Today on the More Cheese Less Whiskers podcast we're having a conversation with a AbdelRahman from the UK.
You've heard me say that in order to scale something, we need to create a scale ready algorithm and that means, just in the simplest terms, that you have to figure out what is the unit of one that's going to underpin the economic transaction.
What is it you're offering? What is someone buying? Who's the winner in this, and who stands to gain from it?
Sometimes when you have a service that can help a group of people, it's important to understand and establish who is the person that's going to best benefit economically from this, and sometimes it's not actually either side of the original transaction.
It's a little bit complicated to explain in the introduction here, so listen in and see how this conversation evolves and where we ultimately take it. You're going to see a new way of looking at something and I think you'll find this one of the most interesting episodes that we've done.
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Transcript - More Cheese Less Whiskers 122
Dean: . Abdel Rahman
Abdel: Hello.
Dean: There he is. I've got my evil, scheming tablet here. I've got my bottle of water, I've got my comfy chair, I'm ready. I'll just set the stage for people listening in after, because this is a continuation of a conversation we started on an email mastery member's call. In talking with you, it seemed like this would be a really good forum to brainstorm and establish the economic engine of what's going to make this work for you, because you're really, truly at the startup phase.
Abdel: Yes, yes we are.
Dean: Okay, let's start from the beginning and set the stage. Then we'll move forward. We've got a whole hour here to brainstorm, so tell me the story.
Abdel: The story is quite simply, my father 30 years ago went through traumatic experiences as a student here in the UK. He was an international student at the time, and then he read report after report saying that students go through exactly the same trauma, international as well as national, and landlords take advantage of their vulnerability. Based upon that, and it's been years of R&D in order for us to figure out a system whereby we could help students and overcome that vulnerability without really flintching the landlord and then causing more vulnerability.
That's where we are. We tested it with students, and we were able to get students to survey the properties. Then we weigh that and we say whether it's good or not. We go through a coaching process with the landlord where the university's involved, and the landlord is, through positive reinforcement, things like that and encouraged to resolve the issue. That resolves 80% of cases, and those cases that are resolved, we then change the review to say that it's positive.
All positive reviews are then listed for future students within the vicinity of that address, depending upon what university they're studying. Then I can see, "Okay, this is a good landlord," et cetera. It means that they're not leaving it up to chance, because when you go see a property they're going to be very nice to you, they're going to cover up all the problems, the mold, they're going to get rid of the rats there, a slug infestation, et cetera, et cetera. It's only a month or two in that you begin. What we do, we tell what the living experience of previous student tenants are.
Dean: Okay, I'm getting a sense here of what this is going to be similar to, in that it's like a peer-review system for students to share their real experience of living in these apartments or flats or whatever it is, okay?
Abdel: Yeah, it does two things. It stores the student memory as if they were bees all working together. It stores the student memory so that the landlord, because you see, landlords can afford to not really care about students, because they know that next year we're going to get new students. It doesn't matter how much the student complains, the problem's going to be over in a couple of months. We're going to get a new student, we're going to have three months of bliss followed by five months of hell, but that's okay, that's just the business.
By hiding those bad properties and only listing good properties, what it means is that new students are less likely to fall into that and as the list grows, they're even less likely. Now, if they do have issues, our system is not just a survey but it's a review. In other words we act upon it, and therefore we coach the landlord and we change it, with the promise that once it's changed they'll be listed for next year, which obviously helps.
This helps the universities' reputation as well, because one of the biggest problems the UK currently faces is the biggest export for the UK is education, and it's getting a reputation for being extremely non-user-friendly for international students. It's something that they're very eager to change.
Dean: Okay, that's what I'm trying to get a sense of, is who's the most interested in this. It's one of those things, as you're describing it to me, and there's a lot of things that people will describe to me that often are really great ideas if they're up and 100% running, right? If every student would provide this information about all the housing that's available, and all the universities would come on board with this, and all the landlords were responsive and concerned about this, the way like Yelp, where it becomes the industry standard kind of thing.
What I'm curious about, and what I'm trying to figure out is, who's got the self-interest vested in this enough to do something, because it's a big thing to get the word out about something like this at scale.
Abdel: Yeah, I mean, it fits in with monetization a little bit. In terms of the accommodation department within the university, they have issues that they're trying to resolve, because they get blamed, even though it's not actually their job, but they get blamed by students when they're not seen to have done enough. Even though their student is with a private provider, I mean, it's got really nothing to do with the university, but the student is with a private provider, and they're paid a lot of money for their tuition, and the parents expect them, et cetera.
The university accommodation, it would help them, and it would help enhance the reputation of the university if it's known that they have this system that assures quality for their students. That's one part here. Another part is the landlord who would benefit. Okay, the way that we've done up to now, first we went to the students themselves, okay, but we don't monetize with the student because they're stuck, just for many reasons.
We don't really monetize with the student. Then we thought, well, let's go to the university because if we go to the university, the university can then send us all these students, and that's currently where we're at. We think that the biggest vested interest would be with the university, with the actual accommodation office or with the university services department.
Dean: Got you, and then the landlords, this is the trifecta here. The landlord is the other situation, the other party involved in this, right?
