Understanding the Matterport/MSP 3D Scan Pilot

Dear MSPs,

We wanted to address your concerns about a local pilot program we announced a few weeks ago as part of our increasing efforts to drive business and profitability to our existing MSP network. Our program was designed, after extensive market research and conversations with successful MSPs, to help members of our network continue to grow their businesses, add personnel, and offer a competitive, complete service while leveraging their in-market expertise. Here are some of the key highlights to note about the program:

  • We are conducting a small, local pilot in the San Francisco Bay Area in collaboration with two experienced, local MSPs. The pilot is focused on aligning MSP and Matterport business models, and increasing scan business for MSPs. We are testing numerous aspects of the program. This is one of many tests we are conducting in order to expand the business opportunity for everyone.

  • We are not competing with MSPs - we are collaborating with them. Our pilot participants have different business models from one another - which is helping us understand how we can grow the market for everyone. This is not intended to displace any existing MSP services and is focused on helping you scale and create additional revenue.

  • We are targeting segments and verticals not currently served by existing options. This includes price-sensitive parts of the real estate market, and other verticals where we have seen lower penetration for scan services. We do not expect this to conflict with existing mid and upper-market MSP services, but rather act as a supplement to your existing business. We are testing ads, and are in talks with major partners in new or underserved industries where we have not seen adoption of existing Matterport or scan service formats.

  • The goal is to help MSPs focus on their strengths and grow their businesses. We have heard from several MSPs that they face operational and other challenges in growth, so this is an experiment in leveraging Matterport’s resources: to pay for demand generation, and take on time-consuming operational components of running an MSP business -- freeing up MSPs to focus on growing their businesses.

  • The profits are split between Matterport and the MSP. Matterport is covering all of the costs of the program, as well as covering all lead generation, operations, and hosting/processing fees. The profits are then split.

  • This does not draw leads or budget away from the existing MSP network. We are conducting this as a separate pilot, and allocating additional budget, which is made possible by the tighter Matterport/MSP partnership. The pilot should not impact lead flow through the existing MSP Program.

  • Matterport can’t do what our MSPs do. We are not a service business, and we know that our MSPs have built significant in-market expertise and an understanding of their client’s needs offering compelling services. This is about leveraging each other’s strengths to grow this market.

  • Nothing is set in stone. This is a very small scale pilot, among several other programs we’re running. We may or may not decide to roll it out more broadly, but if it doesn’t work for MSPs, then it doesn’t work, but we will have learned a lot.

Many of you have asked us to focus on growing the market for scan demand, and this is one way to do so. If this works, it will result in higher demand for your services, as well as profits for you as you leverage additional camera operators. It is important for us to test new ideas to identify what will bring in scan business to MSPs most profitably, while preserving your existing services. Please give us a chance to see if this can help us all expand the market.

We value your feedback and ideas. Please share your thoughts and concerns by commenting below!

Thank you,

Matterport MSP Program

1

Comments

35 comments
  • @Matterprot Linda, We have been a service provider for almost a year now, own 4 cameras (2 Pro's arrived today) have scanned approximately 9 million sq ft. since the first of this year, yet have only received about 4-5 MSP service inquiries (not 1 followed through with service).  Like I stated above, allow potential customers to select the "Photographer" by simply clicking the state they live in followed by the city and seeing the nearest MSP.  Be more transparent about what pre-screening goes on before we get a lead.  Definitely don't set prices and listen to your MSP's in the AEC space about how you can continue to offer services that other 360 camera manufacturers are already offering.  This pilot project has done you far more damage than any potential gain you thought it may have.  MP needs to listen to the creative end users who use the product everyday.

    2
    Comment actions Permalink
  • Hi

    Thank you all for your feedback @Mike, @Phil, @Jorge, @Colin, @Marcus, @Chris, @Chad, @Kevin, @Sean, @Nat, @Adam, @Eric, @Doug, @Mike, @Adam. We appreciate you sharing your concerns, and are paying close attention to your comments. We paused the SF pilot yesterday.  

    I wanted to provide additional information and transparency to our community. We are in constant communication with our MSPs and hear a very consistent set of concerns:

    • Managing demand generation (getting new business) is challenging
    • The free leads that Matterport has been sending are not converting very well (the prospects are not ready to buy services) and there is not enough volume. 
    • There is difficulty landing larger multi-property deals with bigger companies, especially those that are spread out across regions or geographies, and in new verticals
    • Core business operations are neither what we do best nor what we want to focus on
    • For MSPs who are successfully driving scan business, there is difficulty scaling because of limited time to add operators while developing a portfolio of business

    As we build the Matterport ecosystem, our goal is to help MSPs build scaleable, growing businesses. Our current programs are not enough, so we must test new ones. The SF pilot was one of several small-scale programs designed to zero in on some of these core concerns. For this pilot, we partnered with MSPs who  were contracting out and managing scan services, while Matterport was taking on the cost of digital marketing, operations and billing (things we were told are time consuming and growth blockers for MSPs).

