How Joseph Nakhla built a foundation for growth
The CEO of Tribe Property Technologies on the power of community, digital transformation and navigating the Cold Front of entrepreneurship.
In the final week of May, Joseph Nakhla, founder and CEO of Tribe Property Technologies Inc., was about to speak on his company’s first-quarter earnings call. Jennifer Laidlaw, his marketing VP, spoke ahead of him and ran through a series of statements that surely came from a compliance department, not a marketing department. She had to remind listeners that the discussion would feature forward-looking statements, and these forward-looking statements were “based on management’s current views and assumptions,” and that the discussion is “qualified in its entirety by the cautionary note regarding forward-looking statements” that was appended to the company’s press release which had been released the prior evening after the market closed.
Right before everyone’s eyes glossed over, Laidlaw handed the mic over to Nakhla. He sounded confident, maybe even boisterous, and why not? He had good news to share.
A few months ago, Tribe had begun trading on the TSX Venture Exchange. The company’s Board of Directors was flush with a slate of industry veterans. The management team had added a new CFO in Jim Defer (surely, the person responsible for those forward-looking statements and the requirement to mention them). Nakhla also highlighted a recent acquisition—his company's sixth—of Gateway Property Management.
Business was good. But you may be wondering, what, exactly, is Nakhla’s business? He made sure to remind the call’s listeners of this, too. There are at least three things you should know about it.
First, on a basic level, Tribe is a technology company that provides a suite of products and services for building and managing residential communities. They develop solutions to support everyone in a living community—building owners, councils and boards, developers and contractors and tenants.
Second, they make money in three ways: software and service revenue (paid by real estate investors, developers and condo corporations); transactional revenue (from tenants in their communities paying rent, for example), and; through other digital services and partnerships (like selling financial services and other products to people in the communities they manage).
And third, they're objectively on a roll. How fast are they rolling? At the time of that earnings call, Tribe’s revenue was up 253% year-over-year.
Reporters and analysts may also have wondered, “What’s driving this growth?” On the call, Nakhla said acquisitions played a part. He said Covid-driven digital transformation was a strong contributor, as well. But those are recent catalysts. In business, just like in real estate, nothing gets built without a solid foundation. So for a complete accounting of Tribe’s current success, I think you need to broaden your scope of inquiry far beyond last year. You must consider the journey of its founder and the unique mix of insights and experiences he has collected over 30 years in business.
Based on a recent Zoom call I had with Nakhla, I believe decades of curiosity, hard work and an obsession with building community have set the groundwork for the business he is building. And if you really want to understand what has brought him to this moment, it helps to trace the unconventional steps he took to get here.
This story doesn’t start on an earnings call—or a Zoom call, where this writing stems from. It begins on a coast, but not one most Vancouverites are likely familiar with.
Transcontinental communities and culture
Joseph Nakhla picked up the importance of community and culture at a young age. He was raised in the port city of Alexandria, the third-largest city in Egypt, a place rich in history and where the architecture and cultural characteristics change—from Roman to Ottoman to Christian—depending on what street corner you happen to be standing on.
He grew up in a low-rise that had five families, but only one communal phone. This meant that in order for his family to make calls, they basically had to visit a neighbour. His grandma would call from Canada, but would forget about the six-hour time difference. She’d end up calling one of Nakhla's neighbours at an ungodly hour, thinking they’d just be finishing dinner. However, more often than not she’d catch them in their second cycle of REM sleep.
In the late eighties, his parents moved the family to Canada where they had relatives, and Nakhla remembers his aunt having very specific advice for where they should and shouldn’t go. As Nakhla’ recalls, “We decided to come to Canada, and then my aunt was like, ‘Listen, if you're going to immigrate anywhere, do not go to Quebec. You're gonna freeze.’ You might as well go to Vancouver.”
It wasn’t just the milder winters she wanted Nakhla’s family to take advantage of. She had recently attended the 1986 World’s Fair—Expo 86—the 54-country extravaganza which saw more than 22 million people flock to the North Shore of Falls Creek. She liked what she saw on the West Coast. “I wasn’t there, but that was an incredible coming-out party, right? So everybody was like, ‘Oh go to Vancouver, go to Vancouver,’” Nakha said.
