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Met with first Venture Captialist


By Patrick   Follow   Mon, 11 Feb 2013, 12:31am PST   5,765 views   71 comments   Watch (0)   Share   Quote   Permalink   Like   Dislike  

Thanks to introductions from kind readers, I met with one VC on Thursday and have another meeting on this coming Thursday.

Unfortunately, the best business idea I could come up with was aggregating and selling subscriptions to death, divorce, and bankruptcy data so that buyers can figure out which houses are likely to come on the market soon and get there before the realtors do.

While it's not a bad idea and many people might be willing to pay for that data, the VC pointed out a few practical problems:

* Getting the data from the counties might be hard, even if they are legally obligated to give it since it's all public record.

* Owners who have recently suffered one of those tragic events might not be too happy about people suddenly showing up and making offers on their house.

What do you all think? Is there a better business model I can propose to the next VC? Or a way to solve the two problems above?

I'm grateful for any feedback.

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David Losh   befriend   ignore   Mon, 11 Feb 2013, 11:09am PST   Share   Quote   Like (1)   Dislike     Comment 32

Value Appeal was started by Charlie Walsh after he appealed the tax assessment for his two parking spaces in the condo he bought.

He put together the software to do a comparison of values and now has a working business model that was paid, I think $10 Million by a Venture Capital company, on top of I think it was $2 Million after he started.

If it's something you want to do, and you seem capable, then you can package any kind of information for the public.

Patrick   befriend   ignore   Mon, 11 Feb 2013, 12:15pm PST   Share   Quote   Like (1)   Dislike     Comment 33

Thanks! The nay-sayers are just no fun.

I like the idea of Value Appeal. That guy also aggregates data and helps with forms. It'd love to be able to help buyers that way, with data their agent won't show them, and self-service forms, so that they can press for a lower price on a house and less mortgage debt.

Would be even better if I could start one of those businesses that gets more valuable as more people use it, like Ebay or Craigslist.

Google is actually a public data-entry business too, though most people don't think of it that way. It's zillions of people telling advertisers what to show them, by entering search terms.

Should be some way to do that in real estate...

David Losh   befriend   ignore   Tue, 12 Feb 2013, 12:08am PST   Share   Quote   Like   Dislike     Comment 34

Patrick says

Should be some way to do that in real estate...

No, there isn't.

When I bought my first house you could go to J K Gill and pick up forms to purchase a house. You fill it out contact the agent, contact the owner, and could maybe make a deal.

Today you have redfin who completely screwed up the entire home buying process to swindle as many people as possible.

The founder had a good idea which has been twisted by my very good buddy Glenn Kelman who is called in many circles a snake oil sales person. http://www.crunchbase.com/company/redfin

Today Real Estate is pretty much a lost cause, over run by many Real Estate experts who look at online data as if it will tell them something.

Data gets manipulated all day to fit a broad customer base, rather than the specifics of a home buyers needs. The Case Schiller Index is a prime example.

If you look, all the data is available, but it doesn't mean anything without individual analysis.

You're looking to change a corrupt system that has been made broader based in it's corruption by online data, with online data?

You already mention Ebay, and CraigsList, so how much further can you go?

In addition people are no longer given time to shop.

OK, that's enough reasons why you can't change Real Estate right now, but there are a lot of things you can do to educate the public about house buying, like over all home buying costs.

There is a period of between three to ten days after a buyer signs a deal all the way around, and the end of the inspection period. You could offer a serviced called something like "Second Opinion" that does a detailed anaysis of the home the buyer's finances, the condition of the home, and cost of repair.

I think some sanity is what's needed in the home buying process rather than adjusting what is already in play.

KgK one   befriend   ignore   Tue, 12 Feb 2013, 12:44am PST   Share   Quote   Like   Dislike     Comment 35

Hi Patrick, What stops VC from taking your idea and going with it. What measure did you take to prevent him from stealing it.

You have already posted it on site so there not much secrecy for now but, what can be done to prevent people from stealing ideas.

Patrick   befriend   ignore   Tue, 12 Feb 2013, 12:45am PST   Share   Quote   Like   Dislike     Comment 36

David Losh says

There is a period of between three to ten days after a buyer signs a deal all the way around, and the end of the inspection period. You could offer a serviced called something like "Second Opinion" that does a detailed anaysis of the home the buyer's finances, the condition of the home, and cost of repair.

