From PropTech to Construction Tech: How AI and Execution Scale Real Estate Businesses (w/ Scott Kelly)

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Show Summary

In this episode, Scott Kelly, CEO of Black Dog Venture Partners, discusses the intersection of technology and real estate, the role of business accelerators, and the impact of AI on various industries. He shares insights on navigating risks in tech investments, the importance of building a strong team, and the vibrant entrepreneurial culture in St. Petersburg, Florida.

Resources and Links from this show:

• • • Investor Fuel Real Estate Mastermind
    • Investor Machine Real Estate Lead Generation
    • Mike on Facebook
    • Mike on Instagram
    • Mike on LinkedIn
    • Scott Kelly’s Website
    • Scott Kelly’s Website
    • Scott Kelly on LinkedIn
    • Scott Kelly on X
    • Scott Kelly on Instagram
    • Scott Kelly on Facebook
    • Scott Kelly’s Email Address: [email protected]

  Listen to the Audio Version of this Episode

  Investor Fuel Show Transcript:

  Scott Kelly (00:00)
  Well, think obviously technology is an enabler of industries for decades and AI is revolutionary. There’s no doubt about that. And I was told, or I was asked a question, is AI equivalent to the dot com boom in the 90s? I said, no, it’s the equivalent of the discovery of electricity. It’s that revolutionary. But with any tool, you have to use it properly, you know, and you have to use it effectively. Just putting an AI extension at the end of your company’s domain doesn’t make you an AI company.

  Dylan Silver (02:02)
  Hey folks, welcome back to the show. Today’s guest is the CEO of Business Accelerator, Black Dog Venture Partners, and he’s based out of St. Petersburg, Florida. Please welcome Scott Kelly. Scott, welcome to the show.

  Scott Kelly (02:19)
  Thanks for having me, I appreciate it.

  Dylan Silver (02:21)
  It’s great to have you on here. You’re in one of my favorite areas really of the world, definitely of the country. I’m a big fan of really everything going on in beautiful St. Pete. But before we hop into that, ⁓ walk me through how you got into the real estate space. I always ask my guests how they got into real estate.

  Scott Kelly (02:40)
  Sure. you know I started, obviously, I’ve made a number of investments in my career, and many of them.

  We’re in real estate, both residential and commercial. I bought my own office complex back in the 90s when I was in San Francisco. And although I work with a lot of technology startups, I recently got involved more in prop tech and construction tech because the real estate industry is changing and technology is really leading the way to help developers develop more efficiently and more cost effectively. And it’s helping purchasers

  make better informed decisions. And so we made a couple of investments and involved in a couple of projects in the space. So we’re really applying technology right now to the real estate industry.

  Dylan Silver (03:29)
  I want to ask you about the business accelerator space. think for folks who may be unfamiliar with this, ⁓ walk us through, you know, thousand foot view what’s involved in a business accelerator. Is it funding? Is it ideas? Is it both?

  Scott Kelly (03:45)
  It’s really all inclusive. we, know, at Black Dog, we help companies get access to funding and capital through our network of investors and lenders. We also help them grow their business by creating partnerships and helping them with business development, sales and marketing. I help them build their team to make sure they’re adequately prepared to grow a business and then eventually when the time is right, help them exit. you know, we try to have an all inclusive approach because the reality is sometimes the answer for an entrepreneur is capital.

  and sometimes the answer is everything but capital.

  Dylan Silver (04:18)
  I want to ask you about that space. think we’re a real estate show, right? And of course people in real estate tend to have one focus and one niche, but also you see real estate business owners and business buyers venturing off into the trades. I’ve had people who own gyms as well and really so many different asset classes. Is there one specific asset class or industry?

  that black dog specializes in or is it across the board?

  Scott Kelly (05:38)
  Well, our primary focus has been technology because technology impacts every business, including real estate. As I mentioned before, the construction industry has been an industry that has not been impacted by technology for generations. And you’ve got a whole now a new generation of companies in the construction development space that are aging out and the new folks taking over want to use technology. So ah we are finding is that we’ve been involved

  whether it’s cyber security or artificial intelligence or other industries. But over the last several months and a couple of years, real estate has been one of these industries significantly impacted by technology and specifically AI.

  Dylan Silver (06:24)
  It’s tremendous how much it’s taken over. I mean, from the inside, as a realtor, I’m almost surprised that an industry can move so fast. I also have a background as a student in software engineering. One of the interesting things is I feel like in a lot of ways, real estate has a lot of old guard, but there’s also a tremendous push to really be the first adopters of so much of this tech, which I think is great to see.

  Scott Kelly (06:53)
  you

  Absolutely. We have two portfolio companies, one in property tech, and that’s a company called Property Lens. And they are effectively the car facts for homes. So they allow purchasers and real estate agents to really provide all the customer information they need right away before making that purchase. And then in the construction space, we’re working with a company called AI Builder Company. And they basically provide using AI to provide takeoff estimates far faster and quicker.

  helping the streamline the construction space. So you know, there’s some really great technology out there which is really moving the whole real estate industry, you know, rapidly forward.

