1001 startup ideas - A marketplace for Real Estate Brokers

What is the idea? 

The startup idea is to establish an online platform, which aggregates real estate brokers. The platform will provide tools and information for brokers to be more productive and knowledgeable; the platform will also facilitate information transfer between broker communities and the real estate developers, who can directly access the end consumers through the brokers who use the platform.

Market Definition

 According to an estimate, approximately 210,000 companies operate on the residential brokerage and management field. These companies generated $200 billion in revenue last year. The same report also estimated that there were 35,000 companies operating in the commercial brokerage and management field last year, generating $35 billion in revenue. 

Competitor Analysis

 Most of the current real estate portals are working on B2C model, ignoring the fact that most of the end customer sale still happens through on-field brokers. Through this model, one will be able to tap into existing network of brokers, producing more value for all the stakeholders. Broex is the early mover in the segment in India and has secured 1 million in seed funding last year. They are getting very good response for broker community and running their operation in Delhi-NCR, Mumbai, Bangalore, Pune, Mumbai, Pune, Ahmedabad & Jaipur. Globally there are quite a few startups that are disrupting this field, India is also seeing action with E-commerce player Flipkart's co-founders Sachin Bansal and Binny Bansal, along with other investors, have invested $3,50,000 in a real estate startup named Plabro Networks. Mobile collaboration startup for property brokers BroEx got $1M from Lightspeed in funding last year.

Pain Point & Target Audience

Currently, the brokers do not have an intra-broker platform, through which they can reach out to multiple brokers in a cost effective manner instantly. Unlike the United States, where there is MLS feed listing all deals in the market, there is a lack of such services in other developing countries, which aggregates listing from the brokers and then relays it further. The brokers do not have access to larger deal flow, there only source of information is the current listing sites, where the owner is directly listing the properties. There are many properties, which don’t get listed immediately and are traded through a close network of confidant brokers. The online portals are technology friendly, have better user experience and make recommendations on the basis of researched data. In the race to modernization, the brokers seem to have been left behind. The end consumer has better access to real estate reports than the brokers, thereby diminishing their credibility. The brokers do not have access to tools and knowledge, which can make them compete with other online portals; they are increasingly being seen as technologically challenged and lacking in market trends. The brokers need a platform which can aggregate all of them and give them tips, data points and market trend info in advance so as to be better prepared for deal making. The platform should make it easier for the brokers to scout for and close deals faster. 

Value Proposition

This platform will empower real estate brokers with tools to broker deals faster and compete effectively with other online portals. With this platform, the Broker will remain updated on real estate trends and will be able to effectively compete with online portals. Brokers will also get access to the wider market through fellow brokers for their customers / investors. Real estate developers can use this platform to launch their new projects and reach directly to the large pool of brokers across different cities; this tool will also help them to get early feedback about the market response, before launching the product to the end consumers by spending mega bucks on promotional events and advertisements. 

Business Model

The basic services like market information, deal listing should be provided free of cost to the brokers. Additional services like a an app for managing deal cycle, CRM tools and other tools to enhance productivity of the brokers should be charged on a monthly basis. The services should be delivered as a Saas. This is the same model, which is followed by LinkedIn, Dropbox and other aggregators. 

Way to market

The first step would be start collaborating with real estate associations, to get the database of brokers. Thereafter run a short survey amongst the end users to identify top pain points and develop a beta product strategy. It may be a good idea to scout for a knowledge partner, who can supply real time information from the ground for your consumption and relaying, its best to rely on other providers and outsource this to experts, so that you can focus on the core application.

 Milestones

The first couple of years in this business should be focused on creating a strong community of brokers who use the portal/app on an everyday basis. Based on the feedback and by tracking usage of the platform by brokers, the startup can create the upgrades for which it will charge its customers and start converting its user base into paid users. Typically a good business running on Freemium model can convert 3- 5 percent of its free users to paid users. 

Investment Needed For Prototype

For testing & building the prototype, pitch for raising $100K- $250K from angel investors or incubators like 500 startups. There should be no office rentals or salary payout; the entire budget should be apportioned for customer acquisition and technology. 

Team Capability

You would need to have a real estate expert and a tech expert as co-founders. The real estate expert will bring his expertise in real estate industry to help the tech expert in creating the platform.

Investors / Expert Take

Overall, the private equity investors threw a projected $1.5 billion at real estate tech startups in 2015; as per reports from CB Insights. That’s a big leap from $1.1 billion in venture/ private equity funding in 2014 and represents a threefold increase from 2010 numbers. Whilst most of the real estate technology startups are based in New York City, or at least in the US, there is an untapped market for such emerging products globally. International juggernauts like Jones Lang LaSalle, Cushman & Wakefield and CBRE have been in the brokerage business for generations and would be keenly watching this space as it has the potential to topple their applecart, if it picks up steam.

Resource: http://www.moneycontrol.com