Russ: It's featured guest time on The Businessmakers Show, heard on the radio and seen online at TheBusinessmakers.com. And I've got a repeat guest today because last year at just about this same time, I had Thomas Benford, the founder and CEO of I Protest on the show. Welcome back to The Businessmakers Show, Thomas.
Thomas: Thank you. I'm glad to be back.
Russ: You bet. So here we were last year with your new model of actually handling and protesting property taxes. How did it go last year?
Thomas: Things went great. We were able to get the service launched on May 17th, and so we had about a two-week span to serve our customers, and we were able to save homeowners an average of $605.00, and we had a 98 percent success rate. So I was very pleased with that outcome, and we're looking forward to the 2012 season.
Russ: So you said you had a two-week span to operate. I know there's a kind of season on protesting property taxes. What is the season?
Thomas: Well, the season typically runs from May 1st to May 31st. A homeowner technically has until 30 days after receipt of the notice to file a protest, but for most homeowners, that's going to be by that May 31st deadline.
Russ: So you were probably kind of like a typical startup last year, not really having everything in place to launch May 1st. Was that kind of stressful for you?
Thomas: Well, yes, it's always stressful because you want everything done today, but there is a process, and we were able to get the service up and running. So we're looking forward to 2012.
Russ: Where you have the whole season. Right?
Russ: But my goodness, you say how much was the average savings?
Thomas: Six hundred and five was the average savings for the user.
Russ: Of the people that came on, what kind of percentage of them were you able to help?
Thomas: Roughly I would say 40 percent is the number. We have some very strict criteria that we put the evaluations through in order to make sure that those homeowners have a valid technical argument to make. And so typically, around 50 percent of the people are going to be told that they don't have a strong case to make, and around 50 percent of the people will have a case to make.
Russ: And I know, too, that whether or not they have a case to make, you sort of handle that in a different sort of way than everybody else. This is a unique model. In fact, for those that didn't see last year's interview, tell us about the I Protest process.
Thomas: The way our process works is if a homeowner comes to our site, we will first help them to decide if filing a protest would or would not be beneficial. So we tell them clearly that we do think you have an argument to make or we do not feel you have an argument to make, and that's based upon running two analysis, a sales comparable analysis, and a uniform and equal analysis, which will be based upon the appraisal district's information. If we do feel that you have a valid, technical argument to make, we will then offer to provide you with a self-contained narrative report, which will have all the arguments in them and the documents actually to support, and that's provided for a fee of $39.95. And that report can be submitted online or via the mail in order to serve as the protest argument.
Russ: And so I don't have to go down to the appraisal office at all. It's all online.
Thomas: No, the beautiful part is that as technology has proven, the appraisal districts are starting to provide online protesting platforms, and by 2014, every appraisal district with an online presence by law is supposed to be providing online protesting options.
Russ: But I found yours to be real cool. I just sit there. I enter my address and my e-mail address, and you tell me whether I have a case or not. And if you say I do, then you put together all the day form that I need and actually make it real easy for me to send it in. And the worst case is I could be out $39.00. Is that right?
Thomas: No because we offer a money back guarantee as well. We're confident that the algorithms that we've built up are accurately predicting those outcomes. So if for any reason our data would be found to be insufficient, if you provide us back with the order determining the protest, we would refund that fee of $39.95. So worst-case scenario is you're out of no money.
Russ: That's pretty cool. I know the way that there's a lot of these services where it seemed like it was pretty easy because you just give them the go ahead, but they charged me half of what they're able to save me. So I never felt like they saved me enough, but I felt like they charged me a lot. So you kind of overcome that. Right?
Thomas: Right. Our platform is built upon transparency, and we want to empower the homeowners to do this for themselves because it's not something that's terribly difficult once you understand how the process works, and it's something that the homeowners are definitely capable of doing themselves and making sure that they keep those savings in their own household as opposed to paying them out to an external consultant.
Russ: Now I remember last year, I asked you the question, my goodness, what triggered this idea to launch. But share that with our listeners this year, too.
Thomas: Well, I started working with a gentleman who was doing a commercial property tax business, but he also was picking up residential accounts. And just in doing work to build up the arguments for the hearings discovered that it took in many instances just about the same amount of time to build up the case for $150,000.00 house as it takes to build up for a $3 million warehouse. The time component being fairly efficient, I thought, at gathering the data and putting it together in a logical way, it could take me from 20 to 30 minutes to do that. I knew that many homeowners not being as familiar with the process would take a longer time to do. And I think that served as one of the impediments for why people - a lot of people choose not to participate in the process. And so we know that there are adverse consequences when people don't participate in the process, and we just want to make sure that we were enabling as many people who should be participating to join in and do that in an efficient way.
Russ: I remember your explanation last year about non-participation, these people don't do it for the reasons you just said. But in general, that costs that group money not to be participating. Correct?
Thomas: Exactly because the way the process works as mandated by the state is the appraisal is certified first, and then tax rates are set. So it's not an issue of what the tax receipts are going to be, truly. It's an issue of how is that total tax burden going to be distributed amongst the owners of property in the state. And so when people don't participate, the fundamentally inherit taxation from the people who successfully participate in the process. And so it becomes regressive on those who are non-participants, and a lot of people just aren't familiar with how that process really works.
Russ: You know, I'm recalling how your statement, that very statement last year motivated our producer to participate, and he saved, I think, $700.00, and it was easy because that's - the way you overcome the non-participation is by making it very easy and convenient and not take up much time. And cheap. Right?
Thomas: And cheap. We remove that barrier, also, having to understand how to make the adjustments to the comparables because we - that's all part of the package.
Russ: So here you are now, and the season hasn't started, and you're fully loaded, cocked, and ready for 2012. Right?
Thomas: Yes, we are -
Russ: So this should be a real good year.
Thomas: We're looking forward to it. We hope that we can touch enough people to make sure they're not being adversely affected, and we'll have some mutual benefits there.
Russ: Cool. Now so another thing, when you say touch enough people, I know that there's some expansion in the process this year. Tell us about that.
Thomas: Right, we are looking forward to expanding into the Dallas, Fort Worth, San Antonio, and Austin markets. We are in the process of getting that data from the appraisal districts into our database, and we expect to have those fully functional first week of May.
Russ: So it's exciting times for I Protest.
Thomas: It is. It's a very exciting time. Looking forward to a great expansion.
Russ: Well Thomas, thanks for coming in again. We want to stay in touch with you and hear how it goes.
Thomas: Thank you very much.
Russ: You bet. That's Thomas Benford, the founder and CEO of I Protest. This is The Businessmakers Show, heard on the radio and seen online at TheBusinessmakers.com.