  Dylan Silver (07:33)
  I want to ask you, it’s getting a little bit granular here Scott, maybe give away some of the gold but not all of the gold. When we talk about ⁓ tech, AI, and we talk about ⁓ business acceleration, we talk about funding but also access to strategic relationships, tech seems like maybe a more challenging place to play ball in because there’s more risk. When you’re talking to…

  Scott Kelly (07:38)
  Hmm

  Dylan Silver (08:01)
  business owners who have a tech company, are you ahm really, I don’t wanna say underwriting, but are you assessing, hey, we understand we’re gonna have to take on X many companies, there’s only gonna be a certain percentage that will succeed, and is that higher than in some other spaces? Or are you able to leverage that or to hedge against that risk in some sense by having a purview that.

  Hey, we’re going to have a greater than, you let’s say 50 % success rate with these tech businesses. What’s your angle?

  Scott Kelly (08:39)
  Well the, the angle, first part of that is for everyone listening, have to understand that technology investing and startup investing is probably the highest level of risk out there. It is betting black at the casino. So there’s a lot of risk there. Your technology can be great, but you have to have a team that can execute that technology and turning into a profitable business that eventually yeah exits. But that said, what we bring into the table is the opportunity to grow a business with or without funding.

  Cause I tell a lot of entrepreneurs that maybe you shouldn’t seek venture capital. Maybe you should build a really good business and generate really good revenue and then sell it for a really good profit. Now that said, obviously capital can accelerate the process. Some ministries need the capital. But what we try to bring to the table is our motto is that we solve problems and create opportunities. And those solutions and those opportunities sometimes involve raising money. But sometimes it involves

  making a phone call and building a strategic relationship and generating sales as you wouldn’t get otherwise. And that’s really what we’ve tried to bring to the table.

  Dylan Silver (09:42)
  Right.

  Do you find that most folks who are coming to you and people at that stage where they’re considering taking on capital are, are looking at it first from the capital lens and not enough from what can I do to scale my business? Or is it a little bit of both that you have folks coming to you that may not be interested in capital but that would benefit them nonetheless?

  Scott Kelly (10:45)
  Yeah, absolutely. We get both sides of it. We have companies all the time come to us and we get literally hundreds of pitch decks from early stage companies every month. And you know, some of them, like I said, you know, capital is what they need or what they think they need to accelerate the process. And honestly, sometimes it’s just the right relationship and the right sales process and the right marketing. You know, we had a company a couple of years ago that wanted to raise two million dollars. I looked at their product and I was able to help them sell two million dollars of the product. So.

  They got revenue without giving away anything in terms of equity and were able to build the business without the equity. Again, we are in the business of helping companies get in front of capital, but sometimes that capital and the best non-dilutive capital is going out there and selling your product or service.

  Dylan Silver (11:32)
  Right. You know, I think there’s definitely risks on all sides, right? So you talk about investing in real estate tech, but then as a business owner, when you’ve crafted your vision of it and then you start taking on capital without having the sales to boot, well, now you have more pressure on you to produce. I do want to pivot a bit here, Scott, and ask you about what we’re seeing with disruption when it comes to tech and AI.

  There’s now been so much with what I would call speed to lead with being the first to get in front of clients with also automated follow-up and how this can innovate a rather antiquated system, right? How many old businesses or older businesses have been successful for decades but may still be doing things without any type of consistent follow-up, just kind of relying on a local reputation. Are you seeing a lot of that as well and is that a lot of

  what you see as a value add ⁓ or is it a different messaging and different use cases that you come across with tech and AI.

  Scott Kelly (12:41)
  Well, I think obviously technology is an enabler of industries for decades and AI is revolutionary. There’s no doubt about that. And I was told, or I was asked a question, is AI equivalent to the dot com boom in the 90s? I said, no, it’s the equivalent of the discovery of electricity. It’s that revolutionary. But with any tool, you have to use it properly, you know, and you have to use it effectively. Just putting an AI extension at the end of your company’s domain doesn’t make you an AI company.

  You know, we’re at this point now where it’s from not just building large language models, but it’s actually really applying the technology to make your business more effective. And we’ve got a pretty narrow window.

  for companies to be unique about that. In the mid-90s, having a dot com was something that only the cool people did. Now, everyone has to have a dot com. And we’re probably a year or so away from the same thing happening in AI. But it’s a revolutionary technology. But again, like any tool, a hammer is really effective hitting a nail. It’s very ineffective when it hits your thumb.

  Dylan Silver (13:25)
  Yeah.

  Yeah, you hit the nail on the head there. You know, one of the things with AI that has been challenging for some people, and I’m sure you’ve seen a lot of this as well, because you’re in it every day, is you see, okay, well, this is where I know it can go. Like, for instance, voice tech, right? Several months ago, wasn’t quite there. People were saying that, you I don’t necessarily want to have it be taking inbound calls. Well, now I’ve spoken with models where it’s almost indistinguishable. It fools me.