I like that! It's original and I don't think anyone is doing it. Hard to scale though, since it requires lots of individual work for each house. So how could I do it, being just me? I'd have to hire someone like you, but then why would you work with me?

Data is definitely good though. I wouldn't say the system has been "corrupted" by data in any way. It's corrupted by the commission system, NAR bribes to legislators, and the infestation of every DRE with realtors, who are about as far from unbiased public servants as you can get.

In my ideal world, I'd be able to easily look up:

* Every offer
* Every sale, including all short sales, probate, foreclosures
* Every recent death, divorce, bankruptcy, mortgage default

I'd be able to get it inspected, calculate what I can afford, and calculate the value of the house based on the inspection, all with a minimum of clicks and data entry work.

Then I'd be able to make an offer with standardized online forms legal in that jurisdiction and close without any garbage fees.

Patrick   befriend   ignore   Tue, 12 Feb 2013, 12:46am PST   Share   Quote   Like   Dislike     Comment 37

KgK one says

what can be done to prevent people from stealing ideas.

Nothing, but a good idea is not as valuable as you might think. There are more good ideas than there are competent and dedicated people to execute on them.

David Losh   befriend   ignore   Tue, 12 Feb 2013, 1:13am PST   Share   Quote   Like   Dislike     Comment 38

What I'm saying is that the redfin business model is set in stone. You can mimic it, but it isn't of any benefit to the consumer, as a matter of fact is corrupts the system of Real Estate Agency by putting the burden of the purchase on the buyer.

Real Estate Agency isn't a bad thing, it used to be a good thing. You paid agents who knew where the properties were.

Real Estate agents used to work. Real Estate agents used to hit the pavement, knock on doors, talk to people. You are just trying to duplicate an arm chair property search that any Real Estate agent can do today.

Real Estate agents don't need to know anything because they are following your business model here. They look at the computer all day every day looking for an angle, or have one already.

The buyer in the mean time is on thier own.

There is no agency in what you are proposing, there is no one in the buyer's corner. That's the problem that needs to be solved.

Where will the buyer get the individual support they need?

David9   befriend   ignore   Tue, 12 Feb 2013, 1:42am PST   Share   Quote   Like   Dislike     Comment 39

Patrick says

Nothing, but a good idea is not as valuable as you might think.

Not true. Create a tailored non-disclosure agreement. If anyone does not want to sign, run.

http://hyraip.com/2009/11/three-step-invention-protection-plan/

http://www.nolo.com/legal-encyclopedia/how-protect-invention-when-pitching-30208.html

FortWayne   befriend   ignore   Tue, 12 Feb 2013, 2:20am PST   Share   Quote   Like (1)   Dislike (1)     Comment 40

I personally like the idea for sale by owner. If you can get enough people to your site where they can discuss and chat, while on a side there is for sale by owner it makes sense. Not having to give up 3% to 6% of your property value would be nice. And I know I'll try to sell FSBO when we'll try to sell our place.

The rest would be just spending advertising dollars and getting more folks to your website to both search and sell.

FortWayne   befriend   ignore   Tue, 12 Feb 2013, 2:23am PST   Share   Quote   Like   Dislike (1)     Comment 41

David Losh says

Value Appeal was started by Charlie Walsh after he appealed the tax assessment for his two parking spaces in the condo he bought.

He put together the software to do a comparison of values and now has a working business model that was paid, I think $10 Million by a Venture Capital company, on top of I think it was $2 Million after he started.

If it's something you want to do, and you seem capable, then you can package any kind of information for the public.

I'd pay for a service that would reduce my property taxes. Hell, anyone would if it pencils out.

David9   befriend   ignore   Tue, 12 Feb 2013, 2:24am PST   Share   Quote   Like   Dislike     Comment 42

KarlRoveIsScum says

I got news for you

In a way we are on the same page. Someone with means will likely start licking their chops at an unmarketed business idea from an unknown. (No disrespect, but imo, someone with a job is an unknown.)

