Last week I had an email correspondence with David Whitworth, MBA 2006. Whitworth is living in Austin, Texas and giving the Internet venture a go. Small Planet Guide is essentially an apartment-finder site. When I spoke to Whitworth last year about the concept, he had some pretty interesting Web 2.0 user-gen content features planned. For example, David talked about the ability to overlay user-generated reviews of neighborhood amenities or expert-user-generated descriptions of the neighborhood over a map of available apartments. The core scenario would be to find an apartment not just based on things like number of bedrooms and rent or other "Web 1.0" static attributes like "Basketball Court" or "Swimming Pool" but also based on user-generated content like reviews of the cafe nearby or descriptions of the block. I don't currently see any of those Web 2.0 features on there yet, but maybe they're in the works.
Tell me a little bit about smallplanetguide.com. When and how did you first concieve of the business and how did you go about getting it off the ground? What opportunity did you identify that made you want to get out there and start a business? Who are you working with now (esp. other McCombs people).
The first conception of the idea came about when I was first looking for Austin apartments back in 2004 after getting accepted into the MBA program. The idea has morphed throughout the last two years and is continuing to change on a regular basis as I learn more. I spent my two years at McCombs doing market research and started building the website during my second year. I used a local web development firm to help me design and implement the website in its basic form. And using the help of friend who graduated my first year, we built some functionality designed for the apartment managers. We have since trashed that program because we decided to switch from ASP.NET technology using MS SQL database to PHP using mySQL because future development would be much cheaper.
Right now I am alone but my friend who graduated in 2005 is helping me out for free when he has any free time.
Why software and why internet software?
My passion is utilizing technology to make things more efficient and I also like Real Estate. And since the majority of searchers for Real Estate are using the internet nowadays to begin their search, it was a clear choice. Plus the Real Estate industry has been slow to adopt technology so there were ample opportunities available.
How's business?
Business has been slow in regards to signing up apartments but traffic has been growing tremendously. We had almost 20,000 visitors and over 90,000 page views in the month of January. The apartments have been harder because it was much more of relationship business than I anticipated along with poor timing because of the high occupancy rates and thus less demand to advertise.
What is your target market? Why did you choose it?
To talk about marketing strategy for this business is hard because it is a two-fold strategy. There is marketing for the users and there is marketing to apartments. This has made it difficult in regards to product development as well…because some product features I would like to have would not be well liked by the apartment managers who are in fact my customers since they are the ones paying. My target market for users has been people moving here and who are not familiar with Austin Texas and need more help than just a list of apartments. For instance, users can find out about what Downtown Austin is like as well as other Austin neighborhoods in addition to finding listings for apartments. The target market also tends to be young professionals or graduate students who are moving to Austin for a job or school.
Since our goal is to have every apartment listed, it is hard to say we have a “target” market but many of those apartments will be free listings. Those apartments who are willing and able to pay ad dollars tend to be the large managed properties however we are looking for ways to monetize the listings from the smaller communities and individually owned condos and apartments. But I will have to develop our product a little more before we can try and do that.
What is the competitive landscape like and how do you stack up?
The competitive landscape is tough. There are competitors everywhere you look. But the good thing is that all of them are either too fragmented and or have far superior products for the users so I think they will be easy to steal away from. However convincing the apartment managers to test a new service has been harder than anticipated because they like to work with those people and services they are already familiar with.
Do you have a collaborator/partner strategy?
I have considered a partner strategy in order to monetize my business model that includes free listings but have not pursued it as of yet.
How are you promoting?
Promoting the site has mainly been done by Search Engine Optimization. And I have made great progress in that is a very short time. It usually takes 6 to 12 months just to get noticed by the search engines but I have been indexed and partially optimized in less than 6 months. I am still trying to improve my visibility on the search engines but as of today, we are in the top 10 for Yahoo and MSN and top 15 for Google with the keywords Austin Apartments. The majority of our traffic is coming from the long tail searches where we rank well. I also am the sole provider of apartment search on 60+ kiosks in local Austin hotels. I plan on advertising in the local newspapers in the future as well as looking for referrals from local businesses and Universities.
What is your pricing model? Is it reactive or is there a pricing strategy?
My pricing model has been largely reactive because I have been trying to be competitive and also think that current pricing has to come down as technology improves…much like in the Real Estate market with homes where I see commissions coming down.
How are you financed now? Will that change any time soon?
I am financing myself through credit cards and my IRA. It won’t change soon until I can hope to bootstrap my growth with future revenues. However, I may need to look for Venture funding if I decide to move more quickly to new markets than I originally anticipated.
Related to Q3 - is there a deal out there that would entice you to sell all or part of your company either for a big payout for you or to finance growth?
There are no deals pending.
Describe how your MBA degree has helped you in your current enterprise. What skills has it given you? Favorite class that has helped? Favorite professor that has helped? Etc.
My MBA allowed me the time to do some market research before launching the business. The marketing skills I learned in the Core Marketing and Strategic Marketing has helped me formulate a marketing strategy. And the New Venture Creation class really helped me formulate my idea into something more real. My favorite professor was John Doggett because he really helped me stay focused on the pain of the customer and didn’t stand for taking the easy way out. I took his Opportunity Identification class my first year.
The S|M Take
I think David Whitworth has entered a pretty competitive space with low barrier to entry. Right now he is focusing mainly on promotion (i.e. SEO optimization) to compete while trying to build a critical mass of apartments/managers. To whit, I just googled "Austin Apartments" and SPG did come up on the first page. However, SPG fared slightly worse with "Apartments in Austin", coming up on the second page.
I think the web application in and of itself, although more visually appealing than most out there (IMHO), offers no competitive advantage until Whitworth can incorporate some more advanced features (like the amenities overlay, which I think sounds really useful). I think the user content idea is a good one (other sites like ApartmentRatings.com have similar features) if he can implement it. However that's also tough because a critical mass of ratings is required for users to find the data compelling.
Also, as he mentioned, some features that may drive apartment seekers in certain directions may not be appreciated by the paying customers -- the aparments/managers. This is a classic dillema for any company that charges sellers to list their product while allowing customers to possibly review those products!
All-in-all I'd say that Small Planet Guide is a good-looking website in a crowded space. If you're looking for an apartment in Austin try out www.smallplanetguide.com.
Last week I had a had the opportunity to meet and chat with Daniel Nelson (TEMBA 2006), CEO of Texas MOOT Corp. winning software start-up, Phurnace Software. Nelson started Phurnace with business partner Robert Reeves about a year and a half ago after finding that he simply was not interested in any of the employment opportunities available at the time.
Recent Comments