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Matterport Business Development in the UK?5166

WGAN Forum
Founder
DanSmigrod private msg quote post Address this user
Hi All,

A UK-based Member of the We Get Around Network Forum writes ...

(The Member gave me an okay to anonymize the email and post here for feedback.)

What questions should I ask?

Dan

---

Hello Dan,

[redacted]

I bought a [Matterport] camera in April [2017] and invested heavily to launch a business in May 2017. Till date, i have not managed to secure a single penny of business! I have done a lot of work for free in the hope of generating some work and building my portfolio but nothing is coming of it.

Today [8 August 2017], I spoke to another member of your forum who is based in [redacted] UK and he too has confirmed it is simply not working in the UK.
I believe there is potential for good business in the UK but I can't seem to get hold of it. Any help or direction would be much appreciated, please.

I look forward to hearing from you soon.

Kind Regards,

[redacted]
Post 1 • IP   flag post
Bale100 private msg quote post Address this user
I'm from the UK and know the Real Estate market (which is primarily what MSPs initially target) although I live in the Balearics, Spain which suffers from similar challenges.

1. In the UK & Spain residential property sellers & landlords don't want to spend upfront on marketing - in most cases they spend more advertising their user car than they do marketing their home. Many online agencies tried offering a low fixed fee upfront e.g. €600 to sell a house in place of commission and most have not reverted to commission based.

Clearly someone pays in the end either loaded onto the buyer / commission based once sold / let and less proceeds. There is also the rise of online agents with very thin margins <1% so not much room for add-ons.

2. This is a symptom of no sale no fee by agents trying to win their listing with free valuation, free portals, free photos, free energy rating certificate etc. and in Spain free advertising on No. 1 portals for private sellers / renters so they can bypass the agent.

3. Agencies / brokers won't spend as in the uk if they have a sole agreement it is for example 20 weeks and given that sellers inflate their asking prices the risk is the property may not sell within the given period. Typically the sales cycle is longer than the US...obviously depending on areas.

In Spain most properties >85% are listed with multi agencies (maybe 10, 20... it's ridiculous they're all listing each other's properties to keep their inventory full) so agencies won't spend as they may not get the sale and the client is legally allowed to sell privately - all property portals in Spain offer private sellers free listings so this sets a precedence i.e. everything for free mentality.

The sales cycle can be even longer as they are happy to sit on it for generations than negotiate - until there's a bust!!

4. In Ibiza there are Villas for sale for €30m and clients won't pay for photos, there are Villas renting for €80,000 per week slashed to half price when they don't rent / left empty and they still will not pay several hundred euros for digital marketing: 3d, drones etc.

Sellers & lessors would sooner spend money on ongoing maintenance, interest, utilities etc. on unsold / untenanted properties than invest upfront in marketing to expedite a potential transaction.

Perhaps this is a content issue - look around the world and people don't like paying for content; newspapers, magazines, music and video if they can get away with it.

Also, most content is funded by advertising - does Matterport need to change its business model eg fund the tours through advertising placement?
Post 2 • IP   flag post
Basic
Member
hometakes private msg quote post Address this user
Ok U.S. MSP's, seems like we don't have it too bad over here. As an Ex pat from the UK, I don't think we have too much to bitch about her compared to Europe. Agents overall may be cheap here, but at least theres enough of them willing to spend a $ or two to keep us going.

I can hardly beleive that sellers of the homes in Europe won't pony up seeing as they hardly pay any commission compared to the USA to get their home sold. It should be a no brainer for them to make their home stand out from the others by having all the bells and whistles marketing their home with all the good stuff.

30 Million Euros and no Pro Photos and video? How can someone so successful in being able to afford such a property be so 'brain dead' as not to market their property properly? Actually, how can any seller be that brain dead when they are saving $$$ on very low commission rates?

I guess thats what you get for an unregulated industry allowing anyone to be able to sell real estate without a license. The sellers would never want this, as it would cost them more to sell their homes.

They can't have exclusive agency as brokerages don't share in commissions as there isn't enough meat on the bone. Hence, no MLS service.
Post 3 • IP   flag post
Bale100 private msg quote post Address this user
Correct, unregulated even though I'm not a fan of regulation. This means hundreds of entrants / suppliers and not all are pros with ethics.

There's a slight difference between the UK and Southern European when it comes to Agency commission.


UK - low agency commission, race to the bottom with the emergence of online agents such purple bricks & tepilo etc.

