The New Generation of Real StateWed, 02/21/2018 - 09:21
Q: What opportunities inspired the creation of Dada Room and what are the company’s revenue sources?
A: Dada Room is a tool that helps people find shared housing. Users can access most of the platform’s services for free but they can also subscribe to premium offers for MX$200 to MX$300 per month. This extra service provides access to phone numbers and new ads, meaning users can find a room more quickly. Other income channels include advertising. We also work with insurance companies on additional services and eventually we want to offer users the option to pay their rent through the platform.
When we launched the company four years ago, we realized there were two main reasons why people search for shared apartments. The price for buying or renting in big cities was growing quickly in comparison with young people’s salaries. The average salary for a recent graduate is MX$11,000 but 10 years ago it was MX$9,000. Back then it was possible to rent an apartment in the now trendy Condesa area of Mexico City for MX$2,000. Today this same apartment could cost MX$12,000. We also recognized this new generation entering the Mexican and Latin American labor force is different from its predecessor. Today’s young people prefer quality of life to property, want to live close to work and do not plan to marry at 23.
To arrive at our platform, we studied the most innovative real estate sites, like Airbnb, and online dating platforms, like Tinder. Our product is a combined housing search site and match-making service. This combination provides what our ideal users are looking for: the right space to live in and the right people to share it with. We bring the human element to the real estate market.
Q: What filters do you apply to control what is posted on the website to ensure security and avoid fraud?
A: When we started pitching the idea, the biggest challenge was to convince investors that we could compel people to search for a roommate through the internet. In looking for the right security system we landed on Facebook. Mexicans might not trust the internet but they are among the world’s most active on Facebook. We took advantage of the security efforts made by this great player and now the only way someone can have an account with Dadaroom.com is through a Facebook account. We also created an additional filter so that any user that registers in the platform and who has fewer than 100 friends on Facebook undergoes a manual check.
Q: What are the similarities and differences between Dada Room users in Mexico and those from Latin America?
A: We designed the product for the millennial generation but the age at which people begin searching for housing changes from country to country. Dada Room users are younger in Mexico than in Brazil or Chile. For instance, in Peru, 40 percent of our users are older than 30, while in Mexico only 25 percent are that age. We are in Mexico, Chile, Colombia, Argentina and Peru. The highest growth has been between 20 and 30 percent per month in Colombia and Peru, while in Brazil and Argentina we are still in a period of adjustment with the platform. Today, we have more than a half-million users in Latin America and 90,000 active users per month.
Q: What trends have you recognized in Mexico using the data collected through the site?
A: With the data we compile we can generate studies and press releases that will help us reach the public that we cannot find through the internet. To develop these studies, we first worked with another startup, Atlantia Search, that does online market research and which belongs to the same incubator as us. Then, we hired an in-house researcher, an economist and a sociologist. Now we are developing our own studies that are also helping us identify where our market opportunities are. We have seen demand grow. On average, there is one room available for every four people who are looking in Mexico City. In delegations like Cuauhtemoc the ratio is one room available per nine people looking. We want to reach those who might have a free room but are not renting it yet.