Nakhla’s family made the transcontinental trip in 1989, ultimately settling in the Surrey community of Newton.
Nakhla’s technological revolution
About half a decade later, Nakhla had graduated from the BC Institute of Technology (BCIT) with a diploma in civil and structural engineering. Young and aspiring, he went on to work in a variety of unrelated positions, including a desk job where he was designing sewer systems. “It wasn’t the most intriguing thing in the world for me,” he has said about the experience. But in a foreshadowing of his approach to product and business building, he also said: “I felt that I was making some kind of a difference… I try as much as I can to build solutions that make people’s lives better.”
In another job, which directly exposed Nakhla to the revolution happening in the technology industry, he was introduced to two new things: global positioning systems (“which is not very sexy now, because we all have it in our phones”) and the Internet.
To the mainstream public, GPS was a brand new technology in the mid 90s. And in the same way that today’s executives don’t quite know what blockchain really means, but feel they must hire someone who does, businesses back then were doing their best to hire young and smart grads who understood how new technologies worked—or could at least pretend like they did. Nakhla was recruited by one of those businesses.
“I got hired by this really interesting retailer,” Nakhla told me, “a hippie guy that says, ‘Look, man, everybody keeps calling me about this GPS. I don't know anything about it. I don't want to know anything about it. Do you know? Are you interested in this stuff? You're 21 years old. Come and just take it over in my retail shop because I just need to answer it. I don't think it's here to stay. It's too expensive, not accurate enough. Just figure it out.’”
So Nakhla joined him, “completely wet behind the ears,” he said. “And I just wrapped my mind around it… This is ‘96 right? So I started to learn more and more and I started working directly with the manufacturers to build some cool solutions.”
Since GPS technology was too costly, and in some cases not easily accessible for industries to purchase outright, Nakhla started a licensing business—and lucky for him, the demand was coming from utility companies in the Caribbean islands.
“The beautiful thing about an engineering GPS is you can land it on the island, and you can actually get the whole thing surveyed. Right, because it uses satellites,” Nakhla explained.
“The reason the Caribbean was of interest is that they used to have power lines, historically, above ground, and then hurricanes would come.” The lines would get wiped out. These islands then put all of the utility lines underground. It protected them from catastrophic weather, but also made the lines somewhat invisible. It’s not hard to imagine the issues this created. As Nakhla recalls, “Someone would build a new hotel, and they would be digging, and they don't know where the line is because they don’t have great maps—so they would cut a line and all of a sudden, Club Med doesn't have electricity for two days. Problem, right?”
It was a problem Nakhla was all too happy to solve. He did that for two and half years. “Then I wanted to double down on my belief in the Internet,” he said.
An education in entrepreneurship
While that part of Nakhla’s story highlights the acceleration of his love affair with technology, it also served to kickstart his appreciation for the amount of work—the ups and downs—that go into building successful businesses. It was perfect preparation for the next company he’d help grow for over a decade.
That company was TIO Networks. It was founded by Hamed Shahbazi (now founder and CEO of WELL Health Technologies), and it started out with a modest mandate—“Can we bring the Internet to the masses by way of kiosks and cyber cafes?”—before it evolved and grew to become one of North America’s leading cloud-based bill payment processors. It was ultimately acquired in February of 2017 by PayPal for $304 million. “I wore a number of hats and I cut my teeth and learned a lot of great things. I worked with an amazing team and great technology,” Nakhla said about the experience. But he also emphasized that it wasn’t an overnight success. “That took years.”
He takes extra effort to stress that point because he thinks the hard work of company-building is often missed from the majority of stories that get shared on tech sites. He’s become sick of scrolling through feeds and only seeing positive news. It’s not that he doesn’t like good news. Nakhla is a father. He’s also a mentor to multiple entrepreneurs. He’s pretty sure the realities of what he’s been through—the stress, the struggle—is underappreciated by those who might look up to him. He’s worried: “I just feel like they're just getting one side of the story. Arguably, the easy side of the story, right?”
It’s a topic he’s spoken about publicly at length. The speech he gives follows this format.
