Two Lessons Learned from RentJuice

By Jason Brein

The RentJuice case provides two insights applicable to Excelegrade, my own startup. 

Numerous product, market, and business model similarities allow RentJuice to serve as a paradigm for Excelegrade. First, both are SaaS products monetized through a “freemium” model with monthly subscriptions priced at $30-$40 per user and average customers purchasing 5-6 seat licenses. Second, both address industries – residential real estate and public education – with vast amounts of uncollected data and predominantly manual workflow processes. Third, both attack fragmented ecosystems – the 12M owners of over 30M residential rental units and the 7M teachers spread across almost 100k schools – through their respective “densest hubs” – brokers and teachers. Finally, the education and residential real estate markets depend on local economic trends and regulations, so both companies launched city-by-city anticipating that achieving high densities of users in particular metros would create word-of-mouth and other viral effects. These similarities have allowed me to draw lessons from David Vivero’s success building RentJuice.

Lesson #1: Sales Model
Both RentJuice and Excelegrade offer most features for free but charge for customization, analytics, and reporting capabilities that become more valuable as usage increases. Whereas RentJuice always relied on telesales, we intended to hire a direct sales force to visit schools with particularly high concentrations of free users and sell them reporting and analytics tools to allow them to capitalize on the vast amounts of data that their teachers have been collecting.

One problem: Our unit economics cannot support such a high-touch model. Our sales reps command ~$100k annually, so achieving David Skok's suggested multiple of 6x on-target earnings (“OTE”) requires reps to generate almost 240 new customers each year, or almost one new customer per workday. Even if each rep visits four schools daily – an aggressive assumption given teacher schedules, school check-in procedures, travel time, etc. – sales reps would need to close almost 25% of leads to meet quota. And this already-aggressive assumption ignores the “top of the funnel” – the time required to initiate contact with leads, qualify them as likely buyers, and forge relationships with decision-makers.

Instead, we should follow the RentJuice model and develop a strong telesales force that contacts 50-80 customers per day instead of three or four. This requires developing a compelling web demo emphasizing a few widely-used features rather than customizing demos for individual teachers based on their individual feedback. Which brings me to Lesson #2…

Lesson #2: Product Development
RentJuice and Excelegrade are innovative not because they introduce new functionalities never conceived previously, but, rather, because they improve users’ lives by seamlessly integrating multiple important features. Our feature sets are more valuable than the sum of their parts; just as MLS data integration increases the precision of KPIs on the performance dashboard, student performance monitoring becomes a more attractive feature if test are automatically graded and the results easily tracked. 

Because the value of the each feature does not become fully apparent in the absence of the others, I previously thought we needed to rely on “vision” up until the point at which we could present users with full feature sets. The RentJuice case, however, has convinced me that Excelegrade should immediately and aggressively begin soliciting user feedback. Given the heightened importance of product simplicity in a lighter-touch sales model, the features we prioritize must be crucial and the click patterns required intuitive. David and Kunal spent their days soliciting feedback from residential real estate agents and their nights incorporating these lessons. We should do the same with educators.

To the class: Do you think RentJuice is a reasonable comp for Excelegrade and do you agree with the two conclusions?

1 Excelegrade replaces paper-based tests in K-12 classrooms with assessments on laptops and tablet PCs. Our online software allows instructors to design standards-based assessments, administer tests on mobile devices, automatically grade and track student performance, conduct rigorous data analysis, and create individualized progress reports for students, parents, and administrators – features that save teachers’ time and improve educational outcomes. (See our website and product demo for more information.)