Interview With ActiveRain CEO, Matt Heaton
I first came across AR (ActiveRian) the day after I started the Tomato. At the time they were in their 5th week and were growing by 18 new members everyday. They now boast nearly 3000 members and a weekly growth rate of btwn 60-75 new members a day.
Here are the highlights of our conversation. Please keep in mind that this was an informal conversation. To maintain the intention and integrity of Matt's response, I mostly used his unedited responses, word for word.
RET - So what's the short bio on Matt Heaton?
Matt- After graduating with a BS in computer science, I found myself involved with a few start-ups in the Northwest. I was recruited by AR about two and a half years ago to lead the charge with product development. A year and a half after that we launched our initial product, which was a lead generation system for large real estate companies. At that point I stepped into the CEO position and have been there ever since.
Our current real estate network is an entirely different direction from the core product. The current network that AR is, was originally a transaction management system...to bring together the whole spectrum of parties involved in the real estate transaction: the realtors, the loan aspect, the title, inspectors etc... taking advantage of viral growth ideas - where people were invited in the system to become a community... This idea morphed into a the building of a social network that took all of these viral marketing and viral growth ideas and build it in to one platform for all to use.
RET - What's AR's Mission Statement?
Matt - To empower the real estate professional and in turn, power the consumer. To build a great resource where real estate professionals can come together to share information and to turn around and educate the consumer.
RET - it sounds like you are building a 2 pronged system.. a Real Estate cafe if you will...where realtors can converse and learn and educate each other, and to provide new insight and ideas on their industry nationwide... while at the same time give the consumer a sneak peak to gain an intimate understanding of the experiences of real estate professionals.
Matt - Exactly. There is so much going on so far as real estate technology and companies online that are trying to separate the consumer from the real estate professional. You have all these companies, particularly lead generation companies that are trying to make a lot of money by wedging themselves between and putting walls up between the consumer and the real estate agent. We're trying to do the opposite; we're trying to bring them closer together and create another communication method between the real estate professionals and the consumers
RET - That's awesome! I hadn't even considered that angle with what you are developing here with AR.
There are two phases to the project.
The 1st phase - To target the RE professional build a resource for them. The 2nd phase to turn around and use the infrastructure to target the consumers and break down some of these barriers.
RET - What does ActiveRain mean, why the name?
It goes back to the original lead management system and the idea of Rainmakers - the people that bring in business... So we're active rain makers, we're helping to bring in the business.
RET - What inspired you to make the decision to change directions from focusing on the lead management product to aiming all your guns at the current function of AR? Looking at the industry and everything that's happening online with the industry and it just seemed like the right thing. Everyone seems to be concentrating on the targeting of the consumer, and focusing on listings, but in the long run this isn't helping the consumer that much... and just seeing this great need that is growing and looking at what the next step is, I felt that we could hit it at the perfect time and build that system so that it is in place before the emphasis switches.
RET Besides the listings, what do you feel are the needs of the consumer?
Matt - Regarding the consumer: What's happening on the listing side of things...Listing data is getting more and more open - It may take several years before the battle is finished, but ultimately it is going to be much more open and everyone is going to have access to the listing data and no one is going to be able to use it as a competitive advantage. Now as a consumer I want an agent that represents my interest and that can do their job... so how do you look at actually connecting consumers with their agents as opposed to all these companies using listings to pull the consumers and then hand them out to the agent that they see fit.
RET - That is one of the most interesting takes on the industry I have heard in a ling time. I think that the audience that I am writing to is going to be very interested in reading this concept.
RET What have been the key components to your current success?
There have been a couple.
We were very aggressive in going out and finding the early adopters. We spent a lot if time with one on one communications, trying to bring them on board because of this whole invitation system, if you get someone who is influential, some of them are bringing in 30 or 40 agents onboard the system. The other is the point system; having something there to reward people for participating and helping grow the network.
RET - What about AR's marketing efforts? Do you have advertising campaigns to get the word out?
We have no external advertising. It's all based on viral growth. We have done some press releases, but no, we're not going out and spending money on advertising.
RET - Did you make it down to the Inman Connect convention in SF last month?
We did. It went great and we were able to make some great connections and had a lot of one-on-one opportunities with influential people in the industry.
RET What have been some of the biggest challenges you have found AR having to overcome to stay on the path to success?
I see a number of big challenges coming up. So far, I feel that we have done a good job of
dealing with the challenges as they come. One of the big problems is that we are generating a huge number of users and they are generating a huge amount of content; how to we segment it up, make the content searchable, make it useful as it grows.
RET It sounds like a case of "be careful you ask for, you might get it."
Exactly. The network has exceeded our expectations as far as how fast it is growing. We had figured we would have a few more months of development to solve some of these challenges before we got to where we are now.
RET What misconceptions does some of your audience have about ActiveRain?
That has been one of the challenges to: dealing with the skepticism. There are a lot of people in the industry that automatically get defensive, and feel that they are going to be taken advantage of; that we're going to use their content to build a huge site and do lead generation and end up selling leads back top them. This has never been our plan.
RET - What separates you from other Real Estate social networks?
We are really trying to find a benefit to being a part of this network, it's not just a social
network. Your coming here to not only meet people, but your coming here to market yourself to consumers. We are working hard to define what the benefit of being a part of the network is,
because up to this point I don't think that we have done a great job at defining what that is to
RET What's your least favorite thing about AR?
Dealing with Spam. Making sure that we are not being overrun with advertising and spam.
Particularly with the complications of the point system. We feel that it is vital to grow the
network with the point system rewarding people for doing the right thing... but then it becomes
all about trying to gain points and then people start gaming the system. There's this constant
battle that I can compare to the search engines with people trying to get a better ranking for their site and gaming the system to doing so.
RET - A sort of Black Hat approach to working the system.
RET - What's your 5 year goal for AR.
Matt We want to be the hub for people looking for real estate and mortgage professionals.
RET Is there a question I should have asked you, and didn't?
Matt - Yeah, I am surprised, because every time I do an interview... It's the big question - How do I
plan on making money off this thing?
RET - Ok, how do you plan on making money on this thing?
Matt - Basically, we want to provide value added services on top of the network. We will never charge to participate in the network, and we're not going to become a lead generation company, but we want to be able to provide value added services to our members. Once we've built their trust, we feel that the realtors will be wanting to take advantage of the services we endorse as well as the technology solutions that we offer for their industry.
Thanks, Matt. We appreciate your time.
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