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Ask HN: B2B or B2C?
A recent venture of mine involves aiding students finding a student property at my university. The project was originally going to offer two plans, a free simple version and a premium one with more information.
However, after emailing estate agents, whom liked the idea, they asked what sort of funding I would require to develop the service.
Should I decline the funding and go B2C? Or should I accept and build the service for the estate agents?
- byoung2 14y agoGo B2B. Businesses will pay, consumers will not. If you can build a base of a few hundred real estate agents paying $50 a month, then you'd have money to subsidize a free version for consumers, but I wouldn't bother with B2C until you're making more money with B2B than you know what to do with.
- ceeK 14y agoThat's what I thought. However, would it change things that the service I am developing is aimed at consumers (i.e. the students) but beneficial to real estate agents? The free subsidised version would have to be offered from the start.
- byoung2 14y agoIn general, I would avoid consumers, and in particular, students are a terrible demographic to sell to because they are poor. They will pay rent, because they have to, but they won't pay you for your service. I would go after the realtors first because they can and will pay. If anything, if you have a free product, you should sell leads to the realtors, or sell advertising to realtors (I believe Zillow charges for realtors to list their info). In that case, you're not actually giving away a free product, the students are the product you sell to realtors. In that case, it is worth exploring.
- ceeK 14y agoThank you for your advice, you make a good point. I think I will definitely strive to work with the estate agents. Zillow seems an interesting service. It is similar to what I wish to create here in the UK. The difference is I can tailor it more to students (I'm grouping it with estimated internet speeds, crime statistics, proximity to the university bus stops, how far a walk are you from the student bars etc). Cheers for mentioning it.
- dear 14y ago300 agents x $50 a month x 12 months = $180,000 a year So basically a lifestyle business that won't scale if that's what you are after.
- byoung2 14y agoI offered that example as an arbitrary milestone to reach before exploring the free version. There is no reason to stop at 300, as there are likely a few hundred thousand agents he could sell to. Even 2% of that total is 6000 people paying $50 a month.
- dragonbonheur 14y agoMaybe you should get a buyer, sell the business and move on to other things. Housing booms or busts don't last long and people often fail to realize the transition from one to the other. Education and its financing is about to change as well. Unless you're really passionate about the sector in which case it would be better if you used their marketing infrastructure, thus B2B. With B2C you'll have to compete with Craigslist and lots of other alternatives and competitors and you'll have to spend lots of money in marketing. Of course I could be wrong so please take no offense.
- ceeK 14y agoA fair point. It's mainly just to help students and make money on the side (it's also my CS project). It aims to streamline the whole process of finding a student property rather than actually selling properties themselves (i.e. it links back to the estate agent websites in the end). Think of it as a property comparison service. As such, I'm not particularly concerned about whether booms or busts are happening. I just want to know what would be the right choice in this present case for a student making some side money on a project. Thanks for your input though =)
- dragonbonheur 14y agoSince it might be your first commercial project it is best to team up with them and get the maximum you can out of the experience. You can build and profit from other things later.
- byoung2 14y agoHousing booms or busts don't last long and people often fail to realize the transition from one to the other Irrelevant. Whether boom or bust, people still look for housing, especially apartments. He could expand the offering to cover more than just university student housing. For example, I just bought a house in August 2012 (during a down market), and it would have been useful to have a snapshot of the neighborhood (how many grocery stores, gas stations, restaurants within 1 mile, crime, school ratings, etc). I might have paid $20 for a one off report with all this data. He could sell these reports directly to consumers (like carfax does for cars), or sell them to agents (like eBay has on car listings).