Follow the Leaders: Andrew Schiller, CEO of NeighborhoodScout

Buyers should trust technology to find the right neighborhood

Andrew Schiller, CEO of Location Inc., which owns NeighborhoodScout, takes time out to respond to Inman’s Teke Wiggin.

What’s your favorite activity outside of work and why?

I really enjoy the daily exercise classes at the gym. It feels great to work out really hard to the point of exhaustion, get those endorphins going, but to do it in organized classes that really push you, while doing it with a fun and funny bunch of people so it is social. It’s a great way to make friends!

What’s your favorite classic piece of literature and why?

I have always loved “The Catcher in the Rye.” It is probably because the main character, Holden Caulfield, is creative and rebellious, but also cares deeply about people. I feel the same way.

Are you the first entrepreneur in your family?

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No, my father bounced from job to job (preschool teacher, laborer, welder, machinist) until he started his own business doing what he loves: being out on the water with his Labrador retriever. He became a registered Maine guide, guiding sea kayak trips on the coast of Maine as a business. My grandfather, my dad’s dad, owned a pawn shop in D.C. way back in the day, and my cousins (Larry and Karen) run an awesome catering company in Baltimore called Biddle Street Catering. My mom was a librarian, but is now a published author, poet and playwright. I suppose we are a creative family, but everyone has done it differently!

How’d you come up with the idea for your startup?

I moved to different areas, and I constantly was in a position to try to make expensive decisions on the best places to rent or buy in an area with hundreds or even thousands of neighborhood choices within commuting range of my job or university.

But asking friends or real estate professionals always led to answers that where an inaccurate mix of what my friend or agent thought I wanted, combined with what they themselves want in a neighborhood. It is simply human nature to suggest what you like. As a result, the suggestions were never right. By the time I figured it out, I was already locked into a lease or a mortgage.

Such an expensive mistake! I knew others likely had the same problem, and I knew there had to be a better way. I mean, it is such an expensive decision. And studying every neighborhood in an area, even online one by one, is like “bring me a rock.”

That’s when the solution dawned on me. If you let people select the things they would love to have in a neighborhood, they would be able to create their ideal imagined neighborhood, and have technology instantly discover real neighborhoods that best match their ideal, no matter in what area you live or to where you are moving.

In real estate, it really is all about location. That is what we’ve done with Location Inc.’s NeighborhoodScout.com, which has a patented advanced search that lets you “build” your ideal neighborhood, and then find real neighborhoods that best match your ideal anywhere you want to look. We find the majority of people are using it to make local moving decisions, to optimize their choice before committing to a home, not only when moving far away.

This technology answers the first question almost every homebuyer and mover has: “Where should I focus my house hunt?” and helps us serve all of their needs that follow, right through home purchase.

I also realized that people (including me) try to understand things they don’t know by comparing them to things they do know. So I invented and patented a way to find the best matches to any neighborhood you know and love. Imagine you love a place, but have to move far away. Or imagine you visited a place that you fell in love with. Now, with this technology, you can find the best matches to that place in your local area.

It becomes a real possibility to live in a place like that, without ever changing your job or moving far away. Want to find Mill Valley, California, near New York City? Our search technology identifies Upper Nyack as one of the best matches! It really captures the cultural character of an area in a way that feels like magic, even though it is done with hard data and mathematics! I created the match and the build your ideal neighborhood technologies while working on my Ph.D. in geography, and founded Location Inc. in a turret above a research library at the university.

Describe a time when you felt particularly insecure about the future of your company. How did you bounce back?

It was the fall of 2008 and the economy was getting really bad. We just had a prospective investor pull out, and we were losing money. It was scary. I had to lay people off, and I wasn’t sure how this was going to turn out. But I got through it by working 60 hours per week for months with no pay, risking it all. (Much to my wife’s dismay.) That’s just the kind of person I am. I don’t want to ever let anyone down. Our investors put their trust in me, and I was going to deliver. We reduced our burn, increased our site traffic, and did some great story deals with AOL that raised people’s awareness of our site, and drove a ton of interest to AOL at the same time. I still have good relationships with those folks from that story deal, even though many have moved on from AOL.

What would you describe as your company’s biggest victory since launching and why?

