

42Floors (YC W12) Raises $12.3M Led By NEA  - jaf12duke
http://techcrunch.com/2013/01/31/yc-alum-42floors-raises-12-3m-led-by-nea-to-take-its-office-rental-search-engine-us-wide-and-beyond/

======
sethbannon
My early stage startup has been looking for commercial real estate in New York
City and the entire process is just broken. No transparency, no reputation
system, no repeat game for brokers. I'm hopeful 42Floors can bring needed
innovation to this industry.

~~~
jaf12duke
let us know if we can be helpful Seth. It's a tough, tough problem. But we're
working our asses off to make it easier...

------
josh2600
Look, 42Floors is going to succeed not because their problem domain is the
most interesting, or because their code is the prettiest around. The reason
42Floors is going to be successful is because of Jason's hiring practices and
the entrepreneurial spirit of the staff.

If you read the hiring alerts that hit HN, the 42Floors are very well written,
inspiring and they give a strong feel of the company culture. I admire this
business a lot and I can't wait to see what they accomplish.

Keep rocking in the free world, and congratulations on securing additional
funding.

~~~
jaf12duke
Thank man. It's really appreciated.

We try really hard to make this a wonderful place to work. Of course, all
companies try to do that. Why wouldn't they? Our claim is that we try to be
specifically good for founders. 7 out of 10 of us code and have started a
different company before.

It takes some extra effort to attract and retain people that are talented and
experienced enough to start their own company whenever they want.

We're not perfect. It's no Potemkin Village. But we try.

------
BroNamath
I can't believe this site is still around. Yes RE tech is broken, but their
overly exuberant posts about the geek culture of the office and hiring
practices aren't going to fix that. The fact is, RE brokers like to do deals
with each other, landlords trust their brokers, RE deals are quirky. The
office market has been on a rocketship ride for the past three years, probably
exactly as long as 42floors has been around, and 2MM SF is not a lot. What
happens when office leasing momentum stops?

~~~
jaf12duke
Totally fair. I may disagree, but it's a fair assertion that the commercial
real estate community won't want a tech company getting involved. It's what I
heard from virtually everyone when I talked about starting this company. And
for months, that was the response that I got.

And then something funny happened. We started helping tenants find spaces.
Real tenants, spending real money. Landlords got paid and brokers took
commissions. It's amazing how seeing the product work changes people's minds.

We're not all the way there yet, for sure. We've barely begun. But we have
nearly every top landlord on board--representing hundreds of millions of
square feet. We work with every top brokerage, sending them leads that they
make money on. And most importantly, we continue to serve the tenant, doing
everything possible to make this experience better for them.

But I don't need to try to convince anyone--just keep watching. We had
absolutely nothing 12 months ago. Just watch to see what we accomplish in the
next 12.

~~~
BroNamath
This site seems short sighted. "Tech startups" will soon be an undesirable
tenant. Landlords are looking for long-term leases from credit tenants (it's
how you sell a building: the stable rent roll. No one wants unsustainable
income from a hot sector). They are taking tech startups as tenants now
because they overpay for space (with angel money), that would otherwise sit
empty. Once the seed money dries up (or Round A, etc) startups will be unable
to pay rent and landlords will soon lose their appetite for small short-term
leases at above-market prices. Just wait to experience the herd mentality of
real estate investors; obviously no one on your team seems to want to remember
2007? Why would they if they are on the payroll of a funded startup and no
longer humping it out for RE commissions.

I have spent time on your site and it’s no less convoluted than loopnet,
costar, or craigslist (and about 100 others). To me, 42Floors is a prime
example of the recent startup mess. An over engineered site with too much
funding that no one really needs.

Congrats on your enthusiasm and good luck with your pivot.

~~~
popmikeup
The current market is completely out of sync with the real value/costs of
commercial property. The field has insulated itself from true price discovery
for so long that it is starting to hemorrhage.

This isn't really about finding 'tech startups' a home, but rather that
there's a chance that any new business starting up will need office space. And
don't forget, current office-space tenants are going to start wondering why
they're paying such inflated rates and the people across the way are paying
25-whatever% less for the same kinds of space.

Don't focus too much on new converts; think about everyone paying more for
office space now than they need to.

------
dude_abides
_Since launching a year ago, 42Floors says that it has connected some 1,000
businesses with over 2 million square feet of office space_

Assuming very conservatively that an office with 20 employees requires 4400 sq
ft, 2million/4400=454. Isn't that an extremely low number for one year of
operations?

~~~
martythemaniak
Not necessarily. With startups it's all about growth, and your calculation
misses that completely. For example, your number implies they do a "sale"
about once a day, however if they've seen good growth, they might have been
doing one "sale" a week last year, and 30 "sales"/week today.

Remember that in the early stages exponential growth looks worse than even
linear growth. (example:
[http://www.wolframalpha.com/input/?i=y%3D1.5%5E%28x-3%29%2C+...](http://www.wolframalpha.com/input/?i=y%3D1.5%5E%28x-3%29%2C+y+%3D+x))

~~~
jaf12duke
All we care about is monthly growth. And it's consistent.

------
SatvikBeri
So...when are you coming to Boston?

~~~
jaf12duke
Soon man! We're working on it!

~~~
SatvikBeri
Work faster :). In all seriousness, congrats on the funding, and hope to see
you everywhere soon!

------
unreal37
Congrats to 42floors.

