Sales & Marketing Strategy Steak

Sales & Marketing Strategy Steak

New customers would need to be attracted on both sides of our two-sided marketplace, which Chris Dixon said in our class session that they are some of the hardest types of ventures to start. He commented that social networks or search engines were already around and would be around no matter who ended up being the dominant player or providing the best version of such a platform. Marketplaces, however, may simply NOT exist because they may not hit critical mass, which is necessary for a marketplace to truly grow and be lasting.

Network effects are a huge part of creating such an effective marketplace, so we would want to reach critical mass within a cluster. With a cluster being a small subset of the greater population that may use this marketplace, it is much easier to achieve critical mass when the area has been minimized. For instance, Yelp was successful because they focused not only on the San Francisco area but also limited it to the bars and restaurants within the city. Facebook did the same thing with Harvard, moving on to Ivy Leagues, to colleges and universities and then opened it up to the masses.

We would strategically go after a sub-cluster, such as Los Angeles, where I am from and have experience with the local real estate investors and property managers, and work to get as many of the smaller RE investors and property managers signed up to the platform. The chicken and egg problem becomes an issues, but we would focus on working with the property-managers first, getting them to commit to offering their services if we provided them with a cohort of a certain total number of units that met their liking. Then we could at least list what services could be provided to the investors and at which pricing, if they were to sign up to our platform and join a local cohort. Because the industry is so fragmented on both sides, it would require tactics that are on the ground and go to the investor roundtables and networking events. Partnering with real estate agents and brokers could also be advantageous, and we would work to provide them with incentives that would pique their interest enough to get involved. For instance, we could waive our cut of the fee to these agents and they could be listed on their as a property manager (since many agents also double as property managers for stable income in addition to the variable commissions they earn from selling or buying a property for a client). We could pitch it to them as a way for them to build closer relationships with current owners of properties, and these relationships may lead to them being the agent for such clients when they are ready to sell. Speaking from experience, this is exactly what happened when I built a relationship with my 2nd property manager (after getting rid of my first one who was of low quality and unreliable). My new property manager happened to also be an agent, and I used his services to sell the property when I was ready to do so, about 18 months after he began managing the 4plex for me.

Once we get agents to sign up as PMs (through the incentive), then I believe we could start to gain traction with some smaller RE investors in the areas of Long Beach/Los Angeles. From there, we can get traditional PMs to also sign-up once we have success stories to share of other managers getting business from these marketplace. One last partnership that we would consider, but may be a stretch, is to work with local private wealth managers that work at banks or have private practices in the area. Again, speaking from experience as an ex-financial advisor, many of these clients are small business owners and real estate investors, especially in Southern California of all places. I personally learned a lot about real estate investing from my previous clients and would get referrals from them for contractors and property management services. I have some friends who are advisors and wealth managers, and would start with them and move from there to see what other partnerships could be established. The benefit for them would be added services to their clients and we would also provide them with opportunities to meet the RE investors who come to our platform and may be looking for advisory services or relationships with banks for financing (an important element within the RE investing value chain).