Plunk President and co-founder David Bluhm said a number of issues led to the decision, which included the release of three employees to date and the possibility of more.
The verdict is in — the old way of doing business is over. Join us at Inman Connect New York Jan. 23-25, when together we’ll conquer today’s market challenges and prepare for tomorrow’s opportunities. Defy the market and bet big on your future.
Real estate data and valuation company Plunk is shifting its business model toward the insurance industry in light of the real estate market’s perpetual doldrums.
In a meeting with Inman, company President and co-founder David Bluhm said a number of issues led to the decision, which included the three employees leaving in lieu of accepting salary cuts, and there could be more. Plunk had 20 staff prior to the three departures.
“Residential real estate historically has not paid for data, has not paid for insights to make better decisions,” Bluhm said. “So we have a lot of small contracts and that’s not getting us where we need to go.”
Bluhm said the company hasn’t gained the traction it needed with investors, and that all company staff are aware of the changes. No one was surprised by the reduction.
The company is in the middle of negotiations on a significant contract in the insurance space, where its data and AI models will be used to evaluate large-scale reconstruction costs, primarily as they relate to natural disasters. Bluhm is positive about that deal closing and the company becoming their “lighthouse client,” he said. But it’s going to take time.
Plunk is also aiming to increase its role in the mortgage space, primarily in servicing. It has a contract in place with Mr. Cooper, which collects payments from more than 4 million homeowners on behalf of lenders and investors. Mr. Cooper suffered a cyber attack in November that crippled its operations for days.
“Servicing is very hot,” Bluhm said. “I don’t want to call that a newfound opportunity, but it really has never been exploited properly. It’s important now because [servicers] can become the first player that can capture any event in that homeowner’s life where they need a second loan or to refinance or maybe they are actually going to put their home on the market and move up and buy or downsize, in the case of baby boomers.”
But, Bluhm said, “We’re not getting out of residential real estate; we just need some higher volume contracts.”
Plunk’s problems are not unique. Last week, direct mail technology company Addressable shut down abruptly, and no customers were notified. Addressable was a customer of Plunk.
Beyond the slow market, real estate brokerages are traditionally a very tough sell. The development of in-house products, MLS-provided solutions, the transient nature of agents, brokers’ willingness to extend resources and a general, long-standing malaise about the benefits of technology all contribute to the challenges of selling and adopting technology.
Plunk’s software is used heavily to evaluate lead quality, Bluhm said, but that was never its initial intent. This can lead to mixed sales messaging, a fact compounded by the fact that many brokers have trouble making any technology buy that doesn’t directly produce income.
Scott Feldman, who was one of the three who left, was Plunk’s head of sales. In a June Inman Intel report, he shared some of the challenges he’s faced in his 16-year proptech tenure when trying to get a deal done
“Some companies are a free-for-all,” Feldman said. “You go in and no one lets you answer a question — everyone is asking questions. You need to know how not to lose the room.”
Feldman said he’s talked to countless office managers who serve as internal champions, often having to face agents leaving for another brokerage with different technology products.
“They [office managers] would tell me they had agents leave not knowing they had that solution all along,” he said.
Bluhm told Inman it will look for a sales lead who is more comfortable in the mortgage and insurance verticals and that it wasn’t easy seeing Feldman leave.
“So, we’ll see, you know, who we need on board, how we need to point our resources, how we need to budget everything and see if we can get through this market and find some better traction from the efforts we’ve been doing for the last two years, I guess,” he said.