(A talk I gave this week to a UWA undergrad class, entitled “Taking the Plunge: 10 lessons for entrepreneurs”)
1. Start Up is Easy
Starting a business is 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 as we were with aussiehome.com, then it was tougher still. But sometimes people like to give the new guys a go, and for that I salute the real estate industry and people of Western Australia. Not a place I grew up in, but somewhere I’ve called home for 16 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 back in 1999. The support of a wonderfully supportive spouse helped a great deal, as did the sage advice of a few business people & MBA professors you look up to.
2. Just Get 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! My goodness, we knew very little when we set out. But choosing your business model (advertising, e-tailing or subscriptions) was critical, as was gaining a foothold. Stay lean and nimble. The best article I read on the MBA course was Amir Bhide’s ‘Bootstrap Finance’ (still my favourite): “just get out there, because opportunities only present themselves by you being out there”. [1993 ‘Bootstrap Finance’, Bhide A., Harvard Business Review] How true. Most of what we ended up doing and making money from was not mentioned in our original business plan; most of what we thought would make money did not!
3. Customer Focus
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 sales or marketing (most of it went on IT!) 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. True attention to total customer service was critical – easy to say, but only evidenced in a many 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. We moved into web design, print, seminars and such – mainly from suggestions made from our clients.
4. Timing (not too soon, not too late)
We were also lucky that big players left WA alone for a few years after we started and the dominant newspaper did not make any attempt to go online – they could have crushed us at birth. Sure, there were plenty of 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 that area was there for the taking… and so we took it. 13 years on, and 3 years after selling to REIWA, aussiehome.com still has 75 agencies its system. back in 1999/2000 though it was a land grab. If we’d tried a year earlier or later, I doubt we would have survived.
5. Exploit your niche
We picked off the top end (western) suburbs of Perth, 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’. We also guessed that these more aspirational areas would have the most interest online. So it proved.
6. The Trend is your Friend
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). Without it we would have be done for, with it we could ride the wave of the shift from print to online advertising. A major factor underneath what we did, no question.
7. Get the best people on the bus
Hiring and Retaining the best people is what business is (all?) about. 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. If someone works for you, then by definition they cannot be working for someone else, such as your competitors. Jim Collins (‘Good to Great‘, 2001) adage ‘get the best people on the bus’ and (less well known) do not compromise when hiring, was something we saw realised many times. If you are not sure you have the best, do not hire. When we stuck to this line, we did well with our hires.
8. 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’, also from ‘Good to Great’). We encouraged people to bring us the bad news. Even clients will love to tell you what they think you want to hear. That’s sweet, but you need to hear when things are going off the rails, when you are not fulfilling their needs, when you stuff up. I did not mind taking complaint phone calls – I thanked clients for them. Critical.
9. You can R+D yourself into Bankruptcy
True, the web site/service is important, and it’s 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. Ironic, but true, with more sales, you end up doing more R+D.
10. Exit – harvesting the value
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. It can make you quite jaundiced over the whole affair. 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 in early 2010 that I’d be at REIWA by May that year, I’d have not believed you. Yet when it happened, it seemed the most natural thing in the world.