Abdel: Yes, the landlord's the other party involved and with them, there's the advantage of if they're good, they get thanked. I mean, it's a thankless job, so they get thanked. Then the advantage also is that there's an incentive to continue to be good or to become good, because they'll get recurring business. It's a bit of a medium-term thing, because if the ship sinks, if the university reputation suffers, then after a while their business will suffer as well, because really they're just leeching. All of their customers come because of the university. It's a little bit shortsighted of them not to want to service those students as best as possible.
Dean: Okay, the good landlords get thanked, and the bad landlords are exposed really, right, for being non-responsive?
Abdel: They're exposed to the university but not publicly. Then 80% of them do resolve the cases.
Dean: Only the university sees that. Is it some rating system?
Abdel: A live rating system, live rating system. We literally coach the landlord, and we tell them what's wrong. They have the right to say, "Actually no, the student is lying," or "Okay, I'm fixing this. It's fixed." There's responses that you can give. Then we coach them and then after that 80% of them do change.
Dean: Okay, the student tenant, would they have a voice, they know what to do if there is an issue?
Abdel: Yes, I mean, we want the university to send them an email to say, "Look, this service exists, and it's like having your own personal accommodation assistant who's going to do everything on your behalf."
Dean: Okay, okay. The university, there I'm just making a little grid here on my tablet to keep it all straight here, to look for, what's the primary driver at play here? In the accommodation department, what they have is that this is going to save them time.
Abdel: This is going to save them hundreds of thousands of pounds. I mean, 60% of the reviews we've received have been substandard, and this fits in with other national surveys that have been done by the National Union of Students and other entities.
Dean: Okay, how does this save them hundreds of thousands of pounds?
Abdel: Well, if every case took just three hours to solve, which it doesn't, it takes more than that to sit down and explain everything. Then the student goes and does everything manually, and most of them don't actually, because they're stretched with their studies, they've got debts. There's a million things. They don't have the discipline to write and follow up and log and chase a landlord, and the landlord's ignoring them, et cetera, et cetera.
That takes more than three hours, but if it were to take three hours at the minimum rate of £8.50 an hour or £8 an hour, and 80% of students are living in private accommodation, sorry, 50% require help, it's easily going to be past 100,000 just to employ people that would work three hours per case, actually more than three hours.
Dean: I got you. That's in an ideal world where they feel like they need to employ that many people to do that job. Are they currently employing enough people to do the job?
Abdel: No, nowhere near enough, no.
Dean: They're not saving the money then, right?
Abdel: They're not saving, correct.
Dean: They're not saving because they're not actually hiring the people to do that. They're just doing things, so they're not actually saving the money.
Abdel: That's right.
Dean: Okay, Yeah.
Abdel: They're not actually saving the money. There's another small problem as well, which is that first of all they're not saving the money, but then secondly, they're actually not aware that 60% of students have these issues because we are proactively chasing students and asking them questions, whereas for example, if I was to give you an example of rape victims or domestic abuse, for example, here in the UK they say one in four women have gone through domestic issue and not one in four women is going to go to the police and tell the police that they've had it, because the police don't proactively act because of the shame of it, because of the vulnerability of it.
Maybe they don't even know that what's happening to them is abuse. It's the same thing here. We ask questions that then let the student know, "You know what? We shouldn't have slugs, we shouldn't have mice." They might think that's a normal thing and they should just bite the bullet and shut up, but they shouldn't. I would say that the university actually ever hears maybe five to 10% of the actual problems, as opposed to 60.
Dean: Okay, so that might be that they're going to look at it and say, "It's really not that big an issue, because we know we have a full-time accommodations staff, and we address issues when they get brought to our attention."
Abdel: Some of them have said that, yeah, some of them have said that.
Dean: It's not really a big issue, but you're saying well, stats show this, so you're essentially saying, "Well, if we kick this hornet's nest here-
Abdel: We're going to make two problems, yeah, exactly.
Dean: Yeah, I mean, I'm just role-playing these things here. I want to see this thing here.
Abdel: Some of them have said that, yeah, some of them have said that here. Yeah, some of them will have-
Dean: It's almost like if they don't know there's a problem, then there's no problem, right, but there is a problem underlying.
Abdel: Yeah, which they would rather not. It's a hornet's nest, as you say. If it's not broke, don't fix it, that's a very English, British motto for life. There is that element, but then again, 80% of the cases will be resolved by us. At first, we were saying, "Look, it's not just about the accommodation. This is about actually enhancing the university reputation and saying, 'We are quality assured'."
We assure the quality of our student rentals, but the people in the accommodation office aren't all that bothered with it. That's for more of the services and the marketing. Then when we approach the services and marketing, they say, "Look, this is accommodation, you go to accommodation office." That's where we've been. Just two days ago, after listening to one of the recordings that you made in the email mastery, number five maybe or number three, about that third perspective.
It's not about the use of a third perspective, so that got me thinking and we came up with a bit of a different idea that solves the problems that you've seen, that your intuition has seen up till now. That is that what we're saying is, "Look, we're not going to fix problems anymore. We're going to give you a list of tried and tested properties, a list of properties that other students have vetted and lived in, so what we're doing is, we're selling you that list or we're giving you that list," as opposed to "We're going to fix anything."
