Request for Startups — November 2018
Who said ideas are worthless?
Real Estate Asset Management and Consulting Marketplace
I’ve explored online labor and expert marketplaces for some time now, mostly playing off my interest in The Unbundling of McKinsey. The premise of this framework is that over time, digital platforms will orchestrate outsourced labor markets in verticals like manufacturing + supply chain, pharmaceuticals + life sciences, etc. in a more efficient and data-driven way than the current paradigm.
Large industries where talent outsourcing is common, high supply-side fragmentation, and a large number of sole proprietors are some of the characteristics that support B2B labor market business model. It turns out that one of these segments has been sitting under my nose for quite some time.
According to this report, Real Estate Asset Management and Consulting is almost a $60B industry with ~34% margins and low concentration (four largest firms account for only 15% of revenue). Furthermore, while large franchises like CBRE and JLL come to mind, most businesses in the US in this category are actually run as sole proprietorships.
An online platform could connect commercial tenants or real estate firms to people or small firms with expertise in leasing, project consulting, relocation services, underwriting, etc. From a GTM standpoint, one should go after the long-tail and not play in the same arena as the Blackstones, Hines’, and SL Greens of the world.
A Managed Marketplace for Industrial Equipment Rentals + Leasing
Construction and manufacturing businesses often lease heavy equipment and machinery so they only pay for assets when in use, avoid maintenance + storage costs, and keep the balance sheet lighter. United Rentals is the biggest player on the supply side of this industry. Last year, the company booked $6.6B in revenue. Substantial, to say the least. It was only founded in 1997 but grew rapidly through expansion through the consolidation and acquisition of regional rental operators.
Despite the size of companies like United Rentals, most rental suppliers are fragmented and scattered geographically across the United States. In the context of this market, the managed marketplace approach could be quite useful. In Version One’s Guide to Marketplaces, the authors define a managed marketplace as, “marketplaces that don’t just connect buyers and sellers, but take on additional parts of the value chain to deliver a better overall experience.”
Above, Josh Nussbaum outlines market features that allow for the development of successful managed marketplaces. They include:
- Fragmented industry
- Underlying profit to be had by consolidating suppliers
- Purchase/sale with low frequency
- High transaction cost
- Sale dependent on a complex task
Given what I know about the industrial equipment rental space and United Rentals’ growth story, I believe an online managed marketplace that aggregates suppliers and rental operators could be a more effective and scalable solution than growth through acquisition.
Crypto Credit Card Rewards
This one’s a little weird, mostly because it combines use of fiat currency with the crypto ecosystem. But, I’m interested in companies and business models that “passively” onboard consumers into the crypto ecosystem. Lolli is an example that gives online shoppers BTC through e-commerce rebates. Another would be a crypto-centric payroll system (h/t Tommy Leep).
One could build on top of infrastructure like Stripe Issuing and drop tokens or currencies into a user’s wallet based on card usage. I’d love some feedback on this idea because I don’t have a great picture of how the mechanics would work or if they’d work.
Also, there are a lot of new consumer-focused credit card startups not focused on the acute pain points. Consumers place great emphasis on the rewards ecosystem that accompanies their cards, along with rates and security/anti-fraud.
The Next Wave of SaaS Tools
The most recent surge of SaaS tools emphasize collaboration around high-level functional behavior within organizations. Examples include:
- Figma/InVision: Design
- Lever/Greenhouse: Recruiting
- Lattice: People Management
- Airtable: Databases
- Front: Shared Inboxes
As these tools grow and build robust APIs, I’m interested to see how they sit as infrastructure for the next wave of SaaS businesses that center around cross-functional and more specific use cases like user research, tying product decisions to revenue, quantifying growth feedback loops, and some of the cases Dan Romero spells out above (an operating system for meetings, product specs, etc.) For example, last year I saw a company that tied Intercom and Drift data to Trello/Jira boards.
Other (Less Fleshed Out) Ideas!
- Slack for Insurance: Coordinate communication between brokers, MGAs, insurers, and reinsurers (h/t peter zakin and Alex Bargmann)
- ADU-focused REIT: Leverage data to finance tiny home and accessory building development en masse
- Programmatic B2B Payments and Lending: Modern Treasury looks compelling
- Lumi for Pharmaceutical Packaging: Another picks + shovels play for D2C healthcare
I've written a few Requests for Startups now, and I want to hear what people like about them along with what people don't like. What can be improved? What would you like to see more of? Please reach out at aashaysanghvi[at]gmail.com.
