In January of 2016, we set out to improve the real estate buying and selling experience. While embarking on this journey, we uncovered four main issues facing the industry that needed to be resolved:
Poor data quality
Lack of transparency
Inconsistent customer service
Each of these issues presented its own myriad of problems and difficulties. The first two, data and technology, would certainly improve the user experience at a macro level and would have a tremendous long-term impact. The third, lack of transparency, would be solved by finding a way to make the data more useful, by using technology. But, the fourth - improving customer service - was by far the most important and impactful to the end consumer, so that’s where we began.
To understand the underlying problem of inconsistent customer service in real estate, we spent thousands of hours exploring data and identifying case studies, only to arrive at an incredibly simple answer: The purchase or sale of a home is a complex transaction that takes a deep understanding of the anatomy of a deal (e.g. asset level diligence, contractual negotiations, and hyperlocal geographic expertise), for which expertise can only be obtained through years of hands on experience.
Taking this thesis one step further, it was decided that, apart from understanding alone, the “right” service provider, should have proper pricing alignment and incentives, geographic familiarity, home type expertise, and generally relevant transactional experience; in other words, a proven track record. On the opposite end of that spectrum, engaging the wrong service provider for a deal would all but ensure a poor experience (e.g. the inexperienced attorney working on their first co-op deal, or even the Million Dollar Listing agent that doesn’t put their all into the $550,000 deal).
The first year was spent immersing ourselves entirely in the industry, understanding the customer journey, and soliciting feedback to validate our thesis. We surveyed the alternatives in the market that presented 5-star solutions (e.g. Google and Yelp!), preferred provider lists (e.g. Angie’s List and Referral Exchange), and platforms to advertise (e.g, Zillow and Trulia) to confirm that there was no better solution available. We held focus groups and took over 200 meetings to pitch the idea to industry veterans, potential consumers, and investors to solicit feedback.
How it Was Received:
When we first pitched the concept, most people thought we were crazy and moving the industry backwards. They couldn’t understand why we would focus on improving interactions between real estate agents when we could just remove them from the transaction completely. There was so much pushback that we even doubted ourselves.
Shouldn’t you just remove the 6% commission completely?”
“Everyone knows someone in real estate. I already have my people”
“Why wouldn’t I just ask someone?”
“I can’t imagine one possible situation where anyone would ever want to use this.” (my personal favorite).
Thankfully, there were others who knew the industry and saw our vision: that finding the best advisor to help you buy or sell your largest asset, shouldn't be limited to who you know or left to chance (or who calls you the most). And as if someone were trying to tell us something, there were a tons of these, as well:
Building a Team:
In January of 2017, we assembled the best team we could find to build Top Agents - an online platform where users could search, compare and connect with the best real estate agents for their individual needs, based entirely on data. It wasn’t pretty, but it worked. As our product got better, so did our pitch, and our client servicing. We knew we were on to something when the sales team started encountering less objections and our customers were finishing our pitch for us.
Perhaps it was beginner’s luck, or maybe it was the swag (we made amazing hats), but by the first quarter of 2018, we had a concept that was servicing over 400 active buyers and sellers and had worked on more than $85M in closed sales volume - and we hadn’t even finished our product yet.
In building a “backwards technology company” that prioritized client service and relationships first, we were able to understand and deliver on what our clients valued most.
Now as we prepare to grow and scale our services to new cities and more real estate verticals, we are thankful for all of the people who supported us, and even the ones who challenged us. And, while we prepare to gear up for another year in business, we are incredibly excited about the long road ahead, as we continue our journey as Scout.