About seven years ago a sales representative from one of the two major portals came to me and asked for a 50% increase in our yearly tariff. I was so horrified at the audacity of this proposal, that I thought I had misheard him.
“Did you say 15%”? Even this ‘stuck in my craw’ as it was the equivalent of seven years worth of inflation in one hit. “No” he retorted, “I said 50%”, my worst fears were confirmed. He then tried to diffuse my mounting anger, by sheepishly asking me “not to shoot the messenger”. He explained that it was a diktat from the “head honcho” and there was nothing he could do about it.
I said that I would reluctantly pay this outrageous amount, but asked if I could call an end to the meeting, since I had to get to work on an alternative plan for the longer term.
What was the Alternative Plan?
The plan was to invite 25 of the pivotal residential estate agents across the UK to a secret meeting at Zafferano, a restaurant in Belgravia. Everyone “turned up to a man” without knowing the context. I was flattered. The first question they asked was “What’s this meeting all about”? I responded, “Whilst China is planning for the next 50 years, our Industry is planning for the next two weeks!”
The idea was simple, a property portal for our industry, owned and controlled by agents themselves, in order to try to counter-balance the overwhelming fiefdom that the two largest portals had created for themselves – with our data and at our expense. Effectively, they represented a duopoly and we needed more competition and control over our costs and destiny in the way we provided our clients with a high quality service.
I reminded the gathered throng that if agents have both the money and data, why hand it over to the two portals to create billions of pounds worth of value for them when so much of the value was being created by the agents themselves? If we didn’t “wake up and smell the coffee”, there was a risk that the costs of digital advertising, which is the “life-blood” of the Industry, could rise exponentially.
OnTheMarket is born
As I was expecting some dissension from “the ranks”, much to my surprise, there was overwhelming agreement and, from that moment on, the concept of Agents’ Mutual as a business and subsequently OnTheMarket.com as a brand was born. Over time, a steering group and then a board was formed, with Ian Springett as the CEO to set up the management team and to deliver the site, as promised, in January 2015.
As the self-proclaimed champion of the community of interests of my profession, I thought that this was a “halleluiah moment” for the residential property industry.
Clearly, something very special had happened that evening.
Today, there are around 5,700 agent offices contracted with OnTheMarket and by January 2017, the site received over 11 million visits per month, which is something that one of the rival sites only attained after four years of development.
Whilst keeping the fundamental objectives intact in terms of controlling costs, serving the property-seeking public and shaping the future for its agent members, Agents’ Mutual has recently announced its intention to float on AIM as OnTheMarket plc.
If successful, this process will hopefully generate £50 million of capital for the Company, which will enable it to fund its very ambitious corporate strategy. The market cap of the business could be between £200-£250 million.
None of the shareholders will be selling stock as part of the flotation and the existing loan notes of the members will convert into shares, with “lock-in” restrictions on their sale.
If the flotation goes ahead as planned, the ‘One Other Portal” rule will be dropped since it will have certainly done its job to help OnTheMarket become a very effective “disrupter” site for the Industry, with the aim of injecting competition and controlling costs for the future.
Very unusually for a disparate, competitive Industry, residential agents have been remarkably successful by harnessing the forces of group leverage, which has resulted in not just the formation of OnTheMarket, but other collaborative ventures such as CLEA/The London Magazine and REAP/Fabric Magazine, which have been long established and provide their loyal London readership with two coveted property lifestyle magazines, at very affordable advertising prices for the agents themselves.
As Managing Director of Glentree International and a non-executive director of Agents’ Mutual, I strongly support the proposals to seek to float OnTheMarket on AIM and hope that with continued agent control it achieves its ‘”disruptive” objectives in challenging the status quo.”