Emoov’s former CEO Russell Quirk has revealed why his hybrid estate agency failed in a frank interview published over the weekend.
In it Quirk reveals that investors’ need for rapid expansion, eye watering staff costs, huge digital marketing bills – that saw the company burn through £800,000 a month – and also being out-spent by Purplebricks all eventually brought the company down.
“We were too ambitious and tried to grow too quickly,” he says.
Quirk also reveals that Emoov spent £29 million of investor cash during its eight years, raised primarily from nine rounds of funding during the final four years of trading before going into administration just before Xmas.
He also claims that the cost of hiring the kind of ‘chief’ or C-level staff that investors wanted to see on board meant the company ‘bled cash’.
“The marketing approach that we had – and that the whole online/hybrid sector has – is ridiculous,” he says.
Quirk has expanded on this elsewhere, explaining in a blog on Friday that the cost of gaining instructions from vendors via Google and Facebook cost the company a fortune.
“In the first days of Emoov, the cost per click of the term ‘online estate agents’ was between £2 and £3,” he says.
“Now, it’s around £50 and with many, many more companies slicing the pie.
“Google Adwords went from returning us £2 for every £1 we spent in 2011 to a negative ROI of 30p returned for every £1 spent in 2018.”
But Quirk is also clear that the arrival of Purplebricks and its huge initial £27 million launch budget, was a key factor in Emoov’s demise.
“We were never second or third in terms of the money we raised, and we didn’t have the sugar daddy in the form of Neil Woodford that Purplebricks has or that HouseSimple has with Charles Dunstone or Yopa via DMGT and Savills,” he says.