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Postmortem of a British Startup: Tract
- brudgers 3mo agoTract was founded to build software to fix Britain’s housing crisis. Though there are problems software can fix, software cannot fix most problems because most problems are not software problems. In the case of real-estate, it is a mistake to assume general market inefficiency. For example, the "housing crisis" might be a crisis for people looking for housing, but it is not a crisis for land owners and land owners are the real estate market. A good rule of thumb is "if you think software can solve a problem, you probably don't understand the problem."
- gilleain 3mo agoReminds me of an interview I saw at the height of the NFT/crypto craze, when the interviewee was challenged to come up with a use-case, and they threw out "buying a house". So there is (AFAIK) just one part of the process to buy a house that blockchains could address, and that is transfer of ownership. The rest of the process is an estate agent (realtor) communicating between buyer/seller/legal/etc to make it all happen. A tiny proportion would be solved 'on-chain'. Maybe shouldn't need to be said, but people really need to _actually_ understand a problem before proposing a solution!
- bcjdjsndon 3mo agoIt doesn't even solve the ownership problem... any disputes still get settled in court just like a paper contract. In fact the database with which you store the contract is largely irrelevant to anything. If counterfeit contacts, MAYBE Blockchain has a use.... but even then it's debatable
- physicsguy 3mo agoTransfer of ownership is probably the least controversial part of owning a house in the UK too.
- cryptopian 3mo agoI was discussing railways to somebody and noting how at-capacity the British network is. He was adamant that we just hadn't optimised the system enough and that more maths and more software was needed. I tried my best to explain that we had in fact done that, and that in the end, there's no getting around the bottleneck of moving 100 tonne vehicles along a finite set of steel rails.
- pjc50 3mo agoYou could apply clever modelling to work out what minimal set of upgrades would best increase capacity .. and then spend the next 30 years trying to get one line built. We're stuck at basic political questions like "should there be efficient trains between London and Manchester?" At least Burnham knows what a Manchester is.
- dijit 3mo agowe’re on year 70 of those 30 years. The issue is that its unsexy, not “profitable” and it requires land - not to mention that the timeframes needed will make “the next government” look better. Our governments are recklessly short sighted, and to be fair, even if they were not, their progress would be undone by the disaffected electorate who can be easily convinced that the sitting government is spaffing money up the wall.
- cryptopian 3mo agoI find that when selling people on the idea of network upgrades, people find the solutions unintuitive because issues in one place are often caused by bottlenecks very far away. Half the North West and services as far as Scotland, Wales and East Anglia are stuffed because of a single mile of rail in central Manchester, so you have tell people in rural Derbyshire, "hey, Manchester needs more rail funding, it'll help you, promise". It will, but you have to know a bit about the whole network to understand why.
- brabel 3mo agoIf the system is just at capacity, but not beyond, it’s in fact well optimized. Empty trains are a loss to the company running it. Similar to airliners: they want every flight as full as possible. No company cares if it’s comfortable for the passengers since they either have no competition, or if they do it’s always the one offering the lowest price who wins. The passengers who want comfort can buy first class for a gigantic premium, and that is also well optimized: expensive enough to be profitable, cheap enough to actually sell tickets.
- steveBK123 3mo ago> For example, the "housing crisis" might be a crisis for people looking for housing, but it is not a crisis for land owners and land owners are the real estate market. This is an interesting way of framing the demographic problem, yes. In the US for example, from WW2 thru roughly GFC, working age population grew faster than the retired age population. So there was relative political power in the working age, and a large/growing group to sell houses to. Further, pre-GFC there was a big trade-up market even for existing homeowners. Now demographic & politic power in the west are in the hands of the older, homeowner retired/near retired baby boomers. Incentives to reduce the value of their largest asset are not strong. Also this is why we keep electing dinosaurs in the US.
- pydry 3mo agoBoomers are a scapegoat, used a bit like immigrants, minorities and AI as an excuse for attacks on the working class. The US is an plutocratic oligarchy, not a boomerocracy: https://www.bbc.com/news/blogs-echochambers-27074746 https://www.bbc.com/news/blogs-echochambers-27074746 The candidates which would pursue popular policies tend to get nixed via underhanded political means before ascending to higher office. The oligarchy uses campaign financing and the media they own as a club to beat the two parties into submission and to stamp out any kind of populist opposition which wants to pursue policies which are oligarchy-unfriendly. This includes any kind of reform which might interfere with the value of their property portfolios or redirect their streams of unearned rental income.
- steveBK123 3mo agoBoomers in the US are a scapegoat because they benefited during the great build out of housing in suburbs by moving there, and then became NIMBYs insisting everything remain "just so" now that they own all the houses.
