The Official AppFolio Blog

Tell us about your background and how you co-founded AppFolio? Why did you choose to build software for Property Managers?
This is the 3rd company where I have been the CTO and the first two were successfully acquired — I just love the process of building a company, this is the fun part! As my last company was winding down, I had lunch with Klaus and we both saw that there was real opportunity to build web-based software for specific industries be because they need good and easy to use software and they didn’t have it at the time. We wanted to change that.

I was attracted to property management partly because I had a bit of experience dealing with rental homes in the past. I have to admit that back then, I would consider myself at the “elementary school” level of education in property management, and today I am well on my way to a graduate degree. Early on we also started talking to many property managers and realized that there was a need for a new web-based property management software. None of the property managers we spoke with said they loved their software! Our customers work really hard to provide a great service to their owners and that’s something that we can relate to.

How do you, as the leader of the engineering team, work with UCSB?
We have a really great internship program so every summer we bring in a new class of interns and they work on relevant projects – exciting stuff that our customers end up seeing! Last summer we focused on our search functionality and a prototype of the AppFolio iPhone application. We also sponsor some events on campus, especially related to the engineering department. There is a grad student coffee hour and we sponsor some of the research events as well.

Our team will also collaborate with students when they are working on research where we have some expertise. Klaus and I are sometimes guest speakers and we tell the students about what we are doing and what is going on in the industry. We give them some real-world information that relates to what they are studying academically.

Our engineering team works really fast – we have a new product release/ update every 28 days. How does the team do it?
It really takes a lot of work to make it happen, but it is definitely worth it! We hear so much positive feedback from our customers that they really appreciate how fast we develop, and this makes it very rewarding for all of us.

First of all, we can do this because we have a brilliant engineering team and they make a commitment to what they can accomplish in 4 weeks and they work hard to meet these commitments. We also have invested in technology to automate everything that we can. We have a huge suite of automated tests that ensures that when we do a release everything still works as well as it did before. We also have a large number of customers and when you are making releases every month, the actual process of the release is a very big task. We’ve automated quite a bit of this process as well. The third thing that really makes this work (and it is potentially the most important!) is that we rely on customer feedback. We release a version of a feature that might not have every bell and whistle and then we rely on our customers to tell us what to prioritize next.

Every AppFolian sees every customer request email and I think this is really important. It is amazing how willing our customers are to spend time with us on the phone and help tell us what they need.

What do you think is the future of SaaS – has it peaked or is there still a ways to go?
I think that this is really interesting because on the consumer side, it seems mainstream and you can see the most acceptance. There are a lot of people using Facebook, Hotmail, and Gmail and things like that. I just read the other day that there are a 100 million people in the U.S. using social networks.

From my perspective, there is still a lot of opportunity for businesses to develop and use web-based software. It is still early but people are starting to really see the benefits of it. To me, use of web-based software in business will come in like a tidal wave – it’s on the way.

You were a basketball player at Westmont (I can tell because you’re tall!) how did playing college basketball impact your approach to founding companies and managing engineers?
It’s funny because my coach from college is the VP of Player Personnel for the Miami Heat (Chet Kammerer). I was just out visiting him in Florida and I was telling him that most of what I learned about managing people and running a business is from him.

One of the things I learned from him was that every person is unique. I would see how he would treat each person on the team differently. Some people needed praise and some people needed him to be tough on them. This was interesting because I was used to the idea that you should treat everyone on a team the same. Now I try and recognize that certain people need different things. Another thing I learned from him was that people really want to be challenged to reach their full potential. Lastly, an important thing I learned from him was part of a story he shared with me. A friend of his was getting involved with coaching and went to talk to him for advice. His friend was expecting to hear all about the strategy and important coaching techniques he should learn first. But Chet told him to forget about all of that and that the most important thing to remember is to recruit great players. We try to do this 100% of the time at AppFolio and I’m really proud of all of the great people at AppFolio. I think we feel like a team here and I like the idea of succeeding as a team opposed to succeeding as an individual.

