Barbi Reuter and I were talking this week about a few things...a deal we are working on in Nogales (fortunately, Barbi's team knows where that is), Arizona's epic Pac 12 win (not discussed because I was remiss), and a request I received from a CRE tech startup. My firm is checking out the startup's offering yet Barbi's isn't. The startup's front man asked me to grease the skids for him and see if Barbi would take his call. I gladly obliged as I am a big fan of the offering and have written several posts touting it's virtues. BTW, for BOTH of you who don't recognize Barbi Reuter's name...we also successfully sent men to the moon and returned them...welcome back from the ether...yet I digress...
Barbi agreed to take the front man's call and I believe there is a demo in Barbi's future. Ahhh, the power of social media...the great relationship builder.
The essence of WHY Barbi's firm, Picor, a Cushman and Wakefield Alliance partner in Tucson and Southern Arizona, had not considered the offering was illuminating to me and formed the reason for this post.
CRE firms, and especially those of us who have developed a bit of an on-line presence, are bombarded by startups wanting a piece of our hide...map this, survey that, syndicate your listings, manage your contacts resourcefully, generate more leads with this app, etc., etc., etc. Frankly, it's overwhelming. So much VC is pouring in to CRE tech that it is staggering...but to what end? SOMEONE has to pay for ALL of the new offerings that the VC is creating...AND, what guarantee do we have that the offering will survive and be viable in the years to come?
So to ALL of the tech startups out there, please consider these three things before you contact us.
What is your revenue model? FREE, subscription, or pay per view. The offerings that are free or pay per view (a percent of the CLOSED deal) are much more likely to garner my favor. Please understand the industry can only justify so many monthly subscriptions. If we all subscribed to CoStar, LoopNet, Prospect Now, RealNex (or Apto, or ?), Buildout, Constant Contact we could easily add $1000-$1500 per month to our desk costs. My office of 45 agents currently spends around $1000 per agent per month on third party technology offerings...and that expenditure does not include 80% of the above listed.
Why is your offering unique? Are there other offerings, just like yours, or is yours revolutionary? CoStar got a foothold because it's simply the best. LoopNet was/is consumer facing. ProspectNow provides something that no other owner database provides...phone numbers for owners. Buildout is a one stop shop for listing syndication. ALL are revolutionary...AKA, we can't produce a better product in house for fewer dollars...or we would!
How does your offering help brokers make more money? I was recently approached by CityFeet about advertising on their site. The prime spot was $600-$1000 per month. So JUST to pay for that, I would have to make $4000 per month. Why, you ask? 50% split (pre-bonus) takes $1000 to $2000. 50% tax bracket takes it to $4000. When I asked the sales guy if he could provide a money back guarantee of $4000...the silence was deafening!