It’s not unusual for an entrepreneur to start out with an idea, and then to pivot when he or she realizes there’s a better direction to head in. It’s not easy to do, but sometimes changing course is the best way for a young company to keep moving forward. It may even lead to an entirely new business.
Just ask New York City-based entrepreneur Tina Fine, who decided to start not one but two startups in an effort to connect potential homebuyers and sellers.
Fine launched her first venture, homingCloud, in September 2010 as a kind of matchmaking service for do-it-yourself buyers and sellers — as well as renters and subletters — to meet without involving a real estate broker. Aimed at those looking to avoid the costs of real estate commissions, homingCloud gives consumers an alternative to a standard For Sale By Owner (FSBO) site by allowing them to create profiles and send each other messages that describe what they’re looking for, much like an online dating site might.
But Fine discovered home sellers were nervous about trying to manage the process on their own given the slow housing market. As she explains it, the down economy has made sellers "especially reluctant to go at it on their own." (Consumer surveys by the National Association of Realtors suggest FSBOs accounted for 9 percent of sales in 2010, down from 16 percent in 2000).
While homingCloud is still in business, Fine saw an opportunity to create a second company based on homingCloud’s matching platform that offered a middle ground between a full-service brokerage and a FSBO site. So, in May 2011, she launched HomingMatch with co-founder Joe Smetona.
Described as "broker-chaperoned real estate dating site," HomingMatch is a pre-listing service that brokers can provide consumers who are testing the waters to see if they’re ready to commit to a listing. The platform is still in development and Fine will be previewing it in Startup Alley at Inman News’ Real Estate Connect NYC conference in January. I asked Fine about her background and her plans for making HomingMatch a success.
Q: You ran a company called Truffle Films before starting homingCloud and HomingMatch. What did you do at Truffle?
Truffle Films is a development company I started to market my feature-length scripts. While raising my two children, I took up screenwriting as a hobby. Then I took courses and soon decided to give it a real try, so I formed a company and started to pitch my ideas. I am still writing, and have just finished a feature-length romantic comedy, "The Love App."
Before Truffle, I worked as an economist at the National Economic Research Associates and the Federal Reserve Bank of New York.
Q: You have a doctorate degree in economics from Columbia University. How has your background in economics influenced the development of HomingMatch?
My dissertation was the basis for homingCloud.com and HomingMatch. In my dissertation, "Innovation, Concentration and the Residential Real Estate Brokerage Industry," I modeled and examined the types of innovation that could bring price competition and product variety into the marketplace. I examined whether increasing concentration would allow competitive forces to bring change on their own, or if government antitrust intervention was necessary.
Q: What attracted you to the real estate industry?
When my husband and I were looking for an apartment in Manhattan, pre-Internet, I found it frustrating that I had to leaf though listing sheets scrawled with notes. Articles were being written about people walking up to kiosks in malls and searching databases of houses for sale. I saw computer technology as a way for a brokerage firm to increase the probability of successful in-house matching and possibly leave the co-brokerage system. I decided to investigate the industry for my dissertation.
Q: How does HomingMatch work?
A broker will sign up for the HomingMatch platform and get a unique ID. When a seller contacts a broker, they may not be ready to list because they feel a 6 percent commission is too high, or they may not be sure about which firm to use. At that point, HomingMatch becomes a valuable service the broker can offer.
The seller would create a house profile, search among buyer posts for a match and connect using an on-site message system. Neither party has to share personal emails or numbers at that point. If they find a match and want to start negotiating, the broker steps in and guides them through the rest of the transaction at a lower commission rate. The seller can assume the burden of first showing the house, saving the broker time and money that is often spent on "tire-kickers" who are not ready to make a purchase.
Screenshot showing a mockup of HomingMatch’s messaging capabilities.
In addition, a broker who meets an unsure seller can offer a free HomingMatch trial. If the seller finds a match, the broker will still get a commission for closing. And if the seller is unable to find a match, the broker will be well-positioned to win a traditional MLS listing since a relationship will have been established. When buyers contact a broker, they can be invited to join the pre-MLS network and get a "first look" at new inventory that is not on the MLS.
Q: What did you learn from launching HomingCloud that has changed how you’re developing HomingMatch?
You can’t expect people to find out about your company without pitching it in some way every day.
Q: What’s HomingMatch’s business model?
We will offer a free trial during beta. Afterwards, we will have subscription-based pricing plans for small, mid-sized and large brokerage firms.
Q: Who do you consider your key competitors for HomingMatch?
The field is open. Large brokerage franchises can introduce a HomingMatch system. Our competitive advantage is that we seek to provide a level playing field for all brokerage firms. Unlike many large third-party data aggregators, we do not charge brokers for preferential listing. Payment is simply based on a use metric.
Q: When do you plan to launch HomingMatch to the public?
HomingMatch is not in private beta yet. We are collecting names from those who are interested in joining the beta launch. There is still some programming and development that needs to be completed.
Q: What do you want real estate professionals to know about how they can work with HomingMatch?
Once the site is in beta, we will get everyone onto the site at the same time. This will solve the network externality issues that occur in sites where the value of the service is dependent on the number of users.
Q: What are some of the products or features that will be available to HomingMatch customers to help them connect?
Once a buyer or seller finds a match, they will be able to connect via a private, secure, on-site message system. If they choose, they can utilize other forms of connection.
Q: What are your top three priorities right now?
Raising capital, finding a tech co-founder and increasing our marketing efforts.
Q: Where do you see HomingMatch a year from now?
I learned from homingCloud that it’s difficult to predict how a new business will be received. With that being said, in a year’s time I anticipate that HomingMatch will be a post-beta site with a rapidly expanding user base.
The brokerage industry is ready for change and looking for new ways to attract clients. I think they will see that an interactive matching platform will allow them to put an end to the excessive costs associated with advertising on third-party data sites and listing on syndication sites.
Want to recommend a RE tech startup for an upcoming Startup Scene? Send your ideas to Natalie Fonseca at firstname.lastname@example.org.
Natalie Fonseca is the co-founder and executive producer of Tech Policy Summit and the Privacy Identity Innovation (pii) conference, and the content producer for Inman News’ Data Summit and Real Estate Connect. You can follow her at @TechPolicy.