Growing a Flatsharing Marketplace
Tom Gatzen, co-founder of Ideal Flatmate, discusses the key considerations a small business owner needs to make when you want to expand your business.
I co-founded Ideal Flatmate, the UK’s first matchmaking platform for flatsharing, in London in 2016. After a number of bad flatsharing experiences and seeing the lack of options for the growing number of flatsharers to find like-minded people to live with, my co-founder Rob Imonikhe and I went about building an easier way for people to meet their ideal flatmates without spending months and going through dozens of awkward meetings with people they have nothing in common with!
Since launching a Minimum Viable Product in early 2017, we have grown fast achieving a 30% monthly increase in users throughout the year, developed the product considerably and closed our seed funding round.
There have been many factors to consider along the way, crucially in deciding how quickly to expand our business, grow the team and target new markets. Another major challenge for any tech business is getting the balance right between innovating rapidly to implement improvements and ensuring your systems are set up to adapt in an agile way.
Establishing a USP
Providing a service that meets an existing demand means that there are likely other, similar services that meet the need too. In order to stand out from our competitors however, it is crucial to establish a unique selling point (USP) or feature which differentiates you. Fortunately for Ideal Flatmate, the whole purpose behind the platform and the reason we built the product itself is our USP! There are no other platforms operating in the UK which put such a heavy focus on the people living in a flatshare. Before launching the site, we ran a major study on the key needs and concerns of people living in shared accommodation, asking over 1,000 people 100 questions that were relevant to them. In collaboration with Cambridge University academics, we boiled these answers down into the 20 key questions which helps establish who our users’ closest matches are. Users of Ideal Flatmate can therefore browse matching profiles, assess how likely they are to connect with somebody, speak to them via our onboard messaging system and then meet up when they are more certain that they are likely to be able to live together.
Building a Team
As a start up begins to grow in terms of users and necessary developments, pressures build and it quickly becomes essential to grow as an organisation. This presents its own unique challenges which we have seen over the past 12 months where Ideal Flatmate has grown from a two-person founding team to seven people in house and two out-sourced agencies. One of the first challenges is altering your mindset from wanting to do everything yourself to realising that this is inefficient and that by employing strong, capable people in necessary areas, it gives the company the best chance of growing and allows the founders to focus on more strategic work. The second, harder challenge is actually finding the right people! We have now struck gold and have fantastic colleagues in key positions with technical, financial and marketing experience. One of our primary backers likes to tell us that ‘You hire on experience and fire on culture’ and that has certainly wrung true. When advertising for a role and you are inundated with excellent looking CVs and covering letters, it is a challenge to cut through and work out what will be the best fit. We have found though that if you find somebody with a great work ethic, who is willing to learn and get stuck in, then that goes much further than somebody who might look good on paper in terms of qualifications.
Staying close to our users
One of the keys to our growth has been engaging with and taking feedback from as many of our early adopters as possible. By understanding their needs and frustrations with the current marketplace and being open in our willingness to learn and adapt the product, we have been able to harness the input of our users to our advantage.
In a two-sided marketplace there are two seperate groups of people coming to transact. In Ideal Flatmate’s case this is those searching for a property and those with a room or a flat to rent. We have had to grow both sides at an equally aggressive rate for the product to work and have adopted different marketing strategies to onboard both sets of users. However, we have been relentless in reaching out for feedback as much as possible from both sides. This has even involved Rob and I spending hours simply ringing up people who have used the site and asking them for five minutes to run through their experience. Some of the best changes we have adopted to the site have come from these calls with minor problems being pointed out, which has allowed us to grow faster.
Expansion plans
Whereas some small businesses fail by over-reaching initially, we have focused on capturing a good share of the market in one area first before spreading across the rest of the UK. By focusing on London first, we have been able to build relationships with letting agents and landlords at a local level, understand the needs of our users and build a sustainable revenue model which we can then replicate in other parts of the country where there is a high demand for houseshares. The product is very scalable so one day the aim will be to roll it out across other cities in Europe and we have already been in discussions with operators further afield. The future is an exciting one for Ideal Flatmate!
Take the matching test here: www.idealflatmate.co.uk. You can also follow Ideal Flatmate on Twitter, Instagram and Facebook.