- 21asdffdsa12 3mo agoThe large pensionfunds are half of the oligarch class
- risyachka 3mo ago
- 88 3mo agoExactly this. Housing land supply in the UK is bottlenecked by politics (NIMBYism) and economics (private developers seeking to maximise profits) not software.
- jimnotgym 3mo agoMoreover, prime building land never gets put on the open market. People know people and approach them directly. Why would you give that kind of advantage up to a software company?
- bcjdjsndon 3mo agoMan I wish I had half a million to blow "exploring business models"... There is definitely too much money in the hands of stupid rich people
- guiriduro 3mo agoMaybe that's not as unlikely a prospect (or as bad an idea) as you might think. Do people know if there are relatively small idea-exploration pots of money (VC, angels, subsidies, startup and govt programmes) available in Europe/UK whereby a sufficiently well-qualified initial idea/plan, well-advised small founding team, and initially tested model can go to be funded for PMF exploration without being defocussed into hawking, door knocking and/or being dependent on 'who you know'?
- bcjdjsndon 3mo agoI just feel that as the majority of the country scrat about in dead end jobs just to keep the heating on, finding out that this kind of money is just being frivolously pissed up walls.... It makes you question things
- redwood 3mo agoIs this representative of how many Europeans think about technology startups? If so it's very revealing. You have to be willing to take lot's of bets tobhave any chance that some of them will take off and transform your job market, your economy, or how you live. If you only do things that are sure things guess what... stasis. If you have a culture that denigrates failure rather than one that celebrates proactively trying to learn from it as this postmortem aims for then you're just going to be stuck
- bcjdjsndon 3mo agoIt's easy to say that from the worlds largest economy, but Britain can't even afford to run a single public service at pre-2008 levels in 2026
- antisthenes 3mo ago> A good rule of thumb is "if you think software can solve a problem, you probably don't understand the problem." Someone let American health care startups know that. Not sure what any of them are doing, but it's not lowering health care prices for anyone.
- axod 3mo ago" Housing in Britain is expensive because getting planning permission is difficult. " Nothing to do with millions of new people arriving wanting to live somewhere?
- tnolet 3mo agoAbout 6% to 10% increase in housing cost due to immigration in the UK since 1990. Total increase ~150%. So marginal impact.[1] But nice populist dog whistle. 1: https://www.gov.uk/government/publications/migration-and-housing-costs-what-does-international-evidence-imply-for-the-uk/migration-and-housing-costs-what-does-international-evidence-imply-for-the-uk-accessible#conclusion https://www.gov.uk/government/publications/migration-and-hou...
- enaaem 3mo agoThe problem with right wing populist parties isn't just that they don't adhere to some "woke" abstract moral concepts, but they are just terrible at governing. They are not serious in understanding the causes of any problem.
- mellosouls 3mo agoThey are not serious in understanding the causes of any problem Thats an ideological accusation that can be just as easily aimed at the left.
- enaaem 3mo agoI agree. That's why I am neither.
- brabel 3mo agoThat is not what the report says at all !! > Over the same period, total population growth in the UK has been approximately 20%, again close to the cross-country average in our sample. Immigration, therefore, accounts for roughly half of the UK’s population growth over the last three decades. Population growth has nothing to do with price increases? If it does, then half of the increase being due to immigration seems quite significant. > most credible estimates suggest that a one-percentage-point increase in the immigrant share of the population increases house prices by between 0 and 3%. Rent effects are typically slightly smaller. > The increase in the immigrant shares since the mid-1990s (around 10 percentage points) and overall population growth are close to OECD averages. It’s hard to believe a range including “no effect whatsoever” when you add people to a neighborhood. But assuming a more reasonable 2%, that would mean 20% higher prices attributed to immigration alone. Where did you get at most 10%??
- pjc50 3mo ago[flagged]
- mihaaly 3mo agoBefore studying the document with great curiosity I need to express the feeling of newcomer entrepreneurs to the construction sector not living those highlighted barriers before starting this noble quest.
- mellosouls 3mo agoDepressing that the main lesson learned is "Move to the US", the others also pretty standard HN/PG/SV tropes I think. A useful, quite clear-eyed document though I think. Aside, one of the co-founders websites is an unusually broad affair for a young founder: https://www.henrydashwood.com/ https://www.henrydashwood.com/
- youngtaff 3mo agoBut what problem does move to the US actually solve in this case? House builders don't seem to have a problem acquiring land and rights to develop it Indeed there're permission granted for over 1mn yet to be build residential properties in the UK The problem is UK house builders drip feed houses on to the market to keep their profits up, and slow down building when house prices fall
- pjc50 3mo ago> what problem does move to the US actually solve in this case? None of the specific ones, but the general problem of startups that the UK is a poor environment for funding. Source for million unbuilt homes: https://www.terraquest.co.uk/news-and-insights/more-than-a-million-homes-with-planning-permission-left-unbuilt-since-2015 https://www.terraquest.co.uk/news-and-insights/more-than-a-m... It's not sounding like a very simple to resolve problem :(
- youngtaff 3mo agoLack of tradies is part of the problem but house builders tend to rely on sub-contracting so they don't have to bear the cost of employment, training etc and want someone else to solve the problem for them House builders essentially buy land, get planning, pay a bunch of sub-contractors to slap together a house and then sell it to some poor sap Saying they build houses is a bit of a misnomer in my view
- sjducb 3mo agoThey get away with drip feeding because there’s no competition, because it’s really hard to get permission. A simpler planning system would allow smaller developers to operate and they would buy, build and sell as fast as they can. The reason big developers drip feed is that they have 100 identical houses in the pipeline so they don’t want the price to drop at all, because it affects the price of the houses in the pipeline. The small developer sells quickly so that the cash is available for their next project.