The new thing would be, are you interested in a list of accommodation that has previous student-living experience, positive living experiences of students there, and then take it from there, so that's what we're selling. The reason why I came up with that is, because actually a lot of universities have a list of accredited landlords, but accredited doesn't actually mean that they're going to be good. It just means that they have the minimum, minimum level of gas and electricity standards. They've read a book or attended a job or course or something like that, so they're already there.
Dean: Is there a pledge or something, or is there-
Abdel: By the landlord?
Dean: Yeah, I mean, that somebody could get a rating?
Abdel: No, no, no, there's no feedback. There's no feedback mechanism. Bear in mind as well that, you see, as much as you would think that the landlord should be indebted to the university, at the moment the reality is that lots of universities feel indebted to the landlord because they need someone to house their students. They don't actually want to create... They don't have the mechanism to deal with all that feedback firstly. Secondly, they don't really want to annoy the landlord, because if they do, they're afraid in case the landlord doesn't want to deal with it. That's crazy, because the amount of money that a student landlord makes compared to a normal landlord is at least 50% extra, at least.
Dean: Yes. They jam them in, right? I mean, everything is a bedroom, right?
Abdel: Yeah, everything becomes a flat, yeah, so everyone's afraid. The student feels vulnerable, the landlord feels vulnerable, the university feels vulnerable, and that's why the system took us so long to do, five year’s worth of R&D. It was in order to get over all of these vulnerabilities, and we're there. We believe that we're there and we've tried and tested it. We've got 3,500 reviews of students up and down the country. Now in order to get that mass thing, it's just about getting more students to leave more reviews.
Dean: I wonder what the reality of the accommodation departments are, right now. You were saying that 60% show that there is a problem, but we've calculated that probably only 10%, five or 10% of those will actually ever reach out about it. What's the reality of the volume or noise of this problem at the actual accommodation office? Students-
Abdel: I mean, that 10 to 15% is still quite big and a lot of them actually, they outsource to other providers. We spoke to those other providers, naively, thinking that they would like us to help them, but they quickly saw us as competition, even though we didn't think we were to start with, but they saw it as competition. They give the student manual advice, shifting blame, but they give the student manual advice so the student is not able to follow through. This is a problem and they have a problem that is the same as a problem.
Dean: Yeah, let's narrow this down to one, because it works on the university by university basis, right, so that's really the situation.
Abdel: Correct.
Dean: Let's put some real scenario on this, because it only matters if it's at the university that I'm going to, right? There's no benefit to me as a student tenant, is there?
Abdel: No, there is.
Dean: Well, only at the school that I'm going to, right? That's really what I'm saying is that it doesn't matter. If I'm going to Oxford or I'm going to Cambridge or wherever, that it only matters to me that this exists in Oxford. I don't care if it's at St. Andrews or whatever if I'm not going there, right?
Abdel: Okay, sure.
Dean: Do you know what I mean?
Abdel: The only thing I would add to that is that, even if the university isn't actually with us, any student from anywhere can do this, as long as it's in the UK.
Dean: Okay, I mean, I'm trying to get what's the natural ecosystem here, right? The natural ecosystem of this would be that it's at Oxford, or wherever I'm going, right? Each university is its own stand-alone thing, because you've got the accommodation department at Oxford, you've got the student tenants of Oxford, and you've got the landlords who own the properties of Oxford, right? Those are all going to be different players at all the different universities, right, so the whole of it, if all the UK is made up of these duplicatable models, that's the way it goes, okay.
Abdel: Correct. The only thing to that is sometimes there's two or three universities next to each other.
Dean: Yeah, I get it, in Cambridge there may be two or three universities all at one place.
Abdel: Yes, and they're all within the same vicinity so the students-
Dean: I get it, it's a geography thing, not necessarily.
Abdel: Yeah, exactly.
Dean: That would be the case, right, so that's the thing. Tell me, let's use a city as an example here. Where are you?
Abdel: Birmingham, for example.
Dean: You're in Birmingham, okay. Let's use Birmingham as an example then, and how many universities are there in Birmingham?
Abdel: In Birmingham there are three universities.
Dean: Okay, you've got three universities in Birmingham. How many students collectively go to those, roughly?
Abdel: Maybe 60-70,000?
Dean: Okay, 60,000 students go to those universities. How many of them would be getting off-property accommodation, because some of them would probably be locals, right?
Abdel: Some of them would be locals, but nationally the statistics are, I think, 60 to 80% of them would be renting privately.
Dean: Okay, let's say 40 to 50,000 of them.
Abdel: Correct.
Dean: Okay, let's say 50 just for round numbers here. There's 50,000 of them and you're saying that 60% of them have a problem of some kind.
Abdel: Have substandard accommodation.
Dean: Substandard accommodation, that's your good thing.
Abdel: You know what? Substandard servicing of accommodation, because accommodation is a service and not a product.
Dean: Yeah, okay, 60% have substandard servicing, and that would put us at 30,000 have substandard. Probably only five to 10% of them would bring that up to somebody so 3,000. Roughly they're getting, let's just call it 10 people a day are coming into the office and saying they've got a problem, or they're coming to the accommodation department.
Abdel: That's what our statistics and what we've garnered so far, according to that then, yes.
