Seattle-based Flipt emerged on the scene earlier this month, touting a new service that allowed home buyers and investors to quickly determine if properties should be sold, fixed-up or rented.
“We move beyond a basic housing marketplace to not only provide data, but make sense of the information,” CEO Andrey Nokhrin told GeekWire at the time of the May 1 launch.
But things have now been flipped on their head at Flipt.
Just 22 days after launch, the Flipt Web site is down and Nokhrin tells GeekWire that the businesses is “pivoting” to focus on services for real estate professionals.
What happened? Well, the startup ran into the billion-dollar behemoth: Zillow.
The publicly-traded Seattle company recently sent a cease-and-desist letter to Flipt, alleging that the 5-person startup improperly used its data.
“Zillow regularly takes steps to protect our intellectual property rights, and the manner in which Flipt was using Zillow data was in clear violation of our terms of use and other protections we operate under and we instructed them to stop immediately,” according to a statement issued to GeekWire.
Nokhrin was initially surprised by the letter, since he said the practices they used to compile the data are commonplace in the search engine business. Nonetheless, Nokhrin immediately complied with the request, removing all Zillow data from the site.
“The fact that they have taken it this far and want to make a big deal out of it, it really shocks me,” said Nokhrin, adding that he didn’t believe that Zillow had a strong case. “I was hoping it would get resolved internally.”
Nokhrin said the company was having trouble obtaining real estate data, so he said they came up with a “quick hack” so that they could validate demand for the Flipt service. He said the methods they used are the same that “Bing does to index sites.”
GeekWire first got wind of the issue when Seattle real estate blogger Tim Ellis noticed that Flipt Web site was no longer functioning. Ellis, who writes the Seattle Bubble blog, found some interesting results when he first started poking around on the site earlier this month.
“Flipt was showing a photo of my home that I took — a photo that I had only ever uploaded and associated with my address in one place: Zillow,” said Ellis. “Not only that, but Flipt was showing updated beds/baths details about my home that only Zillow has. I pulled up a number of other homes and found the same thing: photos and home facts that were only found elsewhere on Zillow.”
Zillow’s terms of service prohibit the use of data being downloaded and stored locally, something that Ellis theorized was occurring with Flipt.
“I know they were storing their own copy of the photos, because the URL for the photo of my home on Flipt was on an AWS instance —since taken offline. The filename also matched exactly Zillow’s filename: IS5mqsxgceva1v.jpg,” he said. “So either Flipt was scraping Zillow to get their content or they were using Zillow’s API, but flagrantly ignoring the terms of use.”
Even though Nokhrin does not believe they did anything wrong, he said they responded quickly, thus the reason they took the site down.
He said they took the cease and desist letter “very seriously,” and complied immediately with a response last week. For now, Nokhrin, the former CEO of BuildersCloud, said that they are investigating other ways to get the data.
“Flipt’s score methodology incorporated information from public sources and we are working to improve the quality and integrity of Flipt’s data through exploring potential partnerships,” Nokhrin said in a follow-up email. “Until we source and finalize agreements with real estate data providers, we are focusing on providing innovative marketing solutions to Realtors that will get our business to the infinite runway.”
Update 12/3/15: Flipt now operates an advertising tech and marketing site for real estate agents, and has resolved the issue with Zillow outside of court.