Back to my mid 1990's story with the Venture Capitalist, at first he was so nice, so charming, so helpful at how to find just the right listings he could flip. Agree, I thought of suing the guy at the time, it would have taken much money and effort to uncover his trail of the properties purchased with my licensed help.

David Losh   befriend   ignore   Tue, 12 Feb 2013, 3:34am PST   Share   Quote   Like   Dislike     Comment 43

KarlRoveIsScum says

MAJOR!

KarlRoveIsScum says

It is in use today making millions $$$$

Funny, but all your comments are pretty funny.

You would have to ramp up first, and either sell the concept or they would have to duplicate it. No one is interested in duplication today.

You have a mish mask of misinformation in your comments that isn't worth sorting out.

Biff Baxter   befriend   ignore   Tue, 12 Feb 2013, 4:16am PST   Share   Quote   Like (4)   Dislike     Comment 44

KarlRoveIsScum says

Do you not read what I post?

Does anybody?

Biff

Biff Baxter   befriend   ignore   Tue, 12 Feb 2013, 4:17am PST   Share   Quote   Like   Dislike     Comment 45

KarlRoveIsScum says

Do you have any knowledge of managing data? Maintaining it and updating
it?

Oh my gosh! No I do not. Do you know someone who does? I would surely pay them to help me. I need to hire them immediately. To bad nobody on this site is trying to cram that down my throat.

Biff

Biff Baxter   befriend   ignore   Tue, 12 Feb 2013, 4:19am PST   Share   Quote   Like (1)   Dislike     Comment 46

KarlRoveIsScum says

I got news for you , you could have an iron clad mutual non-disclosure, if
you do not have the attorneys and finances to back it up they are not worth the
paper they are printed on.

KarlRoveIsScum you should not be giving this information away for free. Seriously, stop it.

Biff

Biff Baxter   befriend   ignore   Tue, 12 Feb 2013, 4:20am PST   Share   Quote   Like   Dislike     Comment 47

KarlRoveIsScum says

Stop arguing with me, I have been doing this for over a decade.

If I am reading this correctly, KarlRoveIsScum seems to have some experience in this area.

Biff

David Losh   befriend   ignore   Tue, 12 Feb 2013, 4:24am PST   Share   Quote   Like   Dislike     Comment 48

KarlRoveIsScum says

Yes I created an API for aggregating every shopping site on the net to be used for b2b

company name?

Patrick   befriend   ignore   Tue, 12 Feb 2013, 4:42am PST   Share   Quote   Like (1)   Dislike     Comment 49

David Losh says

There is no agency in what you are proposing, there is no one in the buyer's corner. That's the problem that needs to be solved.

Where will the buyer get the individual support they need?

They sure are not getting it from commission-based agents.

David9 says

Create a tailored non-disclosure agreement. If anyone does not want to sign, run.

VC's never sign NDAs from what I've been told.

KarlRoveIsScum says

As I have explained you cannot do mailers to people who's finances are in securities, you may not contact foreclosures by mail, late payments by mail, and certainly you will have no phones which you will also not be able to do.

You'd be more believable if:

1. You showed some evidence.
2. You could construct a coherent sentence. You wrote "who's" where you mean "whose", for example. And what does "in securities" mean? And "you will have no phones which you will also not be able to do" is just not close to grammatically correct.

David Losh says

What I'm saying is that the redfin business model is set in stone. You can mimic it...

Why do you think I want to mimic Redfin in any way? They are just part of the same old commissions game. I don't want to be like Redfin at all.

What I want to do is find some scalable business model that really helps buyers. You can read "armchair" or "automated" for scalable if you like.

Maybe I should just write an investment newsletter and sell subscriptions to that.

David9   befriend   ignore   Tue, 12 Feb 2013, 4:50am PST   Share   Quote   Like   Dislike (1)     Comment 50

Patrick says

VC's never sign NDAs from what I've been told.

Well, that might explain these 63 reported Venture Capital Scams as recent as 2/9/13:

http://www.ripoffreport.com/directory/venture-capital.aspx

FortWayne   befriend   ignore   Tue, 12 Feb 2013, 5:33am PST   Share   Quote   Like   Dislike (1)     Comment 51

Biff Baxter says

KarlRoveIsScum says

I got news for you , you could have an iron clad mutual non-disclosure, if

you do not have the attorneys and finances to back it up they are not worth the

paper they are printed on.

