What’s your ultimate vision with PocketList?
Over a hundred million Americans are renting the place that they’re sleeping tonight. People spend vast amounts of money renting, and yet, renting from a customer experience standpoint is atrocious, opaque, and competitive. It stinks to be a renter. In most major cities, you’re buying a mid-price sedan a year. Imagine buying a new Honda Accord and then throwing it away every year forever. If it was that hard and that unpleasant, Honda would get our business.
We think the system is fundamentally broken. We are building a new platform based on trust, better information, and better communication in the housing rental space. If you’re average at all, you’re going to spend 12 years of your adult life and over $400,000 being a renter. I want to save you the suckage that I’ve gone through.
I’m assuming the key has been unlocking incentives for renters to get information flowing?
You’ve got all these renters in the world, and they’re an expert in the place they live. Think of that as institutional knowledge, but they don’t value it highly because they’re never going to live there again. That information is so valuable to the person who will replace them.
Marketplaces are a chicken and egg problem. We genetically engineer the chicken back into an egg by doing an end-run around landlords to get the data from renters. We’re getting data from the renters better and earlier. The landlord has never lived in the unit that they own or manage. Even if they’re telling the truth, they don’t know how loud it is at night or what the light’s like on a Sunday afternoon in the living room. How could they possibly share that with you?
The renter is also the only person who knows the exact timing of when they’re going to move out. This is a KPI we track internally. The average PocketList renter is sharing information about the place they’re leaving 58 days before giving notice to their landlord. That’s really powerful. That’s a window of exclusivity that we get into that inventory. This is a marketplace efficiency problem, and we think we can make everyone’s life a lot better.
How did you kickstart the marketplace to get it going?
My co-founder and I have built a couple of startups before. You learn quickly that your ideas are probably bad, and that’s okay. Bad ideas often get upgraded to good ideas when they meet reality. We had this idea, what if we went straight to the renters for information? So, we set up a webpage and hooked up to a Google sheet in one afternoon.
Because we built failed things in the past, we established a reputation as people who cared deeply about this space and wanted to help. We sent an email to our mailing list of all the renters we’d ever interacted with, maybe 800 people or so. We asked for a ton of info. There was quantitative stuff like address, rent, and bedrooms. We also asked you weird qualitative things like what are the neighbors, parking, noise, and light like? The last question is, and this is the big twist, tell us when you plan on moving, and it doesn’t have to be soon. Then Julian and I will manually introduce you to someone whose timing, geography, and budget match yours.
The reaction overwhelmed us, quite frankly. There were people that we had no idea how they were hearing about us. People were not only filling it out, but they were also forwarding it to their friends. People were posting it on secret Facebook groups for people looking for housing. We did what we said we’d do, we started matching people.
I buy into this idea that almost all software products can be achieved with a spreadsheet and an email address. It’s way faster and way cheaper to use a spreadsheet and an email and see if anyone uses it.
I love it. Your story reminds me of that saying that an entrepreneur’s chance to succeed in one company is pretty low, but with a good one over a decade, the chances of success are pretty high.
I take it as a badge of courage that in the 18 months before kicking off PocketList, I pitched to 86 VCs and got 86 straight “no"s for another product in this space. It was a very educational experience.
With PocketLists, we weren’t even raising, and we raised a pre-seed round over a three-day weekend with no decks. I think it just goes to show you, one, keep swinging, and eventually you’ll hit something. Two, there is substantial non-obvious and indirect power of building your network out. Even if you get a bunch of “no”s, you get people who know what you work on and will vouch for you.
What would you say is the biggest risk you’ve taken in building PocketList?
Starting a company, in general, is risky financially. I cringe to think about how much money I would have made if I worked as a senior director of product design or something. But that’s really fricking boring, and that will always be there.
On top of that, I started talking with my wife about starting a company when we had our first kid. My logic was it’s only going to get harder from here, right? There is a cost to delaying this, so let’s just dive in and do it. Then COVID, a financial crisis, and political unrest hit, that is also very hard.
I don’t have any answers as to what the right way to do anything is. I know that people matter, honesty matters, kindness matters, and hard work matters. If you add all those things together, you don’t necessarily get success. However, the only reason I’m still standing is because of those things, there’s no secret. You don’t learn that when you get an MBA, you learn that when you’re four years old.
If you have more questions for Nick, reply to this email with them and we will pass them along!