At CodePole we’ve started a thing called tech talks. Informal chats during our all-hands meetings with people who we work with, have worked with or who are simply doing cool stuff - anyone that inspires us. This time, after a short break, we would like to present to you a chat we had with Phil Lojacono, who is currently the CEO of Liiva. Previously Phil was a CEO and Co-founder of Advanon, a fast-growing Swiss FinTech that was successfully acquired by CG24 Group. You can say that entrepreneurship is written in his DNA. Let’s hear more!
Let’s hear the elevator pitch - what is Liiva and what value are you creating for whom?
Liiva is aiming to provide an end-to-end service for Swiss homeowners. First, we consolidate the entire Swiss market for real estate classifieds. Or in other words, we start by helping people buy a house. Then, we are assisting people in managing their houses. If you rent a flat, usually you have a landlord. If something doesn’t work, you go straight to the landlord. However, when you own the house you don’t have such assistance. Liiva is helping you in that by providing the advice and support you need in managing your own house. In addition, Liiva is an application where you can keep all house-related documents, which makes it very convenient for the end users.
We are developing solutions that should always be transparent and fair to our customers. So basically our project can be divided into 3 core modules: the first module is helping you in buying the house, the second module is helping you in managing your own house and the third module assists you in selling your house. So basically in our vision, the house should never leave Liiva’s ecosystem as we provide services throughout the entire life cycle of owning a house.
Okay, you wanna help the customer find the house, you wanna help the customer in owning the house and eventually sell the house at a later point in time. How do you wanna make money on all of this?
Yeah, that’s a very good question. The initial business model was rather traditional and very much focused on the commission-based business model. That means that whenever someone is taking a mortgage we will get a commission from that, whenever someone is hiring an expert to help him to buy or value a house we will also get a commission, and also when someone will use the services of, for example, a carpenter we will also get a commission. However, after talking with our Clients (we have ca. 3,500 active users on our platform currently!) we decided to change our business model to make our business more innovative, i.e. less B2B and more B2C focused. Currently we are going into a direction of a subscription-based model for premium services. Our users will be able to use everything on our platform for free, but when they decide to buy a premium subscription, they will get additional services. For example, Liiva will give you a guarantee that everything that a craftsman does will be according to your expectations. Additionally, we will have concierge services as well as a 24/7 legal hotline access. We want to completely shift our business model to give our users full cost transparency. That model was very well received by the test users. We are about to bring that to life.
That’s a very interesting turn around. I am glad to hear that it worked out well with the test users. The project seems very innovative to say the least. You mentioned that you have a coverage of over 90% of the real estate classified market. How do you source the apartments and houses?
We get them from the big search platforms that are well known on the Swiss real estate market. We use scraping for that which is allowed by the law in Switzerland. Interestingly, the platforms are not allowed to block the web scraping.
Are there any issues with the web scraping? I can imagine that these platforms keep changing the format of the pages on their websites, which makes scraping more difficult.
It’s quite challenging. At the beginning for example, they changed some house prices, which then, if feeded to our platform, would make us look unprofessional. Recently the entire Swiss market has consolidated. All the major digital search platforms are now owned by one company. Thanks to that we managed to establish good cooperation with them and become their partner.
Getting back to the sourcing - are you using any quality checks for the sourced ads?
We work with an external provider that offers scraping services. They make sure that the data is of sufficient quality, but the quality remains a challenge. We are now focusing on the structuring of how a house should be sold. For those ads we have very strict quality controls. They are “Liiva quality” ads, which are branded with our name and differentiated from the rest of the market.
Alright. Makes a lot of sense. I noticed that you have other cool features such as estimations of the house market value as well as estimations of whether a house needs to be refurbished. How do these work?
We value a house via a 3-step approach. The initial input comes from 2 separate valuation models. The first one depends on a few variables, such as location, size, construction date, etc., and results in a relatively broad valuation range. The second one is a more detailed one with additional information provided via a separate form, but it produces a more exact estimate for the house price. In the third step, our experts visit the house and analyse it further. Such an approach provides us with a complete picture in terms of valuing a house. It is a combination of statistical models and expert knowledge. Apart from estimating the price of a house, we also provide our customers with estimates of additional costs that they would need to incur to get the house refurbished based on the data provided, e.g. renovating a kitchen that is relatively old. Our customers really liked this feature.
That’s a very appealing combination of automated processes with a human factor element. But moving on to the living side of the product - I noticed that you have a modernization planner. You have also mentioned that you have implemented a document management feature. How does it work?
Initially, we had a plan to have something similar to Dropbox, which would allow you to have all documents in one place, e.g. invoices, house plans, etc. We started with just one folder where you can upload the relevant documents, but it had its limitations. Then, we tried to use it as a collaboration tool for banks and insurance providers. They could get access to all the documentation and immediately provide you with a new quote for your insurance. Sharing ability broadens the use cases for this feature. The main idea is for you to have seamless access to all of the information related to your house. This will build customer loyalty and make the relationship much more sticky. It will provide a great added value for our users. However, it is still under development.
That’s a pretty cool thing. Apart from the quality control, what are the features that can bring greater value to the users?
Being a broker for selling houses is a high margin business. However, if you talk to users, they are still insecure on how to market the house. The legal area is very cumbersome for them. A lot of people will have a need to sell the house by themselves. So we again want to build around the market needs that we see. We will split the whole process into 3 different steps. The first step is a service based on a fixed price. You will receive a professional photographer, 360 degrees view of your house, etc., i.e. everything that you need to start a successful marketing campaign. The second step will include the actual selling part. You can manage the visitors yourself. In Switzerland the majority of houses are currently sold via an auction. That’s why we want to build a bidding module which can manage the entire process and multiple bidders. The last step will be related to the finalisation of the proces, i.e. the notary and other legal requirements. All of those services will be priced significantly cheaper in comparison to a standard broker commission that is a dominant model at the moment. The price transparency and our assistance will give our users an option to sell their house without the help of a broker.
There seems to be a great number of interesting features planned for the future. How can you prioritise what should be built first?
It’s a great challenge. You cannot do everything in parallel. You will lose focus and you won’t be able to build up the market. Our main goal is to have our 3 core modules ready to show potential customers our vision. The next priority is to prepare the “selling part” of our ecosystem. Then, in the long run we feel that managing our second core module will be very important. It will allow us to help people really manage their houses properly.
Yeah, it absolutely makes sense. Thanks a lot for the chat!
