XConomy.com | Bruce V. Bigelow | July 22, 2014
When Michael Koh moved to San Diego in 2010, he expected to start a real estate business focused on luxury residential properties, much like the one he had created and sold in Argentina over the previous 11 or 12 years. Instead, he came up with an idea for a mobile app and Web-based technology that would be like combining Pinterest with Match.com for home buyers.
Now, with this week’s official launch of Fypio on the iTunes App Store, Koh says his goal is to gain headway against the entrenched giants of online real estate—Seattle-based Zillow (NASDAQ: Z) and San Francisco’s Trulia (NYSE:TRLA). He views Fypio as a second-generation Web 2.0 startup that is using social media and interactivity to reshape the online real estate business in the same way that LinkedIn made inroads against Monster.com.
The user interface and design created by Fypio co-founder John Kvasnic, a Toronto entrepreneur and IT services provider, enables people to personalize their search for a new home by setting preferences that go way beyond a typical “3 BR, 2 Bath, 1,650 square feet” real estate listing.
Fypio’s preferences can be set to select real estate listings on the basis of such lifestyle features as rustic fireplace, houses with views, kitchen design style, outdoor living space, and pet-friendly parks. The app also can draw information from databases that rank local schools, rate neighborhood crime, and even display the personal incomes of nearby homeowners.
Homebuyers can use Fypio to create lists of images and data about their favorite homes, favorite rooms, design features, and other amenities. Koh views social networks as the next evolution in real estate technology. So Fypio makes it easy for a user to share lists or individual images by e-mail, instant messaging, Twitter, and Facebook. Someone shopping for a home can use Fypio to create a dream house made up of different rooms and share that with their real estate agent. The agent can respond with the listings that come closest to a match.
Koh says Fypio’s online technology also includes learning algorithms that can suggest other real estate listings with similar rooms and design features, much like the “Genius mixes” on Apple iTunes that draw upon a user’s preferences to recommend other music and artists.
“No one else is learning anything from all these tens of millions of real estate shoppers,” Koh says. With Fypio, however, “we’re learning as they’re looking—how long they’ve been looking at property and what their preferences are: if they want a view, where they are looking, what kind of schools they want. We really get to know you as a person and what’s important to your search.”
It is this use of preference-based learning, interactivity, and social media capabilities that differentiate Fypio, and that represent a better overall value for consumers, Koh says. While Zillow claims to get almost 83 million unique monthly visitors, and Trulia says it gets over 51 million, Koh says, “With Zillow and Trulia, there’s no social media. There’s no interactivity. They’re just kind of a flat directory.”
(In Seattle, Xconomy’s Ben Romano says the big industry leaders would disagree. Zillow Diggs, for example, has lots of social features.)
So if Trulia and Zillow already are incorporating similar social and interactive features, what’s to prevent them from “big-footing” Fypio through their own respective platforms?
“There are aspects of our business that they will want to do,” Koh concedes. “But they can’t adopt our whole vision.
“For them, it’s all about putting the property and the Realtor first,” Koh explains. “Their whole business model is based on selling to Realtors. It’s ‘you pay us to host your listings, and we bring you the buyers.’”
At Fypio, Koh says, “It’s all about the buyer. Our approach is geared toward the buyers, and getting to understand what’s important to them.”
Koh anticipates that Fypio will eventually make money by generating leads on active homebuyers to real estate brokers.
For the time being, however, he says he wants to build Fypio’s user base, and get consumers to use the free mobile app. “Right now, I’m not as focused on monetization because there’s a lot of ways to make money—lead generation, home insurance, mortgage.”
After founding Fypio last year, Koh says they raised $1 million in seed funding from friends and family, with Koh and Kvasnic each investing $100,000 of their own money. In recent months, Koh has been meeting with angel investors and venture capital firms to raise another $1 million needed to build out the company, and to extend their technology to the iPad, Android, and other operating systems.
In the end, Koh isn’t so brash as to assert that Fypio will disrupt the online real estate industry. “We’re just helping you find properties based on what’s important to you, and then we give you information about what your life would be like,” he says. Still, it seems like he has a pretty clear sense of what he expects life to be like for Fypio.