Kevin Codey is the cofounder of Realty Perks , an unusual rewards program. We caught up with Codey to learn how to get free stuff with our next home purchase, and about the trials and tribulations of an early-stage startup.
FAST COMPANY: What’s Realty Perks?
KEVIN CODEY: It’s a reward program for real estate. We wanted to create a way for consumers to earn rewards on the largest transaction of their lives, instead of just going to a coffee shop ten times to get a free coffee.
So you buy ten houses, get the next one free?
People automatically think you have to do something X amount of times to get anything. I spend a year on my American Express card, and I get a back scratch. Here, say you buy a $500,000 home, then you get 500,000 points, which are redeemable in a catalog. Things like vacuums, furniture, and small appliances. We have about 3,000 items available. Some examples: a Bissell Cyclone Upright Vacuum costs 54,000 points. A Samsung 32” LED HDTV costs 320,000 points.
What’s in it for the vendors of these items?
They don't give it away. I buy all that merchandise wholesale from vendors. The business model relates to realtors. When a consumer signs up on Realty Perks, they’re connected to a local realtor.
So you funnel business to realtors?
Exactly. Realtors pay us fees to work with our members. Our number of agents is in the thousands, and we can service basically anyone in the country. The fees are only based on successful transactions, so there’s no risk for the agents.
What stage is your business in?
We’re not making any money yet. We’re building out the network and are testing different marketing channels. And trying to raise money. It’s hard. You think as an entrepreneur, people are throwing money around left and right, but that’s not really the case.
What has the hardest moment been for you in launching this company?
One of the best and worst moments was when I had a meeting with one of the biggest brokerages in the country. Back then we had different model: the idea was brokerage companies would use Realty Perks as a tool, and we'd do the back-end work. I presented the program to the president of this company, and he said, “Congratulations, this is awesome.” And now I’m thinking, “This is fantastic. I just landed one of the biggest clients!” And then he said, “It’s great, but I can’t measure the return on my investment.” I wanted to cry. Within 30 seconds, I went from the highest point to the lowest.
So you pivoted.
That’s when we pivoted. We said, hey, let’s have consumers come straight to us, and then we’ll source it to different partners. It makes it more measurable for real estate brokers--they know exactly where their customer came from.
What’s the best advice you could give someone in a tough early stage of the startup process?
Get a cofounder. Six months ago, I was trying to go it on my own, and it was very difficult, especially emotionally, with all the ups and downs. It’s a lot easier when you have someone to work with. I have three cofounders now. You can only tell your friends and family your troubles so many times before they get sick of you. You have to have someone in the trenches with you, who cares as deeply as you.
This interview has been condensed and edited.
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