The Era’s of Growth of the REA Group
The company i run is called the REA Group. The business was started in 1995 in the garage of one of the founders in the Melbourne suburb of Doncaster. In 2000 it came within a few weeks of closing and since then has gone from strength to strength and is now operates 22 property portal sites in 10 countries. It has 750 employees, does over $150m in revenues and is very profitable.
Now when i think about the growth of the business, i think about 4 era’s of growth.
Era 1 – Start Up (1995 – 2000)
The first era is all about the founders finding their voices. The business started in a garage in Doncaster, Melbourne, Australia as a web hosting, ISP, and anything and everything to make money. Somehow they secured the www.realestate.com.au URL and the rest they say is history. They built a very basic site (click here) and went to agents to get them to advertise. It took off slowly but over time they were one of the three leading sites in the country (with www.domain.com.au and www.property.com.au). In 1998 Macquarie Bank purchased 51% of the business with the view of floating it the following year – and float it they did on a very weak business plan. At the float in October 1999, they raised $7m and by mid-late 2000 they had spent it all. The money disappeared on Italian furniture, questionable marketing (ie sponsoring a tennis tournament) and on a massive work force (they hit 60+ people in mid 2000). As they ran out of money, they looked for investors and in late 2000, News Corp agreed to invest $2.25m in cash and $8m in marketing for 44% of the business. I had the priviledge of doing the deal for News.
Era 2 – The Turn Around (2001 – 2002)
In 2001 i joined the business and immediately set about turning the business around. It was clear from the beginning that the business was on a clear path to spending the $2.25m they had raised from News and that there was unlikely to be any more money invested. The areas i focused on first were finance and sales. I removed a few people from the business and set out simplifying the product set and focusing the sales team on selling one product. These simple actions, common sense really, meant we were able to drive rapid growth in the business with the limited resources we had. The key focus was on having a simple vision, building a great team and most importantly living within our means. We slowly grew our way out of the shit!
Era 3 – Focused Local Growth (2003 – 2005)
Era 3 is all about acceleration. By the time we entered this era someime during 2003 the business had turned around and was motoring forward. The focus was on accelerating growth and signing up as much of the market as we could, as fast as we could. We rapidly built out the team, improved systems and processes and rolled out new products and services. The market clearly saw us as the leader and we purchased the #3 player, www.property.com.au, to ensure we solidifed our place as the market leader. Our minds started to ask the question – what next?
Era 4 – Interational Expansion (2005 – today)
With leadership in the Australian market entrenched, the focus started on what next? The answer was quite simple, we need to work on moving the business out of the Australian market (only 2% of the global GDP) to other markets and we therefore started on expansion with the launch of a site in New Zealand (www.allrealestate.co.nz) and the acquistion of a similar busines in the UK, www.propertyfinder.com. Since then we have expanded into italy (www.casa.it), the greater luxembourg region (www.athome.lu), Hong Kong (www.squarefoot.com.hk) and Dubai (www.propertyfinder.ae). The objective is to create options for future growth and hopefully to have another www.realestate.com.au.
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