building small prototypes based on early natural language processing algorithms.

And I could see a future for AI and I could see how AI could revolutionize industries, even though at that time I had no idea what's coming down and nobody really did.

Brent Williams: So that kind of leads us into the first iteration of BetterBot. How does that, as far as starting up a company to leverage AI, how does that coalesce with AI as a thought of this is going to change everything?

Zlatko Bogoevski: That, that's a great question. At that time I had built Buildermind into a solid company and I had a really strong team behind me. So one thing that I knew I had people that could work with me on this project, and this was mostly engineers that I had worked with.

Second thing is I learned a lot more about business. So I knew that if I was going to start a business, I had enough cash to be able to bootstrap this business. And I knew I was going to take a personal risk, but I believe in skin in the game, and I wanted to have skin in the game in this case.

And then what I did, I literally carved out time and removed myself from day to day operations at Buildermind to work solely on building what was an early AI platform for natural language processing. And at that point, I had to decide what our philosophy is going to be. And you hear a lot of times people say, when you build a startup, find a problem, fall in love with it, and then solve that problem.

But for us, it was a little bit different. We had a technology that we believed in, and then we had to find a problem to solve in that technology. So at that point, what we did, we started pivoting. And the first couple of pivots were in construction. They were not very successful because I underestimated the complexity of conversations going in construction.

But an interesting thing happened. I met my co founder, Robert Turnbull at the time. And he was working for one of the largest chat companies in the world. And he had a wealth of multifamily experience. He's actually started I think five or six businesses in multifamily and some of them names that a lot of people recognize even till this day.

And once we met, we started working on this together and it gave new wind to the project. And essentially that's how we ended up in multifamily. And then he was the one that introduced me to people in multifamily and we started demoing our early platform in multifamily and initially it was a platform for current residents, which you could use to report maintenance issues, get in touch with courtesy officers, communicate with the leasing office.

But every time we would demo that platform, people would give us feedback that, man, we have even a bigger problem on the marketing side, problem with leads, problem with responding to prospects. And that's when we decided, and I believe that was like our sixth pivot at that time. And the team was, you know, we better nail it this time around.

And I want to thank a couple of people. I want to thank Jennifer Staciokas and I want to thank Ryan Perez. They were our earliest supporters, amongst others. We were blessed to have some really good feedback early and people to point us in the right direction and to give us an opportunity because putting new technology on a production website, for example, where you've invested a lot of money in marketing can be daunting, but I remember that day like it was yesterday.

We got an opportunity to put our chatbot, a version of BetterBot, and it was still on MVP, a minimum viable product at that time, on our website, and it was in the DC area, and within one hour, we had an appointment, and we got a lead as well, and we knew it. We were like, wow, now we just gotta make sure that this is not a fluke, so we just gotta put this on as many properties as possible, and within a month, we had it on 20 to 30 properties.

And the results were consistent and we were off to the races. We knew what we were going to be spending the following years working on.

Brent Williams: You know, there's nothing better than that very first interaction or sale or something to validate. It's like, Oh my goodness, it's working. Like we had hopes. I obviously it wasn't in the room with you, but I could imagine what that must have felt like to, to have it actually convert in that way.

That's amazing. And it's interesting that it all came back to marketing because at the end of the day, so much of multifamily focus comes first through the marketing lens, and then it kind of goes from there. So you kind of start with the residents, but then at the end of the day marketing is what's going to drive so much of that demand.

That makes, that makes a lot of sense. And I also think it goes to say that having that feedback where it's not just developing it in house. You might have great ideas on what you think is supposed to happen, but until you talk to people and get in their perspectives and get in their heads of what they're looking for it can totally change how you develop your product.

So let's take it to the next step now. So you went from MVP to now getting that initial rollout. And then take us to where you are now, as far as what it looks like now versus how it looked like in those early days from a marketing perspective.

Zlatko Bogoevski: Those early days were very interesting because we were learning a lot, but at the same time, we're offering technology that's not proven.

It's a completely new class of product. And that doesn't happen very often. Yeah, because and understandably people were a little bit anxious and at first being able to grow the company was a little bit difficult because convincing people with a traditional mindset and a lot of them had methods that already provided decent results.

