Tech Startups: Idealista


Last week’s talk was given by Jesus Encinar, founder of Idealista.  Idealista replaces the paper based classified ads with a simple online site to find a place to live.

Here are some lessons from Jesus:

Lesson: If nobody else is doing it, maybe there is no market there.

This was certainly not the case when Idealista began – there were quite a few competitors.  Early on Jesus was faced with a challenge of trying to build a database.  The content is really king in a business of this type, and yet the existing data was poor quality and there were no private ads.  Users often wanted these private ads, so Idealista decided to focus on gathering the private advertisements instead of going with agents, as others had done, and aggregating.

Lesson: Focus on quality.

The question then became – How do you get the data?

Idealista actually walked around and talked to people; they collected telephone numbers, figured out who the private adverts were and put them into the system.  Started with 5,000 ads.  Launched only in Madrid, with a very limited set.  Later on expanded step by step.  Focused on being a *good* solution rather than a comprehensive one.

When it came to the design of the site, Jesus showed us a car demonstration of the model T versus another early car that required extensive user training.  It is clear that simplicity and design is important to drive sales.

Lesson: Focus on ease of use.

There are two keys to the ease of use of idealista:

1) Put only what is absolutely necessary, and customize each page only for what needs to be done on that page.

2) Break the processes into multiple small steps.  Make it easy to get things done.

International Lessons:

Idealista internationalized very early on in their life.  Here are some of the key lessons that we learned from their experience.

  • Be careful when you launch – incredibly difficult.
  • Looking for big countries with no dominant real estate player.
  • Italy was launched 2006, right about the same time as everyone else. (maybe the lesson is that a really attractive market is really attractive to everyone?).  Google, eBay, other smaller ones.
  • It can be more important to focus on being the powerful leader in your local market instead of weak in a lot of markets.
  • It’s easier to launch before everyone realizes that the market is strong.

Some other misc lessons are:

Prices for web site launches are radically less than they were 10 years ago when Idealista launched.  Jesus needed to raise six million Euros.  Hired Anderson Consulting to make their web site – a mistake in the end but at the time they wanted credibility.

Content is exploding – there are 4 reasons for this explosion.

Globalization, content of any site.

User generated content.

Digitalizing and history available in a big way.

End of distribution monopolies.

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