Cathie Anderson

Cathie Anderson: Trio’s simplified Web technology earns a bundle

Cathie Anderson
Cathie Anderson

William Afong, Eric Lefler and Paul Sheng have mastered the art of making money with set-it-and-forget-it technology that other businesspeople need to connect with customers and close sales.

If you’re going to gamble, Sheng told me, you might as well gamble on what you know. Sheng knows a thing or two about gambling. He made a good living by playing poker for a while after he left the world of private equity management at Bain & Co.

“I spent 15 years in the consulting industry, first at McKinsey, and then I switched over to Bain,” he said, “and I co-founded their private equity practice. After about 8 or 9 years there, I had a professional midlife crisis. … I was working minimum 70, 80 hours a week. ... I said, ‘I don’t want to do this anymore. I’ve got two daughters. … I’m out of here,’ and so I sat around with nothing to do for … about nine months. That was when I became a professional poker player. I actually did quite well, but I have to admit I was old enough to realize that this is not a career or a lifestyle that a family man should have.”

In 2006, just as Sheng was really questioning the idea of playing poker all day, Afong approached him to ask him about running his small web-based company, iHouse Web Solutions. The company offered website templates and other services to real estate agents. Sheng put him off, but eventually he agreed to just drop in for a few days and offer Afong some advice on what to keep doing and what to improve.

“I hung out there for three days, but I tell you, within six hours, I realized, ‘Wow, this is a great business,’ ” Sheng said. “Let me define why it’s such a great business. There’s no inventory. There’s no accounts receivable. Everything is paid automatically by credit card on the first day of the month. Your client base is hugely fragmented, which is good. … There’s not like two guys who are like 50 percent of your revenue base, and you’ve got to kowtow and worry that they may cancel.”

Afong had landed a new chief executive officer. Afong remains on staff part-time in the roles of president and chief financial officer. Lefler, a University of California, Davis, graduate, is the chief technology officer. He has basically automated website creation for real estate agents. Using their real estate agent numbers, the iHouse software automatically identifies each agent’s listings on the multiple listing service and updates the MLS postings automatically, including the photos. Homebuyers can go to the agent’s page to create searches for properties, much as they do on Zillow or Trulia. And agents can offer home sellers the option of creating a special Web page that spotlights an individual property.

Since joining the company, Sheng has added 25 salespeople, and he’s looking for more. Roughly 30,000 agents and brokers nationwide are customers, and roughly 40 percent of them perform administrator tasks only once a year. iHouse makes its money on website setup and on monthly subscriptions. As for revenue, Sheng would say only that his staff of 50 totals up annual receipts in the “double-digit millions.” The company has offices in Davis and Sacramento.

There’s only one problem with so much automation, Sheng told me.

“The business was doing quite well and paying the bills, but we were a bit bored,” he said. “So we said, ‘What do we know how to do well, and how can we channel ideas along those vectors?’ ”

“We said, ‘We know how to build websites that are really easy to use and automated and look good and everything,’ and we had focused on a fairly big niche, but we said, ‘Why don’t we build them for the masses, so to speak, anyone and everyone who wants a website?’ So we came up with this new concept. It’s basically do-it-yourself premium websites for everyone. It’s for your little small business … this coffeeshop, this restaurant, this plumber, this lawyer, this dentist, … the local knitting club.’ ”

That was the beginning of, with which individuals or businesses can start a website and choose a template created by Lefler and crew.

There is a built-in potential market. While 83 percent of consumers say they look for local businesses online, only 37 percent of small businesses have websites, according to recent studies.

iHouse has plenty of capacity to add the line of business because of deals with two big data centers. Sheng and Lefler redirected six or seven of iHouse’s 10 engineers to work on the project. All other capital expenditures for the startup were easily covered by iHouse’s cash reserves. Officially launched four months ago, offers free and paid websites, competing with big players such as Wix, Weebly and Squarespace.

Talent agent Joe Fossum-Perez pays for his website with because he finds it easy to use and affordable.

“I looked other places, and I have not found one yet that has the usability that this site has,” said Fossum-Perez, whose Unique Talent & Literary Management is in Vacaville. “It’s easy for people who are just learning computers, learning Web design, to use. It’s drag and drop, and … there’s so many designs on there for every type of business or personal site or hobby, and all you have to do is put your text in there.”

Roughly 300 individuals have signed up, half of them for the free option. Sheng told me that he and Lefler wouldn’t mind if most users chose the free option.

“We’re a business. We like to make money. Duh?” Sheng said. “But I and the CTO in particular have always said, ‘I don’t mind if we have 100,000 people just use our free stuff.’ What I mean by that is we just like building stuff that people use.”

Make it a Big Day

If your nonprofit wants to participate in the Big Day of Giving in May, then you’ll want to sign up for an orientation on Jan. 6. It’s the last webinar for newcomers before the event begins.

“There are several steps the nonprofits have to hit to participate, but they can’t miss the orientation no matter what,” said Priscilla Enriquez, chief giving officer at the Sacramento Region Community Foundation. “They have to be at an orientation. We’re casting a wide net to make this a really amazing day for the region.”

On the Big Day, May 6, the Sacramento Region Community Foundation and its counterparts in Yolo, El Dorado and Placer counties will join with media organizations such as The Sacramento Bee to promote charitable donations in the region.

A website will be created to track all the giving on that day, and all funds will be unrestricted. Those dollars can be crucial for nonprofits that get many funds tied to specific programs.

“We’ve had a series of orientations to get the nonprofits on board,” Enriquez said, “… and this is our last call. It’s Jan. 6 from 9-10 a.m. … They can go to our website, which is to register. Our goals for the Big Day are to enlist 400 nonprofits to raise a million dollars and a match of $250,000. We’d like to engage at least 5,000 donors, and to have at least 30 percent of those donors be new donors to the nonprofits. We’re very close to hitting the 400 nonprofits.”

This story was changed Dec. 28 to correct the spelling of the consulting firm McKinsey & Company.