    This specific pilot was focused on understanding (i.e. market testing) a few key concepts:

    1. How to better scale an effective demand generation program that drives business directly to MSPs?
    2. How do we find prospects who are ready to buy/ Does providing price and package info help?
    3. How to reduce the overhead costs of MSPs by reducing marketing and sales expenses (Business economics)?
    4. How sensitive are potential leads to pricing (Price elasticity)?

    Based on prior market research, we believe that the amount of business done by our MSP ecosystem can increase - in number of jobs and profitable dollars - if we better understand the business economics. Advertising a full-service offering up front, to a small localized target audience in the SF Bay Area, was one such test to see whether it impacts conversions and works for MSPs.

    We believe that with our brand recognition and ability to generate awareness and website traffic globally, we are able to provide something more valuable than leads to our MSPs. We are able to deliver orders that cost the MSP $0 in customer acquisition expenses. Our goal was to test whether we could do that cost effectively.

    We also believe that our current method of asking people for their information for some unknown set of services and pricing is not as effective as it could be. (Nonetheless, we are - and have for some time - been running paid advertising campaigns dedicated to scan demand internationally, which are driving many of the leads that you are seeing, and we continue to test and grow this program alongside other tests.) This pilot was testing whether we can deliver more value to MSPs by better engaging potential buyers, and thus increasing the volume of jobs we send MSPs.

    I want to emphasize that Matterport does not intend to compete with our MSPs by hiring our own staff to capture properties. We recognize that MSPs are an integral part of our ecosystem, and we’re committed to supporting you. As always, we welcome your feedback.

    Thank you for engaging with us in this conversation.

    Matterport Linda

    0
    Comment actions Permalink
  • @matterportlinda @kellyhanson

    I read the entire thread and the thread on the very active Matterport User Group in Facebook. I read your rebuttals and the clarifications MP provided through you.

    So, in the end, the pilot was a catastrophic failure from the MSPs' viewpoint and their trust in MP's marketing strategy and tactics has eroded even further. 

    I am curious to understand what inflow of business MP got from the test. Would you care to publish how many leads were generated over the test period, and how many contracts were actually signed by deep-discounting the service?

    Since you appreciate input from MSPs, I will share a few remarks on the fiasco.

    On the economic sustainability of the pricing level:

    MSPs complained that your test-pricing just cut them off their own market. $200 for a 3,000 sq.ft. home works out at $.06/sq.ft. I would hope MP is not so disconnected from the market(s) that your execs believe 6 cents/sq.ft. can generate any economically sustainable business for a professional photographer. Not even in Alabama. A 3,000 sq.ft. tour takes 2.5 hours on location, at least 1 hr of travel time, and about 1 hour in post. That's 4.5 hours, minimum. $100/4.5=$22/hr give or take. In a big city, travel time would be closer to 2 hrs than to 1 hr. So about $18.2/hr.

    Your rebuttals indicate the test program was designed to find out how MP could generate more business for its MSPs. Pro photographers are 1099ers, not W2ers, so they pay for their own gear, gas, automobile and insurance.   

    Could you please provide the MSP Community with a spreadsheet of the economic model that formed the basis to test a price point of $100? I mean here, the economic model for the MSP. Not the economic model for Matterport.

    In other words, did you test your model to determine if $100 was realistically a sustainable sales price for a MSP?

    Or was it just assumed that over the medium term, Matterport could find people willing to work for $100/tour or less -- like Uber finds drivers willing to work for close to nothing? It is not a stretch of imagination to assume that MP could opt for the "Uberization" of scanning services with a view to generating part of its revenues on marketing services.

    Re: Methodology

     

    From a methodology standpoint, price elasticity can't be tested and measured by offering deep discounts. It has to be tested in small increments, up and down (both ways) from a median price in a given market. If the median price in the SF Bay market is $.15/sq.ft, your study in price elasticity should be 5% (maybe 10% at most) up and down. And progressing from there. Study results will be more accurate because your data have a basis in reality. Deep discounts distort results. Groupon never produced any measure of price elasticity in any market because their pricing practices were unsustainable and too far from the reality of business.

    Pricing elasticity cannot be measured either by adding services to the test. Adding still shots to the pricing test is setting up your testing for failure by comparing apples to oranges. You would have to test your hypothesis "all other factors being equal". The Pro2 is not on the market, most MSPs don't own it, therefore your basis of comparison is the Pro camera. Still shots with the first generation camera are so below-par compared with DSLR shots -- they are unsellable. So your test should be "3D-scan only". 

    This makes the rebuttal claim a bit less credible than we would want it to be. 

    All the more since you could have surveyed your existing MSPs and your existing realtors to find out what the price sensitivity/elasticity of each RE market actually is. No uncertain testing, just experience, real data.


    Re: Effect of advertising unrealistic pricing on the web

    By setting an unrealistic MSRP and using the web and the MP site to advertise it, you probably have misled a larger swath of the market than you care to admit into believing that the MSRP if $.06/sq.ft.  

