Building an Online Real Estate Business From Brazil: Brian Requarth, CEO of VivaReal (Part 4)

Sramana: How long did you do a critical mass of a particular listing such that the marketplace on the other side would become interesting?

Brian Requarth: During that time, we didn’t have enough listings from customers that we were offering free trials to. So we actually built a robot to go out and get the listings for us. At that time, we hired our first employee—an intern from Brazil to work with me in Bogota. It was just cheaper that way. We then started scraping the listings from different websites, which actually enabled us to create more traffic because we started generating more visits.

The first day the intern started, I bought a Skype line. It was a local São Paulo number. I had a vanity number that would forward our inbound Skype calls to the number in Bogota. The intern’s first days were like a nightmare because we started getting these angry callers from these companies threatening to sue us because we had their properties listed on our website. Ironically, the reason they were calling to sue us was because they were getting calls from new customers.

Sramana: Why would they be upset about getting new customers?

Brian Requarth: It was an emerging market and they had these issues of trust. They would think we were taking advantage of them somehow.

Sramana: How did your intern tackle these calls?

Brian Requarth: I wrote him a script in English, which he translated it in Portuguese. He had to literally calm the people down and say, “I totally understand why you’re upset but let me just change the way we think about this. The reason why you’re calling me right now is because you had people that contacted your properties. Our objective is to help you.” We were able to convert a lot of those into trial customers that way. Some of them just didn’t understand and they’re all customers now but at that time, they were very angry.

On his first day, he was doing crisis management—dealing with angry people threatening to sue you. It was so funny because we started getting so many calls because we scraped about a hundred thousand properties. We also started getting a lot of traffic. Literally, I couldn’t even go to the bathroom without the phone ringing and people were just angry calling from all over Brazil. In 2010, we put in the monetization model where we were able to convert them into paying customers and get direct feeds from them.

Sramana: I see. All these people who were listing properties, whose properties you were scraping also started to pay soon enough?

Brian Requarth: Yes, we started getting some customers. If you look at the ramp up, it was two customers in December 2009. We then had 200 in 2010, 500 in 2011, 2,000 in 2012, 5,000 in 2013, and now we have 10,000 customers.

Sramana: What do they pay? What’s the business model that you had settled on?

Brian Requarth: The model is an “all you can list” model. It’s just a flat fee and the range depends on the size of the company and we have some different pricing based on featured listing.

Sramana: They subscribe?

Brian Requarth: Yes, it’s a subscription business. They pay a monthly fee. I left out some really important details. Just go back to the funding of how we started in Brazil. I was living in Colombia and my wife and I bought an apartment in Bogota. I sold this apartment and that’s where we got our seed capital, which is very ironic because it was the only asset I had and it was real estate. I sold a physical property and invested the hard cash from the sale into a virtual online real estate marketplace business.

Sramana: That is your seed capital essentially, how much did that amount? How much did you put into the company to get it to a point where it’s self-generating?

Brian Requarth: I put in $200,000. Basically, it was all the money I had. I sold the property and I put 80% or 85% of it.

Sramana: How long did it take you to get to break-even?

Brian Requarth: We’ve got super aggressive now, so we’re not at break-even yet, but that’s by choice. We were at break-even a long time ago, but we were growing at three times a year.

Sramana: Okay. That means that you have raised money, right?

Brian Requarth: Yes.

Sramana: Without breaking even, otherwise, you don’t survive, right?

Brian Requarth: Yes.

This segment is part 4 in the series : Building an Online Real Estate Business From Brazil: Brian Requarth, CEO of VivaReal
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