As the housing market slowly heats back up and real estate startup powerhouses Zillow and Trulia show that money is flowing into innovation and technology, other firms and individuals are coming out of the woodwork to launch the next successful real estate idea.
Seven of them — ranging from recently launched firms to individuals with compelling ideas — went head-to-head for the chance to win $10,000, impress a room of approximately 100 conference attendees and a panel of real estate heavyweights at the Asian Real Estate Association of America’s (AREAA) national convention on Thursday.
Real estate video startup Onvedeo won top prize, with founder and CEO Boubou Guiro pitching a product that streamlines the creation of listing videos with live voice and local video.
AREAA’s inaugural “Dragon’s Den” competition — inspired by the ABC TV show “Shark Tank” where entrepreneurs pitch a panel of four judges to invest in their companies — put the seven startups to a test by fire.
Before the pitches started, one of the judges, Redfin CEO Glenn Kelman, said that a successful pitch left abstract terms like “viral economics,” “network effects” and “economies of scale” out of the discussion but maintained a laser-like focus on answering the question, “Is this something consumers will open their wallet for?”
Joining Kelman on stage as judges were Sherry Chris, president and CEO of real estate franchisor Better Homes and Gardens Real Estate; Brad Inman, publisher and founder of Inman News; and Jennifer Jeng, co-founder of a mobile-focused startup that enhances the in-game experience at sporting events.
The contestants, selected from 13 applicants, who pitched in the Dragon’s Den were:
- Boubou Guiro, CEO and founder of Onvedeo, maker of automated, localized listing videos.
- Ken Avelino, a Sacramento, Calif.-based lawyer with an idea for a real estate investment trust (REIT) focused on senior housing for Asians.
- Nabil Captan, creator of a video series aimed at instructing consumers about credit.
- Jessica Lee, a San Francisco-based real estate agent with a business idea to turn a real estate listing into a referral-based marketplace of associated services.
- GieFaan Kim, a New York City-based agent working on a secure off-market database for consumers and agents.
- Allen Chiang, owner of a Los Angeles-based brokerage with five offices and more than 300 agents with an idea to make low-key, high-traffic real estate offices that more resemble a coffee shop than “office.”
- Justin Hughes, co-founder and chief operations officer of Realty Mogul, a real estate crowdfunding tool for accredited investors.
Each contestant was given five minutes to pitch his or her product and then was grilled by the judges for seven to 10 minutes.
To determine a winner, the judges selected two finalists and then the audience voted by text message to determine the winner.
After a short deliberation when the presentations were done, the judges announced that Guiro and Kim were the competition’s finalists. The audience then voted Guiro the winner.
Making the pitch
Conferences like AREAA are where deals, and sometimes companies’ success, are born, AREAA President Jim Park told Inman News.
“We wanted people to see deals being done in action,” Park said. He saw the competition as a “manifestation of what these networking events have always been about.”
All contestants used PowerPoint slides to present their businesses and ideas to the audience and panel — some to better effect than others.
Onvedeo’s Guiro, GieFaan Kim and Realty Mogul’s Justin Hughes had the slickest, punchiest and most succinct and well-timed pitches.
Some of the others’ good ideas got lost in presentations that rushed through — if they got to them at all — the value propositions of their service.
Part of the difference in pitch polish could be attributed to the relative maturity of each idea — Onvedeo and Realty Mogul have products that have already been launched to the marketplace for several months and had already raised hundreds of thousands of dollars from investors, and Kim had put $40,000 into his off-market listing site and was launching it soon.
Allen Chiang, who detailed his plan to build low-pressure (for consumers and agents) real estate offices as a cross between a living room and a Starbucks, had already implemented his plan at a 1,000-square-foot office in the Los Angeles area, but it wasn’t clear from his presentation how the idea would be marketed and sold as a product.
Chiang had never pitched the idea before.
