This process of researching start ups as I prepare to attend Celebrate 2015 has connected me with many fabulous people. If you read my first piece about HipPocket, I talked about the basics of the team and idea.
I enlisted the help of a friend, Penny Gardner, who is a licensed realtor. She provided me with some great information that made my research into HipPocket easy and simple. She also took a real interest in the app and its utility. So I asked her to keep a record of her experience with the process of becoming approved through the app and then using it.
Penny took the app to her fellow agents and upon further review, she told me she couldn't use the app based upon language in the licensing agreement her agents sign with sellers. She also gave me the entire email exchange with James Bohan-Pitt detailing her explanation.
I had a follow-up chat with James, and he elaborated on the situation and gave me some great insight into the market, his app, and why it's truly a unique platform that works to serve the social networking needs of agents and brokers.
A Private Social Network For Realtors
James said the majority of a realtor's time is spent talking on the phone and exchanging email and text messages in order to build up interest for a property that has recently come on the market. More time is wasted waiting for professional staging and the resulting pictures to be delivered.
With HipPocket, James told me this pain point of wasted time for realtors is solved with the one tool they use the most: a smart phone. Through the app, the realtor can connect with all members of the private network. These members will receive push notifications when a new property becomes available. All property information can be entered via the mobile device including images, location, and current asking price.
James said there have been many agents who respond questioning the legality of this process. He is quick to reply there is NOTHING illegal about this having a hip pocket listing within individual agencies. He said what Penny was concerned about was contract language that can easily be rectified through an agreement with the seller. This agreement provides a specified period of time wherein the realtor is allowed to market the listing before being required to upload the information to a MLS where all agents regardless of realtor group can access the listing.
THIS article from FoxNews.com seemed to confirm what Penny had originally thought. If you look at the comments at the bottom of the article, many people feel the same. James reminded me again there are NO state nor federal laws restricting the use of hip pocket listings. It's merely a contractual agreement between seller and realtor that prevents the practice from occurring. The seller is allowed to agree to a period of pre-MLS listing provided it's specified within the contract.
Monetizing the App
James confirmed what I believed when he told me HipPocket would use a subscription model to create cash flow. He sees HipPocket as having a few layers of available revenue streams that can help grow the app.
Broker to Realtor Level
James said this is where the primary focus of the app lies. The communication between the brokers and realtors is the real pain point and where the app needs to start. Brokers would pay for the app based upon the number of users in their community.
A second stream of revenue for HipPocket lies in partnering with local associations to provide an endorsed pre-MLS market that opens itself for the association to join and share listings. This is an area not as fertile as the first but would still provide a good source of users to help grow the app.
Individual Premium Accounts
A third and smaller source of revenue would come from individual realtors who would pay for networking and listing services on a piece-by-piece basis. This option is further down the line as the app expands.
James is a fundraising manic with the most understanding and supportive wife ever. James said he was at a check up appointment with his wife and had to leave part way through to pitch to an investor. Right after pitching, he had to hurry back to the hospital as the delivery of his premature twin was imminent. The next day, while is wife was still in the hospital after delivery, James had to leave again to close a round of funding.
James disclosed to me that $305,000 has been raised so far. He wouldn't disclose at what valuation as it was confidential at this time. He did say their valuation has doubled twice. Once in the summer of 2014, and then once more after the current round of funding has closed.
James was very happy with the way HipPocket was being received by investors and users. He classified these first two rounds as seed rounds on the way to Series A. The app itself had evolved from the MVP necessary to go to market into the Minimum Lovable Product that users are really beginning to enjoy.
It was really great that James made time for me. I honestly thought given his situation with his twins and fundraising he would not speak with me. I wouldn't have harbored any ill will if had chosen not to. We scheduled and canceled several times. I know my place right now, and as a writer I do not have a large audience yet. I really can't guarantee James any kind of major distribution from this post.
He did connect with me in the end, and for that I am grateful. As I said on Twitter, he is a credit to the philosophy of the start up community. He took the time for someone like me to better understand his idea.
If you read my post on MVUX, this app solves all three of Jono's points for creating a successful app. It saves time for realtors by shortening the lag time of getting the word out about a new listing. Many realtors belong to several private Facebook and LinkedIn networks that can often bombard the agent with pointless and useless messages. With HipPocket, James said an agent can narrow searches by location and buyer qualifications to generate better quality leads.
It saves money. In the real estate game, time is money. The faster an agent can turn a property the faster everyone gets paid. James told me stories of agents getting calls and messages about a listing after loading property information via the app before returning to the office.
It makes people feel good. Realtors must also be relationship counselors at times. The often agonizing wait while attempting to sell a house can frustrate sellers into jumping from agent to agent. A quicker turnaround helps the agent's perceived credibility and helps establish a better relationship with sellers.
This app in an intra-office app. It's not meant to compare and contrast different regional or national markets. Each office will have its own private network where it will share listing more efficiently. That is not to say a realtor from Los Angeles couldn't be a member of a network in Florida and help someone move. However, James reminded me that real estate is inherently local. That is where his app will focus.
The fact that James is not a realtor is important. He is a tech idea guy who sees problems beyond how a realtor would see them. We spoke about competitors and market space, He said while there are other apps out there, all are backed by realtors and are too broad. This isn't a document services app. This is not Zillow or Trulia. Instead, this is a private mobile social platform that realtors can utilize to make connections and get qualified leads faster and more efficiently.
I like this app for the pain points it seeks to solve. I also like this app because James comes off as a great guy who works hard for those he serves. I will always root for anyone who would take time away from premature newborn twins and a recovering wife to talk with a newbie blogger like me.
On that note, I have included below a promo piece James sent me. You may think I am shilling here. I am not. I have added this to provide more information by which you can decide if there is value here. Questions and comments are welcome here and on Twitter.