There are already at least three companies in this space: RoomieMatch, Roomi, and Roomster. I wonder why nobody I know uses them, but dating apps are very popular?
It seems to me that the triangulation, trust, and transfer problems in roommate matching that go beyond what OKCupid has to deal with:
There are more than two people involved, and the difficulty of finding communal compatibility complexifies geometrically with the number of roommates.
By the same token, people moving in and out happens more frequently with larger numbers of room mates, often with short notice, making it hard to keep a stable equilibrium of preferences.
Imagine if it was easy to “date your future housemates,” perhaps by living together for a month. It’s already emotionally painful for people to deal with or inflict rejection in one-on-one dating. Imagine being the “odd man out” in this situation. That sounds like a recipe for really uncomfortable social dynamics.
Land lords often influence or even entirely control the process of finding new room mates. There are also laws around evictions that make it very difficult to kick somebody out if its not working for others, whereas there are no legal barriers to breaking up with someone you’re dating if there’s no marriage and no kids.
There’s a much higher effort and commitment barrier required to move than to go on a date.
This is speculative, but OKCupid’s success may stem from capitalizing on a cultural institution that makes romantic love feel of vast importance. By contrast, finding an ideal group of room mates doesn’t have the same cultural importance: we still dream of having our own place by ourselves or with our own biological family. To have comparable success, such a service would need to create a new dream. Even if that’s your dream, is it the dream of your housemates?
Similarly, the service OKCupid provides may be less in matching people with compatible characteristics, and more in identifying an abundance of single people and getting them hyped to go on a date. The purpose of the “matching” is to trick you into building up anticipation, not to ensure a really good fit (after all, if it did that too well, people wouldn’t come back for more!). Instinct, hormones, and love do most of the work of making people stick together in the end.
When people do try and start intentional group houses, they’re often organized around a shared social movement, which already have word-of-mouth and social media channels where people can learn about these opportunities for free.
I think a company would do better to work on solving one or more of these problems.
I wonder why nobody I know uses them, but dating apps are very popular?
I think you should be careful with this style of reasoning, because you can use it to explain away any sort of exploitable market inefficiency. For example, prior to Airbnb, we could ask: Why don’t people offer spare rooms in their house to strangers for cash on a temporary basis? And in response, we could generate many valid answers: People are uncomfortable with strangers staying in their house. The strangers could steal something or break something. There may be relevant zoning laws, and established players (hotel chains) who will try to shut you down using regulatory force. Etc. I believe these are all, in fact, issues that Airbnb has faced. Y Combinator hesitated to fund Airbnb due to the “uncomfortable with strangers staying in their house” thing, but in the end, they decided to go forward because they liked how scrappy the founders were. Of course, it paid off massively, and Airbnb is now one of the most valuable companies in Y Combinator’s portfolio.
I agree there are challenges in the roommate matching space which aren’t present in the dating space. But there are also challenges in the dating space which aren’t present to the same degree in the roommate matching space. (Who’s going to want to date weirdos who need the internet for romance? How do you deal with user harassment? How are online profiles supposed to predict that ineffable romantic spark when so much depends on behavioral and perhaps pheromone-related factors? Etc.)
But there’s a big reason why this opportunity is a lot more attractive than online dating: The possibility of making a lot more money per user. Remember most OKCupid users aren’t paying, and paying users only bring in $10-20 per month. Furthermore, you can keep making money even after a match has been made, whereas with online dating, once you successfully match someone and they delete your app, you’re done. If people are willing to pay say an extra $100/month for great roommates, which seems totally plausible given they are already paying that to live in a somewhat more hip part of their city, it becomes worth your while to overcome a lot of problems.
Many of your points are barriers to shared housing in general, not barriers to this service in particular. I would argue that if done right, the service I’m proposing actually offers the potential to greatly mitigate a lot of the hurdles you describe.
You write: “There are more than two people involved, and the difficulty of finding communal compatibility complexifies geometrically with the number of roommates.” Yes, determining compatibility among N roommates is an O(N-squared) operation. But the constant factor matters a great deal. With the existing roommate matching system, each pair of potential roommates has to meet and spend substantial time together before moving in, or there’s incompatibility risk. With the thing I’m describing, we could have a statistical model which gets rid of a lot of the uncertainty up front, in a few seconds of computer time at most.
