In this Q&A, Opcity CEO Ben Rubenstein shares insights into the company’s rocket ride from idea to $210 million exit in less than three years, relying on data-driven leads from ATTOM Data Solutions and adhering to the core value “Decide with Data.”
1. What is the story of how Opcity got started?
I learned a lot from my first startup Yodle. We focused on helping over 55,000 small businesses market online and generate leads to build their companies. We grew Yodle to over 1,500 employees and after our successful exit to Web.com for $342 million, I was ready to tackle many of the same problems we saw in the real estate space.
Real estate didn’t have a lead generation problem. As an industry, we are generating over 100 million online leads a year to only sell 5.5 million homes. What we looked to address is a lead conversion problem. Over 90 percent of all home buyers start their journey online, and the industry simply wasn’t equipped to respond to consumers in a way that helped them move from online to offline. We also saw that many consumers weren’t a good fit for agents that received the leads.
Most agents didn’t get into real estate because they are experts at online lead conversion. So we had huge problems to address. Too many leads were being generated for agents who have so many other responsibilities that it’s nearly impossible to effectively work online leads without support. Ultimately the consumer, agent and broker were all suffering as a result.
We partnered with a brokerage firm in Austin that had made online lead generation and conversion a core strategy and, leveraging 16 years of data, we applied the most successful conversion strategies to the entire national real estate market. In order to do that we raised a $27M series A, one of the largest in central Texas history, to build the team to take this model to the point we are today with over 400 employees in our Austin-based office.
Now we serve 50,000 agents, over 5,000 brokerage firms, process hundreds of thousands of leads every month and will help close 20,000 homes in 2018 after less than three years in business. The team at Move, Inc and Realtor.com saw what we were doing, the significant value we brought to the industry and finalized the acquisition of Opcity in October of 2018.
It’s been a rocket ride, and I am proud of our team for joining me on this mission and accomplishing so much in such a short time.
2. How is Opcity disrupting the real estate market?
There were so many systemic issues in real estate that had to be addressed simultaneously for our model to work.
- Opcity turned online leads from loss leader to profit center for thousands of brokerages. Most firms lose money on their online leads, and your average agent sees a -32 percent ROI on online ad spend. We took the risk of investing in buying leads with our own money so we could prove that our lead conversion model worked. We also put our money where our mouth is by having a referral model so brokers and agents only pay for our services on close. That took a lot of faith in our generation-to-close conversion model.
- Opcity had to do the hardest part of Uber and Match.com at the same time! With the advent of technology, today’s consumer expects a response and results virtually instantly. That’s why we respond to new consumer inquiries in our system on average within 4 seconds. We also connect real, motivated consumers with an agent in real time while on the same phone call. When you call an Uber, you just want to get from point A to point B. In a real estate transaction, the level of money and complexity means you have to have a good relationship with your agent. We had to connect the consumer with an agent instantly, but it had to be the right one, so our team built our agent matching algorithm. This allows us to look at millions of pieces of data about the consumer and the agent to ensure that real-time connection results in a good fit that will lead to a close. This all happens in the span of one phone call. In fact, our agent matching algorithm continues to improve and has increased our own close rate 172 percent in the last 12 months alone.
- Opcity provides real transparency and accountability for online leads to agents, brokers and the industry by staying focused on the consumer. Consumers want the help of an agent. They need to be responded to on their timeline and placed with an agent that is a good fit for them. Agents no longer want leads, they want real, motivated buyers and sellers. Brokers want more visibility into delivering value to their agents and consumers with the right support to hold every aspect of the system accountable to the right actions. We are able to meet every one of these expectations and deliver on it daily. By providing the industry a 24/7, 365-day-a-year lead conversion engine we solved a pain point all parties were feeling. The consumer has new expectations in our on-demand, digital world. Brokers and agents have an expectation that their lead generation and technology partners actually prove an ROI. We are excited to meet those expectations and we have proven that we consistently can.
3. What data is Opcity leveraging to help fuel its platform?
Opcity leverages massive amounts of data to fuel our business. In fact, one of our core values is that we “Decide with Data”. With our model, we are a partner with our brokers, not a vendor. We win when our brokers and agents win by making money together. That creates a lot of risk for our business, and we mitigate that risk by having an incredible data science and analytics team. Every aspect of our business — lead buying, how our call center operates, our agent matching algorithm, even what we serve in our twice daily employee meals — leverages data. For us, data is not about how much we have, but how actionable it is. Every single improvement in our business is a result of applying data to our practices. In fact, we have been able to make our callers nearly 300 percent more productive in the last year alone through data. Every small improvement we make is driven by data that adds up to big results for our consumers, brokers and agents.
4. How is Opcity using applied analytics and machine learning and any other disruptive technology you want to mention?
We have an incredibly robust data science and analytics team driven by my Co-Founder, CFO and Head of Analytics, Michael Lam. Our data science and analytics team is nearly as large as our engineering team. Our research team is results oriented and has a bias towards high-iteration testing. We maintain a handful of conversion-focused machine learning models that inform our technology and multiple parts of our process. Across our various models, we utilize techniques such as random forest, Bayesian models, and neural networks. We have the best data sets in the industry and are growing and enhancing those everyday. Through competition between our models we are always driving continuous improvements in performance. That is how we are always getting better at delivering a great consumer experience, making the best matches between consumers and agents, and supporting our agents and brokers through the entire transaction.
5. How is Opcity using leads/services/data from ATTOM to fuel its platform?
ATTOM has built a powerful lead generation platform in its consumer-facing property RealtyTrac. RealtyTrac has highly actionable information that homebuyers and investors rely on to make informed decisions about opportunities in the markets they want to purchase in. ATTOM did the incredibly difficult work of combing and normalizing a massively fractured data landscape in the real estate industry. When you have millions of agents, millions of home sales and 40,000 zip codes in the US, it is a nearly herculean task to deliver all of that information in a consumer-friendly and accurate way. ATTOM has data as a core part of its DNA, just like Opcity. ATTOM’s data fuels RealtyTrac and in turn, the leads generated there fuel our business. It’s been a great partnership and we continue to look for ways to leverage more of ATTOM’s robust data sets and analysis.
6.Why did Opcity choose ATTOM as a vendor/partner?
We put RealtyTrac and ATTOM through a really rigorous lead testing process, as we do for all lead partners. The leads we invest in have to convert into real closings and though we started small, we now capture every possible lead we can from RealtyTrac because the leads work within our ecosystem and result in closings. Ultimately, our vendors are held to an incredibly high standard and ATTOM proved that it can deliver.
7. How is the marketplace responding to Opcity’s offering?
In less than three years, we went from an idea to a $210 million exit. We now have over 5,000 brokerages, 50,000 agents and will do 20,000+ closings this year. We are currently seeing a 3- to 5-x close rate from online leads compared to the industry average. We have also expanded into mortgage and title with thousands of loan officers and title representatives receiving value from those products. We actively pull in leads from hundreds of different funnels and that proves our model can support nearly any quality lead in the marketplace.
One of the things we are most proud of is our recent survey of our broker customers who rated us a +20 on our net promoter score (NPS). While a little below Starbucks and Amazon, we ranked higher than Netflix and Modelo Beer. It’s tough to beat beer and movies, and while we are proud, we still have work to do. Most importantly we are consistently rated one of the top large companies to work for in Austin, and were just named a 2018 Top Workplace by the Austin American Statesman. We ask a lot from our team, and they see what we are doing and choose to invest in that success every day. Everyone from the consumer, agent, broker and our team is proving that our idea translated into real results for the industry. I am proud to be a part of that.