Dean: Okay. How big are these accommodation departments? Is it typically one person manning the desk, or is it a team?
Abdel: It depends from university to university. It will be from maybe four to 25, but the 25, the only reason there's 25 is because they actually manage their own properties and they're not there as an ambulance service. They're not a hospital. They're there to service their own. They will help, but they only give manual advice mostly.
Dean: I got you. Give me a flavor of what might one of these 10 people that are walking in today be saying. What's driven them to come to the accommodation department?
Abdel: Okay, the landlord isn't responding, even though I've been chasing him for a week.
Dean: Yeah, my bedroom window is leaking. I've had this problem. I can't get in touch with the landlord.
Abdel: They have no idea how to, yeah, for a week, that would be one thing. Another thing would be, for example, that the heating's broken down or there's been a break-in in the house and the landlord won't replace the front door, or there's mold, or there's a mice infestation, or there's a slug infestation, or the landlord comes into the house without any permission, without any notice, many other things.
Dean: Okay, they're coming to file a grievance. "I'm going to report you to the authorities," that's what they might do, or it's now to their landlord and these are the authorities that they're reporting them to.
Abdel: Yeah. Except that they're not really an authority.
Dean: I understand but I mean, that's the sentiment of it, right, that they feel like, "We need to get somebody up here to do something, because it's a pretty serious thing." Then what does the accommodation department do, now that I've come in and my window's been leaking for a week, and the landlord won't return my calls or emails, and I want you to do something about it. Now what?
Abdel: Now the accommodation department will say, "Okay, all you need to do is read this booklet." They'll go through the chapters of that booklet and explain to me that I need to communicate with the landlord in writing, and I have to chase them up. Give that a couple of weeks and if that doesn't happen then come back to me and some of them will escalate it and take it into court. The majority will not. The majority, they don't really want to get involved and they'll send them to a charity that might deal with something like that, charities such as Shelter or anything like that.
What the majority of accommodation offices will do is they will let the student know their rights and how to enforce their rights by themselves, but in no way whatsoever will they-
Dean: They're not rectifying the situation, they're not doing anything.
Abdel: They're not acting as an attorney of any sort.
Dean: They're not doing a thing to help the situation or to get somebody over to fix it or to do anything like that. They're just saying, "Read this booklet," essentially educating them on what they need to do.
Abdel: Yeah.
Dean: Okay, okay. You're saying that if they were on your system, instead of "Read this booklet," they would say, "Download this app."
Abdel: No, what we would like is for the university at the beginning of the year to let all of its students leave a seven-minute survey with us that sets a benchmark and also, based upon that survey, we then either thank or we proceed to coach the landlord and it lets the landlord know that they're being monitored, that the university's aware of the fact that they have the students living there.
Then every term, every three months or so, we send an email to those people who have left reviews. How's it going? How's your property? Has anything changed? They go in, they take three minutes if they need to, to tweak their review. Then if it's substandard, we start the coaching. If it's not, it means there's a positive review and that's it. Now if one of those students fell through the cracks, they could then go to the accommodation office and the accommodation office would say, "Well, okay, you need to go to this website and they'll sort that out for you."
We don't want that reactive. The only reason why we're going to the university is because we want the students to leave mass reviews, because if they don't-
Dean: The built-in benefit to the accommodation department, is that the volume of these coming in would go down, presumably, and actually the people who feel empowered to actually do something may go up, but without raising the number of people that come into the accommodation department.
Abdel: Yes.
Dean: Okay, that's just a deflection, in a way, right, for the accommodation department. It's saving them the time of doing it. Now, let's go to the students then. You're saying that the students, if there are 50,000 of them, are going to fill out a seven-minute survey, so we're going to have 350,000 minutes of student attention to fill out this survey.
Abdel: Correct, and it's incentivized.
Dean: Okay, what's the incentive for me as a student?
Abdel: We have a prize draw. You could win £50. 10 people win £50, et cetera.
Dean: Okay, have you got a benchmark for the number of people you can get, what you would expect to do this?
Abdel: I don't understand exactly what you mean.
Dean: Well, if there are 50,000 students in Birmingham that are eligible to fill out this seven-minute survey that you're going to, "Hey, want to win 50 bucks? Fill out this seven-minute survey." What percentage of those people would fill out that survey?
Abdel: Before, when it was us advertising to the students through online magazines, et cetera, 50% of the people who visited the landing page would leave their details and not proceed. Then I think about 35% would actually do the review. The difference here is that this isn't just incentivized. We want the university to say, "Look we want you to do this, because these guys will take care of your accommodation issues for the year, and it's incentivized."
The assumption here is that the opt-in rate would be higher and the review rate would be higher in terms of the opt-in and then completion the review, it would be higher. At the moment, before we would see that it was about 30% of the people that visited would leave their review.
Dean: Okay, then of the 50,000, how many would you anticipate that you would be able to get to, to get them to go there?
Abdel: If the university sent those emails, I mean, 25% would be okay. I think it would be greater than that. I think it would be maybe 50% or more, because it would be a campaign from the university. That's what we're hoping for, because it would be a campaign from the university. I mean, if the university okay it, then the student union could really take it on board as well and go all at warfare with it.