You write: “By the same token, people moving in and out happens more frequently with larger numbers of room mates, often with short notice, making it hard to keep a stable equilibrium of preferences.” The number of roommates stays the same whether or not we are using the internet to coordinate: In each case, it’s the number of rooms in the house. Since a hypothetical roommate matching service has a birds-eye view of everyone who’s searching for rooms, it can deal better with managing house cultural changes in a sensible way when multiple rooms open up at once. You could even do sophisticated stuff which is infeasible in the current system, like identifying roommate compatibility clusters and matching them with houses of the right size.
I agree “dating housemates” has to be handled carefully. However, note that first, this isn’t even possible with the existing system because there’s too much paperwork involved in signing & breaking leases in order to try out different houses. (Or more realistically, the unpaid volunteer group house leaders in the existing system don’t want to deal with the necessary overhead.) Anyway, worst case you can just leave it out of the plan. Second, I think it could work just fine if you had 3 established houses which each had an empty room and someone wanted to try living in each house for 1 month. I don’t think the residents of the 2 houses which weren’t chosen would have their feelings hurt to a significant degree.
I agree you’d want to talk to a lawyer and figure out the best legal arrangement for the service to use. But better roommate compatibility predictions means this should be less of an issue to start with. Same for the higher effort and commitment barrier point. These are points in favor of a more sophisticated matching system, not against.
I don’t think a new dream is a prerequisite. People who move to a new city already want to make new friends, and living in various houses for brief periods can help with that goal. And people are already having fewer kids. That said, the baugruppe idea probably does require a cultural shift.
I tried to start a group house recently, but gave up after realizing it would be too much work to find people and stuff. I wish a service like what I describe existed.
Shared housing is already a multi-billion dollar market despite the hurdles you mention. People find roommates on Craigslist etc. all the time. If you can capture 10% of the existing shared housing market, that’s a multi-billion dollar opportunity right there, which should easily put you among the top ten Effective Altruist donors. If you’re able to expand the shared housing market, that’s gravy from a financial perspective.
Finally, I want point out that I actually did posit a shift in the underlying economic factors which could make this a profitable opportunity now even if it wasn’t in the past: The increase in loneliness. In other words, a billion-dollar bill may have appeared on the sidewalk just recently. See also this blog post.
Take my thoughts less as objections and more as opportunities. If a business can solve many or most of them, they might prosper. No reason to think it’s impossible to improve on the current rental industry, but you’d want to think through the current set of issues methodically.
AirBnb doesn’t promise anything more than a regular hotel experience in a new setting. OKCupid doesn’t promise anything at all really, except a supply of singles looking to date.
We already have robust services that supply both rental properties and people looking for housemates (the roommate equivalents of AirBnb and OKCupid).
It strikes me that the value you’re suggesting a company could provide is a positive housemate experience, achieved through some sort of algorithm or a setup in which housemates could somehow try each other out as housemates in a flexible way before they commit.
I am highly skeptical of the idea that even the most sophisticated algorithmic matching software can provide better housemate relationships through better matching than is already available. I don’t think any dating apps match people well romantically. The most effective approach with them is to just go on a lot of dates and see if anyone clicks.
It would be more interesting to me if a company figured out a way where people could move in together, stay as long as they liked, move out, try another group, with minimal hassle.
Perhaps an apartment building with pods of furnished rooms connected to a common area. People make profiles, get on the waiting list for an open pod, and the current pod mates can vote on who they want to accept next. They can’t kick out a pod mate they don’t like, but they could switch away to a different pod.
The rates are hotel prices, maybe double what the house normally rents for. When an entire pod clicks, they can move out at their leisure to a rental apartment or house.
It seems to me that this could add value to a typical hotel experience, while using a similar business model. AirBnb already provides a solution to the trust problem of strangers cohabitating.
If this kind of business existed in my city at an affordable price, I might try it. Hotels are about twice as expensive as rental apartments, though, so I imagine this would be a pretty costly investment.
You’d want lots of options for people to live with, which necessitates owning a lot of rental properties.
To avoid that problem, perhaps you could connect with landlords, offering them a cut of the profits in exchange for partnering with your service. You help them manage the properties, to cut the hassle for the landlord, and they’re able to charge higher rates, closer to hotel prices, in exchange for granting this level of flexibility to their renters.