You are definitely an early adopter with technology – Have you used the Google Chrome OS Notebook? What do you think?
I always love using new technology! I had the MacBook Air the day it came out and then I got the Ipad and interestingly enough, I got a Google Chrome Notebook. You can’t actually buy it right now but the Google Chrome OS team asked us to Beta test one of those devices. It is a laptop (a little bit lighter) and it instantly powers on when you open it. It seems to wake up when it’s opened with no delay. The thought behind it is that it uses the standard browser that you are already used to but it doesn’t have a local file system on it. It just connects via wireless and will only allow you to access your data that lives in the cloud. So, what can you use with one of these laptops? You can use Gmail, Google, other websites, and AppFolio. That is why the Google Chrome folks wanted us to test it.

It is very exciting for our property managers. They could be “live” using Google Chrome from anywhere or have one in their rental office and give it to a prospective resident to fill out an online application etc. I really think this is the future of mobile devices – you will not have local storage on your devices because the reality is that your devices might die on you. When you have local storage you have to worry about back-up. What if you were to lose your laptop? Would you lose all of your data?

There was once a CEO at HP who lost his laptop with all of his corporate data on it and that was a huge risk! With the Chrome Notebook there is no data stored locally so if you lose it, all you have to do is change your password that is in the cloud and pull out a new Google Chrome and log in and be precisely where you were when you left off. I think this is very exciting! I think this device will be extremely successful in the future. Hopefully it will come out this year.

What is really happening with mobile devices is that they are not useful without the services through the Web. In this way, I think that Software as a Service (SaaS) is the future of computing because of the demand for mobile devices. People want to be able to have information at their fingertips for maintenance requests, driving directions, or even uploading property photos to their websites.

If you had to make predictions for the next couple of years, do you think cloud computing will still be such a hot topic or has it reached its peak?
The truth is that Cloud Computing and Software as a Service are still really in the early stages. It feels like there is a lot of buzz around it and a lot of people are talking about it but it is still in the early years. There are research analysts like IDC and Gardner and they calculate that currently worldwide companies are spending over $400 billion dollars each year on IT (information technology) and 95% of that is spent on premise-based technology. So really it is spent on solutions where companies run their own servers; they may run their own email server or file server. They might run their own property management software but they really run it on their own server. From the IT spending, only 5% currently is really spent on cloud computing or SaaS. So IDC is predicting that over the next 3-4 years that number will grow to 10%. But even if you take the 10%, that number may sound really huge ($40+ billion) but it is still so small because it’s only 10%. Think about that. So we are truly only at the very beginning.

If you were to use an analogy, a long time ago people used to use horses for transportation and at first only 5% were using cars. But then that transition happened very fast and everyone had cars. I think that is often what happens with these innovations in technology. Even today, I spoke recently to Michael Miller, a previous editor and chief of PC magazine, and he told me that there are still 5,000 mainframes that are being sold today at an average price of $1million each — so the market is still $5 billion. There are still at lot of banks and financial institutions that are running software on a mainframe so even that is still a big business.

There is a very nice book by Nicholas Carr called “The Big Switch: From Edison to Google” and essentially his observation is that most companies at the turn of the century in the US generated their own electricity and power. So they had their own coal fire power plants and the reason why they did that was that if they needed to manufacture something, they knew they needed power.

But then people realized that generating power was not their core competency. With the power grid becoming more reliable they could get power out of the outlet and focus on their manufacturing. That is same transition that is happening now with computing. People are running their own servers and it is very complex so they have to hire IT people to help them but doing that is not really the business person’s core competence. They shouldn’t have to know how to back-up a server and what to do if a server crashes, etc. You should give that to the experts. That is where there is a huge value proposition with Software as a Service and why cloud computing is so important.

