Flip Columbia 2015

Flip is the best way to pass on

leases with landlord satisfaction

signup at hiflip.com

5 interview with brokerage firms

3 interviews with property managers

11 interviews with residential landlords

3 interviews with commercial landlords

54 interviews with residential renters

12 interviews with commercial renters

4 interviews with interior designers

Susannah Vila (MBA)Parthiban Loganathan (CS)

Lakshna Jha (EMBA)ZeLun Gu (Financial Engineering)

24 interviews from before

68 interviews this week

13 interviews yesterday

92 interviews total

What is Flip?

www?A lease is an asset. When you move, you should get some value from it.

Flip is a marketplace for property rental leases. It connects people leaving

their leases with people who want to get on a new lease. We’re

resegmenting the market.

Why are we different?

Flip goes farther upstream to get inventory than anything else out there now. Renters browse apartments before the leases are terminated, see how they’re connected socially to each and can get their name on a new lease with the press of a button and a flat fee. Landlords can ensure equally qualified tenants using our renter profile data.

Flip’s core premise remains the same - we make breaking leases easy

But we had to:● narrow our customer segments● discover value proposition for each (especially landlords)● what we had to do to facilitate onboarding of all customers● understand the fee structure they would be willing to pay

Landlords?

Key Partners

Property

Management

Companies

Landlords

Editorials/Blogs

ISPs/television/home

utilities providers

Key Activities

Develop relationships

with landlords, property

managers and lease

agents

Post new inventory on

Flip in addition to

regular channels

Value Proposition

Lookers:

Early access to housing before

it’s available on the market

Leavers & Landlords:

Free service to find replacement

tenants

Leavers:

Ability to move to better

apartments by passing on

existing lease and to earn money

from their lease

Landlords:

Free service to find tenants

No need for brokerages

Lower vacancy rates

Customer Segments

Multi-sided market:

People looking to rent apartments

and looking to pass on leases.

Millennials age 20-35

Landlords

Revenue Streams

Flat fees for lookers moving in

Rush fees for leavers/landlords

Styling fees for leavers/landlords (discounts with

partnerships)

Small % fees from transaction between lookers and

leavers?

Cost Structure

Cost driven

Variable Costs:

Getting listings, acquisition costs via online advertising,

admin services, credit check

Initial Fixed Costs: MVP development

Channels

Scrape existing listings on craigslist, StreetEasy

Reach out via partnerships with property management companies

Content Marketing via Influencers, lifestyle & design blogs

Social Networks

Promotional Partnerships

Paid Marketing

Key Resources

Flip app on iOS,

Android and Web

Partnerships to

onboard

landlords/leavers

ASAP

Eventual network

effect

Customer Relationships

Personal Assistance:

Flipmates

Followups for customers on

lease expiration (lowers acq.

costs)

Self-Service

Communities: Social

Networks

Day 1

Started with broad

customer base and vague

idea of value and pricing

Progress this week

Day 1 Days 2-4 Day 5

Started with general

idea of 2 customer

segments: lease

breakers and renters

Unsure of value to

landlords, best

distribution channel,

pricing, etc.

Discovered value we could

add for landlords through

renter profiles and data-

packages

Discovered the potential of

the commercial market

Finalized feature set for MVP

(beyond we’ve already built)

Identified all customer segments

and value proposition for each

Validated that customers would

pay for our premium services

Some short term goals we set

1. Understand the business better - the lease

breaking process, the workflow, the pain points

2. Explore the viability of the commercial market

3. Figure out what data landlords use to determine

how good a tenant is

Day 1 - We started learning about what

matters to landlords

Discovery Insight for product-market fit

Landlords who would use Flip have millennial tenants in

urban areas that move frequently due to career changes

or for better value apartments

Initially focus on growing Flip in cities with large under 30

population, especially ones with lots of universities,

because its hard to move units in school year.

Landlords want incoming tenants to be at least as good

as the outgoing one and care about this more than

lowering vacancy rates

Build renter profiles using machine learning to

provide them with data-driven packages on renters that

they’re not getting elsewhere and market to smaller,

more time-strapped landlords

Retail lease breakers are potentially a huge market Explore this through interviews, but probably market time

and money saving to younger, early adopter and

smaller-scale retail tenants

Key Partners

Companies who provide

SaaS to landlords and

property mgmt

companies (Pitch that

we’d be providing a

complementary service)


utilities/interior

design/moving/ other

service providers for

renters (Lead gen)

Value Proposition

Landlords:

-Social recs and recs from good

current tenants

- Service to manage new tenant

sign-ons and spend less time on

admin tasks

- Richer data on tenants to

determine trustworthiness

- Data on demand across

different apartments

Leavers:

Find replacement tenant and

earn money when breaking a

lease

Lookers

- Early access to housing before


- Social - Ability to see if friends

have leases ending soon

- Service that a broker provides

at cheaper flat rate

Customer Segments

Landlords:

Small (less than 1000) residential

landlords with millennial demographic

Retail and commercial landlords with

less than 500 units

Leavers:

Renters under age 30 who are

moving out suddenly (due to

job/school/personal preferences)

looking to pass on their lease

Commercial Renters looking to pass

on leases

Younger, early adopter retail

renters/small businesses looking to

pass on leases

Lookers:

Time-strapped, price insensitive

millennial urban residential renters

who want to get on a new lease

Revenue Streams

Flat fees for lookers moving in


Styling fees for leavers/landlords (discounts

with partnerships)

Cost Structure

Flipmates for admin services: $15/hr

Acquisition costs: $6/looker, $20/leaver

Credit check costs: $12/renter

Software Engineers for app and data platform

Channels

-Scrape and filter existing

listings on craigslist,

StreetEasy

-Content Marketing via

Influencers, lifestyle &

design blogs

-Social Networks

-Promotional Partnerships

-Paid Marketing


Meet landlords/prop mgrs

through tenants who want

to Flip


Flipmates or Self-Service

Key Resources

- Flip app on iOS,

Android and Web

- Partnerships to

onboard

landlords/leavers

- Tenant profile and

analytics platform for

landlords

- Eventual network

effect

Key Activities

Develop relationships

with landlords, property

managers and lease

agents

Content partnerships

and designer

partnerships; consumer

marketing

Days 2-4

Getting there...

Customer Segment Value Proposition

Residential Landlords

● small number of units

● residential local landlords in urban centers like

SF, NY, LA, etc.

● renting to under 30 market

● willing to pay for admin work

● especially if they pay brokers

● allow lease breaks if given a replacement

● Renter activity generates useful data for landlords about i) renters’ profiles (Credit and income plus proprietary data) to help them choose the best tenants and ii) differential demand to help them choose the best price

● Administrative tasks through Flipmates and escrow payments - save time and money

Residential Leavers

● under 30

● move frequently (under 2 yrs) for new

jobs/college/better fit apartments

● looking to replace their lease

● find a better apartment that fits their new lifestyle● spend minutes instead of days finding someone to replace them

and can earn money for their lease

Lookers

● looking for apartments to move into both

passively (5+ months in advance) and actively

● want to avoid brokers

● willing to pay low fees for paperwork

● access apartments before they’re on the market

● avoid broker fees (in NYC)

● get the place you want with the press of a button (on-demand

services from Flipmates) for flat fee

● social: see where friends and friends of friends live

Who are our customers and how do we help?

Customer Segment Value Proposition

Commercial Landlords● commercial local landlords in urban centers like

SF, NY, LA, etc.

● renting to younger business owners who run

retail stores that want better location or small

businesses that care less about location and

more about lower rent

● allow lease breaks if given a high quality

replacement

● make it easy to find high quality tenants

● provide them with business profiles with data on

owner credit history, revenue, assets,

operational history and specified use for the

space (eg - lease must go to a video game

store)

Commercial Leavers● retail stores which want to move to a location

that offers a competitive advantage for their

business

● small businesses who care more about rent

than location

● looking to replace their lease

● find a better location that fits their business

● make it easy to find replacement tenants that

their landlord likes

We Found New Customers!

Unresolved issue: commercial landlords love brokers

Customer Profiles

Ambitious Annie Hardworking Harry Busy Becky

Annie has lived in 3 cities since finishing

college 4 years ago. She’s been in New

York working for the a digital agency, but

just got her dream job working on digital for

the White House. She loves her one bed in

Prospect Heights and hates to leave the

landlord, who only owns three buildings, in a

lurch.

Harry owns 3 buildings in Greenpoint, a

neighborhood with strong historical/cultural

roots but a lot of new, younger inhabitants.

He wants to spend as little time as possible

finding tenants so he work on his life-calling

- a novel - but also needs to people with

good credit scores who won’t trash the

place or upset any neighbors. He thinks that

referrals from current, good tenants is the

easiest and best way to fill vacancies

Becky is getting kicked out of her place in

the Mission in 3 months when the building

gets turned to condos. She needs to find

somewhere new in that time. She wants lots

of space and can afford it. She has no time

to find a new place, though, and brokers

said they didn’t have any early access to

offer her.

Currently pays: 0-50 to post the vacancy

herself; 0-20 hours of time working her

social networks and managing craigslist

responses to find a replacement

Currently pays: One month rent of a broker

fee in slow-moving micro-markets or 0 in

fast-moving markets. ~20 hours of time

posting and culling tenants himself if he

doesn’t use a broker.