So they were not very interested in trying something new, but we were lucky that there were enough adventurers, especially marketers. Marketers are awesome because they are constantly looking for a better way of doing things. They're constantly looking for what's the next thing. And for us, like you said, marketers were kind of like the entryway into property management companies and owner portfolios down the road.

So one thing that happened that really changed everything is COVID. Because for us, The first month of COVID was like, all right, I guess this is how it ends because we were hearing nothing but doom and gloom scenarios. And yeah, we saw businesses folding left and right. And those were especially like brick and mortar businesses.

So for us, we had no idea what's going to happen. But the outlook was bleak. Boy, were we wrong. Within a couple of months, when leasing offices were closed, yet there was still demand for apartments, we saw a huge uptick in orders. So, all of the sudden, not only did we not go down, we saw huge growth that put a lot of pressure on our organization to, to scale quickly.

So That was a very important step and we kind of felt guilty. We're like, wow, the world's going through one of the most challenging times yet for us, this ended up being a big plus for our business.

Brent Williams: You know, it's funny you say that. I mean, I relate to that a lot. When, when those changes were first happening, we had a similar mindset.

We didn't know how things were going to shake out. And we have a Webinar Wednesday series that's online training for on site teams. And, you know, they needed training, especially on these kind of fast changing situations more than ever. And so we just, I mean, it blew it out of the park on the number of trainings that we were doing at that time.

And it felt weird, you know, the same situation. It's like, you, you know, we were having this amazing success from that perspective and then everybody around us though It was like they were struggling and it was it's a very mixed emotions.

I want to get to something when it comes to people being comfortable with AI.

I've always thought that it's a challenge because when people are in control of their own destiny, when it's an individual there, they can have a certain success rate. And if they mess up, if they don't convert right, or whatever. We know we've always been in charge, so we understand that somebody may not convert right.

They may mess up. They may do something wrong. But it's ingrained us to understand that it's a human behind it. And that's how it works. When we give up control to some degree to an AI, and they're doing some of that interaction, then the reality is all they have to do is to be better than a human at the end of the day.

But that's still, I feel like some people get uneasy about that because even if the results fundamentally are better, that lack of control is a real challenge for them from a mental perspective. How do you see that? Do you see that some similar thing play out with this decision making from prospects?

Zlatko Bogoevski: You're spot on essentially, what I'm finding out as I go to a lot of conferences these days, everybody talks about AI. And half the sessions are somehow connected to AI these days. But when you talk to executives in property management companies, when you talk to owners, when you talk to marketers, you will see that a lot of them still don't know how to implement AI in a way that benefits the organization.

Yet it improves digital experiences for prospects and and renters because AI, it's a complex subject. But it also has a huge element that comes from popular culture and science fiction and people have all of these ideas about AI, and some of them may not be rooted in reality. So it's, it's technology that's unique in that way, and we have to navigate around that.

So, for example, we see one of the biggest barriers to success with AI is that people don't exactly know how to implement AI in a way that works and how to do it in a way that's safe and how to give up control and really what is the best modality to implement AI in your organization? On the other hand, we're seeing some huge positives.

So for example, it can massively improve employee satisfaction because it removes tasks that people don't like to do. It can improve organizations because now it turns them into 24/ 7 shops because you no longer have to depend on people. It can affect turnover. We're starting to see now customers report by rethinking what it means to be a leasing agent, for example, that now that job is more face to face than it was with some clients.

And they're seeing really positive results in terms of employee retention, but also in renter satisfaction as well. So it's very interesting. And I think. As an industry, we're still all, we have a job to do in explaining how AI can actually improve things and not make, make them worse.

Brent Williams: Yeah, it's interesting to hear the different perspectives and, obviously there's a lot of fear from onsite teams, how is this going to affect me?

Is it going to take away my job? And, and the most successful implementations that I've heard from are the ones that leverage AI to assist the onsite team to make them be able to do their job in a more effective way, which ultimately makes them happier with their job. You know, I've heard some amazing stories and I don't have them off the top of my head about how employee satisfaction has gone up in some of these instances.

Because they are able to focus on the things that they like to do best or that are most skilled at. We have always had a challenge with on site teams being the jack of all trades. And when it comes to specialization and AI together then they don't have to do all these things at the same time.