Will you tell us a little about your background, where you’re from and how you landed in Santa Barbara?
I am originally from Germany and you can probably tell by my accent when you talk to me. I studied computer science as an under-graduate in Germany. I then got my PhD at UC Berkeley and fell in love with California. I became a Professor in Computer Science at UC Santa Barbara and Santa Barbara is like paradise to me. Especially since I grew up in Germany, I love the weather here because it never rains and you have so many outdoor activities to enjoy with the ocean and the mountains so close. I love it and now my kids grew up here and are true native Californians.

The other nice thing that I like about California is that it is at the forefront of computer science and computing in general. There is a tight relationship between academia and industry here. I think it is an amazing place to have a start up company doing highly relevant stuff with great people, great influence, and great impact.

How has cloud computing / Software as a Service changed since you started working on GoToMyPC years ago?
It has changed a lot. When we were working on GoToMyPC and GoToMeeting we were very early with this concept of Software as a Service. Back then there were premise-based solutions on the market and people had a lot of security questions and they weren’t willing to give up their software to a hosted infrastructure. These days you see people really understanding the benefits of not running their own IT infrastructure. They also see the benefits of other people taking care of security, which is usually much better than they can do themselves. Lots of people are now embracing Software as a Service – consumers have embraced the concept the most, and this is very interesting. Many people are using Gmail and Google and other services. Businesses have been a little slower to move to SaaS but this is the future – and the basis of AppFolio. The future trend of Software as a Service and Cloud Computing is going to happen big time and we want to be part of making that revolution a reality.

What do you like best about your current role at AppFolio?
I love having a great impact and working with the team to create products that customers love. I get a tremendous amount of satisfaction when AppFolio customers come up to me at a Meet Up and say “Wow, AppFolio has had such a great impact on our business and really makes our business smooth. Thank you for helping found AppFolio.”

Day to day I work with the team here, which is phenomenal. My role as Chief Strategist is to look out into the near future and work with the product team to determine what we should do next, what products we should make next and how to make our existing products even better. I love doing that.

Why do you think property managers are so interested / excited to use web-based software to run their business?
I am excited that property managers are “forward thinking” and they really see the value in it and understand that managing the IT is really not their core competence. I think that property managers are business savvy. Before we developed AppFolio Property Manager, we looked at other verticals where the folks that are running the businesses were not as business savvy and got hung up on the idea “I must run the software myself!”. We allow property managers to outsource the computing side of things and they get continuous updates, security, and easy to use software and they love having more time to focus on their own business.

What are some of the benefits you see from having a great University (UCSB) so close and connected to Santa Barbara entrepreneurs?
I still teach a class every 2 years. The last time I taught a graduate computer science class at UCSB on scalable Internet services, and it is great to teach to students who are eager to learn from a person with lots of industry experience. The advantage of that is that we also get a lot of great interns over the summer and many of them want to stay and work with us as an employee. Fortunately, we are a fast growing company and can afford to hire great people and a lot of those people come out of UCSB. It is great to be able to leverage such a strong academic program and those people are the ones who develop strong products and provide valuable service.

Stay tuned for Part 2 of this Interview, Klaus shares a few technology predictions.

The first part of our “Making Your Web Browser Work for You” series of instructional videos went over the basics of the internet browser, the next topic I’d like to cover is a feature I don’t know how I ever did without.

This feature is called “Tabbed Browsing”. It makes exploring the web and using web-based software solutions, like AppFolio, easier and faster by letting you have multiple web pages open in the same window. This allows you to navigate between specific pages faster, reduce desktop clutter by reducing the number of open windows, and more.

Tabbed browsing was first made popular with the initial release of the Mozilla Firefox browser in 2002 and was later adopted by Microsoft’s Internet Explorer 7 in 2006. It has since become an integral part of the web experience and is often utilized by many web-based software solutions. For example, AppFolio’s reports open in a new tab by default, and any links clicked in the report open back in the original tab.

Check out the video below for a more thorough explanation of tabbed browsing and see why once you discover tabs you’ll never go back.