Currently pays:

opportunity cost - she could be spending the

weekend working on her side projects

Key Partners

Companies who provide

SaaS to landlords and

property mgmt

companies (Pitch that

we’d be providing a

complementary service)

Landlords/mgrs send us

leasebreakers


utilities/interior

design/moving/ other

service providers

sweeten deal for

leaseholders

Interior Design Blogs

build awareness about

Flip

Value Proposition

Landlords:

-Social recs and recs from good

current tenants

- Service to manage new tenant

sign-ons and spend less time on

admin tasks

- Richer data on tenants to

determine trustworthiness

- Data on demand across

different apartments

Leavers:

Find replacement tenant and

earn money when breaking a

lease

Lookers

- Early access to housing before


- Social - Ability to see if friends

have leases ending soon

- Service that a broker provides

at cheaper flat rate

Customer Segments

Landlords:

Small (less than 1000) residential

landlords with millennial demographic

Retail and commercial landlords with

less than 500 units

Leavers:

Renters under age 30 who are

moving out suddenly (due to

job/school/personal preferences)

looking to pass on their lease

Younger, early adopter retail

renters/small businesses looking to

pass on leases

Lookers:

Time-strapped, price insensitive

millennial urban residential renters

who want to get on a new lease

Revenue Streams

Flat fees for lookers moving who request

service


Styling fees for leavers/landlords (discounts

with partnerships)

Referral fees for moving companies, etc.

Cost Structure

Flipmates for admin services: $15/hr

Acquisition costs: $6/looker, $20/leaver

Credit check costs: $12/renter

Software Engineers for app and data platform

Channels

-Content Marketing via

Influencers, lifestyle &

design blogs

-Social Networks

-Promotional Partnerships

-Paid Marketing


Meet landlords/prop mgrs

through tenants who want

to Flip


Flipmates or Self-Service

Key Resources

- Flip app on iOS,

Android

- Partnerships to

onboard customers

- “Flipmates”

- Tenant profiles w/

data

-Relationships with

landlords, mgrs

- Eventual network

effect

Key Activities

Build app and platform

Get lease breakers to

share their leases

Get searchers browsing

Build relationships with

partners

Day 5

We ended up here

Millennials like Annie and Becky want experiences that are social, mobile-

first and convenient.

● For Millennials, the definition of expert isn't a professional, its a peer or a close friend with first

hand experience. Recommendations about the best neighborhoods and buildings to live are

more valuable if they are social than if they come from a real estate brokerage.

● Millennials overwhelmingly agree (47 percent versus 28 percent) that their lives feel richer

when they’re connected to people through social media. However there's still no way let your

friends "like" where you live, and vice versa.

● Millennials will pay a premium for speed, ease, efficiency and convenience in all their

transactions and prefer to discover new products on their mobile device. They have an app on

their phone to get anything on demand, and real estate should be no different.

Source: "The Millennial Consumer, Debunking Stereotypes," Boston Consulting Group, 2014

We verified how our customers want to be

reached

Focus on bringing demand side into the top of the funnel at a profitable cost.

Simultaneously, create supply with a combination of low competition, long tail SEM keywords, promotions and biz dev.

Channels and Get Strategy

Results this week

Over 40 signups on website in the past week (organic growth)

Our first 2 true conversions yesterday(even though we have no inventory):● 1 lease breaker gave us till June to find a replacement ● 1 lease breaker asked us to find her replacement

immediately

Moving forward

1. Acquire initial inventory through targeted ads, SEO, partnerships with property managers and possibly with listing aggregators (coopetition?)

2. Get better estimate of residential and (especially) commercial market size and see how much Flip can facilitate the growth of the market for lease breakers

3. Build out the product for other platforms: web, Android, data tools for tenant profiles

4. Figure out how to reach out to retail landlords or if its necessary (maybe we can just market to retail renters

MVP iOS app is built and ready. Currently supports:● Apartment search, browse & listing● Requests for on demand service● Social

Demos have been received favorably

Android and web platform to be developed

Data analytics and tenant profiling platform will be built out in the future after building up data from Flip users

Our product and its future

Thank you!

Sign up at at hiflip.com

for updates on our official release

Things that Flip makes

happen that don’t happen now

Broker blast

Owner/Mgr.

Listing

aggregatorand/or

Renter C.

Flip

Renter B.

Renter A.

at t = 0

Renter A.

at t = 1

Renter A.

at t = 2

necessary

possible

$119

2-10% 1 month rent

Reflects lifecycle of

lease

Appendix A: How it Works

10% 1 month rent

Appendix B: Market

Opportunity

43M renters

Source: National Multifamily Housing Council

43.4M households rent

11.2M under 30

5.6M

moving

this

year

$560,791,000 TAM

assuming single $100 fee

Initial pilot

segment 1.5

M in NY,

LA, Boston

SF

$150M TAM

3.65M

impressions

Another measure: Search

trends

Assumes .5%

CTR

TAM: 365M

SAM: 2.1M

18K

Residential real estate

Listing

aggregators

Data

Possible Acquirer

Partner

SaaS

Appendix C: Competitive

Landscape

Goods sold: 30$ (Average of AC through paid marketing and biz dev)

AC for a renter (demand): max $10, CLV is 20

Margins are significantly higher for leasebreakers with urgency

Cost of services provided: Flipmates: 15$ an hour, credit checks ~12$

Appendix D: Financial Projections

Flip Columbia 2015

Education

Transcript of Flip Columbia 2015