Starting up is hard to do
Letter to the Editor
By Inman News, Monday, March 9, 2009.Re: 'Code name 'Waterfall': Move's play for ActiveRain' (March 4)
Dear Editor:
As the founder of a real estate technology startup, I'm taking notes on the lessons learned in these articles. It has given me an insight I wasn't aware of when I briefly met Dustin Luther and some of the guys from ActiveRain at RETechSouth 2008.
The passion, heart and soul, and commitment to the community by ActiveRain are reflected in the real value their service brings to so many. Yet, building a FREE software platform for the benefit of a community is often challenged head on by the financial temptations of "selling your soul to the proverbial devil."
Without revenue, investment capital has to go a long way to building a product that brings this real value. This challenge is even greater when the revenue-based service isn't built until after the free service is trusted by the community.
Anyone familiar with this process knows, all too well, that a company can bleed out before realizing their long-term financial potential. Often, the community runs the risk of losing out when good ideas are replaced with compromises to survive or, worse, when the company simply disappears.
However, these risks are worth taking by the community. It is from these risks that platforms such as ActiveRain, Twitter, FaceBook, Google, Flickr, Yahoo, Trulia, etc., all got their start. Not all companies will make it. However, we all benefit if these companies keep true to the original calling that got them started … challenging the status quo with the timeless conviction: "There has to be a better way."
As for ActiveRain, I commend them for challenging the status quo as the pioneers that brought relevant social networking to the real estate industry. The apparent failure of Move Inc. to recognize ActiveRain's value confirms the community members could have been the biggest losers in this acquisition. I wish ActiveRain the best as they find their way to survive and monetize while staying true to their vision.
ActiveRain and the like will make mistakes along the way. It's part of the process. As long as they keep true to their original vision, the community will be well served.
David Carroll
CEO
SoftRealty.com Corp.
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Submitted by Joseph Bridges on March 10, 2009 - 6:05am.
Nice letter David. I think one of the hardest parts is building around a model that is completely free and doesn't have any kind of revenue model.
Facebook has an advertising engine built into it, yahoo did as well, and trulia added one later in the game.
Early on Active Rain allowed agents to put their own Google Adsense in so the agent could get the revenue and possibly if they had just kept the revenue for themselves (agents were happy with the free platform) they might not have had to make compromises later.
People like free but many understand it has to get paid for somehow so building in a revenue stream early on, even if not from your primary customer, is a good idea and can open up more decisions later as well as increase the value of the company.
Visit the blog at: http://www.InternetRealEstateSuccess.com
Real Estate Resources at: http://www.OnlineRealEstateSuccess.com
Submitted by Andrew Mooers on March 10, 2009 - 12:14pm.
As a real estate broker and business person, it would be neat to see the interior financial structure behind the curtain and the overhead drain of the above mentioned platforms. When I read about the loss of revenue from say realtor.com,etc last quarter, the numbers are staggering. Control of your overhead is your profit. Like the small mom and pop grocery, designed to be run by one or two people efficiently, and to weather financial storms, you have to wonder if overhead bloat is what is causing the boat to sink. You can grow too fast and without looking sideways at the economy around you when blinded by a driven dream that may warrant applying the brakes like all of us are doing in our day to day operations. I think pie charts in board rooms and time tables create in a vacumn often need reassessment when the light of day to day hit them or causes a change of direction. Reining in of grandiose goals made during more a more robust business climate is not only smart, it is key to being around long after other Goliaths drop by the way side. Business is a marathon of twisting pathways, hills and dales. The many quick decisions made for the short term survival sake have a profound effect on the health, image, morale and mortality of any company.
Maine REALTOR Andrew Mooers - Houlton Maine / Aroostook County
http://www.mooersrealty.com
Submitted by Jonathan Phan on March 10, 2009 - 1:10pm.
You got to spend money to make money.
Jonathan Phan
http://www.jonathansellshomes.com/