One lead type in twelve states, or every lead type in one county

Question

I've spent the last five months on land seller leads specifically, and the depth versus width question is now the whole decision.

Width argument. Land sellers are thin on the ground in any single county. To get 30 to 40 qualified sellers a month on a narrow vertical I have to run twelve to fifteen states, and the buyer for a land lead doesn't care where the parcel is, which is the whole reason land works as a first vertical. One data schema, one message, one qualification script, replicated. Coverage is the constraint. What counties publish varies enormously by state, and roughly a dozen states don't publish sale prices at all, so my comps layer is patchy in about a third of my footprint.

Depth argument. In one county I can know the assessor's file layout, the code enforcement list, the probate calendar and the four buyers who actually close. Lead quality goes up because I know what a real signal looks like there. My cost per qualified lead in my home county is $61. Across the wide footprint it's $148, and the wide leads convert worse for the buyers, which shows up as churn.

The $61 number is contaminated by me being local, and I can't fully separate that. Which side would you build?

joe_delgado5 · Answer

$61 versus $148 isn't the number that decides it. What's the seat price and how many seats can each county carry? If one county supports four buyers at $400 and you're at $61 a lead, deep is a small business with a ceiling you'll hit in a year. Wide at $148 is worse per unit and has room. I run thin margins on purpose so maybe I'm biased, but I'd take the worse unit economics with the bigger room every time.

karen_whitfield · Answer

Land is patient and so are land buyers. The thing @flint's math misses is that a wide land buyer usually wants deal flow in specific geographies for reasons that have nothing to do with your platform, water, access, entitlement climate. Selling a Missouri parcel lead to someone who buys in Arizona is a refund waiting to happen. Depth per buyer matters even if your platform is wide.

brandonlee36 · Answer

The operational answer nobody enjoys: wide breaks in ways you can't see until it's already broken. Twelve states means twelve sets of record layouts changing on their own schedules. I run a small portfolio across two states and even that produces surprises monthly. arbor, whatever you pick, the maintenance cost of width is not linear.

carlos_nunez · Answer

I'd split the difference and go one vertical, five markets you've actually visited. The $61 is contaminated like you said, but part of that contamination is real and transferable, you'll get some of it back in each new market once you've done the county work twice. @orchard's point about buyer geography is the constraint I'd design around, because a marketplace where the buyer side is unhappy dies faster than one where the seller side is thin.

One lead type in twelve states, or every lead type in one county

4 replies