My estimate is that you could raise prices by $4,000/mo on a six bedroom house, with the landlord keeping 25%-50% of the increase. You’d need to give them an incentive to take on an extra potential hassle and try something new.
I suppose there’s merit in a more detailed sorting algorithm. OKCupid may not be able to detect your soul mate, but it helps prevent a match between a 57 year old gay man in Seattle and a 22 year old lesbian in Austin, which is useful. I imagine a better algorithm could at least prevent mismatches like these.
The challenge is that you’d need to ensure a steady stream of clients. Otherwise, the property owners might lose money despite the higher rates. This could be hard if a pod was occupied by a person with an unpopular profile.
Perhaps you could rely on the high rates of the service to eventually incentivize them to move out. You could also put temporarily lower rates on unoccupied rooms to incentivize people to move in.
This service would probably also need to deal with people treating it like a hotel, which could dilute the utility for people treating it as a room mate try before you buy service. You could partly solve that with branding. In any case, a paying client is a good client.
Putting aside the technological requirements of the product, and the big investment an individual would have to make in order to carry this forth. Your premise is that there’s a crisis of loneliness and the solution is to have people live with each other. I just don’t see how that’s evident.
Furthermore, you talk about AirBNB (stands for airbed and breakfast) which started as making a bed (airbed) and breakfast for a guest, a stranger, in your house! most of the interviews I read/listen about those guys (I think Brian Chesky it’s a quite interesting character) they had not idea about what they were making at the beginning, now they have the beneffit of hindsight and the product is definitely not based on house-sharing.
I think more of what AllAmericanBreakfasttalks about is closer to a solution to the “lonely” crisis
When people do try and start intentional group houses, they’re often organized around a shared social movement, which already have word-of-mouth and social media channels where people can learn about these opportunities for free.
Besides that, I do see value in making something easier which now is somewhat hard, although I don’t think the defining feature of the product would be to mix people who like the same food, game, etc...
But you do propose interesting features of a product, I do see a lot of value in this:
Since a hypothetical roommate matching service has a birds-eye view of everyone who’s searching for rooms, it can deal better with managing house cultural changes in a sensible way when multiple rooms open up at once.
Or fixing the problem of community in a broader sense.
But if you are not willing to jump in why should anyone else bother? Startup founders who are passionate about what they make are the most important predictors of success, no one who is browsing Lesswrong or the Effective Altruism Forum will suddenly find their passion and make a billion dollars of it.
There are already at least three companies in this space: RoomieMatch, Roomi, and Roomster. I wonder why nobody I know uses them, but dating apps are very popular?
It seems to me that the triangulation, trust, and transfer problems in roommate matching that go beyond what OKCupid has to deal with:
There are more than two people involved, and the difficulty of finding communal compatibility complexifies geometrically with the number of roommates.
By the same token, people moving in and out happens more frequently with larger numbers of room mates, often with short notice, making it hard to keep a stable equilibrium of preferences.
Imagine if it was easy to “date your future housemates,” perhaps by living together for a month. It’s already emotionally painful for people to deal with or inflict rejection in one-on-one dating. Imagine being the “odd man out” in this situation. That sounds like a recipe for really uncomfortable social dynamics.
Land lords often influence or even entirely control the process of finding new room mates. There are also laws around evictions that make it very difficult to kick somebody out if its not working for others, whereas there are no legal barriers to breaking up with someone you’re dating if there’s no marriage and no kids.
There’s a much higher effort and commitment barrier required to move than to go on a date.
This is speculative, but OKCupid’s success may stem from capitalizing on a cultural institution that makes romantic love feel of vast importance. By contrast, finding an ideal group of room mates doesn’t have the same cultural importance: we still dream of having our own place by ourselves or with our own biological family. To have comparable success, such a service would need to create a new dream. Even if that’s your dream, is it the dream of your housemates?
Similarly, the service OKCupid provides may be less in matching people with compatible characteristics, and more in identifying an abundance of single people and getting them hyped to go on a date. The purpose of the “matching” is to trick you into building up anticipation, not to ensure a really good fit (after all, if it did that too well, people wouldn’t come back for more!). Instinct, hormones, and love do most of the work of making people stick together in the end.
When people do try and start intentional group houses, they’re often organized around a shared social movement, which already have word-of-mouth and social media channels where people can learn about these opportunities for free.
I think a company would do better to work on solving one or more of these problems.
