fintech, social media and entrepreneurship
Mortgages
SmartHippo media review
Nov 21st
I thought I would update my readers with details on what some bloggers and media are saying about SmartHippo, our community site where people help each other find the best mortgage rates. If you’re interested in what we’re doing, please subscribe to the SmartHippo blog.
- “One hopeful developer is George Favvas, who wants to make an application to promote his start-up, SmartHippo.com, which lets homebuyers compare mortgage rates between banks. ‘What we’re doing is inherently social, using the power of community to share information,’ Favvas said. ‘We want to let users be advocates for an application that fills a need.’”
Montreal Gazette
- “What a huge step for consumers to be able to see the feedback on these companies, or just to have any information on these companies that are calling them.”
Leadcritic
- “I know the banks could use a good kick in the pants (I use a local credit union, myself) and maybe an angry herd of consumer hippos could be just the ticket.”
Blognation
- “Especially with the recent mortgage crisis in the US people are more cautious than ever about the rates that they are able to receive and maybe even a bit distrustful of the lending companies. This is the first website of its kind to offer a place to compare and contrast lenders.”
KillerStartups
- “There’s a strong imbalance in the information that each side has, and my friends at SmartHippo have just launched a site to help correct that imbalance. If you’re getting a mortgage, or just want to compare, check these folks out. I really like what they’re doing and where they’re going.”
Emergent Chaos
- “Encore en construction, (SmartHippo) ne s’adresse, pour le moment, qu’aux consommateurs américains. Plus précisément, à ceux qui désirent comparer différents taux hypothécaires obtenus par des gens dans la même situation qu’eux. Grâce à cela, ils seront mieux informés au moment de négocier leur propre hypothèque.”
La Presse (article in French)
Realius – fantasy real estate game TechCrunch40 demo
Sep 24th
I had the pleasure of sharing the TechCrunch40 DemoPit floor with Chuck Teller from Realius. (Let me say that being placed next to cool people makes all the difference when spending 14 hours on your feet.) Realius develops fantasy real estate games and their first game, Price me now, awards users with points and real prizes for guessing the listing price on homes.
The property and pricing information comes from real MLS data. Realius’ business model will be to advertise real world real estate services to people playing the game. Here’s a demo:
Mortgage, debt lead aggregators now selling leads five times
Dec 21st
Over the course of the past few months, financial lead aggregators such as LowerMyBills and NexTag have quietly switched from a 1:4 to a 1:5 model. This means that they are now selling the same lead to five different banks or brokers at the same time.
Prompted by stagnant traffic and an overall tightening of the mortgage refinance market, lead aggregators are looking to grab onto anything that will improve their margins, or at least keep them from eroding.
Theoretically, the total value of a realtime mortgage lead should be the same no matter how many times it is sold. Let’s say a bank is willing to budget $3,000 to acquire a $300,000 refinance loan. If a lead has a 1 in 10 chance of closing, that each lead is then worth $300. Since a consumer can only close a maximum of one refi loan at a time on the same house, increasing the number of lead buyers, logically, should proportionately lower the price each of those buyers pays for the lead. So you’d expect that that same lead, sold four times instead of once, would now fetch $75 per buyer.
But that’s theory. In practice, other factors come into play. Having two offers instead of one increases the chances of the consumer converting, since there is a greater likelihood that one will interest them. But having, say, ten would be overwhelming, and likely turn the consumer off entirely and drive down to zero the chance of any of the lead buyers converting.
The balancing act is finding the optimum number of times a lead can be sold in order to maximize their revenue without ticking off the consumers or lead buyers too much. Is 5 too much, or just right? By moving to 1:5, lead aggregators are betting on the latter.
Are they right? Time will tell. In a future post I’ll discuss why this may all be irrelevant, plus what the implications are for affiliate marketers who target the financial services sector.
