Allen Shulman, the 47-year-old, snowy-haired architect who had been building homes for 25 years before he decided to do an Internet startup, promised us the sun was shining in Denver when we spoke this morning at 9 a.m. Mountain Time.
Betabeat doesn’t usually cover startups based outside of New York, but we’re making an exception: BrightNest has a New York investor, Quotidian Ventures, and its seed round, which closed in October, went unreported. Until now, sorry: $665,000 led by David Cohen through his fund Bullet Time Ventures, with New World Ventures, OCA Ventures, and 11 assorted angels participating, on top of a $335,000 convertible note raised from friends and friends of friends in January 2011. Mr. Shulman and his cofounder, CTO Justin Anthony, made sure to close their funding before they started the winter session at 500 Startups; the company is now raising its Series A.
When BrightNest’s marketing rep pitched us on the startup—”our goal is to make changing furnace filters and cleaning gutters sexy”—we thought it sounded like, well, a bit of a reach for a write-up, for reasons other than geography. A startup built around reminding you to clean your gutters? With all the Twitters and FarmVilles competing for browsing time, how could you ever convince users to spend time with something that most closely resembles a nagging spouse, bugging you to change the lightbulbs, and making you think about things you don’t want to think about, like the mold slowly spreading through your basement?
Even though BrightNest is about to roll out a feature called the “Honey-Do List,” it’s aiming to be more like the handy neighbor than the nagging spouse or helicopter parent. “The solution is not to be a nagging site,” Mr. Shulman told Betabeat. “The solution is to be more of a lifestyle site. Most people love their homes! They’re very proud of the fact that they own their house. That’s still the American dream. If we aren’t nagging, if we spin home maintenance and let people be proud of the fact that their home is safe, things work better. It smells better. We’re helping them take better care of it.”
Skeptical, we took a spin through the site. Simple, clean-looking and friendly, we found ourselves verifying that yes, we had installed smoke detectors; reading an article about how to get wine stains out; and then getting sucked into BrightNest’s excellent beginner’s interior decor blog (check out these sweet wall decals).
“What we found is that as long as we aren’t nagging and as long as we’re making the site fun and funny—we want people to get our email digest and kind of get a little chuckle,” Mr. Shulman said. The digest has a 50 percent click-through rate, he said, and of BrightNest’s 1,500 beta testers, 25 percent complete a task every week.
Mr. Shulman’s recruitment of his CTO—hardly an easy task, as many founders can attest—is another piece of social proof. Mr. Shulman and Mr. Anthony were casual acquaintances, with a few hockey buddies in common. Around the time Mr. Shulman started thinking about BrightNest, the dirt in Mr. Anthony’s furnace filter was reaching a critical mass. Literally days before Mr. Shulman called Mr. Anthony to talk about BrightNest, “Justin had one of those ‘oh shit’ homeowner moments,” Mr. Shulman said. A furnace filter is $8 to replace. But Mr. Anthony had to call a repairman to figure out why air wasn’t circulating. “The guy was laughing at him,” Mr. Shulman said.
“Man, if I had some kind of site like you’re talking about that could help me not be a complete homeowner moron, I’d use it in a second,” Mr. Anthony told Mr. Shulman, in Mr. Shulman’s recollection.
The user base is anyone who owns a home, Mr. Shulman said, and some renters as well. For now, the startup is focusing on moms and young families ages 28 to 45, he said, many of whom are first time homeowners with no idea about how to check a sump tank (more social proof for BrightNest: Google “sump tank” and you’ll find oodles of clueless homeowners turning to the Internet for help).
A secondary user base is real estate professionals, who can gift their clients with branded versions of BrightNest. Builders and real estate brokers have an interest in maintaining relationships with their clients, Mr. Shulman said, for referrals and repeat business. But when he was building homes, he worried that his clients forgot about him as soon as they finished the bottle of wine he gave them as a house warming gift. That is, until something—a flooded basement, a weird smell—prompted them to call in a panic. “No matter what I did as a builder, I couldn’t convince people to be proactive,” he said. “They’d take all the information I gave them and put it on a shelf and wouldn’t open it up until something broke.” He likens BrightNest to a car dashboard that tells you when you’re out of oil or have gone a certain number of miles. Eventually, he said, a BrightNest maintenance report will be like a CarFax report, a document future buyers will expect to inspect.
Real estate professionals who give their clients BrightNest pay $35 a month or $300 a year for the subscription. But Mr. Shulman emphasizes that BrightNest’s main revenue will come from lead generation: light bulbs, furnace filters, and new sump pumps. The startup has the chance to become the central reference for all things home-y, and that includes eco-friendly products with a higher price tag.
Since BrightNest compares itself to Mint, and Mint had a tidy exit-by-acquisition, we asked about buyers. Potential acquirers span the gamut from Home Depot to Google and Microsoft, Mr. Shulman said, or smart grid players (we’re thinking Intel, Con Edison). “There are a ton of different types of organizations that would look at BrightNest in a very interesting and critical way when it comes to acquisition,” he said. “There are 60 million homeowners throughout the country and no one has been able to figure out how to engage them into continually thinking about their homeowner experience.”
BrightNest—originally Abodigy when they entered 500 Startups, a name that was “universally hated”—expects to be out of closed beta in June, he said. That’s a delay from original projection of “over the holidays,” but we decided not to nag them about it.