I think you should be careful with this style of reasoning, because you can use it to explain away any sort of exploitable market inefficiency. For example, prior to Airbnb, we could ask: Why don’t people offer spare rooms in their house to strangers for cash on a temporary basis? And in response, we could generate many valid answers: People are uncomfortable with strangers staying in their house. The strangers could steal something or break something. There may be relevant zoning laws, and established players (hotel chains) who will try to shut you down using regulatory force. Etc. I believe these are all, in fact, issues that Airbnb has faced. Y Combinator hesitated to fund Airbnb due to the “uncomfortable with strangers staying in their house” thing, but in the end, they decided to go forward because they liked how scrappy the founders were. Of course, it paid off massively, and Airbnb is now one of the most valuable companies in Y Combinator’s portfolio.
I agree there are challenges in the roommate matching space which aren’t present in the dating space. But there are also challenges in the dating space which aren’t present to the same degree in the roommate matching space. (Who’s going to want to date weirdos who need the internet for romance? How do you deal with user harassment? How are online profiles supposed to predict that ineffable romantic spark when so much depends on behavioral and perhaps pheromone-related factors? Etc.)
But there’s a big reason why this opportunity is a lot more attractive than online dating: The possibility of making a lot more money per user. Remember most OKCupid users aren’t paying, and paying users only bring in $10-20 per month. Furthermore, you can keep making money even after a match has been made, whereas with online dating, once you successfully match someone and they delete your app, you’re done. If people are willing to pay say an extra $100/month for great roommates, which seems totally plausible given they are already paying that to live in a somewhat more hip part of their city, it becomes worth your while to overcome a lot of problems.
Many of your points are barriers to shared housing in general, not barriers to this service in particular. I would argue that if done right, the service I’m proposing actually offers the potential to greatly mitigate a lot of the hurdles you describe.
You write: “There are more than two people involved, and the difficulty of finding communal compatibility complexifies geometrically with the number of roommates.” Yes, determining compatibility among N roommates is an O(N-squared) operation. But the constant factor matters a great deal. With the existing roommate matching system, each pair of potential roommates has to meet and spend substantial time together before moving in, or there’s incompatibility risk. With the thing I’m describing, we could have a statistical model which gets rid of a lot of the uncertainty up front, in a few seconds of computer time at most.
You write: “By the same token, people moving in and out happens more frequently with larger numbers of room mates, often with short notice, making it hard to keep a stable equilibrium of preferences.” The number of roommates stays the same whether or not we are using the internet to coordinate: In each case, it’s the number of rooms in the house. Since a hypothetical roommate matching service has a birds-eye view of everyone who’s searching for rooms, it can deal better with managing house cultural changes in a sensible way when multiple rooms open up at once. You could even do sophisticated stuff which is infeasible in the current system, like identifying roommate compatibility clusters and matching them with houses of the right size.
I agree “dating housemates” has to be handled carefully. However, note that first, this isn’t even possible with the existing system because there’s too much paperwork involved in signing & breaking leases in order to try out different houses. (Or more realistically, the unpaid volunteer group house leaders in the existing system don’t want to deal with the necessary overhead.) Anyway, worst case you can just leave it out of the plan. Second, I think it could work just fine if you had 3 established houses which each had an empty room and someone wanted to try living in each house for 1 month. I don’t think the residents of the 2 houses which weren’t chosen would have their feelings hurt to a significant degree.
I agree you’d want to talk to a lawyer and figure out the best legal arrangement for the service to use. But better roommate compatibility predictions means this should be less of an issue to start with. Same for the higher effort and commitment barrier point. These are points in favor of a more sophisticated matching system, not against.
I don’t think a new dream is a prerequisite. People who move to a new city already want to make new friends, and living in various houses for brief periods can help with that goal. And people are already having fewer kids. That said, the baugruppe idea probably does require a cultural shift.
I tried to start a group house recently, but gave up after realizing it would be too much work to find people and stuff. I wish a service like what I describe existed.
Shared housing is already a multi-billion dollar market despite the hurdles you mention. People find roommates on Craigslist etc. all the time. If you can capture 10% of the existing shared housing market, that’s a multi-billion dollar opportunity right there, which should easily put you among the top ten Effective Altruist donors. If you’re able to expand the shared housing market, that’s gravy from a financial perspective.