Local high street agents are having to counter this threat. I guess you could argue they could add value with Matterport etc. however again it comes back to having exclusivity for a long enough period where a property is priced to sell....not time wasters that think they're property developers because they've had a new kitchen installed and now the property is worth +25% eg let's market our property at an untrealstic price as nothing to lose...the Agency pays the upfront costs.

Clearly there are areas where demand outstrips supply and is this is not so much of an issue: Parts of London, Devon & Cornwall, Lake District for investment / holiday rental properties etc.


Spain - typically 5% + 21% vat sales commission which is split beteeen multiple agencies. Single agency agreements are rare at 3% + 21% vat.

Seller feels they are already paying through the nose so won't spend on anything.

Agencies generally don't have exclusivity, property prices are dramatically inflated (to cover previous Ponzi scheme 6% incl vat commission & 12% Gov transaction taxes) and therefore sit on the market for years.

Transaction taxes are high at 11-14% depending on location and financing so slower turnover of properties i.e. less property flipping than US so less incentive to sell and move on quickly.

In Spain many sellers of older properties are also trying to hide defects and virtual tours expose everything - there is less home improvement here than is US & UK. Again tax, install new kitchen bathroom tiles etc. need a licence & pay tax.

Improve your property without a licence and the neighbours complain about the noise get a fine. Sell an improved home without a licence and you are caught (satellite or archived images) you either can't sell or get a fine. Symptoms of tax & bureaucracy.
Post 4 • IP   flag post
Bale100 private msg quote post Address this user
I've recently been communicating with another WGA forum member / Matterport MSP based in Dubai (I'm sure he'll correct me if I'm wrong) where the market is regulated. You need to be a GCC (Gulf country national) to own an agency and complete various courses & exams to obtain a licence to operate as a broker.

They too have similar Agency issues re non exclusivity and sellers not willing to pay.

I think commissions are middle of the road around 2% and the property market is reasonably advanced in terms of transactions / turnover.

It comes back to sellers not willing to pay anything upfront and an alternative route to market via free / very low cost leading portals to sell privately ~$50 or zero cost or inflate and let the Agency take on the upfront costs and take your chances.


What amazes me is that sellers with this mentality don't appear to factor in the ongoing maintenance, finance & utility costs of holding property vs relatively small upfront marketing costs.

Then again, this comes down to whether they want to / have to sell and low interest rates only encourage this.
Post 5 • IP   flag post
WGAN Forum
Founder
DanSmigrod private msg quote post Address this user
Hi All,

Another UK based Forum Member sent me the following message.

Dan

---

@DanSmigrod
Please DO NOT USE MY Name - but you can use the content.

I agree with the UK member you spoke about.

I have been a commercial photographer for a number of years and thought the Matterport camera would be a good way to provide a new service to my clients and develop a new revenue stream, I bought a camera in Dec 2106.

I have also put a lot of work (cost) into promoting and trying to generate business, including a new website, flyers for local businesses with the same result, very little interest.

The Matterport UK office pre-sale promised a lot with leads as an MSP, I have had a few, but no sales from them.

I have generate a couple of sales from my work promoting the service.

Then to have an upgrade offer of £500 for my Mk1 camera ...... I am disappointed with the marketing & support from the UK Matterport office, to say the least.

The local Estate Agents I have spoke with all say the same - Matterport need to get 'rightmove' behind the service then Agents will be happy to offer the service to vendors.

I will keep promoting the service as I believe the camera results are great and I would like to get some pay back for the outlay, Camera, website and marketing.

Keep doing the great work in the forum

Regards

[redacted]
Post 6 • IP   flag post
WGAN Forum
Founder
DanSmigrod private msg quote post Address this user
Hi All,

For those of us not in the UK, but following this discussion, I received this additional info from the Matterport Pro (above)...

Dan

----

Rightmove is the main website for all Estate Agents to list their sales & lettings in the UK.

[redacted]

Hope his help

[redacted]
Post 7 • IP   flag post
Bale100 private msg quote post Address this user
Clearly Real Estate is not the only market for Matterport Virtual Tours however it probably represents the largest potential market.

Having a single product (Matterport) / single market (Real Estate) strategy is a big mistake - I guess most of the successful MSPs will have several products / services and span several markets / verticals and target sectors that work / will pay.

In Europe and I guess other places like Dubai the seller / buyer / agent mentality in residential Real Estate needs to change for Virtual Tours to actually work:

From

I'm the seller and the buyer must pay a higher price to cover Agency commission

The Agency must pay for everything or I'll find another Agency that will

It's the Agents fault why my property is not selling so will add more agencies even though they're all listing on the same portals

To

It's my property and when I sell my property and have benefitted I must pay something - I pay sellers fees for other items of my property eg advertising cars etc.