- m-i-l 3mo agoLooks like they were focusing on greenfield rather than brownfield, presumably because the margins are much higher and therefore more appealing to venture capitalists, but getting permission to turn fields and forests into streets and houses is difficult (and often unpopular) for lots of reasons (with "software" not on that list). If their real motivation was "to fix Britain's housing crisis", brownfield sites can be converted into residential use much more quickly and easily, and there is a lot of pre-existing support to make this easier - see e.g. https://www.gov.uk/guidance/brownfield-land-registers https://www.gov.uk/guidance/brownfield-land-registers .
- blitzar 3mo ago> Between May 2023 and March 2025, Tract attempted to build a venture-backed company to address Britain’s housing crisis by improving the planning permission process. After raising a £744,000 pre-seed round in April 2024, we explored several business models: a site-sourcing tool for developers (Tract Source), a free land-appraisal tool for landowners (Attract), becoming tech-enabled land promoters ourselves, and finally, an AI-powered platform to assist with drafting planning documents (Tract Editor). 11 months, 4 pivots (of course one was to Ai) and a cash burn of ~£70,000 per month (approx $100,000) - if you can give me the details of the mark they got £744,000 from, I have a bridge to sell them.
- mellosouls 3mo agoThat's quite a cynical take. They say they returned left over cash to investors though without details.
- blitzar 3mo agoA quick scan of the company liquidation & accounts - they wrapped up with fixed assets of £4,000 (2 laptops?) and £300,000 in cash. So they only burnt through £400k in the year. They do say fail fast.
- vintermann 3mo agoMakes you wonder about their "get to the US" lesson learned.
- blitzar 3mo agoBurning a million dollars isn't cool. You know what is? Burning a billion dollars.
- bcjdjsndon 3mo agoLoool
- wewewedxfgdf 3mo agoI know it's being negative but its hard to avoid pointing out that fixing a housing crisis is not a startup opportunity. It's a social and government and commercial problem, which for many reasons is not actually a problem to be solved because so many people WANT things exactly as they are. Startups are about creating something that people want - and whilst people want a house, that's not what this startup idea is. I'm surprised it got funding.
- SilverBirch 3mo agoI think this is such a great example of misunderstanding a political problem as a technical problem, and misunderstanding twitter as real life. > the political winds seemed favourable Sorry. How? Some libertarians on twitter were in favour. But if you have spent any time paying attention to British politics at all you would note the incredible sway the elderly have over politics. Even the people who are pro-building aren't stupid enough to think you're going to achieve that by building on green belt land, so this idea of an uplift of 140x is just farcical. Half of British debate on house building is disingenuously accusing your opposition of concreting over the green belt, whilst disingenuously promising you can build millions of new homes without concreting over the greenbelt. The problem with building in the UK is mainly planning permission. In the UK is you need approval from the local council and the local council is elected by Nimby pensioners. So you can't get approval. That's it. That's the problem. That's a political problem that you can solve by getting central government to remove local governments ability to block projects. Or by running targeted political campaigns in local areas to get specific things approved. Not by automating the form your fill in to get your planning application rejected.
- nickdothutton 3mo agoMany of the worlds solvable problems are "information problems", and therefore have a good chance of being solvable by software. Sometimes you'll even encounter a problem that looks like something else, but is in-fact an information problem in-disguise as something else. However I do not think the UK housing crisis is an information problem, either plainly or in-disguise.
- bcjdjsndon 3mo ago> Many of the worlds solvable problems are "information problems Common silicon valley misconception, but when all you know is a hammer everything looks like a nail. This is similar to the app that was meant to solve a drinking water crisis in some African nation
- vitorfblima 3mo agomost "information problems" are by design, specially when dealing with speculative markets.
- rad-b 3mo agoA genuinely interesting read, thanks for sharing. Feels like GTM is always the hard part, regardless of how well you solve the technical piece. You can have the best solution in the world and no one to sell it to.