As more and more technology is moving online (or into the cloud) the most important tool your business needs to be familiar with is your internet browser (this term is interchangeable with “web-browser” or just plain “browser”). Take AppFolio Property Manager, for example. AppFolio is a web-based property management software program that you access over the internet using your browser.

I will be creating a series of videos designed to make the work you do in your internet browser easier. Whether you are using internet based software for the first time, or are already a power user, these videos will cover a range of browser features that will help you get the most from your web-based software.

In this first video I go over the core set of features you can expect to find in any major browser (these browsers include: Firefox, Safari, Internet Explorer). For this demonstration I am using the AppFolio-recommended Firefox browser.

Glossary of Terms

Internet – A global system of interconnected computer networks.

Internet Browser or Web Browser – An application to retrieve information on the internet and display it in a human readable format. Examples of this include Firefox (AppFolio’s recommended browser), Internet Explorer (The default on windows), Google Chrome, and Safari (The default on Macs).

Browser Window – The window that appears on your screen when you open an Internet Browser.

Title Bar – The bar at the top of the browser window. This bar usually contains text that describes the contents of the page.

Navagation Buttons – The set of buttons towards the top left of the browser window which provide the ability to move between web pages.

Address Bar – The large bar in the top center of the browser window. This bar contains text showing the Web Address or URL* of the current page. The Web Address or URL is an unique piece of text which tells the Internet browser how to find a specific web page. This text can be edited to go directly to a known web page. press and hold the cntrl key and press the L key to jump to editing the text in this bar.

Search Bar – This bar is found in the top right corner of the browser window. Typing in this bar will use the pre-selected search engine to search the internet for relevant information. Press and hold the cntrl key and press the K key to jump to editing the text in this bar.

Tool Bar – The customizable set of tools that appear at the top of the browser window. Most browsers have a favorites or bookmarks tool bar included.

Tabs Bar – Contains the set of open tabs in that window. Tabs allow you to have multiple web pages open at the same time. This makes it easier to switch between web pages and reduces desktop clutter by needing fewer windows.

Status Bar – shows the current status of a page as it is loaded. The standard progression includes: connecting, waiting, transferring data, done. This bar also shows the destination web address or URL of any link over which the cursor is hovering.

Last week I gave an invited presentation at the MIT Enterprise Forum. The topic was “Cloud Computing and Software as a Service (SaaS) a $160 Billion Market Opportunity.”

The audience was delighted to learn about cloud computing and the vision behind AppFolio and about our web-based solution for property managers.

What is Cloud Computing? It is Internet-based computing where shared resources, software, information, and massively scalable IT capabilities are delivered on demand “as a Service.” But the real advantage of Software-as-a-Service is that it can be accessed from anywhere, any device, using just a simple browser. Users can be working from PCs, Macs, iPhones, and even new iPads. This is exciting!!

Cloud computing represents the next major computing cycle after Mainframe Computing, and PC & Client/Server Computing [Wikipedia] because it dramatically reduces the IT complexity. As Nicholas Carr, the author of “The Big Switch,” likes to point out, 100 years ago large companies stopped generating their own electricity and instead plugged into the newly built electric grid. This freed them up to focus on their core business instead of electricity generation. The same exciting transformation is happening today with Internet cloud computing. It allows companies to focus on their business and customers, instead of managing servers, databases, backups, and the complexities of information technologies.

Annual worldwide IT spending today is close to $400 Billion [IDC], 95% of which is delivered by on-premise IT solutions. Only 5% is delivered by IT Cloud Services. But this is changing quickly. No wonder IDC predicts that cloud computing is a $44B opportunity, Gartner predicts $56B of cloud services revenue, and Merrill Lynch estimates cloud-computing revenues will soon reach $160 billion.

There is a tidal wave going through the IT industry, the future of computing is web-based and property managers are definitely embracing web-based technology. When you’re no longer required to be at your desk to access and share information, you can get so much more work done!

Property Managers – In addition to web-based property management software, what other kinds of Software as a Service applications are you using to improve your productivity?