They can really focus on selling. I think at a session at Apartmentalize was saying that we're turning our, we've turned our onsite team members or leasing consultants into bots where they're having to do so many things that they're not really focused on the thing that they're supposed to be doing, which is selling.

And so having AI nurture the prospect and get them to the leasing consultant in a time when they can actually sell, then everybody's happier. So I think it's fantastic. One thing I want to build upon what you said earlier.

That things happen in , in stages, like in almost a stairstep manner, right? So it's not just a gradual ascension of changes. It's something big happens and it's a big stairstep. And I'm curious your perspective on AI right now, or is it a stair step that we've just hit a major step and now it's going to be people figuring out how to work with it until we had another major stair step or, or how, how does that work from an AI perspective?

Zlatko Bogoevski: We've definitely hit a major stair step with the introduction of large language models like ChatGPT. That was a huge stairstep in the technology that we use in AI, the technology that we used that looked really modern, just three, four years ago now seems ancient based on statistical algorithms that simply can't perform nowhere near what you see in performance of large language models.

Now, what that really means, it means increased capabilities because what we've seen, for example, in our AI right now, people can have a conversation that lasts five minutes. They can have 19, 20 email exchanges and the entire conversation makes sense. So now we're able to answer questions on a much deeper level than we could before.

So what we're going to see is AI is going to make its way into multifamily. And, there's no other alternative. So I think it's going to be more about how to smartly implement it. And how to benefit from it on an organizational level. Because I think the opportunity to leverage AI right now to build a very lean, profitable operation are there.

And it couldn't, couldn't have come at a better time. Because right now, if you look at with high interest rates, how many property managers and owners are actually struggling because of the basic economics of their property. So, right now, they're, everybody's looking for the most profitable way to operate a property.

And I think AI is that solution. And it can be implemented in many different places in the organization to optimize things from leasing, that seems to be the low hanging fruit, but also resident retention, maintenance, and so on and so forth. So, I think that We are just now starting a new era, and if you look at the prediction from, for example, Gartner, they're saying that the big spend on AI is going to happen in the next two to five years, and I believe that's going to happen in multifamily as well.

So, the question becomes more is, how do you overcome these challenges as an executive in a multifamily company? How do I know that I'm getting the ROI? How am I partnering with the right company that's going to be my guide on implementing AI? So, there are still some issues and challenges in place.

Brent Williams: You know, it's interesting how there's certain times where an external pressure forces innovation or forces adoption in some way. So we, we talked about COVID and now, with these high interest rates we're seeing another external pressure that is forcing companies to focus on the resident experience.

How are they engaging with residents so they don't leave, ancillary income, and then also expense management of, how do you do things in an efficient manner. And whether or not that both forces more of AI and and specialization, these things are all interrelated from these external pressures that force companies to be more efficient.

When we have dramatic rises in rents, there's so much money sloshing around and it's so easy to say, I'm going to try this and this and this. When things get rough, then it really clarifies on, what are we really focusing on right now? And so it definitely seems like this is going to be one of the major focuses.

So, so anything else that we should cover? Any other prognostications, anything else that you see from an organizational perspective or how companies should be viewing AI as we go forward?

Zlatko Bogoevski: One thing that I really like, I like Scott Galloway. He's a economist and he does predictions every year. And he said something that I think is, it's going to be true in multifamily as well, that AI, it's not going to take your job in the near term, but a person that knows how to leverage AI will take your job in the near term.

So that's why I think that you shouldn't fear AI, but fear a competitor that knows how to leverage AI better than you. I am convinced that the winners will be the ones that know how to implement this very powerful technology and to solve some of our big business problems and to operate in a more profitable manner.

Absolutely. Absolutely.

Brent Williams: Zlatko , thank you so much for your time today. I've, I've enjoyed every moment of it and everybody, I hope you all have enjoyed it too. So Zlatko is going to his team at BetterBot is going to be presenting at our upcoming Multifamily Demo Day in August. So make sure to check out that event, check out their demo as well.

Got some really cool stuff coming up. So Zlatko , thank you so much.

Zlatko Bogoevski: Thanks.

Brent Williams: Have a great one, everybody. Take care.