There's an app for that

Houston startup plans to expand services and footprint following $2 million seed round

Ben Johnson's business idea turned into a growing company making the lives of apartment dwellers easier. Courtesy of Apartment Butler

Ben Johnson thought consolidating resident services for household chores — like doing the dishes and walking the dog — could be done more efficiently. So, he created Houston-based Apartment Butler in 2016 to do just that.

"I started thinking a lot about apartment industry," Johnson, who is the founder and CEO, says. "I just saw the industry as a whole is one that hadn't been really disrupted yet — the technology was dated."

Johnson, who worked in oil and gas banking for seven years, was commuting to Chicago on the weekends to get his MBA at the University of Chicago at the time. He was surrounded by so many people starting different types of companies. The program pulled him out of the energy industry so that he could see how something like Apartment Butler could work.

Over two years later, Johnson is fresh off a $2 million seed fund raising round that closed August 31. Houston-based Mercury Fund lead the round and Austin-based Capital Factory participated. The money raised went into growing Apartment Butler's staff. In just five months, the team has tripled from four members to 12. The company is hiring a vice president of engineering who will be based in Austin, where the technical team will also grow.

Johnson talks about more growth plans — including a footprint expansion to two new markets and new services for its users — in this week's Featured Innovator interview.

InnovationMap: How did you come up with the idea for your company?

Ben Johnson: I came up with this idea of Apartment Butler because I lived in an apartment, and I had a puppy. I would drive home at lunch to let this puppy out. There were 10 different dog walkers in my apartment community, and it made no sense to me why 10 different people would drive to this apartment community every day to walk dogs. Why can't we just come together and combine out purchasing power as a group of people and get better prices in a more efficient way?

Apartment communities for years had been aggregating things like pest control or trash service and getting a better deal. But why for these resident-elected services there was no medium for residents to broker a deal for themselves.

Separately from this idea, I was fortunate enough to catch a shift in thinking in the apartment industry. Managers and developers for years had been spending more and more money on pools and fitness centers. It had been this arms race for amenities and had been starting to think about more than just those amenities.

IM: How did you get your start?

Johnson: We had three services to start: housekeeping, pet care and dry cleaning/wash and fold.

I really had no idea what I was getting into. I was starting a three-sided platform in a city that doesn't spit out a lot of tech companies — certainly not many with a consumer-facing component. It was just like blind arrogance that led me to do this in a non-target market for startups.

One benefit to being in Houston is that i found a robust network of high networth individuals in the real estate industry that were our first capital. We were able to raise $780,000 in our first angel round in 2016. All of those individuals came from the apartment industry and then became our customers.

IM: What's been a challenge for y'all?

Johnson: Being here in Houston was a real challenge — there are entire skill sets that don't exist here. There's not technical product managers or lead engineers and you don't meet those people organically. When it came time for me to find someone to help me grow this business, it was like shooting in the dark, and I didn't yet have a network. I met someone online and, for a fee, they built our first product, and it left a lot to be desired. I think a lot of people would have stopped there.

Consumer-facing businesses are very, very hard. You look at our lead investor, Mercury Fund, which I would consider ne of the top VCs in the state, if not the country. They built a very successful series of funds doing B-to-B software. Even in Austin, which is known as a tech hub and has a vibrant startup scene doesn't have a big B-to-C presence. There's not capital for B-to-C companies in the middle of the country because the capital required to go direct to consumers is really high and the model is not nearly as predictable. Apartment Butler is not B-to-C; we have a B-to-B-to-C strategy, where we sell to the the apartments and they become our channel for customer acquisition.

IM: So, how did you manage to stand out in an environment that was so tough?

Johnson: What we're doing is unique. I didn't realize how complicated our business model was going to be.

Houston's doing a lot. It's going to be a long road. But as a city, there's a need for the largest venture capital provider in town to support companies that have gotten really good traction, whether or not it fits their mold. The city needs capital to flow into businesses

Every single VC I pitched to in wanted to require us to move to Austin as a condition to our funding. I wanted to grow this business in Houston. I thought I was going to have to move to Austin because there wasn't a VC for us here. The fact that Blair and Mercury stepped up and said, I know this is a little outside the box but this company is great for Houston. We need to keep them." And I'm glad they did.