Dean: Yeah, now, is that another thing? Is that something that I was going to ask you about? Is there another advocacy group. Yeah, that would be able to rally behind this? The student union is what I was-
Abdel: Right, right. They can rally. They would give emotional support. We have knocked this door. We went all the way up to the top in terms of the National Student Union and local unions as well, spoke to the presidents, to the heads of welfare, et cetera, et cetera. The issue that they've got is that they're not grassroots so they don't have student emails. Everything is done on a campaign level. What would have to happen is that they would have to literally, manually go out and make posters and speak to people et cetera, et cetera.
Now, we could maybe leverage that, if someone wants to run a campaign to get into office and go through that, but it's not really the route that we want to take, whereas if the university was running it and the union supported that or jumped on the bandwagon, then they would benefit and they would add further credibility and motivation. A compelling stage would be stronger. The actual student unions themselves don't really have emails for students.
Dean: Yeah, but the accommodation department would have everybody’s record.
Abdel: Accommodations? Well, not the accommodation department but another department, but the accommodation department communicate with that department and let them know, "Look, we want this email sent out to students," et cetera.
Dean: Okay, okay. Then the students for the potential prize of £50 will spend seven minutes to fill out this survey. Then what happens from there? They fill out the survey. You were saying, maybe you get let's say, 10,000 people to fill out this survey, if you've got a 50,000 thing. It sounds high, I'm just going to tell you, just to get that many humans as a percentage to do anything selflessly, incentivized or not, you know what I mean?
Abdel: That's over at the universities. Bear in mind we've already got three-and-a-half thousand reviews, and that was done manually by us through advertising, and that was just with incentivization. It didn't have anything to do with the university behind it, so we're hoping that with the university behind it is going to make a huge... Plus, most people know they're going to have issues. The other thing is we're asking to leave a review in November, which is when it starts getting cold and they've been there for two months already, so they're past the honeymoon stage. The landlord's not quite as responsive, et cetera, et cetera.
Dean: Right, okay. Has anybody paid any money yet, at this point in the journey here, where we are?
Abdel: No-one's bought, no-one's bought it, no.
Dean: No, I'm saying, in this whole situation here, nobody has made any money or spent any money. There's been no money exchanging hands.
Abdel: Up till now, no, apart from us spending money to make the thing, but yeah.
Dean: No, no, no, I'm not talking about you and the business, I'm just talking about this interaction trifecta here between the students and the thing and the landlord, nobody has spent any money yet. This is all just getting the information. Okay, who ultimately is going to pay for this now, in your model within the universities?
Abdel: In the model the university will pay in order for us to turn on the service, but remember that recently we changed what the service would be from, "We're going to fix your problems" to "We're going to give you a list of good providers for you to deal with the next year." Then upsell after that, after providing that service would be, "Okay, well, you know what? Here's a list of 60% of them, but this list could be 60% bigger. Here's how."
Then they pay for the extras where we coach the landlords. That's one person that would pay. The other thing is, once we have a list of landlords big enough, once we have a big enough list of landlords, we will then be getting commission from the landlords for sending them students on a yearly basis.
Dean: Okay, sending students. Now you're directing students. You're getting paid a commission, then you're incentivized to feature the ones that are paying you the commissions, right?
Abdel: No, no. We will only show properties with good reviews. We will only show properties with good reviews.
Dean: I understand that.
Abdel: There's two ways we've thought about this. If the landlord won't pay commission or whatever, then we will ask the student if they want to access that particular landlord's details, which we will have, for them to pay almost like a reverse thing, but that's further down the line.
When we've spoken to most landlords, they're more than happy to do this, because they're already paying a lot of money to be on other platforms that don't specialize with students. The other thing is that we're going to be saving landlords a lot of time because it's almost like booking on lastminute.com or booking.com. You know you're going to a hotel, you know you're going to receive a good service, so if their property had good reviews for one or two years, someone from China is going to be happy to pay a deposit subject to just everything on that description being true, just like with booking.com.
You book it but you can always cancel when you get there if it's not real, if there's a problem, but you're not going to because the hotels want to service you in order to keep their reputation, et cetera, et cetera. That would be the incentive for the landlords to remain with us, is that they only deal with students because of the way that they structure their homes, et cetera, so they actually want a student-only website.
They do exist, but the other student-only websites are based on advertising, they're not based upon misuse, so they're actually tilted towards the landlord, because the ones who pay more get seen more. With us it's about the ones with the better rating get more views.
Dean: I mean, it's interesting to say that on paper.
Abdel: Agreed. It's not my normal modus operandi.
Dean: Yeah, yeah, yeah.
Abdel: I usually do direct marketing but this is a little bit hit and miss, it's flying blind and hoping for the best. I do appreciate that, but it's where we are at the moment.
Dean: Yeah, okay. How much, if the university did want to get on board with this, that's who your first sale is going to be, right, to get the money? How much are they going to pay?
Abdel: About 10,000 and the only reason for that is we want to go in underneath. There's a number, procurement, after which they have to go public and then people have to fight for the contract and show. For most students it's £10,000, so we don't want to go through that. We want to get it ASAP.
Dean: Right, so if I'm looking at this situation here for the economic impact of Birmingham, that there's a potential for £30,000 or whatever.
