How TheRedPin aims to take a swipe at the real estate industry
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A new app aims to bring the 'swipe left, swipe right' culture to real estate listings.
If you can swipe right and find a mate, why not a mid-century modern house in Leaside?
That’s the premise of Keith McSpurren’s re-boot of web-based real estate brokerage TheRedPin. He wants to harness technology to transform the traditional real estate industry.
Machine learning and software won’t replace agents, but they will standardize and streamline the property search and they will sharpen the industry’s tools, says the 47 year old, who has two decades of experience as a start-up guy and corporate turnaround man.
“In its essence I think it’s mathematical,” says McSpurren.
Longstanding real estate practices, including the industry’s white-knuckle grip on data, make it ripe for the kind of disruption that technology has wrought on sectors such as transportation and entertainment.
It starts with an idea that TheRedPin calls its Pick 3 Challenge, which works in a way similar to how Netflix recommends movies based on its customers’ past preferences.
Users of the website are offered the chance to click on three properties.
Then they get a bare-bones email with pictures of three more properties.
House hunters put a check mark or an X under the pictures, depending on whether they like it or not. Based on their preferences, the system sends them other similar properties refining the choices each time to provide a closer match.
Right now, the Pick 3 homes are selected by human beings, with the results fed into a recommendation engine so that, in time, the software can take over the process entirely.
“If the person says ‘yes,’ and we do our sort of Tinder yes/no, yes/no, it’s helpful for the consumer in the moment. But it’s even more helpful for the next consumer that shows up,” he says.
The current system of searching properties will eventually match a buyer with a home. But the information that kind of buyer brings to the transaction — space requirements, proximity to schools or roads — stays with one agent. It doesn’t benefit the next customer in line.
But, says McSpurren, “software does that because software remembers and learns, and that’s the biggest differentiator that I’m trying to bring to the company.”
During the six months he has occupied the spartan corner office of TheRedPin’s Church and Front Sts. loft-like headquarters, McSpurren has picked a team of 10 software developers, part of a head office that used to be about 45 to 30 employees. The company also has a network of about 80 agents.
The CEO says he is applying the operational discipline that was lacking prior to his arrival. Each person has a role on a team focused on transforming the real estate experience.
He figures by the end of the year TheRedPin will be on its way to delivering on that technology-based promise.
“Our favouriting system and our learning system, even in its rudimentary stages already works better. They don’t have anything like that and neither does anyone else I know of,” he says.
Leveraging Artificial Intelligence (AI) technology into a recommendation system to match consumers with properties is certainly feasible, says associate professor Alex Wong of the Department of Systems Engineering at the University of Waterloo, who spoke about the technology in general but not TheRedPin specifically.
“The technology is ready and I wouldn’t say it’s stretching the imagination of applying it to real estate,” he says.
It may not have happened yet because real estate is a well-established business — those typically take longer to assess the impacts and potential benefits of technology like AI. But the industry has something that is key to AI — a standardized listing system and customer profiles.
“One of the things that is crucial to powerful AI is information,” says Wong.
He warned, however, that any recommendation system needs to work well if the broker wants to establish and maintain trust with its clients and agents.
“If it gives you results that are not quite there yet, it might end up taking the real estate agent more time, in which case why bother using the tool?” says Wong.
New tools are something McSpurren wants to provide TheRedPin agents. The realtors, he says, are great — but there are good agents in every company. Giving his agents better technology helps set them apart.
TheRedPin's new app — available for Android and iOS — allows clients to track exactly where their agents are at all times. So if a customer is waiting to tour a home or submit an offer, they can see if the agent is right around the corner or stuck in traffic.
“Then we evolve it beyond that,” says McSpurren. “So if I'm an agent, I'm out taking pictures of some houses, I don't have to email them to you, they just show up on your app so you can see them.”
McSpurren’s own lack of a real estate licence cements his status as an outsider. You don’t need a real estate licence to see a highly fragmented industry running on the same business model for decades, says the married father of two teenagers.
Upon earning his business degree from Wilfrid Laurier University, he spent only four years on his starter career as a Procter & Gamble brand manager handling household names like Mr. Clean, Pringles and Pantene shampoo.
He was lured away by a media job that he hated four months in. So he joined forces with a friend from P&G, who had left to do an MBA at Harvard.
“This is 1998 and we both thought this internet thing was really cool,” says McSpurren. “Eight months later we’ve got $4 million in venture capital and we’re building a company called Sales Driver.”
It was a system that allowed corporate sales people to collect points toward incentive prizes. They sold it the middle the dot.com crash in 2001.
For the next 10 years, McSpurren managed a private equity firm for an extended family. Among its holdings was a failing furniture company in Durham, Ont.
“This was my first turnaround experience. As the person running the fund that had an investment, I ended up getting a board seat, terminating the CEO and then became the CEO until I found a furniture guy to take over.”
McSpurren’s next venture was CoverItLive, an early blogging platform that was picked up by major news outlets including the Toronto Star. It made a lot of money -- until an Apple launch precipitated its meltdown.
That was followed by Class Messenger, a platform allowing parents and teachers to speak confidentially and directly over the internet. It was bought by a U.S. company last year.
TheRedPin’s investors include TrilogyGrowth headed by Joel Silver and financed by Gerry Schwartz’s Onex Corp., and Som Seif’s Purpose Investments.
They want to see traction on his ideas in relatively short order, says McSpurren.
But, he adds, the big-name backers offer inspiration as well as financing and its attendant pressure.
“I’ve been in my own companies before where I thought I had a great idea and great execution but I had trouble finding investors,” he said.
“In this case, they’re sitting there going, ‘We believe in what you’ve said. Now start to deliver it and we’ll accelerate behind it.’ “
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