November Monthly Radar – GeekEstate Blog
[Note from editor: We publish a Weekly Radar for Geek Estate Mastermind members that’s more like Reader’s Digest or a college radio station than it’s like reading TMZ or watching the news. Our recommendations and synthesis come out every Friday morning along with member news to peruse. This is a wrap-up for the month of November with the a couple articles from each week.]
In addition to the Thanksgiving holiday, November included a member lunch in Seattle and our first gathering of folks in Chicago.
- We launched a new series for members. Category product reviews. The first segment: Small Landlord Property Management Software.
- Vendor sales strategies at the broker level
- Background on the rentals category product review
- The underwhelming rentals search experience
- Why showings data creates a true network effect
- How brokerages can compete with iBuyers
- When removing friction isn’t always a good thing
COZY ACQUIRED BY COSTAR FOR $68M
Big news out of the small landlord property management space with the news that CoStar (operator of Apartments.com) acquired Cozy for $68 Million. Congratulations to Gino and the team. The company was founded after their time at Flickr, who’s co-founder Stewart Butterfield joined Cozy’s board of directors and went on to launch the popular work collaboration tool Slack. I’ve been a customer since 2013 and worked with Cozy on integration during my time at Move. We’ll cover the announcement and its implications more in our newly launched series on Small Landlord Property Management Software. There are so many implications with this deal, but something to think about over the next few days is how it affects the portal space. Independent landlord listings comprise a unique set of rentals content not yet democratized on the web. While portals have become a necessary channel for large portfolios of apartment communities and mid-sized property management firms – many independent landlords still get the results they want from a red and white yard sign coupled with a Craigslist posting. Capturing those users via free software could be a massive win for CoStar, whose primary product line is business intelligence reporting. Also, while capturing that listing inventory could be an enormous win for Apartments.com, it could mean an even more significant loss for Zillow, realtor.com, and Apartment List. Bonus: my hometown investors from Bend, Seven Peak Ventures, were early investors in Cozy. -Greg
THE CONSUMER VIEW ON A BILLION DOLLARS IN SELLER LEADS
Mike Del Prete believes Zillow is sitting on a billion-dollar opportunity from their Offers business in seller leads alone. “Zillow says that since launch, nearly 20,000 homeowners have taken direct action on its platform to sell their home. Of those, it has purchased just about 1 percent of homes (around 200).” The company has a goal of 5% national market share for Offers which would require purchasing 10% of the requests it fields, though Mike says, “A more realistic target would be to only purchase around 1 percent of requests.”
The seller’s perspective: “If I know there is a 99% chance that Zillow will NOT buy my house, why exactly should I waste my time?”
Can a consumer product/service with a 99% rejection rate stand the test of time? It seems like a House of Cards scenario that will inevitably crumble. If you have a counterpoint, by all means, I’m all ears. -Drew
REFLECTIONS ON A FAILED APP LAUNCH
I learned that it wasn’t worth documenting features that we passed on in favor of focusing solely on those that we shipped. Secretly, I never fully bought into this mantra and tried to chronicle as many of the ideas tabled over the years. While agile teams shouldn’t spend development time looking backward – a retrospective centered on what didn’t work might be even more valuable than one focused on what did. That’s why I was happy to read App mistakes: the ten lessons we learned launching (& killing) our $200K mobile app. The product lead for Hotjar (a user experience and analytics application) breaks down the failure of one of their failed product launches in a step by step guide which even includes what they would have done differently the second time around. Those steps include: find out if your idea is something customers want, validate the concept, validate the user experience, consider the costs, define the MVP, get the MVP in front of users. Sounds simple when distilled into one sentence, but for anyone that works in product, this is a short read and worth your time. -Greg
LETTING THE DOOR HIT PEOPLE ON THE WAY OUT
I stumbled across this post from Mathilde Collin, the founder of Front, as people were tweeting out their favorites. But in her piece 9 Most Useful Pieces of Advice I’ve Received, the most relevant snippet for me right now came from Daniel Yanisse of the company Checkr: “Give generous packages when you let people go.” Mathilde argues that “Not only is it good for the person leaving, but it will also help your managers make tough decisions. It’s always hard to let go people, but if the organization needs it, then you have to make sure managers are empowered to make these calls.” I’m inspired by companies who are quick to move on from bad fits but do with generosity, empathy, and tact.