Abdel: Initially, yes, initially, before landlord commission and whatever else, from the universities, I mean.
Dean: Yeah, three, that's what has to get it started, right, to get that going? In order for them to write that check, we've got to figure out what is the pay-off for them, right? If they're going to see the savings of this, the benefit, the cost savings of this, would there be someone that this might come down from? Are they working autonomously, or are they going to say, "Well, you need to take this up with..." and pass the buck over to somebody else who's actually going to... Does the accommodation department have its own budget?
Abdel: Yeah, yeah, usually, usually.
Dean: A lot of this is just getting the right coding, right, in a way? I mean, in terms of what you're actually referring to it as can make the difference. Is there something that they would already have a budget for, that this could easily come out of or save them money from?
Abdel: Ah, mm-hmm. With some universities in London, they already have a budget for third-party services that continue to just give manual advice. I mean, I've never really thought about that before, because we were trying to find our zag, not where we are similar to others, but where we're different. From that respect I never thought about that up till now, but some of them have that budget for outsourcing to third parties.
I don't know if they would trust us enough, because they are already doing that, but lots of them spend money for example, serving the current situation for students. They spend money doing that, so that idea there was that we would give them statistics about how many students were in substandard and good quality accommodation whilst giving the students access to the portal next year, which would be 40%, right? Once they've bought that, we can then say, "Well, look, there's 40%. Do you want us to move that from 40 to 80?"
In which case you would then take up the landlord coaching module, which is going to be another 10 or 30. I mean, this 10,000 marker is just to get the foot in the door without procurement and hassle. Once we're in, like I said, it would be saving them hundreds of thousands. Once we're in and they're happy to work with us, I think we would have the trust and relationship and speak to them and other departments at the same time, because it would have to be a cross-departmental decision. This is what I'm guessing.
Dean: Mm-hmm (affirmative). Is this a non-profit or you're building this for profit?
Abdel: It's a business.
Dean: It's a business, okay, great.
Abdel: We've had some resistance with that.
Dean: Yeah, that's what I'm wondering, right? That's the thing where-
Abdel: That's where we're encountering some resistance with some of the student unions. They're a little bit socialist in their outlook, if I'm honest with you, in terms of, "Oh, what you're doing is just to make money." Well, there's lots of easy ways to make money, but this is not very easy. We do have a mission and we do actually want to help students.
Dean: Yeah, because this really is not very easy, is it? I mean, just there's a lot of moving parts here. What I think you really need is, I'm just trying to think about if there's a way to phrase something about having a grant or something to set up a case study in that Is Birmingham where you live or where you would or what would be the…
Abdel: Either Birmingham or London or Manchester, somewhere like that.
Dean: Yeah, it seems like Birmingham or Manchester would probably be easier to create an isolated situation, right.
Abdel: By the way, we're happy to give the universities beta version of this.
Dean: Right, and that's the thing, is what you just really need to do is for the version of this, I mean, even if you need to get one thing that you can point to that actually takes this from theoretical to real, right, because really there's somewhere between three to probably six total individuals that you need to know to make this happen in Birmingham, right, with the three universities in Birmingham? There's either one head of the accommodation department or each, or one and their boss or something, whoever they need to get approval from. That's what I mean by there's only three to six individual people that need to be sold on this.
Abdel: Convinced, yeah.
Dean: Convinced, right. Do you have a pitch deck, or if you were to go and present this to them that you would be able to present the problem, the solution, the proposition, the whole thing?
Abdel: I mean, I can send you those details but where we're at right now, I wanted to contact them cold and say something like, "Would you be interested in a list of accommodations that have had positive tenant living experiences so that future students could live there and not risk suffering bad accommodation or malicious landlords? This list is based on student living experiences across the year and It's not just a list of accredited landlords. Let me know if you're interested."
Dean: I think you're trying to give them enough information to, Interested is a loaded word, right? If I think about those three people, you can't jam too much in there. Where are you doing this the most right now? Where are your 3,500?
Abdel: London.
Dean: Okay, in London. If you were to come up to Birmingham or to Manchester and you're saying, "I'm coming to Birmingham next week and I'd love to get together and talk to you about a pilot program we've been doing in London," and framing it for what they are.
Abdel: Which would be what?
Dean: In terms of the scope of what it is, right, like what's going on, just to set up an appointment with them, right? They're not going to be-
Abdel: Well, we did that. We did that with two universities. One really was very interested, but they said that they had their own repair software but this isn't a repair software. It's a coaching thing, but then they said, "Well, we don't want to confuse our students." It's just a case of keeping in touch with them but the opportunity's not going to happen in the next couple of months.
Though I did send them an email to say, and I'm just thinking maybe they'd get back to me or not, but I did send them an email and say, "Well, look, we'll switch that module off, but we'll give you a list and we'll give you the statistics, because they were looking at statistics to sort out their managed accommodation was better than their non-managed accommodation. That was their benefit from using our system. We still have the same problem face to face.
Dean: Yeah, because it just seems like work. You know what I mean? There's no real savings on this. You need, I'm trying to go through my subtractive process here.
Abdel: Even though we were saying to them it was free.
Dean: Yeah, well free is not, you know what I mean?
Abdel: It's never free, yeah.