There’s the appeal of entrepreneurship. It could be money or fame, for example. Then once you get into it, there’s the warmth of entrepreneurship—the early wins like raising seed funds, shipping your beta product and netting your first sale. “I’m not here to talk to you about that,” Nakha told a Vancouver audience back in 2017. No, he wants to talk about what he calls the cold front of entrepreneurship—a metaphor that honours an element of his upbringing.
About 95% of Egypt’s population lives in two regions called the Nile Valley and the Delta. They don’t really have a choice, because the rest of the country is virtually uninhabitable. It's a desert, remember. Nakhla explains that mornings in the desert are really hot and nights are extremely cold. The temperature can go from thirty-five degrees in the morning to below zero at night. “We call that a cold front,” he explained. “The definition of which is basically is a transition zone where cold air mass comes out and literally wipes out hot air.”
Day-to-day startup life can be like that, he said. Euphoria displaced by misery. Except growing a startup is a lot less predictable than the desert’s hot and cold intervals.
With a startup, the cold part of the front can persist. Hustling can be a grind. A slog. “You wake up. You just closed some financing, you feel an amazing energy. And then you get your butt kicked because the product that you're about to launch fails and you get some bad news or the financing you thought was going to close doesn't close.”
Nakhla wants to help entrepreneurs successfully navigate the cold front because he believes that’s the difference between the companies that succeed and those that fail.
“There’s not a single successful company that’s built a product that nobody else has tried. They failed. But why did they fail? That’s what you have to be thinking about,” he said.
“A lot of the products you use have been tried before. I believe what often happened is that when the cold front hit the founder or the cold front hit the person who really mattered, he or she quit. They didn’t have it in them to take that next step.” He has four pieces of advice to help founders push through the cold front.
First, he says to be honest with yourself. Second, he cautions against feeling sorry about your situation. “Admit what you could’ve done better,” he said. Third, be clear on your reason, your why. “If it all goes sideways, why would you wake up the next day and do it again? If you can’t answer that, you have a problem,” he warns. Four, keep your feet moving and wake up the next day with vigour. “Your staff, the people around you are going to get their cue from you that this is going to be okay. It might be all going sideways, but it’s going to be okay because he’s moving his feet. He’s still pushing forward.”
He points to his time at TIO as a period that most outsiders view as smooth sailing, but in fact, featured many chapters of choppy waters. “A lot of people say, ‘Good for you, you were with TIO. You were part of this journey and success.’ But do you know how many times we should have died as an organization?” he asked. “It's not the sexy side of the story, but for somebody developing his or her own repertoire of skill sets, to be a good entrepreneur—they need to hear that.”
Digital and social transformation
Joseph Nakhla’s ideas do not stop with weather analogies. The cold front is just one of many macro-insights he’s picked up along the way that directly impacts the work he is doing today—and fueling Tribe’s success.
Nowadays, you cannot pick up Fortune magazine or the business section of the New York Times without reading a CEO or Mckinsey consultant waxing poetic about the virtues of the digitization of businesses. It wasn’t always like that, said Nakhla.
“Everybody talks about digital transformation now,” Nakhla said. “It was a very different conversation in 2003. What’s digital transformation? How much destruction can you really cause? All the things that we believe in now, I lived it in terms of seeing the team execute on it. We were there at the birth of mobility.”
Nakhla had one of the first iPhones in Canada, and he questioned how Apple could build a usable phone with essentially no buttons. “That just blew my mind,” he said. But then his company, TIO, used the collective innovation happening as a springboard for their business. He was part of a team that delivered one of the first payment engines on a phone.
For him, this was evidence of the speed at which technology can affect and disrupt businesses, “no matter how old the traditional model is.”
Over the last two decades, Nakha has also picked up a more comprehensive understanding of how technology impacts consumer expectations as they relate to service delivery.
Incredibly, it still wasn’t very long ago that navigating transportation for a night out in Vancouver could be a massive dilemma and planning challenge. But now that we have ridesharing options, we all take it for granted, Nakhla said. The same goes for food delivery, for example. Nakhla says the situation used to be that it was nice if the pizza gets delivered in an hour. “Now you can take your absolute pick of a food type,” he said, “and it’ll be delivered to you.”
