Apartment-hunting site MyNewPlace launches
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We recorded a podcast with founder John Helm for the recently resurrected "Inside Silicon Valley" podcast. But here is the quick-and-dirty on the business.
MyNewPlace works with mostly large apartment building owners (for now) to create detailed listings of their available rentals or leases. MyNewPlace only gets paid when a landlord finds a renter as a result of the web site.
(Click to enlarge)
How does MyNewPlace track this and get credit? It's a bit of an honor system. Renters go back to MyNewPlace and confirm that they've signed a lease or rental agreement. Then the company charges the landlord an advertising fee of $375. What incentive is there for the renter to tell MyNewPlace about the transaction? MyNewPlace pays renters a rebate -typically $100 - when they report that they found a place through the Web site.
This is not a typical Web 2.0 crawl-and-aggregate business. MyNewPlace needs to establish relationships with each of the apartment owners and work with them to create detailed and useful listings. The task gets a little easier once they've populated the database with most of the big buildings. But there is a significant up-front investment of time and money - hence the $8 million in funding that the company took last month.
"It's a very expensive proposition,'' Helm said. "We actually had to go out and manually build that database and input much of that information by hand.''
Helm is a veteran of the space, having founded All Apartments in the 1990s and eventually selling to Homestore in 1999.
Why dive into the same space again?
"The industry itself hadn't realy evolved beyond where it was in the late-90s,'' Helm said. "It was an advertising-based revenue model with classic Web 1.0 search functionality.''
Helm watched Rent.com find success with a pay-per-performance model where the apartment owners only pay when their properties are rented. But MyNewPlace hopes to improve on the search experience for the renters, by adding maps and other features.
http://www.siliconbeat.com/cgi-bin/mt331/mt-tb.cgi/1327
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ok. so what's new since apartments.com? same exact model.
mark pincus on May 1, 2006 11:11 AMComment link
First, I think you mean Rent.com, not Apartments.com.
Apts.com charges a flat listing fee, so it's like buying an ad in the newspaper.
Rent.com charges a "success fee" of $375 when the lease is reported by the tenant (possibly less for big REITs).
[Comment edited for factual errors at the request of the comment author. - Eds]
Jeb on May 1, 2006 1:00 PMComment link
I'm the Director of Product and User Experience at MyNewPlace. I'd like to add that another differentiator between Rent.com and Apartments.com versus MyNewPlace is that the user interface at MyNewPlace is easier, "less is more", but will far more powerful search functionality/flexibility. We did quite a bit of consumer/renter research and found that the renter's were under-served by the other apartment sites. Additionally, as was pointed out by another comment, the rebate model works better fro apartment owners as they only pay when they actually get a vacancy filled rather than paying an up front "advertising" fee. It's a win for the renter as well as the landlord.
Micki on May 1, 2006 7:24 PMComment link
You say itās a win win for the landlord and tenant?
I am a landlord and rent corporate apartments, which as you know are short term. Since there are about 3000 of us doing this business short term averaging 3 to 4 months rent, do you really think you are serving our market? You take 375 for a rental and then another 200 dollars for the rebate you give to the tenant?
Also I do not see the landlords being short changed by sublet.com or Craigās list, which to me are the best thing to happen to the American small apartment owner since the newspapers gouged us into for rent signs on the front of our buildings.
Maybe a deep pocket REIT or internet illiterate with a lot of money will spend with you, but not unless your blow a lot of that 8 mil on marketing. Because unless I am forced into using your service by demand or you offer us corporate apartment guys a fair deal, I personally donāt want to know you. I don't have a problem using the search facilities of Craigās list. Do you?
Comment link
You say itās a win win for the landlord and tenant?
I am a landlord and rent corporate apartments, which as you know are short term. Since there are about 3000 of us doing this business short term averaging 3 to 4 months rent, do you really think you are serving our market? You take 375 for a rental and then another 200 dollars for the rebate you give to the tenant?
Also I do not see the landlords being short changed by sublet.com or Craigās list, which to me are the best thing to happen to the American small apartment owner since the newspapers gouged us into for rent signs on the front of our buildings.
Maybe a deep pocket REIT or internet illiterate with a lot of money will spend with you, but not unless your blow a lot of that 8 mil on marketing. Because unless I am forced into using your service by demand or you offer us corporate apartment guys a fair deal, I personally donāt want to know you. I don't have a problem using the search facilities of Craigās list. Do you?
Comment link
@sholom
Nobody is shoving this pay per performance ad down your throat. So you sell corporate apartments and Mynewplace.com doesn't make sense for your business, hooray for you. Craigslist serves its purpose for its users, the paid advertising sites serve their purpose for their users. Get over yourself already. If you had something positive to say, would you have bothered?
AntiNegativeLandlordGuy on May 22, 2006 5:24 PMComment link