    Some MSPs have already suffered consequences from this action as attested in this thread and on Facebook.

    For over a year now, MP has been making massive use of Facebook ads and display ads/remarketing to attack directly real-estate agencies to sell its cameras: MP execs can't be oblivious of the way propagation works over the web.

    On this account, I would have expected MP to communicate in a transparent manner, and acknowledge that it was a gross "error" to (1) advertise a price that looked like an MSRP and (2) give a way to people situated outside of the testing area to make inquiries.

    What it looks like, rightly or wrongly, is that your campaign was designed to harvest names and start creating another mailing list to be exploited by MP.

     

    Re: Transparency

    Transparency has never been the redeeming quality of MP's communication -- as witnessed by the way MP actively prevented developers to provide MP-to-GSV conversion services and MSPs to use these services (to the detriment of MSPs' businesses).  

    To this day, the long-overdue MP-to-GSV pilot program is not released on the market. Yet, many MSPs know the technical solution has already been in existence for about a year (and perfectly functional).

    MSPs could have benefited from it already by bundling MP scanning and GSV-publishing services and selling the resulting value-adding service to retailers.

    MP could have chosen to make a temporary licensing deal with the technology providers, and everyone would have been happy making money. Instead, MP crushed both the technology providers and the MSPs with legal threats, and hushed it all up with non-disclosure agreements.

    This general feeling of the threads is that examples of this sort extend to other areas of the relationship with MSPs. Trust is not automatic. It is earned continuously. From the voices in the threads, Matterport does not benefit from the trust of its community. An issue to consider rather carefully, and most likely, some core values to realign at the C-level.

     

    Re: Bringing value to MSPs

    From a personal perspective, the best innovation brought so far to the MSP is the integration of video in the tags. With this innovation, I can bring in additional value to my clients, and I can also differentiate my services further because competing technologies do not offer this just yet.

    I can shoot and integrate sales/marketing videos to help the 3D tours become "live" sales tools. Much more powerful than "just 3D tours". My services can become marketing-oriented rather than just "photography-oriented". That's were value is added.

    In the end, the only thing that really makes a difference for the Realtor or the retailer is how fast they sell their products. Considering this solid truth, MP would NOT have to embark on weird initiatives to generate leads for MSPs and expand the market if the product itself would clearly, absolutely, undeniably help clients (realtors, retailers, event venue operators, etc) sell their products/services faster.  

    When results speak for themselves, products sell. When results are inconclusive or not so clear, products sell less. Any product/service that sells like hot cakes can clearly demonstrate its results in a jiffy -- even when the salesman is clumsy.

    MP has yet to produce a single scientific study (i.e. based on scientific methodology) to show by how many days, in a series of given RE markets, MP Showcases actually reduce the time-on-market of various types of RE properties.  The papers that are published on the MP website are not scientific, and the "evidence" is fairly general or just indirectly related to 3D scans.

    Likewise, there is no study to show how a 3D tour prompts travelers to call a hotel to book a room or professional buyers to book an event venue.  

    Why not invest MP's marketing dollars into controlled studies? And publish the results widely if they are fantastic... or use the not-so-conclusive results to improve the product until 3D tours sell like hot cakes and there is little need to "educate" the market? A market is quickly educated when they see undeniable results. The buzz goes fast and the market grows fast. Witness: the Sony Walkman, the Apple iPod, etc.

    Either way, whether the studies are conclusive or the product needs to be improved to achieve its purported goal (i.e. making more money to the beneficiary of the service), that effort would be of huge value to MSPs.

    "Selling proven value" rather than "selling on price" is the way to grow the MSPs' service business and MP's own camera-selling business. MSPs are not looking forward to discounting their services to get more clients. They are looking forward to increasing their prices, delivering high quality services (that really help their clients make a faster buck) and living more interesting lives.

    MP's best bet to energize its MSP base is to give them more ways to deliver more actual, proven, undeniable, eye-popping value to their clients -- i.e. "my 3D scan service + other stuff I can do for you with my gear will sell your own stuff 3 times faster for more money."

    The rest is weird, ill-conceived solutions to pad up a bottom line.

     

    1
    Comment actions Permalink
  • Just seen this. 

    Very concerned as i have just purchased a camera in the UK - significant outlay once all the VAT and extras are included. 6k plus.

    The whole reason we took the chance was that the UK market was untapped and we could dictate pricing.

    I have zero interest having prices set a few hundred pounds. I am aiming a lot higher. The thought that MP will in effect be undercutting me with the significant investment i have made is frankly horrifying. 

    Make your mind up are you a provider to the industry or are you wanting to be the industry?

    0
    Comment actions Permalink
  • So... Is this "pilot" suspended or terminated?  If MP is still indicating the former, I strongly suggest the latter. I think it's simply a betrayal of MSP's and bad press for MP in general.  Anyway, which is it?

    0
    Comment actions Permalink

Please sign in to leave a comment.