“That's not a shock,” he added. Of course, it’s not. He’s in the category of people who have been driving these digital shifts. “But with that expectation, there's inward and external pressure on industries that haven't changed,” he said.
Creating room for disruption
New consumer expectations and new technological capabilities combine to set up unlimited opportunities to disrupt staid industries. As to why Nakhla chose to focus on real estate and community living, he said, “I tackled [an industry] that is close to my heart because I love cities, I love the way people live, and connecting communities. If you look at the way property management has been delivered for the last 50 years, there is a great argument that it hasn't changed much. So if it hasn't changed much, what can technology do to play a role there?”
With that realization in the early 2010s, he began to sow the seeds that would grow to become Tribe’s predecessor, a startup called Bazinga! Nakhla first had the idea of helping residential stratas communicate more efficiently when a friend of his was having challenges with their condo. “It really just opened the doors for me [and] I began doing more market research on it,” he told a reporter in 2013. “As I did, the opportunities seemed to get bigger and bigger.” No platform existed for condo and apartment living and he “just got completely obsessed with it.”
Bazinga! launched in early 2012 and reportedly took only 30 days from the first demo to secure a paying customer. By early 2013, the startup had major customers including Bosa Properties, Aquilini Development, the Onni Group, Port Capital and Alpha Beta.
As the saying goes, success begets success, and in the case of Bazinga!, this meant the business had to change to accommodate Nakhla’s growing ambition. There’s a long version and a short version of how Bazinga became Tribe. Here’s the short version.
Bazinga! was primarily focused on software in real estate communities. It could be deployed anywhere and operated in British Columbia and Ontario. There were no geographical boundaries or limitations. However, as soon as Nakhla decided to go, as he said, “full suite, inclusive of property management,” provincial and municipal regulations came into play.
The Tribe brand was created to use Bazinga!’s tech, while also adding the new property management services. Nakhla kept the Bazinga! name for the initial software solution because the complete solution wasn’t yet licensed in every jurisdiction where Bazinga! operated.
However, what happened next forced him to retire the Bazinga! name altogether. Tribe took off so fast to a point where he said, “You know what, let’s not fight the brand connectivity problem. Saying, 'Let's kill this thing is a little harsh,’ but I said, ‘Let's kill Bazinga! and go with the Tribe brand across our suite of products now that we’re national. It was a really, really good move.’”
Final forward-looking statements
There is a tip in business writing which says that you should replace adjectives with data. On that recent earnings call, Nakhla chose to heed this advice. While I’m sure he could’ve said, “Tribe is a promising company and we’re showing great potential,” he instead let the facts and numbers say as much.
Tribe is a public company with a 190-person team operating in seven markets, he said. It’s the sixth-largest condo management company and the sixth-largest rental management company in Canada. The company manages more than 40,000 homes representing about 100,000 people. His team oversees a $200 million annual budget on behalf of their communities. The communities Tribe manages represent around $11.5 billion dollars in assets.
Tribe is seeing 90% adoption of their digital tools in new condo developments.
And yet, for Nakhla, despite his own views on the power of technology—its role in his personal entrepreneurial journey, its role in the success of his previous ventures—he told me that technology is not a silver bullet for what his company is trying to achieve.
“This concept that whiz-bang technology changes the game that we just spoke about,” he said. “Well, ride-sharing is only as good as not only the robustness of the technology, but the driver and the experience. We're still people. We're still humans. And in property management, we feel that a lot more because there are a lot of decisions and human touches and opportunities for things to either go right or wrong. The definition of success varies depending on human behaviour.”
Technology needs to empower good decisions, he believes. On the idea that innovation like AI—which his company is leveraging in their products—is going to do all the thinking and get things right 100% of the time, he’s not sold. “I think it's a little early. I still think human involvement is critical in some of these decisions, at least in our industry.”
“It still requires human feel,” he said. “This is about homes; it's emotional, it's scary, it's big investments—a lot of dynamics there that technology just can't solve. I think we cannot ignore these things, and nor should we, as technologists, or people that are champions of technology, forget about that component.
“Actually, I think the most successful companies will be ones that are very aware of the importance of that.”
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