Upad: James Davis
James Davis on reinventing the rental market
Company name: Upad Website:www.upad.co.uk Founders: James Davis Age: 33 Based: North West London Staff numbers: Nil – services contracted out Date started: October 9, 2008
Tell us what your business does:Upad is a free online service that matches renters to their ideal pad and to private landlords directly. At the moment there are about a million tenancy agreements that are created in London every year, and yet there’s no mechanism bringing private landlords and renters together. You have the traditional estate agent, with the high fees that they charge at the corporate end of the spectrum, and then there are various shifty sites that cater for room share/ flat share; but the main body of the rental market consists of people looking to rent either on their own or with a partner or with one or two flatmates. For them, there is no real offering: that’s where Upad comes in.
Where did the idea for your business come from? I’ve been a landlord for 12 years now, renting places out in London for the long-term and to young professionals in the main – as most private landlords do. I found that a lot of tenants were viewing 30 to 40 properties before finding one that matched their criteria, which seemed nonsense to me. Surely you should be able to get rid of the ‘hassle factor’, plug in the details that matter to you, whether that’s parking, broadband, or outside space, as well as price and location, and get results that match your criteria.
How did you know there was a market for it? There are various reasons why the rental market will be and has been growing – factors like people getting married later, a flexible working culture and of course the affordability of property ownership – for every 1% increase in salary, there’s a 2% increase in house prices. The trend is towards more people renting – the rental sector is set to increase from just under a million to 1.6 million by 2021. And the way we see it, there’s a gap in the market for something that’s more cost-effective than the existing high street estate agent offering. Letting only makes up 2-3% of high street estate agents’ revenue, it’s not a key market for them at all. And then they charge the equivalent of half of the net profits an established landlord takes!
How did you raise the money, how easy was it? I did the usual speaking to various Business Angel groups. I got involved in lots of forums and looked into the market place extensively. A lot of the venture capitalist companies will only invest once the business is launched and once it’s proved it’s got legs, but there are also a lot of people out there that either have a lot of experience in the property market place or within travel or dating, and they can see the commonality of it all. There are plenty of people out there who are willing to invest in start-ups, but I think it’s the relationship between an investor and the founder that really matters. It requires a lot of time and effort and pounding the pavement. You need to have the same vision – if you’re both coming at it from different angles, it’s not going to help.
Advice to budding entrepreneurs: It’s important to put the time and effort into talking to people and to listening to your customers: it makes your business so much stronger. I want to speak with the users of our site, to see what their experience is. A lot of businesses don’t speak to and listen to their customers, but it’s important to find out where people have heard about your service, would they recommend it, what would they improve etc. I’m spending a lot of time doing this – I just wish there were five clones of me to do it as well! It’s not something you should contract out.