OpenRent, the 3 year old online lettings agency founded by Daz Bradbury and Adam Hyslop, is on a mission to remove all hassle from renting property. With a little help from a lot of technology.
The start-up recently signed a landmark 'media-for-equity' deal with Northern and Shell. Essentially OpenRent get a whole bunch of TV, press and digital advertising, in exchange for a little equity.
To find out more, we spoke to Founder Daz Bradbury:
Hi Daz, tell us what OpenRent is about?
We're set up for Landlords - helping with finding tenants, and setting up a tenancy without the cost of a high street agent.
We also make it easier for tenants finding rental property that is available, without the risks of gumtree / craigslist.
What compels Landlords to use OpenRent above a High Street Agent?
Rent Now is our all-in service, including referencing, contracts and deposit protection, for £49.
It gives tenants confidence that the property exists and they can, hassle free, rent it now.
To what level have you achieved product/market fit?
We're constantly improving and evolving. However, with 17,000 landlords already having used us we're getting to know pretty well what landlords and tenants want. :-)
Who do you consider your most potent competition?
That depends. The high street lettings agent will always exist, and they could learn to be more efficient and offer services at a low cost. Although that is unlikely.
The other online agents vary, from well funded companies like Purplebricks and Rentify, to longer standing agents like Upad. But nobody has a stronghold and we all have slightly different approaches. I say, the more companies encouraging landlords to look online, the better!
What was the most tough moment along your journey, and how did that affect what you do today?
There was a period where every phone call from OpenRent would be routed through to my mobile. Every call from tenant or landlord, 24/7, I'd handle.
9-5 I was answering emails. The rest of the time I was putting in site changes and automating processes. It was an extremely tough and stressful time, but it's what made us the company we are today, and was the only way to isolate all the pain points and realise the importance of speaking to users on a daily basis so we can keep improving.
We're now a team of 5 people that handle more rental transactions than any other agent in the country bar Foxtons.
Any challenges that you foresee?
There are always challenges - and these change week to week. I back our team though.
The biggest challenge we face is educating landlords and tenants, whilst not overloading them with information.
Being part of a rental transaction is a regulatory nightmare, there is a lot to think about, and I'm fairly sure landlords and tenants out in the real world are breaking the law all the time - they want unenforceable clauses in their contracts, they don't want to "protect" their deposit, they want a deposit that is 12 months rent, or they have no idea about anything and simply want our advice on how to do everything - we have to cover all scenarios, from experienced customers, to first time landlords and first time tenants.
Hence, with our platform, you want everything to be simple - to hide away the complications of a rental transactions.
But - inevitably - there are things we need to explain to the landord. Our on-boarding process can't be - "Here's a training course, once you pass, you can advertise with us", so we need to help landlords (and tenants), when they hit one of these questions.
There is a fine balance to this, and something we are improving on all the time. In the meantime, we just have landlords and tenants give us a call or send us an email, and we will explain - and whilst certainly scalable - it's not the best solution. We should be providing the right information, at the right time, and with enough flexibility that every customer is satisfied and can make an informed choice.
How did the founding team meet?
We met at University in 2004.
What are your work habits like?
We have usual hours for the team 9am-6pm, but I'm basically always working in one way or another. Adam is probably the hardest working person I've ever met.
You mentioned Adam works hard; what does he do exactly?
Good question. I'm in charge of product, deal with customers, suppliers, the whole lot.
On a daily basis I want to have something dealt with that is non-technical, so I throw it "over the wall" and I know Adam is working tirelessly until it's done.
I don't need to go through the normal hoops of setting reminders, chasing for work / answers - it just gets done - we're both on the same page, and can equally make big decisions.
Without someone working equally hard - getting stuff done and hustling - the company will never go anywhere. I'd hate to be in a position where I had to hire someone to simply chase my co-founder!
Do you receive any outside help? If so, in what form?
Sheraz Dar is our advisor, and we have now brought on board Northern & Shell - so for marketing advice we're doing pretty well.
We use service providers for some of our products (think Gas Safety) - but that's just the nature of the business (no surprises there).
What is innovative about your technology?
We completed the first rental transaction online in 2012. End to end. I believe we were the first to do this.
Very impressive with the first online end-to-end rental transaction. Do you see this ever becoming the norm? If so, what conditions need to exist to enable that (in your opinion)?
I certainly do see it becoming the norm. Agents are starting to catch up and offer, for example, contract signing online. Digital signatures have been around since 2000 - about time they became mainstream for property!
The only thing stopping this becoming the norm is where the supply is - if the supply was 100% on OpenRent, it would be the norm already. I see agents using more advanced tech, along with the online players, and this becoming the norm in the not too distant future.
What have your technological challenges been so far?
We tackle tech challenges daily - either to improve the landlord experience, or to help with some of the admin burden for our customer service team.
Having the infrastructure, on a small budget, to being able to handle a nationwide TV advert was also a challenge we had to overcome.
Can you expand on the specifics of adapting the site/service to handle the additional traffic generated by TV advertising?
TV traffic is crazy. Your advert goes out and suddenly, over the period of a minute or so 500k-1m people are watching that advert. TV stations across the country are very well synced, so all the traffic comes in basically at once. Coupled with the fact our ad has a direct call to action, and most people sit in front of the TV with a smartphone, we'd see immediate spikes that could be very large indeed.