I think that would be NeighborhoodScout’s continued very robust traffic and ongoing traffic growth. It is a testament to how much people like the service. It also allows our cost of customer acquisition to be very, very low.

What’s been the biggest obstacle your business has encountered, and how have you dealt with it?

The biggest obstacle has been explaining to people the difference between searching “by” neighborhood (for home listings) and searching “for” neighborhoods (by criteria you choose to find the best neighborhoods for you).

Many people think neighborhood search is just typing in the name of a neighborhood and getting a report on that neighborhood, or receiving home listings, rather than having the best neighborhoods for your custom needs revealed for you out of hundreds or even thousands of choices within the commuting range of your job.

We have overcome this by demonstrating the power of the advanced search engine in numerous media stories, by creating simple-to-use “lifestyle searches” from recipes combining the data in unique ways, and by video demonstrations. The most fun is to do live webinars. I just have a ball doing those!

What puzzles you most about the industry?

The way multiple listing services are often very individual to an area and not widely shared.

Founder of NeighborhoodScout.com

What is the most important lesson you’ve learned about building a business since launching your company?

I’ve learned to listen to our customers and focus on their needs, above all.

What’s the most overrated real estate technology?

I think the technology to search for home listings by neighborhood or school attendance zone is really overrated. That is so simple to do. But it assumes that the homebuyer has to first decide what neighborhood they want, or what school they want. But that is not easy to do if you don’t have good information and search tools. It is the first step at the top of the funnel above all else. It is missing the most important part of all — letting your needs lead you to the best neighborhoods for you — and then look for home listings. Not just pick a neighborhood out of the blue.

In real estate, it really is all about location. The same with schools. Why pick one out of the blue? In addition, kids grow quickly, and many families have more than one child. So buying a house focusing only on one school doesn’t make sense. Much better to select a neighborhood that is rated by school quality based on all of the K-12 public schools your children will be exposed to if you live there, so you can home in on the best neighborhoods not just for this year, but for all the years your children will be in school.

Why set yourself up to have to move every two to three years at great cost when you don’t have to? That is why NeighborhoodScout offers a search by best schools, which lists the neighborhoods that offer the best in any area you select. Then you can click to see home listings in those neighborhoods. To me, this makes all the sense in the world.

How will the role of the real estate agent change over the next five years?

Concierge services, combined with good negotiating skills to intermediate buyer and seller, will likely be key. I also think an agent’s ability to target a market for a particular home will be so important by the lifestyle the home and neighborhood best serve, and the people who are in, or want to be in, that lifestyle.

What motivates you more: power or money?

I think money is power. I am motivated by money for security reasons, I believe. Growing up with modest means, that is important to me. I believe firmly that the most power comes from knowledge, and I worked my way to a Ph.D. from growing up in a cabin with no running water and no electricity (kerosene lamps, wood stove) nearly 20 miles from the nearest traffic light. I suppose it sounds like Abe Lincoln! It was difficult, but I appreciate the opportunity I had to go to college, to learn, and then to be doing something remarkably inventive with my life.

What is your biggest professional fear?

Being a great inventor, but not a great marketer. I think this stems from me being a bit shy.

What is your biggest personal fear?

I fear working long hours in something I am passionate about but time going by so fast. I fear lifting my head one day and seeing my children grown and life gone by. Like Rip van Winkle! Time is more scary to me than the scariest movie. It is so limited, and we can’t go back. I suppose that is the reason I chose to start Location Inc. rather than accept a tenure-track assistant professor position as I was finishing my Ph.D. I wanted no regrets. I wanted to build something extraordinary! But still, time goes so quickly!

Who do you respect most in the industry?

Spencer Rascoff, CEO of Zillow. I am so impressed by the way he has built Zillow into a big business that works so well. In addition, every interaction I have had with Zillow employees has been good. The tone, the culture at his company seems right.

Describe what you do in one sentence: I guide both the technical and business directions of Location Inc., for both NeighborhoodScout and for its B2B products, while empowering our staff to be self-starters who share in the success of building something great. It’s not mine. It’s ours.

Age: 49
Degree, school:
Ph.D., geography, Clark University
M.S. geography, University of Tennessee
B.A. geography and anthropology, University of Southern Maine

Location: Worcester, Massachusetts
LinkedIn: http://www.linkedin.com/in/andrewschiller
Twitter: @NhoodScout