KarlRoveIsScum you should not be giving this information away for free. Seriously, stop it.

Biff

I wouldn't be surprised if even Patrick had this Karl the troll on ignore too.

Biff Baxter   befriend   ignore   Tue, 12 Feb 2013, 5:44am PST   Share   Quote   Like   Dislike     Comment 52

KarlRoveIsScum says

yes I am a GENIUS


My api can aggregate every shopping site, they offer 12.

Hey genius. Your terminology isn't even right. Software would be used to aggregate shopping sites. This software would hopefully but not necessarily have an API.

You don't drive to town with a car door. You drive to town in a car that happens to have a door.

What I really want to know is if you are typing with your feet. I know the jacket prevents you from typing with your fingers.

Biff

David Losh   befriend   ignore   Tue, 12 Feb 2013, 6:52am PST   Share   Quote   Like   Dislike     Comment 53

Patrick says

Why do you think I want to mimic Redfin in any way?

Because it is the new industry standard to let the buyer swing in the wind while commissions get sliced, and diced for market share.

Let me also be clear that redfin is a data collection site that people willing sign up for, and participate in.

They have a lot of avenues of monetization.

redfin represents a problem that needs a solution.

You're not offering solutions.

drew_eckhardt   befriend   ignore   Tue, 12 Feb 2013, 10:56am PST   Share   Quote   Like (1)   Dislike     Comment 54

David9 says

Patrick says

Nothing, but a good idea is not as valuable as you might think.

Not true. Create a tailored non-disclosure agreement. If anyone does not want to sign, run.

Viable startup ideas come from the confluence of problems shared by enough people without adequate solutions, the potential for exponential commercial growth (VCs need 1000% winning returns to offset the median near total loss), technology to solve those problems becoming abundant and inexpensive enough, and people who can solve those problems being or becoming aware of them.

Other people experiencing the same confluence will have come to the same conclusion. At least two other people independently arrived at something like Google's pagerank at the same time and cared enough to document it where the confluence was web search sucks, affordable fast internet was available for the masses and spreading like wildfire, computers and network bandwidth were cheap and abundant, and computer scientists were already ranking papers based on how often they were cited.

VCs know this, may have other portfolio companies working on the same problem, and may invest in such companies in a following round so most won't sign an NDA.

Paul Graham comments
The cult of the NDA

That said startup failure and success are almost entirely about how well you execute (design, implement, market, sell, and iterate when you're wrong or expanding your market).

thomaswong.1986   befriend   ignore   Tue, 12 Feb 2013, 11:06am PST   Share   Quote   Like (1)   Dislike (1)     Comment 55

Patrick says

David9 says

Create a tailored non-disclosure agreement. If anyone does not want to sign, run.

VC's never sign NDAs from what I've been told.

NDA... worthless! show one instance where someone was sued for violating a NDA
in SV. Had such been true and enforceable, we would never seen small new companies being created from former large tech firms. One of the reasons we had such a boom in SV
back in the 70s - 90s.

Frankly such pieces of paper are just filed away and forgotten.

Blurtman   befriend   ignore   Tue, 12 Feb 2013, 11:11am PST   Share   Quote   Like   Dislike     Comment 56

Go with porn, a proven winner.

Patrick   befriend   ignore   Tue, 12 Feb 2013, 11:21am PST   Share   Quote   Like   Dislike     Comment 57

Blurtman says

Go with porn, a proven winner.

Porn production costs are high. Higher than I can pay anyway.

What about porn reviews? People might pay just to follow links right to the best porn.

Blurtman   befriend   ignore   Tue, 12 Feb 2013, 11:52am PST   Share   Quote   Like   Dislike     Comment 58

I've never looked at a porn review. And of course, I have never viewed porn.

JodyChunder   befriend   ignore   Tue, 12 Feb 2013, 11:57am PST   Share   Quote   Like (1)   Dislike     Comment 59

Blurtman says

And of course, I have never viewed porn.

Heh Even if that were true, you wouldn't be missing much. A lot of that stuff is so unsubtle as to make a man turn monastic.

drew_eckhardt   befriend   ignore   Tue, 12 Feb 2013, 3:01pm PST   Share   Quote