Captan, who had recently released a Chinese-language version of his consumer-focused videos about credit to join the English and Spanish versions already published, said he was looking to partner with big real estate organizations in revenue-sharing deals when asked by Inman how he planned to make money.
It wasn’t clear from the presentation how the videos would be marketed to consumers or agents. The competition was the first time Captan pitched his idea in an investor-like setting.
Avelino, who was inspired to put together a real estate investment trust (REIT) for Asian senior housing by his experience with his aging Asian parents and general U.S. demographics, ran out of his allotted time before any details about his plan to hunt for large investors came out.
With some probing by Inman, it wasn’t clear what avenues Avelino had pursued toward getting the big-time investment needed to fund the REIT.
This was first time Lee pitched her business idea in public as well, which might have accounted for some of its opacity. Her business idea — a “Realtor department store” — was centered around making a listing the hub of property-related services.
For example, home stagers, contractors and artists could find listing-related business on the site, which they would pay a referral fee to if they generated business through it.
Questions from Kelman indicated that the presentation hadn’t made that, and other key elements of the idea, clear.
Realty Mogul, an inaugural member of Inman News’ Incubator program, has had a lot of experience pitching both investors and at startup competitions like the Dragon’s Den, Hughes told Inman News. As a member of the Microsoft/TechStars Accelerator in Seattle for three months late last year and the beginning of this one, the firm spent weeks honing its pitch technique, he said.
Hughes, who had pitched Realty Mogul a handful of times to angel investors, but not yet in a competition-like event like this, said he was confident about pitching well.
It’s important to tell a story and stand out, Hughes told Inman News before the event.
In his pitch, he introduced one of the firm’s mentors as one of the investors the firm hoped to service with its product, highlighting its simplicity, pre-vetted deals, and real-time metrics.
Hughes didn’t make the finals, however, likely because Realty Mogul had more of an investor and consumer play than a direct real estate agent or broker one.
Kim, who had never pitched his product, gave a tight presentation about his “The Vault” off-market database, which would provide a secure network for consumers and brokers to access info about listings not marketed elsewhere.
In his presentation, Kim outlined how much money he expected the site to generate based on a “conservative” estimate of the number of deals it could generate in a year.
Questions from Inman and Kelman highlighted that the presentation lacked clarity about the site’s value proposition to both agents and consumers and just how it could keep off-market listings private enough.
But judges were impressed with the site’s potential utility in New York City, which does not have a typical multiple listing service setup.
In his pitch, Guiro outlined the power of video’s influence over a listing’s click-through rate and its improved search engine optimization before showing one of Onvedeo’s sample VidGenie videos, which incorporate live voice (in five languages), local video and a listing’s basic info to automatically create listing videos.
“We want to replace listing photos with video,” Guiro said of Onvedeo’s basic business goal and market opportunity.
In Guiro’s pitch, everything was condensed, Sherry Chris said. “He captured the attention of the audience.”
Audience member Merry Yen, an agent with Prudential California Realty, voted for Guiro to win in the head-to-head vote with Kim.
“Guiro’s presentation was very clear,” Yen said. “It’s a popular idea and something that everybody can use.”
Yen didn’t vote for Kim’s idea, she said, mainly because operating a site like that would be difficult in markets that weren’t New York City.
Another agent who voted for Guiro, Sharon Mancillas, echoed Yen’s take. She liked that Onvedeo was something she could potentially use. “It stood out,” she said.
Guiro had previous pitch experience at Realogy’s FWD pitch competition in June, where Onvedeo didn’t place.
At this event, Guiro’s winning pitch might have generated something much more valuable than $10,000 in cash, however.
Kelman, impressed with his pitch, asked Guiro during his presentation whether he knew Onvedeo competitor Sunday Sky with whom Redfin now works. Guiro said Onvedeo could do video 10 times better.
After asking Guiro about the firm’s ability to scale upward, to handle hundreds of thousands of listings, and being satisfied with his answer, Kelman said, “You should email me.”