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New models in global real estate tech
- 1. New models in global real estate tech 8 March 2017 Mike DelPrete
- 2. A bit about me • Former head of strategy at Trade Me. • Traveling the world looking for new models that are getting traction, and looking at portal strategies. • Currently writing, consulting and advising. • Based in New York.
- 3. Today we’re talking about • Growth strategies of leading property portals • The new winning models • What this means for the industry
- 4. Growth strategies of leading property portals
- 5. Property portals in mature markets are big business…
- 6. …with big profit margins.
- 7. They’re still growing fast; plenty of runway for core advertising business.
- 8. Nearly all of them are expanding across the value stream, providing more services to consumers and agents.
- 10. • Aggressive; seed through full acquisitions • Focus in adjacent services – “one stop shop” • Full acquisitions: building audience and plugging market gaps (NYC) • Operates businesses as stand-alone entities • Conservative – no acquisitions • Focus on core proposition • Blended; minority through full acquisitions • Will fully integrate businesses or operate at arms- length They have varied M&A strategies; there’s no winning formula.
- 11. Audience Extension Agent & Partner Tools Rentals Consumer Focus
- 12. Industry disruption is not going to come from the big portals.
- 13. While best positioned to disrupt the industry, portals are the least likely to because agents are their biggest customers.
- 15. The new winning models
- 16. FSBO Online Agency Disruptive I’ve seen three models getting traction globally…
- 17. I’ve seen three models getting traction globally…
- 18. • Comfree is a FSBO operation in Canada. • 25% market share in Quebec. • Lists over 40,000 houses annually. • Average revenue of ~$1,000 USD per customer. • Around 400 staff, mainly in call centres.
- 19. • Purplebricks is an online agency out of the U.K. • Around 2.2% market share in the U.K. market (~25k houses annually). • Has an online platform and service centre to support local property experts. • Recently expanded to Australia and announced plans to enter the U.S.
- 20. • Opendoor buys and flips houses. • Has raised over $320M and valued at over $1B. • Incredible customer proposition through reducing friction. • Charges a fee of 9% -- higher than the 6% average in the U.S.
- 21. Opendoor is up to 2% market share in Phoenix, and growing quickly.
- 22. And it sells houses for a median average of 5.5% higher than it buys them for.
- 23. While it sounds niche, Opendoor is gaining significant market traction, with a realistic path to $1B in annual revenues.
- 24. Similar models are popping up all over the globe. $30M $32.5M $5M+
- 25. The successful models all share several traits: • Majority of staff are customer facing. • Obsessed with customer service. • Tech-enabled, not tech-led. • Not just about price; offer a better experience.
- 26. Technical vs. non-technical staff ?
- 27. Technical vs. non-technical staff
- 28. The successful models all share several traits: • Majority of staff are customer facing. • Obsessed with customer service. • Tech-enabled, not tech-led. • Not just about price; offer a better experience.
- 29. What does this mean for the industry?
- 30. These new models will disrupt the industry • The models have proven traction and consumer demand. • They will slowly disrupt the industry. • Copycats will pop up in all markets, not just mature markets.
- 31. Disruption will come from well-funded start-ups, not incumbents, portals, nor niche players.
- 32. The impact on property portals • New models still need to advertise on property portals. • Extremely unlikely that portals and new models will compete. • Consumers want choice; portals need to cater to these new models to remain relevant.
- 33. Five years from now… • A more fragmented industry with a focus on consumer choice and increased value. • Agents aren’t going anywhere. • Property portals secure in position as best place to advertise a home for sale.
- 34. Five years from now… Now Future Today 5 years FSBO Online Agency Disruptive Traditional Agents Traditional Agents
- 35. Five years from now… • A more fragmented industry with a focus on consumer choice and increased value. • Agents aren’t going anywhere. • Property portals secure in position as best place to advertise a home for sale.
- 37. www.mikedp.com