Don't Start a Challenger Real Estate Portal

The time to start a market-leading real estate portal has come and gone.

Looking at the foundation years of 652 real estate marketplaces around the world and their corresponding market positions, it's clear that any new entrant hoping to grab the dominant share of agent marketing spend faces a Herculean task.

The conditions needed to cement a new portal brand in the home hunter zeitgeist have dried up in all but the most backward of markets. Efforts to overcome incumbents in mature markets, such as Homes.com's challenge to Zillow, need an established challenger brand, extraordinary market conditions and an outsized budget.

Despite the sky-high margins of companies like Rightmove, Scout24 and REA Group, this is an industry which tends to leave 'also-rans' on the scrap heap.

Judging by the number of portals we track for our biennial Portal Standards Reports, approximately 7% of all real estate marketplaces worldwide go out of business, are forced to pivot, or are acquired every year.

Why then are there still bright-eyed entrepreneurs out there founding websites with real estate listings on?

Often, new portal founders tell of their inspiration arising from sour personal experience when searching for a new home and their conviction that there must be a better way to do it.

"Slow, manual, opaque and full of friction" - Anyone.com founder, Reza Sardeha, describing the real estate industry

Once inspired, research into the technology needed to build a challenger portal reveals a tempting surprise for the would-be founder.

The chicken vs egg problem that early-stage marketplace businesses have traditionally faced has largely been solved by AI-powered scraping technology. New portals no longer have to convince agencies to give them access to listing feeds; they can scrape away safe in the knowledge that their ingested property listings won't suffer from all the inaccuracies that plagued brittle old-school web scrapers.

With such market inefficiency festering for all to see and the technology to create a challenger to do something to fix it so easily harnessed, the temptation to build a new portal is definitely there (at least for the type of people who enjoy 80-hour work weeks and competing against household name brands).

But how do founders make it pay?

New entrants mostly look the same as the established ones on the outside. Under the bonnet, though, the challengers that appear to be doing okay aren't copying what has worked for the market leaders when it comes to generating revenue.

Few are trying to play the leaders at their own subscription-based game, and fewer still are going down the pure freemium route (letting agents list for free and charging for extra visibility).

In fact, almost none of the recently founded companies we've spoken to even refer to their businesses as portals at all.

Monopolio is a lead generation engine for a fintech play. Jitty is experimenting with its buy-side business model. Anyone.com is building a collaborative, cross-country sales platform, and Zefir works a bit like a cross between a mandate lead tool and a brokerage.

The bottom line: if you get so frustrated with buying a house that you simply must start a business to do something about it, don't ask agents for money to show their listings on your website, and don't call what you do a portal.