An 11 year real estate online business case study

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 and 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 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 (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’.

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…

Aussie Home

SEO For Real Estate
Listing Leads
Agentpoint Real estate

About Charlie Gunningham

Charlie set up in Perth with a uni mate during the height of the dotcom boom in 1999. He

10 Responses to An 11 year real estate online business case study

  1. Ryan O'Grady July 19, 2010 at 10:37 am #


    Great article, some very useful information here for new start-ups.

    All too often with a new web based start-up countless money, time and effort is spent in developing the perfect solution. Often launch dates are delayed, budgets blow-out and after 3 to 6 months technology is adjusted.

    My advice is to break the web development down into 2 phases. Phase 1 is to develop the essentials for your business/product and get it to market as quickly as possible. Phase 2 will happen after 3 to 9 months and will be the development of all the extra features and add-ons you initially wanted. You’ll find some of the things you initially thought you needed are no longer relevant and you will definitely have found other things you now realise you need.

  2. Peter July 19, 2010 at 10:38 am #

    Charlie great article. It is fantastic to hear from such a seasoned player in the online field. Like you I rode the ups and downs of the online world since well before the DOT COM crash and well after (I have now just stepped into my own consulting business).

    The one thing that is consistent, from my experience, is that inexperienced investors think the online world is a magical place where you become the next Google overnight and without hard work and trial and error. They also tend to think it’s cheaper and simpler to run an online business. It is not, it is just as expensive, if not more, because the marketing costs are generally higher and the need to keep up with technology advances that much greater. You need a good balance and more importantly you need to know the key characteristics of an online classifieds business (like content is king).

    I have worked for more stat-ups than I care to admit and some I have seen grow, others (most) fail due to lack of funds, unrealistic expectations or lack of executive online experience.

    Whoever is thinking of getting in the online game, classifieds or not, should take the time to have a chat to someone with war stories like yours. Thanks again and good luck with the merge.

  3. Robert Simeon July 19, 2010 at 1:17 pm #

    Great article CharlIe,

    Perseverance is such important strategy as I must admit I never doubted our model – just became increasingly frustrated that others took so long to get the online point. Sitting here in Phuket typing into my iPad and it is hilarious how many people here have never seen one and keep asking me what it is. I feel like a sales representative for Apple computers!

    I believe we are on a totally new flight path now an advanced technology revolution. Although time to stop typing and get into some bacon and eggs (some things won’t change).


  4. Greg Vincent July 19, 2010 at 2:47 pm #

    Thanks for the insight Charlie. Sounds like it has been a huge challenge. yet others may think that AussieHome was an overnight success story. (Sure, an 11 year overnight success story).

    Many agents look to some of the mentors within our industry who are now writing millions of dollars a year in fees & think that it all happened overnight, yet the mentor has usually been working as an agent within that segment of the market for over 20 years.

    Persistence & Vision is the key to success. Not only do you need to have the Vision but others need to be able to buy into what your vision is.

    Congratulations on hanging in there Charlie and recognising your wife’s support along the way. Your success is well deserved. Cheers 🙂

  5. Mac July 19, 2010 at 2:59 pm #

    Simon Baker Becoming American Resident

  6. Peter Ricci July 19, 2010 at 4:02 pm #

    Mac. He certainly has spent his well earned money on a lot of surgery 🙂

  7. Vic July 19, 2010 at 5:53 pm #

    Great article Charlie,

    We are going through the teething stages and can relate to what you have said.

    Working on the basis of not letting our errors cost us too much as we go forward.

    A good principle that has worked for me in the past is: do more of what works, less of what may have a slim chance of working; differently that which is tried but still may work, and scrap altogether that which will not work. And never stop listening.


    ps Peter R., would love to share some of these articles but note that you don’t have a share button for emails. Or maybe you have and I cant see it.

  8. Glenn Batten July 20, 2010 at 9:40 am #


    At the bottom of every article and just above the comments are all the share icons.

  9. Shane Dale July 20, 2010 at 10:34 am #

    Hey Charlie,

    I can really empathise with your story – having lived it myself in parallel since 1996. Real Estate is also a very strange dynamic – and as an industry most outsiders dont “get” it. Thats also because the true operational processes at work are not acknowledged at all. Quite the opposite – there are many many who trumpet loudly their vision of success and sales methodology, often from the USA which doesnt compare well to us here – its not surprising at all that most new players and corporates find it hard to penetrate this industry.

    However – we should congratulate ourselves that Australia is still the most technologically advanced real estate market in the world – I say that in terms of widespread consumer use of internet penetration, advanced media, VPA, data reports, etc

    Perhaps some other market has edged us out I dont know about, but the leading lights and the cutting edge for this stuff is usually originating here – even google maps is australian originated and based.

    Charlie, you have been a contributor to that process as I have – and the members of this forum are still pushing the envelope. Its an interesting if frustrating experience at times. I hope we get a chance to chat soon.

  10. Mac July 20, 2010 at 1:07 pm #

    Just an attempt at mild humour, Pete R 🙂

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