5 minute read
July 26, 2020
Finding Transparency in Residential Real Estate with Dan Belostotsky of HonestDoor
This article originally appeared on www.buildingproptech.com, a retired blog where I interviewed proptech founders on how they were building and growing their businesses.
Hey Dan! What’s your background and what led to you working in PropTech?
I’ve kinda of been an entrepreneur since university. I started my first company in early twenties, sold by mind-twenties. I had some capital to invest, so I put it into real estate - it was my first taste of buying property and renovating.
I realized then how little transparency there was in real estate, and processes that were dated and difficult. This rattled around for awhile as I worked on other things, joined as a venture partner at Panache Ventures and took a UCLA real estate development program before eventually jumping into real estate in earnest by starting a real estate fund called Otto Capital and proptech company Honestdoor.com
What problem are you working to solve with HonestDoor?
Originally, we set out to solve transparency in residential real estate transactions - you wouldn’t know if it flooded, or how many times it’s sold over the past few years.
But as time went on, both buyers and sellers wanted to get involved, since they didn’t have to get involved with a realtor from day one - HonestDoor could be their starting point for buying or selling, providing comparables along with home appraisals where traditionally, a realtor would have to.
Transparency > Empowering home buyer > Empowering Seller > Building Marketplace→in turn having unique listings to the MLS and unique property data
What’s the process been like as you build HonestDoor?
It’s been hard. I’ve had some success in the past and had some luck investing, but starting companies is not easy. Hiring a team, getting investment is still a grind. People come asking really hard questions, and you have to be ready- even if you feel like you’ve “been there, done that”.
Consumer tech in Canada has historically been a hard sell. But we’ve been able to still raise from top Canadian investors, so I think we’re on our way.
👋 Hey reader,
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How have you gone about growing your user base and revenue? What has been most effective?
It starts with a good product - we’re genuinely helping people, and it’s kind of a fun product - that’s given us a huge boost from word of mouth.
We also had a great recipe for PR - we were free, we weren’t making any money at first, and we were really helping consumers, so that helped us quite a bit.
What has been the hardest part of the building, growing or monetizing HonestDoor
We’re fundamentally a real estate data company, so getting data for different cities (let alone different provinces and areas) is difficult because there’s little to no data standardization - it’s different in every municipality. For us, getting people to the site once we get the data has been comparatively easy.
What insights about Real Estate and Technology have you come to realize whilst building HonestDoor?
Once you start climbing the mountain, you realize the mountain isn’t really that high. The competitive landscape isn’t as tough as it appears, and nobody is as far ahead as they seem. The race seems longer than it seems difficult to me - mental and capital strength seem to be huge advantages. You’d be surprised who you can compete with if you have a good product.