Tom Hywood and Jordan Catalano launched their startup, online classified listing site at Apartment Developments about off-the-plan units, last year to grab a share of advertising spend in the property market.
Their fathers Greg Hywood, the CEO of Fairfax Media, and Antony Catalano, the founder of Metro Media, reportedly laughed when their sons called to tell them they were creating an online property sales media business.
“They were in absolute hysterics,” 23-year-old Tom Hywood told Business Insider. His father was at a function and sitting next to Antony Catalano, the father of Jordan, when Tom called.
But were very supportive.
Since then website traffic for Apartment Developments has grown more than 400% over the last year. That’s with listings just for Melbourne. Now the two friends have started on the Sydney market, with good references from current customers in Victoria.
Here’s their assessment of the first year:
What would you have done differently if you were starting again today?
Catalano – “We definitely built features to the first version of the site that could have waited to have been executed later. We were well aware of the need to create a minimum viable product, but when you are actually executing your idea, and full of gusto its easy to get carried away. If we were starting again today, we would definitely trim back the first version of the site and wait to get insights from users and clients as to what features they wanted.”
You’ve seen rapid growth. Why? What factors are at play?
Hywood – “The rapid growth of ApartmentDevelopments.com.au is largely due to the quality of the service provided. The website generates leads which are extremely high in quality and in turn lead to a higher conversion-to-sale rate than the market average. As apartmentdevelopments.com.au is a niche website, purely dedicated to off-the-plan apartments, many of the users are already qualified prospective buyers.
“In addition to the high-quality leads, the pricing model is very reasonable. We understood upon launching that other real estate portals were charging the industry incredibly inflated prices for a service that, in fact, wasn’t providing them with any outstanding results.
“This is a numbers game, the higher number of leads you can provide to your client the better. That being said, quality control is also important. As an agent/developer, it’s not ideal when you are paying a premium fee and receiving 50 enquiries in a month for your property yet none convert into a sale. We have developed a formula which ensures the right people who are in the immediate market for an off-the-plan property are coming to apartmentdevelopments.com.au. Not only are our users enquiring on the properties available on site, but they are following through with a sale at the highest rate in the market.”
What advice would you give to others contemplating a startup?
“1. Find a good co-founder. We were lucky that we were friends before ApartmentDevelopments.com.au, and that the partnership came naturally. It would be completely different, and much harder to do if we didn’t have one another to bounce ideas around with, and balance the workload.
“2. Focus first on building a product that a small amount of users love rather than a product that attracts tons of users but who don’t really care about your offering. An owned audience is incredibly powerful.
“3. Be honest with potential investors. Chances are, if you are young, they will stump you on a question here and there, but the investors worth partnering with are the ones that will challenge your ideas or product, but will be eager to hear how you apply their questions or comments to your what you are pitching. ”
What was the most difficult aspect of starting this business?
Catalano – “When we started the business, I was 23 and Tom was 22. We were pitching to developers worth tens of millions of dollars when trying to raise capital to get the business off the ground. At that age, proving that we were serious and could be trusted was a challenge. We were looking to raise $400,000, which still isn’t peanuts to the people we were approaching, so we had to make sure that we knew the product inside out, and had designs and a prototype to back up what we were pitching.
“Also, when there are already two key players in the market, we knew we had to differentiate ourselves, and that our product would need to provide results for our clients in a rather timely manner, otherwise they wouldn’t have much of a reason to support the new entrant. It was daunting at first to think of how we were going to attract large enough traffic in the beginning to produce enough leads to keep everyone happy. It meant that we really had to position ourselves as a friend to the industry, and be a brand that celebrates everything about apartment living, whilst ensuring we were priced in a way that meant that any sized developer could list on site.”
What was the most fun?
Hywood – “The people you work with. Not only do the two of us have a great time working together, but the people around us are fantastic too and so much fun to work with. In fact, the industry as a whole is filled with really great people who we have been able to form strong relationships with. It most cases when we meet with clients, it feels as though we are catching up with friends.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.