Every entrepreneur learns that the company you envision at the outset almost certainly won’t be the same company you own a year or two later. Take Phillip Lee and Spottage, for example. With the help of the high-profile TechStars and greater industry exposure, Lee and his co-founder, Bryan Leptich, have turned their 2007 Business Plan Competition entry, Spottage, into Rentmatch.com, a rental housing “date match” business that is now the largest listing site.
For Lee, the stops, starts and re-grouping came with the economic downturn, which hit just as Spottage found its stride in 2008. Lee discovered that he was actually serving a lessor’s market rather than the previously hot renter’s market. That shift drove a new emphasis on providing real value and more refined search results for users – something akin to the algorithms behind Netflix’s “suggestions.”
This was also when Lee started to see Spottage in a new light. “Instead of just building another listing site, why don’t we become the intelligent layer that sorts through all those listings and efficiently matches them with renters?” he said. “The problem isn’t lack of inventory. The problem is how to quickly and efficiently match vacant units with renters.”
By working with rather than against the likes of Rent.com, Mynewplace.com and Apartments.com, Lee’s company, now using the more descriptive name of Rentmatch.com, has collected the largest number of listings (roughly 1.5 million) of any comparable site. With that expanded listings pool, the dating began. Rentmatch.com now offers greater levels of customization to match housing seekers with exactly the features they want. Furthermore, their cross-competitive partnerships allowed them to expand beyond university campuses into other urban geographic areas.
“What was surprisingly hard to get used to was the reality that, for a start-up, it’s a race to fail quickly, learn quickly and ‘do more faster,’” he explained. “If you’re too afraid of failure, you don’t take those big risks that can turn into big successes.” Lee’s experience in the TechStars process ingrained this “fail faster” theory in his thinking. With a broader perspective and expanded connections, Rentmatch’s start-up journey has helped set up even more successful “dates” between apartment seekers and lessors.
After saying no to an early buyout “marriage” offer at the Real Estate Connect conference in New York City in early 2012, Lee and Leptich have continued to grow Rentmatch.com. Without marketing or press, site visits went from 1,000 to 25,000 from December 2011 through March 20, 2012. And though the company has always had revenue, Lee notes, “most angel investors have told us to not worry about revenue at the seed stage and instead focus on product market fit and building traction.”
The lean, two-man team plans to add five developers and a sales/business development manager by the end of the year. Like dating, the energy they have put into failing has been worth it, now that they have found the perfect entrepreneurial fit.
Learn more about the world of start-ups via the Center for Innovation and Entrepreneurship at the University of Washington Foster School of Business.