Investing in Belong

We’ve written extensively about the unbundling trend: large, horizontal platforms like eBay or Craigslist getting challenged by startups that better serve the specific needs of a vertical on that incumbent platform.  

Why is unbundling so prevalent? A horizontal platform typically builds “lowest common denominator” features—those that work across all of its verticals—for the sake of platform coherence. This leaves such platforms vulnerable to a more tailored approach on select verticals.  

There are many examples: When I was the Senior Vice President and General Manager at eBay in the early 2000s, the company was the market leader for reselling tickets. Then StubHub came along and built highly tailored features like improved search tools, detailed seating charts, and the electronic transfer of tickets. Despite the fact that StubHub’s transaction fees were substantially higher than eBay’s, those valuable features appealed to both buyers and sellers, eliminating eBay’s edge. More recently, GOAT and StockX have captured a big chunk of eBay’s market for collectible sneakers largely by offering strong product authentication.

Similarly, Craigslist has been a prime target for newcos over the past few decades. It was the early market leader in digital classifieds in the U.S., effectively gutting the newspaper business in the process by draining most of its highly lucrative advertising. A number of enormous businesses have been ripped out of Craigslist by companies that better addressed the needs of a specific vertical.Even this list is incomplete—it doesn’t include other valuable businesses including Nextdoor, Tinder, Bumble, OfferUp, Reddit, Thumbtack, ZipRecruiter, Indeed, and Upwork. For ambitious startups, Craigslist is the gift that keeps on giving!

But there are still a few remaining Craigslist verticals that have largely been immune to unbundling attempts.

Today, I’m proud to announce our attempt to rip yet another major category out of Craigslist. Belong is a three-sided marketplace working to reinvent and modernize the traditional home and apartment rental experience. The company seeks to replace the feudal “landlord” and “tenant” relationship with “homeowner” and “resident.” This service benefits all parties:

For homeowners, Belong provides a technology-enabled property management experience that is far superior to current offerings. (This space has long been prime for disruption: incumbent property management companies are highly fragmented and often sport an NPS score that hovers around zero.)

Belong’s technology matches aspiring long-term renters with homeowners to help them find the place that’s right for them. That has become an increasingly valuable service, as millennials and Gen Z are renting for many more years than their parents did, often due to escalating housing prices.

Finally, Belong connects homeowners and residents with service professionals (Pros), providing turnkey construction, renovation, and management services. It’s a carefully crafted hospitality experience that benefits both the homeowner and the resident. 

Stitching all this together, Belong has operationalized a seamless business model that combines in-sourced field operations; a beautiful and elegantly produced product experience; and a pervasive human touch throughout.  

Belong seeks to inject humanity and personality into the home rental market. The company targets homeowners who love and care about their homes, and it seeks residents who will treat the home as if they own it. This strategy appears to be working: 40 percent of new homeowners already come to Belong through word-of-mouth and organic referrals.

The founding team at Belong started this journey as an Entrepreneur in Residence at a16z. (We rarely have EIRs at a16z, but I was so impressed with them that we broke precedent.) Ale Resnik and Owen Savir, Belong’s CEO and President, are serial entrepreneurs who met just after graduating from MIT and Stanford. They’ve been business partners for almost a decade; collectively, Belong is their fourth startup. They were quickly joined by Tyler Infelise, Belong’s Head of Product, with whom they had previously worked.  

In Belong, we see an experienced, talented team taking on a massive market with a technology-driven, disruptive business model. The team has been running the vertical unbundler playbook I’ve come to know so well, leveraging marketplace dynamics to deliver a better user experience than the traditional Craigslist classifieds approach. Early results are impressive.

The rental market is one of the last remaining large white spaces for technology players in U.S. real estate. Zillow and OpenDoor have strong positions in the home buying and selling space; Airbnb serves the short-term rental space. Belong aspires to fill that white space, tearing yet another category off of Craigslist. Godspeed, Belong!

 

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