Pet Project or Full-Time Hustle? One Startup’s Story

0
16
Pet Project or Full-Time Hustle? One Startup’s Story
Pet Project or Full Time Hustle One Startup’s Story


My name is Steven Wynands and I’m the co-founder and CEO of Peer Reputation. Over 60,000 real estate agents and brokers use our platform to discover and leverage their professional relationships. This is my personal reflection on what happened over our first 12 months that finally gave me the courage to believe in myself and pursue this project full-time. I hope you find it interesting and that it helps you if you’re going through the same decision. 

Facing The Big Decision

I never thought I’d find myself in this position. Saddled with student loans, credit cards, a mortgage, and childcare for two, it would be very irresponsible for me to leave my cushy, government job to pursue my own startup ambitions. I tried to delay this decision as long as possible. I sacrificed sleep so that I could be there for my family and deliver everything my job expected of me. Wishfully, I hoped that the universe would take care of it for me by turning the startup into an overnight success or burying it to the ground. Neither of those things happened, but I did get plenty of signs that helped me make a decision.

Getting Inspired (Again)

I was just one year removed from an unsuccessful real estate startup that spanned two years. I had no intention of jumping into another project, but one afternoon of phone calls changed everything. The first phone call was from a buyer’s agent whose clients were interested in one of my listings. Her call made me uneasy and I wanted to protect my sellers so I made a few more calls of my own. 

I reached out to other listing agents who had recently worked with this buyer agent and was surprised by the responses. I wasn’t connected to these other agents in any way yet they openly shared detailed warnings with me about working with this buyer’s agent. They were eager and grateful for the opportunity to protect other agents and consumers from reliving their nightmares and wished there was an easier way to do so. Thankful and inspired, I called up my friend Steve with an idea.

Starting Up, Extra Lean & First Signs from The Universe

I’ve known Steve since middle school. We worked together throughout secondary school as well as college where we studied computer engineer together at Virginia Tech. We continued working together on projects after graduation including the recent unsuccessful real estate startup. At this point we were each raising two small kids and a bit burned out from long nights and weekends so I approached him with a very simple project based on the phone calls I just had that afternoon. We discussed the backstory and basic specs and agreed to meet a few days later to test out my idea.

The basic premise was simple. I wanted to know if other agents were just as eager to share their feedback to protect other agents and consumers too. To test out this idea I created a list of 600 recently sold homes along with the listing and selling agent information, and Steve coded up a test project to request feedback between these cooperating agents. We built this out on Saturday and Sunday and were ready to launch the following Monday. 

Immediately after launching our test I was prepared to throw in the towel. I thought the experiment had failed and I was just happy to know that we had only spent a few days on it. It turned out that the only failure was my uninformed expectations and analysis. I showed the results of our testing from that day to my brother who enjoys marketing as a Product Manager for Zappos and he was blown away!  He said that we were hugely successful by achieving a 70% total email open rate and 20% email click rate. 

I still wasn’t sure exactly what we were building but I knew enough from his reaction that we had to keep on going. The next week we doubled the sample size and tweaked some wording in our emails and achieved an 80% total open rate and 27% click rate! It was very clear that we were building something that people wanted. We just had to keep it going while we figured out exactly what that thing was.

Product? Market? Fits!

Over the next few weeks, we increased our survey sample sizes and maintained high open and click rates. We received over 10,000 responses in our first month! The manual data loads were becoming so overwhelming that we didn’t have time to work on the platform. I buckled down and focused on creating a web scraper to automate the data routines while Steve worked on building out the infrastructure that could house a richer experience.

Four months after conducting our first test we finally had our platform shell in place. We relaunched our feedback platform more broadly in the same local market and watched the results come in immediately. Now that we finally had a user dashboard, agents were registering and interacting directly with us. A thousand agents registered the first month and I knew we had a hit when they were telling us how surprised they were that this kind of platform hadn’t existed before. They were also asking us for more features! We could not believe how smoothly everything was happening! Things were continuing to ramp up based on user demand.

Traction and Scaling

Eight months into our project, things were going very smoothly. Peter joined us as a co-founder and freed us up to be more strategic and engaged with the user community. Our friends saw their friends using our platform from social media and asked if they could help with our startup. We all had fun learning and growing together while watching thousands of feedback and hundreds of new users register every week, but I could feel the transformation of startup project to company taking place.

10 months into the project, I was spending nights and weekends at Steve’s house again. We’d plan and program into the morning hours and then I would sleep just enough that I could drive home safely and spend time with my family. I was also working nights and weekends to deliver on my full-time job and doing 20 real estate transactions on the side. I knew it was time to come out of the startup honeymoon and figure out if this thing was going to last before I burned out again and so we put ourselves through a major test-expansion.