Dean: It seems like reassurances, right, like "Hey, it's free." Well, okay, but what they're saying is, "I don't see the self-interest in this," right? There's no compelling reason why they would do this. Let's just take a step back from this and start to think who else would, on a corporate level, have an interest on being on the face of this, for a corporate responsibility initiative or "Together we're fixing student housing" kind of thing, bringing awareness to the issue.
I imagine you could have a really great sizzle reel of the kinds of accommodation that people are subject to and that they can't get that you're showing, because all those things are visually disappointing, compelling. If somebody sees a mouse infestation or leaking or mold or slugs or all these things and students being taken advantage of.
It's the mean old landlord and the vulnerable students. It's like students are the underdog. There was just a big thing in 60 Minutes here in America on that, these landlords that are taking over these rent-controlled buildings and forcing the tenants out. Everybody wants to hate the mean old landlord, right, especially when they've done it to a level of being a big deal. Yeah, exactly, not just one landlord who owns a couple of properties and you know what I mean?
When there's the big enemy of this, the fat cat, the fat cat landlord. What I'm wondering is, is there a Home Depot or a UK equivalent of a big box home repair type of retailer that would be willing to fund or sponsor, or be the title sponsor of a pilot project to fund the whole thing? It just seems like it would be so much easier to get the money from a corporate who now has good will-
Abdel: Almost a branding thing.
Dean: The real benefit with the hearts and minds of students who are living in the worst accommodations that they're going to live in for the rest of their life, and that whenever now they move into their own homes, that they're going to have this soft spot for Home Depot, or what's the UK equivalent of Home Depot?
Abdel: I don't know if we have something specifically for that. Some sofa shops are-
Dean: Not sofa shops, like a hardware or-
Abdel: Ah, ah, okay, like B&Q for example, DIY stores.
Dean: Yes, DIY stores, that's right, yes.
Abdel: Okay, yeah, yeah, we got DIY stores here. The only thing with that is that students, they expect the landlord to do that.
Dean: Yeah, I understand that. It's not about that, it's not about that, that's the thing. It's not about the students are going to do this, but it's the thing that this company, this corporate company could be this initiative of improving the lot of these students. If you're saying that there's potentially 30,000 of them just in Birmingham that are living in substandard or have some problem with these things, how many would that be in all the UK? It could be hundreds of thousands, for sure.
Abdel: Yeah, yeah, definitely, yeah.
Dean: Right, that audience, that's what I'm saying is, that to be associated with a good thing for those might be a good.
Abdel: Yeah, it's about branding kind of thing.
Dean: Yes.
Abdel: Okay, yeah, I mean, I don't know how we would get in touch with those, because they're huge.
Dean: I understand, yeah, but it's the same. They would certainly have-
Abdel: Looking for something like that already.
Dean: Sponsorship departments, exactly, that they're looking for ways to accommodate those things. You may incentivize with, instead of "Win £50" that there's space heaters or things that are actually going to improve their life there, kind of thing, or they could get gift cards from the DIY stores, so now you're not incentivizing with your own money, but what if everybody that fills out this survey gets a $10 gift card? You know what I mean?
Abdel: Okay, yeah. Yeah, yeah, yeah, that would work. Then would we still be able to ask others for money, I mean, what would be-
Dean: Yeah, of course you would be able to, yeah. Why not?
Abdel: This is purely just almost a sponsoring thing and giving them a story by which they can then…
Dean: That's exactly right. Yeah, just like all these companies pay to have their logos in the football arenas or the stadiums. They're still charging ticket prices for people to come see the games. This is just an exposure situation, you've got that opportunity. It's like a sponsorship type of thing. It's almost like if you can create this kind of movement, that's really where-
Abdel: Exactly, yeah, yeah, yeah.
Dean: That movement has to come from…
Abdel: It has to have a big brother, someone who's funding it.
Dean: Yes, exactly.
Abdel: Then they get the credit for helping out, which helps them, okay.
Dean: Yes.
Abdel: Awesome. I mean, we can start that path.
Dean: If you had that kind of thing, that's why I took on that detour on that, that then if you had that kind of thing where there's $50,000 or maybe even more, right? Maybe there's $250,000 or whatever that's available there, right, for access to the students that maybe it can be something beyond just the resolution of things, but actually increasing in the way to help, because when you think about it, even no matter what, if this portal is now available for people, everybody who's moving into student housing or whatever, the first thing they're going to do, is they're going to go to one of the DIY stores and get things that they need for around their flat anyway, right?
Abdel: Mm-hmm.
Dean: I mean, that group of people coming in is going to spend collectively a lot of money.
Abdel: Correct.
Dean: Yes. Maybe you start to think about, what's inside? Who's benefiting from these students coming in here, right? It could be like you mentioned, furnishing stores, the DIY stores.
Abdel: Now, I just wanted an angle on, we don't want to make the landlord look as if they're... Because after a while we're going to be asking them for money as well, so we don't want to make them look like they're all evil.
Dean: I get it, no, I get it. I get it, but I would say, that was a thought process while we're trying to get to what the potential economic model that everybody uses.
Abdel: No, I agree with you. I agree with you from that perspective. I just wanted maybe a little bit in terms of your help whether what angle you think?