I'm not sure how technical you want me to get, but I worked closely with the guys at appharbor to make sure the infrastructure (mainly load balancers) were powerful enough, and utilized loader.io and blitz to mimic TV traffic so I could get testing done (generally at night to not disturb most of our users). Our systems are fully scalable, so it was just a case of making sure there were as few bottlenecks as possible, then scaling up - given you can predict where *most* of the traffic is going, caching does most of the work.
What's at the top and bottom of your undoubtedly long list of future features?
I'm constantly helping our team better serve our landlords - so improving tooling around all aspects of their work is fundamental to keeping our prices low and allowing us to continue to grow as successfully as we have been doing. It's about making the information visible to our team immediately, before they even know they need it.
Longer term ambitions include lots of things - I'd love a device we can send to landlords that produces 3D scans of the house. Automating viewings would be an awesome feature to have, there is no reason why photos / videos are the best we can do here, and we already implement Photosynth on the site for landlords that are more tech-savvy / interested in reducing wasted viewings.
In a more realistic time-frame we want to help with the ongoing monthly issues a landlord faces, so keep your eyes out for some news on that front. Now that we've got the tenant-find and tenancy set up aspects finely tuned, it's time to look at how else we can better serve our landlords and tenants.
What's your product management approach?
Make it easy for customers to give feedback, and iterate quickly.
Where did the idea come from?
Trying to rent a property on several occasions in 2007-2012. Being a landlord trying to let out properties over the same period. Both were frustrating, and costly, as hell.
Can you expand on your experience as a Landlord, prior to starting OpenRent?
I got into it to help my grandma, she moved out of her house to move into a bungalow and ended up renting.
She wanted the rental income from her original house to cover the bungalow rent and provide some spending money. Without me knowing about this, she put her house on the market with a local agent and moved to the bungalow. 12 months later, the agent still hadn't found tenants.
My gran told me what was happening, and I got involved. 3 weeks later she had tenants moved in and a monthly rental income.
The story then repeated itself with my mum, and I got involved again. It just grew from there - and I learned little by little as I went along.
I've always been pretty good at finding tenants online, but have used ads in the local newsagent, as well as notices around the office etc. It became apparent quite quickly that if nobody you know comes to mind immediately, posting an ad online is the next best thing - both in finding quality tenants ready to move, and doing so quickly.
Since starting OpenRent, my focus has been solely on the company.
What has been the journey so far?
We're no overnight success, but every month we're helping more landlords and our product is doing more to improve landlord and tenant experience - so slow and steady I'd say.
What would you do differently?
Maybe raise VC money earlier, rather than shy away from it. I think we could have grown even quicker if we really wanted to - and had the backing - but there are cons to that approach too.
Obviously lots of small things I'd do differently, but overall, I'm pretty pleased with our progress.
Have you taken investment? If so, what are the details?
Northern & Shell - Multi-million pound media for equity deal - unfortunately I'm not allowed to go into specifics.
Is there anything you need to help at this stage of your business? Are you recruiting? Do you want to seal a partnership that you currently don't have?
We'll be looking to recruit again before the end of the year - I think bringing on a designer in house to improve the UI & UX would be sensible. We're very functional, but not quite sexy, yet...
I can see lots of opportunities for partnerships, but not one in particular we're going after / or that we need. If some of the big money players wanted to utilise parts of our platform for example, we'd be open to that. We're not trying to stifle the market / innovation - and we think there is huge amount of growth left.
Otherwise - the best thing that could happen to us is if every landlord in the UK knew online agents exist, and they can offer a better than high street service for £29. Our advertising deal will hopefully get us some of the way there.
What's next for OpenRent?
Become as recognisable a brand as Foxtons, except, when people think of OpenRent it will be in a positive light!
Can you elaborate on one or two specific challenges you've faced (other than scaling tech to support the boost in traffic)
If you could wave a magic wand to make one person do something for you, who would it be and what would they do?
It probably wouldn't be related to OpenRent.
If OpenRent becomes wildly successful overnight and you become impossibly wealthy, what would you do next?
Speak to Bill and Melinda Gates - see if I can help make it the Gates-Bradbury Foundation.
Suppose you one day IPO, what would you state in the prospectus as the biggest risk to your business?
If we were at the scale and ready to IPO, I imagine we'd have overcome a fair number of the risks we face today. We're still a startup at this stage.
This is a huge market - but that's not to say the rental market as a whole wouldn't suffer due to regulatory changes, or even the market changing the rent / buy balance.
Agents' Mutual has stated it will exclude online agents from joining. If they invited you in, hypothetically which of Rightmove and Zoopla would you drop?
I doubt we'd drop either - our intention is to get the best advertising possible for the properties we have for our landlords. Not sure why dropping all but one of the top advertisers would ever help us do that. Assuming hypothetically (which is about as likely as us being invited to Agents' Mutual) that Agents' Mutual could offer higher quality, and more leads (ie. they were bigger than all the other players minus one combined), and this was a condition of joining - we'd just look at the data. We can see which portal is performing best for us, and we'd do whatever is best for our customers. This seems unlikely though - customers go where the supply is, and if the supply is being limited, they will only ever get a smaller % of the customers.