IM: What's next for your company?

Johnson: To date, we have been delivering services that have already existed. Yes, we can provide a lower price point and have a hotel-like experience where you can just use an app and we go through your apartment office.
What we're doing now and what we're rolling out in January is our first line of microservices that haven't existed before, or only existed for the ultra-rich.
You want someone to just come in and change your bedsheets, wash your dishes, clean your bathroom, or put your groceries away. The type of experience now starts to be just what you need — a lot of people don't want to pay $70 for a whole cleaning.
The other thing would be footprint expansion. We are launching in Austin on January 7, and we'll be launching our fourth market outside of Texas in March. And then from there, we're going to rapidly accelerate how quickly we're expanding.

IM: What keeps you up at night, as it pertains to your business?

Johnson: We are creating a new industry: Resident services in apartments. I know $2 million sounds like a lot of money, but when you're hiring very talented people, it goes fast. There are 100 things I want to try — experiments I want to run to see how we can get new residents and see what works best, and I only have enough money to do 25. So, it's making sure that I try the 25 best things I can afford to do. Prioritization is what keeps me up at night.

------

Portions of this interview have been edited.

As the city grows, Houston faces more and more challenges from transportation and infrastructure to gentrification and climate change. Getty Images

As technology and infrastructure evolves, Houston is growing and evolving with it — in both good ways and bad.

On October 30, Gensler hosted its annual Evolution Houston forum that brings together various personalities and industries to discuss the future of the city of Houston. The panelists discussed gentrification, climate change, mobility, smart cities, and so many other hot topics Houstonians hear or think about on a regular basis.

Missed the event? Here are some powerful quotes from the discussion.

“I like to think of Houston as an adolescent city, struggling for its identity.”

Peter Merwin, design principal at Gensler, who adds, "If you look at places like New York, London, Paris — those are all luxury cities. They are fully formed, and a consequence of that is that they become unaffordable. It's something that we have to be careful about in Houston."

“One of the things that has been echoed by many of the artists and many of the poor people over the last few years is, [people] ‘want the culture but they don’t want us.’ It’s very reflective when you go [into the communities.]”

Kam Franklin, activist and singer-songwriter of The Suffers. Franklin described how she would move from the various neighborhoods she's lived in after they've grown in culture. She would see such a huge increase in her rent as people were more willing to pay the premium to live in these newly desirable neighborhoods because of the culture, but its pricing out the original inhabitants. Franklin added, "I'm not going to tell any of y'all where I moved."

“We have to continue to support the diversification of mobility options.”

Abbey Roberson, vice president of planning at the Texas Medical Center. Roberson says transportation is something she particularly focuses on considering how many people filter in and out of the TMC on a daily basis. The medical center wouldn't be able to support the traffic with out various modes of transportation — busses, light rails, etc. Roberson adds that this translates to the rest of the city. "We can't just be doing one thing or the other."

“We’re creating this great culture of trail activation.”

Steve Radom, founder & managing principal at Radom Capital LLC, which developed Heights Mercantile off a bike path and is now building out The MKT, which is also along the same bike path. Radom notes that the city has seen a 300 percent year over year in walkability and a 70 percent increase in bike traffic.

“Climate change is not something the city of Houston can change alone.”

Lara Cottingham, chief of staff & chief sustainability officer at the city of Houston. The city's climate action plan is a result of the devastating floods has seen almost annually. The plan is still being drafted but a version is expected to be released before the end of the year. Every city is facing sustainability challenges, and partnerships are what's going to drive change. "In Houston success means partnership," Cottingham adds.

“How do you talk about a city this big and diverse — every neighborhood has its own identity.”

Jon Nordby, managing director of MassChallenge in Houston, discussed how Houston functions differently from other cities in that it its various neighborhoods — the Heights, Montrose, downtown — are different from each other.