For the first ten months, we only served one market as we built and fine-tuned the platform. We had grown at a compound monthly growth rate of 27%, and we were ready to find out if we could replicate our success nationally. We expanded to a few test markets and were thrilled to see that the email open and click rates stayed high as we increased our registered users 42% over the previous month! Everything was going so well but I couldn’t seem to take the leap of faith and work on this project full-time. This is around the time that the universe sent more signals my way.

Our Users Established Our Product Messaging

As an engineer who got into PropTech and then became a top-producing real estate agent, I’m keenly aware of how sensitive the real estate industry can be. I studied how RedFin pulled its Scouting Report project and how Keller Williams opposed AgentMatch. But I also saw how NAR and Houston Realtors had tried moving forward with ratings, and that the agent performance analysis was enough to propel HomeLight to a $40M Series B. Since our platform was built on top of agent-to-agent ratings, I didn’t feel comfortable taking the full-time plunge yet and thrusting myself into major industry scrutiny. That changed very quickly with one phone call from a real estate agent.

Every week we receive feedback from tens of thousands of real estate agents. We also get lots of phone calls and emails about our platform that I answer personally. After I finished my usual explanation on one of these phone calls, the agent responded, “Oh, it’s about professionalism? That’s awesome.” That was the key. Although our system was built on top of ratings that’s not really what we stood for. I learned from our users that they were actually utilizing it for professionalism and accountability. We finally had a message that we could promote publicly with great confidence and it came just in time for the next big moment.

Coming Out of Stealth Mode (Product Timing & The Parker Principles)

On April 2, 2018, Inman News published The Parker Principles: A Real Estate Manifesto. It was created based on input from agents, brokers, companies, and associations from around the country as a series of principles to make real estate better. It echoed so many tenets of our startup: Quality, professionalism, and accountability in real estate. When I read The Parker Principles I felt like these industry leaders were screaming for the solution our team had built. The universe was clearly telling me to pop out of my shell and so I did. I reached out to Inman News about our platform and they covered us two months later in June. I had outed myself as the real estate agent behind Peer Reputation and there was no going back now.

Something’s Gotta Give

We were about 11 months removed from the weekend project that turned into a full-blown startup and the major Inman Connect real estate conference was coming up in mid-July. I knew we had to keep the momentum going so I took a week off from work and flew out to San Francisco to mingle with the industry I had just revealed myself to. 

On the second day of Inman Connect I was standing in the lobby of the Hilton when the COO of Remine, Jonathan Spinetto, said, “Follow me.” He led me through a series of halls and we stopped outside of a suite. When the suite doors opened a few minutes later, MLS executives walked out and I walked into a dim room lit blue by a portable projector and populated with the CEO, COO, and CFO of Remine. Jonathan handed me a display cable and said, “Demo.” 

We went over the platform, the processes, team, and potential roadmap. At one point during our discussion I remember that Mark Schacknies, then-CFO and now-CEO, told me, “You need to sleep.” It actually wasn’t the first time I had heard something like that. When Gill South interviewed us for the Inman News article, she told me that I should devote my full attention to the startup. Smart industry folks were telling me that I needed to quit my full-time job and I was finally ready to consider it.

The Tipping Point & Decision

A few weeks after coming back from Inman Connect, my boss called me into his office and asked me, “Do you have outside employment?” I responded openly and honestly and from there my work life began to unravel. My telework was cut in half which meant I spent more time driving through grueling DC area traffic. I wasn’t prepared to scale back on my startup activities when things were going so well so I just continued sleeping less.

I was tired. The startup was going great and the work environment was souring. Why couldn’t I just quit and focus on the startup? The answer was that I wanted to provide a stable environment for my wife and children, and that requires income. I had been so focused on building the platform and acquiring users that I hadn’t considered income until now. Now I was motivated, confident, and ready to take a leap. On October 17th, 2018 Peer Reputation welcomed its first paid subscriber. 10 days later, I quit my job.

Fast Forward

It’s been 9 months since I quit my job and I don’t regret it one bit. Things have not slowed down and continue to look better and better. I’d love to write more about it but, unfortunately, I’m out of time! I’ve got to get back to preparing for some major events. I’m heading to Inman Connect in Las Vegas where we’ve been selected as a finalist for the Inman Innovator Award. I’ll also be pitching onstage at the conference as one of eight selected startups at Tech Connect. If you’re going to the conference as well please swing by our table in Startup Alley to say hi! (I still can’t believe this is all happening!)



Source link