Dean: Well, the truth is that it would be okay to vilify the bad landlords, because nobody's going to win with that anyway, right? I mean, that's the thing, you're almost shaming them into being good.
Abdel: We're coaching landlords but this is a system to completely, utterly cull out the bad, the totally malicious, the shameless ones, okay.
Dean: Yes, yes. That's what everybody can get behind, right, is that they're not one of them, so they want to take actions not to be seen as one of the bad ones.
Abdel: Okay.
Dean: I have so much more hope for a model that really elevates it to, who does have a financial stake in this? I think that if we're saying the same thing, a DIY store is a Home Depot here, in the US is a big everything to do with the home thing, where you could get everything.
Abdel: Would you do a Walmart type of place?
Dean: It could be Walmart. It could be your Target or yeah, something like that. You know what I mean, thinking like that, now I'm thinking inside the walls, right?
Abdel: Right, right, right.
Dean: Yeah, because what are people going to do? If students are coming, it's exciting. It's the first time they've ever been away from home. Casper Mattress, are the landlords providing beds, are they selling furnished houses?
Abdel: Yeah, yeah, they provide the beds mostly, yeah, mostly, mostly. We can do, for example, you just gave me an idea, there are some stores that are almost like Walmart but they're like Pound Stores, they're very cheap products and students would probably, obviously go there to shop. That's where they said they would go. Those places aren't quite big enough to be a Walmart and so therefore this would help them further carve a niche that they didn't have access to before, in the student niche. Something along that line would work as well.
Dean: Yes.
Abdel: Okay, awesome.
Dean: Now you get to think about that thing, that now you can actually reach the things but there's no then pressure on-
Abdel: Making money straight away, yeah.
Dean: Yeah, exactly, that you're presenting a platform that these that's going to make them look good, it's going to also put them in front of all of these people. There was in Canada, and I'm sure in the US, too, there used to be a service called Welcome Wagon, and businesses would pay to be included in this welcome basket that somebody would go and welcome people who moved into town kind of thing. That could be that kind of model there, that maybe that's the incentive is that you fill out the survey and you get your welcome backpack or something. I'm just thinking how you could-
Abdel: They would be happy to pay us money and send the backpacks?
Dean: Yeah, I think that's part of the deal. Maybe a backpack is a little bit much, right? I'm just thinking about if you were to think of all the people who would love to have access to these students while they're literally coming into... These foreign students, because they're going to be there for three to five years, that where they get established, they're going to have some shop loyalty or get exposed to it.
Abdel: It would definitely create loyalty, yeah, because they've fought their case. Okay.
Dean: Yeah, lots to think about on that, but the important thing is that exercise of what we did there is really the important thing of doing this kind of important work, thinking through different angles and thinking, what would be a dream come true? That's really the question that we always ask. If we're really going to not just solve a paperwork problem for the students, but what if we really became the advocate for these students and created a dream come true experience for them, where they just get this bounty of blessing that they're so lucky. By the way, if there's ever a problem, here's what to do about it, you know?
Abdel: Mm-hmm, perfect. Well, that definitely gives us a different angle. I mean, meanwhile the email I read out to you, would you think there would be any harm in trying that at the same time whilst we do this?
Dean: Well, I think that you've got to be very selective, because it's really only those three people, right? It's not like there's 3,000 that you can send 3,000 emails and see who responds to that, but it's these three people.
Abdel: You mean we could mess up?
Dean: That's what I'm saying. That's when you really want to get your ducks in a row, right? I definitely wouldn't send all three at the same time, because this is really your thing. I'd really get to know them. Part of it then may be part of the sponsorship money could be in the form of a grant or a gift. You'd have to think this through, but I think we're on the right path here, but you got to think this, because this is the first that you've given that kind of approach some thought, so that would definitely talk that path with your team and see what that would look like.
Abdel: Perfect, okay. I really appreciate that, Dean. That was quite insightful.
Dean: Awesome.
Abdel: Thank you very much.
Dean: Good, well, thank you for being so open. This is what this is about. Sometimes, getting that economic engine right is the thing that makes everything drive. You've got to get the scale-ready algorithm right and that's where, rather than think about it as all the UK, let's think about it for Birmingham and specifically one of the universities right now, so you got three shots to refine this, and hopefully get a case study out of it and build it into a national program.
Abdel: Right, right, right, right.
Dean: It's all very exciting.
Abdel: Thank you very much.
Dean: Thanks, Abdel. Bye.
Abdel: Take care, bye-bye.
Dean: There we have it, another great episode. Thanks for listening in. If you want to continue the conversation, go deeper in how the Eight Profit Activators can apply to your business, two things you can do. Right now you can go to morecheeselesswhiskers.com and you can download a copy of the More Cheese Less Whiskers book and you can listen to the back episodes of course, if you're just listening here on iTunes.
Secondly, the thing that we talk about in applying all the Eight Profit Activators are part of the Breakthrough DNA process. You can download a book and a score card and watch a video, all about the Eight Profit Activators at breakthroughdna.com. That's a great place to start the journey in applying this scientific approach to growing your business. That's really the way we think about Breakthrough DNA as an operating system that you can overlay on your existing business and immediately look for insights there.
That's it for this week. Have a great week and we'll be back next time with another episode of More Cheese Less Whiskers.