By the time they decided to go into business together, one man had started and shuttered his own marketing firm and been doing freelance consulting around the Valley. The other had put in thousands of hours as a day trader.
Were they grizzled burnouts, switching careers midlife? Nope – just a couple of college kids.
Danny Loschiavo and Erik Nelson met in a global studies class their freshman year at Arizona State University. Loschiavo, an interdisciplinary studies senior, and Nelson, a supply chain senior, bonded fast – over their entrepreneurial spirit and their joint desire to “be the good guys and still make some money,” Loschiavo says.
They started a search engine optimization consulting business but soon lost interest. Their hearts just weren’t in it, they say. In 2011 they finally found a project they could be passionate about: LeadMagnit, a software program that matches real estate agents and homebuyers and makes the buying and selling of property easier for everyone involved.
Their eureka moment came after watching Loschiavo’s mother, a real estate agent, struggle repeatedly with companies that “over-promised and under-delivered,” Nelson says.
“There are so many products and companies out there that are just shady,” Loschiavo says. “They’re just selling people’s information. This (software) takes the power away from controlling companies ripping everybody off.”
They asked Loschiavo’s mother what her dream product would be — then they got to work designing it.
“We just took everything we hated and did the opposite,” Nelson says.
Their approach – progressive by most real-estate standards – is multi-pronged and pervasive. They have a Craigslist poster, Google search, pay-per-click ads and huge databases of buyers and agents updated daily. They maintain a blog on their website and use their Facebook and Twitter accounts to answer questions around the clock. Internet presence is key, especially in light of a 2011 National Association of Realtors survey’s finding that 89 percent of homebuyers use the Internet to search for homes and that 91 percent of those homebuyers used a real estate agent.
Their goal is to streamline the process and handle the hassles for the homebuyers, sellers and facilitators.
“We put ourselves on platforms that buyers are already on,” Loschiavo says. “Everything is done for them, most of it is automated. They can access it anywhere and get email updates about leads.”
It also helps agents determine which potential clients are serious and qualified to purchase a home.
“It’s an accurate depiction of the current market,” Nelson says. “It helps everyone involved. Agents know what buyers want before they even speak to them. It’s more than a name and a wish and a prayer.”
After beta-testing the software on Loschiavo’s mother and her co-workers for about eight months and seeing it succeed beyond their expectations (600 leads were generated within the first 40 days), the guys weren’t sure they wanted to share their “secret sauce,” with everyone, Nelson says.
“We saw the power it generated and it really kind of freaked us out,” Nelson says. “Thank god for his mom and the fact that she had agent friends to disperse the leads among. It was a real case of ‘uptown problems.’”
They decided to start selling the software in January and went “all in,” Loschiavo says. He's certain LeadMagnit will continue to grow and that it will continue to set itself apart from the competition.
"No one else offers trials,” Loschiavo says. “We push out a lot of free content. We have webinars that a lot of people do. You have to give to get, especially now that everything is more transparent.”
Another point of pride for Loschiavo and Nelson is their pricing. The basic tier is $299 per month for everything but the Craigslist poster (upgrading to that is $500 per month). Similar sites charge double, triple and even quadruple that amount.
“You get so much more for what your share is,” Carmen Cortez, a real estate agent and LeadMagnit customer, says. “They do all the marketing and all the grunt work for you. There’s no need for me to have a website and always be on top of things. They make it happen for us and we don’t have to think about the back end.”
Potential clients are often hesitant to put their trust in such a young team, but Cortez says they’re “smart enough to talk to people in the industry and learn and see what they need. They’re a good partnership, they complement each other.”
LeadMagnit has already established a firm presence throughout Arizona and, somewhat surprisingly, in Canada. Loschiavo and Nelson plan to expand to California this year and want to be in “at least 50” markets within the next three years, Loschiavo says. He credits their success to “sweat equity.”
“You just have to work your ass off, especially when you’re young in an older industry,” Loschiavo says. “But I will outwork anyone. We’re very driven and willing to put in the extra effort.”
In a slap in the face to corporate greed, the guys say it's more important to conduct their business with integrity and always do the right thing. They want to blend old-school customer service and character with their progressive business plans.
“It’s not that hard to be good,” Nelson says. “It sounds cheesy, but you need to care less about your bottom line and more about your customers. Make less dollars-and-cents decisions and more head-and-heart decisions.”
Contact the reporter at llemoine@asu.edu
