It was a Friday night in May 2012 and Elkhart native Jonathan Eppers was dreading the coming weekend.
Sitting in the West Hollywood, Calif. apartment he had rented for six years, Eppers knew he wanted a change of scenery but wasn’t crazy about spending another weekend apartment hunting.
There were a lot of scams, a lack of photos, and a mobile experience that was “not very good.”
So he spent that weekend creating a mobile application he hoped would revolutionize rental housing. Eight months later he founded RadPad with Tim Watson and Tyler Galpin.
Like many tech startups, RadPad has yet to generate any operating revenue, initially focused instead on attracting mobile users. The 31-year-old pays his eight employees and the rent at its Santa Monica headquarters with $2 million secured from venture capitalists that include oil tycoon and former California congressman Michael Huffington.
Eppers figures they’ll burn through that start-up capital in about a year, but he’s confident he’ll have created some revenue streams before then.
“Instagram still doesn’t make any money, but Facebook bought them for $2 billion,” Eppers said during a recent visit to Elkhart. “The reason they bought them was the size of the user base they had. My mandate with RadPad is to build this really quickly and get as many renters and landlords as possible.”
Eppers isn’t sure if he’ll eventually sell RadPad, the easier route, or take it public, which allows Wall Street so much influence over the business. But either option is two to five years away, he figures.
Before then, Eppers and his team of 20-something designers are focused on expanding outside of the Los Angeles market, where they claim 50,000 users a week, to Chicago and Washington, D.C., and then other rental-heavy markets such as Indianapolis.
RadPad’s biggest competition comes from Zillow and Trulia, who are mostly desktop- or web-focused rather than targeting mobile devices.
Every listing on RadPad has at least three photos, while their competitors might only have one, two or no photos.
RadPad has real-time messaging which allows renters and landlords to communicate directly through RadPad. Renters on Trulia and Zillow must use their personal email addresses, which takes longer and requires divulging email addresses to strangers.
While their business model is continuing to evolve, Eppers is confident it will ultimately make money. And lots of it. He said he’s already turned down one acquisition offer that was “in the millions.”
"One thing you’ll find with younger people is I’m more motivated by what we’re creating and how it’s impacting people than the quick pay day,” he said. “I could probably live on that the rest of my life but really I’m trying to create something huge here. By selling out at this point when we’re only a year and a half into it, seems premature to us.”
The first way RadPad plans to generate income is by processing rent payments each month. The millennial generation doesn’t like to write checks and many don’t know how to balance a checkbook, Eppers said. They would rather pay for things by clicking a button on a smart phone.
But many landlords still want their rent paid by check. So for a $1 or $2 fee, added on to the cost of rent, RadPad will receive electronic payment from the tenant, take its cut, and then mail the landlord a check.
"We want you to use our service the entire time you’re renting,” Eppers said. “(Zillow and Trulia) just want you to use them when you’re finding a place, which is like three weeks.”
Eppers also thinks landlords will pay to have RadPad screen applicants for a set of criteria, saving the landlord time and hassle.
After graduating from Elkhart Central High School in 2001, Eppers, the son of Matt and Marcia Eppers, earned a bachelor of science degree in computer graphics technology from Purdue University. Craving nicer weather, he moved to San Diego after graduation and took a management job with clothing retailer Abercrombie & Fitch. Six months later he moved to L.A. after landing a job as a senior product manager with MySpace, the social networking site that preceded Facebook.
From there he went to Edelman PR (now Edelman Digital) before landing another senior product manager gig at eHarmony, the dating site.
While at eHarmony, Eppers noticed a lot of young adults were keeping statistical spreadsheets about people they had hooked up with. So he and Watson created an app they called Little Black Book.
“Thousands of people signed up and they were putting pretty intimate details in there,” Eppers said. “It got to the point where I was like, this isn’t what I want to do. I don’t want to know people’s intimate details. This was kind of a side project. With RadPad we’re actually solving real problems and doing things that are much more meaningful.”
Eppers said he and Watson sold the app for $30,000.
His job hopping is not unusual for his generation, and is part of the reason he believes so strongly in his product. More people are renting than ever before, he said.
“My parents wanted me to find a good job, get insurance and stay there,” he said. “I think that’s sort of the mentality of that generation. Millenials... we get bored easy. We don’t like to settle down in one area. We like to be challenged. I think home ownership kind of plays into that because if you buy a home you have to stay in one place, which kind of limits your options for jobs.“
Eppers said he’s making less money now than he did right out of college, but that’s fine with him.
”I’m so much happier. I love what I do. I work with really smart people and I get opportunities like this to sit down with people like you. Every day is different.”
There have been some bumps in the road. In 2008, in between MySpace and eHarmony, he developed his first app, called FirstString. It allowed high school athletes to share their game story in real time, but never got off the ground.
More recently, a L.A.-based competitor sued RadPad, alleging it was stealing its rental listings. The company dropped the suit three months later after RadPad proved the accusations had no merit, Eppers said.
Eppers said that although he loves Elkhart, he considers Los Angeles home. His parents tell him they’re proud of him but they hope he’ll stay grounded.
He said they have nothing to fear.
“L.A. just has a lot more crazy people than Elkhart,” he said. “A lot of people are full of themselves and it’s a different mentality out there. But then you’ve got this booming tech scene that’s evolving in L.A. I think you’re going to see L.A. start being known as a great place for companies. It’s a good time to be in L.A.“
Eppers, president of his senior class at Central, said his classmates voted him “most likely to remain in Elkhart.” Only half-joking, he said that gave him a little extra motivation after college.
One Central teacher who made an impact on him was business teacher Patti Pletcher, he said.
She said she wasn’t at all surprised by his success thus far.
"He was a bright young man,” Pletcher said. “Even back then he was business-minded. He added a lot to our conversations about business. He was animated when he talked about what he wanted to do. He was one of my best accounting students.”
Pletcher said she knew Eppers was living in Los Angeles and doing well because the family belongs to her church. But Mrs. Eppers is so modest about her five sons, Pletcher didn’t realize he could have already become a millionaire by now.
Eppers said there’s plenty of time for that.
“None of these guys want to sell,” he said of his employees. “They’re committed, they love what we do, and they want to make it even bigger. As the CEO of this company I’m determined to make that happen.”