QuintoAndar is now one of the most famous unicorns in Latin America. The real estate startup has a valuation of over US$ 5B, thousands of employees, and operations in both Brazil and Mexico.
Looking at these numbers, you couldn't even imagine how tough the first days were.
Luckily, we have one of its co-founders tell us like it was.
By that we mean counting pennies, failing at fundraising, building a scrappy MVP, and literally biking to clients and solving the problems of traveling salesmen. But we also mean having a vision that's bigger than yourself and having the necessary persistence to make it happen.
André Penha, the co-founder and CTO of QuintoAndar, shared this and more with Yuri Danilchenko, the co-founder and CTO of yours truly Latitud. You can watch the whole tech talk in the video above, or check our nice and tidy summary below. Take a break from coding and write down these learnings… 👨💻
André Penha started as an engineer for the gaming industry. He would get old console games and port them to so-called dumb phones. These games had to be programmed in languages like Java to run on smaller and more modern hardware.
As a part of a 60-person studio, life seemed to be going well. That is, until André had to negotiate a pay increase because of dire economical times. They said it was his problem and that he could break the contract at any time because they'd just hire somebody else.
"I realized that I was doing something completely replaceable and commoditized. If my team stopped working, someone else would do what we did and the world would remain the same."
André decided to build something that would actually be cool.
There was just one problem: he didn't know how.
The search took him to an MBA at Stanford, where he met someone who would change his destiny. He and Gabriel Braga would co-found QuintoAndar and complement each other. Gabriel was the outspoken CEO, and André the introverted CTO.
QuintoAndar's first six months actually became three years.
The startup raised a Seed round with angels the same year André and Gabriel came back to Brazil and founded the company, in 2012. But then, VCs only wrote the next check in 2015.
"As every entrepreneur at the beginning of a business, we thought we were going to build a PowerPoint, get funded, and nail it. Come on, if you didn't think that, you wouldn't have become an entrepreneur," André says.
When talking to Brazilian venture capitalists, the answer was always the same. Yes, it's a very cool business. No, it's also very complicated and you're not gonna make it. But if you do, call me because I'd like to invest after it works. "All I could think was, 'Well, if it works I probably won't need you to invest anymore.' But I couldn't say that, just imagine it."
André and Gabriel were "counting every single penny and seeing how not to go bankrupt the following month." The contracts were few, the revenue was little, and proptech wasn't even a thing yet.
"It was despairing but we knew we were on to something. The real estate market and the experience were so broken. Not because people are bad but just because it's all so fragmented. And at the same where you're going to live is such an important problem for people. It's the basis of Maslow's pyramid, it's critical, and somebody has to solve it."
André shared that most product people like to see the data and build exactly what customers say they want. But he thinks it's much cooler to build what you think people will want in the future.
"I learned to like the uncertainty of building a thing that you have a vision but you can't really A/B test it, at least not at the beginning. You need to create it and convince people that they need it."
Yeah, that sounds crazy.
Yeah, sometimes it goes wrong.
But sometimes it goes right.
André and Gabriel's persistence eventually paid off. Kaszek took a leap of faith, believed that they were the right founders to crack the code, and led QuintoAndar's Series A. Don't we all love a happily ever after?
QuintoAndar's MVP was limited by the fact that they did not have enough money to build what they wanted to – sounds like everyone in here, am I right?
André even had a cute nickname for their first try: "the not-viable product." It was a page with a phone number. André or Gabriel would pick up the phone and bike to the apartment the customer wanted to check out. No blood, but a lot of sweat and tears.
The real MVP was when the viewings started to be booked automatically. The startup then found an agent to be there in the shortest route possible, given his other bookings.
That's such a common challenge for engineers that it's known as the traveling salesman problem or TSP. André coded the first version of the algorithm to solve that problem. QuintoAndar's always evolving that same algorithm to solve the TSP challenge better and better.
Another priority that goes hand in hand with development is product design. André has always admired the design that brands like Airbnb and Apple have. And them being able to charge double because of it, y'know.
That admiration has translated into a worry about QuintoAndar's product design since the early days. André and Gabriel would draw with pencil and paper. They'd act as common users, discussing changes to be made on the drawn screen.
As the startup evolved, it started doing these tests with actual customers. The product design went to a PowerPoint. But the importance of product design remained the same. Product design translates the product vision and shows users that you care about what they see and feel.
Thought the story ended at Kaszek's check? Sorry, the princess is in another castle and you just got a new quest. The transition from engineer to technical co-founder and chief technology officer isn't a simple one. And it only gets harder and harder as your startup grows.
We know, dealing with a broken code isn't a walk in the park.
But it's still more tangible than managing people.
"The difficult thing about people in relation to computers is also the good thing: they have their opinions. You have to explain what you're feeling and also understand what they're feeling," André explains. Humans are imperfect and unpredictable.
When you have dozens of people, you know them by name and can mix and match based on their personalities and skills. Now imagine doing that with 4,000 employees, a little bit less than 1,000 being in tech.
Yes, that is André's life. Can we all give him a hug?
And what exactly is the problem with having more people? It creates a situation Brazilians like to call telefone sem fio, or a cordless telephone. If you've never seen a cord on a telephone, please get googling or get out.
People relay information so many times that they lose the purpose of the message. At the end of the chain, you'll probably find a "Why are we doing this? Because André said so." And because someone said so is a horrible reason to do something.
The co-founder established a guideline to manage people. If you're an engineer looking to also become a unicorn co-founder and CTO, jot what's next down.
Allow some variance in their behaviors if they stick to the company's core values. Define what's negotiable and non-negotiable. That will make your relationships much, much easier. Word from a unicorn founder to a future unicorn founder. 🦄