I do not want to over inflate my property price as it will attract less potential buyers - the only bigger fool is me when my property remains unsold for a long period in a buoyant market

If I have to schedule viewings every week this costs me time to clean and stage to show house condition - my time is valuable and I only want to tour qualified buyers


If I sell quicker I can move on with my life plans and avoid paying maintenance, utilities and interest (if mortgaged) for something that I have decided to divest


If I try to photoshop images and hide a poorly maintained property - the prospects will see it anyway upon arrival so I must take responsibility and prepare to show house condition

As a potential buyer I only want to see properties with a virtual tour as I value my time and do not want to waste it trailing unsuitable properties / sellers trying to hide something

With regards to Matterport leads 100% of the leads I've received are mystery shoppers researching the market as a potential entrant. Matterports needs to qualify these leads as they're sending through MSP service leads that are in fact their own potential camera product leads.
Post 8 • IP   flag post
Viewing private msg quote post Address this user
Is there any reason you can't get paid when the agency gets paid, setting up a minimum charge to cover your costs if it doesn't sell with that agency? You are sharing the risk and could demand more because of it perhaps.

The issue has always been putting demand in the hands of the public so yes, the big portals here not supporting tours plays a big role. There's a world of angles away from the mind's of an average estate agent though.

It won't be this tough forever (to the UK pro struggling to drum up business). It's only time standing between your camera and a healthy bank balance. Once the public sees how amazing 3D is (especially Matterport and NCTech) on a mass scale then the control of demand changes, with the agents first, then business owners of all types having to keep up with public expectation.

This will all be possible very soon so keep the faith. There are plenty of good guys on this forum who will help you as much as they can.
Post 9 • IP   flag post
Bale100 private msg quote post Address this user
Problem is by the time the European Real Estate market catches on, there will be an oversupply of service providers and newer technologies doing the same thing for less.

Think Energy certificates & floor plans - definitely no longer an attractive business as agents dictate a low flat fee to providers.

We can see there's already a race to the bottom in North America with 3D scanning.

That's why it's essential to diversify and have multiple products / services / solutions for multiple sectors / markets.

Try to solve customer problems with a range of technologies that form a solution rather than commodotising a single scanning service.

Look for opportunities that have an income to self fund the proposal where demand is strong - hence why the holiday rental sector in Devon & Cornwall are willing to pay for 3D & Aerial etc.
Post 10 • IP   flag post
JAX1979 private msg quote post Address this user
Hopefully i can give a unique take on this.

Iam in the UK, I own an Estate Agents, I have just purchased a Matterport Pro 2 Camera.

As an agent i simply will not pay £X to a third party if i can be left out of pocket.

I saw the matterport camera, and the thought of spending circa £150 upfront on a property that i may get a 1% selling fee and not actually sell the property was a no go.

Fee erosion in the UK is massive, we also are fighting the rise of online agents (the States have this coming) We are also being squeezed on PPC and Portal advertising.

Battling to get instructions on is hard enough, if you ask the seller to part with an upfront fee you are shown the door.

I have purchased the camera and will give the scans away free with every instruction, i am using it as an instruction winner.

If you are in the UK and thinking of selling to agents i would strongly advise against it.

HOWEVER - I see massive opportunities in other avenues not selling to estate agents, i have also started another business and we will be marketing to others but NOT estate agents (no money in it).
Post 11 • IP   flag post
Bale100 private msg quote post Address this user
This underscores my comments above.

I have visited some of the Biggest / Global / Prestige Real Estate Brands & Yacht Brokers / Franchises in the business with offices in Ibiza, Portals / Port Adriano Mallorca and Peurto Banus / Golden Mile Marbella.

They are selling Luxury Properties & Yachts in the tens of €millions with maintenance and mooring costs running close to the price of an average European home.

Agents 5% commission + Vat

Yacht brokers 10% commission + Vat

They still will not pay for Matterport as no exclusivity in most cases and sellers won't pay as they think Agencies / brokers get more than sufficient commission to cover this.

Grid lock.

Btw... everyone loves the Matterport product

Focus elsewhere & differentiate
Post 12 • IP   flag post
letsdosome3D private msg quote post Address this user
A lot of agents we've dealt with love the idea at first then lose interest very quickly when they realise that the tours can't easily be viewed on most of the major UK portals.

You're also effectively asking them to double their marketing spend per property which is too much for them to swallow (and in some cases, triple or quadruple given some MSP prices!)
Post 13 • IP   flag post
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