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Listing Bits Podcast with Victor Lund, and More on Broker Public Portal

I listened to Greg’s Listing Bits podcast with Victor Lund the other day. Here’s the episode for the curious folk:

Homesnap recently raised a $14 million Series B. Like Greg, I really wonder how those VCs are ever going to get their money back if the brokers who own 50% of the Broker Public Portal joint venture with Homesnap can nix any acquisition.

Let’s play out this scenario. Homesnap succeeds in growing traffic, they have trouble monetizing (because, let’s be honest, they need a massive sales force to compete against Zillow and Move. that sales force will cost a lot of money to build and grow), Zillow Group comes calling with an attractive acquisition offer. The brokers don’t want to sell. Homesnap (and their VCs) do, because there are very few, if any, other exit options on the horizon. Do the VCs simply let the brokers keep running Homesnap independently? I seriously doubt VCs would invest in a company in which a collective of industry insiders could reject any exit option they didn’t like. Is the joint venture agreement between Broker Public Portal and Homesnap available (either publicly, or to the brokers who invested in BPP)? I’d be curious to see the legal language around acquisition options/control/decision-making. Anyone with inside intel on this, feel free to leave a comment or send me an email.

Doesn’t this just sound like all over again? Maybe Homesnap will sell to Move?

As an aside, I get that this is an industry play, but winning consumers is the only way to change the balance of power. With “agents” being the core constituent BPP/Homesnap are serving (see below screenshot), I still struggle to understand how they are going to get consumers to use Homesnap instead of the known alternatives buyers already use. If consumers are not finding Homesnap early on (prior to speaking to an agent), I don’t see a mechanism for the company to generate considerable revenue. That’s very different than driving traffic from onetime MLS system emails agents are initiating.

About Drew Meyers

Founder of Geek Estate Blog / Geek Estate Labs. Zillow Alum. Travel addict & co-founder of Horizon. Social entrepreneurship & microfinance advocate. Fan of Red Hot Chili Peppers and Kiva.

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  • Greg Robertson

    Great analysis Drew.

  • I really enjoyed the conversation, because there were two very different positions that held strong against each other the entire time. I think Victor answered all of your questions, Drew–obviously not to the point that you believe in the strategy, but clearly enough that investors like his answers. This project will be fun to watch.

    • I did too. It was a great discussion.

      Am I reading your comment correctly to say you believe the strategy will work? How do you see the following two things playing out:
      1. Monetization — every answer I’ve heard as to how Homesnap/BPP will get traffic has been “the agent/broker/mls will send emails out that gets the consumer there”. So, the consumer traffic already has agents. With the facts that connecting consumers with agents is where the lion’s share of portal revenue comes from, how does BPP plan to build a profitable business from agents sending their own clients to a new portal?

      2. Consumer loyalty — even if the consumers do make it there the first time, what’s going to keep them using Homesnap regularly going forward? Is there any differentiator, for the consumer/buyer?

      • I think it’s a viable strategy, as long as you accept the mindset that it doesn’t have to be a “Zillow killer”, just a significant player in the top of the heap.

        1. This is clearly the tough part, but then again, Zillow sold soda ads until they didn’t. Homesnap has Facebook ads and now Google ads it is selling to its 850k agent users–not as strong as direct consumer listing inquiries, admittedly. It could also potentially have a stronger relationship with a larger agent base–the many whom we constantly hear have concerns with Zillow. There will be other products they can sell to agents that we haven’t imagined yet. Their investors will demand it.

        2. Consumers aren’t really loyal with tech unless you’re unbelievably above the fray like Apple, and I’d argue that the hardware is a huge component of that. They just form habits with software. Whatever suits their needs best today is what they use. Portals, so far, have zero lock-in on users. There’s no pain in switching. If 1.X million agents are consistently pushing their consumers to Homesnap, maybe it just becomes habit.

        Corelogic sends out how many million property alerts/day? They don’t send the traffic to a public facing Corelogic website, the traffic goes to the MLS. Homesnap could drive that kind of traffic to a public website instead.

        • 1. “Zillow sold soda ads until they didn’t.” Right, because you really have to have massive, massive reach to make brand advertising work as a business. I wouldn’t bet on that being a viable model if I was Homesnap (certainly not if VCs need 10x returns).

          2. There’s no pain to switching from google to bing, yahoo, duckduckgo… but no one does it. 🙂

          • Good points, but Google is an anomaly/monopoly. People search on Zillow/Trulia/RDC/, most actually say they use 6-12 sites.

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