Finally, I want point out that I actually did posit a shift in the underlying economic factors which could make this a profitable opportunity now even if it wasn’t in the past: The increase in loneliness. In other words, a billion-dollar bill may have appeared on the sidewalk just recently. See also this blog post.
Take my thoughts less as objections and more as opportunities. If a business can solve many or most of them, they might prosper. No reason to think it’s impossible to improve on the current rental industry, but you’d want to think through the current set of issues methodically.
AirBnb doesn’t promise anything more than a regular hotel experience in a new setting. OKCupid doesn’t promise anything at all really, except a supply of singles looking to date.
We already have robust services that supply both rental properties and people looking for housemates (the roommate equivalents of AirBnb and OKCupid).
It strikes me that the value you’re suggesting a company could provide is a positive housemate experience, achieved through some sort of algorithm or a setup in which housemates could somehow try each other out as housemates in a flexible way before they commit.
I am highly skeptical of the idea that even the most sophisticated algorithmic matching software can provide better housemate relationships through better matching than is already available. I don’t think any dating apps match people well romantically. The most effective approach with them is to just go on a lot of dates and see if anyone clicks.
It would be more interesting to me if a company figured out a way where people could move in together, stay as long as they liked, move out, try another group, with minimal hassle.
Perhaps an apartment building with pods of furnished rooms connected to a common area. People make profiles, get on the waiting list for an open pod, and the current pod mates can vote on who they want to accept next. They can’t kick out a pod mate they don’t like, but they could switch away to a different pod.
The rates are hotel prices, maybe double what the house normally rents for. When an entire pod clicks, they can move out at their leisure to a rental apartment or house.
It seems to me that this could add value to a typical hotel experience, while using a similar business model. AirBnb already provides a solution to the trust problem of strangers cohabitating.
If this kind of business existed in my city at an affordable price, I might try it. Hotels are about twice as expensive as rental apartments, though, so I imagine this would be a pretty costly investment.
You’d want lots of options for people to live with, which necessitates owning a lot of rental properties.
To avoid that problem, perhaps you could connect with landlords, offering them a cut of the profits in exchange for partnering with your service. You help them manage the properties, to cut the hassle for the landlord, and they’re able to charge higher rates, closer to hotel prices, in exchange for granting this level of flexibility to their renters.
My estimate is that you could raise prices by $4,000/mo on a six bedroom house, with the landlord keeping 25%-50% of the increase. You’d need to give them an incentive to take on an extra potential hassle and try something new.
I suppose there’s merit in a more detailed sorting algorithm. OKCupid may not be able to detect your soul mate, but it helps prevent a match between a 57 year old gay man in Seattle and a 22 year old lesbian in Austin, which is useful. I imagine a better algorithm could at least prevent mismatches like these.
The challenge is that you’d need to ensure a steady stream of clients. Otherwise, the property owners might lose money despite the higher rates. This could be hard if a pod was occupied by a person with an unpopular profile.
Perhaps you could rely on the high rates of the service to eventually incentivize them to move out. You could also put temporarily lower rates on unoccupied rooms to incentivize people to move in.
This service would probably also need to deal with people treating it like a hotel, which could dilute the utility for people treating it as a room mate try before you buy service. You could partly solve that with branding. In any case, a paying client is a good client.
Putting aside the technological requirements of the product, and the big investment an individual would have to make in order to carry this forth. Your premise is that there’s a crisis of loneliness and the solution is to have people live with each other. I just don’t see how that’s evident.
Furthermore, you talk about AirBNB (stands for airbed and breakfast) which started as making a bed (airbed) and breakfast for a guest, a stranger, in your house! most of the interviews I read/listen about those guys (I think Brian Chesky it’s a quite interesting character) they had not idea about what they were making at the beginning, now they have the beneffit of hindsight and the product is definitely not based on house-sharing.
I think more of what AllAmericanBreakfast talks about is closer to a solution to the “lonely” crisis
Besides that, I do see value in making something easier which now is somewhat hard, although I don’t think the defining feature of the product would be to mix people who like the same food, game, etc...
But you do propose interesting features of a product, I do see a lot of value in this:
Or fixing the problem of community in a broader sense.
But if you are not willing to jump in why should anyone else bother? Startup founders who are passionate about what they make are the most important predictors of success, no one who is browsing Lesswrong or the Effective Altruism Forum will suddenly find their passion and make a billion dollars of it.