The undulating highs and lows of apartment hunting are all too familiar to residents living in New York City’s ultra-competitive real estate market. With an average vacancy rate hovering just above 3%, the Big Apple has become notorious for renting small apartments saddled with hefty broker fees and moving costs.
Avishai Weiss, CEO and founder of the real estate listings website Apartable, can relate to fellow New Yorkers. “Since moving to New York City, I’ve probably lived in about eight apartments. The apartment search process was just painful.” Avishai recalls his frustration during periods when he needed to find a new home. “I’d have to sift through tons of ads on Craigslist to deduce whether a posting was real or fake. Also, there wasn’t any consistency in how owners and brokers were advertising apartments.”
A self-taught coder and experienced business owner, Avishai used cash from a past startup to launch Apartable. The site now has over 600,000 monthly users and currently caters to renters and homebuyers in New York City. Since Apartable made its debut in July 2012, the startup has grown to a team of four and has plans to expand its apartment matching platform nationwide.
So how does an entrepreneur build a startup from a simple prototype to an entire platform capable of serving hundreds of thousands of users? Avishai shares Apartable’s startup story and some key takeaways on what fueled his company’s fast growth.
Don’t Be Afraid to Change Your Strategy
Apartable originally began as a way for people to find no-fee rentals in a city where renters generally pay thousands of dollars for the privilege of moving into an apartment. “There’s no other market like it in the country. New York City renters are usually subject to a broker fee equaling anywhere from one month to 15% of a year’s rent. I started Apartable with the idea that it would be the ‘renter’s advocate’ and a way around this issue.”
Avishai quickly realized, however, that the city’s brokers represented a considerable segment of NYC’s rental market. Recognizing there was a lack of consistency in the way apartments were advertised on the web, Apartable shifted its business strategy to one that provided reliable and transparent information about listings. The company also began to partner with brokerages throughout New York City.
“There are a lot of players in our industry, but Apartable gives true and relevant information to renters. Also, lots of property listing sites are geared towards the brokers and frankly, [the brokers] let them do whatever they want. Apartable doesn’t.”
Define What Makes You Stand Out
When creating a startup brand, the company logo, tagline and mission statement are generally where owners start. Fine-tuning the differentiators that address customer pain points, however, is what will help sell to and convince consumers that your brand is both reliable and trustworthy.
Apartable’s differentiators, Avishai points out, are its website tools. These allow users to organize their house hunt and view detailed reports on building complaints and permit violations. “Renters love the violations and complaints. The agents less so, for obvious reasons,” admits Avishai. “For example, when searching listings, users can easily see whether an apartment has an open bed bug complaint, or if the landlord if being sued by the city.”
Apartable’s online platform pulls this information from open data and government records, then cross-references that information with the company’s brokerage and property management database. By providing plenty of detailed, inside information that isn’t readily available in the rental market, Apartable has positioned itself as the property listings website with the inside scoop.
“What makes us stand apart is that we provide accurate listings that are consistently formatted and structured in such a way so users easily see what’s being advertised and who to contact in each ad separately. I think a lot of consumers appreciate that we’re focused on keeping the process really simple, and [that we’re] giving them the tools they need to figure out what they want in an organized fashion.”
Determine How to Generate Cash From Day One
In today’s tech boom, it’s hard not to read about the newest and hottest app that’s raised equity funding stretching into the tens, if not hundreds, of millions of dollars. It’s easy to get caught up in the hype, warns Avishai. Raising loads of money and gaining millions of users is great. But before you start your business, be sure to figure out how your company will generate revenue up front once you open your doors to customers.
“During my early years as an entrepreneur, I wish I would have thought more about how my online businesses were going to make money. The second you roll out your business to customers, you should be able to collect money from them. Unfortunately, it’s an easy thing to forget due to all the hype happening around tech.”
This basic but important lesson stuck with Avishai, who knew from the beginning that Apartable would operate as a subscription business. In spite of that lesson, Apartable didn’t start off charging professional users. It wasn’t until its user base and online traction had reached a critical point that Apartable implemented a charging model based on selling ads and monthly subscriptions to agents and brokers. Today, individual agents—as well as brokerages and property companies—can choose between Apartable’s flexible subscription plans to advertise postings on the site.
As a subscription business, Apartable has successfully created a source of recurring income by charging a nominal fee to real estate professionals looking to advertise to prospective buyers and renters. “Our company was entirely bootstrapped and now it’s funded through our customers.”
Tap Into Industry Networks for Talent and Mentors
For new entrepreneurs, online and offline professional networks can be valuable channels for receiving helpful advice and for hiring technical talent. “AngelList is great for finding not only funding, but also for discovering talented candidates who are looking to join startups. In fact, one of our team members came through AngelList,” states Avishai.
Currently, Apartable is based out of WeWork’s offices in downtown Manhattan. For the Apartable team, the co-working space has been a great opportunity to learn from other startups about hot button topics, such as the fundraising process.
“There are several real estate brokerages that operate out of WeWork’s co-working spaces. We’ve been in touch with a number of them and have even found some deals through those connections. The tech space is generally good for meeting other industry professionals where you can swap tips on getting customers, solving technical problems and running your own business.”