RentJuice Seeks to Help Landlords and Brokers Get Serious About the Web, Like Consumers Already Are
David Vivero, the co-founder and CEO of San Francisco-based RentJuice, was raised in the real estate business. His family owns and manages several apartment buildings in Miami Beach. He grew up fixing air conditioners, traipsing up and down the stairs collecting rent checks, and negotiating with tenants over security deposits. Even after he went off to Harvard College to study economics, he’d spend every school vacation back in Miami, helping with the family properties.
So when Vivero says landlords and rental brokers are in pain, he knows whereof he speaks. The problem, he says, is that the convenience brought to the consumer side of the market by Web services like Craigslist, Zillow, and Trulia never filtered back to rental offices.In some ways, the new demand for up-to-date online listings has actually made owners’ and brokers’ lives harder.
It’s not that brokers don’t have computerized databases of apartment listings—they do. They’re just not integrated with anything else. Vivero paints a picture of the process that sounds as if it were coming straight out of 1992. “It would start with a property owner trying to understand what units might be vacant on September 1,” says Vivero. “They produce a document. They transmit those listings to apartment-finder services and brokerages. Each broker gets stacks of these and processes them into their database. By the time they finish that, a new one has already been sent, so they’re always playing catch-up. They’re spending hundreds of thousands of dollars a year just on data entry. The whole supply chain suffers. And the reason there is a lot of unreliable information on Craigslist is because even the most genuine broker trying to market a listing may not have the latest info.”
Even before he’d finished his MBA at Harvard Business School, Vivero had decided that what the real estate world needed was a single online platform where landlords and brokers would be able to manage the entire rental process, from a vacancy to a signed lease. “I walked up and down Newbury Street and Commonwealth Avenue and Brighton Avenue [the main loci for rental offices in Boston] and spent time in the offices of brokerages and real estate management companies and listened to their issues,” Vivero says. “I didn’t have a computer science background, so I taught myself Python and started programming.”
The result was RentJuice, which opened its doors in San Francisco in 2010 and collected $6.3 million in Series A financing this spring from Lexington, MA-based Highland Capital, Boston, MA-based NextView Ventures, and a group of high-profile individual investors, including Tim Draper, the co-founder of venture firm Draper Fisher Jurvetson. In March, RentJuice acquired its main competitor—Boston-based Kahoots—and its only real rival now is yougotlistings, a much smaller startup, also based in Boston, that emerged from the Y Combinator venture incubator this spring.
Vivero describes RentJuice as a “virtual rental office” that landlords and brokers can access at any time from any Web browser. It includes a whole lot of features. There’s a database for storing and searching apartment listings; interfaces for publishing these listings on the broker’s own website or Facebook page; an ad-builder that automatically sends listings to 35 outside rental sites such as Craigslist, Rentbits, and Rent Jungle; and a “lead management” area for responding to inquiries from potential renters and scheduling apartment showings. There’s even a tool that spawns instant background checks and credit reports on rental applicants and generates ready-to-sign lease paperwork.
The system, Vivero says, eases the three biggest pain points for any rental broker: tracking apartment availability and pricing, maintaining listings across dozens of websites, and playing both lawyer and banker during the application process. But he hastens to add that the technology isn’t about to put any humans out of a job. “Technology is not going to open a door for you, and we are not building robots that know how to explain how much natural light or noise an apartment might get,” he says. But brokers who use the system do have more time left over to focus on the things that really set them apart, such as their network of property owners. (Landlords like the system, by the way, because it lets them dump all their listings into a single database, then decide which RentJuice-enabled brokers should see them.)
When I visited RentJuice’s San Francisco office in late March, the company had about 20 employees, counting the former Kahoots employees in Boston. The startup isn’t yet national—instead it’s expanding city by city, focusing first on brokers and listings in Boston, Chicago, Miami, and New York. Next week, the company plans to introduce the “RentJuice Index,” giving both brokers and renters a snapshot of the rental markets based on data from its platform.The quarterly index will focus first on Boston and Chicago but will be rolled out in the other cities over time.
RentJuice has been both smart and lucky, to hear Vivero tell it. The company understood its market well, so it has avoided the strategic blunders that lead to the “pivots,” or strategy shifts, so common at young startups. The company did, however, have to scrap its original pricing system. Originally, Vivero says, RentJuice charged by the seat. “The amount of revenue you can book is directly related to the number of people on your staff, and likewise for our cost to serve your account,” he says. “So we had a per-seat model, with a bulk discount for larger numbers of seats. But we ran into huge headwinds with some customers, because they thought our business model inhibited their growth as opposed to supporting it.”
Brokers, in other words, didn’t like seeing their RentJuice fees go up every time they hired a new agent—and the startup lost some customers this way. But early this year, RentJuice switched to flat-fee pricing. For a single broker, a subscription costs $59 per month; for two to 100 brokers, it’s $129 per month. You might think that servicing a 90-employee customer for the same fee as a three-employee customer would strain RentJuice’s own finances—but the reality is that the average brokerage only has about 10 people on the system, Vivero says. Really large customers like Coldwell Banker New England, meanwhile, pay a specially negotiated enterprise rate. The new pricing “has brought a lot of customers back to the table, which has been worthwhile,” Vivero says. “Each time we’ve tweaked the business model, we’ve seen an uptick in the number of customers.”
In an unsubtle attempt to steal a bit of the spotlight from Salesforce.com, the San Francisco cloud services giant known primarily for its customer relationship management (CRM) software, RentJuice has recently begun describing itself as a pioneer in “rental relationship management,” or RRM. And if it can attain hit adoption rates anywhere close to those Salesforce.com has achieved in the world of sales automation, it ought to do well. After all, the number of renters in the U.S. is expected to increase from the current 40 million to 50 million over the next five years—and almost all of those new renters will start their apartment searches online.
“People have known for years that the back-office processes in the real estate world can use help, but they were selling a highly illiquid, slow-moving asset, so there was never really a big need for it,” Vivero says. “But over the last several years, online platforms have increased the demand on the consumer side, and that has caused the supply side to realize they need to rebuild their businesses on top of technology.”
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