  Scott Kelly (13:51)
  Hahaha.

  Dylan Silver (14:15)
  And I’m in the know. And so I think you do have to be able to see, hey, well, where is AI at right now? How can I best use it? But also, how do I make sure that I’m not behind the eight ball, but also putting it out too soon?

  Scott Kelly (14:31)
  There’s obviously a healthy balance between technology and humanity and having human interaction. You know at this point, AI has not taken over my job and my profession yet. ⁓ But the reality is, at the end of the day, business is still done with relationships. Now, can AI help you get in front of more people more effectively? Yes. Can it help build better relationships? That should have to be seen.

  Dylan Silver (14:58)
  I do want to pivot a bit here, Scott, and ask you about, folks who may be looking at scaling a tech business, right, and they’re thinking about, hey, do I need capital? Do I need strategic relationships? Do I need to refine my model? What general advice, again, without giving away all the gold, what general advice would you give folks who may be in that space?

  Scott Kelly (16:03)
  Well, I tell people, every entrepreneur, especially if you’re tech entrepreneur, build your team and build the people around you that can execute. Because I think every entrepreneur has to ask themselves two questions. One’s an easy question, one’s hard. The easy question is, what are you good at?

  And the hard question is, what are you bad at? And then once you really discover that, build a team around that can fill in those gaps. uh because you know ideas are great. Execution is what makes companies and entrepreneurs succeed.

  Dylan Silver (16:35)
  When we when we talk about execution at that level startups right it can feel a little bit like there’s one cowboy leading the way and then everyone else is, is following suit. But then when you get larger especially when you start taking on capital S.O.P. processes you need teams in place. I’m sure you see a lot of that we have one kind of ⁓ forceful leader who’s leading the charge. But then when things scale there needs to be a little bit more balance. How can companies and, and young entrepreneurs

  old entrepreneurs, folks who are leading companies, balance that kind of, know, I got this, this is my baby off the ground with also scaling.

  Scott Kelly (17:15)
  Well, that’s, as I mentioned before, becomes really important to really look within yourself and understand, you know.

  Looking from the other standpoint, if I was a customer buying your product or service, would I feel more comfortable with a solopreneur or a team of experts in different areas? If I was an investor, would I feel more comfortable with a solopreneur or understand the technology or the business, but didn’t understand sales, marketing, accounting, legal, and other aspects of the business? So it’s really incumbent upon entrepreneurs, because most entrepreneurs, myself included, may start as a solopreneur.

  ⁓ Can you be successful as a solopreneur? Absolutely. Can you scale as a solopreneur? That’s a little more challenging, know, unless you have an adequate team that really can fill in the other gaps.

  Dylan Silver (18:06)
  I do want to ask you about the St. Petersburg area. a big fan of that area. ⁓ Before, before I let you go, I, I’ve had so many people on the show from St. Petersburg who’ve told me great things. I’ve actually wanted to, and I still do want to move there at some point in time. I think it would be great. There does seem to be something in the water. It could be Florida in general, but I think St. Petersburg, there’s a lot of interest from entrepreneurs all across the, the country.

  in that area is what’s going on in St. Petersburg.

  Scott Kelly (18:38)
  Well, you know, it’s, St. Petersburg has a great culture of entrepreneurism and a great culture in general. You know, I lived and worked around the world. I spent most of my career on the West Coast, in California and the Southwest. And I moved to the area about three, a little over three years ago and fell in love with the place. You know, from a cultural standpoint, you’ve got a…

  plenty of things to do here and be entertained, you from the beach to downtown to great restaurants. But from a entrepreneur standpoint, there are, I can throw a rock and hit a college or university, you know, anywhere in the Tampa Bay area. So there’s a great education system training, you know, the leaders and the disruptors of tomorrow. And honestly, people are coming here for just that reason. You’ve got a quality of life. You’ve got a obviously a very good tax system, but no state tax here in Florida. ⁓ And you’ve got an environment of

  you know, ⁓ next up. You know, I told people years ago that when I first moved here, this is the next Austin, Texas. And honestly, I think ⁓ people are going to start saying they’re the next St. Petersburg.

  Dylan Silver (19:40)
  That’s right. That’s right. And as a Texas licensed realtor, I can echo that. It does feel that way. uh Very interesting. We are coming up on time here though, Scott. Where can folks go if they’re interested in reaching out to you? Black ⁓ dog venture partners, how can folks get in contact with you?

  Scott Kelly (19:59)
  You can reach out to me through my website, blackdogventurepartners.com. If you want to learn more about pitching to investors, you can go to vcfastpitch.com. You can always find me at LinkedIn and my social media channels at Black Dog CEO. And if you send me an email to [email protected] and put in the subject line, startup tools, I’ll send you a bunch of startup tools from how to build a pitch deck and how to grow your business for free.

  Dylan Silver (20:24)
  Scott, thank you so much for coming on the show here today.

  Scott Kelly (20:28)
  My pleasure, thanks