I noticed this week that the residential real estate brokerage office culture is infected by so much drama around where agents choose to work. I get that small business owners take employee (er, independent contractor) relationships seriously and personally – but the culture is in need of a dramatic shift to a place in which agents feel comfortable switching brokerages if it makes the most sense for them. You’d be surprised at how much pain brokers are willing to inflict emotionally and financially on agents who no longer want to work for them. It’s embarrassing and gross. -Greg
VACASA TO HELP MULTI-FAMILY OWNERS REACH TRAVELERS
One possible route to monetize multi-family vacancies is by putting inventory into the vacation rental marketplace. Joining Stay Alfred, Lyric, and Domicile, Vacasa is throwing their hat in the ring with a new apartment leasing offering to help multi-family owners and operate access traveler dollars. Transforming long-term inventory into sublets and short-term rentals are ripe with opportunity (though city regulators won’t like it much). Vacasa has a first mover advantage on the traveler demand side, they have a hard road ahead in the increasingly competitive landlord tech landscape. Vacation rental behemoth Airbnb has been in rentals since 2013. Once they go into rentals publicly, which is inevitable if they are maximizing shareholder value, they will be beyond a formidable foe. That said, Vacasa is smart to take the risk for the potential outcome to emerge as a power broker. -Drew
BOUTIQUE LODGING FOR THE WIN
My interest in the intersection of travel and real estate led me to notice Curbed’s article on a Silicon Valley-backed hotel startup with a mission of offering boutique lodging for less (in Miami to start). Life House delivers a boutique hotel experience at a discount price. They don’t own the supply, but instead work with “property owners [who] turn their buildings over to Life House, which then renovates, reopens, and reintroduces a new ‘locally rooted lifestyle hotel’ to the market.” As a direct-to-consumer travel brand, they have their work cut out for them on the acquisition side of a ruthlessly competitive industry. A big part of what excites me about the model is Life House serves as an alternative approach for building owners to consider when contemplating whether to sell or set up shop as a property manager. -Drew
Out of the Box
FANTASY FRANCHISES AS A HOOK
HBO has Game of Thrones. Amazon is developing Lord of the Rings. And now Netflix has a major fantasy franchise of its own to compete: Chronicles of Narnia. Millions and millions of people love these shows and will drop everything to spend a few hours, or days, to watch. They’ll even watch multiple seasons in their entirety a second time. These iconic brands are “must have” hooks that prompt fans to open their pocketbooks even if they don’t watch anything else from streaming service X.
What is a real estate brokerage’s “must have” user hook? A CMA? The chance to see one of the 20 listings a buyer is interested in today rather than two days from now when the next agent can show it? A market report for a ZIP code? All are pretty weak hooks in my book. What can brokers offer prospective and current clients that they will truly love? I don’t have the answer, but I offer that up as a challenge to brokers/agents reading. -Drew
BOURDAIN BUSINESS BRILLIANCE
Writing about Bourdain is like remembering the puppy I had to give away to friends when I moved to New York City. I try not to do it too often. When I moved to New York in 2014, Anthony Bourdain had just announced plans to open an international food stall market at Pier 57, and I started making plans to visit every single day. Ultimately, the concept was abandoned, and then we lost Bourdain forever. However, it’s worth keeping his memory alive. “Not giving a shit has been a very successful business model for me.” “[Not having] a reputation to lose, is a huge advantage. From Kitchen Confidential on I made a really determined effort to not fuck up. I was very aware of that tendency. I’m a little more organized, my work is a little more rigorous than it needs to be because that was a regular feature of my whole life up until that point.” Read more in A Dozen Lessons about Business from Anthony Bourdain. -Greg
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