Proptech Growth Strategy Brief Newsletter
Lyvly Growth Strategy
Lyvly aims to improve long-term coliving with nicer spaces and vetted roommates.
"Grain of Salt" Warning: I write this newsletter with an outsider's understanding of the business in question. I am likely to make mistakes, leaps of judgement, and assumptions - that's what makes it fun.
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Like many of real estate tech's emerging subverticals, coliving has had a bumpy ride on it's mission to live up to it's early press and promise.
Over the last few years, companies seeking to tackle the space have fallen into tackling one of three core problems - consolidating the marketplace to make coliving spaces easier to find, improving the spaces themselves, or solving roommate vetting and matching.
That said, the most successful startups in the space have combined all three core problems in interesting ways. Some have figured out that combining operating spaces with a managed marketplace allows them to create a real experience and brand, and other have figured out that niching into a particular geo area or brand allows them to attract people who will mesh well together, which increases margins and extends LTV.
They may all be startups, but they're still real estate companies. That means the market can't be dominated by first to market like it is in software. Real estate moves too slowly for that. What we're seeing is long-term coliving operators like Common and The Collective work to dominate specific cities and expanding slowly, alongside short-term coliving operators like Outsite and now Selina build broad networks to allow users to move between them.
Lyvly is a long-term coliving operator aiming and dominating the London coliving market by building out a broad swathe of residential coliving spaces across the city. Here's how I think they could unlock new levels of growth.
Any conversation about finding tenants should begin with existing rental marketplaces. Only once this channel is exhausted or you're forced to begin paying for placement is it worth pursuing other options.
There are dozens of apartment marketplaces serving London, so I would start by focusing on the ones that likely serve your niche best and expand from there. Format listings in such a way that they might push users to check out Lyvly's website, as this will be a significant differentiator amongst independent rooms for let.
Once these channels produce diminishing returns, build neighbourhood landing pages that optimize on long tail keywords that Lyvly has a good chance to rank with. The current ones are hidden in the app, so the chance to rank for "House Share in Brixton, London" is out the window. Once build, experiment with paid search to find out if the economics of these long-tail keywords are favourable.
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Lyvly asks users for their moving date and age before surfacing inventory. This is likely a big mistake.
Why? For one, they're already asking users to input information - they might as well capture contact info at this stage to be able to nurture web visitors into the future.
Alternatively, they shouldn't ask for any info at all. The move-in date severely restricts the housing inventory that surfaces, making it feel as though there aren't many Lyvly spaces. If this is the route they choose, it would be better to allow users to see all homes in all neighbourhood, and capture all their information at once when they "apply" to view availability. This should help them build a healthy top of funnel, and should make it easier to sell alternative locations should a spot open up.
Aside from availability, Lyvly needs to refine who they're for. House sharing margins are thin, but they can be greatly improved when a company changes the marketing frame. Customers aren't living with them because it's cheaper than living alone - they do it because the people they meet make it worth it.
To make this work, Lyvly needs to refine their personas and make it clear who they're looking for, so the message about who you'll be surrounded by comes through to prospective tenants.
Long-term tenancy is one of the biggest consumer LTVs there are, so leaning into referrals is so important. Lyvly should offer significant and accruing referral bounties, and offer bonuses for tenants to find their own replacement when they decide to move out.
Once Lyvly refines who they're for, they can leverage their city-wide network to offer access to exclusive community events (for networking and socializing) and local perks (like gym discounts and bar happy hours). The goal here should be to make tenants feel like they're losing more than just their flat when they move out - they're losing their social circle, too.
That's it for today. Thanks for reading!
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