In June 2020 I started working for Airhome Invest, a startup active in the world of real estate crowdfunding. The path seemed to be simple. Fate - and a correct application of the concept of lean startup - changed the cards on the table.
The watchword: continuous testing
Testing. This is the watchword for any serious corporate project. Continuous testing to achieve optimization or - at an early stage - the perfect product-market fit.
My arrival at the company coincided with the construction and diffusion of a questionnaire to about 50 respondents with the aim of testing the company's then business model: real estate crowdfunding.
Airhome Invest is a very young startup based in the FinTech District of via Sassetti,32 in Milan. The business model with which it was founded consisted of this: finding an interesting real estate investment opportunity and opening up the possibility for the general public to contribute with small amounts to raise capital to finance the operation.
The operation is WIN-WIN: for Francesco Del Buono, CEO and Founder of Airhome, a long-standing real estate investor, the possibility of doing many operations in a year is opened up, with a fast and simple capital raising. For customers, on the other hand, there is the possibility to invest small amounts and have consistent returns (even 10-15%) at very low risk.
On paper the idea is beautiful. But can you base a solid business on a good idea? The answer is no. It is not enough. You have to investigate customers in depth.
And so I come along. My tasks: market research and analysis and communication care.
First analysis: a not very encouraging scenario
The outcome of the first market research, however, was a little discouraging.
In fact, the Italian market is not ready for real estate crowdfunding. Although macro data indicate very strong growth values, with many small players on the market that have not yet fully established themselves, the total size of the market is still too small.
In fact, Italian investors have low confidence in innovative investment systems and a great deal of convincing is needed to make them experience them. In general what has emerged is that the concept of investment is synonymous with the management of savings and not a risky increase in one's own capital.
This means two things above all: very high costs in order to win customers and the real risk of under-funding the first campaigns.
Listening to the data: courage is needed
The predictions made from these and other insights drew an unripe market, crowded with small, low-profit competitors in which the war phase for achieving initial market leadership was already in sight.
In these situations courage is required. Francesco, the CEO, after very shortly that I was in the company, tells me the crucial word: let's evaluate the opportunity of a PIVOT, of a radical change in our business model.
I admire people who have the courage to take the work of months and put it aside because they saw a better way. It takes courage. A lot of courage.
Subsequent research, however, has fully supported the wisdom of that choice: a more solid business needed to change radically.
A new business model: SaaS + Consulting
Less than a month after my arrival, the company was in turmoil again.
The goal of this phase was: to structure a new solid business model.
Starting point: our assumptions
Assumptions on the product. We had an internal software, ARP, able to find in a few seconds the most advantageous real estate opportunities on the market. No software was able to do the same on the Italian market. The software is also able to make forecasts on the areas of strongest growth and can be a useful platform to sell investment consulting services.
Assumptions on the consumer. It takes months and months for a typical customer, an investor, to spend months and months looking for a real estate investment. Another client might be a non-investment citizen might use it to look for a house to live in.
Assumptions on the market . Completely free. Blue ocean.
Development: qualitative tests and interviews
Product testing: To conduct product testing we called about 10 beta testers, divided into groups of 3. To each of the three groups we submitted different product concepts, testing how credible and useful the different concepts were for their needs.
Customer test. We conducted about 6 qualitative interviews with prospects identified through the main facebook groups linked to the real estate investment world.
Market test. We conducted a market analysis looking for potential competitors or substitute services. We identified some mapping software that could actually be considered a competitor.
Our team conducting an interview via Google Meet
Outcome of the observations
What we have obtained from these tests - which at the moment are still confidential information - has been channelled into a Business Model Canvas, like the one you can see below.
The next step: product development and structuring of the new communication
With the test data we arranged the product trying to make it as attractive as possible to the new segments found.
We also got some pretty interesting insights. Enough to structure a new communication campaign in much more effective terms for our new target market.
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