Having just sold a real estate online business, almost eleven years to the day after it was founded, I thought I’d share some thoughts before they were lost to the sands of time…
Start Up
Starting a business is relatively easy, as it involves buying things. Buying a company name, a domain name, some IT and marketing skills, office space… it’s the running of it that is tough. And if you were starting up in a whole new industry (online real estate ads) in 1999, then it was tougher still. But sometimes people like to give the new guys a go, and for that I salute Western Australia, not somewhere I grew up in, but the place I’ve called home for 13 years now, and a State where new ventures (be they junior miners, baby bios or anything really) are welcomed and often where (due to its remoteness) new products can be quietly launched. The first dotcom boom helped: if you had an MBA, a dotcom idea and a pulse people threw money at you. Perhaps your nerve is the only thing holding you back. The support of a wonderfully supportive spouse or partner helps a great deal, as does the sage advice of a few business people & MBA professors you look up to.
Getting Out There
As many of us know by now, major new IT projects can take three times as long (and cost three times as much) as you think they will. IT has a certain logic to it, that you will learn along the way, but with no experience in IT, real estate or business, we are testament that you can certainly give it a go, and if we can do it, let me tell you, you certainly can. But choosing your business model (advertising, e-tailing or subscriptions were the three in existence when we began) is going to be critical, as is gaining a foothold and moving towards that all important tipping point where enough visitors are coming to your site to view enough content. Without that, you will not enjoy the ride much.
We picked off the top end suburbs, mainly because we hailed from there and thought the internet use would be highest in those areas and many would have fastish web access from their work computers in the city. (Remember, this was in the days of dial up. No one had heard of broadband.) We figured that the real estate agents that plied these areas probably had the success and advertising money to pay for such a new service and might get it sooner than those out in the boon docks. So it proved.
We were also lucky that realestate.com.au and domain.com.au were not around at the time – in fact they weren’t to place salespeople on the ground in WA until we were well established. There were local competitors trying to beat us, and property.com.au were probably the major force at the time, so it was our cool technology (“interactive mapping”) and our parochial nature (“we’re just around the corner!”) that we pushed as our unique selling points. The local Institute site reiwa.com (for some strange historical reason) had not made much impact in the western suburbs, so really the area was there for the taking. It was a land grab.
Most of business really is about remaining close to your customers, and so we spent a lot of time talking and listening to them. We did not have bucket loads of cash to spend on marketing (we’d have just wasted it if we had) and so we had to be a little street wise about how to build traffic, get good SEO results, get our name out and evolve our business model through the years. We moved into web design, print, seminars and such (none of this bore any mention in our original business plan) and so the words of Amir Bhide came true: “just get out there, because opportunities only present themselves by you being out there”. [Bhide’s 1993 ‘Bootstrap Finance’ Harvard Business Review article had become our Bible.]
What Worked?
Like many businesses, we have tried lots of things, thrown away what didn’t work and kept what did. So what worked?
1. The perpetual shift of eyeballs and advertising dollars from print to online was the major ‘wind beneath our wings’, but this on its own would not have been enough (although it was a necessary factor)
2. True attention to total customer service was critical – easy to say, but only evidenced in a million little things done day in day out over a decade. Real estate clients can annoy you, can be unfair, can be wrong… yes, so what? Without them, you are nothing. Most of the time, they happily use your services, pay their bills on time and keep coming back for more. Trust follows. Invaluable.
3. Hiring and Retaining the best people – we’ve always had good people, sometimes certain people did not fit (so they had to go). People are not only your best asset, in a real sense, they are your only differentiating asset.
4. Being Realistic. There will be tough times, sometimes you just have to admit defeat, sometimes you have to push through the barrier and win. This involves judgement and gut feel, but also a healthy dose of reality and reflection (Jim Collins’ ‘Stockdale Paradox’, from ‘Good to Great’ 2001)
5. You can R+D yourself into Bankruptcy. True, the web site is important, and its fun having lots of cool stuff on the portal, but there has to be a balance between making money (sales) and developing a nice site (R+D). I had lots of battles on this one over the years. Sales is hard work, but it is the most important too. Pick up the phone, make that call. Everyday. The reward for making some sales is some time in R+D.
No doubt readers of this will have other comments on ‘what works’.
Exit
Maybe the most difficult decision is to know when to exit, and how to manage that whole process. We had all sorts come across the threshold in 11 years promising this and that. Most just wanted to take a peek under the bonnet. It’s all very emotionally draining. In the end, it was a cup of coffee, an idea that had merit and then a few more meetings to thrash out the numbers. It was all done inside 6 weeks. If you’d told me 4 months ago I’d be where I am today, I’d have not believed you. Yet now it’s happened, it seems the most natural conclusion in the world. In a few months, I hope to blog about ‘merging portals’, but for now, I have work to do doing just that…